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

[judokrab]

On 9/18/2023 at 9:57 AM, connda said:

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

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

But if it is pension income that is not taxable in your home country, then your argument doesn't apply. You could end up having to pay tax on your formerly tax-free pension.

Edited October 25, 2023 by judokrab

[JimGant]

5 hours ago, bamnutsak said:

Would the annuity need to be remitted to Thailand in order to be assessable income?

Yes.

[Des1]

53 minutes ago, paddypower said:

can I ask are you Canadian resident for tax purposes, or deemed non-resident?

Canadian resident

[JimGant]

16 minutes ago, judokrab said:

But if it is pension income that is not taxable in your home country, then your argument doesn't apply. You could end up having to pay tax on your formerly tax-free pension.

 

No, not if you peruse the Technical Explanation for US Model tax treaties -- and the US-Thai treaty used the US Model (albeit the 1996 version):

 

Quote

However, the State of residence ... must exempt from tax any amount of such pensions or other similar remuneration that would be exempt from tax in the Contracting State in which the pension fund is established if the recipient were a resident of that State. Thus, for example, a distribution from a U.S. "Roth IRA" to a resident of the other Contracting State would be exempt from tax in the other Contracting State to the same extent the distribution would be exempt from tax in the United States if it were distributed to a U.S. resident.

https://home.treasury.gov/system/files/131/Treaty-US-Model-TE-2006.pdf

Roth IRAs are only used as an example -- read the whole link to see how, even non-deductible contributions to a normal IRA, would be tax exempt in the resident country.

 

Granted, other non-US related tax treaties probably use one of the other two Models: OECD and UN. But, all Models are almost 95% identical, using common sense -- and differing primarily in emphasis. Anyway, common sense, to me at least, that tax exempt pensions brought into Thailand would be treated as tax exempt by the Thais -- if for no other reason than under the Non-Discrimination clause of most tax treaties.

 

Getting real repetitive around here with facts and nonsense, but since I mentioned common sense, here's what it looks like to me in the future:

 

1. No way can they label all monies remitted to Thailand as income. That doesn't even need any more elaboration. AND, the idea of a remittance tax is even more ludicrous -- and an end to FDI.

2. Since they can't parse what part of a remittance is income, they'll have to rely on self-declaration. Hey, the banks can't tell what part of a remittance is income, and even with FATCA and CRS income reporting info, if their info on your income doesn't match your remittances, which it won't, now what?. Anyway, forget some goat f..... of 10,000 RD clerks massaging non conclusive data. But, expect a higher incident of random audits, to test how self compliance is doing -- I could live with that.

3. Self compliance with me would have me only remitting monies to Thailand from a separate bank account containing my Air Force pension and Social Security funds -- both exclusively tax exempt in Thailand. Thus, no assessable income for Thai taxes, thus no need to file a Thai tax return. Yes, should I need to remit a large chunk for some reason, I could go to the account containing the inheritance from my mom (non income, of course). Again, this would all be self compliance, and would dictate I had no need to file a Thai tax return, and if audited, completely supportable.

 

Anyway, stay tuned. But I can't imagine -- if logic dictates -- that things would be much different from what I surmise. Of course, they might -- including my ace-in-the-hole LTR visa. We live in exciting times. Yawn.

[JRG23]

3 hours ago, paddypower said:

RATFLOL

Does anyone know what this means?

[Mike Teavee]

Just now, JRG23 said:

Does anyone know what this means?

Think it’s supposed to be ROTFLOL…

 

Rolling On The Floor Laughing Out Loud 

[stat]

4 hours ago, paddypower said:

very soon, this will have a negative effect on new sales of investment condos to foreigners. unless buyers are advised by real estate agencies to just rent it out and don't report the income. Realtors are called 'real-a-snakes' in Ireland (partially because many are also lawyers).

I wonder what will be the tax mans take if I agree with the owner to pay my rent to his off shore account. So I never brought the money into thailand 🙂

[Metapod]

So from all of this, my take away for my situation is to simply remit less money into Thailand and pay tax on what I remit. I had planned to make some more investments here but I'll be parking that money abroad and investing outside of Thailand instead. I'll also consider any large purchases or plans domestically as well if it will cost me an additional 30% to do it locally. I travel abroad frequently, so I'll do my major shopping in other countries and things like elective surgury for LASIK etc will just be done elsewhere.

 

 

[Karma80]

22 minutes ago, Metapod said:

So from all of this, my take away for my situation is to simply remit less money into Thailand and pay tax on what I remit. I had planned to make some more investments here but I'll be parking that money abroad and investing outside of Thailand instead. I'll also consider any large purchases or plans domestically as well if it will cost me an additional 30% to do it locally. I travel abroad frequently, so I'll do my major shopping in other countries and things like elective surgury for LASIK etc will just be done elsewhere.

 

 

 

That is pretty much my strategy now. Thailand is making it clear that the only people they want here are wealthy foreigners on an LTR who are exempt from tax on overseas income. Of which only 318 people have applied to date, so that seems to be working out well for the program - not. However with this new government, I wouldn't trust that the rules didn't suddenly change on you after investing here. At least I'm not one of the poor buggers that bought an elite visa thinking it would be part of a tax strategy.

[Jenkins9039]

On 10/22/2023 at 2:59 PM, mokwit said:

You may at some point in the future need to give your bank your TIN to keep the account open bearing in mind the BoT being stricter about non resident accounts. SCB won't open a bank account now without a TIN. You may need a TIN in order to keep the account open in order to be able to show financial proof at extension time.

When did this come in with SCB? - I was there yesterday getting a new card, and had no issues... also informed my credit card would be sent to my home address, no changes.

[Guavaman]

3 hours ago, stat said:

I wonder what will be the tax mans take if I agree with the owner to pay my rent to his off shore account. So I never brought the money into thailand

If the Thai RD adopts the principles of remittance used in the UK for their remittance-based system of income taxation for non-domiciled tax residents with foreign income, similar to what is being discussed for expat tax residents in Thailand:

 

A taxable remittance also occurs where a service is provided in the UK for the benefit of the individual or any other relevant person and the consideration for that service is met using the individual’s foreign income or gains.

Services provided in the UK

• You transfer some of your foreign income from your overseas account to the overseas account of a trader who has provided you with a service in the UK.
• You transfer some of your foreign income to the overseas account of a friend in exchange for using his cottage in the UK for a week.

HMRC Residence, Domicile and Remittance Basis Manual:  RDRM33050 - Remittance Basis: Practical Examples of Remittances to the UK

[stat]

19 minutes ago, Guavaman said:

If the Thai RD adopts the principles of remittance used in the UK for their remittance-based system of income taxation for non-domiciled tax residents with foreign income, similar to what is being discussed for expat tax residents in Thailand:

 

A taxable remittance also occurs where a service is provided in the UK for the benefit of the individual or any other relevant person and the consideration for that service is met using the individual’s foreign income or gains.

Services provided in the UK

• You transfer some of your foreign income from your overseas account to the overseas account of a trader who has provided you with a service in the UK.
• You transfer some of your foreign income to the overseas account of a friend in exchange for using his cottage in the UK for a week.

HMRC Residence, Domicile and Remittance Basis Manual:  RDRM33050 - Remittance Basis: Practical Examples of Remittances to the UK

Great post! However I assume Thai RD will take 10-20 years to come up to european standard and close all loopholes of remittance.

[Lorry]

3 hours ago, stat said:

I wonder what will be the tax mans take if I agree with the owner to pay my rent to his off shore account. So I never brought the money into thailand 🙂

The British guidelines posted by Guavaman mean that "remittance" does not have to be a bank transfer.  It is any way that makes use of offshore income to get an economic advantage (goods, services, whatever) onshore.

One can only hope that the Thais will say a "remittance" is a remittance.

[mokwit]

13 hours ago, Jenkins9039 said:

When did this come in with SCB? - I was there yesterday getting a new card, and had no issues... also informed my credit card would be sent to my home address, no changes.

Apparently they won't open a new account without a TIN now. Not hearing/experiencing request for TIN before they will allow you to do anything, BUT this may come. I can see a possible situation where you might have to provide a TIN to maintain the account.

[redwood1]

14 minutes ago, mokwit said:

Apparently they won't open a new account without a TIN now. Not hearing/experiencing request for TIN before they will allow you to do anything, BUT this may come. I can see a possible situation where you might have to provide a TIN to maintain the account.

 

Yea right, how many Thais have a TIN?.....I bet most Thais do not have one....

[jacko45k]

59 minutes ago, mokwit said:

I can see a possible situation where you might have to provide a TIN to maintain the account.

And where might you be seeing that?

[freeworld]

57 minutes ago, redwood1 said:

 

Yea right, how many Thais have a TIN?.....I bet most Thais do not have one....

I bet all Thais have a TIN.

 

It is their ID number.

 

[tomkenet]

For us married guys.

 

What about the wife gets an overseas bank account.

 

You both remit half of your needs. Should reduce the tax significantly to share the income 50/50 

[bugger bognor]

look into the mirror and repeat the word <deleted> three times! yes that's what you are if you believe you will be submitting tax returns or paying any tax in Thailand and that's being kind

[bugger bognor]

6 hours ago, bugger bognor said:

look into the mirror and repeat the word <deleted> three times! yes that's what you are if you believe you will be submitting tax returns or paying any tax in Thailand and that's being kind

Bell end

[The Cyclist]

I can see conversations being held behind closed, particularly by the 61 Countries who have DTA's with Thailand.

 

Along the lines of ' You have less than 4 million Thais paying income tax, suggest you sort our your own internal affairs, before thinking about taxing Citizens of other Countries '

[Jenkins9039]

3 hours ago, tomkenet said:

For us married guys.

 

What about the wife gets an overseas bank account.

 

You both remit half of your needs. Should reduce the tax significantly to share the income 50/50 

True, and kids have bank accounts... and kids don't have to pay tax, and kids can gift to you.

[quake]

3 hours ago, bugger bognor said:

Bell end

 

Did you mean a Bell Helmet.

They are very good,  I gave my misses one. 

 

Edited October 26, 2023 by quake

[TroubleandGrumpy]

5 hours ago, jacko45k said:

And where might you be seeing that?  (Needing a TIN)

In Australia and most western countries, banks require a Tax Number or they withold part of the 'earnings' and report that to their Tax Dept.

Likely that one day Thailand will also adopt the same practice - if directed by Thai Govt (very suprised if SCB has already done that).

Also a possibility that in order to receive an extension in the future, a TIN and last year's tax certificate/return will be required (years away). 

[JimGant]

3 minutes ago, The Cyclist said:

I can see conversations being held behind closed, particularly by the 61 Countries who have DTA's with Thailand. Along the lines of ' You have less than 4 million Thais paying income tax, suggest you sort our your own internal affairs, before thinking about taxing Citizens of other Countries '

 

Huh? The DTAs with Thailand already give Thailand the right to tax certain foreign income belonging to foreign tax residents of Thailand (like, as a Yank, my IRA payout or my pension from Boeing, etc). Only because of their "remittance" requirement -- a domestic law, with no relationship to any DTA language -- to include "exempt if brought in in a later calendar year" have foreigners (along with Thai fat cats) been allowed to avoid Thai income tax.

 

Now, they're wising up, modifying their domestic remittance law to allow them to take full advantage of the DTA language giving them priority, or even exclusive taxation rights on certain foreign income belonging to tax resident foreign expats. Don't blame them for finally using the DTA agreement they signed to finally collect some tax on foreign income, that had been denied due to a stupid domestic law regarding "remittance."

 

Yes, the stupid remittance law will still be in place, which will still allow some, or maybe all, income from an expat to avoid taxation (if he doesn't need to bring that income into Thailand, ever). And the reason it will still be in place is because Thai fat cats still need it to shelter foreign income, which now, instead of being remitted in the following year, will stay abroad in Swiss ski chalet property, or used to buy yachts and private jets, to finally end up in Thailand for resale. Hey, Thailand, if you really want to fatten your coffer, do away with the remittance requirement and just tax foreign income -- like the rest of the civilized world does. Much harder for the fat cats to duck this.

 

Anyway, to somehow think the new proposed rule violates any language in any DTA is ridiculous. To the contrary -- just shows Thailand can finally make money by using the language of all those DTAs to its advantage.

[beammeup]

1 hour ago, quake said:

 

Did you mean a Bell Helmet.

They are very good I gave my misses one. 

 

 

I think it must be the place where he is from.  Must be a big fan of Bell End.

 

 

 

 

 

[The Cyclist]

53 minutes ago, JimGant said:

Huh? The DTAs with Thailand already give Thailand the right to tax certain foreign income belonging to foreign tax residents of Thailand

 

Sure, that is not in doubt.

 

However, I do not think I will be the only one raising an eyebrow over this, especially when there are less than 4 million Thais paying income tax in Thailand, out of a population of some 7O odd million.

[redwood1]

1 hour ago, The Cyclist said:

I can see conversations being held behind closed, particularly by the 61 Countries who have DTA's with Thailand.

 

Along the lines of ' You have less than 4 million Thais paying income tax, suggest you sort our your own internal affairs, before thinking about taxing Citizens of other Countries '

 

Thailands population is 69 million...

If only 4 million are paying taxes

That means 94% of the Thai population

pays NO tax on income....

 

Let that sink in.....

 

And they want farangs to pay their fair share...lol

 

This is beyond a joke....

[Yumthai]

3 minutes ago, redwood1 said:

Thailands population is 69 million...

If only 4 million are paying taxes

That means 94% of the Thai population

pays NO tax on income....

 

Let that sink in.....

 

And they want farangs to pay their fair share...lol

 

This is beyond a joke....

 

Most sheep are always ready and even obediently ask to be sheared.

[jayboy]

22 hours ago, Metapod said:

So from all of this, my take away for my situation is to simply remit less money into Thailand and pay tax on what I remit. I had planned to make some more investments here but I'll be parking that money abroad and investing outside of Thailand instead. I'll also consider any large purchases or plans domestically as well if it will cost me an additional 30% to do it locally. I travel abroad frequently, so I'll do my major shopping in other countries and things like elective surgury for LASIK etc will just be done elsewhere.

 

 

I have been thinking about these issues too, but surely it's the case that we just don't know enough of the detail at this stage to make specific arrangements.I don't object to paying Thai income tax if fairly implemented.I do object to Thai income tax on inward remittances on sums which are from savings not income, and in my case have in part already had Thai tax paid on them years ago.

 

Be that as it may some possibilities come to mind:

 

- paying school fees directly to the school from off shore

- using foreign credit cards for Thailand expenditure - hotels, flights etc

- ramp up cash/bank holdings in Thailand now

 

and of course reduce remittances to Thailand as far as possible.