Tax filing of foreign sourced income... knowledge/experience?

[K Josh]

Hello,

 

In the situation of a foreigner person doing a tax filing in Thailand of foreign sourced personal income, considering the rule that only the foreign income that is sent to Thailand in the same year that is earned is assessable income for taxation purposes, does anyone have experience/knowledge in how to file this tax return?

 

Regarding the foreign income that is not sent to Thailand in the same year that is earned, so would be not taxable:

I checked the forms used for tax returns but couldn't find anywhere to set it. I guess it should be filed even if it is not taxable.

Is there a special form or a special way to do it?

Or simply should it be not included in the tax filing?

 

Please, I'm not discussing when a foreigner has to do tax filing or not, if should be or not considered tax resident or details about the mentioned rule, the concrete question is as mentioned above.

 

Thanks,

Cheers.

[AlexRich]

A good question, one I’d like to know the answer to? I suspect you only declare income that is considered taxable, so no need to declare overseas earnings not remitted to Thailand during the tax year. 
 

A good Thai accountant with experience of expat returns would be your best bet. 

[nigelforbes]

You do not need to declare income that is earned but not remitted. Similarly, income that is earned and remitted but is excluded, eg US SSc Retirement Income, does not need to be declared. Only relevant income should be declared.

Edited March 15, 2023 by nigelforbes

[khunPer]

17 hours ago, K Josh said:

In the situation of a foreigner person doing a tax filing in Thailand of foreign sourced personal income, considering the rule that only the foreign income that is sent to Thailand in the same year that is earned is assessable income for taxation purposes, does anyone have experience/knowledge in how to file this tax return?

 

Regarding the foreign income that is not sent to Thailand in the same year that is earned, so would be not taxable:

I checked the forms used for tax returns but couldn't find anywhere to set it. I guess it should be filed even if it is not taxable.

Savings are not going to be registered in a tax return form, but always wise to keep documentation that said foreign transfer originates from savings.

 

Foreign income shall be reported in the PND.90-form under the relevant income section; i.e., for example foreign dividends in No.3-3. You can download an English translated tax return form as PDF...????

[federicoP]

Every year I fill my form PND 91 at the local Revenue Office (Chalong - Phuket) with the help of the revenue staff.

I simply show them my bank book with the foreign remittances deriving from my pension and only these are included in my declaration. 

 

Absolutely no mention about other non taxable income.

[placnx]

Are you US or another nationality?

 

I myself am trying to understand how to deal with the situation now where I have almost no foreign interest/dividend income but pay tax on money brought into Thailand. I think that income in US equal to money brought in and taxed in Thailand can be reattributed as foreign income using provisions of the Thai-US tax treaty on forms 1040 & 1116. The point is to get a full tax credit from US on tax paid to Thailand.

 

I am mystified how people can do this remittance from savings.  If savings were mixed with current income abroad, why would the Thai tax authorities not claim on the current income first? Can they look at your foreign tax return?

[topt]

18 hours ago, placnx said:

Can they look at your foreign tax return?

No.

 

Personally unless using a DTA to mitigate overall taxation I don't understand anybody declaring foreign income whether transferred within current year or not. Perhaps when they institute CRS properly it may be necessary but not now. But that's just me...........

[Jenkins9039]

On 3/17/2023 at 9:19 AM, topt said:

CRS properly it may be necessary

CRS is live already...

[topt]

2 hours ago, Jenkins9039 said:

CRS is live already...

As far as I am aware although Thailand has signed up to implement it they are still not there - or have you seen something recently?

 

NB - For the avoidance of any doubt I was referring to Thailand when I said "they" and not other countries.

[jayboy]

On 3/16/2023 at 2:50 PM, federicoP said:

I simply show them my bank book with the foreign remittances deriving from my pension and only these are included in my declaration. 

 

And as a matter of interest do you pay Thai income tax on your pension remittances?

[nigelforbes]

55 minutes ago, jayboy said:

And as a matter of interest do you pay Thai income tax on your pension remittances?

I do, not much but I do declare the income and pay. 

[jayboy]

4 minutes ago, nigelforbes said:

I do, not much but I do declare the income and pay. 

Interesting.If you don't mind me asking, is your pension paid gross (free of tax) from the country of origin?

[Dante99]

On 3/16/2023 at 2:54 PM, placnx said:

I am mystified how people can do this remittance from savings.  If savings were mixed with current income abroad, why would the Thai tax authorities not claim on the current income first?

So do not mix current year income with savings, have a separate account for each and on January 1 each year transfer all money from the current year income account to the savings account since it is no longer current year income.  Of course transfers to Thailand come from the savings account and no Thai taxes.

[nigelforbes]

2 minutes ago, jayboy said:

Interesting.If you don't mind me asking, is your pension paid gross (free of tax) from the country of origin?

Yes, I have three. My UK state pension falls within my UK personal allowance. My US SSc is not taxable here so is not mentioned on my Thai tax return. My private UK pension is also within my UK personal allowance which means it is not taxed in the UK, but, the sum of the UK state pension and my UK personal pension, can mean I am taxed in Thailand. But the private pension is a SIPP so I can control the amounts and the timing of them. 

[federicoP]

12 hours ago, jayboy said:

And as a matter of interest do you pay Thai income tax on your pension remittances?

Yes, on the basis of the Double Tax Agreement between my native country and Thailand, beeing fiscal resident in Thailand, I can pay the taxes on my pension here.

 

 My pension is paid free of tax from my country of origin and I pay here, at a lower rate.

[K2938]

28 minutes ago, federicoP said:

My pension is paid free of tax from my country of origin and I pay here, at a lower rate.

So why don't you wait until transferring your pension money to Thailand, do it only in each following year and avoid the tax in Thailand?

[federicoP]

51 minutes ago, K2938 said:

So why don't you wait until transferring your pension money to Thailand, do it only in each following year and avoid the tax in Thailand?

Because the DTA states that I have to pay taxes in one of the two countries, not that I do not pay anywhere !!!!

If I don't pay anything, my home country can ask me to pay taxes, fines and interest on my pension......

[jayboy]

13 hours ago, nigelforbes said:

Yes, I have three. My UK state pension falls within my UK personal allowance. My US SSc is not taxable here so is not mentioned on my Thai tax return. My private UK pension is also within my UK personal allowance which means it is not taxed in the UK, but, the sum of the UK state pension and my UK personal pension, can mean I am taxed in Thailand. But the private pension is a SIPP so I can control the amounts and the timing of them. 

You will presumably have good reasons but I'm struggling to understand why you are paying tax on your pensions in Thailand, particularly as the amounts involved are small.

[nigelforbes]

55 minutes ago, jayboy said:

You will presumably have good reasons but I'm struggling to understand why you are paying tax on your pensions in Thailand, particularly as the amounts involved are small.

It varies from year to year, if I need extra income one year, from my private pension, the lowest rate of tax here makes it an inexpensive transaction. Obviously I try not to pay any tax, if it can be avoided if it can't Thai tax rates are cheaper than uk rates, at my level of income.

 

 

 

 

 

 

 

 

 

 

 

 

 

[jayboy]

22 minutes ago, nigelforbes said:

It varies from year to year, if I need extra income one year, from my private pension, the lowest rate of tax here makes it an inexpensive transaction. Obviously I try not to pay any tax, if it can be avoided if it can't Thai tax rates are cheaper than uk rates, at my level of income.

 

 

Edited March 20, 2023 by jayboy

[jayboy]

20 minutes ago, nigelforbes said:

It varies from year to year, if I need extra income one year, from my private pension, the lowest rate of tax here makes it an inexpensive transaction. Obviously I try not to pay any tax, if it can be avoided if it can't Thai tax rates are cheaper than uk rates, at my level of income.

 

But how did you become involved in the tax system in the first place? In my experience I have never been aware of a foreign retiree -without any Thai investment income - volunteering to pay Thai tax on pension income.There could be a reason to do so, perhaps if a condition of pension income being paid free of tax by the UK provider being evidence it was being taxed in Thailand.

 

Another possible reason is that UK banks are increasingly under pressure to clarify customers' tax status. It could also be that you simply wish to 'do the right thing' which is admirable.

[nigelforbes]

2 hours ago, jayboy said:

But how did you become involved in the tax system in the first place? In my experience I have never been aware of a foreign retiree -without any Thai investment income - volunteering to pay Thai tax on pension income.There could be a reason to do so, perhaps if a condition of pension income being paid free of tax by the UK provider being evidence it was being taxed in Thailand.

 

Another possible reason is that UK banks are increasingly under pressure to clarify customers' tax status. It could also be that you simply wish to 'do the right thing' which is admirable.

I used to file Thai tax return every year to reclaim tax paid on ban interest. When I reached retirement age and started to recieve pension payments I was obliged to either report the income or to forego the tax paid since the tax on my income was quite small and the tax paid on savings wasn't, I decide to declare the income rather than get caught put downstream.

 

Sorry but this will be my last post, on any subject.

 

 

 

[K Josh]

On 3/16/2023 at 8:54 AM, placnx said:

Are you US or another nationality?

 

I myself am trying to understand how to deal with the situation now where I have almost no foreign interest/dividend income but pay tax on money brought into Thailand. I think that income in US equal to money brought in and taxed in Thailand can be reattributed as foreign income using provisions of the Thai-US tax treaty on forms 1040 & 1116. The point is to get a full tax credit from US on tax paid to Thailand.

 

I am mystified how people can do this remittance from savings.  If savings were mixed with current income abroad, why would the Thai tax authorities not claim on the current income first? Can they look at your foreign tax return?

I'm from Europe.

 

Thanks for your replies folks. After some research I jumped into a local revenue office and they confirmed what was said in this thread, income not remitted to Thailand in the same tax year it was earned, should not be included in the tax return. simple.