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Individual Income Tax

"Income Tax in Thailand" (Personal Income Tax, PIT) is a direct tax levied on an individual's income. A person refers to an individual, a simple partnership, a non-juristic person group, and an undivided estate. In general, a person subject to income tax must calculate their tax liability, submit a tax return, and pay the tax, if applicable, on an annual basis for the calendar year.

Thailand Tax rates
5.0 Tax Payment

Every taxpayer is required to submit the income tax return and make a payment to the tax office by the last day of March of the following tax year. Any withholding tax or semi-annual tax paid to the tax office can be credited against the taxpayer’s tax liability at the end of the year.

Tax Base in Thailand

1. Taxpayer

Taxpayers are classified as "residents" and "non-residents." "Resident" refers to any person who stays in Thailand for a period or multiple periods totaling more than 180 days in a tax year (calendar year). A resident taxpayer is obligated to pay taxes on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident taxpayer, however, is only liable for income tax on income from sources within Thailand.

2.1 Taxable Income

Income subject to income tax (PIT) is referred to as "taxable income." This term includes income in both cash and in-kind benefits. Therefore, any benefits provided by an employer or other individuals, such as a rent-free house or tax payments made by the employer on behalf of the employee, are also considered taxable income for the employee for income tax purposes. Taxable income is divided into 8 categories as follows:

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  1. Income from personal services rendered to employers;

  2. Income from professions, positions, or services provided;

  3. Income from goodwill, copyrights, franchises, other rights, pensions, or income in the form of annual payments derived from a will or other legal act or court judgment;

  4. Income in the form of dividends, interest on deposits in Thai banks, profit shares, or other benefits from a legal company, legal partnership, or investment fund, payments received as a result of capital reduction, premiums, capital increases, profits from mergers, acquisitions, or dissolution of legal entities or partnerships, and profits from the transfer of shares or partnership interests;

  5. Income from renting property and from contract breaches, installment sales, or hire-purchase agreements;

  6. Income from freelance professions;

  7. Income from construction and other work contracts;

  8. Income from business activities, trade, agriculture, industry, transport, or any other activities not specified earlier.

In cases where income categories (2) to (8) mentioned in section 2.1 exceed 60,000 Baht per year, the taxpayer must calculate the tax amount by multiplying 0.5% of the taxable income and comparing it with the tax calculated using progressive tax rates. The taxpayer is required to pay the higher tax.

2.2 Deductions and Allowances

Certain deductions and allowances are permitted when calculating taxable income. The taxpayer must make deductions from taxable income before applying allowances. Therefore, taxable income is calculated as follows:

Taxable Income = Taxable Income - Deductions - Allowances
Deductions allowed for income tax calculation:

Here is a summary of deductions for various types of income:

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  1. Income from employment: 40%, but up to a maximum of 60,000 Baht.

  2. Income from copyrights: 40%, but up to a maximum of 60,000 Baht.

  3. Income from rental:

    • Buildings and shipyards: 30%

    • Agricultural land: 20%

    • All other types of property: 15%

  4. Vehicles: 30%

  5. Any other type of property: 10%

  6. Income from freelance professions: 30%, except in the medical field, where 60% is allowed.

  7. Income from contracts where the contractor also provides significant materials: actual expenses or 70%.

  8. Income from business activities, trade, agriculture, industry, transport, or other unspecified activities: actual expenses or 65% - 85%, depending on the type of income.

Allowances (Exemptions) allowed for income tax calculation:

Types of allowances and their amounts:

  • Personal allowance:

    • For single taxpayers: 30,000 Baht

    • For the spouse of a single taxpayer: 30,000 Baht

    • For non-juristic partnerships or associations: 30,000 Baht per partner, but no more than 60,000 Baht in total

  • Spouse allowance: 30,000 Baht

  • Child allowance (for children under 25 years who are enrolled in an educational institution, or are minors, or a dependent disabled or quasi-disabled person): 15,000 Baht per child (limited to a maximum of three children)

  • Education allowance (additional allowance for children enrolled in an educational institution in Thailand): 2,000 Baht per child

  • Parent allowance: 30,000 Baht for each parent of the taxpayer and their spouse, provided the parent is over 60 years old and earns less than 30,000 Baht

  • Life insurance premium paid by the taxpayer or spouse: Actual amount paid, but not more than 100,000 Baht per person

  • Contributions to approved retirement funds paid by the taxpayer or spouse: Actual amount paid, but not more than 15% of salary, up to 500,000 Baht

  • Contributions to long-term equity funds: Actual amount paid, but not more than 15% of salary, up to 500,000 Baht

  • Mortgage loan interest: Actual amount paid, but not more than 100,000 Baht

  • Contributions to social security paid by the taxpayer or spouse: Actual amount paid

  • Charitable donations: Actual amount donated, but not more than 10% of income after standard deductions and the above allowances.

2.3 Tax Credit for Dividends

Any taxpayer who is a resident of Thailand and receives dividends from a legal company or partnership based in Thailand is entitled to a tax credit of 3/7 of the received dividend amount. When calculating taxable income, the taxpayer must increase their dividends by the amount of the received tax credit. The tax credit amount is then offset against the taxpayer's tax liability.

3.0 Progressive Tax Rates

The applicable income tax rates for taxable income are as follows:

3.2 Separate Taxation

There are various types of income that the taxpayer may not include in their taxable income, or may not be required to include, when calculating the tax liability.

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Income from the Sale of Immovable Property


A taxpayer may not include income from the sale of immovable property acquired through a will or gift in the taxable income when calculating income tax. However, if the sale is for commercial purposes, such income must be included in the taxable income and is subject to income tax.

 

Interest


The following types of interest income may be excluded from the income tax calculation at the taxpayer's option, provided a withholding tax of 15% is deducted:

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  1. Interest on bonds or debentures issued by a government organization;

  2. Interest on savings deposits at commercial banks, provided the total amount of interest received during a tax year does not exceed 20,000 Baht;

  3. Interest on loans paid by a finance company;

  4. Interest received from a financial institution organized under specific Thai law that grants loans to promote agriculture, trade, or industry.

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Dividends

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A taxpayer who is a resident of Thailand and receives dividends or profit shares from a registered company or investment fund, from which a withholding tax of 10% has been deducted, may choose to exclude such dividends from the income tax calculation. However, if the taxpayer chooses to do so, they cannot claim a refund or credit under Section 2.4.

4.0 Withholding Tax

For certain types of income, the income payer is required to withhold tax, file a tax return (Form PIT 1, 2, or 3, depending on the case), and remit the withheld tax amount to the district tax office. The withheld tax is then credited to the taxpayer’s tax liability when the income tax return is submitted. The following are the withholding tax rates for some categories of income:

Type of income Withholding tax rate (in baht)

  1. Employment Income 5 - 37 %

  2. Rent and Fees 5 %

  3. Ship Rental Fees 1 %

  4. Service and Consultancy Fees 3 %

  5. Compensation for Public Entertainers

    • Thai Resident 5 %

    • Non-Resident 5 - 37 %

  6. Advertising Fees 2 %

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