From the beginning of 2024, Thailand will introduce a new tax policy that will affect all foreign residents. The main point of this policy is the introduction of an income tax on foreign income. This decision has caught the attention of locals and foreigners alike and has raised many questions about how it will affect Thailand's tax system.

Who is subject to the new tax?

The legislative changes apply not only to Thai citizens but also to foreigners who are holders of residence permits or long-term visas. This means that anyone who resides in Thailand for more than 180 days a year and earns income from work or assets outside the country will be liable to pay income tax.

How things are now

Until the new rules come into effect, the law reads as follows: residents with foreign income are only liable to pay tax if the money is transferred to a Thai bank account and only in the tax year in which the income was earned. Under the new law, those who have deferred the transfer of their foreign income to the next tax year will not be able to avoid paying contributions.

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Purpose of the new policy

Legal believes that these changes are aimed primarily at three target groups:

  • residents who trade on foreign stock markets through brokerage firms abroad,
  • cryptocurrency traders;
  • and Thais who hide foreign income in offshore accounts for more than one calendar year.

The bottom line is that the tax will be levied on income earned outside the country, regardless of when it was earned or the tax period.

When exactly will the changes come into effect?

The authorities will start taxing the foreign income of individuals on January 1, 2024. This gives the tax authorities enough time to prepare for the implementation of the new rules and collect information on residents' income.

Criticism and possible consequences

Despite attempts to improve the tax base, many experts have concerns: they believe that private bankers and financial institutions may find the policy too uncertain and burdensome.

However, it is worth noting that there are double tax treaties between Thailand and some other countries (including Russia, Belarus, Ukraine, and Uzbekistan). This may help reduce tax liability for residents who confirm payment of taxes in their home countries.