Thai gov. to tax (remitted) income from abroad for tax residents starting 2024 - Part I

[jaideedave]

1 hour ago, Thaindrew said:

use an ATM card from your home country rather than transferring funds in that should negate any need to pay tax

Yes thats an easy solution that I used to do. I started using Wise to eliminate/reduce the transfer fees. My Canadian bank fees add up fast. I will revert to that method again if necessary.

[kevinsan]

In the 80s if one stayed longer than 180 days, you needed to get a tax clearance before being allowed to leave the country. Always interesting negotiations. I believe the tax department burned to the ground in one of those 90s coups.

[Bill97]

3 hours ago, fondue zoo said:

Sooo, how will the Thai rich get around this?

They will basically get it scrapped.  They have a whole lot more at stake than the foreigners here.

 

[h3ith]

The Google translation refers to "income due to work duties or business conducted abroad" or "because of property".

 

[DrPhibes]

2 hours ago, sirineou said:

It all depends on how foreign income will be taxed in Thailand.

Usually these tax treaties subtract the tax you pay in your home country, from the required tax in the country you are an expat. If the tax you pay in your home country is higher or equal to the tax in the expat country then you don't pay anything. But if the tax you pay in your home country is lower than the tax in the expat country , then you pay the difference. 

So if the tax rate in Thailand is lower than your home country you pay nothing, but if it is higher you will pay the difference. 

So let's wait and see how this thing plays out,

One good thing that could come out from paying tax here, is that you might get some residency benefits. I would not mind some sort of scheme where we could use the Thai national insurance plan.   

Some of the US tax treaties exempt certain types of income from being taxed by a foreign country.  Each of us need to now research our home countries tax treaties with Thailand.  I use a different method.  The current law states income earned and then brought in the same year is taxable to a tax resident.  I have a separate bank account in the US to season the money I earn until after the 1st of the next year and then use that money to live here for that next yr. Have 3 accounts for this cycle.  All well documented. Hope this helps.  BTW, leaving with family in June for a couple of years to see how things pan out here.  Did this back when it looked like Thailand was going to Civil War way back in '06.

Edited September 18, 2023 by DrPhibes

[Jingthing]

34 minutes ago, RocketDog said:

Yep, along with Eritrea the only two countries in the world's that do it.

For USA citizens though, the first 100k$ from foreign income is tax free.

US citizens etc. are subject to US taxation rules regardless of the country of our tax residency.

 

 

https://www.konradlegal.com/2023/01/31/thailand-tax-guide-for-us-expats/

[dannyb123]

Instantly reconsidering the elite visa I applied for last week. Easier to stay under the 180 days and split the remaining 6 months between Bali and home.

[FritsSikkink]

3 hours ago, Mike Teavee said:

Could be they claim it & force you to reclaim it via a Tax Return in Thailand or your home country or both. 

That doesn't work as you would have to declare it on your tax return and then deduct it at the same time. 

[placnx]

3 hours ago, freeworld said:

Its about tax residence ie basically 180 days over living in Thailand and one is considered tax resident, nothing to do with a visa length or immigration.

It sounds as though some people claiming that they were transferring savings earned in a previous year will be out of luck if they have income in the current year.

[anchadian]

Further to this, those with assets in countries with a Double Tax Agreement with Thailand whose assets have already been taxed will be exempt. For a list of countries with a DTA with Thailand. -> https://rd.go.th/english/766.html

 

https://twitter.com/ThaiEnquirer/status/1703621814440911065

 

[FritsSikkink]

3 hours ago, Mike Teavee said:

Obviously some income streams like state pensions may be exempt but private pensions would seem to be fair game, even if they've already paid tax on the income in their home countries. 

Not when they signed bilateral agreements which state in which country the tax has to be paid.

[Bim Smith]

Someone has to pay for the government loans for the insane decision to close the country for over two years. 

[SuperSaiyan]

3 hours ago, connda said:

Eventually someone is going to write, "Does that mean farang's pension income too."

Short answer would probably be "No," at least for those countries with bilateral tax agreements with Thailand.  If you're paying income tax in your home countries, then Thailand has no claim to tax the income twice.

In short, it means actually yes, you will have to proof that your income was already taxed and that Thailand has a Double Taxation Treaty with your country.

[foreverlomsak]

3 hours ago, connda said:

Eventually someone is going to write, "Does that mean farang's pension income too."
 

Following is an extract from the Thai Revenue Department - Personal Income Tax, which raises more questions than it answers, to wit Assessable Income does not include any reference to pensions that I can see.

1.Taxable Person

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

 

2.TAX BASE

2.1 Assessable Income

Income chargeable to the PIT is called “assessable income”. The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, is also treated as assessable income of the employee for the purpose of PIT. Assessable income is divided into 8 categories as follows :

1. income from personal services rendered to employers;

2. income by virtue of jobs, positions or services rendered;

3. income from goodwill, copyright, franchise, other rights, annuity or income in the nature of yearly payments derived from a will or any other juristic Act or judgment of the Court;

4. income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings;

5. income from letting of property and from breaches of contracts, installment sales or hire-purchase contracts;

6. income from liberal professions;

7. income from construction and other contracts of work;

8. income from business, commerce, agriculture, industry, transport or any other activity not specified earlier.

[FritsSikkink]

3 hours ago, Shop mak said:

From the link in op

 

It is unclear at this point how this will apply to foreigners living in Thailand on a retirement visa."

 

Many contries has tax treaty with Thailand, so I guess we just have to wait and see.

From the article: Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand.

[Espanol]

1 hour ago, ChasingTheSun said:

Overseas debit cards usually charge between 7% to 10% FX fees/commissions  for thai baht transactions.

Almost as bad as any tax Thailand would likely charge for many people.

 

Revolut and N26 cards don't charge fees/commissions  for thai baht transactions.

 

But they are only for European citizens.

 

 

[ThomasThBKK]

22 minutes ago, h3ith said:

The Google translation refers to "income due to work duties or business conducted abroad" or "because of property".

 

 

It says assets, that's literally everything including stocks, cash in bank, dividends, bonds... 

[ThomasThBKK]

3 minutes ago, FritsSikkink said:

From the article: Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand.

 

 

Only if the tax in that country is higher, else you pay the difference. If it's zero on lets say capital gains, then you pay full thai tax rate on that imo. 

 

DTAs are very specific

[DrPhibes]

55 minutes ago, Wombo1 said:

Back story behind this decision

At the moment you are only taxed on foreign income that you remit to Thailand during the year that it is earnt.

 

So for example if I was to earn money in The Gambia in 2022, if I remit that within 2022 then it is taxed. But if I leave it outside the country and remit it in 2023 then it is not taxed.

 

Essentially they are closing a loop-hole that enabled people to not pay tax on foreign earnings. For example a Hi-So could setup a company overseas, pay themselves a big salary to an offshore account and then only remit that to Thailand 1 year later and pay no tax...

Just posted this exact strategy I use.  Use several bank accounts to season money so that I am using last year's money this year.

[Ben Zioner]

1 hour ago, Thaindrew said:

possible, but I think it would then be held up as discrimination by individuals who have paid for more expensive visas.

Maybe, but the LTR/WP differs from other visas such as Thailand Elite in that tax exemption is advertised as one of its main benefits.

 

None of the other retirement visa offers such benefit. Until now all pensioners who transferred  their income in the year of earning were technically taxable,  but the Tax Office chose to ignore this situation and might to it again. Thais would say that pensions aren't taxable, but that only true as their miserable benefits are, for the vast majority, below 150000 per annum.

[Thorgal]

All "world income" in Thailand is taxable.

 

"World income" in Thailand means any money that has been transferred to a Thai bank account from an overseas non-private account from a company and/or government retirement payment bank account.

 

If your monthly transfers from overseas originates from a private bank account it won't be considered as "world income".

 

On the other hand : if your country did a double tax treaty with Thailand it's advisable to check if they didn't update this agreement. Most of them have been signed and activated in the 80's.

 

Unfortunately, in the latest recent updates of those bilateral tax agreements they added the possibility to be taxed at the country of origin (your home country) if the country of your residence didn't tax and/or you could not provide a tax form from your country of residence.

 

To receive a Thai "no-income-Tax" clearance document is very difficult, read impossible today. Sometimes a clearance document is required by your home country tax administration and excludes any further discussions in the future. 

Edited September 18, 2023 by Thorgal

[placnx]

1 minute ago, anchadian said:

Further to this, those with assets in countries with a Double Tax Agreement with Thailand whose assets have already been taxed will be exempt. For a list of countries with a DTA with Thailand. -> https://rd.go.th/english/766.html

 

https://twitter.com/ThaiEnquirer/status/1703621814440911065

 

That's confusing. The treaty with the US doesn't say that. It allows a credit for tax paid to Thailand.

 

In some US treaties with other countries it's possible to consider US-sourced income as foreign income to the extent that one doesn't have income in the other country but tax is imposed anyway. In that way the credit calculation will probably allow full credit for tax imposed by that other country.

 

Assuming that the Thai-US treaty in its murky language allows this, tax imposed on funds brought into Thailand would not be a problem (except for finding help to fill out the extra IRS form involved).

[crazykopite]

I presume this will commence from the new financial years 01/01/24 at least it gives us time to get income over before then that will keep me going for a years once they realise it’s a non starter and do a UTurn . My pensions are taxed at source in the U.K. if I was taxed over here it would be less that could be a good thing  only time will tell on the other hand they might start losing the many nomads working in Thailands who will just up sticks and move on to a neighbouring country 

[Espanol]

1 hour ago, NorthernRyland said:

so who is this targeted at? People who are working in Thailand are already paying taxes and everyone else who brings their foreign earned money here was already taxed in their home country so who does that leave? maybe people living on investing portfolios but I think even those are taxed in many countries.

 

It affects retirees who are tax residents in Thailand so as not to pay income taxes in their country.

 

 

[DrPhibes]

57 minutes ago, RocketDog said:

Yep, along with Eritrea the only two countries in the world's that do it.

For USA citizens though, the first 100k$ from foreign income is tax free.

Actually not exactly accurate.  The first $112,000 of 2022 WORK income out of the US that fits in a 12 month window out of the country that can span more than one calendar year where your not in the US more than 330 days can be excluded.  Enrolled Agent with the IRS ????

[FlorC]

Starts on jan 1st 2024 . So on tax day 2024 , they are going to look at your income of 2023 ?
Or what you brought in the country in tax year 2023. 
So bringing in more money before 31 dec 2023 , could bite you in the behind ?

What about living from an inheritance ? 
And the cash sniffer dogs at the airport , because I will bring in cash .
One poster  showed that from 150k to 300k = 5% . Worst case for me 15.000 tax a year .
I wouldn't leave for that . 
If they had gone through with the mandatory health insurence , which would cost 40k and up , then I'm out.

[John Drake]

28 minutes ago, Bim Smith said:

Someone has to pay for the government loans for the insane decision to close the country for over two years. 

Where do you think the money for PTP's digital wallet is going to come from?

[sirineou]

2 minutes ago, DrPhibes said:

ax treaties exempt retirement income 

I hope you are right, but I don't think you are 

as far as I know, retirement income is taxed in Thailand and in the US. The only difference is the tax rate and the progressivity. Some other countries such as Australia does not tax the over 60 retirement tax. So  it remains to see if since they pay zero tax on that income and Thailand taxes retirement if they will pay the full tax here. 

Some countries to encourage retirement there,  develop a reduced tax for expats. I think in Greece where I looked into retiring is 7%, Perhaps Thailand will develop such tax system.  

Don't panic yet let's see how this thing develop . 

 

[khunphil]

2 hours ago, smedly said:

I believe this applies to Thai nationals only, foreigner nationals are already taxed in their home country 

There are foreigners working here, paying income tax here and sometimes bringing some oversea money to fill the gap ... so Yes I am eagerly waiting to know more ???? . So not only Thai nationals.

Phil

[MurakamiX]

If done correctly, this is another step forward to being a developed nation. Countries that tax properly are often the more developed nations. Growing pains first though I assume.