selling tax questions - for somebody smarter than me

[lazy catfish]

Selling a little land and a bit confused. I’ve bought land different ways and experienced Thai to Thai selling but never a Thai company selling. Everybody asks how to buy but not often on selling.

I’m not saying I am correct below so please tell me if I am missing something obvious. Any advice very welcome.

Thailand doesn’t have capital gains tax but income tax is paid on capital gain so it amounts to the same thing. The capital gain is decided on how long you own something only, not the purchase price. 20 million has 10 million capital gain after 10 years. You can even pay tax on a loss.

So, let’s say its 20 million baht and owned for 10 years. We’ll ignore legal fees. I will ignore the dodgy person at the land office I know, and the buyer also wants the full amount on the contract.

If it was a Thai person or a foreign condo sale, it would be for the seller about 300k in land office fees and 1.15 million in tax. All paid at the land office. That’s 1.45million – a lot.

If it was a Thai company selling it would be 300k land office fees and 200k withholding tax. Total 500k paid at the land office. Then I presume you would pay corporation tax of 1.05 million (minus the 200k withholding tax already paid - I presume) at the end of the year. That's 1.35 million.

Do Thai people pay all this company tax normally or any of it? The company would be missing all of its assets so somebody would surely notice.

If you sell the company owning the land, you are basically selling all the shares. There is no visit to the land office so no fees. I presume then you would submit a tax return and voluntary pay the income tax. If you already file one, you would add this income. This would be about 1.15 million.

Do Thai people declare this income and pay the tax? Anybody have experience here? I don’t mean you personally if you know what I mean!!

Some of the land I am selling is in company name so I presume selling the company is the best option. A little more in legal fees, no land office fees, just the voluntary income tax. When paid, it would still be cheaper than removing the land from the company.

Or have I gone stupid?

[simon46]

my understanding is that you are not selling the land, so there is no capital gains.

you are instead transferring your controlling interest in the company whose asset is the land (and house).

this will be done at the company house type office sort of up sukumvit passed banglamung a few km on the left.  There is another in Chonburi 40 minutes up the road.

if you arrive before opening at 0830 or so you can pick up a queue number, or a Thai speaker can book a number prior.

you will spend a merry hour signing as will your buyer, it will cost 10000 baht or so.

you will hand over the chanook, house book, company seal to your buyer and he/she will go to the land office.  You will trouser the money at this time and b** off.

Your buyer will demand that city hall taxes are cleared at city hall,  10 years or so these were not payable, later there was no penalty for paying late, that is not the case now and properties in company names are hammered, guess 20 times the rather nominal tax a Thai would pay plus mega interest, so if you have binned these demands this will dominate the few thousand baht fees.

Now might be a good time to get a BG who is good at sulking, pleading, begging, claiming poverty (i.e all of them) to “negotiate” with city hall- while you cower in hiding.  This style of BG is available all over for 10000 baht a time, and assuming that the tax is in the 100s of thousands and you are cowering she can have a real payday.  Water sewerage bill at the same time is peanuts.  

Funnily Thai girls get as worked up about a 829 baht bill as a 230,000 baht bill-  love them.

The lack of any capital gains tax may explain the enthusiasm of Thai authorities for company accounts, city hall tax etc, this is not a risk free loophole, OK for a house there is little option without a serious Thai partner, but buying a condo in company name- aaaah.

[lazy catfish]

great advice, I'd forgotten all about those taxes and yes I've ignored them. Have no issues finding a Thai girl claiming poverty, have Thai kids over 20.