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All individuals who receive assessable income arising in Thailand are liable for personal income tax, whether or not resident and regardless of where the income is actually paid. Resident taxpayers also may be subject to income tax on foreign-source income brought into Thailand in the year the income is received. An individual who lives in Thailand for 180 days or more in a calendar year is deemed to be a Thai resident for tax purposes. A nonresident is subject to tax only on income from sources in Thailand.

Taxable income and rates
The top marginal personal income tax rate is 37%. Generally, an individual's first THB 150,000 net income (income after the personal standard deduction and allowances) is exempt; for individuals older than 65, the exemption amount increases to THB 190,000 assessable gross income.

Taxable income includes employment income, business income and investment income, as well as a wide range of activities and/or benefits, including housing rent, education allowances, home leave and the personal use of a car provided by an employer. Tax enforcement is strict, with penalties levied on overdue taxes and underpayments.

Personal income tax returns must be filed by 31 March following the taxable year (the tax year is the calendar year). Payroll tax deducted by an employer must be filed by the seventh day of the following month.

Determination of taxable income
Taxable income covers income in cash and in-kind. Benefits provided by an employer are treated as taxable income, including rent-free housing, cars and drivers provided for personal use, or any tax paid by the employer on behalf of the employee. Taxable income is divided into the following categories:

  • Income from personal services rendered to employers;
  • Income by virtue of jobs, positions or services rendered;
  • Income from goodwill, copyrights, franchises, other rights, annuities or income in the nature of annual payments derived from a will or court judgment;
  • Income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a company, partnership or mutual fund, payments received as a result of a reduction of capital, bonuses, increased capital holdings, gains from the amalgamation, acquisition or dissolution of companies or partnerships and gains from the transfer of shares or partnership holdings;
  • Income from the letting out of property under hire or hire-purchase contracts;
  • Income from liberal professions (e.g. law, medicine, engineering, architecture, accountancy, etc.);
  • Income from construction and other work contracts; and
  • Income from business, commerce, agriculture, industry, transport or other activities not specified above.

With proper documentation, the following types of income are exempt:

  • Capital gains from the sale of movable property acquired with no intent to earn a profit;
  • Awards for the purpose of education or scientific research;
  • Interest from government bonds provided the bonds are sold abroad and the person who derives the interest is a non-Thai resident;
  • Interest from savings deposits in commercial banks where the aggregate amount of interest received is not more than THB 20,000 a year;
  • Gains from mergers or acquisitions between limited companies that were valued higher than shareholder equity;
  • Gifts made in a ceremony or on an occasion in accordance with established customs, and inheritances;
  • Income from a tax treaty country in certain circumstances; and
  • Income earned abroad by a nonresident.

The tax rules for dividend and interest income are complex. To increase compliance, a 10% withholding tax is imposed on dividends received from companies and a 15% withholding tax applies to interest on bank and finance company deposits. Interest received from a Thai financial institution that deals in lending money to promote agriculture, commerce or industry is exempt. For fixed deposits, the withholding tax rate is 10% in certain cases. Capital gains of individuals are treated as ordinary income, except that a scale of standard deductions applies to gains from the sale of immovable property. Gains from the sale of a residence are exempt from tax if the proceeds are used to purchase a new home within one year before or after the sale of the primary residence.

A personal allowance of THB 30,000 is available to a taxpayer and his/her spouse and THB 15,000 for each dependent child up to a maximum of three children. Married persons filing separately may each claim 50% of the child allowances. For wage earners, there is also a deduction of 40% of gross income, up to a maximum of THB 60,000. The same deduction and ceiling apply to income derived from copyrights. Deductions between 10% and 30% are available on income from the letting out of property, depending on the type of property.

Taxpayers caring for elderly parents are granted a deduction of THB 30,000 per year. Taxpayers are allowed an exemption of up to THB 15,000 on health insurance premiums they provide for their parents. Taxpayers over 65 enjoy an income exemption of THB 190,000. Deductions of as much as 10% of income are allowed for donations to registered charities.

A flat withholding tax of 15% applies to earnings from the transfer of bonds and other corporate debt instruments, rental fees and income paid to nonresidents for the provision of services. However, the tax applies only for the period during which the instrument was in the actual possession of the investor.

Special expatriate tax regime
A reduction in the progressive income tax rates to a 15% flat rate is applicable to assessable income an expatriate receives through the hire of labour by an ROH that provides management, technical or support services to its associated companies in Thailand and abroad. Expatriates are entitled to these benefits while working in Thailand for a period not exceeding four consecutive years.

Capital taxes
There are no capital taxes.


Source: Deloitte

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