Income Tax

Information on Thai taxes: general taxation on income, how it's calculated, when to pay tax, what exemptions there are and more...

All individuals, whether foreign or Thai, who work in Thailand or have taxable income must apply for a taxpayer's identification number which is issued by the Revenue Department on presentation of a Thai identification card or foreign passport and evidence of the need for the number.

• Sole proprietors and ordinary partnerships pay taxes at rates of 10 to 35 percent on their net profits
• Limited partnerships, registered ordinary partnerships and limited companies pay corporate income tax at the general rate of 23 percent of their net profits for accounting periods commencing in 2012, reducing to 20 percent for accounting periods commencing in 2013
• There are lower tax rates for SME companies and juristic partnerships, meaning in this case, an entity with not more than 5 million Baht paid up capital. The tax position is as follows:
  • where net profits are less than 150,000 Baht in the accounting period: no tax
  • where net profits are more than 150,000 Baht but are less than 1 million Baht in the accounting period: 15 percent tax for accounting periods commencing from 1 January 2012
  • where net profits exceed 1 million Baht in the accounting period: 23 percent tax for accounting periods commencing from 1 January 2012, and 20 percent tax for accounting periods commencing from 1 January 2013

• Special rates apply to companies listed on the Securities Exchange of Thailand or the Market for Alternative Investment (MAI)
• 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

Note that the Revenue Department may not immediately update its website information to show changes to tax rates, allowances or reliefs.

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
  

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.

Resident Versus non-Resident

Taxpayers are classified into resident and non-resident. Resident means a person who resides in Thailand for a period or periods aggregating 180 days or more in any tax (i.e., the calendar) year.

Any taxpayer, whether or not Thai tax-resident, is liable to pay tax on income from sources in Thailand on a cash basis, regardless of where the money is actually paid.

A Thai tax-resident may also be subject to tax on income from sources overseas, if that income is brought into Thailand. In contrast, a tax non-resident will not be subject to tax on income sourced from overseas.

Assessable Income

Income liable to personal income tax is called “assessable income”. The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, is also treated as assessable income of the employee for income tax purposes.

Assessable income is divided into eight categories as follows:

• Income from employment with an employer
• Income by virtue of positions or services rendered
• Income from goodwill, copyright, franchise, other rights, annuity or income in the nature of annual payments derived from a will or any other juristic Act or judgement of the Court;
• Income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, interest on loans or debt instruments, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings
• Income from letting out of property on hire and from breaches of installment sale or hire-purchase agreements
• Income from the liberal professions
• Income from construction and other contracts of work
• Income from business, commerce, agriculture, industry, transport or any other activity not specified earlier.

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: 30 percent
  • Other property: 10 percent
• Income from liberal professions: 30 percent; medical profession - 60 percent
• Income from contract work: 70 percent or actual expenses
• Income from businesses: 40 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
• Child allowance (for children under 25 and studying at an educational institution or declared incompetent): THB 15,000 each or 17,000 for each child studying in Thailand, 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
• Life insurance premium to a Thai company (paid by taxpayer or spouse): actual amount not exceeding THB 100,000 (subject to additional conditions)
• Provident fund contributions: THB 700,000 maximum or not exceeding 15 percent of income (only for Thai registered provident funds)
• Approved 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 100,000 (subject to other conditions)
• Social insurance contributions (paid by taxpayer or spouse): amount paid for each
• Charitable contributions: limited amounts of contributions to approved charities are allowed

Tax credit for dividends

The withholding tax for an individual taxpayer on dividends or a share of profits is 10%. An individual who has domicile or is residing in Thailand and receives dividends from any company organized under the laws of Thailand (whether a listed, public or private company) is subject to personal income tax withheld at source at 10%, and also is entitled to claim a tax credit on the dividend depending on the corporate tax rate on the net profit of that Thai company from which that dividend is paid.

Tax Rates for Personal Income

• 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.

Charitable Donations

Donations made to government organizations or foundations or charities, prescribed by the Ministry of Finance

• Natural persons who donate money may claim an allowance for the amount donated. The amount donated when added to other donations must not exceed 10 percent of net assessable income.
• Companies or juristic partnerships who donate money or assets may claim a deductible expense for the amount donated. The amount donated when added to other donations for public charity or public benefit, must not exceed 2 percent of net profit.
• For those who are registered for VAT, who donate assets or goods, the value of donated goods or assets is excluded from the tax base for VAT purposes.

Donations made via a third party, e.g. a TV or radio station

• Natural persons who donate money to flood victims via a company or juristic person as an agent may claim an allowance for the amount donated. The agent must be registered for tax purposes and must distribute donated money to flood victims. The amount donated when added to other donations must not exceed 10 percent of net assessable income.
• Companies or juristic partnerships who donate money or assets to flood victims through a company or juristic partnership as agent, may claim a deductible expense for the amount donated. The agent must be registered for tax purposes and must distribute donated money to flood victims. The amount donated when added to other donations for public charity or public benefit, must not exceed 2 percent of net profit.
• For those who are registered for VAT who donate goods through a company or juristic partnership as agent, exemption from VAT is granted.

Donations to certain educational institutions approved by the Ministry of Education to support education, e.g. construction of school buildings, providing supplies, equipment, books, professional fees and scholarships. Such donations may be claimed as an allowance or expense as follows:

• Individuals may claim an allowance for double the money donated provided the allowance may not exceed 10 percent of net assessable income.
• Companies or juristic partnerships may claim a deductible expense for double the money or assets donated, provided the deduction may not exceed 10 percent of net profit before deducting any donations for public charity, public benefit, sport or education.

Economic Stimulus Measures

First time home buyers who purchase a home for up to 5 million Baht, may claim a tax allowance of 10 percent of the value of their home, for a period of five years, the deduction depending on the amount of income tax paid by the homebuyer.

Further Information

• For full details of income taxes in Thailand, see chapter 12 of the BIA Legal Guide: Click here

Disclaimer

Any statements concerning taxation are based upon our understanding of current taxation laws and practices in Thailand which are subject to change. While every effort has been made to offer information that is current, correct and clearly expressed the publisher is not responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. Readers are encouraged to seek professional advice concerning specific matters before making any decision.