Starting January 1, 2024, the Revenue Department of Thailand will enforce new regulations regarding personal income tax for foreign-sourced income. These regulations, outlined in the Department’s Order No. Por.161/2566, dated September 15, 2023, aim to provide clear guidelines for taxpayers on their obligations and entitlements. Here are the key points you need to know:
Understanding Taxable Conditions
Individuals residing in Thailand for 180 days or more in a tax year and bringing foreign income into Thailand must pay personal income tax on that income. This applies regardless of when the income was earned.
Example: If Taxpayer resides in Thailand for 200 days in 2024 and earns income from abroad, transferring this income to Thailand in 2024 or in any subsequent years, Taxpayer must include this income in the 2024 tax return or in the year when the income is brought into Thailand.
While the 180-day rule is a general guideline for determining tax residency in Thailand, DTAs can modify this determination. For example, U.S.-Thailand DTA includes provisions
to resolve dual residency situations, potentially affecting the application of the 180-day rule. Taxpayers should consult the specific provisions of the applicable DTA to ensure compliance and optimal tax outcomes.
Key Regulations
1. Income Repatriation: Income from foreign sources is taxable in the year it isbrought into Thailand, starting January 1, 2024, onwards.
2. Residency Definition: Any individual residing in Thailand for 180 days or more in a tax year is considered a resident, regardless of the number of entries and exits.
3. Assessable Income: Includes income defined under Sections 40(1) to 40(8), excluding certain exemptions like inheritance or specific familial income up to 20 million baht per tax year.
4. Investment Income: Interest from foreign bonds is taxable when repatriated if the individual resides in Thailand for 180 days or more in the tax year.
5. Timing of Income: Income earned while an individual is a resident and subsequently brought into Thailand is taxable in the year it is brought into Thailand.
6. Exemptions: Income earned while not residing in Thailand for 180 days or more is exempt, as is income taxed in countries with a double taxation agreement (DTA) with Thailand.
Tax Rates and Double Taxation Agreements
Thai citizens and residents are subject to progressive tax rates based on their annual income:
| Taxable Income Range (THB) | Tax Rate |
| 0 – 150,000 150,001 – 300,000 300,001 – 500,000 500,001 – 750,000 750,001 – 1,000,000 1,000,001 – 2,000,000 2,000,001 – 5,000,000 Over 5,000,001 | Exempt 5% 10% 15% 20% 25% 30% 35% |
Thailand has DTAs with 61 countries, preventing double taxation and ensuring fair tax treatment. Individuals can credit taxes paid abroad against their Thai tax liability.
Recommendations
To manage your tax responsibilities effectively:
- Stay Updated: Tax laws can change, so keeping informed about the latest regulations is crucial.
- Maintain Records: Detailed records of residency and income help accurately determine tax obligations.
This article aims to provide a simplified overview of the new personal income tax regulations for foreign-sourced income under Thai law, ensuring that individuals understand their responsibilities and can plan their finances accordingly.
For further information or specific queries, please consult us at Kreston Thailand. Send us an email at info@kreston-thailand.com.
Download Updated Personal Income Tax Regulations for Foreign-Sourced Income