What You Need to Know About Thai Tax Law?
It may very well be on your mind to move to Thailand for good – whether for work – or for the purpose of marriage. Regardless of the length you plan to stay you need to understand the tax laws to avoid fines if you intend to work in Thailand.
As with most countries worldwide, tax laws in Thailand are governed by rules and regulations. Don’t attempt to scheme the government by withholding taxes illegally, or pretend ignorance for their laws or you are going to be penalized extensively. Tourists don’t have to worry about Thai taxes (unless you work illegally – that is without a tax identification number and work permit).
An Overview of the Thai Tax Law
Generally speaking, if you reside in Thailand for a total period of 180 days in any one year (including several visits) you are subject to paying tax. Whether you do business in the country or are in the employment of a Thai employer you will be taxed on your assessable income from such employment. In simple speak this means that you have to pay taxes on your income, regardless whether it is paid to you overseas from a Thai company, or paid to you within Thailand.
However, if you earn income from outside Thailand from a Thai employer then Thai law only taxes your income if you transfer that money to Thailand within the same tax year it has been earned. As with every tax law worldwide, the Thai law is not easy to understand if you are a layman. In either case you are best advised to seek the professional counsel of qualified Thai tax accountants who can help you understand the finer details.
Needless to say, we cannot be held responsible for any information we give you because we are not professional advisers. Income tax is divided into eight categories and you can legally deduct certain expenses from your assessable income. The official list of taxable income includes salary, wage, bonuses, allowances, gratuities, pension, handouts, commission, scholarships and grants for education, rent, residence provided for free from a business, utilities, settlement payments, reimbursements on income tax and even more types of income.
Profits gained from business, trade, commerce or professional occupations are taxable once you are a Thai citizen, even if you may be living abroad for the time being. The more you earn, the higher the tax rate by which you are paying taxes. Take a look at the table below to see how this applies in theory:
Tax Schedule
Net Income (Baht) Rate Percentage
0-150,000 0 %
150,001-500,000 10 %
500,001-1,000,000 20 %
1,000,001-4,000,000 30 %
4,000,001-Up 37 %
Once you’ve been in employ for two months you have to get a tax identification number. Capital gains in the Thai Stock exchange don’t get taxed. But investment and capital gain income inside Thailand will get taxed as a rule.
Your Thai employer automatically deducts your income tax for the government. This is calculated based on your yearly income.
Some countries have a ‘double taxation agreement’ with Thailand. If you happen to live in one of these countries for less than six months in a tax year you are exempt from paying taxes in both countries – Thailand and your country of residence. Specific laws exist to guide this agreement, depending on how much you earn and how your income is structured. To find out whether the double taxation agreement applies for you talk to a financial adviser.
A Note About Social Security
Thailand’s social security is designed to support you in the case of illness or if you lose the ability to work. You can contribute money from your income to a social security fund, but only if your employer has at least ten other employees and has filed the appropriate paperwork to establish the fund for his company. All employees must contribute the same percentage to the fund, so this is usually a set amount that you agree to in your employment contract. Note that the maximum amount you can pay into a social security fund is 15,000 Baht per month. All funds contributed to this fund must be paid within two weeks of being paid wages.
As mentioned before, consult a qualified financial adviser to find out more about the Thai tax laws.
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