JimGant

25 minutes ago, Mike Lister said:

I don't know about other frequent posters in this thread but I'm averaging around five PM's a week from people looking for simple explanations and for help in understanding those basics.

Well, they came to the right person for simple explanations. You lost my vote pages ago, when you advised to submit a tax return with all your income, not just assessable income. Then, recently, you gloat that "I submitted a return with no omissions." So, from pages ago, I remember your going through your return with the clerk, she checking off, "not taxable, not taxable, not taxable, etc" Yep, no omissions. But plenty of stupidity -- that RD office probably had plenty of laughs over the stupid farang that likes to report non assessable income.

21 minutes ago, Jingthing said:

How about this example. 

A US person transfers in 30k usd in a year.

His social security is 20k and the rest of the 30k being 10k from an IRA.

So the American only has to worry about the 10k, correct?

Yes, but not much worry, in extra taxes, because, yes, Thailand will get first dibs on taxing that 10k -- but due to the saving clause in the DTA, you also have to declare that IRA distribution on your US 1040 return. And the US has to give you a dollar for dollar tax credit for what you pay Thailand in taxes. Thus, between what you pay Thailand, and what you pay the US (after the tax credit) is probably a wash.

Plus, if 10k is your only assessable income for Thai tax purposes, you probably won't have any Thai taxable income, after subtracting out all the allowances, deductions, et al. Thus, your only tax bill will be with Uncle Sam, same as if you'd never left Kansas. Thus, you're treated AS IF you're a US tax resident, even tho' you're a tax resident of Thailand, not the US (are you listening, Jerry?)

2 minutes ago, The Cyclist said:

What I was not clear on ( But was led to believe ) was that my Government Pension  was not classed as ' assessable income ' and therefore no annual Thai Tax filing was required.

Yes. But what's weird about the UK-Thai tax treaty is that private pensions aren't addressed at all, at least that I can find. And, there's not even an Article addressing "Other Income," like in the US DTA, where income not specifically addressed in Articles is discussed.

So I can see why Brits scratch their heads when it comes to private pensions and Thailand. Was it intentionally left out of the treaty? And if so, then how do you know if Thailand has "assessable income" of your private pension -- or not?

Maybe the answer lies in the Articles on dependent and independent employment compensation..... But, if I were a Brit, I'd sure like something definitive on private pensions remitted to Thailand.

16 hours ago, The Cyclist said:

 

I am led to believe that you only have to file a Thai tax return if you have ' assessable income ' I am also led to believe ( but I could be wrong ) that income that is covered by a DTA is not classed as ' assessable income '

Well, yes and no. If a DTA says your gov't pension is not taxable by Thailand, but only by your home country -- then, yes, your gov't pension is not assessable income for Thai tax purposes. However, if the DTA says Thailand has exclusive taxation rights on private pensions (which the US DTA clearly states), then that would be assessable income -- IF (under the old rules) it is remitted in year earned. Under the new (proposed) rules, all pre-Jan 1, 2024 earnings are not assessable income - if remitted to Thailand after 31 Dec 2023. Which says you'd best open a new bank account for your 2024 and later earnings -- and do your wire transfers from your pre-2024 bank account -- not that they'll ever have the resources to efficiently investigate transfer sources.

3 hours ago, Mike Lister said:

I'm very certain that most people who reclaimed the tax with held on bank interest, at least had an opportunity to consider the fact they were only filling out part of a tax return and ignoring the bulk of it. That was how I first was told that I needed to file a return and that was years ago, you can't tell me I am the only person in Thailand who was told.

How so? If all my remitted income was from an earlier year, I had no assessable income for Thai tax purposes -- thus no tax filing obligation. Are you saying you somehow had to remit current year income, thus having assessable income for Thai tax purposes? No savings or checking account from a prior year to "filter" your wire transfers through? Weird.

58 minutes ago, Yellowtail said:

If the US bank is offering to make a swift transfer to Thailand for free, you can bet they will rape you on the rate. 

If you send USD, the rate is established at the receiving end. Thus, another reason not to convert at the sending end, especially between a major currency and a thinly traded currency like the baht -- where you get hosed by the spread.

3 hours ago, BobBKK said:

Can someone simply lay out the likelihood that they impose tax on pensions here?  surely 100,000s will leave,

They'd be remiss if they didn't, since they have 60 tax treaty agreements that give them first taxation rights on certain pensions -- mainly private pensions (but not gov't pensions).

Identifying these private pensions would be easy, if they're direct deposited into a Thai bank account. Not so easy if these private pensions are part of a fungible glob of cash flow wired into Thailand, where much, if not most, are not private pensions, and not taxable per the DTA. Here, it would seem only self-assessment by the sender of what part of the wire is assessable income, per DTA, would be the only workable solution.

But this might collect more money than you think, because it you're already paying taxes on these pensions in your home country (like in the US), should Thailand finally utilize the DTA to their benefit -- you'll now mainly pay taxes to Thailand, instead of the US (when you factor in the tax credit from the Thai taxes). So, your combined tax bill --assuming you do owe some US tax, after factoring in the tax credit -- will be the same as if Thailand never took advantage of the DTA (and even less, if you're Norwegian, where any taxes paid to Thailand will negate a tax requirement to Norway, which are higher than Thailand taxes).

So, self assessment should be profitable, which is nice for Thailand, since there's no real alternative. No big deal for Yanks -- my IRA would now have to be declared to Thailand, so, yeah, some more paperwork. But, as previously said, my US tax on this IRA (payable due to the saving clause in the DTA) would be reduced dollar for dollar by the Thai tax credit. Ho hum. No new hole in my pocket.

You're not paying taxes now on your pension -- and are horrified by your country's DTA now allowing Thailand to tax it? Welcome to the OECD's latest effort in re-writing their model tax treaties to, not just eliminate double taxation, but to eliminate no taxation, period. So solly.

On 12/31/2023 at 9:25 AM, WDSmart said:

but Wise takes a couple of days.

They've improved of late. I just sent $20k Jan 1, afternoon, Thai time. It was in my Bangkok Bank account in less than 24 hours the next day, at 1400 (which seems to be the standard log in time for Wise transfers). For some reason, the larger the amount sent, the longer it takes -- or at least that used to be the case. 20 grand in less than 24 hours is right up there with a SWIFT transfer.

21 minutes ago, The Cyclist said:

And going by your example, I would say the 800k in the bank would be the ones that would come  under scrutiny.

Huh? That money was already here before Jan 1, 2024 -- thus grandfathered from the post Jan 1, 2024 remittance rules..... Please share your logic, if it exists.....

Quote

Thats great, you have 800k in the bank. Now what are you living on.

 Wise transfers of my Air Force and Social Security pay, which are exclusively taxable by the US. For the Mercedes purchase, I transferred money from my savings account, founded with an inheritance from Aunt Martha. Should the RD want to have a few rounds on income vs capital, that might prove interesting. But, I really don't think they have, or can afford to have, the resources for such scrutiny. No, they'll reap enough new money when they finally post definitive rules on their latest tax scheme -- and then rely on self-assessment.

An observation: Those with 800k in the bank for retirement extensions, as of 31 Dec 2023, will not come under Immigration scrutiny for taxes, since pre Jan 2024 monies are exempt from the new proposed rules. Just don't let that 800k drop down, as allowed, since the money you backfill with, before your next extension, WILL be tainted under the new rules -- and maybe subject to Imm scrutiny.

But, kinda late now to switch from the 65k/mo to the 800k method. I never quite understood why those who had both options, complained about the opportunity cost of losing home country interest to the lower Thai rates. If this made the difference between you eating chicken instead of steak -- well, your problem was more extensive than opportunity cost.

https://www.morningstar.com/stocks/why-weve-downgraded-fidelity-contrafund

Good find. Something to consider in your overall evaluation of whether or not to invest in Contrafund.

Been a good year for US stocks, particularly compared to last year. Now, I've never been smart enough to invest in individual stocks -- figured the insiders have already queered the package. But, years ago, in researching where to put my IRA tax deferred inputs, the reports on an actively managed fund, Contrafund, caught my attention. Hence, that's where I went. Nice choice, as it turned out; haven't quite made the million mark, per the link, below, due to RMDs, but close. And, of course, 'past is not prologue,' so maybe Contrafund's magic is burned up. Nevertheless, if you're stuck with an under performing mutual fund, maybe a look at this article is warranted:

https://pictureperfectportfolios.com/fidelity-contrafund-fcntx-review-actively-managed-mutual-fund/

10 hours ago, Thailand J said:

US citizens are taxed as [the same as] US residents using the same tax form as the residents : IRS Form 1040. Foreign income is reported on form 2555 attached to form 1040.

Yes, US citizens are taxed on worldwide income, and thus are treated as if they're residents of the US (and, yeah, file Form 1040, same as a real US resident). But, if they live here in Thailand for over 180 days, they're tax residents of Thailand, as far as the DTA is concerned. And this gives Thailand 'first dibs' on certain income -- but such income is still subject to US taxation, per the saving clause -- with credits avoiding double taxation.

As far as the Form 2555 is concerned, this deals only with foreign earned income. It has nothing to do with how US income is dealt with by the Thais, per the DTA, which is what all these latest threads are about. Sure, it's nice to know, if you work full time here in Thailand, how to avoid declaring your Thai income on your US tax return (Form 2555). But that's not what this discussion is about.

20 hours ago, Thailand J said:

swiss actually tax US income but Thai so far has not.

....'cause the Swiss tax US IRAs as income, not as REMITTED ONLY income. Wait 'til Thailand does away with the remittance aspect, then you'll see that the US tax treaty with Thailand, and with Switzerland, are near identical -- and definitely identical in how IRAs are treated. Guavaman has done an excellent presentation on how this works. Suggest you re-read.

3 hours ago, DrPhibes said:

The question is the things taxed on the Thai side, will they allow a credit for what you paid in the US.

 Not up to Thailand for this determination. If Thailand has "exclusive" taxation rights per the DTA on certain incomes, like private pensions and IRAs (which "only may be taxed in the country of residence"), then they get to keep all the taxes they collect under their tax rules. Only the US, in this example, determines whether or not to allow a tax credit in order to eliminate double taxation; but of course the US only realizes any taxes collected, if the US tax bill exceeds the allowed credits. And the only reason the US can tax this income, which is the exclusive taxation right of Thailand, is because of the saving clause, which says, the US may tax all incomes as if the DTA didn't exist -- with a few exceptions, like alimony and child support.

But, the DTA is not the sole reason double taxation is avoided -- the US Revenue Code has always allowed tax credits to avoid double taxation; but, it's only for foreign taxes on foreign income -- not foreign taxes on US income subject to Thai taxes. But, because of the DTA, the Revenue Code can be trumped, to allow credits for Thai taxes on US income. The kicker here is that a Form 8833 needs to submitted with your US tax filing, explaining how the DTA overrides the Code.

Hey, I'm not making this sh**** up.

6 hours ago, Mike Lister said:

So 500k, plus whatever other things you can add, some of which have been mentioned, kids, wife, insurance etc

Nice round figure. So, my income is Air Force pension (not assessable, per DTA), Social Security (not assessable, per DTA), and a required minimum distribution from my IRA, last year being $11000 -- which is assessable, per DTA. BUT, when netted against my allowance/deduction/exemption of $15000 (500k baht), I have a Taxable Income of negative $4000, i.e, I have no taxable income thus should not be required to file a Thai tax return. Several takes on this, but the 'no need to file' makes the most sense.

Some say they're redesigning the tax return to be able to list tax credits. That's nice. But if you have no income from which to take tax credits from -- why would you list tax credits?

Anyway, I'll just be glad I have an LTR visa as insurance against idiocy in the Thai Revenue Department, however that might develop....

1 hour ago, Jingthing said:

So you withdrawal 12k.

Isn't that all very old money so exempt in Thailand?

Well, yes. But you better have shut down the account by Dec 31st 2023 -- or newer deposits will queer the pot, since there are no accounting rules, to my knowledge, that dictate FIFO or LIFO for remittances; under GAAP, this is for inventory accounting.

1 hour ago, Jingthing said:

I thought anything earned before January 1 2024 is exempt?

Yes, indeed. I'm looking at where things are headed post Jan 1 2024. And, actually, where things might go, should Thailand wise up, and forget the remittance fiasco. In which case, a simple, ah, you cashed out $10000 from your IRA, subject to ordinary taxation, and subject, first, to Thai taxation. All easily identifiable.

But, if the remittance rule remains, if you put your IRA distribution into your checking or savings account, mixed with other deposits, say, from military retirement and social security -- and you do a wire transfer to Thailand -- how do you decipher which money was sent, from among the various deposits mixed into a fungible pile of money? You can't. Hence, we're back to the unsolvable problem Thailand will have on sorting out remittance streams for taxability. Stay tuned.

On 11/30/2023 at 10:20 PM, Jingthing said:

If using a trad IRA any US tax paid could presumably be used as a credit on Thai tax due if any (as we don't know yet what the Thai rules will actually be) based on double taxation treaty.

Actually, under the DTA, Thailand has exclusive taxation rights on IRAs, which the language "shall be taxable only in that State" means:

Quote

 pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.

The phrase “pensions and other similar remuneration” is intended to encompass
payments made by private retirement plans and arrangements in consideration of past employment. In the United States, the plans encompassed by Paragraph 1 include: qualified plans under section 401(a), individual retirement plans (including individual retirement plans that are part of a simplified employee pension plan that satisfies section 408(k), individual retirement accounts [IRAs].....

 Now, there is no "exclusivity" in US DTAs, due to the saving clause, that allows the US to tax all global income as if the DTA did not exist. But, with such wording that makes Thailand exclusive taxing authority, the US becomes secondary taxing authority with its saving clause. And, as such, it has to absorb the tax credit from Thailand, and Thailand gets to keep the entire tax proceeds. Thus, there is no US tax credit against Thai taxes -- only a Thai tax credit against US taxes. So, unless the Thai taxes are greater than the US taxes on the IRA distribution, your overall tax bill will be the same as if your IRA wasn't taxed by Thailand.