Thailand: Last chance for tax-free assets swap


Last year, the revenue department allowed individuals and partnerships to enjoy a tax-free swap of business assets to a company, and reduced the transfer fee for immovable property to 0.1% of the government’s appraisal value. Many businesses proceeded with restructuring under this scheme, changing from either an individual or an ordinary partnership to a corporate entity. This allowed the business to pay tax at a flat rate of 20% of its net profit, and 10% of its profit sharing or dividend distributed to each shareholder, thereby reducing the effective tax rate to 28%.

Recently, the Thai cabinet has approved in principle the extension of this tax scheme until 31 December 2018, and the revenue department will soon issue a royal decree and sub-legislation to determine the tax privileges and conditions for this year’s tax-free swap of assets.

It is expected that the privileges and conditions under this year’s scheme will be the same as last year. However, it is also possible that specific business tax (SBT), stamp duty and transfer fees for immovable property will not be exempted or reduced this time.

Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by emailing Danian Zhang at