As of January 1st, 2024, a significant change arrived in the Thai tax landscape. The Revenue Department began implementing a policy taxing foreign-sourced income for Thai citizens and permanent residents. This change impacts expats living in Thailand, retirees receiving overseas pensions, and individuals transferring funds from abroad.
While details are still being refined, here’s what we know so far:
The Change:
Previously, only income earned within Thailand was subject to income tax. Now, under Departmental Instruction No. Paw 161/2566, any foreign-sourced income brought into Thailand becomes taxable. This includes:
• Salaries from overseas employment
• Pensions and retirement income
• Investment income like dividends and capital gains
• Rental income from abroad
Key Requirements:
• If you’re a Thai citizen or expat resident (180 days or more per year), you must report your foreign income on your tax return if you bring it into Thailand.
• The tax now applies to income brought in in any tax year, The tax now applies to income brought in in any tax year, providing it was earned after the 31st of December 2023.
• You’ll be taxed based on the progressive tax rates used for domestic income, ranging from 0% to 35%.
• However, you may be eligible for foreign tax credits to avoid double taxation.
Impact on Expats and Transferees:
This new policy raises several questions for expats and those transferring money:
• Planning is crucial: Understanding your tax obligations for foreign income is essential. Consult a tax advisor familiar with the new regulations.
• Impact on investment strategies: Expats may need to reconsider how they invest overseas and manage their finances, potentially minimizing income repatriation to Thailand.
• Potential administrative burden: Reporting and compliance requirements may increase, especially for complex financial situations.
• Clarity is still needed: The implementation is ongoing, and some aspects remain unclear. Stay updated on official pronouncements and seek professional guidance.
Moving Forward:
The new tax law on foreign income in Thailand introduces significant changes for expats and individuals transferring funds. While uncertainties remain, proactive planning and seeking professional advice are crucial to navigating this new landscape. Remember, consulting a tax advisor can help you understand your specific situation and ensure compliance with the evolving regulations.
The Right Advice:
Here at Isaan Lawyers we have our own dedicated in-house accountants that can help you navigate the rules and laws, register you for your Tax Identification Number TIN and complete your yearly personal taxes.
Need assistance? Get in touch today.
084 471 5775
Email: accounting@isaanlawyers.com
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Please consult one of Issan Lawyer’s qualified accountants for personalised guidance.
Photo is a stock photo from The Pattaya News and meant to represent a “stress free” lifestyle which knowing your tax guidelines will give you.
