Thai Stamp Duty: What Businesses Often Get Wrong
Stamp duty is one of the quieter taxes in Thailand. It does not show up on a tax return. No one files a monthly form for it. Because of that, many businesses pay it late, pay too much, or skip it entirely without realizing the risk.
What Stamp Duty Is
Stamp duty is a tax on certain documents, not on transactions in general. The Revenue Code lists exactly 28 types of instruments subject to duty. If a document does not fit one of those categories, no duty applies. If it does, the duty must be paid at the time the document is executed.
The most common instruments businesses encounter are hire of work contracts, loans, leases, share transfers, and powers of attorney.
The Rate Is Low. The Risk Is Not.
Stamp duty rates are modest. Hire of work contracts pay THB 1 per THB 1,000 of the wage payable to the contractor. Loan agreements pay THB 1 per THB 2,000 borrowed, capped at THB 10,000. Share transfers pay THB 1 per THB 1,000 of the higher of the sale price or paid-up value.
Hire of Work Contracts
THB 1 per THB 1,000 of the wage payable to the contractor
Loan Agreements
THB 1 per THB 2,000 borrowed, capped at THB 10,000
Share Transfers
THB 1 per THB 1,000 of the higher of the sale price or paid-up value
The cost of not stamping
The problem is the penalty. Under the Revenue Code, if a dutiable instrument is not stamped at all, the maximum surcharge is 6 times the duty owed, or THB 25, whichever is higher. Voluntary payment before any audit or assessment attracts a lower surcharge.
Common Situations Where Businesses Miss It
Quotations and purchase orders. A quotation that a customer has not yet accepted is just an offer. No duty applies. The moment the customer signs to accept it, the document may become a binding contract. If the underlying arrangement is hire of work, the signed quotation is now dutiable.
Service agreements with a specific deliverable. The Schedule of Stamp Duty Rates does not use the words “subscription,” “SaaS,” or “retainer.” The relevant question is always whether a given arrangement fits one of the 28 listed instruments. Hire of work under the Civil and Commercial Code is a contract where one party undertakes to produce a specific, finished result and the other pays a wage on completion. An arrangement that provides continuous access to a service over time, with no defined completion, does not fit that description. The Revenue Department has confirmed this approach in rulings on continuous service agreements, finding them outside the Schedule on the basis that no specific finished result is delivered. One example is Ruling No. Kor Kor 0702/4854 (2022), which held that a continuous common area services agreement covering air conditioning, cleaning, security, and utilities did not fall within any listed instrument and carried no duty. That said, the classification depends on the substance of the arrangement, not the label on the document.
Hire of work where the contract value is not yet known. The Schedule addresses this directly. If the wage is not fixed at the time the contract is signed, the parties may estimate it and pay duty on that estimate. If the actual payments received later exceed the estimate, additional duty must be paid at the time each payment is received. Businesses that sign open-ended project contracts or milestone-based agreements should keep this timing obligation in mind.
Intercompany loans. Loans between related entities within a group are still loans. If documented by a promissory note or loan agreement, stamp duty applies on the principal amount, up to the THB 10,000 cap.
Share transfers in private companies. When shares in a Thai private company change hands and a share transfer instrument is executed, stamp duty applies on the higher of the agreed price or the paid-up value per share.
When to Pay
For most instruments, stamp duty is due when the document is executed. If the instrument is executed outside Thailand and then brought into the country, duty must be paid within 30 days of its arrival. For hire of work contracts where the wage is uncertain at signing, additional duty is due at the time each payment is received, as described above.
If you discover an unstamped instrument after the fact, you can pay the duty and surcharge voluntarily before any dispute arises. Doing so removes the evidentiary bar under Section 118.
What to Do
Review standard contract templates to identify which documents in your routine operations fall under the 28 listed instruments. Separate recurring service fees from one-time project fees on quotations and agreements. Train whoever handles contracts to recognize when stamp duty applies before a document is signed.
Disclaimer
Kreston BLAS Advisory Co., Ltd. provides tax advisory and compliance services in Thailand. This article is for general information only and does not constitute legal or tax advice for any specific situation.