Thailand is set to reinforce its tax regulations concerning overseas income, a decisive move by the new government not only to bridge the income inequality gap but also to raise revenues, paving the way for robust economic stimulation measures.
Last week, the financial department rolled out more rigid regulations concerning income from abroad, as informed by Prime Minister Srettha Thavisin during a business forum on Monday.
The revised regulation is scheduled to take effect on January 1, 2024, empowering authorities to tax the foreign earnings of individuals.
This applies if they have resided in Thailand for at least 180 days in the specified assessment year, as stated in the notification from the Thai Revenue Department.
“Some people may not be happy that I am digging in to this area, but inequality is a big issue”, stated Mr. Srettha, highlighting the escalating disparity in wealth due to existing tax gaps. “The principle of tax is that you must pay tax on income you earn no matter how you earn it”.
To fund its economic revival strategies, the newly formed coalition government, led by the Pheu Thai Party, necessitates additional revenues.
A significant action undertaken by his administration is the planned distribution of a 560 billion baht monetary assistance to approximately 55 million Thai adults in the early part of the upcoming year, a move anticipated to boost domestic spending.
As reported by Krungthep Turakij newspaper on September 15, the Revenue Department revealed that individuals residing locally and acquiring income internationally will be liable to personal income tax, disregarding the fiscal year the earnings were accumulated.
Under the prior regulation, residents earning income abroad were taxed solely if the funds were transferred to Thailand within the same year of earning.
The revised, stricter provision aims to eliminate the loophole that permitted individuals to delay the repatriation of their foreign earnings to a subsequent year.
