The men, identified as Tobias and Ian, could face up to two years in prison for desecrating Thailand's national flag.
They were arrested at their guesthouse after allegedly being caught on CCTV tearing down five Thai flags from the awnings of shops in Krabi on Saturday night.
Sources said the pair, who were made to apologize in a video, will appear before a military court in the city of Surat Thani.
The case is being followed by the Italian embassy in Bangkok, which has contacted the families of the men.
The Italians tried to justify their actions by saying they were drunk after spending all night in a pub.
With ANSA