Price For Land ?

[datathomas]

I have a friend who recently bought some land here. The (thai) person who sold the land registred a much lower sum at the land office.

There is, however, a seller/buyers agreement with the right amount, signed by borth parties.

He now have to show the tax people at home that his company here have the assets matching his transfers. This by showing the book keeping for his company here.

The auditor in Thailand say he can only use the amount registered at the land office, not the agreement, for his book keeping.

This is also the "value" of the land for tax purposes in Thailand.

Does anyone know if this is correct and if there are any legal text about this in english?

/thomas

[Artisi]

I have a friend who recently bought some land here. The (thai) person who sold the land registred a much lower sum at the land office.

There is, however, a seller/buyers agreement with the right amount, signed by borth parties.

He now have to show the tax people at home that his company here have the assets matching his transfers. This by showing the book keeping for his company here.

The auditor in Thailand say he can only use the amount registered at the land office, not the agreement, for his book keeping.

This is also the "value" of the land for tax purposes in Thailand.

Does anyone know if this is correct and if there are any legal text about this in english?

/thomas

Quoting a different price to the land office to what it was sold for is probably illegal - although it is common practice - be careful

[sk1max]

The reason for the difference is for tax purposes, your right it is illegal, but quite normal. The lower the price the lower the tax. However if the price stated is too low the land office will use their own figures to calculate the tax. So people should have their ducks in a row before hand.

[katabeachbum]

I have a friend who recently bought some land here. The (thai) person who sold the land registred a much lower sum at the land office.

There is, however, a seller/buyers agreement with the right amount, signed by borth parties.

He now have to show the tax people at home that his company here have the assets matching his transfers. This by showing the book keeping for his company here.

The auditor in Thailand say he can only use the amount registered at the land office, not the agreement, for his book keeping.

This is also the "value" of the land for tax purposes in Thailand.

Does anyone know if this is correct and if there are any legal text about this in english?

/thomas

If you show anything else than the land office transfer agreement, you have commited a crime and can go to jail in LOS for tax cheating. Should be easy to stick to the official numbers and not the pre purchase/pre sale agreement.

The rest of the transfers from back home could be gifted to someone, and not a part of the companys accounting.

[datathomas]

I have a friend who recently bought some land here. The (thai) person who sold the land registred a much lower sum at the land office.

There is, however, a seller/buyers agreement with the right amount, signed by borth parties.

He now have to show the tax people at home that his company here have the assets matching his transfers. This by showing the book keeping for his company here.

The auditor in Thailand say he can only use the amount registered at the land office, not the agreement, for his book keeping.

This is also the "value" of the land for tax purposes in Thailand.

Does anyone know if this is correct and if there are any legal text about this in english?

/thomas

Quoting a different price to the land office to what it was sold for is probably illegal - although it is common practice - be careful

Thanks for the quick answer.My friend is on the war path and want to take the sellser to court to get the right amount registred at the land office.

I have a feeling it will be a long procedure and that he could loose the land as he have a company in the purpose of owning land. He also built a house for himself an the land and I am afraid this will go to.

Probably mor cost for this that find a smooth solution?

[malcolminthemiddle]

I have a friend who recently bought some land here. The (thai) person who sold the land registred a much lower sum at the land office.

There is, however, a seller/buyers agreement with the right amount, signed by borth parties.

He now have to show the tax people at home that his company here have the assets matching his transfers. This by showing the book keeping for his company here.

The auditor in Thailand say he can only use the amount registered at the land office, not the agreement, for his book keeping.

This is also the "value" of the land for tax purposes in Thailand.

Does anyone know if this is correct and if there are any legal text about this in english?

/thomas

Check if the books of the Thai company show assets other than the land that can be used to supplement the registered cost of the land to match any foreign currency transfers? I'm assuming all transfers were company to company?

[datathomas]

I have a friend who recently bought some land here. The (thai) person who sold the land registred a much lower sum at the land office.

There is, however, a seller/buyers agreement with the right amount, signed by borth parties.

He now have to show the tax people at home that his company here have the assets matching his transfers. This by showing the book keeping for his company here.

The auditor in Thailand say he can only use the amount registered at the land office, not the agreement, for his book keeping.

This is also the "value" of the land for tax purposes in Thailand.

Does anyone know if this is correct and if there are any legal text about this in english?

/thomas

Check if the books of the Thai company show assets other than the land that can be used to supplement the registered cost of the land to match any foreign currency transfers? I'm assuming all transfers were company to company?

You are quite rite. The transfers were c to c. As the company just started up the only assets are one house (with a contract and price) and the the land.

His accountant her have a "creative" solution that will take care of everything. Thus rendering some tax and other costs but my friend want a "clear" solution and am willing to go to court to get the seller to change the price. Not likley, I would say. He will endanger the whol deal and maybe loos the land and house.

[Benjie]

The problem is whoever breaks the chain is going to get clobbered for tax.

Say if Mr.B bought it off of Mr.A for 5 million and was registered at land office for 1 million. When Mr.B sells it Mr.C for say 6 million baht, but Mr.C wants it registered as 6 million baht at the land office - all of a sudden Mr.B has a tax bill for the 5million baht 'profit' he's made.

[steelepulse]

Buyer could always offer to pay all, half or whatever of sellers tax bill to get the land office to reflect the proper transaction price.

[malcolminthemiddle]

Use the Thai company to buy some furniture for the house.

[mrgreg]

Benjie is right!

But anyway, you said "The (thai) person who sold the land registred a much lower sum at the land office".

That's simply not possible! You (or "your friend"?) or the representative who acted on your/his behalf has also signed the sale papers (in Thai) at the Land Office.

Now you want to go to court and say "I signed the S&P agreement for a lower amount than the amount I wanted to pay but I did not know; here is the "real" agreement (showing the english one)".

Good luck!

In the best case scenario, you're facing deportation!

[tangoll]

Are you referring to the transfer tax/fees calculated by the Land Dept at time of transfer? If so, then capital gains does not figure into the calculation. The only thing that matters is the transaction value used by the LD for their calculation.

If you are referring to profit tax imposed on a company's annual tax return, then you had better consult with your tax accountant as to whether capital gains on sale of land must be reported, and if so, must you use the transaction values of the two transfers of the land as the basis of computing the capital gains, or can you demonstrate that the capital gains is computed using values other than the transaction values of the transfers at the LD?

[thaiwanderer]

Whilst it is common practice to declare a lesser amount, it is tax avoidance pure and simple.

To infer its something the Thai seller did alone due to (being most kind) the buyer's negligence or without the buyer's active participation is disingenuous. That the buyer is now apparently threatening legal action is pitiful.

If the buyer really wants to make things right he would need to persuade the seller to register the correct amount at the land office, ensure the correct amount of tax is paid and advise the home country tax authorities exactly what he has done and how rectified.

Whether the buyer will face any problems in persuading the seller to co-operate or persuading the home and Thai authorities it was all an honest mistake is entirely another matter.

There is of course the additional problem that he will possibly face uncomfortable questions about his company structure and corporate purpose.

Unfortunately I cannot avoid concluding the buyer only has himself to blame for at the very least not anticipating this at the outset and ensuring he was not involved in a criminal enterprise, although it appears he may have been comfortable doing that anyway depending on his company's structure.

[katabeachbum]

I have a friend who recently bought some land here. The (thai) person who sold the land registred a much lower sum at the land office.

There is, however, a seller/buyers agreement with the right amount, signed by borth parties.

He now have to show the tax people at home that his company here have the assets matching his transfers. This by showing the book keeping for his company here.

The auditor in Thailand say he can only use the amount registered at the land office, not the agreement, for his book keeping.

This is also the "value" of the land for tax purposes in Thailand.

Does anyone know if this is correct and if there are any legal text about this in english?

/thomas

Quoting a different price to the land office to what it was sold for is probably illegal - although it is common practice - be careful

Thanks for the quick answer.My friend is on the war path and want to take the sellser to court to get the right amount registred at the land office.

I have a feeling it will be a long procedure and that he could loose the land as he have a company in the purpose of owning land. He also built a house for himself an the land and I am afraid this will go to.

Probably mor cost for this that find a smooth solution?

both buyer and seller sign the price info in land office, so no need to fight. both have broken the law. The thai may be punished, farang gets deported, company gets investigated and money lost

[datathomas]

Benjie is right!

But anyway, you said "The (thai) person who sold the land registred a much lower sum at the land office".

That's simply not possible! You (or "your friend"?) or the representative who acted on your/his behalf has also signed the sale papers (in Thai) at the Land Office.

Now you want to go to court and say "I signed the S&P agreement for a lower amount than the amount I wanted to pay but I did not know; here is the "real" agreement (showing the english one)".

Good luck!

In the best case scenario, you're facing deportation!

Thanks mrgreg!

I am glad I am not part of this.

Now I can tell my friend go get on the person who helped him register at land office.

I guess that should be an interesting discussion