Finance Tax Break Bonanza: Thais to Benefit from New Foreign Income Rule

[webfact]

File photo courtesy of Expatica

 

Thais are set to enjoy a tax-free advantage on foreign income. The Revenue Department is fast-tracking new legislation that will exempt Thai individuals from income tax on foreign-sourced earnings, which is expected to take effect this year. Once introduced, the law will allow Thai individuals to import foreign-earned income into Thailand tax-free within a two-year period.

 

Pinsai Suraswadi, the director-general of the Revenue Department, emphasised that this move could provide a significant economic boost. Thai individuals collectively hold approximately 2 trillion baht in foreign income. By repatriating these funds, the economy could see a significant lift. The measure aims to reduce the reluctance of Thai investors to move their profits back home due to current tax concerns.

 

Investments made abroad often promise higher returns, which prompts many Thai investors to seek opportunities outside of the domestic market. However, the current tax system discourages Thai investors from repatriating their earnings back to Thailand. Currently, personal income tax rates in Thailand range from 5% to 35%, depending on the level of income.

 

In related developments, the cabinet recently supported the Finance Ministry's proposal to exempt personal income tax on capital gains from digital assets. This includes cryptocurrencies from January 2025 until December 2029. This move aims to attract foreign funds into the Thai crypto market and provide another channel for economic stimulation.

 

The proposed foreign income tax law is expected to have a retrospective effect. This means that even income earned and brought into the country before the law is enacted might benefit from the exemption. The final details, however, await discussion within the Finance Ministry, reported the Bangkok Post.

 

Under current legislation effective from 2024, foreign income is taxed regardless of when it is brought to Thailand. This shifts from earlier rules where only income brought in the same year it was earned would face taxation. The forthcoming regulation will reverse this, encouraging Thais to bring their money back without fearing steep taxes.

 

For those residing in Thailand for 180 days or more in a tax year, the Resident Rule applies, making them liable for income tax on international earnings. ThThis upcoming legislation aims to refine these rules, providing much-needed tax relief for many.

 

Once the ministerial regulation is published in the Royal Gazette, the law will be enforced, potentially invigorating Thailand's financial landscape through increased foreign income flows.

 

  Adapted by ASEAN Now from Bangkok Post 2025-08-05

 

[JoePai]

Thais are set to enjoy a tax-free advantage on foreign income

 

Why only say 'Thai' - does that mean the rest of us do have to pay ?

[MartinL]

4 minutes ago, JoePai said:

Thais are set to enjoy a tax-free advantage on foreign income

 

Why only say 'Thai' - does that mean the rest of us do have to pay ?

 

I was wondering exactly the same thing. Then I remembered that my own UK DTA (and, probably, others) includes a 'non-discrimination' clause - Article 24 - that UK citizens tax-resident in Thailand cannot be treated differently to Thais, if I understand it correctly.

[smedly]

the excuse for introducing these new tax rules last year was primarily to tax foreign income earned by Thais - now they are exempt!!!, are they having a laugh

[redwood1]

But But But........ We have spent years arguing in circles on all the countless and pointless tax threads......Now what are we going to argue about? I feel Cheated...

[Bangkok Alex]

It will pressure Thais to rapatriate their money within the next 2 years. I think it is a smart move.

 

The fact that it remains unclear about foreigners sucks obviously and I hope they will extend the same courtesy to us.

[jayboy]

Thailand’s personal income tax system is based on residency, not nationality, as outlined in Section 41 of the Revenue Code. A tax resident—defined as anyone, Thai or foreign, residing in Thailand for 180 days or more in a tax year—is subject to the same tax rules on assessable income.

[stevenl]

48 minutes ago, JoePai said:

Thais are set to enjoy a tax-free advantage on foreign income

 

Why only say 'Thai' - does that mean the rest of us do have to pay ?

For those residing in Thailand for 180 days or more in a tax year, the Resident Rule applies, making them liable for income tax on international earnings. ThThis upcoming legislation aims to refine these rules, providing much-needed tax relief for many.

[tomkenet]

Yes, probably no discrimination on nationality.

Also, not an one off. 

This exemption would be effective as of Jan 1, 2025, and be valid through Dec 31, 2029.
https://www.bangkokpost.com

[Presnock]

54 minutes ago, JoePai said:

Thais are set to enjoy a tax-free advantage on foreign income

 

Why only say 'Thai' - does that mean the rest of us do have to pay ?

Yeah, reading the text as usual seems to have different variations of meanings.  It says no taxes on foreign earned income for Thais then says for those stayin 180 days taxed on all income earned.  Just like all the other notices from the revenue dept, who really knows what the final outcome will be nor when it might appear.  My opinion anyways after reading so many of these notices of a possible tax change.

[redwood1]

5 minutes ago, stevenl said:

For those residing in Thailand for 180 days or more in a tax year, the Resident Rule applies, making them liable for income tax on international earnings. ThThis upcoming legislation aims to refine these rules, providing much-needed tax relief for many.

 

Relief from what? 

Most Thais have never paid so much as one baht in taxes in their life......And the very very rich are no slackers when it comes to avoiding paying any taxes....  

[NorthernRyland]

58 minutes ago, JoePai said:

Thais are set to enjoy a tax-free advantage on foreign income

 

Why only say 'Thai' - does that mean the rest of us do have to pay ?

You must have been living under a rock, you're Farang so of course you need to pay.

[connda]

1 hour ago, JoePai said:

Thais are set to enjoy a tax-free advantage on foreign income

 

Why only say 'Thai' - does that mean the rest of us do have to pay ?

You're nothing but dog-meat farangs.  Suck it up. 

[Schoggibueb]

The most important scentence in the Bangkok Post article:

"The details are still being discussed within the Finance Ministry."

 

So, no difference until now, since 1.Jan. 2024 same same...
 

[TheAppletons]

45 minutes ago, jayboy said:

Thailand’s personal income tax system is based on residency, not nationality, as outlined in Section 41 of the Revenue Code. A tax resident—defined as anyone, Thai or foreign, residing in Thailand for 180 days or more in a tax year—is subject to the same tax rules on assessable income.

 

  This is the correct answer. ^^

[lordgrinz]

1 hour ago, smedly said:

the excuse for introducing these new tax rules last year was primarily to tax foreign income earned by Thais - now they are exempt!!!, are they having a laugh

 

It's a better way of saying, the Jan 1st 2024 change was just a misunderstanding, without actually losing face. But I see the Director General of the Revenue Department who is "fast-tracking" this new legislation, is not the same tart that brought the last change, she's been replaced, I assume she stepped on the wrong toes.