On 05 Aug 2015, Revenue Code Amendment Act (No 40) BE 2558 was gazetted, putting into effect from 01 Feb 2016, laws that subject gifts to tax in Thailand.

This Insight summarizes the taxation of gifts, as amended by the RCAA (No 40).

Revenue Code Amendment Act (No 40) BE 2558

The reason for enacting this law is to collect taxes on gifts. As the Revenue Code includes provisions that exempt gifts from tax which provisions are inconsistent with taxation of income, it is therefore necessary to amend those Revenue Code provisions so that income derived from the receipt of gifts is subject to tax.

From 01 Feb 2016, the effective date of RCAA (No 40), the amended provisions in the Revenue Code prescribe as follows:

For income derived from a receipt of a gift of immovable property by a lawful child not including an adopted child		Exemption from income tax, only for such income not exceeding 20 million baht in a tax year
For income derived from a receipt of a gift of maintenance or support under a moral obligation by a person who is an ascendant, descendant or spouse		Exemption from income tax, only for such income not exceeding 20 million baht in a tax year
For income derived from a receipt of a gift at a ceremony or on an occasion of custom or tradition by a person not an ascendant, descendant or spouse		Exemption from income tax, only for such income not exceeding 10 million baht in a tax year
and
For income derived from a receipt of a gift in excess of the above amounts		Personal income tax according to the 0-35% progressive rates

Thailand Taxation of Gift Income

But whilst the above amended provisions prescribe that for gifts in excess of the specified amounts shall be subject to tax at the progressive personal income tax rates of 0-35% the amended provisions additionally grant taxpayers an option to pay their income tax at a 5% rate of tax instead of at the 0-35% rates, as follows:

For income derived from a receipt of a gift of immovable property by a lawful child not including an adopted child		On the income amount exceeding 20 million baht, 5% tax payable on the registration of transfer of the immovable property
For income derived from a receipt of a gift of maintenance or support under a moral obligation by a person who is an ascendant, descendant or spouse		On the income amount exceeding 20 million baht, 5% tax payable on the filing of a personal income tax return
For income derived from a receipt of a gift at a ceremony or on an occasion of custom or tradition by a person not an ascendant, descendant or spouse		On the income amount exceeding 10 million baht, 5% tax payable on the filing of a personal income tax return

---