26 May 2016
Instruments and not transactions or persons are subject to stamp duty tax. For the purposes of stamp duty, an instrument is defined as any document chargeable with duty under the Revenue Code.
Only instruments listed in the stamp duty schedule are subject to stamp duty and the persons liable to pay stamp duty are those associated with the instrument. For example, the persons executing the instrument, the holders of the instrument or the beneficiary.
Instruments executed outside Thailand are not subject to stamp duty until the instrument is brought into Thailand.
For an instrument to be used as evidence in a civil court case, the full amount of the stamp duty (including any surcharge) must be paid.
Hire of Work Contracts
For many companies its instrument subject to stamp duty is the ‘hire of work’ contract. A hire of work contract is defined under Civil and Commercial Code as an agreement whereby one person (the contractor), agrees to perform work for another person (the employer) who agrees to pay remuneration to the contractor.
1. If the remuneration is not known at the time of execution of the contract, the stamp duty should be paid on an estimate of the remuneration.
2. If the remuneration is received several times and the stamp duty paid is not sufficient, additional stamp duty should be paid every time payment is received.
3. If on the termination of a contract, it was found that stamp duty was overpaid, a claim for refund may be made.
4. If the instrument was executed outside of Thailand, the stamp duty must be paid within 30 days of bringing the instrument into the country.
Stamp duty rates on a selection of commonly seen instruments are as follows:
For a complete schedule of instruments, the stamp duty and the person liable, please refer to Stamp Duty Schedule in Chapter VI of the Revenue Code.
Payment of Stamp Duty
There are two common methods to pay the stamp duty:
1. Affix the stamps to the instrument
2. Payment in cash* (filing form Or Sor 4 along with the related payment with the Revenue Department)
* Although the term cash used the payment can be made by cheque.
Notable instruments for which the stamp duty must be paid by cash include:
1. Agreement for lease of land, building, other construction or floating house for which the rental fee for the entire lease period is Baht 1m or more;
2. Agreement for lease of land, building, other construction or floating house for which the registration to the officer under the land law is required; and
3. The hire-of-work service agreement for which the service fee is Baht 1m or more.
The late payment of the stamp duty on an instrument is subject to significant surcharges calculated on the stamp duty underpaid.
Note that should the stamp duty liability be identified by the Revenue Department officer during a tax investigation then the maximum surcharge will be six times the amount of stamp duty payable.
Further sources of information
Revenue Department website: