A.Income tax
Who is liable. All resident and nonresident individuals earning income from sources in Thailand are subject to personal income tax (PIT). A Thai resident is also subject to PIT on self-employment and business income from sources overseas if the income is remit ted to Thailand.
Individuals are considered resident if they reside in Thailand for a period or periods aggregating 180 days or more during a calen dar year. Income earned overseas by Thai residents is also subject to PIT if it is remitted to Thailand in the year it is earned.
Income subject to tax. Taxable income consists of assessable income, less deductible expenses and allowances. The taxation of various types of income is described below.
Employment income. All benefits derived from employment are assessable, unless expressly exempt by law. Examples of assess able benefits are wages, salaries, per diem allowances, bonuses, bounties, g ratuities, directors’ fees, pensions, house rental allow ances, the monetary value of rent-free accommodation provided by an employer, and income tax paid and borne by an employer on behalf of an employee.
Tax-exempt benefits include medical expenses as well as travel expenses incurred wholly and exclusively by an employee in carrying out his or her duties. In addition, group medical insurance premiums paid by the employer to an insurance company operating in Thailand on behalf of its employees are tax-exempt benefits if the duration of the group insurance policy does not exceed one year. Income received from a provident fund by an employee at the termination of his or her employment as a
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result of retirement, disability or death is also exempt from income tax, subject to certain conditions.
Self-employment and business income. Taxable self-employment and business income consists of assessable income less deductible expenses and allowances. Generally, all types of income are assessable unless expressly exempt by law.
Investment income. Interest, dividends and other investment income are subject to PIT at the rates set forth in Rates.
A tax credit is granted for dividend income received by an indi vidual domiciled in Thailand from locally incorporated companies. The credit is calculated according to the following formula:
Tax credit = t × dividends received 100 – t
For the purposes of the above formula, t equals the rate of corpo rate income tax applicable to the distributing company.
Capital gains. Gains derived from sales of shares are generally subject to PIT. However, gains derived from sales of securities listed on the Stock Exchange of Thailand are exempt from tax.
Gains derived from sales of real property are subject to PIT. A standard allowance is deductible, depending on the number of years of ownership. This tax also applies to gains derived from sales of real property used in a trade or business.
Taxation of employer-provided stock options. Employees are sub ject to tax on the benefit derived from shares provided either for free or at a favorable price by the employer. The taxable benefit is the difference between the price paid by the employee, if any, and the fair market value of the shares.
Deductions
Deductible expenses. A standard allowance of 50% of assessable income, up to THB100,000, is allowed as a deductible expense against income from employment.
To arrive at net assessable income, the following allowances are permitted as deductions.
Benefit Amount
Personal allowance
THB60,000
Spouse allowance THB60,000
Child allowance
Parental support allowance
Life insurance allowance
Health insurance premiums
THB30,000 per child (THB60,000 for second child born from 2018 onward)
THB30,000 per parent (conditions apply)
Up to THB100,000 (conditions apply)
Up to THB25,000 (aggregate amount of life and health insurance premiums cannot exceed THB100,000)
Parental health insurance allowance
Provident fund (PF) allowance
Up to THB15,000 per parent (conditions apply)
Up to THB500,000 (contribution cannot exceed 15% of basic salary)
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Benefit Amount
Retirement Mutual Fund (RMF)
Up to THB500,000 (contribution cannot exceed 30% of assessable income; combined sum of RMF allowance and PF allowance is subject to certain conditions)
Super Saving Fund (SSF)
Up to THB200,000 (investment cannot exceed 30% of assessable income; investment period from 2020 to 2024)
Interest allowance (housing loans)
Donations allowance
Up to THB100,000 (conditions apply)
Up to 10% of net assessable income
Social security fund allowance Actual amount (5% of basic salary, not exceeding THB9,000 per year)
Patronage of disabled spouse/parent/ THB60,000 per person child/dependents allowance (conditions apply)
Education and sport donation
Two times actual payment allowance but not over 10% of assessable income after deductions of other allowances
Pension insurance
Up to THB200,000 (contribution cannot exceed 15% of assessable income; combined sum of RMF allowance, SSF allowance, PF allowance and pension insurance may not exceed THB500,000; conditions apply)
Business deductions. Certain expenses are fully or partially deduct ible, depending on the type of income. For some expenses, standard deductions are provided. The following table provides the rates of deduction for certain types of income.
Type of income
Rate of deduction
Employment and service income 50%, up to THB100,000
Income from copyrights 50%, up to THB100,000
Income from goodwill or other rights 50%, up to THB100,000
Dividends and interest None
Rental income
Either 10% to 30%, or actual amount of expenses
Either 30% or 60%, or professions actual amount of expenses Income from work Either 60%, or actual contracts amount of expenses
Income from liberal
Income from other businesses, Either 40% or 60%, commerce, agriculture, or actual amount industry and transport of expenses
Rates. Personal income tax is levied on an individual’s net assess able income at the following progressive rates.
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Net assessable income
B. Other taxes
Net worth tax. PIT normally is levied on assessable income earned during a calendar year. However, the tax authorities may reassess income tax based on net worth if the amount of a tax payer’s income is believed to be understated. In practice, this power is rarely exercised.
Inheritance and gift taxes. Under the Inheritance Tax Act, which took effect on 1 February 2016, inheritances received are taxable only on the accumulated value in excess of THB100 million per benefactor, at a rate of 5% in the case of descendants or parents or 10% in all other cases. The tax filing must be completed within 150 days from the date of receipt or penalties and sur charges are applied.
In general, gifts are taxed at a flat rate of 5%. However, gifts received from a legitimate parent, child or spouse (up to THB20 million per tax year) or in a ceremony or on occasions in accordance with custom and tradition (up to THB10 million per tax year) are exempt from tax.
C. Social security
The social security contribution rate is 5% on a capped remu neration of THB15,000 per month. As a result, the contribution is capped at THB750 per month and THB9,000 per year.
D. Tax filing and payment procedures
PIT payable by employees is withheld by employers. Some selfemployed individuals, including certain professionals and those engaged in the rental of property, must make an interim income tax payment by September.
All individuals who earn income in Thailand during a calendar year must file personal income tax returns with the Revenue Department by the end of the following March. Self-assessed income tax must be paid on the filing date.
Married persons are taxed jointly or separately, at the taxpayers’ election, on employment income and jointly on all other types of income.
E. Tax treaties
Thailand has entered into double tax treaties with the jurisdictions listed below. The method of eliminating double tax varies by treaty.
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Exceeding Not exceeding Tax rate THB THB % 0 150,000 0 150,000 300,000 5 300,000 500,000 10 500,000 750,000 15 750,000 1,000,000 20 1,000,000 2,000,000 25 2,000,000 5,000,000 30 5,000,000 35
Armenia India Romania
Australia Indonesia Russian
Austria Ireland Federation
Bahrain Israel Seychelles
Bangladesh Italy Singapore
Belarus Japan Slovenia
Belgium Korea (South) South Africa
Bulgaria Kuwait Spain
Canada Laos Sri Lanka
Chile Luxembourg Sweden
China Malaysia Switzerland
Mainland Mauritius Taiwan
Cyprus Myanmar Tajikistan
Czech Republic Nepal Turkey
Denmark Netherlands Ukraine
Estonia New Zealand United Arab
Finland Norway Emirates
France Oman United Kingdom
Germany Pakistan United States
Hong Kong Philippines Uzbekistan
Hungary Poland Vietnam
F. Entry visas
The government of Thailand through its embassies or consulates overseas can issue many types of visas. However, the three prin cipal types of visas requested by foreigners from Thai embassies and consulates are tourist visas, non-immigrant visas and transit visas.
Tourist visas are granted for the purpose of tourism only and are normally valid for 60 days. Non-immigrant (business type or Non-B) visas are required for foreign nationals who wish to work or conduct business in Thailand. The holder of a non-immigrant visa is granted a stay of 90 days. The visa may be extended, sub ject to meeting certain conditions, with permission from the Immigration Bureau.
G. Work permits
Foreign nationals who wish to work in Thailand must obtain work permits from the Employment Department. To be eligible for a work permit, a foreign national must enter Thailand on a NonImmigration Category “B” (Non-B) Visa.
The granting of a work permit is discretionary, based on such criteria as the nature of the work, the knowledge and skills of the applicant, the capital of the employer, and the proportion of Thai national employees to foreign national employees. The consider ation process and criteria for companies with Board of Investment (BOI) privileges are different, and an expedited process is avail able.
After all required documents are received, the time for processing a work permit can range from approximately a few days up to two weeks, at the discretion of the authority. Applicants may not begin working in Thailand while their work permit applications and other papers are being processed.
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Non-BOI companies seeking to extend a visa must show evi dence of payroll withholding and Thai Social Security Fund contributions of the foreign national.
To change employers after an applicant receives a work permit, the applicant must cancel the existing work permit before filing a new application reflecting a change of employer.
Work permits are usually granted for one year. An application for renewal is required if the holder wishes to continue working in Thailand.
A foreigner caught working without a valid work permit is sub ject to a fine or imprisonment or both. The employer in Thailand is also subject to a fine of up to THB100,000 per person.
H. Short-Term Business Travelers
All foreigners entering Thailand for work or business activities are required to apply for a Non-B visa at a Thai embassy abroad. Certain types of activities undertaken in Thailand may require a separate work permit, or an Urgent Work Permit (UWP) if the duration of work is less than 15 days. The Ministry of Labor provides guidance on the specific types of activity that require a UWP, and travelers should seek professional consultation prior to travel.
I. Family and personal considerations
Family members. The working spouse of a work permit holder does not automatically receive a work permit; an application must be filed independently, and a change of visa type is required.
Marital property regime. Thailand does not have a community property or similar marital property regime.
Forced heirship. No forced heirship rules apply in Thailand.
Driver’s permits. Although Thailand has no driver’s license reci procity agreements with other countries, a foreign national may drive legally in Thailand with an international driver’s license.
Obtaining a Thai driver’s license requires taking a written exami nation and a driving test and undergoing a physical examination.
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