Revenue Department instructions No. Paw 161 and Paw 162 state that a tax resident of Thailand who derives assessable income from an employment or business carried on abroad, or from a property situated abroad, shall be required to include such income in their personal income tax return for the payment of tax in the year that the income is brought into Thailand. The instructions were issued by the Revenue Department as guidelines to revenue officers when conducting tax audits or advising taxpayers on the taxation of foreign income under the Revenue Code. The law remains unchanged. Prior to the Revenue Department issuing these two instructions, the law had been interpreted as limiting the taxation of foreign income to income that is derived and remitted into Thailand in the same tax year. Foreign income earned in 2023 or prior years that is brought into Thailand after December 31 2023 will not be subject to tax.
Starting this year, Thailand’s Revenue Department has revised its approach to taxing foreign income received by tax residents. Paul Ashburn of HLB Thailand summarises the changes Historically, if a person was a tax resident of Thailand and they received income from offshore, they could avoid paying Thai tax on such income by receiving the income offshore and deferring any remittance into Thailand until the new year. To address the disparity in the taxation of income from sources outside the country compared with income earned within the country, the Thai Revenue Department issued instructions to revise the tax treatment of foreign income remitted into the country by individual taxpayers, effective from January 1 2024.
By Paul Ashburn
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