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Includes PIT Guide

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Includes PIT Guide

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Home › Accounting services › Personal income tax

Learn more about Personal Income Tax

Income tax, also called Personal Income Tax (PIT) in Thailand, is a direct tax on all income a person receives. By person, we mean a natural person, a partnership, a company without legal personality, an undivided heritage between several people or a deceased. Taxpayers are classified as residents or non-residents based on length of stay in Thai territory. In general, a person subject to Personal Income Tax must calculate their tax liability, complete their tax return and pay tax, if any, accordingly on a calendar year basis. The amount of Personal Income Tax payable is calculated based on progressive rates provided for by the Thai tax code. The tax return as well as the tax payment must be submitted to the Revenue Department no later than March 31 following the taxable year.

Table of contents

Who is subject to Personal Income Tax in Thailand?

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.

Can the tax non-resident be subject to income tax?

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.

What is the taxable income?

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.

How is taxable income calculated?

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:

➤ Distribute the income you have received between the 8 income categories mentioned above
➤ The exemption regime provided for by said income category must be applied (table below)
➤ You should then add up all the income you received after applying the deductions
➤ It is now possible to determine the taxable income after having subtracted the allowances from your family quotient. In fact, you benefit from an automatic deduction on your taxable income of:
- 60,000 THB as a taxpayer
- 60,000 THB for your wife if she has no income
- 30,000 THB for each of your children under certain conditions

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

What are the possible deductions applicable?

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.

Income category Authorized deduction
Salaries and wages 50% within the limit of 100,000 THB
Income from goodwill, copyright and others 50% within the limit of 100,000 THB
Interest income, dividends and capital gains No deduction allowed
Real estate rental income:
- Buildings and docks
- Agricultural land
- Other types of terrain
- Vehicles
- Other types of property
Deduction allowed:
- Actual expenses or 30%
- Actual expenses or 20%
- Actual expenses or 15%
- Actual expenses or 30%
- Actual expenses or 10%
Income from liberal professions (law, medical practice, engineering, architecture, accountancy and fine arts) Actual expenses or 30% deduction except for the medical profession where 60% is allowed
Income from an employment contract whereby the contractor provides essential materials other than tools Actual expenses or 70%
Income from business, commerce, agriculture, industry, transport or any other activity not specified Actual expenses or between 40 and 60% depending on the type of income

What are the tax rates applicable to the progressive system?

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

Taxable income (THB) Applicable rate
0 – 150 000 0%
150 001 – 300 000 5%
300 001 – 500 000 10%
501 000 – 750 000 15%
750 001 – 1 000 000 20%
1 000 001 – 2 000 000 25%
2 000 001 – 5 000 000 30%
More than 5,000,000 35%

What are the incomes that can opt for autonomous taxation not subject to the progressive regime?

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:

➤ Interest income may, at the option of the taxpayer, be excluded from the calculation of income tax, if a tax of 15% is withheld at source. However, the following forms of an individual's interest income are exempt from all tax:
- Interest on bonds or debentures issued by a government agency
- Interest on savings deposits in commercial banks if the total amount of interest received does not exceed THB 20,000 in a tax year
➤ Dividends may, at the option of the resident taxpayer, be excluded from the calculation of income tax, if a final withholding tax of 10% is imposed
➤ Regarding income from the sale of real estate, special rules apply to the calculation of gains on the sale of real estate. This may allow a taxpayer to pay a final withholding tax to the Land Department instead of including the gain realized on the sale as normal taxable income.

How to make an income tax declaration?

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.

When is it possible to benefit from a tax credit?

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.

What is the Tax ID number?

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:

➤ Photocopy of passport
➤ Tax ID Form
➤ In the event that you wish to use a service provider acting as an agent, it is necessary to complete a mandate for the benefit of your legal representative authorizing your representative to file a request to obtain your Tax ID number
➤ Proof of receipt of income(s) in Thailand

What are the penalties for late or failure to declare?

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:

➤ A fine of 100% of the amount of tax payable in the event of an incorrect declaration; or
➤ A fine of 200% of the amount of tax payable for failure to report

I have income from Thai real estate and live abroad, do I have to report in Thailand?

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.

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