This guide outlines of the topics concerning personal income tax in Thailand that employees and employers must know.
Tax residents in Thailand are required by the law to pay and file personal income tax returns every year, and it is important as a taxpayer that you understand and acknowledge your tax obligations.
Let’s learn more about income tax in Thailand.
What is a personal income tax in Thailand?
Personal income tax is a tax imposed on an individual’s income resulting from:
- Advantages realised in Thailand, in cash or in kind (paid in or outside Thailand)
- Income from a foreign source that is brought into Thailand within the year
Income generated by non-residents is only subject to the personal income tax if the advantages are received in Thailand.
Who is considered as a tax resident in Thailand?
Both residents (people residing in Thailand for a period or periods aggregating more than 180 days per tax year) and non-residents have to apply for a personal income tax ID and file a personal tax return each year.
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Types of taxable income in Thailand
Assessable income in Thailand is categorised into eight categories:
- Income from employment, including wages, salary, bonus, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment
- Income from the hire of work, office of employment or services
- Income from goodwill, copyright, franchise, patent or other rights
- Income from interest, dividend, bonus for investors, gain on amalgamation, acquisition or dissolution of a company or partnership or gain on transfer of shares
- Lease of property, breach of a hire-purchase agreement and instalment sale contract
- Income from liberal professions, such as law, medicine, engineering, architecture, accountancy and fine arts
- Income from a contract of work whereby the contractor provides essential materials other than tools
- Income from business, commerce, agriculture, transportation or any other activity not mentioned above
As specified in the fourth point, capital gains are taxable as ordinary income. As is the case in many countries, capital losses cannot be offset against the capital gains.
There are three exceptions to the taxability of the capital gains:
- Income from wages and salary, including the benefits provided by an employer (e.g. income from stock options, personal income tax paid and absorbed by the employer, living allowances, monetary value of rent-free accommodation…), but excluding business travel expenses and medical treatment
- Capital gains on the sale of non-interest bearing government bonds or debt instruments (although there are exceptions)
- Capital gains on the sale of government bonds
Personal income tax rates in Thailand
Thailand employs a progressive tax system for personal income tax, the rates of which are as follows:
|Taxable income (THB)||Tax rate|
|0 – 150,000||Exempted|
|150,001 – 300,000||5%|
|300,001 – 500,000||10%|
|500,001 – 750,000||15%|
|750,001 – 1 million||20%|
|1,000,001 – 2 million||25%|
|2,000,001 – 5 million||30%|
|5,000,001 or more||35%|
Available deductions and allowances
Taxpayers can deduct the standard amount or actual expenses from the income received as follows:
|Income type||Deductible expenses|
|Employment income (1)||50% of the assessable income capped at THB 100,000|
|Income from hiring of services (2)||50% of the assessable income capped at THB 100,000|
|Income from goodwill, copyright and other rights (3)||50% of the assessable income capped at THB 100,000 or the actual expenses|
|Income from interest, dividend (4)||Expenses cannot be deducted|
|Rental income (5)||10 – 30% of income or actual expenses|
|Income from liberal professions (6)||30 – 60% of income or actual expenses|
|Construction income (7)||60% of income or actual expenses|
|Income from business, commerce, agriculture, transportation or other income (8)||60% of income or actual expenses|
Resident taxpayers can deduct personal and specific allowances in accordance with the table below:
|Personal allowances for taxpayers||60,000|
|Child allowance (maximum of three children each)||30,000 per child|
|Parent allowance||30,000 per parent (ages over 60)|
|Maternity and pregnancy allowance||Actual payment but not exceeding 60,000|
|Care of disabled or incapacitated family member||60,000 each|
|Care of a disabled or an incapacitated person other than a family member||60,000|
|Social security fund contributions||Maximum of 9,000 per year|
|Life insurance premium||Not more than 100,000 per year|
|Health insurance premium||Not exceeding 15,000 per year (when combined with life insurance premium does not exceed 100,000)|
|Health insurance premium for parents||Not exceeding 15,000|
|Mortgage interest incurred for the purpose of purchase or construction of a residential building in Thailand||Maximum of 100,000 per year|
|Contributions to the Provident Fund||Contributions with a limit of 15% of total wages but not exceeding an allowance of 500,000|
|Contributions to the Retirement Mutual Fund||Contributions with a limit of 15% of total assessable income subject to tax with a maximum allowance of 500,000|
|Donations to specified charities||Actual donated amount up to 10% of taxable income after all other allowances are deducted|
Filing a personal income tax return
The tax year for personal income tax is the calendar year ending December 31, and tax filings and payments must be completed by March 31 of the following year (PND 90 or 91). Personal income tax filings may be done on paper or online. For income derived from hiring out property, liberal professions and all income that falls within the scope of point (8), the taxpayer also has to file a half-yearly tax return on September 30. These taxes may be set off at the end of the tax year as tax credits.
In response to COVID-19 in 2020, the cabinet extended the deadline for income tax return to 30 June only for e-filings.
Penalties and surcharge for late or inaccurate filing
An individual who submits inaccurate tax returns will be subject to a penalty rate of 100% and 200% in the case of failing to file the tax return. If the taxpayer submits a written request and the assessment officer considers that the taxpayer did not intend to evade the taxes and cooperated with the officer during the tax audit, the penalty will be reduced by 50%.
Any individual who fails to pay the tax within the specified time will be liable to pay a surcharge of 1.5% per month, or a fraction of the amount of tax to be paid or remittable, excluding the amount of the tax imposed.
If the Director-General extends the time limit for payment or remittance of tax and tax is paid or remitted within extended time, the surcharge will be reduced to 0.75% per month or fraction thereof.
Any person who knowingly or wilfully reports false information or gives false statement or responds to questions with false information or submits false evidence to evade taxes or tries to evade taxes will be liable to imprisonment for three months to seven years and a fine of THB 200,000.
Tax clearance certificate
The following individuals must apply for a tax clearance certificate:
- Liable to pay tax or tax arrears before departing Thailand
- Has a duty to file a tax return and pay tax on behalf of the company or juristic partnership incorporated under foreign laws and has been carrying on business in Thailand
- Receive income from being public entertainers in Thailand
A foreigner must apply for a tax clearance certificate within 15 days before leaving Thailand. The tax clearance certificate must be presented to the Immigration Office on the departure date.
Failure to apply for the tax clearance certificate will be liable to pay a surcharge of 20% of the tax payable. The foreigner may also be subject to a fine not exceeding THB 1,000 or imprisonment of not more than one month, or both.
Taxpayers should stay compliant with their personal income tax obligations in Thailand in order to avoid being fined or imprisoned.
If you are looking for professional tax services, we recommend contacting Acclime.