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

[MartinBangkok]

I feel relieved.

 

After reading every single post, 48 pages now, I feel so relaxed and happy.

 

I have been working, and living in Thailand, the last 18 years on a Work Permit (WP).

 

The last 4-5 years have been increasingly difficult regarding renewal of the WP. Without any forwarning at all, I have been asked for new documents and new requirements.

 

Not to mention the nightmare is is dealing with the officers of immigration, labour and revenue (none of whom speak understandable English.. - maybe 1 in a 100).

 

And also their very condescending attitude and behaviour towards me (white, older farang).

 

This, in addition to all the ways we get ripped off and  discriminated in this country, I have decided that enough is enough, no more if this. 

 

This is my final year full time in Thailand, I will stay maximum 180 days a year.

 

I am already looking forward to a new adventure. Really, really, looking forward to it :-).

 

I guess I am lucky, being single and working online and not having established any binding commitments to this country (to be honest, that has been a smart choice ever since my first week in Thailand at the beginning of the century, when my then Thai girlfriend, sided with the motor cycle taxi guy even if he tried to rip me (us) off triple the going rate)

 

Cheers

 

(side note: I will probably qualify for the LTR-Visa, but considering my experience with this country (and as stated in numerous posts), you cannot be sure of anything, any other that they will try screw the farang in any way possible)

[stat]

11 minutes ago, MartinBangkok said:

I feel relieved.

 

After reading every single post, 48 pages now, I feel so relaxed and happy.

 

I have been working, and living in Thailand, the last 18 years on a Work Permit (WP).

 

The last 4-5 years have been increasingly difficult regarding renewal of the WP. Without any forwarning at all, I have been asked for new documents and new requirements.

 

Not to mention the nightmare is is dealing with the officers of immigration, labour and revenue (none of whom speak understandable English.. - maybe 1 in a 100).

 

And also their very condescending attitude and behaviour towards me (white, older farang).

 

This, in addition to all the ways we get ripped off and  discriminated in this country, I have decided that enough is enough, no more if this. 

 

This is my final year full time in Thailand, I will stay maximum 180 days a year.

 

I am already looking forward to a new adventure. Really, really, looking forward to it :-).

 

I guess I am lucky, being single and working online and not having established any binding commitments to this country (to be honest, that has been a smart choice ever since my first week in Thailand at the beginning of the century, when my then Thai girlfriend, sided with the motor cycle taxi guy even if he tried to rip me (us) off triple the going rate)

 

Cheers

 

(side note: I will probably qualify for the LTR-Visa, but considering my experience with this country (and as stated in numerous posts), you cannot be sure of anything, any other that they will try screw the farang in any way possible)

So far farangs have not been screwed by the tax authorities at all! But this is maybe going to change, but still TH is a very good deal as they "only" potentially tax your remittances which in my case is very little in comparision to my worldwide capital gains and dividends. However the Philippines tax is zero so in that regard a big difference. Dealing with the RD could be a potential nightmare and show stoper at least for me.

Edited September 25, 2023 by stat

[Lorry]

@MartinBangkokI basically agree with you,  but 2 side notes:

17 minutes ago, MartinBangkok said:

officers of immigration, labour and revenue (none of whom speak understandable English

After 18 years in Thailand,  working on a WP, you don't speak Thai with them? Baffles me.

17 minutes ago, MartinBangkok said:

my then Thai girlfriend, sided with the motor cycle taxi guy even if he tried to rip me (us) off triple the going rate)

I wanted to write you should have learned to find a better kind of girlfriend. But girls who would side with a farang boyfriend a really rare. (They do exist, though - but the fact that they are so rare tells us something about Thai culture)

Edited September 25, 2023 by Lorry

[Misty]

3 hours ago, stat said:

 

You are correct that it is not a law but a directive, my apologies!

 

But as mentioned in the directive, all older directives are void as is also stated by a very reputable law firm.

 

According to the New Order, if Thai tax resident individuals derive offshore-sourced income and bring offshore-sourced income into Thailand, they will have to pay Thai personal income tax, regardless of whether such income is brought into Thailand in the calendar year of receipt or in subsequent calendar years. The New Order will apply to any taxable income that is brought into Thailand from 1 January 2024 onward. Any regulation, instruction, revenue ruling or practice which is contrary to or inconsistent with this New Order shall be repealed.

It is noteworthy that if the offshore-sourced income is not a taxable income (e.g., proceeds from the sale of offshore securities or assets with no gain) or income that is exempted from Thai personal income tax under the Revenue Code, such as income from insurance, Thai tax residents will not have to pay Thai personal income tax when they bring that income into Thailand.

 

Source: https://insightplus.bakermckenzie.com/bm/tax/thailand-offshore-sourced-income-brought-into-thailand-from-1-january-2024-onward-will-be-subject-to-thai-personal-income-tax/

 

 

Also here:

 

Article 2: In line with the issuance of this order, all existing rules, regulations, orders, responses to inquiries, or any practices that contradict or oppose the provisions laid out in Order No. 16/2023 shall be void.

 

 

https://franklegaltax.com/thailands-new-tax-rules-reporting-foreign-income-for-residents/?lang=de

Can a directive override a Royal Decree?

[Misty]

1 hour ago, stat said:

and again the new directive could impact even a royal degree. That is what I am saying along with EVERY tax advisor. The situation is unclear. Let's hope you are in the right and LTR visa holders are exempt.

No, every tax advisor is definitely not saying that. And neither is the BoI.  Before you post again here, perhaps you can write and ask them as so many of us LTR visa holders already have?

[K2938]

56 minutes ago, Misty said:

And neither is the BoI.  Before you post again here, perhaps you can write and ask them as so many of us LTR visa holders already have?

While the statements of the BOI provide some comfort to LTR visa holders, the honest truth is probably that currently nobody - including the BOI - really knows what the final outcome will be and all this is kind of a giant negotiation between all interested parties.  Having said that however the chances of LTR visa holders to escape the tax are probably better than those of any other group of foreigners since they do have the Royal Decree which no other group has.  Quite well positioned are probably also Thai Elite visa holders since the program would show a devastating decline of applicants if the tax benefits do not remain and these people pay big money for their visa which directly goes into the Thai budget so there is a strong incentive for the government to protect them.  But what the final outcome will be really only the future will show.

[stat]

1 hour ago, Misty said:

No, every tax advisor is definitely not saying that. And neither is the BoI.  Before you post again here, perhaps you can write and ask them as so many of us LTR visa holders already have?

I read 14 sites of tax advidors all agreed that this could change everything even for LTR visas. I already asked the BoI explicitly on income remitted, no answer yet.

 

Pls post a source of some tax advisors staating LTR is definitly tax exempt in the future, I bet you will not come up with a single one! Already posted the exact wording of LTR and it is clearly stated income from another year is exempted. That was exempted under any visa in the past.

 

My tax professor always said: Do not rely on planing taxes to detailled as the laws will change.

 

Do not get me wrong I hope LTR is exempt.

Edited September 25, 2023 by stat

[stat]

2 minutes ago, K2938 said:

While the statements of the BOI provide some comfort to LTR visa holders, the honest truth is probably that currently nobody - including the BOI - really knows what the final outcome will be and all this is kind of a giant negotiation between all interested parties.  Having said that however the chances of LTR visa holders to escape the tax are probably better than those of any other group of foreigners since they do have the Royal Decree which no other group has.  Quite well positioned are probably also Thai Elite visa holders since the program would show a devastating decline of applicants if the tax benefits do not remain and these people pay big money for their visa which directly goes into the Thai budget so there is a strong incentive for the government to protect them.  But what the final outcome will be really only the future will show.

100% correct no one knows, but some people here (not you) pretend to know for sure. The BOI is just a small player vs the governement. The BOI cannot give you a guarantee at all.

 

Now we know why they raised the cost of the elite visa; in order to sell as many elite visas before releasing this devasting blow to "rich" expats in Thailand with the effect that the elite visa will cease to be attractive to a lot of people.

[redwood1]

What will be funny is when this whole stupid idea is droped...And all this speculation will be for nothing...

[Rampant Rabbit]

For a resident who is 65 years of age or older, an exemption is granted on income up to an amount not exceeding THB 190,000.

[Misty]

2 hours ago, stat said:

I read 14 sites of tax advidors all agreed that this could change everything even for LTR visas. I already asked the BoI explicitly on income remitted, no answer yet.

 

Pls post a source of some tax advisors staating LTR is definitly tax exempt in the future, I bet you will not come up with a single one! Already posted the exact wording of LTR and it is clearly stated income from another year is exempted. That was exempted under any visa in the past.

 

My tax professor always said: Do not rely on planing taxes to detailled as the laws will change.

 

Do not get me wrong I hope LTR is exempt.

I have asked the BoI explicity on income remitted, and they have answered me. Why they answer me and not you I do not understand. Do you have an LTR visa?

 

Please post links to your 14 advisors who all agree that this could change everything for LTR visa holders.

 

 

 

[MistyBlue]

5 hours ago, stat said:

"income under section 40 of the Revenue Code derived in the previous tax year..."

 

 

Isn't this in relation to the filing date? Tax returns submitted Jan-March are for assessable income derived in the previous tax year?

[Misty]

5 hours ago, MartinBangkok said:

I feel relieved.

 

After reading every single post, 48 pages now, I feel so relaxed and happy.

 

I have been working, and living in Thailand, the last 18 years on a Work Permit (WP).

 

The last 4-5 years have been increasingly difficult regarding renewal of the WP. Without any forwarning at all, I have been asked for new documents and new requirements.

 

Not to mention the nightmare is is dealing with the officers of immigration, labour and revenue (none of whom speak understandable English.. - maybe 1 in a 100).

 

And also their very condescending attitude and behaviour towards me (white, older farang).

 

This, in addition to all the ways we get ripped off and  discriminated in this country, I have decided that enough is enough, no more if this. 

 

This is my final year full time in Thailand, I will stay maximum 180 days a year.

 

I am already looking forward to a new adventure. Really, really, looking forward to it :-).

 

I guess I am lucky, being single and working online and not having established any binding commitments to this country (to be honest, that has been a smart choice ever since my first week in Thailand at the beginning of the century, when my then Thai girlfriend, sided with the motor cycle taxi guy even if he tried to rip me (us) off triple the going rate)

 

Cheers

 

(side note: I will probably qualify for the LTR-Visa, but considering my experience with this country (and as stated in numerous posts), you cannot be sure of anything, any other that they will try screw the farang in any way possible)

Martin my experience with Immigration and the increasing difficultly and requirements of renewing a NonB visa was similar to yours. One difference was that I own a Thai company, and therefore had a binding commitment of sorts. I switched to the LTR visa and have been very happy with the BoI. They are a pleasure to deal with, and the LTR visa itself is a real breath of fresh air.

 

It's interesting to me now that the Royal Decree granting LTR tax privileges seemed to be specifically intended to thwart any change in interpretation of the Thai Revenue Department's Resolution No 2/2528.  It's almost as if the change in interpretation we see now was known, and expected, when the LTR visa system was set up.

[jonny on the spot]

6 hours ago, redwood1 said:

So you will make almost zero intrest on your money and be taxed for the privilege of spending it........... Gee this joke just keeps getting better and better...LoL  YAWN

BKK Bank does pay that 0.5 percent quite regularly though i can report ????

[jonny on the spot]

6 hours ago, Dogmatix said:

Saw an old friend today who said he had been harassed by the RD a few years ago.  He was based in TH for years but worked offshore and had no Thai sourced income.  Then after he retired in Bkk he was employed for a couple of years by the Bkk office of an international firm as an advisor which landed him in the Thai tax net for the first time. After his contract expired he stopped filing income tax returns as his only income was a European pension already taxed at source.  So he assumed no assessable income, no more  tax returns.

 

Suddenly one day a delegation from the RD shows up unannounced at his house demanding that he file tax returns again and pay tax on his foreign sourced income. His Thai daughter dealt with them and they ended up agreeing that his pension was not assessable because it was already taxed at source in a DTA country.  The next year they showed up again with the same demands.  My friend is very irascible and was visibly upset with the RD officers since his his assessable tax situation was still the same as the previous year. Eventually his daughter gave the boss man 1,000 baht to go away and not come back.  So far they haven't.

There we go, our future tax Baht working for us in action, I hope my redemption is a 1000 Bhat.

[Dogmatix]

An RD order should not be able to cancel a royal decree but the RD DG is effectively using his order to modify the Revenue Code which is an Act of Parliament which can only be amended by parliament.  It would to be overreach of authority in either case. The BOI reports to the PM Office BTW.

 

The loophole in the royal decree is that it only exempts prior year income, ie the year covered in a tax return. It doesn’t cover years before that which the RD says will not be taxable. For example, if you have an LTR visa and you remit $20k last year which you can show you earned last year, no problem. But, if you remitted $1m last year to buy property and can only you earned $20k of that last year, you could be made to 35.% tax on the whole million bar 20k. The RD could assume the power to issue an order clarifying this point too,

 

will this happen? Probably not? But who would have guessed the RD would amend an Act of Parliament with a lowly RD order? Nothing is sure in this environment where government departments feel free to break their own laws and constitution with support from the PM and finance minister.

Edited September 25, 2023 by Dogmatix

[jonny on the spot]

I know what im going to do if this actually comes to fruition.Im going nowhere near a Thai tax office or number.

I will waste 3 million Baht on a condo in Malaysia or Cambodia, learn the 20 words of whatever language to match my extensive Thai vocabulary and dig in to watch Netflix for 6 months of the year.

I am too invested in Thailand to leave altogether, but i wont subject my self to what this tax abortion is going to become, i just cant do it.

[hwas]

52 minutes ago, Dogmatix said:

It doesn’t cover years before that which the RD says will not be taxable.

I believe that you meant “will be taxable”.

In any event, not a concern for me, as I only became a tax resident this year and have the LTR

[ukrules]

55 minutes ago, Dogmatix said:

The loophole in the royal decree is that it only exempts prior year income

It is NOT a loophole, it's enshrined in law.

A loophole would be something they didn't consider when writing the law which clearly isn't the case with this regulation.

[Lemsta69]

10 minutes ago, jonny on the spot said:

I know what im going to do if this actually comes to fruition.Im going nowhere near a Thai tax office or number.

I will waste 3 million Baht on a condo in Malaysia or Cambodia, learn the 20 words of whatever language to match my extensive Thai vocabulary and dig in to watch Netflix for 6 months of the year.

I am too invested in Thailand to leave altogether, but i wont subject my self to what this tax abortion is going to become, i just cant do it.

looks like I'll have to do the same except I have friends in Bali so I'll probably look at trying to stay there half the year if I can.

 

I like Thailand but it only works if they don't tinker too much with the existing rules or try to clean the place up. paying tax on all foreign remittances and getting sweet FA in return is not a good deal at all.

[jonny on the spot]

3 minutes ago, Lemsta69 said:

looks like I'll have to do the same except I have friends in Bali so I'll probably look at trying to stay there half the year if I can.

 

I like Thailand but it only works if they don't tinker too much with the existing rules or try to clean the place up. paying tax on all foreign remittances and getting sweet FA in return is not a good deal at all.

Well said i agree with every word of that.

I tell you another thing, i bought my last 2 new trucks last year, no more cars no more building houses no more nothing.

Restraunts tesco lotus and gas are all this place is getting from me.

Edited September 26, 2023 by jonny on the spot

[Srikcir]

On 9/18/2023 at 10:11 AM, fondue zoo said:

Sooo, how will the Thai rich get around this?

See Panama Papers.

[Ricardo]

Fifty years ago, as a teenager, I used to wash cars for pocket-money, will Thailand now suddenly want tax on that income ?  Obviously not !  So the question is just how far back they will want to go, in trying to tax my earnings/investment-profits.  We might eventually get clarity, but I'm not going to panic, or hold my breath either.

 

When Immigration change the rules, which one tries to comply with, it often takes them years for it to come fully-into-effect.  And in the past the older pre-change cases have often been grandfathered, for some years, one might hope that the same will happen this time, too ?

 

It happens that I might find it convenient next summer, to spend a longer-than-normal trip to the UK or Canada, that too will buy me some further time, waiting to see how this is implemented while still having spent under-180-days in Thailand, next calendar-year.  So again there, a bit of time for clarity to emerge from the general gloom, or sanity to reverse the possible new-rule.

 

The main problem I see is that, for my annual retirement-extension every Autumn, Immigration currently tell me to bring-in 12*B65k monthly-transfers from overseas, whereas the possible new tax-rule/law sets a maximum of B150k before income-tax starts.  This is an inherent contradiction.  The two requirements ought surely to align ?  But TiT.

 

Lastly I would estimate that I've brought-in, and spent in the local-economy, some B50-million over the past twenty years, generating economic-activity of some B250-million within Thailand.  Does the country really now want retirees like this to stop coming here  ...  it really would be cutting-off their own noses, to spite their face ?

 

I have to believe (for now) that this is simply a mis-step, poorly thought through, which will turn out to be a false-alarm.  But  ...  I am holding my breath, just a bit !  ????

Edited September 26, 2023 by Ricardo

[jonny on the spot]

6 minutes ago, Srikcir said:

See Panama Papers.

Either that or ignore the new rules in fine Thai style.

It dont matter to them they are never getting prosecuted anyway.

[jonny on the spot]

2 minutes ago, Ricardo said:

Fifty years ago, as a teenager, I used to wash cars for pocket-money, will Thailand now suddenly want tax on that income ?  Obviously not !  So the question is just how far back they will want to go, in trying to tax my earnings/investment-profits.  We might eventually get clarity, but I'm not going to panic, or hold my breath either.

 

When Immigration change the rules, which one tries to comply with, it often takes them years for it to come fully-into-effect.  And in the past the older pre-change cases have often been grandfathered, for some years, one might hope that the same will happen this time, too ?

 

It happens that I might find it convenient next summer, to spend a longer-than-normal trip to the UK or Canada, that too will buy me some further time, waiting to see how this is implemented while still having spent under-180-days in Thailand, next calendar-year.  So again there, a bit of time for clarity to emerge from the general gloom, or sanity to reverse the possible new-rule.

 

The main problem I see is that, for my annual retirement-extension every Autumn, Immigration currently tell me to bring-in 12*B65k monthly-transfers from overseas, whereas the possible new tax-rule/law sets a maximum of B150k before income-tax starts.  This is an inherent contradiction.  The two requirements ought surely to align ?  But TiT.

 

Lastly I would estimate that I've brought-in, and spent in the local-economy, some B50-million over the past twenty years, generating economic-activity of some B250-million within Thailand.  Does the country really now want retirees like this to stop coming here  ...  it really would be cutting-off their own noses, to spite their face ?

 

I have to believe (for now) that this is simply a mis-step, poorly thought through, which will turn out to be a false-alarm.  But  ...  I am holding my breath !  ????

This country REALLY dont think at all, they just cant shut their mouths, the idea of think first get a working plan then speak dont enter these peoples minds.

[Happy happy]

It is my understanding that those with a retirement visa and subject to a double taxation agreement will be unaffected by the new provisions. Even if monies are brought into a Thai Bank unless it exceeds 2 million baht in 1 year the banks in Thailand will not alert the Revenue Dept.

If of course you are currently filing tax returns here the situation may be different...

 

Edited September 26, 2023 by Happy happy

[Srikcir]

On 9/18/2023 at 9:49 AM, webfact said:

regardless of whether it was earned income

What is "earned income"?

Not pension/social security distributions.

 

US Internal Revenue Service:

• Examples of earned income are wages, salaries, tips and other taxable employee compensation. Earned income also includes net earnings from self-employment . Earned income DOES NOT include amounts such as pensions and annuities, welfare benefits, unemployment compensation, worker's compensation benefits.  https://www.irs.gov/government-entities/Indian-tribal-governments/itg-faq-2-answer-what-income-is-considered-earned-income

 

KPMG observation of effect on Section 41 Paragraph 2 of the Thai Revenue Code by the proposed tax changes:

• Previously the assessable income derived by a Thai tax resident from employment, a business carried on overseas, or from a property situated overseas, would have been subject to Thai personal income tax. The new interpretation means that foreign-sourced income brought into Thailand from 1 January 2024 onwards will be subject to Thai individual income tax... (my bold emphasis)

US Foreign Earned Income Exclusion:

• The US foreign earned income exclusion was created to avoid double taxation for Americans living abroad.

      If taxed other than as earned income by Thailand, tax likely cannot be credited against US income for US tax purposes. In effect a double taxation and violation of US-Thailand tax treaty. But Thailand wants now to emphasize more investments from the US Government?

 

[jvs]

Yes ,it happened.

Backtracking or a better explanation?

Only earned income .

Read the paper that can not be mentioned here.

[Hummin]

12 hours ago, K2938 said:

Currently having or not having a Thai tax number should not make any difference whatsoever.  If you are legally staying in Thailand which I assume applies to most on this forum, then the Thai authorities know about you regardless of if you have or do not have a Thai tax number.

 

57 minutes ago, Happy happy said:

It is my understanding that those with a retirement visa and subject to a double taxation agreement will be unaffected by the new provisions. Even if monies are brought into a Thai Bank unless it exceeds 2 million baht in 1 year the banks in Thailand will not alert the Revenue Dept.

If of course you are currently filing tax returns here the situation may be different...

 

I guess we have to wait and see, it will be all speculations for now.

[Lemsta69]

8 minutes ago, jvs said:

Yes ,it happened.

Backtracking or a better explanation?

Only earned income .

Read the paper that can not be mentioned here.

Of course you can mention other news sources, you're just not allowed to link to some of them as stipulated by those other sources, not AN.