Tax planning and regulatory compliance

Taxation in Thailand for Foreigners and Expats

Thailand offers a competitive tax environment for both individuals and corporations, with attractive incentives for investors and expatriates. This guide provides a comprehensive overview of the Thai tax system, including personal income tax, corporate income tax, VAT, double tax treaties, tax procedures, special regimes, and incentives valid through 2025.

1. General Structure of the Tax System

• Tax Authority: Revenue Department of Thailand (Revenue Department).
• Fiscal Year: January 1 to December 31
• Tax Residency: Anyone staying ≥180 days in Thailand within a calendar year is considered a tax resident.
• Types of Taxes:
  • Direct:
    • Personal Income Tax (PIT)
    • Corporate Income Tax (CIT)
  • Indirect:
    • Value Added Tax (VAT)
    • Excise taxes
    • Customs duties
    • Stamp duty
  • Local:
    • Land and Building Tax (annual property tax)

2. Personal Income Tax (PIT)

Progressive Rates (2025):

• 0% up to 150,000 THB
• 5% from 150,001 to 300,000 THB
• 10% from 300,001 to 500,000 THB
• 15% from 500,001 to 750,000 THB
• 20% from 750,001 to 1,000,000 THB
• 25% from 1,000,001 to 2,000,000 THB
• 30% from 2,000,001 to 5,000,000 THB
• 35% over 5,000,000 THB

Tax Residency and Liability:

• Tax Residents (≥180 days): taxed on Thai-sourced income and foreign income remitted to Thailand.
• Non-residents: taxed only on Thai-sourced income.

Personal Deductions:

• Taxpayer: 60,000 THB
• Spouse: 60,000 THB
• Children: 30,000 THB/child (up to 3)
• Parents: 30,000 THB
• Social Security: up to 9,000 THB
• Insurance & pensions: limits between 100,000–500,000 THB
• Mortgage interest: 100,000 THB
• Donations: up to 10% of net income

Filing and Withholding:

• Annual filing (PND 90/91) by March 31.

Withholding Taxes:

• Residents: advance payments.
• Withholding (advance for residents, final for non-residents):
  • Salaries: 15%
  • Dividends: 10%
  • Interest and royalties: 15%

3. Corporate Income Tax (CIT)

• Standard rate: 20%.
• SMEs (capital ≤5 million THB and sales ≤30 million THB):
  • 0% up to 300,000 THB
  • 15% up to 3 million THB
  • 20% above that

Corporate Residency:

• Thai companies: taxed on worldwide income.
• Branches: Foreign branches taxed on Thai income + remittances (taxed at 10%)

Filing and Payments:

• Annual return: PND 50 (within 150 days after fiscal year-end)
• Semiannual prepayment: PND 51
• Withholding taxes on foreign payments:
  • Dividends: 10%
  • Interest and royalties: 15%

4. VAT and Indirect Taxes

VAT (Value Added Tax):

• Current rate: 7% (reduced; legal rate is 10%)
• Registration threshold: annual revenue >1.8 million THB
• Filing: monthly (VAT form)
• Exemptions: education, healthcare, financial services
• Exports: 0% rate

Other Taxes:

• Specific Business Tax (SBT): 3.3% on financial and real estate services
• Excise taxes: on alcohol, tobacco, fuel, luxury vehicles
• Customs duties: vary by product; free trade agreements (FTAs) may reduce them
• Stamp Duty: required on legal documents and contracts
• Land and Building Tax: annual property tax at the local level

5. Double Tax Treaties

• Over 60 bilateral treaties in force (including with Spain)
• Main benefits:
  • Avoids double taxation with tax credits
  • Limits withholding taxes at source (dividends: 5–10%, interest/royalties: 0–10%)
  • Applies the “183-day rule” for employment income
• Note: Thailand has no DTA with the USA

6. Practical Tax Procedures

1. Personal Tax ID (Lor Por 10): required for taxpayers
2. Business registration: requires commercial registration and corporate tax ID
3. Key filing deadlines:
   • PIT: PND 90/91 by March 31
   • CIT: PND 50 (annual) and PND 51 (prepayment)
   • VAT: by the 15th of each month
4. Tax Clearance: mandatory when permanently leaving Thailand (forms P.1 / P.3)

7. Incentives and Special Regimes

• BOI (Board of Investment):

  • CIT exemption for 5–8 years
  • Customs duty exemption
  • 100% foreign ownership permitted
  • More info: BOI Thailand

• EEC (Eastern Economic Corridor) and special zones:

  • CIT reduced to 3%
  • PIT of 0.1% in southern zones until 2026
  • Fixed PIT of 17% for international experts
  • More info: EEC Thailand

• IBC (International Business Center):

  • CIT between 3% and 8%
  • Fixed PIT of 15% for executives
  • Dividend tax exemption

• Special Visas:

  • LTR (Long-Term Resident): Fixed PIT of 17%, exemption on foreign income
  • Elite and Retirement visas: immigration and tax benefits depending on profile

8. Relevant Updates (2024–2025)

• Remitted worldwide income: As of January 1, 2024, foreign income transferred to Thailand is taxable. Proposed 2025 exemption: income remitted one or two years after earning it may be exempt.
• VAT: Maintained at 7% until September 2025; possible increase to 10% thereafter.
• Financial Transaction Tax (FTT): 0.11% tax on stock market trades (SET).
• Regional incentives: CIT at 3% and PIT at 0.1% in southern Thailand until 2026.
• Tax reform under study (2025–2026): Possible changes to PIT, CIT, and new tax categories.

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