Prime Minister Srettha Thavisin has spearheaded a “new generation” of long-stay visas including the Long Term Residence, the revamped Elite Visa, the yet-to-be-clarified Destination Thailand Visa, and specialist visas such as the four-year Smart Visa for those working legally, coupled with income tax concessions.
These reforms are imaginative and sometimes confusing, in tandem with improvements for short-stay tourists. Over 90% of new arrivals will soon get 60 days visa-exempt on entry. Updates come from the Cabinet, Tourist Association of Thailand, Board of Investment, or Immigration Bureau, with no single source for all information.
However, many expats are outside these initiatives due to the high fees. For instance, the Long Term Residence Visa requires retirees to have an income of $80,000 annually, or a significant financial investment, while the five-year Elite registration now costs $25,000. As a result, most expats, including retirees and those married to Thais, rely on annually renewable extensions of stay based on an original non-immigrant visa.
The annually renewable visa holders are concerned about the Thai Revenue’s recent reinterpretation. Section 41 of the tax code, which was long ignored but is now enforced, requires Thai tax residents (anyone spending more than 180 days in a year in Thailand) to obtain a tax identification number and file a tax return by March 2025 for income transmitted to Thailand in the calendar year 2024. If this income was pre-taxed in a country with a double taxation treaty with Thailand and can be documented, it is unlikely to be taxed again in Thailand.
But the Revenue has not categorically confirmed this assumption, and the specifics vary across the 61 countries with tax agreements with Thailand. What happens to those who ignore this requirement is unknown, but given the Thai approach to strict laws and lax enforcement, they may initially evade scrutiny. While it’s been suggested that visa renewals could be tied to tax registration, there’s no immediate sign of this happening.
It’s also notable that Thailand, along with around 140 other countries, has agreed to share international banking transactions of individuals under the Organization for Economic Cooperation and Development (OECD) to combat tax havens and money laundering. Therefore, fleeing to countries like Cambodia or the Philippines as a tax exile is not a viable escape since they are OECD members too. The idea of banking as a private matter is becoming outdated.
The Thai Revenue has also recently suggested extending the tax net from 2025 to include income earned globally by Thai tax residents, whether or not it is transmitted to Thailand. This potential law change is still under consideration. Most annual renewable visa holders, however, don’t have significant offshore assets like villas in Spain. The best defense remains thorough documentation of income.
Prime Minister Srettha emphasized this week, “Revenue collection is very important and the finance ministry is considering additional measures to stimulate the economy.” He is targeting the bigger players who have exploited loopholes in Thailand’s tax system to avoid paying taxes. Annually renewable visa holders are rarely the “big fish” but unfortunately, they share the same waters.
Inspired by: Mr. KC Cuijpers
For more information: Please contact Town & Country Property – [email protected]
