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

[metisdead]

Some off topic posts in violation of our Community Standards and the replies have been removed as this topic is not about the tax system in China. 

[freeworld]

3 hours ago, lordgrinz said:

I assume when you mention "Thai Tax ID", at least in the case of a Farang, you mean the "Pink ID"? Because I just checked my wife's Thai Tax Return and I am listed on it with my Pink ID number.

Usually the Thai ID is the TIN for Thais. I have this first hand from the Thai tax office in our area. For foreigners it is usually a tax number obtained and issued from the tax office. Pink ID number is maybe a tax number issued as a pink ID number.

[trainman34014]

15 hours ago, lamyai3 said:

This equates to around 100 baht per month based on the pitiful savings rates.

Yes; if you keep only the minimum amount required in the account.    However; would you rather have the 1200 Baht in your pocket or leave it for the Thai Government to take it ?

[freeworld]

2 hours ago, scorecard said:

Is Section 40 and it's contents applicable to Thai citizens only or all people residing in Thailand?

Taxes dont discriminate on citizenship or nationality. It is residence based as in most countries.

[Sheryl]

4 hours ago, RupertIII said:

Today's update in the Thai Enquirer, seems not just us foreigners that are concerned about all this, in particular the lack of clarity surrounding it.

https://www.thaienquirer.com/50755/opinion-thailands-ambitious-plan-to-tax-incoming-funds-risks-falling-flat-due-to-lack-of-clarity/

Yes, I think this is far from finalized.

 

It seems a common tactic of the Thai government to make announcements as a sort of trial balloon to see what reaction it gets ahead of actually doing something.

 

Doesn't mean this won't happen in some form but what exactly is far from set in stone at this point.

 

If/when the tax code is amended it will be necessary to (1) carefully read the revised text (not possible now as nto yet written let alone ratified yet) and (2) carefully read the Tax Agreement between your country and Thailand as applicable. 

 

I think in most cases any change will not be applicable to funds being transferred in by retirees, for 2 reasons: (1) often of a type exempt under tax treaties (e.g. pensions) and (2) often would not qualify as income (e.g. long term savings).

 

What they are aiming at is a loophole whereby Thai residents  can avoid tax on recently earned or passive income by remitting it to Thailand after the year in which it was earned. Not pension income and equivalent, nor transfer of foreigners' savings that were accumulated in many cases before even moving to Thailand.

 

The problem of course will be to find a wording which makes all that clear with no confusion.

 

Another concern will be ensuring (assuming a change is enacted) that provincial tax offices understand it. As we all know,  the Thai government often does not do a very good job of clearly communicating guidance to the field and different offices often have different interpretations.

 

Might be wise for those who do so, to reconsider  filing for refund of bank interest until the dust settles as that would bring you to  the Provincial Tax authorities' attention. I actually stopped doing this a year ago because 2 years running it led to me being called in  for questioning and having to provide extensive documentation of incoming transfers and answer a lot of intrusive questions. I prevailed (and luckily had saved credit advices to show money came in from abroad) but it was such a hassle I decided not worth it for a few hundred baht. A new directive about income from foreign sources, if issued, would much increase the odds of such scrutiny.

 

It would also likely be prudent to carefully read through the Tax treaty between your home country and Thailand to see if the money you are bringing in is exempt and, if it is not, consider the implications; if so, consider how clear the paper trail would be to show this.  For example, I currently have my US Social Security directly deposited to my bank in Thailand and that is the only money I bring in, and the credit advices clearly identify SSA as the originator of the funds. So I'm good. But in the past, before ISS started direct deposits to Thailand,  I was having savings transferred the origin of which would be hard to isolate as there were multiple sources  of funds coming into the same US bank accounts over time. I have always filed US tax returns on all income, including that earned abroad (3rd country, not Thailand) so would always have been protected from double taxation, but establishing that might have been complicated, and might even have necessitated filing both Thai and US tax returns and claiming tax credit on one of them.  A headache I would naturally prefer to avoid.

 

 

 

 

[beammeup]

So if you are on an O based on marriage visa, and you need to send 400K. at 10% are you and your wife entitled to 30K each tax credit? If so you actually get back money? Or even at 15% you end up paying zero.

Edited September 19, 2023 by beammeup

[Srikcir]

Just saw this thst maybe relevant to this story : 

H.R. 5432 Tax Simplification for Americans Abroad Act has been introduced in the U.S. House of Representatives

The Tax Simplification for Americans Abroad Act will:

• Create a simplified tax return form to help make it easier for Americans filing from abroad who owe no U.S. tax
• Eliminate double taxation for pensions and retirement distributions (including Social Security benefits), scholarships, fellowship grants, disability benefits, childcare expenses, family medical leave, and unemployment benefits
• Consolidate the FBAR into FATCA, increase the filing threshold, and eliminate the requirement to report separately to FinCEN

[kwilco]

 

        Stat - "And here I am thinking I spend a lot of money on vat, visa fees, import duties etc but apparently that does not count in your book... Apparenty you are not aware than 90% of thai people do not pay any tax at all."

 

"Many Thais, both rich and poor, are simply outside of the tax system. Just three million Thais out of 67 million regularly pay income taxes."   

 

and all Thais pay VAT etc a when their income hits a certain level they pay income tax - I see no reason to excuse foreigners from this playing field.

[bannork]

5 minutes ago, freeworld said:

Taxes dont discriminate on citizenship or nationality. It is residence based as in most countries.

So does that mean Thai migrant workers sending money home from overseas are going to be taxed?

[sirineou]

3 hours ago, pizzachang said:

Yes, you're correct. This refers to people who regularly pay income taxes in Thailand. I imagine, it is Thai citizens, who earn money abroad and pay their taxes.  A retired citizen from another country (not a Thai or a Thai passport holder) is not a "tax resident".  

What you say might be correct, but I have delt with this issue in other countries who have Tax reciprocity treaties and in the countries I looked into the above was not true, 

So I guess we will have to wait and see. if this proposal is approved and if so what form it will take.

So asked  chat GPD 

"what are the rules of the reciprocity tax treaty between the US and Thailand "

Below is a cursory synopsys . I am sure each aspect is pages and pages long.

 

The tax treaty between the United States and Thailand, officially titled the "Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income," sets out various rules and provisions to prevent double taxation of income and to promote cooperation in tax matters between the two countries. Please note that tax treaties can be complex, and it's essential to consult the treaty's text or seek advice from a tax professional for specific details. However, I can provide a general overview of some key provisions commonly found in tax treaties:

Residency: The treaty defines who qualifies as a resident of each country for tax purposes. Residents are generally subject to tax in their country of residence.

Taxation of Business Profits: The treaty provides rules for the taxation of business profits, including rules for determining when a business has a permanent establishment (PE) in the other country and how such profits are taxed.

Dividends, Interest, and Royalties: The treaty often reduces or eliminates withholding tax rates on dividends, interest, and royalties when certain conditions are met. For example, withholding tax rates on dividends may be reduced to a specific percentage.

Capital Gains: The treaty may include provisions on the taxation of capital gains, especially gains from the sale of immovable property.

Independent Personal Services: Rules for taxing income from independent personal services, such as consulting or professional services, may be outlined in the treaty.

Pensions and Annuities: Provisions related to pensions and annuities may be included, specifying which country has the primary taxing rights.

Elimination of Double Taxation: The treaty typically outlines mechanisms for eliminating or reducing double taxation. This can include allowing taxpayers to claim a foreign tax credit or providing an exemption method.

Non-Discrimination: Tax treaties often include provisions to ensure that residents of one country are not subject to discriminatory taxation in the other country.

Exchange of Information: There may be provisions allowing the two countries to exchange tax-related information to prevent tax evasion.

Mutual Agreement Procedure: The treaty may establish a procedure for resolving disputes between the tax authorities of the two countries.

Please note that the specific details of the U.S.-Thailand tax treaty, including tax rates and thresholds, can vary depending on the nature of the income and the specific circumstances of the taxpayer. It's crucial to consult the actual treaty text or seek advice from a tax professional to understand how the treaty applies to your situation. Additionally, tax treaties can be subject to updates and amendments, so it's essential to ensure you have the most current information.

Regenerate
Send a message
 

[GeorgeCross]

16 minutes ago, vibration said:

Many thanks for sharing this as it was something I was not aware of, is it possible that you can document this and many thanks in advance.

google "thai gift tax" loads of resources but its basically up to 20M per year to spouse children or parents - of which i have the full set here.. nice!

 

wife mentioned unlikely to change for 3 reasons:

1 dowry

2 buy property for spouse (money gift)

3 for thais to send money home to parents while working abroad

 

now the only question here is:

will they only tax income remitted or demand the full amount payable (to extend visa etc)

 

will wait for those answers. in the meantime our property projects are on hold.

as is her new car!

[Sir Dude]

Hmm, I don't think retirees have too much to worry about who just live off of their pensions... although I understand the concern shown in the thread due to previous hair-brained ideas governments have had here. Also, there is a good chance that this will rattle the cage of the elite here so much that it is quietly walked-back or dropped further down the line. 

 

However, if they did follow through with it, then I'd have serious misgivings about how they would enforce it without out-rightly sparking an exodus of people from multiple walks of life/demographics. Also, for example, how would they police ATM system when someone takes like $300 out of their foreign bank on any given street or place with an ATM... sure, might be possible but the logistics involved are huge, plus the high street banks here might well baulk at the extra cost and time/effort involved. It would require considerable investment in tech and all sorts.

 

The sad thing here is, if you legally work here and have a WP, then you might get screwed if you bring in anything from overseas... and mostly those like this are the ones who might need extra cash. 

 

What about if you worked here (like a teacher), and say, your brother sends you $1000 for your birthday... is that liable to tax? It's not "income", it's a gift. Complete BS.

 

On top of that, if more needed to be mentioned, the leeches want more money from us but are not prepared to pony-up anything in return. How about Anutin makes "residency" easier? How about some more rights in return? How about less discrimination on so many things? How about a less oppressive immigration department for the legit folks? How about longer visas for the workers you want to take more from?

 

Someone might live and work here but they are not a "resident" with the associated rights that go along with that word. A completely ill-thought out idea that's loaded with problems stamped all over it. Good way to tank the economy even worse... as even if there is disparity in wealth dispersion, all the money ends up being spent in the economy eventually, which is an overall positive. If they convince people (or money generally) to bail like the CCP has in China... then we can all see how well that is working out. 

 

The new government is a bunch of muppets that sold out to the old government and puppeteers just to get their exiled leader back... and now need new revenue sources to pay for the ill-conceived ideas they promised the mob to get the votes, who they also ultimately betrayed.

 

So shamelessly cynical. Okay, rant over.... have a good day everyone.

 

 

 

 

 

 

 

Edited September 19, 2023 by Sir Dude
A few typos

[Sheryl]

2 minutes ago, sirineou said:

What you say might be correct, but I have delt with this issue in other countries who have Tax reciprocity treaties and in the countries I looked into the above was not true, 

So I guess we will have to wait and see. if this proposal is approved and if so what form it will take.

So asked  chat GPD 

"what are the rules of the reciprocity tax treaty between the US and Thailand "

Below is a cursory synopsys . I am sure each aspect is pages and pages long.

 

The tax treaty between the United States and Thailand, officially titled the "Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income," sets out various rules and provisions to prevent double taxation of income and to promote cooperation in tax matters between the two countries. Please note that tax treaties can be complex, and it's essential to consult the treaty's text or seek advice from a tax professional for specific details. However, I can provide a general overview of some key provisions commonly found in tax treaties:

Residency: The treaty defines who qualifies as a resident of each country for tax purposes. Residents are generally subject to tax in their country of residence.

Taxation of Business Profits: The treaty provides rules for the taxation of business profits, including rules for determining when a business has a permanent establishment (PE) in the other country and how such profits are taxed.

Dividends, Interest, and Royalties: The treaty often reduces or eliminates withholding tax rates on dividends, interest, and royalties when certain conditions are met. For example, withholding tax rates on dividends may be reduced to a specific percentage.

Capital Gains: The treaty may include provisions on the taxation of capital gains, especially gains from the sale of immovable property.

Independent Personal Services: Rules for taxing income from independent personal services, such as consulting or professional services, may be outlined in the treaty.

Pensions and Annuities: Provisions related to pensions and annuities may be included, specifying which country has the primary taxing rights.

Elimination of Double Taxation: The treaty typically outlines mechanisms for eliminating or reducing double taxation. This can include allowing taxpayers to claim a foreign tax credit or providing an exemption method.

Non-Discrimination: Tax treaties often include provisions to ensure that residents of one country are not subject to discriminatory taxation in the other country.

Exchange of Information: There may be provisions allowing the two countries to exchange tax-related information to prevent tax evasion.

Mutual Agreement Procedure: The treaty may establish a procedure for resolving disputes between the tax authorities of the two countries.

Please note that the specific details of the U.S.-Thailand tax treaty, including tax rates and thresholds, can vary depending on the nature of the income and the specific circumstances of the taxpayer. It's crucial to consult the actual treaty text or seek advice from a tax professional to understand how the treaty applies to your situation. Additionally, tax treaties can be subject to updates and amendments, so it's essential to ensure you have the most current information.

Regenerate
Send a message
 

Unfortunately this is not very accurate (as often happens when using Chat GPT) and seems to be talking in general about what might be in a Tax Treaty rather than the specifics of the actual one between the US and Thailand.

 

Links to which have been previously posted.

 

Of particular importance is the clear exemption of US Social Security and annuities from taxation by Thailand , full stop.

 

Tax treaties really are not that lengthy or hard to read. Suggest everyone review the one specific to themselves.

 

 

[Gknrd]

Looks like this is going to be as bad or worse than Colombia. Even the so called tax experts here disagree. It's a sh$t show over here.  I just stay my 180 then leave.

[Hummin]

Well my plan for  8 month in Thailand next year changed to 179 days! No way I'm paying tax to Thailand ever!

Edited September 19, 2023 by Hummin

[Mr Meeseeks]

4 minutes ago, Gknrd said:

Looks like this is going to be as bad or worse than Colombia. Even the so called tax experts here disagree. It's a sh$t show over here.  I just stay my 180 then leave.

I did the same when I was working offshore in Brazil.

[kwilco]

17 minutes ago, bannork said:

So does that mean Thai migrant workers sending money home from overseas are going to be taxed?

Like everyone else, it depens on how much they earn - I suspect they are way outside the tax bracket.

[Isaan sailor]

Looks like a little panic has set in.  Western currencies have jumped up.  Could high rollers be pulling Baht out of banks?

Edited September 19, 2023 by Isaan sailor

[sirineou]

2 minutes ago, Sheryl said:

Unfortunately this is not very accurate (as often happens when using Chat GPT) and seems to be talking in general about what might be in a Tax Treaty rather than the specifics of the actual one between the US and Thailand.

 

Links to which have been previously posted.

 

Of particular importance is the clear exemption of US Social Security and annuities from taxation by Thailand , full stop.

 

Tax treaties really are not that lengthy or hard to read. Suggest everyone review the one specific to themselves.

 

 

You are right about AI answers. First when I ask about the US Thai tax reciprocity treaty, it told me that the isnt one , then when I said that's not true and that one was signed 1996 it apologised and gave me the answers below. 

I did say that the below seems to be a cursory synopsys 

Can you please post that link, I have not seen it.yet

How about private company pensions, and income from bonds and such. 

One thing for sure, if this thing goes into affects we will all need a specialized accountant. or a plan B

[John Drake]

43 minutes ago, Sheryl said:

Might be wise for those who do so, to reconsider  filing for refund of bank interest until the dust settles as that would bring you to  the Provincial Tax authorities' attention. I actually stopped doing this a year ago because 2 years running it led to me being called in  for questioning and having to provide extensive documentation of incoming transfers and answer a lot of intrusive questions.

Thanks for the heads up. I was considering filing for the return. Should have known better. Flying below the radar is the key to a relatively stress free time, here. And it's becoming harder to do so.

[FritsSikkink]

On 9/18/2023 at 11:24 AM, Mike Teavee said:

Less than 150,000b pa! - How do you live on 12,500b pm! (No don't answer that)!!!

 

For anybody who's interested here are the current Thai Tax Rate bands... 

 

There are deductibles too.

[El Matador]

To give a bit of perspective.

Indonesia and Vietnam tax everyone on their worldwide income.

Malaysia only taxes local income. And Philippines only taxes local income IF YOU ARE FOREIGNER. But if you get a Filipino passport you will get taxed worldwide.

 

Seems Thai nationals will be taxed worldwide wherever their income comes from without any possible loophole as they are the main target according to the articles.

Still have to see the details if foreigners will be taxed exactly the same on their worldwide income. Although I doubt it will happen, a tax system like in the Philippines could be an option if they want to keep stable their base of expats. That would be a positive discrimination for once.

Tax treaties only offer a protection to avoid to pay twice a tax on the same income but can't avoid bureaucracy and potential increased taxes if the treaty is not that great. Some of them were written 30 years ago in a very different context.

 

If they introduce someday a 90 days visa exemption (as some are thinking), you could do your 2 visa exemptions in a year and call it a day. Hassle free, and without all the bureaucratic nightmare, that would be an attractive alternative.

 

 

 

[Sheryl]

14 minutes ago, sirineou said:

You are right about AI answers. First when I ask about the US Thai tax reciprocity treaty, it told me that the isnt one , then when I said that's not true and that one was signed 1996 it apologised and gave me the answers below. 

I did say that the below seems to be a cursory synopsys 

Can you please post that link, I have not seen it.yet

How about private company pensions, and income from bonds and such. 

One thing for sure, if this thing goes into affects we will all need a specialized accountant. or a plan B

This was the link I had posted

https://library.siam-legal.com/thai-law/u-s-thai-tax-treaty-pensions-and-social-security-payments-article-20/

covers pensions, SS, annuities

 

https://library.siam-legal.com/thai-law/u-s-thai-tax-treaty-dividends-article-10/

https://library.siam-legal.com/thai-law/u-s-thai-tax-treaty-interest-article-11/

cover dividends and interest respectively.  It looks like you could potentially be taxed on same but with limits to avoid double or excess taxation between the 2 countries.

 

I would suggest to try to avoid bringing interest or dividend income into Thailand unless it is to your overall advantage (i.e. lower tax rate than in US)

 

 

[Hummin]

33 minutes ago, Hummin said:

Well my plan for  8 month in Thailand next year changed to 179 days! No way I'm paying tax to Thailand ever!

Well, since I'm stil working in Norway, pay tax to Norway, nothing will be changed for me even I stay 8 months as planned. 

[Hummin]

33 minutes ago, Hummin said:

Well my plan for  8 month in Thailand next year changed to 179 days! No way I'm paying tax to Thailand ever!

Well, since I'm stil working in Norway, pay tax to Norway, nothing will be changed for me even I stay 8 months as planned. 

[Baht Simpson]

8 hours ago, scorecard said:

Cut and paste from earlier in this thread:

Presumably these are tiered rates.

[scorecard]

Just now, Baht Simpson said:

Presumably these are tiered rates.

Up 2 U.

[bang saen guy]

It would appear that this, like many other issues, has not been clearly thought out. 

For those referring to this as a new government, it is not. Thaksin is back

[Lorry]

16 hours ago, Thorgal said:

only for Thai citizens

The word "only" was added by you, its not in coconuts and not in the original from the RD, which has been translated in this thread 3 times

Edited September 19, 2023 by Lorry

[snoop1130]

Thai Government Alters Overseas Income Tax Rules to Close Loopholes

 

 

In an effort to tackle loopholes in overseas income tax, the Thai government has pulled out new rules that it said would permanently close these gaps for good, while also addressing issues of income inequality within the country.

 

However, the new rules have caused concern amongst many foreign expats even though the intention of the rules seem mainly targeted at Thais and dual tax agreements could avert some of the impact for some foreigners. Regardless of the intention, however, the rules could still complicate things for some foreign nationals who stay in Thailand over 180 days a year.

 

The Thai Ministry of Finance last week implemented a tighter rule on overseas income, which will take effect on January 1st, 2024, onward.

 

Full story: The Pattaya News 2023-09-19

 

- Cigna offers a range of visa-compliant plans that meet the minimum requirement of medical treatment, including COVID-19, up to THB 3m. For more information on all expat health insurance plans click here.

 

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