Personal Income Tax (PIT) is a direct tax levied on income of a person. A person means an individual, an ordinary partnership, a non-juristic body of person and an undivided estate. In general, a person liable to PIT has to compute his tax liability, file tax return and pay tax, if any, accordingly on a calendar year basis.

1.  Taxable Person

     Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

2.  TAX BASE

       2.1  Assessable Income
             Income chargeable to the PIT is called “assessable income”. The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, is also treated as assessable income of the employee for the purpose of PIT.

Deductions allowed for the calculation of PIT

Type of Income Deduction   a. Income from employment     b. Income received from copyright   c. Income from letting out of property on hire       1) Building and wharves       2) Agricultural land       3) All other types of land       4) Vehicles       5) Any other type of property     d. Income from liberal professions     e. Income derived from contract of work whereby the contractor provides essential materials besides tools   f. Income derived from business, commerce, agriculture, industry, transport, or any other activities not specified in a. to e. 40% but not exceeding 60,000 baht 40% but not exceeding 60,000 baht   30% 20% 15% 30% 10%   30% except for the medical profession where 60% is allowed actual expense or 70%   actual expense or 65% - 85% depending on the types of income

Allowances (Exemptions) allowed for the calculation of PIT

Types of Allowances Amount Personal allowance     -  Single taxpayer     -  Undivided estate     -  Non-juristic partnership or body of persons Spouse allowance Child allowance (child under 25 years of age and studying at educational institution, or a minor, or an adjusted incompetent or quasi-incompetent person) 30,000 baht for the taxpayer 30,000 baht for the taxpayer’s spouse 30,000 baht for each partner but not exceeding 60,000 baht in total 30,000 baht 15,000 baht each (limited to three children) Education (additional allowance for child studying in educational institution in Thailand) Parents allowance Life insurance premium paid by taxpayer or spouse Approved provident fund contributions paid by taxpayer or spouse Long term equity fund 2,000 baht each child 30,000 baht for each of taxpayer’s and spouse’s parents if such parent is above 60 years old and earns less than 30,000 baht Amount actually paid but not exceeding 100,000 baht each Amount actually paid at the rate not more than 15% of wage, but not exceeding 500,000 baht Amount actually paid at the rate not more than 15% of wage, but not exceeding 500,000 baht Home mortgage interest Social insurance contributions paid by taxpayer or spouse Charitable contributions Amount actually paid but not exceeding 100,000 baht Amount actually paid each Amount actually donated but not exceeding 10% of the income after standard deductions and the above allowances

Tax rates of the Personal Income Tax

Taxable Income (baht) arginal Taxable income (baht) Tax Rate (%) 0 - 150,000 (2008 onwards) 150,000 Exempt 150,001 - 500,000 350,000 10 500,001 - 1,000,000 500,000 20 1,000,001 - 4,000,000 3,000,000 30 4,000,001 and over   37

In the case where income categories (2) - (8) mentioned in 2.1 are earned more than 60,000 Baht per annum, taxpayer has to calculate the amount of tax by multiplying 0.5% to the assessable income and compare with the amount of tax calculated by progressive tax rates. Taxpayer is liable to pay tax at the amount whichever is greater.