Personal Income Tax (PIT) 2020
In Thailand, the revenue department is responsible for taxes on income. Income tax included corporate income tax and personal income tax, while a corporate income tax is fixed rate, personal income tax is tax on certain level of income.
This article will deliver personal income tax information. All resident, means any person living in Thailand for a cumulative 180 days or more in the calendar year, will be taxable on income from Thailand. Personal income tax is computed on cash basis, so any amount of money is paid and brought into Thailand in the same year that is earned will be included. However, a disabled or taxpayer at 65 years of age or older are exempted from Tax.
The tax rates for employment income and hire of work are as follows:
In the personal income tax structure, taxable income of THB 150,000 or lower is exempt from tax,
THB 150,001 – 300,000 is charged 5%
THB 300,001 – 500,000 is charged 10%
THB 500,001 to THB 750,000 is charged 15%
THB 750,001 – 1 million is charged 20%
THB 1,000,001 to 2 million is charged 25%
The income band for the 30% bracket is for 2,000,001 - 5,000,000 baht, and the range for the top rate of 35% starts at income over 5 million.
Tax Deductions & Allowances
Like every other country, several deductible expenses and allowances are available in Thailand too. These are intended to lessen the personal income tax burden or reduce the tax load.
Each individual taxpayer can claim
THB 60,000 personal allowance
a 50% expense allowance (but not exceed THB 100,000)
a THB 30,000 child allowance
insurance premiums of up to THB 100,000
up to THB 200,000 for retirement insurance premiums
up to THB 100,000 for mortgage interest, plus a raft of contributions
up to THB 9,000 for social security funds, provident funds, and retirement mutual funds (RMFs).
Allowances and Reliefs
A resident may deduct personal and specific allowances:
Insurance and Investment
For the purpose of encouragement people to save money for their retirement. There is a benefit of investment in insurance and mutual fund to be used in tax reliefs.
Life insurance premium paid may be deducted from your assessable income. A qualified life insurance is subject to follow conditions under the announcement from the revenue department. The insurance policy is issued by an insurer who carried on insurance business in Thailand. The life insurance allowance can be used from actual premium but not over THB 100,000
Health insurance premium paid may be deducted from your assessable income as well as life insurance premium. The conditions should be followed under the announcement from the revenue department. The premium is paid to an insurance company operating in Thailand. The health insurance premium can be used from actual premium but not over THB 25,000. The eligible amount of life insurance and health insurance premium is actual paid premium but not exceeding THB 100,000 in total.
Health insurance premium for your parents or your spouse’s parents may be eligible for a health insurance premium allowance. The eligible amount is the actual premium but not exceeding THB 15,00 in total. The parent must not have assessable income exceeding THB 30,000 with the personal identification number. If you are non-Thai resident, a qualified parent must be a Thai resident.
The annuity insurance premium paid is eligible for the actual amount not over 15% of your assessable income with the cap of THB 200,00
The contribution to Social Security Fund under the law on social security can be entitled to an allowance. The qualified amount is actual contribution of 5% of income but not exceeding THB 9,000 in normal year but reduce from 5% to 1 % for period of March to May 2020 in accordance of COVID-19 condition.
Provident fund allowance is deductible according to actual amount paid but not exceeding THB 10,000 which up to THB 490,000 of any excess is also deductible by way of income exemption.
For the purchased investment units in Retirement Mutual Fund (RMF) can be entitled to an allowance with the requirements of an investment every calendar year with the holding period at least 5 years. You must not redemption the investment when your age is under 55 years old. The eligible amount is actual payment not over 30% of taxable income with a cap of THB 500,000.
The latest mutual fund, Super saving fund (SSF) which can be entitled to an allowance claim from actual amount payment not over 30% of taxable income with the cap of THB 200,000. The holding period at least 10 years from purchased date. The tax beneficial period for SSF is limited from the investment period between 2020-2024.
The eligible amount of Parent’s health insurance, annuity insurance, the contribution to Social Security Fund, Provident fund, RMF and SSF is actual paid premium but not exceeding THB 500,000 in total.
For those who have paid residence mortgage loan interest, you may be entitled to interest deduction. The interest on loan should be taken on banks which is carry on business in Thailand. The purchase or hire purchase a building, a building with land or a condominium with the purpose of residential building.
The total combined amount you paid for qualified residence mortgage loan interest can be deducted with the actual amount but not over THB 100,000
For donation there are two categories, double donation allowance and actual donation allowance.
The double donation allowances in total of all organizations can be calculated by double deduction of actual donated amount but not exceeding 10% of income after standard deductions and allowances. Not every organization can be implemented with double deduction. It is implied for those organization announced from the Thai government and can be categorize into 4 main organizations.
Educational organization under the ministry of education with donation via e-donation only.
Hospital organization under Thai government with the original receipt or via e-donation directly sent the information to the revenue department.
Sport organization under the Sports Authority of Thailand with the original receipt or via e-donation directly sent the information to the revenue department.
Donation for other organizations which is announced from the revenue department.
For other charitable contributions can be deducted with actual amount but not exceeding 10% of income after standard deductions and allowances as well.
Payment and Form
The employer is responsible for the completion and submission of the PND 1 and for related withholding tax, social security fund deductions and provident fund contributions, where applicable. Responsibility for the completion and submission of the PND 90 or 91 rests with the employee.
Personal income tax is one of the key revenues that allow government to develop our country. As a part of resident in Thailand it is a crucial responsibility to pay attention on personal income tax. This will benefit both taxpayer and the revenue department, regarding to the understanding regulation of income tax and ensure that the information is up to date.
Tax Relief Measures 2020 – 2021 in Response to COVID-19
Thailand has issued a variety of tax relief measures to counter the economic impact of the COVID-19 outbreak. This comes after the Bank of Thailand has forecasted the economy shrinking by 5.3 percent this year, aimed at supporting tax payers in Thailand. Below please find an overview of the most significant measures. Further measures are expected to be rolled out in the future.
Reduction in withholding tax (“WHT”) rates.
On 30 Mar 2020, Thailand Tax Ministerial Regulation No 361 (BE 2563) was gazetted, reducing the 3% withholding tax rate to 1.5% for domestic payments for the hire of work, services, commission, and professional fees, as period below:
For payments made during the period 01 April 2020 to 30 September 2020 – 1.5%; and
For payments made during the period 01 October 2020 to 31 December 2021 – 2% (for e-payments and e-withholding tax only)
Payments to foundations or associations that carry out business are not be eligible for any of these reductions.
Those who will receive the benefits from this tax measures include individuals, companies, and partnerships.
Deduction of expenses for donations for COVID-1
For those who make donation to the Office of the Permanent Secretary, Prime Minister’s Office in order to help fight the COVID-19 Virus between 5 March 2020 and 5 March 2021 can deduct the expenses.
An individual: 10% maximum of net income
Companies or legal partnerships: 2% maximum of net income
Remark: The donation is exempt from VAT
Faster VAT refunds
Businesses that participated in the ‘Good Exporter’ program can
receive VAT refunds as below:
15 days (normally take 30 days) for businesses filling through the e-filing system and.
45 days (normally take 60 days) for businesses filing paper returns
Personal income tax filing extension (PND.90/91)
The government has extended the deadline for the filing of personal and CIT returns. The new deadline for filing personal income tax is August 31, 2020.
Corporate income tax filing extension (PND.50/51)
The filing deadlines for corporate income tax of a non-listed company is extended as follows:
Accounting period ending 2019 (PND 50), in case of the taxpayer to file a tax return from 1 April 2020 – 30 August 2020, the deadline will be extended to 31 August 2020; and
Accounting period ending 2020 (PND 51), in case of the taxpayers to file a tax return from 1 July 2020 – 29 September 2020, the deadline will be extended to 30 September 2020.
Remark: Without this tax relief measure, the regular filing and payment deadline is within 150 days from the last day of an accounting period.
Personal tax allowance for purchase of SSF units
Individual taxpayers will be able to claim an allowance of up to Baht 200,000 for units purchased in a Super Savings Fund from 1 April 2020 to 30 June 2020 (3 months) , where the fund has a policy to invest not less than 65% of its NAV in securities listed on the Stock Exchange of Thailand (SET).
This allowance is separate from the allowance normally allowed for purchases of SSF units and is not subject to the deduction limit for retirement funds of Baht 500,000.
Related Article: Understanding Thailand Payroll Deduction and Employee Benefits Taxes