Know about land and building taxes Countermeasures (Final)

              Finally, the draft Land and Buildings Tax Act B.E.… (“Land Tax”) was approved by the National Legislative Assembly on November 16, 2561. This law will take effect. Effective after the date of publication in the Royal Gazette. As for the collection of taxes on land and buildings, To come into force from 1 January 2563 onwards.

              In the previous section, I explained the principles. and has explained the basics of the said law in some sections. This edition presents all remaining sections. So that readers can understand how to prepare to deal with land and building taxes in 2563.

Tax reductions and tax relief and transitional provisions

1. The law provides for the enactment of a Royal Decree to reduce taxes on certain types of land or buildings in order to suit the economic, social, and eventual needs of the locality. which will be reduced not more than 90% of the amount of tax payable (Section 55)
2. During the first 2 years, low rates will be enforced to relieve tax burdens. And during the first 3 years, there will be relief from tax burdens in cases where land and buildings must be taxed according to this law. Higher than house and land taxes or local maintenance taxes that were previously paid as will be discussed next

Land and building tax rates Effective during the first 2 years (2563-2564) (Section 94)

            Draft Land and Building Tax Act A transitional provision has been established to relieve the tax burden during the first 2 years of land and building tax collection, that is, from 1 January 2563 to 31 December 2564, by collecting the tax. at the following rates

1. Land or buildings used for agricultural operations (Section 94 (1))

            In the case where a natural person is the owner of land or a building used for agriculture. Will be exempt from land and building taxes for the first 3 years, that is, from 1 January 2563 to 31 December 2565, without limiting the tax base value (Section 96) 2. Land or buildings used as residences (Section 94 (2) – (4)) in the case of land used for residences The draft Land and Buildings Tax Act specifies the effective tax rates for the first 2 years for each case as follows: 2.1 In the case of the main house. (name in the house registration) where a natural person owns both the land and the building

            In the case where a natural person is the owner of land or a building used for agriculture. Land and building taxes will be exempt for the first 3 years, that is, from 1 January 2563 to 31 December 2565, without limiting the tax base value (Section 96).

            2.Land or building used as a residence (Section 94 (2) – (4))

            For the case of land used for residence The draft Land and Buildings Tax Act specifies the effective tax rates for the first two years for each case as follows:

2.1 In the case of the main house (name in the house registration) where a natural person owns both the land and the building

*Except according to Section 41, first paragraph, together with Section 95.

2.2 In the case of the main house (name in the house registration) which a natural person is the owner of the building But I don't own the land.

*Except according to Section 41, second paragraph together with Section 95.

2.3 In the case of land or buildings used for residences other than cases 2.1 and 2.2 (such as a second house that is not listed in the house registration)

3. Land or buildings used for commercial purposes (other than agriculture and residential use) (Section 94 (5))

4. Land or buildings that are left vacant or not used as appropriate to their condition (Section 94 (6))

           After 2564, a Royal Decree should be enacted specifying the actual land tax rate that will be collected. It is specified as a single rate or multiple rates based on the value of the land or building. If no Royal Decree is enacted The highest rate must be used first (Section 37, paragraph 5). The Commissioner noted that the Royal Decree should be enacted in advance so that business operators can use it to plan investments.

Tax burden relief for the first 3 years (Section 96 and Section 97)

            In the event that the tax that must be paid under this draft law is higher than the house and land tax or local maintenance tax that was previously paid (the old tax), there will be relief from the land and building tax burden (the new tax) during the first 3 years, that is, during the date. 1 January 2563 to 31 December 2565 by paying tax equal to the original tax that was previously paid plus the difference between the land and building tax and the original tax. (Remaining taxes) which will be reduced as follows:

In addition, in the case of land or buildings used for agricultural operations which are owned by natural persons Land and building taxes will be exempt for the first 3 years.

Taxpayer's rights

            This draft law specifies the rights of taxpayers in various areas as follows:

• Right to submit a request to extend the deadline for objecting to a tax assessment. If there are reasons that make it impossible to object within the specified period (Section 14)
• The right to file a complaint when it is seen that the land and building inventory is incorrect (Section 32)
• Right to request tax installments As specified in the Ministerial Regulations (Section 52)
• The right to request a refund of tax in the case of paying tax without being obliged to pay or paying more tax than you have to pay. If it is the case that the local government organization has made a mistake in assessing the tax. Have the right to receive interest of 1% per month or fraction of a month (Section 54)
• The right to apply for a tax reduction or exemption in cases where there is cause for damage to the land or buildings to be dismantled, destroyed, or damaged to the point of requiring repairs in important parts (Section 57).
• The right to submit a petition opposing or contesting the assessment or collection of land tax to the local administrator (Section 73, first paragraph)
• Right to appeal to the Tax Assessment Appeal Board In the case of disagreement with the result of consideration of the petition submitted to the local administrator (Section 73, paragraph four)
• The right to submit a request for a deferment of tax payment during the period of objection or objection to the assessment or collection of tax. or during an appeal to the Tax Assessment Appeal Committee (Section 73, paragraph five)
• Right to appeal tax assessment to court without waiting for the decision of the Tax Assessment Appeal Committee In the case where the Tax Assessment Appeals Committee does not complete its decision within the specified time period (Section 81, paragraph four)
• Right to appeal the decision of the Tax Assessment Appeal Committee to the court (Section 82)

Filing and paying taxes (Section 44, Section 46, Section 49, Section 51 and Section 53)

                        1. Taxpayers will receive notification of tax assessments under this draft law from local government organizations in February. The assessment form will contain at least the following details (Section 44)

• List of land or buildings
• Capital appraisal price
•  Tax rate
• Amount of tax payable

                        2. Taxpayers must pay taxes according to the assessment notification form within April of every year. (There is approximately 2 months to pay taxes) (Section 46) By paying taxes at the local government organization, such as in the case of land or buildings within a municipal area. It must be paid at the municipal office, etc. Taxes may be paid by registered mail. Pay via bank or any other means as announced by the Ministry of Interior (Section 49 and Section 51)

                        3. If there is an incorrect tax assessment Local government organizations can review or amend them. But no review or amendment has elapsed after 3 years from the last day of the tax payment deadline (Section 53).

                        4. If the land or building has overdue taxes. Rights and juristic acts cannot be registered. The local administrative organization must notify the Land Department within June (Section 59).

Requesting a tax refund (Section 54)

            In the case of paying tax without being obliged to pay or paying more tax than you have to pay Either through their own mistakes or due to the assessment of the local government organization. Taxpayers have the right to request a tax refund by submitting it to the local administrator by submitting a request within 3 years from the date of tax payment. By sending supporting documents to the request such as evidence and explanations.

            In the case where the local administrator deems that it is an incorrect tax assessment Taxpayers are entitled to receive interest at the rate of 1% per month or fraction of a month from the date of filing the refund request until the date of refund.

Tax assessment appeal (Section 73, Section 81 and Section 82)

            Taxpayers have the right to appeal a tax assessment or tax charge. The steps are as follows:

                        1. Submit a petition opposing the assessment or collection of land tax to the local administrator in the prescribed form within 30 days from the date of receipt of notification of the assessment or collection of land tax. The local administrator will complete the consideration of the request within 60 days from the date of receipt of the request and send a letter notifying the result of the consideration to the taxpayer (if not considered within 60 days, it will be considered that the taxpayer's request is approved).

                        2. If the local administrator does not agree with the taxpayer's request Taxpayers have the right to appeal to the Tax Assessment Appeals Committee within 30 days from the date of receipt of the notification. By submitting an appeal to the local administrator. The Tax Assessment Appeals Committee will complete its consideration within 60 days from the date of notification of the appeal. (This period may be extended to no more than 30 days)

                        3. Later, if the taxpayer does not agree with the appeal decision of the Tax Assessment Appeals Committee. Taxpayers have the right to appeal the decision by filing a lawsuit with the court within 30 days from the date of notification of the decision.

                        However, if the committee considers appeals of tax assessments The appeal decision was not completed within the 60 day period from the date the appeal was received. or within the extended time period mentioned in Section 2. The taxpayer has the right to sue in court without waiting for a decision. The lawsuit must be filed within 30 days from the date the said period expires.

Measures to deal with land and building taxes

            1. In the case of having many residences You should consider making the house with the highest value your main home. By entering your name in the house registration of the house with the highest value. Because the main house will be exempt from land tax for the first 50 million baht of the tax base value in the case that you own both the land and the building (Section 41, first paragraph) or exempt for the first 10 million baht of the tax base value in the case that you are the owner of the building but is not the owner of the land (Section 41, second paragraph)

            2. In the case of having land or buildings used for both agricultural and residential purposes. You should consider farming to achieve the ratio specified by law. (It is expected that secondary legislation to establish this ratio will be enacted in the future. But at present it is likely that not less than 3/4 of the total area must be used for agricultural purposes in order to pay land tax at the rate for land or buildings used for agricultural purposes. which is lower than in the case of using it as a residence If the conditions are not met Land owners must pay taxes in proportion to their use as determined by law (Section 38).

            3. In the case of land or buildings that are left vacant or not used as appropriate to their condition. Land owners should consider the following options:

            3.1 Use land or buildings for agricultural purposes under a personal name to exempt from taxes for the first 3 years or to pay taxes at a lower rate, provided that the criteria specified by law are met. (It is expected that an announcement will be issued to determine the ratio of use of land or buildings that will be classified as land or buildings used for agriculture.)

            3.2 Use it to build a residence. In order to pay tax at a lower rate, conditions regarding various types of uses must be considered as to what the criteria for calculating land tax will be. (Initially, it is likely that not less than 3/4 of the total area must be used for residential purposes.)

            3.3 Use land or buildings for commercial purposes. In order to pay tax at a lower rate or to prevent having to pay land tax at a higher rate of 0.3% every 3 years (Section 43)

            4. In the case of having land or buildings with a tax base value of more than 50 million baht, there are the following considerations:

            4.1 In the case of land or buildings owned by a natural person and used for agricultural purposes. Should not consider transferring into a company or juristic partnership. In order to receive an exemption from land tax for the value of the tax base of 50 million baht per local government organization area (Section 40) or (except in the case of Section 96) that is exempt from property tax for 3 years, regardless of the value.

            4.2 In the case of land or buildings used for commercial purposes This is because land tax is paid the same whether the owner is a natural person or a company or juristic partnership. May consider transferring into a company or juristic partnership in order to deduct land tax as an expense in calculating corporate income tax.

            5. In the case of real estate business operators, it is necessary to follow up to see if there will be secondary legislation to exempt or reduce tax rates in what way for land that is not yet in use or how to determine the rate of depreciation deduction. building

            6. If you have a long-term rental contract or contract renewal Consideration should be given to negotiating the terms of which contracting party is responsible for paying the property tax to avoid later disputes over whether the new property tax is considered part of the original contract or not.

conclusion

                        Because this law still requires secondary legislation. Royal Decree specifying tax rates and other announcements involved in determining the conditions of use. Those interested should follow closely but overall And the said land tax rate is not very high. Preparation is also no more difficult. I hope that after the enactment of the law This law will be improved to be more effective.