The principal taxation law in Thailand is the Revenue Code. Beside this, there are also separate acts on Customs and Tariffs, Excise Tax, Leased Land Tax, Municipal and Locality Tax, and Sign Board Tax.
In Thailand, taxes are collected in two ways. There are direct taxes (personal and corporate income taxes and petroleum income tax) and indirect taxes (value-added tax, excise tax, customs duties, stamp duties, and specific business tax).
In general, the income tax is made by self-assessment and taxpayers must declare their income and pay tax to the authorities. The tax declarations and payments are assumed to be correct. However, the Revenue Department has the power to audit taxes and taxpayers’ financial records.
Value-added tax is collected upon the consumption of goods and services and is also levied on imports.
In order to eliminate double taxation, Thailand has Double Tax Agreements with 54 countries and seven ASEAN members (Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, and Vietnam). These agreements apply only to income taxes, namely personal income tax, corporate income tax, and petroleum income tax. Other taxes are not covered.
The treaties place taxpayers in a more favorable position for Thai income than they would be under the Revenue Code.