Integrity Legal, an influential network of law firms in USA and Asia, has condemned the proposal of the Thai Revenue Department to tax Thai and foreign residents on their worldwide income irrespective of whether those monies are brought to Thailand. The current regulations (effective January 2024) permit only the taxing of “assessable” income actually transferred from abroad.
In their latest video, the Bangkok-based firm points out that a worldwide policy ruling would strongly deter investment in Thailand, especially as Thai Revenue has no actual jurisdiction to control assets outside the country. If such a radical policy were to be introduced, it would first require a formal change in Thai law which is by no means a formality.
Meanwhile Pichai Chunhavajira, the finance minister delivering a keynote address Shaping Tomorrow, said that current personal and corporate income tax rates remain higher than in competition countries and should be rejigged. He made no mention of the income tax situation for Thai and foreign tax residents. Not a single government spokesperson so far has endorsed, or even commented on, the Revenue’s radical proposal to tax worldwide income, even though first mooted last June.
Social media in Thailand has prophecies that the issuing of annual extensions of stay are about to become dependent on income tax clearance in Thailand. There has been no confirmation from the Cabinet or the immigration bureau. Such a policy would present all manner of problems. For example, many holders of longterm visas, such as Elite, spend less than six months per year in Thailand, whilst notional tourists can easily exploit the new visa exempt rules to clock up more than 180 days in a calendar year. A person’s visa status does not magically show tax liability, or the lack of it.
Thai Revenue, of course, has the role of recommending courses of action to increase national tax income. However, Integrity Legal’s warning that the Golden Goose is in danger of self-assassination illustrates the threat of continuing silence by government ministers or the Cabinet. As many expats threaten to quit living here and the national economy continues to struggle, the need for proper debate is already well overdue.
