Thailand is actively developing its investment attractiveness, launching business support programs, promoting digital visas, and doing everything to position itself as a safe haven in Southeast Asia. And it remains one.
However, its tax system:
Is formally simple (in terms of understanding the payment procedure and legality);
In practice, entails strict liability for violations of the tax regime and non-payment of taxes (including deportation and fines for foreigners);
Remains limited in transparency for foreigners.
In this article, we will explore:
What types of taxes exist in Thailand and who needs to pay them?
How do you pay taxes if you're a freelancer, investor, director, or business owner?
In what cases can the tax authority impose additional taxes retroactively?
How to avoid double taxation (or at least not fall into it blindly)?
The most popular tax optimization schemes.
The Main Difference from Indonesia
Compared to taxes in Indonesia—read more about that HERE: - https://bali-legal.com/en/nalogi-v-indonezii-en the Thai tax system IS ACTUALLY MUCH STRICTER, WITH A SHOCKING NUMBER OF TAXES, AND IF YOU DON'T KNOW THE NUISANCES, IT'S EASY TO END UP WITH AN ADDITIONAL 30-40% TAX BURDEN. (Highlighted on a blue background).
Thailand appears:
More predictable in tax logic;
But more "formalized," especially towards foreigners;
Less flexible if you've missed deadlines or made mistakes in your reporting.
There are fewer informal ways to "resolve" arrears in Thailand, and international agreements on tax information exchange are actively enforced..
Key Taxes in Thailand
1 - Corporate Income Tax — CIT
| Annual income of the company | Tax rate |
| Up to 300,000 baht | 15% |
| From 300,001 to 3 million THB | 20% |
| Over 3 million THB | 20% |
The minimum corporate tax rate is 15%.
Reporting is submitted annually (at the beginning of the new year), along with a biannual advance calculation (using Form P.N.D. 51).
Important note: Foreign companies earning income from Thailand (even without registration) may be subject to a 10–15% tax if there is no agreement on avoiding double taxation.
Example:
A company earns 2,500,000 THB in net annual income. The tax breakdown would be:
15% on the first 300,000 THB (approximately 10,000 USD) = 45,000 THB.
20% on the remaining 2,200,000 THB = 440,000 THB.
Total tax for the year: 485,000 THB.
2 - Personal Income Tax — PIT
This operates on a progressive scale:
| Annual income (THB) | Bet |
| Up to 150,000 | 0% |
| 150,001 – 300,000 | 5% |
| 300,001 – 500,000 | 10% |
| 500,001 – 750,000 | 15% |
| 750,001 – 1,000,000 | 20% |
| 1,000,001 – 2,000,000 | 25% |
| 2,000,001 – 5,000,000 | 30% |
| Over 5,000,000 | 35% |
This tax applies to all individuals who have tax residency in Thailand. THAT MEANS LIVING IN THAILAND FOR MORE THAN 180 DAYS PER YEAR!!!
Tax residents must file a tax return (Form P.N.D. 90/91) — even if they have zero income.
Here’s an instruction guide for filling out the form and paying taxes - https://www.rd.go.th/fileadmin/download/english_form/2024/GUIDE_91_67_Complete.pdf.
Example:
You have received 1,500,000 THB for the year. Tax = about 225,000 THB.
What does "living in Thailand for more than 180 days a year" mean?
Thailand considers a person a tax resident if they::
Spend at least 180 days within Thailand during a calendar year.
This means:
You don't need to live continuously for 180 days straight.
You can enter and exit the country — as long as the total number of days spent in Thailand within a calendar year (January 1st – December 31st) exceeds 180 days.
Example:
January: 60 days
March: departure
April-August: another 130 days
Total: 190 days in 2024
Congratulations — you are now a tax resident of Thailand!
Additionally:
Each calendar year is counted separately;
There is no "reset" of the counter after leaving the country
If you spend over 180 days in total, you are required to file a tax declaration.
3 - Value Added Tax — VAT
Standard rate is 7%, which is significantly lower compared to many countries in Southeast Asia.
VAT is mandatory when revenue exceeds 1,800,000 THB per year.
Certain activities are exempt from VAT (such as education, rentals, healthcare).
Example:
An online school generates 2,100,000 THB in annual revenue. VAT tax = 147,000 THB.
4 - Withholding Tax — WHT
There are three main types of withholding taxes:
| Payment type | Bet |
| Salary | 3-5% |
| Dividends | 10% |
| Services (non-resident) | 15% |
Example:
If you pay a foreign designer $2,000, the Withholding Tax (WHT) would be 15%, resulting in $300 being withheld.
When distributing dividends to yourself as a business owner, you'll face a 10% tax on the withdrawal amount (which might turn out to be more advantageous than paying the annual corporate tax).
IN THIS RESPECT, WORKING AS A FOREIGNER IS FAR MORE ADVANTAGEOUS IN THAILAND COMPARED TO INDONESIA, WHERE A HEFTY 31% TAX ON PAYMENTS FOR FOREIGNERS' SERVICES STILL EXISTS.MOREOVER, THERE IS A CLEAR UNDERSTANDING OF HOW TO LEGALLY PAY LESS ГДЕ ДО СИХ ПОР СУЩЕСТВУЕТ ГРАБИТЕЛЬСКИЙ 31% НА СУММУ ОПЛАТЫ ЗА УСЛУГИ ИНОСТРАНЦЕВ.
SUMMARY ON TAXES (SPECIFIC CASES)
Personal Income Tax
If you earn income from abroad while staying in Thailand for more than 180 days, you are considered a tax resident, as we've already discussed earlier.
Example:
You receive a salary of $4,000 per month, or approximately 1,600,000 THB per year.
→ PIT (Personal Income Tax) based on the progressive scale = ~20–25% = up to 400,000 THB
International Transfers
If you transfer income to Thailand within the same calendar year, it is considered taxable. Large transfers can trigger a tax audit, which is why banks are reluctant to open accounts for foreigners without long-term visas (or simply refuse to do so).
Example:
Transferring $50,000 from Europe → PIT (Personal Income Tax) at a rate of up to 25% = ~$12,500 USD.
Taxes for Business Owners
Example:
Company: Generates an income of 5,000,000 THB
CIT (Corporate Income Tax) = 1,000,000 THB
Director's Salary: 1.2 million THB → PIT (Personal Income Tax) ≈ 220,000 THB
Dividends — 1 million → WHT (Withholding Tax) = 100,000 THB.
Total: Approximately 1,320,000 THB in taxes.
Rental Income
Example:
Monthly rental income of 35,000 THB = 420,000 THB per year
→ PIT (Personal Income Tax) = 5–10% = 20,000–30,000 THB.
What traps are easy to fall into in Thailand due to inexperience?
1 - You think that since you haven't registered a company, taxes don't apply to you. However, if you stay in Thailand for more than 180 days a year, you are obligated to submit your tax return (even if it's zero)..
2 - You believe transferring money through cryptocurrencies makes it invisible. This isn't true if you use unofficial cryptocurrency exchanges in Thailand. There are several methods to bring money into Thailand without paying taxes, usually costing 3-3.5% of the nominal value. Licensed Thai crypto exchanges are already reporting their users to authorities.
3 - The Digital Nomad Visa = "freelancing permit". Yes, but this visa does not give you the right to avoid paying taxes. Furthermore, if you engage in freelancing in Thailand, it can also be a violation of immigration law.
All these issues can lead to fines, deportations, and other problems.
If you reside in Thailand for an extended period, it's best to:
Obtain a TIN (Tax Identification Number); find more details here - https://www.rd.go.th/english/21987.html.
Understand whether you're a tax resident (staying longer than 180 days?).
Submit PIT / CIT / VAT / WHT on time.
Don't hide transfers like an amateur; instead, structure your business and optimize your taxes.
HOW CAN YOU LEGALLY REDUCE YOUR TAX LIABILITY?
Legal methods do exist, and the government itself offers them through tax planning. Here are some STANDARD approaches:
1. Use Double Taxation Avoidance Agreements (DTA)
Thailand has signed DTAs with over 60 countries.
If you earn income overseas, you can:
Provide tax documents from your home country showing that taxes were paid. The system works quite well and can be relied upon.
Get exemption from WHT or credit for taxes already paid.
Pay tax in the source country and avoid double taxation in Thailand.
Example:
You're a Russian resident receiving dividends from a Thai company
→ Instead of a 10% WHT, it could be reduced to 5%
→ Savings: Up to 50,000 THB on every million in dividends.
2. Register a BOI Company
You can read more about this here - https://bali-legal.com/en/biznes-v-tajlande-vs-na-bali-en.
Participating in the Board of Investment (BOI) program provides:
Up to 8 years of exemption from corporate tax (CIT = 0%)
No import duties
Simplified visa and permit systems.
Suitable for sectors like IT, R&D, innovation, education, processing, logistics.
Example:
An IT company under BOI earns 4,000,000 THB annually
→ CIT = = 0% instead of 800,000 THB in taxes
→ Savings over 8 years: up to 6,400,000 THB.
3. Optimizing the Distribution of Income Between Salary and Dividends
Dividends are taxed at 10%, but they do not fall under the progressive PIT scale. Salary establishes status and can be kept minimal. The benefit lies in controlling the tax base.
Example:
Instead of taking a salary of 1,500,000 THB per year (PIT = 25%)
→ Pay yourself 600,000 THB in salary and 900,000 THB in dividends
→ PIT: 50,000 THB + WHT: 90,000 THB = 140,000 THB instead of 375,000 THB.
Thailand isn’t a tax paradise, but neither is it a nightmare.
If you act consciously, don’t hide, and build a structured approach, you can pay taxes calmly and profitably. HERE, YOU DON’T NEED TO HIDE — HERE, YOU NEED TO PLAN.
Tools like BOI, DTA, and smart income distribution aren’t “schemes,” but rather instruments embedded in the law itself.
The key is to understand your status, sources of income, keep track of annual reporting, and grasp how the system works.
Alternatively, fill out the form below for a free consultation on running a business, calculating taxes, and comprehensive business process support.
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