As a foreigner, you may be required to pay taxes during your stay in Thailand, whether as a tourist or an expat. To avoid penalties or even prosecution, it is important to know which taxes you must pay to the government while in Thailand.

This page provides information about the taxes that foreigners in Thailand have to pay, how to pay them, and how to legally reduce your tax burden.

Value Added Tax in Thailand

Value Added Tax (VAT) is a tax on the added value of certain goods and services, which arises at each stage of their production or distribution. As a consumer, you pay this tax when you purchase the product or service. In this case, the tax is collected by the company on behalf of the Thai government. All consumers, whether Thai or foreign, must pay this tax. However, tourists who are not residents of Thailand can claim a tax refund (see below).

The current VAT rate in Thailand is 7% and is levied on most goods and services, from restaurant meals and souvenirs to tourist activities. However, the VAT is often already included in the price, so the final price is rounded and consumers don't need to calculate it themselves before purchasing.

Even if it appears you haven't paid VAT, as a tourist in Thailand you should check your receipts to see if it has been charged. If so, keep the receipt to claim a refund.

How tourists in Thailand can get a VAT refund

Strictly speaking, only residents of Thailand are required to pay VAT, as the revenue goes to the government. However, it would be too complicated to check whether a customer is liable for VAT on every transaction. Therefore, tourists receive a total refund of the amount at the end of their trip.

You can apply for a VAT refund in Thailand if you meet the following criteria:

  • You are not a Thai citizen.
  • They currently have no residence in Thailand.
  • You will leave Thailand on a flight from a Thai international airport.
  • You must leave Thailand with the purchased goods within 60 days of the purchase date.
  • The goods or services you have purchased must have come from places marked with the "VAT refund for tourists" label (you must spend at least 2,000 Baht in shops with this label).
  • You are filling out a VAT refund form for tourists.

    • Once you meet the requirements, you can apply for your VAT refund in person at the Tourist VAT Refund Desk at a Thai international airport, submit the documents to the Tourist VAT Refund Office, or send them by post to the Thai Tax Administration.

    The Thai tourist tax will return in 2025.

    The Thai government has proposed the reintroduction of a tourism tax. Once the new tax comes into effect, it will be paid by all visitors upon arrival. The amount of the tax will depend on the chosen mode of transport.

  • Tourists arriving by plane must pay a tax of 300 Baht.
  • Tourists must pay a tax of 150 Baht upon arrival by sea or land.

    • However, the government has indicated that it may set the tax at a uniform fee of 300 THB for all ports.

    The measure has been proposed again to combat overtourism by increasing infrastructure funding and developing alternative destinations to attract visitors from overcrowded areas. A precise date for the introduction of the tourist tax has not yet been set, but the Thai government expects it to come into effect at the end of 2024 or, at the latest, 2025.

    Corporate tax

    This is an income tax levied on companies and legal entities established in Thailand or based abroad. Therefore, if you operate a business set up in Thailand or run a branch of a foreign company, you will have to pay corporate income tax. With corporate income tax, you are essentially taxed on your profits after deducting allowable business expenses from your total revenue.

    Taxable companies and legal partnerships include:

  • Companies or partnerships established under Thai law (e.g., a public limited company or a registered partnership).
  • A company or partnership based abroad that conducts business in Thailand or receives income from Thai sources.
  • A business operated for commercial and profit-making purposes by a foreign government authority or organization, or a legal entity established under foreign law.
  • A joint business venture.
  • A foundation or association engaged in profit-making activities (excluding those listed by the Thai Minister under section 47 (7) (b) of the Thai Tax Law).

    • The standard tax rate is 20% of net profit, although the exact amount varies depending on the type of business or its legal form. For example, small and medium-sized enterprises (SMEs) are subject to a reduced progressive tax rate of 0% to 20%.

    How to reduce your company's tax burden in Thailand

    There are ways to reduce your company's tax burden. One of the best methods is through incentives from the Thai Investment Board (BOI). This provides tax benefits if you operate in an industry that Thailand is actively promoting. These benefits include:

  • Corporate tax exemption: Depending on the type of BOI funding you have applied for, your company may receive a corporate tax exemption on the net profits generated from the funded activities for a period of 3 to 13 years.
  • Increased tax deductions: The BOI subsidy also reduces the costs of transport, electricity and water supply, allowing you to deduct these expenses from your company's net profit, resulting in lower corporate tax.
  • Reduced duties on imported materials: Another benefit of BOI funding is the reduction or waiver of import duties on materials needed for operations, thereby lowering overall costs.

    • If you have established an SME, you may also be able to take advantage of tax breaks to reduce your burden, especially if the paid-in capital is 5 million Baht (or less) and the annual turnover is below 30 million Baht.

    Personal income tax for foreigners in Thailand

    If you earn income during your stay in Thailand, you will most likely have to pay income tax. The amount of tax depends on your annual income. The tax rate varies depending on your income bracket and ranges from 5% to 35%. The higher your income, the higher the tax rate.

    Do all foreigners in Thailand have to pay income tax?

    There are two situations in which you are required to pay income tax. The first involves the Thai withholding tax rule. This states that you must pay tax on all income from Thai sources, regardless of where you are located at the time the income is received. This includes taxable income such as wages and rental income. Therefore, for example, if you work from home for a Thai company or own property in Thailand and receive rental income while living abroad, you will be taxed.

    The next point concerns the Thai tax residency regulations. These state that you must pay taxes if you are a tax resident of Thailand. You are considered a Thai tax resident if you spend at least 180 days in the country during the tax year, which corresponds to the calendar year. All income from domestic sources, as well as any foreign income that you transfer to Thailand, is subject to taxation.

    All individuals who are tax residents in Thailand must file an income tax return for their annual income by March of the following year. This obligation applies even if your income does not reach the tax-free threshold.

    How to reduce your Thai income tax burden

    Tax credits and deductions can reduce your personal income tax burden, just as in other countries. However, to understand all available options, it is advisable to consult a Thai tax advisor to ensure you don't overlook anything and end up paying too much tax.

    Another way to reduce your Thai income tax is to apply for a visa with tax benefits. One example is the Thailand Long Term Traveler (LTR) visa, which allows you to receive all income earned abroad tax-free. If you apply for the LTR visa for highly skilled professionals, you will benefit from a flat income tax rate of 17%, regardless of your actual tax rate.

    You can also check whether your home country has a double taxation agreement with Thailand. Such an agreement reduces your tax burden by either requiring you to pay taxes in only one country or by limiting the amount of tax payable based on the country with the higher tax rate. An experienced Thai tax advisor with knowledge of both Thai and foreign tax law can provide you with further information.

    Experts for Thai tax consulting and tax return services in Thailand

    Should you have any further questions or concerns regarding the various taxes in Thailand, please contact the tax advisors at Siam Legal. As a full-service law firm, we have been assisting foreigners for over 20 years and possess the necessary qualifications and expertise to explain your tax obligations and minimize your tax burden.

    Our tax team analyzes your current financial situation and identifies all possible deductions and tax credits you can use to legally reduce your tax liability. We also assist you with applying for a Tax Identification Number (TIN) and filing your tax return. This ensures that any mistakes will not result in penalties or prosecution.

    Contact Siam Legal today to schedule a consultation and find out how we can eliminate your tax stress and help you keep as much of your money as possible.

    Frequently asked questions about Thai taxes for foreigners

    What is the deadline for filing a tax return in Thailand?

    Thailand has two main tax periods. The first is the annual tax return, due from the beginning of the year until the end of March. This applies to all types of taxable income, and most returns must be filed by March 31st of the respective year. The second tax period is the semi-annual tax return, due from July 1st to September 31st. This applies only to certain types of taxable income.

    Which types of income are taxable in Thailand?

    Anyone earning taxable income in Thailand must pay taxes on it. Taxable income includes not only money, but also assets and benefits in kind. This also includes taxes paid on it as well as tax credits according to Section 47 of the Thai Tax Code. All taxable income must be remitted to the relevant tax authorities.

    This can include, for example, the following types of income:

  • Earned income such as salary and wages
  • Income from self-employment
  • Income from intellectual property and goodwill
  • Income from investments, interest payments and other financial sources
  • Rental payments from any real estate that you have either rented or acquired ownership of
  • Income from freelance professions
  • Income from commissioned work
  • Income from other activities not mentioned above (e.g. trade, agriculture, industry or transport).

    • What happens if I don't submit my tax return on time?

    Anyone who is liable for taxes but fails to pay or intentionally misrepresents their income faces penalties that can jeopardize their stay in Thailand. These range from fines to imprisonment.

    How do I file my tax return in Thailand?

    You are required to file a tax return each tax year before the deadline. You can do this at a branch of the Thai tax office in your country of residence or online via their website. Should you require assistance completing your tax return, we recommend contacting our tax advisors at Siam Legal.

    Can I be exempt from paying Thai income tax?

    In certain cases, you can benefit from tax exemptions. One way to do this is by applying for a Thai visa that offers tax exemptions as one of its benefits. A good example of this is the LTR visa, which exempts you from taxation in Thailand on all income earned abroad.