Bookkeeping, audit, balance sheet, withholding tax, VAT, corporate and personal income tax — handled correctly under Thai tax law.
Don't think it's on holiday as well
There’s a constant misconception that because Koh Samui, and its surrounding islands provide a relaxed tropical island lifestyle and very little authoritative presence, that people and/or companies are not required to take the law and/or accounting practices seriously!
Accounting in Thailand is actually very similar, in procedure and protocol, to western countries, and requires that each/every tax payer understands the laws in order to avoid visa and permit issues, fines and even investigation from the Revenue Department.
So, what should you know and how can you better understand the accounting laws and the compliance thereto in Thailand? Samui Law Firm have an experienced team who revert to the source [the Revenue Department] to qualify specific or ambiguous requirements, particularly where doubt is present. Some further information is included on the right of this page.
A ‘Claimable’ Expense may be confusing to foreigners, perhaps because Thai lawyers and/or accountants may find it difficult to communicate the specifics that make the expense claimable in another [not their native] language.
Understanding what makes an expense claimable according to the Revenue Department [Tax Office in Thailand] is important so, put as simply as possible;
a claimable expense is any qualifying [your company is allowed to claim the purchase because it is related to the activities of your company] expense and/or fixed asset that is sold by another party; individual or company, and purchased by your company, that includes ALL of the necessary information on the ‘ Receipt ‘, for a non VAT registered seller, or a ‘ Tax Invoice/Receipt ‘, for a VAT registered seller, to the purchaser [your company].
Information like the seller’s full legal name, tax id and registered company address, the purchaser’s full legal name, tax id and registered company address and specific details about the product and/or service being sold/purchased as well as, any/all applicable taxes like; Withholding Tax [WHT], and/or Value Added Tax [VAT], to be paid at the time of exchange [sale/purchase].
For more information on accounting and tax laws in Thailand, check out the most recent Thai Tax Booklet (2025/26), in English, drawn up by Price Waterhouse Coopers [PWC].
Under Section 41 of the Revenue Code an individual, Thai citizen or foreigner, who lives in Thailand for one or more periods totalling at least one hundred and eighty (180) days in any tax year is, for tax purposes, deemed a resident of Thailand and subject to tax on all assessable income derived from sources within the country, whether paid within or outside Thailand. A non-resident individual is subject to tax only on assessable income from Thai sources, regardless of payment location.
Foreign-sourced income [rule updated from 1 January 2024]: under Revenue Department Instructions Paw. 161/2566 and Paw. 162/2566, a Thai tax resident who earns assessable income from work performed abroad or from assets located abroad in any tax year starting from 1 January 2024 is subject to Thai personal income tax on that income when it is brought into Thailand — whether it is remitted in the same tax year it is earned or in any later tax year. Foreign-sourced income earned before 1 January 2024 is not subject to this new rule [under the previous rule it was taxable only if remitted to Thailand in the same tax year in which it was received].
The current personal income tax rates on net [taxable] income per annum are as follows:
0 – 150,000 THB = Exempt
150,001 – 300,000 THB = 5%
300,001 – 500,000 THB = 10%
500,001 – 750,000 THB = 15%
750,001 – 1,000,000 THB = 20%
1,000,001 – 2,000,000 THB = 25%
2,000,001 – 5,000,000 THB = 30%
Over 5,000,000 THB = 35%
Net taxable income is calculated after deducting expenses and allowances. The main personal allowances are:
Taxpayer [personal allowance] = 60,000 THB
Spouse [if the spouse has no income] = 60,000 THB
Each legitimate child = 30,000 THB, plus an additional 30,000 THB for the second and each subsequent child born in or after 2018
[A child qualifies if under 20 years of age regardless of whether he/she is studying or, under 25 years of age and studying at university level, in Thailand or abroad. There is no limit on the number of natural children that can be claimed, but there is a limit of three (3) when claiming adopted children.]
Parental care = 30,000 THB each
Care of disabled or incapacitated family members = 60,000 THB each
Life insurance premiums [on the taxpayer's own life; policy of at least ten (10) years with an insurer operating in Thailand] = up to 100,000 THB*
Health insurance premiums [taxpayer's own health, paid to a life or non-life insurance company in Thailand] = up to 25,000 THB*
Health insurance premiums for the taxpayer's or spouse's parents = up to 15,000 THB
Mortgage interest [purchase or construction of a residential property in Thailand] = up to 100,000 THB
Retirement savings [provident fund [PVF], retirement mutual fund [RMF], super savings fund [SSF], national savings fund and pension life insurance contributions] = deductible within prescribed limits**
Social security fund contributions = deductible
In addition, a resident of Thailand who is 65 years of age or older is entitled to a personal income tax exemption on income up to 190,000 THB.
There is a double [200%] deduction allowed for donations to educational organizations, but the combined deduction must not exceed 10% of net income.
Notes:
* The claimable amount cannot exceed 100,000 baht when combining the allowances for life and/or health insurance premiums for the taxpayer.
** The claimable amount cannot exceed 500,000 baht when including the allowance for provident fund contributions [PVF], a retirement mutual fund [RMF], super savings fund [SSF], national savings fund contributions, pension life insurance premiums, government pension funds, and private teachers’ aid fund contributions.
The annual personal income tax return must be filed by 31 March of the following year [hardcopy filing] or by 8 April [online filing].
Withholding Tax or WHT [abbreviated], is applicable when invoicing a company for your services only, WHT is not applicable to ‘off the shelf’ products, sold by your company. The percentage of WHT is dictated by the type of service being offered. Examples are as follows:
1% WHT on Transportation [like delivery services, excluding public transport] or, 2% WHT on Advertising Fees [like promotion of your business in a magazine] or, 3% WHT on Professional Services [like Samui Law Firm] or, 5% WHT on the Lease of Assets [like property].
1% WHT on Transportation [like delivery services, excluding public transport] or,
2% WHT on Advertising Fees [like promotion of your business in a magazine] or,
3% WHT on Professional Services [like Samui Law Firm] or,
5% WHT on the Lease of Assets [like property].
The applicable WHT is deducted from the excluding VAT [if your company is VAT registered] total invoice value and paid each/every month on your behalf, by your accounting company, to the Revenue Department on or before the 7th of the following month.
Example: your company sends an invoice for 1,000 baht plus VAT [1,000 baht x 1.07 [7%] = 1,070 baht] to another company for services rendered. The ‘payer’ [company receiving and paying the invoice] is obliged by law to withhold three (3) percent for ‘Professional Services’ on the VAT exclusive amount [1,070 baht Total Amount – 70 baht in VAT = 1,000 baht x 0.03 [3%] = 30 baht]. Therefore, the ‘payee’ receives 1,040 baht into their bank account [or in cash] for services rendered, and the ‘payer’ must provide evidence to the ‘payee’ [withholding tax forms – stamped and signed by the ‘payer’ company], that the withheld amount [30 baht], has been paid to the Revenue Department.
Note 1: the total amount payable by the ‘payer’ remains 1,070 baht, of which 1,040 baht is paid to the company providing the services and 30 baht is paid to the Revenue Department.
Note 2: the VAT payable to the Revenue Department [RD] by the ‘payee’ is not affected either, it remains [70 baht] as calculated above, meaning, the net amount received by the ‘payee’ after all deductions is 1,070 baht minus 30 baht[Withholding Tax paid to the RD by the ‘payer’] minus 70 baht [Value Added Tax paid to RD by the ‘payee’] = 970 baht, being three (3) percent less than the VAT exclusive amount originally invoiced.
Note: for payments made through the Revenue Department’s e-withholding tax system, a number of WHT rates [for example the 3% rates for professional services, hire of work and most service fees, the 5% rates for rental of assets and prizes, and the 2% rate for advertising fees] are temporarily reduced to 1% for payments made from 1 January 2023 to 31 December 2025.
Once you [as a person], your partnership or your company reaches a turnover of 1,800,000 THB in any given financial year [with some minor exceptions], you are obliged to register for Value Added Tax. VAT in Thailand has a statutory standard rate of 10% but is currently collected at the reduced rate of 7% [extended by the government until 30 September 2026], and this input/output tax must be added onto each and every invoice, once registration has been activated. This tax is very similar to other countries like England [VAT] or Australia [GST].
You may, of course, choose to add the VAT on top of each product or service you sell or include the VATwithin your current pricing but, whichever you decide, VATmust be reconciled every month and paid to the Revenue Department on or before the 15th of the proceeding month
Specific Business Tax [SBT] is levied on certain businesses for which it is difficult to determine a value addition thus, Value Added Tax [VAT]. These businesses are considered to be operating outside the VAT system.
Companies that are subject to Specific Business Tax include those in the following sectors:
Banking and Finance Life Insurance Pawn Brokerage Real Estate Others such as those engaged in re-purchasing agreements and factoring and those specified by the Royal Decree.
Banking and Finance
Life Insurance
Pawn Brokerage
Real Estate
Others such as those engaged in re-purchasing agreements and factoring and those specified by the Royal Decree.
Some organizations belonging to the above listed categories may also be exempt from Specific Business Tax. Such organizations include; the Bank for Agriculture and Agricultural Cooperatives, the Government Housing Bank, the Government Savings Bank and the Bank of Thailand.
Entities subject to Specific Business Taxmust register with their District Revenue Office within 30 days of their first day of business operations.
Specific Business Tax is calculated on gross monthly receipts and must be filed each month with the District Revenue Office regardless of whether the business had income for that month or not.
Once the Financial Year has drawn to a close [typically December 31st], and the company has shown a Profit, in line with Profit & Loss above, Corporate Tax shall be applied, depending on the size of the company and the amount of annual net profit made by the company.
The standard corporate income tax rate in Thailand is 20% of annual net profit. However, small and medium-sized enterprises [SMEs] benefit from reduced progressive rates. A company qualifies as an SME when both of the following conditions are met:
1. paid-up capital does not exceed 5,000,000 THB on the last day of the accounting period and,
2. income from the sale of goods and services does not exceed 30,000,000 THB in the accounting period.
Qualifying SMEs shall be taxed as follows:
0 – 300,000 THB in annual net profit = 0% [exempt] Corporate Tax
300,001 – 3,000,000 THB in annual net profit = 15% Corporate Tax
Over 3,000,000 THB in annual net profit = 20% Corporate Tax
Companies that do not meet both SME conditions shall be taxed at the standard rate of 20% on annual net profit.
Note: net profit is calculated on turnover [for that financial year], minus all Claimable Expenses [for that financial year], equals net [taxable] profit.
The annual corporate income tax return must be filed, and any tax paid, within 150 days of the end of the accounting period. A half-year return must also be filed within two (2) months after the end of the first six (6) months of the accounting period.
Similarly to Profit & Loss above, if you own a Thai partnership or company, the Department of Business Development [DBD], where the partnership or company was created, ‘reserves the right’ to close the partnership or company down [defunct], in the event that the company does not submit an End of Year Balance Sheet & Audit for three (3) consecutive years.
If you own a Thai partnership or company, the Department of Business Development [DBD], where the company was formed, will allow a three (3) year grace period for the partnership or company to reach Profitability before the DBD ‘reserves the right’ to close [defunct] the partnership or company as a non viable entity.
Further to this, in the event that the company runs at a Loss [is not profitable], for two (2) consecutive years, the Labor Office also ‘reserves the right’ to not issue or renew any foreign Work Permit.
Before you panic..! ‘reserve the right’ does not necessarily mean the DBD will close [defunct] your company for certain but, it does mean that they maintain the power to do so should they wish to exercise the right!
Samui Law Firm offers transparent, affordable fees for monthly accounting services. Fees are based on the number of invoices, bills and receipts we would normally process for your company each and every month:
0-10 invoices/bills/receipts [from your company] = 1,500 THB + VAT per month, 11-25 invoices/bills/receipts [from your company] = 2,500 THB + VAT per month, 26-50 invoices/bills/receipts [from your company] = 3,500 THB + VAT per month, 51-100 invoices/bills/receipts [from your company] = 4,500 THB + VAT per month, 101-200 invoices/bills/receipts [from your company] = 6,000 THB + VAT per month, 200+ invoices/bills/receipts [from your company] = Contact Us for a Quotation
0-10 invoices/bills/receipts [from your company] = 1,500 THB + VAT per month,
11-25 invoices/bills/receipts [from your company] = 2,500 THB + VATper month,
26-50 invoices/bills/receipts [from your company] = 3,500 THB + VAT per month,
51-100 invoices/bills/receipts [from your company] = 4,500 THB + VAT per month,
101-200 invoices/bills/receipts [from your company] = 6,000 THB + VATper month,
200+ invoices/bills/receipts [from your company] = Contact Us for a Quotation
We also charge a supplementary service fee for VAT registered companies as there is extra work to reconcile VAT each and every month:
VAT Registered Company = 1,000 THB + VAT per month
VAT Registered Company = 1,000 THB + VAT per month