Thai Rental Property Income

[Chunkton]

Sorry if this has been covered before. If you own investment property in Thailand that earns you rental income what are the tax implications, and is it regarded as working when you don't have a work permit? I asked a Thai accountant but didn't get any sensible answer. I know it goes on quite a bit undeclared but just wanted to know the legalities. Thanks in advance.

[chuenjit]

How do you own the property ? If it it through a company your accountant will do the normal tac returns and you will pay tax on any earnings .

[Chunkton]

How do you own the property ? If it it through a company your accountant will do the normal tac returns and you will pay tax on any earnings .

I have a couple of condos, may keep them and rent them, or wait a while and sell when the market improves. Had a company, work permit etc, but don't need any more so closed it. The accountant I think was really a book keeper and doesn't really know much.

[trogers]

This means you already had paid taxes and have a tax number.

Just pay 5% of the rents collected by the 7th day of every following month using your tax number, and then do an annual income tax assessment and pay any outstanding income taxes based on your total annual income by end March, ie. the total tax you should pay less the total of 5% paid by you every month.

You do not need a work permit to make investments and have returns from your investments.

Edited July 19, 2009 by trogers

[Chunkton]

This means you already had paid taxes and have a tax number.

Just pay 5% of the rents collected by the 7th day of every following month using your tax number, and then do an annual income tax assessment and pay any outstanding income taxes based on your total annual income by end March, ie. the total tax you should pay less the total of 5% paid by you every month.

You do not need a work permit to make investments and have returns from your investments.

Thanks for that, 5% isn't much to stay legal.

[chiangmaibruce]

You do not need a work permit to make investments and have returns from your investments.

t, obviously there is a line somewhere between "making an investment" and doing work as per the definition the Thai agencies use. i would be curious to know if you have come across anything in writing that clarifies that point (amd can provide details). I have seen this clearly written in the case of Malaysia (refer the Malaysia: My 2nd home web site), but never in Thailand.

Oh I lie actually, I have seen it stated in a personal email I received from the Thailand Elite card people (no, i'm not a member) but never in a truly official source or court proceedings.

You will recall the TV thread about the guy in phuket who was on the management committee for some condos he owned - and got charged for no work permit (haven't heard what the eventual outcome was there). But there I guess there was a further degree of involvement in the investment.

[trogers]

You do not need a work permit to make investments and have returns from your investments.

t, obviously there is a line somewhere between "making an investment" and doing work as per the definition the Thai agencies use. i would be curious to know if you have come across anything in writing that clarifies that point (amd can provide details). I have seen this clearly written in the case of Malaysia (refer the Malaysia: My 2nd home web site), but never in Thailand.

Oh I lie actually, I have seen it stated in a personal email I received from the Thailand Elite card people (no, i'm not a member) but never in a truly official source or court proceedings.

You will recall the TV thread about the guy in phuket who was on the management committee for some condos he owned - and got charged for no work permit (haven't heard what the eventual outcome was there). But there I guess there was a further degree of involvement in the investment.

I use housing agents to secure tenants for all my condo units (3 at this time) and they act as witnesses in the lease agreements as well.

If my units need maintenance, I have my contractor take care of it.

I also have my regular cleaner to upkeep the units during vacant periods.

Thus, I am purely a landlord leasing out my condo units for rental income. No work permit required, though I do have a work permit from my consultancy company.

[katabeachbum]

This means you already had paid taxes and have a tax number.

Just pay 5% of the rents collected by the 7th day of every following month using your tax number, and then do an annual income tax assessment and pay any outstanding income taxes based on your total annual income by end March, ie. the total tax you should pay less the total of 5% paid by you every month.

You do not need a work permit to make investments and have returns from your investments.

Thanks for that, 5% isn't much to stay legal.

There is also a 12,5 % rental tax to the local tessabaan which most people dont pay.

[Chunkton]

Thanks everyone for the comments, had actually expected more people affected by this, but guess not as common as I thought.

I don't live in Bangkok, so accurate legal advice difficult. I gather though that pay the tax and you are at least dealing with government departments honestly and should be viewed as someone trying to do the right thing as opposed to someone just operating in the black economy. Generally most governments are happy if collecting tax.

[trogers]

This means you already had paid taxes and have a tax number.

Just pay 5% of the rents collected by the 7th day of every following month using your tax number, and then do an annual income tax assessment and pay any outstanding income taxes based on your total annual income by end March, ie. the total tax you should pay less the total of 5% paid by you every month.

You do not need a work permit to make investments and have returns from your investments.

Thanks for that, 5% isn't much to stay legal.

There is also a 12,5 % rental tax to the local tessabaan which most people dont pay.

This 12.5% is property tax levied on assessed annual rental value, and should be paid annually. This tax law was effected over 70 years ago. Problem is, local authorities have no department and no standard methods to make assessments, nor to enforce collection. Thus, most people don't pay.

But new property tax structures are been reviewed by the government that will replace this 12.5%.

Edited July 21, 2009 by trogers