Thailand Tax Laws and Regulations

Thailand Tax Laws

Bradford Jacobs has more than 20 years’ experience in the front line of international payroll providers, and we ensure our clients comply with every aspect of taxation legislation across the globe. Our ‘knowledge’ is vital for international companies expanding into Thailand and then further afield into Asia and the Pacific Rim.

Dealing with tax, payroll, and employment regulations for your staff from overseas is always a potentially troublesome process with complications that demand expert guidance. Thailand is no exception and employers cannot risk mistakes at state level or among the 77 provinces, which apply different limits on such as minimum wages.

Overview of Taxes in Thailand

* Thailand uses the Thai baht (THB) as its unit of currency.

Personal Income Tax (PIT): Income is exempt up to THB 150,000 (€4,010, US$4,580). There are six further tax bands through 5%, 10%, 15%, 20%, 25% up to 30%, with income over THB 5,000,000 (€135,980, US$154,444) taxed at 35%. Returns are not required from single individuals with employment income under THB 120,000 (€3,200, US$3,666) or THB 220,000 (€5,876, US$6,720) for married persons. Couples can file joint or individual tax returns.

Social Insurance Taxes: Employers contribute the equivalent of 5% of their employees’ salaries and employees also contribute 5% of salary to the Provident Fund and the Workers’ Compensation Fund. Contributions are capped at THB 750 (€20, US$23).

 Corporate Income Tax (CIT): The rate is 20% with companies incorporated in Thailand liable for tax on their global income. Companies incorporated abroad are taxed on Thailand-sourced income. Companies with capital under THB 5,000,000 (€135,980, US$154,444) are exempt from CIT on income up to THB 300,000 (€8,028, US$9,170). A rate of 15% applies on these companies with taxable income up to THB 3,000,000 (€80,284, US$91,733). Liability reverts to 20% for taxable income above that.

Withholding Tax (WHT): Dividends paid to Thai and non-resident companies and individuals are subject to 10% WHT. Interest paid to companies not incorporated in Thailand is liable for 15% WHT.

Value Added Tax (VAT): The standard rate of 10% on the sale of goods and services has been reduced to 7% until at least September 2023. Exempt categories include foodstuffs, education, and healthcare, while exports are zero-rated. Individuals or companies that supply goods or services with an annual value of THB 1,800,000 (€48,130, US$55,030) must register with Form Vat 01 to obtain their 13-digit VAT number with the Area Revenue Office in the province they operate. Since September 2021, overseas providers of digital services and electronic platforms must file returns to the Thai Revenue Department if income exceeds THB 1,800,000.

Specific Business Tax (SBT): Applies to certain sectors not subject to VAT, such as the financial sector (3%) and life insurance (2.5%).

Thai Individual Tax – Single, Married

The tax year is the calendar year from January 1 till December 31. Hard copy individual tax returns must be filed by March 31 of the following year, or April 8 if filed online. Individuals who spend a total of 180 days in Thailand, not necessarily consecutive, in a calendar tax year are considered tax residents. Thai tax laws do not define short-term residency rules.

Residents and non-residents are taxed on employment and business income whether payments are made in or outside Thailand. Residents who earn income from abroad are taxed if it is paid into Thailand in the tax year it is received. Returns are not required from single individuals with employment income under THB 120,000 (€3,200, US$3,666) or THB 220,000 (€5,876, US$6,720) for married persons. Individuals earning most forms of business income must file a return for the first half of the year by September 30 and pay any taxes due. Married couples can opt to file joint or individual returns.

* Thailand uses the Thai baht (THB) as its unit of currency.

Personal Income Tax (PIT)

Figures in THB, euros, and US dollars

Income up to THB 150,000 (€4,010, US$4,580) is exempt.

Annual income from:	To:	Percentage tax:
THB 150,001 (€4,010, US$4,580)	THB 300,000 (€8,017, US$9,167)	5%
THB 300,001	THB 500,000 (€13,358, US$15,278)	10%
THB 500,001	THB 750,000 (€20,038, US$22,920)	15%
THB 750,001	THB 1,000,000 (€26,725, US$30,562)	20%
THB 1000,001	THB 2,000,000 (€53,430, US$61,126)	25%
THB 2,000,001	THB 5,000,000 (€135,980, US$154,444)	30%
Over 5,000,001		35%

Social Insurance Taxes

Contributions to the Provident Fund and Workers’ Compensation Fund

Employers – 5% of employees’ salaries

Employees – 5% of their salaries