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

[MeePeeMai]

7 minutes ago, tomacht8 said:

Clear as dirt. if I for example transfer 800K Thai Baht from my home bank to a Thai bank for my Non O retierment visa in 2024. Are taxes then due?

Depends on many different factors, such as is the 800k baht already taxed in your country?  Does your country have a Double Tax Treaty with Thailand?  Also depends on the final wording (if there ever is any) of the new rules etc...

 

Basically, no one can answer this one right now definitively but it might be a good idea to bring that money in this year (as long as that money was earned in 2022 or earlier).

 

Better to be safe than sorry.

Edited October 9, 2023 by MeePeeMai

[BE88]

2 hours ago, stat said:

Pls add a souce for your claim, my understanding is different but I could be wrong. I agree there is a risk that it could turn out that way but currently there is no indication of said happening I know of.

I have only described what the Thai government's decision could be. Here there are only suppositions, because the Thai government does not provide any clarity on the matter.

Nobody is certain even if someone thinks they know everything.

 

[ChaiyaTH]

9 minutes ago, MeePeeMai said:

Depends

With other words: yes you are right

[tomacht8]

9 minutes ago, MeePeeMai said:

Depends

What does it depend on? The money comes from savings investments for which, for example, I paid taxes in my home country 7 years ago. How will the Thai tax officials check this? Or will it be such a mess again that you'll have to pay an unofficial processing fee under the table?

[MeePeeMai]

1 minute ago, tomacht8 said:

What does it depend on? The money comes from savings investments for which, for example, I paid taxes in my home country 7 years ago. How will the Thai tax officials check this? Or will it be such a mess again that you'll have to pay an unofficial processing fee under the table?

Sorry, I edited my post above - here is a copy and paste from it

 

Depends on many different factors, such as is the 800k baht already taxed in your country?  Does your country have a Double Tax Treaty with Thailand?  Also depends on the final wording (if there ever is any) of the new rules etc...

 

Basically, no one can answer this one right now definitively but it might be a good idea to bring that money in this year (as long as that money was earned in 2022 or earlier).

 

Better to be safe than sorry.

[K2938]

41 minutes ago, MeePeeMai said:

Clear as dirt. if I for example transfer 800K Thai Baht from my home bank to a Thai bank for my Non O retierment visa in 2024. Are taxes then due?

Just time your move to Thailand such that in your first year you will be in Thailand less than 180 days.

[UKresonant]

1 hour ago, MangoKorat said:

Is that from an official Thai source?  If so, could you please give details as this is very important?

 

Just to clarify, UK state pension is not tax free, it is considered as taxable income and counts toward the total of any income you receive.  In reality, most people don't pay tax on their pensions as their total income falls below the tax threshold of £12570 per year. 

 

I know nothing about pensions, tax thresholds or income from other countries so commenting from a purely UK/Thailand position............................................................

 

The basic UK state pension is currently £203.85 per week or £10,200.20 per year. If your income from other sources i.e. employment takes your total income to over £12570, you pay tax on it.  Private pensions may have been taxed at source and therefore adjustments would have to be made. Income from property, i.e. rent, will also become taxable but will be subject to various allowances.

 

So (excluding income from private pensions or property because they depend on specific circumstances as per the above), you are living abroad and your UK pension is the basic £10,200 you will not pay any tax in the UK. It remains to be seen whether or not it will be taxable in Thailand where the threshold is way below £10,200. 

 

Those who have private UK pensions/other income from the UK in addition to their state pension may well be receiving a total of well over the UK tax threshold and will therefore be taxed in the UK.   Previously, my understanding of the double taxation agreement was that if income had been assessed and subject to tax in the UK, it would not be assessed or taxed in Thailand. I'm no accountant and it seems, from what I've read as a result of these new Thai tax laws, that UK income will form part of assessable income in Thailand but credit given for tax paid in the UK.  How that actually works out, I know not but if correct, it brings about the possibility that tax may well be payable in Thailand and the UK.

 

That's the problem, as I see it as well.

 

I have only one pension that is clearly only to be taxed in the UK under the DTA. This pension is only about 90k baht per year gross, but they would they exempt it or would they use it as a layer to push other items up into the higher progressive Tax bands. Back in 2018 I asked HMRC how would this pension be considered. They reckoned it is possible they could ask for the tax and refund it (but hopefully they would not).

Another more substantial pension is from the same continuous service, but as it's not straight out of the UK treasury so they are probably not going to treat it as exempt (unless they take it's title at face value.

 

"Treaty does not include an article dealing with non-government pensions" (from the digest list https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710099/DT_Digest_April_2018.pdf )

 

So my other pensions are in the firing line, though all tax it paid in the UK, the only advantage with them id I could configure them to zero income if I were anticipating being in Thailand more than 180 days.

 

Then there are UK ISA's , tax and gain exempt in the UK, but again possibly not in Thailand.

 

"No Relief for State Pension"

 

Anyone taking their occupational or money purchase/DC pension in the UK, and then moving to Thailand, from the UK, best make sure they are there less than the 180 days in that calendar year, if they take their "Tax Free" lump sum, which could be millions of baht Thailand Thailand may want a slice!

 

Unless they come out with some sort of global exemption clause for retired / married folk, I would think UK folks have a lot to worry about . The UK DTA is massively less protective as regards pension compared with the USA DTT, so IMHO the headline that said  if you have DT treaty, not to worry, is totally misleading for UK folks. Unless further clarified by Thai RD..

 

If they again enforce the Tax clearance certificate, to let you out the country over 180 days, could be another issue. It fizzled out end of the 1990's I think, but is it not still lurking in old RD pages somewhere.

 

I've never managed to stay in Thailand for a whole year, I think the most was about 260days, with the longest trip probably 70ish days on a ME Visa.

The only hope for me is perhaps article 4, as the UK will always be my area of vital interest, and as a national etc. But if the over 180 days is an exponential increase in having to deal with Thai Officialdom, what a substantial incentive not to get involved. I'm not saying I wont plead (for what is essentially an extended visitor visa status) for a year in the future.

 

if it is only "money brought into Thailand" as some article suggest, I can't see the mechanism for remittance only basis either.

 

I'm the UK now so hope all the UK guinea pigs will feedback outcomes over the following 17 months ????.

 

 

 

Edited October 9, 2023 by UKresonant

[stat]

1 hour ago, Mike Lister said:

I do not suggest that CRS and international taxation standards are connected, they are two different things. 

That is what you have written before: "Once again, all that is happening is that Thailand is attempting to become a fully paid up member of CRS Reporting and fall in line with international standards on taxation, it's in their best interests to do this. " It was my understanding that this was your opinion...

[Mike Lister]

Just now, stat said:

That is what you have written before: "Once again, all that is happening is that Thailand is attempting to become a fully paid up member of CRS Reporting and fall in line with international standards on taxation, it's in their best interests to do this. " It was my understanding that this was your opinion...

They are two separate things, for goodness sake, it's a list of items, nothing suggests they are linked or connected!

[stat]

17 minutes ago, Mike Lister said:

They are two separate things, for goodness sake, it's a list of items, nothing suggests they are linked or connected!

I think everyone who read your post understood very well that you made the connection, glad you agree that CRS has nothing to do with new order of the RD. CRS just makes it easier to implement the new order if they were to tax all income instead of just the remitted income.

[Mike Lister]

4 minutes ago, stat said:

I think everyone who read your post understood very well that you made the connection, glad you agree that CRS has nothing to do with new order of the RD. CRS just makes it easier to implement the new order if they were to tax all income instead of just the remitted income.

So now you understand what everyone else thought, really! Well, what I think, regrettably, is that it's time for you to visit the ignore list. Bye.

[Puccini]

8 hours ago, TroubleandGrumpy said:

Thanks.

 

Could you also provide your view on this statement from that Sherringsa brief:

 

It depends on the DTAs of Thailand with the individual countries.

[Dogmatix]

A Swiss banker told me that since Thailand only signed up for CRS this year, the first information that will go to the Thai government will for calendar year 2024.  They have to provide Balance as of 31 Dec 2023 and 31 Dec 2024 and income during the year, which I believe includes interest, dividends and external inflows.  That means the RD won't have any information from overseas financial institution on income and inflows during 2023 to help it investigate remittances in 2023 to determine whether they were income earned in 2023 or earlier.  That won't stop them demanding supporting documents of course.  However, I think there is an argument in favour of only starting to get tough in respect of 2024 when the prior year loophole is gone.  No guarantees but I would guess they will not trouble too much to investigate large remittances between now and the year end which don't need to be entered on tax returns unless the income was earned this year. 

[K2938]

10 minutes ago, Dogmatix said:

A Swiss banker told me that since Thailand only signed up for CRS this year, the first information that will go to the Thai government will for calendar year 2024.  They have to provide Balance as of 31 Dec 2023 and 31 Dec 2024 and income during the year, which I believe includes interest, dividends and external inflows.  That means the RD won't have any information from overseas financial institution on income and inflows during 2023 to help it investigate remittances in 2023 to determine whether they were income earned in 2023 or earlier.  That won't stop them demanding supporting documents of course.  However, I think there is an argument in favour of only starting to get tough in respect of 2024 when the prior year loophole is gone.  No guarantees but I would guess they will not trouble too much to investigate large remittances between now and the year end which don't need to be entered on tax returns unless the income was earned this year. 

While the Thai tax authorities will not get the older data automatically, they can ask for it from most tax jurisdictions in case of need based on various mutual assistance agreements.  So if they find something which makes them want to investigate, they will in most cases be able to do so.  The data will just not be received automatically.

[stat]

1 hour ago, Dogmatix said:

A Swiss banker told me that since Thailand only signed up for CRS this year, the first information that will go to the Thai government will for calendar year 2024.  They have to provide Balance as of 31 Dec 2023 and 31 Dec 2024 and ...

Pls find enclosed what exactly is transmitted via CRS. There is no distinction between principal, profit etc. If you trade 100x10.000 USD CRS will show 1.000.000 in monies you have received! So at first glance Somchai from the RD will imply that you have to pay tax on 1 M USD. You will have a hard time explaining that you only transfered 120K Baht to Thailand during the year ????

crs_user_guide_2_0.pdf

Edited October 9, 2023 by stat

[Guavaman]

15 hours ago, jerrymahoney said:

All I will say is that IRA is not specifically mentioned in US-Thai DTA technical manual.

https://www.irs.gov/pub/irs-trty/thailand.pdf

 

Personally, I will only be taking minimum required distributions from IRA as it is available as payable-on-death no probate to my Thai wife.

Sorry for the bad news 

 

Here is the file:  

Treaty-Thailand-Technical Explanation-11-26-1996.pdf

[Guavaman]

11 hours ago, atpeace said:

Ok, purchase most things now with my debit card on Lazada, Big C hotels, etc.  Switch to my USA debit card and that eliminates 80% of transfers?  Send any other money to my GF and spend that. So many loop wholes that I fail to think this will ever come to fruition.  Stranger things have happened to me but have my serious doubts this will amount to anything.  I just thought of another easy workaround while typing but don't feel like sharing ????

 

I would be furious if Lazada shared that I purchased my g-string underpants with a foreign credit card to the the tax man.

Think about this: When you purchase with a debit card, you are authorizing instant payment to a vendor in Thailand with funds REMITTED to the vendor in Thailand.

 

On the other hand: When you purchase with a CREDIT card or withdraw a cash advance from a bank or ATM, you are authorizing a LOAN = debt with the bank issuing the CREDIT card, subject to payment of interest.  

 

The Baht that you are spending is a LOAN from a bank offshore, where you must repay the loan subject to interest. You have not remitted income into Thailand; rather, you have incurred a debt by the transaction in Thailand. Thus, not assessable nor taxable income. 

[fusion58]

Not sure when this boneheaded policy will actually go into effect, but if it happens to kick in before my planned repatriation date, then I will simply stop transferring any money into Thailand. and just pay my rent and all of my bills directly from a U.S. checking account via Wise.

[Lorry]

33 minutes ago, Guavaman said:

Think about this: When you purchase with a debit card, you are authorizing instant payment to a vendor in Thailand with funds REMITTED to the vendor in Thailand.

 

On the other hand: When you purchase with a CREDIT card or withdraw a cash advance from a bank or ATM, you are authorizing a LOAN = debt with the bank issuing the CREDIT card, subject to payment of interest.  

 

The Baht that you are spending is a LOAN from a bank offshore, where you must repay the loan subject to interest. You have not remitted income into Thailand; rather, you have incurred a debt by the transaction in Thailand. Thus, not assessable nor taxable income. 

Funny, I just today explained the same to a friend.  It wasn't my idea,  someone else had mentioned it on AN.

But does Somchai the RD inspector understand all this?

[Guavaman]

1 hour ago, Lorry said:

Funny, I just today explained the same to a friend.  It wasn't my idea,  someone else had mentioned it on AN.

But does Somchai the RD inspector understand all this?

If one brings in tax exempt social security only, you won't need to file, so Somchai will never have to deal with you. Of course, you need to meet the immigration requirements for income brought in or in the bank. That is, unless immigration requires evidence for how you live if your 800k sits untouched in a bank account.

[StayinThailand2much]

9 hours ago, tomacht8 said:

How will the Thai tax officials check this? Or will it be such a mess again that you'll have to pay an unofficial processing fee under the table?

They will probably tax you first, then leave it to you to prove things to reclaim it.

[Mike Lister]

Just now, StayinThailand2much said:

They will probably tax you first, then leave it to you to prove things to reclaim it.

Extremely unlikely, if not impossible! If they were to do that, no foreigner would ever buy real estate here again because they would need  to transfer something like 120% of the purchase price, in order to pay the tax first.

[jerrymahoney]

4 hours ago, Guavaman said:

Sorry for the bad news 

OK I missed that on  IRA. Why is it bad news?

[Guavaman]

 

13 minutes ago, jerrymahoney said:

OK I missed that on  IRA. Why is it bad news?

It is considered income same as a private pension for Thai taxation.

[jerrymahoney]

5 minutes ago, Guavaman said:

 

It is considered income same as a private pension for Thai taxation.

For anyone who wants to remit IRA funds to Thailand. But that ain't me as I wrote.

[K2938]

6 hours ago, Guavaman said:

Think about this: When you purchase with a debit card, you are authorizing instant payment to a vendor in Thailand with funds REMITTED to the vendor in Thailand.

 

On the other hand: When you purchase with a CREDIT card or withdraw a cash advance from a bank or ATM, you are authorizing a LOAN = debt with the bank issuing the CREDIT card, subject to payment of interest.  

 

The Baht that you are spending is a LOAN from a bank offshore, where you must repay the loan subject to interest. You have not remitted income into Thailand; rather, you have incurred a debt by the transaction in Thailand. Thus, not assessable nor taxable income. 

While this is a very creative argument, I can virtually guarantee you that the Thai Revenue Department will NOT agree with this.

[Yumthai]

2 hours ago, K2938 said:

While this is a very creative argument, I can virtually guarantee you that the Thai Revenue Department will NOT agree with this.

"guarantee" says who? Please provide source and references.

A loan is a loan, a line of credit is a line of credit. Thailand cannot reinterpret global standard definitions.

Now, if you mean you think that they will start taxing debts, this is a very speculative and unreal opinion.

Edited October 10, 2023 by Yumthai

[KannikaP]

On 9/18/2023 at 10:35 AM, freeworld said:

No doubt foreigners residing in Thailand and making use of govt services and infrastructure should be paying tax in Thailand, this is a fuction of the world order.

Rubbish. I live here 365 days a year, I pay for all Government Services regarding Immigration and Government Hospital, and pay for infrastructure as in using the roads, by paying my road tax disc every year.

All money I send to Thailand, either in my name or my GFs, is spent in Thailand so incurs VAT.

How much more should I pay?

[bugger bognor]

Will be up to a 100 pages of guesswork and hearsay soon 555 I will say it again anybody who believes that your pension will be taxed is a fool! Anybody who believes all transfers to your Thai bank from overseas will be taxed at source is delusional! Anyone who actually sincerely believes that every expat and foreign resident of Thailand will have register for. A  tax code and submit tax returns in Thailand is mentally retarded, IT WILL NOT HAPPEN

[atpeace]

9 hours ago, Guavaman said:

Think about this: When you purchase with a debit card, you are authorizing instant payment to a vendor in Thailand with funds REMITTED to the vendor in Thailand.

 

On the other hand: When you purchase with a CREDIT card or withdraw a cash advance from a bank or ATM, you are authorizing a LOAN = debt with the bank issuing the CREDIT card, subject to payment of interest.  

 

The Baht that you are spending is a LOAN from a bank offshore, where you must repay the loan subject to interest. You have not remitted income into Thailand; rather, you have incurred a debt by the transaction in Thailand. Thus, not assessable nor taxable income. 

Thanks and I was wondering about this and enjoyed your easy to understand explanation.  In either case it wouldn't be assessable unless you kept all your receipts and volunteered the information.  As far as I know, there is no means for the Thailand to track the transaction.  Merchants get a name, last 4 digits on card and really nothing they can do with that information.  Am I wrong?