Departmental Instruction No. Paw 161/2566, issued by the Thai Department of Revenue, introduces significant changes to how personal income tax on foreign-sourced income is collected in Thailand.
Effective January 1, 2024, Thai taxpayers are required to declare and pay tax on foreign-sourced income brought into Thailand in the year it is earned, closing a previous loophole. Both Thai citizens and foreign residents must pay income tax based on a progressive tax rate, with exemptions for annual income up to 150,000 baht and a maximum tax rate of 35 percent for income over 5,000,000 baht.
The goal of these changes is to establish a fairer tax system for individuals with income from both foreign and domestic sources. Under the new tax treatment, Thai taxpayers must pay tax on income earned from employment, business, or property abroad after bringing it into Thailand, regardless of when it enters the country. This rule applies to all taxpayers in Thailand, and it also outlines the income tax rates for Thai citizens and foreign permanent residents.
Taxpayers are categorized as either “resident” or “non-resident,” with “resident” status applying to any person residing in Thailand for more than 180 days in any tax (calendar) year. Residents are liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. Non-residents are only subject to tax on income from sources in Thailand.
From January 1, 2024, individuals who live in Thailand for 180 days or more in a tax year will be taxed on their income for that year. They are required to report and pay income tax for the 2024 tax year and submit income tax forms by March 2025. These changes are aimed at creating a fairer tax system and will impact foreign investors.”
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