Thailand Personal Income Tax Explained 2024

What Is Personal Income Tax in Thailand?

Personal income tax in Thailand is a portion of The Kingdom’s overall taxation system that is levied directly on assessable income. According to Section 40 of the Thai Revenue Code B.E. 2481 (1938), assessable income includes direct salary payments as well as benefits from employers such as subsidized housing or tax payments.

This tax can be levied on individuals, partnerships, non-juristic persons, and undivided estates. In total, there are 8 categories of assessable income sources according to The Revenue Department of Thailand including income that is:

• From services rendered to employers.
• A byproduct of those services rendered to employers.
• From recurring sources such as copyright, franchises, and yearly payments from a will.
• Related to gains from investments such as stocks, dividends, and business sales. Generated by property leases and real estate contracts. From liberal professions such as architecture, engineering, accounting, and fine arts.
• From construction and other work contracts.
• Generated by other sources not specified.

Thai law distinguishes between non-residents and residents in Section 41 of the Revenue Code by looking at the total number of days of residence in a year. If a person lives in Thailand for 180 days or more out of the calendar year, they’re considered a resident for tax purposes.

Being a tax resident of Thailand means that you owe tax on both income in Thailand and foreign-based income brought into The Kingdom. If you have non-resident status, you only pay tax on Thai-based income.

What Is the Taxation System in Thailand?

The taxation system in Thailand is based on direct and indirect charges. Each year, those with taxable personal income are responsible for filing by March 31st or April 8th if they submit online.

The 3 main forms of direct taxation in Thailand include:

• Personal income tax (PIT) which is levied at progressive rates based on yearly income and goes up to 35%.
• Corporate income tax rates based on net profit going up to 20%.
• Petroleum income tax of 50% on petroleum exploration or production companies.

The Thai economy also depends on the following main forms of indirect taxation:

• Value Added Tax (VAT). A tax of 7% on the sale of goods and services.
• Specific Business Tax (SBT) is charged to businesses whose services don’t fall clearly under the definition of VAT. These include banks, securities businesses, life insurance brokers, pawnshops, and the sale of immovable property for profit. The taxation rate is 2.5-3.3% depending on the income source.
• Withholding Tax (WHT) that must be taken at the source and paid directly to the Revenue Department, usually in the case of non-residents. The percentage depends on the type of income, with salary falling in the same 0-35% progressive range as regular income tax. This is then used as a tax credit when calculating PIT.
• Property tax based on the type of property and its appraised value. The government taxes most residential properties annually at 0.03% of their value in accordance with the 2020 Land and Building Tax Act.
• Excise tax, mostly on luxury goods on top of VAT, charged at different rates depending on the type of product such as 0-6.5 baht per liter of petroleum products, 0-44 baht per liter of some non-alcoholic beverages, and 0.025-1.25 baht per gram of tobacco product.

What Is the Personal Income Tax Rate in Thailand?

Personal income tax rates are progressive in Thailand. The lowest taxation rate is 0% for those earning less than 150,001 baht per year. The highest rate is 35% for those earning more than 5,000,000 baht in a year.

The entire tax progression is as follows:

Personal Income Tax Calculator

Personal income tax in Thailand is calculated as follows:

Total assessable income – deductions – allowances = taxable income

Once you have a number for your total taxable income, you can then use it to determine what percentage of it you’ll pay in tax according to the progressive tax rate table.

What Is the Difference Between Deductions and Allowances in the Thai Taxation System?

The difference between deductions and allowances in the Thai Tax system is that deductions are usually based on percentages of income while allowances are often concrete amounts in Thai baht that can be deducted from gross salary.

Some examples of potential Thai tax deductions on gross income from the Thai Revenue Department include:

• Property rental income. For residential property, this would be 10%.
• Income from copyright is 40% but not exceeding 60,000 baht.
• Income from contract work where materials other than tools are provided is the expense amount, or 70%.

Examples of Thai tax allowances include:

• Spouse allowance of 30,000 baht.
• Child allowance of 15,000 baht per child for up to 3 children.
• Life insurance premiums not exceeding 100,000 baht each.

Personal Income Tax Payments and Forms

Personal income tax payments in Thailand vary from one person to another with different forms and due dates based on the individual’s circumstances. The following table summarizes main tax forms used for personal income.

New Tax Rule on Foreign Income

The new tax rule on foreign income came into effect on January 1st, 2024 after the government confirmed the future changes on September 15th, 2023. It serves as an update to Section 41 of the Thai revenue Code. The addition states that assessable foreign-sourced income will now be taxed regardless of the year that it was earned.

Prior to 2024, there was a loophole that meant income was only taxed if it was remitted in the same year that it was earned. This latest change closes that loophole.

The new addition makes it so that anyone bringing money into Thailand must file a Thai tax return and pay taxes on that money if they’ve lived in Thailand for 180 days or more, filed a tax return in the previous year and are a Thai resident, or are a Thai citizen. There are some exemptions that can lower or even eliminate the tax burden.

What Are the Income Tax Exemptions?

The main income tax exemptions for Thailand fall under Section 41 paragraph 2 of the Revenue Code and mean that the person in question has no obligation to pay taxes in Thailand.

The 5 main cases for income tax exemption in Thailand are:

1. Those who reside in Thailand for fewer than 180 days.
2. Those on long-term residence (LTR) visas under the LTR Visa program for highly skilled professionals. In this case, they have a lower, flat tax rate of 17%.
3. Those who invest in a foreign investment fund or depositary receipt.
4. Those who don’t physically bring their income to Thailand from overseas.
5. Those who have already paid income taxes to a country that Thailand has a double tax agreement with such as Australia, Germany, and the USA.

What is the purpose of double tax agreements?

The main purpose of double tax agreements is to avoid overburdening tax payers and reduce fraud by sharing information with other countries. Another benefit of double tax agreements is that they lead to greater economic cooperation and a stronger bond between countries.

FAQs About Thai Personal Income Tax

How Do Thai Residents File Income Taxes?

Thai residents file income taxes either online or by submitting paper forms. You can file online via the Thai Revenue Department up until April 8th.

If you’re filing a physical tax return, the various forms can be found on the Revenue Department website. As long as the return is posted by March 31st, Bangkok residents can send their form along with a check or money order with the appropriate amount to:

Finance and Revenue Management Division, the Revenue Department

Revenue Department Building 90 Soi Phaholyothin 7

Phaholyothin Road, Kwang Phyathai, Phayathai, Bangkok 10400

Do Foreign Retirees Pay Taxes in Thailand?

Yes, foreign retirees pay taxes in Thailand if they haven’t already paid taxes on the income or their home country doesn’t have a double taxation agreement (DTA) in place.

Australia is an example of one country with a special agreement for pensioners. According to their DTA, income from pensions are eligible for a tax credit in Thailand as long as they paid tax in Australia.

Are There Income Tax Refunds in Thailand?

Yes, there are income tax refunds in Thailand for those who have paid too much in taxes throughout the year and filed their returns correctly.

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