If you are considering moving to Thailand, beaware of the Thai Tax Laws.
An indepth review of sources of information that outline the tax rules for Digital Nomads or foreigners that with to reside in Thailand.
I’m an accountant but not a tax expert with Thai laws. However, I do know what you need to look out for, and am experienced with understanding the cultural aspects of business in South East Asia.
I’ve attempted to collate all the sources of information that I have found on the internet, reference the actual Thailand Revenue Code, then talk about what Thai Tax Accountants informally advise.
Are you are resident or non tax resident?
It’s important to know whether you are a resident or a non tax resident of Thailand. Different tax rules apply, whether you are a resident or not.
Once you have determined your tax residency, you then need to apply the tax rules for your status.
As a tax resident you may have different tax implications than someone who is a non-tax resident.
Therefore, it’s vital to understand whether you are a tax resident or not.
Source 1: The Thailand Life
“The law stipulates that anyone who resides in Thailand for longer than 180 days is considered a resident. Once you stay the 180 days, the law requires you to declare money brought into the country if it was earned within the current tax year.”
According to this blog, if you stay in Thailand for more than 180 days, you will be regarded as a Thai Tax Resident.
It mentions that you must declare any monies if it is earned AND brought into the country in the current tax year. It’s unclear as to what “earned” means, and nor does it explain what is the “current tax year”.
It is important to understand what does earned mean or what does income mean according to Thai tax laws.
It’s also important to know that the Thai Tax Year is from 1 January to 31 December. Some countries have tax years that do not coincide with calendar years.
Source 2: Thailand Taxable Income
“Residents of Thailand are subject to tax on their worldwide income, regardless of where it is earned. This means that if you are a resident of Thailand, you must pay tax on any income you earn both in Thailand and abroad.
On the other hand, non-residents of Thailand are only subject to tax on income earned within Thailand.”
- This source, reaffirms that tax residents of Thailand are to pay tax on worldwide income, but it doesn’t mention whether monies are brought into the country or not.
- This source also reaffirms the scope of taxable income for non-residents of Thailand.
Source 3: Digital Nomad in Thailand
“Whereas for residents, the law requires them to pay tax for income earned from sources in Thailand AND the portion of income from foreign sources that they bring into Thailand.”
This source is perhaps the most vague for Thai Tax residents. However it incorrectly mentions that the portion of income from foreign sources that is brought into Thailand is taxable. This is not correct, if the income earned is brought into the country in the following tax year.
Source 4: PWC Tax Summaries
“Thailand taxes its residents and non-residents on their assessable income derived from employment or business carried on in Thailand, regardless of whether paid in or outside Thailand. Residents who derive income from abroad are taxable on that income if remitted into Thailand in the year in which it is received.”
PWC is one of the largest Accounting and Consulting firms in the world. (However, they have been caught for corrupt conductin in Australia in 2023).
This source explains a little bit more of what is “income”. Here income is monies earned from employment or business that is carried in Thailand. What does carry business mean? It’s unclear.
In addition, it also says for tax residents, their income from abroad is taxable if the money is brought into the country in the same year in which it was received. It’s not clear what “same year” actually means.
Source 5: Tilleke Thailand Tax Guide
“Under the Revenue Code, an individual, Thai or foreign, who derives assessable income from sources in Thailand is liable to pay personal income tax whether or not such income is paid within or outside Thailand.
A person (Thai or foreign) who resides in Thailand at one or more times for an aggregate period of 180 days or more in any tax (calendar) year will be regarded as a resident of Thailand for tax purposes. A resident of Thailand is liable for personal income tax on income from sources inside Thailand and on assessable income derived from sources outside Thailand.
However, the imposition of tax on income derived outside Thailand will apply only to income derived and brought into Thailand in the same year in which such income is earned.”
This source is more accurate than others in that it references the Revenue Code. Without being critical of other source, the only way to be sure of Thai Tax laws is to refer to the actual wording of the law.
In this case, you can clearly see for tax residents that income is only tax for abroad sourced if it is brought into the country in the same year that it was earned.
Source 6: Thailand Tax Law Online – Revenue Code
“Under section 41 of the Revenue Code an individual Thai citizen or foreigner who lives in Thailand for one or more periods totaling at least 180 days in any tax (calendar) year is, for tax purposes, deemed a resident of Thailand and subject to tax on all assessable income derived from sources within the country, whether paid within or outside Thailand, and on assessable income derived from foreign sources to the extent that it is brought into Thailand in a year in which income is received.
A non-resident individual is subject to tax only on assessable income from Thai sources, regardless of payment location.”
“Section 41 A taxpayer who in the previous tax year derived assessable income under Section 40 from an employment or from business carried on in Thailand, or from business of an employer residing in Thailand or from a property situated in Thailand shall pay tax in accordance with the provisions of this Part, whether such income is paid within or outside Thailand.
“A resident of Thailand who in the previous tax year derived assessable income under Section 40 from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax in accordance with the provisions of this Part.”
“Any person staying in Thailand for a period or periods aggregating 180 days or more in any tax year shall be deemed a resident of Thailand.”
The Thailand Revenue Code is quite vague and leaves a lot open to interpretation.
However it’s clear that:
- If you say for more than 180 days in aggregate Thailand, you will be considered a tax resident according to their laws.
- If you are a tax resident, income that is brought into the country from abroad will be assessable if it is within the “same year”.
- Any income derived within Thailand is taxable, whether you are a tax or non tax resident.
What does Year mean in the Thailand Revenue Code?
The word on the street, is that “year” means the tax year from 1 Jan to 31 Dec. I have tried to personally find this reference in the Thai Revenue Code, but can’t find it. Hence, I have to rely of the experience of Thai Tax accountants to interpret Year.
How do you know what is acceptable or not acceptable in Thailand Tax?
Thailand is a developing country and does not have clear black and white tax laws, unlike many developed countries. It is “open” to interpretation, however there is an application of common sense. That is, in any developing country, if it doesn’t make sense, then it won’t be allowed. Irrespective of how well you argue your case.
Will I have to declare if I only bring in $100USD?
Technically you do if you are a tax resident and have earned that money from being employed or conducting business. Will you get caught and black listed from the country forever? The odds are similar to winning Powerball. No.
In many countries, there is a materiality threshold or a reasonability check that they are applying. Logistically there aren’t many countries that can spend the time investigating small sums of money.
I’m not a Thai Tax expert. Please use the above information as a one stop shop for what is on the internet regarding tax laws for Digital Nomads and Foreigners. Seek professional and qualified advice, if you need assurance of your tax obligations.