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Personal Allowances and Deductions

Ensure compliance with all legal obligations through our meticulous handling of personal allowances and deductions.

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In Thailand, “personal allowances and deductions” and “other allowable deductions” play a crucial role in determining an individual’s net income for tax purposes. The Thai Revenue Department oversees the taxation system and allows individuals to claim personal allowances and deductions from their net income, aiding in the minimization of tax liabilities.

This comprehensive system is designed to provide tax resident individuals in Thailand with a fair framework for planning and calculating personal income taxes. The process involves deducting standard expenses from the gross income in the form of Personal Allowances, as described below. After this deduction, individuals can further reduce their taxable income by claiming various Other Allowable Deductions.  These deductions are essential for ensuring that taxpayers are not burdened with excessive tax obligations and can effectively plan their finances and their long-term savings for the future.


Personal Allowances and Deductions:

Each Personal Income Taxpayer is entitled to deduct a range of allowances to reduce their personal taxable income and, subsequently, their tax liability. These allowances include:

  1. Personal, Spouse (if spouse has no income) and Children: Taxpayers can claim allowances for themselves, their spouse, and their dependent children, helping to alleviate the overall tax burden.
  2. Parent allowances: Deductions can be allowed for the taxpayer and/or their legal spouse for their parents over 60 years of age with income less than THB 30,000.
  3. Disabled Care allowances: Depending on specific circumstances, taxpayers are allowed to receive deduction for the care of disabled or incompetent family members; furthermore, care of a disabled or incompetent person other than a family member (limited to 1 person).

Other Allowable Deductions:

Several other deductions are allowed to reduce personal taxable income, which include:

  1. Life Insurance, Pension Insurance, and Health Insurance: These premium contributions are often eligible for deductions, encouraging individuals to invest in protecting themselves and their families from loss of life, health and income.
  2. Provident Fund contributions, Retirement Mutual Fund (RMF), and Super Savings Fund (SSF): Contributions to long-term savings that encourage individuals to invest in their future and their ultimate retirement.
  3. Home mortgage interest: Allowing deductions on the cost of interest paid for the purchase of your home.
  4. Social security contributions: Allowing deductions on the employees’ portion they paid during the year into the Social Security Fund.
  5. Donations: Allowing deductions aided most prominently at support of education development, governmental hospitals, justice, juvenile offenders, sports development and Thai culture and heritage. Deductions are also allowed for certain charities and benefits given for public organizations in Thailand.

It’s crucial for personal taxpayers to keep accurate records of eligible personal allowances and deductions to maximize their benefits and ensure compliance with the tax laws. Taxpayers must stay informed about the specific personal allowances and deductions available to them, as tax laws can change regularly over time. Some personal allowances and deductions that were once available may have been discontinued, and taxpayers should be aware of these changes to avoid any unintended tax consequences.

Tax resident individuals in Thailand who compliantly and fully utilize the above “personal allowances and deductions” can greatly benefit from significant annual personal income tax savings and achieve effective long-term investment / savings planning to secure their personal goals and their family’s future prosperity.

Utilizing AO’s payroll and taxation expertise ensures that individuals can optimize their tax positions while remaining in full compliance with Thai statutory and tax regulations. These services can assist in accurately calculating taxable income, maximizing relevant personal allowances and deductions, and staying updated on any changes to the tax laws that may significantly impact the success of their personal wealth plans.


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Point of Contact

Khun Suwaree has a degree in Business Administration, majoring in accounting and an MBA. She is a seasoned accountant with more than 30 years of professional experience. She has been a Finance & Accounting Manager in various large businesses (production, trading, and services). She is experienced in several accounting programs (MYOB, Xero, QuickBooks, SAP, Navision Accounting, Formula Accounting, MS Dynamics 365, etc.) as well as B-Plus payroll software.

Her commercial mind, with an excellent grasp of Thai Tax, plays a big role in helping both local and International clients across various industries.

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