Thailand Income Tax. This guide explains how Thailand taxes individuals and companies in practice: residency and scope, personal income-tax mechanics and brackets, corporate taxation (including SME and incentive regimes), withholding and reporting rules, the treatment of foreign-sourced income and recent policy changes that materially affect cross-border taxpayers.
Tax liability in Thailand turns first on residency. An individual is generally tax resident if they are present in Thailand 180 days or more in a calendar year; residents are taxed on Thai-sourced income and — depending on timing rules discussed below — may also be taxed on certain foreign-sourced income when it is remitted into Thailand. Non-residents are taxed only on Thai-source income, often under final withholding arrangements for specific income types. (Always confirm presence-days with precise travel records; simple month counts can mislead.)
Thailand uses a progressive PIT scale with a tax-free floor and marginal rates that rise to the top bracket. The headline bands in current Revenue Department practice are: exempt up to THB 150,000, then 5%, 10%, 15%, 20%, 25%, 30% and a top rate of 35% for the highest incomes. These rates apply to net taxable income after allowable deductions and personal allowances.
What is taxable? Salary, bonuses, allowances (cash and many benefits in kind), business and professional profits, rents, royalties, interest and capital gains (subject to special rules) are within the PIT base. Common deductible items include certain social-security contributions, approved pension/retirement scheme contributions within limits, life-insurance premiums up to statutory ceilings and specified personal allowances (spouse, children, etc.). Payroll withholding by employers is the practical first step for most employees, with annual reconciliation via a personal tax return where required.
Practical tip: when modelling net pay, include employer social-security and payroll withholding as part of the total employment cost — Thai employer burdens and the progressive PIT scale can materially affect net compensation figures.
For companies resident in Thailand, the headline corporate income tax (CIT) rate is 20%, applied to net taxable profits. Smaller companies and certain taxpayers may benefit from graduated SME rates and special reliefs: commonly-applied SME structures have lower rates on the first tranche of net profit (for example separate reduced bands for very small profit brackets). Practitioners routinely model a 20% baseline and separately calculate SME concessions where the company meets qualifying turnover and capital tests.
Because many businesses use tax incentives (e.g., BOI promotion), effective tax burdens can differ widely between an ordinary 20% CIT and an incentivized project with years of exemption followed by normal rates. For multisite groups and multinationals, factor in both statutory rates and incentive expiry timing in cash-flow modelling.
Thailand operates an extensive withholding system — employers withhold from salaries and payers withhold on many domestic and cross-border payments (interest, royalties, service fees, rents and dividends in some cases). Rates depend on payment type and recipient status; treaty relief often reduces WHT on cross-border payments but requires documentary proof. WHT is the primary compliance touchpoint: improper withholding by paying agents creates assessment and penalty exposure for the payer, so operational controls around supplier classification and tax-cert handling are essential.
Historically Thai residents were taxed on foreign-sourced income only when it was remitted into Thailand in the year it was earned or later. Since 2024 the Revenue Department and tax policy makers have actively clarified and amended how remitted foreign income is taxed, including draft relief that preserves tax-free treatment for income remitted in the same year (or the immediately following year) and taxes income remitted after that window. Practical consequence: the timing of repatriation (when you bring foreign cash into Thailand) can change the taxable outcome; careful cash management and pre-remittance planning now matter more. Taxpayers should obtain current Revenue guidance before moving large foreign receipts into Thailand.
Practical example: a Thailand tax resident with significant dividend or consultancy receipts overseas should model three scenarios — (a) keeping funds offshore, (b) remitting within the same year (likely non-taxable under recent relief drafts), and (c) remitting later (taxable) — and document sources and timing that support the chosen treatment.
Thailand has implemented legislation to support the OECD Pillar Two global minimum tax (15% “top-up”), effective from January 1, 2025, which imposes a top-up tax on large multinational groups meeting the 750 million-euro consolidated turnover threshold. While this is a corporate-level measure, it affects group effective tax rates and therefore investment location decisions and transfer-pricing analyses for multinational employers operating in Thailand. Expect reporting complexity and coordination between local CIT filings and global GloBE returns for qualifying groups.
Individuals file annual tax returns (calendar year), while employers submit monthly withholding and social-security reports. Corporate taxpayers file annual CIT returns and provisional tax payments where required. The Revenue Department’s data-matching, bank information exchanges and cross-border cooperation mean that large or unusual transactions (offshore remittances, large one-off capital gains, related-party payments) are high-audit triggers. Late filing or underpayment results in surcharges, interest and potential penalties — keep contemporaneous documentation (bank remittances, contracts, invoices, payroll evidence) and maintain a defensible file.
Residency review: confirm whether the 180-day test applies for the tax year. Keep travel logs.
Model net income: use gross-to-net calculators that include employer social-security and progressive PIT bands.
Remittance strategy: plan timing of foreign-sourced receipts; seek written tax guidance when remitting large amounts.
WHT management: classify payees correctly; collect tax certificates and treaty forms to avoid unnecessary over-withholding.
Incentives & BEPS readiness: if you are a multinational, model the Pillar Two top-up and check eligibility for BOI or other incentives.
Documentation: bank remittance proofs, employment contracts, audited accounts and tax returns are the defense in an audit.
Local advice: regulatory nuance (e.g., how Revenue applies remittance timing) is shifting — get up-to-date counsel before repatriating funds.
Thai Revenue Department (official PIT and withholding guidance).
PwC / KPMG / EY local tax alerts and gov-gazette notices for Pillar Two and CIT changes.
Specialist local firms and Revenue circulars for foreign-income remittance rules and draft relief.
Thailand’s taxation landscape is familiar in structure (progressive PIT, 20% headline CIT, broad withholding) but the practical outcomes increasingly hinge on timing — especially the timing of remittances of foreign income — and on global rules that affect multinationals. For individuals with cross-border income, plan the remittance schedule consciously and get current Revenue guidance before transferring large sums home. For companies, test the group for Pillar Two exposure and model incentive expiries against ordinary CIT.