On September 18, 2023, the Thailand Revenue Department announced a new tax regulation on its website:
“Starting January 1, 2024, a Thai tax resident who brings foreign-earned income into Thailand must pay Thailand income tax.”
This is a big change to Thai income tax regulations because expats never had to pay Thai income tax on foreign-earned income if they didn’t bring the money into Thailand after 12 months of earning it.
So, let’s take a look at what changed and how to deal with it.
Note: this article has not been finalized. We will update it as more information is released. In the meantime, you can subscribe to our newsletter to stay informed. Also, we are not tax advisors. If you want to bring foreign-earned income into Thailand in 2024, it’s best to talk to a tax advisor.
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Contents
What is the New Regulation?
On Friday, September 15, 2023, an official document from the Revenue Department about the new regulations on foreign-earned income leaked into the public. However, at that time, it hadn’t yet been confirmed if the new regulations would become official.
However, On September 18, 2023, the Revenue Department posted the news on its website regarding Revenue Code Section 40 and Section 41.
This means that for the rest of 2023, if you bring foreign-earned income into Thailand, you don’t have to pay Thailand income taxes on it as long as the money was earned at least 12 months prior.
However, as soon as this new regulation takes effect in 2024, you have to pay Thailand income taxes on all the money you bring into Thailand, in the year in which you transfer it into the country.
Who Needs to Pay Thai Foreign-Earned Income Taxes?
Based on the official statement, the new regulations are mainly for Thai tax residents who bring foreign-earned income into Thailand.
Basically, it’s for everyone, both Thais and non-Thais, who stay in Thailand for more than 180 days a year.
As for the income, it can come from employment, dividends, interest, pensions, capital gains, and so on. It can be simply stated that any income you earned from abroad will be subject to Thai taxation if you bring it into Thailand.
This is for personal income taxes only.
Do I Need to Pay?
If you stay in Thailand for more than 180 days and bring foreign-earned income into the country, you may have to pay Thailand income taxes on it.
However, please note that Thailand also has double-taxation agreements with many countries in the world. This means if you already pay taxes for that income in your home country, you may not have to pay taxes on that income in Thailand.
You can find out more about Revenue Code Section 40 and 41 here.
What’s the Cause of This Change?
No one really knows why the Revenue Department released this new regulation. However, since the new regulation was released shortly after Thailand formed its new government, many Thai tax experts believed that the new Thai government would like to promote investment in Thailand.
Previously, many Thai investors preferred to invest abroad because of the higher return on investments. And they were able to transfer the profits from abroad back to Thailand during the next calendar year without having to pay Thailand income taxes.
Starting in 2024, they cannot do this anymore.
However, since the new regulations are mainly for personal income taxes, if people want to invest overseas, they can still invest in Thailand mutual funds that invest in the overseas markets and make profits from dividends and capital gains.
This will, in the end, promote investment within Thailand.
In addition, since the new regulations will begin next year, Thai investors still have time to send money back to Thailand without having to pay taxes until the end of 2023.
How Much Do I Have to Pay?
When the new regulation takes effect, the tax rate you pay will be based on your personal income tax rates, which is a progressive rate of 0 percent to 35 percent.
You can check out our Thailand income tax guide for more information.
Will Pensions be Taxed?
If you retire in Thailand and regularly send your pension here, it’s likely that you may have to pay Thai personal income taxes on that money starting in 2024, if you stay in the country for more than 180 days per year.
However, in case your pension is already taxed in your home country, you might not need to pay Thailand income tax because of the double taxation agreement.
How Do I Declare Foreign-Earned Income Taxes?
We are not sure about this. However, it’s believed that starting in 2024, when you file your personal income taxes in Thailand, there should be an additional field on the tax form about foreign-earned income.
Also, we are not sure how the Revenue Department is going to monitor it as well.
How Do I Handle the Process?
Since the new regulations will start in 2024, if you have foreign-earned income and want to avoid paying personal income taxes in the country, you should transfer your money to Thailand by the end of 2023.
Note that foreign-earned income should be transferred in 2023 at least one calendar year after you earned it to avoid being taxed in Thailand.
If in 2024 you want to bring foreign-earned income into Thailand that was already taxed, keep all of your tax paperwork to avoid being taxed twice.
It’s also important to remember that we are not tax advisors. So, please take any advice in this article as just that – advice. If you want to transfer foreign-earned income into Thailand, we recommend you to talk with a tax advisor to make sure you follow the new tax regulations correctly.
So if excisable, will we effectively start to pay income tax from 2025 onwards, based on tax returns of 2024? Thank you.
Yes, it should be like that. But please note that if you already pay that income that in your home country, it’s highly possible that you don’t need to pay Thailand income tax because of the double taxation agreement.
So Thailand doesn’t recognize for example social security income from the United States for purposes of a loan to build a home because it is not considered Thai taxable income. If I now have to pay income taxes to Thailand does this income become accepted for purposes of a home loan?
In case it’s a home loan, I believe you don’t need to pay that tax. However, it’s still a good idea to check with the revenue department officer or tax advisor once the law is official next year.
Also, you can look at this Revenue Code Section 40 to find out more about their definition of income: https://www.rd.go.th/english/37749.html#section40
Hi,
Thanks for that informative article.
What do you know about the double-tax treaty, between UK & TL?
How would this treaty add to the article?
Cheers, Tam
Thailand has a double taxation agreement with the UK. In case you already pay tax in the UK, you might not need to pay tax in Thailand.
many people are retired and do not want to do a busines,just retire and relaxe as they are old.thailand is going to make many people go to cambodia,vietnam,phillipines,mexico, costa rica,belize,etc…..
What about disability recipients??
The new regulations should be for disability recipients too. But they have more tax deductions. If I remember correctly, it’s 60,000 baht per year.