Thailand’s Revenue Department has unveiled its plans to impose personal income tax on the foreign earnings of residents. According to reports, this proposed tax policy has specific targets in the population, including crypto traders who reside in the Southeast Asian country for up to 180 days a year.
Thailand’s Revenue Department Tweaks Tax Policy
On Tuesday, September 19, the Bangkok Post reported that Thailand’s Revenue Department had reviewed a section of the country’s Revenue Code. The new rule now states that any person who lives in the Thai Kingdom for at least 180 days a year and earns foreign income from work or assets will be subject to personal income tax.
Based on the analysis of legal experts, this new policy seems to have three specific targets, including Thailand residents who participate in foreign stock markets through foreign brokerages, cryptocurrency traders, and Thais who exploit the current taxation system.
The report revealed that the previous rule allowed residents with overseas earnings to be taxed only if the money was remitted into Thailand in the same year it was earned. However, the new tax policy aims to fix the loophole of people deferring the transfer of their foreign income to a different year.
An anonymous Finance Ministry official further explained:
The principle of tax is that you must pay tax on income you earn from abroad, no matter how you earn it and regardless of the tax year in which the money is earned.
This new tax policy will take effect on January 1, 2024, with residents, as well as those with overseas earnings, expected to report their income in 2025.
With Bitkub, the largest Thai crypto exchange, offering only 94 trading pairs and a daily trading volume of $20.4 million, it is likely that many Thai crypto traders use offshore exchanges. However, it remains to be seen how the Revenue Department intends to tax earnings from overseas crypto trading.
A Way To Fund The National Airdrop?
This new tax policy comes following the selection of Srettha Thavisin as the Prime Minister of Thailand. Central to the pro-crypto politician’s campaign were promises of economic relief, including a national “airdrop.”
According to local reports, 10,000 baht (about $300) would be given to every Thai citizen above 16 years. This “airdrop” will be in the form of a national token, which can be converted to cash at designated banks.
The project would reportedly cost about 560 billion baht ($15.7 billion). And several commentators have suggested the Revenue Department’s new tax policy is a way to fund the planned nationwide stimulus.
Nonetheless, the new tax rule has had its share of critics, with various reports saying it could worsen Thailand’s existing income disparity.