Bought House In Company Name 8 Years Ago And Just Sold Private. Taxes!

[khunian]

In 2005 bought a villa for 5.3 m. Invested a further 2.0 m to upgrade etc., but of course Thai style with no receipts.

Just sold March 2013 for 7.5 m to a Thai private person less taxes, real estate commission, lawyer transfer fees etc., so almost got my money back.

However... what my lawyer and real estate company failed to tell me was that the value of the house depreciates annually meaning although there was no profit - there was on paper meaning for 2013 I would have to pay about a million Baht. (On top of the 365.000 SBT and Corporate Tax already paid at the land office)

I was recommended by 2 good friends (Thai) to walk away and let the company sleep and after 3 years it will be struck off the register as I am no longer doing any business with Thailand.

However my solicitor warns in doing so, I will be blacklisted and not allowed to return to the Kingdom.

I have firstly decided to sign off the balance sheets for 2012 to give me a years time to make up my mind. Who might have any suggestions how to reduce the theoretical profit or what might happen if i do nothing at all?

This thread might also serve as a warning to anyone who bought through a company and wishes to sell privately years later. I certainly would never had sold if I had been aware of the above.

[Sunbelt Asia]

If the company could make losses (generating more justifiable company expenses) then it would be possible to offset the profit, then the taxes paid to the Land office could be used as tax credit. This must be done before the end of 2013, otherwise by May of 2014, you will have to record this as tax being paid in 2013.

Eventually, the company may be able to get this (partially) back as tax credit. The Seller’s income tax paid at the land office is calculated from the selling price, while taxes paid in the annual audit are based on profits.

We don't recommend that you abandon your company, your solicitor is correct; it will result in fines and it could result in blacklisting.

[sunbeltlegal][/sunbeltlegal]