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Income Tax in Thailand: Who Needs to Pay & How Much

I have a few working in Thailand related posts on TTL, and one common question that comes up is related to income tax.

Specifically, how much tax does a foreigner have to pay on his/her earnings, and whether others such as digital nomads, who are not currently paying tax in their country of origin, have to pay tax in Thailand.

Tax law in Thailand is actually pretty complicated, so in this post I’ll just cover the need to know stuff.

I would also advise that if you aren’t on PAYE with a company and are required to do your own return that you get an accountant. Tax returns have to reported in Thai, which presents a language barrier for many.

thailand income tax

Income Tax on Earnings

Income tax in Thailand is based on assessable income. The definition of “assessable” covers the following:

  1. Employment or services rendered
  2. Professional fees
  3. Interests, dividends and capital gains on securities
  4. Royalties
  5. Copyrights
  6. Rental of properties/assets
  7. Income from contractor related activities
  8. Others

The Thai Tax Year

The Thai tax year runs from 1st January to 31 December. An income tax return needs to be made to the tax office by the 31st March, for the prior tax year. Payments need to be made immediately because there are penalties for delayed processing and settlement.

For those earning income from property selling or engineering, architecture, accountancy, fine arts and the art of healing, the tax return must be filed on or before the 31st of September, with the tax due on or before the 30th of June of the following year.

Foreigners should note that when renewing your work permit, you will need to show a copy of your tax submission for the previous year.

Thai Income Tax Bands – 2016

Income Band Rate Notes
0  – 150,000 Exempt
150,000 – 300,000 5% New Tax Rate
300,000 – 500,000 10%
500,000 – 750,000 15% New Tax Rate
750,000 – 1,000,000 20%
1,000,000 – 2,000,000 25% New Tax Rate
2,000,000 – 4,000,000 30%
4,000,001 and Up 35% New Tax Rate (Reduced from 37%)

Yes, I know what you’re thinking, Thailand’s tax rates are pretty much the same as my home country! One saving grace is that Thailand does not have a 45% tax rate like some countries.

All forms of earnings are generally taxable and fall under the personal income tax bracket. This ranges from a work salary to capital gains or dividends, lease transactions, or even selling clothes on the sidewalk – as long as the earnings are over 150k per year.

Working Online (Digital Nomads) & Paying Tax in Thailand

There’s a a myth among the “work online” community, which, by the way, avoids the work permit issue because the current law simply doesn’t legislate for it, that Thailand is a grey tax zone; meaning one can work inside Thailand and not pay tax in their home country, or Thailand for that matter.

This isn’t true. Everyone has a tax liability in Thailand. So if you're a digital nomad in Thailand, working as a web developer, blogger, web cam stripper or whatever, you should be aware that if you aren’t paying tax in your home country, you will need to pay tax in Thailand.

Thailand is not a tax haven. It never has been, and isn't likely to ever be.

Resident Vs Non Resident

The law stipulates that anyone who resides in Thailand for longer than 180 days is considered a resident for tax purposes. That’s right; not a resident as in a citizen, but citizen as in eligible to pay tax. This means you’ll need to pay tax on your global income, which is money you earn in your home country and any other country.

If you are a foreigner and reside in Thailand for fewer than 180 days each calendar year, then you are will only have to pay tax on the earnings that you earn inside Thailand.

Now, before you say, “But I haven’t got a work permit!.” It doesn’t matter. Those who do not have a work permit are NOT exempt from paying tax.

“But how will they know I’m not paying tax in my home country”, you might ask.

I will tell you.

Double Tax Treaties

Thailand has double tax treaties with nearly every country on the planet. The purpose of a tax treaty is to prevent a company from one country being taxed twice on income earned in the other country. This also applies to individuals performing services in the other country.

So, if you are paying tax in your home country, you’re legal. If you’re in the “grey zone”, you’re not. You see, it’s very likely that when Thailand finally does get around to addressing the digital nomad visa/work permit issue, that they’ll realise most of these people aren’t paying tax in their home countries and by law should be paying tax in Thailand. And tax is always collected on retrospective earnings. Food for thought.

How to Get a Tax Number

If you are earning profits and residing in Thailand, you need a tax ID number to pay your dues. The tax office will happily grant you a tax number. To acquire one, you’ll need a passport or identity card, and need to demonstrate why you need a number.

Tax Deductions & Allowances

Like every other country, tax deductions and allowances are available in Thailand too. These are intended to reduce the tax load and make it seem almost generous that the tax man isn’t taking the shirt entirely off your back, so to speak.

Deductible Expenses

Source of Income Deduction Rate Allowed
1. Employment Income 40% – not more than 60,000 THB
2. Copyright Income 40% – not more than 60,000 THB
3. Rental Income from assets and properties 10% – 30%
4. Profession:
a. Medical Professionb. Liberal Profession		 a. 60%

b. 30%
5. Actual Expense or Contract Work 70%
6. Actual Expense or Business Activities 65% – 85%

Tax Allowances

Aside from the scheduled tax allowance provided in the table below, there are limited allowances for the following:

  1. Home mortgage interest payments
  2. Purchases of retirement mutual fund and long term equity fund
  3. Contributions to charities
  4. Social Insurance contributions
  5. Life Insurance premiums
  6. Qualified provident fund payments
Amount Exemption
30,000 Both for the taxpayer and the spouse
a.15,000

b 2,000

 For each child

Education allowance for each child
30,000 For the taxpayer and spouse’s parents, if the parents are over 60 years old and whose income for the tax year is below 30,000 Baht

Got a specific question related to tax in Thailand? Leave it in the comments section below.

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  1. Hello I do have a question about income and taxes. First of all I have a Thai friend that wants to hire me at his business. Is it true that for US citizens they must pay you a minimum of 60,000 baht a month in order to hire you and give you a work permit. If this is true then he will have to pay me 720,000 baht a year and at a 15% tax rate that is 108,000. So are you saying that at the end of the year I would be responsible for 108,000 baht but with a deduction of 60,000 baht for my wife and I and 15,000 for a child which would be 75,000 I would need to pay 33,000 baht to the Thai tax office every year?

    Reply

    • It would seem that way, though I’m not 100% clear if the spouse and child deductions apply to non-Thai partner/children, or partner/children of non-Thai worker.

      There is an update to the deduction as follows:
      Deductible expenses for income under Sections 40 (1) [employment income and other fringe benefits derived from an employment contract] and 40 (2) [service income derived from services that are not professional services and are not services provided as part of a business that requires substantial capital investment] of the Thai Revenue Code would increase from 40% of income (capped at 60,000 baht) to 50% of income (capped at 100,000 baht).

      Reply

  4. Hi, I and three other friends jointly bought a condominium lease in Phuket which is to be leased out part of a hotel the property is still under construction now will be completed by 2019.

    I have a few questions as follows:-

    1) The developer has offered a 5% interest for the full payment we made – is this taxable ? and If yes how are we to file the income tax in Thailand ? Is there a minimum amount and below where we are not required to file tax forms ?

    2)Is there a different treatment for rental income that we expect to receive in the future ?

    3) The property is held jointly in 4 names, how do we file income tax assuming that we have to ? Is it filed jointly or separately filed by 4 separate persons ?

    4) Based on what I have read all of us will be non tax resident in Thailand as we do not spend more than 180 days in Thailand in any one year.

    5) Can you recommend an accountant or tax preparer that can help me file the tax forms in Thailand as none of us are anywhere near Thailand ? and How much would this usually cost ?

    Reply

  5. I propose to take up residence in Thailand in next 2 months and propose to reside for more than 180 days & presumably will come under Tax net. I shall have no income in Thailand. My present income is full time online trading in CFD, Forex, Commodities etc. through my broker in Cyprus. Will it be considered a foreign income & the amount repatriated to Thailand will be taxed(? The amount will not be taxed in my home country since I shall be treated non-resident there

    Reply

      • I have deleted your capital letters. There is no need to shout.

        What part haven’t I answered. I have answered this in full twice now. Please read my latest answer thoroughly. You can ask any reputable accountant and they will tell you the same.

        Reply

    • So you will be non-resident in your home country but living in Thailand. So your tax liability will be in Thailand. Thailand is not a tax haven, so when you bring your untaxed earnings into Thailand to spend, if you have not paid tax in your home country then you will be subject to tax in Thailand. Whether you choose to declare this or not is your business, but at some point, assuming your home country has an income tax system too, you will have to pay tax. Unless of course you incorporate a company in a tax-free country and go to spend the money there.

      As I have said previously: Avoiding tax is the easy part. You can incorporate a company offshore and be non-domicile in your home country. But gaining access to the money to spend is the hard part. Because the moment you transfer money from the country your company is incorporated in, you will have to pay tax. To avoid this, you would need to take up residence in a tax-free country too. But even then, what if you visit your home country and need to transfer money to a bank account there to spend. This is where you become unstuck.

      Reply

      • Dear Sir,
        still there is an unclear part in your answer.
        You say “if you bring your untaxed earnings….”
        What about if one brings his existing capital? Which might be taxed or not in the past.

        What about if you bring your earnings in the next year? The eranings are already considered a capital, as somewhere was mentioned that the eranings are taxable in Thailand if brought into Thailand in the same year when earned.

        Please clarify this?

        regards

        Reply

        • I quote: “Earnings arising outside Thailand – includes inter-alia job income; rental income; pension income; investment income (ie interest and dividends) that does not come from activities in Thailand – is only taxable in Thailand to the extent that you bring it into Thailand in the same Thai tax year that you earned it. If you are able to show that you are not relying on current year income for current year spending in Thailand (ie you are living off ‘capital’ (= earnings of previous years)) you will not be taxed in Thailand for those foreign (to Thailand) earnings. In short, Thailand does not tax any of its residents on worldwide income that is not remitted in the same tax year. If you are confident that you can demonstrate that you are spending in Thailand out of prior year foreign earnings and not out of current year earnings you can claim a tax refund.”

          But you still need to file a tax return. And as I’ve said, even if you are exempt from paying tax in Thailand, you still have a tax liability in your home country when the money is brought in, regardless of where you have been stashing it.

          Reply

          • Dear Sir,
            Thank you. It becomes clearer.
            I guess nobody wants to pay unnecessary taxes for the Politicians to become richer.
            So if you spent all your earnings in the next tax year in Thailand, then you do not need to pay anything in your home country as there will be nothing to transfer there. Correct?

            1. Anyway I can keep my earnings under company name and transfer as needed, when needed.
            Are there any rules in Thailand about offshore companies that belong to Thai residents?
            If I am a Thai resident and have a company outside Thailand, which does not do any business in Thailand, what are the tax liabilities for such a company and the Thai resident/shareholder?

            2. if you hold your assets outside the home country and live in Thailand, what happens when the banks report you accounts to the Thai authorities?
            Will this couse any problems in Thailand? Those will be assets that have been earned outside Thailand and not brought into Thailand and will become capital in the next year.

            Regards

            Reply

            • Correct. But you still need to file a tax return.

              1. You are brining money into Thailand, so again, you need to file a tax return to show the money is not being spent in the year it is earned.

              2. Why would there be a need to report you? You should already be transparent about your earnings through your tax return.

              If you are earning a considerable income and you are seeking to avoid paying tax, it really would pay for you to spend some of that money on an accountant. You live in Thailand where accountants are relatively inexpensive, so just pop down to your local accountants and pay for an hour of their time to fully understand the requirements. My knowledge is proficient for the average person, but not for complex tax avoidance.

              Tax may make some politicians richer in corrupt countries, but Thailand offers free medical care to all its citizens, including the very poor and disabled. So you if you are benefiting from living in Thailand and using public services such as parks, roads, schools, hospital, cultural sites, etc., then it won’t hurt you to contribute to society and help those less fortunate than yourself.

              Reply

              • I am equally interested to pay tax in a country where I am resident and live permanently. All I wanted to know whether my type of income will be treated as foreign income and whether the tax will be imposed only on amount that I shall bring in to Thailand in the particular tax year. I think my query is clarified by your answer

                Reply

              • Dear Sir,
                Thank you.
                You are correct, however there are few factors I need to consider, that is why I ask the questions in details.

                I am not a Thai resident. I am considering moving as Retiree to a country where I pay limited and reasonable amount of tax. It might be Malaysia, Thailand, Mauritius etc. Once the country is selected, I will deploy a tax consultant in the relevant country.

                1. In regards to tax returns-do I have to fill tax return based on Worldwide Incomes if I am a Thai resident/non-citizen on Retirement visa? I know that all money sourced from Thailand have to be in the tax return, but what about the incomes outside Thailand and not brought in Thailand?
                2. All banks are starting reporting based on the residency of the account owner. So my account will be reported in Thailand if I am a Thai resident. If I do not declare in the Thai Tax return the money earned and kept outside Thailand, this might cause problems.

                And last but not least, I have been living in lots of countries and everywhere I end up paying tax and not getting any benefits from it. I have always had to pay for hospital, security, education for my children, government services. Maybe somewhere taxes are used for good of the people, but I have not seen this.

                Even Thailand is known as corrupted country-you better know the past and what was in the news in regards to your ex-president.
                And even If I pay taxes in Thailand, what benefit do I get for me and my family? As a non-citizen, one cannot get medical aid, on the contrary, the hospitals rip foreigners apart when they end up there. I need a very expensive insurance to cover part of the costs. Schools, government services, etc., all is paid for. Just an example – To visit a park, a foreign retiree is paying few times higher fee than a local.
                So excuse my statements, but that is the reality I see.

                Regards

                Reply

  6. I am considering retiring to Thailand from the UK. I would like to understand the tax position on receiving my private pensions in Thailand. I assume it would be treated as foreign income but would it be taxed?

    Reply

  7. I find this site useful as it clears up the gossip/ misinformation area. Someone had a question about land prices in or around major cities. I live in Surin province. Land is measured in RAI (ไร่๗ ไ้รแ้), which is some fraction of an acre. I think either 3/4 or 4/3, but it doesnt really matter. Here 20 Rai of land outside Surin costs 3m Baht, or 1 Rai = 150,000 บาท. Your Thai partner will own it, but that does not stop you sharing any profit on the land (either crop or resale, if a contract between you exists between you.

    Reply

    • I’m not 100 percent sure on this. I could be wrong… but under Thai labour laws I don’t think you could profit directly from harvesting crops or the resale of land, unless you set-up a Thai company and registered your interest in the land through that company. In this situation, I think you’d probably want to say that your partner chooses to give/gift you x amount of money rather than that you are profiting from the land, as it may be seen at a legal level that your wife bought the land with your money, put it in her name and is giving you the profit. Your wife can just gift you money from her income (not necessarily attributed to the land), which she would have paid tax on anyway. In this regard it would just be a case of a wife giving her husband money.

      1 rai = 0.39 acres (according to Google) 🙂

      Reply

  8. Hello,
    the law say:
    “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.”

    If one has incomes outside Thailand and does not bring those in Thailand in the year of earning, those are non taxable in Thailand.
    Please advise what is wrong with this as it is noty mentioned in your article?

    Reply

    • Also, in response to the very first comment below ThailandLife itself says

      “TheThailandLife says

      In terms of earnings on investments overseas, while living in Thailand, there’s a rule that foreign income is only subject to tax in Thailand if you bring it into the country in the same year it was earned.”

      So ThailandLife please kindly clarify. Thank you.

      Reply

      • You have clarified the question with my answer:) Foreign income is only subject to tax in Thailand if you bring it into the country in the same year it was earned. But also remember that it is likely your country has a double tax treaty with Thailand, so if that income has already been taxed in your home country then it is NOT eligible to be taxed in Thailand.

        Reply

        • Hello,
          I will try to ask the question in clearly manner.
          Let’s assume that I reside in Thailand and I am a tax resident in Thailand.
          Let’s assume that I receive incomes/interest in Offshore bank account from cash deposits and Intellectual Property Rights(Royalties) and those are not taxed in my home country as i do not reside there.

          Accordingly the law reading those incomes are not taxable in Thailand if they are remitted in the next tax year or not remitted at all in Thailand.
          IS THAT CORRECT?
          The offshore banks will start reporting the account balances in the country of residency(Thailand in this case) as from this year.
          Will this cause any tax liabilities/problems for a Thai resident (on retirement visa)?

          Reply

  9. I got married in January last year and work for a company legally in Bangkok. However, they did not record my marriage. They are now aware. Do I deserve a tax rebate and, if so, how much? My salary is above 1 million baht a year but below 1.5 million. Does my wife get a rebate? She is currently on 5% tax?
    Regards,
    Mark

    Reply

  10. Hello! Thanks for the very useful information!
    Do you have a recommendation for an accountant, I would like someone to file my tax return for me for 2016. Nearly all my income is from renting out my four Thai properties – is it correct that there is a 30% deduction for rental income of homes/condominiums?
    Best wishes
    Jan

    Reply

  11. The accountant of a friend of mine living in Thailand claimed: if you have no work permit, and mainly work “online” for business partners outside of Thailand, it is tax free. As: “no work permit” -> “no tax number” -> “no taxes”. However this clearly implies: you are not self employed working in Thailand for Thai business partners or are “employed” by a Thai employer.
    Anyway, no idea if that is “correct”, just liked to mention it in regards to your “Resident Vs Non Resident” paragraph, which basically contradicts the accountant I mentioned.

    Reply

    • Well, technically he is right because you need a tax number to pay tax. But they’ll happily issue you one 🙂

      The point here is that if you are paying tax on your income outside of Thailand they you don’t need to worry, if that is, you are a resident of a country that has a double tax treaty with Thailand.

      The issue here is that a lot of people are “hiding out” in Thailand and working online, believing that Thailand is a grey tax zone, or even a tax-free haven. It isn’t.

      Sure, you don’t need a work permit (yet) because the current law hasn’t been updated to enforce rules for this type of work and they aren’t sure how to tackle it, but regardless of the work permit issue your income needs to be taxed either in your home country or in Thailand.

      If you earn money, you have a tax liability. You will have to pay tax on those earnings, somewhere, at some point. Unless you want to move to the Cayman Islands.

      Reply

  12. Hi, thanks for informative article.

    I have a Thai spouse and currently living in Thailand on the Thai Marriage Visa (and considered a resident).

    I currently have a small consulting project for which I am paid B140,000 for services performed within Thailand.

    Since this “small” income is tax-free (in the 0% tax bracket), do I have to submit income tax returns? PS. The company which commissioned the project is deducting 3% withholding tax from the total amount.

    Reply

    • The company you did the work for deducted 3% withholding tax on the basis that you were being paid as a business entity outside of Thailand. I’d leave it this way, because by definition you have carried out this work illegally, without a work permit, or a business visa — which would enable you to carry out certain acts of business while on a visit to Thailand. You can’t work on a marriage visa. If you had a registered Thai company, you would file a tax return, regardless of whether you earned under the threshold to pay tax. I’d pocket the money and keep quiet 🙂 But be careful doing such work going forward.

      Reply

  14. Hi we are currently in Australia but own condo in Thailand which we rent out – last year we submitted tax return whilst we were staying in Bangkok but this year we will not be returning until Aug 2017. Are we able to lodge tax return online from Australia – I have searched but cant find anything on this. many thanks

    Reply

  17. VERY informative. Thanks! When you mention an amount for tax purposes, sometimes you state that is baht and sometimes there is no designation. Are all income amounts you refer to in baht?

    I receive a death benefit which falls under a narrow exemption in US for taxation and is not taxed. Also, Social Security. I assume neither would be taxed? Also, do I have to have a job lined up first to get a work permit?
    Thank you.

    Reply

    • No, because you will be paying tax in your home country on these investments. Thailand has double tax treaties with most countries which means if you pay tax at home on investments you won’t be required to pay it here.

      Reply

  20. Hi,

    I have 2 Thai kids, aged 17 and 16.
    They have recently moved to Australia to finish their studies.

    Am I, as a Thai tax payer, still entitled to the 15k per child benefit.
    I do realise I won’t get the 2k per education allowance.

    Many thanks,

    Sean

    Reply

  22. This article was actually rather good timing as I was just thinking about income tax in Thailand the other day. I will be retired of course – and I assume that retirement benefits are not taxed – but if I should ever buy a second condo for investment purposes I wanted to know what the taxes would be on rental income, as well as any property taxes.

    Anyway, its good to know that, should I decide to become a webcam stripper while in Thailand, I won’t have to pay taxes in both countries. 

    By the way, in your opinion, do you think that these “digital nomads” truly believe that they are not required to pay taxes? Or do they just figure that if they can get away with it then why bother? Or perhaps they are just rationalizing to themselves why they should not be obligated to pay taxes. After all I’ve found that human beings are very good at rationalizing unethical behavior to get what they want, particularly when the person being short-changed is a government or big company. Of course, I suppose their also might be a few out there who fear that if they register as tax payers now then they will be more likely to get into trouble once the laws change and government cracks down on people doing this kind of work without a work visa.

    Reply

    • In terms of earnings on investments overseas, while living in Thailand, there’s a rule that foreign income is only subject to tax in Thailand if you bring it into the country in the same year it was earned. Of course, if you bought a second condo then you’d have to pay tax on the rental profits.

      I’m not sure in all cases those working online believe they don’t have to pay tax, but I’ve heard the “grey zone” rumour a number of times before. I think Thailand makes for an easy place to hid out and stay off the radar. Thailand doesn’t have its act together in updating the work permit law to cover the digital age, but when it does I’m pretty sure they will start looking at such cases and asking the simple question, “Where are you currently paying tax”. The other thing people should consider is that if you move back to your home country and suddenly start paying tax, they may well ask, at some point — when they see how long your business has been in operation, “where did you pay tax for those years?” Then you’d face the prospect of having to pay a huge tax bill and possibly fines too.

      My advice to anyone working online would be to start paying tax asap; not necessarily because I agree with income tax laws, but because you could save yourself a lot of headache in the future.

      Reply

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