Thailand’s LTR tax breaks are written for separate categories

Thailand’s Long-Term Resident visa is advertised with two tax benefits: a personal income tax rate of 17 per cent, and relief on income earned abroad. Both sit in Royal Decree No. 743, published in the Royal Gazette on 23 May 2022 and in force the next day. The two sections do not name the same category. Section 3 names one of the visa’s four categories; section 5 names the other three. Neither list repeats a name from the other.

Two sections, two lists

Section 3 reduces withholding tax and fixes it at 17 per cent for a foreigner in the highly-skilled professionals group who holds the long-term resident visa and whose income comes from employment by a company or juristic partnership carrying on a targeted industry under one of three named statutes: the law on enhancing national competitiveness for targeted industries, the investment promotion law, or the Eastern Special Development Zone law. Section 5 exempts income tax under Part 2, Chapter 3, Title 2 of the Revenue Code for three groups — wealthy global citizens, wealthy pensioners, and work-from-Thailand professionals.

The highly-skilled group is not among the three. None of the three appears in section 3. That is a comparison of two printed lists rather than a reading of what either section means.

The visa on its own does not produce the rate

The rate in section 3 depends on the employment as much as on the visa. The reduced rate applies where tax computed under section 50(1) of the Revenue Code would otherwise come to more than 17 per cent, and the decree defers the working conditions to the Director-General.

Those further conditions are in the Director-General’s Notification on Income Tax No. 427, dated 26 August 2022 and applying from 1 September 2022. Clause 3, which by its own terms governs sections 3 and 4 only, requires the employer to notify the Director-General of the employee’s name through the area revenue office where the establishment is located, by the last day of the first tax year in which the right is used. The employee then receives the reduced rate for income received from the date that office receives the notification, not from the date the visa was issued. The employee must also file form Phor.Ngor.Dor. 95 for that year, and an employee who fails to comply in a given tax year does not get the benefit for that year.

Section 4 adds a condition that falls on the individual: income withheld at 17 per cent is left out of the annual aggregation only if the foreigner does not ask for that tax back and does not claim it as a credit, in whole or in part. These are not the only conditions the two instruments impose. Clause 3 imposes none of them on the three groups named in section 5.

The relief is measured on what is brought in

Section 5 is narrower than the phrase “tax exemption for overseas income” on the Board of Investment‘s own page suggests. It covers section 40 assessable income of a tax year that has passed, arising from duties or business carried on abroad or from property situated abroad, that has been brought into Thailand. What that wording does to income earned and remitted inside the same year is the open question of this article, and it is taken up below.

Section 5 sits beside a general rule that was set out in 2023 and applies to remittances from 1 January 2024. Departmental Instruction Paw 161/2566 of 15 September 2023 directs that a person who is resident in Thailand within the meaning of section 41 and has foreign-source assessable income in that tax year, and who brings that income into Thailand in any tax year, must include it in the computation for the year of remittance. Paw 162/2566 of 20 November 2023 added that this does not apply to income arising before 1 January 2024.

What the Board of Investment asks first

Notification 427 ties the tax benefit to the criteria the Board of Investment announces, so the qualification sits upstream of the decree. As the board’s site stood on 15 September 2026, wealthy pensioners must be 50 or over with unearned or passive income of at least USD 80,000 a year at the time of application, salaries expressly not counted, or between USD 40,000 and USD 80,000 with a further USD 250,000 invested in Thailand. Wealthy global citizens must hold at least USD 1 million in assets and USD 500,000 invested in their own name, in Thai government bonds with at least five years remaining, direct investment in Thai-registered companies, or Thai property. The board states that every condition must be maintained for the life of the visa.

Where the text stops

Section 5 speaks of income of a tax year that has passed. Paw 161 uses the same statutory phrase in its preamble and then, in its operative clause, speaks of income of that year brought in in any tax year. Nothing in either text settles what happens to a holder in a section 5 group who earns abroad and remits in the same calendar year, and neither reading should be assumed.

Section 7 of the decree provides that where the right has been used and the holder then fails to comply in a tax year, the right lapses for that tax year only. That is a yearly test rather than a qualification passed once. The section says nothing about the visa; the board states separately that the visa’s own conditions must be maintained throughout.

For anyone weighing Thailand as a base, the question is not whether the visa carries a tax benefit but which of the two the decree writes for their category, and what has to keep being true for it to hold. Relief under section 5 turns on where income arises and when it is brought in. The rate under section 3 turns on a qualifying employer, that employer’s notice, and the date the revenue office receives it.