Personal Income Tax Guide (for foreigners) Thailand

[Mike Lister]

Below are the links to the main international tax consultancies in Thailand. Because they are all based in Bangkok and have existing connections with the Revenue Department, they will be amongst the first to know of any new tax changes. You can check each one of them periodically to see what new things have been announced: 

 

https://kpmg.com/th/en/home/insights/2019/01/th-tax-and-legal-news-flash.html

 

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Further-guidance-on-Foreign-Sourced-Income

 

https://sherrings.com/tax-advisor-insights-updates-thailand.html

 

https://www.grantthornton.co.th/insights/tax-alerts/

 

https://www.siam-legal.com/thailand-law/thailand-new-tax-on-foreign-income-an-overview/

 

https://www.pwc.com/th/en/press-room/press-release/2023/press-release-14-11-23-en.html

[exfatriate]

I don't want to clog up this thread needlessly but I feel I have to offer my heartfelt thanks for all the work and thought and care that you've put in to this, Mike!

[George FmplesdaCosteedback]

On 1/11/2024 at 6:20 PM, billd766 said:

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.

Mike is obviously trying to make sense of this but I fear we are as usual talking about Thai administration that never work out the details before implimenting a new law. I doubt any of the district areas or even the main office knows what to do even now with 10 months to go before this hits the fan.

I need better details on all the allowed deductions for instance. Nobody can live here on 120k a YEAR???

 

 

[Hepbub]

Thanks for all this info Mike, really appreciate the effort you have put into it. Unfortunately, i am still a little confused, I get a uk state pension, and a small norwegian state pension, both of which I pay tax on in each  country. As the UK and Norway have DTA with Thailand, will I have to pay Thai tax on any money I bring into Thailand from either pension. I only transfer money as needed apart from housekeeping for my Thai wife, usually from an ATM. Apologies if this has already been asked, but have been unable to read all 13 previous pages, only the first 6.

[Mike Lister]

1 hour ago, George FmplesdaCosteedback said:

Mike is obviously trying to make sense of this but I fear we are as usual talking about Thai administration that never work out the details before implimenting a new law. I doubt any of the district areas or even the main office knows what to do even now with 10 months to go before this hits the fan.

I need better details on all the allowed deductions for instance. Nobody can live here on 120k a YEAR???

 

 

The following is a complete guide

 

https://www.rd.go.th/fileadmin/download/english_form/220364guide-allow.pdf

[Mike Lister]

2 minutes ago, Hepbub said:

Thanks for all this info Mike, really appreciate the effort you have put into it. Unfortunately, i am still a little confused, I get a uk state pension, and a small norwegian state pension, both of which I pay tax on in each  country. As the UK and Norway have DTA with Thailand, will I have to pay Thai tax on any money I bring into Thailand from either pension. I only transfer money as needed apart from housekeeping for my Thai wife, usually from an ATM. Apologies if this has already been asked, but have been unable to read all 13 previous pages, only the first 6.

No, you shouldn't have to pay tax on either pension because you already pay tax on them in the countries where they arise. The Revenue did a question and answer session with one of the large tax consultancies and this was confirmed during that meeting, the details are here:

 

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

 

 

[kiwikeith]

On 1/12/2024 at 12:47 AM, 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.

If you sell your family home,accumulated years ago and invest the money into a taxed account in NZ do you have to pay tax on transfers to  Thailand. 

NZ has a double tax agreement with Thailand that is almost identical in wording to Australia and the uk 

 

 

 

 

 

 

 

 

 

 

 

 

[Mike Lister]

3 hours ago, kiwikeith said:

If you sell your family home,accumulated years ago and invest the money into a taxed account in NZ do you have to pay tax on transfers to  Thailand. 

NZ has a double tax agreement with Thailand that is almost identical in wording to Australia and the uk 

 

 

As of writing, I am unsure, this issue has arisen a number of times so we're trying to understand it completely. There are a number of aspects. If the sale was concluded prior to 1 January 2024, the provides are free of Thai tax, that is certain. If the sale was concluded after that date and was subject to Capital Gains, it also is likely to be free of Thai tax with any tax paid in the home country offsetting any tax liability in Thailand. BUT, if the sale was concluded after 1 January and was free of tax in the home country, it is unclear if the Thai Revenue will regard that as non-taxable income or not. Much will depend on the contents of the DTA, the rest will depend on the Thai RD treatment of that gain. What we do know is that CG in Thailand is taxed at PIT rates.

[Mike Lister]

No sooner do I try and wrap things up when another point arises, which has been added to the end of the document:

 

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.

[The Theory]

In the US I don't have to even file for tax return, even though my fixed deposit accounts generate some interest. 
Is it something that is limited to the US ? 
 

 

[Phulublub]

4 hours ago, Mike Lister said:

No sooner do I try and wrap things up when another point arises, which has been added to the end of the document:

 

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.

This is the point I was trying to highlight a couple of days ago and is potentially even more complicated than that for some. 

 

Consider those with both UK Government Pension (exempt) and UK State Pension (not exempt) and other non exempt income (dic=vidends, interest etc) .  Will they be able to allocate their personal allowance to their exempt income so that ALL the non-exempt is taxed at 20% thus reducing any potential additional liability here, or must it be pro-rata? 

 

PH

[UKresonant]

3 hours ago, Phulublub said:

This is the point I was trying to highlight a couple of days ago and is potentially even more complicated than that for some. 

 

Consider those with both UK Government Pension (exempt) and UK State Pension (not exempt) and other non exempt income (dic=vidends, interest etc) .  Will they be able to allocate their personal allowance to their exempt income so that ALL the non-exempt is taxed at 20% thus reducing any potential additional liability here, or must it be pro-rata? 

 

PH

If you do not require any further documentation from Thai RD, to interact with another countries RD, perhaps some issues. To prevent double exclusion. The UK / Thai situation may not generate the a problem. 

Though not in detail technically correct , I will only intend to remit PAYE pretaxed pensions, to the exact net value one uk tax year in arrears, associated p60 etc available etc and hope that will suffice. E.g.  100% of pension 1, 100% of pension 2., 3 , 4. To value required to keep me whole. 

 

Otherwise very complicated....

 

 

[Mike Lister]

I've updated Point C at the end of the document - this point remains unclear

 

C. International Gift Tax rules - need clarity regarding tax liabilities on the gifter and the receiver.

[Mike Lister]

9 hours ago, The Theory said:

In the US I don't have to even file for tax return, even though my fixed deposit accounts generate some interest. 
Is it something that is limited to the US ? 
 

 

I'm going to add this to the list of unclear issues, you raise a very relevant point. 

 

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?

[Mike Lister]

I have added another point at the end of the document.

 

L) - Capital Gains rules overseas vs CG rules Thailand.

 

(an all encompassing point that involves real estate and investments)

 

NOTE: It is clear from the Sherings Q&A 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.

[Mike Lister]

1 minute ago, Halfaboy said:

 

Thanks for your fast reply.

 

To make it more easy I will give an example.

 

Bought a house in 1991 for 100, I expect to sell the house end of 2024 / early 2025 for 300. Value as per 1^st January 2024 is (assumed) 280.

1)      Who is authorised to assess the value of my house as per 1^st of this year.

2)      Can the value of my house as at 1^st January of this year be considered as  ‘money in the bank’ ?

 

Appreciate your answer.

As said, we don't know at this stage how the real estate sale proceeds issue will pan out, which is why it is listed in the unknowns/unclear list at the end of the document. What you quoted earlier was just one possible method but as already stated, it's impractical for real estate sales.

[Mike Lister]

These are the major outstanding issues on the list of unknows/unclear points at the end of the doucment:

 

C. International Gift Tax rules - need clarity regarding tax liabilities on the gifter and the receiver. Done

 

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 will the taxation (or clearance) of imported overseas funds into Thailand, needed to buy Thai real estate, be handled.

Imported funds to buy real estate will almost certainly be handled in the same way that imported funds for any purpose will be handled, there's nothing special about the fact those funds are buying property versus anything else.

 

 

L) - Capital Gains rules and taxation rates overseas vs CG rules and PIT rates in Thailand.

[Mike Lister]

1 minute ago, JimGant said:

 

This is getting ludicrous. What money brought into Thailand is going to be spent on is of no concern to the tax collectors. They'll assume all money coming in is not subject to income taxation -- unless declared otherwise. They don't have the means to tell income from non income. Even direct deposits may not be taxable (assessable) income, if exempted by DTA. Too much overthinking going on here....

Yes, probably not explained very well, the poster has combined a an expense issue with capital gains..

 

The issue I raised at the end of the document is solely Capital Gains, specifically relating to real estate overseas and the ability of the buyer to assess that for tax paid and tax due. The solar and car issues were not part of that issue.

[Bluetongue]

I'm still a bit confused about residency. The guide states that you are a tax resident of Thailand if you are here for 180 days in a calendar year, no if's but's or maybe's. Why then does the DTA between Australia/Thailand in Part 4 Residency (pasted below) appear to give some discretion about this? Have these rules been amended at some stage? As an almost doddering old fool I am struggling with interpreting these things.

 

Article 4

Residence

 

1. For the purposes of this Agreement, a person is a resident of one of the Contracting States:

 

(a) in the case of Australia, if the person is a resident of Australia for the purposes of Australian tax; and

 

(b) in the case of Thailand, if the person is a resident of Thailand for the purposes of Thai tax.

 

2. A person is not a resident of a Contracting State for the purposes of this Agreement if the person is liable to tax in that State in respect only of income from a source in that State.

 

3. Where by reason of the preceding provisions, an individual is a resident of both Contracting States, the status of the person shall be determined in accordance with the following rules, applied in the order in which they are set out :

 

(a) the person shall be deemed to be a resident solely of the Contracting State in which a permanent home is available to the person;

 

(b) if a permanent home is available to the person in both Contracting States, or in neither of them, the person shall be deemed to be a resident solely of the Contracting State in which the person has an habitual abode;

 

(c) if the person has an habitual abode in both Contracting States, or in neither of them, the person shall be deemed to be a resident solely of the Contracting State with which the person's personal and economic relations are the closer.

 

4. For the purposes of the last preceding paragraph, an individual's citizenship or nationality of a Contracting State shall be a factor in determining the degree of the person's personal and economic relations with that Contracting State.

 

5. Where by reason of the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, it shall be deemed to be a resident solely of the Contracting State in which it is incorporated, created or organized.

[TPDH]

If you're a Thai tax resident and you have crypto investments in a foreign crypto exchange. You then earn income/capital gains on these foreign crypto investments while being a Thai tax resident, but, you never transfer that foreign income into Thailand, do you have any tax obligations on that income in Thailand? 

 

On the one hand this post says that you do not pay any tax on foreign income that is never brough into Thailand. But, then it also says that it doesn't matter if you bring your foreign income into Thailand or not, as long as you earned the foreign income while being a Thai tax resident you need to tax it in Thailand. Maybe someone could clarify? 

[Mike Lister]

22 minutes ago, TPDH said:

If you're a Thai tax resident and you have crypto investments in a foreign crypto exchange. You then earn income/capital gains on these foreign crypto investments while being a Thai tax resident, but, you never transfer that foreign income into Thailand, do you have any tax obligations on that income in Thailand? 

 

On the one hand this post says that you do not pay any tax on foreign income that is never brough into Thailand. But, then it also says that it doesn't matter if you bring your foreign income into Thailand or not, as long as you earned the foreign income while being a Thai tax resident you need to tax it in Thailand. Maybe someone could clarify? 

Only funds remitted to Thailand are taxable here.

[Bazle]

On 2/13/2024 at 7:10 AM, Bluetongue said:

I'm still a bit confused about residency. The guide states that you are a tax resident of Thailand if you are here for 180 days in a calendar year, no if's but's or maybe's. Why then does the DTA between Australia/Thailand in Part 4 Residency (pasted below) appear to give some discretion about this? Have these rules been amended at some stage? As an almost doddering old fool I am struggling with interpreting these things.

 

Article 4

Residence

 

3. Where by reason of the preceding provisions, an individual is a resident of both Contracting States, the status of the person shall be determined in accordance with the following rules, applied in the order in which they are set out :

 

(a) the person shall be deemed to be a resident solely of the Contracting State in which a permanent home is available to the person;

 

(b) if a permanent home is available to the person in both Contracting States, or in neither of them, the person shall be deemed to be a resident solely of the Contracting State in which the person has an habitual abode;

 

(c) if the person has an habitual abode in both Contracting States, or in neither of them, the person shall be deemed to be a resident solely of the Contracting State with which the person's personal and economic relations are the closer.

 

Perhaps I am not understanding your point correctly, but I do not see any discretion.

 

This article (often referred to as the "tie-breaker" article) usually includes the words "for the purposes of this agreement", and it would have helped if they had included them here.

 

So, you can be regarded as a resident of one country for the purposes of the legislation in that country, but can be regarded as a resident of the other country for the purposes of the treaty. And what the treaty says in relation to the taxation of any particular income or gain over-rides what domestic legislation says (unless there is something in the treaty that says otherwise).

[Mike Lister]

On 2/13/2024 at 6:26 AM, CharlesHolzhauer said:

Have the International Inheritance Tax Rules been clarified regarding tax liabilities on the receiver?

"Inheritance tax
A legacy received by an individual or a corporate entity, regardless of nationality, from a testator who has died is exempt from PIT under the Revenue Code but is subject to inheritance tax. 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.

Property subject to the inheritance tax comprises immovable property, securities according to the law, bank deposit accounts or other money of a similar nature that the testators have the right to call back or claim from financial institutions or persons who hold such money, registered vehicles, and financial assets to be prescribed in royal decrees".

 

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

[Mike Lister]

I have updated Para 24 in the document regarding Gifts and Inheritance Tax:

 

24. - Gifts and Inheritances Tax

Gifts Tax - "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.

 

The following gifts are exempt from PIT:

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.

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

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.

 

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.

 

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.

 

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

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

 

Inheritance Tax - "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".

 

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

[Mike Lister]

The following is the current proposals for Capital Gains, within the document. Comments? 

 

"Capital gains

 

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

 

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.
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.

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.

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)

 

Capital losses may not be offset against capital gains.

 

Dividend income
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.

 

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

[Mike Lister]

And finally this morning:

 

"Cryptocurrencies and digital tokens

Share of profits or any benefits from holding or possessing digital tokens or gains from the transfer of cryptocurrencies or digital tokens are subject to a WHT at the flat rate of 15%."

 

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

[Yumthai]

3 hours ago, Mike Lister said:

"Cryptocurrencies and digital tokens

Share of profits or any benefits from holding or possessing digital tokens or gains from the transfer of cryptocurrencies or digital tokens are subject to a WHT at the flat rate of 15%."

 

15% WHT is a not a final tax. Crypto capital gains and interests should be declared and taxed under PIT rates (minus WHT deduction).

In my opinion, it is implied Crypto held within Thailand. Crypto capital gains/interests held offshore should be taxed when remitted in Thailand.

 

[Yumthai]

3 minutes ago, Mike Lister said:

Do you have an updated link on that, ONLY from one of the major consultancies or the RD themselves?

 

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

 

"Personal tax on the amount of the proceeds that exceeds the costs of the investment (...), and tax credit against the amount of tax payable for the WHT deducted ..."

 

"... crypto income from licensed exchanges in Thailand"

 

"... crypto income outside Thailand and bringing it into Thailand"

 

 

 

[Mike Lister]

An update of crypto, per the above, with thanks to Yumthai:

 

The new proposal is as per the Sherrings link, https://sherrings.com/cryptocurrency-income-personal-tax-thailand.html

 

PIT on the gain for internal transactions, or,

 

PIT on the amount brought into Thailand.

 

Comments?

[UKresonant]

19 minutes ago, TigerCat said:

Sorry, I'm trying to edit or delete my original reply, but I don't know how.

 

I know they want the source, that the funds came from abroad, but my point is, if they are going to tax you at the Land Office / Department, then why would they care if the money has already been taxed or not?  Because the way it has been, is you pay taxes at the Land Office / Department, you are paying taxes in Thailand at the Land Office / Department.  

A. So Are the source of funds created overseas before or after 1st Jan 2024?

B. Were you / will you be Thai Tax Resident when you derived the funds.

 

The Land Office tax is for all and I'd different from the issue of the tax on bring funds into Thailand.