Stamp Duty in Thailand: Another Tax to Keep in Mind

In Thailand, most agreements must be executed in simple written form with the signatures of two witnesses — except where mandatory registration with a government authority is required.

However, it is important to note that certain types of agreements are subject to Stamp Duty, regardless of whether registration is required.

When is Stamp Duty applied?

1. Long-term lease (leasehold)
If a lease agreement is concluded for a period exceeding three years, it must be registered with the Land Department.

In this case, two fees apply:
– 1% — registration fee
– 0.1% — stamp duty calculated on the total rental amount for the entire lease term

Payment of stamp duty cannot be avoided — it is collected at the time of registration.

2. Short-term lease (up to 3 years)
Even if a lease agreement is concluded for one year and does not require registration, the landlord is still obligated to pay stamp duty.

Other agreements subject to Stamp Duty

3. Loan agreement
– Stamp duty rate: 0.5% of the loan amount
– Maximum amount: 10,000 baht

4. Hire of work agreement
– Rate: 0.1%

Note: The tax authorities interpret hire of work agreements more broadly than defined in the Civil and Commercial Code. Therefore, agreements that may not appear to fall under this category can still be subject to stamp duty.

Liability for non-payment of Stamp Duty

Delay of more than 15 days:
– penalty equal to twice the stamp duty amount

Delay of more than 90 days:
– penalty equal to five times the stamp duty amount

Example:
If stamp duty on a loan agreement is not paid at the maximum amount:
– base duty: 10,000 baht
– penalty: up to 50,000 baht

Potential business implications

– Difficulties in reflecting the agreement in financial statements
– In some cases, the risk of the document being deemed invalid

Special cases

Agreements involving foreign parties (for example, between a foreign lender and a Thai company) are also subject to stamp duty on a general basis.