Finance Ministry challenges tax cut proposal for holders of new long-stay visa

A proposal to introduce a long-stay visa for 4 target groups of foreigners has already hit a hitch, with the Finance Ministry pushing back against a suggested tax rate of 17% on local earnings. The ministry argues that the reduced rate will affect government revenue.

Under the proposal, wealthy foreign nationals could apply for a special visa that would permit stays of up to 10 years. Eligible foreigners would also be able to own property and land in the Kingdom, while paying 17% personal income tax on revenue earned in Thailand.

The proposal was submitted to the Centre for Economic Situation Administration at a meeting chaired by PM Prayut Chan-o-cha last Friday. However, an anonymous source has told the Bangkok Post that the Finance Ministry is resisting the proposed tax cut and has asked for more agencies to be consulted and for the proposal to be re-submitted.

According to the Bangkok Post report, the long-stay visas would be aimed at wealthy foreigners of any age, who in turn would need to invest at least US$500,000 in government bonds or property or foreign direct investment. Applicants would also need proof of at least US$80,000 in income over the previous 2 years and would need assets worth at least US$1 million and health insurance coverage of US$100,000.

Foreigners wishing to avail of the visa for retirement purposes would need to be at least 50 years of age, with an income of US$40,000 a year and health insurance coverage of US$100,000. They would also be required to invest US$250,000 in government bonds or property. They would be granted a 10-year visa which would permit them to purchase property and land, work a maximum of 20 hours a week without a work permit, and pay 17% tax on their earnings.

In the case of digital nomads, or employees of large organisations who are close to retirement age, a yearly income of US$40,000 would be required, as well as the US$100,000 health insurance coverage.

SOURCE: Bangkok Post