Thailand’s Government to Cut Land and Buildings Tax and CIT Rates on SMEs

Posted by Reading Time: 4 minutes

Thailand’s government has announced that it will be cutting the tax rates on its Land and Building tax, as well as on its Corporate Income Tax rates for small and medium-sized enterprises.

Land and Buildings Tax

Thailand’s Finance Ministry is planning to cut the maximum rates of the Land and Buildings tax in half from previous proposals. Additionally, tax exemptions will be expanded in order to help landlords and homeowners.

The newly proposed rates will be as follows:

  • 25 percent on land for agricultural use (reduced from 0.5 percent)
  • 5 percent on land for residential use (reduced from one percent)
  • Two percent on land for commercial use (reduced from four percent)
  • Unused or vacant land will be taxed at 0.5 percent and rates will double every three years but will not exceed a maximum level of two percent of the appraised value (the ceiling rate for unused land was previously set at four percent)

According to Rungson Sriworasat, Thailand’s Finance Permanent Secretary, the tax rate cuts are aimed at allaying taxpayers’ worries and the effective rates would be well below the maximum rates. The country’s Finance Minister, Sommai Phasee, has stated that the new regulations should result in the reduction of the gap between the ceiling and the effective tax rates, reducing it to three to four times rather than the original eight to ten times.

Related-Reading-Icon-Asean Link

RELATED: Thai Economy Sees Improvement Due to Increased ASEAN Integration

Additionally, the government has clarified that tax rates will be based on the appraised value of the homes and land, these are as follows:

  • Owners of homes and land with a value not exceeding one million baht after deducting depreciation will not be liable to pay the land and buildings tax
  • Homes and land worth more than one million baht but not exceeding three million baht after depreciation will be charged at half the effective tax rates
  • Homes and land valued above three million baht will be levied at the effective tax rates

Corporate Income Tax

In a recent decision, Thailand’s Joint Public-Private Consultative Committee will reform the tax structure for small and medium-sized enterprises (SMEs), which are currently taxed at a CIT rate of 20 percent. Thailand defines an SME as any business with an annual turnover of not more than THB200 million.

Corporate Income Tax (CIT) is a direct tax levied on a juristic company or partnership carrying on business in Thailand or not carrying on business in Thailand but deriving certain types of income from Thailand. In general, the CIT amount is based on the net income companies obtain while exercising their business activity during one business year.

The reduced taxes will be applied to businesses with lower profits; the rates will be as follows:

  • A five percent rate on SMEs with a net annual profit of up to THB5 million (US$150,000)
  • A 10 percent rate on SMEs with profits of up to THB10 million
  • A 15 percent rate on SMEs with profits of up to THB20 million

Additionally, an in-principle agreement has been reached which will result in the Revenue Department dropping its retroactive audit for back taxes on SMEs who are registering for tax the first time – this should result in more SMEs registering and increasing the tax base for the Thai government.

Professional Service_CB icons_2015

RELATED: Dezan Shira & Associates’ Tax and Compliance Services

Thailand’s CIT rates have fluctuated over the previous years, with an average rate of 27 percent from 2006 until 2014. In 2007, rates reached their highest level – 30 percent; the lowest level was hit in 2013 – 20 percent. The current CIT rate in Thailand continues to be 20 percent.


Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.


Related Reading Icon-VB


Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.


An Introduction to Tax Treaties Throughout Asia
In this issue of Asia Briefing Magazine, we take a look at the various types of trade and tax treaties that exist between Asian nations. These include bilateral investment treaties, double tax treaties and free trade agreements – all of which directly affect businesses operating in Asia.



The 2014 Asia Tax Comparator
In this issue of Asia Briefing Magazine, we examine the different tax rates in 13 Asian jurisdictions – the 10 countries of ASEAN, plus China, India and Hong Kong. We examine the on-the-ground tax rates that each of these countries levy, including corporate income tax, individual income tax, indirect tax and withholding tax. We also examine residency triggers, as well as available tax incentives for the foreign investor and important compliance issues.