Thailand is strategically located in the heart of ASEAN surrounded by fast-growing economies such as Cambodia, Laos and Vietnam. Its geographical proximity to two of Asia’s economic powerhousesー China and India is one of the many reasons investors are choosing to start their business in Thailand. The Thai government is also undergoing several projects to strengthen digital infrastructure nationwide that will drive the country into the 4.0 era.
Whether you are starting a business for the first time or expanding your reach overseas, it is of fundamental importance for an employer to understand the tax obligations and taxation system where the business is. To help employers and HR leaders grasp the basics of taxation in Thailand, Links has put together some essentials of what you need to know about Thailand’s tax rates, corporate taxes and income taxes.
Please note that this page serves as a general guide only, for more details on Thailand’s taxation system, please visit official government websites:
Tax Obligations as an Employer in Thailand
As an employer in Thailand, there are certain tax-related obligations you must fulfil once you have made your first hire. With responsibilities regarding company registration, tax liabilities, business operations and so on, many business owners choose to outsource mundane HR tasks to service providers like Links International. Find out how exactly does payroll outsourcing work today!
Withholding Tax for Personal Income Tax (PIT)
Certain incomes are subject to withholding taxes at source, this includes employment incomes. Employers are obligated to withhold tax, file tax return, and remit the withheld amount to The Revenue Department of Thailand.
Social Security Fund Contribution
The Social Security Act of 1990, amended in 1999, requires employers to withhold social security contributions from the monthly wages of employees and remit to the Social Security Fund. The fund is used to compensate employees for sickness, maternity, disability, death, child allowance, old-age and unemployment. The current rate of contribution for both the employee and employer’s share is 5% of the employee’s salary and the maximum contribution amount is THB750 per month.
Thailand Corporate Tax Rates
Corporate Income Tax (CIT) is levied on companies carrying out business activities in Thailand and companies not carrying out business activities in Thailand but deriving certain income from Thailand. A company is considered a taxpayer in Thailand if it is incorporated under the Thai jurisdiction or incorporated under foreign jurisdiction and carrying out business activities in Thailand or deriving Thailand-sourced income.
The standard corporate income tax rate in Thailand is 20% of the company’s net income, however, rates may vary depending on the type of taxpayer.
Corporate Income Tax for Small Business
Companies are considered a small business or company when it has a paid-up capital less than THB 5 million at the end of each accounting period.
|THB 0 – THB 300,000||0%|
|THB 300,001 – THB 3 million||15%|
|Above THB 3 million||20%|
Corporate Income Tax for Other Taxpayers
|Taxpayer||Tax Base||Tax Rate|
|Companies listed in the Stock Exchange of Thailand (SET)||Net Profit||20%|
|Companies newly listed in the Stock Exchange of Thailand (SET)||Net Profit||20%|
|A company newly listed in the Market for Alternative Investment (MAI)||Net Profit||20%|
|Bank deriving profits from International Banking Facilities (IBF)||Net Profit||10%|
|A foreign company engaging in international transportation||Gross receipts||3%|
|A foreign company not carrying on business in Thailand receiving dividends from Thailand||Gross receipts||10%|
|A foreign company not carrying on business in Thailand receiving other types of income apart from dividend from Thailand||Gross receipts||15%|
|Foreign company disposing profit out of Thailand||Amount disposed||10%|
|Profitable association and foundation||Gross receipts||2% or 10%|
Employees’ Income Tax in Thailand
As an employer, it is important, and a responsibility, to understand and facilitate your employee’s tax obligations in addition to your own.
Taxpayers of personal income tax (PIT) in Thailand are categorized into two groups: resident and non-resident. An individual is considered a resident for tax purposes when he or she has resided in Thailand for a period of more than 180 days or periods aggregating more than 180 days in one tax year. Resident taxpayers are taxed on any Thailand-sourced income as well as a portion of foreign income brought into Thailand. Non-resident taxpayers are taxed only on Thailand-sourced income.
Employment income of both resident and non-resident are taxed on the same progressive scale as follows:
Thailand Personal Income Tax Rates
|THB 0 – THB 150,000||0%|
|THB 150,001 – THB 300,000||5%|
|THB 300,001 – THB 500,000||10%|
|THB 500,001 – THB 750,000||15%|
|THB 750,001 – THB 1,000,000||20%|
|THB 1,000,001 – THB 2,000,000||25%|
|THB 2,000,001 – THB 5,000,000||30%|
|THB 5,000,001 and above||35%|
An individual with a Net Chargeable Income of THB 750,000
THB150,000 x 0% + THB150,000 x 5% + THB 200,000 x 10% = THB 27,500
Links International is an award-winning HR service provider offering 100% in-country solutions across Asia. At Links, we understand your business’ HR needs, therefore, we offer professional and efficient HR services including payroll outsourcing, visa applications, employer branding, flexible recruitment solutions as well as HR tech that will help unify and manage multi-country HR platforms, so you can focus on value-adding activities to grow your business. Contact one of our representatives today to see how we can help!