February 21, 2023

Double Tax , What should EXPAT know? | MBMG GROUP

Double Tax , What should EXPAT know? | MBMG GROUP

As an expatriate, double tax agreements (DTAs) may play a role in your personal tax affairs if you are receiving income from both your home country and the country where you are residing.

As an expatriate, you may be taxed in both your home country and the country where you are residing. However, if the two countries have a DTA in place, the DTA may provide relief from double taxation by either exempting the income from tax in one of the countries or providing for a tax credit against your tax liability in one country for the tax paid in the other.

For Example, if you are receiving income from both Thailand and another country. DTAs are agreements between two countries aimed at avoiding double taxation of the same income by both countries.

If you are a resident of Thailand, you are generally taxed on your worldwide income in Thailand. However, if Thailand has a DTA with the country where you are receiving income, the DTA may provide relief from double taxation by either exempting the income from tax in Thailand or providing for a tax credit against your Thai tax liability for the tax paid in the other country.

As they can have a significant impact on their overall tax liability. It is recommended to seek professional advice from a tax advisor or an expatriate tax specialist to fully understand your tax obligations and to ensure that you are taking advantage of any relief available under the DTAs.

The provisions of DTAs between Thailand and other countries can affect an expatriate’s tax liability in several ways:
  1. Tax residency status: The DTAs may have different rules for determining tax residency status, which can impact the expatriate’s tax liability in Thailand and the other country.
  2. Taxable income: DTAs may provide relief from double taxation by either exempting income from tax in one country or allowing a tax credit for taxes paid in the other country. This can impact the amount of taxable income for the expatriate in both countries.
  3. Tax rates: DTAs may provide for a lower tax rate for certain types of income, such as dividends, royalties, or interest, which can result in lower tax liability for the expatriate.
  4. Reporting requirements: The DTAs may have different reporting requirements for expatriates, which can impact the time and resources required to comply with tax obligations in both countries.

As they can have a significant impact on their overall tax liability. It is recommended to seek professional advice from a tax advisor or an expatriate tax specialist to fully understand your tax obligations and to ensure that you are taking advantage of any relief available under the DTAs.

What ’s Double Tax Agreements (DTAs)

Double Tax Agreements (DTAs) are agreements between two countries to avoid double taxation of the same income by both countries. 

In the case of Thailand, DTAs are bilateral agreements between Thailand and other countries that aim to provide clarity and certainty for taxpayers with cross-border activities.

DTAs in Thailand generally cover areas such as income from employment, business profits, dividends, interest, royalties, and capital gains. The agreements also provide for the exchange of information between the two countries for tax purposes.

The purpose of DTAs in Thailand is to encourage foreign investment and trade by reducing the tax burden for individuals and companies with cross-border activities. By reducing the risk of double taxation, DTAs can create a more favorable environment for investment and promote economic growth in both countries.

It’s important to note that DTAs are complex legal instruments and require professional tax advice to fully understand their provisions and implications.

Who is considered “A Resident of Thailand” ?

In Thailand, residency status is determined based on the amount of time an individual spends in the country and the location of their permanent home. A person may be considered a resident of Thailand if they:

1. Stay in Thailand for at least 180 days in a calendar year.

2. Have a permanent home in Thailand and are present in the country for at least 120 days in a calendar year.

3. Are present in Thailand for an uninterrupted period of at least 183 days in a tax year, regardless of the location of their permanent home.

A person who is considered a resident of Thailand is generally taxed on their worldwide income, regardless of the source of the income. A non-resident, on the other hand, is taxed only on income that is earned in Thailand.

It is important to accurately determine your residency status in Thailand as it has significant tax implications. 

You may consider seeking professional advice from a tax advisor or an expatriate tax specialist to fully understand your tax obligations and to ensure that you are correctly classified as a resident or non-resident for tax purposes. It’s always best to seek the advice of a tax professional to ensure compliance with Thai tax laws and regulations.


Disclaimer: The above information has not been independently verified. This investment brief is given for information only and does not represent an investment proposal, recommendation or advice to invest in the shares or business of the subject company. Additional information shall be made available to interested parties subject to the execution of the requisite confidentiality undertakings. The financial information, actual and/or forecast, provide herein is based on management representation.


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