Understanding Income Tax in Thailand

Thailand, like elsewhere in the world, has a complex tax system designed to collect money from its residents and workers, and invest that money back into the country. The government takes it seriously—which means you and your organization need to comply and keep up-to-date with its regulations.

Every country has its own nuance to income tax collection, and Thailand is no different. In this article, we’re going to dive into everything you need to know about income tax Thailand, including Thailand income tax for foreigners, dates you’ll need to file on, and personal income tax Thailand.

What income is taxable Thailand?

Thailand’s tax system might seem a bit complex at first glance, but understanding the basics isn’t overly daunting when you break it down. Let’s start with the big question: what kinds of income are actually taxable in Thailand?

If you live in Thailand (or spend more than 180 days a year there), you’re considered a tax resident. This means you’ll be taxed on your worldwide income, not just what you earn from your work in Thailand. If you’re not a resident, you’re only taxed on the income you earn within Thailand.

Here’s a quick overview of what generally falls under the taxable income umbrella:

  • Employment Income: This includes your salary, bonuses, commissions, and any other benefits you get from your job.
  • Business Income: If you own a business or are self-employed, your profits will be taxed.
  • Investment Income: This covers things like interest, dividends, and capital gains from investments.
  • Rental Income: If you own property and rent it out, that income is taxable.
  • Other Income: This can include things like royalties, pensions, and certain types of windfalls.

Thailand also has a few specific rules and exemptions that can affect your income. For example, certain types of income are exempt from tax, and there are deductions and allowances that can lower your overall tax bill. We’ll delve deeper into these in the upcoming sections.

Keep in mind that this is just a high-level overview. The specifics can get a bit more complicated, so it’s always a good idea to consult with a tax professional for personalized advice. But hopefully, this gives you a good starting point to understanding how income tax Thailand works.

Read next: Thailand Minimum Wage Guide for Employers

Who has to pay income tax Thailand?

personal income tax Thailand

The main factor involved with who pays what tax in Thailand comes down to residency. But Thailand has a unique take on what constitutes residency, and how that affects your income tax. Here’s how it works:

Resident income tax

If you live in Thailand, or you’re here for more than 180 days a year, you’re considered a tax resident. This means you’ll need to pay income tax on all your income, whether it’s earned in Thailand or overseas (if you bring it into the country). So, your salary, business profits, investment income, etc., it’s all on the table.

Non-resident income tax

If you don’t meet those residency criteria, you’re a non-resident for tax purposes. This means you’ll only pay income tax on the money you earn within Thailand. If you’re a digital nomad working remotely for a foreign company, for example, your earnings wouldn’t be subject to Thai income tax as long as they stay outside of Thailand.

What are the rates of personal income tax Thailand?

Thailand has a progressive tax system, which means the more you earn, the higher the rate you pay. This is designed to be a fairer way to tax income, so workers who make less don’t feel an unnecessary tax burden. The rates for 2024 for residents (those staying in Thailand for more than 180 days) look like this:

If you’re earning ฿ 500,000 per year:

  • The first ฿150,000 is tax-free.
  • The next ฿150,001-300,000 is taxed at 5%
  • The remaining ฿200,000 is taxed at 10%

Of course, this is just an example and your actual tax situation could be affected by a number of different deductions and allowances. Make sure to consider your own circumstances and talk to a professional if you have any confusion.

What about non-residents?

If you’re a non-resident, the Thailand income tax for foreigners looks a bit different. For 2024 the income tax Thailand rates are:

  • Employment income: Flat rate of 15% (unless your employment contract states otherwise)
  • Other income: Progressive rates from 5% to 35%, depending on the type and amount of income.

What are the deductions in personal income tax Thailand?

There’s some good news when it comes to paying your income tax Thailand—you can claim deductions to lower your taxable income, and take a bit of the sting out of tax season. Here are some common deductions you should strive to take advantage of:

Social Security contributions

Everyone in Thailand chips in towards the country’s social security system. This comes straight out of your paycheck, but the good news is that you can deduct it from your taxable income.

Provident fund contributions

If your employer offers a provident fund (similar to a retirement savings plan), your contributions to it can be deducted, too. This is a great way to save for the future and lower your tax bill at the same time.

Medical expenses

You can usually deduct some of your medical expenses, including health insurance premiums and costs for certain treatments. This can be a big help, especially if you’ve had major medical costs.

Charitable donations

Giving to charity is a great thing to do, and the Thai government incentivizes it by offering tax deductions. There are specific rules about what types of donations qualify, so be sure to check those out.

Just remember, the amount you can deduct for each of these things often has a limit. For example, for social security, you can only deduct up to ฿ 9,000 per year. And for donations, the maximum deduction is usually 10% of your taxable income.

What are double taxation agreements? 

If you’re a foreigner living and working in Thailand, you might be worried about getting hit with a double tax whammy – paying Thailand income tax for foreigners and your home country on the same income.

Luckily, Thailand has signed double taxation agreements (DTAs) with over 60 countries, including the US, UK, Canada, Australia, and many others. These agreements are international tax treaties designed to prevent this double taxation issue, which can put an unfair tax burden on non-Thai workers.

How do DTAs work?

It varies from agreement to agreement, but the general idea is that a DTA will set out rules for how each country taxes certain types of income. This includes items like:

  • Which country has the right to tax certain income: For example, a DTA might say that your salary is only taxable in Thailand if you’re working there.
  • Reduced tax rates: Some DTAs might even offer reduced tax rates on certain types of income to make things more favorable for taxpayers.
  • Tax credits: If you do end up paying taxes in both countries, a DTA might allow you to claim a tax credit in one country to offset what you’ve already paid in the other.

It’s important to note that even if your home country has a DTA with Thailand, the way it applies to you can depend on your specific circumstances. It’s always best to consult with a tax professional to make sure you’re taking full advantage of any available benefits and avoiding any unexpected tax bills.

One common question people ask is, “how do I know if my country has a DTA with Thailand?” The easiest way is to check the list of countries with DTAs on the Thai Revenue Department website or consult with a tax advisor.

When to file income tax Thailand?

Mark your calendars, because tax season in Thailand typically runs from 1 January to 31 March of the following year. This means if you earned income in 2024, you’ll need to file your tax return by 31 March 2025. Filing late might incur legal penalties, so ensure you’re on top of a timely tax filing.

However, there are a few nuances and exceptions to consider. These are:

  • E- Filing: As of January 2024, new rule grants an automatic 8-day extension for returns and payments filed online, making the tax filing deadline 8 April instead. 
  • Mid-Year Returns: If you own a business, you might need to file a mid-year return by 31 August for the first half of the year.
  • Extensions: In certain situations, you might be able to get an extension to file your return. It’s best to check with the Revenue Department to see if you qualify.

How to file income tax Thailand?

Thailand income tax for foreigners

Filing your income tax Thailand doesn’t have to be a headache—the Thai Revenue Department offers several options to make it as easy as possible:

Online submission

This is the most convenient and popular option. You can file your tax return online through the Revenue Department’s e-Filing system. It’s a secure platform that guides you through the process step-by-step. Plus, if you’re expecting a refund, you’ll usually get it faster this way.

Mobile app

Prefer to file on your phone? The Revenue Department’s RD Smart Tax mobile app lets you do just that. It’s a user-friendly app that’s available in both Thai and English, so you can file your taxes on the go.

Paper forms

If you’re more comfortable with the traditional way, you can always file a paper return. You can download the forms from the Revenue Department’s website or pick them up at your local tax office. Just fill them out and submit them before the deadline (usually 31 March for the previous year’s income).

Whichever way you choose to file, make sure you submit your tax return on time to avoid any penalties or late fees.

Things You’ll Need for Filing Personal Income Tax Thailand

Before you jump into filing your personal income tax Thailand, it’s a good idea to gather a few important documents. This will make the process smoother and help ensure everything is accurate.

1. Taxpayer identification number

This is your unique ID for tax purposes in Thailand. If you’re a citizen or resident, it’s usually your national ID card number. If you’re a foreigner, you’ll have a tax ID card issued by the Revenue Department.

2. Income documents

You’ll need proof of all the income you earned during the tax year. This could include:

P.N.D. 50: This is the withholding tax certificate your employer should provide, showing your salary, taxes withheld, and other important details.

Bank statements: These can help verify your income from interest, dividends, or other sources.

Business income statements: If you own a business, you’ll need these documents to show your revenue and expenses.

3. Expense documents

Don’t forget about deductions! Gather documents that can help prove your eligible expenses:

  • Medical bills and receipts
  • Charitable donation receipts
  • Provident fund statements
  • Proof of life insurance premiums, home loan interest payments, etc.

4. Tax withholding

If your employer or other payers have withheld any of your personal income tax Thailand, you’ll need proof of that. This can be found on your P.N.D. 50 or other withholding tax certificates.

5. Double taxation agreements

If you’re a foreigner and your home country has a DTA with Thailand, you might need to provide a residency certificate or other documents to claim benefits under the agreement.

Simplify Income Tax Thailand with Omni

Understanding Thailand’s tax regulations is crucial for businesses to fulfill their tax obligations accurately and timely. That’s why it’s important to have the right tools by your side to ease this complicated process.

Omni offers a comprehensive payroll solution tailored to Thailand’s specific requirements. With features like support for Thai baht and automated tax calculations, Omni can help HR teams simplify the process for personal income tax Thailand. 

With our automated payroll software, digitized and secure pay slip distribution, and dedicated support teams to guide your team and ensure compliance with income tax Thailand, Omni’s payroll processing reduces the administrative burden of your HR team and frees up valuable time to dedicate to more impactful business processes.

Book a demo today and learn how Omni can help you streamline your income tax Thailand processes to ensure compliance for your organization.

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