Thailand is one of those places which is hugely popular by digital nomads because of its nice beaches, great weather and vibrant places. And then I didn’t even mention the cost of living… However, if you are a tax resident of Thailand you better watch out for the tax changes 2024 in Thailand for digital nomads. We’ll dive deeper in what you need to know and how this can impact your tax liability taking into account the tax changes 2024 in Thailand for digital nomads.
Current Tax Rules
Currently, you pay taxes in Thailand on local income. Furthermore, and more importantly, you pay taxes on foreign income if you bring it into the country in the same year as you made the income. On the contrary, this means that if you only bring the money into the country after the year it was made, you don’t pay any taxes on it in Thailand. A lot of people use this rule to their advantage by just postponing to when they bring the money into the country. Consequently, they don’t pay taxes on the money and thus save on Thai taxes.
Personal income tax rates in Thailand are progressive and thus depend on how much you make. The tax rates start at 5% if you make more than approximately €4.000 per year. The highest rate is 35% if you make more than approximately €130.000. For everything in between, different tax brackets apply. However, as already mentioned, if you only bring in foreign income after the year it was made, you currently don’t pay any taxes on it. You can calculate yourself what this saves you in taxes.
Tax Changes 2024 in Thailand for Digital Nomads
Recently, the new government announced their plan to make some changes to the aforementioned rules regarding foreign income. More specifically, they want to tax foreign income in any case once you bring it into the country, irrespective of the timing. Consequently, the trick of postponing the payout of your foreign income till a later tax year will not work anymore.
Anyhow, you could still limit your tax liability by only bringing in so much money into the country as you need to cover your day-to-day expenses. If you don’t remit your excess income back into the country, you don’t pay taxes on that money you are saving up. In this way, you can limit your tax liability. This will also mean that your tax liability will be connected closely to your lifestyle. If you spend a lot of money, you will also pay higher taxes. If you live a more frugal lifestyle, the impact might be rather limited.
Thailand will remain a popular spot for digital nomads for all the reasons mentioned before. However, from a tax point of view, it might become just a little less interesting. Nevertheless, if you limit the money you bring into Thailand to what you need for your day-to-day expenses, your tax liability might still remain rather limited.
If you want to learn more or want to discuss your personal situation, feel free to reach out!