There has been much speculation about a recent proposal by the Ministry of Finance to tighten-up collection of tax on foreign earned income remitted to Thailand. The new rules are due to come into effect from 1st January 2024, but, at the time of writing, full details of the legislation have yet to be finalised by government.

It is important to note from the outset, that the proposals are not especially targeting foreigners resident in Thailand for more than 180 days a year, but more particularly Thai citizens who do not currently pay tax on income earned abroad that is remitted home. 

It is also important to note that the proposals are not entirely new as Paragraph 2 of Section 41 of the Revenue Code currently states that local residents who earn overseas income are subject to personal income tax (PIT). 

However, previously this Thai Revenue Code was interpreted differently in that the assessable income derived by a Thai tax resident from employment, a business carried on overseas, or from a property situated overseas, would have been subject to Thai personal income tax only if taxable income was brought into Thailand in the same tax year. Whereas the new interpretation means that foreign-sourced income brought into Thailand from 1 January 2024 onwards will be subject to Thai personal income tax, regardless of the tax year in which the income was derived.

Non-resident foreigners remitting-in funds to buy property in Thailand are therefore unaffected by these taxation proposals. On the other hand, foreigners who are resident in Thailand, i.e. they spend more than 180 days per year in the country, may be affected and may be required to file annual tax returns if they are not already doing so. In this regard however, it should be borne in mind that Thailand has double taxation agreements with 61 countries, meaning if tax has already been paid on foreign derived income it would not be taxed again on arrival in Thailand.