What Taxes Can You Expect on Thailand Property Rental Income?

Thailand property tax

If you are considering a property rental venture there are many considerations to make – many people jump into this area of business without thoroughly examining the implications and nuances of the involved process. To be successful and to secure a consistent profit you must look at every possible angle such as property prices, location, local amenities, competition, service rates and potential rental income.

One aspect that is sometimes overlooked is rental income tax – in most countries, you must pay a range of taxes if you are renting a property as a means of making a monetary gain – the value and process of this rental tax will vary however from country to country. Thailand is no exception and landlords must pay rental income tax – this article explains what taxes you can expect to pay and the associated involved processes.

Who is Liable For Rental Income Tax in Thailand?

Before we look at the associated taxation fees, it is important to understand exactly WHO has to pay tax. This minor detail is often overlooked but it is a vital pointer nonetheless. There are two definitions outlined in the Thai Revenue code that plays a contributing factor – the definition of a tax resident, and the definition of a who pays rental tax:

– A tax resident is defined as: “any person staying in Thailand for a period or periods aggregating 180 days or more” (Section 41)

Due to this statement, many foreigners believe that they do not have to pay rental tax if they are not a Thai resident, or have lived in the country for less than 180 days. However, the following statement negates this:

– “A taxpayer (i.e. anyone) who in the previous tax year derived accessible income under Section 40 from a property situated in Thailand shall pay tax”

So basically, ANYONE who has earnt an income from a rental property in Thailand is required to pay tax. The only exception to this rule is a development lease – if someone has purchased a lease from a developer, they are not required to pay rental tax.

What Rental Tax is Required to Be Paid?

The amount of tax required is calculated based on a progressive scale relating to personal rental income. The following link below denotes the current percentage values of payable tax:

Link article: Detailed Tax Information on Thailand Property

To submit rental tax, an individual must fill out the PND 91 personal income tax return by the end of March, after the year in which the income was earned. If an individual fails to report rental tax then they are solely responsible and can be assessed by the Thailand Revenue Department. Furthermore, penalties can be given which usually equals the amount of tax required plus a serious surcharge.

Finally, there is also a “Withholding Tax” that must be paid by the person renting your property. This tax equates to 15% and must be deducted by the tenant from the total rent value. Once deducted, the Withholding Tax must be submitted to the Local Revenue Department. It is both the landlord and tenants joint responsibility to submit this tax. It should be noted that this Withholding Tax is credited back to the landlord if required after their annual income tax liability has been calculated. Find Thai Property provide full rental support and can manage the administration of the entire process.

Hopefully, you should now have a clearer understanding of exactly who pays rental tax, what percentage is taxable, and how you submit your tax return.


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