Tax residency in Thailand and taxing overseas income

[buksida]

Department to amend tax on foreign income remittance
The Revenue Department is preparing to draft legislation to amend the collection of tax on foreign income remitted to Thailand.

According to Panuwat Luengwilai, deputy director-general of the department, Thais with income earned abroad who remit it to Thailand regardless of the tax year must include that income in their personal income tax filing in Thailand.

The tax rate is progressive, with rates ranging from 5% to 35%.

These regulations regarding the taxation of foreign income remitted to Thailand were amended during the previous government and have been in effect since Jan 1, 2024.

For foreign income earned before Jan 1, 2024 and remitted to Thailand after that period, the previous rules still apply. That means if a Thai earned foreign income before 2024 and remitted it after the year the income was earned, the remittance is not subject to the tax.

Mr Panuwat said the department is drafting a royal decree to amend the current criteria, in line with the policy of Finance Minister Pichai Chunhavajira, who is encouraging Thai nationals with foreign income to repatriate funds for domestic investment.

Under the new guidelines, Thais with foreign income will not be taxed if they remit that income in the year it was earned or the following year. For example, if income is earned in 2025 and brought into Thailand in 2025 or 2026, it is not subject to tax.

However, if the income is remitted after that period, normal tax obligations apply.

This condition is intended to expedite the repatriation of foreign income, potentially supporting domestic investment, in line with government policy.

Mr Panuwat said the current rules on taxing foreign income have discouraged Thais investing abroad from bringing their money back into the country.

A source from the Finance Ministry who requested anonymity said the taxation of foreign income follows the residency-based principle, whereby Thailand taxes the income of individuals who reside in the country.

This rule applies to persons who stay in Thailand for 180 days or more and have foreign income.

The department has consistently applied this residency-based taxation principle, which aligns with OECD guidelines.

https://www.bangkokpost.com/business/ge ... remittance

They must have noticed a big decline in foreign inflows, so from what I understand, if you can prove you earned it in the same year you bring it in, its not taxable.

[404cameljockey]

This article throughout refers only to Thais with foreign income. Let's hope they are not changing previous policy and taxing non-Thais in a different way to Thais.

[buksida]

It says any person who stays in Thailand for more than 180 days, which includes foreigners on long-stay visas. So I presume this rule change applies to us as well.

[Hahuahin]

Under the new guidelines, Thais with foreign income will not be taxed if they remit that income in the year it was earned or the following year. For example, if income is earned in 2025 and brought into Thailand in 2025 or 2026, it is not subject to tax.

So, if I understand this correctly, we are now back to square one, well more or less. For me personally following the above and the tax treaty with my home country then I don't need to pay tax on my pension transferred here this year (monthly transfers) and home country will be happy because tax treaty says clearly "what you don't proof to have paid tax on in Thailand you pay tax on in home country"
hahuahin

[Big Boy]

We're back to the same problem I encountered. How do you prove it?

I had to prove I'd paid tax. The requirement is now having to prove when you earned it.

[Big Boy]

They must have noticed a big decline in foreign inflows, so from what I understand, if you can prove you earned it in the same year you bring it in, its not taxable.

I for one have stopped bringing more than I need into Thailand, and have been spending much less. If every expat is the same, they must have noticed a huge difference.

[buksida]

Not to mention all the rich Thais leaving their capital overseas where it earns better yields and doesn't get scrutinized by the Thai taxman.

[Dannie Boy]

That’ll be far more than the amounts expats transfer to Thailand!!

[Big Boy]

No, of course not, but it all amounts up, and it none of it is going in the direction the powers that be want it to go.

[404cameljockey]

It says any person who stays in Thailand for more than 180 days, which includes foreigners on long-stay visas. So I presume this rule change applies to us as well.

The rest of the article only refers to Thais. So I took the reference to mean 'any Thai person' who stays in the country for more than 180 days. I don't see any mention of non-Thais anywhere in the article, hence I wonder whether this applies to us or not.

[Dannie Boy]

The way the article is written you’d easily conclude that it doesn’t apply to foreign nationals, but of course it wouldn’t be the first time something hasn’t been crystal clear!!

[kwajdiver]

Sounds good. From my reading the Thai tax code does not differentiate between Thais and non-Thais – if you spend 180 days or more you are a Thai tax resident.

Also agree that they probably saw a significant decline in foreign income coming into Thailand from both Thais and expats, and from I read they really need it for the economy. Expat retirees don’t bring money into Thailand to save it – they spend it on daily living expenses, taking trips within Thailand, buying houses and cars, supporting families…….. The government is spending a lot of money to try and encourage domestic tourism, and we usually take 3-4 trips a year within Thailand where we use hotels and eat out at restaurants, but we had temporarily delayed these trips when this tax stuff first started.

If this is adopted, I hope, but don’t really expect it, that a written clarification will be issued about reporting or not reporting this income - we will probably again see different tax offices saying different things. From my previous reading many believe that if the money you transfer into Thailand is considered non-assessable income you do not have to submit a Thai income tax form each year reporting this income. If so, per this article, if you transfer the same year as the income was earned the income would be considered non-assessable; therefore, no Thai tax return would be required…..I hope this is true.

[Martinoo]

I submitted in March, asking for a refund according my calculation...
They asked for additional documents which I submitted the week after.
I check online every month and no further requirements and all quiet on the eastern front....

[Martinoo]

Thai Revenue planning new decree making remitted foreign funds within one year tax-free for residents
https://www.thaiexaminer.com/thai-news- ... residents/

How long will it last until they recall this information??

[buksida]

Indeed, as reported in the BK post on the 19th: viewtopic.php?t=36607&start=653