The Treasury explains share sales tax Next year, they will stop collecting 0.055%, but will start collecting the actual rate of 0.1% from January 1, 2024, confirming that there are no exceptions for large ones. and does not affect the ability to compete
Because the Cabinet meeting this week approved the store. “Sales Tax” After Thailand has exempted this tax for more than 30 years, Mr Arkhom Termpittayapaisith Minister of Finance and Mr Lawon Sangsanit, Director General of the Department of Revenue have opened a press conference to explain various details of the effective date . Exempt tax rate to the reasons for doing it The details can be summarized as follows:
What is stock sales tax? Except for a long time Why does he come back to collect again?
Tax on the sale of shares (Financial Transactions Tax) is a specific business tax for the sale of securities on the Stock Exchange of Thailand which must be paid at a rate of 0.1%, but Thailand has exempted this tax since 1992 due to the establishment of the Stock Exchange of Thailand So they do not want to tax measures be a cost burden. and want the market to grow strongly
Today, the stock market has grown much stronger. Compared to the year 1991, it can be seen that the market value (Market Cap) of about 900 billion baht has increased to 20 trillion baht in 2022. The Ministry of Finance is confident that Specific business taxation on stock sales during this period is appropriate. and in accordance with international principles
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 Collecting taxes from the sale of securities (Tax Financial Transactions ) such as Thailand.
The Ministry of Finance reasoned from the Department of Revenue that it realizes the importance of “Fairness in tax collection” and wants to “reduce inequality in the distribution of income” by drafting a royal decree issued under the Revenue Code. On the reduction of the specific business tax rate And determining the business that is exempt from specific business tax (No.) BE …. Repeal the specific business tax exemption for the sale of securities in the stock market.
When do you start collecting sales tax?
In force from the first day of the 4th month following the month in which the Royal Decree is published in the Government Gazette. or give a grace period of about 90 days
However, it still cannot be identified. “The exact date” because the cabinet agreed in principle. which still has to wait for the consideration of the Council of State first
“Day 91 will be the first storage day. in order to get adjustment A let the securities company (Broker) prepare and negotiate with the Department of Revenue about sending revenue to the state. Which method is not difficult anyway Since this tax collection is considered a general measure, collecting all transactions that have been sold,” said Mr. Arcom.
At what rate?
Collection of sales tax on shares will be divided into 2 periods at the following rates:
- Step 1 Raised 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.
- Step 2 Raised at a rate of 0.1% (when combined with local taxes, it will be 0.11%) effective January 1, 2024.
Mr Lawon said that the abolition of such tax exemption This may result in higher transaction costs on the Thai stock exchange from 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 tax collection with the tax rate reduced to 0.055%, the cost will be 0.195%, similar to that of Singapore. However, 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, there are still “except” A specific business tax for the sale of securities on the stock market i
- Market Maker registered with the Stock Exchange of Thailand only for the sale of securities the person is registered as a market maker of such securities
- Social Security Office
- A prudent fund
- Government Pension Fund
- Welfare fund under the law on private schools
- Mutual Retirement Fund
- National Savings Fund
- Mutual funds established under the Securities and Exchange Act To sell investment units in mutual funds only to the Social Security Office or funds according to items 3-7.
Is Market Maker a broker? Why was he excluded?
The law requires members of the stock exchange (Brokers) who represent sellers. are bound to deduct a certain business tax from the proceeds sold and file tax returns and pay taxes on behalf of the seller The seller does not have to submit a tax return yet.
The Director General of the Revenue Department said from news reports that there will be tax exemptions for large investors. It misrepresents news. The fact is that there is a tax exemption for a Market Maker versus a Pension Fund
by Market Maker is a securities company (Broker) registered with the Stock Exchange of Thailand. There is a duty to continuously offer and sell securities registered as a market maker. develop new investment products in the stock market And Market Maker is not a big investor as the news has made it out to be.
