Introduction of Inheritance and Gift Tax

The Inheritance Tax Act was formally announced on 5 August 2015. The act has been effective since 1 February 2016.

Keywords: Mazars, Thailand, Tax, Inheritance Tax, Gift Tax, National Legislative Assembly

9 February 2016

The government did not expect the inheritance tax and gift tax bills to generate huge revenue. Their purpose was to ensure that Thai people have a more equitable system between high and low income earners.

There is an attempt to ensure fairness by taking into account the circumstances of low income earners by way of exemptions. For example, children of poor rice growers might not be able to pay the tax on the land they inherit.

Under this act, if the inheritance received has a value exceeding 100 million baht, no matter where received, or if received all at once or over a period of time, only that portion which exceeds the value of 100 million baht shall be taxed. For the purposes of this inheritance tax, the value of the inheritance subject to tax means the value of the asset received as an inheritance offset by the liabilities inherited.

The tax rate is 10% of the value of the inheritance subject to tax. However, if the recipient is a descendant or surviving older relative of the owner of the inheritance, the rate is reduced to 5%.

Whilst in theory the imposition of an inheritance and gift tax may seem fair and equitable as a policy measure to assist in reducing the disparity between the rich and poor, the introduction of such tax may prove difficult to implement and will be open to abuse.

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