Thailand Income Tax. Thailand’s personal income tax (PIT) and corporate income tax (CIT) systems are essential considerations for individuals and businesses operating or residing in the country.
Failure to comply can result in severe penalties, including back taxes, fines, and criminal charges. Accurate knowledge of tax liabilities, filing obligations, and available deductions is critical.
The primary law governing income tax is the Revenue Code of Thailand.
Who Is Subject to Thai Income Tax?
| Status | Tax Obligation |
|---|---|
| Resident Individual | Taxable on worldwide income. |
| Non-Resident Individual | Taxable only on income derived from or remitted into Thailand. |
| Thai Registered Companies | Taxable on worldwide profits. |
| Foreign Companies Doing Business in Thailand | Taxable on profits derived from Thailand only. |
Residency Definition:
An individual is considered a tax resident if they stay in Thailand for 180 days or more during a calendar year.
Personal Income Tax (PIT) Structure
| Annual 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% |
Important:
Income includes salary, bonuses, commissions, rental income, interest, dividends, royalties, capital gains (in certain cases), and business income.
Corporate Income Tax (CIT) Rates
| Company Type | Tax Rate |
|---|---|
| Standard Thai Company | 20% |
| Small and Medium Enterprises (SMEs) | Graduated rates (15%–20%) depending on net profit amount. |
| Foreign Company (permanent establishment) | 20% on Thailand-sourced profits. |
| Foreign Company (without a PE) | 15% on certain gross income items like service fees, royalties. |
Taxable Income: Key Inclusions
| Category | Example |
|---|---|
| Employment Income | Salaries, bonuses, allowances. |
| Business Income | Profit from trade, profession, or services. |
| Investment Income | Dividends, interest, capital gains (except gains from securities traded on the SET, usually exempt). |
| Property Income | Rental or lease of property. |
| Other Income | Prizes, gifts exceeding thresholds. |
Allowable Deductions and Expenses (PIT)
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Personal Allowance: 60,000 THB per taxpayer.
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Spouse Allowance: 60,000 THB (if applicable).
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Child Allowance: 30,000 THB per child.
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Insurance Premiums: Up to 100,000 THB.
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Mortgage Interest: Up to 100,000 THB.
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Retirement Mutual Fund (RMF) Contributions: Up to 30% of income or 500,000 THB (whichever is lower).
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Donations: Up to 10% of assessable income after deductions.
Withholding Tax System
Thailand operates a withholding tax system whereby certain types of income are taxed at source:
| Type of Payment | Typical Withholding Tax Rate |
|---|---|
| Employment Income | Progressive rates. |
| Service Fees (domestic) | 3% |
| Rent | 5% |
| Dividends | 10% |
| Interest | 15% (for individuals) |
Payers are required to withhold and remit tax to the Revenue Department on behalf of the recipient.
Tax Filing Requirements
| Filing Requirement | Description |
|---|---|
| Individuals (PIT) | Annual filing by March 31st of the following year (form PND 90/91). |
| Companies (CIT) | Annual return within 150 days after accounting year-end (form PND 50); half-year interim tax filing also required (form PND 51). |
Taxpayers must maintain proper records and submit electronic filings if revenue exceeds certain thresholds.
Special Cases and Exemptions
| Case | Special Rule |
|---|---|
| Capital Gains on Securities | Exempt if securities traded on the Stock Exchange of Thailand (SET). |
| Foreign Income Remitted into Thailand | If earned in a prior tax year while non-resident, generally not taxed if remitted later. |
| Double Taxation Treaties | Thailand has treaties with 61 countries; can reduce or eliminate tax on cross-border income. |
Penalties for Non-Compliance
| Violation | Penalty |
|---|---|
| Late Filing | Fine of 2,000 THB plus surcharges. |
| Late Payment of Tax | 1.5% monthly surcharge. |
| Understatement of Income | Up to 100% additional tax liability penalty plus criminal prosecution for fraud. |
Recent Trends and Developments
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Global Minimum Tax: Thailand is considering adjustments to align with OECD global tax reforms (Pillar Two, 15% minimum corporate tax).
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Crypto Asset Taxation: The government has issued guidelines for taxing cryptocurrency trades and earnings.
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Digital Service Tax: Discussions underway for applying VAT on foreign digital services consumed in Thailand.
Conclusion: Strategic Tax Management is Essential
Thailand’s income tax system is complex but navigable with proper planning and understanding. Whether an individual employee, business owner, or foreign investor, compliance demands careful attention to registration, correct classification of income, maximization of lawful deductions, and punctual filings.
Ignoring these obligations can result in significant financial and legal consequences.