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Tax rates in Thailand

Tax Rates

Consumption Taxes

Nature of the Tax
Value-Added Tax (VAT)
Tax Rate
The standard rate of VAT is 10%, but the rate is currently reduced to 7% until 30 September 2021.
Reduced Tax Rate
Exports of goods and services are zero-rated. If the services are partially used in Thailand, the part of the services used in Thailand (if can be segregated) is subject to VAT at a rate of 7%.
Other zero-rated items include International transport services by aircraft or seagoing vessels; the sale of goods and provision of services to United Nations Organization, an embassy, legation, consulate-general or consulate; the sale of goods and provision of service between bonded warehouse and the other bonded ware-house between the supplier who carries on the business in a free trade zone.
There is no other VAT reduced rate in Thailand.
Other Consumption Taxes
Some goods and services are subject to excise tax, including: alcoholic and certain non-alcoholic beverages, tobacco products, boats, motor vehicles, playing cards, certain entertainment services, crystal glassware, etc.
 
Find out more about Taxes and Accounting in Thailand on GlobalTrade.net, the Directory for International Trade Service Providers.
 

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Corporate Taxes

Company Tax
20%
Tax Rate For Foreign Companies
A domestic corporation is subject to tax on worldwide income, while a foreign corporation is subject to tax on income generated in Thailand.
A foreign company not carrying on business in Thailand is subject to a final withholding tax on certain types of assessable income (e.g. interest, dividends, royalties, rentals, and service fees) paid from or in Thailand, at a rate of 15% (10% for dividends).
Capital Gains Taxation
Capital gains are treated as ordinary income and taxed accordingly for corporate income tax purposes. As such, capital losses can be used to offset net taxable profits.
Capital gains paid to overseas recipients are subject to a 15% withholding tax, although an exemption may apply to gains derived by investors from certain countries with which Thailand has signed a double taxation agreement.
Main Allowable Deductions and Tax Credits
In general, taxes are deductible except corporate income tax and VAT. Interest on money borrowed for the purpose of acquiring profit or business is deductible. Start-up expenses, such as incorporation expenses and registration fees, are deductible when incurred. Bad debts written off are deductible (subject to conditions and procedures), same as provident fund contributions.
Losses may be carried forward to offset profits of the following five accounting periods. The carryback of losses is not allowed.

Donations to specified charities or for public benefit, as well as those to education or sport associations are deductible in the amount actually paid but not exceeding 2% of net profit.
Royalties, management service fees, and interest charges paid at arm’s length to foreign affiliates are also deductible.

Other Corporate Taxes
A specific business tax (SBT) is collected at fixed rates on the gross revenue of certain businesses not subject to VAT, such as commercial banking, similar financial businesses, and the sale of immovable property, which are taxed at 3%, and life insurance, which is taxed at 2.5%. Certain revenue derived by commercial banks and finance, securities, and credit foncier businesses are taxed at a rate of 0.1%. An additional 10% is levied at municipal level.

From 2020, a Land and Construction Tax Act replaced the house and land tax and the local development tax. The maximum tax rate depends on the type of land/building and the appraisal value, as follows:
- for land used for agricultural purposes, the progressive tax rates range from 0.01% on land valued up to THB 75 million to 0.1% on land valued above THB 1 billion
- for land used for residential purposes, the progressive tax rates range from 0.02% on land valued up to THB 50 million to 0.1% on land valued above THB 100 million
- for land used for commercial purposes, the progressive tax rates range from 0.3% on land valued up to THB 50 million to 0.7% on land valued above THB 5 billion
- for land that is left unattended or that is not being utilized to the extent appropriate for its nature, the progressive tax rates range from 0.3% to 3% (the tax rate will increase by 0.3% annually if the land is not used).

Stamp duty is levied on different types of documents and instruments, including contracts for hire of work, loans, share transfers, leases of land or buildings, and insurance policies.

Capital duty does not officially exist in Thailand; however, there is a one-time fee when registering a company.

Employers are required to contribute 5% of the employee's remuneration to the Social Security Fund (capped at a contribution of THB 750/month). Nevertheless, for January, February and March 2021, the contribution rate has been temporarily reduced to 3% (capped at THB 450/month).

Other Domestic Resources
Revenue Department of Thailand
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Thailand East Asia & Pacific United States Germany
Number of Payments of Taxes per Year 21.0 23.4 10.6 9.0
Time Taken For Administrative Formalities (Hours) 229.0 195.1 175.0 218.0
Total Share of Taxes (% of Profit) 29.5 33.8 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Individual income tax Progressive rate from 0 to 35%
From THB 0 to 150,000 Exempt
From THB 150,001 to 300,000 5%
From THB 300,001 to 500,000 10%
From THB 500,001 to 750,000 15%
From THB 750,001 to 1,000,000 20%
From THB 1,000,001 to 2,000,000 25%
From THB 2,000,001 to 5,000,000 30%
Over 5,000,000 35%
Allowable Deductions and Tax Credits
The law provides for a personal allowance of THB 60,000 each for the taxpayer and the taxpayer’s spouse (provided that the taxpayer's spouse does not file one's own return) and THB 30,000 for each child. Furthermore, an allowance for parental care of THB 30,000 per parent is deductible. A non-resident is allowed deductions for spouse, children, and parent only if they are resident in Thailand.

A standard deduction of 50%, capped at THB 100,000, is available in respect of employment income, whereas business deductions are not available against employment income.
Donations to educational institutions, public health care facilities, approved charities, and the Technology Development Fund for Education are deductible in the amount donated, capped at 10% of net income after all allowances and deductions (however, a double tax deduction is allowed in respect of donations to support certain educational programmes and cultural activities).
Health insurance premiums up to THB 15,000 paid to a life or non-life insurance business in Thailand for the taxpayer’s parents or the parents of the spouse of the taxpayer is allowable as a deduction. Premiums paid by a taxpayer for his own health insurance can be deducted up to THB 25,000.
Life insurance premiums paid by a taxpayer on one's own life are allowed as a deduction, provided that the insurance policies are for a minimum period of ten years and the insurer is carrying on a life insurance business in Thailand. Health and life insurance premiums can be deducted up to an overall amount capped at THB 100,000 (including the health insurance premium deduction). In addition, premiums paid for life insurance for the taxpayer's spouse who does not earn an income is are deductible up to a maximum of THB 10,000, provided the marital status exists throughout the tax year.
Mortgage interest incurred for the purpose of purchase or construction of a residential building in Thailand may be deducted up to THB 100,000. Retirement mutual fund contributions can be deducted up to 30% of assessable income received that is subject to income tax (limited at THB 500,000/tax year).

For business incomes, all expenses exclusively incurred for the purpose of the business may be deducted; or else the taxpayer can opt for a standard deduction ranging from 10% to 60%, according to the type of business.

Special Expatriate Tax Regime
Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.
Expatriates working for companies qualifying for the international business centre regime may opt to be taxed at the final withholding tax rate of 15% instead of the normal progressive tax rates for a maximum period of 4 consecutive years, whether or not he or she has occasionally been travelling out of Thailand during that period.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of the double taxation agreements signed by Thailand
Withholding Taxes
Dividends: 10%; Interest: 15% (certain types of interest are also subject to an advanced withholding tax of 1%); Royalties: 3% (if paid to a Thai company)/15%.

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Find out more about Taxes and Accounting in Thailand on GlobalTrade.net, the Directory for International Trade Service Providers.

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Latest Update: May 2022

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