JimGant

There's nothing in this remittance charade that dictates whether or not money sent from a bank account is "old" money (i.e., pre 2024) or "new" money (i.e., interest earned post Jan 2024). And, even more, if you add earnings to this account post Jan 2024, these earnings can be either non assessable via the DTA, like gov't pensions -- or assessable, like private pensions. So, you send a chunk of money to Thailand from this account -- from which tranches does this money come from? There certainly aren't any rules regarding this -- at least as of now. So, as part of the whole self-assessment drill, it would seem it's up to you to identify which tranches you tapped for remittance. With good records, you certainly could make sure you're remittances are first tapping the non assessable funds in that bank account -- hey, your call. But, jeez, I can't imagine such a detailed reporting requirement, with all the associated costly manpower, ever occurring. Maybe a random compliance audit here and there. No, just another aspect of the necessary self-assessment aspect of this goat rope. Just be prepared to argue your methodology of identifying tranches for cash flow remitted.

A little common sense would put this ridiculous rumor to rest. Why would any cash flow into Thailand automatically be considered "income," and not just a capital input for, say, Foreign Direct Investment, or for providing for living expenses. If this cash flow came from pre 2024 savings, or from DTA exempted income, it's not assessable income. But nobody's going to parse this cash flow to determine what it is, or isn't. It will be you, the tax resident, to parse this cash flow. And, why in the world -- if RD decided all incoming cash flows were income -- would they tax it at the top marginal tax rate of 35%? Again, common sense says it would climb the laddered tax rate scale, zero, to five percent, etc. Come on, folks -- engage a little logic.

The DTA says Thailand has exclusive taxation rights on your private pension (but the US has secondary rights, due to the saving clause that allows the US to override all aspects of DTA language). So, if your private pension exceeds all those allowances, deductions, 150k freebies offered in a Thai tax return -- then, yeah, you have Thai taxable income, and thus need to file a Thai tax return. But you get a credit for these Thai taxes against your US tax bill; but, as you say, you owe no US taxes. Well, then, the credit is worthless (well, not quite -- you could file an extensive Form 1116, which would allow a carry-over of this credit, should you have future US taxable income.... a lot of work if your future shows no US taxation). Anyway, this is a case where having to pay Thai taxes, and no US taxes -- means you're now in a situation of owing someone taxes (but, without exploring various math scenarios, I really think if you owe no US taxes, because the standard deduction exceeds your adjusted gross income, then you most likely won't meet the Thai taxable income threshold either). As far as someone parsing your Social Security remittances apart from your private pension remittances -- of course this won't, and can't happen -- fungibility of money remittances is a wonderful thing. As said a monotonous amount of time on these threads -- it will all be self-assessment. Keep good records; report what looks correct to you; and give yourself the benefit of the doubt, particularly if you can support a good argument, should it (unlikely) ever come to that. [I give myself a tax credit for Bangkok Bank withheld taxes on my US return. Rules say, if I can get this withholding refunded, I can't get the credit. My excuse, should I ever get a letter audit from the IRS, is that I read on an expat forum that I can't get a tax refund without a TIN; and I can't get a TIN without a work permit. This would be my excuse if ever audited (weak as it may be). Integrity? No tax evasion? Nope -- Thailand keeps the taxes, and the US gives a credit, vice US gets the taxes, and Thailand has to refund their withholding taxes to me. Thus, taxes working where I live.]

List all your bank and IRA/401k balances as of 12/31/2023. This is the amount you can remit to Thailand that will be non assessable, i.e., not reportable, on a Thai tax return -- for ever and ever going forward into 2024 and beyond. Just keep good records, like, say, you open a new bank account in 2024, and fill it with pre 2024 funds, plus you use it for direct deposits of your gov't pensions, and Social Security payments (exempt by DTA). Thus, this new bank account contains only money that is not reportable on a Thai tax return. And this should be the source of your Wise or SWIFT transfers. I mention including your 12/31/23 IRA/401k balance, because of the uniqueness of Thailand's remittance rule, plus the exemption for pre 2024 income. Thus, Thailand says income earned pre 2024 is exempt from their new remittance rule. But money in an IRA pre 2024 has also been earned -- it's just tax deferred until it is payed out. Thus, I would be completely in my rights to tell Thai RD that my IRA funds pre 2024 are not reportable, as they were earned pre 2024. That it's taxable in a later year, when withdrawn -- is neither here nor there (until Thailand drops the remittance malarkey and just looks at taxable worldwide income).

Hear hear.

If you really needed hand holding, which you won't with the professional approach of BoI, Star Visa in CM is on the BoI list of agents. But, you still have to go to Bangkok for the final inkings -- they can't do that for you. Actually, my trip, as I hate traveling, was a surprise joy, as I treated myself to everything five star -- hotel, limo to and from airport, limo to Boi, surf and turf dinners, young... nevermind. But, hopefully the internet will be available for the one year report -- mail would be an ok backup. Star Visa, however, says they can do that report for you, if needed. Which, it probably won't be.

Well, DTAs can be amended with "protocols." Hopefully, one such protocol might be re the UK-Thai DTA, and will finally address private pensions, which the current DTA is silent on. Other protocols might just update DTAs that have grown long in the tooth, and thus have led to misunderstandings. Can't really envision a scenario where an updated DTA would be detrimental to me.... But, who knows...

That's nice. But if you're in Thailand for 180 days or more -- you're a resident for tax purposes. That you don't have a residence status that allows you to get a Thai passport makes no difference to the taxation aspect. Again, if you're here for 180 or more days, you're subject to the DTA and Thai taxation. A quick glance at the OZ-Thai DTA shows a carbon copy of most English speaking countries' DTAs, all based on OECD and UN Model tax treaties. For private pensions: Key to the above, the the phrase: "shall be taxable ONLY in that State." This means exclusive taxation rights. As pointed out by an OZ tax accountant somewhere in all these threads, yes, this means Oz has no taxation rights on these private pensions, only Thailand. That they don't exercise this right -- because it's not remitted -- apparently doesn't negate the exclusivity. And OZ apparently doesn't have something like the saving clause found in the US DTA, which trumps the exclusivity, and allows taxation by the US, in spite of what's declared in the DTA. A good deal, I guess -- if Thai taxation rates are lower than Aussie rates of taxation.

For those of us who will break even, because any increase in Thai taxes will be an equal decrease (through credits) in our home country taxes (the US, for example) -- then I certainly have no problem with my taxes now transferring to Thailand. Less money for infrastructure improvements in the US, that I'll never see -- and more money for Block 70 F-16's, to ward off the hoards of Burmese Mig-29's and SU-30's (well, ok, maybe mo' betta going to increased welfare benefits).

No penalties for not filing if no tax owed. Only if filing late, and taxes are owed. Then, it's a fine equivalent to taxes owed, or twice taxes owed (I forgot what drives the difference).

Ok. So then does Thailand have exclusive taxation rights -- thus the UK can't tax these private and State pensions? Or does Thailand have primary taxation rights, but the UK can also tax, but has to give a credit for Thai taxes? Or in reverse -- the UK has primary taxation rights? Without any clarity in the DTA, we're in a double taxation quandary. Dunno. Hope it all sorts out for the Brits. But, since Yorktown, I won't lose too much sleep.

I said, "unless they're gov't pensions."

Unless you don't live in that country, then most DTAs have the country of residence with exclusive or primary taxation rights, unless they're gov't pensions. But you knew that....

Certainly not to Thailand, if not remitted. This, however, may change, if and when they figure out that the remittance gimmick is still costing them lost tax revenues.

So, Thai law says that, unless exempted by law, decree, or language in a DTA, it's assessable income. So, what do the Brits say about that private pension that's not mentioned in the DTA? Do they bend over and agree that Thai law allows for their taxation? Or do they say, "Nothing in the DTA gives Thailand taxation rights, either exclusive or primary, so we reserve the right to tax that income." And they do. What does the expat Brit do? If he gets a tax bill from the Brit tax folks, I guess he pays it, as I doubt he'll complain that Thailand says they have primary or exclusive taxation rights. To which the Brit tax folks say, "Where in the DTA does it say that?" Anyway, a big mess without specific language in the DTA. And there's no default position in the absence of specific language, which would be that one country has exclusive taxation rights (and thus the other country has no taxation rights). Or one has primary taxation rights (like we saw recently with Belgium), where the primary country keeps all the tax collection, but issues a credit to the secondary country, who gets to keep any taxes above the issued credit. So, what's a Brit expat with State and private pensions going to do? Maybe, like The Cyclist, visit your local RD office and ask them to sort out this mess. Or, file your Brit tax return, then do a quick assessment on whether or not, should this income be remitted, that you'd be liable for some Thai taxation. If not, kick back, have a beer, and don't worry about filing a Thai tax return.

If that is true, the tax department will refund the paid tax in Belgium if it is more than you had to pay in Thailand?? As double taxes in tyhe whole world are not done. Here's a quote from the Belgium-Thai DTA re non government pensions: Most DTAs have the country of residency as the primary, or even exclusive, taxing country. Belgium, however, gets first taxation rights on private pensions paid in Belgium, and Thailand gets secondary taxation authority. This is indicated by the language "may be taxed" which is OECD Model tax language to indicate taxation may occur in both countries, but the "may be taxed" country has first dibs. (To indicate exclusive taxation rights, where only one country can tax, the language is "may only be taxed.") Thus, the recent statement from the Belgium embassy is consistent with the DTA: Belgium has first taxation rights, but Thailand can also tax. But because Thailand is the secondary taxing authority, it has to grant a credit for Belgium taxes paid. Therefore, if those Belgium taxes are more than the Thai taxes, no taxes owed to Thailand. If less, then you still pay full fare to Belgium, but you also pay Thailand a tax equal to the amount that exceeds the credit. If it's obvious you won't owe Thailand any taxes after the credit, makes you want to not file a tax return with Thailand. And if you don't owe taxes, no penalty, no jail time. Hmmmm.

Why not?

..... or, what -- that everything that is not included is taxable by the country of residence?

BS

As I posted somewhere in this mess of threads, for Brits, their DTA does NOT define assessable income when it comes to private/State pensions. As such, how is one to know that his Brit private pension is assessable income for Thai tax purposes?

DTA's address income, not income remitted. Thus, Thai RD gives credit that foreigners have some brain power to claim remitted income is from last year. Whether it is or not, is neither here nor there, as RD doesn't have the resources to call people in for questioning. And for those with direct deposits into Thailand of their pensions? You'd think that would be easy pickings for RD. But apparently not, as they didn't waste resources hitting all the banks to see if Joe Farang's direct deposit was from Boeing (taxable) or Uncle Sam (not taxable).

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.