JimGant

Let's set the scenario. New worldwide taxation scheme replaces taxation of remitted income. It probably won't come into effect until, at the earliest, 2025. Come 2025, all your worldwide income in that tax year is subject to Thai taxation, as modified by DTAs. Thus, worry only about your tax year 2025 worldwide income. Monies already in Thailand pre 2025 are automatically savings -- only tax aspect here would be interest earned on these savings. Monies in your home country savings accounts pre 2025 are savings, thus no income tax angle (again, except for earnings within the account). What's new here is: foreign income earned in 2024, that was assessable and might be remitted to Thailand in 2025 or later -- would now be exempt from Thai taxation; whereby under the remitted law, it would be assessable income, subject to taxation, in any year remitted. So, if you currently have 2024 foreign income that you really need in Thailand, but know that if you remit it this year, or in any later year -- under the current rules, it will be subject to taxation. Now, if this new worldwide rule comes into effect in 2025 -- well, wait until 2025, or later, to send to Thailand. No taxation in this scenario. Maybe the new rules ain't so bad, for those waiting with baited breath to send money across the border -- but can't afford the remittance based taxes. Serendipity, maybe?

First off, if I'm filing a tax return, I would have assessable income that exceeds the Thai standard deduction (TEDA) -- thus having taxable income. Otherwise, I wouldn't file. But you're saying you'd like Thai tax forms to have line items where I can put my non assessable income? What for? So the RD guy can argue with me on the fine points of my DTA, as to why it's not assessable? No way. I'd win the argument, at that level. No profit with this approach, just a waste of resources. Now, for folks not filing tax returns, and who can be shown to have large cash flows into their Thai bank -- yeah, call them in for a chat on assessable vs non assessable income. But line items for non assessable income, for the folks who actually file.....? Naaaa.

Under this new "forget the remittance BS," it will only be the current tax year (normally coinciding with the calendar year) whose intake of funds will be subject to income scrutiny. In the US, the IRS knows what most of this income is -- due to 1099's -- but other income, like self-employment income, relies on self-assessment, to a large extent. Same for tip and gambling winnings, as an example. For Thailand, maybe FATCA and CRS reporting will provide income figures. But, I wouldn't, at this stage, put too much faith on the completeness of this reporting. Thus, self-assessment will play a bigger role in Thailand for getting anything approaching a representative picture of income potentially subject to taxation. So under this new worldwide system -- any monies you possess that existed prior to the current tax year -- are savings. Don't need a special law, when remittances aren't involved, to designate a previous year as a 'savings' portfolio.

But -- if you're a Yank -- you're already paying US taxes on that "significant overseas income." Thailand, going to worldwide taxation, is just going to now get a piece of the pie, per DTA -- and issue a credit to be absorbed by the US for those taxes Thailand is now collecting. For the Yank: In most cases, no change in total yearly taxes paid between both countries. For someone not paying taxes to home country -- well, welcome to the world of "you're going to pay someone," per OECD's guidance.

Of course, your govt pensions and social security are strictly US business -- and need not be reported to TRD, as they're exclusively taxable by the US. IRAs, private pensions, annuities-- to name three -- are primarily taxable by Thailand. So, you just self-declare this income on your Thai tax return -- no official paperwork needed. And since Thailand is primary taxation authority, there's no credit due from the US: Thailand, as primary taxation authority, gets to keep all the taxes -- and issues a credit to the US to absorb. So there's NO US tax credit against Thai taxes. On the US side, you don't need any official paperwork from TRD to take a credit against your US taxes -- you just do it, based on the numbers you derived from you Thai tax return. Since you don't have to file your US return until June, plenty of time to file a Thai tax return, and get the amount to credit. One other example -- rental income from a US property -- is a mix, with the US as primary taxation authority (but not exclusive taxation authority), and Thailand as secondary. In this scenario, if it's possible that Thailand would collect more taxes on this rental income than the US, then obviously they would want you to file a tax return. Probably, however, unlikely, if you're a middle class US taxpayer. In this situation, I'd just not file a Thai tax return (since the US credit would kill all Thai tax collection). No tax evasion, of course. And easily explained if ever audited. Anyway, the credit game seems to be on way -- with Thailand issuing the credits. And not much paperwork involved, that I can see.

Are you talking about going from remittance taxation of worldwide income -- to just pure taxation of worldwide income? Very little, if any, difference -- unless somehow you could exist in Thailand without remitting any (or most) of your assessable income. I believe you're a Yank -- I'd really be interested in why you think the new worldwide income taxation will cost you any money? Thanx for your time.

Nice to finally see some forward thinking in the Thai govt. Finally being able to use the language in their DTAs with other countries (before, if the money wasn't remitted in same year, DTA language was worthless) to collect the taxes stipulated in the treaties -- is a nice, and necessary, touch. Particularly with the looming aging population problem. That I'll spend my last years here in a stable, and sufficiently financed, economy -- is reassuring. And getting rid of the remittance loophole, and going to worldwide taxation, is really a no brainer -- for policy makers who have the country's well-being as their altruistic goal.

Going to taxing just income, and not remitted income, means discerning which commingled funds are assessable income, and which are not, will no longer be an item, or a problem.

You miss the whole point on the new policy, which won't care about any money brought in -- only income earned in the current tax year, that per DTA, is taxable by Thailand. Nevertheless, all that money in your pre 2024 bank account is now savings, not current year income. Feel free to remit it, or not, as there's no longer a tax angle to it.

No, neither if cashed out in Thailand or US. Currently, under the remitted taxation system, if you cashed out a chunk of your IRA and sent it to Thailand this year, it would NOT be assessable income -- because the Thai rules say all income earned before Jan 2024 is not subject to Thai taxation. And this chunk of your IRA (assuming no contributions in 2024) would definitely be pre-2024 income. That it is 'tax deferred' income, makes never no mind in this remittance scenario. There would, of course, be US taxation on this chunk of IRA -- but with no offsetting Thai credits, since you paid no Thai tax on it. Now, under the new worldwide income scenario, if you cashed out a chunk of IRA in 2024, it would now be a taxable event, both in Thailand and the US (because of the US savings clause). And the amount of taxable IRA would be the same, both on your US and Thai tax returns. And, per DTA, Thailand has primary taxation rights on this IRA, thus gets to keep all the taxes it collects, and the US has to absorb a tax credit for same. But total tax bill between the two countries would thus be the same as if I only paid taxes to the US. Example: I cash out $15000 of my IRA (which, in real life, approximates my last year's RMD). This all falls into my 12% tax bracket, so my US taxes on this IRA is $1800 In Thailand, I have their equivalent of 'standard deduction' (also called TEDA, in some quarters) being 500,000 baht (age over 65, no wife deduction). When I plug in the $15,000 IRA as assessable income, this (using 36 FX) translates into 540,000 baht. So when I subtract TEDA, I end up with 40,000 baht of taxable income. All of this falls in the first Thai tax bracket, where the rate is 5%. So, tax bill is 2000 baht, or $56. Now, on my US tax return I could take this Thai tax bill of $56 dollars as a tax credit, lowering my US tax bill from $1800 to $1744. And, I wouldn't even need to file the tax credit Form 1116, since I'm below $600 (filing joint). Just a one line item entry on Schedule 3, and that's it. No extra effort at all. Now, look at both scenarios: Remitted and worldwide. My total tax bill is the same -- $1800 or $1744+$56. So, at least for Yanks and private pensions and IRAs -- this new worldwide income scheme is a real yawner. And, it's even tempting (tho' I've been warned about giving tax advice on this forum) to say: Is my time worth filing a Thai tax return for $56? I guess it could be, if I could do it all online, although I don't have (or want) a TIN. Will need to ponder that one. Worldwide income taxation by the Thais doesn't alter much for Yanks.

Welcome to the OECD's new world of, not just 'no double taxation' but also 'no no taxation.' The new model tax treaties are being written to accomodate this. Some countries, like the US, aleady prevent 'no no taxation' with its savings clause, that gives the US at least secondary taxation rights, even in situations where the DTA gives the other country exclusionary rights. Norway's system is interesting. If you can show the Norwegian tax authorities that 100% of you Norwegian income (to include govt pensions) was subject to taxation by Thailand, then you get a complete pass from Norwegian taxes (even if the Thai taxes were considerably less than what the Norwegian taxes would have been). And apparently that's how it works out, and why Norwegians in Thailand welcome being taxed by Thailand.

Why's that? The US already taxes my worldwide income. If Thailand wants a piece of the pie, their share, per the Double Taxation Agreement, will be a credit against my US taxation. Except for a very few outlier scenarios, there will be no change in my total annual tax bill under this new policy.

Stay tuned. Getting away from the remittance screwiness will allow CRS and FATCA reporting (which only reports on income, not remittances) to allow TRD to have a first hand look at potential taxable income, which isn't the case, when all remittances need to be parsed as to whether or not assessable or non assessable income. Limited TRD resources will now be better used towards more productivity. This remittance thingy came about, with the " bring it in next year" clause as a means of tax evasion. That's now gone. The remittance thingy no longer serves a purpose -- and its demise would bring in additional tax revenue. No brainer, as its existence no longer provides Thai fat cats that tax evasion avenue they once had. Obviously, there will be individual scenarios that show the new scheme's affect on taxation. I guess, if you've somehow been able to hold off your offshore income from remittance to Thailand -- you'll now be in for a hit. Most of us, I guess, will be a notch or two down from that scenario. What that means in a new tax hit -- remains to be seen.

As far as I can find, only a handful do -- and this is the "non-dom" option, for legal residents who are not domiciled in country of residency. UK comes to mind. Malta, also.

Just like 99% of the rest of the world that don't have quirky remittance rules for income taxation. Thailand is petitioning to join the OECD community. And this community has been working hard to level the playing field with their "global minimum tax" on large corporations: https://tax.thomsonreuters.com/blog/what-is-global-minimum-tax/ It sounds like -- if Thailand is going to reap billions in new taxes -- that the remittance rule has allowed large corporations, headquartered in Thailand, to avoid taxes due to this remittance rule. So, I guess it was time to go for the quirky remittance rule -- if Thailand wanted a nice new tax source -- and also wanted to be welcomed in to the OECD community with smiles. It's possible this won't filter down to the individual taxpayer. But, I bet it does.

As I applied in July 2023, I only sent Tax Year 2022's Form 1040 and related 1099's.

I got my LTR WP back in July 2023. I queried BoI about whether or not one or two years of tax returns were needed. Here's the answer I got back: I guess you'll find out whether or not a second year's tax return is required...... Curious.

Yes. The final purpose for the remitted assessable funds makes no difference to its taxability. [However, the jury is still out on whether or not remitted funds that are a legitimate gift are exempt from income tax.]

As a tax resident, it's the sender, if the remittance is assessable income, who is responsible for the income tax. There could be a second, unrelated taxable event, if the receiver gets a gift -- or is being paid for a service or product.

Your wife will be taxed. Why would she be taxed? Her bank account is just your intermediary for receiving funds that you remit to Thailand. Self-assessment says it's you that has the obligation to declare, or not, remitted funds to Thailand as assessable income. These funds certainly aren't your wife's remitted foreign income funds.

Wouldn't it make sense that, if the powers that be wanted to give LTR visa holders a tax perk -- the simplest avenue would be: Let's grandfather the LTR visa holders under the old rules. Which, of course, means: remit the money in a later year than year earned. Obviously, another bump in the road with these new tax angles that need to be ironed out.

Wow, did you get a wrong number. The DTA's elimination of double taxation is highly dependent on being able to take a tax credit for one country's taxes against the other treaty country's taxes. A key example is US private pensions and IRAs, which the DTA gives primary taxation rights to Thailand. As such, those taxes paid to Thailand on this US income is allowed as a credit against US taxes. And, yes, some form filing is required to accommodate this (like Form 8833). But, this certainly shows it ain't a one way street -- Thailand, in many situations, gets to keep all the collected taxes -- and the US has to absorb a tax credit against such.

Not necessarily. If you paid US taxes on a private pension you remitted to Thailand, the DTA says Thailand has exclusive taxation rights on that pension -- and if remitted in same year paid, and LTR folks aren't correct about its exemption -- well, need to declare on a Thai tax return, and then file an amended US tax return for the credit. Ain't this fun.

Where'd you get that from? And who cares -- if you filed your US taxes -- before you determined the tax credit you'd get from your Thai tax return -- you could always file an amended return. But that would never be necessary -- if you live in Thailand, your US tax return isn't due until June 15th; Thai tax return, several months earlier. Thus, you certainly know the credit to take. Heck, even if you file your US return the end of Feb, you'll know -- by the back of a napkin -- the upcoming Thai taxes, which you flip to your US tax return; no Thai official paperwork required to be attached.

Interesting. Just from the US perspective, can you show why -- under the new Thai guidance -- your total tax bill, between the two countries, will be anything more than you're now paying to the US? From all I can see -- and because of the US saving clause, whereby your total worldwide income is taxable by the US, regardless of treaty language -- all those new taxes you'll be paying to Thailand will be acceptable as a credit against your US tax on same income. Thus, more tax income for Thailand, less for the US. But for you, no difference in out of pocket total tax payments.