Taxes for Expats in Thailand

    Your complete guide to expat tax in Thailand:

    Tax rates

    2017 income tax rates in Thailand

    Taxable Income Band THB National Income Tax Rates
    1 - 150,000 0%
    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 + 35%

     

    Residents and nonresidents are taxed on their Thailand-source income.

    Thai residents are also taxed on foreign-source income, but only if the income is brought into Thailand in the year derived (repatriation in later years is exempt from personal income tax).

    A married couple may opt for a joint or separate filing on all types of personal income.

    The spouses may agree to file tax returns separately with respect to employment income and file tax returns jointly on other types of personal income.

    Employment income, including most employment-related benefits, is subject to personal income tax (PIT).

    Profits derived by an individual from the carrying on of a trade or profession generally are taxed under the personal income tax regime.

    Passive income also is taxable.

    Subject to certain restrictions, deductions are granted for first-time purchases of a personal residence, insurance, mortgage interest, retirement or long-term equity plans, charitable contributions, etc.

    Personal allowances are available to a taxpayer, his\her spouse, children and parents in certain cases.

    Assessable income is subject to reduced progressive rates, up to a maximum rate of 35%.

    Expatriate employees of a Regional Operating Headquarter (ROH), International Headquarter (IHQ) or International Trade Center (ITC) may be entitled to a flat income tax rate of 15% that will apply from four to eight years, depending on the status of the ROH, IHQ or ITC, as the case may be.

    Dividends and interest are taxed at source at a rate of 10% and 15%, respectively.

    Capital gains are exempt from personal income tax if the shares sold are of a public company registered on the stock exchange of Thailand; otherwise, gains are subject to the normal progressive personal income tax rates.

    The tax year is the calendar year.

    Tax on employment income is withheld by the employer and remitted to the tax authorities, generally on a monthly basis.

    An individual must file an annual personal income tax return on or before 31 March of the following year and pay any additional income tax due at that time.

    A monthly surcharge of 1.5% applies to underpayments of tax, up to the additional tax amount that was due, and a penalty of up to 100% of the tax due will apply when the income tax liability is formally assessed by the tax authorities.

    An employee must contribute 5% of his or her monthly compensation to social security. The employer also is required to contribute.

    Who pays

    Who pays tax in Thailand?

    All resident and non-resident individuals earning income from sources in Thailand are subject to personal income tax (PIT). A Thai resident is also subject to PIT on self-employment and business income from sources overseas if the income is remitted to Thailand.

    How it works

    How is income taxed in Thailand?

    Expat tax rules on employment income - All benefits derived from employment are assessable, unless expressly exempt by law. Examples of assessable benefits are wages, salaries, per diem allowances, bonuses, bounties, gratuities, directors' fees, pensions, house rental allowances, the monetary value of rent-free accommodation provided by an employer, and income tax paid and borne by an employer on behalf of an expat employee.

    Self-employment and business income - Taxable self-employment and business income consists of assessable income less deductible expenses and allowances. Generally, all types of income are assessable through expatriate tax returns unless expressly exempt by law.

    Expat investment income - Interest, dividends and other investment income are subject to PIT at the applicable rates.

    A tax credit is granted for dividend income received by an individual domiciled in Thailand from locally incorporated companies according to tax rules.

    DTAs

    Taxes for expats in Thailand: Double tax relief and tax treaties

    Thailand has entered into double tax treaties with 60 countries. The method of eliminating double tax varies by treaty.

    Residency

    Expat tax advice on residency in Thailand

    Individuals are considered resident if they reside in Thailand for a period or periods aggregating 180 days or more during a calendar year. Income earned overseas by expat residents is also subject to PIT if it is remitted to Thailand in the year it is earned.

    IHT

    Do I have to pay inheritance and gift tax?

    A 10% tax is levied on the beneficiary portion of an inheritance exceeding THB 100 million (a 0% or 5% rate may apply in certain circumstances).

    A gift tax also is in effect: a 5% tax is levied on the beneficiary portion of assets exceeding THB 20 million (or THB 10 million in the case of persons that are not ascendants, descendants or spouses).

    Finally on this point, do not assume that just because you've expatriated to live in Thailand that your estate will not be liable to inheritance tax (IHT) in your old home nation, or any nation where you hold assets.  For example, those domiciled in Britain remain liable for IHT on their worldwide estate.

    If you are concerned about mitigating your IHT liability, we'd like to offer you a free initial consultation to determine whether we can help you.

    CGT

    Do I have to pay capital gains tax?

    Gains derived from sales of shares are generally subject to PIT. However, gains derived from sales of securities listed on the Stock Exchange of Thailand are exempt from tax.

    Gains derived from sales of real property are subject to PIT. A standard allowance is deductible, depending on the number of years of ownership. This tax also applies to gains derived from sales of real property used in a trade or business.

    Net worth tax

    Net worth taxes for expats

    PIT normally is levied on assessable income earned during a calendar year. However, the tax authorities may reassess income tax based on net worth if the amount of a taxpayer's income is believed to be understated. In practice, this power is rarely exercised.

    Finally...

    We believe the above information is accurate, however tax rates and rules can change, and we are NOT tax experts. Therefore, please do not rely exclusively on the information to determine your liability for tax.

    Speak to a local tax expert for personalised advice, or consult an international taxation consultancy.

    If you'd like our help to source someone to assist you, please get in touch and we will do all we can to help.

    Relax, and join the 10,000 other international investors who have made the smart decision to let us help.

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