Tax Related Concerns When Renting a Warehouse

If you are a first time warehouse lessee, chances are you are not well aware of the possible expenses that come with renting a property. There is a huge difference between renting a warehouse and renting a residential property and one of which is tax-related fees. If you are looking for warehouse for rent Chonburi (คลังสินค้าให้เช่า ชลบุรี, term in Thai), below are the things that encompass your tax expenses in relation with renting a warehouse.

Withholding tax deduction at source

The lessee is responsible in processing withholding tax and the lessor must ask the lessee for a certificate of withholding tax. In Thailand, the withholding tax is around 5% of the rental fee. On the following months, the lessee should submit the withheld tax to the revenue office. Here is what you should keep in mind – if the landlord implement other charges such as maintenance fees, service fees, and other common fees, a 3% should be deducted from the fee. 

VAT (Value Added Tax)

The good thing with rental fee in Thailand is that you don’t need to add value added tax or also known as VAT. However, if you have an annual income of 1.8 million Baht, you need to supplement VAT, especially in cases where there are other related expenses such as maintenance fee and service fee, to name a few. 

Stamp duty

Once the lessor and lessee had come up with a decision to proceed with the tenant and landlord relationship, the next step is to pay the stamp duty. This step will complete the rental agreement and will make the entire process legal. The stamp duty rate is capped at 0.1% of the total rental contract. Who will be responsible for the payment? It depends on what is agreed upon by the landlord and the lessee. 

Property Taxes (Land and Building)

The government of Thailand has a new tax-property tax for land and buildings. The lessee or the owner, depending on their agreement can pay for property tax for both land and usage of properties. In the case of warehouse and rental properties used for manufacturing reasons, the Thai government’s basis for calculating property taxes is based on commercial uses. The tax rate is at 0.3% for value below 50 million Baht. The rate can go as high as 0.7%, specifically for property with a value over 5,000 million Baht. 

If you feel like renting a warehouse starts and ends with deposit and advance fee, then you are wrong. There are taxes involved and it varies from one place to another. Of course, the type of rental property has a lot to do with tax payment. Therefore, when choosing a warehouse for rent in Thailand, you need to make sure you consider all important matters. It is a must to do your research well so you will be able to come up with the best decisions – decisions that are beneficial for your business and for your budget in general. It all boils down to doing your research well.