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| Personal Income Tax (PIT) is a direct tax levied on income of a person. A person means: |
 a natural person (an individual) |
| a non-registered ordinary partnership |
| a non-juristic body of person |
| anestate which remains undistributed. |
| In general, a person subject to PIT has to file a tax return and pay tax by the end of March following the tax year which begins on January 1 and ends on December 31 every year. |
| 1. Taxable Person |
| Taxpayers are classified into “resident” and “non-resident”. “Resident” means any individual residing in Thailand for a period or several periods in total of at least 180 days in a tax year (January 1 – December 31). A resident of Thailand has a duty to pay tax on income remitted from a source in Thailand as well as on any income from a foreign source in connection with the taxpayers’ employment or business carried on abroad or a property situated abroad, and that income is remitted into Thailand within the year that the taxpayer receives that income (i.e. cash basis). A non-resident is subject to tax only on income from sources in Thailand. |
| 2. TAX BASE |
| 2.1 Assessable Income |
| Income that must be included for the purpose of PIT computation is called “assessable income”. Besides cash, assessable income includes in-kind benefits such as a rent-free employer-provided homeand the amount of tax paid by the employer on behalf of the employee. |
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| (1) income from personal services rendered to employers such as salaries, wages, employer-provided stock options, work-related compensation and fringe benefits; |
| (2) income from contract for hire, positions or services rendered; |
| (3) income from goodwill, copyright, franchise, patent, annuity, or income in the nature of annual payments derived from a will, juristic act, or judgment of the Court; |
| (4) income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings; |
| (5) income from lease of property, breaches of hire-purchase contracts, and breach of installment sales contracts; |
| (6) income from liberal professions such as law, medicine, engineering, architecture, accountancy and fine arts; |
| (7) income from construction and other contracts of work whereby the contractor provides essential materials other than tools; |
| (8) income from business, commerce, agriculture, industry, transport or any other income not specified in (1) – (7). |
| 2.2 Deductible Expenses and Allowances |
| Deductible expenses and allowances lower the tax base as taxpayer may deduct the deductible expenses and allowances from his assessable income before applying the tax rate: |
| TAXABLE INCOME= Assessable Income - deductions - allowances |
| Deductible expenses allowed depend on the category of assessable income as follows: |
| Category of Income |
Deductible Expenses |
| a. Income from employment (Category (1) and (2)) and income from copyright (Category (3)) |
40% of income but not exceeding 60,000 baht |
| b. Income received from copyright (Category (3)) and income from dividends and interests (Category 4) |
No deductions are allowed. |
| c. Income from rental of property |
Actual and reasonable expenses, or a lump sum deduction of 10% to 30% depending on the type of rented property |
| d. Income from breach of hire-purchase contracts or installment sales contractsIncome from liberal professions |
A lump sum deduction of 20% |
| e. Income from liberal professions |
Actual and reasonable expenses, or a lump sum deduction of 30% (except for the medical profession whereby 60% is allowed) |
| f. Income derived from contract of work whereby the contractor provides essential materials besides tools |
Actual and reasonable expenses, or a lump sum expense of 70% |
| g. Income derived from business, commerce, agriculture, industry, transport, or any other income not specified in a. to f. |
Actual and reasonable expenses, or 65% - 85% depending on the types of income |
| Allowances (Exemptions) allowed for the calculation of PIT |
| Types of Allowances |
Amount |
| Taxpayer (and a partner of non-juristic partnership of body of persons) |
30,000 baht for the taxpayer |
| Spouse |
30,000 baht |
| Child allowance (child under 25 years of age and studying at educational institution, or a minor, or an adjusted incompetent or quasi-incompetent person) |
15,000 baht for each (limited to three children) |
| Additional education allowance (additional allowance for child studying in educational institution in Thailand) |
2,000 baht each child |
| Parents allowance |
30,000 baht for each of taxpayer’s and spouse’s parents if such parent is above 60 years old and earns less than 30,000 baht |
| Life insurance premium |
Amount actually paid by taxpayer or spouse on the taxpayer's own life but not exceeding 100,000 baht each |
| Contributions to approved Provident Fund or Retirement Mutual Fund (RMF) |
Amount actually paid by taxpayer or spouse at the rate not more than 15% of wage, but not exceeding 500,000 baht |
| Contribution to Long Term Equity Fund (LTF) |
Amount actually paid up to 15% of wage, but not exceeding 500,000 baht in a tax year, provided that the invested unit is held for at least 5 years, except in the case of incapacity or death during the investment period |
| Home mortgage interest |
Amount actually paid for the purpose of purchase or construction of a residential building in Thailand but not exceeding 100,000 baht |
| Social insurance contributions |
Amount actually paidby taxpayer or spouse |
| Donations to specified charites |
Amount actually donated but not exceeding 10% of assessable income after all standard deductions and allowances |
| 2.3 Tax Credit for dividends Any taxpayer who domiciles in Thailand and receives dividends from a juristic company or partnership incorporated in Thailand is entitled to a tax credit of 3/7 of the amount of dividends received. The amount of tax credit is creditable against his tax liability. |
| 3.1 Progressive Tax Rates Personal income tax rates applicable to taxable income are as follows. |
| Taxable Income (baht) |
Marginal Taxable Income (baht) |
tax Rate(%) |
| 0 - 150,000 (2008 onwards) |
150,000 |
Exempt |
| 150,001 - 500,000 |
350,000 |
10 |
| 500,001 - 1,000,000 |
500,000 |
20 |
| 1,000,001 - 4,000,000 |
3,000,000 |
30 |
| 4,000,001 and over |
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37 |
| | In the case where income categories (2) - (8) mentioned in 2.1 are earned more than 60,000 baht per year, taxpayer has to calculate the amount of tax by multiplying 0.5% to the assessable income and compare with the amount of tax calculated by progressive tax rates. The tax amount is whichever greater. |
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There are several types of income that the taxpayer may elect to have a final withholding tax instead of including it in his assessable income in calculating the tax amount in a tax year. |
| Income from sale of immovable property |
| Taxpayer shall not include income from sales of immovable property acquired by bequest or by way of gift to the assessable income. However, if the sale is made for a commercial purpose, such income must be included as the assessable income and be subject to PIT. |
| Taxpayer may elect to exclude from the computation of PIT provided that a tax of 15 per cent is withheld at source: |
| (1) interest on bonds or debentures issued by a government organization;> |
| (2) interest on saving deposits in commercial banks if the aggregate amount of interest received is not more than 20,000 baht during a taxable year; |
| (3) interest on loans paid by a finance company; |
| (4) interest received from any financial institution organized by a specific law of Thailand for the purpose of lending money to promote agriculture, commerce or industry. |
| Dividends |
| Taxpayer who resides in Thailand and receives dividends or shares of profits from a registered company or a mutual fundfrom which tax has been withheld at source at the rate of 10 per cent, may opt to exclude such dividend from the assessable income when calculating PIT. However, in doing so, taxpayer will be unable to claim any refund or credit as mentioned in 2.4. |
| For certain categories of income, the payer of income has to withhold tax upon the remittance of such income, file tax return Form P.N.D. 1, 2 or 3 as the case may be, and submit the amount of tax withheld to the District Revenue Office. The taxpayer (the payee) can credit the withheld amount againsthis total tax amount at the time of filing PIT return. The following are the withholding tax rates on some categories of income. |
| Types of income |
Withholding tax rate |
| Employment income |
5 - 37 % |
| Rents and prizes |
5 % |
| Ship rental charges |
1 % |
| Service and professional fees |
3 % |
| Public entertainer remuneration |
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| Thai resident |
5% |
| non-resident |
5 - 37 % |
| Advertising fees |
2 % |
| 5. Tax Payment |
| Taxpayer is liable to file PIT return and make a payment to the Revenue Department within the last day of March of the following tax year. Taxpayer, who derives income category (5) – (8) during the first six months of the taxable year is also required to file a half-year return and make a payment to the Revenue Department within the last day of September of a tax year. Any withholding tax or half-year tax which has been paid can be used as credits against the tax liability at the end of the year. |
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Last update : Thursday, February 21, 2013
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