I've had a lot of requests to write out the general ideas of Thailand personal individual income tax, so I tried.
I attempted to make it as unprofessional as possible, so that it is easily comprehensible.
Philosophically and theoretically, compared to other countries, Thailand taxation is not that difficult, nor is it too complex.
But in practice, Thailand accounting is quite complicated. I don’t care who you are and what your education and experience is, it’s not something you should try to do on your own. It is extremely idiosyncratic, inconsistent, and non-standard from district to district and revenue department to revenue department (sometimes even from official to official), and extremely strict on seemingly completely unimportant, minor issues.
If you are under the impression that a very well educated Western CPA, ACCA, professor of accounting from ivy League wherever or Oxford/Cambridge or any of the other best schools in the world can do a better job with Thai accounting then Thais, you are extraordinarily incorrect.
If you recall nothing else from what I've written or me as a human being, remember this: only Thai people should do Thai accounting. I am an American Tax Lawyer with 25 years experience and a doctorate in international tax, and I would never even attempt it! I've tried. I think I understand it better than any other foreigner I've ever met, and I still would never try it. (At least never my own! That’s for damn sure).
The language and the culture alone make this an absolute truism. Forget about understanding Thai accounting from an academic point of view or the knowledge of Thai accounting laws and rules, the language and the culture come first.
So find a good Thai accountant! They might have a farang boss, but that only means you're paying a premium to talk to a individual of European descent.
Here we go.
Please contact me at the following NAPA sites & contacts: https://www.facebook.com/profile.php?id=100088464564938&mibextid=ZbWKwL
You can also contact me at jmazzola@napabusinesssolutions.com or our office in Prawet at 02-427-149 or at our website:
And check us ranked #4 as the best accounting firms in Bangkok at https://www.cleverthai.com/best-accountants-bangkok/#napa-business-solutions
THAI PERSONAL INDIVIDUAL TAX
Individual – Miscellaneous and ‘other’ taxes
Social Security Contributions
All employees must contribute 5% of their salaries to a social security fund, with a monthly maximum contribution of THB 750.
Employers and the government are both expected to contribute an equal amount.
Consumption taxes
Value Added Tax (VAT)
The current VAT rate is 7%. (However, this is down from 10% and appears to be a temporary measure that will continue indefinitely). The law specifies 10%.
Please contact us for a company tax summary with information on VAT returns and payments. It is incredibly crucial, and the penalties and punishments are severe.
Net wealth/worth taxes
Thailand has no net worth or wealth taxes.
The inheritance tax
A legacy obtained by an individual or corporate organization, regardless of nationality, from a deceased testator is exempt from PIT under the Revenue Code but subject to inheritance tax. Heirs are only subject to inheritance tax if the value of the legacy exceeds THB 100 million and was collected from each testator combined, either once or multiple times.
The inheritance tax rate is 10%, with the exception of ascendants or descendants of the testator, who pay 5%. The tax does not apply to legacies received by a testator’s spouse.
Immovable property, securities as prescribed by law, bank deposit accounts or other money of a similar nature that the testators have the right to call back or claim from financial institutions or persons who hold such money, registered vehicles, and financial assets to be prescribed by royal decrees are all examples of property subject to inheritance tax.
Employment income
Both resident and non-resident individuals who receive assessable income as a result of hiring a service in Thailand, including salary, bonuses, gratuities, pensions, the monetary value of rent-free housing, the employer’s payment of income tax, or any other money, property, or benefits derived as a result of hiring a service, are taxed in Thailand, regardless of whether the income is paid within or outside Thailand. There are no exceptions for foreigners or short-term residents.
Capital Gains
Most capital gains are taxed like ordinary income. However, the following capital gains are excluded from taxation:
Capital gains on the selling of shares in a Thai company listed on the Stock Exchange of Thailand, as well as the sale of mutual fund investment units.
Gains from the sale of non-interest bearing debentures, bills, or debt instruments issued by a corporate body, unless the bonds or debt instruments were sold for the first time at a price less than their redemption price to an individual.
Gains from the sale of assets listed on stock exchanges in ASEAN member nations and exchanged via the ASEAN Link, excluding treasury bills, bonds, bills, or debentures.
Capital gains and investment income received by a resident from sources elsewhere than Thailand are not taxable unless they are transferred to Thailand in the year of receipt.
Capital losses may not be deducted from capital gains.
Dividend Income
Dividends received from a Thai-incorporated company are subject to a flat 10% withholding tax (WHT). A Thai resident who receives dividends from Thai-incorporated companies may choose to exclude this income from income tax computation and waive the tax credit described in the Other tax credits and incentives section.
Interest income
Interest earned on bank deposits, loans to finance firms, debentures, and bills issued by a corporate entity is subject to WHT at a flat rate of 15%. Individuals can choose to exclude interest income from other income, in which case they pay the 15% WHT, or to include it with other income and pay tax at the PIT rates, in which case the tax withheld at source is credited against their tax burden.
Cryptocurrencies and digital token
Shares of earnings or benefits from holding or having digital tokens, as well as gains from transferring cryptocurrencies or digital tokens, are subject to a 15% WHT.
Gifts
PIT is imposed on gifts donated by people who are still alive. The tax is levied on assets or amounts given to parents, ascendants, descendants, spouses, or others when the value of the gift reaches a predetermined threshold, which varies depending on the type of gift and donor. Assets or amounts supplied that do not exceed the threshold are tax-exempt.
The following gifts are exempt from PIT.
A parent’s income from the transfer of ownership or possessory rights in an immovable property without consideration to a legitimate child, except an adopted kid, is limited to THB 20 million per child for the duration of the tax year.
Maintenance income or gifts from ascendants, descendants, or spouses may not exceed THB 20 million per tax year.
Maintenance income obtained from a moral responsibility or gifts made in a ceremony or on occasions in line with established tradition from those who are not ascendants, descendants, or spouse, up to THB 10 million every tax year.
Income from gifts in the case when the recipient intends to utilize them for religious, educational, or public benefit objectives in accordance with the donors’ intentions under the criteria and conditions specified in the ministerial regulations.
Gifts in excess of the aforementioned levels will be subject to PIT at the 5% rate and will not be combined with other income when calculating the yearly PIT liability.
Exempt income
Some types of income are exempt from PIT. Per diem, travel expenditures, and some fringe perks, such as medical treatment, are all exempt from taxation as work income. Exemptions also include maintenance income deriving from moral obligations (see Gifts above) and the corpus of a legacy or inheritance (see Inheritance tax in the Other taxes above).
In addition, assuming certain conditions are met, gains or benefits from registered provident funds, retirement mutual funds, long-term equity funds, and national saving funds, as well as monies derived from insurance or social security funds, are tax exempt.
To help low-income individuals and the elderly, the first THB 150,000 of net income is tax-free. A resident aged 65 or older is eligible for an income exemption of up to THB 190,000.
Employment expenditures
In terms of employment income, a standard deduction of 50% is allowed, up to a ceiling of THB 100,000. Business deductions are not allowed for employment income.
Personal deductions.
Charitable contributions
Donations in the following categories are deductible in the amount donated but must not exceed 10% of net income after all allowances and deductions:
• Make donations to educational institutions, public health care facilities, religious organizations, and approved charities.
• Donations of up to Baht 10,000 can be made in cash, assets, or other forms to support political party fundraising initiatives.
• Make an e-donation to the Royal Forest Department to assist the Ministry of Natural Resources and Environment’s Community Forest Partnership for Climate Action Programme from January 1, 2023 to December 31, 2027.
All gifts in the following areas are eligible for a double deduction, as long as the total amount does not exceed 10% of net income (assessable income after allowances and deductions):
• The Ministry of Education approves donations for educational projects, such as buildings, computers, books, and teachers.
• Donations to state hospitals.
• E-donations to the Equitable Education Fund from January 1, 2024 to December 31, 2028.
• From July 26 to December 31, 2024, e-donations can be sent to the Chai Pattana Foundation, Information Technology Foundation, and Ramathibodi Foundation under HRH Princess Maha Chakri Sirindhorn’s patronage.
• Make e-donations to the Sports Authority of Thailand, Provincial Sports Committees, Provincial Sports Associations, sports associations, or the National Sports Development Fund between January 1, 2023 and December 31, 2024.
• Make e-donations to the Thai Red Cross Society or medical and public health foundations between January 1, 2023 and December 31, 2024.
• E-donations to the Metrology System Development Fund, Public Health System Development Fund, Science and Technology Development Fund, and Thailand Science Research and Innovation Fund from January 2023 to December 31, 2025.
Life Insurance Premiums
Life insurance premiums paid by a taxpayer on one’s own life in an amount not exceeding THB 100,000 are deductible, provided that the insurance policies are for at least ten years and the insurer conducts business in Thailand. If the policy includes a savings plan that gives an annual return to the policyholder greater than 20% of the annual premium, the full premium is non-deductible.
Qualified pension life insurance premiums paid to a Thai insurer are deductible up to 15% of total assessable income, with a limit of THB 200,000. However, this limit, along with contributions to a registered provident fund, the civil servant pension fund, the teacher’s welfare fund, and investments in retirement mutual funds and super savings funds, cannot exceed THB 500,000 in a single tax year.
Furthermore, the amount paid for a life insurance premium for the taxpayer’s non-working spouse, up to a maximum of THB 10,000, is deductible as long as the marital status exists during the tax year.
Health insurance premiums.
A taxpayer can deduct up to THB 25,000 in health insurance premiums paid to a life or non-life insurance firm in Thailand for their own health. The deduction for this premium, along with the above-mentioned life insurance premiums, cannot exceed THB 100,000 in total.
A health insurance premium of up to THB 15,000 paid to a life or non-life insurance firm in Thailand for the taxpayer’s parents or the parents of the taxpayer’s spouse is deductible.
Expenses for prenatal care and infant delivery.
For each pregnancy, the taxpayer or spouse can deduct up to THB 60,000 in antenatal care and child birth expenditures. If the expenses for each pregnancy are not paid in the same tax year, the amount actually paid in each tax year is acceptable, but the total cannot exceed THB 60,000.
Mortgage interest expenditures
Mortgage interest paid for the acquisition or construction of a residential building in Thailand can be deducted up to THB 100,000.
Retirement Mutual Fund Contribution
A contribution to a retirement mutual fund is deductible up to 30% of assessable income subject to income tax, with a limit of THB 500,000 each tax year. However, if the taxpayer has any of the above-mentioned contributions to eligible pension life insurance, they must be included in the THB 500,000 limit.
Super Savings Fund Investment
An investment in a super savings fund is deductible up to 30% of assessable income subject to income tax, with a limit of THB 200,000 each tax year. However, if the taxpayer has any of the above-mentioned contributions to eligible pension life insurance, they must be included in the THB 500,000 limit.
Thai ESG Fund Investment
An investment in a Thai ESG fund of no more than 30% of assessable income, up to a maximum of 100,000 Baht.
Social Security Fund Contribution
Contributions to the government’s social security fund are also deductible.
Personal Allowances
The taxpayer and his or her spouse are both entitled to a personal allowance of THB 60,000 (assuming that the spouse does not file their own return). There is also an allowance of THB 30,000 for each child, with an additional THB 30,000 for the second child born in or after 2018.
Furthermore, a parental care stipend of THB 30,000 per parent is deductible. Non-residents may deduct expenses for their spouse, children, and parents only if they live in Thailand.
Furthermore, a deduction of THB 60,000 per person is permitted for the care of disabled or incapacitated family members, as well as THB 60,000 for the care of a disabled or incapacitated person who is not a family member.
Business deductions
Individuals engaged in business or the practice of a profession may deduct all expenses incurred solely for business purposes, subject to the various rules provided in the Revenue Code. Alternatively, a standard deduction of 10% to 60%, depending on the type of the firm, may be used.
Losses
Individuals are not permitted to carry losses forward or back.
Individuals: Foreign tax relief and tax treaties.
Foreign tax relief
Foreign taxes cannot be used to offset Thai taxes unless a double tax agreement (DTA) or tax treaty that allows it.
Tax treaties
Thailand has DTA agreements or tax treaties with the following countries:
• Armenia.
• Finland
• Mauritius
• Spain
• Australia
• France
• Myanmar
• Sri Lanka
• Austria
• Germany
• Nepal
• Sweden
• Bahrain
• Hong Kong
• Netherlands
• Switzerland
• Bangladesh
• Hungary
• New Zealand
• Taiwan
• Belarus
• India
• Norway
• Tajikistan
• Belgium
• Indonesia
• Oman
• Turkey
• Bulgaria
• Ireland
• Pakistan
• Ukraine
• Cambodia
• Israel
• Philippines
• United Arab Emirates
• Canada
• Italy
• Poland
• United Kingdom
• Chile
• Japan
• Romania
• United States
• China
• Korea
• Russia
• Uzbekistan
• Cyprus
• Kuwait
• The Seychelles
• Vietnam
• Czech Republic
• Laos
• Singapore
• Denmark
• Luxembourg
• Estonia
• Malaysia
• South Africa
Individual – Additional tax credits and incentives
Taxpayers are eligible to credits against their annual tax burden for taxes withheld at the source.
Persons domiciled and residing in Thailand have the option of using income tax withheld at source from dividends received from Thai-incorporated companies to offset their tax liability. In this situation, a credit to account for the underlying corporate income tax paid on the profit being distributed is applied to dividend income, which is then combined with other types of revenue. Tax at the PIT rates is computed on total taxable income, and the value of the tax credit is deducted from the calculated tax.
Individual – Tax Administration
The tax year is the same as the calendar year.
Tax Returns
All individuals earning income are required to file a tax return by March 31st of the following year for hardcopy filing and April 8th for online filing, with the exception of individuals whose income from employment is THB 120,000 or less (for single persons) or THB 220,000 or less (for married persons) and those with income from other sources (with or without employment income) of THB 60,000 or less (for single persons) or THB 120,000 or less (for married individuals).
Individuals involved in most forms of business must also file a report of income for the first six months of the year by September 30th and pay the tax owed.
Each husband or woman earning an income has the option of filing their income tax return separately or jointly with their spouse, whichever they want.
Payment of taxes
Income tax must be withheld at the source from salary payments, other job benefits, and certain other types of income. The remaining tax balance for a calendar year is due when the annual tax return is filed.
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