Who is required to pay tax in Thailand? 

According to Section 41 of the Revenue Code, there are two types of income subject to taxation in Thailand: the Source Rule and the Resident Rule. 

Thai-sourced income 

If an individual generates income from sources within Thailand (e.g., employment, activities carried out in Thailand, business operations, or property located in Thailand), such income is subject to income tax, whether it is paid within or outside of Thailand. 

Foreign-sourced income 

Foreign-sourced income is subject to tax in Thailand if the individual meets both of the following conditions: 

• The individual resides in Thailand for 180 days or more during any tax calendar year (starting from January 1, 2024). 

• The income earned abroad has been remitted (fully or partially) to Thailand, even if the remittance occurs in a later tax year. 

What has changed as of January 1, 2024? 

Before January 1, 2024, if individuals brought income into Thailand in the same year it was earned, it was subject to income tax by the Revenue Department. However, if the income was brought into Thailand after the year it was earned, no tax liability applied. 

From January 1, 2024, onwards, income remitted to Thailand is subject to income tax at progressive rates ranging from 5% to 35%, regardless of when it was earned. 

Foreign-sourced income not subject to tax includes: 

• Income earned abroad before January 1, 2024, that is brought into Thailand in a later tax year. 

• Income earned abroad by a foreigner who is not a Thai tax resident (i.e., staying in Thailand for less than 180 days during the tax calendar year) even if such income is brought into Thailand. 

Do foreigners need to pay double tax? 

Income tax paid abroad can be credited against Thai taxes if permitted under a Double Tax Agreement (DTA). 

If a foreigner who is a resident of Thailand pays tax on income earned abroad, the tax paid can be credited against the ax payable in Thailand. However, the credit amount cannot exceed the amount of Thai tax liability on the foreign-sourced income. 

Important notes: 

• Documentation and evidence may be required to prove the sources of income and to claim a foreign tax credit under the Double Taxation Agreement. 

• All documents must be in English or Thai. 

• To claim a foreign tax credit, it is recommended to provide a Tax Payment Certificate issued by the foreign tax authority. 

GPS Legal is dedicated to providing reliable guidance on a wide range of legal matters. If you have questions about tax compliance in Thailand or need assistance with other legal concerns, please don’t hesitate to contact us. We’re here to help you navigate the legal landscape with confidence.