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Taxes in Thailand: Which should I pay?
Save money with the lowest taxes in Asia! Find out everything you need to know about Thailand's taxes for individuals and businesses
Did you know that taxes in Thailand are one of the most competitive tax systems in Southeast Asia? When living in a foreign country, we must also be aware of its tax obligations to stay up-to-date with payments.
This country has relatively low rates compared to other countries, and additionally, the Thai government has signed tax treaties with more than 60 countries to encourage foreign professionals to move to the country.
In this article, we’ll explain in detail the taxes you need to pay in Thailand in 2025, both for individuals and businesses. We will show you the current rates for direct and indirect taxes with practical examples so you can better understand how they apply.
If you’re thinking about moving to this country to live, work, set up a business, or invest, keep reading this guide we’ve prepared for you, saving you time and headaches!
Taxes for Individuals in Thailand
Individuals, or natural persons, are those who have rights and obligations recognised by the law. According to the tax system, this refers to someone working as an employee or self-employed, not representing any company or corporation. For example, digital nomads or local workers would be considered natural persons.
There are various taxes in Thailand for these individuals, both direct and indirect. We’ll explain it in more detail below.
Personal Income Tax
This direct tax applies to the income earned by each individual, both within and outside the country. Additionally, it’s progressive, ranging from 0% to 35%, so the rate increases as earnings rise, but who has to pay it?
- Tax residents: If you spend more than 180 days in Thailand, you are a tax resident and must pay taxes on your global income.
- Non-residents: You only need to pay this tax on income earned within the country.
| Tax rate | Annual Income in Dollars | Annual Income in Euros |
|---|---|---|
| 0% | $0 – 4,000 | (€0 – 3,648) |
| 5% | $4,001 – 8,000 | (€3,648 – 7,296) |
| 10% | $8,001 – 13,300 | (€7,296 – 12,130) |
| 15% | $13,301 – 20,000 | (€12,130 – 18,241) |
| 20% | $20,001 – 26,600 | (€18,241 – 24,260) |
| 25% | $26,601 – 53,300 | (€24,260 – 48,612) |
| 30% | $53,301 – 133,300 | (€48,612 – 121,577) |
| 35% | More than $133,300 | (More than €121,577) |
For example, if you, as an individual, earn $30,000 (€27,361) a year, you would pay a total of $3,905 (€3,561) annually, applying the percentages from the table above.
Value Added Tax (VAT)
This indirect tax in Thailand, known in other countries as VAT, is applied to the consumption of goods and services. Due to Thailand’s low cost of living, the VAT rate is reduced compared to countries where it can be as high as 21%, such as in Spain.
The final consumer pays it, as it’s reflected on the receipt or invoice issued by the company, which is responsible for submitting it to the Thai government.
- Standard rate: 7% for all goods and services.
- Exemptions: medical services, education, local transport, and exports.
- Example: If you buy a piece of clothing worth $100 (€91.21), a 7% VAT will be added, bringing the total price to $107 (€97.59).
Land and building tax
Any individual who owns property or land in Thailand will be subject to this annual property tax. The rates depend on whether the property is residential or commercial, ranging from 0.02% to 1.2% based on the property’s appraised value:
- Residential: rate of 0.02% to 0.10%. For a house worth $150,000 (€136,809), you would pay a tax of 0.02%, amounting to $30 (€27.36) per year.
- Commercial: rate of 0.30% to 0.70%. For a commercial property in Chiang Mai valued at $100,000 (€91,206), you would pay $300 (€273) per year.
- Land: up to 1.20%. For a land plot worth $200,000 (€182,412), the tax would be $2,400 (€2,188).
Stamp Duty
A certain tax is applied to legal documents or transactions in Thailand, which must be paid by individuals. These are official documents used to formalise agreements.
This tax is not based on your income, but rather the type of document, and is paid by purchasing stamp duty stamps, which are affixed to the certificate or processed online:
- Lease contracts: tax of 0.1% on the rental value. A yearly rent of $6,000 (€5,472) would incur a stamp duty tax of $6 (€5.47) annually.
- Shares: tax of 0.1% if you buy or sell unlisted shares.
- Promissory notes: tax of 0.05% on the document value.
- Exemptions: employment contracts and personal transactions without legal formation.
Taxes for Businesses in Thailand
Now that we’ve covered taxes for individuals in Thailand, let’s look at the taxes that businesses or corporations face in the country.
Corporate Income Tax
Just as individuals must pay tax on their annual income, businesses are subject to corporate income tax on the revenue they generate each year. It’s a direct and progressive tax, depending on the type and size of the business:
- Standard rate: 20% on net income exceeding $300,001 (€273,619).
- Reduced rate: 15% for businesses with income under $300,000 (€273,618).
- Example: A business with annual net income of $400,000 (€364,824) would pay $45,000 for the first $300,000 at 15% and $20,000 for the remaining $100,000 at 20%, resulting in a total tax of $65,000 (€59,283).
VAT
As we explained earlier regarding this same tax, businesses are responsible for collecting the VAT from the final consumer, which they will then pass on to the government.
For this, businesses must be officially registered and can also claim VAT deductions for business-related purchases. Let’s see how it works:
- Standard rate: 7% on the sale of goods and services.
- Example: If your business sells a product for $1,000 (€912), you would add 7% to the final price, $70 (€63.84), which would be collected from the customer and then remitted to the government.
Social security contributions
Businesses with employees must pay a series of taxes in Thailand to contribute to the social security system. This rate applies to the employee’s monthly salary as follows:
- Contribution rate: 5% of the employee’s salary, plus an additional 5%.
- Example: If you have an employee who earns $2,000 (€1,824) per month, the tax you must pay would be $200 (€182).
Property and Land Tax
Taxes on commercial or industrial properties of businesses in Thailand are calculated based on the appraised value and the rate will depend on the type of property and location:
- Rate of 0.30% to 0.70%: for commercial properties.
- Example: If you buy a commercial building in Bangkok valued at $500,000 (€456,030), you would pay a 0.50% rate, which would amount to $2,500 (€2,280) per year.
Withholding Tax
In Thailand, when a business pays suppliers for specific services, they must withhold a percentage of that payment and send it to the government. Here’s how it works:
- 3% rate: for professional services like lawyers or consultants.
- 5% rate: for leases.
- 15% rate: for payments to foreign entities.
- Example: If you have to pay $2,000 (€1,824) for a service contracted to a consultant, the withholding tax would be 3% = $60 (€54.72).
How to Pay Taxes Online in Thailand
The country’s tax system allows you to pay taxes online. This means you can complete all your taxes even if you’re travelling abroad, following these steps:
- Register in Thailand’s Tax Department system via the official e-Tax portal (www.rd.go.th).
- Select the type of tax you want to pay.
- Have all necessary information about your income, profits, invoices, and deductions ready.
- Complete your tax declaration by following the instructions on the website.
- Make the payment via bank transfer or credit card.
- Save the digital confirmation of your payment on your device.
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| Subscription | Details | Rate |
|---|---|---|
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Tax Benefits in Thailand
In addition to all the taxes in Thailand we’ve outlined in the previous sections, the government has also implemented a tax incentive plan to help new businesses and attract foreign talent. Here are the main incentives:
| Tax benefit | Description |
|---|---|
| Exemption for New Entrepreneurs | Exemptions or tax reductions for up to 3-5 years. |
| Special Economic Zones (SEZ) | Reduced tax rates to promote investment. |
| Foreign Investment (BOI) | Exemption on income tax for up to 8 years and exemption on property tax. |
| Reduced Taxes for Expatriates | Fixed 15% tax rate on income earned outside Thailand. |
| Thailand Elite Visa Program | Administrative advantages for establishing residence in the country. |
| Technology Company Creation | Tax deductions and VAT exemptions. |
Frequently Asked Questions About Taxes in Thailand
This tax is paid annually through the Thai Tax Department’s e-Tax system. You can make the payment via bank transfer or credit card.
Yes, the government has implemented a series of measures to encourage foreign talent to come to the country. Some of these benefits include a fixed 15% tax rate on income earned outside Thailand.
Some of these zones include Chiang Rai, Tak, Mukdahan, Sa Kaeo, Trat, Songkhla, and Chachoengsao
This tax applies to real estate properties, whether homes, commercial buildings, shops, or land. The rate varies from 0.2% to 1.2%, depending on the property’s appraised value.
As it is a progressive tax, it depends on your annual income. This rate ranges from 5% to 35%, and those earning less than $4,000 (€3,648) are exempt.
