Offshore Income Taxable in Thailand
From 1 January 2024 onwards, a taxpayer who has offshore income from employment, from a business abroad or from a property situated abroad must pay tax in Thailand regardless of whether such income is remitted into Thailand within the same tax (calendar) year in which the income is derived..
The Revenue Departmental Instruction No. Paw 161/2566 (“Paw 161/2566”) regarding assessable income under Section 41 paragraph 2 of the Thailand Revenue Code (“TRC”) was published on 15 September 2023. The new practice changes the method of collecting personal income tax on the foreign sourced income remitted into Thailand from a resident of Thailand.
In general (prior to Paw 161/2566), according to the residence rule, a Thai tax resident (any person staying in Thailand for a period or periods totaling 180 days or more in any tax calendar year) who has offshore income from employment, a business or property situated abroad will only be taxed when bringing the foreign income into Thailand within the same tax (calendar) year in which such income is derived.
However, due to the newly released practice, a taxpayer who is considered as a Thai tax resident shall pay tax for such assessable income regardless of whether such income is remitted into Thailand within the same tax (calendar) year in which the income is derived. Any previous guidelines or rulings contradicting Paw 161/2566 shall be cancelled.
The taxpayer who has paid income tax in the country in which the income arises (source country) may be eligible for tax credits in Thailand subject to the criteria specified in the Double Tax Agreement between Thailand and such country.
For more information, please contact Sasivimol@bakertilly.co.th.