Inheritance tax draft bill green-lighted
The cabinet yesterday endorsed the draft bill for an inheritance tax that seeks to impose a 10% levy on bequests of more than 50 million baht.
The bill will now be forwarded to the National Legislative Assembly for deliberation and will take effect 90 days after publication in the Royal Gazette.
The tax is expected to take effect by next June, said deputy government spokesman Maj Gen Sansern Kaewkamnerd.
He insisted the 10% rate was a just a ceiling, with Deputy Prime Minister Wissanu Krea-ngam hinting during yesterday's cabinet meeting that the Finance Ministry wanted to charge only 5%.
Mr Wissanu said the ministry needed to study an exact rate in greater detail.
Taxable assets include residences, land, vehicles, bonds, equities and deposits at financial institutions. Non-registrable assets such as jewellery, amulets and luxury watches are excluded.
The inheritance tax will be levied on those who receive assets worth more than 50 million baht from a deceased person, while a gift tax, a parallel tax aimed at closing loopholes in the inheritance tax, is imposed when the donor dies within two years of a transfer of assets to a beneficiary.
Maj Gen Sansern said the ceiling rate for gift tax was set at 5% on bequests above 10 million baht.
Beneficiaries subject to tax include Thai citizens and non-Thai citizens who have domiciles or headquarters in Thailand for three consecutive years. The tax is also applied to non-Thai citizens whose inherited assets are in Thailand.
All assets donated to religious activities, universities or foundations for charity purposes will be exempt from tax payments. Assets inherited by wives or husbands after their spouse died will also be tax-free under the new regulations.
However, the cabinet did not discuss the land and buildings tax bill yesterday, Maj Gen Sansern said.
The new taxes are among measures the government is pursuing in order to narrow income disparity.
Kasikorn Research Center hailed the cabinet's approval, saying it was the first time in Thailand's history that the government had made a bold and concrete move in carrying out an inheritance bill with a clear enforcement duration.
It said tax rates would be relatively low compared with countries such as the US (18-40%), Britain (40%), Japan (10-55%), South Korea (10-50%) and the Philippines (5-20%).
However, to tackle social disparities the government must reform issues such as educational opportunities, job opportunities and accessibility to financial services.