How Stamp Duty Works for Leases and Loans in Thailand

What Is Stamp Duty in Thailand?

Stamp duty is a tax levied on specific legal instruments and documents in Thailand, governed by the Revenue Code (Sections 103-124) and the Stamp Duty Schedule annexed to it. The purpose of stamp duty is to give legal instruments evidentiary weight — a properly stamped document can be used as evidence in court, while an unstamped document that should have been stamped cannot.

This is a critical point that many foreigners and even some Thai businesses overlook: if a lease agreement or loan contract has not been properly stamped, it may not be admissible as evidence in Thai court proceedings. This means that even if you have a valid, signed contract, failing to pay stamp duty can leave you without legal recourse in a dispute.

Which Instruments Require Stamp Duty?

The Stamp Duty Schedule lists 28 categories of instruments subject to stamp duty. The most relevant for expats and businesses in Thailand include:

• Leases and rental agreements (Schedule 1)
• Hire-purchase agreements (Schedule 3)
• Loan agreements and promissory notes (Schedule 5)
• Powers of attorney (Schedule 7)
• Insurance policies (Schedule 8-10)
• Share transfer instruments (Schedule 15)
• Contracts for work and services (Schedule 4)
• Letters of guarantee (Schedule 17)

Stamp Duty on Lease Agreements

Applicable Rate

Lease agreements are covered under Schedule 1 of the Stamp Duty Schedule. The rate is:

• 1 THB per 1,000 THB of the total rent for the entire lease period (or per 1,000 THB of any fraction thereof)

How to Calculate

To calculate the stamp duty on a lease:

1. Determine the total rent for the entire lease term
2. Divide by 1,000
3. Round up to the next whole number
4. That is your stamp duty in THB

Examples:

• 1-year lease at 20,000 THB/month: Total rent = 240,000 THB. Stamp duty = 240,000 / 1,000 = 240 THB
• 3-year lease at 50,000 THB/month: Total rent = 1,800,000 THB. Stamp duty = 1,800,000 / 1,000 = 1,800 THB
• 30-year land lease at 100,000 THB/month: Total rent = 36,000,000 THB. Stamp duty = 36,000,000 / 1,000 = 36,000 THB

Important Notes for Leases

• Leases exceeding 3 years must be registered at the Land Office to be enforceable against third parties. Registration involves a separate registration fee of 1% of the total rent, in addition to stamp duty.
• Sub-leases are also subject to stamp duty at the same rate.
• Lease renewals are treated as new instruments and require fresh stamp duty.
• Who pays: By default, the lessee (tenant) is responsible for stamp duty on a lease, though this can be contractually agreed otherwise.

Stamp Duty on Loan Agreements

Applicable Rate

Loan agreements and promissory notes fall under Schedule 5 of the Stamp Duty Schedule:

• 1 THB per 2,000 THB of the loan principal (or fraction thereof)
• Maximum stamp duty: 10,000 THB per instrument, regardless of the loan amount

How to Calculate

1. Take the loan principal amount
2. Divide by 2,000
3. Round up to the next whole number
4. That is your stamp duty (capped at 10,000 THB)

Examples:

• Personal loan of 100,000 THB: 100,000 / 2,000 = 50 THB
• Business loan of 5,000,000 THB: 5,000,000 / 2,000 = 2,500 THB
• Property loan of 30,000,000 THB: 30,000,000 / 2,000 = 15,000 THB, but capped at 10,000 THB

Important Notes for Loans

• Who pays: The borrower is responsible for stamp duty on loan agreements.
• Promissory notes have the same stamp duty rate as loan agreements.
• Overdraft agreements are subject to stamp duty based on the credit limit.
• Interest-free loans are still subject to stamp duty based on the principal.

Stamp Duty on Powers of Attorney

Since powers of attorney (POA) are commonly used alongside leases and loans, it is worth noting their stamp duty rate:

• General power of attorney: 30 THB
• POA for a specific act: 10 THB
• POA authorizing legal proceedings: 30 THB

How to Pay Stamp Duty

Method 1: Revenue Stamps (Adhesive Stamps)

For instruments with stamp duty of 200 THB or less, you can use adhesive revenue stamps (Akon Stamp). These are purchased at post offices, Revenue Department offices, or authorized vendors. The stamps are affixed to the instrument and then cancelled by writing or stamping across them.

Method 2: Cash Payment at the Revenue Department

For instruments with stamp duty exceeding 200 THB, or for any instrument where you prefer a more formal process, you can pay stamp duty in cash at the Revenue Department. The department will stamp or certify your document.

Method 3: Electronic Stamp Duty (e-Stamp)

Thailand has been progressively rolling out electronic stamp duty payment through the Revenue Department's online system. This is especially common for instruments involving financial institutions and large transactions.

Timing

Stamp duty must be paid within 15 days of the date the instrument is executed (signed). For instruments executed outside Thailand that will be used in Thailand, stamp duty must be paid within 30 days of bringing the document into the country.

Penalties for Non-Payment

Failing to pay stamp duty on time results in penalties:

• Within 15 days of the deadline: Stamp duty amount plus a surcharge of 2 THB per 5 THB of duty owed, or the equivalent of 200% surcharge
• After 15 days but within 90 days: Stamp duty amount plus a surcharge of 4 THB per 5 THB of duty (400%)
• After 90 days: Stamp duty amount plus a surcharge of 5 THB per 5 THB of duty (500%)
• Maximum surcharge: The penalty amount cannot exceed 500% of the original stamp duty

Beyond the financial penalty, the most significant consequence is that an unstamped instrument cannot be admitted as evidence in any civil case, criminal case, or any proceeding until the stamp duty and penalty have been paid. This is codified in Section 118 of the Revenue Code.

Exemptions

Certain instruments are exempt from stamp duty:

• Government-to-government transactions
• Instruments executed by the Government Savings Bank or Government Housing Bank in certain capacities
• Instruments related to the Bank of Thailand's monetary operations
• Small-value instruments below the minimum threshold specified in the schedule
• Certain agricultural and cooperative transactions

Most lease and loan instruments between private parties are NOT exempt and must be properly stamped.

Practical Recommendations

• Always stamp your lease agreements. Even for short-term leases, the cost is minimal and the legal protection is significant.
• Include a stamp duty clause in your contracts. Clearly state which party is responsible for paying stamp duty to avoid disputes.
• Pay stamp duty promptly. The 15-day window after execution is generous — use it. Penalties escalate quickly.
• For large transactions, consider using the Revenue Department's cash payment system rather than adhesive stamps for a cleaner record.
• Keep receipts. Maintain proof of stamp duty payment alongside your original documents.
• Remember the evidentiary rule. An unstamped document cannot be used in court. This alone makes stamp duty one of the most important and underappreciated compliance steps in Thai contract law.
• Consult a lawyer for complex transactions. Multi-layered deals (lease with sublease options, loans with guarantees) may involve multiple instruments each requiring separate stamp duty.