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Thailand taxing foreign sourced income this year

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The Department of Revenue will collect tax on foreign-sourced income from this year, including income from overseas employment or rental income. Whilst there has been a lot of speculation about how this will all pan out, especially for retirees, there has been little further information posted about the matter since the start of 2024.

Until now, Thai residents paid tax on such income only if it was brought to Thailand in the same calendar year. However, a new instruction issued by the Department of Revenue, means any income earned abroad, whether through business or property, must be declared, regardless of when it entered the country, and will be taxed in the year it’s earned. This will apply to all taxpayers in the kingdom.

The ruling is for Thais as well as any foreigners who stay in the country more than 180 days in a year.

Expats who live in Thailand for 180 days or more during the tax calendar year will be liable for tax for income earned in that year. As of January of this year, the income will need to be accounted for in the tax calendar year and income tax forms submitted before March 2025.

The new rule applies to any salaries from foreign employment, income from overseas business operations, and passive income such as property rental, dividends, or interest earnings.

According to a report from ASEAN Briefing, both Thai citizens and foreigners who are resident in the kingdom will be liable for income tax if annual earnings meet the following criteria:

• 0 to 150,000 baht (US$4,177) is exempt from income tax
• More than 150,000 baht (US$4,177) and up to 300,000 baht (US$8,354) are subject to a 5% tax rate
• More than 300,000 baht (US$8,354) and up to 500,000 baht (US$13,923) are subject to a 10% tax rate
• More than 500,000 baht (US$13,923) and up to 750,000 (US$20,884) are subject to a 15% tax rate
• More than 750,000 (US$20,884) and up to 1 million baht (US$27,846) are subject to a 20% tax rate
• More than 1 million baht (US$27,846) and up to 2 million baht (US$55,683) are subject to a 25% tax rate
• Over 2 million baht (US$55,683) and up to 5,000,000 baht (US$139,201) are subject to a 30% tax rate
• More than 5,000,000 baht is subject to a 35% tax rate

The new rule aims to make the tax system fairer, particularly for taxpayers with income from both foreign and domestic sources. It also brings Thailand’s tax codes in line with many western countries. Other south east nations are also adjusting their tax codes in a similar manner.

SOURCE: ASEAN Briefing

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