JimGant

1 hour ago, Mike Lister said:

Even SSc income is assessible income, until you file a return and declare that it is excluded income, under the DTA. Not filing a return and assuming the RD knows that transfer you receive every month is excluded under some DTA of other, is not a valid assumption.

Where did you come up with that? I would argue that assessable (taxable) income that is excluded from Thai taxation, due to the DTA, is NOT to be included on your tax return. If it were, on what line would you back it out with a negative number? Or, would you attach a note saying, "Forget X amount of income on page one, since it's really not taxable income, due to a DTA with the US." Or, do you just not include it at all on your return? One, two, or three -- give my your best choice.

2 hours ago, scorecard said:

The Aussie Old Age Pension is by specific law exempt from all taxation. The Aussie War Vets pension and war disability pension is also, by specific law, exempt fom taxation.

And, based on this from the US technical explanation of US DTAs, if you remit cash flow to Thailand that is exempt from taxation in your source country -- well, then, it remains tax exempt in Thailand:

Quote

However, the State of residence, under subparagraph (b), must exempt from tax any amount of such pensions or other similar remuneration that would be exempt from tax in the Contracting State in which the pension fund is established if the recipient were a resident of that State. Thus, for example, a distribution from a U.S. "Roth IRA" to a resident of the other Contracting State would be exempt from tax in the other Contracting State to the same extent the distribution would be exempt from tax in the United States if it were distributed to a U.S. resident.

US DTAs are based on the OECD Model, as are most of the world's DTAs. Yes, there are minor differences -- but doubtful Australia's tax exempt payments are NOT included in the OECD boilerplate language that dictates tax exempt income maintains its flavor in both contracting states.

For a Yank, where govt pensions and social security are "exclusively" taxable only by the US -- I guess if these two sources weren't enough for my annual cash flow to Thailand, I'd establish a separate bank account with these two sources, plus my Roth distribution. Then, there could be no doubt of the non taxable source of my money wired to Thailand.

And, since this wired money is non taxable by Thailand, then, I have no assessable income subject to Thai taxation, per the DTA -- and thus no need to file a Thai tax return (current rules, for single filers, is the requirement to file -- IF your assessable income exceeds 60000 baht ). Anyway, no tax avoidance/evasion here; thus, any knock on the door by khaki dressed revenuers would only result in possibly more paperwork, but no fines. But, unless RD hires 10000 more clerks, this ain't gonna happen.

Anybody used this part of Bangkok Hospital -- and if so, what's your assessment? Thanx.

4 hours ago, Mike Lister said:

The Thai tax dispensation on previous years income has been done away with so waiting for one year after the money was earned, doesn't achieve anything.

.... unless you have one of three categories of an LTR visa. Then, per royal decree, or some such proclamation, nothing changes re tax exemption per remitting in a later year. Yeah, best decision I ever made -- no visits to Immigration for five more years, and no more 90 day reports (although, with online reporting, that wasn't really such a hardship). So, if you qualify, give it a good look....

4 hours ago, Longwood50 said:

So basically it is as I described.  If you are a tax resident in Thailand and have income earned in the USA, the USA requires you pay tax in the USA.  They will give you a credit for tax paid to another country.  Hypothetically if the amount of tax due in Thailand was $30,000 but you paid only $20,000 in USA taxes, you would owe the additional $10,000 tax here in Thailand.  

Yes. And in this example, this is where you're required to file a Form 8833 to take the tax credit -- because the Thai taxation is on USA income -- and the Internal Revenue Code says foreign tax credits can only be taken on foreign income. Ah, but the DTA allows credits on Thai taxes on US income, to avoid double taxation. So, the Form 8833 needs to be filed, showing how the DTA trumps the Internal Revenue Code (no Form 8833 needed to take advantage of the DTA's exclusivity on Social Security and Govt pensions, since no Thai tax return filed, nor allowed, on this "exclusivity" of taxation by the US).

On 10/15/2023 at 1:46 PM, stargazer9999 said:

It is my understanding that the USA has had a double tax treaty with Thailand since 1997.  Does this help USA citizens in any way to avoid this new tax?

Absolutely. First, Yanks pay income tax on all their worldwide income, which, of course, would include any and all income subject to Thai income tax. So, assuming this initial guidance is true, which said, "If your home country has a DTA with Thailand, and you pay income tax in your home country, then you're not affected by this new ruling" -- well, Yanks are home free. Even the nebulous "if you pay income tax" in your home country, which possibly would, in some countries, not cover taxation of income subject to Thai income tax -- again, as a Yank, you DO pay tax on any and all income subject to Thai tax.

Now, the DTA makes US Govt pensions, and Social Security, the "exclusive" taxing right of the US. So, if I wanted to isolate these payments as direct deposits to a separate US bank account -- then a Wise wire of these funds to Thailand would stand out as completely exempt from Thai taxes. [But, currently I Wise-wire these funds from a savings account over ten years old, and complete with former years' direct deposits and other fungible amounts of deposits. But, I would feel confident arguing what funds were actually wired -- not that FIFO or LIFO accounting would resonate with Thai authorities.]

Anyway, the only thing that could possibly be changed with the new ruling is: I wire some of my cashed in IRA funds to Thailand -- and under current rules, I wire these in a later year, thus avoiding taxation. But the DTA says, Thailand has 'first taxation rights' on these IRA funds -- ok, but they don't, under their own (current) rules, that say it's not taxable if brought in in a a later year.

But, yeah, under the new proposal, if I wire these IRA funds to Thailand in current year, or in a later year -- they're taxable by Thailand under the DTA. So, I have to declare these on a Thai tax return. But as my IRA funds aren't too large, the Thai tax would be considerably less than what the taxes would be on these same funds on my US return -- so the tax credit means the total taxation between the two countries is a wash. [The DTA saving clause says these IRA funds are NOT exclusively taxable by Thailand -- but have to be included in your US tax return.]

Anyway, long explanation. Bottom line: Yanks won't be affected in their total tax bill, between US and Thailand, with these new rules. DTA keeps numbers the same -- maybe only a Thai tax return in your future, but at no cost but time.

9 hours ago, Lorry said:

9 hours ago, JimGant said:

Invoked where? If my US govt pension is "exclusively" taxed by the US, who cares what year I bring it over to Thailand..... per treaty, it never plays any part in the Thai tax scheme, meaning: no reference to it is required in the filing of Thai taxes.

I don't think any taxman in the world would accept your reasoning. 

"Show me all you've got!"

And then it's THEIR decision what is taxable and what not.

Well, maybe in your country. In the US, income tax is confined to cash flows that are defined as "taxable income." Just like Thailand's "assessable income." Thus, a gift from my aunt Martha, a loan from aunt Agnes, and an inheritance from dear old Mom -- would not have to be declared on my US income tax return. And, also, Thai social security is only taxable by Thailand, per DTA -- thus, again a cash flow omitted from my US tax return. Common sense, actually.

9 minutes ago, Mike Lister said:

foreigners in Thailand have been filing returns for years using the facilities of DTA's. Every time income is brought over during the year it is earned, the DTA is invoked.

Invoked where? If my US govt pension is "exclusively" taxed by the US, who cares what year I bring it over to Thailand..... per treaty, it never plays any part in the Thai tax scheme, meaning: no reference to it is required in the filing of Thai taxes.

2 hours ago, SHA 2 BKK said:

Subject to the provisions of Article 19, pensions and annuities paid to a resident of one of the Contracting States shall be taxable only in that State.

My read of this is: Private pensions are taxable "only" in Thailand. And per Article 19, Australian govt pensions are only taxable by Australia. Pretty much like the US.

So, looks like Aussies will need to file a Thai tax return, since they, like the rest of us, won't have that "bring that private pension into Thailand next year" to escape taxation in Thailand.

8 minutes ago, noobexpat said:

Whether its taxable is irrelevant...its assessable. So why wouldn't a tax return not be needed?

'Cause assessable equals taxable -- and income excluded under a DTA is no longer assessable, for taxation purposes -- nor taxable, for assessable purposes. Thus, no tax return needed. Phew.

4 hours ago, Sheryl said:

But if no tax due, no return required, yes?

You would think so......

But here's a quaint quote re do you have to file, or not:

Quote

All persons earning income are required to file a tax return no later than 31 March of the following year for hardcopy filing and 8 April for online filing, except for individuals whose income from employment is THB 120,000 or less (for single persons) or THB 220,000 or less (for married persons)

https://taxsummaries.pwc.com/thailand/individual/tax-administration

5 hours ago, TroubleandGrumpy said:

7 hours ago, jerrymahoney said:

All my income qualifies under Article 20 US-Thai DTA and cannot be taxed in Thailand.

You will still (IF this goes ahead) be required to lodge an income tax return, declaring exactly what you have said above. If the Thai RD agrees with you, they will issue you a tax certificate/clerance.  Or they might disagree and send you a bill ???? 

Negative. You're not required to file a Thai tax return if you don't have income that's taxable. So, my Air Force pension and Social Security payment are "exclusively" taxable by the US. Thus, it's not taxable by Thailand, and so no income tax return required.

But, my IRA required minimum distribution *IS* taxable by Thailand, as per the DTA, they're the primary taxing authority for IRA distributions. Yes, I also have to declare this IRA payment on my US tax return, per the savings clause. And, per the treaty, I'll get a tax credit for the Thai taxes, thus having a no net tax increase/decrease between the two taxing authorities (yes, there can be some net differences, depending on tax ratios -- but this thread has already become too unbearable to elaborate).

Geez, it's so obvious that Thailand is now caught up by its short and curlies, with a procedure that will never work -- because of the REMITTANCE aspect of their approach to taxation. And the remittance aspect of taxation was established years ago to allow Thai fat cats an avenue for tax avoidance. So, if Thailand wants to realize more tax revenue -- and why wouldn't they -- then drop the remittance aspect, and just concentrate on "foreign assessable income."

Anyway, as one example of just going to taxing foreign income, irrespective of remitted, or not -- and why it's doable, practical, and a money earner:

As a US citizen, living full time in Thailand, the DTA says that my IRA proceeds are first priority taxable by the country of my residence, i.e., Thailand. But since their existing rule said, no it wasn't taxable, because it was remitted in a later year than derived -- well then, the US, using its "saving clause" in the tax treaty, says: Thank you, Thailand, we'll collect the taxes on this IRA, with no tax credit payable, since you stupidly didn't tax it.

Thus, a smart Thailand would assess the current world of data exchange, particularly CRS and FATCA - where you now can see foreign income of your tax residents -- and come to the conclusion that: It's smarter, more practical, and more efficient to tax foreign derived income -- full stop -- without a remittance requirement to it. Yes, I'd then probably have to file my IRA proceeds as income on a Thai tax return (using the honor system, but backed up with FATCA data) -- but I'd get this all back, as a credit, when I file my US tax return. And Thailand would get the taxes they're entitled to via the treaty, which is fair. I could handle that.

As for the Thai fat cats? Well, they'll no longer have an "out" to deny foreign income via the remittance ruse. And that's why, I'm afraid, the remittance aspect of any new Thai approach to taxation -- won't be dropped. Sigh.

12 hours ago, Mike Teavee said:

Are you sure you won't have to pay more tax overall? 

Well, there could be a case, where a very large amount of a US private pension is paid, and remitted to Thailand, in a tax year. The Thai tax on that amount could exceed the US tax on that same amount. So, under the rules, you'd only get a tax credit up to what the US tax would be on that same amount. So, yeah, those extra Thai taxes over the amount allowed as a credit against your US taxes -- would now be a gotcha in the new era of remittance taxation on income.

17 minutes ago, scorecard said:

" For those non-Yanks screaming about no more free ride from somebody's taxes? Welcome aboard."

 

?

Only Americans will be paying no more taxes on their worldwide income under this new Thai tax proposal. Thus, all the complaints we're hearing on this thread must be from all those who have been getting a tax holiday by leaving their home country for Thailand -- and now that door is closing.

3 hours ago, TroubleandGrumpy said:

but I refuse to pay taxes to a Government that treats me like a tourist and demands 90 day reporting, TM30s, Annual payment/begging to stay, permission to leave and re-enter, double poricing, etc etc etc. 

 

Rant over ????

Adios, and good luck.

Americans have no dog in this fight, since all our worldwide income is already taxed. The only new wrinkle might be, according to the DTA, Thailand has "first taxation rights" on certain income, like private pensions and IRA payouts. But my other US income -- Air Force retirement and Social Security -- is exempt from Thai taxation, per tax treaty. So, maybe I'll have to file a Thai tax return, declaring my IRA income, and paying Thai taxes on this. But, per DTA, I'll just take this as a tax credit on my US tax return, and come out zero sum tax obligation. Anyway, Thailand gets the tax revenue they deserve, per treaty -- and the US pays for it via credit.

Actually, I won't mind paying Thailand the taxes that the treaty says are theirs. Surprised they haven't reached this point earlier. Sharper minds in the Thai tax department these days....? Maybe -- but obviously several sharp edges still needing to be filed down.

For those non-Yanks screaming about no more free ride from somebody's taxes? Welcome aboard.

17 hours ago, Dogmatix said:

It is now a policy of the previous government which current government may not like much and might not feel very bound by it.

Then, they'd be pretty stupid, to torpedo an incentive to bring in (or maintain) wealthy pensioners and global citizens. Actually, this new gov't has shown several positive inclinations -- and not much stupidity. We'll see....  In any event, as a Yank, these new rules won't affect my total tax bill, as I pay Uncle Sam on all my worldwide income -- but maybe in future years Thailand will get to keep the tax on my IRA required minimum distribution -- and that amount will be subtracted out of my US tax return as a credit. Ho hum.

6 hours ago, Arkady said:

Interesting but no mention of the potential impact on the condo market,

Actually, the article you mention addresses the impact on FDI, which includes condos, and buyers who have lived here a long time, but who bring purchase money in from abroad. BoI, a major player in Thai economic guidance, is the personal protector of FDI, a major player in economic growth -- so I doubt they'll allow things to go forward as now presented.

If they just got rid of the "remittance" aspect of all of this, and just concentrated on income earned abroad, regardless of remittance, then things could be workable. CRS and FATCA reporting aren't going to show remittance; heck, all my taxable income is direct deposited into my US savings account, from which Wise sucks it out for transfer to Bangkok Bank, mixed with five years of previous income and non income (inheritance), to become a mass of fungible dollars -- how is FATCA (or CRS) going to trace that as identifiable income? They can't (at least for now -- AI may be down the road. Barf).

Anyway, there are too many loose elements with this new proposal for it to go forward  -- not the least of which is torpedoing FDI, to include condos.