September 18, 2013
TAXATION OF INTERNATIONAL ASSIGNEES in THAILAND
Introduction: International assignees working in Thailand
This folio has been prepared for the benefit of foreigners working in Thailand and provides selected
aspects of Thai taxation and related laws as they have been last updated as of January 2012.
It is intended to give only a basic understanding and it is not intended to be comprehensive.
Accordingly it should not be used as the basis for specific action.
It is recommended that readers seek professional advice before acting on any of the matters outlined
here in this folio.
STEP 1.: Understanding basic principles
The Scope of Taxation in Thailand
1. Every person who, in the course of the preceding year, derived assessable income from a post or office
held in Thailand or from business carried on in Thailand, or business of an employer in Thailand,
or a property situated in Thailand, must pay tax. This is regardless of where the income is paid.
2. An individual who has derived assessable income from a post or office held abroad, or business carried
out abroad, or a property situated abroad, must pay tax if:
a. The individual has resided in Thailand for 180 days or more in any tax year; and
b. Has brought such assessable income into Thailand.
The Thai Tax Year
3. The Thai tax year is the calendar year, i.e. January 01 to December 31.
Methods of Calculating Tax
4. Income is taxed on a preceding year basis at progressive rates. Should an individual's assessable
income (apart from employment income) be Bht 60,000 or more, the income tax computed will not be
less than 0.5% of assessable income.
Net income is the balance of assessable income allowing for deductions and allowances.
Husband and Wife
5. A wife may file a separate income tax return for assessable income derived from her employment.
All other income will be treated as a husband's income.
Determination of Residence
6. A person who has resided in Thailand for 180 days or more in a tax / calendar year is deemed to be
a Thai resident.
STEP 2: Understanding the Thai Tax System
Taxation of employment income
7. Income from an employment performed in Thailand would be subject to Thai tax, irrespective of where
the employment income is paid. Income would include cash, properties, benefits received which are
ascertainable in terms of money, or tax absorbed by the payer of assessable income or any other person
at all levels.
The above includes salaries, wages, per diem allowances, bonuses, gratuities, pensions, commissions,
education payments, house rent allowances, the monetary value of rent - free residence provided by an
employer, utility bills, payments made by an employer for the settlement of any obligation due from an
employee, income, tax reimbursements, etc.
8. Certain income is exempt from personal income tax, for example:
- Per diem payments representing reimbursable business expenses or transport expenses which are
wholly, exclusively and necessarily incurred in carrying out duties outside the normal place of work,
- Relocation expenses for the portion of the travel expenses incurred by the employee at the beginning
and the end of the Thai employment,
- Inheritances or gifts customarily given in any ceremony or on any occasion,
- Sums derived from insurance or from a funeral assistance scheme,
- A monthly employer's contribution to the Social Security Fund at a rate 5% of wages, on the portion not
exceeding Bht 10,000, but not exceeding Bht 490,000 per annum, and money or any benefits received
from the Official Provident Fund upon retirement, disability or death,
- Old age allowance (over 65 years of age) of Bht 190,000 income exemption each of the employee
and / or spouse who derive(s) income.
Withholding Tax
9. All employers are required to deduct income tax at the time of each payment of income in accordance
with the following rules:
- Multiplying the income paid in each payment by the number of payments to arrive at the total amount which
would be payable in a year, and
- Computing the tax on such income, after deducting expenses and allowances, if any, in accordance with
the personal income tax rates, and
- Dividing the amount of tax so computed by the number of payments.
Regional Operating Headquarter
10. Foreign employees of a Regional Operating Headquarter (ROH) in Thailand may elect to pay personal
income tax at a 15% flat rate of their gross employment income if they forego withholding tax credits on any
interest and dividend income. This privilege is available only to expatriates (i.e.: non-Thai Nationality)
employed by a ROH and is limited to their first four years of employment in Thailand.
To be entitled to the benefits once again, expatriates have to discontinue employment with any ROH in
Thailand for more than 365 days.
Sole Proprietorship and Partnership Income
11. Profits or gains from trades, business, commerce, professions, or vocations which are performed in
Thailand are subject to tax whether or not the individual is resident in Thailand.
Investment Income and Capital Gains
12. In general, investment income and capital gains arising from sources in Thailand are taxable with the
exemption of capital gains on Thai Stock Exchange Securities which are not taxable. A non-residents not
subject to tax on investment income and on capital gains derived from sources outside Thailand.
13. A resident is subject to tax on investment income and capital gains derived from sources outside
Thailand, if the investment income and capital gains are remitted into Thailand, in the year in which they are
derived.
Double Taxation Relief
14. A resident of a country having a double taxation agreement with Thailand may qualify for exemption from
Thai personal income tax. Double taxation agreements contain clauses which exempt a resident of one
country from tax on employment income in the other country if he or she is generally present in the latter
country for not more than 183 days in the tax year or not more than 183 days in any 12 months period
(depending on the specific double taxation agreement ), provided certain other conditions are met
regarding the payer of the employment income.
Social Security Fund
15. The objective of the fund is to support employees who suffer from accident, illness, disability or death,
not related to work. In addition, the fund is established to support employees in case of maternity, old age
and unemployment.
Employers having at least one employee fall within the scope of the Social Security Fund.
16. Employers, employees and the government must contribute an equal monthly sum to the Social Security
Fund at the rate of 5% on employment income.
Employer and employee contributions must be remitted to the Fund by the employer's accountant within
07 days of the following month through an authorized Commercial Bank or at the Social Security Office.
STEP 3: What to do before you arrive in Thailand
Visa
17. International assignees are required to obtain non-immigrant visas for themselves and for all the family
members before coming to work in Thailand.
Transferring Funds
18. Before remitting overseas income to Thailand at the start of your assignment, it is important for you to
ascertain whether you are to be treated as resident for tax purposes in the year of arrival. If your residence
starts in the year of arrival, any remittance of overseas income derived from January 01 of your year of arrival
will be subject to Thai personal tax.
STEP 4: What to do when you arrive in Thailand
Work Permit
19. As an international assignee, you are required to obtain a work permit prior to working in Thailand.
Applications may be made before or after arrival in Thailand. Applicants must hold a non-immigrant visa
category "B" for obtaining a work permit. A work permit will be granted for a period of one year and not
related to the validity of visa. However, you must retain the validity of non-immigrant B visa until the end of
assignment in Thailand.
20. You are exempt from work permit requirements if you are:
- A member of a diplomatic corps, or a consular mission,
- A representative of a member country or on the staff of the United Nations Organization and its specialized
agencies,
- A personal servant of the above,
- Performing duties under the agreement between the Government of Thailand and a Foreign Government
or an International Organization,
- Performing duties of the benefit of education, culture, the arts, sport or such other activities as prescribed
by Royal Decree, or
- Permitted by the Government of Thailand to perform any duty.
21. Certain occupations covering manual and industrial labor and some professional occupations such as
Accounting, Financial Law, Architecture and Civil Engineering are forbidden to international assignees.
22. If as an international assignee, you are employed by a company to promote investment you will have
some difficulty in obtaining a work permit.
Customs
23. It is important to note that your personal effects cannot be cleared from customs free of import duty
unless you have obtained a work permit which is valid for one year.
Tax Identification Number
24. A taxpayer is required to obtain an identification number within 60 days of receiving income.
An application must be filed with the Revenue Department for those residing in Bangkok, and with the
Provincial Amphur (District) Revenue Office
STEP 5: What to do at the end of the year
Tax Return
25. The following individuals are required to file income tax returns for income earned in the preceding
tax year:
- A person who has no spouse and earns income of more than Bht 30,000,
- A person who has no spouse and earns income of more than Bht 50,000 exclusively from employment,
- A person who has a spouse and earns income of more than Bht 60,000 from sources other than employment,
- A person who has a spouse and earns income of more than Bht 100,000 exclusively from employment,
- An ordinary partnership or other non-legal group of persons, which earns income of more than Bht 30,000,
- An estate which earns income of more than Bht 30,000.
26. A taxpayer is required to file a tax return and pay income tax (if any) at the District Revenue Office where
the taxpayer resides.
Effective from 2003 tax year, the submission of an annual personal income tax return via the internet is allowed
for all of the following situations:
- A taxpayer who has paid the correct amount of tax payable during the year,
- A taxpayer who has an additional tax to be paid when filing the tax return. In this case, the additional tax to be
paid would be transferred from the individual's Thai Bank account to the Revenue Department's account.,
- A taxpayer who has overpaid tax during the year and would like to request for the tax refund.
27. Your income tax is due and payable once a year (by March 31 of the following year) unless you derive
income from:
- Hiring property,
- Liberal professions (Law, Medicine, Engineering, Architecture, Accountancy, Fine arts),
- A contract which a contractor provides essential construction materials excluding tools, and
- Carrying on commercial or industrial businesses i.e. trading and services.
If you receive income from the above mentioned categories, you are subject to submit your first half-year
return by the end of September of the year in which you received the income and your annual tax return by
the end of March of the following year. Tax paid in the first half year filing will be a credit against annual tax.
28. On filing your return, if the tax due amounts to at least Bht 3,000, you may pay the tax in three equal
installments. The first installment must be paid when you file your return, the second installment within one
month from the date when the first installment was due, and the third installment within one month from the
date the second installment was due.
STEP 6: What to do when you leave Thailand
Exit Requirements
29. The following international assignees require tax clearance certificates before leaving Thailand:
- Individuals responsible for tax payment or remitting the outstanding tax or tax payable before or at the time
of departure,
- Individuals responsible for submitting tax returns and paying taxes on behalf of a juristic partnership
established under foreign law and carrying on business in Thailand.
30. If you wish to leave Thailand on holiday or business and will return to Thailand, you must obtain a re-entry
visa or your visa will automatically expire.
Tax Return
31. Your personal tax return issued by the Revenue Department will be available towards the end of the year or
early in the following year. If you leave Thailand before your return is available, you can i) choose to prepare
a departure Thai personal income tax return (PND 93 Form) and file with the Revenue Department before
leaving Thailand to clear the Thai tax liability or ii) appoint your employer or accountant to complete, on your
behalf, your personal tax return covering your employment income from January 01 to your date of departure.
Work Permit
32. You do not have to return your work permit to the Labor Registrar.
Transferring Funds
33. When you have paid personal income tax correctly, you may transfer your personal funds out of Thailand
by following the Foreign Control Regulations as prescribed by the Bank of Thailand.
By: Pavlos Paul Georgakis
Managing Director & CEO
P.G. Thai Enterprises Co., Ltd
