If you are a foreign individual residing in Thailand you are still required to pay or file for your Personal Income Tax or PIT. This type of tax is a direct tax imposed on the income of a person, and the amount is based on a progressive rate schedule set out by the Revenue Department of Thailand. Taxpayers are classified as either "resident" or "non-resident". For personal income tax purposes, "resident" refers to a person who has resided in Thailand for more than 180 days in that calendar year.
Correct and timely payment of taxes, including Personal Income Tax and other taxes in Thailand, is crucial if you are seeking Permanent Residence status in the country. Meeting tax obligations is one of the determining factors considered in the Permanent Residence application process, alongside other requirements related to your visa and duration of stay in Thailand.
As per the guidelines of the Revenue Department of Thailand, income subject to Personal Income Tax (PIT) is referred to as "assessable income." This encompasses both cash and non-cash income. Therefore, any benefits provided by an employer or other parties, such as a rent-free house or employer-paid taxes on behalf of the employee, are also considered assessable income for PIT purposes. Assessable income is categorized into 8 categories as follows
A resident is liable for tax on income derived from sources in Thailand and on income from foreign sources brought into the country. A non-resident is subject to tax only on income derived from employment or business conducted in Thailand and from property located in Thailand.
Typically, a taxpayer is required to calculate their tax liability, file a return and pay any tax due on a calendar year basis. The return and payment are made to the Revenue Department by the last day of March in the year following the taxable year.
For certain types of income, the tax must be withheld by the payer when payment is made. The payer of the income is responsible for filing a tax return and submitting the amount of the tax withheld to the District Revenue Office. The amount of tax withheld is credited against the payee’s tax liability at the time of filing their Personal Income Tax return.
Perhaps the best-known type of withholding tax is the Personal Income Tax deducted by an employer from an employee's wages, but there are many other types of transactions in Thailand that are subject to withholding tax.
It is important that you make sure all of your taxes in Thailand are well-managed and taken care of, otherwise, it may pose a possible threat to your stay in Thailand. It is advised you should inquire with taxation professionals to avoid any problems related to such issues.
Juslaws & Consult's lawyers possess in-depth expertise in Personal Income Tax Laws in Thailand and have considerable experience in offering tax planning advice and services to both individuals and businesses in the country. If you need further information on any of our Taxation Services, please feel free to contact us.