Thailand Tax Regime

Thailand taxes companies incorporated in Thailand on worldwide income, and foreign companies on the profits of business carried on in Thailand, at a corporate income tax rate of 20%. Small companies (low paid-in capital and turnover) pay on a reduced 0%/15%/20% scale, and the Board of Investment grants generous multi-year tax holidays to promoted activities. A foreign company without a Thai presence is taxed by final withholding (generally 15%, and 10% on dividends). Indirect taxation runs through a 7% value-added tax. From 2025 a 15% Pillar Two top-up tax applies to large multinational groups.

Individuals are taxed on a progressive scale to 35%, on Thai-source income and on foreign income brought into Thailand (the remittance basis, recently tightened). There is no local income tax. A company is resident if incorporated in Thailand; an individual is resident if present for at least 180 days in a tax year.

1.1 Sources of law and treaties

The Revenue Code (governing corporate income tax, personal income tax, VAT, specific business tax and stamp duty), the Petroleum Income Tax Acts and the Investment Promotion Act govern the system, administered by the Revenue Department and (for incentives) the Board of Investment. Thailand has an extensive treaty network and is implementing the OECD's international tax standards.

1.2 Recent developments

The most consequential recent and pending changes are:

The Emergency Decree on Top-up Tax (promulgated December 2024) implementing the OECD Pillar Two regime — a qualified domestic minimum top-up tax, an income inclusion rule and an undertaxed-profits rule, all effective for fiscal years beginning on or after 1 January 2025 — for groups with consolidated revenue over EUR 750 million.

A tightening of the personal remittance basis: foreign-source income of a Thai tax resident is now taxable when remitted to Thailand in any later year (not only the year earned), with a proposal to move toward worldwide taxation under discussion.

Continued Board of Investment and International Business Centre incentives, and the periodic renewal of the 7% VAT rate (the statutory rate is 10%).

Headline statutory corporate income tax rate for a resident company. Where sub-national (state, provincial, cantonal or municipal) corporate taxes apply, the combined rate reported by the OECD is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

Top marginal statutory personal income tax rate on employment income for a resident individual. Where sub-national (state, provincial, cantonal or municipal) income taxes are a standard part of the system, the combined top rate is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

2.1 Residence and scope

A company incorporated in Thailand is taxed on worldwide income; a company incorporated abroad is taxed on profits arising from or in consequence of business carried on in Thailand (including through a branch). A foreign company not carrying on business in Thailand is instead subject to final withholding tax on certain Thai-source income (interest, dividends, royalties, rentals and service fees). There is no separate local income tax.

2.2 Rates

The corporate income tax rate is 20% of net profit. Small companies and juristic partnerships — those with paid-in capital not exceeding THB 5 million and revenue not exceeding THB 30 million — instead pay 0% on the first THB 300,000 of net profit, 15% on profit up to THB 3 million, and 20% above. Petroleum companies are taxed separately under the Petroleum Income Tax Acts (50% for concessionaires, 20% for production-sharing producers).

2.3 Income determination and deductions

Net profit is computed on an accruals basis from the accounts adjusted for tax, with deductions for expenses incurred exclusively for the business and not specifically disallowed. Depreciation follows maximum statutory rates (with accelerated allowances for certain assets), and a number of expenses attract enhanced (additional-percentage) deductions as incentives. Specific rules govern reserves, donations and entertainment.

2.4 Interest and financing

Thailand has no general statutory interest-barrier or thin-capitalisation rule applicable to ordinary companies (a debt-to-equity expectation applies under Board of Investment promotion), but interest deductions must satisfy the arm's-length standard, and withholding-tax and specific-business-tax consequences attach to related-party and cross-border financing. Anti-avoidance scrutiny applies to back-to-back and low-substance arrangements.

2.5 Losses

Tax losses may be carried forward for five consecutive accounting periods to offset future profits; there is no carryback. Losses are personal to the company, and there is no group-relief or consolidation regime, so each company is assessed separately.

2.6 Transfer pricing

Thailand's transfer-pricing regime (in force since 2019) requires related-party transactions to be at arm's length, with an annual disclosure form for companies above a revenue threshold (broadly THB 200 million) and local-file/master-file documentation on request, plus country-by-country reporting for large multinational groups. The Revenue Department actively reviews related-party pricing, and advance pricing agreements are available.

2.7 Incentives — the Board of Investment and IBC

The Board of Investment (BOI) grants promoted businesses powerful incentives — corporate-income-tax holidays of up to eight years (extendable, and longer for targeted ‘S-curve’ and advanced-technology activities), import-duty exemptions, and non-tax privileges such as land ownership and work permits. The International Business Centre (IBC) regime offers reduced corporate-tax rates and withholding reliefs to qualifying regional headquarters, treasury and trading operations meeting expenditure and employment conditions.

2.8 Pillar Two

The Emergency Decree on Top-up Tax implements the OECD Pillar Two GloBE rules — a qualified domestic minimum top-up tax, an income inclusion rule and an undertaxed-profits rule, all taking effect together for fiscal years beginning on or after 1 January 2025 — for groups with consolidated revenue over EUR 750 million. The domestic top-up tax brings the effective rate on Thai profits of in-scope groups up to 15%, with notification, GloBE information return and top-up-tax return due within fifteen months of the year-end (eighteen for the transition year), and detailed mechanics left to subordinate legislation.

3.1 Residence and rates

An individual is a Thai tax resident if present in Thailand for at least 180 days in a tax (calendar) year. Residents are taxed on Thai-source income and on foreign-source income that is brought into Thailand (the remittance basis, recently tightened so that remittances in any later year are caught). Personal income tax is progressive across eight bands, from a tax-free threshold rising to a top marginal rate of 35%, with standard and itemised deductions and personal allowances.

Indicative. As-of June 2026.

3.2 Investment income and capital gains

Dividends from Thai companies may be taxed by a final 10% withholding (or included in the progressive computation with an imputation-style credit). Thailand has no separate capital-gains tax: gains are generally taxed as ordinary income, but capital gains realised by individuals on the sale of shares listed on the Stock Exchange of Thailand through a licensed broker are exempt. Interest is generally taxed by a 15% final withholding for individuals.

3.3 Inheritance, gift and the absence of a wealth tax

Thailand levies no annual net wealth tax, but an inheritance tax applies at 10% (5% for ascendants and descendants) on the value of an inheritance received by any one heir above THB 100 million, and a related gift tax of 5% applies to large gifts above defined thresholds. Most estates fall below the inheritance-tax threshold, so the practical reach is narrow.

A foreign company without a Thai presence is taxed by final withholding on Thai-source income: dividends at 10%, and interest, royalties, rentals and service fees generally at 15%, each reduced by treaty. Domestic payments are also subject to withholding at source (broadly 3% on services and professional fees, 5% on rent, 1% on interest and 10% on dividends), creditable against the recipient's final liability. Representative non-resident outcomes:

5.1 Pricing, source and the minimum tax

Thailand's international framework rests on its source rules, the transfer-pricing regime (Section 2.6) and, for large groups, the Pillar Two top-up tax (Section 2.8), rather than on a CFC or interest-barrier regime. The remittance basis for individuals and the branch-profit and final-withholding rules for foreign companies determine the reach of Thai tax on cross-border income.

5.2 Anti-avoidance and disclosure

The Revenue Department applies substance-over-form and specific anti-avoidance provisions to counter artificial arrangements, supported by the transfer-pricing disclosure form, exchange of information and (for large groups) country-by-country and GloBE reporting. Treaty benefits are subject to the principal-purpose test under the multilateral instrument.

5.3 Foreign tax relief

Residents obtain relief for foreign tax under Thailand's treaties (by credit) and, in defined cases, unilaterally, limited to the Thai tax on the foreign income; the remittance basis itself limits the foreign income within charge. The mutual-agreement procedure addresses cross-border double taxation, and advance pricing agreements provide transfer-pricing certainty.

6.1 Value-added tax and specific business tax

VAT is charged at 7% (the statutory rate is 10%, reduced by periodically renewed decree), with a 0% rate for exports and certain international services and exemptions for small businesses and specified supplies. Certain businesses outside VAT — notably banking, finance and the sale of immovable property — are instead subject to the specific business tax (broadly 3% plus a municipal surcharge, an effective 3.3%). Foreign suppliers of electronic services to Thai consumers must register and account for VAT.

6.2 Property, stamp and other taxes

A land-and-building tax is levied annually by local authorities on the appraised value of property (at low rates that vary by use), and transfer fees and specific business tax or stamp duty apply on real-estate transfers. Stamp duty applies to specified instruments, and excise tax applies to fuel, vehicles, tobacco, alcohol and certain other goods. There is no net wealth tax.

6.3 Social security and customs

Employer and employee social-security contributions (each a percentage of wages up to a cap) fund health, pension and unemployment benefits. Customs duties apply on imports, subject to ASEAN and free-trade-agreement relief and to Board of Investment and free-zone exemptions for promoted and export activity.

7.1 Filing and payment

Tax is self-assessed and administered by the Revenue Department. Companies file a half-year return (PND 51) within two months of the end of the first six months of the accounting period, paying tax on estimated or actual half-year profit, and an annual return (PND 50) within 150 days of the year-end. VAT and withholding-tax returns are filed monthly, and audited financial statements accompany the annual return.

7.2 Audit, rulings and limitation

The Revenue Department conducts desk and field audits and issues rulings on the application of the Revenue Code. Assessments are generally made within two years of filing (extendable to five years, and to ten years where no return is filed), and surcharges and penalties apply to underpayment and late filing, mitigated by voluntary correction.

7.3 Disputes

A taxpayer appeals an assessment to the Board of Appeal and then to the Tax Court, with onward appeal to the Court of Appeal for Specialised Cases and the Supreme Court. The mutual-agreement procedure under treaties addresses cross-border double taxation, and advance pricing agreements and rulings provide certainty.

Indicative deadlines. As-of June 2026.

9.1 Entity choice and foreign ownership

Foreign investors typically operate through a Thai limited company or a branch or representative office; the Foreign Business Act restricts majority foreign ownership in many service and other sectors (commonly to 49%), so the structure, any BOI promotion (which can permit majority or full foreign ownership) and treaty protections must be considered at the outset. A branch is taxed at 20% on its Thai profits, with a remittance tax on profits sent abroad.

9.2 BOI promotion and structuring

Promoted activities almost always seek Board of Investment privileges — multi-year corporate-tax holidays, import-duty exemptions and relaxed foreign-ownership and work-permit rules — while regional functions use the International Business Centre regime. Financing and related-party pricing are tested under the transfer-pricing rules, and dividend repatriation is planned around the 10% withholding (treaty-reduced) and any BOI exemption.

9.3 A worked illustration

A Thai company with THB 10 million of net profit pays corporate tax at 20% — THB 2 million. A qualifying small company (paid-in capital up to THB 5 million and turnover up to THB 30 million) would instead pay 0% on the first THB 300,000, 15% to THB 3 million and 20% above, and a BOI-promoted company may pay 0% during its tax-holiday period. A foreign company without a Thai presence is taxed only by final withholding on Thai-source payments (10% on dividends, 15% on most other income).

9.4 Compliance and practical points

The half-year and annual corporate returns, monthly VAT and withholding filings, and the transfer-pricing disclosure form drive the compliance calendar, and the Revenue Department audits deductibility, withholding compliance and related-party pricing. The remittance-basis reform makes the timing of foreign-income remittances important for resident individuals, and large groups must now meet the Pillar Two notification and top-up-tax obligations.