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[alfabravo]

Hi: I am a new to Thailand and Phuket. I bought a hotel lease in the end of April 2013 in Phuket. Formed a company and become director of the company in end of May. Unfortunately the lawyer I hired screwed me and messed up my case very well. Applied for work permit in May but still dont have it. I was supposed to get my lawyer company services for accounting but decided against it, the way she handled my cases. I was stuck up with work permit and other issues till now, and I have not hired the accounting firm yet. This I am going to do in coming week. However I have queries regarding my tax liabilities for me and company. Last week the Revenue department came to the hotel asking about 3% tax, and I have to report them back.

My questions are:

1. I am on Non Immigrant B visa but dont have work permit so I assume, I dont have to pay any tax.

2. When I pay hotel rent to the owner on quarterly basis, do I have to pay any tax to the government also? It is my expense and income of the owner. What tax is it called and how much %?

3. In my contract, it is written that Hotel Property Tax will be shared half half between owner and lessee. When do I have pay this tax?

4. Since it is a new company, I think I dont have to pay corporate tax yet.

5. Any other tax that I have to pay.

Thanks for you help in advance.

[lemoncake]

Mate, get an accountant yesterday, you are in real mess.

With rent, you suppose to pay withholding tax.

Not really sure what the 3% is for.

If you do not have WP you are not working, however business is.

The withholding tax that you talking about being shared is paid monthly(not sure if could be changed to quarterly)

Without knowing your full details, its hard to give you more accurate or in depth answers, but you really need a good accountant.

You will not be able to get WP by yourself,, you would need law firm or accountant to do some magic, because its a new company, not so easy to get WP.

[FritsSikkink]

Next time do everything in the right order:

1. Do your research and ask a lot of questions
2. Get a lawyer and form a company and sort out your work permit
3. Get an accountant.
4. Buy a lease.

For now get an accountant and a good lawyer.

Edited July 6, 2013 by FritsSikkink

[monty]

There are several taxes involved when renting/leasing a commercial building and running it as a hotel.

1) HLT tax (House and land tax), 12,5% of the yearly rental/lease revenue, to be paid by the building/land owner to the local municipality.

2) 5% withholding tax on the rent, to be paid by the payer of the rent (much like an employer has to pay withholding tax on his staff's salary). As this is actually a down payment on the income tax of the building owner, it is often contractually agreed that the building owner should pay this (or can be subtracted from rent due).

3) Hotel tax. This is a provincial tax, to be paid by the hotel operator, and can be maximum 3% of actual room rates received. The percentage is free to be chosen by the province but capped at 3%. Paid monthly on exact occupancy/room revenue. This tax is legally allowed to be charged to the customer, although I doubt many hotels do this!

4) Income tax of the company operating the resort (yearly or every half year, with the required monthly withholding taxes if applicable).

5) VAT (monthly). VAT registration required if the business turns over more then 1.8 million/year,or anyway needed if employing a foreigner (required to apply for WP).

6) Personal income tax if you are working for your own company, monthly withholding tax of minimum 5%. In your case paid by your own company as being your employer!

I am not sure which department came by asking for 3% (and of what), the revenue department can collect 3% withholding tax on "services and professional fees",not sure hotel revenues fall under that description. When I was running a resort we never paid withholding tax on business revenue to the revenue department, but did pay all the other above mentioned taxes. We did pay withholding taxes on salaries etc when required.

[lemoncake]

There are several taxes involved when renting/leasing a commercial building and running it as a hotel.

1) HLT tax (House and land tax), 12,5% of the yearly rental/lease revenue, to be paid by the building/land owner to the local municipality.

2) 5% withholding tax on the rent, to be paid by the payer of the rent (much like an employer has to pay withholding tax on his staff's salary). As this is actually a down payment on the income tax of the building owner, it is often contractually agreed that the building owner should pay this (or can be subtracted from rent due).

3) Hotel tax. This is a provincial tax, to be paid by the hotel operator, and can be maximum 3% of actual room rates received. The percentage is free to be chosen by the province but capped at 3%. Paid monthly on exact occupancy/room revenue. This tax is legally allowed to be charged to the customer, although I doubt many hotels do this!

4) Income tax of the company operating the resort (yearly or every half year, with the required monthly withholding taxes).

5) VAT (monthly). VAT registration required if the business turns over more then 1.8 million/year,or anyway needed if employing a foreigner (required to apply for WP).

6) Personal income tax if you are working for your own company, monthly withholding tax of minimum 5%.

I am not sure which department came by asking for 3% (and of what), the revenue department can collect 3% withholding tax on "services and professional fees",not sure hotel revenues fall under that description. When I was running a resort we never paid withholding tax on business revenue to the revenue department, but did pay all the other above mentioned taxes. We did pay withholding taxes on salaries etc when required.

Agree, though i do not believe i ever paid the 3% hotel tax.

OP story is very confusing and i am not sure if lawyer has screwed something up, or OP is confused about things.

HLT is paid ONLY if the lease is registered with the land office, i think the half/half is this tax, but unsure if lease is registered.

Always pays to have all paperwork in order and to have an accounting team at hand to make sure all is above the board.

With me, i do not even speak with the revenue department when they come around. I call accountant and let her talk with them to avoid any "misunderstanding"

[monty]

HLT has to be paid by everybody who uses a building commercially.

It is 12.5% on the estimated or actual value of the revenue the building generates. This has to be declared to your local administration, registered lease or not.

In my case we owned the land/building, and operated the resort ourselves, so the HLT was based on a (heavily negotiated) average occupancy/roomrate. No lease at all involved.

Hotel tax only has to be paid if you are actually registered as a hotel, guesthouses for example are exempt.

In Pattaya the Chonburi hotel tax department has a dedicated office in the soi just before the main highway police office on Sukhumvit.

We never paid this (same problem, accountant was not aware), they eventually found our place and we had to pay back tax for 2 full years.

After that they were very easy, we paid a fixed amount/month, no detailed reporting required.

Sent from my GT-I9001 using Thaivisa Connect Thailand mobile app

[lemoncake]

HLT has to be paid by everybody who uses a building commercially.

It is 12.5% on the estimated or actual value of the revenue the building generates. This has to be declared to your local administration, registered lease or not.

In my case we owned the land/building, and operated the resort ourselves, so the HLT was based on a (heavily negotiated) average occupancy/roomrate. No lease at all involved.

Hotel tax only has to be paid if you are actually registered as a hotel, guesthouses for example are exempt.

In Pattaya the Chonburi hotel tax department has a dedicated office in the soi just before the main highway police office on Sukhumvit.

We never paid this (same problem, accountant was not aware), they eventually found our place and we had to pay back tax for 2 full years.

After that they were very easy, we paid a fixed amount/month, no detailed reporting required.

Sent from my GT-I9001 using Thaivisa Connect Thailand mobile app

I lease the building and to the best of my knowledge never had to pay HLT tax. Already had 3 visits from the revenue department and no problems there.

[monty]

Nothing to do with the revenue department. This is a tax which is collected by the local administration (Or Bor Toh).

Who needs to pay?

If you own real estate in Thailand that has been used in the last year for commercial purposes, including a holiday house or unit, you may be liable to fi le a return for house and land tax (HLT).

What property is exempt?

A number of exemptions are provided under the law. Where the property is used by the owner as their place of residence, then it shall be exempt from HLT under Section 10 of the HLT Act. An exemption is also provided under this Section if a representative of the owner resides in the building to take care of it and the building is not used for storing goods or for a commercial purpose.

How much do I have to pay?

HLT shall be calculated on the yearly rent received for the property. If the property is not rented out e.g. the owner uses it in his business, an assessed rental value shall be determined instead. A reduction of the rental value may be requested in certain circumstances e.g. the property has been vacant, it has been damaged or is in a serious state of disrepair.

What are the fi ling requirements?

Persons liable to HLT shall submit Form Por.Ror.Dor.2 at the District offi ce or Sub-district Administrative Organization where the property is located within the end of February. For new properties, supporting documents should also be provided, for example, title deed of the property, sale and purchase agreement, lease agreement, construction permit, house registration, map of the property etc.

A tax assessment shall then be issued and shall be payable within 30 days from the date of receiving the assessment. Surcharges apply for late payment.

[monty]

The local district is often under staffed for actually going out trying to find commercial buildings not yet paying their dues.

Hence why many people get away for a fairly long time without paying.

But sooner or later they will come round, and then the fines and back taxes can become a rather scary hefty amount!

And it is the building owner who is responsible, not the person renting or leasing the building!

[lemoncake]

The local district is often under staffed for actually going out trying to find commercial buildings not yet paying their dues.

Hence why many people get away for a fairly long time without paying.

But sooner or later they will come round, and then the fines and back taxes can become a rather scary hefty amount!

And it is the building owner who is responsible, not the person renting or leasing the building!

That is what i thought, the owner of the building liable to pay, hence why, i have not been paying or approached to pay

[alfabravo]

THANK YOU ALL FOR VERY USEFUL INFORMATION. i

[asteven]

Hey there,

I was in the same situation in bangkok a year ago.

It is best to get an accounting firm that charges 12,000 baht monthly and let them handle it.

Need any contact info let me know.?

[lemoncake]

Hey there,

I was in the same situation in bangkok a year ago.

It is best to get an accounting firm that charges 12,000 baht monthly and let them handle it.

Need any contact info let me know.?

12000??? I think you are being ripped off, I pay 4000 monthly and it seems to be the going rate unless something really complicated or large co