Thailand to amend tax on foreign income remittance
The Revenue Department is preparing to draft legislation to amend the collection of tax on foreign income remitted to Thailand.
According to Panuwat Luengwilai, deputy director-general of the department, Thais with income earned abroad who remit it to Thailand regardless of the tax year must include that income in their personal income tax filing in Thailand.
The tax rate is progressive, with rates ranging from 5% to 35%.
These regulations regarding the taxation of foreign income remitted to Thailand were amended during the previous government and have been in effect since Jan 1, 2024.
For foreign income earned before Jan 1, 2024 and remitted to Thailand after that period, the previous rules still apply. That means if a Thai earned foreign income before 2024 and remitted it after the year the income was earned, the remittance is not subject to the tax.
Mr Panuwat said the department is drafting a royal decree to amend the current criteria, in line with the policy of Finance Minister Pichai Chunhavajira, who is encouraging Thai nationals with foreign income to repatriate funds for domestic investment.
Under the new guidelines, Thais with foreign income will not be taxed if they remit that income in the year it was earned or the following year. For example, if income is earned in 2025 and brought into Thailand in 2025 or 2026, it is not subject to tax.
However, if the income is remitted after that period, normal tax obligations apply.
This condition is intended to expedite the repatriation of foreign income, potentially supporting domestic investment, in line with government policy.
Mr Panuwat said the current rules on taxing foreign income have discouraged Thais investing abroad from bringing their money back into the country.
A source from the Finance Ministry who requested anonymity said the taxation of foreign income follows the residency-based principle, whereby Thailand taxes the income of individuals who reside in the country.
This rule applies to persons who stay in Thailand for 180 days or more and have foreign income.
The department has consistently applied this residency-based taxation principle, which aligns with OECD guidelines.
Source: https://www.bangkokpost.com/business/general/3028760/department-to-amend-tax-on-foreign-income-remittance
