Lower personal income taxes begin in 2017

Published in EIC Outlook Q1/2017 Click here for more detail

The Cabinet approved a restructuring of the personal income tax code during its meeting on 19 April 2016. The changes came into effect on 1 January 2017 and focus on three main areas:

1. Amendment of deductible expenses 1) Increases the maximum expense deduction against salaries, wages, and commissions¹⁰ from 40% of income, but not exceeding THB60,000 , to 50% of income but not exceeding THB100,000. 2) Increases the expense deduction against income from goodwill, copyrights and other rights¹¹ from 40% of income from copyrights, but not exceeding THB60,000, to 50% of income but not exceeding THB100,000.
   
   
2. Amendments of deductible allowances 1) Increases the taxpayer’s standard allowance to THB60,000, from THB30,000. 2) Increases the standard allowance for a taxpayer’s spouse to THB60,000, from THB30,000 . 3)Increases the standard allowance for a taxpayer’s dependent children to THB30,000 per child (including all children), up from THB15,000 per child, limited to three. Cancels the education allowance of THB2,000 per child. 4) Allows a deduction of THB120,000 for joint filing for a taxpayer and a taxpayer’s spouse who earns income. 5) Increases the allowance for an undivided estate from THB30,000 to THB60,000. 6) Increases the deduction for an unincorporated ordinary partnership or group of persons from THB30,000 for each partner, but not exceeding THB60,000, to THB60,000 per partner but not exceeding THB120,000. Lower personal income
   taxes begin in 2017
   
   
3. Amendments of income bracket Broadens the 30% tax bracket to cover those earning THB2-5 million, compared to THB2-4 million before. Thus, individuals making THB4-5 million will be subject to a lower tax rate.

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¹⁰ Employment income under section 40(1) and section 40(2) of the Thai Revenue Code

¹¹ Accessible income under section 40(3) of the Thai Revenue Code