Tax Incentives to Attract Highly Eligible and High-Net-Worth Expatriates – Law Alliance

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Tax Incentives to Attract Highly Eligible and High-Net-Worth Expatriates

26 September 2022

To promote Thailand as destination for expatriates with high eligibilities and net worth, Royal Decree (No. 743) (“Royal Decree 743”) was issued on 21 May 2022 to grant tax incentives to certain expatriates, with a cardinal rule that they must hold 10 year long-term resident visa (“LTR Visa”).

Under the Royal Decree 743, a so-called “High-skilled Professional” expatriate employed by a company in the targeted industry under the National Competitiveness Enhancement for Targeted Industries Act B.E. 2560 (2017), the Investment Promotion Act B.E. 2520 (1977) (amendment in 1991, 2001 and 2017), or the Eastern Special Development Zone Act B.E. 2561 (2018), will be granted with a flat rate withholding tax of 17% on salaries, instead of the normal progressive tax rates of 5 – 35%, provided that such expatriate refrains from crediting or claiming a refund of such withholding tax.

Where a “High-skilled Professional” expatriate earns income under Section 48(3) of the Revenue Code, e.g. dividends, interests/discounts/capital gains from debt instruments, for which he/she may opt to treat 15% withholding tax (10% withholding tax for dividends) as final tax, or income from a sale of immovable property with the specific tax computation under Section 48(4) of the Revenue Code, which may be opted as a final tax, in order for the expatriate to be entitled to 17% tax rate, he/she must opt for such treatment under Section 48(3) and (4), and refrains from crediting or claiming for a refund of withholding tax or tax being paid.

In respect of the “High-skilled Professional” expatriate, the D-G Notification No. 427 further requires that, in order for tax incentive to apply, the employer in the targeted industry must submit to the Revenue Department a submission form with his/her required details. Also, such expatriate must receive salaries as remunerations for works done in the targeted industry and file an annual PIT Return Form for individual with tax incentives (Form PND 95) within the deadline.

Failure to fulfill any condition will disqualify the expatriate from the tax incentives for the relevant year.

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