Thailand corporate tax rate, incentives, filing dates, and compliance explained

Why expand to Thailand?

Thailand, Southeast Asia's second-largest economy after Indonesia, is called a land of opportunity for foreign companies.¹ It enjoys close proximity to major economies like China, India, Malaysia, and Vietnam. Thailand has transformed into a technology, manufacturing, and services hub thanks to the Eastern Economic Corridor, a government initiative. An extensive seaport, rail, and air network makes it a logistics leader as well.

What also attracts foreign companies to Thailand is its corporate tax regime, with progressive tax rates for small and medium-sized enterprises (SMEs).

Corporate tax in Thailand

Companies or juristic partnerships carrying on business in Thailand must pay corporate income tax on net profit. According to Thailand's Revenue Department, which sets Thai tax regulations, the term 'companies and juristic partnerships' includes limited companies, public companies limited, limited partnerships, and registered partnerships.

Companies incorporated in Thailand are subject to corporate income tax on profits derived from Thailand and on foreign-sourced income remitted into Thailand in the same accounting period, while foreign companies are taxed only on income arising from business carried on in Thailand.

In a further distinction, foreign companies with permanent establishment or PE (with office, branch, employees, or representatives in Thailand) pay corporate income tax on net profit from business activities in Thailand, while foreign companies without a PE are generally subject to final withholding tax on Thai-sourced income such as dividends, interest, royalties, rent, and service fees, subject to applicable tax treaty relief.

Tax rates and structures

The Thailand corporate tax rate in 2025 is 20%.

However, for qualifying small and medium-sized enterprises (SMEs), Thailand applies a progressive corporate income tax structure rather than a flat rate. Companies with paid-up capital of less than THB 5 million and annual revenue below THB 30 million are taxed at 0% on the first THB 300,000 of net profit, 15% on profits from THB 300,001 to THB 3 million, and 20% only on profits exceeding THB 3 million. This means the 20% rate applies only to the portion of profit above the threshold, not the entire amount.

For example, an SME earning THB 4 million in net profit pays 0% on the first THB 300,000, 15% on the next THB 2.7 million, and 20% only on the remaining THB 1 million.

In addition, foreign companies engaged in international transportation may be subject to a 3% tax on gross receipts from international transportation activities, which is treated as a final tax.

For foreign companies without PE, the final withholding tax rate is 10% for dividend income and 15% for all other assessable income types.

What is taxable net profit?

For corporate tax calculation, one must first determine net profit, which is total revenue minus allowable expenses.

Under the Revenue Code, Thailand's principal tax law, allowable expenses cover:

• Ordinary and necessary expenses
  
• Interest expense (excluding interest on capital reserves or company funds)
  
• Losses from the previous 5 accounting periods
  
• Bad debt
  
• Wear and tear
  
• Provident fund contributions
  
• Donations of up to 2% of net profit
  
• Entertainment expenses up to 0.3% of gross receipts, but not more than TBH 10 million
  
• Depreciation (conditions apply).
  

Expenses that are non-deductible include:

• Income tax
  
• Fines and surcharges
  
• Funds (excluding provident fund)
  
• Personal expenses
  
• Certain entertainment and service expenses that are not wholly and exclusively incurred for business purposes
  
• Expenses not for the purpose of earning profit
  
• Expenses not for the purpose of business in Thailand
  
• Expenses where recipient cannot be identified.
  

Tax incentives and exemptions

The Board of Investment, which promotes foreign investment in Thailand, offers numerous tax incentives, especially in priority sectors. These tax incentives come in the form of corporate income tax exemptions, tax holidays, and reduced rates that significantly reduce tax liability.

Tax incentives for foreign companies that choose to register in Thailand include:

• A corporate income tax holiday of 3–8 years if their business is technology-related or supports local infrastructure development and enhances resources.
  
• Exemption or reduction of import duties on raw material and machinery for companies engaged in R&D or export-driven production.
  
• Double deduction for transportation, electricity, and water supply costs.
  
• 200% deduction on cost of hiring qualified researchers.
  
• 150% deduction on cost of employee training.
  

Companies that conduct business in targeted industries enjoy a corporate income tax reduction on 50% of salary expenses for the 2025–2029 period, subject to conditions.

This corporate tax reduction is complemented by a lower withholding tax of 17%. The concession applies to companies in targeted industries that employ highly skilled foreign professionals or have skilled Thai nationals returning from abroad.

These incentives are subject to BOI approval, sector eligibility, and ongoing compliance conditions.

When to file tax returns

Corporate tax returns must be filed within 150 days of the end of the accounting period. The accounting period is normally 12 months, with some exceptions. For newly established businesses, for instance, the first accounting period can start from the date of incorporation and end on any date of their choosing. Companies may also request the Revenue Department director-general to change the end date.

Tax returns must be filed on Form CIT 50 while foreign firms without PE must use Form CIT 54.

Tax returns must be submitted to the Revenue Department – the official website for which is rd.go.th – along with annual tax payments made in the local currency. Returns can be filed manually or electronically, with e-filings receiving an eight-day filing extension.

Apart from the annual tax, companies are also required to pay prepaid tax. To do so, they must prepare an estimate of their annual net profit and tax liability. Based on that, they must pay half of the estimated tax amount within two months of the end of the first six months of the accounting period using Form CIT 51. This prepaid tax is later credited against the annual tax.

Reduce tax burden with double taxation agreements

Thailand has double taxation agreements with 61 countries to prevent the same income from being taxed twice. Its double taxation treaty with Singapore was signed in 1975 and revised in 2015.

Under the Singapore-Thailand DTA, business profits are taxed only in the company's home country. However, for a Singapore company that conducts business in Thailand through a permanent establishment, Thailand may tax profits attributable to the PE.

The agreement also makes special provisions for shipping enterprises and airlines. A Singapore airline's profits from the operation of aircraft in international traffic can only be taxed in its home country. However, a Singapore shipping firm's profits from the operation of ships in international traffic may be taxed in Thailand, albeit reduced by 50%.

Furthermore, the DTA provides tax relief on income from dividends, interest, branch remittances, royalties, capital gains, and service fees.

Other taxes to take note of

Here are 7 other taxes the Thai government imposes on businesses:

Petroleum income tax

Companies involved in oil and gas exploration and production (E&P) in Thailand are subject to a specialised petroleum tax with tax rates depending on the type of contracts the companies are under.:

• Companies under concession contracts are taxed at the rate of 50% of annual net profit under the Petroleum Income Tax Acts (PITA).
  
• Companies under production sharing contracts are taxed at 20% of annual net profit under PITA.
  
• Companies with service contracts are, however, taxed under the Revenue Code and subject to the standard 20% corporate income tax.
  

Apart from income tax, E&P companies also pay excise tax on petroleum products and a carbon tax embedded in the excise tax.

Value-added tax (VAT)

Thailand’s standard value-added tax (VAT) rate is currently 7%. This reduced rate has been officially extended under Royal Decree No. 799 until 30 September 2026, after which it may revert to the statutory 10% rate unless further extended. Exports attract a zero rate while basic goods and services (groceries, education, healthcare, real estate sales, etc) are exempt from VAT.

Foreign digital services providers with annual revenue above TBH 1.8 billion from services provided to non-VAT registered customers in Thailand must register for VAT, file VAT returns, and pay VAT to the Revenue Department.

Specific business tax (SBT)

Businesses exempt from VAT—banks, businesses dealing in finance and securities operations, life insurance providers, etc—pay a specific business tax (SBT) instead at rates of 0.1%, 2.5%, and 3% of gross receipts. A 10% municipal tax surcharge is imposed alongside the SBT.

Eligible companies must register themselves with the Revenue Office, file SBT tax returns every month, and pay tax within 15 days of the following month.

In practice, SBT is almost always subject to an additional 10% municipal tax calculated on top of the SBT amount. As a result, the effective tax rate is higher than the headline rate. For example, a business subject to a 3% SBT rate will effectively pay 3.3% once the municipal surcharge is included.

Customs duties

Customs duties ranging from 0% to 80% are levied on imports and a few exports. Exemptions available under the Customs Tariff Decree and preferential rates under free trade agreements can reduce tax liability considerably.

Stamp duty

This applies to various types of documents, such as contracts for work, loans, and insurance policies. Duty rates are either fixed for certain documents or calculated at the rate of TBH 1 per TBH 1,000 of the value on the contract.

Land and building tax

Included in the local government taxes, this tax applies to companies owning land or buildings. Tax is collected annually before the end of April.

Global minimum tax

As part of its implementation of the OECD’s Pillar Two Global Minimum Tax, Thailand has introduced legislation providing for a Domestic Top-up Tax (DTT). This mechanism allows Thailand to collect any top-up tax locally where in-scope multinational enterprise groups are subject to an effective tax rate below 15%, rather than allowing the tax to be collected in another jurisdiction under the OECD’s allocation rules.

The DTT applies to multinational enterprise groups with consolidated global revenue of at least EUR 750 million, aligning Thailand’s approach with the OECD’s Global Anti-Base Erosion (GloBE) rules.

Historical tax rates and recent reforms

The corporate tax rate in Thailand has stayed steady at 20% since 2013. It is a steep decline from an all-time high of 30% in 1998. The tax rate had swung between 25% and 30% from 1999 to 2012.

The implementation of the 15% global minimum tax in January 2025 is the most significant tax reform in Thailand in recent years. It is targeted at multinationals with a consolidated annual turnover exceeding EUR 750 million. If their effective tax rate in Thailand falls under 15%, they must pay the difference as a top-up tax.

Tax compliance and registration

Fulfilling tax obligations in Thailand demands awareness of various taxes in play, filing deadlines and reporting requirements. Here are some best practices to follow for tax compliance:

• Register with the Revenue Department and obtain a tax identification number within 60 days of incorporation or starting a business.
  
• Prepare annual balance sheets that are auditor-certified and shareholder-approved. File them with the Commercial Registration Department within five months of the fiscal year-end and with the Revenue Department within 150 days.
  
• Keep accurate and complete records of accounts, tax invoices, financial statements, and supporting documents for at least five years to be ready for any tax audits.
  
• Make a note of the tax return deadline, which is within 150 days from the end of the accounting period.
  
• Remember to pay the mid-year prepaid tax.
  
• Ensure tax returns are accurate and on the right form.
  

Taking corporate tax obligations seriously helps one avoid penalties, surcharges, and fines, which in some cases can escalate to double the amount of tax due.

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Frequently asked questions

What is the corporate income tax in Thailand?

Corporate income tax in Thailand is generally levied at 20% on net profits, with progressive tax relief available for qualifying small and medium-sized enterprises.

What is the corporate tax rate in Thailand in 2025?

The corporate income tax rate in Thailand is 20%. Smaller businesses enjoy a tax exemption on net profits up to TBH 300,000 and a reduced rate of 15% on net profits between TBH 300,001 and TBH 3 million.

What is the 3% tax in Thailand?

This is a specific business tax levied on businesses that are exempt from paying VAT. Banking, finance, securities, and credit businesses as well as businesses with transactions similar to commercial banks are subject to SBT at 3% of gross receipts.

What is the highest tax rate in Thailand?

A 50% petroleum income tax for companies involved in oil and gas exploration and production, and operating under a concession contract, is the highest tax rate in Thailand.

What is the global minimum corporate tax in Thailand?

This is a 15% tax levied on multinationals with a consolidated global income of over EUR 750 million.