Many of us look to investment in order to beat inflation and generate returns on our hard-earned money. Whether you are living in Thailand or you are a digital nomad who is looking to work remotely in Thailand, it’s good to understand capital gains tax implications while you are in the country.
In this article, we will be looking at capital gain on your investment (shares, funds and cryptocurrency) in and outside of Thailand.
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"Capital gain” definition from Thailand revenue department
Thailand’s revenue department describes capital gain under assessable income as the below.
“Income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings”.
Based on the above, Thailand regards capital gain as assessable income in general. Does this mean whenever you make profit from divesting your investment, you will need to pay tax in Thailand? Not necessary, and we will explain why in the sections below.
Thailand capital gains tax on shares and funds in Thailand
Thailand has made some tax exemptions on certain types of investment made in Thailand. These include capital gain from the sales of shares in companies listed on the Stock Exchange of Thailand and sales of units in certain long term mutual funds in Thailand. This means, if you buy and sell shares on SET listed stocks, you will get Thailand capital gain tax exemption.
However, if you hold onto stocks or cash then earn dividend or interest in Thailand, the revenue department will consider these as part of your assessable income. Feel free to check our other post on how income tax is computed in Thailand.
Now if you are a digital nomad or person working remotely in Thailand, we know what you are thinking. You might have this question in your head, so what’s the impact on my investments held in my home country or overseas? Let’s see more about this in the next section.
Thailand capital gain tax for foreigners
Thailand capital gains tax does not consider any investment gain from investment outside of Thailand. For example, you might have an investment portfolio in the U.S. that a U.S. broker manages. Investment gain from such a source is not taxable in Thailand.
However, there are 2 important things to note:
- Any capital gain remitted into Thailand may be subject to taxation (more about money transfer options)
- Investment gain made in your own country may still be subject to tax in your country tax (for example, the U.S. has capital gain tax of up to 20%)
Cryptocurrency tax in Thailand
Cryptocurrency has been a hot topic recently and a lot of people invest/trade cryptocurrency in Thailand. However, Thailand has yet to make very specific rules for cryptocurrency tax. Nonetheless, any capital gain produced from digital assets is generally subject to Thailand’s progressive tax as part of addressable income. Furthermore, cryptocurrency, which is a digital asset, is subject to 15% withholding tax as well.
In addition to the above, another common question about this topic: when is cryptocurrency taxable? According to a law firm Frank Legal & Tax, the main events are selling cryptocurrency for fiat (like THB, USD etc.) or use cryptocurrency to pay for goods and services.
Can you actually purchase anything using cryptocurrency in Thailand? The answer is yes. A major property developer recently announced that they have started accepting crypto currency payment!
How extensive is the Thailand capital gains tax on one’s investments?
In general, if you are a digital nomad or remote worker who already invests in your own country, most likely you don’t need to pay any capital gain tax in Thailand. However, there is an exception, which is when you remit your proceeds into the country.
On the other hand, if you are looking to invest locally in Thailand, you can consider investing in local stocks. Local stocks are those available in the Thailand stock exchange. Such investment can give you tax exemptions as well.
In summary, you can manage your tax exposure carefully if you understand what’s taxable and what’s not according to Thailand’s tax regulation. Hope this knowledge about how Thailand capital gains tax works can give you more peace of mind!
Check out our other posts on Thailand: