Last year, the Law “On Amendments to the Tax Code” (No. 48) came into force, which affects private individuals who regularly receive funds into their bank accounts in Thailand.
Banks are required to report all annual transactions on personal accounts to the Revenue Department in the following cases:
— If the number of incoming transactions (payments received or deposits made into the account) exceeds 3,000 per year.
— If the number of incoming transactions exceeds 400 transactions with a total amount exceeding 2 million baht per year.
If an individual’s account falls under reporting requirements, then all accounts held by that person within the same financial institution will also be treated as “reportable accounts.”
The financial institution’s report must include the following information:
- ID number, passport number, tax ID, or other identification details of the account holder
- Full name of the account holder (or name of an unregistered partnership or group of account holders)
- Total number of incoming transactions across all reportable accounts
- Total amount of incoming transactions across all reportable accounts
- All account numbers classified as reportable
For the purpose of calculating the number and amount of incoming transactions, financial institutions must include all deposits into accounts, all incoming transfers, payments received via QR codes or other electronic payment channels, as well as foreign currency deposits (converted using the Bank of Thailand’s purchase rate on the last day of the reporting year).
Based on audit results from the tax authorities, account holders may be subject to tax investigations. If incorrect tax calculations are identified, tax liabilities may be reassessed.
Account holders who fail to file tax returns or submit inaccurate information may be subject to additional penalties.
The main purpose of this reporting system is to bring freelancers, online sellers, and other informal businesses into the legal tax framework with proper tax compliance.
Informal business operators whose accounts fall under the reporting category risk, after reassessment of income and back-tax calculations, paying significantly higher taxes compared to operating as a legal entity with proper accounting. The maximum personal income tax rate is 35%, whereas corporate income tax is capped at 20%.