Does a foreigner need to pay Personal Income Tax in Thailand?
If you are earning an income in Thailand then you may be subject to Personal Income Tax.
Two Rules determine whether foreigners are subject to Personal Income Tax.
- Source rule
If a foreigner earns income in Thailand, then they are subject to Thai income tax through the source rule. - Residence Rule
This is more complex and starts with determining tax residency. If a foreigner spends more than 180 days in Thailand within a calendar year then they will be deemed tax resident in Thailand.
If tax resident then any foreign sourced income is subject to Thai Personal income tax, ONLY if it is brought into Thailand within the same calendar year that the income was gained.
This means that if you have a salary from your home country and bring your wages into thailand each month, technically you are subject to Thai personal income tax.
Alternatively if you leave the funds in your overseas bank and make a yearly transfer to Thailand in January you have no tax obligations in Thailand.
In reality however, many individuals with overseas income don't declare this to the Thai authorities and as such don't pay Thai income tax. Determining the source and date earned would be a challange for thai authorites so they spend little time enforcing this, unless they have sufficient evidence.
If you are working legally in Thailand you will expect to be paying income tax.
Types of Personal Income Tax
There are 2 different forms related to personal income tax, depending on where your income is being generated.
Phor Ngor Dor 91 (PND 91 ภ.ง.ด.91)
Anyone who earns salary from a company every month ( wages + bonus +OT + any other income benefit from the company must be calculated as his/her income) must file Phor Ngor Dor 91.
Phor Ngor Dor 90 (PND 90 ภ.ง.ด.90)
Business owners or anyone who has additional income through commission, freelance work and any other sources of income which are not as a salaried employee must file Phor Ngor Dor 90
If you have wages from a company and also have freelance jobs, extra money from your business (under your name), must file both Phor Ngor Dor 91 and 90.
Tax Rates
The tax rate that you pay is based on your total yearly income, as detailed below.
| Net Income in THB | Personal Income Tax Rate |
|---|
| 0 to 150,000 THB | Exempt 0% |
| 150,001 to 300,000 THB | 5% |
| 300,001 to 500,000 THB | 10% |
| 500,001 to 750,000 THB | 15% |
| 750,001 to 1,000,000 THB | 20% |
| 1,000,001 to 2,000,000 THB | 25% |
| 2,000,001 to 5,000,000 THB | 30% |
| 5,000,001 THB + | 35% |
Each of these rates are paid in order until the total salary amount has been reached.
eg. with a taxable income of 350,000 THB
First 150,000 pays 0 tax
Next 150,000 pays 5% which is 7,500 THB
Then the remaining 50,000 pays 10% which is 5,000 THB
Meaning a total tax of 12,500 THB, which would normally be splitted into 12 equal payments of 1,041.66 and deducted from the employees wages each month.
Deductable Allowances
Individuals are also able to make deductions from the total income, which reduce the amount of income which they are taxed on.
For example everyone is entitled to a personal tax deduction of 60,000 THB so if your total yearly income was 410,000 THB then the amount of taxable income considered in the Tax Rates section would be 350,000 THB
The available deductions and their eligibility are detailed below:
Personal Tax Deduction
60,000 THB - everyone can claim this.
Spouse Tax Deduction
60,000 THB - This can only be claimed if you are married and your spouse has had no income in that tax year.
Child Tax Deduction
30,000 THB per person, for children under the age of 20 (or under 25 if the child is studying), if born before 2018.
60,000 THB per person for children born after 2018.
If the children are adopted then a maximum of 3 children can be claimed, there is no limit for biological children.
Parents Tax Deduction
30,000 THB per biological parent that is over 60 in the tax year and dependant on you. Siblings cannot share this deduction, only 1 child can claim per parent.
30,000 THB per spouses parent is available on the same terms, providing that the spouse has had no income during the tax year.
Disability Deduction
60,000 THB per person for dependents with disabilities, provided that the disabled person has a disability card and has not earned more than 30,000 THB in the tax year.
Antenatel & Delivery Expenses
Maximum of 60,000 deductable as actualy paid, which must be verified with receipts. Expenses can include delivery costs, medicines, medical supplies and hospital stay.
If the wife has no income then this deduction can be passed to the husband.
General life insurance premiums Including accumulative insurance
Maximum of 100,000 THB, deductable as actually paid, provided the coverage is for a minimum of 10 years.
If insurance is for a spouse with no income it can be deducted to a maximum of 10,000 THB
Personal health insurance premiums
Maximum of 25,000, deductable as actually paid. Includes health and accident insurance.
Must not exceed 100,000 THB deduction when combined with General life insurance premiums
Parents' health insurance premiums
Maximum of 15,000, deductable as actually paid, without age restrictions.
If spouse has no income in the tax year then can increase an additional 15,000 THB, as actually paid.
Annuity life insurance premiums
Maximum of 300,000 THB and not more than 15% of total annual income, deductable as actually paid.
If any deduction for life insurance premiums then limit is reduced to 200,000 THB
Total deduction combined with investment categories for retirement, must not exceed 500,000 THB.
Social Security Fund
Deductible as actually paid, but not more than 7,200 baht (previously not more than 9,000 baht)
Retirement Mutual Fund
Deductible as actually paid, not more than 30% of total annual income.
Maximum 500,000 THB when combined with other retirement funds.
Government Pension Fund
Deductible as actually paid, not more than 15% of total annual income.
Maximum 500,000 THB when combined with other retirement funds.
Super Saving Funds
Maximum of 200,000 THB, deductible as actually paid, not more than 30% of total annual income.
Maximum 500,000 THB when combined with other retirement funds.
National Savings Fund
Maximum of 13,200 THB per year.
Maximum 500,000 THB when combined with other retirement funds.
Social Enterprise Business Investment
Maximum of 100,000 THB, deductable as actually paid.
General Donations
Up to 10% of income after tax, deductible as actually paid.
Donations for education, sports, social development and government hospitals
Up to 10% of income after tax, deductible as 2X actually paid.
Political party donations
Maximum 10,000 THB, deductable as actually paid.
Housing interest
Maximum 100,000 THB, deductable as actually paid (interest portion only).
Deceased Deduction
60,000 THB automatic deduction on year passed away (for final tax due from or returned to estate)
Deduction of undivided inheritance
60,000 THB deduction
Ordinary partnership or non-juristic body of persons
60,000 THB per person, not exceeding 120,000 THB in total
Community enterprises operate in the form of ordinary partnerships or non-juristic body of persons.
Maximum 60,000 THB, deductable as actually paid.
How & when to pay Personal Income Tax
This is normally handled in 2 parts.
Companies will calculate the expected tax due for each employee and deduct 1/12 of the yearly rate each month from the employees salary.
This is then submitted with a form Phor Ngor Dor 1 (PND 1 ภ.ง.ด.1) and paid to the revenue department by the 15th of each month.
In addition everyone earning income need to file their personal income tax report each year.
This needs to cover the previous year and must be filed by the 31st March if filing a paper copy, or by the 8th April if filing online. As mentioned earlier, this requires either (or both) of forms PND 90 and PND 91.
Exceptions are made for individuals earning less than 120,000 THB per year, or 220,000 THB if married.
Certain forms of business also require a mid year filing covering the first six months, to be submitted by 30th September.
If everything was calculated correctly during monthly salary deductions then there will often be nothing to pay when the yearly (or half yearly) personal tax return is filed. In this case everything is complete for the year.
Or, if there is a difference in the tax due and the tax paid this balance will need to be cleared, which either requires an additional tax payment from the individual, or will result in a tax refund from the revenue department.
This can often occur if deduction eligibility or salary changes during the year, or if HR only become aware of certain items at the year end.
Fines & Late Payments
If tax is not paid within the provided deadline then an additional 1.5% shall be due for each partial or full month until the payment is made.
If the tax return is not filed ontime, or tax not paid, resulting in an officer issuing a summons then a fine of an additional 100% or 200% of tax due shall be applied. These fines may be reduced or waived in accordance with the regulations prescribed by the Director-General, with the Minister's approval.
In case of not submitting P.N.D. 90, 91 or 94 within the deadline, shall be liable to a criminal fine not exceeding 2,000 THB.
In the case of deliberately giving false statements or provide false or fraudulent evidence to avoid or attempt to evade taxation Imprisonment from 3 months to 7 years and a fine from 2,000 THB to 200,000 THB.
Deliberately neglecting to file a tax return to avoid paying tax shall result in a fine of not more than 200,000 THB, imprisonment of not more than 1 year, or both.