Company owned house - City Hall TAX

[Naam]

29 minutes ago, scubascuba3 said:

Yes but i imagine they will stop it when and if there is a big fuss by Thais maybe over a shortage or cost of housing

and after the big fuss Farangs will be expropriated and their property distributed among the "needy"?

[pattjock]

On 8/14/2017 at 3:56 PM, Naam said:

little do you know

Cute reply. Why don't the all knowing Naam enlighten us what the company property tax is and what the tax is on a second property?

[Naam]

2 hours ago, pattjock said:

Cute reply. Why don't the all knowing Naam enlighten us what the company property tax is and what the tax is on a second property?

there is no such thing like a company property tax. tax for a second property? i have no idea as it does not apply to me.

[janclaes47]

On 07/08/2017 at 7:29 PM, Pilotman said:

My house has been company owned for 3 years.  I pay tax on the anniversary of the company registering the property  at then land office. . Amount sounds about right.  

 

That is corporate income tax.

 

Property tax exists for years, and is the no different for companies or private owners, but you don't get informed about it.

 

There have been other threads regarding this in the past years, and from those threads it was clear that Nongprue is one of the districts that enforces the tax.

 

So at one point in he future you may receive a bill going back years.

[pattjock]

3 hours ago, Naam said:

there is no such thing like a company property tax. tax for a second property? i have no idea as it does not apply to me.

Well, as you have no idea I guess little do you know

 

From further interweb searches it looks like what I said in my initial posting was correct.

 

" There are no general property taxes (capital tax on property imposed by the government) in Thailand, but real properties put to commercial use (residential houses not 'owner occupied' and commercial buildings) must under the Building and Land Tax Act pay a 'rental' tax at a rate of 12,5 % of the annual rental value or the annual assessed rental value, whichever is higher. "

 

" It is the property owner's responsibility to inform the local authorities (Or.Bor.Tor or local municipality) and pay building and land tax before the end of February each year. "

 

This means that if you buy a property using a company you will have to pay this tax. They also apply this tax if you buy condos as a foreigner and rent them out.

 

A lot of people have been hit by this law, having to pay 10 years back taxes and fines.

 

But, as it does not apply to you you should be OK

[Naam]

33 minutes ago, pattjock said:

Well, as you have no idea I guess little do you know

 

From further interweb searches it looks like what I said in my initial posting was correct.

 

" There are no general property taxes (capital tax on property imposed by the government) in Thailand, but real properties put to commercial use (residential houses not 'owner occupied' and commercial buildings) must under the Building and Land Tax Act pay a 'rental' tax at a rate of 12,5 % of the annual rental value or the annual assessed rental value, whichever is higher. "

 

" It is the property owner's responsibility to inform the local authorities (Or.Bor.Tor or local municipality) and pay building and land tax before the end of February each year. "

 

This means that if you buy a property using a company you will have to pay this tax. They also apply this tax if you buy condos as a foreigner and rent them out.

 

A lot of people have been hit by this law, having to pay 10 years back taxes and fines.

 

But, as it does not apply to you you should be OK

you are mixing up property tax with the tax on rental value. you are also wrong who is the debtor for the latter because the tax is the company's liability. let me repeat "little do you know".

[pattjock]

1 hour ago, Naam said:

you are mixing up property tax with the tax on rental value. you are also wrong who is the debtor for the latter because the tax is the company's liability. let me repeat "little do you know".

I'm not sure where you lost the focus of this thread but it was about someone who had to pay tax for his company owned house and wondered why.

 

This tax law is covered by the Building and Land Tax Act and has nothing to do with rental. The tax is applied weather a rental contract exists or not and weather rent is paid or not.

 

So instead of repeating yourself please add some further information to the readers of this thread if I have any of the facts wrong.

[KittenKong]

2 hours ago, Naam said:

you are also wrong who is the debtor for the latter because the tax is the company's liability.

 

Does that make any difference given the type of companies under discussion here?

[KittenKong]

2 hours ago, pattjock said:

A lot of people have been hit by this law, having to pay 10 years back taxes and fines.

 

I suspect that more and more people who own property via companies will be getting demands for this, once the government and revenue people understand what an easy source of quick cash it is. And unlike most Thai laws, this one seems to be worded in such a way that there are no obvious loopholes or grey areas.

 

Some 30% of my building is company-owned and a quick calculation of the total amount due from all those units backdated for 10 years gives a surprisingly high result.

[pattjock]

41 minutes ago, KittenKong said:

 

Does that make any difference given the type of companies under discussion here?

As far as I understand this applies on any property that could be considered to be residential and would apply to any kind of company.

 

If you have a company that exports coconuts to Europe and that company buy a property you would have to pay tax if you or someone else lives there, paying rent or not. If the property is only used to store and pack the coconuts there is no tax.

Edited September 3, 2017 by pattjock
spelling

[KittenKong]

1 hour ago, pattjock said:

As far as I understand this applies on any property that could be considered to be residential and would apply to any kind of company.

 

If you have a company that exports coconuts to Europe and that company buy a property you would have to pay tax if you or someone else lives there, paying rent or not. If the property is only used to store and pack the coconuts there is no tax.

 

Indeed. But Naam appeared to be suggesting that the tax liability being with the company rather than the owner of the company was in some way relevant or important. In the case of companies used by farangs solely to own properly here (which would be nearly all of them), I dont think that it matters who gets the bill.

[Naam]

7 hours ago, KittenKong said:

 

I suspect that more and more people who own property via companies will be getting demands for this, once the government and revenue people understand what an easy source of quick cash it is. And unlike most Thai laws, this one seems to be worded in such a way that there are no obvious loopholes or grey areas.

 

Some 30% of my building is company-owned and a quick calculation of the total amount due from all those units backdated for 10 years gives a surprisingly high result.

as i mentioned already it would be only fair that Farangs who enjoy Thailand's huge income tax advantage on their offshore proceeds. even the 12.5% tax which is levied on all rentals and potentially applied to foreign shareholders who occupy company held property is absolutely peanuts (less than my utility cost) when compared with the tax savings. 

[Naam]

6 hours ago, KittenKong said:

 

Indeed. But Naam appeared to be suggesting that the tax liability being with the company rather than the owner of the company was in some way relevant or important. In the case of companies used by farangs solely to own properly here (which would be nearly all of them), I dont think that it matters who gets the bill.

it does matter to differentiate what the tax is called, what it's for and who is liable to pay. facts should prevail in threads where people are looking for information.

[KittenKong]

2 hours ago, Naam said:

as i mentioned already it would be only fair that Farangs who enjoy Thailand's huge income tax advantage on their offshore proceeds. even the 12.5% tax which is levied on all rentals and potentially applied to foreign shareholders who occupy company held property is absolutely peanuts (less than my utility cost) when compared with the tax savings. 

 

I see your point but condo owners (like me) are not liable to any of those taxes. Nor indeed are people who rent.

[ThaiBob]

I own my own condo and do not pay taxes of any kind, but I have friends who own both condos and houses using the Thai company structure. They have no rental income but every year they sit down with their accountant and calculate and pay a tax or taxes. In the case of a friend's condo it is around 15k per year. The question the OP must ask is has he done the same and if not, why not? Perhaps the authorities have simply caught up, who knows? 

[Naam]

1 hour ago, KittenKong said:

I see your point but condo owners (like me) are not liable to any of those taxes. Nor indeed are people who rent.

in my [not so] humble view it is only a matter of time till the Thai taxman finds ways to make foreigners pay some income tax. there's nothing wrong with that and clearly justified if it's not an outrageous percentage many nanny states levy. 

[pattjock]

On 9/4/2017 at 9:05 AM, Naam said:

in my [not so] humble view it is only a matter of time till the Thai taxman finds ways to make foreigners pay some income tax. there's nothing wrong with that and clearly justified if it's not an outrageous percentage many nanny states levy. 

I'm pretty sure that foreigners who work here already have to pay income tax and I don't think the government will allow foreigners to work here illegally just because they pay income tax.

 

There is the large portion of foreigners living here on a visa extension based on retirement/marriage but they, in many cases, live on limited funds and already contribute to the economy by paying VAT and spending on gods and services as well as, in some cases, supporting relatives to their Thai spouses.

 

If the government decided to tax retirement/marriage foreigners it would imply that they would then could claim medical and social benefits, which the government could of course refuse. More likely is that there will be a compulsory medical insurance for foreigners living here on a visa extension, as has been widely discussed.

[Naam]

5 hours ago, pattjock said:

I'm pretty sure that foreigners who work here already have to pay income tax and I don't think the government will allow foreigners to work here illegally just because they pay income tax.

dear Sir.

what part of my posting is it you don't understand?

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Naam    11,267

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Posted yesterday at 04:58 AM

as i mentioned already it would be only fair that Farangs who enjoy Thailand's huge income tax advantage on their offshore proceeds.

 

[pattjock]

25 minutes ago, Naam said:

dear Sir.

what part of my posting is it you don't understand?

 

The post I answered to did not mention offshore proceeds, I stand corrected that you did mention this in an earlier post. I do agree with you that a fair tax should be paid, provided that you do get some benefits.

 

Still, if you spend more than 180 days a year in Thailand you are a tax resident and have to pay tax on all offshore proceeds.

 

The only way around this is if there is a tax agreement with the offshore location or if you park the funds offshore for one year before you bring it in to Thailand.

 

Obviously it's very hard to police these things but as they are transferring their records from shoe boxes to computers and linking these with immigration and banks there will most likely be more income to the local IRS.

 

The funds they may gain from this is most probably minuscule compared to the total tax revenue so I do not think this is a big priority to the local IRS.

 

 

[Rimmer]

Please stay on topic which is about Tax on company owned houses

[Langsuan Man]

Posters here always think that this company owned property "loop hole" is for foreigners, it is not, it was designed by rich Thais to "obscure" their holdings and minimize their tax bills, for both property and income taxes

 

This sudden interest on the part of Pattaya City is probably part of the long standing push to get property re-assessed and taxed that has been proposed by the past several governments to enable local administrations to obtain tax money without going to the central government for infrastructure funds

 

Unfortunately  those in power have thwarted these efforts because those who own land want it to increase in value and by leaving it empty it will accrue value for their heirs

 

Enforcing property taxes would stop this practice  

 

 

[nickcar]

I wonder if the knowledgable people on this forum would be kind enough to advise the correctness of my understanding of the law.

 

1 a chanot for a condo is not the same as a chanote for land. A condo chanote will always include the cost of the condo, but a land chanote may not include the value of the buildings on it.

 

2 It is perfectly legal to lease land and then build on it, and the lessee can be the owner of the building, and further a foreigner may be the owner of the building. 

 

3 owner of land is defined by the chanote, house registration is not relevant. 

 

4 owner of the building is defined by who paid for it, again house registratioion is not relevant. 

 

5 a tax on the company is always paid by the company, never by a shareholder. This is relevant as it will go in the company accounts as an expense and therefore reduce any profit. This obviously does not include the company tax on profits.