JimGant

Automatically assessable income? No, discussion of State/private pensions is just not addressed in the Thai-UK treaty. Strange? yes. Intentional? who knows. But does this make it automatically assessable by Thailand? Hmmm. Maybe the Brits and Thais just couldn't reach an agreement on this. Weird, and not very helpful for tax planning. But you can't just conclude that these State/private pensions are automatically taxable by Thailand, if there's no mention of them in the DTA. Thus, why not make your own decision on whether or not these are assessable incomes for Thai tax purposes -- if not delineated by the DTA, what's to say they're assessable....... Nada, to those of us who think positive. Plus, there's another consideration here that goes unanswered by the DTA's omission -- does the UK have the right to also tax these pensions? Or are Thailand's tax rights exclusive? The following is from discussion on the OECD Model tax treaty: Without this being addressed in the DTA, there's a potential problem in allowing the UK to tax these pensions should Thailand decide not to (because they weren't remitted). But probably not in reality, as you have no DTA to wave at UK tax collectors to say Thailand has exclusive taxation rights. So, you're going to be taxed by somebody, it would appear. But it sure would be nice, at least for the Brits, to have a DTA that spelled out what's what.

I just read the UK-Thai DTA, and I can finally see where The Cyclist is coming from -- State and private pensions are never addressed in this treaty, unlike gov't pensions, which are exclusively taxable only by the paying country. Thus, a trip to the RD office to get their read on State and private pensions. And I can only imagine they probably weren't aware of the details (or lack thereof) of the DTA; their take was probably, "we've never taxed foreign pensions and we have no guidance to begin now." Why the UK-Thai DTA doesn't mention private and State pensions is beyond me...... They don't even have an Article, like US treaties have, entitled "Other Income," that addresses income, like gambling winnings, that aren't specifically addressed elsewhere. Here's a Technical Explanation related to that US Article "Other Income": Well, that's not very helpful, as it doesn't define who's the primary taxing country (i.e., who gets to keep all the taxes, but has to issue a tax credit). Presumably, it's the country of residence -- but it's not specific about this. Thus, as The Cyclist has found out, determining assessable income from one's DTA isn't always that helpful. But, I'm not sure I'd go to my local RD office for their opinion on what is, and isn't, assessable income. I'd just give it my best shot, with the benefit of the doubt going to me -- plus, I'd keep good notes on my thought process, should I ever be queried (which seems doubtful).

Huh? Apparently, the only thing discussed were your two UK pensions, excluded from Thai taxes via DTA. And you say there was no discussion about assessable income, which would be any private pensions you have. But I would think your prime reason for visiting the tax office was to determine whether or not such private (and/or state) pensions were subject to Thai taxation, and, as such, met the threshold for having to file a Thai tax return.....? Anyway, you left the tax office fat, dumb, and happy -- and your trip report is meaningless, except to you.

There's no way they'll be able to parse cash flows into Thailand to determine capital inflows vs income inflows. And if the latter, whether those income inflows are exempt via a DTA -- what are they gonna do -- hire thousands to peruse DTAs of 61 nations (contemplate a cost/benefit conclusion of that) ? And say they did -- for my and wife's remittances to Thailand, yes, they could easily discern Air Force pensions and Social Security as non assessable via DTA (although I filter these through my US savings account before being forwarded by Wise -- another roadblock to parsing). And my wife's Pan Am pension is issued by a Federal agency - the Pension Benefit Guarantee Corporation (PBGC) -- because Pan Am went bankrupt and their pensions were taken over by the PBGC. So, it looks like her pension, issued by the Feds, would be exempt under the DTA, at least in the eyes of a Thai RD DTA analyst. Nope. The fine print says, "a pension for service to the government." Not a pension issued by a gov't organization. You think that nuance would be caught by an analyst? Anyway, a lot of other reasons why parsing remittances won't work, even with bank codes, which, as I understand, may have some Wise transfers coded as domestic, not international -- how's that square with coding of foreign remittances? And, of course, the bank account established and funded pre Jan 2024 -- all my Wise transfers come from such an account -- and I would declare that such transfers come from the oldest tranche, not the newest, post Jan 1, 2024 tranche. As there are no international accounting dictates on Fifo and Lifo for remittances, and unless Thailand dictated otherwise (doubtful), I'd be in my right to self-assess that my Wise transfers came from the oldest part of my bank account (and thus I've got many years of pre 2024 funds to work through before worrying about remittance taxation). And, yes, there's that term "self-assess" again, which is becoming tiresome repeating that it will be the only logical way Thailand can implement its new ruling. Unless you have direct deposits on pensions taxable by Thailand, according to DTA -- you've got flexibility in your self-assessment, particularly if you had a nice stash of pre 2024 savings.

You don't declare monies that are exempt from Thai tax. Tax forms only have lines for assessable income, which is logical: Why would Thai tax collectors want their forms cluttered with figures that have no tax value?

Why did you think you might have to? Assessable income over 120,000 baht? And what was their reason for saying you didn't have to file a return? Thanx.

You think a mia noi's claim might be successful? " He say he luv me mak mak and all his money will be mine."

Ok. Just allow some counter arguments that the readers can chew on.

Well, Lou, I guess you won't rest easily unless your wife goes through probate. Also sounds like maybe there's someone out there that might contest the Will. Fortunately, I don't have that problem.

Makes no sense. Yes, they need to make a copy of your passport, as they're required to report your death to your embassy. But your bank passbook? Would that be your joint account passbook also? Highly doubtful -- unless the lawyer mafia has done an end around...to make sure probates don't slip away.

Oh, come on Mike. If it's practical, like the person getting your bank funds is your sole beneficiary; you have no outstanding debts; and there's no one standing in the wings who could possibly complain -- why not cut the lawyers and their fees out of the loop. And recommended by your bank manager (in this case, mine)? Sounds like another thread of yours, where you say you're legally required to file a tax return if you have 120k in assessable income, even tho' you have no taxable income, and therefore are not subject to fines or penalties. I'll go with the practical, over the legal in both these situations -- particularly if there are no penalties involved.

Oh my. My bank account for Immigration, thus single owner, has my wife as co-signator, meaning only my name is indicated as account owner, but her signature is visible thru UV light. As co-signator, she can have her own ATM card, and she can march into the bank with my passbook and withdraw as much as she likes. Upon my death, this power, like power of attorney, probably dies. But since no one in the bank would know I'm dead (why would they, since no one, including my wife, is required to tell them -- and the police certainly aren't going to collect my passbook from my wife), she could still functionally withdraw. Or she could go online, and do a transfer from my account to hers. Illegal? Maybe -- but since she's the sole beneficiary in my Will of that bank account, and is the executor -- who's the aggrieved party to file a complaint? The only aggrieved parties are the slimy lawyers denied their exorbitant probate fees. And the bank manager's liability? Absolutely none, as she has no liability unless notified of the death, and then the obligation to freeze the account sets in. Yes, the lawyer mafia, greedy for probate fees, have gotten a lot of bank managers scared about releasing funds without a probate release, including, sadly, Amphur Wills, which in the old days were the poor man's escape from lawyer fees, in preparation and probate. Fortunately, my small town bank manager has told us, with a wink and a nod, to just come and collect the deceased's bank assets -- she apparently doesn't care too much for lawyers either. No, this subject pops up on this forum frequently, including the chance that misinformed bank managers might even freeze joint accounts. My bank manager has said this is absolutely not the case, so I'll probably not clean that account out, should the wife die. But, maybe next year a new bank manager...... Hey, the high cost of probate, and the time consuming execution of it, certainly makes one look for workarounds. And if your Will has your wife/partner as sole beneficiary, and you have no liabilities -- why wouldn't you use the workaround I just described? Just who is going to press charges -- the lawyer mafia? That would be interesting, and ludicrous.

Essentially, yes. The formula for integrating foreign tax credits into your US tax return is interesting, if you like math riddles. Check out the instructions for Form 1116. But, if your Thai taxes on this IRA are less than the US taxes on same amount, your total tax bill between what you pay Thailand and what you pay the US will be the same as if you never filed with Thailand. And, as I think you alluded to, I have no problems paying Thailand and not the US my tax dollars/baht, as I'd rather pay to fix pot holes here than in Iowa. Timing is where it could be tricky, as you need to have your Thai tax return results (for credit purposes) prior to filing your US tax return. But an extension with the IRS is no big deal, as neither are amended returns.

Yeah, but nice to know what the treaties say is their right to enforce.

I'm not declaring anything - I'm reading from the Technical Explanation of the Thai-US tax treaty: I you want to see a test case on how a US expat's IRA is handled, read the following link. It is based on the US-Swiss DTA, which, like the Thai-US DTA, is based on the OECD and UN Model tax treaties. Thus, considerable similarity. Just substitute "Thailand" for "Switzerland" as you read. The main difference, of course, is that Switzerland taxes income, whether remitted or not. Same as most civilized countries. https://hodgen.com/ira-distribution-to-u-s-citizen-living-in-switzerland-which-country-taxes-it/

Sorry. All that money in your 401k or IRA is tax deferred income (unless you padded it with some after tax income, in which case Form 8606 would apply). Thus, when you take your annual Required Minimum Distribution or any other distributions, that now becomes taxable income in the year it is taken. So, nope, can't say it was income prior to Jan 1, 2024. And, the DTA says Thailand has exclusive taxation rights on this income (if remitted). And the saving clause says you also have to declare this income on your US tax return. However, the Thai taxes would be a credit against US taxes owed. The guy who agreed to this on the DTA was an idiot, as here you have years and years of tax deferred income, whereby the US collected no taxes. And now when paid out, and you're a resident of Thailand, Thailand gets first collection rights on this money, and the US maybe no money, if the Thai credits cover the US tax. Wonderful planning, US.

Then quit making it sound like all remittances have tax consequences.

None of these transfers are necessarily taxable events. What's the source and character of these transfers? If made this year from a pre 2024 financial account, not a taxable event. Take out a loan from a bank and send it for a condo purchase -- not a taxable event. Put X amount of your DTA-excluded gov't pension in a bank account, and send no more than X amount to Thailand - not a taxable event (you'll never be asked, but if so, you can self-parse this treaty-excluded X amount from other fungible funds in the account - just don't send more than the X amount). I would even go as far as saying, debit card purchases from this bank account that don't exceed X amount would survive any scrutiny (which, again, I doubt Thai RD will challenge your word, or records of amounts in bank that are treaty exempt). From the drift of this thread, it sounds like folks believe any money you send to Thailand would be taxable, or even have some tax withheld upon arrival. Nuts. Thailand is not going to kill off Foreign Direct Investment by questioning the character of all monies remitted into Thailand. This, if done, will be done later, probably by self-assessment -- the only method that is realistic.

Indeed. Dandruffman123 must be joshing.

We're forgetting that the new rule applies to remitted INCOME, not remitted cash flow. A credit card cash flow to the Thai merchant I buy from is just a loan from the bank that issued me the credit card. It's not remitted income. This is in the same category as, I borrow $100,000 from my mother, which I then remit to Thailand. Whether I gave my mom a note, or she considered it a gift, is neither here nor there. It is definitely NOT income, and therefore would not show up on my US tax return, nor would it be considered income for Thai purposes. How I pay the bank back, or how I pay Mom back, does not redefine this loan as income. Do you really think the Thais are going to view all remittances into Thailand as income? Of course not. And they're not going to be able to differentiate remittances between income and capital. As said too many times on these threads, common sense dictates that what you report as assessable income on your Thai tax return will be determined only by you. Random compliance audits, like we do in the US, may be in the future. But even if hit by one of them, if you filter all your monies through an offshore or home country bank, the fungibility of such money, and some good record keeping, should shoo away the revenuers.

Indeed (unless the applicable DTA says the home country has exclusive taxation rights on that income).

Because it was money taxable exclusively by your home country -- and/or it was money earned in 2022, or earlier? Sorry to question your methodology, but a few folks have indicated that they believe that "all money in bank accounts pre Jan 1st, 2024" is exempt from the new rules. It is -- but not from the old rule, meaning 2023 earnings remitted in 2023 are subject to filing a Thai tax return in 2024 -- if not exempt via DTA.

Taxable, of course, is the remaining assessable income after subtractions of allowances, deductions, and the 150k freebie. Similar to the US definition of taxable income (TI), which is adjusted gross income (assessable income), less the standard deduction. No TI, no tax filing required. But what is your "excluded assessable" category?

Well, the definitions do kinda muddy things. But for most of us reading this, we're concerned about foreign derived income, and what part of that is assessable, and thus subject to a Thai tax filing. So, we're mainly interested in income excluded by a DTA and income not remitted to Thailand. Both of these are "other-than-assessable" (how's that?) incomes and therefore are not includable on a tax return. But, don't follow the rule on remittance timing, you'll stumble into the 'assessable' bracket. Bottom line: Your Thai tax return, if you don't work here, could easily be empty of numbers -- all legal, if you're familiar with your country's DTA -- and you're familiar with remittance timing. And you certainly wouldn't provide any "other-than-assessable" numbers to Thai RD, since they're probably not interested in numbers that don't provide taxes -- plus, more pragmatically, there are no lines on which to provide such information.

There's no place on a Thai tax return to include income that is not assessable income. Thus, you would not include monies excluded by your country's tax treaty with Thailand. And monies remitted in a later year than year earned (under the old rules). Or monies remitted from a bank account funded pre Jan 1, 2024 (under the new rules). Thus, for most of us retirees, very little, if any, assessable income to include on a tax return, except maybe interest from your Thai bank account. So, if you have no taxable income (assessable income minus allowances, deductions, 150k freebie), no reason to file a tax return, as there's no penalty for not filing, if no taxes owed. As an aside, because of the weird remittance rule for what's assessable income -- it's best to filter all remittances to Thailand through a home country or off shore bank account. And one established and funded pre Jan 1, 2024, if possible. Then, have all your wire transfers come from this account, backfilling it with only treaty exempt income, like gov't pensions for most of us. Thus, if this new rule takes effect, you're covered under the pre 2024 income being exempt. And should post 2024 additions to this bank account -- like reinvested interest -- come into question (not likely) -- your answer is you draw from the oldest deposits first (FIFO). Nothing likely to challenge this.