Personal Income Tax (PIT) is a direct tax levied on income of a person. Individuals liable to pay tax on their income are classified as either ‘resident’ or ‘non-resident’. A resident is any person living in Thailand for a cumulative 180 days or more in the calendar year.
A resident will be taxable on income from all sources in Thailand on a cash basis regardless of where the money is paid, and on the portion of income that is brought into Thailand in the same year that it is earned. A non-resident is only taxable on income from sources in Thailand.
Tax rates vary according to income of the income. In the personal income tax structure, taxable income of 150,000 baht or lower is exempt from tax, 150,001-300,000 baht is charged 5%, 300,001-500,000 baht is charged 10%, 500,001 to 750,000 baht is charged 15%, 750,001-1 million baht is charged 20% and 1,000,001 to 2 million is charged 25%. The income band for the 30% bracket is for 2,000,001 to 5 million baht, and the range for the top rate of 35% starts at income over 5 million.
For salaried people, employers have the obligation to deduct this tax at source when paying taxable salaries. These deductions are based on an estimate of the annual taxes that we divide by 12 months. The employer is responsible for the completion and submission of the PND 1 on or before 7th of the following month however companies registered for e-filing have an extra eight days. An annual filing is mandatory every year.