THAILAND Law and Practice Contributed by: Olaf Duensing, Jerrold Kippen and Weeraya Kippen, Duensing Kippen, Ltd.
8.5 Tax Benefits The following maximum depreciation rates apply. • Permanent buildings – generally 5% per year; however, under certain conditions, 25% in the first year and 5% per year in the following years for the remainder of the value. • Temporary buildings – 100%. Land does not depreciate. Deductions on rental income are applicable and actual expenses may be deducted in the case of houses, buildings or other constructions. If the property is let by the owner, a standard deduc - tion of 30% is allowed as expenses. Rental income tax recipients have the option to define the taxable income by sufficiently documenting their actual rental income-related expenses. If these expenses are higher than the standard 30% deduction, are reasonable and sufficient - ly documented, then such deduction can be effected.
profit of the whole accounting year is the basis of taxation and not a single taxable event, such as the sale of immovable property. Natural Person or Individual When an individual sells an immovable property, the withholding tax is generally calculated based on the official appraised value of such property, less certain deductions. The deductions depend on the duration of ownership of the property to be transferred. The calculation is done using a specific formula created by the legislature which takes into account how long the property has been owned and the progressive tax rates applicable to individuals, but may be calculated without including any of the seller’s other annual taxable income. It should be noted that even if the transfer of immovable property is without consideration (ie, a gift) by an individual, it will be deemed a sale subject to personal income tax.
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