Taxes are always a relevant and unavoidable topic. Fortunately, in Thailand, recent developments—especially regarding personal income tax—have generally been positive.
At the time, the tax rates established in 2013 were still in force. The main goal—to reduce undeclared “cash-in-hand” salaries—has largely been achieved through a progressive tax system, along with deductions and allowances that reduce taxable income. Taxes are calculated and paid at the end of the fiscal year based on total income, deductions, allowances, and expenses.
Starting from 2017, updated tax rates and increased deductions were introduced.
Tax Rates
2016 Rates:
- 0 – 150,000 Baht: 0%
- 150,001 – 300,000 Baht: 5%
- 300,001 – 500,000 Baht: 10%
- 500,001 – 750,000 Baht: 15%
- 750,001 – 1,000,000 Baht: 20%
- 1,000,001 – 2,000,000 Baht: 25%
- 2,000,001 – 4,000,000 Baht: 30%
- Over 4,000,000 Baht: 35%
2017 Rates (updated):
- 0 – 150,000 Baht: 0%
- 150,001 – 300,000 Baht: 5%
- 300,001 – 500,000 Baht: 10%
- 500,001 – 750,000 Baht: 15%
- 750,001 – 1,000,000 Baht: 20%
- 1,000,001 – 2,000,000 Baht: 25%
- 2,000,001 – 5,000,000 Baht: 30%
- Over 5,000,000 Baht: 35%
The key change: the top tax rate now applies only to income exceeding 5 million Baht (previously 4 million).
Deductions and Allowances
| 2016 | 2017 | |
|---|---|---|
| Deduction | 40% (max 60,000) | 50% (max 100,000) |
| Allowance | 30,000 Baht | 60,000 Baht |
Example Calculation
Let’s take a typical foreign employee earning 35,000 Baht per month:
Annual income: 35,000 × 12 = 420,000 Baht
2016 Calculation
- Deduction: −60,000
- Allowance: −30,000
- Taxable income: 330,000
Tax breakdown:
- 0 – 150,000 → 0% = 0
- 150,001 – 300,000 → 5% = 7,500
- 300,001 – 330,000 → 10% = 3,000
Total annual tax: 10,500 Baht
Monthly tax: 875 Baht
2017 Calculation
- Deduction: −100,000
- Allowance: −60,000
- Taxable income: 260,000
Tax breakdown:
- 0 – 150,000 → 0% = 0
- 150,001 – 260,000 → 5% = 5,500
Total annual tax: 5,500 Baht
Monthly tax: 458 Baht
Key Takeaway
With the updated rules, individuals earning less than approximately 310,000 Baht per year (around 26,000 Baht per month) are effectively not subject to income tax.
The consulting agency InvestEast provides comprehensive information on tax obligations for both individuals and legal entities, including filing deadlines and liability for non-compliance.Author: Alexandra Agapitova.
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