Offshore Income Tax Update

Further Guidance for interpretation on Foreign-Sourced Income 

Previously, the Revenue Departmental Instruction No. Paw 161/2566 (“Paw 161”) regarding assessable income under Section 41 paragraph 2 of the Thailand Revenue Code (“TRC”) was published on 15 September 2023.  

Paw 161 changes the method of collecting personal income tax on the offshore income brought into Thailand. That is, any taxpayer who is considered as a Thai tax resident (any person staying in Thailand for a period or periods totaling 180 days or more in any tax year) shall pay tax if he/she brings the foreign-sourced income from 1 January 2024 onwards regardless of the foreign-sourced income is remitted into Thailand within the same tax (calendar) year in which it is derived. 

However, according to Paw 161, it is doubtful whether or not foreign-sourced income earned by Thai tax residents before 1 January 2024 shall be taxable if it is brought into Thailand from 1 January 2024 onwards. In such case, the taxpayer may be required to determine and provide adequate documentation/evidence to prove such income to the tax authorities. 

On 20 November 2023, the Thai Revenue Department issued the Revenue Departmental Instruction No. Paw.162/2566 ("Paw 162") as further guidance for interpretation of Paw 161/2566. This Paw 162 added paragraph 2 of Clause 1 of Paw 161 to clarify that foreign-sourced income earned before 1 January 2024 and remitted into Thailand from 1 January 2024 onwards will not be subject to personal income tax. In other words, the foreign-sourced income earned by Thai tax residents prior to 1 January 2024 will not be required to include the calculation of their Thai personal income tax, even if such income will be remitted into Thailand from 1 January 2024 onwards. 

Note that this tax update contains general information in summary form. Therefore, it is only intended for use as a general guidance and should not be used to determine the issues without obtaining professional advice for your specific areas.