Double taxation in Thailand.

Double taxation occurs when the same declared income is being taxed by two or more different jurisdictions. This can happen when an individual or a company resides or operates in more than one country and is mitigated by double tax treaties between countries. As a result, the income will be taxed only once.

Thailand first introduced a double tax agreement in 1963 (with Sweden) and has dramatically increased the list count ever since. Currently, there are 55 countries that have a mutual double tax agreement with Thailand:

Armenia, Australia, Austria, Bahrain, Bangladesh, Belgium, Bulgaria, Canada, Chile, China, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Great Britain and Northern Ireland, Hong Kong, Hungary, India, Indonesia, Israel, Italy, Japan, Kuwait, Laos, Luxembourg, Malaysia, Mauritius, Myanmar, Nepal, Netherlands, New Zealand, Norway, Oman, Pakistan, Philippines, Poland, Romania, Russia, Seychelles, Singapore, Slovenia, South Africa, South Korea, Spain, Sri Lanka, Sweden, Switzerland, Turkey, Ukraine, United Arab Emirates, United States of America, Uzbekistan and Vietnam.

Who is covered

The double tax agreement concerns both individual and juristic persons who are residents of the contracting states. In order to be entitled to the treaty benefits, the person must be of the following:

  • An individual who stays in Thailand for at least 180 days per year (in a row or in aggregate)
  • A juristic person incorporated under the Civil and Commercial Code of Thailand

Taxes concerned

The double tax agreement with other countries only applies to income taxes, namely personal income tax, corporate income tax and petroleum tax. VAT, specific business tax and others are excluded.

Double taxation explained

In essence, the qualified persons are put into a more favourable position for Thai tax purposes than under the domestic law. If the persons generate income in Thailand but don’t have a permanent establishment in the country, their income tax on business profits is subject to exemption. In addition, the withholding taxes on payments of income to foreign juristic entities not carrying on business in Thailand may be reduced or exempted under the double taxation treaties.

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