Thailand Income Tax

Thailand Income Tax is governed by the Revenue Code, primarily through the operation of Personal Income Tax (PIT) and Corporate Income Tax (CIT) systems. The classification of income, determination of tax liability, and obligations of residents and non-residents differ significantly. For individuals and corporations operating or residing in Thailand, understanding the scope of tax liability, withholding mechanisms, and available exemptions is critical for both compliance and strategic planning.

II. Tax Residency and Its Implications

Under Section 41 of the Revenue Code, a person is considered a tax resident of Thailand if they reside in the Kingdom for 180 days or more in any tax year (January 1 to December 31). Residency status affects tax exposure as follows:

• Tax Residents are taxed on:

  • All income earned within Thailand

  • Foreign-sourced income remitted into Thailand within the same tax year

• Non-residents are taxed only on Thailand-sourced income, regardless of remittance.

The definition of “remittance” includes any transfer of funds into Thailand via bank or other financial services, which means careful attention is needed for foreign income and offshore transfers.

III. Categories of Taxable Income (Section 40, Revenue Code)

Thai law classifies income into eight categories, which are treated differently for deductions and withholding:

1. Employment income (salaries, wages, bonuses)

2. Lump-sum payments from employment or services rendered

3. Professional services (legal, engineering, architecture, etc.)

4. Contract work

5. Rent and lease of property

6. Royalties

7. Dividends, interest, capital gains

8. Other income (e.g., pensions, annuities)

Each category is subject to specific deduction rules (either standard or itemized) before applying tax rates.

IV. Personal Income Tax Rates (Progressive)

The PIT is calculated on net assessable income after applying deductions and allowances.

• Standard deduction (e.g., 50% for employment income, capped at THB 100,000)

• Personal allowance: THB 60,000 per taxpayer

• Spouse and child allowances

• Contributions to pension funds, social security, and qualified insurance

V. Foreign Income and the Remittance Rule

Thai residents must report foreign-sourced income only if it is remitted into Thailand in the same calendar year in which it is earned.

• Remitted in the same year: Taxable in full

• Remitted in subsequent year(s): Not taxable under current law

This remittance rule allows for legitimate tax deferral, especially for high-net-worth individuals and international professionals with offshore income. However, this rule has been subject to reinterpretation, and changes in enforcement may occur.

VI. Corporate Income Tax (CIT)

Companies incorporated in Thailand or foreign companies carrying on business in Thailand are subject to CIT:

• Standard rate: 20% of net profits

• Small companies: Progressive rates apply if revenue does not exceed THB 30 million annually

VII. Double Taxation Agreements (DTAs)

Thailand has over 60 DTAs to avoid double taxation and to provide relief on cross-border income. DTAs:

• Define taxing rights between Thailand and treaty partners

• Provide for reduced withholding tax rates

• Define permanent establishment rules for foreign companies

• Allow foreign tax credits for taxes paid abroad

Applications of DTA benefits often require submission of a Certificate of Residence and pre-approval from the Thai Revenue Department.

VIII. Tax Filing and Payment Obligations

Individuals

• Tax year: Calendar year

• Filing deadline: March 31 (manual), April 8 (e-filing)

• Returns: Form PND.90 (with Thai income), PND.91 (only employment income)

• Withholding from employers may cover liability, but annual return is still required

Companies

• File interim tax return (Form PND.51) for the first six months

• Annual return (Form PND.50) within 150 days of fiscal year-end

• Monthly WHT returns, VAT (if applicable), and Social Security Fund (SSF) filings are also mandatory

Penalties for non-compliance include surcharges, fines, and interest.

IX. Key Tax Issues and Developments

• Transfer pricing laws now require documentation of related-party transactions if revenue exceeds THB 200 million.

• E-commerce tax enforcement has expanded, with digital service providers now liable for VAT registration and reporting.

• Crypto taxation: Gains from cryptocurrencies and digital assets are now taxable under capital gains and must be reported under Section 40(4)(g).

X. Conclusion

Thailand’s income tax regime is structured, enforceable, and nuanced. Residency status, source of income, and remittance timing critically influence tax exposure. While the law provides planning opportunities, it also imposes serious compliance duties — particularly for international residents and businesses.

Sound tax advice and careful recordkeeping are essential, especially for:

• Foreign residents earning abroad

• Digital nomads and remote workers

• Foreign-invested Thai companies

• Individuals utilizing leasehold and investment structures