Glossary, tax and fees

Withholding tax in Thai property

ภาษีเงินได้หัก ณ ที่จ่าย

Withholding tax is income tax deducted from a payment before it reaches the person who earned it. On a Thai property sale the land office collects it from the seller at transfer: 1% for a company and a sliding-scale amount for an individual. Rent paid from Thailand to a non-resident owner carries 15% withholding.

For a company seller the tax is 1% of the higher of the sale price and the appraised value, and it counts as a credit against the company's corporate income tax.

For an individual the calculation uses the appraised value, not the price. A standard deduction is taken according to the number of calendar years of ownership, from 92% for one year down to 50% for eight years or more. The remainder is divided by the years of ownership, taxed at the progressive personal rates of up to 35%, and multiplied back by the number of years. An individual can generally treat the amount withheld as final tax on the sale.

Thailand has no separate capital gains tax for individuals selling property, so this withholding is how the gain is taxed. It is the seller's cost.

On rental income, 15% is withheld from rent paid from Thailand to a non-resident owner. See property taxes and buying costs and rental income and tax.

General guidance, not legal or tax advice. Take independent legal advice before you commit to a purchase.

Terms related to withholding tax

Appraised value: The appraised value is the official value that the Treasury Department assigns to land, buildings and condominium units as the base for government fees and taxes. It is usually lower than the market price.
Specific business tax (SBT): Specific business tax is a 3.3% tax on the sale of property by a company or developer, or by an individual who has owned it for less than five years. It is charged on the higher of the sale price and the appraised value.
Tax residency: A person is a Thai tax resident for any calendar year in which they spend 180 days or more in Thailand, whatever their visa or nationality. Residents are taxed on Thai income and on foreign income they bring into the country.
Double taxation agreement (DTA): A double taxation agreement is a treaty between two countries that settles which of them may tax each type of income and how the other gives relief, so that the same income is not taxed twice. Thailand has agreements with 61 jurisdictions.