Thailand’s Revenue Department published a new tax guideline whereby all overseas sourced income received in Thailand by tax residents will be subject to Personal Income Tax as of January 1, 2024.
Legal experts believe the policy is aimed at three main groups of people:
- Residents who trade on foreign exchanges through foreign brokers;
- Residents who are cryptocurrency traders;
- Thai nationals who have been taking advantage of a tax loophole that allows them to bring foreign income into Thailand tax-free after keeping it in a foreign account for more than one calendar year.
According to the Revenue Department’s new guideline, individuals must calculate and pay income tax on their income under section 48 of the Income Tax Act in the tax year they bring their assessed income into Thailand under section 41 of the Internal Revenue Code. This obligation applies whether the income comes from assets located abroad; income from work and business activities abroad; or both.
Even if Tax Residents would receive foreign income in one tax year and bring it into Thailand in a different calendar year, they would still have to declare and pay income tax. The proposal was released on September 15 to close the tax gap that currently allows taxpayers to wait until the next calendar year to repatriate foreign sourced earnings in order to avoid paying taxes on such income.
It is still unclear if taxpayers who have already paid taxes in another country will be subject to double taxation on their income in Thailand. The new system, which comes with some perks, is expected to stick to the many double tax treaties Thailand has already signed with other countries to avoid double taxation.