Thailand’s New Plan: Taxes on World Income?

The Thai tax authorities are preparing a tax reform under which foreign tax residents in Thailand will be asked to pay tax. In future, the entire global income is to be declared and taxed in the tax return. Where no double taxation agreements exist, there is a risk that the tax burden will escalate.

The reason for the search for new taxes is the lower than expected income of the tax authorities in the first half of the year. Overall, the tax burden in Thailand is still relatively low: in 2022, the tax rate was 13.5% of GDP. In comparison, Germany is at 39.3%, Austria at 43.1% and the OECD average at 34.0%.

However, the ongoing efforts to change the rules on foreign income taxation, from the recently introduced scheme to this new proposed amendment, remain controversial due to their far-reaching implications, and the Ministry of Finance will be closely monitored by the various stakeholders as the plans are implemented to ensure that any new rules on foreign income taxation in Thailand are implemented in a truly fair and effective manner.

It is still unclear when the reform will take place. However, given the effort involved in the implementation and the high-capacity utilisation due to the recent change in income tax, the reform is not expected to take place this year.

It is therefore important for taxpayers in Thailand to monitor the legal situation and take appropriate action in the future, such as filing a tax return. Sanet Legal & Accountancy, the German-speaking law firm in Bangkok, will keep you up to date on this topic!