The Thai Department of Revenue has issued Departmental Instruction No. Paw 161/2566, bringing significant changes to the collection of personal income tax on foreign-sourced income.
Key Takeaways
- Effective January 1, 2024, Thai taxpayers must declare and pay tax on foreign-sourced income brought into Thailand in the year it is earned, eliminating the previous loophole.
- 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 changes in the income tax system in Thailand, as per Instruction No. P 161/2566, aim to create 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 to Thailand, regardless of when it enters the country. This rule applies to all taxpayers in Thailand.
The provision also outlines the income tax rates for Thai citizens and foreigners who are permanent residents. The changes aim to create a fairer tax system and impact foreign investors.
Thai citizens and foreigners who are permanent residents will be subject to income tax, if they earn annual income at the following rates:
| Taxable income (Baht) | Tax rate % |
| 1-150,000 | Exempt |
| 150,001-300,000 | 5% |
| 300,001-500,000 | 10% |
| 500,001-750,000 | 15% |
| 750,001-1,000,000 | 20% |
| 1,000,001-2,000,000 | 25% |
| 2,000,001-5,000,000 | 30% |
| 5,000,001 and over | 35% |
Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is 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. A non-resident is, however, subject to tax only on income from sources in Thailand.
If a person lives in Thailand for 180 days or more in a tax year, they will be taxed on their income for that year. Starting from January 1, 2024, this income will be subject to tax. Individuals need to report and pay income tax for the 2024 tax year and submit income tax forms by March 2025.
