Land tax and building tax in Thailand

The owner of real estate that is used for commercial purposes must pay taxes on his profits:

- Personal income tax or Corporate income tax

- Land and building tax

Personal income tax must be paid to the Tax Department before the end of March of the year following the reporting year, with an increasing rate.

Land and building tax have to be paid to the local administration until the end of February of the year following the reporting year. Let’s talk about this tax.

Land and building tax rate

The tax rate is 12.5% per annum of the actual rental amount for the year or of the estimated rental value of the property for the year (for tax purposes, choose the larger of these amounts). This means that if the rental price is too low, the local administration can review this amount and recover the tax from the estimated rental price.

The tax is calculated on the basis of the entire rental amount for the year without any deduction for expenses, for example, for the maintenance of the building. But the amount of land and building tax is the cost that can be included in the calculation of personal income tax or corporate income tax.

Who pays the tax

The owner is responsible for reporting and paying tax. However, the lease agreement may indicate that the land and building tax is paid by the tenant in excess of the rental price.

The owner of an apartment in a condominium (with the right of freehold or with the right of leasehold) is responsible for paying land and building tax if he rents out an apartment.

The land and building, especially in the case of a long-term lease (more than 3 years), is usually carried out by the tenant (buyer of an apartment for long-term lease).

Payment procedure

Filing a tax return for land and building tax is a duty of the property owner, local authorities will not notify each owner about the date of paying tax and its amount. However, random checks of companies are not excluded. And if the company should, but did not pay the land and building tax, local authorities independently, without the participation of the owner, determine the cost of rent, calculate the tax on this amount for all years of non-payment, plus fines for the entire term.

Therefore, voluntary payment of land and building tax will be more profitable than compulsory. In addition, in the case of the latter, they can check the company not only for tax payments, but also pay attention to Thai shareholders and other subtle nuances.

For all questions of paying land and building tax, please contact: + 66 87-348-57-03 (WhatsApp, Viber).

Author: Aleksandra Agapitova

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