What are the Rules under Double Tax Treaty in Thailand?
posted a year ago
A foreigner working remotely in Thailand must also know if their home country and Thailand have a double tax treaty.
Double taxation is when tax is on the same source of income by two or more distinct jurisdictions. It typically arises when a person or corporation conducts business internationally. Double taxation prevention is the main goal of these agreements. This centers on the ideas of income-sourcing rights and the presence of permanent establishments.
Numerous nations and jurisdictions have Double Tax Treaties with Thailand. By enabling a tax credit in the nation of residence or by offering a tax exemption, double taxation is prevented.
Taxation Rules under DTA states that the income is taxable in:
- The nation where the employment is actually exercised, or,
- Where the employee is physically present when executing the tasks for which the employment income is paid.
This provision shall be subject to a general exception. Additionally, this will apply to all persons performing services in the course of employment. To qualify for the exemption, the compensation must meet three requirements that are often outlined in a DTA. The three conditions generally demand the following:
a. The employee is present in Thailand for less than 183 days or similar in the relevant period
b. The employer is not a tax resident of Thailand
c. The remuneration is not borne by a permanent establishment of the employer in Thailand.
The employee will not be subject to personal income tax in Thailand on their income from employment exercised in Thailand if the conditions of an applicable DTA, i.e., the DTA of the nation in which the employee is a tax resident, are met.
Very often, people operating remotely in Thailand for a foreign employer on occasion fit under this exception. In this case, you should get expert guidance from a tax advisor who is knowledgeable about Thailand’s tax regulations and double tax treaties. Contact us for a no-cost introductory consultation.
posted a year ago