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This guide is an overview of inheritance tax in Thailand.
Inheritance tax was announced on 5 August 2015 with the purpose of making the tax system fair by taxing those who gain wealth from the inheriting estate of a deceased person.
Let’s take a look at how inheritance tax works in Thailand.
Who is liable to pay tax when inheritance is received?
Under section 11 of the Inheritance Tax Act, the following persons who received inheritance have a duty to pay tax:
- A person of Thai nationality
- A natural person of non-Thai nationality but having a domicile in Thailand according to the law on immigration
- A person of non-Thai nationality but receiving an inheritance which is an asset situated in Thailand
- Juristic person registered in Thailand or established by Thai laws, or a Thai shareholder(s) who holds more than 50% of the registered and paid-up capital
Who is not liable to pay inheritance tax?
The following instances are exempt from paying inheritance tax:
- Receiving inheritance with a value of not exceeding THB 100 million.
- Being a legal spouse to the inheritance owner.
- Receiving an inheritance from the owner who died before the date of the enforcement of the Inheritance Tax Act (1 February 2016).
- A government agency or legal entity receiving inheritance for education, religious or public purposes.
- Persons or international organisations under commitments between Thailand and the United Nations, or according to international laws or contracts or reciprocal arrangements with other countries.
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Inheritance tax rates
If the inheritance received has a value exceeding THB 100 million, only the portion that exceeds THB 100 million will be taxed.
The inheritance tax rates for the exceeding amount are:
- 5% inheritance tax for parents and descendants
- 10% inheritance tax for other heirs
Assets subject to inheritance tax
Inherited assets subject to the tax are:
- Immovable property
- Securities in accordance with the Securities and Exchange Act
- Deposited money, or other forms of wealth, where the heir has the right to withdraw it from a financial institution or claim it from a person holding the deposit
- A registered vehicle
- Financial assets to be prescribed by a Royal Decree
How to calculate inheritance tax?
When calculating inheritance tax, you must first determine whether the value of the assets exceed THB 100 million or not.
According to section 15, the calculation of the value of assets shall be based on the price or value receivable on the date of receipt of such assets through inheritance as follows:
- Immovable property – the capital value of the immovable property appraised for the purpose of collecting fees for the right and juristic act registration under the Land Code, deducted by the third-party rights in accordance with the criteria prescribed in the Ministerial Regulations shall apply.
- Securities listed on the Stock Exchange of Thailand – the price of such securities as at closing of the business hours of the stock exchange on the date of receipt of inheritance shall apply.
- In other cases, the criteria stipulated in Ministerial Regulations shall be stipulated in general without being specific.
Once the value is determined, if the asset value does not exceed THB 100 million, you will not be liable to inheritance tax. If the value exceeds THB 100 million, the inheritance tax will be subject to a rate of either 5% or 10%.
For example, if the inheritance value is THB 150 million, the tax for parents and descendants would be THB 2.5 million (5% x 50 million), or for other heirs, the tax will be THB 5 million (10% x 50 million).
Filing inheritance tax
Those who receive an inheritance of more than THB 100 million must file an inheritance tax return and pay the tax within 150 days from the day of receiving the inheritance. The tax return can be printed from the Revenue Department’s website and submitted at the branch area revenue office.
Penalty for not paying inheritance tax
There are both fines and criminal penalties if the inheritance tax return is not filed or fail to file the return within the deadline.
| Circumstance | Punishment |
| Filing the tax return and paying tax after the deadline | A fine of two times the amount of the tax payable and payment of an additional 1.5% per month from the day the tax filing time expires |
| Incomplete or false tax return | A fine of 0.5 times the tax payable |
| Failure to file a tax return | A fine not exceeding THB 500,000 |
| Failure to comply with the summons or order or fails to answer questions of an assessment official or the chairperson of the Commission of Appeal | Imprisonment for a term of not exceeding one month or a fine not exceeding THB 20,000 or both |
| Destroy, remove, conceal or transfer to other persons the property that is seized | Imprisonment of not exceeding two years and a fine not exceeding THB 400,000 |
| Knowingly or intentionally notifies false statement, gives a false statement, answers with a false statement or shows false evidence in order to evade tax | Imprisonment for a term not exceeding one year or a fine not exceeding THB 200,000 or both |
If the offender is a legal entity, managing director, manager or representative of the juristic person, he/she will also be punished.
Conclusion
Other than making the tax system fair by taxing individuals who receive an inheritance, the Thai government also expected that inheritance tax will stimulate the economy by spreading out wealth.
Feel free to contact Acclime for guidance on inheritance tax in Thailand.
Related guides
-
Accounting in Thailand: Introduction - Taxation in Thailand: Introduction
- Withholding tax in Thailand
- Personal income tax on Thai vs foreign sourced income
- Value added tax (VAT) in Thailand
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