Phuket has long been a popular destination for expats and foreign property buyers, attracting them with its beautiful scenery, strong expat community, and growing real estate market. The island's appeal stems from a combination of factors, including vibrant culture, developed infrastructure, relatively relaxed property ownership regulations, and a favourable tax regime.

However, the Thai Revenue Department has recently announced changes to the taxation of foreign-sourced income brought into Thailand. These changes, aimed at broadening the tax base, may affect both expats and overseas buyers.

Understanding Thailand's income tax law is essential to comply with the regulations set forth in the Thai Revenue Code. In this article, you will learn what the new income tax law in Thailand means and how it impacts expats and foreign property buyers.

Key Principles of the New Income Tax in Thailand

According to amendments to the revenue code, effective from 1 January 2024, the Thai Revenue Department has changed how foreign income is taxed for residents.

Any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. This applies regardless of nationality.

• Thai-sourced income: If a foreigner derives income from sources within Thailand (e.g., work performed, business carried on, or assets located in Thailand), such income is subject to income tax, whether paid within or outside Thailand. For example, if you buy a property in Phuket for investment, the income generated from your property will be taxed under this rule, as it is generated within the country.
• Foreign-sourced income: If a foreigner derives income from sources outside Thailand, such income is subject to income tax if the following conditions are met:
  
  
  1. Income is earned in any tax year starting from 1 January 2024 onward by a foreigner who stays in Thailand for 180 days or more in that tax year.
  2. Income earned is remitted to Thailand (wholly or partially), even if that remittance occurs in a later tax year.

Foreign income will be taxed at a progressive rate ranging from 5% to 35%. Thailand's tax system ensures that as more income is earned, higher rates apply, aligning tax liability with an individual’s financial capacity.

The new law not only affects individual tax liability but also signals a shift toward a more comprehensive taxation approach. It reflects a global trend of taxing worldwide income for residents and influences the landscape for foreign investment in Thailand, including Phuket.

Impacts on Expats

Phuket has become a top destination for expats seeking a high quality of life, affordable living, and business opportunities. Understanding local tax law is essential for compliance, optimizing tax planning, avoiding penalties, and managing finances effectively.

Many expats may be concerned that their various sources of overseas income could now be affected. Common income sources earned while being a Thai tax resident — such as pensions, investment dividends, or profits from overseas business ventures — are now potentially taxable if transferred into Thailand.

The exact impact depends on several factors, including the timing of the remittance, the type of income, and the application of any tax treaties or exemptions. It is important for expats to evaluate their personal financial situation and understand which sources of income may now be subject to Thailand’s new income tax law.

What Generally Falls Under the Taxable Income Umbrella?
 

• Employment Income: salary, bonuses, commissions, and other job benefits
• Business Income: profits of business or self-employment
• Investment Income: interest, dividends, and capital gains from investments
• Rental Income: income from leasing property such as houses, apartments, condos, and commercial spaces
• Other Income: royalties, pensions, and certain types of windfalls

In 2025, the Thai Revenue Department proposed a grace period for income earned from 2024 onward, allowing tax-free remittance within two calendar years. This partially alleviated tax implications for expats, particularly those remitting retirement income or investment earnings within the exemption period.

On 4 August 2025, a report from the Bangkok Post confirmed that the Revenue Department is expediting this legislation and aims to finalize it within 2025. The new law is expected to take effect starting 1 January 2026. However, it may be applied retroactively once promulgated, leaving the final application date subject to confirmation.

Penalties for Non-Compliance

Failing to comply with the tax filing requirements may incur penalties including:

• A penalty of 200% of the assessed tax payable
• A 1.5% surcharge per month that the tax remains outstanding
• A fine of up to THB 200,000 or one year of imprisonment (or both) if it is established that a return was intentionally withheld to evade taxes
   

Impacts on Foreign Buyers

For foreigners looking to buy property in Phuket, these changes may sharpen the focus on tax planning strategies, increasing the need for local expert consultation. Foreign buyers need to understand the tax implications when planning investments to ensure they maximise returns.

Despite the complexities introduced by the new law, Phuket continues to offer numerous benefits for foreign buyers. The property market is relatively stable, with consistent growth in property values compared to more volatile markets elsewhere.

Contributing factors include:

• Strong reliance on cash purchases
• A thriving tourism sector driving rental demand
• Consistent infrastructure development

This creates a favourable investment environment, allowing buyers to feel confident about long-term potential.

Phuket also presents strong potential for rental income thanks to its tourism industry and expat community. Investors can expect attractive returns from both short-term vacation rentals and long-term leases to expats and digital nomads. Popular areas like Patong, Kata, and Bangtao see high occupancy rates, especially during peak seasons.

Summary

Thailand’s new taxation criteria for foreign-sourced income represent a significant shift for individuals residing in the country for more than 180 days a year. This necessitates careful tax planning and record-keeping for both individuals and businesses.

For expats, these changes may increase compliance burdens. Consulting with a qualified tax advisor familiar with Thai tax regulations and applicable tax treaties is essential for a clear understanding of your situation.

For foreign buyers and investors, professional guidance is equally important. Tax advisors can help you understand how the new rules may affect your property strategy and ensure compliance, while minimizing risks and maximizing profitability.

Finally, understanding Thailand's obligations regarding tax information exchange can inform your investment decisions and ensure compliance with international regulations.

Contact Us

If you’re considering property investment in Phuket or want advice tailored to your situation, get in touch with our team today. We can guide you through both the property market and the new tax landscape, helping you make informed, confident decisions.