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Taxation For Foreign Investors
The Thailand Revenue Code is the main body of law that codifies procedures regarding tax assessment and the collection of the various taxes in Thailand. Taxes are mostly collected under a self-assessment system, whereby taxpayers are responsible for correctly filing their tax returns and for paying taxes.
Thailand has entered into numerous Double Taxation Agreements (“DTAs”) with other countries.
The most important taxes that apply to foreign investors in Thailand are corporate income tax and personal income tax. However, there are other taxes and contributions to keep in mind, such as value-added tax, specific business tax, stamp duty, certain municipal taxes and social security payments.
1. Taxation of Individuals
Regardless of whether an individual is a Thai resident or not, if income is derived from employment or business conducted in Thailand, such a person is subject to Thai personal income tax. Furthermore, if an individual stays in Thailand for at least 180 days in any calendar year, he/she is considered a Thai tax resident. As a tax resident, if foreign-sourced income is brought into Thailand in the same year that it is earned, such income will be subject to Thai tax. There are certain deductions of allowances and expenses available, including standard allowances such as personal allowance, allowances for life insurance premiums, provident or pension funds, interest payments, and donations. Depending on the government’s policy each year, there may be other possibilities for tax allowances besides the standard allowances.