Dogmatix

A Swiss banker told me that since Thailand only signed up for CRS this year, the first information that will go to the Thai government will for calendar year 2024. They have to provide Balance as of 31 Dec 2023 and 31 Dec 2024 and income during the year, which I believe includes interest, dividends and external inflows. That means the RD won't have any information from overseas financial institution on income and inflows during 2023 to help it investigate remittances in 2023 to determine whether they were income earned in 2023 or earlier. That won't stop them demanding supporting documents of course. However, I think there is an argument in favour of only starting to get tough in respect of 2024 when the prior year loophole is gone. No guarantees but I would guess they will not trouble too much to investigate large remittances between now and the year end which don't need to be entered on tax returns unless the income was earned this year.

How does this work? You have bitcoin somewhere which is not notifiable under CRS and don't have to pay Thai tax on gains?

Not if that's the only income you have. It is just below the threshold.

It seems that anyone surviving in Thailand on a full frozen UK state pension without other income would just squeeze into the Thai tax net. Taking basic deduction of 60k plus 190k over 65 deduction would put them about 85k over the 150k threshold and that would be in the lowest progressive rate of 5% resulting in about 4k tax which would be payable in Thailand without tax credit, as it would be below the threshold in the UK. Any private pension or other UK income puts you into higher Thai tax rates but as UK tax kicks in over the UK threshold, the Thai tax take net of tax credit is still going to be quite low. However, the low Thai tax threshold means that every single UK pensioner who has at least the full frozen pension or equivalent from other sources is liable to Thai tax and will have to file a tax return and pay, in most cases, a small amount of Thai tax after tax credit. If 80k British pensions pay just 4k Thai tax, they will 320 million baht which they will be happy to have. But will it worth the hassle of forcing them to calculate their tax liability, which cases of other income will be quite complicated, and file tax returns? I doubt it, once you net off economic losses from retirees who leave, switch to spending less than 180 days in the Kingdom and decide not to bring in any case for a condo, car or to start a business to avoid being taxed at 35%. Definitely a huge amount of greed without much thought put into it.

Non-state pensions are not exempt in any of the DTAs I have looked at.

I called the RD some years ago when I stopped working for a while to ask this question and the answer was that there was no requirement to file a tax return with income below the threshold but I can't tell you that is in the Revenue Code. It may an RD Order. Anyway, as you say, most Thais and migrant workers don't file tax returns and the RD doesn't chase them up. In my case I stopped filing for a few years, then resumed filing with no comment from the RD.

No details of the 30 day insurance tourists are supposed to get in exchange and no projected revenue and costs. Obviously tourists will get little or no benefit from this and the revenue will disappear into a black hole of incompetence and corruptio.

Yes it is tourist tax not a travellers tax as it used to be.

Funny that Thailand refused to condemn a far more widespread attack on Ukraine by Russia.

Apples and oranges. Jenkins was referring to UK state pensions. You quoted from US DTA.

Yes. It's just on a remittance basis for now but who knows what the future might bring.

I hope they leave the Burmese alone. Their desperate junta government has just introduced a foreign income tax of 10% and made them remit 25% of their salaries home every month to be exchanged at the official rate which is half the black market rate. They can't get new work permits approved by the junta, if they don't pay. So that is another 12.5% tax. Junta cronies have the foreign exchange licenses, so they will get all change all the foreign currency remitted by Burmese workers at the official rate and then change it at the black market, taking 50% of all the remittances for themselves which they can then change back to dollars at the official exchange rate and deposit in their Singapore bank accounts. Talk about rape of a nation but nice work, if you can get it.

I remember these - a right PITA, if you had to go on a trip at short notice. Secretaries sent messengers to get them but retirees would have to flog over to the RD themselves, if they re-introduced them in the same format. They must have suspended the requirement with an RD order and another RD order would bring them back. A dictatorial Thaksinite government would love this and Immigration also loves anything that causes grief to foreigners whom they regard as all criminals.

The only reference to pensions in the UK Thai tax treaty is in Section 19: (2) (a) Any pension paid by the Contracting State or a political subdivision or a local authority thereof to any individual in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State. That means only pensions occupational pensions paid to former civil servants and local government people shall only be taxable in the UK. There is not even any mention of the UK state pension which means it can be taxed in Thailand and the RD can tax the different between UK tax on it and Thai tax, if the Thai tax is higher, which it will be, if the taxpayer has no other income and has only basic Thai tax deduction. This won't be so bad for over 65s who get an additional 190k deduction. The UK wasn't very aggressive in negotiating this. They should have got the state pension exempted like the yanks did and the Thais wouldn't have cared in those days, so I guess the Brits were too lazy to ask. There was no retirement visa at that time and therefore the only British retirees were expats with PR who retired in Thailand after spending the latter part of their career in the Kingdom. Anyway the large numbers of recently arrived wealthy Chinese are in worse shape, as their DTA is only for companies, as it was negotiated in the early 80s, not long after the Cultural Revolution, when there was no private enterprise and no private wealth 555.

My understanding from the clear as mud RD Q&A was that any remittance to wifey under 20 mil in a tax year is not assessable for tax and doesn't need to be declared. But Srettha has told the RD to review Inheritance Tax and any review would also include Gift Tax.

The problems with this, as I see it are: 1. LTR visas don't provide any exemption for earnings earned before the LTR visa was issued. Therefore someone coming in with a new LTR visa and wiring funds to buy a condo will have to pay up to 35% tax, if they can't prove they earned the money after the LTR visa was issued, which is unlikely, if they earned the money somewhere else. 2. The Royal Decree was announced last year under the previous government and the whole LTR scheme was the brainchild of that government, one guy in particular who didn't get a job in this government. although he hoped to be a minister or at least a deputy minister. So the Srettha government feels no particular obligation to this project. The LTR tax exemption didn't seem like a big deal when anyone could just wait till the next tax year and get the same exemption. Now resentment will build up from Thais who will see the LTR visas holders like British people used to see the non-domiciled foreigners who got exemption from foreign source income, like Rishi Sunak's rich Indian wife. Now the non-dom tax privileges are being gradually whittled away to nothing. Even though no one cares about expats, Srettha said this is being done in the interest of fairness and equality which will look odd when he gives tax exemption only to rich foreigners while taxing the butts off Thais and less well off foreign retirees who are often struggling to support Thai families. I predict the LTR tax exemption won't survive long term. Another Royal Decree or an amendment to the Revenue Code would eliminate it. Those with 10 year LTR visas are unlikely to get this privilege with their first renewal and it might not even last that long. The first Elite cards came with the right to buy land but that was axed in the first few months with an offer of a refund. LTR visa holders would probably get their 50k baht back pro-rata, if the tax exemption went mid stream, i.e. a 25k refund if it went after 5 years and you no longer want the visa on that basis. Obviously the BOI people who write that stuff have to sound upbeat because they are still selling the LTR scheme and will judged on their sales numbers. But they have no power and are part of the PM's office.

Definitely driving retirees away both those on modest pensions and the wealthy ones. Just the uncertainty (both regarding this edict and worries about future edicts from a flaky government getting deep into debt) and the hassle of having to file tax returns and deal with capricious official in a non rule of law jurisdiction is enough to put most people off.

Unfortunately the UK Thai tax treaty doesn't exempt the UK state pension from taxation in Thailand, only government service pensions for civil servants and local government officers. The US treaty does exempt social security.

I think you've got too many zeros there but the 207 years is correct. It is a drop in the bucket but makes Thailand no longer an attractive retirement destination and makes it impossible for retirees who are already here and renting to buy a condo without leaving for over half a tax year which could be costly and inconvenient. Many will ask why bother coming back? It creates great uncertainty for LTR visas and Elite/Privilege too, as who knows what they can chuck out at short notice next. Netting off incremental tax with retirees leaving or not coming and not buying condos and new cars etc, the overall effect on the retiree sector which they have been trying to promoted is bound to be negative in economic terms. How incredibly stupid! I don't think the results will be much better for the Thai overseas investment sector. Keeping tax accounts for capital gains, dividends and interest is going to be a headache for traders who don't have to do this on their Thai stock portfolios. If I were doing that I am sure I would give up and bring the money home but this is unfair too because the short notice period means they have to pay tax on earnings from this year and had no time to tax plan. Many wealthy Thai investors will just leave money overseas indefinitely that they would otherwise have reinvested in the Thai economy. So probably a net negative on the Thai side too. If you saw Srettha blathering on TV about the digital wallet and the fuel subsidies (he said that 99 economists and two former Bank of Thailand governors were a minority because they were only 101 out of 71 million people), it is clear he is a man of shallow intellect, who can't or is too lazy to think things through. He seems to just agree to all the ridiculous policies handed to him in scripts by the faceless, unelected Thaksinite team which is Thailand's equivalent of Classic Dom Cummings to Boris Johnson.

What I meant was past savings that are still overseas and to be remitted in future, not past remittances of past savings. But yes, they can tax past remittances and can go back 20 years, I think, but only if the remittances comprised earnings in the year they were remitted. I don't think they will bother with that, particularly as they won't have past CRS information as they only joined this year. They have never bothered with it in the past.

I think loans from company bank accounts could work. However, bear in mind that banks under CRS have now started to lift the corporate veil and will report on the beneficial owners of the company bank accounts. I think in Switzerland they will report on any shareholder who owns over 25% and they will report on beneficial owners of trusts too. All this without telling you, unless you ask. Bank secrecy is completely gone there. If that is not enough, BVI companies now have an obligation to file unaudited accounts with their BVI agents for 2023 onwards. The accounts are not publicly available but can be revealed to any tax authority that is a part of CRS. So the RD will know, if you are a beneficial owner of the company that makes the loan, and if it is a BVI company, they will be able to see the company accounts you file with the agent to check it really has loans, has paid dividends, salaries etc. I imagine unaudited accounts requirement is just the thin end of the wedge and audited accounts may follow later. Of course it may be hard to find auditors for family holding companies, particularly, if the past unaudited accounts filed were fraudulent. The problem I see is that the RD might lift the corporate veil and say a loan from your company is income. They could also say that, if a loan is not repaid within a certain time frame. If you pay interest on the loan you have to deduct withholding tax.

One thing I find particularly disgusting about this is the short notice. It should have been done as an act of parliament for a major change like this with a longish notice period. But Srettha jumped on this unlawful reinterpretation as a great way to counter critics of his stupid unfunded digital wallet and fuel subsidies, even though any tax from this will not arrive till 2025 over a year after the digital wallet is spent and forgotten by the voters. As it is all many people will not have records of past income, tax credits and bank balances because there was never much need to keep them. I am even starting to think seriously about leaving for the first time in over 30 years. I will do better in a jurisdiction that taxes global income in the year that it arises but not past income on remittance. I wouldn't mind paying tax on overseas earnings if I had them but being forced to pay tax on past savings remitted just to survive is unacceptable.

I have had another look at the RD's Q&A sheet regarding RD Order P 161/2566. The way they write the Thai is pretty hard to read and the google translation comes out worse than usual because the original is in pdf format and the Thai characters get jumbled when cut and paste. Anyway it is only a superficial attempt to clarify a very few points that may arise for Thai taxpayers. But a couple of points are worth mentioning. Q 4. Like most of it the answer is rather garbled but it is does seem to say that inheritances from overseas will not be taxable as normal income. Presumably this means they will be taxed at Thai rates if death took place after the Thai IHT Act came into force. What it doesn't mention is that overseas inheritances are taxable in Thailand, if over the threshhold, whether remitted to Thailand or not. It also seems to say that gifts from overseas between direct relatives and married couples are tax free up to 20 million, which is consistent with Thai Gift Tax. But it doesn't reference Gift Tax per se or say that gifts to non family up to 10 million are tax free, as per Thai Gift Tax law. It also mentions very special situations like support of parents and spouse which implies this is another tax law not the Gift Tax Law. So much for clarification. They are really a load of so and sos. For those who have a Thai missus who has a foreign bank account, perhaps you could transfer money to her overseas and get her to gift the money to you in Thailand, rather sending money to the missus which you may not get back. Q 10. This deals with a question about a Thai who moves back to Thailand and brings back money earned while spending several years living abroad. The answer is vague but what they are saying seems to be that such a person had better make sure they bring in all the money in the year before they become tax resident again. Many Thais returning home will get caught by this unwittingly, if they move back before July in any year without understanding this, which is pretty disgusting. But even more worrying, this doesn't offer any hope for foreigners who are already tax resident and want to remit savings from abroad going way back, if they say the Thai workers savings would taxable if they brought them back after becoming tax resident again. It seems to imply tough luck, we'll tax your savings at 35%,m whereas the 2003 RD directive was that savings are not taxable. RD Order 161 2566 Q&A.pdf

Half of my son's kindy class are sick at the moment, at least two with RSV. The US FDA recently approved the first RSV vaccine from Glaxo Smith Kline and it is now being rolled out in the US. When will be available in Thailand? Not even mentioned in the OP.

He has a new boss now, recently returned to Thailand who can get rid of him, if he doesn't listen.