The Thai Department of Revenue has enacted Departmental Instruction No. Paw 161/2566, which introduces substantial amendments to the taxation of foreign-sourced income for personal income tax purposes, effective from January 1, 2024. 161/2566 was issued to provide interpretation to Section 41 Paragraph 2 of the Thai Revenue Code. This directive mandates that Thai taxpayers, including both citizens and residents, who earn income from employment, business activities, or property outside of Thailand, are required to pay taxes on such income upon repatriation to Thailand.

Under the prior regulations, foreign-source income was taxable only if repatriated to Thailand within the same calendar year it was earned. The new instruction closes this loophole by requiring the declaration and taxation of overseas income regardless of the repatriation timeline, within the tax year it is earned.

This revised taxation rule applies to all Thai taxpayers. This includes:

• Thai nationals;
• Residents who have previously filed taxes in Thailand;
• Foreign nationals residing in Thailand for 180 days or more within a tax year.

For the 2024 tax year, with tax filings due by March 2025, income tax will be applicable under the following conditions:

• Income earned both within and outside of Thailand, including wages, business income, and passive or property income as specified under sections 40 and 41 of the Revenue Code.

The income tax rates for Thai citizens and permanent foreign residents are structured as follows:

• Income up to 150,000 baht is exempt;
• Income over 150,000 baht up to 300,000 baht is taxed at 5%;
• Income over 300,000 baht up to 500,000 baht is taxed at 10%;
• Income over 500,000 baht up to 750,000 baht is taxed at 15%;
• Income over 750,000 baht up to 1 million baht is taxed at 20%;
• Income over 1 million baht up to 2 million baht is taxed at 25%;
• Income over 2 million baht up to 5 million baht is taxed at 30%;
• Income above 5 million baht is taxed at 35%.

Instruction No. P 161/2566 signifies a pivotal shift in Thailand’s approach to taxing foreign-sourced income, aimed at creating a more equitable tax environment for individuals earning from both domestic and international sources. This is particularly relevant for foreign investors and expatriates residing in Thailand.

Yours sincerely,

The editorial team at Invest Bangkok Property