Inheritance Tax As mentioned in Chapter 15 Other taxes, Thailand came into force for the first time on February 1, 2016, inheritance tax. Thailand`s double taxation agreements do not deal with or mention inheritance tax. Therefore, the question arises as to whether inheritance tax is paid under Thai tax law and whether the deceased`s estate is charged in another country subject to inheritance and estate tax, or vice versa, whether the payment of inheritance tax in the first country is charged on the IHT bill in the second country. Tax treaties aim to avoid double taxation and prevent tax evasion. As a general rule, they offer a means of granting a double payment of taxes on the same income to a person who has income that would normally be taxed in more than one country, or a tax credit for the tax paid in one country against the tax debt of a taxpayer in another country. In addition to providing benefits to taxpayers, double taxation agreements also provide for cooperation between governments in the prevention of tax evasion. Avoiding double taxation Treaties generally provide that individuals and businesses in more than one country do not have to pay taxes on the same income or, in the case of double taxation, a credit is granted in the second country for taxes paid in the first country. Dividends paid to companies Since the maximum tax on dividends paid to companies abroad is 10%, there are no specific tax benefits with respect to Thai tax rates. They do not cover VAT or the specific business tax. Since the mineral oil tax is an income tax, it is generally covered by tax treaties.
For example, if a Singapore company sends a person to Thailand to study the possibility of opening a factory in Thailand, his salary would most likely be exempt from Thai income tax, provided he spends less than 183 days in Thailand. While, in most cases, residence, physical presence and place where taxes are paid are more important than nationality in determining benefits under a tax treaty, most tax treaties contain a general language that provides that, in similar circumstances, citizens of a country under tax contract cannot be required to pay more taxes or taxes than citizens of the other country. Given that Thailand often attempts to tax foreign companies that have a representative in Thailand, it is often wise to rely on a tax treaty to obtain an exemption from this tax, since mere representation or representation in Thailand is not, in itself, a stable institution for subjecting the foreign company to taxation. As a general rule, no stable establishment is established when the company has a person in the country, unless that person regularly negotiates contracts, negotiates goods with regular deliveries, ensures the order entirely or almost for the company or any other company controlled by the first company. Capital gains paid to individuals Capital gains paid to individuals as a result of sales of shares to the Securities Exchange of Thailand and investment funds are tax-exempt under domestic law, so there is no particular benefit under a tax treaty. Tax credits, although Singapore and some other countries, but not the United States, do not pay taxes, also allow a credit for their taxes for taxes that should and should have been paid to Thailand, but which are tax-exempt in Thailand under the Investment Promotion Act.