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Personal income tax

Personal Icome Tax in Thailand

Personal income tax in Thailand is a legal requirement for all individuals who earn income within the country. The Thai government has set a progressive tax rate, which means that the more income you earn, the higher the tax rate will be. It is important for individuals to understand and comply with the personal income tax laws in Thailand in order to avoid penalties and fines.

Applying for a personal income tax return can be a complex and time-consuming process, especially for those who are not familiar with Thai tax laws. For this reason, many individuals choose to hire professional tax services to assist with the process. Phuket Legal Firm offers comprehensive personal income tax services to help individuals navigate the process and ensure timely compliance with the laws and regulations.

Applying for the Personal Income Tax Return

The personal income tax return in Thailand is filed annually, with the tax year running from January 1st to December 31st. The deadline for filing the return is March 31st of the following year. It is important to note that if you are a new resident in Thailand, you will be required to file a tax return for the portion of the year that you were a resident.

As a resident of Thailand, you must file a tax return if your income exceeds the personal income tax threshold. Currently, the personal income tax threshold is 150,000 baht. If your income exceeds this amount, you are required to file a tax return and pay tax on the excess income.

Steps in the Form

Filing a personal income tax return in Thailand can be a complex process, and it is important to ensure that all of the necessary information is included in the return. The form is divided into several sections, including information on your personal details, income, deductions, and tax liability.

Personal Details: In this section, you are required to provide information on your personal details, including your name, address, and ID number. It is important to ensure that this information is correct and up to date.

Income: In this section, you are required to provide information on your income for the tax year. This includes all sources of income, such as salary, rental income, and investment income. It is important to supply accurate information on your income to ensure that the correct amount of tax is paid.

Deductions: In this section, you are able to claim deductions for certain expenses, such as medical expenses, charitable donations, and home loan interest. These deductions can help reduce your tax liability.

Tax Liability: In this section, you are required to calculate your tax liability for the year. This includes calculating the tax on your income, deducting any allowable deductions, and taking into account any tax credits or exemptions that you may be eligible for.

Phuket Legal Firm Can Help

The process of applying for a personal income tax return in Thailand can be complex and time-consuming. For those who find it challenging to navigate the process, Phuket Legal Firm offers assistance with the personal income tax return process. Our team of experienced professionals can help with all aspects of the process, including document preparation, tax calculation, and filing the return through the Revenue Department’s e-filing system.

We can also provide assistance with ongoing compliance requirements, such as tax payments and filing annual returns. By using our services, you can save time and money by ensuring compliance with laws and regulations, and by providing valuable advice and help throughout the process.

More Tax information

Type of Income	Deduction
Income from employment	40% but not exceeding 60,000 Baht
Income received from copyright	40% but not exceeding 60,000 Baht
Income from letting out of property on hire
– Building and wharves	30%
– Agricultural land	20%
– All other types of land	15%
– Vehicles	30%
– Any other type of property	10%
Income from liberal professions	30% except for the medical profession where 60% is allowed
Income derived from contract of work whereby the contractor provides essential materials besides tools	actual expense or 70%
Income derived from business,commerce, agriculture, industry, transport, or any other activities not specified earlier	actual expense or 65-85% depending on the types of income

Allowances (Exemptions) allowed for the calculation of PIT

Types of Allowances	Amount
Personal allowance
– Single taxpayer	30,000 Baht for the taxpayer
– Undivided estate	30,000 Baht for the taxpayer’s spouse
– Non-juristic partnership or body of persons	30,000 Baht for each partner but not exceeding 60,000 Baht in total
Spouse allowance	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 each (limited to three children)
Parents allowance
(parents over 60 years of age with income less than 30,000 Baht)	30,000 Baht each
Old age allowance
(over 65 years of age)	190,000 Baht income exemption each
Education
(additional allowance for child studying in educational institution in Thailand)	2,000 Baht each child
Life insurance premium
paid by taxpayer or spouse	Amount actually paid but not exceeding 100,000 Baht each
Approved provident fund contributions	Maximum allowance (exemption) of 500,000 Baht, but not exceeding 15% of income
Long term equity fund	Maximum allowance (exemption) of 300,000 Baht, but not exceeding 15% of income
Home mortgage interest	Amount actually paid but not exceeding 100,000 Baht
Social insurance contributions
paid by taxpayer or spouse	Amount actually paid each
Charitable contributions	Amount actually donated but not exceeding 10% of income after standard deductions and allowances

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. In computing assessable income, a taxpayer shall gross up his dividends by the amount of the tax credit received. The amount of tax credit is then creditable against his tax liability. Tax credit = dividend x corporate tax rate/(100-corporate tax rate)

Tax Rates – Progressive Tax Rates

Personal income tax rates applicable to taxable income are as follows. Tax rates of the Personal Income Tax

Taxable Income	Tax Rate (%)	Tax Amount	Accumulated Tax
0 – 80,000 (before 2004)	Exempt	–	–
0 – 100,000 (2004) 0-150,000(2008)	Exempt	–	–
150,001-500,000	10	35,000	35,000
500,001 – 1,000,000	20	100,000	135,000
1,000,001 – 4,000,000	30	900,000	1,035,000
4,000,001 and over	37

In the case where income categories (2) – (8) mentioned in 2.1 are earned more than 60,000 Baht per annum, 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. Taxpayer is liable to pay tax at the amount whichever is greater.

Separate Taxation

There are several types of income that the taxpayer shall not include or may not choose to include such income to the assessable income in calculating the tax liability.
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 when calculating PIT. However, if the sale is made for a commercial purpose, it is essential that such income must be included as the assessable income. Nevertheless, from January 2003, gains from sales of residential buildings shall not be included as income if such gains are spent on purchasing a new home within 1 year before or after selling his primary residence.

Interest

Interest Interest income may, at the taxpayer’s selection, be excluded from the computation of PIT provided that a tax of 15 per cent is withheld at source. However, the following forms of individual’s interest income are exempt from 15 per cent withholding tax; (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 institutions organized by a specific law of Thailand for the purpose of lending money to promote agriculture, commerce or industry.

Dividends

Taxpayer who is a resident in Thailand and receives dividends or shares of profits from a registered company or a mutual fund which tax has been withheld at source at the rate of 10 per cent, may choose to exclude such dividends from the assessable income when calculating PIT. However, in doing so, taxpayer will be unable to claim any refund or credit as mentioned in 2.3.

Withholding Tax

For certain categories of income, the payer of income has to withhold tax at source, file tax return (Form PIT 1, 2, or 3 as the case may be) and submit the amount of tax withheld to the District Revenue Office. The tax withheld shall then be credited against tax liability of a taxpayer 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
1. Employment income	5 – 37 %
2. Rents and prizes	5 %
3. Ship rental charges	1 %
4. Service and professional fees	3 %
5. Public entertainer remuneration – Thai resident – non-resident	5 % 5 – 37%
6. Advertising fees	2 %

Tax Payment

Taxpayer is liable to file Personal Income Tax return (Form PIT 90 or 91) and make a payment to the Area Revenue Branch Office within the last day of March following the taxable year. Taxpayer who derives categories of income (5) – (8) during the first six months of the taxable year is also required to file half – yearly return (Form PIT 94) and make a payment to the Area Revenue Branch Office within the last day of September of that taxable year. Any withholding or half-yearly tax, which has been paid, can be used as a credit against the tax liability at the end of the year.