Thailand to Offer Tax Break on Foreign Income to Lure Billions Back Home

Thailand's Revenue Department is poised to amend ministerial regulations, proposing a tax exemption for foreign-sourced income aimed at incentivising Thais to repatriate over 2 trillion baht in overseas investments.

The move seeks to significantly boost the domestic market, allowing income earned and repatriated within two tax years to be exempt from personal income tax.

The department's director-general, Pinsai Suraswadi, revealed that the Revenue Department is reviewing changes to rules on foreign income brought into Thailand.

This comes as the department has identified over 2 trillion baht in Thai investments abroad, spanning assets from real estate to stocks, generating hundreds of billions in returns.

Pinsai explained that while Thailand's tax system generally levies personal income tax on foreign earnings brought into the country (a rule adjusted on 1 January 2024 to apply from that date onwards), the new proposal offers a key concession.

Foreign income generated from 2024 onwards could be exempt if repatriated within two tax years from its origin. Income brought in after this period would be taxed normally.

"The process will involve Cabinet approval and a review by the Council of State before becoming law," Pinsai stated. 
 

He also clarified that for concerns about double taxation, Thailand maintains a tax credit mechanism under its agreements with 61 countries, allowing taxpayers to offset foreign tax paid against their Thai liability.

Meanwhile, Pinsai acknowledged significant challenges to revenue collection. Although the department collected 1,138,182 million baht in the first seven months of the current fiscal year (October 2024 - April 2025), exceeding last year's figures, she anticipates a decline between May and July.

A significant shortfall of over 15 billion baht is expected from year-end corporate income tax filings. This comes despite earlier Fiscal Policy Office (FPO) estimates of a potential ฿36 billion shortfall for the entire fiscal year.

To bolster revenue, the department plans proactive audits of businesses not currently in the tax system, focusing on restaurants, nightlife venues, cash-based trade, and pharmacies – a practice not undertaken in over five years.
 

The Revenue Department is also exploring new tax bases through three approaches:

Policy adjustments: Such as potentially increasing the Value Added Tax (VAT) rate from the current 7% (reduced from 10%).

Administrative improvements: Issuing regulations for more efficient collection of smaller tax items.

Structural changes: Drafting new laws for taxes that could boost state revenue, or for other purposes like a tax on international travel.

With the government's deficit budget, the Revenue Department faces a formidable task: a target of 2.4 trillion baht for fiscal year 2026, an increase of over 100 billion baht from 2025's target, despite the current year's slower revenue growth.