Benefits for expats in Thailand: how to avoid double taxation

Guarantees from Thai tax authorities for expats

The fiscal authorities of the Kingdom of Thailand have assured resident expats that the recently announced rules on taxation of overseas income will not come into effect until January 1, 2024. Any remittances to Thailand will remain tax-free until that date.

Earlier, fears were circulating among expats that the tax office might start retrospective audits of transactions. However, this official statement from the fiscal authorities has reassured the public.

Double taxation risks for expats

In September 2023, the Thai Department of Tax Administration announced its intention to tax foreign income of individuals resident in the Kingdom. This refers to various social security payments, pensions and certain inheritances received from abroad.

As many expats already pay tax on such income in their countries of citizenship, they are concerned about the risk of double taxation. Although there are relevant agreements between Thailand and a number of countries, including the Russian Federation, the interpretation of these documents can vary.

Main targets for Thai tax officials

According to experts, the priority for the Thai fiscal authorities will be citizens of the Kingdom and expats with offshore accounts who engage in financial speculation or own businesses abroad.

To separate such individuals from ordinary pensioners, the authorities will require all to register with the tax office to obtain a personal taxpayer identification number. However, the mere fact of registration does not yet trigger direct tax obligations.

Prospects for expats in Thailand

Many details of the innovations are not yet entirely clear and are unlikely to become clearer by January 1, 2024. It is not a question of enacting a new law, but of clarifying the interpretation of the current policies of Thailand's fiscal authorities.

Most likely, at first, the registration of expats in the tax office will be voluntary. Experts recommend foreigners to be patient and wait for additional clarifications from the government of the Kingdom of Thailand.