Personal Income Tax on Rental Income: Answers to the Most Common Questions

Following our previous article on the taxation of rental income from real estate in Thailand, let’s look at several questions that property owners commonly have.

Do I need to file a half-year tax return if I only receive a salary?

No.

The half-year personal income tax return is filed by individuals receiving income under the categories specified in Sections 40 (5)–40 (8) of the Thai Revenue Code:

· 40 (5) — income from leasing or letting out property;

· 40 (6) — income from liberal professions;

· 40 (7) — income from contracts for work performed;

· 40 (8) — other income from carrying on a business.

If you receive only a salary and have no income falling under the categories listed above, you are not required to file a PND94 half-year tax return.

For foreigners in Thailand, the most common category among those listed above is rental income under Section 40 (5).

If you are a Thai tax resident, receive similar income outside Thailand, and remit it to Thailand, the tax treatment may be different. In such a situation, Thai tax legislation and applicable double taxation agreements must be taken into account.

How can I provide a lease agreement if the apartment is rented out through Airbnb for several days?

If you rent out the property for short periods and do not enter into individual lease agreements with each guest, you cannot use a lease agreement to document such income.

Rental of property for a period of less than 30 days is treated differently from ordinary long-term rental. Such income falls under Section 40 (8) — other income from carrying on a business.

Different tax calculation rules apply to this type of income. In particular, this type of income is not exempt from VAT, although a higher deduction may be available.

There is another important point to consider.

Short-term rental of property may fall under legislation governing hotel operations. Providing accommodation for short periods may require compliance with the requirements for obtaining the appropriate license.

Therefore, daily rental of an apartment should not be viewed solely as a way of earning rental income without taking into account the requirements of hotel legislation.

Do I need to file a tax return if my income is small and no tax is actually payable?

Yes, in most cases, a tax return must still be filed.

You are not required to file a tax return if your total income does not exceed THB 60,000.

If your income exceeds this amount, you must file a tax return even if, after applying the deductions and allowances provided by law, your taxable income falls within the bracket subject to a 0% tax rate.

For example, if your income is THB 150,000, this does not mean that you do not need to file a tax return simply because the applicable tax rate is 0%.

Do I need to declare income from foreign real estate if the money is transferred to Thailand?

If you receive income from real estate outside Thailand and remit it to Thailand, whether you are required to declare it depends, among other things, on your tax status and any applicable exemptions.

In particular, the income may not be subject to tax in Thailand if:

You are not a Thai tax resident, meaning that you were present in Thailand for fewer than 180 days during the calendar year.
You obtained an LTR visa before remitting the relevant income to Thailand. Special rules apply to LTR holders in relation to foreign-sourced income remitted to Thailand.

At the same time, it is important to note that the application of an exemption depends on the specific circumstances and conditions of the relevant tax regime.

What should I do if foreign income is exempt from Thai personal income tax under a double taxation agreement?

If income is exempt from Thai personal income tax under a double taxation agreement, this does not necessarily mean that the taxpayer is completely exempt from filing obligations.

Depending on the specific circumstances, it may be necessary to file a tax return and provide documents confirming that tax has been paid in another country or demonstrating another basis for exemption from taxation in Thailand.

The Key Point

When it comes to taxation of real estate income, it is important to consider not only the amount of income received, but also its nature.

Long-term rental, short-term accommodation through booking platforms, salary income, and foreign-sourced income fall into different categories and may be subject to different tax rules.

Therefore, before filing a tax return, it is important to correctly determine the category of income and the rules applicable to it.