Navigating tax laws can be challenging for many expats and foreign residents in Thailand. Recent changes to Thailand tax residency rules were announced in September 2023 and came into effect on 1st January 2024. These rule changes significantly impact expats and other foreigners staying in Thailand for extended periods.
This guide aims to clarify these new Thailand tax residency rules and provide practical guidance for managing your tax obligations effectively.
Are You a Thai Tax Resident?
If you stay in Thailand for 180 days or more within a tax year, you are considered a Thai tax resident. The tax year follows the calendar year in Thailand. When counting days, include any part of a day you are in the country.
This status subjects you to personal income tax on all assessable foreign income brought into Thailand. Our ‘Guide to Understanding Assessable Foreign-Sourced Income in Thailand’ explains in more detail what income sources are taxable when transferred into Thailand.
Listen to our podcast: Defining Tax Residency: What Expats in Thailand Need to Know
The Obligations of a Thai Tax Resident
As a Thai tax resident, you must file a tax return if your annual income exceeds THB 120,000 as an individual or THB 220,000 as a married couple. This filing requirement applies even if you do not owe any taxes. Tax returns must be filed within three months of the year-end.
How Does This Affect You?
With the new definition of tax residency, it’s crucial to understand your tax obligations. Frequent travellers or those with extended stays in Thailand might need to adjust their financial planning.
Here are some key steps to consider:
- Assess Your Tax Residency Status: Calculate the days you’ve stayed in Thailand during the current tax year. If it exceeds 180 days, you are considered a tax resident, regardless of your visa status, and subject to Thai personal income tax.
- Review Your Income Sources: Keep a detailed record of all foreign funds transferred into Thailand. Determine if these funds are taxable to understand your tax liability.
- Assess Applicable Double Tax Agreements: Thailand has 61 Double Tax Agreements (DTAs) that prevent double taxation on the same income. Many expats can claim relief through these treaties, so examining how they affect your personal situation is important.
- Obtain a Thailand Tax Identification Number (TIN): To file taxes, you must obtain a TIN from your local Revenue Department. For more information on TINs and if you need assistance, Expat Tax Thailand offers a TIN application service.
- Consult a Tax Professional: Given the complexities of tax laws, especially regarding foreign income, seek personalised advice. Our team at Expat Tax Thailand is equipped to guide you through these changes and help minimise your tax burden.
How to Optimise Tax Outcomes
If you have Thailand tax residency, managing your tax obligations in Thailand can be straightforward with the right strategies.
Here are a few tips to consider help reduce your tax liability before filing a Thailand tax return:
- Explore Global Tax-Efficient Strategies: How you structure your global assets can make a significant difference your overall tax burden.
- Leverage Deductions and Exemptions: Depending on your visa type, profession, or specific fund transfers, you may be eligible for various deductions or exemptions. Understand which ones apply to you.
- Check for Double Taxation Agreements: Explore and understand any DTAs that affect your individaul circumstances.
Long-Term Resident (LTR) Visa Exemption
Thailand’s Long-Term Resident (LTR) Visa exempts some holders from taxation in Thailand by Royal Decree. For more details, please refer to our article, ‘Exploring the Expat Tax Benefits of Thailand’s Long-Term Resident (LTR) Visa’ or watch our webinar, which explains the benefits and criteria for the LTR visa in detail.
Professional Tax Advice
Navigating Thai tax laws can be overwhelming. At Expat Tax Thailand, we are here to help expats understand their tax obligations so they can make informed decisions about how to proceed. If you have further questions or need further support, book a free consultation with our support team – we’re here to help.
