The time has come to submit personal income taxes and tax return filing in Thailand.
From 1 January to 10 April 2023, Thai taxpayers have the legal obligation of income disclosure to the Revenue Department of Thailand. For this, you must have an account of your income in Thailand between January 1 and December 31, 2022.
Are you Liable to Pay Tax this Season?
A person is a Thai tax resident if he/she/they stay in Thailand for 180 days during a calendar year. No matter what time you enter or leave Thailand, each day will count as one. A tax year in which you are a resident is a full year for tax purposes. To prove this, keep a copy of your passport on hand.
How to Submit your Personal Income Tax this Season?
Taxpayers must do the electronic filing of Personal income tax returns by April 10 every year. However, they can do a hard copy form filing to the Revenue Department by March 31. Individuals can file their personal income tax returns online at https://efiling.rd.go.th/rd-cms/, which is the website of the Revenue Department.
Taxpayers must submit a physical copy of their personal income tax return. For this, they have to use form PND 90/91 at any Revenue Department Area Office. Furthermore, they have to pay all additional tax that is due in cash, by cashier’s check, or by QR code. Note that, a taxpayer must make this payment seven days after the day of the issue of the tax return. After March 31, late filers will have to pay an additional 1.5% monthly fee (or a fraction thereof) along with the outstanding tax. For up to three months, those who apply will have access to interest-free installment payment arrangements. Late document submission carries a THB 200 to THB 2,000 fine.
Please make sure to report the right taxable income on your Personal Income Tax Returns (PND 90, 91). Regardless of the source of income or your Thai Citizenship, the assessment includes earnings from all sources in Thailand. It also includes revenue from overseas brought into Thailand in the same tax year. Therefore, you must consider them all during your tax return filing in Thailand.
Both residents and non-residents are subject to tax rates that range from 0% to 35%. We’ll go into more detail about the difference between residents and non-residents below.
Pay Tax for Income from Abroad
According to the “Residence Rule,” Thailand will tax you on any foreign income you bring into the country. This is applicable for all income in a particular tax year if you are a Thai tax resident. It might also have connections with your international employment.
Before beginning to work in the Kingdom, please carefully consider if you want to bring in foreign money. Earnings in form of capital gains, rental income, or interest income are taxable. However, non-residents can receive such overseas income in Thailand without its consideration being taxable.
What are the deductions for Dependents?
To avail of benefits from reductions or deductions during tax return filing in Thailand, you must know about the specifics. Dependent refers to a person who has no income throughout a tax year. Dependents can include wives and children who live abroad.
If you live in Thailand, you are eligible for deductions as a family allowance. This is applicable to your family comprising your dependent spouse and up to three children.
To avail of this allowance, you must provide the Revenue Department with the following documents:
- Copy of your marriage certificate;
- Children’s birth certificates;
- The whole passport you use for travel during the tax year, front to back, including the blank pages.
To demonstrate that your children are students, you will have to provide a copy of a tuition fee receipt. On doing so, you can claim them as dependents for tax purposes. Furthermore, you can avail deduction on your taxes if your child is an incompetent person. It is applicable for a quasi-incompetent person also 25 years of age or older during the tax year.
If your dependents are Thai citizens, you can still claim these deductions even if you are not a Thai resident. For this, you have to provide the Revenue Department with copies of their whole passports.
Tax Reduction
Let’s look at some legal ways that foreign workers can lower their tax obligations. Let’s start with the different deductions that will be available for Tax Year 2022-23.
- A Taxpayer can claim Up to THB 60,000 as a standard deduction.
- The taxpayer’s spouse is eligible for THB 60,000 Baht standard deduction. However, this is possible only if the taxpayer can produce proof of marriage and the spouse is not working.
- A taxpayer can claim a deduction of up to THB 30,000 for their children (for up to 3 children).
- Due to the social security rate reduction in 2022, the social security fee is applicable as a tax deduction on the actual amount of no more than THB 6,300.
- According to the actual paid amount of not more than THB 100,000, life insurance premiums and savings insurance premiums may qualify for a tax deduction.
- Premiums for accident and health insurance covering the health part are useful for a tax deduction on the actual paid amount of not more than THB 25,000.
- Annuity life insurance premiums can be used to claim a tax deduction of 15% of your income, up to a maximum of THB 200,000. For this, the insurance must be with a Thai Life Insurance Company for a cover period of at least 10 years.
- Retirement Mutual Fund (RMF) contributions can be deducted from taxes at a rate of 30% of taxable income, up to a maximum of THB 500,000, and for a period of five years.
- Super Saving Funds (SSF) (for long-term saving) are eligible for a tax deduction of 30% of taxable income based on the actual amount paid, up to THB 200,000, with benefits for a five-year period.
- Investment funds for social enterprises are eligible for tax deductions up to THB 100,000.
Tax deduction from donations
- Donations to charitable, educational, and religious organizations that do not exceed 10% of annual net income
- Donations to state hospitals, schools, sports teams, and other charitable organizations are tax deductible up to two times the amount of the donation, but not more than 10% of gross income after other deductions.
- Charity or donations to political parties are tax deductible up to a maximum of THB 10,000.
Tax deduction from immovable property
A taxpayer can claim a tax deduction of up to THB 100,000 for loan interest on residential property purchases.
Other tax deductions such as the government’s economic stimulus program
The Shop Dee Mee Kuen Project 2565 allows a maximum deduction of THB 30,000 for purchases of goods and services in the country between January 1 and February 15, 2565, based on the actual paid amount. Goods and services subject to Value Added Tax (VAT) such as OTOP products and books (including e-books) are examples of tax-deductible goods and services.
The following are deductible for those with a Thai-dependent spouse:
- Life insurance premiums of up to THB 10,000 per year for the spouse.
- An amount of up to THB 30,000 for each dependent parent of the spouse.
- Up to THB 15,000 in annual health insurance premiums for you and your spouse’s parents if they are covered by a Thai plan.
If you receive income from a foreign source and bring it into Thailand, you must show a receipt proving that you already paid tax on it so that Thailand can credit your account for it.
For complete assistance and support on Tax Return filing in Thailand, email us your requirements to [email protected]
