Tougher Thai inheritance tax laws to be applied against the wealthy

[webfact]

Tougher inheritance tax laws to be applied against the wealthy

BANGKOK, 19 September 2014 (NNT) - Finance Minister Sommai Phasee stated that a proposal has been made to extend the inheritance tax against people who have transferred their assets to their beneficiaries two years before their death.

According to the Finance Minister, any beneficiary who is entitled to inherit assets and property two years before their benefactor’s death would be required to pay the tax in a bid to prevent inheritance tax evasion.

Inheritance assets such as property, savings, stocks, and real estate must all be declared in advance so that the taxes can be properly calculated.

Mr. Sommai, however, firmly believes that the new inheritance tax laws are considerably lax since the tax rate is only fixed at 10 percent compared to some countries that charge a higher rate. He also said that anybody whose combined assets and wealth are valued lesser than 50 million baht would be exempt from paying the tax.

Nonetheless, Mr. Sommai declared that those who avoid the inheritance tax are susceptible to receive a jail sentence up to 6 months. The law is expected to take effect at least a year from now after careful considerations have been made.


-- NNT 2014-09-19

[Snig27]

The rich tend to have their money either offshore or in various other entities and it's untouched by such laws, which, if experience elsewhere offers any evidence, hits the middle class and costs the economy more than it gathers in.

[JoePai]

Would not think it would harm the middle class as : anybody whose combined assets and wealth are valued lesser than 50 million baht would be exempt from paying the tax.

[FangFerang]

"The law is expected to take effect at least a year from now after careful considerations have been made."

Translated: Once there are loopholes in place that are not obvious (like selling assets to grantees, oh say 100 million baht homes for 100 baht) the law will be finalized and in full non-force.

[Obb]

Thailand, and all similar nations where the rich own and control everything and there is a huge impoverished population, should implement LUXURY TAXES.

[Gunna]

Thailand, and all similar nations where the rich own and control everything and there is a huge impoverished population, should implement LUXURY TAXES.

And then the rich will buy even more while overseas and tourists will buy less while shopping here . Maybe VAT to 10% on non essential goods would help.

[Obb]

Thailand, and all similar nations where the rich own and control everything and there is a huge impoverished population, should implement LUXURY TAXES.

And then the rich will buy even more while overseas and tourists will buy less while shopping here . Maybe VAT to 10% on non essential goods would help.

Uhhh, no, no, and no.

There will be duties payable on purchases made abroad. (And how many stinkin' XL size SUVs, luxury houses, 4th Thailand residences, Jacuzzis and so forth do you really think the disgusting Thai elite will be buying "overseas"?)

The luxury tax would be refundable for non-Thais.

And a VAT increase on "non-essential goods" is just a form of LUXURY TAX. A bad one, but still of the same family.

Edited September 19, 2014 by Obb

[Thailand]

A lucrative business in the offing for tax planners.

[rubl]

Only in Thailand the topic title would be "against the wealthy" whereas in lots of countries it would be "applied to all" or just simple "applied"

BTW for all those emitting negative waves, such "property and inheritance laws' were prepared also by a previous appointed government, the Surayut government that is. PM Surayut dropped the laws as he was convinced by some that such important laws should only be introduced by an 'elected' government. That was seven years ago

Edited September 19, 2014 by rubl

[Robby nz]

Only in Thailand the topic title would be "against the wealthy" whereas in lots of countries it would be "applied to all" or just simple "applied"

BTW for all those emitting negative waves, such "property and inheritance laws' were prepared also by a previous appointed government, the Surayut government that is. PM Surayut dropped the laws as he was convinced by some that such important laws should only be introduced by an 'elected' government. That was seven years ago

Twice actually Rubi.

Both times enacted by military Govts after a coup and both times dumped by the next elected.... guess whose, proxy Govt.

[salavan]

"any beneficary who is entitled to inherit assets and property two years before their benefactor's death would be required to pay the tax" ok no problem so how about 2 years and 6 month's or say 2 years and 1 month

[Triplebank999]

"any beneficary who is entitled to inherit assets and property two years before their benefactor's death would be required to pay the tax" ok no problem so how about 2 years and 6 month's or say 2 years and 1 month

Under the proposed legislation that wold be ok, there has to be a cut-off somewhere but it's academic anyway as no-one knows exactly when they're going to die, do they? It's not something that is easily planned for.

Edited September 19, 2014 by Triplebank999

[Lukecan]

This law is a joke.

There are 70 thousand dollar millionares in Thailand

50 million baht makes how much? 1.5 million $

Only 40-50k people will be affected

Thats like less than top %0.1, forget 1%

[rickirs]

I give Thailand an "A" for effort and a "D" for legislation. Its proposed inheritance tax is simply naive and juvenile. Its few mechanics are poorly thought out - leaves a lot of legal tax evasion opportunities, and lacks any kind of tax evasion detection. When you read through the various inheritance, estate, and gift tax laws in other modern countries (ie., "International Estate and Inheritance Tax Guide 2013" by Ernst & Young that covers 40 Western and Asian countries) you will find they have very comprehensive taxation laws and detection systems in place.

The proposed law seems to have been created from scratch without regards to knowledge of practices of similar laws in any other country. Rather than taking the next 10 years to fix legislation, why not start with good legislation from the start? At least have the International taxation community review and comment of the proposed legislation, especially since Thailand must develop inheritance tax treaties with other countries as part of its detection and assessment program. Inheritance, estate, and gift taxes are "Big Boy" forms of government revenue sources. Thailand needs get it right early on or carry the stigma of being just another emerging economy.

[BSJ]

"He also said that anybody whose combined assets and wealth are valued lesser than 50 million baht would be exempt from paying the tax." Setting the bar a bit high I think....unless they don't want to collect much in tax.

"Nonetheless, Mr. Sommai declared that those who avoid the inheritance tax are susceptible to receive a jail sentence up to 6 months." What beneficiary has much say over the wording of the will? It's more likely the deceased would be responsible for avoiding tax.

[CaptHaddock]

I don't expect the inheritance tax ever to take effect. The proposal is part of the junta's current show of even-handedness, all of which will evaporate in due time leaving the burden of so-called "reforms" substantially on the poor. Even Abhisit tried to implement an inheritance tax and didn't get away with it. The rich haven't gone away and can be presumed to have considerable clout in post-coup Thailand.

Edited September 20, 2014 by CaptHaddock

[Luxfare]

Inheritance tax regardless of the family estate is simply legal theft, if a family has earned their wealth legally and have paid the legal taxes all their life to then take a cut after their death is nothing short of robbing the dead. The super wealthy should be taxed higher but leave them alone once they pass.

[rubl]

I give Thailand an "A" for effort and a "D" for legislation. Its proposed inheritance tax is simply naive and juvenile. Its few mechanics are poorly thought out - leaves a lot of legal tax evasion opportunities, and lacks any kind of tax evasion detection. When you read through the various inheritance, estate, and gift tax laws in other modern countries (ie., "International Estate and Inheritance Tax Guide 2013" by Ernst & Young that covers 40 Western and Asian countries) you will find they have very comprehensive taxation laws and detection systems in place.

The proposed law seems to have been created from scratch without regards to knowledge of practices of similar laws in any other country. Rather than taking the next 10 years to fix legislation, why not start with good legislation from the start? At least have the International taxation community review and comment of the proposed legislation, especially since Thailand must develop inheritance tax treaties with other countries as part of its detection and assessment program. Inheritance, estate, and gift taxes are "Big Boy" forms of government revenue sources. Thailand needs get it right early on or carry the stigma of being just another emerging economy.

The NLA only has one year and last time an appointed government tried to implement "property and inheritance laws" they were told that such important legislation should be handled by an elected government only and they consequently dropped the matter. That was seven years ago.

Now, of course, if you think the NLA should carefully consider matters and only when it's right and acceptable by you, you might implicitly accept they stay on a wee bit longer as well.

[Time Traveller]

Inheritance tax regardless of the family estate is simply legal theft, if a family has earned their wealth legally and have paid the legal taxes all their life to then take a cut after their death is nothing short of robbing the dead. The super wealthy should be taxed higher but leave them alone once they pass.

I agree with this in principle, but the idea is to avoid people who are like legacy generations. Ultimately, this may be fair in other countries, in Thailand there are individuals who are exempt from all income taxes. These also happen to be the same people who would have the highest inheritence tax bill if it was applied equally. So no it's not a fair tax for thailand.

[Time Traveller]

deleted double post

Edited September 20, 2014 by Time Traveller

[Geordie59]

In the UK inheritance tax has been around for ever. I have never been able to work out why, if you have paid all due taxes while accumulating your wealth, you should then have to pay another 40% tax on your assets when you die.

The tax will mostly uncollectable in Thailand.

It would be far better to get the rich to pay while they are still alive and close the loopholes and under the table deals that are done annually when tax declaration time comes around.

[Geordie59]

In the UK inheritance tax has been around for ever. I have never been able to work out why, if you have paid all due taxes while accumulating your wealth, you should then have to pay another 40% tax on your assets when you die.

The tax will mostly uncollectable in Thailand.

It would be far better to get the rich to pay while they are still alive and close the loopholes and under the table deals that are done annually when tax declaration time comes around.

[brfsa2]

This law is a joke.

There are 70 thousand dollar millionares in Thailand

50 million baht makes how much? 1.5 million $

Only 40-50k people will be affected

Thats like less than top %0.1, forget 1%

yes, but that 0.1% owns at least 50% of Thailand wealth,.

and only 50M Baht? there will always be a way to overcome that, just declare the 200M houses as 50M. no problem.

Thailand it's ridiculous useless laws... well at lest they are trying.

[whatproblem]

It's a start in the right direction ,little steps forward are better than nothing

[Boss]

The rich tend to have their money either offshore or in various other entities and it's untouched by such laws, which, if experience elsewhere offers any evidence, hits the middle class and costs the economy more than it gathers in.

Only partly true. The big land- and property owners can hardly move their assets off shore

[impulse]

In the UK inheritance tax has been around for ever. I have never been able to work out why, if you have paid all due taxes while accumulating your wealth, you should then have to pay another 40% tax on your assets when you die.

You may have worked and paid taxes your entire life. Your kids haven't.

You don't have to pay inheritance tax. Your kids do.

Inheritance taxes bring us just a tiny little closer to the concept that "All men are created equal".

My opinion (not that it matters)- once you've left your kids all the money they will reasonably need in their lifetime, anything above that should be redistributed to the public good. Maybe if that were the case, we wouldn't see dynasties hoarding billions of dollars for generation after generation, while other families' kids are born into abject poverty and hunger- into a world of shrinking opportunities and horrible income and wealth disparity.

How the politicians spend it is a big issue, but a different issue.

Edited September 20, 2014 by impulse

[Geordie59]

In the UK inheritance tax has been around for ever. I have never been able to work out why, if you have paid all due taxes while accumulating your wealth, you should then have to pay another 40% tax on your assets when you die.

You may have worked and paid taxes your entire life. Your kids haven't.

You don't have to pay inheritance tax. Your kids do.

Inheritance taxes bring us just a tiny little closer to the concept that "All men are created equal".

My opinion (not that it matters)- once you've left your kids all the money they will reasonably need in their lifetime, anything above that should be redistributed to the public good. Maybe if that were the case, we wouldn't see dynasties hoarding billions of dollars for generation after generation, while other families' kids are born into abject poverty and hunger- into a world of shrinking opportunities and horrible income and wealth disparity.

How the politicians spend it is a big issue, but a different issue.

We are encouraged to save for our old age, then if we die ahead of expectation we are taxed on what is left over.

Most people as they get older live their lives and work for the benefit of their children to a great extent. That being the case why should they have to pay inheritance tax if they happen to die younger than expected.

If countries could get corporations to pay similar levels of tax as individuals do we could all get a 50% cut in taxation rates and governments would still have loads to squander on themselves and their follies.

[belg]

take from the rich and give to the .... politicians ... not the poor

that is what really happens since day 1

what is a farang with some capital dies... let's say he had 50.000.000 baht ... they will ask the thai widows to caugh up 5 million instantly ?

the farang can also have children in his home country that want their share ... and there it will be taxed again ?

[rickirs]

" ... people who have transferred their assets to their beneficiaries two years before their death ..."

Can't these transfer events be better handled with a GIFT TAX against the doner at the time of the transfer? Administration of the tax is manaegable in real time and not two years after the fact. And make the Gift tax rate 40% that will likely discourage many gifts from being made when the asset would only be taxed later at 10% as an inheritance tax.

[Thanet]

"will be"

"after careful consideration"

Yeah, right.