Owning Property in Thailand and Your New Zealand Tax Obligations

House For Sale In Surat Thani, Koh Samui

So, you wanna buy an apartment in Thailand, but you're not sure how Inland Revenue would view it?  

Firstly, if you are a resident of New Zealand for tax purposes, you will be taxed in New Zealand on all of your "worldwide income". This is income derived from New Zealand as well as income derived from all other countries. (See here for more info)

This means that if you buy rental property in Thailand and it makes a profit, then you'll have to declare that income here in New Zealand as well as in Thailand.

Secondly, there is a Double Tax Agreement between Thailand and New Zealand, so tax paid in each country is taken into account. 

How does it work then?
If you own property in Thailand in your personal  name then you'd be required to file for it there, and then declare the income here as well. NZ would calculate the tax paid there, and what should have been paid here.  If there is a difference in your contra, then you'll have to pay the difference to IRD. If the difference is in your favour, then you don't get a tax credit: you just won’t have to pay any more.

Thailand Tax Information
Corporate income tax rates:

• 23 percent – For accounting periods beginning 1 January 2012 to 31 December 2012
  
• 20 percent – For two accounting periods beginning on or after 1 January 2013
  

Personal income tax

• Net taxable income is taxed at progressive rates up to 37 percent. 
• The maximum current tax rate applies to income exceeding THB 4million in the case of both residents and non-residents.
  

Tax residence

• All companies, including other forms of legal entities, that are registered under Thai law, or that are incorporated under foreign law and carry on business in Thailand, are subject to corporate income tax. 
  
• All income of companies registered under Thai law is subject to corporate income tax. Companies registered under foreign law and carrying on business in Thailand are taxed on their net profits arising from their business activities in Thailand.
  

Property taxes

• A house and land tax is levied at the rate of 12.5 percent of the assessed rental value of the property. It is levied on the owner of the building, but does not apply to owner-occupied residences.
  

Info sourced from:
http://www.kpmg.com/Global/en/services/Tax/regional-tax-centers/asia-pacific-tax-centre/Documents/CountryProfiles/Thailand.pdf

Our conclusions
So, you’d need to get advice from a Thailand-based accountant obviously, but  a Thai company would pay between 20-23% tax, and then a 12.5% property tax on top.  However, as it is all in THB this still may be relatively low in NZD. So this may well be the best way to go.

Other Countries
For the UK, see this article; for Australia, check out this blog; for Malaysia, see here; Singapore? See this article.

Disclaimers
We have no affiliation with or endorsement from KPMG or Thailand-Property.com.