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Overview of Tax Issues for Expats in Thailand

Submitted: August 2014

The Thai tax year runs from 1 January to 31 December.

 

Tax Residence

You will be considered resident if you stay in Thailand for more than 180 days in a calendar year. As a resident, you will be taxable on your worldwide income and gains. Tax treaties can also affect whether you are treated as a resident or not. For more details, please see: Employment Taxation.

 

Employment/Business Taxes

For resident, a withholding tax is deducted by your employer from your wages or salary. They will also deduct social security contributions. You will generally have to complete a tax return after the end of the year. The marginal (highest) tax rate is 35%. If you are self-employed, you will pay income tax based on the profits of your business, after deduction of costs. For more details, please see Employment Taxation.

If you start a company in Thailand, you will be liable to corporation income tax on the profits you make from your business. The standard corporate income tax rate is 20%; for small and medium enterprises (SMEs), there is a reduced rate of 15% on their first 1 million baht of income. New companies must complete a complicated registration process which may take longer than a month to complete. Companies have to file a half-year return and pay provisional tax based on estimated income for the year. After the end of the year, they must submit a tax return within 150 days of the end of the fiscal year in which the income was generated. For more details, please see Business Taxation.

 

Investment Taxes

Residents of Thailand are subject is subject to a withholding tax of 10% on their interest income and Thai-sourced dividend income. Both must be reported on tax returns, together with any interest or dividend income earned from abroad. For non-residents, the witholding tax rate is 15%. Interest and dividend income received from abroad is generally tax-exempt for non-residents in Thailand. Capital gains are treated as ordinary income.

Rental income worldwide is taxable for residents in Thailand. Non-residents pay tax on Thai-sourced rental income only. Rental income (after allowable costs) is treated as ordinary income. In addition House and Land Tax is payable at a rate of 12.5% of rental income. For more details, please see Investment Taxation.

 

Tax Treaties

Thailand has signed tax treaties with 55 countries worldwide. The withholding tax rates are 15% for interest and royalties, and 10% for dividends. Withholding taxes rates on payments made to taxpayers in other countries which have tax treaties with Thailand in place (or non-residents in Thailand) can be reduced. The treaties also mean that the amount of withholding tax charged on money flowing into Thailand by the originating country can be reduced. For more details, please see Tax Treaty Considerations.

 

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