Thailand to bring foreign-source income within scope of personal income tax

Thailand’s Revenue Department issued Order No. Por.161/2023 on 15 September 2023, which introduced important amendments to the taxation of foreign income, specifically targeting individuals with assessable income from work duties or activities abroad or from assets located abroad. It will come into effect on 1 January 2024.

Previously, foreign income was only subject to personal income tax in Thailand if two conditions were satisfied: the individual resided in Thailand for 180 days or more in any given tax year and the foreign income was remitted into Thailand within that same tax year. Consequently, if a tax resident individual deferred the remittance of foreign income into Thailand to the following year, then that foreign income would effectively be exempt from personal income tax.

The new Revenue Department Order amends Section 41, paragraph two of the Revenue Code such that income from work or business carried on outside Thailand or income from property situated outside Thailand that is remitted to Thailand by tax resident individuals will be subject to Thai personal income tax, regardless of whether the income is brought into Thailand in the same calendar year of receipt or in subsequent years.

The New Order will apply to any taxable income that is brought into Thailand from 1 January 2024 onward. Any regulation, instruction, revenue ruling or practice that is contrary to or inconsistent with the new Order will be repealed.