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 contains provisions that exempt gift income from tax, which is inconsistent with taxation of income, it's necessary to amend those provisions so that income tax becomes payable on the receipt of gift income.

From 01 Feb 2016, the effective date of RCAA (No 40), the amended provisions in the Revenue Code continue to exempt gift income from tax, but also subject gift income to tax, 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 Subject to personal income tax for such income exceeding 20 million baht in a tax year
For income derived from a receipt of a gift of maintenance or patronage under a moral obligation by a person who's an ascendant, descendant or spouse		Exemption from income tax, only for such income not exceeding 20 million baht in a tax year Subject to personal income tax for such income 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 Subject to personal income tax for such income exceeding 10 million baht in a tax year

Taxation of Gift Income

But whilst the above amended provisions prescribe that for gifts in excess of the specified amounts are subject to personal income tax at the progressive rates of tax, the amended provisions additionally grant taxpayers the option to pay a 5% rate of tax instead of the 0-35% progressive rates of tax, 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 patronage under a moral obligation by a person who's 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

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