webfact Posted July 31, 2014 Share Posted July 31, 2014 TAXInheritance tax gets NCPO nod Erich Parpart, Somluck Srimalee The NationBANGKOK: -- FOR THE first time in the Kingdom's modern history, Thais who are bequeathed fortunes by their wealthy relatives would have to start paying an inheritance tax under a Finance Ministry proposal that has already been blessed by the ruling National Council of Peace and Order. The ministry also has floated two taxes on real estate and beverages. Permanent secretary Rungson Sriworasat said the ministry had briefed the NCPO about the inheritance tax plan last month. The junta has agreed with this initiative and will send it to the Council of State for legal review. When the NCPO finalises the draft tax bill, the Finance Ministry will table it before the National Legislative Assembly when it comes into existence this year. The inheritance and real-estate tax ideas are not new. The Finance Ministry has bounced them off all governments over the past 10 years because both taxes will ensure fairness for all taxpayers, he said. However, all of the governments, which came from elections, could not pass this act because it would have burdened some people who are landowners and estate recipients. The inheritance tax would be levied on all domestic assets passed down to descendants such as residences, land, cars, stocks and bonds. But it would not be collected from assets overseas. The ministry declined to disclose details such as progressive tax rates. Thailand would become the third country in Asean to adopt an inheritance tax, behind Singapore and the Philippines, and join other Asian countries - India, Japan, South Korea, China and Taiwan. The real-estate tax would be assessed on land and improvements at a rate ranging from 0.05-2 per cent. This means vacant land appraised at Bt10 million would incur a tax bill of Bt5,000 at the tax rate of 0.05 per cent for the first year. As the idle land is held longer, the liability would rise to Bt200,000 a year at a rate of 2 per cent. The owners of residences appraised at Bt1,000,001 would pay a real estate tax of Bt1,000.001 a year. For every Bt1 million in appraised value, the real-estate tax would amount to Bt1,000 a year. Atip Bichanond, director of major residential developer Supalai, said this will impact owners of more undeveloped land, not property developers. However, the Business Housing Association has proposed to the Revenue Department an exemption for residences appraised at not over Bt1 million or occupying not more than 50 square wah of land. "I do not know if the new act has any exemption. If not, that will not be fair to lower-income families," said Atip, who is also president of the association. The new excise tax on beverages is proposed to be imposed according to sugar content, to expand the country's tax base. Source: http://www.nationmultimedia.com/business/Inheritance-tax-gets-NCPO-nod-30239966.html [thenation]2014-08-01[/thenation] Link to comment Share on other sites More sharing options...
Popular Post soundman Posted July 31, 2014 Popular Post Share Posted July 31, 2014 This is great news. Hopefully it will force land speculators who buy land and then just sit on it for generations to actually do something with it or sell it, rather than waiting 30 years for some fool to come and offer 3x market value. This vacant land tax rate should probably be calculated at 5% inside designated metropolitan boundaries. Hopefully this would create a fluid and realistic property market that reflects true value for the landowner rather than a few rich families owning all the good positions. 13 Link to comment Share on other sites More sharing options...
Popular Post Chang_paarp Posted July 31, 2014 Popular Post Share Posted July 31, 2014 Not going to tax overseas assets inherited, guess what this is going to Prompt? Anyone going to promote tax havens or overseas Investments? 5 Link to comment Share on other sites More sharing options...
chooka Posted July 31, 2014 Share Posted July 31, 2014 So how is the Thai happiness meter going now? Looks like the NCPO street parties are over. Link to comment Share on other sites More sharing options...
chooka Posted July 31, 2014 Share Posted July 31, 2014 Not going to tax overseas assets inherited, guess what this is going to Prompt? Anyone going to promote tax havens or overseas Investments? My wife own 3 investments properties in Melbourne (house & Land) so good news for her. Link to comment Share on other sites More sharing options...
Bender Posted July 31, 2014 Share Posted July 31, 2014 they should also implements a farang tax plus a bigger bigger tax for retired farang and a huge one for farang married to bg 2 Link to comment Share on other sites More sharing options...
Thailand Posted July 31, 2014 Share Posted July 31, 2014 (edited) Big business for tax planners. Very simple to mitigate liability. One of the best earners for tax professionals. That said I guess new taxes will be necessary to compensate for loss of income from tourism,construction etc. Honeymoons don't last long. Love the sweetness tax, considering how much sugar is in so many products here. Not going to help the happyness factor though. Edited July 31, 2014 by Thailand Link to comment Share on other sites More sharing options...
hanuman2543 Posted July 31, 2014 Share Posted July 31, 2014 A bitter pill to swallow for some but a long overdue step in the right direction. And a big thumps up for a tax based on sugar content. This has the potential to save many lives. Sent from my i-mobile IQ XA using Thaivisa Connect Thailand mobile app 2 Link to comment Share on other sites More sharing options...
Mmorris Posted July 31, 2014 Share Posted July 31, 2014 So how is the Thai happiness meter going now? With this news, it should go up. See the very sound post that soundman posted earlier as to why. 2 Link to comment Share on other sites More sharing options...
Suriya4 Posted July 31, 2014 Share Posted July 31, 2014 How to get Thaksin money if overseas assets are not tax? I suggest to tax 10% of all overseas assets to promote buy Thai properties. 1 Link to comment Share on other sites More sharing options...
bangkokheat Posted July 31, 2014 Share Posted July 31, 2014 undeveloped land, so after 50 years you pay 100% tax, and if you own it more than 50 years you will owe the tax man at 2% per year, makes sense Link to comment Share on other sites More sharing options...
wolf5370 Posted August 1, 2014 Share Posted August 1, 2014 Does this mean diet coke/pepsi will be 20% cheaper? :) Never a fan or Inheritance Taxes - usually they mean people who paid taxes their whole lives and saved for their children, get taxed again on the same savings. However, here in Thailand, we know most of these really wealthy people paid little taxes and cheated their incomes, so a worthwhile step at least for a generation or two, to level the playing field. "However, the Business Housing Association has proposed to the Revenue Department an exemption for residences appraised at not over Bt1 million or occupying not more than 50 square wah of land." - I agree with that, poor people simply cannot afford to pay taxes on houses they inherited generation after generation, and now suddenly have to pay annual taxes on it. All this should only hit the wealthy with minimum cut offs (except the unused land taxes - which should be universal). Hope they have thought this through though, seems to have many easy outs from this level of info. Easy to keep the land "working" by planting teak trees - there, now its working land, for the next 25 years. That's without anything fancy like moving the land between owners to stop its increase year on year. Gifting away assets in trust to you children rather than using a will to pass it down. And so on. 1 Link to comment Share on other sites More sharing options...
wolf5370 Posted August 1, 2014 Share Posted August 1, 2014 undeveloped land, so after 50 years you pay 100% tax, and if you own it more than 50 years you will owe the tax man at 2% per year, makes sense Quite clearly says 2% maximum - so could never get to 100% 1 Link to comment Share on other sites More sharing options...
smutcakes Posted August 1, 2014 Share Posted August 1, 2014 undeveloped land, so after 50 years you pay 100% tax, and if you own it more than 50 years you will owe the tax man at 2% per year, makes sense I am not sure you are reading it correctly or i am confused: My reading is either two ways, it increases by 0.05% per annum which would mean it would take 40 years to get to 2% payable per annum, but then the 3 year adjustment is irrelevant? Or It is increased by an average of 0.05% every 3 years which would mean it takes about 60 years to even reach 1% I am sure i must be reading it incorrectly. Will the undeveloped land/agriculture tax really hurt any of the large landholders outside city areas? Surely having large swathes of land changed into 'agriculture' whilst holding it would be used to mitigate the undeveloped land tax? I do agree with the taxes, but i am sure for the most part landlords will simply pass the tax cost down to tenants, farmers operating the land. Link to comment Share on other sites More sharing options...
Popular Post Hornell Posted August 1, 2014 Popular Post Share Posted August 1, 2014 It's a pity that they haven't decided to review the taxes on alcohol to bring Lao Khao into line with other spirits. No that might really help to save a few lives! 5 Link to comment Share on other sites More sharing options...
wolf5370 Posted August 1, 2014 Share Posted August 1, 2014 undeveloped land, so after 50 years you pay 100% tax, and if you own it more than 50 years you will owe the tax man at 2% per year, makes sense I am not sure you are reading it correctly or i am confused: My reading is either two ways, it increases by 0.05% per annum which would mean it would take 40 years to get to 2% payable per annum, but then the 3 year adjustment is irrelevant? Or It is increased by an average of 0.05% every 3 years which would mean it takes about 60 years to even reach 1% I am sure i must be reading it incorrectly. Will the undeveloped land/agriculture tax really hurt any of the large landholders outside city areas? Surely having large swathes of land changed into 'agriculture' whilst holding it would be used to mitigate the undeveloped land tax? I do agree with the taxes, but i am sure for the most part landlords will simply pass the tax cost down to tenants, farmers operating the land. I read it as - it starts at 0.05% per year of value - then every 3 years it is amended up by (an average of) 0.05%. Thereby taking 40 raises to reach 2% - 120 years! Seems silly, I would imagine it will change to increase faster at set stages instead, which would make more sense - say 0.05% first 3 years, 0.25% next 3 years, 0.5% next 3 years...so on - assuming the goal is to make them do something quickly with the land. Link to comment Share on other sites More sharing options...
wolf5370 Posted August 1, 2014 Share Posted August 1, 2014 It's a pity that they haven't decided to review the taxes on alcohol to bring Lao Khao into line with other spirits. No that might really help to save a few lives! There are always problems using taxes to try and curb smoking and drinking. It rarely works, other things are cut out instead, like quality food in favour of processed etc. Also, here it is not hard to get illegal Lao Kow, and it would simply become more prevalent - and with no controls as to purity. Link to comment Share on other sites More sharing options...
Popular Post Bluespunk Posted August 1, 2014 Popular Post Share Posted August 1, 2014 (edited) "However, all of the governments, which came from elections, could not pass this act because it would have burdened some people who are landowners and estate recipients." Those people being "burdened" (AKA been obliged to pay their fair share of taxes, any taxes) and those elected at times being one and the same person. Edited August 1, 2014 by Bluespunk 4 Link to comment Share on other sites More sharing options...
BSJ Posted August 1, 2014 Share Posted August 1, 2014 Unless the government thinks it through carefully we could see some well off people shipping money out of country to invest elsewhere......oh yer, some already have! 2 Link to comment Share on other sites More sharing options...
wordchild Posted August 1, 2014 Share Posted August 1, 2014 this article is inaccurate (as per usual for the Nation) in its reference to inheritance tax in Singapore. There is no inheritance tax in Singapore, it was abolished a few years ago. 2 Link to comment Share on other sites More sharing options...
WitawatWatawit Posted August 1, 2014 Share Posted August 1, 2014 Be so much more fun if the inheritance tax was made retroactive. So, what is the govt going to do with this flood of revenue? PS: Well done Mr Atip for mentioning the lower income families. Re my question above, let's just hope more money is spent on raising the quality of life for the poor and giving their kids a real chance to make a decent life for themselves. 1 Link to comment Share on other sites More sharing options...
smutcakes Posted August 1, 2014 Share Posted August 1, 2014 undeveloped land, so after 50 years you pay 100% tax, and if you own it more than 50 years you will owe the tax man at 2% per year, makes sense I am not sure you are reading it correctly or i am confused: My reading is either two ways, it increases by 0.05% per annum which would mean it would take 40 years to get to 2% payable per annum, but then the 3 year adjustment is irrelevant? Or It is increased by an average of 0.05% every 3 years which would mean it takes about 60 years to even reach 1% I am sure i must be reading it incorrectly. Will the undeveloped land/agriculture tax really hurt any of the large landholders outside city areas? Surely having large swathes of land changed into 'agriculture' whilst holding it would be used to mitigate the undeveloped land tax? I do agree with the taxes, but i am sure for the most part landlords will simply pass the tax cost down to tenants, farmers operating the land. I read it as - it starts at 0.05% per year of value - then every 3 years it is amended up by (an average of) 0.05%. Thereby taking 40 raises to reach 2% - 120 years! Seems silly, I would imagine it will change to increase faster at set stages instead, which would make more sense - say 0.05% first 3 years, 0.25% next 3 years, 0.5% next 3 years...so on - assuming the goal is to make them do something quickly with the land. Thinking more, it may mean it is adjusted 0.05% per annum, but the value is reassessed every 3 years? Link to comment Share on other sites More sharing options...
Popular Post robblok Posted August 1, 2014 Popular Post Share Posted August 1, 2014 It seems the junta is serious about taxing the rich if this goes on many have to eat their words that the junta is there for the elite. I myself think its great they broaden the tax base. I hope the middle class gets some tax breaks as they are usually the ones paying salary tax and the real rich not. 3 Link to comment Share on other sites More sharing options...
SoilSpoil Posted August 1, 2014 Share Posted August 1, 2014 This means that every middle class property owner is gonna pay a couple thousand a year. The fleecing of the middle class continues as even 1 bedroom condos in Bangkok are going for at least 1 million baht these days. Those who own 10 million homes or have hundreds rai of land won't worry that much, but your average hard working family will. If the junta introduces this tax scheme overnight, it will be pure thievery. Link to comment Share on other sites More sharing options...
wolf5370 Posted August 1, 2014 Share Posted August 1, 2014 This means that every middle class property owner is gonna pay a couple thousand a year. The fleecing of the middle class continues as even 1 bedroom condos in Bangkok are going for at least 1 million baht these days. Those who own 10 million homes or have hundreds rai of land won't worry that much, but your average hard working family will. If the junta introduces this tax scheme overnight, it will be pure thievery. Yes, and the question is what happens if/when people are unable to pay? Arrest and imprisonment? Eviction? Homes that have been lived in for generations could easily hit a million, with land - a strip of grass jammed between two buildings near me is currently up for almost twice that and I doubt you could get more than a small garage on it (and no drive - red/white curb - so even then you're scuppered). Link to comment Share on other sites More sharing options...
h90 Posted August 1, 2014 Share Posted August 1, 2014 This is great news. Hopefully it will force land speculators who buy land and then just sit on it for generations to actually do something with it or sell it, rather than waiting 30 years for some fool to come and offer 3x market value. This vacant land tax rate should probably be calculated at 5% inside designated metropolitan boundaries. Hopefully this would create a fluid and realistic property market that reflects true value for the landowner rather than a few rich families owning all the good positions. but the fruit juice ideas are rather strange. 50 % tax if I mix Orange juice with soda water? Link to comment Share on other sites More sharing options...
robblok Posted August 1, 2014 Share Posted August 1, 2014 This means that every middle class property owner is gonna pay a couple thousand a year. The fleecing of the middle class continues as even 1 bedroom condos in Bangkok are going for at least 1 million baht these days. Those who own 10 million homes or have hundreds rai of land won't worry that much, but your average hard working family will. If the junta introduces this tax scheme overnight, it will be pure thievery. Its a 1000 bt per million a year hardly a probem for the middle class Sent from my SM-G900F using Thaivisa Connect Thailand mobile app 2 Link to comment Share on other sites More sharing options...
smutcakes Posted August 1, 2014 Share Posted August 1, 2014 This means that every middle class property owner is gonna pay a couple thousand a year. The fleecing of the middle class continues as even 1 bedroom condos in Bangkok are going for at least 1 million baht these days. Those who own 10 million homes or have hundreds rai of land won't worry that much, but your average hard working family will. If the junta introduces this tax scheme overnight, it will be pure thievery. Yes, and the question is what happens if/when people are unable to pay? Arrest and imprisonment? Eviction? Homes that have been lived in for generations could easily hit a million, with land - a strip of grass jammed between two buildings near me is currently up for almost twice that and I doubt you could get more than a small garage on it (and no drive - red/white curb - so even then you're scuppered). Another interesting point. All over areas of prime Bangkok there are families people who have resisted the urge to sell their prime land to developers and live in the shadows of shiny new blocks. I suspect some (not all) have very little money at all, but obviously have a very valuable asset under their feet. The value of the land would probably be huge, and they would have no way of paying the tax, leaving little option but to sell to the developers...... hopefully there is some clauses which may relate to the tax not being payable on a families primary residence or alike, with the aim to target more on those with multiple abodes for renting out. 2 Link to comment Share on other sites More sharing options...
SoilSpoil Posted August 1, 2014 Share Posted August 1, 2014 This means that every middle class property owner is gonna pay a couple thousand a year. The fleecing of the middle class continues as even 1 bedroom condos in Bangkok are going for at least 1 million baht these days. Those who own 10 million homes or have hundreds rai of land won't worry that much, but your average hard working family will. If the junta introduces this tax scheme overnight, it will be pure thievery. Its a 1000 bt per million a year hardly a probem for the middle class Sent from my SM-G900F using Thaivisa Connect Thailand mobile app Mind you, but the lower and middle class families in Thailand are struggling to make ends meet these days. Household debts and credit card debts are soaring. Prices of gas, electricity, (poor) education, healthy food are higher than ever, so yes every 1000 baht is tough for a lot of people. Link to comment Share on other sites More sharing options...
robblok Posted August 1, 2014 Share Posted August 1, 2014 This means that every middle class property owner is gonna pay a couple thousand a year. The fleecing of the middle class continues as even 1 bedroom condos in Bangkok are going for at least 1 million baht these days. Those who own 10 million homes or have hundreds rai of land won't worry that much, but your average hard working family will. If the junta introduces this tax scheme overnight, it will be pure thievery. Its a 1000 bt per million a year hardly a probem for the middle class Sent from my SM-G900F using Thaivisa Connect Thailand mobile app Mind you, but the lower and middle class families in Thailand are struggling to make ends meet these days. Household debts and credit card debts are soaring. Prices of gas, electricity, (poor) education, healthy food are higher than ever, so yes every 1000 baht is tough for a lot of people. Middle class wont have a problem with this and lower class is almost exempt. They could have upped the value of houses to 2 million or so to be sure but otherwise I think this is great. I hate taxes but Thailand needed this the middle class salary workers were paying it all while the real rich did not. The poor were getting all the money from the middle class instead of from the rich. The percentages should have been higher and the threshold higher too to get the rich harder but still this is a major step ahead and a true sign the junta is not here for the rich as they are hit hardest. The junta is really doing what needs be done.. no political party would have done this as all they were doing was spending money on popular policies and not increasing the tax base. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now