2013 Changes to Taxation Law in Thailand – Business and Personal Income Taxes

As with any country, taxation codes in Thailand are continually changing in accordance with the political and business climate and the government’s obvious needs to collect revenue, while fostering a business-friendly environment.

When calculating payroll you really can't afford taxation amateurs

When calculating payroll you really can’t afford taxation amateurs

In regard to Business taxation, withholding tax and indirect taxes as well as taxes on individuals, there are myriad factors that determine how much, in terms of percentage, taxes are due and withheld.

One example of recent changes to the tax codes is that the corporate income tax levied on both Thai and foreign companies, in 2012, was 23% however for 2013 and 2014, the rate is set at 20%.

Payroll and Income Taxes – Keeping Current

On December 18, 2012, the government passed new regulations lowering personal income taxes for 2013. The new rates are progressive, and three new tax brackets have been added; 5%, 15% and 25%. Notably, the top marginal tax bracket has been lowered from 37% to 35% (for those lucky enough to be making over 4M THB a year).

In terms of ex-pats working in Thailand, typically they’re charged in the highest brackets, but there are also unique opportunities and alternative ways to save on tax payments. One way expats can save on their taxes is by working for a Regional Operating Headquarters (ROH), because this incentivises personal income taxes with a 15% rate, as opposed to the commonly applied progressive system.

Avoiding Confusion and Remaining Compliant

Certainly the best advice we can provide for dealing with these recent changes is to make sure your Human Resource Management professionals are  knowledgeable and remain continually abreast of the changes to the tax codes, and the impact these might have on your business structure.

CloudForce HR provides Payroll Outsourcing Services, which is one way many companies are avoiding the hassle and ensuring your payroll services are compliant with ever-changing legislation.