ThailandTax Obligations Detailed

Employers in Thailand have various tax obligations related to their employees' income, social security contributions, and corporate income tax.

Employer Obligations: Income Tax

• Withholding: Employers must withhold personal income tax (PIT) from employees' salaries monthly. The PIT rate is progressive, ranging from 0% to 35% based on the employee's earnings.
• Remittance: Withheld PIT must be remitted to the Revenue Department within seven days of the following month. For December withholdings, this would mean January 7 of the following year.
• Annual Withholding Statement: File an annual withheld income tax statement by the end of February of the following year, summarizing the entire year's withholdings.
• Filing Returns: Monthly payroll tax returns (Form Por Ngor Dor 1) are due within seven days of the following month. Electronic filing may offer an extended deadline of eight additional days.

Employer Obligations: Social Security

• Contributions: Both employers and employees contribute to the Social Security Fund (SSF).
• Rate and Cap: The contribution rate is generally 5% of the employee's salary, up to a maximum of THB 750 per month. This may be subject to adjustments.
• Registration: Employers must register with the Social Security Office within 30 days of hiring their second eligible employee. Eligible employees are generally those between 15 and 60 years old.

Corporate Income Tax

• Standard Rate: The standard corporate income tax rate is 20%.
• Half-Year Return (Form CIT 51): Requires prepayment of half the estimated annual tax liability or the tax due on the actual first six months' profit. The filing and payment deadline is two months after the first six months of the tax year.
• Annual Return (Form CIT 50): The annual corporate income tax return is due within 150 days of the company's fiscal year-end. An eight-day extension is granted for e-filing.

Global Minimum Tax (GMT) - Effective from 2025

• Multinational Enterprises (MNEs): MNEs with consolidated annual revenue exceeding EUR 750 million are subject to a minimum effective tax rate (ETR) of 15%.
• Top-up Tax: Companies with an ETR below 15%, including those benefiting from Board of Investment (BOI) incentives, may need to pay a top-up tax to meet the 15% threshold.
• Qualified Domestic Minimum Top-up Tax (QDMTT): Thailand may implement a QDMTT to collect this top-up tax domestically.

Upcoming Changes in 2025 for Individuals

• Proposed amendments may require Thai residents staying 180 days or more in a calendar year to pay tax on their global income. Currently, foreign income is taxed only if remitted into Thailand within the same year it was earned.

Note: This information is current as of February 5, 2025, and is subject to change. Always consult with a tax professional for the most up-to-date advice.

In Thailand, employees are subject to deductions for income tax, social security, and other specific items.

Income Tax

• Progressive Rates: Income tax rates range from 0% to 35% based on income levels. The employer withholds and remits these taxes monthly to the Revenue Department. Employees file annual returns for reconciliation and potential refunds.
• Standard Deduction: A standard deduction of 50% of employment income, capped at THB 100,000, is applicable. Business expenses are not deductible against employment income.
• Allowances and Deductions: Various allowances and deductions can reduce taxable income. Examples include those for healthcare, education, and contributions to provident funds, social security, and retirement mutual funds. Allowances are also available for dependents and investments in approved securities.
• Provident Fund Contributions: Employee contributions to a registered provident fund are deductible up to 15% of the wage, capped at THB 500,000 annually. The employer typically matches contributions up to a specified limit. An employee is allowed to contribute more than the employer.
• Retirement Mutual Fund (RMF) and Super Savings Fund (SSF): Investments in RMFs are deductible up to 30% of assessable income, with an annual limit of THB 500,000. SSF investments have a separate deduction limit of up to THB 200,000 annually.
• National Savings Fund: Investments in the national savings fund are deductible up to THB 500,000 annually.

Social Security

• Employee and Employer Contributions: Both employees and employers contribute 5% of the employee's salary up to a monthly cap of THB 750. These contributions fund benefits like medical care, maternity leave, and disability payments.

Other Deductions

• Easy E-Receipt 2.0: This program allows for personal income tax deductions up to THB 50,000 for eligible goods and services purchased between January 16 and February 28, 2025. The first THB 30,000 applies to general purchases with e-tax invoices or receipts. An additional THB 20,000 is for purchases from registered community enterprises, social enterprises, and OTOP (One Tambon One Product) goods. Exclusions apply to certain items like alcohol, tobacco, vehicles, and utilities.

Tax Year and Filing

The tax year in Thailand aligns with the calendar year. The deadline for filing the annual personal income tax return is typically March 31 of the following year.

This information is current as of February 5, 2025, and may be subject to change. Consulting a qualified tax advisor is recommended for personalized guidance.

In Thailand, Value Added Tax (VAT) is a 7% consumption tax on most goods and services, with specific exemptions and zero-rated categories. Businesses exceeding THB 1.8 million in annual turnover must register and comply with VAT regulations.

VAT Rates

• Standard Rate: 7% (This reduced rate is in effect until September 30, 2025, after which the standard rate of 10% may be reinstated unless further extended by the government.)
• Zero Rate (0%): Applies to exports, international transport (air and sea), and transactions within designated zones (e.g., bonded warehouses, free zones).

VAT Registration

• Threshold: Mandatory for businesses with annual turnover exceeding THB 1.8 million. Voluntary registration is available for businesses below this threshold. Non-resident businesses supplying goods or services in Thailand, especially digital services to non-VAT-registered customers, must also register if they exceed the THB 1.8 million threshold.
• Timeframe: Businesses must register before commencing operations or within 30 days of exceeding the threshold.
• Process: Businesses in Bangkok register at Area Revenue Offices. Businesses outside Bangkok register at Area Revenue Branch Offices.

VAT Filing and Payment

• Taxable Period: Monthly (calendar month).
• Filing Deadline: 15th of the following month. Electronic filing through the Revenue Department's online system extends the deadline by eight days (until the 23rd of the following month). Those filing electronically have until the 15th day of the month following the month in which a VAT liability arises.
• Multiple Business Locations: File separate returns and payments for each location unless otherwise specified by the Revenue Department.
• Excise Tax: If applicable, file VAT return with the Excise Department along with the excise tax return within 15 days of the following month.
• Imports: VAT is collected by the Customs Department at the point of import. Returns must be submitted to Customs upon import.

VAT Exemptions

Certain goods and services are exempt, including:

• Basic groceries
• Healthcare services and medical supplies
• Education services and textbooks
• Rental properties and sale of real estate
• Services by Thai government organizations
• Land transportation
• Religious and charitable activities
• Specific financial services (e.g., interest, dividends)

Penalties

• Penalties and interest are imposed for late filing, late payment, inaccurate returns, and failure to register.

Tax Invoices

• VAT-registered businesses must issue tax invoices. Specific requirements exist for invoice content, including details like tax identification numbers, descriptions of goods/services, and VAT amount. Invoices in foreign currencies must also display the equivalent Thai Baht amount and the exchange rate used.

Specific Business Tax (SBT)

Businesses exempt from VAT may be subject to SBT, a gross receipts tax levied on specific sectors like banking, finance, and real estate. Generally SBT is 3% for banking and similar businesses and for the sale of immovable property and 2.5% for life insurance.

Additional Notes

• Input VAT can be offset against output VAT. Refunds can be claimed for excess input VAT or for businesses with only zero-rated income.
• Keep accurate records of transactions, VAT calculations, and supporting documentation.

This information is current as of February 5, 2025, and may be subject to change. Always consult with a tax professional for the most up-to-date and specific advice.

Thailand offers a range of tax incentives for businesses and individuals in 2025. These incentives aim to stimulate economic growth, promote specific industries, and attract foreign investment.

Corporate Tax Incentives

Several incentives are available for corporations operating in Thailand:

• Board of Investment (BOI) Incentives: The BOI offers various incentives for promoted activities, including:
  • Exemption or reduction of import duties on machinery, raw materials, and essential goods.
  • Corporate income tax (CIT) exemptions for up to 13 years, depending on the activity and location. MNCs may opt for a 50% CIT reduction for up to 10 years, instead.
  • Additional deductions for transportation, electricity, and water costs.
• Special Economic Zone (SEZ) Incentives: Businesses in SEZs can benefit from:
  • A 50% CIT reduction for five years after the tax holiday expires.
  • Double deduction of transportation, electricity, and water costs for ten years.
  • A 25% deduction of investment costs for facilities.
• International Business Center (IBC) Incentives: IBCs can access reduced CIT rates (3-8%) based on expenditure in Thailand.
• Regional Operating Headquarters (ROH) Incentives: Generous tax incentives are offered to companies registered as ROHs in Thailand, with less stringent requirements compared to the previous scheme.

Personal Income Tax Incentives

Individuals in Thailand can also benefit from several tax incentives:

• Personal Allowances: These include allowances for oneself, spouse, children, and parents, ranging from THB 30,000 to THB 60,000 per person.
• Easy E-Receipt Program (2025): A deduction of up to THB 50,000 is available for purchases made between January 16, 2025, and February 28, 2025, supported by electronic tax invoices or receipts.
• Domestic Tourism: Taxpayers can deduct expenses paid to Thai tourist services, tour guides, and hotels, up to THB 15,000.
• Other Deductions: Various other deductions are available for expenses like life insurance premiums, home loan interest, retirement contributions, and certain donations.

Global Minimum Tax (GMT)

As of 2025, Thailand has implemented the OECD's GMT, impacting multinational corporations (MNCs) with annual revenues exceeding €750 million. This requires a minimum 15% tax on worldwide profits, regardless of where they are earned. Thailand also aims to tax residents' worldwide income beginning in 2025.

Application Procedures

For BOI incentives, applications must be submitted to the BOI. SEZ incentives are managed by the Industrial Estate Authority of Thailand. Applications for other incentives and deductions are typically made through the annual tax filing process with the Revenue Department.

While the standard corporate income tax rate in Thailand is 20%, various incentives and deductions can significantly reduce the effective tax burden for both corporations and individuals. These are subject to change, so staying up-to-date with current regulations is essential for maximizing tax benefits. Consulting a tax professional is recommended for personalized advice.