Personal Income Tax (PIT) is a direct tax that is levied on the income of a person. In general, a person liable to PIT has to compute their tax liability, file a tax return and pay tax, if any, in each calendar year. This person is then declared a Tax Resident in Thailand. You must submit your PIT on or before March 30th of every year or you have until April 8th of every year to file online. If you are employed by a company you most likely have a Tax Identification Number (TIN) and every year your employer will furnish you with a TAWI 50. This form is used to calculate your Personal Income Tax.
Taxpayers - Resident and Non-Resident
Taxpayers are classified into two categories "resident" and "non-resident". "Resident" means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand.
A "Non-Resident" is, however, subject to tax only on income from sources in Thailand.
Tax Identification Number (TIN)
Whether you are a tax resident or not and you are liable for Personal Income Tax you will need to apply for a Tax Identification Number (TIN). It is a relatively painless process if you are accompained by a Thai. We have a service that will help you get a TIN. Below you will find all the requirements;
- Valid passport with a valid visa or visa exemption
- Lease agreement of six months or greater, including a copy of the landlord’s ID
- Proof that you have spent at least 180 days of the last 365 days in Thailand (past entry stamps on passport)
Special Note: Technically, you don’t need to have spent at least 180 days of the last 365 in Thailand to obtain a TIN. If you haven’t spent 180 days of the last 365 in Thailand but have a potential tax liability, the tax office will ask for further documentation as proof, such as a letter of intent to buy a condo or proof of investment if you’re expected to receive dividends.
Tax Base - Assessable Income
Income chargeable to the PIT is called "assessable income". The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, are also treated as assessable income of the employee for the purpose of PIT. Assessable income is divided into 8 categories as follows:
- income from personal services rendered to employers;
- income by virtue of jobs, positions or services rendered;
- income from goodwill, copyright, franchise, other rights, annuity or income in the nature of annual payments derived from a will or any other juristic Act or judgment of the Court;
- 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;
- income from letting out of property on hire and from breaches of installment sales or hire-purchase contracts;
- income from liberal professions;
- income from construction and other contracts of work;
- income from business, commerce, agriculture, industry, transport or any other activity not specified earlier.
Income Tax Table
Below please find the most recent Income Tax Table (All amounts show are in Thai Baht)
1-150,000 - Exempt from Tax
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%
5,000,001 and over - 35%
So let's show you how it works - This will be based on earnings of 100,000 THB per month and you worked 12 months last year, thus a total income of 1,200,000 THB
Calculation:
- 150,000 THB is tax Free
- the next 150,000 THB is taxed at 5% = 7,500 THB
- the next 200,000 THB is taxed at 10% = 20,000 THB
- the next 250,000 THB is taxed at 15% = 37,500 THB
- the next 250,000 THB is taxed at 20% = 50,000 THB
- and the last 200,000 THB is taxed at 25% = 50,000
Total tax that should have been paid is - 165,000 THB. Granted, that there are also some tax deductions permitted which would reduce your gross income and thus reduce your income tax burden. BUT your employer would perform this rough calculation and determine that they would Withhold approximately 13,750 THB from each monthly payment. And if they do exactly as we assume, you may even qualify for a Tax Credit.
EXTREMELY IMPORTANT - The Tax Law consultants at Professional Corporate Services know a thing or two about Personal Income Tax in Thailand and we can surely help you plan correctly and submit correctly, thus we strongly suggest that clients consult with one of our professionals. Please remember the 1st consultation is totally FREE so don't hesitate to contact us for more information!
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