How can you reduce your income tax in Thailand?
How much tax you can save as an expat in Thailand will depend on your family and income circumstances. Typically, long-term residents and locals with families will be likely able to deduct more, but more on that in a moment.
As a refresher, this is the formula for calculating your income tax in Thailand:
Taxable income = Assessable income - Deductions - Allowances - Tax creditsAs you can see, a lot can be deducted from your income before it gets taxed, so knowing the ins and outs of tax deductions, allowances, incentives, tax credits and exempt income can help you save a lot of money down the road.
Benefits of knowing your way around Thai tax
There are two main advantages of being able to navigate the Thai tax system:
- You can pay less in tax
- You can avoid overpaying tax
When you anticipate your earnings and tax savings for the year ahead, you can coordinate with your HR or accountant to deduct the exact amount each month. As a result, you don’t need to wait for a tax refund at the end of the tax year and give the Thai government an interest-free loan.
Complete list of tax deductions and allowances in Thailand
Let’s dive into the full list of deductions and allowances. Both are typically listed as either a percentage of assessable income or the actual expense incurred.
Deductions
Depending on the type of income you are earning, you can deduct the following amounts from your assessable income:
| Type of income | Deduction |
|---|---|
| Type 1: Employment income Salary/wages, pension income | 50% of assessable income but not more than 100,000 THB (types 1 and 2 share a single combined 100,000 THB cap). Business deductions are not available against employment income. |
| Type 2: Income from the hiring of services Remuneration benefits, commissions, freelancer service fees, agent fees, meeting fees, director fees… | |
| Type 3: Royalty income Goodwill, copyright and other rights income, income from annuities, wills, juristic acts, judgments, etc. | 50% of assessable income but not more than 100,000 THB |
| Type 4: Interest, dividends, capital gain | Any taxpayer who domiciles in Thailand and receives dividends from a juristic company or partnership incorporated in Thailand is entitled to a dividend tax credit. The credit equals the dividend multiplied by the corporate tax rate paid by the company, divided by (100 minus that rate). At the standard 20% corporate rate, the credit is 20/80 of the dividend received. In computing assessable income, the taxpayer grosses up the dividend by the amount of the tax credit, and the credit is then offset against the tax liability. |
| Type 5: Rental income | 30% for houses, buildings vehicles 20% for agricultural land 15% for other lands 10% for other |
| Type 6: Professional/liberal services income | 60% for medical professions 60% for artists (from Royal Decree No. 803, gazetted February 2026) 30% for other professions |
| Type 7: Contractor/Construction services income | 60% of assessable income |
| Type 8: Other income (business, agricultural, commercial, industrial, transport, other activities) | All expenses incurred for the purpose or the business OR 10-60% of assessable income (subject to the various rules prescribed in the Revenue Code) |
| Foreign Income brought into Thailand | No expense allowed |
Rules on foreign income (updated for 2024 onwards)
As discussed in our article on Thailand income tax, resident taxpayers are subject to tax on income earned both within and outside of Thailand. Previously, foreign-sourced income was only taxable if it was brought into Thailand in the same year it was earned. That changed on January 1, 2024. Foreign-sourced income earned from that date onwards by a Thai tax resident is now taxable in the year it is remitted into Thailand, regardless of when it is brought in.
Three carve-outs apply. Income earned before January 1, 2024 remains exempt when remitted. Income earned in a year when you were not a Thai tax resident (fewer than 180 days in Thailand) is not taxable even if remitted later. And non-residents can bring foreign income into Thailand without triggering any Thai income tax.
Note: the Revenue Department has drafted an amendment that would exempt foreign income remitted within the same year it is earned or the following year. As of mid-2026, this has not been enacted, so the rules above still apply.
Allowances
Personal allowance
| Type | Allowance | Notes |
|---|---|---|
| Personal allowance (every taxpayer) | 60,000 THB | |
| Taxpayer aged 65 or over | 190,000 THB | Technically an income exemption rather than an allowance, applied against assessable income. |
| Disabled taxpayer (under 65) | 190,000 THB | Requires a Thai disability certificate. A disabled taxpayer aged 65 or over can claim the 190,000 THB exemption only once, not twice. |
| Dependent spouse allowance | 60,000 THB | Available if your spouse has no income in the tax year, or if you file jointly. Spouses and children living abroad can also qualify as dependents. If you are not a Thai resident, you can still take these deductions if your dependents are Thai residents. |
| Child allowance For parental care of dependent minor children or children not over 25 years of age and studying at an educational institution | 30,000 THB per biological child, with no limit on the number of children. 60,000 THB for the second child onwards born in or after 2018. The first child always receives 30,000 THB regardless of birth year, and birth order is counted across all children. 30,000 THB for adopted children, and if claiming for any adopted child, the care of children allowance is limited to three dependent children in total | The child must not have assessable income above 30,000 THB in the tax year. |
| Parental care For care of dependent parents of taxpayer or spouse in Thailand, over 60 years of age and having income not more than 30,000 THB per year. Only one taxpayer can claim it. | 30,000 THB for each parent | The parent must hold a Thai ID card. A non-resident is allowed deductions for spouse, children, and parents only if they are residents in Thailand. |
| Disabled or incompetent person support (family) | 60,000 THB for each family member | Requires a Thai disability certificate. |
| Disabled or incompetent person support (other than family)
| 60,000 THB (one person per year) | Requires a Thai disability certificate. |
Specific allowances
| Type | Allowance | Notes |
|---|---|---|
| Health insurance premiums (own) | Up to 25,000 THB is allowed as a deduction | Policies must be with a Thai insurer. The deduction for your own health insurance, together with your own life insurance premiums, can’t exceed 100,000 THB in total. Life insurance policies must have a term of 10 years or more. |
| Life insurance premium (own) | Amount paid but not exceeding 100,000 THB | |
| Health insurance premiums for parents For the parents of the taxpayer or spouse with income of not more than 30,000 THB per year. | Actual expense but not more than 15,000 THB in total. | The 15,000 THB cap is the combined total across all parents, not per parent. There is no age requirement for this allowance, unlike the parental care allowance. The policy must be with a Thai insurer. This allowance sits outside the 100,000 THB insurance cap. |
| Life insurance premium for spouse | Up to 10,000 THB | The spouse must have no income. This allowance sits outside the 100,000 THB insurance cap. |
| Retirement / pension life insurance | 15% of assessable income, maximum of 200,000 THB. Policy term must be 10 years or more, with a Thai insurer. | All combined, they can’t exceed 500,000 THB |
| Provident fund contribution | Amount paid with a limit of 15% of wages, maximum 500,000 THB | |
| Thailand National Savings Fund contribution | Amount contributed, up to 30,000 THB per year | |
| Retirement mutual fund (RMF) contribution | Amount invested with a limit of 30% of assessable income, maximum 500,000 THB | |
| Super savings fund SSF investment Invested between 2020-2024, must hold for at least ten years | Amount invested with a limit of 30% of assessable income, maximum 200,000 THB. The purchase window ended on December 31, 2024, so no new purchases qualify. | |
| Thai ESG fund | Amount invested with a limit of 30% of assessable income, maximum 300,000 THB per year, for purchases between January 1, 2024 and December 31, 2026 | Units must be held for at least 5 years. This allowance sits outside the 500,000 THB retirement cap. From 2027, the limit is scheduled to revert to 100,000 THB with an 8-year holding period unless extended. |
| Thai ESGX (LTF conversion) | Up to 50,000 THB per year in tax years 2026 to 2029 | Applies only to taxpayers who converted their LTF holdings into Thai ESGX units during May to June 2025. The first 300,000 THB was deductible in 2025, and the portion between 300,000 and 500,000 THB is spread equally across 2026 to 2029. |
| Home mortgage interest | Amount paid but maximum 100,000 THB | For the purchase or construction of a residential property in Thailand. |
| Social Security Fund contribution | Amount contributed | 5% of monthly wages. From January 1, 2026, the wage ceiling is 17,500 THB per month, so the maximum contribution is 875 THB per month (10,500 THB per year). For 2025 and earlier, the maximum was 750 THB per month. |
| Antenatal care and child delivery | A deduction of up to 60,000 THB for each pregnancy is allowed for expenses paid by the taxpayer or spouse for antenatal care and child delivery. If the expenses for each pregnancy are not paid in the same tax year, the amount paid in each tax year is allowed, but no more than 60,000 THB. | |
| Charitable contributions / donations | Amount donated but not exceeding 10% of the income after standard deductions and the above allowances | Donations to approved education, sports and state hospital causes count at double the amount donated, still within the 10% cap. From January 1, 2026, donations to most organisations must be made through the Revenue Department’s e-Donation system to qualify. |
| Political party donations | Amount donated, up to 10,000 THB | |
| Domestic purchase of goods or services expense (Easy E-Receipt) | Up to 50,000 THB for the 2025 tax year only, for purchases from a VAT-registered vendor (in Thailand). Exceptions apply. Learn more about the tax rebate. | Applied to purchases made between Jan 16 – Feb 28, 2025. E-tax invoice/e-Receipt required. No equivalent programme has been approved for the 2026 tax year as of mid-2026. |
| Social Enterprise Investment Allowance | Amount invested but not more than 100,000 THB for each tax year, available from tax year 2021 onwards | Investment in shares or partnership capital of a registered social enterprise under Royal Decree No. 735. Shares must generally be held until the enterprise is dissolved. |
*Note that tax reduction entitlements on your Thai tax return cover only Thai plans. Foreign pensions, social security plans, life insurance plans, home mortgages and charitable donations are not deductible on your Thai tax return.
Tax credits and foreign tax relief
When your income gets withheld at a source, you can claim tax credits that count towards your tax liability for the given year. Examples are your employment income withheld at source or income from dividends from companies incorporated in Thailand.
If you also earn income in other countries where you also pay tax and these countries have a double tax agreement with Thailand, you can offset your tax in Thailand with your foreign taxes. Thailand has these agreements with the following countries:
| Countries | ||
|---|---|---|
| Armenia | India | Romania |
| Australia | Indonesia | Russia |
| Austria | Ireland | Seychelles |
| Bahrain | Israel | Singapore |
| Bangladesh | Italy | Slovenia |
| Belarus | Japan | South Africa |
| Belgium | Korea, Republic of | Spain |
| Bulgaria | Kuwait | Sri Lanka |
| Cambodia | Laos | Sweden |
| Canada | Luxembourg | Switzerland |
| Chile | Malaysia | Taiwan |
| China | Mauritius | Tajikistan |
| Cyprus | Myanmar | Turkey |
| Czech Republic | Nepal | Ukraine |
| Denmark | Netherlands | United Arab Emirates |
| Estonia | New Zealand | United Kingdom |
| Finland | Norway | United States |
| France | Oman | Uzbekistan |
| Germany | Pakistan | Vietnam |
| Hong Kong | Philippines | |
| Hungary | Poland | |
Non-deductible expenses and losses
As an individual taxpayer, you can’t carry forward or carry back your losses. Moreover, you can’t also deduct:
- Tax penalties, surcharges and criminal fines under the Revenue Code
- Any artificial or fictitious expense
- Any damage recoverable under an insurance contract or contract of indemnity
- Any disbursement if the payer can’t prove the identity of its recipient.
Tips for maximising tax deductions and lowering your income tax
While I can’t tell you which deductions and allowances will work for you, I can share some quick tips from my personal experience. Besides the obvious deductions and allowances (taxpayer allowance and deduction from employment income), your best bets in terms of tax savings are:
Maxing out your life and health insurance (if applicable)
They must be purchased from Thai providers and are currently capped at 100,000 THB.
Maxing out your local investments (via SSF, RMF, provident fund etc.)
If you are an investor planning to stay in Thailand long-term (and Thai funds align with your investment strategy), you might want to look into SSF and RMF in particular. You can currently deduct up to 500,000 THB for contributing to these funds (and a few others) in aggregate!
Deducting business expenses incurred from deriving business income (Type 8)
You can deduct relevant business expenses from your side hustle, for example, equipment, tools etc.
Making use of special government tax schemes
You can take advantage of the government tax schemes for purchasing goods and services from VAT-registered sellers in Thailand. These schemes come and go but are great if you would buy those things anyway. The last two were at the end of 2020 and the beginning of 2022 (each offered a maximum deduction of 30,000THB).
Claiming back your bank interest (knowing what income is tax exempt)
If you’ve earned bank interest from your savings account of less than 20,000 THB per year, you can exclude it from your total assessable income (provided 15% was withheld by the bank) and claim the withholding tax back at the beginning of the following year before you file your tax return). OR you can include it and use the withholding tax as a tax credit, whatever works out better.
A similar principle applies to dividends from Thai assets.
The above strategies will only save you money if you genuinely need the end products or services (e.g. insurance). Otherwise, you will spend more money than you save.
But perhaps most importantly, let your employer / HR department knows about your deductions and allowances. Most aren’t proactive enough to ask, in which case you would be unnecessarily leaving money on the table.
Have I left something out, or do you know any other effective ways to reduce your Thai income tax? Please email me; I’d like to know!
Conclusion
As you can see, Thailand offers many deductions and allowances.
If you don’t have a family yet and are earning employment income, you should be able to figure out your tax savings quite quickly by yourself. But in more complex cases (e.g. you have multiple sources of income, have a family, and qualify for other deductions or allowances), you might benefit from speaking with an accountant, tax advisor, or employer. They will be able to help.
In any case, it’s worth your time looking into these. You can potentially save tens or hundreds of thousands of baht!
