JimGant

On 9/20/2024 at 2:12 AM, chiang mai said:

Whilst technically not tax resident perhaps in the UK under formal rules, tax that arises there is still due and payable. The net affect being tax residency in two countries.

We seem to be on a semantics circle jerk....

Let me show this quote again:

Quote

For a period of dual residence, double taxation agreements are particularly important in resolving any double taxation which may arise. When interpreting a double tax treaty for a dual residence period, you need to work out in which country you are resident for the purposes of the treaty

So, if you live more than 180 days per calendar year in Thailand -- and have a UK private pension that you remit to Thailand during this year -- then per the tie breaker rules in the UK-Thai DTA -- Thailand is your country of residency for the purpose of the DTA. Thus, you pay taxes on the private pension to Thailand. And per DTA, NO tax is payable to the UK. Double taxation is avoided.

Unfortunately, the UK-Thai DTA is silent on private pensions. But OECD and UN Model tax treaty language holds that income not described in any DTA article is exclusively taxable in country of residency (as determined by the DTA).

2 hours ago, NoDisplayName said:

Forget the 'taxable' amount after Thai deductions and allowances.  This is about total assessable income

This is about taxable income, which is assessable income after Thai deductions, allowances, free 150k are deducted. Nothing left, no taxable income. Certainly this is not about "total assessable income," which is meaningless, if there's no taxable income after the deductions.

2 hours ago, NoDisplayName said:

Assessable income under worldwide taxation will be all your income streams, disregarding IRS deductions and allowances.

Assessable income, for Thai taxation purposes, will be all that income the DTA says is taxable by Thailand. This could be, for example, private pensions, which Thailand has primary taxation rights on -- or rental income from US property, which Thailand has secondary taxation rights on. Or it's not assessable income, like US govt pensions. IRS deductions and allowances play NO role in the Thai taxation equation -- only the deductions and allowances in their tax rules. It's only when certain deductions and allowances, like the US good-deal for long term cap gains, which Thailand doesn't copy, that you find the disparity will hurt the Yank taxpayer. For the simplistic tax return that I highlighted for my situation, the Yank will not be hurt by these new Thai tax rules.

On 9/11/2024 at 1:45 PM, NoDisplayName said:

Thailand has it's own exemptions and allowances, and will tax the foreign income BEFORE those exemptions/allowances were applied.

Nope.

Here's what my taxes would look like if Thailand went to the worldwide system -- actually, it wouldn't be any different than if they stuck with the remittance system.

What I'm looking at here is what income would be taxable by both the US, and by Thailand -- per the DTA:

My Air Force pension, and Social Security would be exempt from Thai taxes. But my Required Minimum Distribution (RMD) from my IRA would now be primarily taxable by Thailand -- and secondarily taxable (because of the treaty's saving clause) by the US.

My Standard Deduction with the US would be, for single, age over 65, $16,200 (TY 2024).

For Thailand, my so-called TEDA (Standard Deduction equivalent), comprising for a single over age 65, with a pension payment, and including the 150k freebie: 500,000 baht ($15,200, at latest FX rate - 32.8)

Ok. Now my RMD is all into the US tax bracket of 22% ('cause the govt pension and SS get me there). So, my average RMD for the last few years -- of $20,000 -- would be well into taxable income territory -- and at 22%, would cost me $4,400 in US taxes.

Now, this RMD of $20,000 is the equivalent of 656,000 baht (again, FX of 32.8). And to get into Thai taxable income territory, I need to exceed their equivalent of Standard Deduction, which as we outlined, was the 500,000 TEDA. And we do get into taxable income territory. Thus, my taxable Thai income is: 156,000 baht.

Which amounts to 8,100 baht in taxes, or $247 -- which is $4,153 less than what I pay the US on this same RMD -- which, of course, can be subtracted from my US taxes, as a credit, leaving me with the same tax bill I would have, if I only paid US taxes, and not Thai taxes. Hmmmm. Maybe it's not time to relocate....

And what if my US taxable RMD, plus maybe some interest income from both the US and Thai banks -- equaled $40,000? Again, I'm still in the 22% US tax bracket (for a tax bill of $8,800); but have now crept into the Thai 20% tax bracket. However, most taxation occurs at lower bracket rates, so my effective Thai tax rate is 13%, or 107,400 baht, or $3,274. Again, much less than the US -- and completely available as a tax credit against US taxation.

Hey, I'm not sure of how much of an average Yank I am -- I have about 30% of my securities in mutual funds, held by my standard IRA. So, all my cap gains are taxable as ordinary income, both in the US and in Thailand. But for Yanks heavily involved in individual stocks, and thus get a great tax advantage on US taxes for long term cap gains -- and qualified dividends -- well, then, they'll take a hit, as Thailand won't reciprocate those nice US tax breaks. So, yeah, maybe a few Yanks looking to vacate.

But, I surmise my example is more the norm for Yanks -- and I won't be losing some American pals.

On 9/14/2024 at 11:55 PM, KhunHeineken said:

All the Thai's will understand is they can now write up a tax bill for just about every foreigner living here, and they have to pay it,

Not likely. Whether we're talking remitted cash flow, or worldwide cash flow -- Thailand won't have the needed data to identify whether or not that cash flow is non income (savings), or if income, whether it's assessable income per DTA, or not. Thus, it will all be self-assessment by the tax payer, and TRD will have to give the benefit of the doubt. The best they can do in enforcement is the occasional random compliance audit.

1 hour ago, EVENKEEL said:

Shouldn't repatriation be part of the proposal.

Thomas Jefferson tried that.

7 hours ago, chiang mai said:

The net affect being tax residency in two countries.

So, the UK-Thai tax treaty is worthless, i.e., you can't use the treaty's tie breaker language to determine which country has primary taxation rights, and the other secondary taxation rights? This would mean double taxation, which I doubt an expat Brit would stand for....

But, hey, King George tried SRT a few centuries ago, telling Americans they were honorary British residents, for tax purposes. We know how that ended.

9 hours ago, chiang mai said:

"It is possible to be resident for tax purposes in more than one country at the same time. This is known as dual residence".

Ok. But for tax treaty purposes, where, again, you have to determine which country is your tax treaty country of tax residence ('cause of the exclusionary or primary taxation rights language), you have to resort to the treaty's tie breaker language. From the link you provided:

Quote

For a period of dual residence, double taxation agreements are particularly important in resolving any double taxation which may arise. When interpreting a double tax treaty for a dual residence period, you need to work out in which country you are resident for the purposes of the treaty. This is usually determined by a series of ‘tie-breaker’ tests to determine that country. Usually this is the country which is:

1. the country where you have a permanent home available to you,

Old, disabled folks using Digital Wallet? Hopefully they have IT literate grandkids to help.

1 hour ago, topt said:

You can be tax resident in both places in the same year

Well, no -- not for treaty purposes. All treaty language gives the country of residence priority in taxation rights for many categories of income -- either exclusionary or primary. So, there can't be a "both" situation.

The language for tie breaking residence situations in most DTAs is pretty straightforward: Where do you live most of the year; what country has your primary residence; etc. Can't reach an agreement? Well, then you go to the "competent treaty authorities" for a decision (who the he-- are they -- and how would you ever engage with them......). Oh well.

16 hours ago, Mike Teavee said:

That's my point, in the UK HMRC has clear guidelines that if you use a Foreign Credit Card to purchase Goods or Services in the UK and then pay the resulting bill using money from a Foreign Bank Account you are remitting money into the UK.

If memory serves, the remitting taxation aspect for UK taxpayers pertains only to non domiciled residents -- and is where taxation on credit card purchases is covered. Non dom "residents" is a strange animal, at least it appeared so when I tried to figure out from HMRC literature on how you become one.

Any Brits out there a non dom UK resident? If so, could you explain how you acquired this status -- and how you tie break your Thai tax residency status with your UK tax residency status. Thanx.

1 hour ago, Liverpool Lou said:

"She said, just don't tell me what you are doing, I don't want to know".

Yes, she said that, obviously, because her advice and your actions would be illegal, something in which she does not want to be complicit!

Actually, this is almost verbatim what our Bangkok Bank branch manager told us several years ago. Her explanation was: If a bank does not know of your death, they have no legal responsibility to freeze your account -- and withdrawals, per usual, can occur.

Wife has already been told to withdraw most of my funds (leaving small amount, and account open) soonest -- even before my barbecue.

14 hours ago, DrJack54 said:

Very poor illegal advice. 

Do some research on the topic

Not advice, but an observation.

Sounds like you have done research  concerning the legal requirement for somebody -- police, hospital, embassy, whomever -- to ferret out where you bank and then notify this bank(s) of your death.

Could you please share this information? Thanx.

17 minutes ago, LivingNThailand said:

then slowly over a few weeks take out the money out of my immigration account via internet banking and put the money in the joint account.  I don't know why the bank would be notified of my death? 

If you read that referenced thread, you'll see that there have been situations where (confused) bank managers have frozen joint accounts. So, maybe best to transfer to her personal account. And, yeah, the bank has no avenue to ever hear of your death -- embassy, hospital, wat, whatever -- no legal requirement to notify your bank -- not that they would ever know what that bank is....

23 hours ago, LivingNThailand said:

No problem transferring the money right away

Yeah, with online banking -- have her do it fast, in case the bank finds out about your death and freezes your account (thereby she'll have to rely on a many-month probate process). Supposedly, she's supposed to go the probate route. But, especially if she's the sole beneficiary in your Wiil, there's no aggrieved party to press charges.

Another thing you might do is make her co-signatory on your account. This doesn't mean it's joint, so there's no affect with immigration. But, it allows her to access your account, so if you're terminal, she can tap your account perfectly legally. And, if you're dead -- where, supposedly, co-signatory status is no longer in effect -- this erstwhile status just adds further credence to her bonafides, along with her being sole beneficiary in you Will. Only the lawyer mafia, out a probate fee, will be concerned. Too bad.

3 hours ago, DrPhibes said:

However, If they ask for my US income tax returns, I'm leaving.

Why? Would any Thai taxes due, per DTA, not be a one for one against your US tax return? Or, do you have such substantial Long Term Cap gains, that Thai taxes on would, as a credit, overwhelm your US taxes? Can't think of any other scenario where you might lose money with any new Thai tax scheme.

8 hours ago, NoDisplayName said:

If you as a single filer earn about $15K in dividends, plus $45K in capital gains, your US tax bill is $0.

 

But your Thai tax bill will be $10,000.

You have no US tax to claim foreign tax credit.

Agreed. Most Yanks I know don't live off substantial annual LT cap gains and dividends. But, yes, there are some.

8 minutes ago, Ebumbu said:

Therefore, I need an accountant. I have one bookmarked. Any recommendations?

Sorry. They're all fixated with the blood in the water.

17 hours ago, Felton Jarvis said:

As a US citizen, I definitely have to pay taxes on my retirement income,

Are you currently paying US taxes on this retirement income?

7 hours ago, Ebumbu said:

If I'm already taxed in the US, I believe there's a treaty against double taxation in Thailand, no? So, I think Thailand can only tax the "foreign earned income" part of my income, which is exempt fro US taxes. Am I on the wrong track?

Definitely.

9 hours ago, mdr224 said:

How many thai people pay taxes? Not many i imagine

Many because -- their assessable income doesn't reach the threshold for becoming taxable income.

9 hours ago, lordgrinz said:

My Scenario with my wife making close to the 25% tax rate, means that if I sent over B1 Million here, it would be taxed at about 25%.

Why file jointly, adding your income to the wife's 25% tax rate? File singly, and your numbers will be a lot better.