04-08-2025
Law exempting tax on foreign income in the offing
The Revenue Department is expediting the introduction of legislation to exempt Thais from income tax on foreign-sourced earnings within this year.
According to Pinsai Suraswadi, director-general of the department, the new law exempts income tax for Thai individuals who bring foreign-sourced income into Thailand within two years from when the income was earned. The details are still being discussed within the Finance Ministry.
Once the law is promulgated this year, it may be applied retroactively, he said.
Mr Pinsai said Thai individuals collectively have roughly 2 trillion baht in foreign income, and if this money were moved to Thailand it could stimulate the economy.
The tax incentive encourages the repatriation of foreign income, he said.
Many people invest abroad because they expect higher returns than they would earn from domestic investments. However, once they make a profit, they may be reluctant to bring the money back to Thailand due to tax considerations, said Mr Pinsai.
Personal income tax in Thailand is applied on a progressive scale, ranging from 5% to 35%, depending on the level of income.
On June 17, 2025, the cabinet approved the Finance Ministry's proposal to exempt personal income tax on capital gains from the sale of digital assets or cryptocurrency. This exemption would be effective as of Jan 1, 2025, and be valid through Dec 31, 2029.
Mr Pinsai said the proposed crypto tax measure will be another tool to attract foreign funds into the country via the crypto trading market.
The draft ministerial regulation is awaiting publication in the Royal Gazette, after which it will be enforced.
With regard to the taxation of foreign-sourced income, the Revenue Department applies the Resident Rule principle. Under this principle, individuals who reside in Thailand for 180 days or more within a tax year (January to December) are considered tax residents and are subject to income tax on all income, whether earned domestically or abroad.
Before 2024, individuals with foreign income had opportunities for tax planning to reduce their tax liability. The law at that time stipulated that foreign income brought into Thailand in the same year it was earned would be subject to tax. However, if the income was brought in after the year in which it was earned, no tax liability would apply. For example, foreign income earned in 2020 but brought into Thailand in 2021 would not be taxed.
Under the current law on the collection of income tax from foreign-sourced income, effective since 2024, an individual is liable to pay personal income tax on such income regardless of the year it is brought into the country -- whether it be in the year in which it is earned or in any subsequent year.
