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When it comes to Thailand income tax for foreigners, there’s a lot of misinformation floating around on the internet.
Some expats will tell you that they never pay income tax. Others, however, will tell you that they file every year. Who should you listen to?
Then there are the tax rates. If you do have to file personal income taxes in Thailand, what percentage will you be taxed?
So many questions that need reliable answers.
With that in mind, this guide will help you determine if you’re a tax or non-tax resident in Thailand, what your tax rates in the country are, and how to file your personal income taxes.
- Do Expats Pay Income Tax in Thailand?
- Tax Residents Vs. Non-Tax Residents
- Personal Income Tax Rates
- Withholding Taxes
- Tax Deductions and Allowances
- Filing Taxes
- Tax IDs
- Double Taxation Agreement
- Are Pensions Subject to Tax?
- Digital Nomad Tax Liabilities
- Does Thailand Tax Foreign-Earned Income?
- Corporate Income Taxes
- Now, on to You
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Do Expats Pay Income Tax in Thailand?
As an expat living in Thailand, the most common type of tax you’ll have to pay is personal income tax.
Even digital nomads who work remotely in Thailand might have to pay income taxes.
Keep in mind, Thailand is not a tax haven. So if you plan on living here without encountering any legal issues, you have to make sure you file taxes on any liable earnings.
To determine if you have to pay taxes in Thailand, you first need to find out if you’re a tax resident in Thailand.
Please note that everyone living in Thailand pays taxes. It comes in many forms. The most outstanding tax is VAT (value-added tax), which is charged at 7 percent on most products and services in Thailand.
Tax Residents Vs. Non-Tax Residents
Expats in Thailand fall into two categories:
- Tax residents
- Non-tax residents
A tax resident is anyone who lives in Thailand for 180 days of a calendar year. Anyone shy of that number is considered a non-tax resident.
This important difference in residency classification means there is also a difference in what income is taxable.
However, any income you earn during the year but leave in a bank account outside of Thailand is not subject to taxes.
This means, if you make money abroad and don’t want to pay income taxes on it in Thailand, you must leave the money in a foreign bank account and send it to Thailand during the next calendar year.
This also applies to pensions, but we’ll talk about that in greater detail in a section below.
In comparison to tax residents, non-tax residents are only liable for income that is earned in Thailand. This means your income from foreign sources aren’t taxed.
Also, be aware that in order to work and get paid from a company in Thailand, you must have a Thai work permit.
Personal Income Tax Rates
Thailand has a progressive tax system, which means your tax rate increases as your income increases.
You must pay taxes once you earn more than 150,000 baht a year after tax deductions. Then, the more you make, the higher tax rates you have to pay.
At present, the maximum tax rate is 35 percent for those who make over 4,000,000 baht a year.
The table below shows what your tax rates will be at different incomes.
|Taxable Income (THB)||Rate||Taxable amount (THB)|
|Less than 150,000||0||0|
|More than 4,000,000||35%||–|
As you might’ve noticed, tax rates are comparable to most other countries, so the assumption that Thailand is a tax haven is untrue.
The main source of personal income tax for expats in Thailand is through employment.
Note that if you work for a Thai company with an International Business Center (IBC) status, have a tax-residency status in Thailand, make a minimum annual income of 2,400,000 baht, your personal income tax rate is going to be a flat 15 percent.
Besides any income you earn from your employment in Thailand, you will also be expected to pay tax on other earnings.
This includes but isn’t limited to capital gains, investment income, dividends, interest, and rental income.
The table below shows you the different tax rates for these situations.
Depending on your income type, you may or may not have to pay personal income taxes on that money.
For example, if you rent out your condo, you have to pay a 12.5 percent tax on the annual rental income.
Your rental income would also be subject to personal income tax at the rate of 0 percent to 35 percent as mentioned in the first table.
On the other hand, you only have to pay taxes on earnings from dividends and bonds at either 10 percent or 15 percent, respectively.
However, unlike rental property, dividends and bonds aren’t subject to personal income tax.
Thailand has a tax withholding system where your employer, payer, or financial institute withholds a percentage of your income from each paycheck and submits it to the Revenue Department.
If it’s an income from employment, the withholding tax rate will be calculated based on your annual income from the progressive tax rate chart mentioned earlier.
Your total annual tax due at the end of the year will then be divided by the number of payments – for example 12 if you get paid once a month – and this is how much taxes will be deducted from each of your paychecks.
|Rents and prizes||5%|
Although your payer withholds your taxes and pays them on your behalf, you should always ask for withholding tax certificate, which is necessary for filling your personal income taxes.
Tax Deductions and Allowances
To decrease taxpayers’ burdens, Thailand has a number of deductibles and allowances available to both Thais and expats.
Major deductions include:
- Employment income
- Copyright income
- Income from renting out buildings, agricultural land, vehicles
- Liberal professions income
On top of that, the Thai government also allows a number of allowances when calculating total taxes such as but not limited to:
- Personal allowance
- Spousal allowance
- Child allowance
- Parents allowance
- Health insurance premiums
- Life insurance premiums
- Home mortgage interest
- Charitable contributions
The deduction and allowance rates and amounts for different income sources vary.
This table shows popular deductions for expats:
|Personal allowance (available to everyone)||30,000|
|Child allowance per person||15,000|
|Parent allowance per person (both you and your spouse)||30,000|
|Super Savings Fund||5% of your income but not exceeding 500,000 baht|
|Social Security||Same amount you contribute|
|Donation||Same amount you donate but shouldn’t exceed 10% of your income|
|Rental Income||30% of your annual rental income|
Note that deductions are subject to change every now and then. You can check the Revenue Department website for the most up-to-date rates.
Taking advantage of the allowances and deductions the Thai government provides can save you money on taxes, so it’s definitely in your best interest to make the most of them.
Non-tax residents are also eligible for some personal and specific allowances.
For most people, personal income tax filing starts on 1 January and is due by 31 March of every year for any income earned in the previous year.
The tax year ends on 31 December and starts on 1 January of every year.
You can file your taxes online through the Revenue Department E-Filing system.
Here’s a list of what you need to file taxes in Thailand:
- Tax ID (see next section on how to get your tax ID)
- E-filing account (you can register once you have a Thai tax ID)
- 50 tawi (for those who are employed in Thailand – your employer will give you this)
- Withholding tax certificate
- Deduction evidence such as receipts, SSF certificates, and letters of consent
If you work in Thailand, your employer may help you file your taxes.
If you file your own taxes, ask your Thai colleagues or an accountant for help since the tax filing form is only available in Thai.
Otherwise, once you log in to the E-filing system, you have to take the following steps:
- Add your personal address in Thailand
- Choose your source of income
- Specify how much you make for each income type, including how much tax is already being withheld
- Choose deductibles and specify amount
Please note that you need to choose the source of income correctly through the official code.
For example, if it’s income from employment, it’s Section 40(1). If it’s income from subletting your condo, it’s Section 40(5).
Then, the system will show you how much tax you have to pay or how much of a tax return you’re going to get.
You can pay your taxes by credit card or through a local wire transfer.
If you get a tax return, you can ask the Revenue Department to send a check to your address or you can donate it to a political party.
Your local Revenue Department should be your only point of contact when it comes to taxes in Thailand.
It can take anywhere from under a week to a few months to get your tax return depending on when you file.
If you file early, there’s a chance that you’ll get your tax return within a week or two.
If you file late in March, then it could take more than two months to get your tax return.
After you file your taxes, the Revenue Department may ask you for more documents. If they do, you can upload requested documents through the system – and you should be good to go.
You can track your tax filing status on the E-filing website.
Also, keep a copy of your tax filing because you’ll need it when renewing your work permit.
If you earn advertising fees, are employed in public entertainment, or have rental income, you’re also required to file a mid-year tax return by September 30th.
With all that said, when filing personal income taxes, consult with an accountant to make sure that you can plan your taxes in advance and file them correctly to prevent any fines and/or penalties.
To file your tax returns, you’ll need to register for a tax identification number.
You can apply for a tax ID at your nearest revenue office with your passport or identity card, proof of address, and an application.
If you work in Thailand, your employer will register for a tax ID on your behalf, but either way it must be done within 60 days of receiving your first paycheck.
Double Taxation Agreement
Over 50 countries have double taxation agreements with Thailand to ensure you won’t be taxed twice – once by Thailand and again by your country of origin.
The United States, Canada, the United Kingdom, Australia, New Zealand, Germany, Norway, Russia, are a few of the countries that have such treaties in place.
You can see a full list here.
However, even if Thailand has a double taxation agreement with your country, you might still have to file personal income taxes in your home country.
For instance, U.S. Citizens have to file in both countries.
To do this, you must get an English tax certificate from your local Revenue Department.
Are Pensions Subject to Tax?
Pension and taxes in Thailand are tricky, and it’s a hot topic for those who retire in Thailand.
Generally, there are three scenarios.
Scenario one: your pension is taxed in your home country. You don’t have to pay tax on in Thailand because of the double taxation agreement.
Scenario two: your pension isn’t taxed in your home country. If you transfer it to Thailand on the next calendar year, you don’t need to pay taxes on it.
Scenario three: you bring your pension into Thailand. You must declare your pension income and pay taxes on it.
However, the reality is that Thailand doesn’t seem to be enforcing this law.
Many Thaivisa.com members went to the Revenue Department to find out whether or not they need to pay taxes on their pension.
They received similar answers, which is that you don’t have to pay income tax on your pension if you’re a retirement visa holder.
This is another reason why Thailand is a good place for retirees.
Just be aware that the letter of the law is that pensions are taxed, but a lot of people have been turned away at the tax offices.
Officials might enforce this law in the future, though, like they did with TM30s and changing your address in Thailand.
Digital Nomad Tax Liabilities
Digital nomads are in a bit of a gray zone when it comes to tax liabilities in Thailand.
In the end, it comes down to which visa you have and whether you’re a tax resident in Thailand.
If you’re a tax resident, you have to pay taxes for all income made in Thailand and any foreign income you brought into Thailand during the year.
However, you can’t make income in Thailand without having the right visa and work permit.
If you’re a non-tax resident who stays in the country for less than 180 days of a calendar year, you still have a tax liability and need to pay your taxes somewhere.
Failing to pay your taxes will catch up to you once Thailand introduces laws to enforce this issue.
Not only that, the Thai government will make you pay for any outstanding taxes with penalties.
Does Thailand Tax Foreign-Earned Income?
It depends on your tax status and when do you bring the income into Thailand.
As mentioned earlier, if you’re a non-tax resident, your foreign-earned income isn’t subject to tax in Thailand.
If you’re a tax-resident, your foreign income will be taxed when you bring it into Thailand in the same calendar year.
For example, if you make money abroad in 2021 and bring it into Thailand in the same year, you must pay taxes on this foreign income.
On the other hand, if you bring it into Thailand in 2022 onward, then it’s not subject to Thailand income tax.
Corporate Income Taxes
This article is mainly about personal income taxes.
However, if you run a business in Thailand, check out our article on Taxes You Have to Deal with as a Business Owner in Thailand.
Now, on to You
Getting used to a new country while familiarizing yourself with its laws and rules on taxes can be a difficult task, but having the right resources can make it easier.
Make sure you organize and classify your different sources of income, and then check what your liabilities are and what your tax rates for each source is.
Also, taxes must be submitted in Thai, so you’ll be requiring the services of a Thai accountant. Make sure you ask them any questions you’re unsure of to cover all your bases.
Taking stock of what we’ve laid out above will provide you with peace of mind as you navigate Thailand’s personal income tax system and get accustomed to the country’s unique way of life.