Taxation

 

Q: What is the income tax rate in Thailand?

A: Personal income tax is imposed at a progressive rate ranging from 5 percent to 37 percent. Corporate income tax is imposed at a rate of 30 percent of net profits.

 

Q: When is the due date to file tax returns of an individual?

A: An individual must file annual income tax returns not later than the end of March of the following year. Half-year income tax returns are required for individuals who earn certain types of income such as rent, professional fees, income from construction, income from sales of goods, etc. The half-year income tax returns must be filed not later than the end of September of the respective tax year.

 

Q: When is the due date to file tax returns of a juristic person?

A: A juristic person must file half-year tax returns not later than 2 months after the first 6 months of an accounting period and annual tax returns not later than 150 days after the end of the accounting period.

 

Q: Is there any consolidation treatment whereby companies within a group may be treated as one tax entity?

A: There is no consolidation treatment under Thai tax laws. Each corporation is taxed as a separate legal entity.

 

Q: Are payments by a Thai juristic person to a foreign juristic person subject to any Thai income tax?

A: Yes. Payments of certain types of income, usually in the form of service fees, royalties, interest, dividends, rent or professional fees from or in Thailand to a foreign juristic person not carrying on business in Thailand are subject to income tax in the form of a withholding tax at a rate of 15 percent, except for dividends, for which the rate applied is 10 percent.

 

Q: What is the Thai income tax imposed on a foreign juristic person carrying on business in Thailand?

A: For a foreign juristic person carrying on business in Thailand, the income tax imposed is 30 percent corporate income tax on net profits and 10 percent profit remittance tax on profits remitted or deemed remitted abroad.

 

Q: Is there a specific capital gains tax in Thailand?

A: There is no specific capital gains tax in Thailand. Capital gains are subject to tax in the same manner as any other forms of income.

 

Q: Is there a sales tax in Thailand?

A: There is a value added tax ("VAT") instead of a sales tax. The VAT is imposed on sales of goods, provision of services and import of goods into Thailand.

 

Q: What is the VAT rate?

A: The VAT is currently imposed at a rate of 7 percent, which has been reduced from the normal rate of 10 percent on April 1, 1999. From April 1, 2001 onward, the VAT rate will be raised back to 10 percent. For exports of goods, the VAT rate applied is 0 percent.

 

Q: When are VAT returns filed?

A: The VAT registrant must file VAT returns and pay tax (if any) to the local district office monthly, within 15 days from the end of the month which the VAT is to be accounted for.

 

Q: Does Thailand impose taxes on stock options granted by an employer to employees?

A: An employee who received stock options is subject to individual income tax at the time they are exercised. The taxable income derived from receiving stock options is based on the difference between the exercise price and the market price of the shares on the date of receiving ownership in such shares.

 

Work Permit

Q. Are foreigners allowed to work in Thailand?

A. Yes. However a foreigner must obtain a work permit prior to commencing work in Thailand, unless exempted.

 

Q. In case a foreigner works in Thailand but his salary is paid by the parent company outside Thailand, is he still required to have a work permit?

A. Yes. A work permit is required regardless of where the salary is paid.

 

Q. Is a foreigner allowed to work right after he has filed a work permit application?

A. No, only when the work permit has been granted.

 

Q. How long does it take to get a work permit?

A. Usually 2 – 3 weeks.

 

Q. What type of visa is required, if a foreigner wishes to work in Thailand?

A. A Non-Immigrant "B" (Business) Visa.

 

Q. How long is a foreigner allowed to live and work continuously in Thailand?

A. A foreigner can live and work continuously as long as applicable permits are renewed.

 

Q. What is the required minimum ratio of local employees to foreigners in a company that applies for a work permit in Thailand for its foreign employees?

A. There shall be a minimum of 4 local (Thai) employees per 1 foreigner.

 

Q. In case a Thai company wishes to have a foreign technician to install machinery and to teach their Thai staff for 1 – 2 weeks how to operate the machinery, would this foreigner be required to apply for a work permit?

A. In case of necessary and urgent work to be carried out over a period of not more than 15 days, a work permit is not required. However, a notification needs to be filed with the respective authorities.

 

Q. How can a foreign company apply for work permits for its employees?

A. It cannot be done. Only a legal entity registered in Thailand is eligible to apply for work permits.

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