Dogmatix

I would say a DTA can be invoked to justify not declaring income that is not assessable in Thailand, i.e. US SS which cannot be taxed in Thailand according to the treaty. Apart from that and government service pensions there is little or nothing else where the treaties say "shall be taxed" in the contracting state that pays it. Where the treaties say "may be taxed" you would have to declare the income and claim a tax credit, where tax has been paid. If you have not yet paid tax on the income, you would have to pay full Thai tax on it and claim a Thai tax credit on your foreign tax return.

Found this on the website of an international law firm, called Watson, Farley and Williams with an office in Bangkok. They point out that P. 161/2566 is merely an administrative directive to RD officers and is not law (and therefore not binding on taxpayers). And they expect that it will have to upgraded into a legal amendment, presumably either through a Royal Decree or an Act of Parliament. https://www.wfw.com/articles/recent-development-in-thai-tax-on-foreign-sourced-income/ IMPLICATION FROM THE DEPARTMENT INSTRUCTION NO. PAW 161/2003 If enacted and upon it becoming into effect, a Thai Tax Resident will be liable for PIT when their Foreign-Sourced Income is brought into Thailand, regardless of the tax year in which the income was earned. A press release issued by the Revenue Department on 18 September 2023 further added that the amount of tax paid in the source country that acceded to a double tax treaty (“DTA”) with Thailand could be applied as a tax credit as Thai PIT payable, in accordance with rules stipulated under an applicable DTA. Whilst this new instruction could have significantly affected PIT implications, it is worth noting that at this stage the Departmental Instruction is an internal guidance for revenue officers, rather than law. As such, it is anticipated that this proposed instruction will be escalated to legislative channel before it is officially implemented as law. London Trainee Megha Vijh also contributed to this article. The Q&A that the RD provided on P. 1610/2566 shortly after its announcement skirted around the issue of its legality. Below is my own translation of Q11 and the answer. QUESTION #11 Is Revenue Department Order No. P.161/2023 a law or not? Are taxpayers under a legal obligation to comply with this order or not? ANSWER: It is not a law. It is an order explaining the meaning of the Revenue Code Section 41 paragraph 2. Taxpayers have a duty to comply with the law in paying taxes. Thus the this type P. administrative order from the director-general of the Revenue Department is considered a guideline for Revenue Department staff to follow in order for them to provide advice to taxpayers, so they may follow the law correctly. The answer looks like a mealy mouthed and self-contradictory attempt by the director-general to give himself the authority to unilaterally reinterpret or amend the Revenue Code through a RD administrative order to staff which will then be binding on taxpayers. However they had to admit it does not have the force of law which would logically mean it is not legally binding on taxpayers. With this shoot from hip, edict happy Thaksinite government with an absentee finance minister directing the RD anything is possible. However, you would think that the RD legal department would advise against leaving a reinterpretation with such wide ranging implications as a mere administrative order to staff on how to advise taxpayers with no force of law, so that it can be readily challenged in the Central Tax Court which might actually find against the RD director-general for over reach of authority. If there is to be some form of enactment, that would involve at the very least, I imagine, a cabinet resolution involving some discussion among the coalition ministers and possibly some revisions. However, as I said, anything seems possible with this flakey blast from the grim past government with its concerns focused squarely on short term political self interest and no cares about negative implications for the Thai economy or fairness towards taxpayers who have organized their affairs to comply with a 38 year old interpretation of the law.

The PND94 forms you linked is for businesses to file their their half yearly tax returns. Those are English forms that can be filled out online and printed out for reference but can't be filed. There will be a Thai version you can fill out online and print out to file manually with the RD, To file online, you have to register online and fill out an interactive form in Thai which does the calculations for you. If you have Thai dividend income, you can even have that transmitted directed to RD and it will all be printed out and calculated on the form.

I really can't see the RD making any concessions for foreigners and certainly not based on what type of visa they are on. Everything in the Revenue Code is based on tax residence, not whether you are a Thai or a foreigner. The only concession to foreigners I have ever heard of is the Royal Decree for LTR visa holders and that was obviously pushed by the BOI as a marketing tool and the RD probably had its arm twisted to agree to its principle of equal taxation for all nationalities. Who would be championing the course of retirement extension holders against the RD and finance ministry? The BOI champions the cause of LTR visas and Thai Elite champions the cause of Elite Card holders but no part of the government champions the cause of retirement extension holders who seem to be merely tolerated along with marriage extension holders and no one in government cares whether they stay or go. Hopefully there will be a rethink or at least a clarification of this but, if anything happens, I would expect it to be applicable to all tax residents. One exception could money remitted to buy a condo, if the resort condos make enough noise but we haven't heard a peep out of them so far.

For those who need to remit income, as or soon after it arises, from which tax is not yet been paid or deducted, it seems that they will have to pay Thai tax and claim the Thai tax credits later, rather than the other way round, if the income is from a country with a DTA. Taking the UK as an example. A retiree might remit a combination of state pension and private pension, from which tax is not deducted at source, in the month is arises to live on. (I am not sure of the rules for deduction of tax from UK private pensions but I have a small private pension that is paid to my UK bank account without tax deductions.) Actually in this example the retiree should have been paying Thai tax on income remitted in the year it was earned all along and who knows, if they will start auditing the past years of those who start filing tax returns showing income remitted as soon as it arises. It would be like shooting fish in a barrel, since nearly all would be guilty of Thai tax evasion under the old rules. Anyway you have to file the Thai tax return by end March and pay tax, while the UK tax year ends 5 April. So it is unlikely you will be able to produce foreign tax credits unless you are remitting income from the previous tax year which is tax free under the old rules. At any rate, it might be easier to pay the full Thai tax and claim the Thai tax credit at home, not counting the hassles of translation, because, if you pay tax at home and the Thai tax assessment is greater, you will have to pay the difference to the RD and claim the foreign tax credit anyway.

It depends on whose life. The life of an Isaan peasant is not worth much to the government but they can't afford to look bad to the voters. The life of a police sergeant killed by a rich kid is worth nothing to the government or even the police.

Will village shops that are not registered for VAT and whose owners don't file tax returns qualify for the digital wallet anyway? I doubt it.

Of course it is nothing to do with abductions, scams, a sluggish Chinese economy and real estate sector with huge NPLs on the verge of collapse.

Is it possible to get tax certificates from HMRC on tax paid in the UK for tax credits? When I rented out a house in the UK and didn't yet have the overseas landlord exemption from withholding tax on rent, I had to push the agent to get tax certificates for the amount of tax they had withheld to give to the accountant who did my UK tax return. It was not a hard copy document with stamps and signatures like Thai government departments like. it was just a electronic certificate that could be forged by anyone. I have no idea if similar certificates can be obtain for income tax payments and, if so, would the RD accept them, if not stamped and signed in hard copy.

It will work the same way it does now. Tax is withheld from salaries and all other assessable income has to be declared by the taxpayer on a PND91 form, i.e. self assessment. You pay the tax you have self assessed immediately after filing your tax return. They will ask for documents supporting any income declared or deductions claimed that are not automatically notified to them. They may dispute your self assessment and ask you to pay more. They will have access to information about remittances and the inspector teams check things at random but have a long backlog. I was summoned for an audit for my company going back to 2016 in 2021. So, if something looks not right in your 2024 tax return, you could be audited in 2029 or later. That means the interest you have to pay on the back taxes and penalties will be greater.

Not blaming you. Just the dictatorial shoot from the hip style of the new government. I think it is clear that US SS will not be taxed. No need to worry about that but other nationalities have no similar protection.

Srettha is being sent off on endless glad handing roadshows by Thaksin, just like his alleged kik, Yingluck, before him. That leaves Thaksin's boys free to manage things without interference from Srettha. Some of these advisors are toxic like Kittirat who was an utterly incompetent finance minister and was responsible for the suicides of farmers who died like flies when Kittirat failed to pay them for the rice the had pledged under Thaksin's money spinner rice pledging scam.

The Foreign Ministry last evening (Sept. 14) confirmed that Thais were not their special target. What a ridiculous comment by the Foreign Ministry. They were more than happy to kill and capture Thais as a bonus and were after Israelis and any other nationality visiting the area or working there. Otherwise, why would they have shot Thais and Filipinos and dragged them off as hostages?

There has been stony silence about the RD's opinion seeking efforts. It would not be surprising, if they only provide more clarity in time for filing of tax return forms in 2025 and amending the forms may not happen. Judging by their pathetic and poorly written Q&A effort, the RD's idea of clarity is different from most other people's anyway. Since they have started from the position that the finance minister/PM gave them carte blanche to change the Revenue Code unlawfully without going through parliamentary process or even a Royal Decree, there is no particular reason why they should bother with any niceties towards tax payers. The RD DG now feels empowered and we are back under the autocratic Thaksinite rule by edict system, where parliament is bypassed. If taxpayers don't like it, they can become tax non residents or sue in the Central Tax Court but good luck with that.

The US has allowed Spanish tax returns for years and now offers many more languages. https://www.irs.gov/newsroom/irs-expands-tax-help-into-more-languages-form-1040-offered-in-spanish-and-more-services-information-available-in-multiple-languages

Have you successfully filed a PND 90/91 in English? I don't believe it's possible, even if that is claimed on the RD website. I have filed online for many years and never saw the option to file in English. In the past they had an option to translated pages, which sometimes sort of worked, but not for filing.

Some neighbouring countries have lower cash export limits. HK never had one before but introduced a limit for import and export of cash without declaration of HK$150,000 and Singapore has a limit of S$15,000. UK is GBP 10,000.

Increasingly obvious that Thaksin is having Srettha wheeled around the world like a cardboard cut out or automatic greeting machine to keep him out of the country, so he can't interfere with Thaksin's faceless back room boys who are actually running things. Srettha can't answer any questions but comes back with unfounded claims of persuading foreigners to invest in Thailand. We saw the same pattern with Yingluck who visited a record number of countries as PM but achieved nothing except for boosting the fortunes of brand name goods vendors in the countries she visited.

The point I was making was the strong possibility that there will be no further clarification from the RD and no change to the RD order.

What I meant was that there is no reason to expect the RD to issue copious guidance on foreign tax credits under DTAs, as many are expecting, since the RD has been dealing with cases of foreign tax credits for individual taxpayers for decades and has issued some rulings on the subject going back 20 years. Also it doesn't seem to be a problem to the RD that there is no place to submit foreign tax credits on the tax return forms. Presumably you have to write them (in Thai) and make your case for the deduction. That would preclude online filing. What a PITA. The topic of the Lorenz partners article was indeed re taxation on foreign dividends but the RD ruling the author referenced, 0706/7556 from 2009, was actually about earned income. You can read the ruling here https://www.rd.go.th/24356.html . It is about employees of a Thai company who were sent to work on an assignment in the Philippines for an unspecified period of time but they must have remained Thai tax residents. The company continued paying their salaries into bank accounts in Thailand after deducting Thai withholding tax and it seems that Filipino withholding tax was also charged, possibly paid by the company. So they were double taxed anyway. The ruling allowed them to claim tax credits for the Filipino tax payments and get a refund of the excess Thai tax paid under the treaty. I couldn't find the other ruling but it was probably something similar. I don't understand why the RD had to make this ruling for the employees to claim the tax credit after being double taxed or why Lorentz said that was wrong, unless it is something specific to the Filipino treaty but that is not what they said. Anyway the point is that RD most likely feels under no obligation to provide any guidance on foreign tax credits for individuals or amend tax return forms to accommodate them, even though their capricious and unlawful reinterpretation is going to mean that tens of thousands of foreign tax residents, most of whom are illiterate in Thai and have never had to file a Thai tax return before, are now going to have claim foreign tax credits vs probably 5 or 10 a year who had their company accountants do it for them.

An interesting comment on foreign tax credits from Lorenz and Partners' website https://www.lorenz-partners.com/taxation-on-foreign-dividend-under-thai-law/ . Not exactly sure what they are referring to but they seem to believe that RD is systematically wrong in allowing individuals to claim foreign tax credits but does anyway. What is somewhat worrying though is that this shows that the RD has already made rulings on foreign tax credits for individuals as far back as 2004, even though there was little need for anyone to want to claim them under the previous interpretation of section 41. So those who are waiting for reams of guidance notes from the RD on the application of DTAs for individuals might be disappointed, if the RD feels its already clarified all that in 2004 and 2009 - job done.

Went Yingluck ran of countries to visit, Thaksin packed her off on official visits to the Vatican City which one of her entourage described as San Marino in a speech, and Montenegro (to pick up her passport and she was glad she did). I would like see Srettha in a photo op with the pope and telling the Thai journos that the Vatican was going to invest heavily in a whole bunch of new cathedrals and churches in Thailand.

This is not clear from the Revenue Code because the gift tax amendment was drafted before RD order P 161/2566. However, at that point they would or should have been thinking of remittances of money in the year they were earned in the form of gifts of support to spouses from Thai overseas workers which appear tax exempt whether they were taxed overseas or not. Some Thai workers are in countries that don't have income tax.

Good points and this gift tax thing may end up being important to many expats. The wording in the RD's own translation of the Revenue Code, incorporating the 2015 amendment on gift tax, is slightly clearer. Let's look at Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation: (27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year. You raise a good point that it may not be possible to file a joint spousal tax return, if there are gifts between spouses during the tax year, although this is not specified. And the RD could argue that a gift from offshore to a spouse that is later gifted back to the spouse onshore has been cancelled out, making the original remittance taxable at up to 35%, even though it seems perfectly legal in the Revenue Code. Who, in 2015, would have imagined that spouses might want to this? There are no spaces for gift deduction on tax return forms because gifts under 20 million are "assessable income that are exempt for the purpose of income tax calculation" and therefore don't need to be declared at all. The gift tax amendment was drafted in a very basic way as they just wanted to prevent people from transferring huge estates on their death beds to avoid the new inheritance tax which came in soon afterwards. Previously there was no tax on gifts. I doubt they thought of cases where the donor might be gifting untaxed assessable income from offshore or cases where the donor was not a tax resident or not. I assume they only envisaged gifts from income that was already taxed in Thailand (or had legally avoided taxation) from tax residents to other tax residents. Otherwise why would someone wealthy enough to gift 20 million from offshore not just wait till the following tax year to remit offshore money and be sure it was tax free, even if over 20 million. The gifting could be done from onshore then. Since Srettha has ordered the RD to review inheritance and gift, I guess they will spot this potential loophole and plug it or reduce it before we have time to test it.

Re tax on mutual funds. 40(4)(b) says that dividends from mutual funds are taxable. 10% withholding tax is deducted from Thai mutual fund dividends. For foreign mutual funds that withhold tax, a foreign tax credit may apply, but the Thai tax rate will be up to 35%. 42(23) says that income from sale of investment units in a mutual fund is tax exempt and you are right that it doesn't specify that the mutual fund should be registered in Thailand. But how do we claim exemption and what documents would be required or would the officer reinterpret the Revenue Code for himself and say that only applies to Thai mutual funds. This is an interesting question for those who own mutual funds in overseas accounts. The limited range of mirror funds or Foreign Investment Funds (FIFs) managed by Thai asset management companies paying double management fees is a capital gains free option for those with money onshore. 42(24) Exempts the income of a mutual fund, i.e. the internal income earned by the mutual fund from capital gains, dividends and interest.