Taxes in Thailand

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Taxes in Thailand

Below is information on taxes in Thailand:

• Sole proprietors and ordinary partnerships pay taxes at rates of 10 to 37 percent on their net profits
• Limited partnerships, registered ordinary partnerships and limited companies pay corporate income tax at the general rate of 30 percent of their net profits
• For a complete listing of all taxable entities including personal, business, VAT and property taxes, the Revenue Department website has details of withholding percentages, timeframes, and regulations regarding each entity: Click here

The main tax office is in Bangkok, but there are Revenue Department office branches throughout Thailand. The Main Office also has English-speaking personnel who can help with filing taxes, general information or to locate a branch.

• Revenue Department, Main Office
  At: Phaya Thai Road, Military Bank Building, Bangkok 100400
  Tel: 02 247 2748
  Website

Note: living in Thailand does not necessarily exempt a person from filing tax returns and paying taxes in their home country. Although a person may be exempt from paying taxes if they earn less than their government's tax thresholds, filing a return helps to avoid any problems in the future. The relevant Embassy will have the appropriate forms and regulations for its country's taxes.

Taxes on Personal Income

Resident versus non-resident

A foreigner who lives in Thailand for more than 180 days in a tax year (the calendar year) is considered a Thai resident for tax purposes. A resident is required to file taxes on all income received within Thailand as well as income received from foreign sources brought into Thailand.

A non-resident living in Thailand less than 180 days within a tax year is only required to file a tax return and pay taxes on income received from sources within Thailand.

All foreigners who work in Thailand are generally required to hold a valid work permit for the position they hold. But a tax resident foreigner is liable to pay tax on income received, as set out above, regardless of whether they have a work permit.

Taxable income

In Thailand, "assessable income" is charged to Personal Income Tax (PIT) whether it is income paid in cash or in kind, such as free use of the company car or free housing. This creates the tax base to determine the proper withholding percentage for each taxpayer.

There are eight categories of assessable income:

1. Income from employers
2. Income by virtue of position held or services rendered
3. Income from royalties for example copyright, goodwill, franchise, as well as any income from court judgements or any juristic Act
4. Income from dividends; profit-sharing; partnerships; gains from acquisitions, mergers or dissolutions of juristic companies or partnerships; gains from any transfers of shares or transferring of partnership holdings
5. Income from hire-purchase contracts, releasing property on hire, and any breaches of instalment sales
6. Income from liberal professions
7. Income from construction and contracts of work
8. Income from business, including agriculture, commerce, industry, transport and/or any income not mentioned above

Deductions and allowances

Taxpayers should make their deductions from the assessable income first before the allowances can be permitted. The calculation for taxable income is as follows:

• Assessable Income, minus deductions, minus allowances equals Taxable Income 

The types of deductions for personal income include:

• Income from employment: 40 percent, not exceeding THB 60,000
• Income from royalties: 40 percent, not exceeding THB 60,000
• Income from property on hire
• Buildings/wharves: 30 percent
• Agricultural land: 20 percent
• Other types of land: 15 percent
• Vehicles: 30percent
• Other property: 10
• Income from liberal professions: 30 percent; medical profession - 60 percent
• Income from contract work: 70 percent or actual expenses
• Income from businesses: 65 percent to 85 percent depending on source of income or actual expenses

Allowances or exemptions for individual taxpayers include:

• Personal allowance
• Individual taxpayer: THB 30,000 
• Married taxpayer: THB 30,000 for taxpayer's non working spouse
• Non-juristic partnership: THB 30,000 per person, not exceeding THB 60,000 total
• Spouse allowance: THB 30,000 
• Child allowance (for children under 25 and studying at an educational institution or declared incompetent): THB 15,000 each, to a maximum of three children
• Parent allowance (for parents over 60 with income less than THB 30,000):  THB 30,000 each (subject to other conditions if the parent is non-Thai)
• Old age allowance (over 65): THB 190,000
• Education allowance (additional allowance for child studying in Thailand): THB 2,000 per child
• Life insurance premium (paid by taxpayer or spouse): actual amount not exceeding THB 100,000 (subject to additional conditions)
• Provident fund contributions: THB 300,000 maximum or not exceeding 15 percent of income (only for Thai registered provident funds)
• Long term equity fund: THB 500,000 maximum or not exceeding 15 percent of income (subject to further conditions)
• Home mortgage interest: amount paid not exceeding THB 50,000 (subject to other conditions)
• Social insurance contributions (paid by taxpayer or spouse): amount paid for each
• Charitable contributions: amount donated not exceeding 10 percent of total taxable income (after deductions and allowances)
• Retirement mutual fund (RMF) and Provident fund contributions: THB 500,000 maximum or not exceeding 15 percent of income (only for Thai registered provident funds)

There is also a tax credit for any taxpayer who receives dividends from a company or partnership incorporated in Thailand. The credit is calculated by taking total dividends multiplied by the reduced corporate tax rate. The tax credit will reduce the taxpayer's tax liability.

• Dividend x corporate tax rate / (100 – corporate tax rate) = tax credit

Tax Rates for Personal Income

If income is from any source other than employment and is more than 60,000 baht per year, the taxpayer must calculate the tax as follows:

• Assessable income x 0.5 percent = taxable amount
• Compare calculated taxable amount to tax rated amount
• The taxpayer is responsible for paying whichever tax amount is greater
• For more details see the Revenue Department

Procedures for filing personal income tax

An individual can file their own tax return, but all returns must be filed in Thai. A company can file its own tax return but this must include the balance sheet which must be drafted by an accountant and be in Thai.

Tax Identification Number (Form L.P. 10.1)

Every taxpayer, resident and non-resident, in Thailand must have a Thai Tax Identification Number (TIN) issued by the Revenue Department. This must be applied for within sixty days of receiving assessable income. If the person uses a personal identification number (PIN) issued in accordance with civilian registration law, a TIN is not needed.

• For further information from the Revenue Department: Click here

To apply for a new TIN at any area revenue office, provide a photocopy of:

• Passport
• House Registration Document, if applicable
• Court order appointing estate administrator, if applicable

Tax calendar and deadline to apply

The tax calendar for Thailand begins 1 January and ends 31 December. All taxpayers must file their taxes no later than 31 March for the previous tax year; for example, to file taxes from 2006, the deadline was March 31 2007. Payment must be made in full on or before the 31 March deadline. There is no payment plan at this time.

If income is derived from property on hire, liberal professions, contract work or business and income was received during the first six months of the year, the taxpayer must file a half-yearly return (Form PIT 94). The deadline for filing and payment is 30 September of that taxable year. Any half-yearly tax paid will be credited against tax liability on 31 December.

Capital Gains Tax

Income derived from the sale or transfer of shares and property is considered ordinary income. There is no separate capital gains tax in Thailand.

A resident taxpayer who receives dividends from a juristic company or partnership incorporated in Thailand is entitled to a tax credit. In computing assessable income, a taxpayer must gross up his dividends by the amount of the tax credit received. The amount of tax credit is then creditable against his total tax liability.

A resident taxpayer who receives dividends or a share of profits from a registered company from which tax has been withheld at source at the rate of 10 percent, may choose to exclude such dividends from the assessable income when calculating personal income tax. However, in doing so, the taxpayer will be unable to claim any refund or credit as mentioned above.

Wealth, Inheritance & Gift Tax

There is no wealth tax in Thailand. There is no inheritance tax as such but a person who receives cash or property as a result of the death of another may be liable to pay income tax.

• See AngloINFO INFOrmation page on Wills & Inheritance Law in Thailand

There is no Gift Tax in Thailand.

Property Taxes

There are different taxes for different types of property transactions in Thailand.

Renting of immovable property (land and houses) is subject to house and land tax at the rate of 12.5 percent of the annual rental value of the property. In addition, if the lessee is a corporate entity, the lessee is required to deduct income tax at the source of 5 percent on rental payments. Letting of immovable property is not subject to VAT.

For the sale of property by a corporate entity or individual, there are four types of taxes involved:

• if the seller is a company the withholding tax is 1 percent, based on the actual sale price or the appraisal value, whichever is higher. If the seller is an individual, the withholding tax is quite complicated and there are more details below.
• specific business tax of 0.11 percent, based on the actual sale price or the appraisal value, whichever is higher. The specific business tax is normally 3.3 percent but has been reduced to 0.11 percent from 29 March 2008 to 28 March 2010 as a temporary tax incentive to boost the economy
• a transfer fee of 0.01 percent, based on the value of the property transferred as appraised by the land office regardless of actual price. The transfer fee is normally 2 percent but has been reduced to 0.01 percent from 29 March 2008 to 28 March 2010 as a temporary tax incentive to boost the economy
• individual and corporate sellers are subject to stamp duty unless they have already paid the specific business tax in which case they will be exempt

Where an individual sells immovable property, they must pay income tax calculated at progressive rates of 10 to 37 percent on any gain arising, regardless of whether the individual acquired the property by way of inheritance, gift from another person (free of any consideration) or purchase (but without any commercial intention to sell the property at a later date).

However, if the seller acquired the immovable property by way of inheritance or gift (free of any consideration), then the permitted rate of expenditure that can be deducted against tax is fixed at 50 percent, and a seller who acquired immovable property either with or without commercial intention will be entitled to varying rate of deduction according to the number of years the property was owned by that seller before sale.

Below is the schedule of permitted deduction according to the number of years owned an individual seller:

An individual seller who acquired immovable property by any of the methods mentioned above will normally be subject to withholding tax on income from the sale of the immovable property, but at the maximum withholding tax rate of 20 percent of the sale price.

However, an individual seller who acquired immovable property by way of inheritance, gift (free of consideration) or any without commercial intention, and withholding tax has been deducted upon sale of that property, the seller has a choice: they can treat this payment of withholding tax as final tax due on the transaction, or include this income with all other income derived by the seller in that year when he completes his tax return.

Note that the method of calculation of withholding tax on income from sale of immovable property is different from that used normally. If chosen, allowances will not be taken into account, and the income tax threshold of Baht 150,000 will not apply. On the other hand, if the seller decides to aggregate the income from property sale with all other income, then the exemption for the first 150,000 Baht of income will normally apply.

Double Tax Treaties

In an effort to build better international relationships, Thailand has joined with fifty-one countries to establish a fair tax system. Tax treaty agreements have been established with each country to avoid tax being paid twice on the same income or where tax is paid in Thailand to enable a tax credit to be claimed where such income is subject to further taxation in another country.

• For a list of countries that have tax treaties with Thailand: Click here

Tax Forms

• General Tax Forms for Personal and Business
• Tax Identification Number
• Non-resident Withholding Tax Certificate Form
• Certificate of Residence Form
• Certificate of Status of Taxable Person Form

Further Information

• Revenue Department
• Locate any country's embassy
• Ministry of Labour and Social Welfare
• Department of Employment
• Thailand Legal Guide

Prepared by: Stephen Frost, Director, Bangkok International Associates
17th Floor ITF Tower, 140/36-37 Silom Road, Bangkok 10500, Thailand
Tel: 02 231 6201-3, Fax: 02 231 6204, e-mail, Website
Copyright © Bangkok International Associates 2007-2009 All Rights Reserved

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