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

[The Cyclist]

12 minutes ago, Flyguy330 said:

Are you confusing Malaysia and Thailand in that post Stat?

Malaysia DOES NOT tax residents foreign income - unless you remit it to Malaysia from a non DTA country (and/or with no tax paid proof).

 

I think that when the muddy waters are cleared, there will be no difference between Malaysia and Thailand regarding the above.

 

DTA Country and income taxed in that Country will not be subject to Thai tax.

[stat]

4 hours ago, Flyguy330 said:

Are you confusing Malaysia and Thailand in that post Stat?

Malaysia DOES NOT tax residents foreign income - unless you remit it to Malaysia from a non DTA country (and/or with no tax paid proof).

The 'tax paid proof' is extremely lenient, as I described above.

https://www.ey.com/en_my/tax-alerts/tax-treatment-of-income-that-is-received-from-outside-malaysia#:~:text=With this development%2C a flat,in Malaysia by Malaysian residents.

 

If you have a source stating that no foreign income will be taxed in MY pls let us know, thanks! My understanding is that MY will or has started to tax foreign income, but I am happy to learn otherwise.

[stat]

4 hours ago, Celsius said:

All these schemes movung here, moving there will end up costing more than simply paying tax in Thailand. 

 

There are really only 2 options. Stay in Thailand or move permanently elsewhere.

There are expats with 7 figures investment income per year who are way better off traveling which will cost them 5K USD per year more instead of paying 300K USD in taxes. And now pls no comment if one would have that amount of income etc, thx!

Edited November 2, 2023 by stat

[Celsius]

10 minutes ago, stat said:

There are expats with 7 figures investment income per year

 

Yes, and they all live in On Nut

[The Cyclist]

50 minutes ago, stat said:

here are expats with 7 figures investment income per year

 

Vietnamese Dong ?
 

51 minutes ago, stat said:

who are way better off traveling which will cost them 5K USD per year

 

Seriously ?
 

US $ 5000 a year travelling. What are they travelling on, an elephant ?
 

A good 2 week holiday including spending money will cost you close to $ 5000 for 2 people.

[Lorry]

6 hours ago, Celsius said:

All these schemes movung here, moving there will end up costing more than simply paying tax in Thailand. 

 

There are really only 2 options. Stay in Thailand or move permanently elsewhere.

It's not about the cost of traveling. 

Many foreigners who live here like it here, for whatever reasons (girls, Thai family, avoid military service, the temples...).

The ones with money will still like it if everything is on average 50% more expensive (the effect of paying 35% tax on all remittances). 

The ones without money don't pay 35% tax anyway,  as outlined many times in this thread. 

 

Snowbirds are in a different situation.  Someone who usually stays 190 days a year may choose to cut it down to 179 days. 

[Flyguy330]

2 hours ago, stat said:

https://www.ey.com/en_my/tax-alerts/tax-treatment-of-income-that-is-received-from-outside-malaysia#:~:text=With this development%2C a flat,in Malaysia by Malaysian residents.

 

If you have a source stating that no foreign income will be taxed in MY pls let us know, thanks! My understanding is that MY will or has started to tax foreign income, but I am happy to learn otherwise.

Ah, I see where the confusion is.

What I'm saying is that Malaysia does not tax foreign sourced income (inc pensions) UNLESS and UNTIL you remit such earnings. There's absolutely no question of Malaysia looking to levy tax on Malaysian tax residents foreign income while it's still overseas (like the US does).

Does Thailand tax your foreign income irrespective of remittance? I kinda got that idea from some of the comments here. Nasty....

 

When remitting money to Malaysia, yes, the new Remittance Tax applies (dated to 1st Jan 2022). But as I've said before, you can produce a 40 year old tax cert and they'll exempt the remittance for that amount. There's no requirement to prove the specific income remittance was taxed, only that you have PAID tax on an equivalent amount. Strange as it may seem - I see the logic. It would be a nightmare to scrutinise every single remittance declaration to confirm the particular monies are 'sterile' from co-mingling with untaxed money in the same remitting account.

 

I really do get the feeling Malaysia doesn't like this whole remittance tax idea, but they've been arm twisted into it by the bloody Yanks who want to control the whole world it seems.

 

By the way, I wrote an email to my local friendly tax person in LHDN today about the property I recently sold in europe. She confirmed that there will be NO TAX on the remittance of the proceeds, neither FSI tax nor CGT. Happy days.

Edited November 2, 2023 by Flyguy330

[stat]

21 minutes ago, Flyguy330 said:

Ah, I see where the confusion is.

What I'm saying is that Malaysia does not tax foreign sourced income (inc pensions) UNLESS and UNTIL you remit such earnings. There's absolutely no question of Malaysia looking to levy tax on Malaysian tax residents foreign income while it's still overseas (like the US does).

Does Thailand tax your foreign income irrespective of remittance? I kinda got that idea from some of the comments here. Nasty....

 

When remitting money to Malaysia, yes, the new Remittance Tax applies (dated to 1st Jan 2022). But as I've said before, you can produce a 40 year old tax cert and they'll exempt the remittance for that amount. There's no requirement to prove the specific income remittance was taxed, only that you have PAID tax on an equivalent amount. Strange as it may seem - I see the logic. It would be a nightmare to scrutinise every single remittance declaration to confirm the particular monies are 'sterile' from co-mingling with untaxed money in the same remitting account.

 

I really do get the feeling Malaysia doesn't like this whole remittance tax idea, but they've been arm twisted into it by the bloody Yanks who want to control the whole world it seems.

 

By the way, I wrote an email to my local friendly tax person in LHDN today about the property I recently sold in europe. She confirmed that there will be NO TAX on the remittance of the proceeds, neither FSI tax nor CGT. Happy days.

Glad we are on the same page now. Yes MY and TH will apparently start taxing remitted income only. So for remitted income there should "only" be the differnence in tax brackets. Glad you mentioned the 40 year old tax declarations. This of course would be a big plus.

[Lorry]

21 minutes ago, Flyguy330 said:

What I'm saying is that Malaysia does not tax foreign sourced income (inc pensions) UNLESS and UNTIL you remit such earnings.

That's what Thailand will do from Jan 1, 2024, on.

 

22 minutes ago, Flyguy330 said:

Does Thailand tax your foreign income irrespective of remittance?

No, and there are no publicized plans to do so.

 

23 minutes ago, Flyguy330 said:

When remitting money to Malaysia, yes, the new Remittance Tax applies (dated to 1st Jan 2022). But as I've said before, you can produce a 40 year old tax cert and they'll exempt the remittance for that amount. There's no requirement to prove the specific income remittance was taxed, only that you have PAID tax on an equivalent amount. Strange as it may seem - I see the logic. It would be a nightmare to scrutinise every single remittance declaration to confirm the particular monies are 'sterile' from co-mingling with untaxed money in the same remitting account.

Hopefully, Thailand will be as lenient, too.

But the way I know Thai bureaucrats doesn't give me much hope.

[stat]

2 hours ago, Celsius said:

 

Yes, and they all live in On Nut

Trust me on this there are some rich expats for this specific reason in TH. However I had to google Nut street so different clientele then 🙂

[K2938]

8 hours ago, TroubleandGrumpy said:

One problem is that funds in a Thai bank are only 'Govt Guaranteed' up to a total of 1 Million Baht.

It used to be 15 Million, but the Junta gradually reduced the guarantee over the years.

So what would you consider to be the "safest" banks in Thailand from a fraud/bankruptcy risk point of view?

[K2938]

8 hours ago, Flyguy330 said:

Malaysia DOES NOT tax residents foreign income - unless you remit it to Malaysia from a non DTA country (and/or with no tax paid proof).

Thank you very much for your highly useful insights on Malaysia. 

Could you kindly elaborate what is meant with "unless you remit it to Malaysia from a non DTA country", please?  Does this mean that

(1) the mere and sole fact that there exists some double taxation agreement between Malaysia and country X makes all funds remitted from country X tax free in Malaysia for a foreigner or

(2) it depends on what the DTA precisely says about these funds (which is how things normally work in the realm of DTAs) or

(3) this is unclear? 

Thank you.

Edited November 2, 2023 by K2938

[Lorry]

5 hours ago, K2938 said:

So what would you consider to be the "safest" banks in Thailand from a fraud/bankruptcy risk point of view?

SCB - as safe as the monarchy

KTB - as safe as the government

BBL - as safe as Thai capitalism

[andux]

10 hours ago, The Cyclist said:

 

Seriously ?
 

US $ 5000 a year travelling. What are they travelling on, an elephant ?
 

A good 2 week holiday including spending money will cost you close to $ 5000 for 2 people.

 

Not all traveling is a "good 2-week holiday" in a resort or being all day visiting attractions, doing city tours and buying souvenirs.

 

Traveling can also involve renting an apartment for a couple of months somewhere to live there almost like a local, with the occasional night out or museum visit. 

[TravelerEastWest]

19 hours ago, TroubleandGrumpy said:

One problem is that funds in a Thai bank are only 'Govt Guaranteed' up to a total of 1 Million Baht.

It used to be 15 Million, but the Junta gradually reduced the guarantee over the years.

 

Not a big problem usually just open accounts in different banks...

[JRG23]

Still no official word on what is happening.

Meanwhile, financial/tax companies/consultants are having a field day trying to scare expats (through, for instance articles and webinars) into paying for their expensive services. 'Please get in touch if you have any queries about your tax situation in Thailand. We are here to help'.

 

 

[Flyguy330]

14 hours ago, K2938 said:

Thank you very much for your highly useful insights on Malaysia. 

Could you kindly elaborate what is meant with "unless you remit it to Malaysia from a non DTA country", please?  Does this mean that

(1) the mere and sole fact that there exists some double taxation agreement between Malaysia and country X makes all funds remitted from country X tax free in Malaysia for a foreigner or

(2) it depends on what the DTA precisely says about these funds (which is how things normally work in the realm of DTAs) or

(3) this is unclear? 

Thank you.

Hi K2938; First off, you know what a DTA is? It's the acronym for 'Dual Tax Agreement'. These are agreements signed between countries to prevent people/companies being taxed in both countries on the same money. Normally there will be a statement in the agreement specifying in which country the taxable monies are to be taxed, and an equal exemption is given from taxation in the other contracting country. 

If your money originates from a country having a DTA with your new home (Thailand/Malaysia, wherever...) and you can show it has already been taxed in the origin country, then you should not be taxed again on it when you remit (send) it to your new home country.

 

Regarding your bulletin points;

 

1. Not ALL funds. Specifically those which have been taxed in the origin country (at a minimum of 15%). They may ask for proof (Certs).

 

2. I've worked in several Asian countries which have a DTA with my home country. I've read each of them. There's a standard 'format', almost a cut and paste document, except there are always minor differences from country to country. You need to read each one carefully, or get help with it.

 

3. No - but remember, I'm just a bloke on the interweb. I'm not a tax advisor. And rules constantly change. Better to do your own due diligence. I'm only relating my own experience so far.

[racket]

Quote

According to the document, “…those that have earnings from occupation or business abroad or wealth that is located abroad…and has brought these assets into Thailand…must factor this into their personal income tax for the year.”

 

So if they retain their assets abroad, then I assume they wont be subject to tax. 

[Mike Lister]

14 minutes ago, racket said:

 

So if they retain their assets abroad, then I assume they wont be subject to tax. 

Correct

[Mike Lister]

15 hours ago, K2938 said:

So what would you consider to be the "safest" banks in Thailand from a fraud/bankruptcy risk point of view?

 

23 hours ago, TroubleandGrumpy said:

One problem is that funds in a Thai bank are only 'Govt Guaranteed' up to a total of 1 Million Baht.

It used to be 15 Million, but the Junta gradually reduced the guarantee over the years.

 

No, the "junta" did not reduce the guarantee, the DPA and the BOT agreed to do so. The DPA was put in place with high limits in order to attract foreign capital. Once that job was done, many years ago, it was always the plan to reduce the guarantee, to  more realistic and sustainable levels. Several announcements were made over the years but something always arose to where it was cancelled at the last moment, eventually the levels were reduced.

 

As far as safest bank is concerned, Bangkok Bank has been labelled as systemically important to Thailand by several agencies, including World Bank and IMF.. 

[TroubleandGrumpy]

15 hours ago, K2938 said:

So what would you consider to be the "safest" banks in Thailand from a fraud/bankruptcy risk point of view?

 

There are 3 banks in Thailand that are OK - as determined by the international rules when remitting money into Thailand.

Bangkok Bank (BKK), Siam Commercial Bank (SCB) and Kasikorn Bank (KB).

SCB (used to) have a lot of hidden and annual charges.  Both BKK and KB have lower charges.

All 3 Banks have more Branches and ATMS than the others.

 

The next issue (most critical) is at what Branch to open an account.

IMO open an account in a large Branch in that Province - not a small local branch.

Most Provinces have their largest branches in a Mall - that also means they are open longer hours than the 'street' Branches.

 

Get 2 accounts - one from each Bank - just in case something goes wrong when you are not near 'home' branch.

The banking system in Thailand is not National - it is more like a franchise within each Province.

For any serious/difficult issue, you will be directed to go to the Branch where you opened the account.

 

Never ever use ATMs that are not either in/next to the Branch, or in a large shop - BigC, Makro etc.

 

 

 

 

 

 

[TroubleandGrumpy]

59 minutes ago, Flyguy330 said:

1. Not ALL funds. Specifically those which have been taxed in the origin country (at a minimum of 15%). They may ask for proof (Certs).

Good Post - you are right, now it is a matter of 'wait and see' - while also planning what to do if/when they impose income taxes on Expats.

 

Your last few words are what really worries me - "They may ask for proof (Certs)".  What that means is exactly the problem will be if/when Thai RD requires an Expat to lodge a tax return and 'explain' the money that they are remitting into Thailand. If the Thai RD demands 'proof' that taxes have already been paid in home country, otherwise taxes will be applied in Thailand, then most of us are upthat creek without a paddle. 

 

The DTAs were 'built' for businesses, not for personal taxes. It is easy for a business to provide 'proof of taxation' in other countries, but it is not so easy (sometimes impossible) to get proof for a person.  And that is the core of the problem - if Thai RD views all remittances as income unless/until proven otherwise, then there is going to be a lot of business for those Thai based tax lawyers/accountants.

 

I have posted a lot on this topic (it is why I joined) and after reading through nearly every post, my plan is to bring additional funds into Thailand  this year.  The rule starts from Jan 1 2024, and I am also not a tax resident this year (<180 days).  Then in 2024 I will only bring into Thailand the minimum required, while I wait to see how things pan out.  If I am required to lodge a tax return in 2025, and there are 'tax problems' - then we will be leaving Thailand. 

 

I am already paying 'fees' for the privilege of spending over a million baht in Thailand every year - on which I pay a lot of VAT (far more than the average Thai).  But I have no legal rights, I cannot use the hospitals for SFA costs like the Thais, I pay more than the Thais for most things (dual pricing),  and I get no Govt benefits or services (including the 10K handout, and the Travel Incentives, etc etc etc).  I can accept that as part of the deal, including placing a large amount of my money into a bank account, and being forced to get medical insurance. I am treated like and given the same rights and benefits as a (long term) tourist - I cannot and will not accept also paying income taxes. 

 

I do hope the Thai Govt is 'hearing' this message being shouted loudly and clearly by many Expats - if they go ahead and make Expats pay income taxes, then there will be a lot of Expats leaving Thailand. 

[TroubleandGrumpy]

1 hour ago, racket said:

 

So if they retain their assets abroad, then I assume they wont be subject to tax. 

 

Unless they earn money for you - rent, interest, returns, etc. which technically is taxable. 

I do not think capital gains tax would be applicable - but I am not sure about that one. I dont have assets that I will sell for a profit. 

 

[retiree]

59 minutes ago, TroubleandGrumpy said:

if they go ahead and make Expats pay income taxes, then there will be a lot of Expats leaving Thailand. 

Lord, if you are listening, please please please open an Expats will leave Thailand proposition on a hard-money prediction market so that I can short it.  Judging by the number of times it has been raised I'm sure it will be a well-capitalized market, and worthy of Your indulgence. 

[redwood1]

1 hour ago, TroubleandGrumpy said:

 

Unless they earn money for you - rent, interest, returns, etc. which technically is taxable. 

I do not think capital gains tax would be applicable - but I am not sure about that one. I dont have assets that I will sell for a profit. 

 

Just give them a blank check and they can fill in the amount.....Problem solved...

[Mike Lister]

1 hour ago, TroubleandGrumpy said:

Never ever use ATMs that are not either in/next to the Branch, or in a large shop - BigC, Makro etc.

 

And don't walk down dark alleys alone at night, never carry more than 50 baht in cash and always carry a spray can of mace on your belt. arf arf

 

 

[redwood1]

3 minutes ago, Mike Lister said:

 

And don't walk down dark alleys alone at night, never carry more than 50 baht in cash and always carry a spray can of mace on your belt. arf arf

 

 

 

Well, the ATM point is valid for 2 reasons...

 

#1 If your card is ever not returned, you will have someone to talk to..

#2 ATMs at a bank have a much lower chance of having a skimmer..

[Mike Lister]

1 hour ago, TroubleandGrumpy said:

 

IMO open an account in a large Branch in that Province - not a small local branch.

Most Provinces have their largest branches in a Mall - that also means they are open longer hours than the 'street' Branches.

 

Get 2 accounts - one from each Bank - just in case something goes wrong when you are not near 'home' branch.

The banking system in Thailand is not National - it is more like a franchise within each Province.

For any serious/difficult issue, you will be directed to go to the Branch where you opened the account.

 

Respectfully, I disagree.

 

In my experience, the biggest and best branches are the business branches which tend to be stand alone branches in town and city centres. They are nearly always full service branches whereas mall based branches area training grounds for junior staff.

 

Secondly, as long as you have your bank book with you, you can resolve almost any problem at any branch in the country. Thailand does operate a provincial banking system which means that it charges customers for cash transactions (deposits or withdrawals) that are made at branches outside of the home province.

 

 

[Mike Lister]

4 minutes ago, redwood1 said:

 

Well, the ATM point is valid for 2 reasons...

 

#1 If your card is ever not returned, you will have someone to talk to..

#2 ATMs at a bank have a much lower chance of having a skimmer..

Yes I suppose, assuming that people still use ATM cards instead of cardless ATM withdrawals. 

[TroubleandGrumpy]

12 minutes ago, retiree said:

Lord, if you are listening, please please please open an Expats will leave Thailand proposition on a hard-money prediction market so that I can short it.  Judging by the number of times it has been raised I'm sure it will be a well-capitalized market, and worthy of Your indulgence. 

Good luck with that - but I dont think he is listening at the moment 🙂

 

One of the problems with dealing with Expats in Thailand, is that the Thai Govt does not know how many there are.

Therefore, they have no idea how many left when the Junta started cracking down on the 'Bad Guys'.

Likewise, they will not know how many will leave if they start imposing income taxes - nor will we know for sure.

 

What I can  say is that one of the Thai lawyers I know has got involved in the 'review' currently being undertaken by the Thai RD, and likewise so has a member of my Wife's Thai family (who is also married to an Expat). The lawyer is saying nothing, and I doubt he will be trying to stop Expats having to lodge a tax return (good for his business). But the Thai family member has said that there are hundreds of other Thai Wives also complaining about the fear that their Expat husbands will leave Thailand if they have to pay income taxes.  Obviously they are all on the 'Married Visa' - but I assume the same thing will be felt by many of those on the 'Retirement Visa'. Certainly there has been a lot of Expats saying the same thing on this forum.  And I do know a few Expats, and all of them are saying 'no way'  - it is one thing to deal with all the illogicval, inconsistent and downright stupid things that Thai Immigration imposes on Expats, but it will be another thing altogether if the Thai RD becomes a part of our lives.