Thailand Income Tax for Foreigners in Thailand

Thailand Income Tax for Foreigners

With the new Thai income tax rules going into effect in 2024, there have been many questions surrounding the Thailand income tax for foreigners in Thailand. If you are a foreigner living in Thailand and earn income from either a local or foreign source, it’s important that you understand these regulations and how they affect you to avoid issues with the Thai Revenue Department (TRD).

This page will cover the Thailand income tax for foreigners in Thailand, how to file a tax return, the penalties for noncompliance, and how you can ensure your returns are filed correctly to avoid trouble with the law.

If you operate a business in Thailand, refer to our page on corporate taxes in Thailand.

Important tax terms in Thailand

Before we get started, it’s best to familiarize yourself with some common terms used when discussing Thai taxes of any kind.

• Tax Resident: Anyone who stays in Thailand for more than 180 days cumulative (not consecutive), regardless of nationality or residence status in Thailand.
• Thai Tax Year: The Thai tax year is the same as the calendar year, from January 1st to December 31st.
• Thai Tax Season: This is the time when tax returns must be submitted for the previous tax year. It runs from January to March or July to September for those individuals and businesses that must file twice a year.
• TRD: The Thai Revenue Department, often shortened to just RD.
• Assessable Income: Any earned income that is eligible for taxation such as salary, dividends, or rental property income. Once your total assessable income is calculated, the amount of payable tax you owe will be determined by your net income according to the tax bracket. Income that is not assessable does not contribute to your total and does not affect your tax bracket.
• Foreign-Sourced Income: This is any assessable income that you receive from a source outside Thailand.

Do Foreigners Have to Pay Personal Income Tax in Thailand?

In short, yes, every Thai tax resident must pay personal income taxes on foreign-sourced income that is brought to Thailand. Additionally, anyone who derives income from a Thai source must also pay personal income tax on that income. This is explained in Thailand’s two fundamental income tax principles: the source rule and the residence rule.

The Thai Tax Source Rule

Under the source rule, any person who, in the previous tax year, derived assessable income from Thai sources shall pay income tax. This is regardless of whether such income is paid inside or outside Thailand. Assessable income includes, but is not limited to wages, profits from businesses, rental income, and more.

Note that the source is what matters here. Where the taxpayer lives is not relevant if their income is derived from a Thai source.

For example: In 2024, Mr. A, a resident of Brazil (which does not have a double tax agreement with Thailand), received salaries from working for a company in Thailand remotely. Because he earned assessable income from an employer in Thailand, he is required to pay tax on that income even though he does not live in Thailand, and will need to file a return by March 31, 2025.

Another example: Ms. B, a resident of Brazil, received rents from leasing a condominium she owns in Thailand. As she earned assessable income from property situated in Thailand, she has to pay tax on that income in Thailand.

The Thai Tax Residence Rule

Under the residence rule, any resident of Thailand who, in the previous tax year, derived assessable income from foreign sources shall pay income tax upon bringing such assessable income into Thailand.

The key here is "brought into Thailand." At the moment, only foreign-sourced income that is brought into Thailand can be taxed, even if it is considered assessable. However, the Thai government is, as of 2024, considering drafting new foreign income tax law that would tax the foreign-sourced assessable income of Thai tax residents regardless of whether it is brought into Thailand or not.

For example: In 2024, Mr. C, a tax resident of Thailand, received salaries working remotely from Thailand for a company in Brazil and transferred the money from his Brazilian bank account to his Thai one. Because he had assessable income from work duties abroad and brought it into Thailand, he must pay tax on that income in Thailand and will need to file a return in the 2025 tax season.

Another example: Mrs. D, a tax resident of Thailand, received profits from a company she owns in Mexico, but kept the money overseas in a Mexican bank account. Although she earned assessable income from sources situated abroad, she doesn’t have to pay tax on that income in Thailand because she didn’t bring the income into Thailand.

What is Considered Assessable Income in Thailand?

It can be difficult to determine what kinds of income can be taxed in Thailand and which kinds cannot. When added together, your total assessable income determines your tax bracket and the percentage of this total you must pay. So, to avoid overpaying or underpaying you should familiarize yourself with what to include on your tax returns and what not to.

Assessable income in Thailand is defined by law as including property or any other benefit received that may be computed into a monetary value. This means that, as with most countries, in Thailand your assessable income includes more than just your salary and profits from businesses or investments.

Some examples:

• Mr. E received a car as a prize from a winning lottery ticket in Thailand. A car is property, so its value is added to his assessable income.
• Ms. F is employed by a company in Thailand. In addition to salaries, she is provided with free residence for the duration of her employment. Free accommodation is a benefit that may be computed into a monetary value, which makes it assessable income. The cost of rent she would have paid will be added to her assessable income.

What Kinds of Income in Thailand are Assessable for Income Tax Purposes?

There are 8 general categories that assessable income in Thailand fall under:

1. Income from employment, such as salaries, wages, and pensions.
2. Income from posts or supply of services, such as directors’ fees, commission fees, service fees.
3. Goodwill, copyright, rights of similar nature, and annuities from wills, juridical acts or courts’ decisions.
4. Investment income such as Interests, dividends, gains from amalgamation, acquisition or dissolution of a company or juridical partnership, gains from transfers of shares in companies or holdings in juridical partnership, shares or other benefits of similar nature from possession of token digitals, and gains from transfer of cryptocurrency or digital tokens.
5. Income from lease of property, from breach of hire-purchase contracts, or from breach of installment sale contracts.
6. Income from specified liberal professions, namely law, accounting, medicine, engineering, architecture, and fine arts.
7. Income from a contractor agreement where the contractor has to provide essential materials besides the tools.
8. Income from business, commerce, agriculture, industry, transport or any other activity not specified above.

If you aren’t sure whether your income from a particular source is assessable or not, it is highly recommended to consult with a Thai tax expert. Failure to include assessable income on your tax return could be construed as tax fraud in Thailand, and ignorance will not be an acceptable excuse.

What Are the Thai Income Tax Brackets?

Find your total assessable income for the tax year on the left. You must pay tax equal to a percentage of that total, which is listed in the right column.

Note that your total tax liability will be all of your assessable income minus any deductions. Once your tax liability is calculated, you can reduce this total with any applicable tax credits. There are many tax credits and deductions for foreigners in Thailand, so speak to one of Siam Legal’s tax consultants to discover which ones you qualify for.

An example: Mr. G has a total assessable income in 2024 of 655,000 THB. Normally, he would have to pay 15% (98,250) and file a return by the end of the 2025 tax season in March.

However, he qualifies for 160,000 THB in tax deductions, bringing his total assessable income down to 495,000 THB, which puts him in a lower tax bracket that only requires him to pay 10% (65,500). But then, Mr. G qualifies for 15,500 in Thai tax credits, bringing his total tax liability for 2024 to 50,000 THB.

What Happens if a Foreigner Doesn’t File a Thai Tax Return?

A person who is liable for tax but doesn’t file a tax return or files an inaccurate or false tax return will face civil and perhaps criminal penalties.

Civil Penalties For Tax Offenses in Thailand

If you fail to file a tax return and pay your taxes within the deadline, you will have to pay a surcharge of 1.5% of the tax due per month from the day following said deadline. This surcharge will be imposed until the tax is completely paid, with a fraction of a month counted as one month.

In addition to the surcharge, if you are summoned to appear before Thai tax officials and they find that you haven’t filed a tax return, you will have to pay a fine equal to double the amount of tax due.

If you filed an inaccurate tax return which caused you to pay less tax than what you actually owed, you will have to pay a fine equal to the amount by which you underpaid.

An example: Mr. P filed an inaccurate tax return which resulted in an underpayment of 20,000 THB. Later, the tax authority discovered this error, reassessed his income tax liability, and notified him to make an additional payment. Mr. P did not make the required payment until October of that year, which is 7 months after the March filing deadline. Therefore, he is now responsible for the underpaid amount of 20,000 THB, but he will also be subject to a fine equal to the underpaid amount, which is an additional 20,000 THB. Furthermore, he must pay a late surcharge of 2,100 THB (20,000 x 1.5% x 7 months). As a result, his total tax payment will amount to 42,100 THB (20,000 + 20,000 + 2,100).

Another example: Mrs. Q didn’t file a tax return or pay any income tax. The tax authority discovered this, reassessed her income tax liability, and instructed her to make a tax payment of 30,000 THB. She also does not pay this amount until October. In this case, not only will Mrs. Q be responsible for the unpaid amount of 30,000 THB, but she will also be subject to a fine equal to double the unpaid amount, which is an additional 60,000 THB. Furthermore, she must pay a late surcharge of 3,150 THB (30,000 x 1.5% x 7 months). As a result, she will have to pay a total penalty of 93,150 THB (30,000 + 60,000 + 3,150).

Criminal Penalties For Tax Offenses in Thailand

A person who fails to file a tax return before the March deadline will be subject to a fine of not exceeding 2,000.

If the offender is found to have intentionally provided false information, shown false evidence, or committed fraud of some kind to evade tax or even just attempt to evade tax, criminal charges will be filed. The offender can be subject to imprisonment from 3 months to 7 years, and a penalty of 2,000 THB to 200,000 THB.

If the offender deliberately fails to file a tax return to evade taxation, they will face a fine of up to 200,000 THB, imprisonment of up to 1 year, or both.

How to File an Income Tax Return as a Foreigner in Thailand

Generally, a person is required to file an annual tax return by March 31st for the previous year.

Every Thai tax resident, Thai or foreign, is required to file a tax return, but this does not mean that every Thai tax resident will pay income tax. Thailand’s income tax works on a bracket system, so taxpayers with higher incomes pay higher percentages of that income in tax. To meet the minimum threshold for taxation in Thailand, a taxpayer must earn a minimum income.

For unmarried individuals, they meet the minimum threshold of taxation if they:

1. Have assessable income exceeding 60,000 THB.
2. Have assessable income under Category 1 only that exceeds 120,000 THB.

Or in the case of a married taxpayer, they will meet the minimum threshold if they:

1. Have assessable income exceeding 120,000 THB.
2. Have assessable income under Category 1 only that exceeds 220,000 THB.

Furthermore, if a taxpayer earns assessable income under Category 5, 6, 7, and 8, they are also required to file a mid-year tax return by September 30 of the tax year for income earned during the first half of that tax year. Tax paid at the time of the mid-year filing can be used as credit against the annual tax liability.

Filing a Tax Return as a Foreigner

The simplest way for a foreign taxpayer to file a tax return is online through the TRD’s web portal. It provides services in English, but it can be confusing, especially for complex tax returns with multiple income streams. Users must separate their income streams manually and input the correct totals in each of the categories, as well as delineate which credits and deductions they believe they are owed.

Returns can also be filed in person, but this must be done at the TRD office that has jurisdiction over the taxpayer’s region of residence. However, English services are not guaranteed, and TRD officials will generally not assist in calculating deductions, credits, or owed tax.

Professional Income Tax Return Filing Services for Foreigners in Thailand

It is possible to file a Thai tax return by yourself, but it can be challenging for foreigners because of the complex systems and less-than-ideal English language services. You can try to calculate what tax you owe or which deductions you qualify for, but making a mistake and filing an inaccurate tax return may result in civil and criminal penalties. When it comes to getting their money, the TRD does not often take ignorance as an excuse.

On the other hand, filing alone may cause you to miss tax benefits for which you are eligible, like allowances under Thai law or tax relief from foreign tax treaties. If you miscalculate and pay too much in tax, you won’t be penalized, but don’t expect the TRD to catch your mistake and pay you back.

That’s why it is worth considering the professional filing services for Thailand income tax for foreigners in Thailand from Siam Legal International. We have a full tax consulting team on staff with both Thai and international advisors, so we are well-versed in the local and international tax laws foreigners are bound by.

Our experienced tax team will analyze your financial situation to identify all eligible deductions and credits, maximizing your tax benefits. We will also assist you in obtaining a tax identification number and file your tax return on your behalf correctly and on time. With our assistance, you can be sure that your tax is properly managed and that you are safe from penalties and prosecution for tax fraud.

Contact Siam Legal’s tax team today for a consultation or complete tax return filing services.