Paying 2017-2018 income tax in Thailand? Read this
If you're moving to Thailand as an expat, or if you're a foreigner who earns income from Thailand, you need to understand your duties when it comes to paying tax.
Tax is seldom simple, and your obligations could be complex if you're an expat or juggling life between two countries. This overview of the Thai income tax system is a great starting point. But, if you think you might need to pay tax on some or all of your income in Thailand, it's smart to get professional advice.
What income is taxable in Thailand?
You might see tax in Thailand shortened to PIT - personal income tax. Taxable income includes all income from earnings, plus both monetary and non-monetary benefits. Money from earned employment, rental income, interest and dividends all comes into scope. Any benefits - for example if you get a house to live in rent free as part of your job - may also be assessed as taxable.
(Source 20 December 2017)
Who has to pay income tax in Thailand?
To work out what tax you owe in Thailand, first you have to establish whether you're:
- A resident taxpayer
- A non-resident taxpayer
Resident income tax
In Thailand, the tax year is the same as the calendar year - 1 January through to 31 December. You're considered a resident for tax purposes if you live in Thailand for 180 days or more on aggregate over the year.
As a resident taxpayer, you have to pay tax on any income you make in Thailand, to Thai authorities. You also have to pay tax on any income made elsewhere, if it's remitted to Thailand in the year it's earned.
( Source 20 December 2017)
Non-resident income tax
If you live in Thailand for less than 180 days over the tax/calendar year, you might be deemed to have non-resident tax status. This means you pay tax in Thailand only on relevant income you’ve earned in Thailand.
( Source 20 December 2017)
In what instances do Thai residents working abroad need to pay income tax?
Whether or not you have a tax bill in Thailand will depend on whether you're classed as a resident or not. If you're in Thailand for over 180 days then you'll have to pay tax on any income earned in or remitted to Thailand that year. If you're in Thailand for less time, you might only have to pay tax in Thailand, on your earnings that originate in Thailand.
What are the income tax rates in Thailand in 2017-2018?
Thailand has a progressive tax system. The first 150,000 baht you earn is tax free, and then a progressively higher tax rate is applied based on how much you earn above that level.
If you’re employed, your employer will withhold tax from your wages under the pay as you earn (PAYE) system.
The most up to date rates available for both resident and non-resident taxpayers in Thailand are as follows:
| Income range | Thailand income tax rate (%) 2017 |
|---|---|
| Up to THB150,000 | 0% |
| THB150,001 - THB300,000 | 5% |
| THB300,001 - THB500,000 | 10% |
| THB500,001 - THB750,000 | 15% |
| THB750,001 - THB1,000,000 | 20% |
| THB1,000,001 - THB2,000,000 | 25% |
| THB2,000,001 - THB5,000,000 | 30% |
| Over THB5,000,000 | 35% |
( Source 20 December 2017)
What are the tax exemptions in Thailand?
Depending on your personal circumstances you’ll be able to claim a tax free personal allowance, which is removed from your gross income before calculating tax.
After doing that, you might also be eligible for other tax breaks depending on your personal situation. To be eligible for any of these allowances you have to include them on your tax declaration.
Here are some of the exemptions, deductions and credits that you might need to know about.
Personal allowance
The personal allowance for an individual taxpayer is THB60,000, and you can also claim the same against your spouse’s tax return if they’re not earning income themselves. You can claim a THB30,000 allowance for each dependant child, and the same if you’re caring for an elderly parent. There’s a further allowance of THB60,000 for care of a disabled person.
Non-residents can only claim allowances against individuals who live in Thailand, so if your parent lives outside of the country, for example, you’re not eligible for this deduction, even if you contribute to their care.
Business deductible items
The process for claiming tax relief on business costs depends on what type of business you’re engaged in. In some cases you can offset any costs which are incurred exclusively due to work, or you might find that a standard deductible amount is applied. This standard amount can be from 10%-60%, and is set out in the tax code.
Other deductible items
You can remove the costs of some things, including charitable donations, healthcare costs, life insurance premiums, mortgage interest and pension payments. There are caps and limits in place for these items, and you’ll be asked to prove the payment was made.
( Source 20 December 2017)
What sort of double taxation agreements are there with Thailand?
Double taxation treaties are set up to make sure that people don’t have to pay tax twice on the same income. This could be important if you’re a digital nomad travelling in Thailand, for example. In theory you might be liable to pay tax on your earnings from work done in Thailand - but you could also be liable to pay tax on your worldwide earnings in your home country if you’re still deemed a resident there.
If this is the case, you can offset the tax due in Thailand against the tax you’ve already paid in your home country, as long as there’s a double taxation agreement between Thailand and your home country. That way you only ever pay tax once on the income.
Thailand has double taxation agreements with the following countries:
Thailand double taxation agreements
|---|---|
| Armenia | Malaysia |
| Austria | Mauritius |
| Australia | Myanmar |
| Bahrain | Netherlands |
| Bangladesh | New Zealand |
| Belarus | Nepal |
| Belgium | Norway |
| Bulgaria | Oman |
| Cyprus | Philippines |
| Canada | Pakistan |
| China | Poland |
| Chile | Romania |
| Czech Republic | Russia |
| Denmark | Seychelles |
| Estonia | Switzerland |
| Finland | Singapore |
| France | Slovenia |
| Germany | Sweden |
| Hungary | South Africa |
| Hong Kong | Spain |
| Israel | Sri Lanka |
| Indonesia | Taiwan |
| Ireland | Tajikistan |
| India | Turkey |
| Italy | Ukraine |
| Japan | UAE |
| Korea | Uzbekistan |
| Kuwait | UK |
| Luxembourg | USA |
| Laos | Vietnam |
(Source 20 December 2017)
How do I pay income tax in Thailand?
You can get the forms you need to declare your tax, in English, along with guidance on the Thai Revenue Department website. Your tax bill is due as soon as you file your return, although if you’re working for a Thai business you might well find that all the tax you have to pay has been withheld under the PAYE system.
If you need to pay more taxes once you have made your declaration, you can do so using cash, card, cheque or bankers draft, at either a local tax office, or an approved bank.
(Source 20 December 2017)
If you’re an expat paying your taxes in Thailand, you might need to make an international bank transfer from a bank account held in a different country or currency, to a bank account in Thailand, to cover the costs. If you’re doing this, it could work out more expensive than you expect it to. Firstly, charges will be added to the transfer. And secondly, the exchange rate used might not be the real, mid-market rate, which you’d find on Google.
Banks and money exchange services often mark up the exchange rate by as much as 4-5%. The difference is their profit - but it means that you’re paying more than you need to for your transfer.
Luckily, you don’t have to use a traditional bank to make your international transfer. There’s a better alternative - Wise. Wise works differently to banks. That means you can get your money transferred quickly and safely, using the real exchange rate, and just a small, upfront fee.
There’s no magic, and no smoke and mirrors. It actually pretty simple. Wise doesn’t use the pricey SWIFT system for making bank transfers. Instead, their new approach brings down the costs of making international transfers. And the savings are passed on to you - the customer.
If you’re making an international transfer to pay your taxes, you don’t want to be out of pocket because of unfair - and hidden - fees. Wise offers the real exchange rate and only a small, transparent fee for every transfer, which could save you money on cross-border transactions. See if you can get a better deal from Wiseif you find yourself needing to pay your taxes abroad.
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