Thailand income tax system is governed by the Revenue Code B.E. 2481 (1938) and enforced by the Revenue Department, under the Ministry of Finance. The law applies to both Thai and foreign individuals, legal entities, and partnerships. It distinguishes between resident and non-resident taxpayers, and tax liability is imposed on worldwide income, Thai-sourced income, or remitted foreign income, depending on the taxpayer’s status.
This article analyzes the Thai personal income tax and corporate income tax regimes, the residency rule, scope of assessable income, deductions and exemptions, reporting obligations, and recent amendments related to international tax cooperation.
II. Taxpayer Classification
A. Individuals
Under Section 41 of the Revenue Code:
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A Thai tax resident is any individual who resides in Thailand for 180 days or more in a calendar year.
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A non-resident is taxed only on income earned in or from Thailand, regardless of duration of stay.
B. Legal Entities
Entities subject to corporate income tax (CIT) include:
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Companies and juristic partnerships incorporated in Thailand
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Foreign companies carrying on business in Thailand
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Foreign companies receiving Thai-sourced income
III. Personal Income Tax (PIT)
A. Scope of Assessable Income
Under Section 40 of the Revenue Code, there are eight classes of income:
| Section 40 Class | Type of Income |
|---|---|
| (1) | Employment (wages, salaries, bonuses, allowances) |
| (2) | Fees from services, professional income (doctors, lawyers, architects) |
| (3) | Copyrights, goodwill, annuities |
| (4) | Interest, dividends, shares in profits |
| (5) | Lease of property, sub-leasing, hire of land |
| (6) | Construction and transport contracts |
| (7) | Business, commerce, agriculture, industry |
| (8) | Other income (e.g., gain from transfer of rights, commission not falling elsewhere) |
Income from all classes must be aggregated unless expressly exempted.
B. PIT Rates (Progressive)
| Taxable Income (THB/year) | Rate |
|---|---|
| 0–150,000 | Exempt |
| 150,001–300,000 | 5% |
| 300,001–500,000 | 10% |
| 500,001–750,000 | 15% |
| 750,001–1,000,000 | 20% |
| 1,000,001–2,000,000 | 25% |
| 2,000,001–5,000,000 | 30% |
| Over 5,000,000 | 35% |
Taxable income is calculated after deductions and allowances.
IV. Deductible Expenses and Allowances
A. Standard Deductions by Income Class
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Employment income (Section 40(1)): flat 50% deduction, capped at THB 100,000
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Service income (Section 40(2)): 50% or actual expenses (requires documentation)
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Rental income: 30%–50% depending on property type
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Business income: actual expenses (audited if income exceeds threshold)
B. Personal Allowances (for Residents)
| Allowance Type | Amount (THB) |
|---|---|
| Personal allowance | 60,000 per taxpayer |
| Spouse (non-earning) | 60,000 |
| Child (up to 3 children) | 30,000 per child |
| Parent (qualified support) | 30,000 per parent |
| Life insurance premium | Up to 100,000 |
| Provident fund contributions | Limited |
V. Tax Residency and Foreign-Sourced Income
A. Worldwide Income Rule for Residents
A resident taxpayer is subject to income tax on:
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Thai-source income; and
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Foreign-source income only if remitted into Thailand in the same tax year (as clarified in Revenue Department Order No. Por.161/2017).
Important Update: As of 1 January 2024, the Thai Revenue Department has announced it will begin taxing foreign-sourced income remitted at any time, even if earned in prior years, for residents. This reverses the longstanding practice and has broad implications for expatriates and digital nomads.
B. Non-Resident Taxation
Non-residents are taxed only on Thai-source income, at the same progressive rates, but without access to personal deductions.
VI. Withholding Tax System
Thailand uses a withholding tax (WHT) mechanism for many income categories. Payors are required to deduct WHT at source.
| Income Type | WHT Rate |
|---|---|
| Salaries (Thai resident) | Progressive |
| Fees to non-resident | 15% |
| Dividends | 10% |
| Interest | 15% (10% for residents) |
| Royalties (non-resident) | 15% |
| Rent | 5% |
| Prizes | 5% |
WHT can either be final (for non-residents) or creditable against annual tax (for residents).
VII. Corporate Income Tax (CIT)
A. General Rules
Companies incorporated or registered in Thailand are taxed on worldwide income. Foreign companies are taxed only on Thai-source income.
B. CIT Rates
| Entity Type | CIT Rate |
|---|---|
| Standard companies | 20% on net profits |
| SMEs (capital < THB 5 million; income < THB 30 million) | 15% up to THB 300,000, then 20% |
| Foreign company not carrying on business in Thailand (but with income) | Withholding tax rates apply |
C. Allowable Deductions
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Depreciation (per Revenue Code schedules)
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Salaries and wages
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Business expenses (must be wholly and exclusively incurred)
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Donations (limited to 2% of net profits)
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Loss carry-forward: 5 years allowed (no carry-back)
VIII. Filing Requirements and Penalties
A. Individuals
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Annual return (Form PND 90/91) due by 31 March
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Monthly WHT return (Form PND 1) for employers
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Online filing available
B. Companies
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Annual return (Form PND 50) due within 150 days from year-end
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Half-year estimated return (Form PND 51) required for most companies
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Monthly WHT returns (PND 3, 53), VAT filings, and Social Security contributions also mandatory
C. Penalties
| Offense | Penalty |
|---|---|
| Late filing | THB 2,000–5,000 |
| Late payment | 1.5% monthly surcharge (capped) |
| Under-declaration | 100% of underpaid tax (may be reduced) |
| Failure to withhold tax | Liable for tax + surcharge + penalty |
IX. Double Taxation and Treaties
Thailand has over 60 Double Taxation Agreements (DTAs) with major jurisdictions, covering:
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Income from employment
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Dividends, interest, royalties
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Business profits, permanent establishment rules
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Elimination of double taxation via credit or exemption methods
Certificate of residence (COR) and proper documentation are essential to claim DTA benefits.
X. International Cooperation and Transparency
Thailand is a signatory to:
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OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters
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Common Reporting Standard (CRS)
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BEPS Inclusive Framework
These agreements support automatic exchange of financial data, cross-border tax enforcement, and information transparency.
XI. Conclusion
Thailand’s income tax regime combines territorial and worldwide taxation principles, with clear rules distinguishing resident vs. non-resident treatment. While tax rates remain competitive, enforcement has grown stricter, and international information sharing now imposes new compliance burdens on foreign nationals and global businesses.
Legal and tax professionals operating in Thailand must stay current on:
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Shifting rules on foreign-source income taxation
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Withholding obligations across various income classes
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Treaty protections and risks of permanent establishment
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Reporting obligations under international exchange standards