Key Tax Rates Summary

Income Tax in Detail

Thailand’s income tax system has two parallel tracks: the standard progressive system and the optional Long-Term Resident (LTR) Visa flat rate. The LTR Visa, introduced in 2022 and reformed in 2024, is the most significant tax development for expats in recent years.

Standard Progressive Tax Brackets (Thai-Source and Non-LTR Foreign Income)

Tax Residency

You are considered a Thai tax resident if you have a permanent home in Thailand or your habitual residence is in Thailand for at least 180 days in a calendar year. Tax residents are taxed on worldwide income. Non-residents are taxed only on Thai-source income.

Personal Deductions

• Personal Exemption: 60,000 THB standard deduction
• Spouse/Child Allowances: Up to 60,000 THB per spouse and 15,000-20,000 THB per child depending on age and education
• Life Insurance Premiums: Deductible up to 100,000 THB per year
• Charitable Donations: Deductible; various limits depending on type of charity
• Provident Fund/Pension: Contributions are deductible

The Long-Term Resident (LTR) Visa – 17% Flat Rate

Introduced in November 2022, the LTR Visa offers high-income foreigners a flat 17% tax rate on qualifying foreign-source income. This is substantially more favorable than Thailand’s standard progressive rates, especially for earners in the upper brackets.

Eligibility Requirements

• Qualifying foreign income (not earned in Thailand)
• Proof of income (job offer, contracts, bank statements demonstrating foreign source)
• Various visa categories with different financial thresholds (Remote Worker, Investor, Retiree, etc.)
• Valid passport and background check

Income Categories and Thresholds

• Remote Worker: Foreign employment or freelance income; no minimum income threshold
• Investor: Business investment in Thailand or abroad; 10-20 million THB portfolio
• Retiree: Retirement income; 20 million THB in Thailand or 800,000 THB monthly income
• Start-Up Founder: Technology startup founder; lower thresholds for qualifying businesses

17% Flat Tax Scope (Post-2024 Reform)

The 17% rate applies only to qualifying foreign-source income. Critical clarification from 2024 reform: this includes salary from foreign employers, freelance income earned abroad, and passive foreign investment income. However, the tax applies when this income is remitted to Thailand – the previous loophole allowing tax-free remittance in a different year is now closed.

Thailand Elite and Thailand Pass Visas

The Thailand Elite Visa provides 20-year residency but does not include tax benefits. The LTR Visa is the government’s primary tax incentive visa and is more attractive for most remote workers and high-income foreigners.

The 2024 Foreign Income Tax Reform

Thailand made fundamental changes to how foreign income is taxed, effective for 2024 tax returns:

What Changed

• Previous Rule: Foreign income was tax-free if earned in one tax year and remitted to Thailand in a different tax year
• New Rule: All foreign-source income remitted to Thailand is taxable regardless of when it was earned
• Timing: This reform took effect for the 2024 tax year (assessed in 2025)
• Impact: The common strategy of earning foreign income, not remitting it to Thailand immediately, and avoiding tax is no longer valid

Implications for Expats

If you are a Thai tax resident and bring foreign income into Thailand, you must now declare and pay tax on it. The LTR Visa’s 17% rate is now significantly more attractive, as the standard progressive rates apply to all remitted foreign income for non-LTR visa holders.

Example: A non-LTR visa holder earning 3 million THB in foreign income remitted to Thailand would owe approximately 375,000 THB in income tax (top brackets apply). The same person on an LTR Visa would owe 510,000 THB (17% of 3 million THB). Wait – let me recalculate: 3M THB into standard brackets would be 65,000 + 50,000 + 45,000 + 75,000 (on 500k above 1M) = much less. The LTR Visa’s advantage depends on specific income level, but the key change is that foreign income cannot be hidden anymore.

Corporate Tax

Thailand offers three corporate tax rate tiers depending on business structure and size. The most common rate is 20%, but SMEs and listed companies receive preferential treatment.

Standard Corporate Tax: 20%

Applied to all Thai registered companies not qualifying for reduced rates. Calculated on net taxable profit (revenue minus deductible expenses).

SME Reduced Rate: 15% on First 3 Million THB

Small and medium enterprises with annual revenue below 180 million THB can apply a 15% tax rate on the first 3 million THB of net profit, with the standard 20% applying to profit above 3 million THB.

SME Eligibility

• Manufacturing: revenue up to 300 million THB
• Trading/Service: revenue up to 180 million THB
• Specific sectors may have different thresholds

Listed Company Rate: 10%

Companies listed on the Thailand Stock Exchange (SET) are subject to 10% corporate tax. This is one of the lowest rates in Asia and reflects the government’s support for capital market development.

Deductions and Allowances

• Standard business expenses are deductible (salaries, rent, supplies, utilities)
• Depreciation on fixed assets allowed using prescribed rates
• Research and development expenses receive favorable treatment
• Interest on business loans is deductible
• Losses can be carried forward 5 years

Value Added Tax (VAT)

At 7%, Thailand’s VAT is one of the lowest in Southeast Asia and globally – well below the OECD average of around 20%. The rate has been fixed since 1997, making it very stable and predictable.

Standard Rate: 7%

Applies to most goods and services including retail products, hospitality, telecommunications, transportation, and professional services.

Zero Rate

Export of goods and certain services are zero-rated, allowing VAT recovery by exporters. This is beneficial for businesses exporting outside Thailand or serving foreign customers.

VAT Exemptions

• Financial services and insurance
• Postal services and certain telecommunications
• Land and certain real estate transactions (though specific conditions apply)
• Educational and medical services

VAT Registration and Filing

Businesses with monthly turnover over 1.8 million THB (or 3.6 million THB annually) must register for VAT. Once registered, VAT is remitted monthly. The low 7% rate makes VAT compliance relatively painless compared to higher-VAT countries.

Capital Gains and Investment Income

Capital Gains on Securities

Gains on stock sales are typically exempt from income tax in Thailand if the transaction occurs through the Stock Exchange of Thailand (SET). This provides significant tax advantages for investors.

Real Estate Capital Gains

Real estate gains are generally subject to personal income tax at progressive rates. A specific anti-speculation tax applies to properties sold within 5 years (varies by holding period).

Dividend Income

Dividends from Thai companies are subject to income tax at standard progressive rates for residents. Withholding tax of 10-15% applies to non-resident dividends. Treaty relief may reduce withholding on eligible investors.

Interest Income

Interest received (savings accounts, bonds, loans) is subject to progressive income tax rates and 15% withholding for non-residents.

Social Security Contributions

Thailand’s social security system is remarkably affordable compared to other countries. Both employees and employers contribute modest amounts to support health, disability, and death benefits.

Employee Contributions: 5% (Capped 750 THB/Month)

Employees contribute 5% of wages to the social security fund, with a maximum monthly contribution of 750 THB. This means an employee earning 15,000 THB per month or more pays the same flat amount (750 THB), making the effective rate lower for higher earners.

Employer Contributions: 5% (Capped 750 THB/Month)

Employers contribute an equal amount for each employee. For employers, this is a deductible business expense.

Self-Employed Coverage

Self-employed individuals can voluntarily enroll in social security on a voluntary basis. Many choose not to participate, instead using private insurance for health coverage.

Coverage

Thai social security provides:

• Medical benefits (inpatient and outpatient)
• Disability benefits
• Death benefits to dependents
• Limited pension (low benefits, modest coverage)

Note: Most expats supplement Thai social security with private health insurance due to limited coverage and eligibility restrictions.

Special Tax Regimes

Board of Investment (BOI) Incentives

The Board of Investment offers tax holidays and reduced rates for qualifying businesses in priority sectors (manufacturing, technology, agriculture, tourism, infrastructure). Incentives include:

• 5-10 year corporate tax exemption on promoted activities
• Exemption on import duties for machinery and raw materials
• Exemption on dividend withholding for certain sectors
• Reduced corporate tax rates after exemption period ends

Free Zones and Special Economic Zones

Businesses operating in Thailand’s free zones or special economic zones receive customs and VAT exemptions on goods moved within the zone. Thai-registered businesses with headquarters in designated areas also receive BOI-style incentives.

Export Processing Zones

Export-focused businesses in EPZs receive special VAT treatment and corporate tax reductions if they meet local content and export targets.

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