Main Taxes in Thailand
The main taxes in Thailand are:
Direct Taxes:
- Personal Income Tax
- Corporate Income Tax
- Inheritance Tax
- Petroleum Income Tax
Indirect Taxes:
- Value Added Tax (VAT)
- Specific Business Tax
- Customs Duties
- Excise Tax
- Stamp Duty
- Land and Buildings Tax
The primary legal framework for taxation is the Revenue Code, which governs personal and corporate income taxes, VAT, specific business taxes, and stamp duties. The Inheritance Tax is regulated by the Inheritance Tax Act, customs duties by the Customs Act, excise tax by the Excise Act, and petroleum income tax by the Petroleum Income Tax Act.
This overview focuses on corporate (business) taxes in Thailand.
Corporate Income Tax
Companies incorporated in Thailand are liable to corporate income tax on income derived from sources of income both in and outside Thailand.
Companies incorporated outside Thailand are liable to tax on profits earned or accrued from business activities in Thailand and on certain types of income derived from sources within Thailand.
Foreign companies not doing business in Thailand are liable to withholding tax on certain types of taxable income (e.g. interest, dividends, royalties, rents, services) paid from or within Thailand. The standard tax rate is 15 per cent and for dividends it is 10 per cent. Depending on the provisions of double tax treaties, other rates may apply.
The basic income tax rate in Thailand is 20%. The tax rates for small businesses (registered capital does not exceed 5 million Baht at the end of each accounting period, total income from sales of goods and/or services does not exceed 30 million Baht) are 0%, 15% or 20% depending on the amount of profit.
See details in the table:
| Taxpayer | Tax Base | Rate |
|---|---|---|
| Businesses (general rule) | Net Profit | 20% |
| Small Businesses (<5 million Baht capital, <30 million Baht income) | Net Profit ≤ 0.3 million Baht | 0% |
| Net Profit 0.3 to 3 million Baht | 15% | |
| Net Profit > 3 million Baht | 20% | |
| Foreign Companies (Non-operating in Thailand, receiving dividends) | Amounts Received | 10% |
| Foreign Companies (Non-operating, other incomes from Thailand) | Amounts Received | 15% |
| Foreign Companies (Withdrawing profits from Thailand) | Amounts Withdrawn | 10% |
| International Business Center* | Net Profit | 3%, 5%, 8%** |
| BOI Benefited Companies* | Net Profit | 0% |
| Companies in Special Economic Zones | Net Profit | 0% |
Notes:
*Special conditions apply.
**Rates depend on annual operating expenses in Thailand:
- 3% for expenses from 60 to 300 million Baht
- 5% for expenses from 300 to 600 million Baht
- 8% for expenses over 600 million Baht
Value-added tax (VAT)
The standard VAT rate in Thailand is 10%, but it’s currently reduced to 7% until 30 September 2024, subject to possible extension. VAT applies to sales of goods and services, with exports being zero-rated. Certain goods and services, like basic groceries, education, and healthcare, are exempt. Businesses must register for VAT using form VAT 01 either before starting operations or within 30 days after their annual turnover exceeds 1.8 million Baht.
Here’s a table summarizing the VAT rates in Thailand:
| Activity or Goods/Services | VAT Rate |
|---|---|
| Sale of goods/services, import of goods/services | 7% |
| Taxpayers with annual turnover < 1.8 million Baht | Exempt |
| Educational services | Exempt |
| Medical services | Exempt |
| Auditing services | Exempt |
| Domestic transport | Exempt |
| Real estate rental | Exempt |
| Import in duty-free zones | Exempt |
| Export of goods | 0% |
| Services rendered in Thailand but used abroad | 0% |
| International air/sea transport | 0% |
| Trade between custom warehouses/free zones | 0% |
| Sales to UN, its agencies, embassies, consulates | 0% |
Specific Business Tax (SBT)
Specific Business Tax (SBT) in Thailand applies to certain business activities not subject to VAT.
This includes commercial banks, financial institutions, and real estate sales, which are taxed at a 3% rate, as well as pawnshops and life insurance activities taxed at 2.5%.
There is a reduced SBT rate of 0.01% for certain revenues of commercial banks and financial organizations.
An additional 10% of the tax is levied as municipality tax.
Stamp duty
Stamp duty is imposed on 28 different types of documents and instruments in Thailand. These include contracts for work, loans, share transfers, leases of land or buildings, and insurance policies. The rates of stamp duty vary depending on the type of document or instrument. For most commercial documents, stamp duty is either a fixed amount or calculated as 1 Thai Baht per 1,000 Thai Baht of the stated value in the contract.
Petroleum Income Tax
Petroleum Income Tax is imposed on companies engaged in the exploration or production of oil and gas in Thailand under concessions or production sharing agreements. This tax also applies to companies that purchase crude oil for export from concession holders.
Companies operating in the petroleum industry under service contracts are not subject to petroleum income tax; instead, they are subject to income tax under the Tax Code. Additionally, petroleum income tax does not apply to activities in the downstream sector, which includes refining, distribution, and sales.
Companies with oil concessions are taxed at a rate of 50 percent of their annual net profits derived from petroleum operations. This includes profits from the transfer of concession interests and other activities related to petroleum operations. Deductions are permitted for “ordinary and necessary” business expenses, as well as for the amortization of capital expenditures, oil royalties, and other charges. However, certain types of expenses, including interest, are not eligible for deductions.
Producers participating in production sharing agreements are subject to a tax rate of 20 percent on their annual net profits derived from the petroleum business. This encompasses profits from the transfer of interests, rights, annuity payments, or any other regular recurring income.
Land and Building Tax
The Land and Building Tax law came into effect on January 1, 2020. This law replaced previous taxes that primarily pertained to rental income rather than property tax.
Details here
Reporting deadlines
| Frequency | Tax / Reporting Type | Form | Deadline |
|---|---|---|---|
| Monthly | Withholding Tax | PND 1, 3, 53, 54, PP 36 | By the 7th day of the following month |
| VAT | PP 30 | By the 15th day of the following month | |
| Social Security | Sor Por Sor 1-10 | By the 25th day of the following month | |
| Semi-Annually | Corporate Income Tax (Prepayment) | PND 51 | Within 60 days after the semi-annual period (starting from the second year of operation) |
| Annually | Corporate Income Tax | PND 50 | Within 150 days after the end of the period |
| Personal Income Tax | PND 90, 91, 94 | By March 31 of the following year |
Land and buildings tax
Read details here
Land and Buildings Tax in Thailand
Have questions about taxes in Thailand? Email me or use the form below.
Photo by Kelly Sikkema on Unsplash