Thailand’s New Tax Rules: Reporting Foreign Income for Residents
The Revenue Department of Thailand has issued Order No. 161/2023, which means a significant shift in tax obligations for residents earning income abroad or possessing overseas assets. This directive, signed by the Director-General of the Revenue Department, mandates that specific criteria must be met by individuals living in Thailand who must now report and pay income tax on their foreign earnings.
The primary focus of Revenue Department Order No. 161/2023 is the taxation of assessable income earned abroad by individuals residing in Thailand. This directive pertains to Section 41, paragraph 2, of the revenue code, which stipulates that individuals must declare income acquired abroad if their work duties, business activities, or assets are based outside of Thailand, and this income was brought into the country in a given tax year.
Key Provisions of the Order
Clause 1: The order applies to individuals falling under Section 41, paragraph 3, of the Revenue Code, who have assessable income due to work duties, business activities, or assets located abroad, as defined in Section 41, paragraph 2, in the tax year and bring this assessable income into Thailand in any tax year. These individuals are required to report this assessable income and include it in their income tax calculations under Section 48 of the Revenue Code. The tax assessment should coincide with the tax year in which the income was brought into Thailand.
Article 2: In line with the issuance of this order, all existing rules, regulations, orders, responses to inquiries, or any practices that contradict or oppose the provisions laid out in Order No. 161/2023 shall be void.
Article 3: The order will be effective for assessable income imported into Thailand from January 1, 2024, onwards.
Conclusion
This directive represents a significant change in the tax obligations of residents in Thailand who earn income abroad or possess overseas assets. Affected individuals are now required to ensure that their foreign earnings are accurately reported and appropriately taxed in accordance with Thai tax laws. The order aims to enhance transparency and compliance with tax regulations among residents in Thailand who engage in international economic activities.
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Sireetorn Keeratiwetchakul
Sireetorn is a Thai attorney with nine years of experience. She specializes in taxation law. Her expertise encompasses a wide array of transactions, including share purchases, asset acquisitions, and various combinations thereof.
Fabian Doppler
Fabian is a founding partner of FRANK Legal & Tax. He focuses his practice on corporate / commercial and real estate law, as well as litigation. He is admitted to the Bar of Stuttgart, where he actively practiced law before coming to Thailand in 2005.
