Revenue Department urges tax residents in Thailand to file 2024 returns by March 31. Expats with over 180 days in Thailand must submit returns for income remitted in 2024. New tax rules require filing electronically, with possible refunds for early submissions.
The Director-General of the Revenue Department on Thursday called on taxpayers to file their end-of-year returns for 2024. This will be the first year that all foreign residents in Thailand are included. Changes to tax regulations in 2023 make all income remitted to Thailand by foreign residents in the country for over 180 days last year declarable. The income tax payable by each foreigner depends on the nature of such income and the tax treaty with their country of origin. The question now is how many foreign taxpayers will file returns between now and March 31st. After that, it remains to be seen if follow-up actions will be taken against those who fail to do so. A Thai Examiner survey in 2024 showed that 16% of people plan to take professional advice, while a full 58% would not file a return at all.
The Director-General of the Revenue Department on Thursday revealed that tax returns for 2024 can now be filed online. Mr. Pinsai Suraswadi, in particular, specified the annual return forms PND 90 and PND 91, which are due to be returned by March 31, 2025.
In effect, only electronic forms will be accepted until April 8, 2025. Paper returns must be received by the end of March.
Pinsai Suraswadi appointed as Revenue Department Director-General. Significant changes to expat tax laws
Certainly, this year, all expats who have been residents of Thailand for 180 days or more in the course of the last year are liable to file a return. The return pertains to taxable income earned within Thailand and remitted to Thailand during 2024.
Mr. Pinsai is newly appointed to the post of Revenue Department Director-General, having taken over from the previous Director-General, Ms. Kulaya Tantitemit.
Under Ms. Kulaya’s tenure, significant changes were made in 2023, particularly through orders P161/2023 and P162/2023 issued in September and November 2023, respectively.
Pushed by former Prime Minister Srettha Thavisin, these changes clarified, firstly, that remitted income by foreigners is taxable, and secondly, that 2024 would be the first year in which tax would be collected under a new dispensation.
The move comes in response to rising public debt in Thailand as the government battles with slow growth and increasing commitments due to an ageing population.
At this time, many expats in Thailand plan to file returns with the Revenue Department before March 31, 2025.
A poll suggests that 42% intend to do so. However, the Thai Examiner survey indicates that the majority (58%) will not. The same poll showed that 16% would consult with a Thai tax advisor on their obligations. Notably, 95% of foreign expats originate from countries that have tax treaties with Thailand.
The diverse nature of expat tax situations, differing tax treaties, and the future taxation of worldwide income
An issue lies in the fact that each country’s treaty with the kingdom is substantially different. At the same time, each individual residing in Thailand has unique circumstances. The diverse nature of the expat community further complicates the matter, even before considering the differences in tax treaties.
Furthermore, the Thai government is reportedly drafting legislation to increase the tax burden on foreign residents.
In short, the plan moving forward aims to align Thailand with Organisation for Economic Co-operation and Development (OECD) principles. Essentially, this means that foreign residents in the kingdom will eventually be liable to pay tax on their worldwide income.
Nevertheless, for now, in 2025, the focus is on the taxation of remitted income for 2024. It remains to be seen how the implementation of these new tax changes will play out.
For instance, will the government issue notices to expats who have not filed returns on remitted income? Indeed, there is the possibility of the Revenue Department taking further action.
At this time, it is unclear how each individual’s situation will be treated. Undoubtedly, there is a need for clarification from Thailand’s authorities on these questions.
Early submission of tax returns may result in refunds for taxpayers, with a new online system available
On Thursday, Mr. Pinsai highlighted that those submitting returns early may be able to avail themselves of tax refunds. This would apply to individuals who pay tax on a monthly basis through their employer.
The new filing system is available on www.rd.go.th in addition to the RD Smart Tax application.
To file an income tax return for 2024, taxpayers should use the D-MyTax (Digital MyTax) system.
The income tax system offers generous allowances. For most foreign expats on basic incomes such as ฿60,000 a month, the tax bill is approximately ฿11,000. Furthermore, the amount due can be paid in three instalments once the amount exceeds ฿3,000.
The Thai government expects limited extra revenue from the new tax changes, but a shift in tax culture is underway
It is not clear how much the Thai government expects to generate in extra revenue from this change. Estimates suggest it may be ฿3–5 billion.
Undoubtedly, many wealthier expats in Thailand have the option of relocating to avoid spending 180 days in the country. In the recent Thai Examiner survey, 55% were considering this tactic.
Presently, the Thai government’s public debt level has risen sharply since the COVID-19 crisis. Previously, it was a healthy 41.1% of GDP. However, since then, it has increased to 64% of GDP, approaching the 70% ceiling.
In the meantime, with a slowly growing economy, the share of tax revenue to GDP has dipped. It fell to a record low of 14.6% of GDP in 2022 and afterwards rose slightly in 2023 to 14.9%. Before the pandemic, for instance, in 2016, the figure was 16.4%.
Despite this, the fragile nature of Thai politics and the economy has stymied successive Thai governments from increasing taxes. Therefore, the opportunity to tax foreign income is being seized.
The Thai Cabinet passed a decree taxing foreign multinationals at 15%, as economic challenges persist
In December, the Thai Cabinet also passed a decree to tax income on foreign multinationals operating in Thailand. This is set at a minimum of 15% based on new OECD regulations aimed at making large international corporations pay a minimum tax rate.
Meanwhile, Thailand’s government is struggling to secure funding for economic stimulus while also meeting increased budget demands. In particular, these are being driven by increased Social Security and Government Pension Fund contributions.
55% of Foreign Expats thought of moving out of Thailand in 2024. Majority will not file tax returns
Revenue Department preparing legislation as new Expat tax regime may link visas and tax returns
Undeniably, the room for flexibility granted to the Minister of Finance, Pichai Chunhavajira, is limited. Figures for 2023 showed that civil service salaries and fixed overheads, in addition to contributions and interest payments, accounted for no less than 67.2% of the government’s total budget.
Even then, the government is running a deficit. For instance, in 2024, its deficit is projected to be ฿593 billion or 3% of GDP. The total budget expenditure is ฿3.48 trillion.
Join the Thai News forum, follow Thai Examiner on Facebook here
Receive all our stories as they come out on Telegram here
Follow Thai Examiner here
Further reading:
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
Wealthy foreigners to own small landholdings associated with homes here agreed in principle
New plan for the Thai economy could see an elite foreign visa scheme generate up to 6% of GDP
Economic plan to put the smile back in Thailand’s appeal to western foreigners to live and work
IMF urges government to loosen nation’s purse strings as finances tighten with the tax take down
Plan to allow high tech and skilled foreigners to live and work in Thailand for up to four years
