JimGant

1 hour ago, JohnnyBD said:

Case 1: John, a US citizen, takes a $30k IRA distribution in 2024, and remits it to Thailand in 2024. John reports it on IRS 1040 tax return as normal, but he also files 1116 and claims a credit for taxes paid in Thailand, thereby reducing his US tax bill.

Using a 34bt FX rate, John's Thai tax bill -- assuming a 560k TEDA/150k freebie -- would be about $1300 (assuming the IRA is his only assessable income remitted). And since the saving clause mandates that John must also declare that $30k IRA on his US tax return -- this would amount to $6600 in US taxes, if in the 22% tax bracket. But, yes he can file a Form 1116 (and also Form 8833) and take a tax credit against that US tax -- so after that credit, his US tax bill on the IRA would be $5300. But your composite tax bill equates to the country having the higher tax bill -- in this case the US, with $6600.

Two conflicting scenarios here. One, if you believe your IRA's value on 12/31/2023 qualifies under Por 162 as "pre 2024 income." Or two, you believe some reports that only cash savings in a bank account qualify under Por 162. In the above example, it matters not which scenario you choose: Believe your IRA qualifies under Por 162, so don't even file a Thai tax return, with its $1300 tax charge. But do pay full fare of $6600 to the US, since there's no credit to be had -- total tax bill the same under either scenario. So, the argument over Por 162 and IRAs would be moot, at least in the above scenario.

1 hour ago, JohnnyBD said:

Cases 2: John, a US citizen, takes a $12k IRA distribution in 2024, and remits it to Thailand in 2024. John reports it on IRS 1040 tax return as normal, but he cannot claim a credit even though he filed a Thai tax return, because he didn't pay any taxes in Thailand due to his deductions and allowances.

In this scenario, Thailand doesn't exist as far as your US tax return filing. No Thai tax, no tax credit against your US taxes. Now, the opposite side of the coin would be -- a Thai tax on your remitted Roth IRA -- but no US tax on same, on which to apply the credit. This is where you want to believe that Por 162 covers Roth IRAs -- so that remitted Roth IRAs would thus be non assessable for Thai tax purposes.

1 hour ago, Jingthing said:

I've heard nothing of the kind that the savings clause has anything to do with IRAs.

Did you read my link, and particularly the Swiss ruling on how the saving clause definitely applies to IRA distributions to US expats who now are tax residents abroad, whose new country has 'exclusive' taxation rights on that distribution.....? That, hopefully, will show you how the saving clause "has anything to do with IRAs." And how Carden's assertion that Thailand is unique in being exempt from the saving clause when it comes to IRAs -- is totally ludicrous.

42 minutes ago, Jingthing said:

I get the gist of what you're saying but this grand "scam" trad IRA loophole that you were posting about years ago was BEFORE 2024.

What I was saying is, only you and Thomas Carden have gone on record as saying you aren't required to file on your US tax return your Traditional IRA distro, because the saving clause uniquely doesn't apply with the US tax treaty with Thailand. This scam is equally applicable today, if Thai taxes are less than US taxes on same distro -- or you just don't remit your IRA distro to Thailand. But my main point is: You're dead wrong about your Traditional IRA not being taxable by the US because the DTA says Thailand has 'exclusive' taxation rights on your remitted Traditional IRA distro.

40 minutes ago, Jingthing said:

4 hours ago, JimGant said:

That's why I said "traditional IRAs....." are subject to the saving clause found in the DTA -- and thereby taxable by the US.

Neither type is taxable in the US for Thai tax residents.

A little education here, Jingthing.

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Most income tax treaties contain what is known as a "saving clause" which prevents a citizen or resident of the United States from using the provisions of a tax treaty in order to avoid taxation of U.S. source income.

 Thus, with but a few exceptions (like alimony and child support payments), there are no "exclusive" tax rights in the Thai-US tax treaty, like the "exclusive" tax right mentioned in the DTA that Thailand has on US private pensions and Traditional IRAs. Instead, the US -- per the saving clause -- always maintains a "secondary" taxation right in the DTA situations giving Thailand "exclusive" rights. In effect, Thailand still gets "primary" taxation rights, meaning, they get to keep all tax collections, and don't have to absorb a tax credit; but the US gets secondary rights -- but DOES have to absorb a credit for the taxes paid Thailand. Nothing violating the spirit of "no double taxation" with this situation, since credits come into play. But what it does do -- is ensure that there is not a "no no tax situation." A situation the OECD is trying eliminate with its new Model Tax Treaties. And a loophole the US plugged many years ago, with its saving clause insertion in all DTAs.

Jingling, click on this link and prepare for an educational read:

https://aseannow.com/topic/1008555-tax-specialist-in-chiang-mai/page/3/

It's about a scam -- dreamed up by a US tax advisor in Bangkok -- who went around to various Thai cities with his sales pitch that he had found a glitch in the treaty language between Thailand and the US, that would exempt US IRAs from the saving clause. Thus, just come to Thailand for 181 days and become a Thai tax resident -- and you're exempt from US taxation on your IRA withdrawals. And -- even better -- remit that IRA withdrawal to Thailand the following year (remember, the old rules), and don't even pay tax to Thailand! Thus, Thailand -- per this scam artist -- would become the only country to which a US expat could move to -- and never have to pay US tax -- nor Thai tax! Too good to be true? Duh.

Anyway, read the link and pay attention to the IRS ruling vis-a-vis Switzerland, from the IRS top legal person, on how a US person, who becomes a tax resident abroad, but who has annual Traditional IRA withdrawals -- still is subject to US taxes on these withdrawals, per the saving clause. And note how the Swiss DTA is similar to the Thai DTA with the US, including treaty language. No surprise here, as both follow the OECD and UN Model Tax Treaties.

So how this charlatan tax advisor in Bangkok has gotten away with this (as he apparently has, as we've seen nobody questioned by the IRS) is curious -- and sad. He apparently charges an arm and a leg -- but, heck, I guess, if the deal wasn't such an obvious scam, my $300k Traditional IRA becoming tax exempt would be worth the price. And many, apparently, have gone this route. And even with Por 161, if Thai taxes were much less than US taxes on the same IRA withdrawal -- it would still be a money maker for Thomas Carden, er, Elmer Gantry. But, hey -- if my theory on Por 162 is correct (i.e., don't even declare it to Thailand, as it's pre 2024 income) -- Carden's scam is still completely in play.

Anyway, Jingthing -- be careful on how much credence you give to tax advisors. As Ben Hartman has raved on and on about -- they're all illegal crooks.  And, yes, Ben is referring to not having legal credentials to practice in Thailand. My example is about a crook who lacks integrity. But, of course, none of this helps in determining if correct interpretation of TRD dicates are correct -- from any of these questionable so-called tax advisors....

3 hours ago, NoDisplayName said:

Please be careful when using acronyms that others may not understand, OK(*)?

The only acronym I've used recently is "IRA." So, what exactly are you talking about?

7 minutes ago, NoDisplayName said:

Unless you've converted your pre-tax contribution traditional IRA to a tax-free withdrawal Roth

That's why I said "traditional IRAs....." are subject to the saving clause found in the DTA -- and thereby taxable by the US.

9 minutes ago, Jingthing said:

but under the DTA not subject to U.S. tax

Traditional IRAs and 401ks are certainly subject to US tax, per the saving clause found in all DTAs. So, all this argument about IRAs not being taxable by Thailand, per Por 162, is only a matter of interest, but certainly not one of tax savings -- since either Thailand or the US, or both, will collect your taxes (subject to credit relieve, of course).

1 hour ago, NoDisplayName said:

Is that the entire remittance, or only the portion declared as original capital, with capital gains being assessable?

 

If that be the case, what is the cost basis?  Purchase or Dec 31 2023 NAV?

The annual reinvested cap gains of my stock mutual fund have now become "tax deferred income," same as the original wage that established that stock mutual fund. Thus, Dec 31 2023 value of my IRA is all covered by Por 162 edict -- i.e., it's non assessable savings.

13 minutes ago, Jingthing said:

My reading reflects a consensus of tax advisor advice confirmed by TRD

Sadly, much of this advice is questionable, no doubt due to the lack of any definitive/consistent language out of TRD. A situation where ones own reasoning can make more sense.

33 minutes ago, atpeace said:

We get it - private pensions aren't covered by the DTA and I understand why they aren't covered. 

Actually, they are covered. And the DTA gives not only primary taxation of such pensions to Thailand, but "exclusive" taxation rights. However, the US "saving clause" reduces this to only "primary" taxation rights, meaning, the US has secondary rights -- so can also tax these pensions, but has to absorb a tax credit for the Thai taxes paid.

Now, the DTA treats IRA payouts as "pensions," for DTA purposes -- but since IRAs are really tax deferred income/savings -- this is where Por 162 comes into play, and exempts all those pre 2024 IRA savings/income from Thai taxation.

13 minutes ago, atpeace said:

Your guess is as good as anyone's.  Is Thailand going to get a forensic tax unit to analyze what portion of 2024 saving are based on cost basis.  I seriously doubt it and hence the pre 2024 exemption.  In the future theoretically earning realized or unrealized will be taxable.  

As of Dec 31, 2023, my IRA consisted of stock mutual funds. All originally funded with pre 2024 wage income, then every year subsequently, these mutual funds declared dividends and cap gains -- thus more tax deferred INCOME reinvested in the fund. So, by Dec 31, 2023, my IRA was ALL pre 2024 income. That is was ALL tax deferred income, by US tax standards, is a no never mind in the eyes of Por 162. Thus, my IRA balance on Dec 31, 2023 is non assessable income, as far as Thai taxes are concerned. Again, as previously said, Por 162 overrides the DTA language saying this remitted income is primarily taxable by Thailand.

29 minutes ago, Jingthing said:

Pensions aren't savings.

Yes, but IRAs are.

42 minutes ago, atpeace said:

Please show me any documentation that pre 2024 "savings" in private pensions are taxable.  Post 2024 saving would be taxable I assume.

This is an on-going argument -- especially by jingling. Yes, prior to Por 162 -- which exempts all pre 2024 income -- private pension remittances were taxable by Thailand. But Por 162 exempted pre 2024 income, which both traditional and Roth IRAs consist of. Thus, Por 162 'trumps' the DTA language that, otherwise, would make IRA remittances to Thailand taxable. And Por 162 just says "pre 2024 income." It doesn't say that income can only be in a bank account -- which grifters like Expat Tax Thailand expound on.

Anyway, I'd certainly be confident in excluding my IRA remittances from assessable income -- you really do have Por 162 at your back. And, as such, why wouldn't you give yourself the benefit of the doubt -- which, in the 1% chance you're ever audited, would certainly exclude you from any tax evasion charge, or criminal charges. No brainer.

2 hours ago, bamnutsak said:

If I have ZERO assessable income do I have to file a return?

Ph***k no! Why would you think otherwise? Some weirdo on this forum put that thought in your mind?

21 hours ago, Presnock said:

I indicated  that I was returning to CM in 4 months so would be doing the next 1-year report there. 

Did my 1-yr report in CM, using an agent, Thai Visa, as they're a lot closer to me than Imm (although two trips required, plus 800bt). Someone reported -- after I had already done mine -- that using the Imm drive by window, used for 90-day reports, works just fine. Thus, that will be my avenue at next report time.

41 minutes ago, Harrisfan said:

Every professor should be given IQ tests. Score below 115 you get fired. This guy looks about 92.

Yeah, but this guy gets a pass, 'cause he's Black -- and because Columbia is one of the biggies when it comes to DEI.

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Columbia University is actively working to foster a diverse, equitable, and inclusive environment, with initiatives across various departments and schools, including the establishment of DEI offices and task forces, and a focus on addressing systemic issues and promoting anti-racism

On 3/5/2025 at 9:15 PM, DonniePeverley said:

Honestly, arrived back in the UK yesterday and felt i could finally breath again. The air is beautiful. Crisp. Clean. Amazing. 

Ah, yes -- the smell of Halal cooking.

23 minutes ago, NoDisplayName said:

They simply confirmed that the rules for gifting IN Thailand apply for gifts given outside, as well.

"Wife called the TRD helpline to confirm, gifting law applies to funds given to a spouse into an offshore account, and she can bring in the funds as she pleases."

So, you're saying an offshore account can't act as a filtering/laundering device? Technically, it certainly can -- as I've demonstrated in the above discussion. Ethically, maybe not -- unless it truly is a gift to the wife.

But, what's the bottom line? You send your private pension directly to your wife's Thai bank account -- but make a note to yourself that this is a gift, thus you don't bother filing a Thai tax return. Alternatively, wife gets your gift thru her US savings account, then forwards it to Thailand. Same result -- no taxation. Only if an audit should occur, would her remittance vs yours stand up to scrutiny.

But, who cares. Chance of audit remote -- play the gift game as you choose.

33 minutes ago, NoDisplayName said:

We want to gift offshore so that remittances are her gift, NOT my funds deposited in her account and then declared as a gift. 

Well, of course. Let's assume your wife had a US savings account, established ten years ago, and had on 12/31/2023 a balance of $500k. In that $500k were gifts you had given to her over the years. These gifts were, of course, after US tax paid funds (by you) -- thus now residing as her savings. So, today, on March 9, 2025, she wires $500k to her Thai bank account. A taxable event, considering Por 162? A reportable gift event, had the amount exceeded 20M baht? Of course not.

I think the use of her offshore savings account to launder these remittances could be looked at from a couple of angles. Say, you're separated from your wife, so the money she wires to herself is used strictly by her. Thus, a gift. But, on the other hand, I say your gift to her -- which you've paid US income taxes on -- has morphed into savings -- and thus the gift aspect is now a non player. So, if you're both living together in Thailand, and your private pension, now a gift to your wife, is sent to Thailand to support the both of you -- I think you're both technically and ethically above-board.

Again, this comes back to TRD suggesting the offshore 'laundering' route. Sounds like a good tax avoidance (evasion?) scheme. That TRD would recommend it -- is curious (but refreshing).

1 hour ago, NoDisplayName said:

"Filter?"  Like at a, you know, laundry? 

Right. That's why TRD said you couldn't send it VFR direct as assessable income and just say, hey, this is a gift; 'cause taxability depends only on the characteristics of the remitted income, not what it is finally used for. Your characteristics, by sending direct, wouldn't be overcome by declaring it as a gift. The wife, remitting from a savings account full of fungible dollars -- with only the interest earned on these dollars possibly subject to Thai tax -- is home free. All the money in her savings account is post-US taxation, which, ipso facto, makes it savings.

Why do you think TRD advised you to laundry thru a foreign account -- and not send direct and then claim its use was as a gift? Obvious answer -- and nice to see there are some helpful folks at TRD.

12 hours ago, NoDisplayName said:

Wife called the TRD helpline to confirm, gifting law applies to funds given to a spouse into an offshore account, and she can bring in the funds as she pleases. 

Ah, I give my Thai-US wife my annual private pension earned in the US. (We both have US bank accounts - but we're both Thai tax residents.) She puts it into her US savings account, where it has now become savings (I, of course, have already paid the US tax on this pension). And, per US tax law, I pay no US gift tax, as it's a gift to my spouse.

As a private pension, should I remit it to Thailand, then Thailand has primary taxation rights on it, per DTA. But if I "filter" it through my wife's savings account -- and she remits it -- this gift, which has morphed into savings, is no longer income, let alone assessable income. And, assuming the wife remits this money into her Thai bank account, it's lost its 'gift' aspect -- so no Thai gift tax for her to pay, if in excess of 20m baht.

Anyway, that TRD should offer this "filtering" mechanism to get around Thai tax on a gift (can we call it "laundering?") suggests TRD is aware that remitted assessable income doesn't lose its taxability just because its purpose is as a gift. Remember the argument: assessable remitted income, whether used to buy a condo, a Honda, or groceries -- is still taxable, as purpose of that remittance is immaterial. And this, goes the argument, applies to gifts. Sounds like the TRD hotline is well aware of this.

Here's a good read on Thai Tax Clearance certificates -- a relic of the past, but still on the books:

https://www.legal.co.th/resources/corporate-and-tax-advisory/thailand-tax-law/what-thai-tax-clearance-certificate/

One of the more glaring statements in this presentation is this:

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 It is my understanding that about 20 years ago they really stopped doing them in earnest but the regulatory structure as evidenced by the fact that this is on the Revenue Department's website still exists and depending on a given set of circumstances, I have seen limited circumstances where just to be safe, foreigners have been advised to go ahead and obtain a Thai Tax Clearance Certificate just to sort of "put all their ducks in a row".

Sound like advice from a certain someone on this thread? Or a typical charlatan Agent pitch to scare you into forking over some baht?

No, we've not seen any evidence of anyone exiting Thailand being asked for this certificate. Maybe a remote chance, if you're running a business here in Thailand.....  But certainly a retired expat, who wasted time, money, and energy getting such a certificate -- would be -- to put it nicely -- foolish.