Last 18th of September 2023 the Thai Revenue Department announced the order Por 161/2023 which means a substantial regulatory amendment on what was the main policy for tax residents in Thailand till today. This new order will change the income tax under Section 41 paragraph 2 of the Revenue Code.
H&P is a law firm with a well-known area of expertise in Thai Tax Law. In the last few years, our Tax lawyers in Bangkok have been engaged by many private clients and high net worth individuals to prepare opinions on International Tax exposure and Double Taxation Agreements.
The Tax order Por 161/2023 stipulates that” “The person, who has the assessable income from foreign countries or from the properties in foreign countries and bring such income into Thailand, must use that income to calculate for the income tax on the year that the person bring such income to Thailand.”
In our professional opinion, it was a question of time that the Revenue Department announced such a new policy as the international pressure on Thailand has been notable to harmonize the internal policy to international and global tax standards.
According to the regulator, the legal ground behind this order is to avoid the legal loopholes, such as that the income was calculated for Personal Income Tax only when the tax resident bring the income into Thailand within the same tax year.
In the new scenario, foreigners, or Thai nationals, who are tax residents according to the Thai Revenue Code, meaning they have a residence in Thailand at least 180 days in the tax year and bring the income from the foreign countries into Thailand, no matter which tax year, then they will have to pay Personal Income tax on such funds brought into the country. Of course, this should be calculated in accordance with the Double Taxation agreement signed between Thailand and other countries.
In the opinion of our Bangkok Tax Lawyers, this will not affect only the wealthy individuals but also small investors. The new order will be effective on the assessable income that is brought into Thailand from 1 January 2024.
Our Tax Lawyers in Thailand will monitor and follow up the impact of this new policy in 2024 and the implementation will be key as well to see the Thai Revenue Department tools for tracking the individuals’ assessable income.
If you need a legal consultation on Thai Tax Law and Doble Taxation Agreements, please contact our Bangkok law firm at [email protected]
