Foreign income tax proposal raises eyebrows among retail investors

A call has been issued to the government to reconsider the proposed foreign income tax, which could significantly impact retail investors with overseas investments, according to Jitta Wealth Asset Management.

Trawut Luangsomboon, Jitta’s chief executive, voiced his concerns about the Revenue Department’s plan to include assessed income from abroad in the personal income tax calculations. He pointed out that the notion of overseas investors being wealthy is largely misconstrued.

“In fact, over the years small investors have increasingly turned overseas because they see an opportunity to obtain better returns than in the domestic market, or they want to diversify their portfolio to lower risks.”

He highlighted that modern online platforms enable retail investors to commence their overseas investments with a meagre few hundred or thousand baht.

“If the department collects tax on investments in foreign stocks, small investors would be affected more than wealthy investors.”

He proposed that the government should extend the capital gains tax exemption, currently available for local stock investments, to foreign stock investments as well.

“I’m ready to represent investors in discussing these issues and possible solutions with the Revenue Department.”

He further stressed the necessity for clarity in the guidelines for tax calculations on foreign stock investments, given their distinct nature from other global asset incomes such as rental real estate and overseas work revenues.

“Stocks are risky assets and there is a chance of a profit or loss, with investment often carrying a high transaction cost. This can make tax calculations complicated, with possible confusion in the treatment of investors. Therefore, if taxes are required on investment in overseas stock markets, the tax calculation should be clearly defined to ensure fairness to all investors.”

Trawut encouraged the government to support investors in generating positive returns from global investments.

“When investors gain profit from an investment abroad, they will bring these profits back to spend in the country, stimulating economic development.”

In a related development, Chavinda Hanratanakool, chairwoman of the Association of Investment Management Companies, assured that the proposed tax on global investments will not affect investments in mutual funds, reported Bangkok Post.

“Investment in this segment remains unaffected.”

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