JimGant

25 minutes ago, ding said:

Hmm well the DTA exists to expressly stipulate that it is not an "and" taxation situation. The DTA is clear that the US will collect taxes on Articles 6 ....That means Thailand does _not_ get to tax that. It's expressly exempt from taxation claims from Thailand.

There are many examples of both countries having taxation rights on the same income -- otherwise, why would you need a credit system, if only one country could tax..... The rental example is the purest, because others involve the "saving clause," whereby the US has secondary taxation rights on all income taxed by Thailand, even tho' the DTA gives Thailand certain "exclusive" taxation rights. [Private pensions, IRAs, etc.] Thus, because of the "saving clause," even tho' Thailand has "exclusive" taxation rights on my private or IRA pension, it practically results in Thailand only having "primary" taxation rights, with the US having "secondary" rights. In this case, Thailand keeps all the collected taxes, and the US gets to keep only the taxes collected after absorbing the Thai tax credit. So, double taxation is avoided, but the country getting "first dibs" per the DTA, gets to keep all the taxes, by not having to absorb a tax credit.

But back to Article 6, and rentals. Here, the US is "primary" taxation authority -- per the DTA language of "may" collect taxes -- if the DTA said "may ONLY" collect taxes, then the US would be the exclusive taxation authority, and Thailand would not have secondary taxation authority:

Quote

The first paragraph of Article 6 states the general rule that income of a resident of a
Contracting State derived from real property situated in the other Contracting State may be taxed in the Contracting State in which the property is situated. ......This Article does not grant an exclusive taxing right to the situs State; the situs State is merely given the primary right to tax

Thus, Thailand also has the right to tax your rental income, but must absorb a tax credit equal to the taxes paid the US. A fat cat Thai, with rental property in the US, and in the Thai 35% tax bracket -- would probably find he owes quite a bit of tax to Thailand, as the US tax credit for this rental income would probably be small. But, this is why Thailand would like to have this option of secondary taxation rights, even tho' for paupers like you and me, the US tax credit would probably cancel out any Thai taxes owed.

1 hour ago, ding said:

The IRS has not sent me a notice that they give up their right to collect that portion of my tax so it remains the in situ Contracting State collecting the tax from its citizen living in Thailand (the Other Contracting State). There is no tax to "credit" in Thailand because it is exempt due to being paid to the US IRS and subject to the DTA.

It's not an either/or situation -- both countries get to tax your rental income, per the DTA. In this case, the US is the primary taxation authority, and Thailand the secondary. Thus, the US taxes you with no regard to Thailand, and keeps all the tax collection, since, as primary, they don't have to absorb a credit. Thailand, on the other hand, can consider your rental income as assessable income, but, per the DTA, has to use the US taxation as a credit against its taxation. So, if in a low tax bracket, your US taxation credit may completely wipe out any Thai taxation. In higher tax brackets, Thailand could net some taxes from your rental income.

Anyway, if you figure out on a worksheet that you'd owe Thailand no taxes, after it absorbs the US tax credit, don't even bother to include this rental saga on your Thai tax return, should you have to file for other reasons. Obviously, keep that worksheet should RD come knocking down the road.

1 hour ago, ding said:

**So... my rental house in the US is taxed only in the US, not Thailand.

You forgot to copy this part of the technical explanation for rental receipts:

https://www.irs.gov/pub/irs-trty/thaitech.pdf

Quote

This Article does not grant an exclusive taxation right to the situs State; the situs State is merely given the primary right to tax.

Thus, Thailand has secondary taxation rights on rental income from your US (situs) rental property, i.e., the situs country does not have exclusionary taxation rights. For practical purposes, this means the US gets to keep all taxation on that rental income, while Thailand only keeps any taxation left after subtracting out a tax credit for the US taxes. Thus, in many (most) cases there won't be any taxes left for Thailand to collect.

Today's Thai tax forms don't allow for you to show a rental taxation net of a US tax credit. So, do the math on a matchbook, and if zero or negative, just don't report it. If there is some taxation due, after subtracting out the tax credit on a worksheet, fiddle with the numbers to arrive at that number, to insert on your tax return.

This concept, seen in many DTAs, of primary and secondary taxation countries, is fortuitous for the secondary country, should the primary country not tax the income in question. But, if country A is designated as having "exclusive" taxation rights, well then, country B has no rights, even if country A chooses not to exercise its taxation rights. Exclusive taxation rights are also contained in the DTA phrase: "May be taxed ONLY in country A", while "may be taxed" is code language in OECD Model tax treaty language as having primary taxation rights. Got that?

Now you know why the Treasury Dept has seen fit to write technical explanations for certain tax treaties.

8 minutes ago, Mike Lister said:

You appear to be very cavalier about telling members to ignore this and that, which, whilst that advice may well appeal greatly to the common sense side of things, doesn't always match up with the way the laws are written. I on the other hand would feel much more comfortable presenting the facts, even if that means saying I don't know, and leaving others to make their own decisions.

There are no laws written about FIFO and LIFO for remittances, at least that are discoverable by the Thai taxpayer, or at least for now. Thus, you're free to choose how to identify a remittance of co-mingled funds. If you got into an argument on this point with an RD official, I believe you'd have sufficient grounds to stand on.

Your approach of, "I don't know, you make your own decision" is, I guess, one way to present guidance to folks looking for advice. To me, it's a cop out: You don't even offer a pros and cons scenario, with a recommended best choice.

My years as a CPA, doing taxes for airline flight personnel (yes, not expats), showed me the US Tax Code is full of omissions and conflictions. As such, there are gray areas, that have two or more avenues, and where you give your client the avenue best to his advantage. I won most of my audits (and the few I lost weren't with prejudice). You give it your best shot, and if you lose -- because it wasn't a frivolous tax dodge -- you're in the, "well, we gave it our best shot."

So, Unkown1, I present a gray area that you can take advantage of, without any possible negative consequence, that I can imagine, under the current law. Or you can take Mike's Simple Tax Guidance, which is so simple, it doesn't provide any guidance, or at least alternatives, at all. Good luck.

4 hours ago, Unknown1 said:

To be honest I think that any confrontation with them is lose-lose situation with high risks. I'm thinking about pay now and try to clarify it later (deadline is 9th April, so no time now). Can I request a refund later if I believe that tax was paid by mistake? They probably won't return it unless proper documentation is provided. This looks like a "safe" decision.

Looks like an uninformed decision. There is nothing -- yet -- that says using FIFO to categorize remittances is illegal. You're completely kosher to consider that 30k remittance as non-assessable, by being principal, not income. And, do you think you're on their radar screen, with your (relatively) piddly remittances? Or, you'll be one of the 300,000 expats, with remittances, to be called into the office to parse those remittances? No way, Jose.

Forget filing. Go have a beer.

11 minutes ago, Mike Lister said:

LIFO and FIFO are intended for inventory management accounting rather than financial reporting, I don't know how extensively the practice will be accepted here, if at all.

Yeah, they may eventually demand LIFO, or some kind of average. But until they decide, if they ever do, I say you're free to pick and choose, to your advantage. What advice do you have?

5 minutes ago, KhunLA said:

Read for yourself what the authorities put out, not info from salespersons.

At the beginning of all this, the authorities (which office, undefined) said: If you can show a home country tax return, plus a DTA with Thailand, you owe no taxes to Thailand. Not much further news on that, so maybe they had their toes and fingers crossed when they put that out.

20 hours ago, Unknown1 said:

My situation is very similar. I had initial capital on US brokerage account on Jan 1 2023 and made more income in 2023. Let's say I had 100k initially, made 50k income and transferred 30k into Thailand from this account. Should I pay anything or not for 2023?

Until something is stated on how to treat co-mingled monies, my two-cents says, use FIFO. Thus, your oldest money, the principle, is where your 30k remitted money comes from. You're not going to get audited (certainly RD scarce resources will be reserved for the fat cats). But if you did, you certainly have a plausible explanation -- since until declared otherwise, FIFO is perfectly acceptable.

1 hour ago, KhunLA said:

I'm surprised people are still confused & asking questions of strangers for their taxes. 

I'm not. With wrong information being put out by some Thai law firms, and other organizations, what's to be believed? Example from an unnamed law firm:

Quote

The new amendment to the Revenue Code in Thailand, which will come into effect on January 1, 2024, requires tax residents of Thailand to declare all of their overseas income, regardless of where it is earned.

That's complete baloney. Thai RD is not interested in income that is not assessable, and thus not taxable. This would include all non remitted income; income from pre 2024; and income exempt per DTA. Plus, there's no place on a tax return to provide non assessable income -- so if you don't owe taxes, are they asking you to walk into a RD office with an Excel spreadsheet....

Quote

 To take advantage of a DTT, foreigners will need to declare their overseas income to the Thai Revenue Department and provide documentation to prove that they have already paid taxes on that income in the other country.

Ludicrous. Again, Thai RD is not interested in my US govt pension, exclusively taxable by the US. And they're not interested in my VA pension, which is not even taxable by home country -- so how could I provide documentation that taxes were paid on that income? They may be confusing some reports that, income taxed in home country is completely exempt from Thai taxes, if you show the home country tax return. This has nothing to do with a DTA, however; just a nice possibility to ease all this tax mess.

Anyway, too much disinformation making things confusing for the tax situation.

3 hours ago, spambot said:

So for example with £175,000 inside a savings account on 31 Dec 2023 - Then remitting 65k Thb / month (Approx. £17,500 / yr) to a Thai Bank for Visa ext. This essentially provides 10yrs of remittance that is free from taxation - Am I understanding you correctly?

Yes. The only snag, should you be called in to explain the sources of your remittances, is if you opened a new bank account post Jan 1 2024, and in this account all your post Jan 1 2024 monies were deposited, and these are the monies being remitted to Thailand. For appearance sake, you need to have transferred enough money from your pre 2024 account to your post 2023 account -- up to the 175k GBP grandfathered amount -- to cover remittances to Thailand. Yes, with the fungibility of money, you shouldn't need to play this game. But, should you get a bean counting nerd in RD on your case, this would give cover. But if you don't go this route, I certainly wouldn't lose any sleep over it.

52 minutes ago, yang123 said:

Bangkok Hospital Chiang Mai also offers IV sedation

Ah, that's what it was. I was sitting in the dental office when a gurney wheeled out with what I perceived as a corpse. My immediate question to myself: Did he get a discount?

56 minutes ago, lordgrinz said:

I would like to avoid filing any taxes here in Thailand though, or have to explain where my money comes from,

I'm just curious -- what are the sources of your remitted income to Thailand? If largely current year private pensions, then, yes, assessable income. But not assessable are govt pensions and social security, from current or past years; any and all monies from a financial account established pre 2024, where the balance on 31 Dec 2023 exceeds any and all monies remitted; and IRA Required Minimum Distributions, and other distributions, since, if you're taking RMDs, your IRA contributions were well before 31 Dec 2023.

So, not sure where your worries are coming from -- unless most of your remittances are current year private pensions. Otherwise, doubtful you have any Thai taxable income.

Worried about bad guys (or bad wives) getting sensitive data? Your information is never on review, unless you get a tax compliance audit (unlikely, unless you're remitting tons of money, and not filing a tax return). And even here, you can redact all your information on the supporting 1099s, except payer, payee, and amounts. Relax.

21 minutes ago, lordgrinz said:

So no paper trail of where it came from, or would the issue arrive after I try to deposit it in my Thai bank account?

But of course. The bank clerk will sit down with you and divide the $15000 into four piles. The first is from your latest private pension check, say $2500, so it's assessable income. The second, say $5000, is from your govt pension, thus it is not assessable, per DTA. The third, say $5000, is from a savings account that was closed on 31 Dec 2023 -- thus this is money grandfathered, and thus not assessable. And the last $2500 is from rental receipts from a house in your home country. Now, home country gets primary taxation rights on this, but Thailand has secondary rights, per most DTAs, so it is assessable income ('tho Thailand will have to apply a credit of home country tax against its Thai tax). So, you have a total of $5000 (180000 baht) of assessable income. Now the law says you must file a Thai tax return for assessable income  over 120000 (single, 220000 married). Stupid law, since if you're over 65, you won't have any taxable income until assessable income exceeds 500000. So you won't owe any tax. And there's no fine or foul if you don't owe tax. So ask yourself -- why file?

Anyway, back to the bank. Obviously, this scenario is absurd. As it would be for all cash flows -- SWIFT, Wise, etc. So, it's "up to you" (famous phrase of Alfred E. Somchai) to self-assess your remitted cash flows as to whether or not they're savings or income. And if the latter, is that income assessable, or not. Just keep good records, including rationale for judgement calls (like using FIFO), in case you're amongst the 1% called in for a compliance audit.

Way too much over-thinking on this matter.

1 hour ago, Darksidedude said:

how can they have the right to tax someone on their foreign income or savings its absolutely absurd.

Of course they have the right to tax foreign income, if the tax treaty allows. And these same treaties prevent double taxation, through exclusivity or by tax credits. But, yeah, they don't have the right to tax savings -- and there's no plan to do so. The rumor that all remittances into Thailand will be subject to taxation is pure baloney. Unless it's a direct deposit of a taxable foreign income, like a private pension, then it's up to you to parse what's income and what's savings, in that cash flow of fungible money into Thailand. The banks certainly can't determine what is and what isn't income. Nor can RD.

So it's up to you to determine whether or not you have a Thai tax obligation. For many of us, already paying our home country taxes on worldwide income, our total tax bill between home country and Thailand probably won't change -- with, now, Thailand finally getting some tax revenue, and the home country losing same tax revenue, by having to grant a credit. Ho hum.

Certainly it wouldn't be cost effective for RD to man up to check all tax situations of foreigners. In fact, it may make sense to go with what we've already heard, namely: "Pay tax in your home country, no need to file Thai tax return." But, just to make it scary for tax cheats, set up random tax compliance audits. And, of course, if you're not paying tax to your home country, now you have the opportunity to pay someone something. Sounds good to me.

14 minutes ago, Phulublub said:

Nope.  The was (and is) no loophole.

 

In the past, you could "decide" if asked, that inbound funds were from prior years' and therefore not assessable.

 

Now, you could "decide" that inbound funds are from savings held at 1 Jan and therefore not assessable.

 

It is a question of fact (a legal term) where and when the funds originated.  In both cases you are either telling the truth or you are not, depending on the real origination of the funds.  Nothing has changed in that regard.  At all.

Bingo! And right in bed with Mike Lister.

On 4/2/2024 at 2:37 PM, Mike Lister said:

It's not about AN, that is a decision individuals must make and shouldn't be advised.

Shouldn't be advised!?. You're kidding. Folks reading these tax threads certainly are looking for advise. The waters are still so muddy on all this new tax rumor that it's impossible to have a definitive thread on what's what -- and to "lock" a thread to make it definitive, by disallowing further argument, is ridiculous.

Anyway, in a situation like, do I file 'cause my assessable income exceeds 120k, and the law says so -- or do I not, 'cause I have not taxable income and there's no penalty for not filing -- is a question begging for advice. At least a "pros" and "con" discussion of this is warranted.

Without such, all these tax threads, spewing forth much rumor and speculation, are pure crap.

8 hours ago, Mike Lister said:

If by not reporting your DTA exempt income, that means you do not have enough assessable income to meet the reporting threshold and doesn't warrant filing a tax return, then don't (there is no penalty for not filing a return, when no tax is due).

The official reporting threshold is having 120k (220 married) of assessable income. But, for someone over 65, with a TEDA of 500k, you have no taxable income until assessable income exceeds 500k. Thus, with assessable income up to 500k, there is no tax due. And, as you said: "There is no penalty for not filing a return, when no tax is due."

So, now that you're no longer an employee of AN, and thus have no further 'tow the legal line' responsibility to AN -- are you now recommending that common sense says: Don't waste your time filing a Thai tax return if you have no taxable income, thus no taxes owed, thus no possible fines or penalties?

2 hours ago, scottiejohn said:

they also demanded an update TM30 as mine was too old as it did not show my address, just the fact that it had been recorded! 

Yeah, my dog-eared Receipt of Notification is from 2016, and doesn't have my address on it. I guess I could update it online, with the online TM30 system. Is that system now working ok?

4 hours ago, Pib said:

If going the Tricare coverage method be sure to get an annual Tricare coverage eligibility letter as that letter reflects the effective coverage going back up to 6 years which confirms you have continuous coverage going back at least 6 years.

So you'll only need to get one Tricare letter -- the one you get in the year of your five-year update -- since it will reflect that you've had coverage for the previous six years.

36 minutes ago, HerewardtheWake said:

PIB's points are quite important. I am sure BoI will insist on an LTR visa holder's having met the requirements during all the time the visa has been valid. 

Never dipping below 100k in a bank account used for health self-insuring -- might be interesting to 100% prove. Probably asking only for end-of-year statements would be the solution.

1 hour ago, Misty said:

For those who qualify, an LTR visa is generally much better than the other options you mention. 

But if you don't qualify, rationalizing that other visa options are better -- should make you feel better about your lack of assets.

2 hours ago, Tony M said:

If it is not necessary to file a tax return  under the above circumstances, and Immigration decides that they wish to see evidence of tax paid before granting an extension of stay, how will we evidence to Immigration that we didn't need to file a tax return as we had been transferring savings ?

Just have good records of all your financial balances on 31 Dec 2023. This is the amount of non assessable income you can bring into Thailand going forward, to be joined with any subsequent non assessable income, like govt pensions exempted by DTA. The fungibility of money is your friend.

3 hours ago, Mike Lister said:

The rental income derived from overseas property is not taxable in Thailand, as long as it remains overseas. But, if that income is remitted to Thailand, it is assessable to Thai tax.

Yes, but Thai tax receipts would be net (via credit) of any tax paid to the country where the property is located. The following from the US technical explanation; but it's pretty much standard language in all the treaties that follow the OECD Model: 

Quote

This Article does not grant an exclusive taxing right to the situs State; the situs State is
merely given the primary right to tax. The Article does not impose any limitation in terms of rate
or form of tax on the situs State

So, Thailand has secondary taxation rights. Just how you'd treat this on a Thai tax return is an interesting question, since there currently are no lines for tax credits... Of course if your situs country doesn't tax you, Thailand gets to keep the whole enchilada, since there are no tax credits to net out. That's why having secondary taxation rights might pay off in some situations.

26 minutes ago, Lacessit said:

If you stay in Thailand for more than 180 days, you are deemed a Thai tax resident. In that case, you would stop paying tax in the USA.

 You'll always pay tax to the US, or at least have to file a tax return -- because of the so-called "saving clause" in the DTA, which allows the US to tax all your worldwide income irrespective of what the DTA says. This is not as onerous as it sounds, because the DTA does prevent double taxation. But it does mean, if Thailand can't tax it because of the DTA, or won't tax it, because it is not remitted -- then the US taxes it -- and keeps the whole kit and caboodle, since there's no Thai offsetting tax credit. Conversely, if per DTA, Thailand has exclusive, or at least primary taxation rights -- and they implement their taxation authority -- then they keep the whole kit and caboodle -- and your US taxes are reduced by the Thai tax credit on that remitted income.

Thus, for Yanks, your total tax bill between both countries probably won't change a bit -- unless Thai effective tax rates on subject income exceed that of the US. In that case, you pay full fare to the US Treasury, and pay Thailand whatever net taxes remain after subtracting out the US tax credit. I can't see that happening to me, because even if I cashed out a huge chunk of my IRA, all that money was pre-2024 income -- and thus not assessable for Thai tax purposes. All my other income is govt pensions, and thus exempt.

But, I've got an LTR visa, so I'm protected from this goat rope. However, my wife isn't -- so need to keep an eye open on her situation, when I kick.