Personal income tax refers to direct tax levied on a person’s income. A ‘person’ may refer to an individual, an ordinary partnership, a non-juristic body of persons as well as an undivided estate.
Both residents and non-residents need to apply for a personal income tax ID.
Residents have to pay taxes on all income resulting from:
1. Income realized in Thailand, in cash or in kind (paid in or outside Thailand)
2. Income from a foreign source that is brought into Thailand within the year
Non-residents are subject to personal income tax only on income generated in Thailand.
The assessable income is classified into eight categories:
1. Income from wages and salary, including the benefits provided by an employer (e.g. income from stock options, personal income tax paid and absorbed by the employer, living allowances, monetary value of rent-free accommodation, etc.), but excluding business travel expenses and medical treatment
2. Income from employment or services rendered.
3. Income from royalties (goodwill, copyright, franchise, patents or other rights)
4. Income from dividends, interest (e.g. on deposits with banks in Thailand), capital gain, bonuses for investors, acquisition or dissolution of companies or partnerships, etc. However, this does not include the share of profits obtained from a non-juristic body of persons or from the sale of investment units in a mutual fund
5. Income resulting from leasing out a property
6. Income resulting from professional services (e.g. law, medicine, engineering, accounting, architecture and fine arts)
7. Income resulting from construction and other contracts of work, whereby the contractor provides essential materials
8. Income from business, commerce, agriculture, industry, transport or any other activity not-specified here above (carry-all clause). Insurance benefits, inheritances and scholarships, however, do not make part of the assessable income and are thus not subject to personal income tax
Thai law does not allow offsetting capital losses against capital gains.
There are three exceptions to the taxability of the capital gains:
1. Capital gains on the sale of shares in a company listed on the Stock Exchange of Thailand
2. Capital gains on the sale of non-interest bearing government bonds or debt instruments (although there are exceptions)
3. Capital gains on the sale of government bonds
The personal income tax system is progressive:
|THB 0 – 150,000 (THB 189,999 if the taxpayer is older than 65 years)||Exempted|
|THB 150,001 – 300,000||5%|
|THB 300,001 – 500,000||10%|
|THB 500,001 – 750,000||15%|
|THB 750,001 – 1,000,000||20%|
|THB 1,000,001 – 2,000,000||25%|
|THB 2,000,001 – 4,000,000||30%|