After our previous article, we received numerous comments and questions about what we had overlooked in our tax calculations and which details deserved more attention.
We acknowledge these omissions and are here to correct them. After all, it has been a while since we discussed taxes in detail.
Let’s calculate the seller’s Personal Income Tax (Withholding Tax), taking all the transaction details into account.
Initial Data
- Selling price: THB 10,000,000.
- Government appraised value: THB 7,000,000.
- Ownership period:
- Scenario 1 — 3 tax years.
- Scenario 2 — 7 tax years.
What Should You Know Before Calculating the Tax?
When an individual sells property in Thailand, Withholding Tax is calculated based on the government’s appraised value of the property, not the actual selling price.
Yes, it may sound strange: even if the property is sold for THB 20 million, the Withholding Tax in our example will still be calculated based on THB 7 million.
The calculation takes into account the ownership period, the applicable expense deduction percentage, and a special progressive tax scale.
Let’s examine both scenarios.
Scenario 1. Selling Property After 3 Tax Years of Ownership
Step 1. Determine the Taxable Base
The applicable expense deduction for an ownership period of 3 years is 77%.
7,000,000 − (7,000,000 × 77%) = THB 1,610,000.
Step 2. Divide the Taxable Base by the Ownership Period
1,610,000 ÷ 3 = THB 536,666.67.
Step 3. Calculate Tax Using the Special Progressive Tax Scale
Unlike the standard Personal Income Tax scale, the first THB 150,000 is not tax-exempt when calculating Withholding Tax on a property sale.
Calculation:
- First THB 300,000 × 5% = THB 15,000.
- Next THB 200,000 × 10% = THB 20,000.
- Remaining THB 36,666.67 × 15% = THB 5,500.
Total tax for the calculation year: THB 40,500.
Step 4. Multiply the Tax by the Number of Years of Ownership
40,500 × 3 = THB 121,500.
The Withholding Tax on a property sold after 3 tax years of ownership is THB 121,500.
Scenario 2. Selling Property After 7 Tax Years of Ownership
Step 1. Determine the Taxable Base
The applicable expense deduction for an ownership period of 7 years is 55%.
7,000,000 − (7,000,000 × 55%) = THB 3,150,000.
Step 2. Divide the Taxable Base by the Ownership Period
3,150,000 ÷ 7 = THB 450,000.
Step 3. Calculate the Tax
- First THB 300,000 × 5% = THB 15,000.
- Next THB 150,000 × 10% = THB 15,000.
Total tax for the calculation year: THB 30,000.
Step 4. Multiply the Tax by the Number of Years of Ownership
30,000 × 7 = THB 210,000.
The Withholding Tax on a property sold after 7 tax years of ownership is THB 210,000.
Comparison of Results
Even when the selling price and government appraised value remain the same, the amount of Withholding Tax can differ depending on the ownership period.
| Item | 3 Years of Ownership | 7 Years of Ownership |
|---|---|---|
| Selling price | THB 10,000,000 | THB 10,000,000 |
| Government appraised value | THB 7,000,000 | THB 7,000,000 |
| Expense deduction | 77% | 55% |
| Taxable base | THB 1,610,000 | THB 3,150,000 |
| Withholding Tax | THB 121,500 | THB 210,000 |
As we can see, when selling the same property at the same government appraised value, the Withholding Tax after 7 tax years of ownership is higher than after 3 years.
In our next article, we will explain when other taxes on property sales in Thailand are payable and how to calculate them — Specific Business Tax (SBT) and Stamp Duty.
Author: Alexandra Agapitova.
All rights reserved.
Copying and use of these materials without the owner’s written consent is prohibited.