Dogmatix

It’s a reasonable question but no. Prior years foreign sourced earnings will only be assessable, if remitted from 1 Jan 2024 for which a tax return is required in 2024. The rule for tax returns is that you only have to file them, if you have assessable income over the tax free of 150,000 a year plus the standard taxpayer deduction. For 2021 only 3.3 million people filed tax returns and paid tax and the rest of the 71 million claimed by default to have income less than the threshold. Since they are effectively unable to tax their own people, you can see why the RD would feel it was a big win to rope a couple of hundred foreigners, who cannot complain or vote (other than with their feet) into their tax net. With all these Thaksinite popularist welfare schemes that will generate any sustainable growth and step up government debt what we are heading for as sure as God made little green apples is 10% VAT which is the mainstay Thailand’s tax collection with some help from import tax. Income tax is just a side show

This can be contentious. I recall that Ung Ing, the Thaksin daughter who is currently a PM candidate, was assigned to take a capital gain by her dad when she went to London to take a short course in home economics or something. The anti Thaksinite yellow camp found out about it and argued that she hadn’t qualified to be non-tax resident that year and should cough up the tax. For ordinary citizens and foreigners, if the RD decided you are a tax resident, you pay.

Dear Director General, Your Order No. Por 161/2566 has created a great of interest and excitement amongst the expatriate community in Thailand. As a result of the order many expatriates are now eagerly anticipating their opportunity to file .a PND 90 tax return for the first time in 2025. But before they can do that, they will need answers to a large number questions that have been posted in this thread. Please feel free to leave the answers to all the questions below.

Capital gains will be a big problem for property sales too, if you need to remit the proceeds. Thailand has no capital gains tax but taxes gains as income at the top marginal rate with no inflation indexing which would be more than the rate of capital gains tax paid in the UK in many cases. Then there will cases of folk who planned to sell their primary UK residence, which is exempt in the UK, to buy a property and retire here. If they are Thai tax resident or become tax resident during that tax year, they are in trouble and for most of those caught in the Thai tax net, it probably wouldn't be worth remitting the proceeds at all and maybe not worth staying in Thailand, if treated like that. One thing that is not clear to me is how do tax credits work? I pay tax on UK sourced income which is a combination of UK pension and rental income. All I have to show for that is a copy of my tax return and electronic demands for tax on account or after the balancing amount from HMRC with no receipts. I can't imagine this will be what the RD will accept to approve tax credits. And if I remit a portion of my taxed income for a year, will they keep track of that and let me remit the balance later?

Assuming that a a certified tax return or tax clearance certificate would be required, which is pure speculation at this stage, it would be very simple for Immigration. Tax returns have to be filed by 31 March. So from 1 April any visa renewal application of a one year visa would require the appropriate document from the RD. What could be simpler?

I agree. The incompetence of what they have done boggles the mind. They have a right to do whatever they think fit but it should have been at least a year in the making with copious guidelines probably running into hundreds of pages for taxpayers and RD staff.

I agree that it was not a loophole, or if so, it was a loophole intended by parliament. However, the 2003 ruling made clear there was only at that time an intention to tax foreign sourced income not savings. The prior year rule which is very clear in the Revenue Code but now being ignored was an effective mechanism to prevent taxing foreign sourced savings. But I think taxing of pensions is very likely and, indeed, as things stand they are now taxable in most cases whenever they are remitted. In fact they have always been taxable, if remitted in the prior tax year, meaning that pensions remitted in 2023 are already taxable when you do your tax return in 2024. So it would need a specific ruling to exclude pensions, rather than a ruling to make them assessable. The UK DTA only prohibits Thai tax on a government pension for services rendered to that government but that doesn't exclude the UK state pension or private pensions. So Thailand has the right to demand that pensioners file tax returns and submit tax credits in whatever form the RD deems acceptable (notarised, translated or whatever). The RD has probably never bothered to do this because pensioners could avoid tax by having pensions paid into an account at home and remit prior year pensions instead. Those who have to show pensions of 65k a month or a lump sum of 800k or 400k will be low hanging fruit for the RD. The government would waffle about the pensioners using roads and services and stuff, so needing to pay a contribution. The LTR visa holders are exempted and maybe Elite card holders I am not sure. So they wouldn't feel they were losing pensioners they cared about it, if there were an exodus. It would take a big outcry from activists representing Thai families to counter this but by and large the average Thai voter wouldn't give a stuff. However, it is possible they will decide that it is all too much trouble as the DTAs might reduce their tax take on pensioners to be not worth it and carve out an exemption. But as the law stands pensions are taxable.

The problem is where do savings come from? It is hard to argue they were not earned at some point in time and the RD has now given itself the right to tax foreign sourced income going back indefinitely. The 1987 tax ruling that effectively deemed income earned in prior tax years as savings is now rescinded by the latest order. So what savings are now exempted by the 2003 ruling, if it still stands? The RD can decide that the 2003 on savings is also automatically rescinded because it contradicts the new order making foreign sourced income earned at any time in the past assessable. Otherwise they will have the same problem as before with people saying the money they have remitted was savings. Who's then to say what is savings and what isn't?

Many people are saying stay cool and wait for the fine print. But what if there are no more details by 1 Jan? I think that is a quite a possible scenario. It is not a change in the law. They have just decided the law means something different from they last said it meant in 1987 because, well, times changed and the meaning of language changes too, right? So no obligation for for the detailed guidelines and seminars that might be expected to explain a new law because this is still the old law. After 1 Jan they might throw out a few tit bits of information on how they see what is taxable. But if they allow themselves to get drawn into discussions before then, they risk having to delay which Srettha will not want to do because he is under pressure to show he will tax the rich to fund PT’s popularist schemes. And once the deadline is past they have more bargaining power with taxpayers. It’s quite possible we have to do the first tax returns by 31 March 2025 under this reinterpretation with little more guidance than we have now.

Immigration was very happy handling tax clearance certificates!from the RD when needed them to leave the country. I think they would be delighted to tell people they can’t renew their visas without a tax clearance document. Any reason to tell foreigners they don’t have the correct documents is welcome.

The RD ruled that overseas pensions are taxable in Thailand in 2023. I don’t see any wording in the latest order rescinding that. So they are still taxable, even if not specifically listed.

The latest ruling says any prior rulings that contradict it are rescinded. Thus the 2023 ruling that overseas savings are not taxable could be deemed as rescinded. Savings are prior years earnings which the latest duly says are taxable without time limit.

No you won’t. They will just look at your foreign documents and tell you to get them notarized at the Foreign tax office and the Thai embassy in your country, then translated and notarized at the Thai foreign ministry. When you have finished that, they will look at the translations and say Mai Tai Kha. Then you pay tax at the full rate without tax credit deductions and interest and penalties, if late. You may be blocked from leaving the country and renewing your visa, if you don’t pay on time.

They are qualified to treat patients with herbs and traditional medicines. You can find in traditional medicine clinics.

There must be a lot of other convicts in prison who would also make good advisors to the government like the activists rotting away on LM and Computer Crimes Act charges. Pardon them too. And don’t forget Thaksin’s pending LM prosecution.

There is a long letter in the Bangkok Post on this today which I am not allowed to post or link here. Among other things it implies that decreeing a new meaning of an existing law other than what was intended by parliament, rather than amending it in parliament is dubious legally. But I wonder if anyone would challenge it in court. On the other hand I would doubt that Srettha would feel confident about getting this through parliament. His “pro-dictatorship” friends have more seats than PT and many are likely to have accumulated substantial offshore funds through various mechanisms while in power. Also many PT MPs will not like it.

Yes they did something like that before or even worse. You used to have to pay a fee to the RD to get a tax clearance certificate for a foreigner to show to Immigration to prove your tax was paid up to date to leave the country. The YouTube presentation by a group of expat financial advisors earlier in the thread warns that they expect Immigration to demand tax receipts in order to renew retirement and marriage extensions and will probably require tax paid at least on the minimum of 67k a month.

The difference is that they have made people frantic wondering how they are going to survive in Thailand with their overseas savings taxed as income by some greedy boneheads trying to make others pay for their vote buying, so they can stay in power enriching themselves with corruption.

Something raised by a friend was the possibility of taxing international health insurance payouts in Thailand. If you claim for an operation in Thailand on your overseas insurance policy, will the remittance either to you directly or the hospital trigger off a tax demand due to income receive from overseas? Companies like AXA now use a Thai payment agent to make the payments to hospitals which would it even easier for the RD to track this “windfall” type of overseas income.

The RD spokesman was not being very truthful when he claimed there was international pressure on Thailand to do this. No other countries tax overseas income earned years ago on a remittance basis AFAIK and taxing on a remittance basis is virtually unheard of. The pressure from OECD, particularly the US and UK has been to set minimum corporate tax rates to make it harder for companies to avoid tax by shifting their domiciles to low tax jurisdictions like Ireland and Luxemburg but it is not the same for individuals because they have to actually live in a place to become a tax resident and the US which exerts most of the pressure re corporate tax doesn’t care what Thailand does te personal tax anyway because it taxes its citizens on a global basis. You won’t see countries like Singapore, HK and the gulf states suddenly taxing offshore personal income under international pressure. Yes, there is international to collaborate with Common Reporting Standards (CRS) and FATCA etc and provide information on financial accounts of foreigners in Thailand, which in the case of FATCA ThAiland only complied with under threat of being cut off from the US correspondence banking system and thus international USD transactions. But it is huge distortion to blame international pressure for what they have just done. It seems to be the usual Thai government approach to assume that all Thai people are morons incapable of accessing any information in English from overseas and to blame foreigners for all nasty things they do themselves (remember the unwashed foreigners spreading COVID).

An interesting question is whether banks would be ordered to withhold tax on all individuals to Thai or foreign individuals, maybe over a certain amount. So far withholding tax is applied to interest, dividends, services from contractors, property sales. In case of dividends, 10% tax is deducted and you have the choice of accepting that or filing them with your tax return, if you think you can get some tax back. Since many foreigners will have a problem figuring out tax returns, they might do the same and let you choose to accept the withholding tax or file, if you have tax credits or otherwise think you can get some of the tax back. Of course that would mean waiting up to about 18 months to get a refund which would be somewhat inconvenient for some. On the other hand, leaving it up to foreigners to declare and pay at the end of the year would result in lost revenue from those who might accumulate a large tax bill over a few years of not filing and then flee the country when they start getting threatening letters. But the currently the law requires you do a self assessment, file a tax return and then pay any tax due.

At a guess I would say that this issue needs to be cleared up either by the Thai RD figuring it out by itself and issuing a regulation to cover it (highly unlikely) or by the Australian government negotiating an amendment to the Thai-Australia double tax treaty, which would take years. Until either of those things happen, it seems unlikely you would be able to produce documentation to convince the RD to allow a tax credit. But Srettha doesn't care. He just wants short term fixes that he can tell TV reporters will be done in 3 or 6 months, just like he is going to get rid of cannabis and speed pills. When the time comes and nothing happens he hopes to have moved the newsflow on.

Based on a Revenue Department order which is real.

I think anything you remit to TH before 1 Jan 2024 is home and clear but after that maybe not. What happens is that fill in your PNG 90 tax return which hopefully will be revised adding spaces to deduct DTA tax credits on overseas income by Jan-Mar 2025 which will be the first time you have to report this stuff (i.e. for the l2024 tax year) and you will pay tax based on that calculation, if any is owing. Then they will send you a letter with a list of supporting documents you have to submit to the RD which will for sure include evidence of the sale of property or whatever generated the income and evidence of tax credits, if you are claiming any, all probably with certified and notarised Thai translations. They will attempt to match the tax credits with the income to be sure there is a match which may only be the case, if you remit the exact amount you paid tax on. They will have many reasons to reject your tax credits to be sure.

Of all the groups affected the real estate developers will have the most impact on Srettha for obvious reasons. He is not going to care about expats because there are already exemptions for Elite and LTR visas and these are the only retirees they want. The Thai stock traders are one of the target groups. So they won't get any quarter. I can see an exemption for funds remitted by foreigners to buy condos or long leases transferred at the Land Department in the name of the foreign, i.e. not Thai wives' names. There would be follow up to ensure the property was purchased and might be a minimum holding period of say 5 years like the LTFs and RMFs where you have to pay the tax saved, if you sell early, to prevent people bringing in a boatload of cash for a luxury condo and then flipping, paying only about 5% in tax instead 30-35% This would take some time to draft and legislate. So it might come after the new rule has taken effect puttin the market in limbo for a year or two.