The interpretation of Section 41 Paragraph 2 of the Thai Revenue Code underwent a significant shift with the new law issued on September 15, 2023. Previously, Thai tax residents were taxed only on their foreign-sourced income if it was brought into Thailand within the same tax year. This interpretation meant that income from employment, overseas business activities, or property situated abroad was exempt from Thai personal income tax if not remitted into Thailand in the same tax year. However, the new law marks a departure from this previous stance. Starting from January 1, 2024, foreign-sourced income brought by Thai residents into Thailand will be subject to Thai personal income tax irrespective of when it was brought into Thailand. So, who are by definition the Thai tax residents to whom the new law is to be applied?
An individual is considered a resident of Thailand if they spend a total of 180 days or more in Thailand during any tax year.
Please note that if the abovementioned foreign-sourced income is taxed in the country of origin, the foreign tax paid in that country can be applied as a tax credit against personal income tax obligations in Thailand, in accordance with the regulations specified in relevant double taxation agreements between Thailand and such foreign country.
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