BANGKOK, Thailand – Expats living in Thailand and receiving pensions from Germany, Austria, or Switzerland are being urged to understand new tax declaration obligations, even if their pension income is minimal.
The Thai tax system distinctly separates the obligation to file a tax return from the obligation to pay taxes. Misunderstanding this can lead to fines, according to the Thai Revenue Code. This guide aims to clarify the declaration requirements and relevant thresholds in simple terms.
Who is considered tax resident in Thailand?
Before delving into deadlines and Baht amounts, it’s crucial to determine if Thai tax law applies to you. Section 41 of the Thai Revenue Code defines a tax resident as anyone staying in Thailand for at least 180 days between January 1 and December 31. These days do not need to be consecutive. Whether you’re a tax resident is solely based on the number of days spent in the country, regardless of visa type or nationality.
The threshold is precisely 180 days. Individuals spending 179 days or less in Thailand are considered non-residents and are exempt from declaring foreign income. Those who spend 180 days in the country are subject to Thai tax law without exception.
When does the declaration obligation apply? The exact Baht amount
For tax residents receiving funds from abroad, the question arises: From what amount must a tax declaration be submitted? This is governed by Section 56 of the Thai Revenue Code, which outlines four thresholds depending on marital status and income type.
For pensioners with foreign pensions, capital gains, or rental income, the rule is clear: individuals living alone who have received over 60,000 Baht transferred into Thailand annually must file. For those living with a spouse, this threshold increases to 120,000 Baht per year. This does not imply tax is due, but rather that the P.N.D. 90 form must be submitted.
A single person transferring approximately 4,500 Baht monthly remains below the threshold and needs no declaration. However, transferring 5,500 Baht or more monthly crosses the 60,000 Baht mark, making a declaration mandatory.
Income from employment in Thailand: Different thresholds, different rules
This is a critical distinction often misrepresented in expat forums. Section 56 differentiates between two income types. Individuals employed in Thailand receiving wages from a Thai employer, classified under Section 40 (1) of the Revenue Code, only need to declare income exceeding 120,000 Baht (single) or 220,000 Baht (married). These higher thresholds apply exclusively to employment income earned within Thailand.
Conversely, pensioners transferring their pensions from Germany, Austria, or Switzerland do not fall under Section 40 (1). Their income is treated as “other income” under the Revenue Code, for which the lower thresholds of 60,000 Baht (single) and 120,000 Baht (with spouse) always apply. Those citing a universal 120,000 Baht threshold for all foreigners have likely confused these categories, with the 60,000 Baht limit being the relevant figure for most retirees from German-speaking countries.
Which money counts? The directive Por. 161/2566
Not every Baht deposited into a Thai account is automatically taxable. The decisive factor is directive Por. 161/2566 from the Revenue Department, effective January 1, 2024. It stipulates that foreign income earned from January 1, 2024, and transferred to Thailand in the same calendar year is taxable. This aligns with Section 41 (2) of the Revenue Code, extending tax liability for tax residents to foreign earnings.
Sections 40 to 42 of the Revenue Code define what constitutes “income,” including pensions, capital gains, dividends, and rental income from abroad. Savings that have already been taxed or funds demonstrably earned before January 1, 2024, are not included. Therefore, transferring old savings from a German account to Thailand does not incur tax, provided the origin can be documented through bank statements or pension notices.
Old savings before 2024: What the protective clause Por. 162/2566 regulates
Funds accumulated in a German account before January 1, 2024, and subsequently transferred to Thailand are exempt from taxes, as per directive Por. 162/2566 issued on November 20, 2023. This clause clarifies that income earned prior to January 1, 2024, is excluded from the new taxation, irrespective of the transfer date. Consequently, money saved in 2019 and sent to Thailand in 2025 will not be taxed.
However, the burden of proof lies with the taxpayer. To qualify for this protection, one must provide documentation proving the funds were earned before 2024. Old bank statements, savings book entries, or previous pension certificates serve this purpose. Without such evidence, the Revenue Department may treat the transfer as taxable new income.
Allowances under Section 47: Why many pay no Baht despite declaration obligation
Even for those obligated to file, paying taxes is rare due to generous deductions under Section 47 of the Revenue Code. A 50% deduction for expenses, capped at 100,000 Baht, is applied first. Then, a personal allowance of 60,000 Baht is deducted. Individuals aged 65 or older can claim an additional age allowance of 190,000 Baht.
Married individuals can deduct 60,000 Baht for their spouse if the spouse has no independent income. For example, a 67-year-old pensioner receiving 400,000 Baht annually would deduct 100,000 Baht for expenses, 60,000 Baht personal allowance, and 190,000 Baht age allowance. The remaining 50,000 Baht is below the 150,000 Baht tax-free zone, resulting in zero tax liability. Despite this, a declaration is required if the 60,000 Baht threshold is met, serving to inform the Revenue Department of the tax-free status.
The Double Taxation Agreement: What Germany, Austria, and Switzerland regulate
Many retirees from German-speaking countries inquire whether a Double Taxation Agreement (DTA) exempts them from Thai tax liability. The answer is nuanced. The DTA between Germany and Thailand (effective 1968) stipulates in Article 18 that statutory pensions from the German Statutory Pension Insurance (DRV) and private pensions are exclusively taxed in Thailand, with Germany waiving its taxing rights.
Civil servant pensions fall under Article 17, being taxed in Germany. For Austrians, DTA BGBl. No. 263/1986, Article 18 (1) states that private pensions and PVA pensions are taxed solely in Thailand, while Article 19 covers civil servant pensions, taxed in Austria. Switzerland has its own DTA articles. The fundamental principle remains: a DTA does not absolve anyone of the declaration obligation in Thailand; it merely specifies which country collects the tax.
Form P.N.D. 90: How and when to submit the declaration
Those required to declare must submit Form P.N.D. 90 (ภ.ง.ด.90) to the Revenue Department. This form covers all income outside of regular employment in Thailand, thus pertaining to pensioners and expats with foreign income. For paper submissions, the deadline is March 31 of the following year. Online submissions are accepted until April 8. The form is available on the Revenue Department’s website (rd.go.th), with online filing through the efiling portal (efiling.rd.go.th).
A Tax Identification Number (TIN) is a prerequisite. New applicants can obtain one in person at the Revenue Department with a passport, visa stamp, and proof of address. The relevant form is L.P. 10.1 and is free of charge. For first-time filers or those unsure about DTA income entries, engaging a local accountant is recommended for a fee between 2,000 and 4,000 Baht, which is less than the penalty for an omitted declaration.