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.
|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
- Other types of property
- 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|
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%|
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.|
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:
|➤ 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|
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|
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.