Due to the recent war in the Middle east region, many foreign companies, wealthy families and high net worth individuals are looking for a plan B in countries such as Thailand due to the lack of stability in the long term due to the ongoing foreign military aggression in middle east.
Our law firm in Thailand Herrera and Partners H&P have conducted several legal consultations via meetings or videocalls for corporations and private clients regarding legal aspects such as immigration, corporate law and specially taxation in Thailand.
Our lawyers and tax advisers in Thailand have prepared a Questions & Answers Q&A with a brief summary of the relevant aspects of Thai Corporate Tax, Double Taxation agreements signed by Thailand, LTR and tax exemptions for individuals and companies operating in Thailand.
Question: What is the Corporate Income Tax ratio under Thailand Tax Law?
Our answer: Corporate Income Tax Rate under Royal Decree (No. 530) B.E. 2554 (2011) is divided into two cases as follows:
- General Companies or Juristic Partnerships
A flat tax rate of 20% is applied to net taxable profit. This applies to limited companies, public companies, and juristic partnerships that do not qualify as SMEs. - Small and Medium Enterprises (SMEs) – Progressive Rates
Qualified SMEs are entitled to progressive tax rates, which help reduce the tax burden at lower profit levels:
|
Net Profit (THB) |
Tax Rate |
|
0 – 300,000 |
Exempt |
|
300,001 – 3,000,000 |
15% |
|
Above 3,000,000 |
20% |
To qualify as an SME, the business must meet all three conditions as of the end of the accounting period:
- It is a juristic person incorporated under Thai law
- It has paid-up registered capital not exceeding THB 5 million
- It has annual revenue from sales of goods and/or services not exceeding THB 30 million
If, in any given year, the business exceeds the revenue or capital thresholds, it will not be eligible for the progressive rates in that year and must revert to the standard 20% corporate income tax rate.
Question: What is the VAT percentage under Thai Law in 2026?
Our answer: Previously, the VAT rate was set at 10%. However, it has been reduced to 7% and the reduced rate has been extended periodically.
As of the Cabinet resolution dated 9 September 2025, the 7% VAT rate has been extended for another year, from 1 October 2025 to 30 September 2026.
It remains to be seen whether the rate will be adjusted back to 10% within this year.
Question: What are the tax incentives under BOI and the maximum tax benefits that a foreign investor can obtain under Thailand Board of Investment BOI?
Our answer: The incentives granted depend on the type of business and the specific conditions of the promoted project.
The maximum tax incentives that may be granted include:
Tax Incentives:
- Corporate income tax exemption for up to 13 years (Section 31)
- 50% reduction of corporate income tax (Section 35 (1))
- Exemption or reduction of import duties on machinery (Sections 28/29)
- Reduction of import duties on raw or essential materials (Section 30)
- Exemption of import duties on items imported for research and development (Section 30/1)
- Double deduction of transportation, electricity, and water costs (Section 35 (2))
- Additional 25% deduction for installation or construction costs of infrastructure facilities (Section 35 (3))
- Exemption of import duties on raw or essential materials used for export production (Section 36)
Question: What are the tax benefits that an investor can obtain under the Thailand Eastern Economic Corridor policy?
Our answer: There are various incentives available to investors, depending on the location of the company and the type of business. In summary, they include the following:
Tax Incentives:
- Corporate income tax exemption on net profits from business operations for up to 8–13 years (and up to 15 years for special projects)
- 50% reduction of corporate income tax on net profits for up to 5 years after the tax exemption period ends
- The right to carry forward losses incurred during the corporate income tax exemption period to offset against net profits after the exemption period
- The right to deduct investment expenses from net profits
- Additional deductions for transportation, electricity, and water costs
- The right to deduct investment costs for installation or construction of facilities from net profits
- Exemption of dividend income from inclusion in taxable income
- Exemption of goodwill, royalties, or other similar income from inclusion in taxable income
- Exemption or reduction of import duties on machinery, items used for research and development, items imported for re-export, and necessary raw materials used in the promoted business
- Exemption of export duties
Question: How many double taxation treaties is Thailand a party to?
Our answer: Currently, Thailand is a party to a total of 61 Double Taxation Agreements (DTAs), as follows:
| No. | Country | Entry into Force | Effective Tax Year |
| 1 | Cambodia | 26 Dec 2017 | 1 Jan 2018 |
| 2 | South Korea | 29 Jun 2007 | 1 Jan 2008 |
| 3 | Canada | 16 Jul 1985 | 1 Jan 1985 |
| 4 | Kuwait | 25 Apr 2006 | 1 Jan 2007 |
| 5 | China | 29 Dec 1986 | 1 Jan 1987 |
| 6 | Chile | 5 May 2010 | 1 Jan 2011 |
| 7 | Czech Republic | 14 Aug 1995 | 1 Jan 1996 |
| 8 | Seychelles | 13 Mar 2006 | 1 Jan 2007 |
| 9 | Cyprus | 4 Apr 2000 | 1 Jan 2001 |
| 10 | Japan | 30 Aug 1990 | 1 Jan 1991 |
| 11 | Denmark | 12 Feb 1999 | 1 Jan 2000 |
| 12 | Taiwan | 19 Dec 2012 | 1 Jan 2013 |
| 13 | Turkey | 13 Jan 2005 | 1 Jan 2006 |
| 14 | Tajikistan | 23 Dec 2013 | 1 Jan 2014 |
| 15 | Norway | 29 Dec 2003 | 1 Jan 2004 |
| 16 | New Zealand | 14 Dec 1998 | 1 Jan 1999 |
| 17 | Netherlands | 9 Jun 1976 | 1 Jan 1976 |
| 18 | Nepal | 14 Jul 1998 | 1 Jan 1999 |
| 19 | Bahrain | 27 Dec 2003 | 1 Jan 2004 |
| 20 | Bangladesh | 9 Jul 1998 | 1 Jan 1999 |
| 21 | Bulgaria | 13 Feb 2001 | 1 Jan 2002 |
| 22 | Belgium | 28 Dec 1980 | 1 Jan 1980 |
| 23 | Belarus | 2 Sep 2006 | 1 Jan 2007 |
| 24 | Pakistan | 7 Jan 1981 | 1 Jan 1979 |
| 25 | Poland | 13 May 1983 | 1 Jan 1983 |
| 26 | France | 29 Aug 1975 | 1 Jan 1975 |
| 27 | Myanmar | 15 Aug 2011 | 1 Jan 2012 |
| 28 | Finland | 26 Feb 1986 | 1 Jan 1987 |
| 29 | Philippines | 11 Apr 1983 | 1 Jan 1983 |
| 29.1 | Philippines (Revised) | 5 Mar 2018 | 1 Jan 2019 |
| 30 | Mauritius | 10 Jun 1998 | 1 Jan 1999 |
| 31 | Malaysia | 2 Feb 1983 | 1 Jan 1983 |
| 32 | Ukraine | 24 Nov 2007 | 1 Jan 2008 |
| 33 | Germany | 4 Dec 1968 | 1 Jan 1967 |
| 34 | Russia | 15 Jan 2009 | 1 Jan 2010 |
| 35 | Romania | 13 Apr 1997 | 1 Jan 1998 |
| 36 | Luxembourg | 22 Jun 1998 | 1 Jan 1999 |
| 37 | Laos | 23 Dec 1997 | 1 Jan 1998 |
| 38 | Vietnam | 31 Dec 1992 | 1 Jan 1993 |
| 39 | Sri Lanka | 12 Mar 1990 | 1 Jan 1991 |
| 40 | Spain | 16 Sep 1998 | 1 Jan 1999 |
| 41 | Switzerland | 15 Dec 1997 | 1 Jan 1998 |
| 42 | Sweden | 26 Sep 1989 | 1 Jan 1990 |
| 43 | United States | 15 Dec 1997 | 1 Jan 1998 |
| 44 | Singapore | 15 Feb 2016 | 1 Jan 2017 |
| 45 | Slovenia | 4 May 2004 | 1 Jan 2005 |
| 46 | Australia | 27 Dec 1989 | 1 Jan 1990 |
| 47 | Austria | 1 Jul 1986 | 1 Jan 1986 |
| 48 | United Kingdom and Northern Ireland | 20 Nov 1981 | 1 Jan 1981 |
| 49 | Armenia | 12 Nov 2002 | 1 Jan 2003 |
| 50 | Italy | 31 May 1980 | 1 Jan 1978 |
| 51 | India | 5 Jan 2016 | 1 Jan 2017 |
| 52 | Indonesia | 23 Oct 2003 | 1 Jan 2004 |
| 53 | Israel | 24 Dec 1996 | 1 Jan 1997 |
| 54 | Uzbekistan | 21 Jul 1999 | 1 Jan 2000 |
| 55 | United Arab Emirates | 28 Dec 2000 | 1 Jan 2001 |
| 56 | Estonia | 23 Dec 2013 | 1 Jan 2014 |
| 57 | South Africa | 27 Aug 1996 | 1 Jan 1997 |
| 58 | Oman | 27 Feb 2004 | 1 Jan 2005 |
| 59 | Ireland | 11 Mar 2015 | 1 Jan 2016 |
| 60 | Hungary | 16 Oct 1989 | 1 Jan 1990 |
| 61 | Hong Kong | 7 Dec 2005 | 1 Jan 2006 |
Question: What is the Personal Income Tax ratio under Thai Tax Law?
Our answer: The Personal Income Tax in Thailand is as progressive rate (as rate 0% – 35%), which will be calculated and considered based on the total income of each Year after deduct the personal income tax allowance as the tax perspective. Please see the detail as table below:
| Net Income (THB) | Tax Rate (%) |
| 1 – 150,000 | 0 % |
| 150,001 – 300,000 | 5 % |
| 300,001 – 500,000 | 10 % |
| 500,001 – 750,000 | 15 % |
| 750,001 – 1,000,000 | 20 % |
| 1,000,001 – 2,000,000 | 25 % |
| 2,000,001 – 5,000,000 | 30 % |
| Over 5 millions | 35 % |
Question: How does a person become a tax resident in Thailand?
Our answer: In the Thai tax practice, the foreigner can become the Thai tax resident in case the foreign national spend more than 180 days on that Tax period (January until December).
Then our lawyers at H&P can to apply the Thai Tax ID, file the Personal Income Tax within every end of March of each year and obtain Thai Tax Residence Certificate that can be legalized by our lawyers to be provided to revenue departments of other countries to confirm the full compliance of tax obligations.
Question: Does a tax resident in Thailand need to pay taxes for the income perceived abroad?
Our answer: According to the Notification of the Director-General of the Revenue Department Number Por. 161/2566 and Por. 162/2566 which was promulgated on 1st January 2024, if the foreigner spend over than 180 days in Thailand (becoming tax resident in Thailand) and only if he/she brings funds from abroad into Thailand, then this money or fund should be treated as income and subject to the Personal Income Tax filing on that Tax period as the Tax perspective.
Question: What are the Tax benefits under the LTR visa?
Our answer: According to the LTR visa and the Tax benefits under The Royal Degree number 743 section 3 and section 4 , please find a brief summary of the categories that provide tax-exemption benefits as explained below:
-Group 1: Wealthy Global Citizens
(Individuals holding at least USD 1 million in assets)
Tax exemption applies
-Group 2: Wealthy Pensioners
(Retirees aged 50 and older with an annual pension or stable income)
Personal Income Tax exemption applies
-Group 3: Work-from-Thailand Professionals
(Remote workers employed by well-established overseas companies)
Personal Income Tax exemption applies
-Group 4: Highly-Skilled Professionals
Flat tax rate of 17% (The Personal Income Tax)
-Group 5: Spouses and Dependents
(Spouse and children under 20 years old)
Personal Income Tax exemption applies
If you need tax advice in Thailand as a foreign individual or foreign corporate, please contact our tax lawyers and accounting team in Bangkok at info@herrera-partners.com
