Tax Facts - Thailand

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
  1. Income from employment.

40% but not exceeding Baht 60,000

  1. Income from hire work.

40% but not exceeding Baht 60,000
  1. Income received from copyright.

40% but not exceeding Baht 60,000
  1. Income in the nature of interest, dividend or capital gain.

-
  1. 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%
  1. Income from professional services.

30% except for the medical profession where 60% is allowed.
  1. Income derived by contract work or whereby the contractor provides essential materials besides tools.

Actual expense or 70%
  1. 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.