Sumet Mingmongkolmitr and Warumporn Chaosanguan

On 18 September 2023, the Thai Revenue Department released the Revenue Department’s Order No. Por. 161/2566 regarding payments on the income tax under Section 41 paragraph 2 of the Thai Revenue Code (the “New RD’s Order”).

Under the New RD’s Order, Thai tax residents who derive assessable income from work or activities conducted outside Thailand or derive assessable income from property situated outside Thailand, and bring such income into Thailand in any tax year, shall be required to include such income in the personal income tax calculation for the tax year in which the income is brought into Thailand. The New RD’s Order will be effective on the assessable income that is brought into Thailand from 1 January 2024 onwards. Whilst per the current practice, the taxpayers are not required to include such income in the personal income tax calculation if they bring such income into Thailand in the latter tax year.

The New RD’s Order would affect Thai tax residents (individuals regardless of nationality who aggregately stay in Thailand for not less than 180 days during a given tax year). Under the country’s tax system, Thai tax residents are required to self-declare when it comes to personal tax liability. Consequently, there is ambiguity regarding the practicality and effectiveness of the tax authorities’ tools for tracking and cross-checking the individuals’ assessable income. Some taxpayers have further raised concerns about whether the new policy would place both more tax and administrative burdens on legal taxpayers.

In this regard, the taxpayers who derive assessable income from offshore are recommended to plan and review their tax planning for bringing the income into Thailand. Furthermore, our Firm anticipates foreseen problems in declaring and proving the assessable income brought from offshore under this New RD’s Order.

As the Revenue Department has not yet released further guidelines responding to the above concerns, the Tax and Customs Practice Group at Blumenthal Richter & Sumet will keep track of developments in connection to its order regarding offshore income tax for Thai tax residents and inform you accordingly.