Almost all those who are planning a purchase of real estate in Thailand, are going to lease it in the future, that would either return some of the money spent to buy money, or as a profit from investment in real estate in Thailand. Given the warm tropical climate and the proximity of the sea - real estate here is always in high demand for rent. In this case, of course, can not help but worry about taxation in Thailand. How much do you have to pay taxes on the profits from rental housing?
According to the Tax Code of the Kingdom of Thailand, from the income received from the rental of real estate, a tax must be paid, regardless of the term of the lease. It does not matter who owns the dwelling: a subject of the Kingdom of Thailand, a company registered in the territory of the country, or a citizen of a foreign country. In the Kingdom of Thailand, a progressive tax rate is applied, that is, the more profits you receive from renting your property during the calendar year - the higher the tax rate.
Interest rates depend on the income that was received from the rental of real estate. The calculation of the tax is as follows:
- from 1 Baht to 149,000 Baht - is not taxed;
- from 150 000 Baht to 499 000 Baht - the tax rate will be 10%;
- from 500,000 Baht to 999,000 Baht - the tax rate will be 20%;
- from 1 000 000 Baht to 3 999 999 Baht - the tax rate will be 30%;
- from 4 000 000 Baht or more - the tax rate will be 37%.
At the same time, only 70% of the income received falls under the taxable amount, of which another 30,000 Baht are deducted. This rule applies to all rental income. Let's see how the tax is calculated in practice.
Suppose that the annual income from renting an apartment was 100,000 Baht. The tax is levied only on 70%, which means 70 000 Baht, of which another 30 000 Baht are deducted. Thus, the taxable portion will be 40,000 Baht. This amount is less than 150,000 baht, which means that it is not taxed.
Consider another case: we have a beautiful apartment, or several houses that brought us an income of 1,000,000 baht, of which 70% of taxes are taxed minus 30,000 baht, that is, only 670,000 baht. In this case, the tax is calculated according to the following scheme:
the first 150,000 Baht are not taxed;
for the next 350 000 Bat - tax will be 10%;
for the remaining 170,000 baht - the tax will be 20%;
35,000 Baht + 34,000 Baht = 69,000 Baht (total tax)
In the third case, suppose the income was 10,000,000 Baht. The taxable base, in this case, will amount to 6,970,000 Baht, which means that we will have to pay a tax of 2,133,900 Baht, not a small amount at all. The question naturally arises - "How to reduce this tax?". One of the absolutely legal options is registration of business. If you have your own accounting, you will be able to take into account expenses, due to what you can cut taxes on profits.
If you are going to buy property in Thailand and want to profit from your investments - knowledge about taxation of renting housing will not be superfluous for you. Based on them, you will be able to estimate what income you will receive from your investments and how many taxes you will have to pay from it.