Thailand tax system - taxation of Thai companies and individuals: VAT, income tax and capital gains. Tax treaties of Thailand.
Basic taxes (briefly)
|Corporate tax (in detail)||The standard income tax rate is 20%|
|Capital gains tax. Details||All capital gains earned by a company are treated as ordinary revenue for tax purposes|
|VAT. Details||The standard VAT rate is 10% (temporarily - until September 30, 2021 - reduced to 7%)|
|Other taxes||Social Contributions, Property Tax, Inheritance Tax|
|Stamp duty||1 Baht|
International tax agreement
|Australia, Austria, Bahrain, Belgium, Bulgaria, Canada, Chile, China, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hong Kong, Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Korea, Kuwait,Luxembourg, Malaysia, Mauritius, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Romania, Russia, Seychelles, Singapore, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey, Ukraine, United Arab Emirates, United Kingdom, USA|
Personal income tax
Residents and non-residents of Thailand are both taxed on their income from employment and business in Thailand, regardless of where the remuneration is received. Residents of Thailand are taxed on income from foreign sources when such income is received in Thailand.
The tax is paid at progressive rates:
- For income up to THB 150,000 at the rate of 0%;
- From THB 150,000 to 300,000 at the rate of 5%;
- From THB 150,000 to 300,000 at the rate of 5%;
- From THB 300,000 to 500,000 at the rate of 10%;
- From THB 500,000 to 750,000 at the rate of 15%;
- From THB 750,000 to 1,000,000 at the rate of 20%;
- From THB 1,000,000 to 2,000,000 at the rate of 25%;
- From THB 2,000,000 to 5,000,000 at the rate of 30%;
- Over THB 5,000,000 at the rate of 35%.
Gains from the disposal of assets are taxed as ordinary income. Gains from the sale of shares listed on the Stock Exchange of Thailand, certain securities listed on stock exchanges of ASEAN countries and some other assets are exempt from tax.
Dividends from Thai companies are subject to 10% withholding tax, but a taxpayer may opt for a progressive rate, crediting the tax paid at source under special rules. Interest income is subject to 15% tax, also with the option of paying tax at a progressive rate.
Corporate income tax
Thai companies pay corporate income tax on their worldwide income, while foreign companies pay tax on the income sourced in Thailand.
The standard corporate income tax rate is 20%.
Gains from the disposal of assets are included in the total taxable income.
Dividends received by a company listed on the Stock Exchange of Thailand from another Thai company are exempt from tax provided that the shares are held for three months before and three months after the dividend is received. In the case of non-listed companies, only half of the dividends received are exempt if the above conditions are met; full exemption is granted subject to an additional criterion – holding at least 25% of the voting shares in the Thai company that distributes the dividends.
Dividends received from foreign companies are exempt from tax provided that at least 25% of the voting shares in a foreign company are held for at least 6 months and profits are taxed in that foreign jurisdiction at least at 15% rate.
Thailand has no CFC rules.
Payment of dividends is subject to 10% withholding tax. Payments of interest and royalties are taxed at 15% rate.
The tax rates can be reduced under double tax treaties (DTT).
The standard VAT rate is 10%.
Social security contributions
Social security contributions are generally paid at the rate of 5% of the employee's remuneration, but not more than THB 750 per month. Contributions are paid by both the employer and the employee.
An annual municipal tax is payable on land and buildings. The maximum possible tax rates, depending on the purpose of use of the property, vary from 0.01% to 0.7% and will increase to 0.15% - 3% from 2022.
Inheritance tax is payable by heirs if the total value of the estate cumulatively exceeds THB 100 million. The tax rate is 10%, the rate is 5% for relatives in directly ascending and descending lines; spouses are exempt from inheritance tax.
Stamp duty applies to various documents and instruments. The rates vary depending on the type of document. Stamp duty is levied on most commercial documents either as a fixed amount or at the rate of THB 1 per THB 1,000 of the contract value.
International tax treaties
Thailand has 49 Double Tax Treaties (DTC) with the following jurisdictions:
48 DTCs: Australia, Austria, Bahrain, Belgium, Bulgaria, Canada, Chile, China, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hong Kong, Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Korea, Kuwait, Luxembourg, Malaysia, Mauritius, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Romania, Russia, Seychelles, Singapore, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey, Ukraine, United Arab Emirates, United Kingdom, USA.
Thailand has also signed and ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The MLI entered into force for Thailand on July 1, 2022.
Thailand has foreign currency controls aimed at centralizing foreign exchange transactions, monitoring capital outflows, and maintaining the stability of the national currency.
There are rules for compulsory repatriation and sale of foreign exchange earnings, placing funds on a deposit, buying foreign currency for trade and investment transactions, etc.
Taxes of Thailand
|Min. rate for corporate tax||20%|
|Capital gains tax||Regular rate|