Treasury Explains Stock Sale Tax Next Year, Truce To Collect 0.055%, But Will Start Collecting 0.1% Effective Rate From Jan. 1, 2024, Confirming There Are No Waivers For Stocks big. and does not affect the ability to compete
From the case that the Cabinet this week approved the filing. “Sales Tax” After Thailand exempted this tax for more than 30 years, Finance Minister Arkhom Termpittayapaisith and Mr. Lawon Sangsanit, director general of the revenue department He opened a press conference to clarify various details from the effective date. tax rate Exempt from reasons for doing so The details can be summarized as follows:
What is stock sales tax? Except for a long time Why come back to collect again?
Financial Transaction Tax it is a specific trading tax for the sale of securities on the Thailand Stock Exchange that must be paid at a rate of 0.1%, but Thailand has exempted this tax since 1992 due to the establishment period of the Thailand Stock Exchange Therefore, we do not we want fiscal measures to be an economic burden. and wants the market to grow strongly
Today the stock market has gotten much stronger. Compared with the year 1991, it can be seen that the market value (Market Cap) from around 900 billion baht has increased to 20 trillion baht in 2022. The Ministry of Finance is confident that a specific corporate taxation on the sale of shares during this period is appropriate. and in line with international standards
Some countries use a capital gains tax, such as the US, Japan, and some countries use a combination of the two, such as the UK, but most use a capital gains tax. Collection of taxes from the sale of securities (tax on financial transactions) such as Thailand.
The Ministry of Finance by the Revenue Department said it understood the importance of “Equity in tax collection” and wanted to “reduce inequalities in income distribution” by drafting a royal decree issued under the Revenue Code. On reducing the rate of the specific corporation tax AND determining the enterprise which is exempt from the specific corporation tax (n..) BE …. Abolishing the exemption from the specific corporation tax on the sale of securities in the bag.
When do you start collecting sales tax?
In force from the 1st day of the 4th month following that of publication of the Royal Decree in the Official Gazette. o grant a grace period of approximately 90 days
However, it is still not possible to identify it. “The exact date” because the cabinet agreed in principle. which still has to wait before the examination of the Council of State
“Day 91 will be the first filing day. to have an adjustment And let the securities company (broker) prepare and discuss with the revenue department about sending revenue to the state. Which method is not difficult anyway Because this tax collection is considered a general measure, collecting every transaction that was sold,” Arkom said.
At what rate?
The collection of sales tax on shares will be divided into 2 periods at the following rates:
- Phase 1 Charged at a rate of 0.05% (when combined with the local tax, it will be 0.055%) from the date of entry into force of the Royal Decree until 31 December 2023.
- Phase 2 Charged at a rate of 0.1% (when combined with local taxes, it will be 0.11%) effective January 1, 2024.
Mr Lawon said the abolition of this tax exemption This could lead to higher transaction costs on the Thai stock exchange by 0.17% to 0.22%, but still at a competitive level. This is lower than Malaysia’s 0.29% and Hong Kong’s 0.38%, but may be slightly higher than Singapore’s 0.20%.
However, in the first year (2023) of collecting the tax with the reduced rate at 0.055%, the cost will be 0.195%, similar to Singapore, but it is believed that it will not affect the liquidity of the stock market in the long term
Who is exempt from sales tax?
However, they are still there “except for” Specific professional fee for the sale of securities on the stock exchange a
- Market Maker registered with the Thailand Stock Exchange only for the sale of securities that the person has registered as a market maker in such securities
- Social Security Office
- provident fund
- State pension fund
- Provident fund in accordance with the law on equal schools
- Mutual pension fund
- National Savings Bank
- Mutual funds established under the Securities and Exchange Act Sell mutual fund units only to the National Insurance Office or funds under items 3-7.
Is Market Maker a broker? Why was he exempted?
The law requires members of the exchange (Broker) to represent sellers. are obligated to deduct the specific business tax from the proceeds sold and file tax returns and pay taxes on behalf of the seller. The seller does not have to file a tax return again.
The director general of the Revenue Agency has stated that according to news reports there will be tax exemptions for large investors. It’s a misrepresentation of the news. The thing is, there is a Market Maker vs Pension Fund tax exemption
from Market Maker is a securities firm (Broker) registered on the Thailand Stock Exchange. There is an obligation to continuously offer and sell securities that have been registered as a market maker. develop new investment products in the stock market And Market Maker is not a big investor as the news presented.
