Types of corporate taxes you need to know when setting up a company in Thailand (2025)

Understanding the tax system is an important factor before set up business in thailand. The country imposes a variety of taxes on businesses, from corporate income tax, value-added tax, contractor tax to stamp duty and special business tax. Below are the important taxes that businesses in Thailand should be aware of.

1. Corporate Income Tax (CIT)

All companies incorporated in Thailand are subject to corporate income tax (CIT) on their global income. Meanwhile, foreign companies are only subject to income tax arising from business activities in Thailand.

• The standard corporate income tax rate is 20% on net profits.
• Different tax rates apply to specific types of businesses:
  • Small businesses with net profit from THB 300.000 to THB 3 million: 15%.
  • Enterprises with net profit over 3 million THB: 20%.
  • Bank profits from international: 10%.
  • Foreign companies doing international transport business: 3% of total revenue.
  • Foreign companies receiving dividends from Thailand: 10% of total income.
  • Foreign companies not operating in Thailand but having income from this country (other than dividends): 15%.

2. Personal Income Tax (PIT) in Thailand

Owners and employees working in Thailand are subject to personal income tax at progressive rates. The tax rates are as follows:

• Under 150.000 THB: Tax free.
• 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%.

3. Value Added Tax (VAT) in Thailand

VAT applies to businesses supplying goods and services in Thailand at a standard rate of 10%. However, this rate is currently reduced to 7% until September 30, 9.

Some special cases of VAT application:

• Export of goods and services: VAT 0%.
• Digital services from abroad (income over 1,8 million THB/year): Supplier must register for VAT and pay tax.

4. Thailand Special Business Tax

Some sectors are not subject to VAT but are subject to special business taxes, including:

• Banking, finance: 3%.
• Life insurance: 2.5%.
• Real estate: 3%.

In addition, businesses must also pay an additional city tax equivalent to 10% of the special business tax payable.

5. Withholding Tax in Thailand

Certain types of income are subject to withholding tax:

• Dividend: 10%.
• Interest rate: 1%.
• Royalties: 3%.
• Advertising fee: 2%.
• Services and professional fees:
  • 3% if paid to a Thai company or a foreign company with a branch in Thailand.
  • 5% if paid to a foreign company without a branch in Thailand.

6. Stamp Duty in Thailand

Stamp duty is levied on certain transactions, ranging from 1 THB to 200 THB. Some common transactions include:

• Land and house lease contracts: 1 THB per 1.000 THB rent.
• Share transfer: 1 THB per 1.000 THB value of shares.
• Loan Agreement: 1 THB per 2.000 THB loan (maximum 10.000 THB).
• Life Insurance: 1 THB per 2.000 THB insurance amount.
• Hire purchase of assets: 1 Baht per 1.000 Baht of total contract value.

7. How does GLA support businesses in declaring accounting taxes in Thailand?

GLA provides comprehensive tax and accounting consulting and support services to businesses in Thailand, helping businesses comply with legal regulations and optimize tax obligations. Services include:

• Tax & accounting consulting according to Thai regulations: Guide businesses to comply with regulations on corporate income tax, personal income tax, VAT, contractor tax, stamp tax, etc. 
• Register for tax code & initial tax declaration: Support businesses in completing tax registration procedures and preparing necessary documents.
• Periodic tax declaration and payment: Make timely corporate income tax, value added tax and contractor tax reports as required by Thai tax authorities.
• Prepare annual financial statements: Prepare financial statements in compliance with Thai Accounting Standards (TFRS) and assist with audits as needed.
• Optimize tax liability: Propose reasonable solutions for businesses to minimize taxes payable while still complying with the law.
• Tax refund & tax exemption support: Consulting and processing VAT refund dossiers, applying tax incentives for businesses.
• Representative working with tax authorities: Support businesses when requested for tax audit, data explanation and handling related issues.
• Support foreign businesses: A guide for foreign companies on taxes in Thailand, including tax obligations when doing business or receiving income from this country.

8. Frequently asked questions about accounting tax in Thailand

Highlights

• Diverse tax system: Businesses in Thailand are subject to a variety of taxes such as corporate income tax (CIT), value-added tax (VAT), withholding tax (WHT), special business tax (SBT) and stamp duty with different tax rates depending on the size and type of business.
• Reasonable Corporate Income Tax (CIT): The standard corporate income tax rate is 20%, but small businesses can enjoy a preferential tax rate of 15% if their profits are below THB 3 million.
• VAT and withholding tax (WHT) have special provisions: standard VAT is 10% but is being reduced to 7% until 30/9/2025. Payments to foreign companies may be subject to WHT withholding from 1% to 15%.
• Special industries subject to SBT: Some sectors such as banking, insurance, real estate are subject to special business tax of 2.5% - 3% instead of VAT.
• Accounting and tax reporting compliance: All businesses operating in Thailand must submit annual financial reports, ensuring compliance with tax regulations to avoid legal risks.