Inheritance tax in Thailand.

In August 2015, the Thai authorities announced the introduction of the Inheritance Tax Act. This tax levied on heirs will come into effect on February 2, 2016 and comprises the following specifications.

Subjects not liable to pay the tax

The newly announced Act is not applicable to:

  • Inheritance the owner of which dies before February 2, 2016
  • Inheritance received by the spouse of the owner

Subjects liable to pay the tax

Subject to the new tax are all persons with Thai nationality. In this regard, the law extends to legal entities as well:

  • Legal entities registered in Thailand or under Thai law
  • Legal entity in which shareholders of Thai nationality hold more than 50% of the share capital at the time the legal entity has the right to receive an inheritance
  • Legal entity the managerial team of which consists of more than 50% of Thai nationals

Next, the Act is applicable to persons of a foreign nationality residing in Thailand under the immigration law. It is important to note that the Act applies to the above mentioned subjects regardless of where the inherited property is situated.

Additionally, persons of a foreign nationality not residing in the country but receiving the inheritance situated in Thailand are likewise liable to pay the tax.

Exemptions

The following instances are exempt from paying the inheritance tax:

  • Person who inherits the heritage the former owner of which expressed their intention that the inheritance to be used for the purposes of religion, education or in the public interest
  • A legal entity and governmental organisations receiving the inheritance for religious, education or public purposes
  • A person or international organisation to which Thailand has an obligation under the UN or under international law, or in accordance with a treaty or mutual agreement between Thailand and such country

Assets subject to the tax

Overall, inherited assets subject to the tax are:

  • Immovable property
  • Securities under the law governing securities and the securities market
  • Deposited money, or other form of wealth, where the heir has the right to withdraw it from a financial institution or claim it from a person holding the deposit
  • Registered vehicle
  • Other assets as specified by a Royal Decree

Inheritance tax rate

The inheritance tax rate is set at 10% of the value of the inheritance subject to tax. Nevertheless, should the recipient be a descendant or an older relative of the owner, the rate is reduced to 5%. A special instance is an inheritance exceeding the value of 100M THB – in this case, only the part exceeding this amount will be taxed. The taxable amount is further offset by any liabilities that come with such inheritance.

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