Thailand Income Tax for Foreigners

What is meant by “deductible expenses”?

Your job and copyright earnings are both tax deductible up to a total of 60,000 baht per year in deductible expenses. Rental income with real and appropriate expenses or a lump-sum deduction of 10% to 30% depending on the type of rented property, and copyright and other rights income 50% of assessable income but not more than 100,000 baht.

Profits from non-compliant hire-purchase or instalment sales contracts that have deductible expenses for a lump-sum deduction of 20% and income from liberal professions that have deductible expenses for a lump-sum deduction of 30% (except for the medical profession whereby 60% is allowed)

Income derived from a contract of work in which the contractor provides necessary materials other than equipment with a deductible expense of 70% and the income derived from business, trade, agriculture, industry, transportation or any other income not stated above with a deductible expense of 65% to 85% depending on the types of income.

What documents do I need to get a tax ID number?

You’ll need to bring the following documents to the tax office to apply for a Tax Identification Number (TIN):

– Valid passport with a valid visa or visa exemption
– Lease agreement of six months or more, with a copy of the landlord’s ID
– Proof that you spent at least 180 days in Thailand in the previous Calendar year (past entry stamps on passport)
– Resident Certificate from Immigration is required in many parts of the country.

I’m a freelancer in Thailand. How do I pay taxes?

As a freelancer in Thailand, you’ll most likely be classified as a business owner for tax purposes. This means you’ll need to register your business with the Thai Revenue Department. The registration process typically involves submitting documents like your passport, visa, and proof of address. Once registered, you’ll be responsible for filing tax returns annually, declaring your income and claiming any deductible business expenses. It’s important to keep detailed records of your income and expenses throughout the year to ensure you can accurately claim these deductions when filing your tax return.

Do I need to pay taxes on income earned outside of Thailand?

Generally, no, you won’t need to pay income tax for foreigners if you are outside of Thailand if it remains outside the country. Thailand follows a residency-based taxation system, meaning your tax liability is based on your residency status and where you earn your income. So, if you’re a resident taxpayer (staying in Thailand for more than 180 days a year) but earn income from freelance work done overseas and keep that income in a foreign bank account, it wouldn’t be subject to Thai income tax.

What happens if I don’t pay my taxes in Thailand?

Failing to fulfill your tax obligations in Thailand can lead to various penalties. These may include:

• Late filing penalties: If you miss the deadline for filing your tax return, you’ll be subject to a late filing penalty, typically calculated as a percentage of your tax liability.
• Interest charges: If you have outstanding tax payments, you’ll be charged interest on the overdue amount.
• Denial of visa renewal: In severe cases, the Thai immigration authorities might deny your visa renewal application if you have unaddressed tax issues.
• Legal action: In extreme situations, the Thai Revenue Department might take legal action against you to recover unpaid taxes.