Thailand: Business Environment
A domestic corporation is subject to tax on worldwide income, while a foreign corporation is subject to tax on income generated in Thailand.
A foreign company not carrying on business in Thailand is subject to a final withholding tax on certain types of assessable income (e.g. interest, dividends, royalties, rentals, and service fees) paid from or in Thailand, at a rate of 15% (10% for dividends).
A tax of 10% is applied to branch profits remitted to the foreign head office. The tax is not restricted to remittances only, but also applies to any transfer or credit of profits to the head office account in the books, even if no funds are actually sent abroad.
Donations to specified charities or for public benefit, as well as those to education or sports associations, are deductible in the amount actually paid but not exceeding 2% of net profit.
Royalties, management service fees, and interest charges paid at arm’s length to foreign affiliates are also deductible.
From 2020, a Land and Construction Tax Act replaced the house and land tax and the local development tax. The maximum tax rate depends on the type of land/building and the appraisal value, as follows:
- for land used for agricultural purposes, the progressive tax rates range from 0.01% on land valued up to THB 75 million to 0.1% on land valued above THB 1 billion
- for land used for residential purposes, the progressive tax rates range from 0.02% on land valued up to THB 50 million to 0.1% on land valued above THB 100 million
- for land used for commercial purposes, the progressive tax rates range from 0.3% on land valued up to THB 50 million to 0.7% on land valued above THB 5 billion
- for land that is left unattended or that is not being utilized to the extent appropriate for its nature, the progressive tax rates range from 0.3% to 3% (the tax rate will increase by 0.3% annually if the land is not used).
Stamp duty is levied on different types of documents and instruments, including contracts for the hire of work, loans, share transfers, leases of land or buildings, and insurance policies.
Capital duty does not officially exist in Thailand; however, there is a one-time fee when registering a company.
Employers are required to contribute 5% of the employee's remuneration to the Social Security Fund (capped at a contribution of THB 750/month).
Thailand | East Asia & Pacific | United States | Germany | |
Number of Payments of Taxes per Year | 21.0 | 23.4 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 229.0 | 195.1 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 29.5 | 33.8 | 36.6 | 48.8 |
Source: Doing Business, Latest available data.
Individual income tax | Progressive rate from 0 to 35% |
From THB 0 to 150,000 | exempt |
From THB 150,000 to 300,000 | 5% |
From THB 300,001 to 500,000 | 10% |
From THB 500,001 to 750,000 | 15% |
From THB 750,001 to 1,000,000 | 20% |
From THB 1,000,001 to 2,000,000 | 25% |
From THB 2,000,001 to 5,000,000 | 30% |
Over 5,000,000 | 35% |
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Latest Update: September 2023