Dogmatix

The new airport projects are vital to fill PT coffers. They did well out of Swampy under Thaksin's watch when contractors complained they demanded 30% commissions for supplying furniture and stuff and contracts for trolleys and bag handling were given overseas companies with Thai shareholders whose stated addresses were abandoned buildings in Bkk. Now the whole merry go round starts again.

Not mentioned in the Thai Enquirer article is that RD order P 161/2566 is a directive binding only on RD employees. RD P orders are low down in the pecking order, do not have the force of law and are not binding on the general public. Srettha, as finance minister, has spoken in support of the RD's disingenuous reinterpretation of existing law, even though it is an overreach of its authority. It is not clear what the RD and Pheua Thai have in mind at this stage. To make it binding on the public a higher level of announcement is required, e.g. a Royal Decree but that could only take effect no less than 90 days after publication in the Royal Gazette and therefore could not take effect by 1 Jan 2024, as announced by the DG. Will they just leave as an unlawful order by the RD changing tax law and risk being challenged and humiliated in the Central Tax Court? Who is to say? A party that can come up with such a numbskulled scheme as the digital wallet is capable of anything.

I agree with this interpretation that it was indeed parliament's intention to tax only foreign source income earned and remitted in the prior tax year. I have reviewed a legal amendment of Section 40 drafted in the 80s and the drafters used elaborate phraseology to make clear that they meant earned any prior tax year, referring to Thai source income. But in Section 41 they did not and 70 years have passed without any attempt to interpret it differently - until now.

Looks a bit like Prinn who also had a penchant for raping young women working in financial services. Perhaps they will be good buddies comparing notes about their rapes in the pokey.

Better get used to kratom as that's all that will be left after Thaksin has recriminalized cannabis. He might come back for kratom later.

“No, I am not behind gambling websites. Someone just wanted to force me to confess to this crime and implicate certain figures,” Suchanun declared firmly to reporters last Thursday, Minnie dated a policeman who was a major or lt col at the time and it didn't occur to her that he might be married. When she found out she dropped him but got back together with him later on, having presumably decided it no longer mattered that he had a wife and family. She seems to have a credibility rating of close to zero.

It's hard to imagine that Thailand's "infinite appeal" will endure in the mind of an LTR retiree faced with RD inspectors showing up at his 20 mil condo in Phuket demanding 10 mil in tax, interest and penalties, 5 years after he bought the condo. It also makes sense that people who already tax residents or will be in their first year would abandon plans to buy condos with taxable past savings.

Given that there has only been an order issued for RD staff to reinterpret the Revenue Code other than it has been interpreted with copious rulings and precedents for 38 years and there has been nothing with the force of law binding on taxpayers to follow that interpretation, it seems to follow that something more binding will be issued by the government itself, if it plans to go ahead with this. In the worst case, that could be a Royal Decree amending the Revenue Code along the lines of 161/2566 but even that could not be effective by 1 Jan 2024 because announcements in the Royal Gazette need to give at least 90 days notice. It is a real mystery what Srettha as finance minister or his Phuea Thai masters plan to do with this. Leave it as it is and risk a backlash from wealthy Thais filing a case in the Central Tax Court and potential humiliation? Rethink it and at least flesh out the details with new tax rates, threshholds etc but that would probably need an Act of Parliament which might not pass, being a major revision, not emergency legislation. Note that PT has recently criticised MFP for its plan to introduce a capital gains tax on Thai stocks, which would incidentally be problematic because foreigners could still avoid it via DTAs) and a wealth tax and has just ditched the Prayut government's plan for a transactional tax on Thai stocks talking about the need to develop the Thai stock market and regional competitiveness. Nothing could be further from these objectives than 161/2566. Srettha justified on ill thought out grounds of equality and fairness without thinking about the potential damage to the Thai economy and competitiveness. He could still blame it on the RD like they have blamed the transactional tax on the Finance Ministry, if he goes no further than this, and pull out. Let's see.

Good stuff. It occurs to me that this only became an issue for the RD after the police order to allow 1 year retirement extensions which I believe was in mid 80s. Prior to that there wasn't any visa more than 3 months apart from PR and NON-B for those with WPs. So the concept of foreigners becoming tax residents and living off foreign source income didn't arise that much.

I think, if the RD wants to build a case based on your example c) it ought to show how much tax is lost through this and I suspect it is not much. A more frequent situation used to arise with multinationals giving expat staff and some senior Thais in Thailand two contracts: for their work in Thailand and for their work outside Thailand. The outside salary was paid somewhere that doesn't tax foreign source income like HK or Singapore, claiming of course that none of the work was performed in that jurisdiction or it would have been taxable there. It's been over 20 years since the last major multinationals (much longer for US multinationals) ceased offering this perk which they had used to save themselves money, as they later had to pay higher salaries to compensate for the higher local taxes on fully onshore packages. Remember that Thailand had a top tax rate of 60% from, I think, only about 2 million baht until the early 90s when it was reduced to 35% and the argument for dual contracts became less compelling. Countries like Malaysia helped stamp it out by establishing its own salary scale for expats in various jobs, eg foreign bank branch manager, and charging them tax on that, if it was more than their declared salary. No need for any investigations, evidence or tax evasion trials. I remember a junior expat colleague posted to KL complaining that he was being charged income tax on a salary significantly higher than the salary he actually received from our firm which was being paid to him entirely in Malaysia. I think most of these people who still have dual contracts are working for businesses that are fairly small but earn income offshore and don't have to worry about their international reputations (unlicensed expat financial advisors who earn commissions from offshore funds and hire expat staff without WPs spring to mind). There may be some Thai consultants working part of the year offshore and earning fees in jurisdictions that don't charge withholding tax but I guess it is a pretty small number. The problem with most of these deals is that the work is usually done largely in Thailand and is therefore taxable anyway. The RD can go after these cases without reinterpreting the existing law by making the taxpayer show his travel record to justify that he spent enough time in the countries where he earned the fees. If just a few days a year, it would not justify earning most of his remuneration outside Thailand.

Chada looks like a mafia boss himself. I suppose it takes one to know one. One question is since this officials are all appointed by the Interior Ministry, why did they hire them in the first place, if they already knew they were gangsters and were able to compile death list in a couple of weeks?

I admired her when she was standing up to Thaksin's death squads during his war on drugs but I lost respect when she promoted the import of the fake explosives detector which the British manufacturer later admitted at his trial had no functional components in them. No action was ever taken against Thai officials, including Pornthip and Prayut, who ordered that junk at vast expense and with large commissions presumably paid by the fraudsters. Her anti-democracy behaviour and rants as a junta appointed senator were the last straw. Son Nam Naa.

Deleted by Dogmatix

The government's strategy to boost economic growth to its target of 5% next year seems to involve mainly promoting low end Chinese tourism and its digital wallet scheme. It will need a lot of Chinese tourists on zero dollar tours to counteract the increase in government debt caused by the digital wallet and other vote buying schemes as well as the initiative to drive high end foreign retirees out of the country through a remittance tax at 35% which will in turn impact the condo market.

Good. Now cancel the proposed tax on foreign remittances to Thailand. You can blame it on the Revenue Department like you blamed this one on the Finance Ministry.

She was treated with the contempt she deserves for her disgusting behaviour. Suck it up senator.

No. That is resolution 7/2528 (not 2/2528) regarding taxation of interest paid to foreign bank branches by their head offices overseas.

Your points are well made and I will not go through all of them. Much is still unknown, particularly the text and circumstances of 2/2528 which I have so far searched for in Thai in vain. I am not sure if Section 41 dates back to the original Revenue Code of 1938 or was added later but we can imagine that foreign sourced income was not a very important consideration when it was drafted and that few countries had notions of global taxation then either. Also we need to take into account that Thai parliaments often draft legislation with deliberate ambiguity to allow varying interpretations. Re the points above. For some who have been tax residents for decades your interpretation is effectively the year dot. Also for Thais, who are the intended targets, it is from whenever they started earning foreign source income. I have read Thai laws in the original extensively and the impression I get is that, since Thai is not a very precise language, the drafters will often use lengthy phraseology to make sure only one meaning is possible, if they want to be precise. That is why I surmised that the drafters of Section 41 didn't mean any previous tax years because they could have added wording to make that abundantly clear but didn't. I admit that is not conclusive but for me it is a weight of probability.

That means they should work overtime to re-establish their pro-democracy principles.

CRS (Common Reporting Standards) has been in place in most developed countries since 2018 and in Thailand only since 2023. It is a an agreement that banks and other financial service providers (mainly stockbrokers) will provide information to other jurisdictions on their tax residents. Since Thailand joined this year it is eligible to be sent information on any tax residents that have accounts in any of the other signatory countries and vice versa. The information provided year end balances and any payments received during the year. It is something the financial service provider are obliged to do by their national laws at their own expense. In the case of FATCA, which is imposed unilaterally by the US under threats, this has become so burdensome that many financial services providers have responded by axing all American owned accounts, eg Thai asset management companies and many Swiss private banks. However, CRS is an international agreement and companies don't have the option to axe foreign accounts for that. The Thai RD, being under pressure to increase tax revenue in permanently sluggish economic conditions due to appalling Thai economic management, took an opportunist view that it could use CRS as a means to increase revenue, while blaming it on international pressure.

Of interest to some may be this translation of an explanation of orders that can be issued relating to the Revenue Code that have a lesser forces than Acts of Parliament or Royal Decrees from the itax website https://www.itax.in.th/pedia/ประมวลรัษ Announcement from the Director-General of the Revenue Department Revenue Department orders Ministry announcement Ministry regulations Decision of the Tax Commission Supreme Court judgment , etc. Note: The Revenue Department's orders, which T.P. stands for "general," have the status of subsidiary laws in which the Revenue Department uses higher legal authority to enforce on a general basis, unlike the Revenue Department orders that P. is abbreviated from. "Practice" which is only a guideline for the work of the revenue officers. It is not directly enforced on the public RD Order P. 161/2566 is indeed just a directive to RD staff and is not directly enforceable on the public, as pointed out by Acharn Kittipong of Baker McKenzie in his Krungthep Thurakit article. It seems most peculiar that a major tax law change is announced first in a directive to staff only with only just over 3 months notice for taxpayers to comply with it after 38 years, despite the fact that they are not legally bound by it. The implication is that RD staff will illegally enforce it anyway without any supporting legislation. Acts of Parliament and Royal Decrees require a notice period of at least 90 days after announcement in the Royal Gazette before they can take effect. And yet taxpayers are only indirectly given notice via a directive to staff of a major tax law change after 38 years with no legally binding legislation. For a PM and finance minister from Pheua Thai, a party that prides itself on upholding democracy and democratic principles, to support this arbitrary style of imposing illegal changes to long standing laws rather than going through proper parliamentary procedures is nothing short of extraordinary.

My point was that ในปีภาษีที่ล่วงมาแล้ว could mean "in the previous tax year" or "in a previous tax year" because Thai has no definite or indefinite articles. However, if parliament had intended it to mean taxation of income in prior years going back to the year dot, they would surely have made that clear by saying something saying similar to the wording used in 161/2566 to clarify that it meant in any previous tax year whatsoever. As you know Thai officialese never uses one word when 10 words would better convey the meaning. In fact, if parliament intended open ended taxation of past earnings, there would have been no need to even mention "previous tax year". They could have just stated that foreign sourced income is taxable. but using the phrase "in the previous tax year" was logical because it was consistent with local income from the previous tax year that has to be declared in annual tax return forms. I can't find Resolution 2/2528 (1985) but its existence to clarify that the Article 41 only referred to the previous tax doesn't appear to detract from the interpretation that parliament only intended to tax to tax the previous tax year, rather the opposite. At any rate Kittipong makes a good point that principles of taxation dictate that in cases of ambivalence in tax law, tax authorities should make interpretations in favour of tax payers.

Yes, but are they the ones that came up with that commentary?

I think there will be scammer phone calls. There are already loads of Thai scammer phone calls to individuals and corporate taxpayers persuading to transfer money to the account of a fake RD officer to lose their file. The accounts turn out to be in the name of some poor sod who was made to open the account for the scammers for a pittance and emptied out immediately. This could be a new business line for the expat financial services call centre scammers. It could also be a new line of business for RD inspectors who made unannounced visits to taxpayers' homes and indulge in extortion. We could start seeing tragic stories of elderly expats now verging on dementia getting cleaned out by RD and freelance scammers.

Vinit's statement that "tax collection is to comply with international standards on the exchange of financial information to promote tax transparency..." was a complete non-sequitur. International standards now require exchange of financial information and Thailand has now complied with that with much foot dragging 5 years behind schedule. International standards do not require taxation of foreign source income and countries in SE Asia such as Singapore and HK don't tax it and have intention of taxing it. Furthermore no countries I know of have a remittance tax on foreign source income like Thailand. So how could they be under international pressure to be the only country to do what they are now trying to do? This is a total distortion of reality to justify the overreach of the RD's authority.