Business expenses in Thailand: what you can deduct in 2026, and the caps

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You freelance from Thailand or run a Thai company, and you want each baht you spend to reduce your tax. After reading, you will know which costs are deductible in 2026 and which caps bite. You will also know the flat-rate options for individuals and the paperwork expected.

Thailand business expenses in 2026: the key figures

What changed for 2026

• From 1 January 2026, company donations to temples and certain designated charities, hospitals and schools must go through the e-Donation system to be deductible, according to PwC's Thailand deductions summary (secondary).
• Large groups with consolidated revenue of at least EUR 750 million are under the Top-up Tax Emergency Decree from accounting periods starting 1 January 2025 (Revenue Department News No. 6/2025). For them, extra deductions can now be clawed back by a minimum tax.
• Otherwise, the deduction rules, depreciation rates and caps below are unchanged from 2025.

Is this guide for you?

Read on if you…

• run a Thai limited company and approve its expenses;
• freelance from Thailand as a tax resident and must pick a deduction method;
• are deciding between invoicing personally and setting up a Thai company.

Probably not your case if you…

• are a salaried employee with no side income (see personal tax deductions in Thailand);
• run a foreign company with no Thai presence, staff or agent.

Which expenses can a Thai company deduct?

A Thai company is taxed on net profit, computed on an accrual basis. It deducts expenses allowed by the Revenue Code. The Revenue Department's corporate tax page lists the main ones:

• ordinary and necessary business expenses: salaries, rent, software, marketing, professional fees;
• interest, except interest on the company's own capital, reserves or funds;
• taxes, except corporate income tax and VAT paid to Thailand;
• bad debts written off under the ministerial rules;
• depreciation ("wear and tear") at the maximum rates below;
• contributions to a registered provident fund;
• entertainment up to 0.3% of gross receipts, capped at THB 10 million;
• donations up to 2% of net profit, with extra relief for some education and sports donations.

What a Thai company cannot deduct

The same RD page lists 20 categories. The ones that matter most for small companies:

1. Reserves and provisions, with limited exceptions.
2. Personal expenses, gifts and charity beyond the public-benefit rules.
3. Capital spending and improvements (ordinary repairs are fine). You depreciate instead.
4. Fines, surcharges, criminal fines and corporate income tax itself.
5. Salary to a shareholder or partner above a reasonable level.
6. Expenses not actually incurred, or belonging to another period.
7. Expenses not for profit or not for the business in Thailand.
8. Expenses where the payee cannot be identified.
9. Rent paid for assets the company itself owns.

Here's the catch with item 8. A cost paid in cash to someone with no invoice and no tax ID is not deductible, however real it was.

What are the depreciation rules in 2026?

Depreciation is capped by Royal Decree. You may use a lower rate if your accounts do. The RD corporate tax page gives these maximum rates:

Small-company acceleration. A company with fixed assets (excluding land) of no more than THB 200 million and no more than 200 employees can write off 40% of machinery, equipment, computers and software in year one. Factory buildings can start at 25%, then up to 5% (PwC, secondary).

Accelerated methods are allowed if the total period is not shorter than 100 divided by the rate.

How do freelancers and sole traders deduct expenses?

If you invoice as an individual, your income falls into one of the eight categories of Section 40. Each has its own deduction, set out on the Revenue Department's expense deduction page:

The 40(8) rates come from Royal Decree No. 629 B.E. 2560 (2017), which lists which activities get 60%. Check your activity before assuming the higher rate.

In practice, many remote freelancers selling services fall under 40(2). Then the flat deduction tops out at THB 100,000, and actual expenses are not an option. That is often the moment a company starts to make sense.

Income under 40(5) to 40(8) also requires a half-year return (P.N.D. 94) between July and September (RD filing deadlines). Rates and filing are in personal income taxes in Thailand.

How do VAT and withholding tax interact with your costs?

VAT

Register for VAT once annual turnover passes THB 1.8 million, according to the RD VAT page. The rate is 7% until 30 September 2027, under Royal Decree No. 807 B.E. 2569. Registered businesses credit input VAT on business purchases backed by a proper tax invoice. Input VAT on entertainment cannot be credited, but the RD says it can be deducted as a corporate expense.

Unregistered businesses simply treat VAT as part of the cost.

Withholding tax on what you pay

A Thai company paying for services withholds tax and gives the supplier a certificate. The RD corporate page lists these rates:

• service and professional fees to Thai companies: 3%;
• advertising fees: 2%;
• rent paid to individuals: 5% (RD personal income tax page);
• income paid to a foreign company with no Thai business: 15% of gross, 10% for dividends, often reduced by treaty.

Withheld tax is filed on form CIT 53 (Thai payees) or CIT 54 (foreign payees) within 7 days of the following month. A missing withholding certificate does not make the cost disappear, but you owe the tax plus a 1.5% monthly surcharge.

Which structure makes your expenses work best?

The small-company rates need paid-up capital of THB 5 million or less. Revenue from goods and services must not exceed THB 30 million (PwC, secondary). Dividends you take out then suffer 10% withholding.

One warning. Running a foreign company from your desk in Bangkok can make it taxable in Thailand. The RD's guide for foreign companies applies Thai tax where a company has "a branch, an office, an employee or an agent in Thailand". See corporate income tax in Thailand and legal forms of business in Thailand. To have the entity chosen and registered for you, see Heavnn business setup.

Common mistakes (and what they cost)

• Paying suppliers without a tax ID on the invoice → the expense is disallowed in an audit; the extra tax carries a 1x civil fine and 1.5% monthly surcharge.
• Booking a luxury car at full cost → depreciation above the THB 1 million cost base is added back to profit every year.
• Entertaining without tracking the 0.3% cap → the excess is added back and taxed at 15–20%; the input VAT on it is not creditable either.
• Paying a foreign freelancer or vendor without withholding → you owe the 15% withholding yourself, plus the 1.5% monthly surcharge.
• Assuming 60% for all freelance income → service fees under 40(2) get 50% capped at THB 100,000; a wrong claim triggers an assessment with fines.

Frequently asked questions

Can freelancers in Thailand deduct expenses without receipts?

Yes, by taking the flat deduction. Service fees under 40(2) get 50%, capped at THB 100,000 together with any salary. Business income under 40(8) gets 40% or 60% depending on the activity, under Royal Decree No. 629. If you choose actual expenses instead (where allowed), you need proof for every item, including the supplier's identity.

Are home office costs deductible in Thailand?

For a company, rent for space it actually uses is deductible, but not rent for assets it owns itself. Keep a lease in the company's name and withhold 5% on rent paid to an individual landlord. On the flat deduction, home office costs are already covered by the flat rate. You cannot add them on top.

Is entertainment deductible for a Thai company?

Yes, up to 0.3% of gross receipts, with an absolute cap of THB 10 million a year. Anything above is added back to taxable profit. Input VAT on entertainment cannot be credited. The Revenue Department says it can still be deducted as a corporate expense. Document the guest and the business purpose.

How long can a Thai company carry losses forward?

Five accounting periods. Carry-back is not allowed. Losses stay with the company that made them, so plan profitable activities inside the same entity. Individuals with flat deductions have no loss to carry forward at all, which is another reason high-cost businesses often prefer a company.

Are fines and tax surcharges deductible?

No. The Revenue Department lists fines, surcharges, criminal fines and corporate income tax itself among non-deductible items. Other taxes, such as specific business tax or stamp duty, are generally deductible. VAT paid to Thailand is not deductible when it is creditable as input tax.

How do Thai expense rules compare with Hong Kong and the Philippines?

Thailand caps entertainment at 0.3% of gross receipts and car depreciation at a THB 1 million base. The Philippines also caps entertainment by formula, while Hong Kong works on a general deductibility test with territorial taxation. See business expenses in Hong Kong and business expenses in the Philippines.

Related guides

• Corporate income tax in Thailand: rates, SME bands and filing
• Legal forms of business in Thailand: company or sole trader
• Personal income taxes in Thailand: the 0–35% scale
• Specific taxes of Thailand: VAT and other levies
• Your tax guide to Thailand
• Business expenses in Hong Kong
• All country tax guides

Sources

• Corporate income tax – Revenue Department of Thailand
• Expense deductions for personal income (การหักค่าใช้จ่าย) – Revenue Department of Thailand
• VAT and SBT – Revenue Department of Thailand
• Filing deadlines (กำหนดเวลายื่นแบบ) – Revenue Department of Thailand
• Income tax guide for foreign companies – Revenue Department of Thailand
• News No. 6/2025: Top-up Tax Emergency Decree – Revenue Department of Thailand
• Thailand corporate deductions – PwC Worldwide Tax Summaries (secondary)
• Thailand taxes on corporate income – PwC Worldwide Tax Summaries (secondary)

This guide is general information, not personalised tax advice. See how we research and review.