Thailand to tax all income earned abroad starting next year

Thais earning income abroad and exploiting a well-known tax loophole are about to have their vibe killed by the country’s greatest party pooper: The government. A statement issued by the Revenue Department Friday announced that all money earned by Thai citizens must be taxed as personal income, effective January 1, 2024.  

The document states that under Section 41 of the Revenue Code, people who have assessable income due to work or business activities abroad, or assets located abroad, in a previous tax year and have brought this assessable income into Thailand in any subsequent tax year, are obligated to calculate and pay taxes on the income under Section 48 of the Revenue Code in the tax year the income is brought into the country. That is a lot to wade through but the gist is this: if you earn money abroad and bring it back into Thailand, you pay income tax on it, even if you earned the foreign income in a previous tax year. 

The change announced September 15 is meant to close a loophole in the tax system that allows people to avoid paying income tax on foreign assets and earnings by leaving the income abroad until the next tax year. Thailand’s current tax laws already require foreign income and assets to be taxed as personal income, but only if the income or asset is brought into Thailand during the same tax year it was earned abroad. This created a loophole by which individuals could avoid paying income tax on foreign earnings entirely by simply waiting for the current tax year to end before bringing that money back to Thailand. 

It remains to be seen whether individuals who have already paid taxes on their income in the foreign country would be subject to double taxation on that income in Thailand. Thailand already has many double tax treaties with foreign countries to prevent double taxation, and it is expected that those treaties would continue to be honored under the new system where exemptions or benefits are available. 


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