If you are a foreign individual residing in Thailand you are still required to pay or file for your Personal Income Tax or PIT. This type of tax is a direct tax imposed on the income of a person, and the amount is based on a progressive rate schedule set out by the Revenue Department of Thailand. Taxpayers are classified as either "resident" or "non-resident". For personal income tax purposes, "resident" refers to a person who has resided in Thailand for more than 180 days in that calendar year.
If you are vying for a Permanent Residence status in Thailand, one of the determining factors is if you are paying your taxes correctly and on time. Also, it is important to pay for the Personal Income Tax and other taxes in Thailand in relation to your visa and stay inside the country.
In accordance with the Revenue Department of Thailand, income chargeable to the PIT is called “assessable income”. The term covers income both in cash and in-kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, is also treated as assessable income of the employee for the purpose of PIT. Assessable income is divided into 8 categories as follows :
A resident is liable for tax on income derived from sources in Thailand and on income from foreign sources brought into the country. A non-resident is subject to tax only on income derived from employment or business conducted in Thailand and from property located in Thailand.
Typically, a taxpayer is required to calculate their tax liability, file a return and pay any tax due on a calendar year basis. The return and payment are made to the Revenue Department by the last day of March in the year following the taxable year.
For certain types of income, the tax must be withheld by the payer when payment is made. The payer of the income is responsible for filing a tax return and submitting the amount of the tax withheld to the District Revenue Office. The amount of tax withheld is credited against the payee’s tax liability at the time of filing their Personal Income Tax return.
Perhaps the best-known type of withholding tax is the Personal Income Tax deducted by an employer from an employee's wages, but there are many other types of transactions in Thailand that are subject to withholding tax.
It is important that you make sure all of your taxes in Thailand are well-managed and taken care of, otherwise, it may pose a possible threat to your stay in Thailand. It is advised you should inquire with taxation professionals to avoid any problems related to such issues.
Juslaws & Consult's lawyers have extensive knowledge on Personal Income Tax Laws in Thailand and experience in providing tax planning advice and services to individuals and businesses in Thailand. If you require additional information on any of our Taxation services please do not hesitate to contact us.