If you (as an individual) have ever questioned yourself whether you have to pay income tax in Thailand or not, the starting point to answer that question is to determine the source of income that you earned.
Income derived from sources in Thailand (such as, work or employment performed in Thailand, property in Thailand, business in Thailand, etc.) would be taxable in Thailand. Income derived from sources outside of Thailand would be taxable in Thailand only if BOTH of the following two conditions were met:
(1) The earner stayed in Thailand for 180 days or more in the calendar year that he received that income, and
(2) The earner received that income in Thailand OR received it outside of Thailand but brought or remitted it into Thailand in the same calendar year that he derived it.
Although Thailand has recently adopted a regulation that defines the gains from trading cryptocurrencies as one type of taxable income, the tax authorities have not stated anything about how to determine the sources of those gains; such as, for which circumstances that such gains are considered sourced in or outside of Thailand? Thus, if it were established that the gains were sourced outside of Thailand, does this mean they could never be taxable in Thailand, unless both of those two conditions set out above were met? Hence, to us, it makes total non-sense if someone were to argue that, if a person who earned gains from trading cryptocurrencies spent the majority of time in Thailand in a year, the whole amount of those gains that he received would be considered Thai-sourced income and thus entirely taxable in Thailand. In such a case, it would make more sense to us to apportion those gains to Thai-sourced income VERSUS foreign- sourced income. However, which basis would be used for that apportionment? Can we use the number of days that the earner stayed in Thailand VERSUS outside of the country in a particular calendar year? These are the questions that remain un-answered by the Thai tax authorities.
The next challenge to the Thai tax authorities is how could they know if someone derived gains from trading cryptocurrencies, even if that trade was made through a trading company in Thailand. So far, we are not aware of any mechanisms of the Thai tax authorities to track the person's income that he received from trading cryptocurrencies, unless such person received that income from the payer in Thailand who deducted the 15% withholding tax on the payment, or he received that income in his Thai bank accounts. Yet, this could be changed in the near future.
Last but not least, the knowledge in cryptocurrencies (and other borderless transactions) of most Thai tax officers, who has a duty to perform a tax audit on taxpayers, remains in doubt. It would not be a surprise for us if someone stated that most of the Thai tax officers still did not know what crypto currencies were. Yet, this could be changed in the near future.
We, N-Able Group, are a real proficient expert in Thai personal income tax matters, especially for the issues of Thai personal income tax that concerns foreigners. If you have any further questions or need any assistance in Thai taxation matters, please do not hesitate to contact us.
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