Thailand Introduces Tax Exemption for Foreign Earnings as Incentive to Attract Billions in Personal Wealth
Thailand's Revenue Department Advances Proposal to Encourage Repatriation of Overseas Thai Funds Worth Over 2 Trillion Baht
Amidst a predicted revenue shortfall, the Revenue Department is set to revise its regulations, proposing a tax exemption for foreign-earned income to entice Thais to bring back over 2 trillion baht in foreign investments.
The initiative aims to significantly bolster Thailand's domestic market, exempting income returned within two tax years from personal income tax.
The director-general of the Revenue Department, Pinsai Suraswadi, has announced plans to fine-tune regulations governing foreign income entering Thailand.
According to Pinsai, the Revenue Department has identified approximately 2 trillion baht in Thai investments abroad, encompassing real estate, stocks, and other assets generating substantial returns.
The proposed tax exemption would permit foreign income generated from 2024 onwards to be tax-exempted if repatriated within two tax years from its origin. Income brought in after this period would be subject to standard taxation.
Pinsai clarified that the plan would require Cabinet approval and a review by the Council of State before being enacted. Furthermore, he addressed concerns about double taxation, noting that Thailand's tax credit mechanism under agreements with 61 countries allows taxpayers to offset foreign taxes paid against their Thai liability.
Despite surpassing the previous year's revenues, the Revenue Department anticipates a decline in revenue between May and July, with a potential shortfall of over 15 billion baht from year-end corporate income tax filings.
As part of an effort to bolster revenue, the department will conduct proactive audits of businesses not currently in the tax system, focusing on the restaurant, nightlife, cash-based trade, and pharmacy sectors. This practice has not been implemented in over five years.
In addition, the Revenue Department is exploring new tax bases through policy adjustments, administrative improvements, and structural changes. Potential modifications include increasing the Value Added Tax rate, issuing regulations for more efficient tax collection, and drafting new laws for taxes that could boost state revenue.
Given the deficit budget and a target of 2.4 trillion baht for fiscal year 2026, the Revenue Department faces a significant task, with the new year's target representing an increase of over 100 billion baht from the previous year's target.
- TAGS
- Thailand
- Thai Revenue Department (TRD)
- Tax Breaks
- The Thai Revenue Department's proposal for a tax exemption aims to encourage Thais with over 2 trillion baht in foreign investments, earned from stock market, real estate, and other assets, to repatriate their funds and invest back in the Thai economy.
- To enhance the domestic business sector, the TRD plans to exempt foreign-earned income within two tax years from personal income tax, specifically focusing on income generated from 2024 onwards.
- As part of their efforts to stimulate business, the TRD is considering tax policies that can boost revenue, such as adjustments in Value Added Tax (VAT) rates, drafting new taxes, and implementing regulations to improve tax collection in the restaurant, nightlife, cash-based trade, and pharmacy sectors.
- The director-general of the TRD, Pinsai Suraswadi, explained that the tax credit mechanism under agreements with 61 countries would help taxpayers offset foreign taxes paid against their Thai liability, addressing concerns about double taxation.
- Despite the prediction of a revenue shortfall, the TRD is working diligently to meet the government's revenue objectives, aiming to raise over 2.4 trillion baht for the fiscal year 2026, an increase of roughly 100 billion baht compared to the previous year's target.
