Personal Income Tax (PIT) is a direct tax levied on income of a person. A person means an individual, an ordinary partnership, a non-juristic body of person, a deceased person 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.

1.  Taxable Person

     Taxpayers are classified into "resident" and "non-resident". "Resident" means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

2.  TAX BASE

       2.1  Assessable Income
             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, are also treated as assessable income of the employee for the purpose of PIT.

       2.2  Deductions and Allowances

             Certain deductions and allowances are allowed in the calculation of the taxable income. Taxpayers shall make deductions from assessable income before the allowances are granted. Therefore, taxable income is calculated by:

TAXABLE INCOME = assessable income - deductions - allowances

Deductions allowed for the calculation of PIT

Type of Income Deduction Income from employment Income received from copyright Income from letting out of property on hire -  Building and wharves -  Agricultural land -  All other types of land -  Vehicles -  Any other type of property Income from liberal professions Income derived from contract of work whereby the contractor provides essential materials besides tools Income derived from business,commerce, agriculture, industry, transport, or any other activities not specified earlier 40% but not exceeding 60,000 Baht 40% but not exceeding 60,000 Baht 30% 20% 15% 30% 10% 30% except for the medical profession where 60% is allowed actual expense or 70% actual expense or 65-85% depending on the types of income

Allowances (Exemptions) allowed for the calculation of PIT

Types of Allowances Amount Personal allowance     -  Single taxpayer     -  Undivided estate     -  Non-juristic partnership or body of persons Spouse allowance Child allowance (child under 25 years of age and studying at educational institution, or a minor, or an adjusted incompetent or quasi-incompetent person) 30,000 Baht for the taxpayer 30,000 Baht for the taxpayer's spouse 30,000 Baht for each partner but not exceeding 60,000 Baht in total 30,000 Baht 15,000 Baht each (limited to three children) Education (additional allowance for child studying in educational institution in Thailand) Life insurance premium paid by taxpayer or spouse Approved provident fund contributions Long term equity fund 2,000 Baht each child Amount actually paid but not exceeding 50,000 Baht each Maximum allowance (exemption) of 300,000 Bath, but not exceeding 15% of income Maximum allowance (exemption) of 300,000 Bath, but not exceeding 15% of income Home mortgage interest Social insurance contributions paid by taxpayer or spouse Charitable contributions Amount actually paid but not exceeding 50,000 Baht Amount actually paid each Amount actually donated but not exceeding 10% of income after standard deductions and allowances

       2.3  Tax Credit for Dividends

            Any taxpayer who domiciles in Thailand and receives dividends from a juristic company or partnership incorporated in Thailand is entitled to a tax credit. In computing assessable income, a taxpayer shall gross up his dividends by the amount of the tax credit received. The amount of tax credit is then creditable against his tax liability.

                Tax credit = dividend   x  corporate tax rate/(100-corporate tax rate)

3.  Tax Rates

       3.1  Progressive Tax Rates

                Personal income tax rates applicable to taxable income are as follows.

Tax rates of the Personal Income Tax

Taxable Income Tax Rate (%) Tax Amount Accumulated Tax 0 - 50,000 (before 2003) Exempt - - 0 - 80,000 ( 2003 onwards) Exempt - - 80,001 - 100,000 5 1,000 1,000 100,001 - 500,000 10 40,000 41,000 500,001 - 1,000,000 20 100,000 141,000 1,000,001 - 4,000,000 30 900,000 1,041,000 4,000,001 and over 37

In the case where income categories (2) - (8) mentioned in 2.1 are earned more than 60,000 Baht per annum, taxpayer has to calculate the amount of tax by multiplying 0.5% to the assessable income and compare with the amount of tax calculated by progressive tax rates. Taxpayer is liable to pay tax at the amount whichever is greater.

       3.2  Separate Taxation

             There are several types of income that the taxpayer shall not include or may not choose to include such income to the assessable income in calculating the tax liability.

               Income from sale of immovable property

             Taxpayer shall not include income from sales of immovable property acquired by bequest or by way of gift to the assessable income when calculating PIT. However, if the sale is made for a commercial purpose, it is essential that such income must be included as the assessable income. Nevertheless, from January 2003, gains from sales of residential buildings shall not be included as income if such gains are spent on purchasing a new home within 1 year before or after selling his primary residence.

               Interest

               Interest income may, at the taxpayer's selection, be excluded from the computation of PIT provided that a tax of 15 per cent is withheld at source. However, the following forms of individual's interest income are exempt from 15 per cent withholding tax;

	(1)	interest on bonds or debentures issued by a government organization,
	(2)	interest on saving deposits in commercial banks if the aggregate amount of interest received is not more than 20,000 Baht during a taxable year,
	(3)	interest on loans paid by a finance company,
	(4)	interest received from any financial institutions organized by a specific law of Thailand for the purpose of lending money to promote agriculture, commerce or industry.

               Dividends

               Taxpayer who is a resident in Thailand and receives dividends or shares of profits from a registered company or a mutual fund which tax has been withheld at source at the rate of 10 per cent, may choose to exclude such dividends from the assessable income when calculating PIT. However, in doing so, taxpayer will be unable to claim any refund or credit as mentioned in 2.3.

4.  Withholding Tax

      For certain categories of income, the payer of income has to withhold tax at source, file tax return (Form PIT 1, 2, or 3 as the case may be) and submit the amount of tax withheld to the District Revenue Office. The tax withheld shall then be credited against tax liability of a taxpayer at the time of filing PIT return. The following are the withholding tax rates on some categories of income.

Types of income	Withholding tax rate
1.  Employment income	5 - 37 %
2.  Rents and prizes	5 %
3.  Ship rental charges	1 %
4.  Service and professional fees	3 %
5.  Public entertainer remuneration      -  Thai resident      -  non-resident	5 % 5 - 37%
6. Advertising fees	2 %

5.  Tax Payment

       Taxpayer is liable to file Personal Income Tax return (Form PIT 90 or 91) and make a payment to the Area Revenue Branch Office within the last day of March following the taxable year. Taxpayer who derives categories of income (5) - (8) during the first six months of the taxable year is also required to file half - yearly return (Form PIT 94) and make a payment to the Area Revenue Branch Office within the last day of September of that taxable year. Any withholding or half-yearly tax, which has been paid, can be used as a credit against the tax liability at the end of the year.