Inheritance Tax in Thailand
Thailand’s Inheritance Tax Act, enacted in 2016, mandates a tax of 5% on property inherited by descendants or ascendants, and 10% for other statutory heirs, applied when estate values exceed one hundred million baht.
Key exemptions include spouses, inheritances intended for religious or educational purposes, and entities under specific international agreements as stipulated in the inheritance tax act b.e. 2558.
Inheritance Tax in Thailand
In 2014, the Thai government, under the leadership of Prime Minister Prayuth Chan-ocha, enacted the Inheritance Tax Act B.E. 2558 as part of a new economic policy aimed at supporting national development.
Officially gazetted in 2015 and coming into force in 2016, this legislation introduced inheritance tax measures designed to contribute to the country’s fiscal resources.
Overview of the Inheritance Tax Act
The Inheritance Tax Act stipulates that descendants or ascendants who acquire property from a deceased individual are required to pay an inheritance tax of 5% of the property’s value, provided the inheritance received exceeds 100 million baht.
For other statutory heirs, the tax rate increases to 10%. This tax applies only if the value of the inherited asset or property exceeds one hundred million baht and is subject to inheritance tax.
Calculation and Payment of Inheritance Tax Rate
The value of the property for tax purposes is calculated based on its worth on the date of inheritance.
It’s important for heirs to understand that the tax payment is due within 150 days of the inheritance transfer, as stipulated in the inheritance tax act B.E. 2558. Fortunately, if the tax is paid within this period, no penalties will be imposed.
Exemptions and Non-Taxable Inheritances
Certain conditions exempt individuals and entities from paying inheritance tax. These exemptions include:
- A spouse inheriting from a deceased partner, if the value is above 100 million baht, might still be required to file a tax return.
- Inheritances designated for religious, educational, or public benefit purposes are not typically subject to the inheritance tax as per the Inheritance Tax Act B.E. 2558.
- State agencies and juristic persons with religious or educational objectives.
- Persons or international organizations covered by agreements with Thailand and the United Nations.
Taxable Items Under the Thai Inheritance Tax Act
The assets subject to Pay Inheritance Tax include:
- Immovable properties.
- Securities as defined under the law on securities and exchange.
- Bank deposits and other similar financial instruments.
- Vehicles that are registered.
- Other financial assets as specified by Royal Decrees.
Conclusion
Thailand’s Inheritance Tax Act represents a significant policy designed to harness financial resources from the transfer of significant estates to aid in national development.
By understanding who is liable to pay the tax, what is exempt, and how and when payments must be made, heirs can effectively navigate the complexities of this law and file the necessary tax return.
This ensures compliance with the legal requirements while honoring the financial legacies of loved ones.
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This article is not intended to serve as legal advice and cannot be relied upon as legal advice. All references to Thai law, including the inheritance tax act b.e. 2558, should be verified by your qualified legal advisor.
FAQs
Q: Is there Inheritance Tax in Thailand?
A: Yes, Thailand does have an inheritance tax system in place.
Q: What is the threshold for being subject to inheritance tax in Thailand?
A: In Thailand, individuals inheriting an amount exceeding 100 million THB are liable to pay inheritance tax.
Q: How is inheritance tax regulated in Thailand?
A: Inheritance tax in Thailand is governed by specific tax laws and inheritance laws that determine the tax liability of individuals receiving an inheritance.
Q: Who is responsible for filing inheritance tax in Thailand?
A: The heirs or beneficiaries who are liable to pay tax are responsible for filing an inheritance tax return and paying the applicable taxes according to the law.
Q: Are expatriates residing in Thailand subject to inheritance tax?
A: Expatriates living in Thailand are also subject to inheritance tax if the inheritance received has a value that exceeds the specified threshold.
Q: What factors determine the amount of tax to be paid for inheritance in Thailand?
A: The amount of tax to be paid is calculated based on the value of the inheritance received, the applicable tax rate, and other related factors as per the inheritance tax law.
Q: Can a spouse of the deceased be exempt from inheritance tax in Thailand?
A: In certain cases, a spouse of the deceased may be exempt from paying inheritance tax according to the family law provisions in Thailand.
This article is not intended to serve as legal advice and cannot be relied upon as legal advice. All references to Thai law should be verified by your qualified legal advisor.