The Treasury explains the sale tax of shares Next year, respite to collect 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
From the case that the Cabinet meeting this week has approved the storage. “Sale 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 Revenue Department Has opened a press conference to clarify various details from the effective date. tax rate Exempt to the reasons for doing it The details can be summarized as follows:
What is stock sales tax? Except for a long time Why is it coming back to collect once more?
Tax on sale of shares (Financial Transaction 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 period of the establishment of the Stock Exchange of Thailand Therefore do not want tax measures to be a cost burden. and wants 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) from approximately 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 line with international principles
Some countries use a capital gain tax, such as the United States, Japan, and some countries use a combination of the two, such as the UK, but most use a capital gain tax. Collect taxes from the sale of securities (Financial Transaction Tax) like Thailand.
The Ministry of Finance by the Revenue Department reasoned that it realized the importance of “Fairness in tax collection” and want 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 determine the business that is exempt from specific business tax (No..) B.E. …. Abolishing the specific business tax exemption for the sale of securities in the stock market.
When do you start collecting sales tax?
Effective from the 1st 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 regarding 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 day of storage. in order to have an adjustment And let the securities company (Broker) prepare and discuss with the Revenue Department regarding sending revenue to the state. Which method is not difficult anyway Because this tax collection is considered a general measure, collecting every transaction that has been sold, ”said Mr. Arkom.
At what rate?
Collecting 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 effective date 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 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 long term
Who is Exempt from Sales Tax?
However, there are still “except” Specific business tax for the sale of securities on the stock market to
- Market Maker registered with the Stock Exchange of Thailand only for the sale of securities that the person has registered as a market maker of such securities
- Social Security Office
- provident fund
- Government Pension Fund
- Welfare fund under the law on private schools
- Retirement Mutual 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 it exempted?
The law requires members of the stock exchange (Brokers) who represent sellers. are obligated to deduct specific business tax from proceeds sold and file tax returns and pay taxes on behalf of the seller The seller does not have to submit a tax return once more.
The Director-General of the Revenue Department said that from news reports that there will be tax exemptions for large investors. It is misleading news. The fact is that there is a tax exemption for Market Maker vs. 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 that have been registered as a market maker. to develop new investment products in the stock market And Market Maker is not a big investor as the news has presented.
