Thailand: Proposed specific business tax on income from securities trading via stock markets

A draft Royal Decree to impose a specific business tax on income from securities trading via stock markets approved

Proposed specific business tax on income from securities trading via stock markets

23 December 2022

The Thai Cabinet approved a draft Royal Decree to impose a specific business tax (SBT) on income from securities trading via stock markets.

The Royal Decree has not yet been promulgated.

A selection of key points and tax implications of the proposed law are summarized below:

Transactions subject to SBT	Sales of securities through stock markets. An exemption will only be applicable to the sales of securities made by the following sellers: Market makers who registered with the stock markets and trade the stocks that the market makers registered for Pension funds (e.g., social security fund or provident funds) whose trading value does not exceed 15% of the overall trading value
Types of securities under SBT scope	Securities registered in the stock markets which are: Ordinary shares Preferred shares Warrants Derivative warrants Exchange traded funds Depository receipts Units Transferrable warrants for subscription of shares for capital increment
Persons liable for SBT	The person liable for SBT is the seller. The seller’s broker, as an agent of the seller, is required to deduct SBT from the sale proceeds and file the SBT return (Form PT.40) to remit SBT to the tax authorities under its own name on behalf of the seller. The seller is not required to file the SBT return. It should be noted that under Section 91/9 of the TRC, the broker shall also be deemed a person liable to SBT.
Tax base	Revenue derived from the stock trading (before expenses)
Tax rates	Reduced SBT rate of 0.055% (0.05% SBT plus the local tax at 10% of the SBT rate) from the effective date until 31 December 2023 Statutory SBT rate of 0.11% (0.1% SBT plus the local tax at 10% of the SBT rate) from 1 January 2024 onwards

Read a December 2022 report prepared by the KPMG member firm in Thailand

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