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

[stat]

3 hours ago, RafPinto said:

You can't see the benefits?

A lump sum for a 10 year visa at 50,000Baht including multi re-entry permits.

 

Against:

10x1900 Baht visa renewal = 19000Baht

10x1000 Baht re-entry = 10000Baht (presuming it is a 1 re-entry permit only).

10x500 Baht taxi to and from airport (my case)= 5000Baht

Bank fee for statements: let's say 200x10=2000

Total expenses= 36000Baht

 

Interest at 1% on 800k= 8000Baht

8000x10=80,000Baht

TOTAL=80.000-36000 Baht expenses

44.000BAHT PLUS

 

LTR:

One off payment of 50,000Baht

Withdraw your 800k

 

Invested at 8%= 64000x10= 640000 baht

 

 

 

Against:

LTR: 50000-10(64000)= 590000 BAHT plus in your bank

 

LTR against one year visa:

590000-44000= 546000

 

I am not even talking about multi-entry fee.
Not talking of cost to visit your bank yearly for the paperwork.
Not talking about using an agent.

Not talking about 3 monthly reports.
Not talking about taking passport pictures 

 

and and and

 

For me, It was a no brainer to apply for the LTR.

 

 

Sound calculation. Only unknown is what happens if Thailand for example introduces new tax laws or a myriad of other things and you decide to leave Thailand after 2 years. I Agree LTR Visa is good alternative if you are sure you will stay the 10 years and gives you peace of mind (However they can still deny you reentry as in case of Covid or other stuff).

[stat]

2 minutes ago, TroubleandGrumpy said:

Personal Income Tax | The Revenue Department (English Site) (rd.go.th)

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.

 

This below is the 'big one' and what worries me because of 'Thai Interpretation' by Thai Government Employees of the Rules and Regulations (example - Immigration Officers from Provice to Province).

 

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.

 

I cannot find anything on the Thai Revenue Department website that specifically covers foreign sourced funds, and when they are or are not assessable income.

 

Until the Thai Govt clearly states that the funds I bring into Thailand from my personal savings/investments in Australia are not subject to their taxation obligations, because they were already taxed or tax exempt in Australia, then this is a problem that I need to plan for going ahead as an Expat living in Thailand.  It would be impossible for me to prove, to the satisfacytion of an arrogant Thai Revenue Officer who is being poushed to 'get more money', that my super fund has taxed my earnings - the taxes are paid across the whole fund, not at the individual account level. 

 

I fully agree to your post! They will never bother to understand a foreign tax declaration. But maybe this is the ideato make the law so opaque that you have to pay tea money as you could never satisfy all the formal requirements.

[Dogmatix]

21 minutes ago, Hepbub said:

Completely confused now! The thread started off about the Thai government wanting to tax money coming into Thailand. Then it diverged into the long term visa, then into stocks and shares?????

 

If I pay income tax on my UK state pension, which is then paid into my UK bank, do I have to pay tax on money I transfer from that account to my account in Thailand? A fairly simple and straight forward question...I don't have any other income.

The UK state pension is specifically taxable only in the UK under the double tax treaty. So the answer is no but private pensions you probably have to pay Thai tax and claim a tax credit for tax deducted in the UK.  But, if they get serious on this, they might require you file a tax return anyway to show you have exempted income.  No one can say what nonsense they will think up.  They are completely incompetent and don't bother to think anything through at the Revenue Dept and Srettha and his team.

[Ricardo]

2 hours ago, Neeranam said:

8% is not much. Now, I get 19% by holding my Polkadot in Nova, a non-custodial wallet. 

As a cynical old (retired) management-accountant, I would be surprised if that higher-return comes without higher risk, but I do sincerely hope it will work out for you.  ????

[gamb00ler]

7 hours ago, Isaan sailor said:

We shall see how strong those tax treaties really are.  It’s their country, and they can do as they please.

The tax treaties are unlikely to be ignored by any Thai government.

 

I checked the US/Thai  treaty to learn about treaty termination.  Either party can withdraw from the treaty with 6+ months notice.

[FritsSikkink]

59 minutes ago, Arkady said:

The current forms have a space to declare foreign income but I don't think there is anywhere you can claim a tax credit under a foreign DTA.

There are several options:

1) People from a country with a DTA, don't have to declare at all.

2) People from a country with a DTA, do have to declare but tic a box "not applicable because of DTA".

3) People from a country with a DTA, do have to declare but can deduct tax being paid in the other country. This would need a change to the tax form.

 

They can't deduct any tax beforehand as they don't know any deductibles involved. So this would mean that people might have to pay a considerable amount of tax after their tax filling has been audited.

[JackGats]

22 minutes ago, stat said:

Sound calculation. Only unknown is what happens if Thailand for example introduces new tax laws or a myriad of other things and you decide to leave Thailand after 2 years. I Agree LTR Visa is good alternative if you are sure you will stay the 10 years and gives you peace of mind (However they can still deny you reentry as in case of Covid or other stuff).

Even if you leave Thailand to settle elsewhere, the LTR gives you the right not to worry about the 30 day-deadline whenever you visit Thailand again.

[Dogmatix]

8 hours ago, ukrules said:

 

Interesting from the point of view of a foreigner like me.

 

If I were to take out a mortgage on a house in the UK or even just a reasonably large personal loan and send the funds here then I could prove that it's a loan (loan contract) but the transfer wouldn't be coming from the bank directly.

 

The funds would be credited to my UK bank account as is usual with any loan and I would then 'wire' however much I require using swift.

 

This is the first I'm hearing about foreigners being prohibited from receiving offshore loans, perhaps that restriction was only for the certificate allowing future repatriation of the funds - that's not something I would require. It's a for life kind of deal.

 

 

You would have to check with a bank on whether foreigners are prohibited from receiving offshore loans.  I have heard more than once from bank fx officers who called to ask the purpose of a foreign remittance for reporting to the BoT that the only categories available for foreigners were, I think, living expenses and purchase of condo. When I convince them I was Thai they agreed to report as an offshore loan.  The reporting is quite informal now but in the past you had to go to the bank and fill out a form for more than US$20k.  That was when I got follow up calls from the BoT on how the sericing of the debt was going and those were loans to a Thai company, although I have booked personal offshore loans to myself (as a Thai). I was able to repay the company offshore loans with loan agreements the bank didn't look at but haven't tried to repay the personal loans. 

 

Anyway I think it would be important to have an entity or another person remit the loan to Thailand or they could just argue it was not a loan but you were remitting income earned abroad.  Loan documents can be self drafted following any template on the internet.  You can add terms to make the loans bullet repayment, meaning all the interest is rolled up and paid at the end to explain why no interest payments.  You can also add terms to say the loan can be rolled over indefinitely at the discretion of the lender after a 10 year term or something.

 

 

[cleopatra2]

33 minutes ago, Dogmatix said:

The UK state pension is specifically taxable only in the UK under the double tax treaty. So the answer is no but private pensions you probably have to pay Thai tax and claim a tax credit for tax deducted in the UK.  But, if they get serious on this, they might require you file a tax return anyway to show you have exempted income.  No one can say what nonsense they will think up.  They are completely incompetent and don't bother to think anything through at the Revenue Dept and Srettha and his team.

The UK state pension is not included in any provisions of the UK Thai tax treaty. 

Thus both states have a right to tax.

It would fall under the article to eliminate double tax , by using the credit method.

[Thaindrew]

39 minutes ago, TroubleandGrumpy said:

Personal Income Tax | The Revenue Department (English Site) (rd.go.th)

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.

 

This below is the 'big one' and what worries me because of 'Thai Interpretation' by Thai Government Employees of the Rules and Regulations (example - Immigration Officers from Provice to Province).

 

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.

 

I cannot find anything on the Thai Revenue Department website that specifically covers foreign sourced funds, and when they are or are not assessable income.

 

Until the Thai Govt clearly states that the funds I bring into Thailand from my personal savings/investments in Australia are not subject to their taxation obligations, because they were already taxed or tax exempt in Australia, then this is a problem that I need to plan for going ahead as an Expat living in Thailand.  It would be impossible for me to prove, to the satisfacytion of an arrogant Thai Revenue Officer who is being poushed to 'get more money', that my super fund has taxed my earnings - the taxes are paid across the whole fund, not at the individual account level. 

 

for a while its going to be the case that we will bring the minimum amount of money into Thailand as possible to live to minimise tax exposure based on the statement "the portion of income from foreign sources that is brought into Thailand". Over time how RD apply the rules will become more known in terms of offsets / allowances, how they deal with inbound funds for property purposes etc.

 

At least, at this stage, they aren't proposing to tax all global income, otherwise there may way be an exodus

[Isaan sailor]

6 hours ago, JustThisOnePostOnly said:

This is a fantasy I know, but just in case somebody powerful is reading...

 

What is the difference between letting me stay here indefinitely as a retiree on a visa vs. letting me stay as a citizen?

 

I think I can speak for many Americans (who are taxed by our government regardless of where we live) when I say I would jump at the chance to pay taxes exclusively to Thailand.  Can only do that if we renounce our U.S. citizenship, and we can only do that if we get that second passport.

 

I have to believe this would end up being a huge chunk of money.  It wouldn't just be the Americans who are already here, you'd find all kinds of people who would come here and happily pay taxes to Thailand just for the opportunity to not fund the things the U.S. is doing today.

I file jointly taxes every year to the IRS.  I even pay Estimated Quarterly taxes when appropriate.  As a retiree, I don’t normally owe much if anything.

In return, I collect Social Security.  No way I would give it up for Thai citizenship.

[Dogmatix]

1 hour ago, FritsSikkink said:

There are several options:

1) People from a country with a DTA, don't have to declare at all.

2) People from a country with a DTA, do have to declare but tic a box "not applicable because of DTA".

3) People from a country with a DTA, do have to declare but can deduct tax being paid in the other country. This would need a change to the tax form.

 

They can't deduct any tax beforehand as they don't know any deductibles involved. So this would mean that people might have to pay a considerable amount of tax after their tax filling has been audited.

The DTAs assume it is possible to file for Thai tax using tax credits from DTA countries but the Thai PNG 90 and PNG 91 tax returns have no space to enter these tax credits.  This seems to speak volumes about how many have actually declared overseas income from the previous year, under the current rule, for Thai taxes claiming overseas tax credits.  Also about the state of preparedness of the RD to implement their new interpretation.  However the RD is clearly going to want you to file in full, rather than tick a box saying "not applicable because of DTA" in the case the Thai tax would be higher in which case they could still collect something after deducting the tax credit.  This is very likely since the threshold to pay Thai income tax is lower than most farang countries and foreigners are less likely to be able claim as much in allowances vs Thais, although the over 65 allowance is pretty good. 

[GeorgeCross]

50 minutes ago, Thaindrew said:

for a while its going to be the case that we will bring the minimum amount of money into Thailand as possible to live to minimise tax exposure based on the statement "the portion of income from foreign sources that is brought into Thailand". Over time how RD apply the rules will become more known in terms of offsets / allowances, how they deal with inbound funds for property purposes etc.

 

At least, at this stage, they aren't proposing to tax all global income, otherwise there may way be an exodus

wouldn't they just roll the unpaid tax to the following year? nothing states it restarts each year only that it can be collected any year

 

" you bring 1M baht farang but owe 2M. pay 1M now or no visa.. "

Edited September 20, 2023 by GeorgeCross

[stat]

1 hour ago, FritsSikkink said:

There are several options:

1) People from a country with a DTA, don't have to declare at all.

2) People from a country with a DTA, do have to declare but tic a box "not applicable because of DTA".

3) People from a country with a DTA, do have to declare but can deduct tax being paid in the other country. This would need a change to the tax form.

 

They can't deduct any tax beforehand as they don't know any deductibles involved. So this would mean that people might have to pay a considerable amount of tax after their tax filling has been audited.

Are you aware that a DTA in this regard only applies if you reside in both countries in the same tax year? Apparently not... If you live in Thailand with a retirement visa it is unlikely that you also live somewhere else.

[FritsSikkink]

Just now, stat said:

Are you aware that a DTA in this regard only applies if you reside in both countries in the same tax year? 

No, it doesn't.

I work here and will get a pension from my home country soon.

[stat]

1 hour ago, JackGats said:

Even if you leave Thailand to settle elsewhere, the LTR gives you the right not to worry about the 30 day-deadline whenever you visit Thailand again.

This is a very small benefit in my eyes ... If I leave Thailand I would not be coming back for more then 30 or 45 days but that is just my opinion.

[stat]

1 minute ago, FritsSikkink said:

No, it doesn't.

I work here and will get a pension from my home country soon.

In case of you receive a pension from the other country yes you have coverage of DTA but only for your pension payments. In terms of worldwide capital gains or any other matter you are not under a DTA in general terms.

[JimTripper]

1 hour ago, Isaan sailor said:

I file jointly taxes every year to the IRS.  I even pay Estimated Quarterly taxes when appropriate.  As a retiree, I don’t normally owe much if anything.

In return, I collect Social Security.  No way I would give it up for Thai citizenship.

Neither would I. They change things so often in Thailand I don’t think a citizenship would be on par with a USA citizenship even if it were offered. If they changed it down the road what then, become stateless without medical or social security? No thanks ????.

Edited September 20, 2023 by JimTripper

[david555]

17 hours ago, LikeItHot said:

They can't force people to transfer money in like 65000 a month and then say ok now that's taxable income.  If that precedent is set they could just say ok now you must transfer in 100000 and the raise it every year to generate more taxes. 

So it looks the 800 k system is more favorable as you start as a non-o 3 months ,..... as then you are just a tourist when starting and so not under the 180 days rule for becoming a taxable resident ....

And just keep them 800K (or 400K+ 7 months...in case withdrawing for living ) on account

 

And if traveling from home country whenever ,bring cash with you to live from .......(keep attention not to bring from Europe no more than not to declare  limit by leaving home country E.U. U.K. or USA. but no more than 9999 ,for US i am not aware the not to declare amount ....)

 

Just a thought .....????

Edited September 20, 2023 by david555

[JimGant]

1 hour ago, gamb00ler said:

I checked the US/Thai  treaty to learn about treaty termination.  Either party can withdraw from the treaty with 6+ months notice.

But why would Thailand want to? There's nothing in the treaty hindering tax collections of US private pensions, for example. It's just that Thailand hasn't put out an order to identify all those direct deposits of private pensions -- prima facie of taxable income coming into Thailand in year paid. And I doubt Thailand would really want to rock the boat and put US gov't pensions in the taxable category -- not that the US would allow it.

 

No, I can't understand why the treaty somehow applies to where things are now headed....

[Dogmatix]

I think it quite likely that the real estate lobby will push them to exempt tax resident foreigners who remit funds to buy a condo.  If the agree to do that, they might require proof that the condo was actually purchased and the value was the same.  Otherwise the foreigner condo market will be limited to buyers who don't live in Thailand and are just buying holiday homes or doing money laundering in the case of one group of foreigners. 

 

Even if they carved out an exemption for condo buyers, that would not help guys who want to remit cash to buy a piece of land and a house in the wife's name. 

[Dogmatix]

The main problem is that they are largely targeting Thais who trade stocks offshore which has become quite popular since the Thai stock market has gone nowhere in the last 7 years, while things like US tech stocks have gone through the roof.  Most of these are middle class Thais who didn't start off with money overseas but remit cash abroad to trade stocks and want to bring it back over the medium term.  They are relatively easy to track. But foreigners start off with cash overseas and, if they are retired, need to bring money in from time to time to cover living costs or make major purchases like property or cars from taxed income for which they may not have documentation to qualify for tax credits, if these are available.  So this will end up as a remittance tax for foreigners at rates going up to 35%.  That is the reverse of capital controls which apply a withholding tax to stop money being sent out of a country. You would think they would want to be encouraging capital inflows for private consumption and investment, not taxing them away. 

 

Of course Thai traders are very unhappy to be asked to pay tax on stock trade earnings but they will at least have untaxed gains to pay tax on as few countries charge capital gains on non-residents. Dividends are a different matter and they may be double taxed on dividends from some countries.  The case of these class Thais is quite different because they will be taxed on their gains and dividends, not on their savings. 

[JimTripper]

I have been living here for years with no Thai bank account. I can just use the atm, but only because I have the o-a visa.
 

I guess atm withdrawals are exempt from taxation for now. No way to track that 180 days that I know of, but they could tax it coming out of the atm for everybody including tourists.

 

They do ask for passport each time I make a deposit into someone else’s account currently when I go into the branch, using money I just got out of their atm. I wonder if they will try to tax that.

 

If I deposited using the deposit atm does it ask for passport? Not sure on that one. I guess eventually everything will be validated with some sort of digital id and central bank digital currency as the surveillance state grows.

Edited September 20, 2023 by JimTripper

[Klonko]

38 minutes ago, stat said:

In case of you receive a pension from the other country yes you have coverage of DTA but only for your pension payments. In terms of worldwide capital gains or any other matter you are not under a DTA in general terms.

For the time being, Thailand is not taxing worldwide income. If you are in a higher income bracket, I recommend not relying on media releases or AN discussions or your interpretation of the applicable DTA, but to retain professional tax advice to ensure an efficient setup from 2024. However, clarification may only be obtained in 2024 upon practical implementation by the authorities. My plan B is to limit my presence in Thailand to 179 days if I incur substantially higher taxes or have to go through a burdensome process.

[realfunster]

8 minutes ago, Dogmatix said:

The main problem is that they are largely targeting Thais who trade stocks offshore which has become quite popular since the Thai stock market has gone nowhere in the last 7 years, while things like US tech stocks have gone through the roof.  Most of these are middle class Thais who didn't start off with money overseas but remit cash abroad to trade stocks and want to bring it back over the medium term. (snip)

 

Of course Thai traders are very unhappy to be asked to pay tax on stock trade earnings but they will at least have untaxed gains to pay tax on as few countries charge capital gains on non-residents. Dividends are a different matter and they may be double taxed on dividends from some countries.  The case of these class Thais is quite different because they will be taxed on their gains and dividends, not on their savings. 

 

In my case I would be more like the typical Thai investor who has invested overseas and would be bringing my funds back in Thailand at some point (or maybe not if this transpires...).

 

Pretty sure my overseas investments are taxed for capital gains and most deduct tax on dividends. Likely no issue there.

An exception, the UK offers zero tax on dividends for non tax-resident investors, which was looking an attractive option, until this news reared it's ugly head.

 

Whilst I would certainly pay any due tax in Thailand through gritted teeth, I would do so.

 

More of concern for me would be the sheer bureaucratic ball-ache of any such process with the Revenue Department and the documentation/time required.

 

If they want people to reduce offshoring investments they can look to reinstate/reinvent LTFs. They changed this scheme a few years back, so many people started looking for alternatives. The SET is far from stellar but certainly has the convenience factor for locals, removes most FOREX risk and used to come with decent tax benefits. I was chugging along for many years using LTF until they changed the scheme/benefits. The change is what actually motivated me to go out, research, set-up an offshore trading/investment account and move most of my investing out of Thailand 

 

As for the overall tax regimen in Thailand, well, let's save one that for another day...

 

[hondoelsinore]

10 hours ago, itsari said:

Tax has its uses which keep you a free man to travel the world . Your attitude is scum

name one.

[itsari]

Just now, hondoelsinore said:

name one.

Defence

[stat]

1 hour ago, Klonko said:

For the time being, Thailand is not taxing worldwide income. If you are in a higher income bracket, I recommend not relying on media releases or AN discussions or your interpretation of the applicable DTA, but to retain professional tax advice to ensure an efficient setup from 2024. However, clarification may only be obtained in 2024 upon practical implementation by the authorities. My plan B is to limit my presence in Thailand to 179 days if I incur substantially higher taxes or have to go through a burdensome process.

Funny thing is I give professional advice on DTA applications and taxes...

[stat]

6 hours ago, RafPinto said:

NO

Do you know someone who is retired at 50 and is drawing a pension?

 

I got accepted and do not draw any pension.

Personal income under LTR : Wealthy Pensioners’ definition is “unearned income such as a pension, rental, capital gain, dividend, etc”. Earned income (salary) will not be considered eligible income for LTR: Wealthy Pensioners application.

 

This is very valuable information! So documents from your broker of capital gains were accepted? Thanks!

[Skeptic7]

On 9/18/2023 at 12:38 PM, RichardColeman said:

Imagine if they started taxing you on the income you had already been taxed on in another country 

Yeeeah...That's exactly what everyone's already imagining❗