This article outlines key updates from Thailand’s Revenue Department Order No. P.162/2023, issued on November 20, 2023, clarifying tax regulations for expatriates effective from January 1, 2024. It highlights the relief provided to expatriates, stating that foreign-sourced income earned before January 1, 2024, won’t be subject to new tax rules, even if remitted to Thailand afterwards. The piece underscores the importance of preparation for future tax liabilities and advises expatriates to stay informed and consult experts for adapting to these upcoming tax changes in Thailand.
TL;DR Key Takeaways on the latest Expat Tax Clarification from the Revenue Department
- New Tax Regulation Update:
Thailand’s Revenue Department issued Order No. P.162/2023, clarifying the tax regulations for expatriates effective from January 1, 2024. - Clarification on Foreign-Sourced Income:
The update specifies that foreign-sourced income earned before January 1, 2024, will not be subject to the new tax rules, even if remitted to Thailand after this date. - Relief for Expatriates:
This clarification provides temporary relief and reduces concerns about retrospective taxation on previously earned income. - Importance of Preparation:
Despite this relief, expatriates must still prepare for future tax liabilities on foreign-sourced income remitted to Thailand from 2024 onwards. - Advisory for Expats:
Expatriates are advised to stay informed, consult experts, and review their financial plans to adapt to the upcoming changes in Thailand’s tax regulations.
Thailand Expat Tax Concerns Addressed
The September 15 announcement had caused considerable concern among the expatriate community. It implied that all overseas income remitted to Thailand would be taxable from 2024, irrespective of when it was earned. This created anxiety over potential retrospective taxation and increased financial burdens.
Revenue Department Order No. P.162/2023 regarding Expat Tax
Issued 20 November, 2023
TRANSLATION
Revenue Department order No. P.162/2023
Subject: Payment of income tax under Section 41, paragraph two of the Revenue Code.
In order for revenue officials to consider this as a practice guideline for inspecting and giving advice to those residing in Thailand which has assessable income according to Section 40 of the Revenue Code. In the past tax year Due to work duties or business conducted abroad or because of assets located abroad according to section 41, paragraph two of the Revenue Code The Revenue Department has ordered the following:
Add the following as the second paragraph of Section 1 of the Revenue Department Order No. P.161/2023 regarding: Payment of income tax according to Section 41, paragraph two of the Revenue Code, dated 15 September 2023.
“The provisions of paragraph one shall not apply to assessable income arising before 1 January 2024.”
Ordered on 20 November 2023
Kunlaya Tantitemit
(Miss Kulaya Tantitemit)
Director General of the Comptroller General’s Department acting government official
Director General of the Revenue Department
Clarification Offered by Revenue Department Order No. P.162/2023
The November 20th order, however, has provided much-needed clarification and relief. It explicitly states that the provisions of the earlier order (DI Paw.161) will not apply to foreign-sourced income earned before January 1, 2024. Any income generated abroad before this date will not be subject to the new tax rules, even if brought into Thailand after January 1, 2024.
Tax Significance for Expatriates in Thailand
This clarification is significant for expatriates in several ways:
- Temporary Relief: It offers a temporary reprieve from the immediate expansion of tax liabilities.
- Clearer Financial Planning: Expatriates now have a clearer understanding of their tax obligations, aiding in more effective financial planning.
- Reduced Retrospective Taxation Concerns: Anxiety surrounding retrospective taxation on previously earned income is mitigated.
Preparing for the Future
Despite this relief, the broader framework of the new tax regulation remains unchanged. From January 2024, expatriates will still need to account for all foreign-sourced income remitted to Thailand. Therefore, preparation and adaptation remain key:
- Keep Informed: Stay updated on any further developments or clarifications in Thai tax law. To sign up for our expat tax alerts click here.
- Consult Experts: Seek advice to understand and navigate these changes effectively.
- Financial Review: Review and restructure financial arrangements to comply and get the best outcomes with the forthcoming tax regulations.
Get Organised to Stay Ahead
Revenue Department Order No. P.162/2023 marks a significant update in Thailand’s evolving tax landscape for expatriates. While it offers some relief concerning income earned before 2024, it’s a reminder of the impending changes. This period is an opportunity for expatriates to prepare, seek professional guidance, and align with the new realities, ensuring a smooth transition into Thailand’s new tax era
Learn how to navigate the Thai tax system with our step-by-step guide.
