Key takeaways
- When a developer sells condominium units and houses in the ordinary course of business, Specific Business Tax (SBT) of 3.3% (including local tax) is payable on the date of registered transfer, not at Presale, and no VAT is charged on those property sales.
- Standard CIT rate of 20%
- Cross-border tax planning needs substance and a supporting business rationale.
Chapter 24 Tax strategy for real estate projects
Tax must be planned from the Feasibility Study stage because it affects cash flow throughout the cycle. The main taxes are corporate income tax (CIT), VAT, Specific Business Tax (SBT), withholding tax (WHT), transfer fees, stamp duty and land and building tax. CIT is charged at the standard rate of 20% of net profit. Sales revenue is recognised when control passes to the customer under TFRS 15, while land held for development and sale is treated as inventory under TAS 2.
A common mistake is mixing up VAT and SBT. When a developer sells real estate in the ordinary course of business, SBT of 3.3% (including local tax) is payable on registration of ownership transfer. Booking deposits and down payments received during Presale do not yet give rise to SBT. Activities subject to VAT, such as commercial rental or hotel services, are filed through PP 30. Input VAT relating to income that is not subject to VAT cannot be credited; include it as a cost in the model and allocate it separately if the business has mixed activities.
Sound planning starts with collecting expense documents, timing recognition to match the standards, using tax losses carried forward within the 5-accounting-period limit of the entity concerned, and separating BOI activities from non-BOI activities. Transactions between group companies must be at arm's length and supported by transfer pricing documentation.
The standard transfer fee is 2%, and the government periodically introduces temporary reductions. For the rates, measures and conditions of transfer fees, mortgage registration fees and land and building tax, check the latest announcements of the Land Department and the Revenue Department before relying on them.
Chapter 25 International tax planning
This chapter starts by mapping cross-border cash flows and taxes: from profit in the project company, through corporate income tax and withholding tax on dividends, interest or royalties paid out, to tax in the recipient's home country. The calculation must cover the whole route, not just the rate in one country.
Before relying on a DTA, check that a treaty is in force, obtain a tax residency certificate and keep documents to prove beneficial ownership. The key principle is not to use a structure solely to obtain treaty benefits, because the Principal Purpose Test and Limitation of Benefits can deny them. A holding company that will be accepted should have a real office, staff, expenditure and decision-making in that country.
The handbook walks through BEPS compliance, from transfer pricing, treaty use, permanent establishment and country-by-country reporting to Pillar Two. Thailand has applied the top-up tax since 1 January 2025 to multinational groups with consolidated revenue of EUR 750 million or more. Groups within the threshold must assess the effect on tax privileges and on companies in low-tax jurisdictions.
For Exit, compare the tax on a share sale with that on an asset sale, including withholding tax for foreign sellers and treaty rights. Before restructuring, assess the tax on transferring assets or shares, duties and the effect on existing privileges, then sequence the steps with a tax adviser who checks the rules of every country involved.