In December 2019, the Ministry of Interior publicly announced timeline extensions to the Land and Building Tax Act (the "Act"), in order to give relevant authorities more time to collect data and make accurate tax assessments. The key extension is to extend the tax payment deadline from April 2020 to August 2020.

The government has also postponed other key parts of the Act's timeline, which are summarized below.

Issue Former Deadline New Deadline
Announce and notify taxpayers of subject-to-tax properties. By the end of November 2019 By the end of March 2020
Announce the appraisal value of land and buildings, tax rate and other details related to tax collection. By the end of January 2020 By the end of May 2020
Issue tax assessment letters to taxpayers. By the end of February 2020 By the end of June 2020

On 25 December 2019, the Ministry of Interior published in the Government Gazette new notifications and regulations, which are subordinate laws issued under the Act. The two key ministerial regulations are:

1) Ministerial regulation regarding the definitions of Vacant Property; and

2) Ministerial regulation regarding installment payments of the land and building tax.

These recently-announced regulations set out clear examples on how vacant properties are defined and installment payments can be made. More details are provided below.

Vacant Properties

According to the Act, one of the four property categories subject to the land and building tax covers land or a building that is either: (i) left vacant; or (ii) not properly used or reasonably used ("Vacant Property").

The ministerial regulation regarding the definition of Vacant Property further explains that land is considered Vacant Property if it meets either of the following criteria:

a) it can be used for agricultural purpose, but is not used per the criteria set out by the Minister of Finance and Minister of Interior (it is worth noting that to date such criteria has not been issued); or
b) it can be used, but has not been used for the entire past tax year, unless this was due to reasons such as force majeure or unforeseeable circumstances.

A building is considered Vacant Property if it meets either of the following criteria:

a) it is ready to use and can be used for agricultural, residential or other purposes, but has not been used for one of these purposes for the entire past tax year; or
b) it can be used, but is abandoned and was not used for the entire past tax year.

The ministerial regulation regarding the definitions of Vacant Property also makes clear that the following are not classified as Vacant Property for the purpose of the Act:

1) land that is being prepared for use;

2) buildings that are under construction;

3) land or buildings that a law or court order has forbidden from being used; and

4) land or buildings that are under a court's review for contentious matters involving legal title or possessory rights.

Installment payment of land and building tax

Only a taxpayer who has at least Baht 3,000 of tax due will be eligible to pay in installments. A permitted taxpayer who desires to settle the land and building tax in installments must submit a request letter to the local sub-district administrative organization (SAO) by April each year. Installment payments must be paid in three equal rounds, in April, May and June. However, for fiscal year 2020, due to the extended deadlines, submit the request letter by August 2020 and make the installment payments in August, September and October 2020.

According to the Act, failure to settle the tax within the timeline will be considered default; a defaulting taxpayer is required to pay all outstanding tax to the authorities with an applicable surcharge at 1 percent of tax arrears per month or fraction thereof.

We will keep you updated on new developments of the Act.

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