How do foreigners living in Thailand pay taxes?
According to Section 41 of the Revenue Code.
Income Subject to Taxation
Income from Thai sources:
All income derived from sources within Thailand, such as salaries, business income, or profits from assets located in the country, is subject to taxation.
This rule applies regardless of where the income is paid — within Thailand or abroad. For example, if a foreigner works in Thailand or owns rental property, these earnings must be included in the tax base.
Income from foreign sources:
- Income derived from outside Thailand is taxable if two conditions are met simultaneously:
- This income was earned on or after January 1, 2024, and the foreigner stayed in Thailand for 180 or more days in the calendar year.
The income was transferred to Thailand fully or partially. Even if the transfer occurred in subsequent tax years, such income is subject to taxation.
Income Not Subject to Taxation in Thailand
Income earned before 2024:
Income from foreign sources earned before January 1, 2024, but transferred to Thailand in later years, is not subject to taxation.
This rule eliminates retrospective taxation of such income.
Income of non-residents:
If a foreigner is not a tax resident of Thailand, their income from foreign sources, even if transferred to the country, is not taxable.
This applies to cases where the foreigner spends less than 180 days in Thailand in a year.
These provisions create a clear distinction between the tax obligations of residents and non-residents, which is especially important for those planning a short-term stay in the country.
Filing a Tax Return
Foreigners required to file a tax return in Thailand must use forms P.N.D. 90 or P.N.D. 91.
Tax obligations include:
- Total income earned from Thai sources during the tax year.
Income from foreign sources transferred to Thailand during the current tax year. - If foreign income is partially transferred, the taxable base is apportioned according to the amount transferred. This simplifies tax calculations and helps avoid double taxation under the Double Taxation Agreement (DTA).
Foreign Tax Credit
Under Double Taxation Agreements, taxes paid abroad can be credited against Thai taxes.
This prevents double taxation of the same income; however, evidence of tax payments, such as a certificate from a foreign tax authority, must be provided.
Conditions for claiming tax credit:
Documents must be in English or Thai.
The credited amount cannot exceed the tax assessed on the corresponding income in Thailand.
For foreigners living and working in Thailand, it is essential to closely follow changes in tax legislation and plan the transfer of foreign income carefully to minimize tax obligations.