Personal income tax in Thailand: pay less with health insurance

Working expatriates in Thailand are responsible for their own Personal Income Tax (PIT) filing to the Revenue Department. Due to Covid-19 pandemic, the filing deadline for 2019 individual income tax returns was pushed back to August 31, 2020. The deadline for 2020 PIT filing has not been confirmed but we are expecting a similar date for 2021.
However, many new expats are unaware that they even have to declare their income taxes, let alone how they can reduce their taxable income.

Holders of personal health insurance in Thailand can reduce their taxable income by up to 25,000 THB. 

Gif Tax Reduction

How much can you save with a health insurance?

The percentage that can be deducted depends on the annual net taxable income, as outlined below:

Net Taxable Income

Deduction

Accumulate tax payable

First 150,000 Exempt 0
150,001 - 300,000 5% 7,500
300,001 - 500,000 10% 27,500
500,001 - 750,000 15% 65,000
750,000 - 1,000,000 20% 115,000
1,000,001 - 2,000,000 25% 365,000
2,000,001 - 5,000,000 30% 1,265,000
5,000,001 and over 35%  

 

Similarly to most countries, numerous personal income tax deductibles are available to reduce annual net taxable income; such as child allowance, spouse (without income) allowance, and insurance. Consequently, the net taxable income can potentially be less than the annual income, when taking tax deductibles into account. 

 

How the health insurance tax deduction works: an example

To illustrate how this deduction works, let’s use an imaginary character.
Sam is a young foreigner, working for an international company in Bangkok. He earns 1.8 million baht per year, making him fall into the [1,000,001 - 2,000,000] income bracket.
Sam has a health insurance and pays 40,000 THB annual premium. He is therefore eligible to 25,000 THB deductible.

When filing his personal income tax return, Sam can expect to reduce his taxes by 25,000 THB x 25% = 6,250 THB. 

How can expats claim the deduction?

In some companies, the HR department can assist expats in filing tax returns. For thai readers, PIT can be filed online on the Revenue Department's website. 

A proof of a valid Thailand health insurance policy will likely be needed in order to claim the deductible. The insurance policy needs to be paid during the tax year for the deductible to be effective for the same year. For tax return purposes, the insurance payment date will be taken into account, not the policy start date. 

Please note: The maximum personal income tax allowance for both health insurance and life insurance premiums cannot exceed more than 100,000 baht. This means, those who have already claimed 100,000 THB life insurance premium as a tax deductible, cannot add the health insurance 25,000 THB deductible. 

Get Personal Health Insurance

 

Luma Members seeking assistance for their personal income tax return can enjoy 10% on tax filing services with our Partner B-Accounting, as part of our Luma Privilege Program.