New Personal Income Tax Structure

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Personal Income Tax (PIT) is a direct tax levied on the income of a person.  A person means an individual, an ordinary partnership, a non-juristic body of persons and an undivided estate.  In general, a person liable to PIT has to compute his tax liability, file tax return and pay tax, if any, accordingly on a calendar year basis.

Thai Personal Income Tax Structure revision was approved as follows:

1.Deductible expenses for the following income would increase from 40% of income (capped at 60,000 Baht) to 50% of income (capped at 100,000 Baht):

  • -Income derived from employment, whether in the form of salary, wage, per diem,  bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-  free residence provided by an employer, payment of debt liability of an employee  made by an employer, or any money, property or benefit derived from  employment.
  • -Income derived from a post or from the performance of work, whether in the form  of a fee, commission, discount, subsidy, meeting allowance, gratuity, bonus,  house rent allowance, monetary value of rent-free residence provided by a payer  of income, payment of debt liability of a taxpayer made by a payer of income, or  any money, property or benefit derived from a post or from the performance of  work, whether such post or performance of work is permanent or temporary.

2. The scope of deductible expenses for income derived from under the section 40 (3) of the Revenue Code [Fee of goodwill, copyright or any other rights, annuity or annual payment of income derived from a will, any other juristic act, or court decision] – that was previously restricted only to copyrights, would expand to include goodwill, copyrights and other rights and will increase from 40% of income (capped at 60,000 Baht) to 50% of income (capped at 100,000 Baht).

3. Tax Allowances

  • -The Personal Allowance will increase from 30,000 Baht to 60,000 Baht, and  where the taxpayer and spouse both earn taxable income, the maximum  deduction for both of them would be 120,000 Baht.
  • -The Spouse Allowance will increase from 30,000 Baht to 60,000 Baht.
  • -The Child Allowance will increase from 15,000 per child (capped at 3 children) to  30,000 Baht per child (uncapped).
  • -The allowance for an estate would increase from 30,000 Baht to 60,000 Baht.
  • -The allowance for a non-juristic partnership or a non-juristic body of persons  would increase from 30,000 Baht for each individual (capped at 60,000 Baht) to  60,000 Baht for each individual (capped at 120,000 Baht).

4. Progressive Tax Rates

Income Tax

 

5. The minimum income threshold required to file a tax return shall be revised as follows:

I. For a taxpayer who has only employment income:

  • -If single, and income exceeds 100,000 Baht (previously 50,000 Baht); and
  • -If having a spouse, and the sum of the taxpayer’s and spouse’s income exceeds  200,000 Baht (previously 100,000 Baht)

II. For a taxpayer who has employment income and other income, or who has only other income that is not employment income:

  • -If single, and income exceeds 60,000 Baht (previously 30,000 Baht); and
  • -If having a spouse, and the sum of the taxpayer’s and the spouse’s income  exceeds 120,000 Baht (previously 60,000 Baht)

III. An undistributed estate must file a Tax Return if its income exceeds 60,000 Baht  (previously 30,000 Baht)

IV. A non-juristic partnership or a non-juristic body of persons must file a tax return if its income exceeds 60,000 Baht (previously 30,000 Baht).

6. This proposal would apply to the tax year 2017 onwards.

Thus, based on the proposal above, if you are an employee and your monthly salary is 25,833 Baht or less, assuming that you do not receive other taxable income during the year (such as bonus or other fringe benefit), you will not have to pay Personal Income Tax.

Please See Related FAQ under Accounting