These are What You Must Include and Exclude during Individual Income Tax Filing!

The confusion over whether or not you are eligible for individual income tax filing in Thailand is unending. Although, it varies from one individual to another, I have just tried to talk a little about the Thai tax laws.

An individual whether a resident or a non-resident, deriving income from a Thai office or a business carried on in the country is subjected to personal income tax. However, the Thai law doesn’t differentiate between domicile, residence and citizenship. Now the question is what you must include in the individual income tax;

Inclusions

• Gross Income from Employment

This includes wage, pension, house rent allowance, salary, gratuity, per diem, monetary value of the rent-free residence, and money, property or advantages derived by the virtue of hiring different services.

• Capital Gains

Capital gains are taxable. It is considered as a part of an individual’s normal income in relation to the sales of shares and acquisition and dissolution of partnerships and companies. But then, gains or earnings on sales of shares that are listed on the Thai Stock Exchange or acquired without a motif to trade are exempted from tax.

• Miscellaneous Income

Residents are subjected to payment of tax on almost all classes of income gained in Thailand or even derived from abroad. On the other hand, non-residents are taxed on the income received in Thailand. Some other items of assessable income include annuities, dividends, fees, interest and professional or business income.

Apart from the inclusions, it is equally important to know the exclusions. Let’s have a look;

Exclusions

• Business-related deductions

In a situation where someone is carrying out a trade, profession or business, the rules of deductibility of expenses are similar for companies unless the one who is paying tax is unable to show sufficient evidence of expenses. Also, allowances that are given by an employer for purposes like entertaining the customers would not be stated as an assessable income unless the expense is supported by proper documents.

• Non-business Expenses

Mortgage interest for purchase or construction of Thai residential buildings may be deducted up to Baht 100,000.

• Personal Allowance

When it comes to income from employment, a deduction of 40% is allowed.

After applying all the deductions and allowances to the assessable income of the individual the taxable income is finally calculated.