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Inheritance Tax and Gift Tax in Thailand - Ask Drew Noyes

Drew Noyes, PAPPA Co., Ltd. Law Office Pattaya Times newspaper and website 16.07.2011 09:09

Many foreigners are concerned when they ask us at PAPPA Co., Lt.d Law Office to draw up a legal and enforceable Last Will and Testament (10,000 baht) for them that their Thai heirs will pay additional estate taxes. Additionally, when presents like gold or a house (amazing what we are willing to give that special Thai!) are given this sometimes raises the concern that a gift tax will somehow be invoked. Both inheritance taxes and gift taxes are common in Western countries so these are reasonable concerns.

Inheritance Tax and Gift Tax per se, do not exist in Thailand. Money or value received as a named beneficiary in a will or the legal next of kin in the absence of a will is not subject to a special tax in Thailand.The value is subject to ordinary personal income tax only. 

In the event of a death if the value is cash paid from an insurance policy purchased in Thailand, then the Thai Revenue Department will be informed of the payment by the issuing insurance company and at the end of the tax year the beneficiary should add the amount to his or her annual income for tax payment for that year. The tax must be paid prior to April 30th of the next year, not on receipt. 

Regarding taxes on gifts, if it is a gift of a gold probably no one will pay tax, but if it is a house or property which must be transferred at a regional Land Office, then the personal income tax will be paid by the recipient when they SELL the property, not when they received it as a gift. 

However, if they received the property from a death of another, then the value of the property may be subject to personal income tax payable to the Revenue Department the year it is transferred to him or her and a second personal income tax will be due on sale at the Land Office based on the declared sale price, or Land Office valuation. 

It is important to note that foreigners, or Thais of multiple nationalities, may be subject to an Inheritance or Estate tax from value received as a beneficiary of the death of a Thai or non-Thai. If the assets are out of Thailand, or if the beneficiary is subject to taxation by another country that has an Inheritance or Estate tax, then tax may be due. The foreign embassies in Bangkok can give guidance if one has such concerns. 

Gift tax, likewise, does not exist in the Thai tax code, however tax payments  may be applicable in the same way as described for Inheritance tax collected by a foreign government.

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