Corporate taxation in Thailand has changed considerably over the past twenty years. The corporate income tax rate has fallen from 30% to 20%, VAT has been kept at a reduced 7% for more than thirty years (although it remains technically temporary), and a 15% global minimum tax has applied to large multinational groups since January 2025. For a foreign investor or the manager of a company in Thailand, understanding how the Thai tax system works is essential, both for compliance and for lawful tax planning. This guide sets out how the system works in 2026, including the specific tax treatment of BOI-promoted companies and IEAT industrial estates.
Last updated: October 2026
Corporate income tax (CIT)
Standard rate
The standard corporate income tax rate in Thailand is 20% of net taxable profit. It applies to companies incorporated in Thailand and to foreign companies carrying on business in Thailand.
Reduced rates for SMEs
Small and medium-sized companies benefit from progressive rates if they meet both of the following conditions:
- paid-up capital of no more than 5 million baht at the end of the accounting period
- annual revenue of no more than 30 million baht
| Net profit | CIT rate |
|---|---|
| Up to 300,000 baht | 0% |
| 300,001 to 3,000,000 baht | 15% |
| Above 3,000,000 baht | 20% |
Tax residence and tax base
A company incorporated in Thailand is taxed on its worldwide income.
A foreign company (incorporated outside Thailand) is taxed in Thailand only on its Thai-source income:
- If it carries on business in Thailand (branch, office, employees or agent): it is taxed at 20% on the net profits from that business.
- If it receives Thai-source income without carrying on business in Thailand: withholding tax is deducted from that income (dividends, interest, royalties, service fees), with no deduction of expenses.
Calculating taxable profit
Taxable profit is calculated from the accounting profit, adjusted under the rules of the Thai Revenue Code. The main deductible expenses include:
- salaries and social security contributions
- rent and occupancy costs
- depreciation (at the rates allowed by the Revenue Code)
- interest and financial costs
- advertising and business promotion expenses
- professional fees
Some expenses are partly or fully non-deductible, including fines and tax penalties, unapproved donations, expenses without proper supporting documents, and excessive remuneration.
Tax losses
Tax losses can be carried forward for 5 accounting periods. Thai tax law does not allow losses to be carried back.
Filing and payment
Corporate income tax is paid in two steps:
- Half-year return (PND 51): due within two months after the end of the first six months of the accounting period. Tax is calculated on half of the estimated profit for the full year. If the estimate is understated by more than 25% without reasonable cause, a surcharge of 20% of the shortfall applies.
- Annual return (PND 50): due within 150 days of the end of the accounting period. The balance of tax is paid with the return, after crediting the half-year payment.
The accounting period is normally 12 months. A newly incorporated company’s first accounting period can be shorter.
Value added tax (VAT)
Current rate
The statutory VAT rate in Thailand is 10%. However, for more than thirty years, it has been reduced to 7% by royal decree, renewed regularly. The latest extension keeps the rate at 7% until 30 September 2027.
The 7% rate is not permanent: it must be renewed by decree. In practice it has been renewed for more than three decades, but businesses should not take it for granted beyond the current expiry date.
Registration threshold
Any business with annual taxable turnover above 1.8 million baht must register for VAT with the Revenue Department within 30 days of exceeding the threshold.
Transactions covered
- 7%: sales of goods and services in Thailand, and imports
- 0%: exports of goods, services performed in Thailand and used abroad, and certain international services
- Exempt: including unprocessed agricultural products, education, healthcare, rental of immovable property, sales of real estate (subject to Specific Business Tax instead) and domestic transport
VAT on foreign digital services
Since September 2021, foreign providers of electronic services (platforms, software, streaming, online advertising) whose annual income from non-VAT-registered customers in Thailand exceeds 1.8 million baht must register for Thai VAT, file monthly returns and pay the VAT collected, without deducting input VAT. They are not required to issue tax invoices.
VAT returns
VAT-registered companies file a monthly return (PP.30) by the 15th of the following month. When filed online through the Revenue Department’s e-Filing system, the deadline is usually extended by 8 days.
Specific Business Tax (SBT)
Some activities outside the scope of VAT are subject to Specific Business Tax, calculated on gross receipts:
| Activity | SBT rate |
|---|---|
| Banking and similar financial businesses | 3.0% (0.01% for certain transactions) |
| Life insurance | 2.5% |
| Sale of real estate in a commercial manner | 3.0% |
| Pawnshops | 2.5% |
A local tax of 10% of the SBT is added, which brings the effective rate on real estate sales, for example, to 3.3%.
Withholding tax (WHT)
Withholding tax is a central feature of the Thai tax system. A company making certain payments must deduct a percentage at source and pay it to the Revenue Department on behalf of the recipient. For a Thai company receiving the payment, the amount withheld is a tax credit against its own corporate income tax.
Main domestic withholding tax rates
| Type of payment to a Thai company | WHT rate |
|---|---|
| Dividends (to a listed company, or a company holding at least 25% of the payer’s voting shares without cross-shareholding) | 0% |
| Dividends (other cases) | 10% |
| Interest (to companies other than banks and finance companies) | 1% |
| Royalties | 3% |
| Service and professional fees | 3% |
| Rent | 5% |
| Advertising | 2% |
| Transport | 1% |
Withholding tax on payments abroad
When a Thai company pays a foreign company that does not carry on business in Thailand, the standard rates, before any tax treaty, are:
| Type of income | Standard rate |
|---|---|
| Dividends | 10% |
| Interest | 15% |
| Royalties | 15% |
| Service fees (Thai-source) | 15% |
These rates can be reduced under Thailand’s double tax agreements (DTAs).
Double tax agreements
Thailand has double tax agreements with 61 countries. They reduce or eliminate double taxation on income earned in one country by residents of the other, and generally cover dividends, interest, royalties, capital gains and employment income.
| Treaty country | Dividends | Interest | Royalties |
|---|---|---|---|
| France | 10% | 3% / 10% / 15% | 0% / 5% / 15% |
| Belgium | 10% | 10% / 15% | 5% / 15% |
| Germany | 10% | 0% / 10% / 15% | 5% / 15% |
| Switzerland | 10% | 10% / 15% | 5% / 10% / 15% |
| United Kingdom | 10% | 10% / 15% | 5% / 15% |
| United States | 10% | 10% / 15% | 5% / 8% / 15% |
| China | 10% | 10% / 15% | 15% |
| Japan | 10% | 0% / 10% / 15% | 15% |
Where several rates are shown, the applicable rate depends on conditions such as the type of recipient or the type of royalty. To benefit from treaty rates, the recipient must be a resident of the other country under the treaty and provide a certificate of tax residence to the Thai company making the payment.
Transfer pricing
Thailand applies transfer pricing rules based on OECD principles. Transactions between related companies (parent and subsidiary, sister companies) must be carried out at arm’s length.
- Disclosure form: companies with annual revenue above 200 million baht and related-party transactions must file a transfer pricing disclosure form online within 158 days of the end of the financial year.
- Local file: documentation, in Thai, must be kept for five years and provided to the Revenue Department on request, normally within 60 days (180 days for a first request).
- Penalties: up to 200,000 baht for failing to comply with the reporting requirements.
- Country-by-country reporting: applies to groups with consolidated revenue above 28 billion baht.
Companies below the 200 million baht threshold are exempt from the reporting, but must still price their related-party transactions at arm’s length.
The global minimum tax (Pillar Two)
This is the most significant change in recent years. The Emergency Decree on Top-up Tax B.E. 2567 (2024) brought the OECD’s Pillar Two rules into Thai law, for fiscal years starting on or after 1 January 2025.
It applies to multinational groups with consolidated revenue of at least 750 million euros in at least two of the four previous years. For these groups, a minimum effective tax rate of 15% applies in each country. If the effective rate in Thailand is below 15%, for example because of BOI exemptions, Thailand collects a domestic top-up tax to bring it up to that floor. The first top-up tax returns for fiscal years ending 31 December 2025 are due by 30 June 2027.
For SMEs and groups below 750 million euros of revenue, the global minimum tax does not apply, and BOI incentives keep their full effect.
Tax treatment of BOI-promoted companies
BOI promotion changes a company’s tax position significantly, but it does not remove all its tax obligations.
What BOI promotion exempts
- Corporate income tax: net profits from the promoted activity are exempt for 3 to 13 years depending on the activity group, usually within a cap linked to the amount of investment.
- Dividends: dividends paid from the exempt profits of the promoted activity during the exemption period are not taxable for shareholders.
- Losses: losses incurred during the exemption period can be carried forward and deducted from profits for five years after the exemption ends.
- Import duties: machinery, and raw materials used to make exported goods, can be imported free of import duty.
- After the exemption: some projects receive a 50% reduction of corporate income tax for a further period, depending on the location or specific measures.
What BOI promotion does not exempt
- VAT: a BOI company charges and pays VAT normally, including on imports.
- Non-promoted income: income from activities not covered by the promotion (trading, interest, other services) is taxed at the normal rate. The accounts of promoted and non-promoted activities must be kept separate.
- Withholding tax: the company must still withhold tax on its payments (salaries, services, rent, payments abroad).
- Filing: the company files its CIT returns normally, showing promoted and non-promoted income separately.
- Social security and payroll taxes: these apply normally.
For large multinational groups, the global minimum tax can reduce the value of the BOI exemption. The BOI and the Ministry of Finance are therefore introducing a refundable tax credit compatible with Pillar Two. For the details of BOI incentives, see our complete guide to BOI promotion.
Tax treatment in IEAT industrial estates
Setting up in an IEAT industrial estate does not, in itself, exempt a company from corporate income tax. The tax effect depends on the type of zone:
- General Industrial Zone: no specific tax regime. The company pays corporate income tax, VAT and import duties normally, unless it is also BOI-promoted.
- IEAT Free Zone: machinery, equipment, raw materials and goods brought into the zone are exempt from import duty, VAT and excise tax. These taxes apply when goods leave the zone for the Thai market. Goods re-exported abroad bear no Thai import taxes.
Many manufacturers combine the two: the IEAT Free Zone for customs duties and VAT on imports, and BOI promotion for corporate income tax. The BOI also grants an extra year of CIT exemption to some projects located in a promoted industrial estate. See our articles on the IEAT Free Zone and on choosing an IEAT industrial estate.
Other taxes for companies
Land and Building Tax
The Land and Building Tax Act B.E. 2562 (2019) replaced the former property taxes. Rates depend on how the property is used:
- Agriculture: 0.01% to 0.1% of the appraised value
- Residential: 0.02% to 0.1%
- Commercial and other uses: 0.3% to 0.7%
- Vacant or unused land: 0.3% to 0.7%, increasing progressively the longer it stays unused, up to 3%
Stamp duty
Stamp duty applies to certain documents, such as leases, loan agreements, share transfers and contracts for work. The rate depends on the type of document, for example 0.1% for leases and share transfers.
Excise tax
The Excise Tax Act B.E. 2560 (2017) applies to a list of products such as alcohol, tobacco, vehicles, petroleum products and sugary drinks. Rates are based on value, quantity, or both.
Key points
- Standard CIT rate: 20% of net profit, with progressive rates for SMEs (0%, 15%, 20%).
- VAT: 7% until 30 September 2027 (statutory rate 10%), registration above 1.8 million baht a year.
- Withholding tax on payments abroad: 10% on dividends, 15% on interest, royalties and service fees before treaty relief, with 61 tax treaties.
- CIT is paid in two steps: half-year return within two months, annual return within 150 days.
- Transfer pricing reporting applies to companies with revenue above 200 million baht.
- Global minimum tax since January 2025 for groups above 750 million euros of revenue.
- BOI promotion exempts CIT on promoted income, but not VAT, withholding tax or non-promoted income. IEAT Free Zones exempt import duties, VAT and excise on goods entering the zone.
Frequently asked questions about corporate tax in Thailand
Will the 7% VAT rate continue after September 2027?
The current extension runs until 30 September 2027. The 7% rate has been renewed regularly for more than thirty years, and a return to 10% would be politically and economically difficult, but businesses should follow announcements as the expiry date approaches.
Is a BOI company fully exempt from corporate income tax?
During the exemption period (3 to 13 years depending on the activity group, usually within a cap), profits from the promoted activity are exempt. Income from non-promoted activities remains taxable at the normal rate, and VAT and withholding tax apply normally. After the exemption period, the normal 20% rate applies, unless the project qualifies for a 50% reduction.
Does setting up in an IEAT industrial estate reduce corporate income tax?
Not by itself. An IEAT Free Zone exempts import duties, VAT and excise tax on goods entering the zone. Corporate income tax exemptions come from BOI promotion, which many companies in industrial estates combine with their IEAT location.
Is a foreign company without an office in Thailand taxable?
A foreign company that does not carry on business in Thailand is not subject to Thai CIT on its profits. But Thai-source income it receives (dividends, interest, royalties, service fees) is subject to Thai withholding tax, which a tax treaty may reduce.
What is the global minimum tax and how does it affect BOI companies?
The global minimum tax sets a minimum effective tax rate of 15% for multinational groups with revenue of at least 750 million euros. If a BOI company in such a group has an effective rate below 15% because of its exemptions, Thailand collects a top-up tax. SMEs and groups below the threshold are not affected.
How is withholding tax applied to dividends paid to a French or Belgian company?
Thailand’s domestic rate on dividends paid abroad is 10%, the same as the treaty rate for France and Belgium. The parent company can then generally credit this tax in its own country, under its domestic rules and the treaty.
How long must tax documents be kept?
Accounting documents must generally be kept for at least five years, and transfer pricing documentation for five years from the filing of the disclosure form. The Revenue Department can review returns within set periods, and the general statute of limitations for tax is ten years. Expenses without proper supporting documents can be disallowed in a tax audit.
Conclusion
The Thai tax system is relatively favourable to businesses, with a 20% corporate income tax rate, 7% VAT and significant BOI incentives. But it is also detailed and constantly changing. The global minimum tax is the biggest change in decades for large multinationals, while for SMEs and foreign investors below the threshold, BOI incentives remain fully effective. In all cases, careful tax planning, rigorous bookkeeping and regular monitoring of changes are essential.
Our accounting team handles bookkeeping, payroll, tax filings and BOI reporting for foreign companies in Thailand. If you need support with your tax obligations or want to review the tax structure of your investment, contact our team at our offices in Thailand.