NLA passes first inheritance tax bill

[Lite Beer]

THRESHOLD RAISED TO BT100M
NLA passes first inheritance tax bill
ERICH PARPART
THE NATION

BANGKOK: -- Assembly backs levy 145-5 after threshold raised to Bt100m, minimum rate dropped to 5%, as sommai lauds bid to decrease inequality

Thailand is about to join a host of other countries in levying a tax on inheritances in a bid to improve income redistribution, even though critics question whether the tax will be effective.

This country will be the fifth Asean nation to introduce such a law after Singapore, Philippines, Vietnam and Malaysia. Singapore and Malaysia, however, subsequently stopped collecting inheritance taxes.

Other Asian countries that levy such a tax include Japan, South Korea and Taiwan.

The National Legislative Assembly passed the bill in its third reading with 145-5 votes, while 10 others abstained.

The government yesterday agreed to soften the controversial inheritance tax bill by not opposing the National Legislative Assembly's request to cut the tax rate to 5 per cent and raise the threshold to Bt100 million when the NLA vetted the bill. Some people will be hit with a 10-per-cent rate.

Finance Minister Sommai Phasee said Cabinet had endorsed the NLA special committee's request to lower the rate from 10 per cent and increase the threshold from Bt50 million during the bill's second reading yesterday.

Philippines' inheritance tax rate is between 5 and 20 per cent while Vietnam has a flat rate of 10 per cent.

In Thailand, the second reading also resulted in changes to the date that the law comes into effect.

An "inheritance tax commission", to be headed by the finance minister, agreed with the special committee's proposal to extend the launch date from 90 days to 180 days after it is announced in the Royal Gazette.

The law was expected to come into effect at the beginning of 2016 before the changes to the date.

The main reason for the extension is to allow more time for the inheritance tax commission to finalise details.

"The tax commission has agreed with some of the changes that were requested by the NLA's special committee and the Cabinet does not have any objections regarding the changes that have been made," Sommai said.

"The reason for the inheritance tax is very clear - it is to lower inequity by taxing the wealth of the rich to increase the income of the country so that more funds can be allocated to improve the living quality of the poor.

"The government has agreed to raise the threshold to Bt100 million and lower the rate from 10 per cent to the 5-and-10-per-cent model to make the tax less harsh, and we will stick with this latest draft," he added.

The inheritance tax will be levied on people who inherit assets. It will not apply to overseas assets.

The 5-per-cent rate will apply only to offspring, with relatives and anyone else who inherit assets subject to the 10-per-cent rate.

"I know there are many ways to avoid paying the tax but the reason the law is made simple by not including small details that have been requested by the NLA's special committee is that we wanted to lower the cost of collection, and make it easier for the Revenue Department to collect the tax," Sommai said.

During the second reading, NLA members Sunthorn Khakomkul and Woraphol Soktiyanurak said they were worried the law might affect small farmers who had less than 25 rai (4 hectares) and small businesses in Bangkok.

They requested that those two groups be exempt from paying the tax, but the commission set up to steer the introduction of the tax said the threshold being raised to Bt100 million should erase those concerns.

"Any individual who has combined estates of more than Bt100 million should have no problem paying the tax," said Chana Yusathaporn, a commission member.

The taxable assets of individuals who have to pay the tax will be reviewed every five years by the Revenue Department based on the Consumer Price Index provided by the Commerce Ministry.

Individuals found to have evaded the tax will have to pay double what they should have paid in the first place.

Source: http://www.nationmultimedia.com/politics/NLA-passes-first-inheritance-tax-30260773.html

-- The Nation 2015-05-23

[Lite Beer]

NLA passes inheritance tax bill by majority votes

BANGKOK: -- The National Legislative Assembly on Friday endorsed the final reading of the inheritance tax bill by 145 votes against 5 with ten abstentions after heated debate on certain sections of the bill.

In essence, the bill seeks to impose inheritance tax ranging from 5 to 10 percent on the amount exceeding 100 million baht worth of properties inherited by individuals.

In case the inheritors of inheritance are parents or children of the deceased, the tax imposed will be five percent otherwise the tax will be 10 percent.

Finance Minister Sommai Phasee said that the inheritance tax law would constitute a symbol of the narrowing of social disparity. He explained that the government did not tax someone inherited 100 million baht worth of inheritance but only the amount that exceeds 100 million baht.

Earlier, inheritance worth in excess of 50 million baht was to be taxed, but the amount was changed to 100 million baht.

The inheritance tax bill will become effective 180 days after its publication in the Royal Gazette.

Source: http://englishnews.thaipbs.or.th/nla-passes-inheritance-tax-bill-by-majority-votes

-- Thai PBS 2015-05-23

[orange31]

Not much. Could have been more, should have stuck with the original tax rates.

[WitawatWatawit]

I want to head the department that assesses property values. I'm well prepared with a calculator that doesn't go above 99,999,999.99 baht.

[Robby nz]

Much watered down, the rich have won that one, no overseas assets to be taxed. Overseas bonds and shares in overseas companies, the rich have plenty of options to avoid that tax.

[Time Traveller]

Much watered down, the rich have won that one, no overseas assets to be taxed. Overseas bonds and shares in overseas companies, the rich have plenty of options to avoid that tax.

there's no law saying you have be rich to have overseas assets. Everyone can equally invest offshore for the same benefit.

Edited May 23, 2015 by Time Traveller

[BlackJack]

watch money move now

plenty of time to plan