THAILAND Law and Practice Contributed by: Olaf Duensing, Jerrold Kippen and Weeraya Kippen, Duensing Kippen, Ltd.
• any building used for any commercial pur - pose and having a total floor area of 300 square metres or more; or • any building used for any industrial or educa - tional purpose is a building subject to control over its use. Inspection and Use Certification On completion of the construction of the use- controlled building, notification must be given to the local government administration to inspect the structure. After the inspection, if the local government administration determines that the construction was completed in accordance with its building permit, permission to use the build - ing will be granted and use certification for the purpose applied for in the building permit will be issued. If, however, the local administrative office does not inspect the building within 30 days of the notification of completion, the owner or possessor of the building may go ahead and use, or allow others to use, the building for the purpose stated in the building permit.
in order to take advantage of the tax benefits, the selling entity must be dissolved within the same accounting period as the business transfer takes place. 8.3 Municipal Taxes Municipal taxes do not apply specifically to busi - ness premises. However, real estate is subject to property tax, which is a local tax. 8.4 Income Tax Withholding for Foreign Investors Withholding taxes apply to the rental and sale of immovable property. “tax resident” of Thailand is any person stay - ing in Thailand for a period or periods aggre - gating 180 days or more per year. However, it is important to note that the duty to pay tax on rental income in Thailand does not depend on being a tax resident of Thailand or whether the income is received in Thailand. Rental income is considered taxable income regardless of Thai tax residency under the Thai Revenue Code. The relevant law states that a taxpayer (ie, “anyone” ) who in the previous tax year derived assessable income from a property situated in Thailand must pay tax, whether such income is paid within or outside Thailand. Thus, anyone, tax resident or not, who earns rental income from a property in Thailand, must pay tax on that income, no mat - ter whether the rental income is paid on-shore or off-shore. It is the duty of the payer of the rent to deduct withholding tax from the rental payment and submit it to the local revenue department. How - ever, both the lessee and the lessor are jointly liable for the payment of this withholding tax. The amount of withholding tax depends on whether the lessor is a tax resident of Thailand
8. Tax 8.1 VAT and Sales Tax
VAT is not applicable to the sale and purchase of real estate. However, specific business tax (SBT) of 3.3% applies to the sale of immovable property by juristic persons. Exemptions to the SBT requirement may apply to a sale by a natu - ral person. Where SBT is not applicable, stamp
duty at a rate of 0.5% applies. 8.2 Mitigation of Tax Liability
If the real estate asset to be transferred is the only or main asset of the selling entity, an entire business transfer might be beneficial. The trans - fer of the real estate asset that is part of an entire business transfer is not subject to SBT. However,
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