Personal Income Tax Thailand Bangkok


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Every person, resident or non-resident, who derives assessable income from employment or business in Thailand, or has assets located in Thailand, is subject to personal income tax Exemptions are granted to certain persons, including United Nations. officers, diplomats and certain visiting experts, under the terms of international and bilateral agreements.

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Personal income tax is applied on a progressive scale as follows:

Annual Taxable Income (Baht) Marginal Tax Rate
0 – 150,000 Exempt
150,001 – 300,000 5%
300,001 – 500,000 10%
500,001 – 750,000 15%
750,001 – 1,000,000 20%
1,000,001 – 2,000,000 25%
2,000,001 – 4,000,000 30%
4,000,001 – and above 35%
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Individuals residing for 180 days or more in Thailand for any calendar year are also subject to income tax on income from foreign sources if that income is brought into Thailand during the same taxable year that they are a resident.

Personal income taxes and tax returns must be filed prior to the end of March of the year following the year in which the income was earned.

A standard deduction of 40 percent, but not in excess of 60,000 Baht, is permitted against income from employment or services rendered or income from copyrights.

Standard deductions ranging from 10 percent to 85 percent are allowed for other categories of income. In general, however, taxpayers may elect to itemize expenses in lieu of taking standard deductions on income from sources specified by law.

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Standardized deductions are allowed for other types of taxable income as categorized below:

• Interest, dividends, capital gains on the sale of securities: Forty percent, but not exceeding 60,000 baht. • Rental income: Ten percent to 30 percent depending on type of property leased. • Professional fees: Sixty percent for income from medical practice, 30 percent for others. • Income derived by contractors: Seventy percent. • Income from other business activities: Sixty-five percent to 85 percent depending on the nature of the business activity.

Taxable Income may be reduced by the following allowances

General allowance, available to all taxpayer 30,000 Baht

Allowance for taxpayer’s non-working spouse 30,000 Baht

Child allowance 15,000 Baht

Child Eduction allowance 2,000 Baht

Allowance for Taxpayer’s parents or spouse’s aged parents – 30,000 per qualifying dependent

Contributions made by taxpayer and spouse to an approved provident fund at the amount contributed but not exceeding 15% of wages or 500,000 Baht per year.

Interest payments on loans for purchasing, hire purchasing or construction of residential buildings by the taxpayer and spouse at the amount paid but not exceeding 100,000 Baht

Amounts contributed to the social security fund by the taxpayer and spouse.

Contributions made by taxpayer and spouse to approved retirement funds at the amount contributed but not exceeding 15% of wages or 500,000 Baht per year.

Contributions made by taxpayer and spouse to approved long term investment funds at the amount contributed but not exceeding 15% of wages or 500,000 Baht per year.

Donations contributions at the actual amount donated but not exceeding 10 percent of taxable income after allowances.

Additional taxes can be assessed, within a period of two years from the date of filing a return, and up to five years for tax evasion or tax refund. If an individual fails to file a return, the assessment officer may issue summons within a period of 10 years from the filing due date.

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Treaties to avoid double taxation

Thailand has treaty agreements to eliminate double taxation with the following countries:

Armenia, Austria, Australia, Bahrain, Bangladesh, Belgium, Bulgaria, Canada, China, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Hong Kong, Hungary, Indonesia, Israel, Italy, India, Japan, Kuwait, Laos, Luxembourg, Malaysia, Mauritius, Nepal, Netherlands, New Zealand, Norway, Oman, Pakistan, the Philippines, Poland, Romania, Singapore, Slovenia, S Korea, S Africa, Spain, Sri Lanka, Sweden, Switzerland, Seychelles, Turkey, Ukraine, United Arab Emirates, United Kingdom and Northern Ireland, United States, Uzbekistan and Vietnam.

The treaties generally place taxpayers in a more favorable position for Thai income than they would be under the Revenue Code, as profits will only be taxable if the taxpayer has a permanent establishment in Thailand.

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As SUMMARY of DEDUCTIONS and ALLOWANCES

Tax deductions and allowances are available in Thailand. These are intended to reduce the tax load of an income tax paying individual.

Deductible Expenses

Income Source

Deduction Rate

1. Employment Income

40% but not more than 60,000 THB

2. Copyright Income

40% but not more than 60,000 THB

3. Rental Income from assets and properties

10% – 30%

4. Profession:
a. Medical Profession

   b. Liberal Profession

a. 60%

b. 30%

5. Actual Expense or Contract Work

70%

6. Actual Expense or Business Activities

65% – 85%

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Tax Allowances

Aside from the scheduled tax allowance provided in the table below, there are Limited allowances for the following:

  1. Home mortgage interest payments

  2. Purchases of retirement mutual fund and long term equity fund

  3. Contributions to charities

  4. Social Insurance contributions

  5. Life Insurance premiums

  6. Qualified provident fund payments

    Amount

    In Exemption

    30,000 THB

    Both for the taxpayer and the spouse

    a. 15,000 THB

    b. 2,000 THB

    a. For each child

    b. Education allowance for each child

    30,000 THB

    For the taxpayer and his spouse’s parents if the parents are above 60 years old whose income for the tax year is below 30,000 THB

    However, the Personal Income Tax is based on the Assessable Income of the tax payer. Assessable income includes:

    1. Employment or services rendered

    2. Professional fees

    3. Interests, dividends and capital gains on securities

    4. Royalties

    5. Copyrights

    6. Rental of properties/assets

    7. Income from contractor related activities

    8. Others

    For a taxpaying individual, either a Thai national or a foreigner, the taxation system of the Kingdom may be very confusing. Added with the tax rates and terminologies, understanding one’s tax obligations may even get more perplexing.

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