Q: When is the deadline for submit personal income tax(PIT) return for income arising in year 2004?
A: For income arising in calendar year 2004 (Jan 2004-Dec 2004), individual taxpayer should file personal income tax return and submit tax payment (or requested for tax refund) within Thursday 31st March 2005.
Q: How to file personal income tax return?
A: PIT return (either with additional tax payment or tax refund)shall be files via internet at http://www.rd.go.th
or by hand at the Area Revenue Office.
Q: Which types of tax return i should be filing?
A: There are 2 kinds of PIT return ; PND 90 and PND 91.
PND 90 is a form use for individual taxpayer who have various types of income such as salary, dividend, interest, rental income, royalties, etc.
PND 91 is a form use for individual taxpayer who have income from salary only (Employment income only).
Example : For an employee who received only salary income from his employer, he shall use form PND 91. On the otherhand, for an employee who received salary income and also received dividend income from shares, he shall use form PND 90 instead.
Q: Joint return/seperate return for husband and wife
A: According to the Thai Revenue Code, husband and wife are required to file a joint tax return. Hence, income of wife shall add up to husband's income and compute tax on the summation amount of income of both husband and wife. (Wife's income shall be considered as part of a husband income) This result to a higher tax burden to a married couple than a single person from an increasing tax base and higher progressive tax rate.
However, there is some exceptional for salary income, Thai tax law allow a wife to compute her salary income seperate from her husband income.
Example : For a married couple who husband has income from salary and interest whereas his wife has income from salary and dividend. A wife can compute and file a seperate tax return on her salary income only. While her husband is required to include his salary, interest and his wife's dividend income in his taxable income and compute tax on these summation amount.
Q: Who have to pay Personal Income tax?
A: There are 4 types of tax entity ; individual, body of person or unincorporated partnership, death person and estate of the death person on the following year after a person died.
Q: Personal Income Tax base
A: Assessable income in Thailand is comprehensive. It includes salary, wage, per diem, bonus, bounty, gratuity, pension, director fee, brokerage, discount, subsidy, meeting fee, house rent allowance, monetary value of rent-free accommodation provided by an employer, income tax paid and borne by an employer, any other property or benefits derived by virtue of hire of services, rental fee, interest, dividend, capital gains and royalties.
Q: What is PIT rate for income tax 2004?
Q: Personal income tax deduction
A: Thai residents shall be given a lump-sum standard deduction from employment income or personal services income at 40% of assessable income up to a maximum of 60,000 Baht.
In case of other income, actual expense or a lump-sum standard deduction of 10%-30% shall be applied on lease income and 30%-85% shall be applied on professional, business and miscellaneous income.
There is no tax deduction against passive income such as interest, royalties, dividend and other investment income.
Q: Tax allowance
1. A Thai resident(present in Thailand >=180 days) is entitled to deduct amounts allowed for spouse and children whether or not his spouse and children are staying in Thailand.
A non-resident is entitled to deduct amounts allowed for spouse and children only if their spouse and children are staying in Thailand.
2. In the case of husband and wife with salary income file a seperate tax return, children's allowance and parent's allowance shall be divided equally between husband and wife.
Q: What are supporting documents?
A: If you file tax return via internet, it is not required to submit supporting documents however these documents should be keep as a record for a possible requested by the Revenue Officer.
However, for filing tax return by hand at the Area Revenue Office, example of the following documents should be attached: Withodling tax certificate, marriage certificate, children birth certificate, receipts for payment of donation or any other allowance payment (; insurance premium, long-term equity fund, mortgage interest payment)
For a non-resident taxpayer or foreigner, copies of passport (every pages) is also reqired for supporting documents.
Q: How to save tax?
(1) Dividing tax base: since PIT is progressive tax rate, dividing tax base will lower tax base which result in lower tax payment.
(1.1) by types of income: PIT in Thailand is a combination between global and schedular system, even though it required to include all types of income in taxable income, however, some exeptional income which already subject to witholding tax is allow to exclude from taxable income in the PIT computation. As such, excluding those income will lessen your tax base and also lower tax rate. However, you have to compare whether your tax rate after include those income is lower or higher than witholding tax rate. If your taxable income is subject to tax rate which is lower than witholding tax rate, you should include these income in taxable base and request for a refund.
Example: Interest income paid to individual is subject to witholding tax at 15%. If your taxable income (including interest income) is subject to tax rate at 10%, you should include interst income in your taxable income and request for a tax refund on an excess witholding tax. On the contrary, if your taxable income (including interest income) is subject to tax rate at 30%, you should exclude interest income from your taxable income.
According to the Revenue Code, it allows several types of income which were subject to witholding tax to be exclude from taxable income; interest(WHT 15%), dividend(WHT 10%), sale of immovable property(progressive tax rate with special tax computation method). The summary of what you should do to this income is as follows:
-Interest : compare whether your taxable income (including interest income) is subject to tax rate at lower or higher than 15%. If it is lower than 15%, you should include interest income in your taxable income but if it is higher than 15%, you should not include interest income in your taxable income.
-dividend : include as income if your taxable income is subject to tax rate lower than 37%. Since dividend income receive from company will have a tax born in it (CIT and WHT) at 37%, and the Revenue Code allow you to claim for tax credit which you will get a refund bakc in the case where your tax rate is lower than 37%.
-Income from sale of immovable property should not include in taxable income. It is saver to use pay WHT tax in the method provide by law.
(1.2) by tax entity : Instead of including all types of income to your personal income tax, a person who have business or have interest income may choose to divide tax base by set up a body of person or incorporated partnership (consists of more than 1 person) as another tax entity in order to lower his/her personal tax base.
(2) Use tax exemption or allowance provided by law:
In year 2004, exempt income has increase 80,000 Baht to 100,000 which will result in saving your money for 1,000 Baht each. Also, there is a new allowance for subsidising parent at 30,000 Baht which will result in tax saving of up to 44,000 Baht.
Apart from above tax update, you also eligible for various of tax exemption as example below:
o Per diem or travelling expenses spent by an employee in good faith exclusively and wholly for carrying out his duty and reimbursed by employer at actual cost.
o Per diem or travelling expenses paid in lump sum and not exceeding the fixed rate defined by the Director General.
o Relocation and travelling expenses reimbursed by employer.
o Medical expenses reimbursed by an employer for treatment performed in Thailand on the employee himself, his spouse, his parents or children; and for treatment performed abroad on the employee while he performs his duties in the foreign country.
o Income from the sale of securities in the Stock Exchange of Thailand (SET) and the sale of agricultural futures contracts by offset positions in the Agricultural Futures Exchange of Thailand.
o Income from mutual fund or from the sale of investment units in a mutual fund.