Dogmatix

What they have said though is that they will tax remitted income that arose outside Thailand in any previous tax year. That allows them to tax anything on the basis that all savings were earned at some point.

I wonder how many dealings you have had with Thai bureaucrats. If the RD order is allowed to stand, as it is, they will tax all those things according to the letter of the order, or each individual tax office's interpretation of it. The are under great pressure to collect more tax and foreigners are a perfect target because they have no vote and the Thais in the villages don't give a monkeys about them. What you are saying is that some of this is so dumb that they will have to walk back some or all of it.

Perhaps the BOI should add this gem to the LTR website. Bring in your past savings to buy a condo and car and other stuff and you will be subjected to an attractive remittance tax rate of only 35%. This will make them really competitive compared to Malaysia My Second Home and the the Philippines. The Malaysian scheme is much more expensive but lets you import your own car (I think it still does) and buy residential land. I think you can import your own maid too, if a married couple, or presumably a male butler, if single male. Of course you can still make sure you don't become tax resident in the tax year you bring in your nest egg. But that applies to all retirees with no special benefits for LTR visas. Some may not understand the Catch 22 of the tax exemption and bring everything in their first tax year and stay over 180 days. They could find out when RD officials with outstretched hands arrive at their sea view condo or infinity pool villa. Others may come and spend some time renting before they decide to buy and find it is already too late as they have become tax resident and would need to leave the country for an extended period to shake that off.

Thanks for the clarification, So the LTR visa will not allow someone to come and transfer their nest egg here to buy property and car etc, unless they earn all that after getting the LTR visa, which is unlikely to retirees. It could be that LTRs will be subject to less scrutiny than others due to the Royal Decree but the RD got nasty on seeing a large remittance coming through to a foreigner, whom they might not know at first had an LTR visa, If they demanded evidence it was earned after getting the visa, it might be all over. Move back home and forget about the LTR visa and Thailand before being assessed for back tax, interest and penalties. This now has the look of being the reverse of the previous policy that taxed income in the prior year only left alone savings from before that. How ironic.

Yes. I have claimed the 190K in addition to the 60k. No problem.

He is right but also has a grudge against the Shins. He was SG of the SEC during Thaksin's sale of Shin Corp and bent the takeover rules so that Temasek could tendering for the Shin subsidiaries as well, including AIS which would made the acquisition much more expensive for them and might have put them off. He was rewarded by being made Yingluck's first finance minister but started refusing to do what he was told after only a few weeks. So he was sacked and they put out a false rumour that he had stolen funds from the lottery to blacken his character and justify the sacking. He was succeeded as finance minister by Kittirat who has now been indicted on corruption charges relating to rice sales to Indonesia via Siam Indica, owned by a bent rice trader buddy of Thaksin's who is currently residing overseas waiting for statutes of limitations to expire. So Thirachai maybe lucky he got out early,

That was merely the maximum penalty already in place before Thaksin became PM.

Some one who has a BVI company with a bank account may still be able to transfer money as a loan to a Thai resident. But the RD might follow up and reclassify loans never get serviced with interest or repayment of principle as income after some years. I think they can do that with director loans of Thai companies after 6 years. Otherwise a payment from a BVI to a Thai resident would be either payment of salary, consulting fees or dividends which will be assessable income in Thailand.

I am not sure how this scam works but the BVI government has been forced to sign up for information exchange but it is not automatic like banks in most countries. They will hand over information, if asked by another country. For this year for the first time, BVI's have to file unaudited accounts. The accounts can be handed over, if another country asks. Obviously, if the company has a bank account in another country information on year end balances and inflows can be reported under CRS. Most banks will ask where the company is tax resident in order to comply with this. The BVI currently only requires companies to have a tax residence if they are in certain businesses, such as asset management, holding company (holds only shares, no cash or other assets, logistics etc. Probably in futute they will demand a tax residence for the rest too which will close down most personal BVIs. So not really the safe tax haven it was 20 years ago. Turks and Caicos is a better choice for a personal company these days because it refuses to comply with any of the demands from EU, OECD etc.

The Cannabis and Hemp Act will take at least a year to go through parliament, if the government lasts that long, . However, Thaksin is an impatient man and might order the health minister to do the reverse of what Anutin did and recriminalise it first. That shuts down all the weed shops, leaving them nothing much to bargain about, as their investments will be gone.

So the investigation into police involvement with Kamnan Nok that Big Joke was doing has come to an abrupt halt. How convenient.

You are right but Srettha is after quick wins. The idea of taxing foreigners to pay for digital wallets sounds good on the evening news. No one follows up two years later to see it raised little incremental tax and choked off investment. Srettha will be gone by then anyway, 10% VAT is the only way to raise substantial revenue and is surely coming but they will make it look like they tried everything else first.

Sounds like total hot air. Thai market is way below where it was nearly 10 years ago and Thai GDP growth now less than developed economies. All they can come up with is soft power.

If you have an offshore company with an overseas bank account, could it make a gift to you tax free up to 10 mil. Probably not but it might be able to make a loan. Would the RD check to see that you are paying interest with tax being withheld on the interest and repaying the principle? And would they assess it as income, if it is not repaid within a certain time period. I have made a number of offshore company loans to myself of relatively large amounts to buy property, so as to have the ability to remit out again, if necessary, without triggering any enquiries from the RD but under the old rules, they had no reason to take an interest.

There probably are some future rules for inheritance tax because Srettha told the RD to propose ways of raking in more tax from it and from the Land and Buildings tax. Inheritance tax was reintroduced by the junta government, saying it was a symbolic gesture not intended to raise much revenue but was clearly the thin end of the wedge. Gift tax usually goes together, so they will certainly review that at the same time. . I might have to walk back what I said about gift tax not being a fruitful line of enquiry, at least under existing rules. The exemptions do seem to apply to gifts between spouses and I can't see anything about the exemptions not applying to gifts from overseas. You can give 20 mil a year to your spouse for maintenance purposes and the same to your child. But RD officials visit to see, if it looks like that much is being spent on maintenance in a poor Isaan village for example? There seems very little written about gift tax and I can't even find the law in English or Thai. I thought it was included in the Inheritance tax law but it is not. So perhaps you can make tax free gifts from offshore to your Thai spouse up to 20 mil a year tax free. It probably has to stay with her thought. If they see it was transferred to your account, they might it was not a gift but could she transfer it back to you as a gift some time later? If she has an overseas account, the initial gifting could be done there and gifted back to you in Thailand.

Does the Thai concept of common spousal property "sin somrot" allow for gifts between spouses? Maybe because there is a special rate for intra-family gifts. I haven't looked much at the gifting rules. Thai inheritance tax applies to overseas assets, so gift tax could too.

You raise a good point. The English version of Royal Decree 743 translates it as "in the previous tax year", presumably to match the translation of Section 41 of the Revenue Code. The Thai is ในปีภาษีที่ล่วงมาแล้ว which is indeed exactly the same wording as the Thai version of Section 41. Literally it means "in tax year that passed already" which is a bit vague but, since Thai has no definite articles and the drafters would have been more specific, had they really meant "in any past tax years" it is obvious that parliament intended "in the previous tax year", as per the translated versions. I don't know if the RD has to issue another order saying its reinterpretation of ในปีภาษีที่ล่วงมาแล้ว also applies to Royal Decree 743 or whether that will be left to LTRs' and RD inspectors' imaginations. But I think I now have to walk back my interpretation that the Royal Decree doesn't exempt past years, even though that was clearly the intent of the drafter who had no idea the RD would start taxing past years anyway. It would be hard even for the RD to apply two opposing interpretations to the same phrase in two related pieces of legislation just to collect more tax, although mental gymnastics of that type are not out of the question for Thai bureaucrats.

Yes. The Thaksin marketing, PR consultants organise his schedule and spin the trivial events like greeting Chinese tourists at the airport up into major headlines for consumption by Thai TV networks to be forgotten the next day. Just like when T was PM.

Drug dealers, junta family members etc.

Re the LTR visas. These are pretty good way for those can afford them to come to Thailand and the tax exemption looks pretty good, even if it is only for prior year income. However, nothing is set in stone in Thailand, particularly regarding foreigners. A government that decides to tax poor foreigners but exempt rich foreigners in the interests of fairness and equality is vulnerable to attack by opposition politicians. The terms of various editions of the Elite card have changed many times. The original card was only a million, I seem to recall, and provided the right to own land which was axed within a few months before anyone had attempted to exercise it. The LTR visas are valid for 10 years but since the Immigration Act only allows a maximum of a 2 year visa, the BOI has to use roll overs to camouflage this reality, since amending the Immigration Act is not something any government seems to ever want to do, as they can just issue a patch work of ever changing National Police Orders to fill in the details instead without undergoing parliamentary scrutiny. I guess no government will try any funny business in the first 10 years but after that no one can guarantee what renewal terms will look like, specially if some LTR visa holders are accused of money laundering and other crimes.

The condo developers have been surprisingly silent. As you say the Chinese money laundering crowd were the main game for developers pre-COVID but are slow to return. Expats who live in Thailand are a more steady market for condos and retirees tend to buy in resort areas where there are few Thai buyers. They are effectively shut out of the market from 1 Jan. People who move to Thailand, buy immediately and stay over 180 days in their first tax year will get nailed too, in many cases without realising it until a deputation of RD people show up at their nice new condo. Very easy for RD to track since foreign buyers need in most cases need to show they have remitted the entire purchase price to Thailand. Who will accept remitted 20 mil to buy their dream retirement condo in Phuket and finding that after accruing for tax, they have only 13.6m left to pay for the condo? Another aspect is expat retirees who already have funds in Thailand earning the paltry 0.5% interest to live on for many years or will remit them before 1 Jan. I was talking to a friend in this situation who accumulated savings from many years working in the Kingdom before retiring. He was looking at buying piece of land in Chiang Mai and building his dream house there. However, he wants to keep his options open to return to his home country for healthcare reasons and doesn't want to import his entire savings pot to Thailand to earn 0.5% interest and maybe have difficulties sending it out again in future. So he has shelved his plan to buy property in Thailand permanently because it would have eaten into the pot of money he already has in Thailand and could make him have to remit cash from overseas and pay tax earlier. I guess many expats are having similar thoughts about shelving plans to buy property in Thailand, even if they are in a position to get the money in before Jan or already have the funds in Thailand. One never knows what they might come up with next and the idea of RD staff coming and knocking on foreigners doors is not appealing.

If you refer to the Thai text of Section 41 of the Revenue Code, you will see that it uses the expression มีเงินได้ which means literally receive money. That is a much broader definition that "earn" and could complicate this approach.

My initial thought was also that the BOI was prescient in providing the exemption from tax on foreign sourced income and could have had an inking that something like this might happen. But when you look at the wording of the Royal Decree it seems that this may not have really been the case. They seem to have intended to carve out an exemption from the original interpretation only in that they gave exemption from tax on prior year foreign source income remitted to Thailand only, which was all that is taxable under the current interpretation. Had they had full prescience they would have provided exemption for foreign source income earned in any year in the past and remitted to Thailand. The Royal Decree potentially exposes LTRs to random visits from RD officials with outstretched hands examining bank remittances and making the owner prove it was income earned only in the prior tax year and not in years earlier than that which are assessable under the Royal Decree combined with the reinterpretation.

I feel that looking at gifts is a dead end, if the money doesn't come from already taxed income in Thailand. Anyway the limit is 20 mil for family members and 10 mil for others, not 100 mil, which is inheritance tax.

An RD order should not be able to cancel a royal decree but the RD DG is effectively using his order to modify the Revenue Code which is an Act of Parliament which can only be amended by parliament. It would to be overreach of authority in either case. The BOI reports to the PM Office BTW. The loophole in the royal decree is that it only exempts prior year income, ie the year covered in a tax return. It doesn’t cover years before that which the RD says will not be taxable. For example, if you have an LTR visa and you remit $20k last year which you can show you earned last year, no problem. But, if you remitted $1m last year to buy property and can only you earned $20k of that last year, you could be made to 35.% tax on the whole million bar 20k. The RD could assume the power to issue an order clarifying this point too, will this happen? Probably not? But who would have guessed the RD would amend an Act of Parliament with a lowly RD order? Nothing is sure in this environment where government departments feel free to break their own laws and constitution with support from the PM and finance minister.