What is Stamp Duty?

Stamp duty is a tax levied on specific legal instruments rather than on transactions or individuals. Under the Revenue Code, an “instrument” refers to any document subject to stamp duty. The regulations governing stamp duty are outlined in Chapter VI of Title II of the Revenue Code.

1. Who is Responsible for Paying Stamp Duty?

1.1 Liable Parties

Only instruments listed in the stamp duty schedule are subject to the tax. The responsible parties include those executing the instrument, holders, or beneficiaries, as indicated in the third column of the schedule.

1.2 Instruments Executed Abroad

If an instrument is executed outside Thailand, the first holder in Thailand must stamp and cancel it within 30 days of receipt. Failure to do so invalidates the instrument. Subsequent holders can comply and seek reimbursement from previous holders.

1.3 Unstamped Bills

For bills presented for payment without the required stamp, the recipient may pay the duty, cancel it, and reclaim the amount from the liable party or deduct it from the payment.

2. Instruments Subject to Stamp Duty

Instruments liable for stamp duty include, but are not limited to:

• Land transfers
• Lease agreements
• Stock transfers
• Mortgages
• Life insurance policies
• Power of attorney documents
• Promissory notes

3. Methods of Stamping

Stamp duty can be paid through three primary methods:

1. Adhesive Stamps: Affixed and canceled on the document at or before execution.
2. Impressed Stamps: Pre-stamped paper or official stamping by authorities.
3. Cash Payment: Allowed under certain conditions as prescribed by the Director-General.

The Director-General may require cash payments in lieu of adhesive or impressed stamps.

4. Stamp Duty Rates

Rates vary by instrument and are specified in the schedule attached to the Revenue Code.

A few examples include:

• Land/Building Lease: 1 Baht per 1,000 Baht of total rent or key money.
• Stock Transfers: 1 Baht per 1,000 Baht of paid-up or nominal value.
• Loan Agreements: 1 Baht per 2,000 Baht of the total loan, capped at 10,000 Baht.

5. Penalties and Surcharges

5.1 Surcharge

5.1.1 Payment of Duty for Unstamped Instruments

When an instrument is not properly stamped, the responsible person, holder, or beneficiary can present it to a tax official for payment. Duty payment will be allowed under the following conditions:

(a) For instruments executed in Thailand, if presented within 15 days from the due date for stamping, duty can be paid at the standard rates listed in the Stamp Duty Schedule.

(b) In other cases, duty payment is allowed, but a surcharge will apply:

• If less than 90 days have passed since the due date, the surcharge will be twice the amount of the duty or 4 Baht, whichever is higher.
• If more than 90 days have passed, the surcharge will be five times the duty amount or 10 Baht, whichever is higher.

5.1.2 Inspection and Reporting Consequences

If a tax inspection or external report reveals a failure to comply:

(a) For receipts required under the Revenue Code but not issued, the tax official will charge the full duty amount plus a surcharge of six times the duty or 25 Baht, whichever is higher.

(b) For unstamped instruments:

• If no stamp is affixed, the full duty will be charged along with a surcharge of six times the duty or 25 Baht, whichever is higher.
• If the stamps affixed are insufficient, the deficiency will be charged, plus a surcharge of six times the deficit or 25 Baht, whichever is higher.
• In other cases, a surcharge equal to the payable duty or 25 Baht, whichever is higher, will be imposed.

5.2 Penalties

1. Failure to Pay Duty or Cancel Stamps:

• Those who neglect or refuse to pay the required duty or cancel stamps will face a fine of up to 500 Baht.

2. Evasion of Duty:

• Issuing receipts below 10 Baht for values of 10 Baht or more, dividing payments, or falsifying instruments to evade duty will result in a fine of up to 200 Baht.

3. Falsifying Stamp Cancellation Dates:

• Intentionally placing a false cancellation date on a stamp can lead to a fine of up to 500 Baht, imprisonment of up to three months, or both.

4. Failure to Maintain Records or Issue Receipts:

• Not keeping daily financial records, failing to issue receipts when demanded, or issuing improperly stamped receipts may result in a fine of up to 500 Baht.

5. Non-Issuance or Under-Issued Receipts:

• Preventing receipt issuance, failing to issue receipts upon payment, or under-reporting the received amount can lead to a fine of up to 500 Baht, imprisonment of up to one month, or both.

6. Non-Cooperation with Tax Officials:

• Failing to assist tax officials, obstructing inspections, disobeying summons, or refusing to answer questions can result in a fine of up to 500 Baht.

7. Possession or Dealing with Forged Stamps:

• Possessing or dealing in forged or disused stamps with fraudulent intent may incur a fine of up to 5,000 Baht, imprisonment of up to three years, or both.