Personal Income Tax Guide (for foreigners) Thailand

[Mike Lister]

IMPORTANT - This document is provided on an as-is basis and is not intended to provide legal, financial or tax advice. The authors are not lawyers or tax advisers. You, the reader, remain wholly responsible for your own financial and tax affairs. No warranty is given for the contents of this document, either express or implied.

 

 

THE ONCE SIMPLE, NOW SLIGHTLY COMPLICATED,  GUIDE TO PERSONAL INCOME TAX IN THAILAND

16 February, 2024

Version 8, Rev A

Draft work in Progress

 

PURPOSE

 

1) The purpose of this guide is to provide foreigners living in Thailand, with the simplest possible overview of Personal Income Tax (PIT) in Thailand. The scope of this document is limited to PIT.  

 

INTRODUCTION

 

2) This guide is an overview of several core parts of the PIT system. It is not designed to be exhaustive and it doesn’t cover all aspects of PIT, nor is it intended to  override or contradict anything produced by the Thai Revenue Department (RD), or specialist tax companies such as PWC, Sherrings or Mazars. This guide also does not address all types of income or the rules relevant to people from every country. What this guide will provide is, A STARTING POINT for readers to manage their own tax affairs, and it will also provide links to many of the answers for those with simple tax affairs, especially the average pensioner. If after reading this guide, the reader remains uncertain or unclear, they are strongly advised to seek out professional tax advice from a Thai Tax expert, preferably a CPA.

 

OVERVIEW OF THE TAX LAW

 

Thai tax laws require a person to pay income tax to the Thai Revenue Department under the following conditions:

 

Individuals, who are categorized as:

a) Thai citizens;
b) A Thai resident who filed taxes in the previous tax year; or
c) Foreigners who reside in Thailand for one or more periods with at least 180 days in one tax calendar year.

 

And who receive income inside or outside Thailand via:

 

a) Income from employment (wages, salaries, remuneration, etc.) assessable under Section 40 of the Revenue Code;

b) Income from business operations is assessable under Section 40.

c) Passive or property income (interest, dividends, rental income, goodwill, etc.) based on Article 41 paragraph 2 of the Revenue Code.

 

https://www.aseanbriefing.com/news/taxation-of-foreign-sourced-income-in-thailand-begins-in-2024/

 

SUMMARY OF KEY POINTS

 

a) The tax year is the calendar year, tax returns must be filed the following year, before 31 March.

b) Only income remitted to Thailand is potentially taxable in Thailand, income that remains overseas is not taxable for foreigners.

c) You must spend more than 180 days per calendar year in Thailand before you are considered tax resident.

d) There is no double taxation but some income may be taxed at a different rate.

e) Dual Tax Agreements exist between Thailand and over 60 countries, each is different, you must read and understand yours.

f) Tax returns are filed using the honour system. You must declare your income, without any supporting paperwork and this will either be accepted or not, just as in the US and UK.

g) Income that is taxed overseas will not be re-taxed here. Tax paid on income overseas can be used to offset any Thai tax assessment on the same income.

h) Assessable income in Thailand may take many forms, bank transfers, cash, cheques, overseas debit card and ATM transactions etc.

i) Generous Tax Exemptions, Deductions and Allowances (TEDA) exist, along with a zero rated tax band,  to create a significant tax free buffer for many tax payers.

j) How you use your imported funds in Thailand is of no interest to the RD and does not change the taxation of those funds.

k) For the most part, the various tax treaties do not limit the extent to which pension, dividend, rental and interest income can be taxed by Thailand.

 

BACKGROUND

 

3) The rules that govern income tax in Thailand are contained within the RD Tax Code, which has been in place for decades. In November 2023, a single change was made to one of the rules that covers the tax of imported funds, transferred into Thailand. That rule takes effect on 1 January this year (2024). Previously, anyone who remitted funds to Thailand in a different year from when it was earned, was able to import those funds free of Thai tax. 

 

4) That loop hole in the RD tax code has been exploited by wealthy Thai’s and is now closed. Now, any money earned overseas after 1 January 2024 and remitted to Thailand in any year, is potentially liable to Thai tax and must be assessed via a tax return, subject to a minimum income threshold. The purpose of the new rule is to reduce tax avoidance and to help prevent tax evasion. This also now means that overseas funds transfers into Thailand, by foreigners living in Thailand, potentially have an increased risk of being taxed.

 

5) It should be noted that there always was an obligation on the part of foreigners who were tax resident in Thailand, to report Assessable Income every year, provided they met the minimum income reporting threshold. This law has not always been actively enforced in the past and many foreigners have been unaware previously of their obligation to file a tax return. Very little has changed today, that obligation remains unchanged albeit the scope of income that must be reported has now increased and tax collection has taken on a higher profile

 

6) At this time of writing, there are still unanswered questions about exactly how the RD will manage some aspects of the tax process that relates to foreigners tax returns and their overseas income in Thailand. As new information is made available, we will try to update this document and keep you appraised of new developments. If after reading it, anyone remains unclear about the points that have been explained in this document, they are welcome to raise questions to see if anyone can provide clarity. Alternatively, the cost of using a qualified Thai Tax preparer to complete your tax return and answer all your questions, somebody who is a CPA, is unlikely to be expensive. I regret that we are unable to recommend specific people or companies.

 

7) Lastly, there are certain types of visa that fall outside of the RD tax code. The LTR visa for example is one of them, it  received its tax exempt status by royal decree hence visa holders will not to be assessed for Thai tax, in accordance with the rules issued along with that visa and they are specifically excluded from this explanation.

 

TERMINOLOGY & PROCESS

 

8 ) Income that is not remitted to Thailand is Excluded Income. Overseas Funds Transfers that are remitted to Thailand must be reviewed by YOU the tax payer to determine their nature and the source of funds. Some Transfers may be Exempt under the terms of a Dual Tax Treaty (DTA) (see below) or because of RD rules. What remains after excluded and exempt income has been removed, is regarded as assessable income which is subject to a Thai tax return. 

 

THE THREE STAGES OF INCOME

 

9) Remitted or transferred Income - these are any funds sent to Thailand from overseas, for any purpose.

 

10) Assessable Income - this is income that must be declared on a tax return. It excludes income that the RD says is not assessable, it excludes income earned before 1 January 2024 and it excludes any income specifically excluded under the terms of the DTA.

 

11) Taxable Income - this is assessable income from above, but minus TEDA (Tax Exclusions, Deductions and Allowances).

 

12) There can be Remitted Income (number 1 above) that is not Assessable (number 2 above) and not Taxable (number 3 above), savings would be a good example of this.

 

13) There can be Remitted Income that is Assessable but not Taxable, any income that has already been taxed in your home country is an example.

 

14) There can be Income that is Remitted, Assessable and Taxable but on which no tax is payable, this  is because it falls below the level of the Thai TEDA (or Personal Allowances equivalent).

 

15) For example: the RD has confirmed that income and savings earned before 1 January 2024 are Excluded from Thai tax. Similarly, the DTA between the US and Thailand confirms that US Social Security (SSc) income is also Excluded from tax in Thailand. What remains after every type of Exempt fund is deducted, is income that is regarded in this document, and in RD terminology, as Assessable Income that YOU must report on a tax return, subject to a minimum reporting threshold amount. Assessable Income is entered on the tax return and assessed for tax and the appropriate Thai Tax Exclusions, Deductions and Allowances (TEDA) applied. If a positive amount remains, that is considered to be Taxable Income that is subject to tax, in accordance with the Thai Tax Tables.

 

 https://sherrings.com/foreign-source-income-personal-tax-thailand.html

 

16) The following link provides a legal definition of assessable income in Thailand.

 

17) https://www.tilleke.com/wp-content/uploads/2011/05/Thailand-Tax-Guide.pdf

 

DUAL TAX AGREEMENTS (DTA’s)

 

18) A Dual Tax Agreement/Double Tax Agreement (DTA): is an agreement between two countries that sets out which of the two countries has the right to tax specific types of income and all the associated rules. Its purpose, in part, is to ensure that the same funds are not taxed twice by two different countries  and provides a means by which tax that is paid twice, can be recovered, how and from where. Note: If the taxpayer income arises in one country but the tax  payer is resident in a second country, use of a DTA can result in increased tax being paid, if the second country has a higher rate of tax on the type of income in question, than the other. Obversely, allowing income to be taxed in  Thailand, may result in paying a lower rate of tax than in your home country.  It should also be noted that the rules contained in a DTA, take precedent over national tax rules. Copies of all the Dual Tax Agreements between Thailand and other countries are available to download from the following link although we understand that some are being renegotiated at present.     

 

19) https://www.rd.go.th/english/766.html

 

TAX CALENDAR

 

20) Thai tax returns must be filed between 1 January and 31 March. This document is being drafted in January and February 2024. Tax returns are due between now and 31 March 2024, which cover the Thai Tax Year, 1 January 2023 until 31 December 2023. The new tax law changes affecting foreigners in Thailand came into effect 1 January 2024 which means this years income activity is not reportable until at least 180 days from the start of the year. For year round residents, a tax return will be due, beginning 1 January next year, 2025 and this will cover the tax year 2024 which runs from 1 January to 31 December.  

 

TAX RESIDENCY

 

21) If you stay in Thailand for more than a cumulative 179 days, between 1 January and 31 December each year, you will be and always were considered to be Tax Resident in Thailand during that year, almost entirely  regardless of the type of visa you have (special tax exempt classes of visa excluded). It doesn’t matter that you may be Tax Resident in your home country or elsewhere or that you pay tax in those countries, Thailand will still regard you as Tax Resident. Tax Residency and Immigration status (and the visa you hold) are different things. Tax residency is based solely on the number of days you spend in Thailand. A day appears to be counted using the entry and exit stamps in your passport, unlike many other countries where it is determined by where you are at midnight. The number of days counter reverts to zero, on 1 January each year.

 

TAX FILING THRESHOLD

 

22) Because you are Tax Resident, YOU must review your inbound overseas Funds Transfers each year to determine if they represent income assessable to tax in Thailand, nobody else will do this for you. 

 

23) YOU are responsible for determining if your assessable income in Thailand exceeds the threshold and means you must file a tax return. That assessable income might comprise a combination of pension payments, investment income, rental income or any of the other types of income listed in the link above. If you have assessable income of over 120,000 baht per year, you must file a tax return (60,000 baht if your sole source of assessable income is bank interest paid in Thailand). We further understand that you are still required to file a return, as long as your assessable income exceeds the threshold, even though there is no tax to pay. There is no penalty however, that we can see, for failing to file a nill return, at present. 

 

24) As far as we can see, there is no penalty for not filing a tax return, IF doing so would result in no tax being due, even though your income exceeds the minimum reporting threshold of 120,000 baht. On the other hand, failure to file a tax return when tax is due, can result in harsh penalties.

 

TYPES OF INCOME

 

25) First and foremost, only income that is remitted to Thailand is assessable in Thailand, funds that remain outside Thailand are not. If we take the simplest type of income and say that you transfer personal savings from overseas to Thailand and those savings  were earned before 1 January 2024, those funds are not taxable. But savings earned after that date potentially are, thus, the date when the income was earned is extremely important, as is whether or not you were Thailand Tax Resident, when the income created those savings. A word of caution, if your tax return is audited or appears suspicious, you could be asked to provide proof that savings were earned before 1 January 2024 hence it will help if you store statements of each of your accounts showing valuations that are effective as of 31 December 2023.   

 

26) Your income in Thailand is defined as any money paid to you inside Thailand, as well as, potentially, any money you receive from overseas. Both types are potentially assessable income for Thai Tax Residents. There are many types of income that can be classed as assessable. The Thai RD lists some of them in Section 40, 1-8, excluding that income that is excluded by a DTA or other RD rules, and is linked below. However, the list is not exhaustive and does not consider all of the many different types of overseas income that foreigners may have:

 

27) https://www.rd.go.th/english/37749.html#section40

 

28) In Thai tax law, virtually all income is assessable, unless it is subsequently excluded by the taxpayer or under Thai RD rules - there is no concept of non-assessable income. Income is understood to mean money that is received from any source. The definition of income that is derived from  within Thailand is fairly clear, if you work and have a job and you are a Tax Resident, the payment you receive is assessable for tax.  Interest that is paid to you on Thai bank accounts is regarded as assessable income, as is income from investments such as stocks and bonds within Thailand. As a general principle, any payment you receive for work that arises within Thailand is regarded as assessable income. You should note that if you are generating income by working while staying in Thailand, it is (and has always been) irrelevant where that money is paid and whether you bring the money into the country or keep it offshore. That money arises in Thailand hence it is taxable here.

 

29) The rules governing income from overseas are similar to those governing domestic income. Inbound overseas Funds Transfers are  either assessable or exempt, based on their country of origin, source of funds and date earned. Savings and income earned before 1 January 2024 is exempt, untaxed income earned after that date is assessable. Income that is imported where tax has been paid, in the home country, will not be subject to re-tax in Thailand and no double taxation will exist. It is however possible that additional tax could be due in Thailand on that income, if the tax rates here are higher than in the home country.

 

METHOD OF FUNDS TRANSFER

 

30) The way in which overseas Funds Transfers are received in Thailand does not change their definition. Bank transfers, cheques, cash or overseas ATM withdrawals can also be income, the latter because overseas funds were imported to pay for goods or services in Thailand.  

 

INCOME FOR REAL ESTATE PURCHASE

 

31) The Thai Revenue Department does not consider the purpose of the funds that are imported, only whether the funds are assessable or not. For example, funds imported to buy real estate will be addressed in the same way that imported funds for any purpose will be, there's nothing special about the fact those funds are buying property versus anything else.

 

PENSIONS

 

32) Another common type of income is pensions, which may not be straight forward, depending on the type of pension and the country that it comes from. The country of origin is important because there are over 60 different types of Dual Tax Agreements, sometimes called Double Taxation Agreements (DTA’s), between Thailand and those 60+ countries and each DTA is different. As a general rule, most private or company pension, from most countries, appear to be assessable here but YOU will need to confirm that yours is, or is not. As said previously, any tax that has been paid on those pensions in the home country, can be used to offset any tax that is due under Thai RD rules, if the Thai rates of tax are higher and if any tax is due.

 

UK PENSIONS

 

UK Pensions fall into two categories:

 

a) Public Sector (Government): includes Civil Service, Armed Forces and some NHS

b) Private Sector: includes UK State Pension, Company Pensions and private pensions

 

33) The UK/Thai DTA specifically mentions Government Pensions, which can only be taxed in the UK. Private Sector pensions are not mentioned in the DTA and are capable of being taxed in Thailand, unless they have been taxed in the UK, in which case a credit is issued against tax payable in Thailand.

 

US SOCIAL SECURITY

 

34) As said at the outset, US Social Security (SSc) payments, a form of pension paid to some older people, can only be taxed by the US under DTA rules and Thailand is forbidden from taxing them. This means those payments are NOT assessable income.

 

CAPITAL GAINS

 

35) The proceeds from the sale of a capital item such as overseas property, where funds are remitted to Thailand, is one popular source of expat funds, the sale of some investment products such as stocks, shares and bonds is another. Those proceeds typically comprise two parts, capital and profit. If the capital and/or profit was acquired before 1 January 2024, it is free of Thai tax. One way to separate capital and profit may be to have an official valuation or statement that is dated 1 January 2024 since anything earned before that date, is not assessable. Also, if the profit has been the subject of a Capital Gains (CG) return in the home country, that also may be free of Thai tax. Lastly, It is clear from the Sherings Q&A link below that CG resulting from the sale of foreign assets, whilst not resident in Thailand, are free of Thai tax. As a stop gap measure and for planning purposes, selling the assets before moving to Thailand would appear tax efficient. 

 

36) Most types of capital gains are taxable as ordinary income. However, the following capital gains are exempt from tax:

 

a) Capital gains on the sale of shares in a company listed on the Stock Exchange of Thailand, provided that the sale is made on the Stock Exchange of Thailand, and on the sale of investment units in a mutual fund.

b) Gains on the sale of non-interest bearing debentures, bills, or debt instruments issued by a corporate entity, except in the case where the bonds or debt instruments were sold for the first time at a price lower than their redemption price to an individual.

c) Gains on the sale of securities listed on stock exchanges in the Association of Southeast Asian Nations (ASEAN) member countries and traded through the ASEAN Link, excluding securities in the form of treasury bills, bonds, bills, or debentures.

d) Capital gains and investment income earned by a resident from sources outside Thailand are not taxable unless remitted to Thailand in the year of receipt. (this clause will have been changed, in line with the rule change)

 

37) Capital losses may not be offset against capital gains.

 

https://taxsummaries.pwc.com/thailand/individual/income-determination 

 

DIVIDEND INCOME

 

38) Dividends received from a company incorporated in Thailand are subject to withholding tax (WHT) at a flat rate of 10%. A resident of Thailand receiving dividends from companies incorporated in Thailand may elect to exclude this income from the computation of income tax and waive the tax credit referred to in the Other tax credits and incentives section.

 

39) https://taxsummaries.pwc.com/thailand/individual/income-determination

 

40) https://sherrings.com/foreign-source-income-personal-tax-thailand.html

 

41) YOU will need to review the DTA between Thailand and your home  country to fully understand what particular clauses affect you.  

 

PROPERTY RENTAL INCOME

 

42) Most property rental income that is remitted to Thailand is considered to be assessable income and is taxable here, unless of course it has been taxed in the home country and/or the DTA prohibits its taxation (which seems improbable).

 

"All rental properties are subject to a House and Land Tax, which is 12.5% of the annual rental income. On top of that, the rental income is taxable, and owners will have to pay Thai income taxes on the money. Thai income taxes are calculated using a progressive scale ranging from 0-37%".

 

GIFT TAX 

 

43) "PIT is levied on gifts given by persons who are still alive. The tax is collected on the assets or the amount given to parents, ascendants, descendants, spouse, or others based on the value of the gift that exceeds a prescribed threshold, which depends on the type of gift and donor. Assets or amounts given that do not exceed the threshold are exempt from tax.

 

44) The following gifts are exempt from PIT:

a) Income derived by a parent from the transfer of ownership or possessory right in an immovable property without any consideration to a legitimate child, excluding an adopted child, in the amount not exceeding THB 20 million throughout a tax year in respect of each child.

b) Maintenance income or gifts from ascendants, descendants, or spouse, in the amount not exceeding THB 20 million throughout a tax year.

c) Maintenance income derived under a moral obligation or gifts made in a ceremony or on occasions in accordance with established custom from persons who are not ascendants, descendants, or spouse, in the amount not exceeding THB 10 million throughout a tax year.

d) Income from gifts in the case where the person who receives the gifts will use them for religious, educational, or public benefit purposes according to the intention of the donors under the criteria and conditions referred to in the Ministerial Regulations.

 

45) Gifts in excess of the above thresholds will be subject to PIT at the rate of 5% and will not need to be included together with other income when computing the annual PIT liability.

 

46) For ascendants/dependants the threshold is THB 20 mill, nor non-ascendants/dependants it's THB 10 mill".

 

47) https://taxsummaries.pwc.com/thailand/individual/income-determination

 

Note: Only funds that are exempt from Thai tax or funds on which Thai tax has already been paid, can be Gifted. It is not possible to Gift funds that are assessable income, in order to avoid Thai tax.

 

INHERITANCE TAX

 

48) "Heirs are subject to the inheritance tax only on the value of a legacy that exceeds THB 100 million obtained from each testator together either once or on several occasions. The inheritance tax rate is 10%, except in the case of heirs who are ascendants or descendants of the testator, where the rate is 5%. Legacies received by the spouse of a testator are exempt from the tax".

 

49) https://taxsummaries.pwc.com/thailand/individual/other-taxes#:~:text=The inheritance tax rate is,are exempt from the tax. 

 

CRYPTO

 

50) Crypto transactions inside Thailand are subject to PIT on the gain amount, crypto transactions outside Thailand are charged on the amount brought into Thailand, when it is imported.

 

https://sherrings.com/cryptocurrency-income-personal-tax-thailand.html

 

NON-RESIDENT INCOME

 

51) Income that was earned and remitted in a year when a person was Thai tax resident is assessable under Thai tax rules. However, Income that was earned in a year when they were not tax resident but is remitted in a subsequent year, is not taxable under Thai tax rules.

 

TAX IDENTIFICATION NUMBER (TIN)

 

52) Before you can file a tax return in Thailand, you must obtain a Tax Identification Number or TIN from the RD offices in your area. You are required by law to obtain a TIN, within 60 days from when you first derive the minimum assessable income. You will need your passport, a valid and current visa or extension and in many areas, a Certificate of Residency from the Immigration Department. The Thai ID card serves as the TIN for the local population .

 

TAX FILING ELLEGIBILITY

 

53) “All persons earning income are required to file a tax return no later than 31 March of the following year for hard-copy filing and 8 April for on-line filing, except for individuals whose income from employment is THB 120,000 or less (for single persons) or THB 220,000 or less (for married persons) and in the case of having income from other sources (with or without employment income) of THB 60,000 or less (for single persons) or THB 120,000 or less (for married persons)”.

 

54) https://taxsummaries.pwc.com/thailand/individual/tax-administration

 

TAX BANDS

 

55) Thai tax is layered in bands and is payable based on the amount of taxable income that  falls within each band and are shown and linked below:

 

56) Taxable Income per year(Baht) Tax rate

a) 0 – 150,000 Exempt

b) 150,000 – 300,000 5%

c) 300,000 – 500,000 10%

d) 500,000 – 750,000 15%

e) 750,000 – 1,000,000 20%

f) 1,000,000 – 2,000,000 25%

g) 2,000,000 – 5,000,000 30%

h) Over 5,000,000 35%

 

57) https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Payroll/Personal-Income-Tax

 

TAX EXEMPTIONS DEDUCTIONS & ALLOWANCES (TEDA)

 

58) The Thai tax system contains a series of Tax Exemptions, Deductions and Allowances (TEDA) that will help you reduce your tax bill and they are very generous. It is easily possible for the average expat foreign retiree to reduce their taxable income by 500,000 baht or more each year. For example, a retiree aged 65 years of age, married and living here full  time, supporting a Thai wife who has no income and doesn’t file tax return, is allowed the following: 

 

a) Personal Allowance for self (PA1) - 60,000

b) Personal Allowance for wife (PA2) - 60,000

c) Over age 65 years exemption (OAE) - 190,000

d) 50% of pension income received, up to 100k (PD) - 100,000

e) In addition, the first 150,000 of assessable income is zero rated and free of tax (ZR) 

 

59) Additional deductions and allowances exist for health or life insurance premiums paid in Thailand. A complete list of deductions, allowances and exemptions can be found in the links below:

 

60) https://www.rd.go.th/english/6045.html  or from Sherrings below.

61) https://sherrings.com/personal-tax-deductions-allowances-thailand.html

 

TAX FORMS

 

62) The Thai Revenue  tax filing system is on-line but only available in Thai language at present. The tax forms are however available in English and they can be downloaded from the link below.

 

63) https://www.rd.go.th/english/63902.html

 

64) Completing a tax return is a simple affair for most people, if you have difficulty, the Revenue Department staff are extremely helpful. Tax returns must be filed between 1 January and 31 March each year, if you file later than that, penalties will apply, if tax was due. Tax filing is electronic and paper based.

 

THE HONOUR SYSTEM AND PENALTIES

 

67) Tax filing in Thailand is based on the honour system, it relies on you declaring all the correct information every year and there are severe penalties for evading Thai tax. It is not necessary to provide proof or supportive documentation of the things you claim on your tax return, when you file the return. If however your return is audited, supportive documentation may be requested at that time. It would be foolish and a gross under estimation of RD capabilities to think  that doing nothing and keeping a low profile means you should ignore Thai taxation. Very few sane people in the US and UK ignore the tax authorities who tend to have a long reach.

 

68) If a taxpayer is certain that some of their income is Tax Exempt, they may not want to declare it on their Thai tax return, unless the newly designed tax form requires it. If in doubt, you may wish to ask the RD or employ specialist tax advisor's. It should go without saying that some taxpayers may try to suggest that some of their income is not assessable when really they don’t know for sure, or, they know that it is and say it that it isn’t and hoping they wont get found out. In that situation, the RD will not look favourably on such people and penalties are likely.

 

TAX CLEARANCE CERTIFICATES

 

69) It cannot be entirely ruled out that at some point, a link may be established between tax filings and visa extensions. A law already exists that requires foreigners to apply for Tax Clearance Certificates before being allowed to depart the country but it is not being enforced currently. These things are possible because similar things have been adopted in several countries in the past, including the US.

 

REVENUE DEPARTMENT OFFICES STRUCTURE

 

The main office of the RD is in Bangkok. The country is divided into tax regions and each region is sub divided into districts. Small RD offices are located in many tessabahns which serve the local community. When dealing with the RD, it is advisable to deal with at least District Level offices.

 

SOURCES OF TAX INFORMATION

 

70) There are several sources of detailed tax information and these web sites are linked below. The first link is to The Thai Revenue Department Tax Rules which is the most important one which everyone should use as their initial point of reference. The link is to an English language translation of the Revenue Department Law and contains the Revenue Code:

71) https://www.rd.go.th/english/6045.html

72) https://sherrings.com/personal-income-tax-in-thailand.html

73) https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Payroll/Personal-Income-Tax

73.5) https://www.pwc.com/th/en/tax/thai-tax-booklet-2022.html

 

UNRESOLVED, CONFLICTING or UNCLEAR  ISSUES

 

Points A - H resolved and removed.

 

I) - Does the Thai RD consider remitted funds to Thailand that have been through the overseas tax process, to be tax free in Thailand. Or is it the case that overseas tax must be paid on every Pound or Baht that is remitted. In other words, will the Thai RD allow the UK Personal Allowance and other countries exemptions, to be part of the tax paid process.

 

J) - The US is not alone in not requiring certain sectors or classes of people to not file a tax return, even though they have tax paid income, the UK does exactly the same. The question is, how will these classes be able to prove their income is already taxed? 

 

k) - how to distinguish between principal (funds from legacy investments, inheritance, original investment principal) versus earnings (interest, dividends, remuneration) from comingled funds, determination of applicable foreign currency exchange rates for tax assessment, etc.

 

L) - income that is earned in a year when the taxpayer is tax resident but not remitted until a year when they are not tax resident, is it later tax assessible in Thailand?

 

*** END ***

 

[Mike Lister]

Above is the latest version of the Simple Guide to Personal Income Tax (PIT) in Thailand. It was constructed using information gleaned from various threads about  tax but is still incomplete.

 

Readers are asked to contribute to its construction by suggesting new information that should be added or identifying information that is unclear or incorrect….all constructive and relevant comments are welcome. Anyone needing information regarding Thai tax related issues should raise them here. Any issues that represent unknowns will be flagged and recorded at the end of the document and not discussed here, that way the thread can move forward. Separate threads are encouraged for those wishing to discuss topics such as CRS but they should not be discussed here. Any post that does not contain factual answers to questions raised, will be removed.

 

The purpose of this document is to provide core PIT information to as many people as possible and to relieve the anxiety surrounding the tax issue. Inputs to the document should be generic to all nationalities rather than specific to just one nationality. Posts should be concise and to the point, brevity will be appreciated, as will focus on the particular issue being discussed. If anyone has country specific links to their DTA, please feel free to post it here for the benefit of your fellow countrymen/women.

 

We all start anew, and everyone contributes on an equal basis.

[Crossy]

Mike. I have an offshore (Isle of Man) private pension fund that's due to start paying in April 2024.

 

It was funded solely by my (very taxed) income in Thailand, will I have to pay tax on the funds again when it is re-imported (i.e. spent)??

 

[scottiejohn]

 

10 minutes ago, Mike Lister said:

If your income is over 120,000 baht per year, you must file a Thai tax return between 1 January and 31 March.

How does one submit one?  Online or in person and what info/forms are required for someone on a basic pension with money already in the bank here in Thailand above 65 on a retirement extension with no other income?

There are obviously far too many scenarios for you to cover but the one above is as basic as it gets.

[Mike Lister]

7 minutes ago, scottiejohn said:

 

How does one submit one?  Online or in person and what info/forms are required for someone on a basic pension with money already in the bank here in Thailand above 65 on a retirement extension with no other income?

There are obviously far too many scenarios for you to cover but the one above is as basic as it gets.

The online system is in Thai and you need a tax account and a TIN before you can access the system. Your best bet is to go to your local District Revenue office and they will prepare the return for you, as long as you have al the information.

[Crossy]

Just now, Mike Lister said:

The online system is in Thai and you need a tax account and a TIN before you can access the system. Your best bet is to go to your local District Revenue office and they will prepare the return for you, as long as you have al the information.

 

Take a Thai speaker!

[Mike Lister]

2 minutes ago, Crossy said:

 

Take a Thai speaker!

It depends on the location, in the North there are several people at the District Office who speak English plus all RD staff have been extremely helpful in the past.

[Crossy]

Just now, Mike Lister said:

It depends on the location, in the North there are several people at the District Office who speak English plus all RD staff have been extremely helpful in the past.

 

Yeah, the hardest part is getting past the receptionist (same worldwide). Once in the system you could manage alone.

[Lacessit]

Assuming I get a Thai tax number, how do I convince the RD I am bring in savings, not income?

[Mike Lister]

3 minutes ago, Lacessit said:

Assuming I get a Thai tax number, how do I convince the RD I am bring in savings, not income?

A statement dated before 1 January 2024 showing the value of the funds in an account overseas would work. 

[Mike Lister]

1 minute ago, Dmaxdan said:

Logically, they are going to have to employ more English speaking staff.

 

One minor concern of mine is come the first three months of next year they are going to be snowed under with "fish out of water" foreigners.

 

There is estimated to be 30,000 expats in Chiang Mai alone. Whilst not all of them will have to file tax returns it's quite possible that 20,000 plus may have to.

That roughly equates to the RD having to process about 260 foreign tax returns every single working day between January 1st and March 31st!

 

 

The RD is actively moving people from paper to online which if they provide an English language version, will ease the workload massively. Language is not an issue at CM District 1 or 2 offices but I take your point, the work load could increase dramatically.

[Mike Lister]

Here's a few examples that may help some people. Keener eyes than mine will tell me if I made any mistakes

!

(Revised/updated) Abbreviations and Acronyms used below

TEDA = Tax Exemptions, Deductions, & Allowances

OAE = 190,000 (over age 65 years exemption)

PD = 50% of pension received, max 100,000 (deduction for pension income received)

PA1 = 60,000 (personal allowance for the tax filer)

PA2 = 60,000 (personal allowance for spouse)

ZR - zero rated for tax - 150,000 (the zero rated tax band in the tax tables)

(Note: there are additional TEDAs depending on your personal circumstances but these are the major ones most commonly used)

 

PERSON A - Single, over 65, from UK, pension income THB 50k month.

Has assessable income of 50 x 12 or 600,000 per year. Their TEDE totals (PA1, OAE, PD and ZR) or 500,000. Taxable income = 100,000 baht at 5%. Note: if married to a Thai, their TEDA increases by  or 60,000 and their taxable income is 40,000 which is taxed at 5%.

 

PERSON B  - Same as above but from USA on Social Security old age pension

This person pays no tax, married or single, because all of their income is exempt under the Double Tax Agreement between the USA and Thailand.

 

PERSON C - Either A or B above but also has some savings

If the savings were earned before 1 January 2024, there is no change to their taxable income above. IF the savings had been earned after that date, their total assessable income would increase by the same amount. AND/OR, if, they also had savings interest in Thailand during the same period, the interest earned would be added to their taxable income but this would be offset by tax withheld at source by the banks.

 

PERSON D - Under age 50, income from savings and investments.

This person has limited TEDA because of their age plus there is no tax exemption on their sources of income. This person must look at whether their income was taxed at source in their home country, and on the terms and conditions (T&C) of their country's DTA, either of which may make some or all of their income tax exempt.

 

PERSON E  - Property or other capital item such as stocks or bonds

This person has owned their investment for some times but decides to sell it and transfer the funds to Thailand. The sale of the item comprises two parts, the capital that was used to buy the investment and the profit earned since.  

 

The capital used to buy the investment is free of Thai tax but the amount may need to be proven via statements etc.

 

The profit on the investment that was earned prior to 1 January 2024 is tax free but the amount should be capable of being proven hence a statement or valuation dated 1 January 2024 will be helpful.

 

The remaining profit is potentially taxable in Thailand, subject to the terms of any DTA and is added to existing Taxable Income.

 

 

 

 

[Kenny202]

I don't see how this long detailed post makes anything clearer or "simple" in anyway. And forgive me if you have gone to some trouble on everyone's behalf. You say yourself the details are still not complete which is where we have been for months. Absolutely no offence or negativity intended...just my observation

[Mike Lister]

2 minutes ago, Kenny202 said:

I don't see how this long detailed post makes anything clearer or "simple" in anyway. And forgive me if you have gone to some trouble on everyone's behalf. You say yourself the details are still not complete which is where we have been for months. Absolutely no offence or negativity intended...just my observation

There is a significant number of people who have been reading these threads, trying to make sense of what is being said and looking for information. Many of those people contacted me and others directly looking for information. A common theme was that the 200+ thread was so unwieldy and full of arguments, repeat information and information that didn't appear to cover the basics. The decision was therefore made to try and supply readers (not necessarily posters) with the information they were looking for and the feedback thus far has been overwhelmingly positive. It's great that some more experienced or savvy posters want to get into discussions about the implications of CRS etc and debate the handling of complex scenario's but that's not what the majority need at this stage.

[Thailand]

4 minutes ago, Kenny202 said:

I don't see how this long detailed post makes anything clearer or "simple" in anyway. And forgive me if you have gone to some trouble on everyone's behalf. You say yourself the details are still not complete which is where we have been for months. Absolutely no offence or negativity intended...just my observation

 

Disagree totally, I have found the information very useful!

[billd766]

Thank you very much for all your efforts on behalf of us all.

 

I have found the thread clear and concise.

 

I have 3 pensions,

1   the state pension 

2  a military pension

3  a company pension

 

1   They are all brought in as they are paid every month but I did not see anything about the tax rates on that.

 

2   In an earlier post I believe that you mentioned that military pensions were exempt from Thai tax.

 

3   I am 79, married and have a 19 year old son going through university in Chiang Rai. Can I claim an allowance for him? I send him an allowance for his living expenses every month. Can I claim that back also.

 

Thank you.

[Mike Lister]

Once again, if anyone has inputs they wish to include in the document, things that are facts and are certain, let's include them. But let's please not mask the things that are known with debates and conflicts about things that are uncertain or unknown. My role here is to organize the debate and manage it, not to be a subject matter expert. Right now the deliverable is the document in order to bring lots of people up to the same level of understanding, using the facts that are known today.

[Mike Lister]

3 minutes ago, billd766 said:

Thank you very much for all your efforts on behalf of us all.

 

I have found the thread clear and concise.

 

I have 3 pensions,

1   the state pension 

2  a military pension

3  a company pension

 

1   They are all brought in as they are paid every month but I did not see anything about the tax rates on that.

 

2   In an earlier post I believe that you mentioned that military pensions were exempt from Thai tax.

 

3   I am 79, married and have a 19 year old son going through university in Chiang Rai. Can I claim an allowance for him? I send him an allowance for his living expenses every month. Can I claim that back also.

 

Thank you.

Yes, your son can remain as a deduction as long as he remains in full time education, I believe until age 26 if I'm not mistaken. 

 

Yes, UK military pensions are treaty exempt.

 

Your state and company pensions are potentially taxable here but your allowances will be close to 600k baht per year. 

[billd766]

13 minutes ago, Kenny202 said:

I don't see how this long detailed post makes anything clearer or "simple" in anyway. And forgive me if you have gone to some trouble on everyone's behalf. You say yourself the details are still not complete which is where we have been for months. Absolutely no offence or negativity intended...just my observation

I found it reasonably clear and can understand it. One good thing I found is that it has covered the basics and is not specific to any one person.

 

Anybody can ask specific questions that Mike may or may not be able to answer. However there sib nearly 12 months before anything actually takes place and for specific answers that Mike is unable to answer, there is the revenue office in each province who should be able to give a sensible reply.

[billd766]

1 minute ago, Mike Lister said:

Yes, your son can remain as a deduction as long as he remains in full time education, I believe until age 26 if I'm not mistaken. 

 

Yes, UK military pensions are treaty exempt.

 

Your state and company pensions are potentially taxable here but your allowances will be close to 600k baht per year. 

Thank you for a prompt and kind reply.

[UKresonant]

Just now, billd766 said:

2   In an earlier post I believe that you mentioned that military pensions were exempt from Thai tax.

 

Info

 

2. = Taxed only in UK

 

"Article 19 Governmental Services...
 
(2) (a) Any pension paid by the Contracting State or a political subdivision or a local authority thereof to any individual in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State."

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

 

(I'll have the same 3 Types of pension as you have in just over 6 years time hopefully , for DTA purposes).

 

 

 

 

 

[dayo202]

I'm from the UK, age 57 I been living in Thailand for 6 years I'm also married to a Thai.

My question is I do a monthly transfer from my UK bank account into my Thai bank of 25,000฿.

The money I transfer from the UK is saving that I accumulated over my lifetime and sale of my house in UK ( which I made no capital gains on the sale ).

Would i need to pay tax on my 25,000฿ ( annually 300,000฿ ) and if so how much please ?🙏

[Startmeup]

 

32 minutes ago, Kenny202 said:

I don't see how this long detailed post makes anything clearer or "simple" in anyway. And forgive me if you have gone to some trouble on everyone's behalf. You say yourself the details are still not complete which is where we have been for months. Absolutely no offence or negativity intended...just my observation

There is at least half a dozen interviews with Thai tax specialists on YouTube and not one have said they know exactly what these rules mean. 

Edited January 11 by Startmeup

[Mike Lister]

2 minutes ago, dayo202 said:

I'm from the UK, age 57 I been living in Thailand for 6 years I'm also married to a Thai.

My question is I do a monthly transfer from my UK bank account into my Thai bank of 25,000฿.

The money I transfer from the UK is saving that I accumulated over my lifetime and sale of my house in UK ( which I made no capital gains on the sale ).

Would i need to pay tax on my 25,000฿ ( annually 300,000฿ ) and if so how much please ?🙏

It sounds as though you transfer savings and sale proceeds that were all accumulated prior to 1 January 2024, in which case, there is no tax to pay in Thailand on those transfers.

[Mike Lister]

3 minutes ago, Startmeup said:

 

There is at least half a dozen interviews with Thai tax specialists on YouTube and not one have said they know exactly what these rules mean. 

Indeed. I think where we will end up very shortly is a list of knowns and a list of unknowns and as the unknows are made clear and announcements are made, the picture will become clearer. but it will take time and some patience.

[dayo202]

8 minutes ago, Mike Lister said:

It sounds as though you transfer savings and sale proceeds that were all accumulated prior to 1 January 2024, in which case, there is no tax to pay in Thailand on those transfers.

Mike, I'm guessing I still need to file a tax return next January - March 2025 even if I'm paid 0% tax on my transfers.

[Mike Lister]

6 minutes ago, dayo202 said:

Mike, I'm guessing I still need to file a tax return next January - March 2025 even if I'm paid 0% tax on my transfers.

Have you read the document at the start of the thread because I think you ought to, there is information in there that you need to understand which I would rather not have to repeat here? It will also help me if you can come back and tell us if you understood the document or not because that will tell me if we need to make changes to it.

[NoDisplayName]

54 minutes ago, Mike Lister said:

A statement dated before 1 January 2024 showing the value of the funds in an account overseas would work. 

 

46 minutes ago, Mike Lister said:

PERSON D - Under age 50, income from savings and investments.

This person has limited TADE because of their age plus there is no tax exemption on their sources of income. This person must look at whether their income was taxed at source in their home country, and on the terms and conditions (T&C) of their country's DTA, either of which may make some or all of their income tax exempt.

 

Let's try this example, please.

 

Person X:  Over 50 with retirement visa, not collecting pension or social security.  Married to (retired) Thai national, files tax as single with no dependents.  All income from savings and investments. 

 

Manages fund sales and monthly dividends to stay under the tax due threshold in home country (USA).  Files a tax return as is required, but pays no income tax.

 

IRS allows about $14,500 single tax deduction, and up to about $47,000 capital gains taxed at 0%.  Tax return would be filed claiming up to $47K income and capital gains, but would not be assessed tax.

 

How much can person X bring in to Thailand before being taxed, and at what point is a Thai tax return required?  Only Thai income is the measly 1.25% fixed account retirement balance, already taxed at 15%.

 

  What home country documentation, if any, would be required?  A USA tax return showing zero tax paid?  A brokerage statement from the prior year?

 

[Mike Lister]

3 minutes ago, NoDisplayName said:

 

 

Let's try this example, please.

 

Person X:  Over 50 with retirement visa, not collecting pension or social security.  Married to (retired) Thai national, files tax as single with no dependents.  All income from savings and investments. 

 

Manages fund sales and monthly dividends to stay under the tax due threshold in home country (USA).  Files a tax return as is required, but pays no income tax.

 

IRS allows about $14,500 single tax deduction, and up to about $47,000 capital gains taxed at 0%.  Tax return would be filed claiming up to $47K income and capital gains, but would not be assessed tax.

 

How much can person X bring in to Thailand before being taxed, and at what point is a Thai tax return required?  Only Thai income is the measly 1.25% fixed account retirement balance, already taxed at 15%.

 

  What home country documentation, if any, would be required?  A USA tax return showing zero tax paid?  A brokerage statement from the prior year?

 

I can only help with some of the answer and that's the same one I've given to a number of people. Income earned prior to 1 January 2024 is free of tax in Thailand. Proving that was earned before that date will involve a baseline statement of each account, as of 31 December 2023. Thereafter, I don't know, part of the answer depends on what the RD decides to do regarding tax on these transfers for foreigners from countries with whom Thailand shares a DTA. In a worst case scenario, a copy of your US tax return showing the income has been the subject of a return may be helpful but mostly this is a wait and see.

[NoDisplayName]

13 minutes ago, Mike Lister said:

Income earned prior to 1 January 2024 is free of tax in Thailand. Proving that was earned before that date will involve a baseline statement of each account, as of 31 December 2023.

 

So, let's say Person X has a baseline statement from Dec 31, 2023 with a balance of $1 million.

 

Does this mean Person X can transfer into Thailand any of this amount free of tax?  And for how long?  Can X bring in $100K each year for the next ten years tax free, by showing the 2023 base balance along with a sum total of all monies transferred in until exhausted?