Thailand Expat Tax Rates, Allowances and Deductions

Thailand Income Tax Rates & Bands

Thailand Expat: Tax Talks Podcast: Thai personal income tax brackets and progressive tax system explained  (03:18 minutes)

Thailand’s income tax system, like many others, is progressive, meaning the more you earn, the higher the percentage of tax you pay. In simple terms, wealthier individuals face a larger tax burden, while those with lower to middle incomes bear a smaller tax load. Thai personal income tax rates vary from 0% to 35%, depending on your income level. Here’s an example of how it breaks down:

• The first 150,000 baht of your income tax exempt.
• The next 150,000 baht is taxed at 5%.
• The following 200,000 baht is taxed at 10%, and it goes up in similar increments, reaching up to 35% for incomes over 5 million baht.

Your taxable income isn’t taxed at a single rate but is divided across these brackets. For example, if you have a taxable income of 1.2 million baht, different portions of your income are taxed at different rates, resulting in a combined effective tax rate of about 13.75%. This table shows the current rates and bands:

Thailand Income Tax Allowances & Deductions

Thailand Expat: Tax Talks Podcast: What personal allowances and deductions are you entitled to?  (7:49 minutes)

Personal Allowances

• 60,000 baht each for you and your spouse (of the don’t have an income)
• 30,000 baht per child, with an extra allowance for more children born from 2018 onwards.
• The same allowances are available for adopted children, but claims can be made for up to a maximum of three children.
• 30,000 baht for each parent’s care (over 60 and having a Thai Tax ID and not earning over 30,000 baht per year) and 60,000 baht for the care of disabled or incapacitated family members.

Taxpayers aged 65 or over are entitled to claim an additional personal allowance of 190,000 baht. This is in addition to their 60,000 baht personal allowance.

Personal Deductions

The following deductions can be applied to your return.

Charitable Donations

• Donations to certain institutions (educational, healthcare, religious, and approved charities) can be deducted up to 10% of your income after other deductions.
• Some donations, like those to educational or healthcare projects, can be double-deducted, but the total can’t exceed 10% of your income.

Life Insurance

• Premiums for life insurance policies are deductible up to 100,000 baht, but only if the policy is at least ten years long and the provider is registered in Thailand.
• Premiums for pension life insurance can be deducted up to 15% of your income or 200,000 baht, whichever is lower. The total of all pension and savings contributions can’t exceed 500,000 baht per year.
• If your spouse is not earning and you pay their life insurance, you can deduct up to 10,000 baht.

Health Insurance

• Premiums are deductible up to 25,000 baht for yourself and 15,000 baht for your parents (with a Thai Tax ID and living in Thailand with an income of less than 30,000 baht). The health insurance plans have to be Thai-registered plans.
• Total deductions for health and life insurance combined can’t exceed 100,000 baht.

Pregnancy and Childbirth

• Up to 60,000 baht per pregnancy for antenatal and childbirth expenses.

Mortgage Interest

• Interest on a mortgage in your own name for buying or building a home in Thailand can be deducted up to 100,000 baht.

Retirement and Savings

• Contributions to retirement mutual funds are deductible up to 30% of your taxable income or 500,000 baht, within the combined limit for pension and savings.
• Investments in super savings funds are deductible up to 30% of taxable income or 200,000 baht, also within the same combined limit.

Social Security

• Contributions to the Social Security Fund are deductible.

Employment Income Deduction

• You can deduct 50% of your employment income, up to a maximum of 100,000 baht, from your taxable income. However, you can’t claim business-related expenses against this.

Business Deductions

• This is industry specific and business expenses directly related to your business can be deducted. You can choose a standard deduction ranging from 10% to 60%, based on the business type.

Business Losses

• You cannot carry forward or back any business losses.