Major changes to income tax for foreigners in thailand, foreign-sourced income came into effect from January 1, 2024. Under the new requirements, Thai tax residents are now required to pay tax on overseas income in the year it is remitted to Thailand, regardless of when it was earned (subject to certain exemptions such as DTA agreements and LTR visa benefits).
In response to concerns over the negative impact of these changes, a new Royal Decree has been proposed that would ease the rules, These developments represent significant shifts in the Thailand income tax for foreigners policy. If the proposal becomes law, it would allow foreign income to once again become tax exempt, provided it is remitted to Thailand within 12 months of the calendar year it was earned.
In this article we will take a look at the details of the proposed Royal Decree and how it will affect tax residents of Thailand.
Key Points
- Current rules state that Thai tax residents should pay personal income tax on all foreign income remitted to Thailand, regardless of when it was originally earned (subject to exemptions such as Double Tax Agreements and LTR visa benefits etc).
- A new Royal Decree proposes that foreign income earned from January 1, 2024 onwards will be tax exempt if remitted to Thailand within 12 months of the calendar year it was earned.
- Any foreign income earned before January 1, 2024 remains exempt from Thai taxation when remitted, regardless of timing.
- Thai tax residents can still be exempt from taxation or eligible for deductions through Double Tax Treaties, Long Term Residency (LTR) visa benefits, or by keeping income abroad.
What is The Current Understanding of the Taxation of Foreign Income Remitted to Thailand?
On January 1st, 2024, Departmental Instruction No. Por. 161/2566 came into effect, fundamentally changing the Thailand income tax for foreigners who earn income from foreign sources.
Under this new interpretation, Thai tax residents must now include such income when calculating their annual assessable income for the calendar year in which the overseas income is remitted into Thailand.
This means that Thai tax residents are required to fulfill their Thai personal income tax obligations on overseas income, even if it is remitted in a different calendar year from when it was originally earned.
This is a significant change from the previous rules, where income remitted to Thailand in the following calendar year it was earned was exempt from Personal Income Tax.
How does the Proposed Royal Decree Affect the Taxation of Foreign Income Remitted to Thailand?
Following a significant drop in tax revenue for 2024 and 2025 so far, the Thai tax authorities have announced a new Royal Decree to try and address this. The Revenue Department has acknowledged that the stricter tax rules introduced in 2024 may have had a significant negative effect on Thai and foreign residents, causing them to stop remitting overseas income into Thailand due to the increased tax exposure.
The Revenue Department hopes this new proposed Royal Decree will restore investor confidence and encourage economic activity through more flexible tax treatment.
The proposed Royal Decree introduces another significant shift in how foreign income is taxed when brought into Thailand. Under the new framework, Thai tax residents, individuals who stay in Thailand for 180 days or more in a calendar year, may benefit from a tax exemption on foreign income, provided certain conditions are met.
This Decree will apply to any income earned overseas and remitted to Thailand within 12 months of the calendar year it was generated and will be exempt from Thai personal income tax.
For example, if you earn foreign income in 2025 and transfer it into Thailand before the end of 2026, that income would not be taxed under the new rule. However, if the remittance occurs after this 12 month period, it will be subject to the usual tax requirements.
It’s important to note that this exemption applies only to income earned on or after January 1, 2024. Any foreign income earned before this date and remitted to Thailand afterward will still follow the previous rules, meaning it remains non-taxable, even if brought in after the year it was earned.
Please note, the information above is just a proposal and is not law yet. The information contained may change or even be cancelled. If there are any updates or changes we will amend this article accordingly.
What is the Difference Between the Current Rules and the Proposed Changes for Foreign Income?
Under the current rules, Thai tax residents must pay personal income tax on any overseas income earned from January 1st 2024 onwards, in the year it is remitted (subject to exemptions such as Double Tax Agreements and Long Term Residency Visa benefits).
The proposed decree will introduce a 12 month remittance period. This means that if foreign income earned on or after January 1, 2024 is brought into Thailand within 12 months of the calendar year it was earned, it will be exempt from Personal Income Tax.
However, if any income is remitted after the 12 calendar month period, it will remain taxable (subject to relevant exemptions).
| Criteria | Current Rules | Proposed Royal Decree |
| Who do the rules apply to? | Thai tax residents (individuals who stay in Thailand more than 180 days in a calendar year) | Thai tax residents (individuals who stay in Thailand more than 180 days in a calendar year) |
| Type of income | Foreign sourced income remitted to Thailand | Foreign sourced income remitted to Thailand |
| Tax trigger date | Tax is due in the year the income is remitted | Income is exempt from tax if remitted within 12 months of the calendar year it was earned |
| Example: Income earned in 2025, remitted in 2026 | Taxable in 2026 | Not taxable as it is within the 12 month window |
| Example: Income earned in 2025, remitted in 2027 | Taxable in 2027 | Taxable as it is outside the permitted 12 month window |
| Income earned before Jan 1, 2024 | Foreign sourced income earned before December 31st 2023 is not taxable. | Foreign sourced income earned before December 31st 2023 is not taxable. |
What Tax Exemptions are Available to Thai Tax Residents?
While the proposed decree offers some protection for Thai tax residents to remit their foreign sourced income into Thailand, it is limited to just one calendar year from when the income was earned.
While it may seem that under the new Royal Decree, this income will automatically become subject to personal income tax once the one year period has passed. However, this is not necessarily the case, as certain exemptions may still apply.
Some possible tax exemptions available for tax residents of Thailand include:
Double Tax Treaties:
Thailand has entered into tax treaties with 61 countries to prevent the income from being taxed twice, once in the country where it is earned, and again in Thailand when remitted.
Under these treaties, foreign income may be exempt from Thai personal income tax if it has already been taxed in the source country and the treaty provides protection against double taxation.
For example, a Thai tax resident who earns income in a country with a double tax treaty with Thailand and pays tax on that income in that country may be eligible for a tax credit or exemption in Thailand.
It’s important to note that claiming protection under a Double Tax Treaty will require proper documentation to support the claim. For example, a Certificate of Tax Paid from a foreign country.
Long Term Residency (LTR) Visa holders:
Individuals holding an LTR visa in any of the following categories: Wealthy Global Citizen, Wealthy Pensioner, and Work From Thailand Professional, are eligible for an exemption from Thai personal income tax on overseas income remitted to Thailand.
Keeping the income abroad:
The simplest option is to keep the income earned overseas outside of Thailand. By not sending the income to Thailand, the investor would avoid any income tax obligations in Thailand.
However, this may pose a challenge for tax residents of Thailand who rely on this income, for example foreigners who do not work in Thailand but wish to remit passive income to cover their living expenses.
Our Thoughts
Our Thoughts
For those with unrealized foreign income, the proposed Royal Decree will be welcome news. It offers flexibility for tax residents of Thailand who wish to remit overseas income to Thailand without facing immediate tax liabilities, provided the remittance occurs within the 12-month period.
However, this 12-month timeframe may still be restrictive for many individuals, especially those whose income is locked into longer-term financial plans or investment cycles.
For those who this isn’t possible, leveraging Double Tax Treaties where possible becomes important for international tax planning, offering relief by crediting taxes paid abroad. Long-Term Residency visa holders enjoy exemptions, and our advisory services provide tailored solutions, helping clients through these changes with expertise in strategic income management and comprehensive support.
Looking for an Accounting firm in thailand? contact us for a consultation with one of our tax experts on navigating the new foreign income tax regulations in Thailand.
Our experts will monitor the situation closely and keep you up to date with any developments as and when they happen.
Disclaimer
This information is provided for general informational purposes only and is not legal, tax, or financial advice.
