THAILAND Law and Practice Contributed by: Olaf Duensing, Jerrold Kippen and Weeraya Kippen, Duensing Kippen, Ltd.
2.9 Condemnation, Expropriation or Compulsory Purchase Land may be expropriated by the government for public purposes in accordance with the Immovable Property Expropriation Act. Once it is determined that a property is to be expropri - ated, the process is as follows: • a regulation is issued under the Act that iden - tifies the property to be expropriated and for what purpose; • a government committee is convened to appraise the value of the property and deter - mine the compensation to be paid for it; • the government then attempts to agree on a purchase price for the property, and if the price cannot be agreed the owner or posses - sor may file an appeal; and • once the price has been determined, a new law that applies to that specific expropriation is issued and the affected owners or tenants of the expropriated land, buildings, perennial plant, or easements are paid and the property is transferred to the government. 2.10 Taxes Applicable to a Transaction The ownership transfer of immovable property in Thailand is subject to the following. • Transfer fee – in an amount equal to 2% of the government’s official valuation of the property. • Stamp duty – in an amount equal to 0.5% of the actual sale price or the government’s official valuation of the property, whichever is higher. • Specific business tax – in an amount equal to 3.3% of the actual purchase price or the gov - ernment’s official valuation of the property, whichever is higher. • Personal income withholding tax – if the seller is a natural person and has owned the
property for less than eight years. This tax is calculated using the government’s official valuation of the property as the tax base and applying a sliding scale from 0% to 35%, which is adjusted downward depending on how long the seller has owned the property. If the seller has owned the property for eight years or longer, the full tax amount is applica - ble without such reduction. This tax may be treated as a final tax for this transaction with neither the income nor tax included in the seller’s annual personal income tax. • Corporate income withholding tax – if the seller is a juristic entity, a withholding tax equal to 1% of the actual sale price or the government’s official valuation of the prop - erty, whichever is higher, is applicable. This withheld tax is then credited to the seller’s overall payable income tax for that tax year. Most of these fees and taxes are the legal liability of the seller. However, it is not uncommon for the parties to agree to share these costs on a 50/50 basis. In the case of a lease, a registration plus stamp duty fee in an amount equal to 1.1% of the total rent payable for the entire lease term being reg - istered is applicable. The payment of this is sub - ject to negotiation – however, the lessor will most commonly require the tenant to bear this cost. Stamp duty of 0.001% of the share value applies to share transfers. There is no additional tax trig - gered by any change of corporate ownership and control of a company. Effective from 10 April 2024, the registration fees for registering the sale and mortgage at the same time of detached houses, semi-detached houses, terraced houses, commercial buildings or any of the said structures with the accompa -
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