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Thailand Lowers Personal Income Tax rate to 17% to Attract Skilled Thai Professionals Working Abroad to Return Home, Offering Employer Tax Incentives
On March 24, 2025, the Royal Gazette published Royal Decree (No. 793) B.E. 2568, which come into effect on March 25, 2025. This decree aims to encourage highly skilled Thai nationals living abroad, particularly those with expertise in key targeted industries, to return and work in Thailand. The initiative includes tax incentives for both employees and employers to facilitate this objective.
Key Tax Incentives
- Employees – Personal income tax flat rate of 17%
- Qualified employees will benefit from a flat 17% personal income tax on their income derived from employment with companies or limited partnerships in targeted industries.
- This tax incentive applies from the date the Revenue Department receives employer notification until December 31, 2029.
- Employers – 50% Additional corporate income tax deduction
- Companies or limited partnerships operating in targeted industries can deduct 1.5 times the amount of expenses paid to qualified employees (i.e., a total deduction of 150%).
- This deduction applies from March 25, 2025 until December 31, 2029.
Eligibility Criteria
To qualify for the tax reduction, individuals must:
- Be Thai nationals holding at least a bachelor’s degree, with a minimum of two years of work experience abroad.
- Be employed under a labor contract with a company or a limited partnership operating in a targeted industry, as specified by law.
- Return to Thailand and commence the work under the contract within the period between March 25, 2025 and December 31, 2025.
Additional conditions include:
- Applicants must not have ever worked in Thailand during the tax year in which they first claim the reduced income tax rate and must not have been considered a resident of Thailand in the two consecutive tax years preceding the year they first claim the tax reduction.
- During the tax year they claim the benefit, they must be a resident of Thailand (except in the first and last tax years, where a shorter stay is permitted).
- Employers must notify the Revenue Department of the employment of such employees using the prescribed form before making the first payment to the employee. The taxpayer will be eligible for the reduced income tax rate from the date the Revenue Department receives the notification.
- Eligible individuals and companies or partnerships in targeted industries must comply with the rules, criteria, and other conditions set by the Director-General.
These measures reinforce Thailand’s commitment to strengthening its workforce by attracting skilled professionals back to the country while providing financial incentives for businesses in key targeted industries.
This article has been prepared by Baker Tilly Tax (Thailand) Limited for general information purposes only. For more information, please contact tantai@bakertilly.co.th.