Personal Income Tax

Income taxpayers in Thailand fall into two categories: residents and non-residents. The term resident refers to any person residing in Thailand for one or more periods totaling more than 180 days in a fiscal year.

The resident is required to pay tax on all income received in Thailand as well as income from foreign sources but brought into Thailand.

However, the non-resident is only taxed on income received in Thailand, whether income from employment in Thailand, land income from property located in Thailand or income from securities received in Thailand reason for owning shares or shares in a Thai company.

In principle, the tax non-resident is taxed in the country where he holds the status of resident. However, as soon as he receives income from Thailand, it will be taxed in accordance with the Personal Income Tax not governed by the provisions of the Thai Tax Code.

Many bilateral tax treaties between Thailand and third countries have been signed in order to avoid double taxation of taxpayers thus allowing a tax credit on their return.

Residents and non-residents are taxed on their assessable income from employment or any activity carried on in Thailand. Article 40 of the Thai Tax Code provides for eight categories of taxable income:

1. Salaries and wages (including income from stock options, housing allowances and other social benefits).
2. Income from hiring a job, placement office or service rendered.
3. Income from goodwill, copyright, franchise, patent, other rights, rent, etc.
4. Interest income, dividends, bonuses for investors, merger gains, acquisition or dissolution of a company or association, gain on disposal of shares, cryptocurrency ect.
5. Income from the rental of real estate, breach of a hire purchase contract and installment sale.
6. Income from liberal professions in the fields of law, medicine, engineering, architecture, accountancy and fine arts.
7. Income from an employment contract whereby the contractor provides essential materials other than tools.
8. Income from business, commerce, industry and income other than those specified under Wages and salaries with income from an employment contract.

Taxable income can be defined as the sum of annual income deducted from deductions and allowances provided for according to the category of income selected.

To calculate the taxable income, it is necessary to proceed in different successive stages:

Once the taxable income is calculated, it is possible to apply the graduated tax rates.

The methods of taxation are specific to each category of income. Depending on the category of income you receive, the related exemption regime should be applied.

The rates of the progressive plan are as follows depending on the amount of your taxable income:

The taxpayer can decide that certain income is taxed independently of the progressive system. There are, in fact, three categories of income that may be taxed separately:

The Personal Income Tax fiscal year is the calendar year that begins on January 1 and ends on December 31. The declaration as well as the payment of taxes must be submitted no later than March 31 of the following year. It is generally said that the payment of taxes occurs at N + 1.

The declaration is made by filing the PND 90 form with the Revenue Department. PND 90 is a 4-page form distinguishing the eight income categories mentioned above. You must indicate the amount of the only categories of income you receive, apply the related expenditure exemption regime, add all the income to determine taxable income. Once the taxable income has been determined, in No. 9 it is possible to apply the allowances according to your family quotient.

In the event that you only receive your salary, it is not necessary to complete the PND 90 form but only the PND 91 form provided for taxpayers with employment income under article 40 (1) of the code taxes.

Taxpayers are entitled to credits against their annual tax liability for tax that has been withheld at source. This is because for certain categories of income, the income payer must withhold tax at source, complete a tax return and submit the amount of tax withheld to the Revenue Department. The tax withheld is then credited to the taxpayer’s tax liability when submitting his income tax return. The services concerned by the Withholding tax are the payment of salary, rent, dividends, interest or any service rendered.

For example, for dividends that are subject to a statutory withholding tax of 10% by the Thai paying company, beneficiaries may choose to charge Personal Income Tax withheld at source on their obligation.

On the other hand, foreign tax paid on income received cannot be deducted from the Thai income tax declaration unless a bilateral tax treaty expressly provides for it.

In Thailand, each taxpayer must obtain a Tax ID number also called a tax identification number within 60 days of receiving the first income. You must therefore register with the Thai tax authorities. This Tax Id is essential for paying Personal Income Tax.

The following documents are required to apply for a Tax ID:

In the event of a late declaration or absence of declaration, the taxpayer is required to pay an increase equal to 1.5% of the amount of tax payable per month with a maximum ceiling of the total amount of tax payable.

The tax administration can also impose:

As long as you live abroad, you do not have the status of tax resident in Thailand. However, you are subject to Personal Income Tax in Thailand because of the income from real estate you receive from renting your property located in Thailand. For this purpose, you are obliged to declare the real estate income that you receive to the Revenue Department. Income from real estate benefits from a 30% exemption scheme for expenses and you benefit from a tax allowance of THB 60,000 as a taxpayer.