Plan to attract a million foreign investors stalls yet again: TAX breaks are the sticking point

[webfact]

File photo for reference only

 

Plans to attract one million foreign investors into Thailand this year are once again stalled.

 

The Thai plan is to entice one million well-heeled foreigners into the country this year.

 

They hope offering ten year visas, deals to buy 10 million baht condos and give work permits will provide a one TRILLION baht windfall for Thai coffers. 

 

It applies to four groups of foreigners with wealth and required skills as well as digital nomads and rich retirees. 

 

However the sticking point, previously reported and now rearing up again is the proposal to have foreigners pay just 17% income tax instead of the usual 35%.

 

Bangkok Business News reported that the Center for Economic Situation management of Covid-19 chaired by PM Prayuth Chan-ocha had sent back the proposals for consideration at its meeting yesterday. 

 

BBN said quoting unnamed sources that this was after the treasury and ministerial aide M.L. Chayotid Kridakon held behind the scene talks about the tax stipulation. 

 

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[BKKTRAVELER]

To be fair, many Thais I know have difficulties understanding what a billion is, so imagine a trillion...

[Shuya]

7 minutes ago, webfact said:

However the sticking point, previously reported and now rearing up again is the proposal to have foreigners pay just 17% income tax instead of the usual 35%.

After that it will be another one, then another one, then another one... Just not to confess it was destined to fail from the beginning. 

[Whale]

If you want to attract them give them tax free for x years and then a slowly rising amount.

 

The majority (digital Nomads and retirees) will not be paying any tax anyway as they will use the 1 year money import rule. They are supposedly "well off" before they come here anyway so will have reserves for the 1 year rule).

If you want them to start Thailand based businesses then 17% is not attractive enough IMHO.

 

Edited July 23, 2021 by Whale

[mikebell]

59 minutes ago, BKKTRAVELER said:

To be fair, many Thais I know have difficulties understanding what a billion is, so imagine a trillion...

I am British and was taught a million had SIX noughts.  So how many in a billion, please?  And a trillion too?

[khunPer]

59 minutes ago, webfact said:

However the sticking point, previously reported and now rearing up again is the proposal to have foreigners pay just 17% income tax instead of the usual 35%.

Many rich people from my home country would be overwhelmed with happiness to pay only 35 percent income tax, but those that intended to move out for tax reasons have probably already done so, and pay even less income tax...????

[Mavideol]

1 hour ago, webfact said:

However the sticking point, previously reported and now rearing up again is the proposal to have foreigners pay just 17% income tax instead of the usual 35%.

never disappointed with their greed/avarice  555

Edited July 23, 2021 by Mavideol

[Smithson]

The point of attracting foreigners is to bring money to the government/country. Why should they pay less income tax than locals or long term expats, many of whom are self employed?

[billd766]

Will the business be subject to the 49/51 % law, and will the farang owners HAVE to abide by the 4 Thais per 1 farang rule?

 

If the answer to either or both questions is yes, Thailand can forget it.

 

How about the 49/51 % law when buying a condo?

 

If they get a 10 year visa (a good idea IMHO) will the farangs still have to make 90 reports, fill in the TM 28 and TM 30 every time they stay somewhere else overnight?

 

Will they have to have 800,000 or more in the bank and prove it to Immigration every year?

 

Just some of the niggely points to be aware of.

[Hockeybik]

Will 1,000,000 rich Chinese come here to buy condos?

[BKKTRAVELER]

1 hour ago, mikebell said:

I am British and was taught a million had SIX noughts.  So how many in a billion, please?  And a trillion too?

Well, that would be 9 zeroes for a billion and 12 for a trillion...

[dr_lucas]

2 hours ago, Whale said:

If you want to attract them give them tax free for x years and then a slowly rising amount.

 

The majority (digital Nomads and retirees) will not be paying any tax anyway as they will use the 1 year money import rule. They are supposedly "well off" before they come here anyway so will have reserves for the 1 year rule).

The "1 year money import rule" does not apply to income generated locally. 

Ie. If they work from Thailand they must pay income tax even if they import that income in the following calendar year/s. 

[TheFishman1]

I wonder where they come up with these great ideas TIT

[Laughing Gravy]

3 hours ago, webfact said:

Plans to attract one million foreign investors into Thailand this year are once again stalled.

How many plans have actually shown to have worked. Why do the pans continually become unworkable. i would suggest that the teams involved lack an international mindset and what actually would really attract people to Thailand.

 

I am all for Thailand improving and benefiting but the plans put forward, especially recently are 'pie in the sky' and really unworkable and unattractive for many people. I would suggest look more at middle earners and not just the high end all the time. I would also say that those involved in these schemes, need to be realistic and whilst Thailand is the centre of the universe to them, it isn't to most.

 

That way they may just make a success out of a plan one day.

[medina21]

Great idea. Buy a 10 million baht condo which is only worth 7 million in the local market. When governments mandate prices, they create a false market. Also, the 10 year visa will be renewable every year, so is not a 10 year visa.

[Mark17AA]

No one, in their right mind would invest or move their business to this country.. ease of doing business, countless hoops, to many slices of the cake need to be given away. Maybe a different story for the majors, but SME don't stand a chance, there enough hurdles without having to deal with countless indecision, confliction of story etc etc.

 

I looked to move my business from China to here some 10 years ago, the initial conversation did not even last 1 hour, the hand was already bent backwards behind his back palm open.  Moved it back to UK.. absolutely no regrets! and it certainly makes it easier to deal with the US.

[abrahamzvi]

2 hours ago, mikebell said:

I am British and was taught a million had SIX noughts.  So how many in a billion, please?  And a trillion too?

Very simple. Add three 0 to the million to make it a billion, and a further three 0 to male it a trillion. For continental Europe a Milliard is a billion and a billion stands for a trillion. Clear????????

[SymS]

I'm not sure many people would care that much of the tax breaks, Thailand taxes are incredibly low with allowed deductions.
A millionaire could certainly transfer money tax free before entering Thailand, then get him/herself a small salary (100K/150K) per month and pay an effective tax rate of close to 5%.

[bikerbri]

When are Thais going to put their brains in gear before opening their mouths?

[SomchaiCNX]

1 hour ago, billd766 said:

Will the business be subject to the 49/51 % law, and will the farang owners HAVE to abide by the 4 Thais per 1 farang rule?

 

If the answer to either or both questions is yes, Thailand can forget it.

 

How about the 49/51 % law when buying a condo?

 

If they get a 10 year visa (a good idea IMHO) will the farangs still have to make 90 reports, fill in the TM 28 and TM 30 every time they stay somewhere else overnight?

 

Will they have to have 800,000 or more in the bank and prove it to Immigration every year?

 

Just some of the niggely points to be aware of.

I have been living here since 92 and started a company in 2000 but I'm not allowed to buy a condo with may legally earned money. Married, kids, employed x number of Thai. Did not take that money out of the country. Makes sense no? 

[abrahamzvi]

30 minutes ago, dr_lucas said:

The "1 year money import rule" does not apply to income generated locally. 

Ie. If they work from Thailand they must pay income tax even if they import that income in the following calendar year/s. 

Not quite. You are right if the income is generated from Thailand, or generated working for a Thai company out of Thailand. However, if the income is generated oversea from a source which is not present in, nor connected to Thailand then the only income taxed here is income brought into Thailand and earned in the same Tax year

[AMFWolfie]

2 hours ago, khunPer said:

Many rich people from my home country would be overwhelmed with happiness to pay only 35 percent income tax, but those that intended to move out for tax reasons have probably already done so, and pay even less income tax...????

Maybe I'm missing something here. Surely income tax is only paid on actual income generated in Thailand. How will this effect wealthy retirees or anyone they are looking to attract that is not actually working in Thailand??

 

[PETERTHEEATER]

Oh no. Not another 'the breaks failed' report........????

[LivinLOS]

3 hours ago, Whale said:

If you want to attract them give them tax free for x years and then a slowly rising amount.

 

The majority (digital Nomads and retirees) will not be paying any tax anyway as they will use the 1 year money import rule. They are supposedly "well off" before they come here anyway so will have reserves for the 1 year rule).

If you want them to start Thailand based businesses then 17% is not attractive enough IMHO.

 

The one year rule applies to prior earned money which you can use the 'savings route' option.. It can be used with anything that is not active work (dividends, past commissions, residuals, etc etc) but 'active work' work for which you perform any current decision or action to achieve is day 1 taxed, the if it is remitted in any year is no longer relevant for active income.

Of course proving what you actually earn, without full oversight of accounts and accounting, is very difficult. 

[Dogmatix]

The 35% tax rate they are talking about is the top marginal rate of personal income tax.  It only makes a difference to those earning  high onshore salaries over B4m a year.  Most of the target group, namely digital nomands and retirees are not affected by this.  If they can get the visas and land ownership rights they will be happy, as they have no intention of paying Thai tax.

Edited July 23, 2021 by Dogmatix

[Cake Monster]

Without that 17 % Tax rate break, Thailand can expect Zero Investors.

[hotchilli]

3 hours ago, webfact said:

Plans to attract one million foreign investors into Thailand this year are once again stalled.

I wonder why, paradise lost it's charm?

[BE88]

1 hour ago, Hockeybik said:

Will 1,000,000 rich Chinese come here to buy condos?

Yes

[Bluespunk]

2 hours ago, Smithson said:

The point of attracting foreigners is to bring money to the government/country. Why should they pay less income tax than locals or long term expats, many of whom are self employed?

Because the logic behind any plan aimed at attracting foreign investors is to make coming to Thailand attractive

[Sydebolle]

However the sticking point, previously reported and now rearing up again is the proposal to have foreigners pay just 17% income tax instead of the usual 35%.

The question is not only the tax rate (17% vs 35%, in my earlier days it was 37%) but also the return on the tax payments. There is absolutely ZERO return - take schooling. Non-Thai kids could not go to Thai schools (even if you wanted to put kids into these brain-deforming monologue institutions run by semi-divine "teachers"). We're treated second-class citizen, are called dirty farang, alien et al, come last in almost everything ...... go figure. 

Clean up the terrible mess all these governments created in the name of your country, offer something welcoming and attractive; taxation is only one element on a long list of criteria which presently shows more "go elsewhere" than "come to Thailand". Work on it, treat us indifferent and let that sink in; over (a longer period of) time some people might reconsider Thailand as an alternative ........ Understood? Most likely not!