The Revenue Department this week has reassured Thais and expats living here that the new rules on taxation apply only from January 2024 and not earlier. There had been speculation that the Revenue might start probing cash transactions to Thailand in earlier years as, in theory, they have the power to do.
This is the first statement by the Revenue about the taxation changes since September 2023 when it announced its intention to tax income from overseas by tax residents – anyone who lives here for at least six months in a year – no matter when the cash was or will be transferred. The statement at least shows that the Revenue is aware of the complexity of the whole issue.
Expats in Thailand, mostly ignored until now by the tax authority unless legally working here, are concerned that they might be taxed in future on income already taxed in their country of nationality. Typically, state or private pensions, social security payments and some inheritances fall into this category. Many countries have double-taxation agreements with Thailand, although the precise relevance varies from treaty to treaty.
Most Thai legal experts say that the Revenue is primarily interested in Thais or expats with offshore banks accounts, a history of currency speculation or profit-making business enterprises overseas. However, the only way of distinguishing them from typically retired “tax residents” would be for all to register with the Revenue for a tax identification number. That procedure, if required in future, does not necessarily mean that tax would be due.
It is unlikely that the many ambiguities in this saga will be resolved by January 1 next year. This is not a law passed by Parliament but a reinterpretation of traditional Revenue policy which could even be challenged in court. Hence, Revenue clarifications (assuming there are any) are likely to be announced throughout 2024. Any tax due would be payable in 2025.
The best advice to worried expats, notably those retired or living here on family or Elite visas, is to wait for instructions from a government or Revenue authority. For many reasons, that wait may be a long one. It is even possible that, for the first year or two, registration with the Revenue might be “voluntary”, that is only those who believe they are eligible to pay tax should come forward. Overseas cash transactions can be monitored by Thai tax authorities in any case.
