Dogmatix

Was your mate doing this in Thailand or some other jurisdiction? The Jimmy Carr scheme was a bit brazen but the article suggested it was going to take a couple of years for HMRC to come up with rules to close the loopholes. So does the RD have rules to prevent it? I guess they could deem a loan longer than a certain number of years as income but I am not aware of any rules like that in place. I wouldn't suggest doing this for someone working in Thailand as a way to avoid salary tax, certainly for payments coming in on a regularly monthly or quarterly basis. It could work for someone who has sold an assets overseas and wishes to remit some or all of the gains on an occasional basis. It might also be useful for people who have no easy way of showing what was principle or earnings generated prior to 2024 vs post 2024 assessable income. I suspect wealthy Thais will be using this type of method or back to back loans, as suggested by Prof Kitipong.

I see your points but I still think that Thailand would still be able to receive the same assistance and economic cooperation from OECD countries, if it choose to continue taxing foreign source income on a prior year remittance basis. I don't think that Singapore and HK are going to be cut out of any OECD pies for not taxing individuals' foreign source income. If there were real pressure, I think the OECD would want taxation of all foreign source income, not just on a remittance basis. The OECD doesn't have as big a gun as the US has individually. Countries that refused to comply with US FATCA would have been cut out from being able to make US dollar payments that have to do through a US correspondence bank. Some Thai financial institutions refuse to deal with clients who are US persons as a result of FATCA.

I have seen some mention here of generous tax deductions for self-employed persons up to 60% of revenue. As many may not be familiar with this I think it is worth pointing out that these deductions are intended for self-employed persons and unlimited partnerships that prefer not to submit audited accounts which might be more beneficial, if their expenses are more than the standard deduction of 60%, or whatever is permitted for their industry. If you take someone operating a restaurant or selling things from a rented shop, a 60% deduction might not seem overly generous. The 60% deduction has to cover all their costs of products or raw materials, rent, salaries for any staff, utilities, protection money to cops, interest on loans etc. This system is only suitable for small business because your progressive tax rate goes up to 35%, whereas the maximum corporate tax rate is 20%, while directors can charge some personal expenses like company car and driver and entertainment to the company as tax deductible. My point is that these deductions are not that generous, if you business is over a certain size or your total costs are over 60% of revenue and these deductions don't apply to foreign source income, which is subject to standard deductions the same as Thai salary income, so irrelevant to this topic.

If someone has a company in UAE or elsewhere, wouldn't it make more sense for the company to make loans to the Thai tax resident, rather than pay a salary? Loan agreements can be structured so that the repayments can be done from outside Thailand. Even if the Thai tax resident is a shareholder and/or director the RD cannot make objections to loans to them. Interest payments from Thailand would be subject to withholding tax but no need to pay interest from Thailand.

I can see the advantage to Thailand of joining in CRS reporting. Countries that don't will get shunned and even Switzerland had to join after years of resistance, while former tax havens like the British Virgin Islands now provide information such as beneficial owners and directors of companies (and from 2024 unaudited accounts) to foreign tax authorities on request. But what advantage will Thailand get from OECD by taxing foreign source personal income on remittance? What disadvantages do Singapore and HK get from joining CRS but continuing their policies not to tax individuals' foreign source income?

It's less generous than the Prayut governments shopping tax rebates. Those schemes allow you to get a tax rebate on 30,000 baht that was not limited to 10,000 but based on your top progressive tax rate. Under that scheme, if your top rate of tax is the maximum 35%, you would get 17,500 back on 50,000, not just 10,000.

That is the excuse or an exaggeration given by the RD but not very convincing. I think the real pressure was to join the CRS reporting which they have just done 5 years after other major players in the region. HK and Singapore have been under pressure from the EU to prevent double non-taxation of multinationals receiving passive income such as from sales of shares. That seems aimed at multinationals that structure things so that untaxed foreign sourced gains go into a HK or Singapore subsidiary. Singapore has actually just introduced legislation to tax this on a remittance basis with certain exemptions and HK is likely to soon. The idea is probably to discourage these structures, so EU multinationals will pay tax on the income at home. But there is no obvious pressure from OECD on HK and Singapore to introduce tax on foreign source income for individuals. No particular reason for them to care about it, since individuals cannot easily shift notional tax residencies of certain pools of income around like multinationals. As long as they get the CRS information on their own tax residents, I don't think there will much pressure from OECD on Thailand to tax its own tax residents' foreign source income. Srettha said it was about equality but I expect that was an opportunistic rebranding by him after the RD informed him they were doing it, while the RD's reason was mainly that they thought they may as well put the information they will receive from CRS to some useful purpose and see how much incremental tax it brings in.

I think a grey area but unlikely to be an issue since it is not currently an illegal substance. Technically it is illegal for the vendors to promote or sell online but that is just under the herbal medicines law I think and they haven't bothered to enforce it. But it is not specifically illegal to send it to a friend since it is not an online commercial transaction. I don't think you need to be registered with the FDA to send a legal substance to a friend as a gift. I believe you can send supplements like vitamins and indigestion tablets too. If you are worried get the vendor to send it direct.

PT is following in the fine tradition of the Yingluck government's rice pledging scam. Promised the money and got farmers to pledge all their jasmine rice to get cash they could use to buy sticky rice for their families to eat. Only Yingluck dissolved parliament suddenly without giving her finance minister Kitirat time to set up funding for all of it through BAAC. As a caretaker government they no longer had the power to force BAAC to advance the money which was questionable legally even before. About 20 farmers committed suicide as a result and many more faced grim hardship with no money and nothing to eat. Meanwhile they made out like bandits on the crooked deals they arranged to sell the farmers' rice they didn't pay for to fake Chinese government departments. Just promise good things to poor rural folk and take political credit for it and move on without bothering to follow up to see that they get paid.

Never realised she was a transgender before. You live and learn.

Sounds like an excellent excuse for more online censorship and surveillance resulting no reduction of online fraud..

Other countries tend to tax global income. Wealth taxes do exist, eg 0.5% of total wealth over a threshold but don't often work out very well and have been walked back in some countries like France, where a lot of wealthy people simply left. I take the position of Prof Kitipong that it would make more sense for the economy to avoid doing this so as to be competitive with HK and Singapore, which is what the previous PT government of Yingluck strove to do by reducing corporate income tax from 30% to 20%, a theoretical sacrifice in today's terms of about 300 billion or close to 2% of GDP, whereas this new approach is unlikely to raise anything like that. But, if you have to do it, try to make tax rates more in line with Thai tax rates in order to incentivise repatriation of capital, eg 10% on dividends, 0% on equities capital gains, 15% on interest. Also give more time to investors to adjust before implementation and legislate the change, rather than leave it to the RD to reinterpret the law in a way that is non-binding on taxpayers and subject to legal challenges. Re global income tax of Thai tax residents, the Prachachart Thurakit article said the RD wants to amend the Revenue Code to introduce this. So this may be only a stop gap. Whichever way you look at it, Thailand has a fairly low tax take and will need to increase that to meet the growing expectations of welfare, given that GDP growth is expected to continue to underperform due to lack of competitiveness. That probably means higher personal and corporate tax rates, higher VAT, higher inheritance and gift taxes with lower thresholds, as well as global income tax collection.

You got off topic by making condescending remarks about people you objected to criticising this poorly thought out tax policy and suggesting they shouldn't be in Thailand, since only people who accept chaotic policy making should be here.

An interesting point. Certainly the English translation of Royal Decree 743 appears to give exemption to income generated in the previous tax year only - income generated in tax years prior to that being already exempted under the previous interpretation. Because Thai has no definite or indefinite articles or singulars or plurals the Thai just says "in previous tax year" which is ambivalent and is the reason that it is open to various interpretations in the tax code. Whether in future other tax years after 2024 but the immediately prior tax year are included n 743 probably needs to be ruled on by the Tax Court. If the Revenue Code is amended to legislate the RD's as yet unilateral reinterpretation that is technically not binding on taxpayers, things could either way for 743. Parliament could amend 743 or incorporate it into the Revenue Code clarifying that all prior tax years are exempted, or it could include it in a list of prior legislation that is repealed. The LTR programme was a brainchild of the previous uncle parties government, whereas the Elite card from the first Thaksin government. Since the uncle parties are unlikely to ever regain power, the LTR project will not have any champions in government, unless another party adopts this orphan.

Most of the red shirts have by now been released from jail or acquitted, while MFP supporters are still languishing in jail.

Fake news alert. Reports have been circulating that the economy is in crisis and the government needs to borrow 3% of GDP to fix it. Please ignore this fake news that is designed to instill panic and make people spend less and save more, which will in turn lead to a genuine crisis, if enough people believe the fake news.

Fake news alert. There have been fake news stories reporting that Chinese tourists have been shot dead, blown up at Erawan shrine, abducted and raped by other Chinese, drowned in unseaworthy and unlicensed tour boats. These stories are all untrue. Please delete by order of the PM. Job done.

Many Thais feel the same way as I do. Read Prof Kitipong's article. I am Thai myself and, along with 14 million others I didn't vote for the party that lost the election but is now in power and in charge of the finance ministry, overseeing this utterly shameful and unlawful tax rule change. Suggesting that Thais shouldn't come to or be in their own country because they expect a lawful and structured approach to tax reform that doesn't risk driving foreign investment away and harming the economy is not constructive.

So she had assessable income and paid tax and was in the category of about 4 million tax payers, not in the 6 million who filed tax returns but didn't have to pay tax. The question was whether you have to file a tax return, if you have no assessable income and my response was no. The Thai workforce is estimated at 39 million. So with only 10 million tax returns filed 29 workers didn't file tax returns without getting into those with income who are not working.

Due to your uncivil jibes and foul language I am not going to reply to any more of your posts Cyclist. So please don’t ask any more.

You are not required to file a tax return, if you are sure you have no assessable income. The RD reports that around 4 million pay income tax but they are receiving anout 10 million tax returns. The 6 million tax returns filed by people who didn’t have to pay tax must comprise largely people who had tax withheld by employers but need to reclaim it because with allowances they are under the threshold. Some may just file to be safe or because they got in the tax net and feel they have to keep filing. If you have dividends but no other income you can get back more tax than you actually had withheld from the dividends by filing a tax return. Many Thai investors who don’t work file for this reason. What do you get in return if you are a foreign tax payer in Thailand? Nothing. Social security is based on contributions and you can get those benefits, if you pay the contributions but don’t earn enough to pay tax like the migrant workers.

It’s a good question. Traditionally they rely on taxpayers who are not liable to salary withholding tax to declare themselves. Probably nothing will change for some years and then the RD might start negotiating with Immigration to cooperate on this.

The problem is that there has been no effort made by the RD or the government to think this through to see if it is even net beneficial to Thailand, let alone draft the hundreds of pages of regulations needed to cover the complex situations that will arise or even explain how to claim a tax credit when there is no space for this on the form. So it is not surprising that a great deal of angst, uncertainty and speculation has arisen. Probably many people will decide not to move to Thailand, leave Thailand and/or not invest in Thai property due to the uncertainties created, even though it might not turn out to be disadvantageous to them. That is a result of utter incompetence and idleness of the RD and government.

It is likely to affect all retirees. Definitely those who used the prior years loophole are affected but so are those who had all their income remitted direct to Thailand as soon as it arose without offshore seasoning. Most likely everyone is going to have to file a tax return. Some of those who remitted their income direct may have had a Thai tax liability but didn't file a tax return or pay the tax. However, we still don't know how the RD is going to treat income assessable in the country of origin which has a DTA with Thailand; allow deduction of tax credit but tax any differential is the Thai tax would be more; tax the whole lot and tell the taxpayer to claim a refund or claim a tax credit at home; or maybe even exempt and foreign income that is subject to tax overseas, no matter whether the tax is more or less than the Thai tax. Many decisions remain for the RD to make. So far they have just scrawled a few lines to reinterpret the tax law and left it at that which is unprofessional and irresponsible. But there again the top officials all live in huge mansions and drive fancy cars on their meagre civil service stipends. So it is reasonable to assume their working hours are occupied with something more pressing than drafting tedious tax regulations.

Would you take tax advice about being a Thai tax resident from someone who has a vested interest in persuading you to become a Thai tax resident?