For the purpose of Thai personal income tax computation, residents and non-residents taxpayers are taxed on their assessable income. This assessable income can be in any form of cash or in-kind benefits derived from employment or business carried on in Thailand or assets located in Thailand regardless of whether such income is received in or outside Thailand. Any income derived from outside Thailand will be subject to Thai personal income tax only if the income is remitted or brought into Thailand in the year in which the income is derived.
Assessable income is classified into 8 categories as follows:
1. Income from personal services rendered to employers such as salaries and wages (including income from stock options, other equity or work-related compensation and other fringe benefits);
2. Income from hire of work, office of employment or services rendered;
3. Income from goodwill, copyright, franchise, patent, other rights, annuity or income in the nature of annual payments derived from a will, juristic act or judgment of the Court;
4. Income in the nature of dividends, interests (including interest on bank deposits in Thailand), shares of profits or other benefits from a juristic company, juristic partnership or mutual fund, payments received as a result capital reduction, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships and gains on transfer of shares or partnership holdings;
5. Income from lease of property, breach of hire-purchase contracts and installment sale contracts;
6. Income from liberal professions such as law, medicine, engineering, architecture, accountancy and fine arts;
7. Income from construction and other contracts of work whereby the contractor provides essential materials other than tools; and
8. Income from business, commerce, industry, agriculture, transport and any income other than as specified in (1)-(7) above.
Since different types of income have different rates of standard deductions, taxpayers may choose to itemize expenses instead of taking the standard deductions specified by law. Consult with MSNA for further information and expert advice on Thailand personal income tax computation.