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Employment Taxation for Expats in Thailand

Submitted: August 2014

Residence

You will be considered habitually resident once you have stayed Thailand for more than 180 days in a calendar year. As a resident you will be taxable on your worldwide income and gains. If you remain non-resident you will only be taxed on your Thai-sourced income. The wording of double tax treaties can also effect whether you are treated as a resident or not. You must apply for a tax identification number (TIN) within 60 days of becoming employed in Thailand. The relevant application form for an individual is Form L.P.10.1 which must be lodged at the local area office the Thai Revenue Department.  

 

Tax rates and allowances

The tax year runs from 1 January to 31 December. Your employer will withhold tax from your wages or salary. You must supply them with your TIN. They will also deduct your social security contributions. How much tax you pay is the same whether you are considered resident or non-resident; both are taxed at the progressive rates shown in the table below. Certain expat employees who are working for a regional headquarters are taxed at a flat rate of 15%, this flat rate generally applies to up to four years of employment.

There are eight different categories of assessable income:

  • Employment income (salaries and wages), this will also include most fringe benefits such as free meals and accommodation, bonuses and insurance.
  • Income derived from a position or a service rendered
  • Income from copyrights, franchises, patents or annuities.
  • Investment income such as dividends, interest, profit sharing and gains created as a result of the transfer of shares or the amalgamation, acquisition or dissolution of corporate structures.
  • Income from the letting or hire of both moveable and immoveable property
  • Professional income earned for example by an accountant, lawyer, architect or engineer.
  • Income from derived from contracts in areas such as the construction industry, where all materials other than tools are provided by the contactor.
  • Other income not specified above.

Taxable income is calculated after the deductible expenses and personal allowances. Deductible expenses vary according to the category of income; for standard employment income there is a standard deduction of 40% up to a maximum of THB60,000. The personal allowance for a single person is THB30,000. Once these deductions and expenses have been subtracted, the resulting taxable income is subject to progressive tax rates as shown in the table below.

Taxable Income THBRate
1 to 150,0000%
From 150,001 to 300,0005%
From 300,001 to 500,00010%
From 500,001 to 750,00015%
From 750,001 to 1m20%
From 1m to 2m25%
From 2m to 4m30%
Over 4m35%

You will also have to pay social security contributions, but these are small by European standards. You will be required to submit an annual tax return (PND90 or 91) regarding your total income to the tax office by 31 March of the following financial year. For married residents and non-residents, joint or separate filing is now possible with regard to all forms of income.

 

Self-employment

Sole proprietorship is not an option for the majority of expats. The only expats who are allowed to operate a sole proprietorship are those covered by the Treaty of Amity and Economic Relations Between the Kingdom of Thailand and the United States of America. There are details regarding this treaty here.

 

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