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Learn more about Tax Planning

When we talk about Tax Planning, there are two types of taxation: direct and indirect. Direct taxes include personal and corporate income taxes and the oil revenue tax. Indirect taxes include value added tax, excise tax, customs duty, stamp duty and specific business tax. In general, income tax in Thailand is collected by self-assessment, meaning that returns and payments are assumed to be correct. However, the Revenue Department has the power to audit taxpayers’ tax and financial records. Value Added Tax (VAT) is levied on the consumption of goods and services, and is also charged on imports. Whether you are a private individual or doing business in Thailand, our partners are here to help you and to offer you personalized tax planning.

Table of contents

How much income tax do I have to pay?

Income tax, also known as Personal Income Tax (PIT) in Thailand, is a direct tax on all income received by an individual or unincorporated entity. It is taxed on all income of persons resident in Thailand and income of non-residents from Thailand. The amount of tax to be paid is calculated according to progressive rates provided by the Thai Tax Code.

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

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

About Tax Planning, the tax return and the tax payment must be submitted to the Revenue Department by March 31 following the taxable year by filing the PND 90 form.

How much corporate tax do I have to pay?

Corporate income tax is a proportional direct tax on the profits of companies. It is levied on both Thai and foreign companies. foreign companies. The amount of tax to be paid is calculated according to the rates provided by the Thai Tax Code. The standard corporate tax rate in Thailand is 20% on net profits.

A progressive tax rate applies to small and medium-sized enterprises (SMEs) as follows:

Net income (Baht) Tax rate
< 300 000 0%
300 001 - 3 000 000 15%
> 3 000 000 20%

The company must proceed to the approval of the annual accounts within 4 months following the closing of its accounting period. Following the approval of the accounts by the general assembly, the company has a period of one month from the date of the general meeting to file the approved financial approved financial statements to the Department of Business Development (DBD) through the electronic filing system.

It must then file the annual corporate income tax return using the PND 50 form with the Department of Business Development (DBD). “PND 50 form to the Revenue Department within 5 months of the end of the fiscal year.

In addition to the annual return, the company is required to submit the half-yearly return of profits for the first half of the year via the the first half of the year by filing the PND 51 form by August 31 of the same year.

How much tax is deducted at source?

Companies operating in Thailand are required by law to make withholding taxes when they pay salaries to their employees, make payments to a service provider or pay title or rental income to a beneficiary.

The applicable rate of withholding tax varies depending on the category of income paid:

Income category Withholding tax rate
Dividends 10%
Rental income 5%
Rental fees 3%
Transport 1%
Car park 3%
Interests 1%
Royalties 3%
Phone 2%
Advertising costs 2%
Service charges and professional fees โžค 3% if paid to a Thai company or a foreign company with a permanent branch in Thailand.
โžค 5% if paid to a foreign company that does not have a permanent branch in Thailand.
Prizes (awards) 5%

About Tax Planning, withholding tax is a tax deducted at source on a monthly basis. And the entity having deducted at source withholding tax by filing four monthly forms according to the categories of income forms according to the categories of income paid:

Form PND 1 for taxes withheld by the company on salaries paid to employees
Form PND 2 for taxes withheld by the company on interest and dividends paid to beneficiaries
Form PND 53 for taxes withheld by the company from vendors who are legal entities
Form PND 3 for taxes withheld by the company on sellers who are natural persons

The declaration of the ” withholding tax ” is made to the ” Revenue Department ” at the latest within the first 7 days following the month in which the payment was made.

How much tax is payable on petroleum income?

Taxation of income from petroleum operations is imposed on petroleum concession companies and producers who purchase crude oil from the concessionaire for export under the Petroleum Income Tax Acts (PITA). The oil companies under service contracts are not taxed under PITA but under the Revenue Code.

Petroleum concession companies are taxed at a rate of 50% of their annual net profit from oil from oil operations. And producers are taxed at the rate of 20% of the annual net profit from annual net profit from oil operations.

What is the amount of VAT to be paid?

Value Added Tax (VAT) is an indirect tax levied on value added at each stage of production and distribution. Any person or entity that regularly provides goods or services in Thailand, and whose annual turnover exceeds 1.8 million THB, is subject to VAT in Thailand.

VAT is currently levied at a rate of 7% on gross receipts, although a zero rate applies to exported goods and services that are used abroad. Some businesses are exempt from VAT.

About Tax Planning, as soon as the company is registered for VAT, it is obliged to make two monthly declarations. Firstly, it must declare monthly the different amounts of VAT collected and disbursed during the month in order to calculate the VAT payable. The declaration is made via the form “PP 30” at the latest within 15 days of the following month. Secondly, the taxpayer must also pay the VAT on behalf of his foreign service providers who are not registered in who are not registered in the Thai system. In this case, as long as the Thai company uses a service from foreign providers, it must submit a 7% VAT on their behalf through the 7% VAT on their behalf via form “PP 36” within 7 days of the following month.

What is the amount of SBT to be paid?

Due to the difficulty in determining the value added of some businesses for VAT assessment purposes, another tax levy on services, notably in the financial services sector, was introduced in parallel with the VAT levy. services, has been introduced in parallel with the VAT regime. The specific business tax (“SBT”) is levied on gross receipts at fixed rates.

The tax is levied on the gross revenues and the tax rate differs according to the nature of the activity carried out:

Activity Tax base Applicable rate
Banking, finance and similar activities Interest, discounts, service charges service charges, other charges, profits from from the exchange of foreign currency 3%
Life Insurance Interest, service charges and other fees 2,5%
Pawnbroking Interests, fees, remuneration from the sale of a property that has not been redeemed 2,5%
Real Estate Gross profits 3%
Factoring Interest, discounts, service charges and other fees 3%

The SBT declaration is made under the same conditions as the VAT declaration. In fact, in the Tax Planning, the companies subject to SBT are required to file monthly tax returns no later than the 15th day of the following the 15th day of the following month.

How much stamp duty do I have to pay?

Stamp duty is imposed on instruments, not on transactions or persons. An instrument is defined as any document subject to duty under the Thai Tax Code. The following documents are subject to stamp duty: a majority of contracts such as loan, land lease or partnership agreement, financial and commercial documents such as check, bond, bill of exchange or promissory bill and various other documents.

The rates vary depending on the nature of the documents or instruments. The rates range from 1 baht up to 1,000 baht in most contracts and agreements. Stamp duty must be duly stamped at the rate specified in the stamp duty schedule.

About Tax Planning, stamp duty must be paid within 15 days from the date of execution of an instrument in Thailand, with exceptions for certain entities. In most cases, the beneficiary of the consideration of the instrument is required to pay the stamp duty. It is paid by affixing the stamps to the instrument and crossing them out. However, some instruments subject to stamp duty must be paid in cash to the Revenue Department.

What are the customs duty rates?

Customs duty can be defined as a tax levied by the customs service of a state on the import of goods from abroad. In Thailand, customs duties on goods are levied on an ad valorem basis or on a specific rate. The majority of goods imported by Thai companies are subject to rates ranging from 5% to 60%.

Therefore, imported goods are subject to two different taxes:

โžค The customs duties, calculated by multiplying the cost, insurance and freight value (CIF value) of the goods by goods by the prescribed rate. The duty thus determined is then added to the CIF value of the value of the goods.
โžค VAT is then levied on the total sum of the CIF value, duties and excise duties, if any.

Goods imported for re-export are generally exempt from import duties and VAT. Export duties are imposed on only a few items, including rice, hides and leather, scrap metal or steel, rubber, teak and other types of wood.

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