Inheritance Tax in Thailand
On September 12, 2014, the new Prime Minister of Thailand, Prayuth Chanocha delivered his government’s policy statement to the National Legislative Assembly, which declared a new economic policy that shall instate an inheritance and property tax for Thailand within one year. A draft law for the new inheritance tax in Thailand has already been drafted by the Revenue Department and submitted to the National Council for Peace and Order (NCPO) for approval since July of this year. According to the Revenue Department, the draft inheritance tax law has four key points:
- Inheritors of the estate of a deceased person would be required to pay the tax.
- The property of a deceased person’s estate that would be a basis for the tax would only be that kind of property that requires registration, such as a house, land, motor vehicle, stocks, deposits, and bonds, etc.
- The tax rate that is being considered is a progressive rate from 5 to 30 % of the value of the property; however, conflicting reports state that the rate proposed by the Revenue Department was a flat rate of 10% and that those estates that are valued at less than 50 million baht would be exempt from the tax altogether.
- The inheritance tax will be enforced against property within and without the public stock exchange.
The government has explained that the purpose of the proposed inheritance tax is not necessarily to increase government revenues, but was more a matter of fairness as it relates to the tax system. Specifically, those who gain wealth from inheriting from the estate of a deceased person should be tax accordingly just as those who earn an income from working. Furthermore, the government hopes that the inheritance tax will stimulate the economy, since it will allow stored-up wealth to be spread out into the economic system.
Thai media sources have noted the braveness of the government in attempting to pass the inheritance law since it clearly conflicts with the interests of the most powerful elements of Thai society. In fact, the Revenue Department has been pushing for an inheritance tax for the past 20 years, but have met harsh opposition from the aforementioned groups. At this time, the Revenue Department has referred the draft law to the Office of the Council of State for clarification of any ambiguities in the law and also to the Fiscal Policy Office for consideration in order to ensure that the law is fair towards all sides. A statement issued by the Prime Minister during a press conference stated the law would contain “several exceptions.”
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