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Personal Income Tax in Thailand

Personal Income Tax (PIT) is a direct tax levied on income of a person. A person means an individual, an ordinary partnership, a non-juristic body of person and an undivided estate. In general, a person liable to PIT has to compute his tax liability, file tax return and pay tax, if any, accordingly on a calendar year basis.

1 Taxable Person

Everybody who has an income and is living in Thailand must have their own tax ID number. This can be issued by the tax office but you need to present ID such as your passport or ID card. You will also need to show why you need the number. :If you are resident then you are expected to pay taxes on all income that you earn worldwide. If you are not a resident and are in the country for less than 180 days each year then you are only expected to pay tax on the income that you get from within Thailand. Those who do not have a work permit are not exempt from paying taxes.

Thai Taxes have an online service that you can use (in thai) after filling a regitration form available here : http://rdserver.rd.go.th/publish/en/en_document/form_en/frm_po01.PDF

You can also register on line on this page, but it is only in thai language : https://epit.rd.go.th/publish/index.php

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

2 Taxbase

2.1  Assessable Income

Income chargeable to the PIT is called “assessable income”. The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, is also treated as assessable income of the employee for the purpose of PIT. Assessable income is divided into 8 categories as follows :

  1. income from personal services rendered to employers;
  2. income by virtue of jobs, positions or services rendered;
  3. income from goodwill, copyright, franchise, other rights, annuity or income in the nature of yearly payments derived from a will or any other juristic Act or judgment of the Court;
  4. income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings;
  5. income from letting of property and from breaches of contracts, installment sales or hire-purchase contracts;
  6. income from liberal professions;
  7. income from construction and other contracts of work;
  8. income from business, commerce, agriculture, industry, transport or any other activity not specified earlier.

2.2 Deductions and Allowances

Certain deductions and allowances are allowed in the calculation of the taxable income. Taxpayer shall make deductions from assessable income before the allowances are granted. Therefore, taxable income is calculated by :

TAXABLE INCOME = Assessable Income – deductions – allowances

Deductions allowed for the calculation of PIT

Type of IncomeDeduction
a. Income from employment40% but not exceeding 60,000 baht
b. Income received from copyright40% but not exceeding 60,000 baht
c. Income from letting out of property on hire
            1) Building and wharves30%
            2) Agricultural land20%
            3) All other types of land15%
            4) Vehicles30
            5) Any other type of property10%
d. Income from liberal professions30% except for the medical profession where 60% is allowed
e. Income derived from contract of work whereby the contractor provides essential materials besides toolsactual expense or 70%
f. Income derived from business, commerce, agriculture, industry, transport, or any other activities not specified in a. to e.actual expense or 65% – 85% depending on the types of income

 

Allowances (Exemptions) allowed for the calculation of PIT

Types of AllowancesAmount
Personal allowance
            Single taxpayer30,000 baht for the taxpayer
            Undivided estate30,000 baht for the taxpayer’s spouse
            Non-juristic partnership or body of persons30,000 baht for each partner but not exceeding 60,000 baht in total
Spouse allowance30,000 baht
Child allowance (child under 25 years of age and studying at educational institution, or a minor, or an adjusted incompetent or quasi-incompetent person)15,000 baht each
(limited to three children)
Education (additional allowance for child studying in educational institution in Thailand)2,000 baht each child
Parents allowance30,000 baht for each of taxpayer’s and spouse’s parents if such parent is above 60 years old and earns less than 30,000 baht
Life insurance premium paid by taxpayer or spouseAmount actually paid but not exceeding 100,000 baht each
Approved provident fund contributions paid by taxpayer or spouseAmount actually paid at the rate not more than 15% of wage, but not exceeding 500,000 baht
Long term equity fundAmount actually paid at the rate not more than 15% of wage, but not exceeding 500,000 baht
Home mortgage interestAmount actually paid but not exceeding 100,000 baht
Social insurance contributions paid by taxpayer or spouseAmount actually paid each
Charitable contributionsAmount actually donated but not exceeding 10% of the income after standard deductions and the above allowances

 

2.3 Tax Credit for dividends

Any taxpayer who domiciles in Thailand and receives dividends from a juristic company or partnership incorporated in Thailand is entitled to a tax credit of 3/7 of the amount of dividends received. In computing assessable income, taxpayer shall gross up his dividends by the amount of the tax credit received. The amount of tax credit is creditable against his tax liability.

3.1  Progressive Tax Rates

Personal income tax rates applicable to taxable income are as follows

Tax rates of the Personal Income Tax

 

Taxable Income
(baht)
Tax Rate
(%)
0-150,000Exempt
more than 150,000 but less than 300,0005
more than 300,000 but less than 500,00010
more than 500,000 but less than 750,00015
more than 750,000 but less than 1,000,00020
more than 1,000,000 but less than 2,000,00025
more than 2,000,000 but less than 4,000,00030
Over 4,000,00035

To be implemented for the 2013 and 2014 tax years.

In the case where income categories (2) – (8) mentioned in 2.1 are earned more than 60,000 Baht per annum, taxpayer has to calculate the amount of tax by multiplying 0.5% to the assessable income and compare with the amount of tax calculated by progressive tax rates. Taxpayer is liable to pay tax at the amount whichever is greater.

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