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 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 a provision that exempts gifts from personal income tax, it is therefore necessary to enact this law to repeal that provision and to also add provisions in order to subject gifts to taxation.

From 1 February 2016, the effective date of the RCAA (No 40), the Revenue Code exempts gifts from income tax and subjects gifts to income tax, as follows:

Gifts Exempt from Income Tax

For a gift of immovable (real estate) property received by a lawful child (not an adopted child)		Exemption from income tax for the amount received not exceeding 20 million baht in a tax year
For a gift of maintenance or support under a moral obligation received by an ascendant, descendant or spouse		Exemption from income tax for the amount received not exceeding 20 million baht in a tax year
For a gift at a ceremony or occasion in accordance with custom/tradition received by a person who is not an ascendant, descendant or spouse		Exemption from income tax for the amount received not exceeding 10 million baht in a tax year

Gifts Subject to Income Tax

For a gift of immovable (real estate) property received by a lawful child (not an adopted child)		Subject to income tax on the amount received in excess of 20 million baht in a tax year
For a gift of maintenance or support under a moral obligation received by an ascendant, descendant or spouse		Subject to income tax on the amount received in excess of 20 million baht in a tax year
For a gift at a ceremony or occasion in accordance with custom/tradition received by a person who is not an ascendant, descendant or spouse		Subject to income tax on the amount received in excess of 10 million baht in a tax year

Thailand Tax Payable on Gifts Subject to Income Tax

Personal income tax is payable on gifts subject to income tax, as follows:

For gifts received in excess of the above-mentioned amounts

Personal income tax according to the 0-35% progressive rates of tax

However Revenue Code Amendment Act (No 40) grants receivers of gifts subject to income tax an election to pay a 5% rate of income tax instead of the 0-35% rates as follows:

For a gift of immovable (real estate) property received by a lawful child (not an adopted child)		On the amount of the gift received in excess of 20 million baht, 5% income tax, payable on the transfer registrat-ion of the immovable property
For a gift of maintenance or support under a moral obligation received by an ascendant, descendant or spouse		On the amount of the gift received in excess of 20 million baht, 5% income tax, payable on a filing of a personal income tax return
For a gift at a ceremony or occasion in accordance with custom/tradition received by a person who is not an ascendant, descendant or spouse		On the amount of the gift received in excess of 10 million baht, 5% income tax, payable on a filing of a personal income tax return

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