11 Things to Know About Expat Taxes in Thailand
- Thailand at a Glance
- 1. Tax Residency in Thailand
- 2. Thailand Taxes Foreign Income for Residents
- 3. Non-Residents Must Pay Income Tax in Thailand
- 4. Thailand Tax Rates
- 5. Tax Deadline in Thailand
- 6. Other Taxable Income in Thailand
- 7. Deductions and Allowances in Thailand
- 8. US Citizens Must Pay US Tax in Thailand
- 9. US-Thailand Tax Treaty
- 10. No US-Thailand Totalization Agreement
- 11. How to Save on Your US Taxes While Living in Thailand
- Get Help with Your Foreign Taxes in Thailand
Thailand has long been known for its natural beauty and cultural diversity. It’s no wonder that over 40,000 US expats call Thailand their home. But while you savor the food and tropical climate, you may find Thailand taxes for US expats challenging.
Fortunately, we’re here to help. In this guide, we’re going to look at 11 important facts to know about foreign taxes in Thailand.
Thailand at a Glance
- Primary Tax Form for Residents: PND 90 (Personal Income Tax Return)
- Tax Year: January 1st to December 31st
- Tax Deadline: March 31st of the following year for e-filing and April 30th for paper filing
- Currency: Thai Baht (THB)
- Population: Approximately 69 million (as of 2023)
- Number of US Expats: Varies, but estimated to be around 10,000
- Capital City: Bangkok
- Primary Language: Thai
- Tax Treaty: Yes
- Totalization Agreement: No
1. Tax Residency in Thailand
Thailand’s residency requirements are determined by the Revenue Department, which is the Thai equivalent of the IRS. The Revenue Department groups people into two basic categories: residents and non-residents.
To be a resident, you must live in Thailand for 180 days or more during a given tax year. Until you reach 180 days, you will be considered a non-resident.
Knowing your status is essential, as it directly affects the taxes that apply to you.
Keep detailed records of your presence in and out of Thailand, as this can affect your tax residency status. This can include passport stamps, flight tickets, and accommodation receipts.
2. Thailand Taxes Foreign Income for Residents
Yes, Thailand’s income tax does apply to foreign income. However, the rules differ for residents and non-residents.
Previously, income earned outside Thailand and brought into the country within the same tax year was subject to Thai tax. However, from January 1, 2024, Thai tax residents will have a broader tax liability. All foreign-earned income brought into Thailand will be taxable, regardless of the earning period.
This change signifies a shift from the earlier rule that exempted income brought into Thailand after 12 months of earning it. It’s prudent for expats to consult tax experts for tailored advice on this significant alteration in tax law.
3. Non-Residents Must Pay Income Tax in Thailand
The Revenue Department charges taxes for foreigners working in Thailand. Non-residents also pay income tax on any Thailand-source money they earn during their time in Thailand. (However, non-residents are exempt from paying taxes on foreign income.)
Again, if you leave the country before the end of the tax year, you must file taxes on any income you generated during your visit.
4. Thailand Tax Rates
Thailand tax rates vary depending on your personal income. Rates are progressive and range from 0% for those who earn less than 150,000 baht to 35% for those who earn more than 5,000,001 baht.
The currency used in Thailand is the baht, and its abbreviation is THB. The Thai personal income tax rates are shown here in baht.
Income Tax Rates in Thailand (Tax Year 2023)
|Less than 150,000 THB||0%|
|More than 5,000,000 THB||35%|
Unlike the United States, the tax brackets in Thailand are based exclusively on income. Thailand residents won’t have to worry about tax status (e.g., “single,” “married filing jointly,” etc.) when filing their returns.
5. Tax Deadline in Thailand
Thailand taxes for US expats are due on March 31. Residents must file annually using a Personal Income Tax (PIT) return.
If you are an entertainer or receive income from advertising fees, you must pay taxes twice each year. You’ll file your PIT return on March 31 and a “mid-year” return on September 30.
6. Other Taxable Income in Thailand
Income tax is the primary tax that impacts Americans working in Thailand. However, US citizens living in Thailand are also subject to other forms of tax. Here’s a quick overview of each.
Capital Gains Tax
This income is subject to personal income tax if you earn money by selling assets and securities. This most commonly applies to those who sell real estate properties. Taxpayers can deduct a standard allowance depending on the number of years of ownership.
Unlike the United States, Thailand does not charge a capital gains tax on money earned from the sale of securities on the stock exchange of Thailand. So if you invest in the stock market, you won’t pay capital gains taxes on the securities you sell if the company is listed on the national exchange.
Net Worth Tax
While this law is rarely exercised, Thailand’s Revenue Department reserves the right to assess an additional tax if they believe your income has been underrepresented.
Social Security Tax
Like the United States, Thailand maintains a social security system. Employees contribute 5% on the first 15,000 THB they earn, and employers match this by paying an additional 5%. Thailand’s government adds an extra 2.5%. If you are self-employed, you must pay both portions (employee and employer) of your social security payments.
Currently, there is no Thailand-US totalization agreement. As a result, some US expats pay for both social security systems during their time in Thailand.
Thailand enacted the Inheritance Tax Act on February 1, 2016. Under this act, inheritance can be taxed only if the value exceeds 100 million THB per benefactor. In this case, the benefactor can be taxed at different rates depending on their relationship to the deceased.
Descendants and parents are taxed at 5%, while all other benefactors are taxed at 10%. Inheritance taxes must be filed within 150 days after receiving the inheritance amount; otherwise, benefactors must pay a surcharge or penalty.
In Thailand, gifts are subject to a flat tax of 5%. Some exemptions apply. For example, gifts as high as 20 million THB are exempt when received from a parent, child, or spouse. Gifts up to 10 million THB are exempt when given in a ceremony or on an occasion that corresponds to custom or tradition.
Value-Added Tax (VAT) and Duties
Certain items carry a 7% value-added tax (VAT). This tax is levied on various goods and services, though groceries, education, healthcare, and real estate are exempt. Certain legal documents (e.g., leases) are also subject to stamp duty.
As a foreigner living in Thailand, you might be eligible for VAT refunds on certain services and goods. Keep receipts and inquire about the refund process, which can sometimes be completed at the airport.
7. Deductions and Allowances in Thailand
Thailand offers a range of tax deductions and allowances that can significantly reduce your taxable income. Common deductions include:
- Contributions to Social Security
- Life insurance premiums
- Contributions to retirement funds
- Mortgage interest on property loans
Allowances are available for spouses, children, education, and disability.
To learn more, see the “Deductions and Allowances” section on this page of the official Thai Revenue Department website.
8. US Citizens Must Pay US Tax in Thailand
Yes, you’ll need to file US taxes each year with the federal government. If you’re still considered a resident of a US state, you may also have to file state taxes as well.
9. US-Thailand Tax Treaty
The US and Thailand agreed to a tax treaty in 1996, which remains in effect. One purpose of this treaty is to remedy double taxation, which should relieve some of your expat taxes. The tax treaty provisions that cover items on your tax return should be appropriately applied. You may need to consult with a tax advisor to ensure that happens.
10. No US-Thailand Totalization Agreement
The US and Thailand do not currently have a totalization agreement in place. This means that Americans who live and work in Thailand may be required to contribute to both nations’ social security systems.
11. How to Save on Your US Taxes While Living in Thailand
Americans working in Thailand can save on the taxes they owe the US government. Here are the three most common strategies for lowering the amount of taxes you pay.
Foreign Earned Income Exclusion (FEIE)
If you earn income while living abroad, the IRS allows you to exclude this income from your income taxes up to a specific limit. For 2023, this limit is $120,000.
To qualify, you must meet one of two criteria:
- Physical Presence Test: Proving you lived outside the US for 330 days
- Bona Fide Residence Test: Proving you lived in Thailand for one calendar year or more
To prove residency, you will need to have a residency card, visa, income tax statements, and other documentation.
Foreign Tax Credit (FTC)
The Foreign Tax Credit (FTC) is a dollar-for-dollar credit on any taxable income you’ve already paid tax on. This prevents you from being taxed twice and can lower your overall tax liability.
To qualify, you must pay or owe taxes in Thailand. The taxes must be legal, and the FTC applies exclusively to income tax.
Bear in mind that the FTC can apply only to Thai earnings that are subject to US tax. So, for example, if you use the FEIE to exclude a portion of your earnings, you cannot also use the FTC on those earnings.
Foreign Housing Exclusion
The Foreign Housing Exclusion allows US expats living in Thailand to exclude certain amounts that they use for household expenses. These expenses are generally restricted to expenses that uniquely occur due to living abroad, such as purchasing items to help you and your family adjust to a new climate.
Get Help with Your Foreign Taxes in Thailand
Greenback Expat Tax Services can help you make the most of your deductions and navigate the confusing tax situations of expats living abroad. File with us, and our tax experts will help you save money while fully complying with Thailand’s tax requirements.
Contact the Greenback team, and one of our Customer Champions will gladly help. If you need concrete advice on your tax situation, you can also click below to get a consultation with one of our expat tax experts.