Reducing Taxes for Leased Property in Thailand

A common return investors seek comes from leasing property in Thailand out. Prior to seeking it, the following taxes should be taken into account:

1. Duty Stamp
a. Duty stamp is 0.10% base for the entire leased amount in one year.
2. Income Tax
a. The landlord is required to file a tax form twice a year on earnings from the lease. It must
be filed for the mid-year tax between July 1 - September 30 of the calendar year. The
second tax filing period will be from January 1 - March 31 of the next calendar year. The
income tax rate is based on the progressive rate for individual income tax.
3. Value Added Tax
a. Property lease is exempted from Value Added Tax (VAT).
4. Property Tax
a. The applicable property tax is 12.5% of the entire year leased amount.

Example 1:
Mr. A is a single person having his 10 property units leased out; the rent is 10,000 baht per month, per unit. His earnings from leasing for the entire year come out to 1,200,000 baht. If Mr. A has no other
sources of income, then he will need to file taxes as follows:
Duty stamp 1,200.- baht 
Duty stamp is 0.10 % for the leased amount in one year
1,200,000 x 0.10%
Income Tax
First tax filing
1. Income from the first 6 months 600,000.- baht
2. Less lump sum expenses 30% 180,000.- baht
3. Less lump sum personal expenses 15,000.- baht
4. Net income 405,000.- baht
5. Personal Income Tax progressive rate
Net Income for the first 150,000 baht is exempted from tax
255,000 x 10% = 25,500 baht
Mr. A shall pay midyear tax of= 25,500.- baht
Second tax filing
1. Leasing income for the entire year 1,200,000.- baht
2. Less lump sum expenses 30% 360,000.- baht
3. Less lump sum personal expenses 30,000.- baht
4. Net income 810,000.- baht
5. Personal Income Tax progressive rate
Net Income for the first 150,000 baht is exempted from tax
350,000 x 10% = 35,000 baht
310,000 x 20% = 62,000 baht
Total 97,000 baht
Mr. A shall pay tax = 97,000.- baht 
1. Less first tax filing (25,500) baht
2. Second tax filing will be 71,500.- baht
Total first + second tax filing 25,500 + 71,500= 97,000 baht
3. Property Tax 12.5% 150,000.- baht ?
a. Entire year leased 1,200,000 baht x 12.5%
4. Total taxes Mr. A should have paid
 Duty stamp 1,200.- baht
 Personal Income Tax 97,000.- baht
 Property Tax 150,000.- baht
Total Taxes 248,200.- baht 
Tax Reduction Method

Example 2:

Mr. A has divided leases into 2 agreements, the first agreement is to lease out space, and the rent of each unit is 5,000 baht per month for 10 units. Total earnings for the entire year come out to 600,000 baht. The
second agreement is to have furniture leased for 3,000 baht per unit per month along with a security & cleaning fee of 2,000 baht per unit per month.

Total earning for second agreement is 600,000 baht.

Duty stamp
Duty stamp 0.10 % for the entire year leased amount 600.- baht
600,000 x 0.10%
Duty stamp 0.10 % for the entire year security & cleaning fee 240.- baht
240,000 x 0.10%
Total Duty stamp 840.- baht 

Income Tax
First tax filing
1. Income from the first 6 months 300,000.- baht
2. Less lump sum expenses 30% 90,000.- baht
3. Income after lump sum expenses 210,000.- baht
4. Income from leased furniture for the first 6 months 180,000.- baht
5. Less Lump sum expenses 10% 18,000.- baht
6. Income from leased furniture after expenses 162,000.- baht
7. Security & cleaning fee for the first 6 months 120,000.- baht
8. Less lump sum expenses 70% 84,000.- baht
9. Income after expenses 36,000.- baht
10. Net income (3+6+9)408,000.- baht
11. Less lump sum personal expenses 15,000.- baht
12. Net income 393,000.- baht
13. Personal Income Tax progressive rate
Net Income for the first 150,000 baht is exempted from tax
243,000 x 10% = 24,300 baht

Mr. A shall pay tax as per progressive rate 24,300.- baht

Second tax filing

1. Income from lease for the entire year 600,000.- baht
2. Less lump sum expenses 30% 180,000.- baht
3. Income after expenses 420,000.- baht
4. Income from leased furniture for the entire year 360,000.- baht
5. Less lump sum expenses 10% 36,000.- baht
6. Income from leased furniture after expenses 324,000.- baht
7. Security & cleaning fee for the entire year 240,000.- baht
8. Less Lump sum expenses 70% 168,000.- baht
9. Income after expenses 72,000.- baht
10. Net income (3+6+9)816,000.- baht
11. Less Lump sum personal expenses 30,000.- baht
12. Net Income 786,000.- baht
13. Personal Income Tax progressive rate
Net income for the first 150,000 baht is exempted from tax
350,000 x 10% = 35,000 baht
286,000 x20% = 57,200 baht
Total 92,200 baht
Mr. A shall pay tax as per progressive rate 92,200.- baht
1. Less first tax filing (24,300) baht
2. Second tax filing will be 67,900.- baht
Total first + second tax filing 24,300+67,900= 92,200 baht
3. Property Tax 12.5%75,000.- baht 
Entire year leased 600,000 baht x 12.5%
4. Total taxes Mr. A should have paid
 Duty stamp 840.- baht
 Personal Income Tax progressive rate 92,200.- baht
 Property Tax 75,000.- baht
Total Taxes 168,040.- baht ?
Tax Savings
First Method  248,200 baht
Tax Savvy Method  (168,040) baht
Save 80,160 baht

If you plan ahead you will save on tax to maximize the return on your investment!