Recent developments in Thailand’s tax laws signal a shift in how foreign income will be taxed for individuals residing in the country.These changes, driven by international tax standards and Thailand’s participation in global tax transparency initiatives, impact both current and potential foreign residents. Below is an overview of the new regulations and potential laws regarding foreign income tax:

1.Changes to Foreign Income Taxation (Effective 2024)

Under Director General Orders No. Por 161/2566 and Por 162/2566, significant changes to how foreign income is taxed in Thailand will take effect starting January 1, 2024:

    • Remittance-Based Taxation: Previously, individuals residing in Thailand for 180 days or more were only subject to tax on foreign income if it was remitted to Thailand within the same calendar year in which it was earned. Many leveraged this by deferring remittance to avoid taxation.
    • New Rule: From January 1, 2024 onwards, foreign income brought into Thailand will be taxed in the year it is brought into Thailand, regardless of when the income was earned. This eliminates the previous tax deferral strategy, marking a shift from “Same Calendar Year Remittance” to “Remittance” basis taxation.

2. Potential New Law on Foreign Income Arising Abroad

Looking further ahead, there are discussions about a more comprehensive change to Thailand’s foreign income taxation:

    • Arising Income Concept: The proposed amendments, still in early stages, could require individuals residing in Thailand for more than 180 days to pay tax on foreign income, even if that income is not brought into Thailand. This represents a shift from taxing remitted income to taxing “The Arising Income” (income earned abroad), regardless of its movement into Thailand.
    • International Transparency: These changes are driven by Thailand’s commitment to the Global Forum on Transparency and Exchange of Information for Tax Purposes. Through automatic exchanges of financial information between member countries, Thailand’s tax authorities will have access to detailed data about financial accounts and income held abroad by its residents.

While these amendments are still in the early legislative stages, if approved by Parliament, this potential law could take effect as early as 2025, impacting foreign nationals residing in Thailand as well as Thai citizens with income abroad.

3. Exemptions for Long-Term Foreign Residents

Despite these upcoming changes, exemptions exist for certain long-term foreign residents in Thailand who meet specific criteria set by the Thai government. These exemptions aim to attract and retain foreigners who contribute to the country’s development, offering tax relief to qualifying individuals.

4. Planning for the Future

As Thailand’s tax regime becomes more stringent, tax planning will play a critical role for individuals with foreign income. The new rules make it essential to adopt forward-looking strategies to remain compliant and mitigate tax burdens.

At ILAWASIA, we have over 17 years of expertise in taxation, and we stand ready to assist clients with navigating these new tax regulations.

Our services include:

    • Expert Tax Legal Advice
    • International Tax Planning Strategies
    • Compliance with Foreign Income Tax Regulations

If you are a foreign national living or planning to live in Thailand, or a Thai citizen with foreign income, please consider reaching out to ILAW ASIA for personalized guidance and professional support to help you stay ahead of the evolving tax landscape.

Authors: Tanadee Pantumkomon and Wachinorot Siladet

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