Personal Income Tax

How does Personal Income Tax work in Thailand?

Personal Income Tax (PIT) is a direct tax levied on the income of a person. A person means an individual, an ordinary partnership, a non-juristic body of a person, and an undivided estate. In general, a person liable to PIT has to compute his tax liability, file a tax return and pay tax, if any, accordingly on a calendar year basis. Income chargeable to the PIT is called "assessable income". The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, is also treated as assessable income of the employee for PIT. Assessable income is divided into 8 categories as follows:

• Income from personal services rendered to employers
• Income by jobs, positions, or services rendered
• Income from goodwill, copyright, franchise, other rights, annuity, or income like yearly payments derived from a will or any other juristic Act or judgment of the Court
• Income like dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holding, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings
• Income from letting of property and from breaches of contracts, installment sales, or hire-purchase contracts
• Income from liberal professions
• Income from construction and other contracts of work
• Income from a business, commerce, agriculture, industry, transport or any other activity not specified earlier

How is income tax calculated in Thailand?

Thailand makes use of a progressive tax system for personal income tax. The tax year in Thailand ends on December 31, and any due tax filings and payments must be submitted by March 31 of the following year. Personal income tax filings may be submitted by paper or online. For income derived from renting property, the liberal professions, and all income that falls within these activities; business, commerce, agriculture, transportation, etc, the taxpayer must also file a half-yearly tax return on September 30. These taxes may be redeemed as tax credits at the end of the year.