A taxable person is qualified resident if you reside in the territory of the Kingdom for over 180 days during a tax period; is taxed on income wherever products, but only if such proceeds are introduced in Thailand; While a non-resident is taxed only on income produced in the territory of the Kingdom.
The taxation of individuals
The tax base is determined by calculating all income received by the taxable person. System for paying taxes in Thailand is progressive and sorting provides for exemptions and deductions granted to resident taxpayers. In particular, the reductions relate to the recognition of a deduction of THB 30,000 for each taxpayer; additional 30,000 THB for taxpayers with dependent spouse; of 15,000 THB per child and THB 2,000 student for each child enrolled at Thai schools. They are also provided for deductions for interest expenses on loans for the purchase of the dwelling to a maximum of THB 100,000; deduction for contributions to charitable bodies which, however, cannot exceed 10% of taxable income.
Life insurance premiums of the taxpayer may be deducted up to a maximum of THB 100,000, as long as the policy involves a period of minimum term of 10 years and the insurance company is established in Thailand. A non-resident can benefit from the deductions provided for spouse and children if they are resident in Thailand. The bands and the rates in force for paying taxes in Thailand in the current tax year are as follows:
|TAXABLE INCOME||MARGINAL RATE|
|Up to 150,000 BTH||Exemption|
|By BTH 150,001 to 300,000||5%|
|From 300,001 to 500,000 BTH||10%|
|From 500,001 to 750,000 BTH||15%|
|By BTH 750,001 to 1.000.000||20%|
|By BTH 1,000,001 to 2 million||25%|
|By BTH 2,000,001 to 4 million||30%|
|Besides BTH 4,000,001||35%|
The capital gains are exempt from tax if derived from the sale of securities issued by listed companies in Thailand; Vice versa, are included in the calculation of taxable income.
Dividends and interest income are subject to a withholding tax 10% and 15% respectively. Non-residents may apply a more favorable rate if it is ratified an agreement against double taxation. Royalties contribute to the formation of taxable income for residents. They are subjected to a 15% withholding tax for non-resident, or minor earners if it is ratified an agreement against double taxation by the State of residence of the recipient of income.
Paying taxes in Thailand: legal entities
A legal person must pay taxes in Thailand if it was incorporated in the territory of the Kingdom. Resident companies are taxed on income wherever products. Conversely, the non-established taxable persons are taxed on income realized in the Kingdom. The tax base is determined by the operating result, adjusted in accordance with the rules governing fiscal discipline and local accounting. Typically, the costs associated with the production sector are deductible, I mean the interests on loans. As well as donations to charities, but within the limit of 2% of net income, and taxes, except income taxes. Some costs are not deductible: sanctions, penalties and surcharges payable in application of the Consolidated Revenue Code. Losses can be carried forward for five years and it is not allowed to carry forward backwards. The tax rate varies due to the profit for the period according to the following scheme:
the rates are as follows:
|PROFIT FOR THE PERIOD||MARGINAL RATE|
|Up to 300,000 BTH||0%|
|By BTH 300,001 to 3 million||15%|
|Besides BTH 3,000,001||20%|
The capital gains contribute to the formation of the base of legal persons residents; If received by non-residents are subject to a withholding tax of 15%. Prejudice to any exemption or lower rate, application of double taxation Treaties. Dividends are subject to a rate of 10%; or lower if the beneficiary is not resident and was ratified a Convention against double taxation which provides more favourable taxation.
However, if the beneficiary is a legal person residing, dividends are exempt from tax if distributed by a Thai company which holds at least 25% of the earner shares with voting rights at the meeting. Income from interest paid to resident legal entities are subject to a deduction of 1%. Or contribute to the formation of taxable income in the case of banks and finance companies. Are taxed at a rate of 15% if the beneficiary is not resident and has not been ratified any Convention. Royalties are 3% withholding tax for residents. for non-residents the tax rate is 15%, or less if it has ratified a Convention against double taxation by the State of residence of the recipient of income.
Paying taxes in Thailand: Value added tax
Value added tax affects the supply of goods and services in the Thai territory and imports. The tax rate is 7%. Sorting provides that certain transactions are subject to zero, as the supply of goods for exports or services outside the national territory. Supplies of goods and services for government agencies, embassies and consulates. In addition, other operations are considered exempt for value added tax purposes, such as land transport services; the sale and import of agricultural products and fertilizer, magazines and books; cultural, educational and religious services and services rendered by certain professionals enrolled in professional registers and supplies of goods for sale.
Statements, capital requirements, payment of taxes
The tax period for natural persons shall correspond to the calendar year; Conversely, the tax period of legal persons shall not exceed 12 months; the duration should be stated in the articles of association or the articles of Association. It must be authorized by the Revenue Department and the Business Development Department.
Individuals must submit their tax return and adjust the debit balance by 31 March of the year following the tax period covered by the statement. Employers must operate a monthly withholding tax on wages paid to employees. For miscellaneous income the taxpayer must submit an interim statement on the first six months of the tax year. Corresponding emerging debt by September 30 of the current tax period.
Legal persons must pay taxes in Thailand by submitting an interim statement. After the first six months of the start of the fiscal year and pay a deposit equal to half the estimate of expected profit in the year. The transmission and the payment must be made within 2 months of the semester of the current tax period. The charges relating to the statement and the paying-up of the annual balance should be implemented within 150 days of the end of the tax year.
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