Personal Income Tax in Thailand: A Handbook for Individuals and Companies
If you work or conduct business in Thailand, you must grasp the country's personal income tax structure. We will present a full guide to Thailand's personal income tax, including tax rates, deductions, and exemptions, in this post. We'll also go through filing requirements and deadlines, as well as some strategies for lowering your tax obligation.
Rates of Taxation and Taxable Income
Thailand's personal income tax system is progressive, which means that the tax rate rises with your income. Individual tax rates as of 2021 are as follows:
- 0% for income up to THB 150,000
- 5% for income between THB 150,001 and THB 300,000
- 10% for income between THB 300,001 and THB 500,000
- 15% for income between THB 500,001 and THB 750,000
- 20% for income between THB 750,001 and THB 1,000,000
- 25% for income between THB 1,000,001 and THB 2,000,000
- 30% for income between THB 2,000,001 and THB 4,000,000
- 35% for income over THB 4,000,000
It is vital to note that these rates are implemented gradually. For example, if your taxable income is THB 1,500,000, you must pay the following:
- 0% on the first THB 150,000
- 5% on the next THB 150,000 (THB 150,001 - THB 300,000)
- 10% on the next THB 200,000 (THB 300,001 - THB 500,000)
- 15% on the next THB 250,000 (THB 500,001 - THB 750,000)
- 20% on the remaining THB 750,000 (THB 750,001 - THB 1,500,000)
- Therefore, your total tax liability would be THB 140,000.
Tax Breaks and Exemptions
Thailand's personal income tax system offers a number of deductions and exclusions to help you lower your tax bill. The following are some of the most prevalent deductions and exemptions:
- Personal allowance: A deduction of THB 60,000 from your taxable income is available for individuals.
- Dependent allowance: If you have dependents, you can deduct THB 30,000 per dependent from your taxable income.
- Health insurance: Premiums paid for health insurance are deductible up to THB 15,000 per year.
- Life insurance: Premiums paid for life insurance are deductible up to 15% of the insured amount or THB 100,000 per year, whichever is lower.
- Provident fund: Contributions to a provident fund are deductible up to 15% of your salary or THB 500,000 per year, whichever is lower.
- Donations: Donations made to approved charitable organizations are deductible up to 10% of your taxable income.
- In addition to the above deductions, there are also some exemptions available. For example, income from certain investments such as government bonds and mutual funds may be exempt from tax up to a certain limit.
Deadlines and filing requirements
If you live in Thailand and earn more than THB 150,000 per year, you must file a personal income tax return. Thailand's fiscal year runs from January 1st to December 31st.
