Thailand plans new decree to make foreign income tax-free if remitted within one year, easing burdens on residents amid an economic slowdown and revenue shortfall. The move aims to boost capital inflow. Still awaiting final legislation and clearer guidelines.
Thailand on Monday announced another significant shift in taxation policy affecting foreign residents with overseas income. The change will also apply to Thai nationals with investments abroad. Details were outlined in a briefing by Revenue Department Deputy Director-General Panuwat Luengwilai. In essence, the government appears to be preparing to exempt from tax any income remitted to Thailand within one year of being earned. However, caution is advised. The new regime will depend on a royal decree that is still being drafted. Importantly, the move signals a clear acknowledgement of the negative impact caused by the current rules introduced in 2024. Under that regime, all income remitted from abroad was subject to personal income tax, regardless of when it was earned. Thailand is now facing a period of slower economic growth. Revenue collections for the current fiscal year ending 30th September 2025 are projected to fall short by around ฿20 billion.
Thailand’s Revenue Department has announced a significant shift in tax policy aimed at easing burdens on foreign residents and Thai nationals with overseas income. The move comes as the country faces slowing economic growth and declining state revenue.
Under Prime Minister Srettha Thavisin’s government, the Revenue Department—then led by Ms. Kulaya Tantitemit—introduced two key directives: P161/2023 and P162/2023.
The first scrapped a long-standing rule that allowed foreign income to be tax-free if remitted to Thailand after the year it was earned.
Government drafting new law to cover foreign-earned income while respecting global tax treaty obligations
The second clarified that the new policy would apply from January 1, 2024.
At the same time, officials hinted that a more sweeping law was being drafted. That law would eventually cover all foreign-earned income attributed to Thai residents. Crucially, it would still honour Thailand’s tax treaties with more than 60 countries. In short, some income streams would be exempt depending on the country of origin of the taxpayer.
The guiding principle was clear. Anyone classified as a resident of Thailand would be taxed on global income, just like Thai citizens. This followed OECD standards that stress equal tax treatment for all residents.
Until now, the revised regulations threatened to impose a more onerous burden. Both Thai nationals with overseas investments and foreign residents risked facing higher tax bills. However, a dramatic shift occurred this week.
Deputy Director-General of the Revenue Department, Panuwat Luengwilai, announced that new legislation will allow tax exemptions for foreign income remitted within one year of being earned. If income earned abroad in 2025 is transferred into Thailand by the end of 2026, it will not be taxed. The key rule is that the income must be brought in within 12 months of the calendar year it was generated.
Tax-free window of one year will apply to remittances but key questions on scope remain unanswered
This change is expected to benefit both Thai citizens and foreign residents. It could also stimulate more inward capital flow and ease bureaucratic burdens.
However, two major questions remain. First, will this change apply retroactively to income from 2024? If it does, foreign residents who paid income tax this year may be eligible for refunds. If it does not, the tax already paid on 2024 remittances will stand.
Second, will foreign residents be treated identically to Thai nationals under the new rule? The department appears to say yes. Officials stressed that all changes are grounded in OECD principles of fair treatment. That means foreign residents—defined as people who stay in Thailand at least 180 days per year—are entitled to the same benefit.
As a result, by March 31st, 2025, all qualifying residents had to file their income tax returns for the 2024 tax year. They faced Thailand’s progressive income tax rates of 5% to 35%, after allowable deductions.
Modest earners face low tax bills but many foreigners are confused or plan to avoid tax obligations entirely
For most foreigners living on modest incomes, the tax due was expected to be small. Estimates suggest a typical foreign resident paid between ฿10,000 and ฿20,000. But for many, the greater concern lies in the complexity and paperwork required.
A Thai Examiner survey in late 2024 revealed surprising attitudes. While 16% of respondents said they planned to use third-party services to file taxes, 58% said they wouldn’t submit anything at all. More alarmingly, 55% were actively planning to avoid staying in Thailand for more than 180 days to sidestep tax residency rules.
Notably, 95% of respondents came from a country that had a tax treaty with Thailand.
This announcement comes as Thailand’s economic outlook remains weak. On Monday, the National Economic and Social Development Council (NESDC) projected GDP growth between 1.3% and 2.3% for 2025. The key reasons include softer U.S. demand, regional economic trends, and American tariffs that are impacting global trade.
Revenue shortfall blamed on 2024 policy as government now pivots to encourage faster inward capital flow
Meanwhile, the Revenue Department last week reported a worrying drop in revenue. Tax collections are projected to fall short by ฿20 billion by the end of the fiscal year on September 30, 2025. Officials have implicitly acknowledged that the 2024 tax regime significantly disrupted capital inflows. The tighter rules discouraged both Thai and foreign residents from bringing overseas funds into the kingdom.
This week’s reversal signals a change in direction. According to Mr. Panuwat, the new rules are designed to incentivise investment and economic activity. The one-year remittance window is meant to bring in foreign capital faster, helping boost growth.
He said the department is drafting a royal decree in line with Finance Minister Pichai Chunhavajira’s policy. The Minister has made clear he wants to encourage residents with foreign earnings to bring funds home. This could help offset weak private sector activity and high household debt.
A Finance Ministry source, speaking on condition of anonymity, explained that Thailand operates a residency-based tax system. Anyone living in Thailand for at least half the year is subject to tax on global income. That rule has not changed. However, the method of taxing foreign income is now being softened to avoid discouraging compliance.
Tax credits and allowances remain but rules will rely heavily on documentation and tax treaty awareness
Thailand’s progressive tax structure remains in place. Residents can still claim allowances and exemptions, such as deductions for dependents or life insurance.
However, the burden of filing remains. Accurate documentation is crucial. Taxpayers must keep proof of remittances and any taxes paid abroad. This is especially important for those seeking to claim credit under Thailand’s tax treaties.
Of course, if these new provisions come into effect, foreign residents who remit money as it is earned abroad will not incur any tax liability.
The Revenue Department’s move is expected to reduce confusion and panic among foreign residents. While many had feared double taxation or steep penalties, this new approach offers some relief. It also aims to promote fairness and ensure Thailand meets OECD membership criteria.
Officials say the change will not affect those who stay fewer than 180 days a year. Nor will it apply to income earned and taxed entirely abroad that is never remitted. Indeed, this money may be taxable under the new law. Previously, it was intimated that such funds be subject to tax but this also depended on a new as yet unseen law.
Final framework pending but key takeaway is tax-free treatment for income remitted within twelve months
The focus here is on residents and money actually brought into Thailand. Basically, if remitted within one year of being earned, it becomes tax-free under this provision. However, we are still awaiting sight of the new decree or law. For now, the 2024 regime based on amended regulation remains in effect.
That means income remitted for 2025 will be liable to be accounted for by 31st March 2026, similarly to this year. Nonetheless, the government appears to want to change this and offer a better deal to tax residents who remit income to Thailand.
Still, challenges remain. The government must rebuild trust with expatriates and investors unsettled by earlier changes. Many will wait for full details of the royal decree before adjusting their financial plans.
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Revenue Department boss calls on tax residents in Thailand to file 2024 returns by March 31st deadline
With an economy in the doldrums, the Finance Ministry is still pursuing a higher tax take regime
In the meantime, tax professionals recommend that residents carefully track their stay in Thailand and review their foreign income sources. Planning, of course, is key to avoiding complications and ensuring compliance under any new rules.
Thailand’s latest policy shift reflects broader economic goals. It is an effort to shore up domestic liquidity, retain investors and attract more global capital. Whether it will succeed depends on how clearly and consistently it is implemented.
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Further reading:
With an economy in the doldrums, the Finance Ministry is still pursuing a higher tax take regime
55% of Foreign Expats thought of moving out of Thailand in 2024. Majority will not file tax returns
End of the road proposed for Thailand’s ‘Happy go-Lucky’ Economy in Paetongtarn’s Policy Statement
Revenue Department preparing legislation as new Expat tax regime may link visas and tax returns
New tax era in Thailand begins as Revenue now shares data with 138 countries within the OECD
Calls for clarification of new Tax regime which appears to target expat foreign income sources
10 year visa a magnet for global citizens setting up in Thailand with zero tax on offshore income
