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Let our experience be your guide

News

Let our experience be your guide

Pending Bill for Individual Income Tax on Actual Sale Price

The National Legislative Assembly (NLA) is still considering the bill to modify the Revenue Code to impose individual income tax on the transfer of immovable properties based on either the actual sale price, or the standard assessment value of the Land Department, whichever is greater – instead of limiting the tax base to the standard assessment value. Well-to-do families have more concern on the bill than the Property Tax Act. Some needs to rush for the sales of properties before the legislation will come into force in light that the actual sale price of most properties is greater than 200% of the standard assessment value. Hence, the transfer costs are expected to rise sharply. Having said this, it is possible that this bill could be dismissed due to its practicality issue. First of all, it is almost impossible for the land officials, who are in charge of collecting taxes upon registration of the transfer, to be certain of the actual sale price as agreed between the parties. Also, the revenue officials’ workloads on the post audit could incredibly increase due to the need to ensure the strict enforcement of the law – raising the administrative costs and a number of disputes. One alternative in lieu of changing the tax base is to adjust the standard assessment value more frequently, i.e. from every 4 years to every 2 years, so as to reduce the gap between the realistic value of properties and the standard assessment value as much as possible.

By Prof. Piphob Veraphong and Rachanee Prasongprasit

(as at 8 December 2018)

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