You hit the nail Jockey...
I am going to sell a house in June and the buyer will pay me in Euro in an European Country. He was told that should he want to ever transfer the equivalent of the property value out of this country, he should follow the proper proceedures, i.e, fill-in the ST3 form and transfer the Euros into the Thai Baht, etc.. The only thing he's concerned to get the house as fast as possible on a lease contract.
One should ask the developers in HH whether they inform the customers accordingly? I would bet, that they are more concerned selling their stock of properties quickly, than to have to explain beyond company set-ups (legal or not legal!).
Selling property
Norm - To send money out, you need a money trail, therefore you need a form from your bank or from the developers bank to verify you brought money into the country to buy property.norm wrote:I've been under the impression that when you pay tax on the profit you can take it out. The tax amount depends on the length of time you have owned the property. After 5 years there is no tax.
Not sure where I got that from, has anyone transfered any profit out of LOS??
You are not quite accurate about the property tax either! When you go to the land office to sell your property, the tax is fixed and works out at roughly 5.3% of the land office's appraised price of the property (or the sale price if thats more than the appraised price and you declare the true sale price). After 5 years the land tax, property tax and transfer fee combination drops to about 2.5 %. The tax is higher if the ownership is a company. Right now there is tax incentives to boost property sales.
Your question has anyone transfered any profit out of LOS? is an excellent one that I am very interested to find out. Trouble is, if anyone already has, they are probably gone and forgotten.
Re: selling property
Good for you - bad for him. He will have a hard job trying to get his money back out if he does this, because he will have no evidence he brought the money in, (indeed he will not have brought money in, so his only hope would be to sell the house the same way you are doing, or smuggle the money out, (buy a very expensive ring?) Technically, what you are doing is illegal, (money laundering).icebear wrote:I am going to sell a house in June and the buyer will pay me in Euro in an European Country.
thanks for reply jockey, reading back i wasnt clear:
the debate about whether shareholders are due dividends etc is the same when selling as they are every year of running the company ie: they dont get paid
PIT (Personal Income Tax) - Income from sale of immovable property:
if the sale is made for a commercial purpose, it is essential that such income must be included as the assessable income. Nevertheless, from January 2003, gains from sales of residential buildings shall not be included as income if such gains are spent on purchasing a new home within 1 year before or after selling his primary residence
so there is no 'capital gains tax' as we know it, but there is PIT (personal income tax) due on the profit made. its a sliding scale of rates. also a sliding scale of discounts in the tax due depending on how long youve had the property. its locked at 50% discount, so you never have to pay more than half the normal tax rates, and it goes up to 90% discount
if you are spending it on a new house its not due (or its refundable if already paid under as 'withholding' tax)
also at the land office they have their own formulas for calculating values, they are considerably less than real values, therefore tax is lower than in reality
ive seen references to it before, will keep looking for it
foreign companies wouldnt do business here if you could only pay taxes and not actually take your profit out. that'd mean they were losing money
.
the company has to declare and pay the corporation tax, the 49% farang shareholder has majority voting rights and has the say on what to sell, when and how much. he also has the say in what bank account the funds get transferred into, obviously his ownso if your company made 5 million profit and you have 49% (or whatever) of the companies shares, then you can only account for 49% (or whatever shares you own) of the 5 million.
the debate about whether shareholders are due dividends etc is the same when selling as they are every year of running the company ie: they dont get paid
This is from the inland revenue website:2. There is no capital gains tax in Thailand. http://en.wikipedia.org/wiki/Capital_gains_tax
PIT (Personal Income Tax) - Income from sale of immovable property:
if the sale is made for a commercial purpose, it is essential that such income must be included as the assessable income. Nevertheless, from January 2003, gains from sales of residential buildings shall not be included as income if such gains are spent on purchasing a new home within 1 year before or after selling his primary residence
so there is no 'capital gains tax' as we know it, but there is PIT (personal income tax) due on the profit made. its a sliding scale of rates. also a sliding scale of discounts in the tax due depending on how long youve had the property. its locked at 50% discount, so you never have to pay more than half the normal tax rates, and it goes up to 90% discount
if you are spending it on a new house its not due (or its refundable if already paid under as 'withholding' tax)
also at the land office they have their own formulas for calculating values, they are considerably less than real values, therefore tax is lower than in reality
once you have paid due taxes on money made you can send it home, or whereeverIf you know you can take out more money than you bring in based on profit from selling a condo I would very much like to know where you got that information from? Is there a web link?
ive seen references to it before, will keep looking for it
foreign companies wouldnt do business here if you could only pay taxes and not actually take your profit out. that'd mean they were losing money
.
Not if his bank account is not in Thailand! That's what this thread is about.Super Joe wrote: he also has the say in what bank account the funds get transferred into, obviously his own
Before being allowed to take money out the country, the bank want to see if the money came into the country and you have a record of this money coming into the country. In a case of buying through the means of a company, technically, the person taking the money into the country didn't buy property, he bought shares in a company. It was the company who bought the property, not the individual. So now its a different ball game. I believe you would need to show evidence you brought money in to Thailand to invest in a company and that company is now dissolved. You will need to show the companies documents, which will include the sale of all assets, and whatever your shares of the profits are in the company, is the amount you would be allowed to take back out the country. Of course the company would be liable to pay all the taxes associated with the profits.
As for capital gains tax there is no such thing in Thailand. Yes there is personal income tax, but in the case of a foreigner buying a condo and not working, he is not liable to personal income tax, so there would be no other tax to pay, other than the normal tax's paid at the land office.
icebear wrote:
why do you say developers should inform buyers of the legalities involved ? for the past 40 years ive always understood that a buyer employs a solicitor to do this, developers and estate agents are not qualified in law.
icebear, not sure or not whether being paid overseas is illegal or not, but you're meant to declare it and pay tax otherwise it will beI am going to sell a house in June and the buyer will pay me in Euro in an European Country
One should ask the developers in HH whether they inform the customers accordingly? I would bet, that they are more concerned selling their stock of properties quickly, than to have to explain beyond company set-ups
why do you say developers should inform buyers of the legalities involved ? for the past 40 years ive always understood that a buyer employs a solicitor to do this, developers and estate agents are not qualified in law.
jockey,
i wasnt talking about an account overseas. the 49% farang shareholder has the authority to transfer to his bank account in thailand, then after that the subject of this thread comes into play
they are only concerned about tax being paid on money you want to take out, not having to demonstrate that the shareholders got their dividends.
whether shareholders have received their dividends (ie: is all the money yours) is not checked at all at land office. ive done it, all you need is minutes of meeting from company and company stamp
then when a bank (if they actually do) wants to check the amount your sending out, over the amount you bought in, has had the tax paid on it, they can only assume its yours as their government have accepted it as yours by letting you pay tax on it
in other words if the government do not require you to demonstrate shareholder dividends, why would kasikorn
yes, the land office withhold the tax upon sale, its personal income tax for the revenue department
.
i wasnt talking about an account overseas. the 49% farang shareholder has the authority to transfer to his bank account in thailand, then after that the subject of this thread comes into play
they are only concerned about tax being paid on money you want to take out, not having to demonstrate that the shareholders got their dividends.
whether shareholders have received their dividends (ie: is all the money yours) is not checked at all at land office. ive done it, all you need is minutes of meeting from company and company stamp
then when a bank (if they actually do) wants to check the amount your sending out, over the amount you bought in, has had the tax paid on it, they can only assume its yours as their government have accepted it as yours by letting you pay tax on it
in other words if the government do not require you to demonstrate shareholder dividends, why would kasikorn
yes, the land office withhold the tax upon sale, its personal income tax for the revenue department
.
Last edited by Super Joe on Sat Apr 12, 2008 7:58 pm, edited 2 times in total.
this might help people, from siam-legal a big bangkok law firm:
Taxes for Buying and Selling Property in Thailand
Every person residing in Thailand, regardless his/her nationality shall be responsible to pay taxes and fees when buying or selling property. These taxes and fees are as follows:
1.TRANSFERRING FEE
The Transferring fee is 2% of the registered value of the property
'the rest snipped out'
2.STAMP DUTY
Buyer or seller is subject to a 0.5% Duty Stamp
'the rest snipped out'
3.SPECIFIC BUSINESS TAX (SBT)
SBT will only be imposed if you are selling your property, which you have own less than a period of five years. The tax rate is 3.3% of the selling or assessed price of an asset (whichever is higher).
4.WITHHOLDING TAX
Individuals selling their property :
the withholding is determined under to Revenue code of Thailand. The seller shall withhold such tax and pay to the Revenue Department, when he/she earn an income from the sale of immovable property (including condominium unit). Withholding tax rate are calculated based from government assessed price with a deduction of possession year, which are varied depending on the year of your possession (the more years of possession, the more the deduction) and calculate that amount based on the income form the progressive tax rate (range from 0 – 37%)
.
Taxes for Buying and Selling Property in Thailand
Every person residing in Thailand, regardless his/her nationality shall be responsible to pay taxes and fees when buying or selling property. These taxes and fees are as follows:
1.TRANSFERRING FEE
The Transferring fee is 2% of the registered value of the property
'the rest snipped out'
2.STAMP DUTY
Buyer or seller is subject to a 0.5% Duty Stamp
'the rest snipped out'
3.SPECIFIC BUSINESS TAX (SBT)
SBT will only be imposed if you are selling your property, which you have own less than a period of five years. The tax rate is 3.3% of the selling or assessed price of an asset (whichever is higher).
4.WITHHOLDING TAX
Individuals selling their property :
the withholding is determined under to Revenue code of Thailand. The seller shall withhold such tax and pay to the Revenue Department, when he/she earn an income from the sale of immovable property (including condominium unit). Withholding tax rate are calculated based from government assessed price with a deduction of possession year, which are varied depending on the year of your possession (the more years of possession, the more the deduction) and calculate that amount based on the income form the progressive tax rate (range from 0 – 37%)
.
I think the main thing readers of this thread need to know is you need a proper bank trail of your money if you want to take money back out the country. When bringing money into this country, you need to keep records of how your money was used.
Buying a condo the legal straight forward way can still be a little complicated when it comes to selling up but shouldn't be too difficult. We are all still unsure if you can take out the profits i.e bring in 5m for a condo, sell it for 8m can you take all 8m out if you have paid the tax or only 5m. That is what I'd like to know, as I said I've had conflicting advice and no examples.
Despite what anyone tells you, getting your money back out the country after buying a house through a company is much more complicated and full of minefields. I.e lets say you brought in 5m to Thailand to buy a house. What bank records do you have to prove this? You didn't buy a house, you bought shares in a company. Is there records in your company you put 5m baht into it to buy shares? If so, (and I very much doubt it), and your shares are only 49%, then the other shareholders would have to have invested a little more than 5m to make up the other 51%. How can you show records that the 5m baht you brought in to the country was invested through the company to buy a house? How many people set up a company called "Joe Bloggs xxx Co Ltd." set up a company bank account and actually put all the money they brought in to the country into the companies bank account? They didn't, did they! So where is the trail? Thats only for starters! Lets say your company sells the house for 8m. If everything was done properly (which it NEVER is), then the money trail and company records would have said you brought in 5m to buy shares in a company. The company had 11m in the bank and you put in 5m of that. The company then bought a house for 5m. That leaves 6m in the bank (which will never be the case of course). The company sells for 8m so now there should be 14m in the bank. Now you want to get out the company, out the country and take your money with you. If everything was done the right way, (which obviously it won't have been), the records would show you would be allowed 49% of 14m less taxes. But lets be honest. There wouldn't be a trail. It would have been broken. Most who would have brought in 5m would have either sent it to their own personal account or straight in to the developers account. Where are the bank records to say the company paid 5m to the developer to buy the house? There isn't any. If you sold your house, would the money go into the company bank account or your own personal account? Lets face it. Who has bought a house using a company and has a proper money trail like the scenario I mentioned above? The answer is no one.
But don't panic! Its not all doom and gloom! First thing you need to do if you brought money in to the country is check you have records - if not get them now if you can. I bought a house through a company and I sold the house by transferring the directorship of the company. I have records of money I brought in to this country to buy the house. If I want to take the money back out, I will not even mention I sold the house. I'll just say I brought money in to buy a house, but I didn't bother, so now I want to take it back out! Actually I'm also going to buy a condo, but I have to tell you, because my bank transfer records are so old, its not been easy. The quicker you get your documents sorted the easier for you in the future.
Hope that helps?
Buying a condo the legal straight forward way can still be a little complicated when it comes to selling up but shouldn't be too difficult. We are all still unsure if you can take out the profits i.e bring in 5m for a condo, sell it for 8m can you take all 8m out if you have paid the tax or only 5m. That is what I'd like to know, as I said I've had conflicting advice and no examples.
Despite what anyone tells you, getting your money back out the country after buying a house through a company is much more complicated and full of minefields. I.e lets say you brought in 5m to Thailand to buy a house. What bank records do you have to prove this? You didn't buy a house, you bought shares in a company. Is there records in your company you put 5m baht into it to buy shares? If so, (and I very much doubt it), and your shares are only 49%, then the other shareholders would have to have invested a little more than 5m to make up the other 51%. How can you show records that the 5m baht you brought in to the country was invested through the company to buy a house? How many people set up a company called "Joe Bloggs xxx Co Ltd." set up a company bank account and actually put all the money they brought in to the country into the companies bank account? They didn't, did they! So where is the trail? Thats only for starters! Lets say your company sells the house for 8m. If everything was done properly (which it NEVER is), then the money trail and company records would have said you brought in 5m to buy shares in a company. The company had 11m in the bank and you put in 5m of that. The company then bought a house for 5m. That leaves 6m in the bank (which will never be the case of course). The company sells for 8m so now there should be 14m in the bank. Now you want to get out the company, out the country and take your money with you. If everything was done the right way, (which obviously it won't have been), the records would show you would be allowed 49% of 14m less taxes. But lets be honest. There wouldn't be a trail. It would have been broken. Most who would have brought in 5m would have either sent it to their own personal account or straight in to the developers account. Where are the bank records to say the company paid 5m to the developer to buy the house? There isn't any. If you sold your house, would the money go into the company bank account or your own personal account? Lets face it. Who has bought a house using a company and has a proper money trail like the scenario I mentioned above? The answer is no one.
But don't panic! Its not all doom and gloom! First thing you need to do if you brought money in to the country is check you have records - if not get them now if you can. I bought a house through a company and I sold the house by transferring the directorship of the company. I have records of money I brought in to this country to buy the house. If I want to take the money back out, I will not even mention I sold the house. I'll just say I brought money in to buy a house, but I didn't bother, so now I want to take it back out! Actually I'm also going to buy a condo, but I have to tell you, because my bank transfer records are so old, its not been easy. The quicker you get your documents sorted the easier for you in the future.
Hope that helps?
this is from the american chamber of commerce, it mentioned repatriation of funds:
From April 1, 1991, Thailand has substantially relaxed its control of foreign exchange transactions. The relaxation of controls effectively allows authorized banks to conduct the majority of foreign exchange transactions without government control.
Thai residents must exchange foreign currency or place these on deposit in a foreign currency account with an authorized bank within seven days of receipt. The daily balance of a Thai resident’s foreign currency account must not exceed US$5 million for juristic persons and US$500,000 for an individual.
There is no restriction on the amount of investment funds or foreign loan funds that may be remitted into Thailand. Records of inward remittance should be maintained to expedite subsequent outward remittance. Foreign exchange capital investments and loans must be converted into baht or deposited in a foreign exchange account within seven days of receipt by a Thai resident.
Repatriation of capital investments, loan funds, profits, interest, and dividends out of Thailand is not restricted, although tax is generally withheld on remittances of profits, interest, and dividends. The amount of Thai currency that a traveler may take out of Thailand is limited to 50,000 baht.
Thai residents can repatriate funds offshore for international capital investments and loans up to US$5 million per year but approval of the Bank of Thailand must be obtained as a matter of formality.
Proceeds of exports from Thailand in excess of 500,000 baht must be collected within 120 days and converted into Thai currency or deposited in a foreign currency account within seven days of receipt.
From April 1, 1991, Thailand has substantially relaxed its control of foreign exchange transactions. The relaxation of controls effectively allows authorized banks to conduct the majority of foreign exchange transactions without government control.
Thai residents must exchange foreign currency or place these on deposit in a foreign currency account with an authorized bank within seven days of receipt. The daily balance of a Thai resident’s foreign currency account must not exceed US$5 million for juristic persons and US$500,000 for an individual.
There is no restriction on the amount of investment funds or foreign loan funds that may be remitted into Thailand. Records of inward remittance should be maintained to expedite subsequent outward remittance. Foreign exchange capital investments and loans must be converted into baht or deposited in a foreign exchange account within seven days of receipt by a Thai resident.
Repatriation of capital investments, loan funds, profits, interest, and dividends out of Thailand is not restricted, although tax is generally withheld on remittances of profits, interest, and dividends. The amount of Thai currency that a traveler may take out of Thailand is limited to 50,000 baht.
Thai residents can repatriate funds offshore for international capital investments and loans up to US$5 million per year but approval of the Bank of Thailand must be obtained as a matter of formality.
Proceeds of exports from Thailand in excess of 500,000 baht must be collected within 120 days and converted into Thai currency or deposited in a foreign currency account within seven days of receipt.
How can you show records that the 5m baht you brought in to the country was invested through the company to buy a house? How many people set up a company called "Joe Bloggs xxx Co Ltd." set up a company bank account and actually put all the money they brought in to the country into the companies bank account? They didn't, did they! So where is the trail? Thats only for starters! Lets say your company sells the house for 8m. If everything was done properly (which it NEVER is), then the money trail and company records would have said you brought in 5m to buy shares in a company. The company had 11m in the bank and you put in 5m of that. The company then bought a house for 5m. That leaves 6m in the bank (which will never be the case of course). The company sells for 8m so now there should be 14m in the bank. Now you want to get out the company, out the country and take your money with you. If everything was done the right way, (which obviously it won't have been), the records would show you would be allowed 49% of 14m less taxes. But lets be honest. There wouldn't be a trail. It would have been broken. Most who would have brought in 5m would have either sent it to their own personal account or straight in to the developers account. Where are the bank records to say the company paid 5m to the developer to buy the house? There isn't any. If you sold your house, would the money go into the company bank account or your own personal account? Lets face it. Who has bought a house using a company and has a proper money trail like the scenario I mentioned above? The answer is no one.
as far as im told jockey, the authorities are not interested about this, they only want the due taxes paid on the funds being transferred out of the country
you have records of how much you bought in and you have records of the tax being paid on the profits
obviously for condos the above complications do not apply
.
selling property
Super Joe
With a Thai wife it is obviously easer to deal with the aforementioned topic.
It is not the first time that we're selling. Where and how we get the money is of no concern to anybody. This impending sale, we've discussed it with the buyer and he consents with this deal as within a couple of years he'll sign it over to his future Thai wife.
I mentioned the developers, because they're in the business to sell and as soon as the buyer has signed on the dotted line, they maybe refer you to their legal department. It is advisable to find your own lawyer beforehand and get accustomed with the Thai proceedures.
I hope this clarifies what I tried to write.
Cheers,
With a Thai wife it is obviously easer to deal with the aforementioned topic.
It is not the first time that we're selling. Where and how we get the money is of no concern to anybody. This impending sale, we've discussed it with the buyer and he consents with this deal as within a couple of years he'll sign it over to his future Thai wife.
I mentioned the developers, because they're in the business to sell and as soon as the buyer has signed on the dotted line, they maybe refer you to their legal department. It is advisable to find your own lawyer beforehand and get accustomed with the Thai proceedures.
I hope this clarifies what I tried to write.
Cheers,
-
PooftersFrothWyoming
- Amateur
- Posts: 29
- Joined: Fri Apr 11, 2008 1:51 pm
Re: Selling property
I bought an HH apartment a years ago with a friend. Earlier this year bought friend's share because he needed money to buy an apartment in Chiang Mai. From Europe I wired USD into my SCB USD account to a value acceptable to the HH Land Office, with the balance being paid in Europe. Friend wanted me to transfer my USD in SCB account into his local baht account (SCB said banking regulations do not permit USD account to USD account transfers) so he could pay developer of Bangkok flat. But, developer declined because payments must be seen to come from outside Thailand to get the right papers from the bank and to comply with foreigners buying property regulations etc. The fact that I had brought USD into Thailand and kept it in USD didn't count. So I then had to ask SCB to wire my USD100K to friend's account in Europe. That took a couple of visits and a reminder from my employer that we are good customers, that the money arrived in USD etc etc. It was time consuming and bank charges were by no means insignificant, but we did it without too much angst. However, getting USD600K out of Thailand for a property that cost USD400K might be another story altogether even if the paperwork is waterproof...HuaHinR wrote:Someone suggested to me that if property (condo) were bought here, upon selling it (whenever) it might be a problem getting the funds out of Thailand and back to an account in the home country. Anybody know or heard anything about this?
Sold a house in HH at a small profit whilst buying a new one. Profit was sent to my UK account and the balance used to pay for new one. Suppose it would work the same way i.e. have profit paid directly to home country account and the balance (original cost) into your Thai account to transfer yourself thus buyer, seller and authorities should be satisfied.