Thailand’s Finance Minister Arkhom Termpittayapaisith says lawmakers have decided to waive personal income tax for three categories of foreign taxpayers: high-income earners, retirees, and those who work remotely from Thailand.
According to Arkhom, the beneficiaries will be considered long-term residents (LTRs) by the Thai government when they receive long-term residence visas.
Under the first category, the foreign direct investment must amount to at least US$500,000 (16.35 million baht) in government bonds, property, or any other form of direct investment. Over the last two years, they must have accumulated at least $80,000 in income and $1 million in assets.
For foreign retirees to qualify, they must be at least 50 years old, have an income of at least $40,000, and invest at least $250,000.
To work remotely from Thailand, professionals must prove they have an annual income of at least $40,000, a master’s degree or higher, intellectual property rights, and at least five years of experience in a research field.
There is, however, a fourth group eligible for the visa that would be taxed.
Experts in digital services must work for SET-listed companies or have worked for at least three years in private companies with revenues of $50 million or more.
Among this group are highly skilled professionals. In most cases, they must work in targeted industries or in universities or state agencies as academic experts.
The last group, however, is still required to pay personal income tax at the normal rate after they move to Thailand, Mr. Arkhom explained.
Increasing Thailand’s competitiveness
In a statement, Traisulee Traisoranakul, deputy government spokesperson for Thailand, said, “Thailand’s Finance Ministry told the cabinet that there would be no loss of revenue from the plan since the three groups are not paying any taxes here currently.”
It stands to gain, however, if the government levies a 17% personal income tax on certain highly skilled professionals, she said.
Mr. Arkhom said that Thailand’s economic and investment stimulus measures would help to attract high-potential foreign investors. Foreigners and experts with wealth will be attracted to the country.
In addition to broadening the tax base, stimulating domestic consumption and investment, and increasing Thailand’s competitiveness, 1 million high-potential foreigners are expected to stay here, said the finance minister.
Among the proposals from the Interior Ministry are LTR visas for up to four family members, including children under 20.
A visa will be valid for five years and renewable for up to another five, with a final cap of ten years. The visa holders must pay an annual fee of 10,000 baht and report their residential address every year.
Foreigners can apply for work permits after they receive their visas.
The National Economic and Social Development Council (NESDC) predicts the policy will attract one million foreigners in five years, generating 1 trillion baht in revenue.