Thailand considering to ease tax rules on foreign-sourced income

What’s changing?  

Recently, the Revenue Department announced that a new regulation—expected to be issued via either a royal decree or a ministerial regulation—is being drafted to introduce an important change to this regime. Under the proposed rule, foreign-sourced income will be exempt from Thai personal income tax if it is remitted into Thailand within the same calendar year it is earned or in the immediately following year. For example, income earned in 2025 and brought into Thailand in either 2025 or 2026 would not be subject to Thai tax. Remittances made after this timeframe would remain taxable under Thailand’s progressive tax rates, ranging from 5% to 35%.  

Why the sudden u-turn?  

The original enforcement raised widespread concern among expatriates and internationally mobile professionals, particularly retirees and globally mobile Thais with offshore passive income. The forthcoming amendment appears to address these concerns, providing a more practical framework that aligns more closely with international norms and supports the inflow of funds into the Thai economy.  

Key takeaways 

A royal decree or a ministerial regulation is being drafted to exempt tax on foreign-sourced income remitted to Thailand within the same year or the year following the year it was earned. The draft measure will require approval by the Cabinet before it can be enacted. 

The exemption applies to individuals qualifying as Thai tax residents (180 days or more in Thailand in a tax year). 

Income remitted after the two-year window will continue to be taxable at Thailand’s progressive personal income tax rates. 

The law is expected to take effect from 1 January 2025, though formal enactment is still pending.  

Our observation  

As of now, the proposed exemption has not been formally enacted, and several practical details remain unclear. It is evident, however, that the Thai government intends to encourage the timely repatriation of foreign income by relaxing the current rules. Certain implementation issues remain unclear, including how foreign tax credits can be claimed in practice. In some tax offices, Thai tax residents who reported foreign-sourced income earned in 2024 were required to pay Thai tax first and then apply for a refund for taxes paid overseas.  

please stay tuned for the official release of the regulation. Forvis Mazars is available to assist should you require further information or have any questions regarding the proposed amendments.