Dogmatix

Same smoke and mirrors act used for the rice pledging scam the debt of which has not yet been paid off. It effects ordinary people because the government will have to issue a lot of bonds to fund GSB which will tighten credit conditions, causing companies to cut back on expansion and investment which hits jobs.

I don't think it could impact a Royal Decree signed by the PM. It is an RD order signed by the DG of the RD. So it can only cancel other orders and regulations that are RD orders or equivalent under the DG. You can't have a director general ordering decrees that have the force of law But the wording of the Royal Decree is now defective because it doesn't exempt from tax foreign sourced earnings prior to the previous tax year. So their situation would be the reverse of the current situation, if enforced literally,

The wording of the Royal Decree does indeed give exemption from tax for foreign sourced income derived in the previous year. It was presumably worded like that because the Revenue Code only makes foreign sourced income only from the previous year assessable when remitted to Thailand. But now the director general has said that clause no longer means what it says and any prior year income remitted to Thailand is taxable. So foreign sourced income earned by LTR visa holders in years prior to the previous tax year are technically assessable when remitted to Thailand.

Saw an old friend today who said he had been harassed by the RD a few years ago. He was based in TH for years but worked offshore and had no Thai sourced income. Then after he retired in Bkk he was employed for a couple of years by the Bkk office of an international firm as an advisor which landed him in the Thai tax net for the first time. After his contract expired he stopped filing income tax returns as his only income was a European pension already taxed at source. So he assumed no assessable income, no more tax returns. Suddenly one day a delegation from the RD shows up unannounced at his house demanding that he file tax returns again and pay tax on his foreign sourced income. His Thai daughter dealt with them and they ended up agreeing that his pension was not assessable because it was already taxed at source in a DTA country. The next year they showed up again with the same demands. My friend is very irascible and was visibly upset with the RD officers since his his assessable tax situation was still the same as the previous year. Eventually his daughter gave the boss man 1,000 baht to go away and not come back. So far they haven't.

Get used to receiving 0.5% interest in TH, vs 5.5% in USD offshore.

That is inheritance tax. The gift tax kicks in at 20 million for gifts from direct family and 10 million from others. I am not sure how frequently you can receive gifts from the same donor.

Thanks for the response. People from some countries may have trouble getting those documents with electronic signature from tax authorities. I have an accountant prepare my UK tax return but I don't recall receiving any kind of hard copy or electronic document that would be of use from HMRC. I just have my own tax returns and some tax invoices but no receipts from HMRC. I think Vukovar's experience in filing tax returns and getting double tax treaty relief from the RD on foreign source pension indicates that they feel they are capable of implementing this without any further ado. So there might not be any more information or guidelines forthcoming at all. Just do your tax return in 2025 and figure it out for yourself. Online filing seems out of the question as there is no way to apply for tax credits.

The minister is saying that trawler owners would prefer to make modest payments to him to avoid the investment required to comply with international standards. Just throw the press ganged workers over board if they are too exhausted to work any more or complain. It's much easier.

Mea culpa. Yes 100 million not 1 million is the threshold for Thai inheritance tax but Settha has just ordered the RD come up with a plan to increase revenue from IHT and Land & Buildings tax. IHT is charged on Thai assets regardless of where the beneficiary resides. It is charged on foreign assets, if the heir is Thai or resides in Thailand according to Immigration laws, whatever that means. There is obviously potential for overlapping jurisdictions on IHT with Thailand and other countries claiming global jurisdiction over inheritances by their citizens which might become more of an issue, if Thailand amends its inheritance tax with lower thresholds and higher rates. This is further complicated by different approaches to IHT, eg the UK taxes estates but Thailand and EU countries tax heirs. The UK Thai DTA specified inheritance as something that can be taxed in Thailand, even though Thailand had no IHT at the time.

If they go ahead with demanding tax returns from foreigners without locally sourced income, they should at least produce tax return forms in English and add spaces for DTA tax credits with guideline notes explaining what is deductible under each of the 60+ DTAs and what supporting documents will be required. They publish English versions of the forms for guidance but don’t allow you to submit the English versions and there can be differences in the English versions too. I have seen cases where the Thai version had been updated but they had not bothered to update the English version, so that new clauses were missing and the numbers of clauses were wrong. With locally sourced income and no tax credits etc it is possible to file a PNG 90 tax return online, if you can read Thai well enough but otherwise virtually impossible as important messages keep popping up in tiny Thai script. If they are going to tax thousands of foreign retirees, perhaps they should recruit more staff capable of working in English, or perhaps improve the very expensive but poor quality public education system which teaches kids English from primary school to university but creates end products that are incapable of using English in a work situation or even having a basic conversation in the language.

Your experience with the RD sounds horrific, particularly with a relatively small amount of tax at stake. I have been in the Thai tax net for years owing to locally sourced income but they have never been difficult over personal income tax, presumably because they are familiar with the standard Thai documents they request. Did they make you get translations of your home country tax documents, which I guess were not in English, if you are from the EU, unless from Ireland? Also did they need copies of the originals certified by the tax authority. Did the RD deduct the tax you paid overseas from your Thai tax obligation or did they make you pay the Thai tax and claim a tax refund from your home country?

Inheritance tax in Thailand is exempted between spouses and otherwise only payable over l million baht. In the UK it is also generally exempted but only for foreign spouses, if the have lived in the UK and have an NHS number.

It’s particularly disconcerting the way different offices and individual officials are allowed to interpret the law as they please or even just ignore it. We see this with Immigration, Customs, Land offices and District Offices regularly. No reason why RD should be different. Thailand is not a rule of law jurisdiction. It’s rule of incompetence and corruption.

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.