Thailand income tax system is regulated by the Revenue Code and administered by the Revenue Department of Thailand. Individuals and businesses are subject to different tax structures based on their residency status, income source, and taxable activities. Understanding tax rates, exemptions, filing requirements, and penalties is essential for compliance and financial planning.
1. Personal Income Tax (PIT) in Thailand
1.1 Who Must Pay Personal Income Tax?
Taxpayers in Thailand fall into two categories:
- Thai Tax Residents – Individuals who stay in Thailand for 180 days or more in a calendar year. They must declare and pay tax on their worldwide income if remitted to Thailand.
- Non-Residents – Those staying less than 180 days in a year are taxed only on Thai-sourced income.
1.2 Taxable Income
The following income types are subject to personal income tax:
- Employment income (salaries, wages, bonuses, commissions)
- Business and professional income
- Rental income from properties in Thailand
- Capital gains (e.g., sale of stocks or real estate)
- Dividends, interest, and royalties
1.3 Personal Income Tax Rates (Progressive Scale)
| Annual Taxable Income (THB) | Tax Rate (%) |
|---|---|
| 0 – 150,000 | Exempt |
| 150,001 – 300,000 | 5% |
| 300,001 – 500,000 | 10% |
| 500,001 – 750,000 | 15% |
| 750,001 – 1,000,000 | 20% |
| 1,000,001 – 2,000,000 | 25% |
| 2,000,001 – 5,000,000 | 30% |
| Over 5,000,000 | 35% |
1.4 Tax Deductions and Allowances
Individuals can deduct certain expenses to reduce taxable income:
- Personal allowance: 60,000 THB per person
- Spouse allowance: 60,000 THB (if unemployed)
- Child allowance: 30,000 THB per child (limited to 3 children)
- Life insurance premiums: Up to 100,000 THB
- Mortgage interest: Up to 100,000 THB for first-time homebuyers
- Retirement fund contributions (RMF & PVD): Up to 500,000 THB
1.5 Tax Filing and Payment Deadlines
- Annual tax return filing (P.N.D. 90/91): By March 31 for the previous tax year.
- Online filing extension: Until April 8.
- Withholding tax (P.N.D. 1, 3, 53): Employers and businesses must withhold and remit monthly.
2. Corporate Income Tax (CIT) in Thailand
2.1 Who Pays Corporate Income Tax?
- Thai-registered companies: Taxed on worldwide income.
- Foreign companies: Taxed only on Thailand-sourced income or income earned through a Thai branch.
2.2 Corporate Tax Rates
| Company Type | Tax Rate (%) |
|---|---|
| Standard corporations | 20% |
| Small businesses (net profit ≤ 3M THB) | 15% |
| BOI-promoted companies | Tax exemptions or reductions |
| International Business Centers (IBC) | 8%–10% (depending on income) |
2.3 Tax Incentives for Businesses
The Board of Investment (BOI) and the Eastern Economic Corridor (EEC) provide corporate tax benefits such as:
- Tax holidays (3–8 years for targeted industries)
- Reduced CIT rates for high-value industries
- Exemptions on import duties for machinery and raw materials
2.4 Corporate Tax Filing and Deadlines
- Annual Tax Return (P.N.D. 50): Due by the end of May (for companies with a December fiscal year-end).
- Interim Tax Return (P.N.D. 51): Mid-year tax submission due in August.
3. Other Taxes in Thailand
3.1 Value Added Tax (VAT)
- Standard VAT rate: 7% (applies to most goods and services).
- VAT-exempt businesses: Small businesses earning less than 1.8 million THB per year.
3.2 Withholding Tax (WHT)
- Applies to salaries, dividends, interest, service fees, and professional fees.
- Rates vary from 1% to 15%, depending on the income type and recipient.
3.3 Specific Business Tax (SBT)
- Applies to banks, real estate, and financial services at rates between 0.01% and 3%.
3.4 Property and Land Taxes
- Land and Building Tax: 0.01%–0.3% depending on property usage.
- Transfer fees: 2% of the appraised property value.
4. Tax Penalties and Compliance
Failing to comply with tax laws in Thailand can lead to:
- Late filing penalties: Up to 2,000 THB per late filing.
- Interest on unpaid taxes: 1.5% per month.
- Underreporting tax: Fines up to 100% of the unpaid tax.
- Criminal charges: In severe tax evasion cases, imprisonment may apply.
5. Double Taxation Agreements (DTAs)
Thailand has double taxation treaties (DTAs) with over 60 countries, including the U.S., UK, China, Singapore, and Japan. DTAs prevent businesses and individuals from being taxed twice on the same income by providing tax exemptions or reductions on foreign-sourced income.
6. Conclusion
Thailand’s income tax system is complex yet structured, with different rates and obligations for individuals and businesses. Understanding tax residency, filing requirements, corporate taxation, and available incentives is crucial for compliance. Whether for personal tax planning, business operations, or foreign investment, staying informed about Thai tax laws helps minimize liabilities and maximize benefits.