Personal Income Tax (PIT)

Personal Income Tax (PIT), also known as Salary Tax, is a direct tax levied on income of a person.
A person means an individual, an ordinary partnership or a non-juristic body of person.
In general, a person liable to PIT has to compute his tax liability, file tax submission and pay tax, if any, on a calendar year basis.

Taxable Person

Taxpayers are classified into 'resident' and 'non-resident'. A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand. Tax treaties between Thailand and a great number of countries avoid the double taxation on income from foreign sources.

Basis for Personal Income Tax calculation

Income chargeable to the PIT is called "assessable income". The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, are also treated as assessable income of the employee for the purpose of PIT.

Assessable income is:

• Income out of employment
  
• Income out of rendered service
  
• Income from goodwill, copyright, income derived from will or any other juristic act or judgment of court
  
• Income out of interest, dividends, profit-sharing or other benefits arising from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings
  
• Income from letting out of property on hire and from breaches of installment sales or hire-purchase contracts
  
• Income from liberal professions
  
• Income from construction and other contracts of work
  
• Income from business, commerce, agriculture, transport or any other activity not specified before.

Deductions and allowances

To calculate the taxable income the assessable income is lowered by deductions and allowances.

Deductions are granted to an amount of 40% of the assessable income, maximized to 60.000 Baht. This general deduction applies to income out of employment and rendered service. Other income types know special deductions.

Allowances refer to the taxpayer's personal circumstances.

• Personal Allowance; for single living taxpayer 30,000 Baht; when married 60,000 Baht
  
• Child allowances is limited to 3 children each 15,000 Baht for children under 25 years of age and studying at educational institution
  
• Educational allowance; 2,000 Baht per child, studying in an educational institution in Thailand
  
• Life Insurance premium, paid by taxpayer or spouse. The amount actually paid but not exceeding 100,000 Baht each
  
• Approved provident fund contributions paid by taxpayer or spouse. Amount actually paid at the rate not more than 15% of wage but not exceeding 500,000 Baht each
  
• Home mortgage interest; the amount actually paid but not exceeding 100,000 Baht
• Long term equity fund, the amount actually paid at the rate not more than 15% of wage but not exceeding 500,000 Baht
• Parents allowance ; 30,000 Baht for each of tax payer's and spouse's parents if such parent is above 60 years old and earn less than 30,000 Baht
  
• Social insurance contributions, paid by taxpayer or spouse; the amount actually paid each
  
• Charitable contributions; amount actually donated but not exceeding 10% of income after standard deductions and allowances
  

Tax Rates

Personal Income Tax is calculated on progressive tax rates.
In the case where income is earned from source other than employment and income exceeds 60,000 Baht per annum, taxpayer has to calculate the amount of tax by multiplying 0.5% to the assessable income and compare with the amount of tax calculated by progressive tax rates. Taxpayer is liable to pay tax at the amount whichever is greater.

Separate Taxation

There are several types of income that the taxpayer shall not include or may not choose to include such income to the assessable income in calculating the tax liability.
Separate taxation rules apply to income of immovable property sales, income from dividends and interest.

Tax Payment

Personal Income Tax must be calculated, submitted and paid for by employers on a monthly basis. Especially the allowances are strictly dependent on taxpayer's circumstances and may be subject to changes during the year. Employers cannot avoid that, due to changes in personal circumstances, the taxpayer is due or receives back income tax at tax-year end.
Ø Taxpayer is liable to file Personal Income Tax return (Form PIT 90 or 91) and make a payment to the Area Revenue Branch Office within the last day of March following the taxable year.
Ø Employers are liable to file and submit the Personal Income Tax form for all personnel employed and make a payment to the Area revenue Branch Office, 7 days after the end of each month.