retiree
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17 minutes ago, Mike Lister said:
I think there is a difference between suggesting that "48% of the Thai economy is grey, unreported untaxed income", and implying that might equate to "40-50% of GDP figures commonly cited". Perhaps in part this is imprecise terminology. I had intended to imply that 48% of all earnings are unreported and untaxed, . ... GDP measurement on the other hand is a different issue.
You are absolutely right. I jumped to the conclusion that you were referring to GDP, and not income (unlike Schneider and my other citations, who are referring to GDP) -- I guess I'm just used to seeing words like "gray" and "shadow" so frequently used in that context. My apologies for getting this wrong.
Your explanation of 48% makes good sense. I just don't see where the figure comes from, or how close it might be to this X or Y ?
X% of Thai earnings are below or barely above the limit for reporting and taxation.
Y% of unreported Thai earnings would yield significant taxes if discovered.
I'm open to a side bet on the fraction of Y that should be, but are not, showing up on tax returns that are currently filed, and which (I think) the RD has its sights on ;)
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8 hours ago, Mike Lister said:
Yes I agree. One of the problems is that 48% of the Thai economy is grey, unreported untaxed income, I don't know how the government can accurately estimate anything when only 50% of the economy is being reported.
As noted in this post, the figure that is most often cited in this thread -- 46.2% -- is based on admittedly "poor" evidence that is one step below "use with caution."
Prof. Friedrich Schneider is another key reference; he estimates 40.9% in 20141. For what it's worth, he also repeatedly quoted 70% -- and was himself very widely cited -- for 1998-1999, so this seems like a remarkable recovery2,3.
The problem with all of these numbers is made plain in a typical newspaper analysis:
Visible informal business in the country is widespread and consists of street vendors, food stalls, souvenir sellers, repair shops, makeshift entertainment venues and so forth, ... "if this revenue was just taxed by the general 7% value-added tax, the Thai government could have brought in ..." (quoting an anonymous Thai economist)4
Recall that a) income distribution in Thailand is extremely unbalanced, b) 20% of the population receives 50% of the income, c) the average wage in Thailand is 15,400 baht/month, and d) low-income workers and low-revenue businesses are not subject to personal income tax or VAT (all references provided in the link above).
It is intentionally illusory to imagine the income that could be garnered from these folks if only they were "just taxed by the general 7% value-added tax" -- they have intentionally been excluded from such taxation. And it is equally misguided to assume that the government has not carefully considered the effect that applying such a tax would have on a large population that is barely getting by as it is -- more than a third of Thailand's population is either below the poverty line (6.3%)5, or faces food insecurity (28.6%)6.
Thailand is not Italy, where so many large and profitable businesses have historically evaded reporting that years ago, tourists were advised to hold onto their restaurant receipts -- the police were known to demand them to ensure that restaurants were charging VAT. Thailand does have a shadow economy (which many posters on this list seem to be eager to participate in). And in cases of corruption, as well as the problems every country faces in taxing drugs, prostitution, and the like, large sums may be involved.
But these cost far less than I think is commonly imagined in terms of GDP. Corruption is estimated at $1.5-3 billion of $500 billion of GDP in recent years -- a painful bite of the budget, but only a small fraction of the economy. Similarly, prostitution is not taxed, and is also likely to involve billions of dollars, concentrated in a manner that could reasonably yield tax revenue. But (perhaps unlike corruption) that money is spent in ordinary activities (raising families, building houses, etc.) that boost GDP and are taxed.
Overall, I find it hard to see how all of these add up to anything close to the unsupported 40-50% of GDP figures commonly cited. This is a quite interesting topic, though, and I would be grateful for links to any more detailed and accurate assessment of the role the shadow economy plays in Thailand.
1 https://link.springer.com/chapter/10.1007/978-3-319-59846-8_3 New Estimates for the Shadow Economies of 11 Asian Countries from 2000 to 2014 Friedrich Schneider 2017
2 https://www.elibrary.imf.org/display/book/9781589060968/ch01.xml Shadow Economies Friedrich Schneider and Dominik Enste 2002 IMF
3 https://www.imf.org/external/pubs/ft/issues/issues30/ Hiding in the Shadows Friedrich Schneider and Dominik Enste 2002 IMF
4 https://www.gulf-times.com/story/448401/Thailand-s-shadow-economy-among-biggest-worldwide Arno Maierbrugger Gulf Times Correspondent, Bangkok. 2015
5 https://www.adb.org/where-we-work/thailand/poverty Poverty Data: Thailand 2021
6 https://www.frontiersin.org/articles/10.3389/fpubh.2022.1071814/full Socio-demographic and geographic disparities of population-level food insecurity during the COVID-19 pandemic in Thailand Sirinya et al 2023
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45 minutes ago, Dogmatix said:... it would be a major undertaking and would easily take two years to draft and go through all 3 readings in parliament. They might want to reform other aspects of the law as well. There are many legit arguments against global taxation... In addition, there are many ... with wealth offshore who might oppose global taxation
I agree. This is far, far from a done deal. Nor is global taxation (particularly for non-citizen tax residents) something that can be effected with the stroke of a pen. The US, UK, etc. tax codes (each thousands of pages) and guidance (each tens of thousands of pages) took a long, long time to get that way as necessary details were filled in over the years.
Note that if this report is accurate, remittance in 2024 will only be taxable for 2024 income. 2023 and prior assessable income will be protected under the safe harbor rule, and the old interpretation of the code. The earliest remittance that might be affected under the Sept 15 rule won't occur until Jan. 1, 2025, for income earned in 2024.
On the face of it this suggests that the RD would have time to defend a legal challenge. Hopefully this is something a disinterested Thai legal authority, or an expert in procedural law rather than tax law, will comment on.
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56 minutes ago, Dogmatix said:
An article in yesterday's Prachachart Thurakit suggests
A longish response to this important post is on the "short" thread:
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Thank you Dogmatix for posting this important article: https://www.prachachat.net/finance/news-1432180
My interpretation would be slightly different. As expected, the RD is beginning to issue guidance and "safe harbor" rules on tax law enforcement. To clarify, a safe harbor rule typically establishes simple documentary evidence needed to establish that one is not subject to a regulation.
If the article is accurate, the first safe harbor rule is that money remitted from an account that was:
- funded in 2023 or earlier, and
- has not had additional funds credited in 2024 or subsequent years,
will be assumed to be non-taxable income, regardless of when it is remitted. Presumably an account statement that shows
- the pre-existing funds from 2023 or earlier, and
- a remittance to Thailand from that account that matches your Thai income
will be accepted as the safe-harbor evidence. I imagine that it would be advisable for residents to maintain these accounts as-is, and establish new accounts for income and expenditures in 2024 and beyond.
The question of whether Thailand will move to taxing global income of tax residents is non-trivial, and will not be settled by a quick and easy revision of Thai law. I expect that at first there may be an attempt to apply this to Thai corporations, and Thai overseas investors -- long before there is any consideration of taxing the home-country income of individual tax residents as it is accrued, and regardless of whether it is remitted.
Please note that I have no particular expertise in tax or law, besides paying it and obeying them, and any corrections are welcome.
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1 hour ago, Mike Lister said:
....really, I can't believe you or anyone else said that!
And, of course, Anatole France, almost exactly 100 years later: The law, in its majestic equality, requires both the rich and the poor to pay a very fair tax, and forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.
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1 hour ago, Mike Lister said:
...really, I can't believe you or anyone else said that!
But Louis, chéri. It is a très, très fair tax! Do they not pity the poor baker? If we have no money, who will buy his cakes?
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1 minute ago, redwood1 said:The poor don't buy much so they would not pay much VAT....And the rich would pay a lot more VAT.....The VAT is a very fair tax...
No comment, really; just wanted to let that sit there.
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Continuing my comment from here:
Recent figures given for tax filers and tax payers (and inferences about the number of tax scofflaws) may be misleading for at least two reasons:
- temporary decline in employment due to Covid-19,
- as I've pointed out previously, the likelihood, based on income distribution, that many non-payers are de minimis scofflaws, whose evasion is on minimally taxed (5%) income that is not worth the cost of collection.
Consider a Thai taxpayer who:
- supports his wife, his own parents, and two children, and makes the mandatory contribution to the SS fund (6,300 baht),
- does not deduct provident fund, government pension, life insurance, home loan, or up to 30% of income to invest in RMF or SSF funds. If he had fewer mouths to feed he could offset his lost "support" deductions through these.
His tax obligation on an income of 41,000 THB / mo, or 492,000 per year, is zero. The next 150,000 of income would only be taxed at the lowest marginal rate, 5%. This is a substantial income in a country whose average wage is 15,400 / mo.
Finally, I'd note that the published estimates of Thailand's tax-evading shadow economy (46.2% here) are based on data the publication itself rates as D "poor" (on a scale of A-E). It is worse than their C rating: "use with caution." I would assume that any reliance on such figures is reckless, if not irresponsible.
https://www.worldeconomics.com/Country-Reviews/Thailand/
Pointers to any reputable research and publication on the actual distribution of Thai taxpayers and tax scofflaws would be greatly appreciated.
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Most Thai taxpayers who have tax obligations file tax returns and pay taxes.
The link given above (and below) to the NESDC article pdf (Thailand Social’s Outlook of Q4/2022 and overview of 2022) yields these relevant statistics:
- "The total number of personal income taxpayers was 10.8 million persons, while only 4.2 million persons with net income subject to tax (disposable income after deducting expenses, allowances and donations)"
- "There are a total number of 38.8 million persons employed, of which 18.6 million receive wages and salaries, but only 10.8 million reach the tax filing criteria of the Revenue Department."
https://www.nesdc.go.th/nesdb_en/ewt_dl_link.php?nid=4495&filename=social_dev_report
Note that the average wage in Thailand is 15,400 baht/mo -- well below the amount that would require tax filing.
https://tradingeconomics.com/thailand/wages
This is partly explained by the fact that about 32% of the population is in the agricultural sector, in which some 45% of all households have negative annual income.
https://www.pier.or.th/files/dp/pier_dp_204.pdf
(Financial lives and the vicious cycle of debt among Thai agricultural households Chantarat et al, 2023). Note that almost half of all debt is due to direct agriculture costs, e.g. fertilizer; see Table 3 p47 sub B col 1, also Table 4.As a consequence, income distribution in Thailand is extremely uneven: The top 20% of earners receive 50%+ of national income, while the bottom 40% receive just over 15%. (Income distribution in Thailand is scale-invariant Sitthiyot 2023, citing data for 2021 from The Office of National Economic and Social Development Council: Poverty and income distribution statistics; 2023.)
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10335671
Given this distribution -- a flat line, with a very sudden rise at the high end -- I would guess that many tax scofflaws (including some retirees on this list) owe only minimal amounts, and are not cost-effective to pursue. Again, most Thai taxpayers who have tax obligations file tax returns and pay taxes.
Finally, I would point out that the Thais spend a lifetime contributing to their country by contributions and service to Buddhism, availability for military conscription, care for their children, and providing an absolutely essential social safety net for the disabled and aged. Support for the country, and with it the right to enjoy the benefits of citizenship, does not derive solely from paying taxes or VAT.
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4 hours ago, Plus Esse Quam Simultatur said:They ran through it all and then fined me for not having reporting the last 2 years. ... I was fined 400 Baht
Do I understand you correctly? Do you mean no tax, but a 200 baht fine for each year you failed to file?
Underrated post, imho.
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45 minutes ago, Mike Lister said:
My impression is that the Thai Examiner article is a rewrite of this Sept. 29, 2023 article by Special Professor Kitipong Urapeepattanapong (in Thai, translate this page works fine), which I think was posted by Dogmatix (and copied to this thread by me) at the time.
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From my own experience: gabapentin is a go-to here for patient is complaining about a pain that doesn't have any obvious cause. It may be favored because it is somewhat soporific -- this got better during the day, but I always got a terrific night's sleep -- and sleeping well often helps people feel better. Finally, the two capsule sizes may be provided because the standard advice is to increase and reduce the dosage slowly, and spread it out over the day.
There is a great deal of interesting literature about uses of and dosage recommendations for gabapentin on line. It is also available OTC at finer drugstores everywhere.
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Please note that I am not an accountant or tax lawyer. This writeup reflects my understanding of how the Thai tax law affects me, and is how I would explain it to the rubber duck sitting on my desk.
The law regarding what is assessable (as distinct from taxable) income has been in place for decades. It has not been changed. No bill has been introduced to change it.
Only Thai tax residents are Thai taxpayers, and only taxpayers can have assessable income. Income earned in years in which you are not a Thai tax resident is not assessable because you are not a Thai taxpayer.
A simple guideline for my rubber duck:
-- were you a Thai tax resident when you earned it? If so, the income is assessable (section 40),
-- were you a Thai tax resident when you brought it in? If so, the income may be taxable, depending on DTA (section 41),
-- was either answer "no" ? It is not taxable.
The main unclear issue is this: What documentation will a tax resident need to differentiate between assessable income and "other funds" when we bring money into Thailand?
This is the exact same question our accountants ask our home countries or states when we liquidate assets, borrow money, or acquire other income that shows up in our home-country bank accounts: how much of that was capital? how much was income? how and where was the income portion taxed? And it still isn't always 100% clear (ask anybody who walks a fine line on state residence in the USA).
Nevertheless, I would assume that there will be guidelines and "safe harbor" rules for showing the source of funds remitted to Thailand (and whether or not they are assessable and taxable), just as there are in every tax jurisdiction in the world.
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Section 40, below, defines assessable income. I have elided most of it for brevity.
https://www.rd.go.th/english/37749.html#section40
Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.
(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.
[... sections 2 through 7 ... ]
(8) Income from business, commerce, agriculture, industry, transport or any other activity not specified in (1) - (7).
The amount of tax under paragraph 1, which is paid for by the payer of income or by any other person on behalf of taxpayer on any category of income or in whichever tax year, shall be treated as income of the same category and of the same tax year as the income where payment of tax is made.
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Section 41, below, defines taxable income. The bracketed numbers and meaning notes are mine, as explained to my rubber duck.
Note that in paragraph 2, the RD has said (Sept 15) that the English translation of the underlined phrase "in the previous" should instead be understood as "in a previous" .... Whether or not this will require legislation to change the underlying Thai text of the law will probably be determined in court -- if it does, the current reading will stand for now.
https://www.rd.go.th/english/37749.html#section41
Section 41
[1] A taxpayer who in the previous tax year derived assessable income under Section 40 from an employment, or from business carried on in Thailand, or from business of an employer residing in Thailand, or from a property situated in Thailand shall pay tax in accordance with the provisions of this Part, whether such income is paid within or outside Thailand.
Meaning: if you generate income in Thailand it is taxable, no matter where the income is paid, and even if you are not a tax resident.
Meaning of the meaning: if you fly in, work 1 day for a Thai company, then leave, that day's income is taxable.
[2] A resident of Thailand who in the previous tax year derived assessable income under Section 40 from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax in accordance with the provisions of this Part.
Meaning: if you are a tax resident of Thailand your overseas income is assessable per Sec 40 and any DTA, and will be taxed only when it is remitted.
Meaning of the meaning: other than paragraph [1] income, money that is not in Thailand is not taxed in Thailand.
[3] Any person staying in Thailand for a period or periods aggregating 180 days or more in any tax year shall be deemed a resident of Thailand.
Meaning: you are a tax resident only if you are here for 180 days or more in any tax year.
Meaning of the meaning: if you are not a tax resident you will not be taxed as a resident.
Please let me know if you see any factual errors, as I do not want my rubber duck to be misled.
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In August I got a Samsung 4TB T7 external for $219, with $25 import fee and free shipping from Amazon (on Prime, yes, this is not an internal SSD). It was far cheaper than the Thailand price.
I also noticed that over the course of a month the Amazon price jumped up and down quite a bit (about $35 if I recall). This kind of variation seems much more common than it used to be -- I guess that wholesalers are more sensitive to the cost of carrying inventory than they once were. I've seen the same thing happen with 18TB Samusng external drives, whose Thai price has been more reasonable.
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59 minutes ago, TroubleandGrumpy said:
if they go ahead and make Expats pay income taxes, then there will be a lot of Expats leaving Thailand.
Lord, if you are listening, please please please open an Expats will leave Thailand proposition on a hard-money prediction market so that I can short it. Judging by the number of times it has been raised I'm sure it will be a well-capitalized market, and worthy of Your indulgence.
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Move on to grinders? I recently got this via Shopee:
Cuisinart Automatic Burr Mill coffee bean grinder model DBM-8
3,992 baht domestic, a bit cheaper from Korea, vs. $59.95 Amazon, but +$64.50 shipping / VAT so no savings. I got it because it was the only brand on Lazada / Shopee that a) I recognized, b) could find reviews of, and c) wasn't astronomically expensive.
My impression is that it's a great little $60 grinder, although not not quite so great as a 4K baht grinder. Does a reasonable job: fairly consistent, and pretty fine (but not as fine as a pro grinder, like the pre-ground coffee from Cafe Roma on Shopee). However, it has a high RPM / low torque motor, and I'm concerned it will conk out in a few years.
Does anybody have any moderately priced alternatives for fine grind / durable? I usually grind about 50gm, so not teeny tiny.
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1 hour ago, KhunLA said:
The more roasting, darker, the less caffeine.
The collective wisdom of Quora, Reddit, and the sources they pointed suggest that when measured by weight, light and dark roasts have practically the same amount of caffeine. By volume, the dark roasts are a little puffier and hence a particular volume will have slightly less caffeine.
Is there a source or lab test that takes the other position? Perhaps that the heating process reduces the amount of caffeine? I think what we can all agree on, though, is that dark roasts do not have more caffeine.
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18 minutes ago, KhunLA said:
Even pour through a natural paper filter,
I add a second mesh screen; might help but I'm pretty sure the littlest bits are sneaking around the edge rather than through the filter per se. I poured though a paper filter exactly one time before I came to my senses -- decided to man up & just let the grounds settle in the coffee cup, like Clint Eastwood probably does (assuming he's not straining them out with his teeth).
My liver laughs at cafestrol.
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9 hours ago, KhunLA said:
For others, that don't need to fondle their beans before buying: Cafe Roma
Another vote for คาเฟ่โรม่า (Cafe Roma) on Shopee. They have all kinds of beans & roasts, extremely reasonably priced, and arrives within a day or two. I get the dark Italian espresso and grind it fine, even though I also use a French press -- I respect a cup of coffee that can stand up and fight back.
This stuff will put lead in your pencil, even if you don't have anybody to write to.
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8 hours ago, retiree said:
13 hours ago, DonniePeverley said:
Can anyone summarise these past 123 pages in about two lines as to what is going on ?
An agency of the Thai government announced a simple, straightforward change in the interpretation of a single phrase in a single clause in a single sentence of a single paragraph of a single section of a simple and straightforward tax regulation: ... ในปีภาษีที่ล่วงมาแล้ว.
In the past it was interpreted as "in the past tax year", but as of January 1, 2024 it will be understood to mean "in a past tax year "; note that Thai does not rely on the definite article "a" or "the" in the way that English grammar does.
The revised interpretation will primarily impact Thai nationals, and a legal challenge to this change in longstanding practice is expected in the coming year.
In regard to the 123 pages specifically, many individuals realize that they are tax residents who may have to begin filing Thai tax returns; like many first-time filers in new jurisdictions they have questions about the application of longstanding regulations (which have not been altered), and may seek tax accountants (or alternative tax jurisdictions) in the coming year.
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5 hours ago, DonniePeverley said:Can anyone summarise these past 123 pages in about two lines as to what is going on ?
An agency of the Thai government announced a simple, straightforward change in the interpretation of a single phrase in a single clause in a single sentence of a single paragraph of a single section of a simple and straightforward tax regulation: ... ในปีภาษีที่ล่วงมาแล้ว.
In the past it was interpreted as "in the past tax year", but as of January 1, 2024 it will be understood to mean "in a past tax year "; note that Thai does not rely on the definite article "a" or "the" in the way that English grammar does.
The revised interpretation will primarily impact Thai nationals, and a legal challenge to this change in longstanding practice is expected in the coming year.
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Thanks for the response. Yes, I used to get an email 2FA with an 8-digit confirmation code, most recently September 9 (but still can't get on now). Still no idea why it doesn't work now, unless my e-mail or IP is on a block list, which occasionally happens with other international service providers.
And yep, if they give me an e-mail confirmation / appointment time, that's great. I have been concerned I'd miss any attempted phone call (which I generally don't answer or notice, since all I ever get are junk marketing calls).
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Another data point, with questions re logging in, and normal waiting time for SS application (I applied in July).
I have a "legacy" SS password account, and a linked ID.ME account. I have successfully used both in the past, until a month ago.
For the past month both fail during open US hours. The legacy SS password appears to be accepted, but goes to a "We cannot process your request at this time. Please try again later." page. Similarly, the ID.ME account sends me the two-factor ID number, accepts it, then returns me to the original login.gov / id.me / password login page.
I have tried both Chrome and Edge browsers, and both True fiber and leeching off the old lady's phone connection, and both direct and VPN. Same result every time.
I called SS USA yesterday. They said: your legacy account doesn't work because there's no two-factor authentication. We can't fix that, but we can remove it, and you'll be able to log in via id.me. I'm not sure I believe this.
Question: Has anybody had this experience? Should I have them delete the legacy password account?
Fwiw I'm trying to get on to check the status of my (completely ordinary) application for regular benefits, which went in 3 months ago. US SS office says still pending in Manilla. One other data point: the application let me enter a mailing address in the US (separate from my Thai residence address). However, SS operator said that they will only send any info or request mail to my Thai address (which I'm trying to avoid, 'cause my Medicare bill regularly arrives on or after the due date).
Question: should I continue to be patient? Is 3+ months normal(ish) ?
Change in the tax law does target expats living in Thailand and extends reporting obligations
in Thailand News
Posted
If that were the case, a DTA would not need to include details about different taxation rules for different types of income. It could just say "we have a DTA, so use the lowest rates."
Rule 5 ('favor the taxpayer when "the rate of tax stipulated in the Revenue Code is different from that of an agreement" ') would seem to apply only when there is genuine ambiguity. I think this is a general RD principle. Otherwise, as that same FAQ says:
- In a double taxation agreement, there are credit and exemption methods.