Key Information on Revenue Department Order No. 162/2023
Additionally, to the Q & A paper on the new tax regulations published by the Thai Revenue Department, the Thai Tax Authority published the Revenue Department Order No. 162/2023 on 20. November 2023.
This order states, that the following paragraph shall be added to the Revenue Department Order No. 161/2023 regarding income tax payment according to Section 41, paragraph two of the Revenue Code, dated September 15, 2023:
“The provision in paragraph one shall not apply to assessable income arising before January 1, 2024.”
This is an important clarification, because it means that for income that was received before this date, the old rules still apply. This order shall take effect for income brought into Thailand starting from January 1, 2024. This means it applies to income assessable from foreign sources at the domicile of the income earner from the tax year 2024 onwards. Therefore, for income from foreign sources generated before the tax year 2024, the previous principle still applies: the income must be brought into Thailand in the same tax year it is earned, and individuals are not required to pay personal income tax according to the Revenue Code. This is because it does not comply with the traditional interpretation.
Why this new amendment is important shows the following example:
A person is living in Thailand for more than 180 days a year but receives income outside of Thailand since the last 10 years and transfers this money into Thailand. Starting from 01. January 2024, this income will be subject to tax regardless of when it was earned. Due to the new clarification, the taxation does not apply to income he is transferring into Thailand, if he can prove that the income was earned before 2024.
Before this Order 162/2023, the regulations could be read that he has to pay taxes starting from 2024 on any income he is transferring into Thailand, regardless of when it was earned. This assumption is now corrected. Income that was earned in for example 2020 can still be transferred into Thailand after 01. January 2024, without being subject to tax, if it can be proved that this income was earned in 2020.
If you have any questions about minimizing your tax burden in Thailand, please contact us at [email protected].
Setting up a second residence in Thailand has become a popular option for many high-net-worth individuals looking for a safe, stable, and convenient location to reside. With its favorable climate, world-class healthcare system, and vibrant culture, Thailand offers a unique and appealing lifestyle for those seeking a second home. However, before making the decision to establish a second residence, it is important to consider the legal and tax implications, as well as the family’s circumstances and priorities.
In this article, we will outline the key steps based on our experience to take in order to establish a second residence in Thailand, as well as some of the legal and financial considerations you should keep in mind.
Determine your eligibility
The first step in setting up a second residence in Thailand is to determine whether you are eligible to do so. In order to establish a second residence in Thailand, you must have a valid non-immigrant visa. This can be obtained through a variety of means, including work, education or retirement.
Setting up a business in Thailand
There are many legal requirements associated with setting up a business in Thailand. You may need help during the planning stage of your investment or during your day-to-day business operations. In our experience, without the expertise of a law firm that can communicate in Thai, registering your company in Thailand can be complicated and time-consuming.
Obtain the necessary work permit and visa
In order to live in your second residence in Thailand, you will need to obtain certain permits, such as a work permit if business is bringing you to Thailand. As with all work permit applications, experience really speeds up the whole process.
Research property options
The next step once you have decided where in Thailand you would like to set up a second residence is to research the different property options available to you. This may include apartments, condos, or houses. There are many websites and resources available to help you find the right property for you, including real estate agents and online listings. When researching properties, it is important to keep in mind your budget, as well as any legal and financial considerations, such as taxes and insurance, and legal limitations for foreigners.
Register your property
Once you have found the right accommodation, you will need to register your property with the appropriate authorities. This will typically involve filling out various forms and providing proof of ownership.
Thailand has a number of taxes that you will need to consider when setting up a second residence. These may include income tax, property tax, and other taxes and fees.
When considering the tax implications, it is important to keep in mind that taxes are not typically the top priority for families setting up a second residence. Higher priorities include safety, geopolitical stability, healthcare, language, location, climate, schools, cost of living, and quality of life. However, the tax rules and legal system should still be evaluated and considered before making a decision.
When setting up a second residence, it is crucial to work with a reputable and reliable law firm that can guide you through the process. The law and tax firm will work closely with the client’s external advisors to evaluate the family’s matrimonial property regime, estate plan, and tax breaks offered by the destination country. They will also play a key role in ensuring that no aspects are overlooked, as they have a holistic view of the situation.
If you have any legal or tax questions about setting up a second residence in Thailand, please contact our expert team at [email protected]
Thailand is a popular travel destination for many international tourists, but for those who own a boat, it’s important to understand the laws and regulations for obtaining the appropriate license in the country. This article will cover the legal requirements and procedures for obtaining a boating license in Thailand based on our experience.
To apply for a boating license in Thailand, the applicant must provide the following documents:
The applicant’s boat must be Thai national, registered under Thai law, and must have a Thai flag installed.
The applicant must also pass a test, and an English test is available.
The fee for a 5-year boat driving license is 5,000 THB and can be renewed later.
The process of obtaining a boat driving license in Thailand usually takes about 5-7 days, depending on the completeness and correctness of the applicant’s documents.
For boat owners who hold a boat driving license from another country, such as Singapore, and the boat is registered in another country, such as Langkawi, Malaysia, they can bring the boat to Thailand’s territorial waters without obtaining a Thai boat driving license.
They must complete the registration process at the Marine Department and the Immigration and Customs Department in Phuket Marina. The arrivals process is typically completed in one day, while the departure process takes 1-3 working days and costs 100 THB. The required documents for this process are the boat registration, passport of the boat owner and crew, vaccine certificate, radio handbook (NNSI number), and power of attorney (if the captain is not the boat owner).
We explore this in more detail in the following article: Obtaining Permission for Your Boat to Enter Thailand
When you are entering Thailand’s territorial waters, based on our experience, you must comply with the instructions as follows:
Find a parking space for your boat
You can choose between a public (government-owned) or a private port.
Tha Chalong is a public port in Phuket, usually free of charge. However, there are very few parking spaces available. The officer informed me that you might dock your boat outside the port by dropping an anchor, but since there are many storms, the officer does not recommend it.
On the other hand, private ports are great alternatives. You can choose from the following list:
1. Phuket Boat Lagoon Marina
2. Ao Por Grand Marina
3. Phuket Yacht Heaven Marina
Phuket Marina registration process
After the boat docks, you must complete the process at the Phuket Marina Building:
1. Registration: you can pre-register via the website (https://seb.md.go.th/arrival) or at the Marine Department Office on the arrival date.
2. Public Health Room
3. Marine Officer Room: to submit all documents
4. Immigration: normally, it is free of charge; however, under the following circumstances, there shall be an additional fee of 200 THB.
4.1 If you come to immigration outside of the working hours (9 a.m. to 3 p.m.)
4.2 If you dock your boat outside Tha Chalong
4.3 If you make an appointment with the officer
Arrival: free of charge on weekdays and 800 THB on weekends
Departure: 200 THB on weekdays and 1000 THB on weekends
6. Marine Officer Room: to receive the documents
*The process takes approximately an hour to an hour and a half, depending on the situation.
In the event that you hold an international boat license, you are eligible to drive your foreign-registered boat within Thailand’s territorial waters. However, if you wish to drive a Thai-registered boat, you must apply for a Thai boating license under Thai law.
*Kindly be informed that there might be additional costs apart from the above list.
Driving a car in Thailand requires obtaining a valid driving license. If you are a foreigner, it is important to familiarize yourself with the requirements and processes involved before applying for a driving license in Thailand. In this article, we will focus on driving licenses for vehicles (cars) based on our experience.
To obtain a driving license for a car in Thailand, the applicant must meet certain conditions. The applicant must be at least 18 years old, hold a valid non-immigrant visa, and be in good physical and mental health. The required documents include a passport with a non-immigrant visa, photos, a residence certificate issued by the Immigration Bureau, a medical certificate, and a valid international driving license (if any).
The examination for obtaining a car driving license in Thailand involves both a theory and a practical driving test.
The theory and practical driving tests include the following:
The theory test is a 50-question exam that must be taken via an electronic examination system after completing a 5-hour training program. The applicant must score at least 90% (45 questions) to pass the exam. The practical driving test includes forward and backward driving, sidewalk parking, and parking in a car park.
The cost of a 2-year driving license for a car in Thailand is approximately 300-400 THB, which can be renewed and changed to a 5-year license after its expiration. The entire process, from training to obtaining the license, takes approximately 2 days.
For new applicants, you must attend the training at the Department of Land Transportation office. The training period will be at least 5 hours, which is divided into two parts: the morning (from 9:30 a.m. to 12 p.m.) and the afternoon (1 p.m. to 3:30 p.m.).
Writing test (theory test)
After the training is completed, the applicant is required to take the writing test via an electronic examination system. The exam consists of 50 questions, and the applicant must get at least 90 percent, or 45 questions, correct. If the applicant fails to meet such criteria, they will have to retake the exam on the next day or no later than 90 days after the training.
Practice test (practical driving test)
The practical driving test includes forward and backward driving, sidewalk parking, and parking in a car park.
According to a ministerial regulation (No. 386) issued on December 29, 2022, and a notification from the Director-General of the Ministry of Finance, a person liable to personal income tax (other than an ordinary partnership or non-juristic body of persons) is entitled to an income tax deduction under the “Shop Dee Mee Kuen 2023” program for certain expenses incurred for the purchase of goods and services from VAT registrants, provided that a full tax invoice is presented. This article details the specific items, what you need, and the time period covered based on our experience.
This 2023 tax deduction initiative also applies to expenses incurred for certain purchases from non-registered VAT sellers, such as physical book purchases and subscription fees for e-books obtained through an electronic system, as well as expenses incurred for the purchase of a type of good registered with the Department of Community Development under the “One Tambon, One Product” (OTOP) program.
Tax deduction limitations
Taxpayers in Thailand can claim tax deductions of up to 40,000 THB under two categories:
The program is eligible for purchases from January 1 to February 15, 2023 (a period of 46 days)
Products and services included in “Shop Dee Mee Kuen” 2023
Goods and services that are covered by this program include:
The following items and services are not tax deductible under this program:
It is important to note that in order to qualify for the tax credit under “Shop Dee Mee Kuen” 2023, you must request either an original or electronic tax invoice for the purchase of goods and services.
You can find a list of the businesses that are able to issue an e-tax invoice and e-tax receipt by email here.
If you have any questions about tax deduction in Thailand, please do not hesitate to contact us at [email protected]
The season for filing personal income taxes in Thailand has now arrived.
Thai taxpayers have the right to report their income to the Revenue Department from 1 January to 10 April 2023. It is useful to know how much money you made in Thailand between January 1 and December 31, 2022.
Are you a tax resident in Thailand?
A person who spends 180 days or more in Thailand during a calendar year is considered a Thai tax resident according to Thai tax law. Keep in mind that each day will count as one no matter what time you enter or leave Thailand. For tax purposes, a tax year that you are a resident in is treated as a full year. Keep a copy of your passport on hand to confirm this.
Submitting your tax return
Personal income tax returns must be filed electronically by 10 April, but hard copies must be received by the Revenue Department by 31 March. The Revenue Department’s website, https://efiling.rd.go.th/rd-cms/, is where individuals can file their personal income tax returns.
In order to file a hard copy personal income tax return using form PND 90/91, taxpayers must do so at any Revenue Department Area Office along with any additional tax that is owed in cash, by cashier’s check, or by QR code, and that must be paid within seven days of the date the tax return was issued. The deadline is March 31; after that, late filers will be charged an additional 1.5% monthly surcharge (or fraction thereof) on top of the unpaid tax. Those who apply will have access to interest-free installment payment plans for up to three months. The penalty for submitting documents late ranges from THB 200 to 2,000.
When submitting your Personal Income Tax Returns (PND 90, 91), please make sure that the correct taxable income has been reported. This includes income from all sources in Thailand (especially those connected to your Thai employment), regardless of where it came from or whether you are a Thai resident, as well as income from abroad brought into Thailand in the same tax year.
The tax rates range from 0% to 35% for both residents and non-residents. The distinction between residents and non-residents will be discussed in more detail below.
Income from abroad
The “Residence Rule” states that if you are a Thai tax resident and bring such foreign income into Thailand in the same year it is earned, Thailand will tax you on it. It might also be related to your employment abroad.
If you plan to bring in foreign income like capital gains, rental income, or interest income into Thailand before you begin working in the Kingdom, please think it through carefully before you do. Non-residents, however, are permitted to bring in such foreign income without being subject to Thai taxation.
Deductions for dependents
An individual who has no income during a tax year is considered a dependent. Children and spouses who reside abroad can also be considered dependents.
If you are a Thai resident, you can claim a family allowance deduction for your dependent spouse and up to three dependent children.
To qualify for this allowance, you must give the Revenue Department a copy of your entire passport—from front to back, including the blank pages—that you used for travel during the tax year, as well as a marriage certificate and/or copies of any children’s birth certificates.
If you can demonstrate that your children are students—for example, by providing a copy of a tuition fee receipt—you may be able to claim them as dependents for tax purposes. For instance, it may be deducted from your taxes if your child qualifies as an incompetent person or a quasi-incompetent person and is 25 years of age or older during the tax year.
If your dependents are Thai citizens, you can still claim these deductions even if you are not a Thai resident by giving the Revenue Department copies of their entire passports, front to back, including the blank pages.
Let’s look at some legal ways that foreign workers can lower their tax obligations, starting with the different deductions that will be available in 2022.
The maximum tax deduction for the spouse’s insurance premiums is THB 10,000 if there is no income from the spouse.
Tax deduction from donations
Tax deduction from immovable property
A tax deduction of up to THB 100,000 can be claimed for loan interest on residential property purchases.
Other tax deductions such as the government’s economic stimulus program
The Shop Dee Mee Kuen Project 2565 allows a maximum deduction of THB 30,000 for purchases of goods and services in the country between January 1 and February 15, 2565, based on the actual paid amount. Goods and services subject to Value Added Tax (VAT) such as OTOP products and books (including e-books), are examples of tax-deductible goods and services.
The following are deductible for those with a Thai dependent spouse:
1. Life insurance premiums of up to THB 10,000 per year for the spouse.
2. An amount up to THB 30,000 for each dependent parent of the spouse.
3. Up to THB 15,000 in annual health insurance premiums for you and your spouse’s parents if they are covered by a Thai plan.
Remark: If you receive income from a foreign source and bring it into Thailand, you must show a receipt proving that you already paid tax on it so that Thailand can credit your account for it.
If you have any questions related to tax in Thailand, please do not hesitate to contact us at [email protected]
Our blog provides readers with useful and up-to-date information about the Thai legal system. Founded in 2019, the blog has quickly become one of the most popular sources of legal information and analysis in the country.
All our articles are written by experienced Thai lawyers and legal experts who provide readers with a helpful overview of the Thai legal system. Our blog covers a wide range of topics, including corporate law, tax law, civil law, international law, and more. It also provides readers with detailed information about the legal processes, regulations, and procedures in Thailand.
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FRANK Legal & Tax is pleased to announce Nathathai Pichaisawad as the firm’s latest Senior Associate in the Bangkok office.
“We are delighted that Nathathai has joined our team of highly-skilled Senior Associates”, said Fabian Doppler, Managing Partner of FRANK Legal & Tax. “Her expertise in contract negotiation, business licenses, and cross-border transactions is valuable to our clients, and she will be a great addition to the expansion of our corporate legal services”.
“I am excited to join a team of such skilled and experienced legal professionals, and I look forward to continuing to represent FRANK Legal & Tax’s culture of excellence”, said Nathathai.
Nathathai is a Thai attorney with a focus on corporate and commercial law. She has extensive experience advising domestic and international clients on successful contract negotiations, hospitality industry business licenses, and various cross-border transactions. She also has experience in compliance and regulatory matters, particularly in the areas of governmental infrastructure projects. Nathathai holds a Bachelor of Law from Thammasat University (Thailand) and Master of Laws Degree from the University of California, Berkeley, in the United States.
Thailand’s cabinet on Tuesday, 20th December 2022 approved tax measures to help boost public consumption to stimulate the economy moving into recovery. Land and property tax was reduced to 15% along with some registration fees being cut for the year 2023.
Measures to reduce the registration fee for rights and juristic acts for housing in 2023 include reducing the registration fee for transferring real estate from 2% to 1% and reducing the registration fee for real estate mortgages from 1% to 0.01% for housing purchases.
These measures will cover single houses, twin houses, row houses, commercial buildings, and condominiums (both new and pre-owned houses). This relates only to cases where the purchase price and the cost appraisal price do not exceed 3 million baht and the mortgage amount does not exceed 3 million baht per contract.
If you would like any further information, please contact us at [email protected]
Visit our real estate page for more details about our services at www.franklegaltax.com/services/real-estate/