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Tax on income from renting an apartment in Thailand
The number of cases of buying an apartment in Thailand foreigners is increasing. The vast majority of these customers with its plans to re-house the following address - to come to the country for a vacation, to rest there, living at home, and not somewhere in the unknown. At other times, they tend to want to take the vacant apartment for rent, possibly the same vacationers, but have no personal square feet in this wonderful country. So uncomplicated way people hope, even a little, but discourage the acquisition cost of real estate. Moreover, if the rent an apartment for a long time, and the object is very tasty morsel for the tenants, that income may grow into quite a good amount.
However, many of these people who give out your property, forget about the fact that there are state tax authorities that their debtors are not forgotten! But the Russian people are always looking for, where to save, so the question arises - whether it is necessary to share with the Internal Revenue Service?
If you are in doubt as to that effect, then give some examples, but will begin, as usual, with a brief theory.
Thai Tax Code provides that income, which was obtained from the lease of personal property for any period of time in the country, subject to applicable taxes. And it is not important, it is the individual owner-Thai citizen or not. Tax system, as often happens in such cases, provides for the progressive rate of tax which depends on the aforesaid income for the calendar year.
Income of up to 150,000 Baht is not taxed. If more than this amount, but not up to half a million Baht, it is effective tax rate of 10 percent. With an annual income of up to one million Baht interest rate is twice as high. If the annual income from property rental is somewhere in the range between one and four million baht, the tax rate is 30 percent. With an income in excess of four million Baht, the tax rate is the maximum - 37 percent.
However, in determining the taxable amount should be remembered that it is reduced by 30 percent, and this balance is deducted 30,000. This is done especially for all operations of the lease. Remember this rule and will use it in the calculations in the following examples.
So, suppose you have a flat, annual income from renting it out was 100,000 Baht. After some simple calculations based on the above formula, we find that the taxable amount is only 40,000 Baht, which, if you remember, are not taxed.
In the second case, we have one more luxury apartment or even a few, receiving from them for a year a million Baht. Minus the required amount is obtained 670,000 Baht - is the total taxable amount, the tax charge is on a very original scheme. The first 150,000 are not subject to a tax, for the next 350,000 tax is at a rate of 10 percent, that is 35,000 Baht, and the remaining 170,000 - already on the 20-tiprotsentnoy rate, which results in tax 34,000 Baht. After the addition of these figures we see that the total tax revenue in this case is 69,000 Baht.
Finally, the third case, when the income from the lease was fabulous 10 million Baht. In this case, the tax base will be 6, 97 million baht, of which more than two million will go to the state. Weighty sum, to be sure, to part with a very, very difficult.
This raises the following question - "Is it possible to somehow reduce this tax?". Alternatively, you can register a business - this is not the worst option of those available. Advantages here are obvious - you, with its own accounting department, will be able to take into account all costs, which, of course, will reduce the amount of taxes, and the claims of the state itself will not be any.
Actually it should be said about what is considered their taxes - not the most pleasant experience, but believe me, it is very useful to do! You can see how much you get from renting an apartment to rent, and how much it will have to pay - and no surprises in this regard will not be!