Personal
Income Tax or PIT is a direct tax which is levied on the taxable income of a
‘person’. A ‘person’ can mean; an individual, a non-juristic body of persons,
an undivided estate, a deceased person or an ordinary partnership.
In general
terms, a person liable to Personal Income Tax must compute their tax liability,
file tax returns and pay tax (if any is owed) on a calendar year basis. There
are two types of taxpayer, these being ‘resident’ and ‘non-resident’. You would
be classed as a ‘resident’ in Thailand if you were to reside there for 180 or
more days in any tax (calendar) year. A resident of Thailand is liable to pay
tax on income from sources in Thailand on a cash basis, regardless of where the
money is paid, as well as on the portion of income from foreign sources that is
brought into Thailand in the same year that the foreign income is derived. A
non-resident, however, is only liable for Personal Income Tax on income from
sources in Thailand.
Income
chargeable to Personal Income Tax is classed as ‘assessable income’. This term
covers income both in cash and in kind. This means that any benefits provided
by an employer or other persons, such as rent free housing or the amount of tax
paid by the employer on behalf of the employee, are also treated as assessable
income on the employee for the purposes of Personal Income Tax.
Assessable
income is split into eight categories. Certain allowances and deductions can be
offset against assessable income in order to calculate taxable income.
Taxpayers will make any deductions from assessable income before the allowances
are granted.
The
following table details deductions permitted for the calculation of Personal
Income Tax in Thailand:
|
Type
of income
|
Deductions
|
- Income from
employment.
|
40% but not exceeding Baht 60,000
|
- Income from
hire work.
|
40% but not exceeding Baht 60,000
|
- Income received
from copyright.
|
40% but not exceeding Baht 60,000
|
- Income in the
nature of interest, dividend or capital gain.
|
-
|
- Income from
letting out of property on hire:
|
-
|
|
5.1.
Building and
Wharves.
|
30%
|
|
5.2.
Agricultural
land.
|
20%
|
|
5.3.
All other types
of land.
|
15%
|
|
5.4.
Vehicles.
|
30%
|
|
5.5.
Any other type
of property.
|
10%
|
- Income from
professional services.
|
30% except for the medical profession where
60% is allowed.
|
- Income derived
by contract work or whereby the contractor provides essential materials
besides tools.
|
Actual expense or 70%
|
- Income derived from business,
commerce, agriculture, industry, transport, or any other activities not
specified earlier.
|
Actual expense or 40% to 85% depending on the types of income
|
The
following table details allowances permitted for the calculation of Personal
Income Tax:
|
Type of allowances
|
Amount
|
|
Personal allowance for a single tax-payer.
|
Baht 30,000 for the taxpayer.
|
|
Personal allowance for non-juristic partnership or body of
persons.
|
Baht 30,000 for each partner but not exceeding Baht 60,000 in
total.
|
|
Spouse allowance (legally married).
|
Baht 30,000.
|
|
Child allowance (child under 25 years of age and studying at
educational institution, or a minor, or an adjusted incompetent or
quasi-incompetent person).
|
Baht 15,000 each (limited to 3 children).
|
|
Education (additional allowance for child studying in
educational institution in Thailand).
|
Baht 2,000 each child (limited to 3 children).
|
|
Life insurance premium paid by taxpayer or spouse.
|
Amount actually paid but not exceeding Baht 100,000 each.
|
|
Approved provident fund contributions and retired mutual fund.
|
Maximum allowance (exemption) of
Baht 500,000 but not exceeding 15% of income.
|
|
Long term equity fund.
|
Maximum allowance (exemption) of Baht 500,000 but not exceeding
15% of income.
|
|
Home mortgage interest.
|
Amount actually paid but not exceeding Baht 100,000.
|
|
Social security contributions.
|
Amount actually paid.
|
|
Parent allowance (parents of either taxpayer and/or legal spouse
over 60 years of age with income less than 30,000 Baht)
|
Baht 30,000 each parent
|
|
Undivided estate.
|
Baht 30,000
|
|
Disability allowance (cost of caring for disabled persons).
|
Baht 60,000
|
|
Charitable contributions.
|
Amount actually donated but not exceeding 10% of income after
standard deductions and allowances.
|
The tax
rates fir resident and non-resident individuals (2008 and subsequent yeaqrs)
are as follows:
|
Taxable income (Baht)
|
Tax rate %
|
Tax amount
|
Accumulated tax
|
|
0 – 150,000
|
Exempt
|
-
|
-
|
|
150001 – 500,000
|
10
|
35,000
|
35,000
|
|
500,001 – 1,000,000
|
20
|
100,000
|
135,000
|
|
1,000,001 – 4,000,000
|
30
|
900,000
|
1,035,000
|
|
4,000,001 and over
|
37
|
-
|
-
|
Persons
over age 65 get an exemption on the first Baht 190,000 of taxable income
instead of the normal Baht 150,000 threshold.
Authorised and Regulated by the Financial Services Authority
