Thailand inheritance tax and gift tax will start taking effect on 1 February, 2016. It is the first inheritance tax law in the country. 5% for ascendants or descendants and 10% for others are to be levied on inherited assets worth more than Baht 100 M. In order to prevent avoidance of the newly announced inheritance tax, Thailand gift tax is also introduced by amending the types of tax exempt income in the Thai Revenue Code. The gift tax will be enforced on the same day as the Inheritance Tax.
The inheritance tax is levied on heirs, both individuals and juristic persons. It is also applied to non-Thai nationals who are considered residents in Thailand according to Thailand immigration law and non-Thai inheriting assets which are located in Thailand.
The gift tax: Before 1 February 2016, the types of income exempt from personal income tax include income derived from maintenance, income derived from moral obligation, inheritance or a gift received in a ceremony or on other occasions in accordance with established custom. However, starting from 1 February 2016, only the following types of income are exempt from personal income tax:
1. The portion of inheritance income not more than Baht 100 M;
- Income derived from the transfer of ownership or possessory right in an immovable property without consideration by the parent to a legitimate, non-adopted child, only for the portion not more than Baht 20 M per tax year;
- Income derived from maintenance or gift from ascendants, descendants or spouse, only for the portion not more than Baht 20 M per tax year;
- Income derived from maintenance under moral purposes or gift received in a ceremony or on occasions in accordance with custom and tradition from persons who are not ascendants, descendants or spouse, only for the portion not more than Baht 10 M per tax year; and
- Income from gift received for use for religious, educational or public purposes according to the rules and conditions under a ministerial regulation yet to be issued.
For the taxpayers receiving income stated in No. 2 to 4 above, which exceeds the thresholds, may choose to pay tax at the rate of 5% and do not have to include those incomes in their annual personal income tax calculation/filing.
Consult with MSNA for your Thailand accounting and tax needs.