| Thailand Income Tax Rates The tax rates for resident and non-resident individuals for 2009 are as follows:
Taxable Income (Baht) / Tax Rate (%) / Tax Amount / Accumulated Tax
0 - 150,000 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%
Persons over age 65 get an exemption on the first Baht 190,000 of taxable income instead of the normal Baht 150,000 threshold.
Income Tax exemption limit for senior citizens will increase by Rs.15,000, and Rs.10,000 for women and others each.
After the declaration of the income tax exemption limit, the new exemption limit will be Rs.240,000 for senior citizens, Rs.190,000 for women, and Rs.160,000 for others.
Income chargeable to 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 rent-free housing 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 eight categories. Certain deductions and allowances can be offset against assessable income in order to calculate taxable income. Taxpayers shall make deductions from assessable income before the allowances are granted.
Deductions allowed for the calculation of Personal Income Tax (PIT)
a. Income from employment: 40% but not exceeding 60,000 baht
b. Income received from copyright: 40% but not exceeding 60,000 baht
c. Income from letting out of property on hire
1) Building and wharves: 30%
2) Agricultural land: 20%
3) All other types of land: 15%
4) Vehicles: 30%
5) Any other type of property: 10%
d. Income from liberal professions: 30% except for the medical profession where 60% is allowed
e. Income derived from contract of work whereby the contractor provides essential materials besides tools: actual expense or 70%
f. Income derived from business, commerce, agriculture, industry, transport, or any other activities not specified in a. to e. : actual expense or 65% - 85% depending on the types of income
Charge to tax: Thailand Tax is imposed on assessable income. A resident of Thailand is taxed on income earned in Thailand and on income earned offshore which is brought into Thailand in the year the income is earned. Non-residents are subject to income tax on all income earned in Thailand.
Tax Residence: Generally speaking, an individual is a tax resident in Thailand if he/she has been physically present in Thailand for an aggregate period of 180 days (or 183 days for Double tax treaty countries) in any calendar year. The number of days is counted from the date the individual arrives in Thailand as shown in their passport.
Thailand Corporate Tax RatesThe standard corporate income tax rate in Thailand in 2009 is 30%.
There are also several different reduced tax rates for small companies, and companies that are listed on the Stock Exchange of Thailand (SET). Please see rates below:
Taxpayer / Tax Base / Tax Rate %
1. Small Company (1)
. net profit not exceeding Baht 0.15m: exempt (2)
. net profit over Baht 0.15m but not exceeding Baht 1m: 15% (4)
. net profit over Baht 1m but not exceeding Baht 3m: 25%
. net profit exceeding Baht 3m: 30%
2. Companies listed on Stock Exchange of Thailand (SET)
. Listed between 6 September 2001 and 31 December 2005 / net profit for first five accounting periods beginning on or after 6 September 2001: 25% (3)
. Application for newly listed on SET between 1 January 2007 and 31 December 2008 and registered by 31 December 2009 / net profit for first three accounting periods after listing: 25%
. Listed before 29 July 2008 / net profit on first Baht 300m for three accounting periods from 1 January 2008 to 31 December 2010: 25% (4)
. Listed before 29 July 2008 / net profit on the amount exceeding Baht 300m for three accounting periods from 1 January 2008 to 31 December 2010: 30%
3. Company listed on Market for Alternative Investment (MAI)
. Listed during 6 September 2001 to 31 December 2005 / net profit for first five accounting periods beginning on or after 6 September 2001: 20%
. Application for newly listed on MAI between 1 January 2007 and 31 December 2008 and registered by 31 December 2009 / net profit for first three accounting periods after listing: 20%
. Listed before 29 July 2008 / net profit on first Baht 20m for three accounting periods from 1 January 2008 to 31 December 2010: 20% (4)
. Listed before 29 July 2008 / net profit on the amount exceeding Baht 20m for three accounting periods from 1 January 2008 to 31 December 2010: 30%
4. Bank deriving profits from International Banking Facilities (IBF) / net profit: 10%
5. Foreign company engaging in international transportation / gross receipts: 3%
6. Foreign company not carrying on business in Thailand but receiving dividends from Thailand / gross receipts: 10%
7. Foreign company not carrying on business in Thailand but receiving other types of income apart from dividend from Thailand / gross receipts: 15%
8. Foreign company remitting profit out of Thailand / amount remitted: 10%
9. Profitable association and foundation / gross receipts: 2% or 10%
10. Regional Operating Headquarters (ROH) / net profit: 10% (5)
11. Board of Investment (BOI) / net profit: 0% (6)
1 Small company refers to companies with paid-up capital not exceeding Baht 5m at the end of each accounting period.
2 The 15% rate applies for accounting periods beginning on or after 1 January 2004. An income tax exemption for the first Baht 150,000 is effective for the accounting periods beginning on or after 1 January 2008.
3 The reduced rate applies for currently listed companies for five accounting periods beginning on or after 6 September 2001.
4 The rates apply for currently listed companies which do not utilise other corporate income tax privileges granted including that specified under No. 2b and 3b in the Table above.
5 An entity may qualify for concessions granted as an ROH including a reduced corporate income tax rate of 10% and a flat personal income
tax rate of 15% for expatriate individuals (for a four-year period) if certain conditions are met including the provision of administrative, technical, management and other supporting roles to 'affiliates' or branches in at least three other countries other than Thailand.
6 Depending on the location (investment zone) and type of activity undertaken, a company may qualify for a tax exemption (tax holiday) for three to eight years on corporate profits as well as a reduction of import duty on imported machinery and materials, as well as an exclusion of income tax on dividends derived from BOI activities.
About Thailand Corporate Tax
Corporate Income Tax (CIT) is a direct tax levied on a juristic company or partnership carrying on business in Thailand or not carrying on business in Thailand but deriving certain types of income from Thailand.
Corporate income tax is levied on both Thai and foreign companies. A Thai company means a company incorporated under the law of Thailand. Thai company is subject to tax in Thailand on its worldwide net profit at the end of each accounting period (12 months). A foreign company means a company incorporated under foreign law. Generally, a foreign company is treated as carrying on business in Thailand if it has an office, a branch or any other place of business in Thailand or has an employee, agent, representative or go-between for carrying on business in Thailand. A foreign company carrying on business in Thailand is subject to CIT only for net profit arising from or in consequence of business carried on in Thailand, at the end of each accounting period. However, a foreign company engaged in international transport is subject to tax on its gross receipts. When a foreign company disposes its profit out of Thailand, such profit will be subject to tax on the sum disposed. Profit also means any sum set aside out of profits as well as any sum which may be regarded as profit.
A foreign company, not carrying on business in Thailand but deriving certain types of income from Thailand, such as service fees, interests, dividends, rents, professional fees, is subject to corporate income tax on the gross amount received.
Dividends
Dividends received by a company listed on the Stock Exchange of Thailand are exempt from tax as are those received by any other company incorporated in Thailand holding at least 25% of the voting shares in another Thai company, without any cross shareholding either directly or indirectly, provided that the related investments have been held for a period of at least three months before and three months after the receipt of the dividends. Where a Thai company does not qualify for the shareholding period specified above, it will nevertheless only need to include in its assessable income an amount of 50% of a dividend received from another company incorporated in Thailand.
Dividend paid by a foreign company to a Thai company after November 2005 will be exempt from Thai corporate income tax if the paying company has a minimum corporate tax rate of 15% and the Thai company has a 25% or more equity interest in the foreign entity and maintains its shareholding in that company for a six-month period.
Thailand Value Added Tax (VAT) RatesThe current rate of VAT in Thailand is 7%.
Zero Percent Rate
Certain activities are liable to VAT at the rate of zero percent. Those activities include:
- export of goods;
- services rendered in Thailand and utilized outside Thailand in accordance with rule, procedure and condition prescribed by the Director-General;
- aircraft or sea-vessels engaging in international transportation;
- supply of goods and services to government agencies or state-owned enterprises under foreign-aid program;
- supply of goods and services to the United Nations and its agencies as well as embassies, consulate-general and consulates;
- supply of goods and services between bonded warehouses or between enterprises located in EPZs.
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