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

[Mike Lister]

Just now, jts-khorat said:

 

I try to find a trabnslation office called MOFA, there is one in Dubai, which I presume is not the one you are talking about.

 

If you talk about the Ministry of Foreign Affairs (MFA), they do accredited translations of a quite limited range of English documents (tax forms not being among them). Have seen no mentioning of tax forms in Slovakian or Swedish. Maybe you could send a link where those could be done.

Or, more sensibly, you could go ask at any MoFA office!

[The Cyclist]

For anyone that might be interested, I renewed my extension last Friday.

 

I was bitterly disappointed that neither of the.2 very good looking girls at the bank or immigration took it upon themselves to slap me in handcuffs, wire up my gonads to a 12V battery and grill me endlessly on TIN's, or lack thereof. Neither was I given any advice that next years extension would require a TIN or evidence of paying / not paying tax in Thailand.

[Morch]

7 minutes ago, jts-khorat said:

 

I tried to find a translation office called MOFA, there is one in Dubai, which I presume is not the one you are talking about.

 

If you talk about the Ministry of Foreign Affairs (MFA), they do accredited translations of a quite limited range of English documents (tax forms not being among them). Have seen no mentioning of tax forms in Slovakian or Swedish. Maybe you could send a link where those could be done.

 

Haven't tried French, German or Mandarin, so these maybe different. For most others, I think you'll have to pay for a translation to English, then notarize and get it signed by relevant Embassy. The Embassy will usually have a list of  'approved' translators/notaries to pick from. Easier if it's a two-in-one combo. The Ministry of Foreign Affairs then signs/stamps/approve the English translation and you take all the paperwork to the relevant government office. If something is missing or not quite what asked for, need to restart process.

[Morch]

11 minutes ago, The Cyclist said:

For anyone that might be interested, I renewed my extension last Friday.

 

I was bitterly disappointed that neither of the.2 very good looking girls at the bank or immigration took it upon themselves to slap me in handcuffs, wire up my gonads to a 12V battery and grill me endlessly on TIN's, or lack the lack of. Neither was I given any advice that next years extension would require a TIN or evidence of paying / not paying tax in Thailand.

 

I asked a couple of weeks ago at immigration. First reaction was a blank, second (higher up the food chain) was the usual pained 'don't-ask-me-this': vaguely aware but no actual information on how (if at all) this relates to them. 

[tomkenet]

30 minutes ago, FritsSikkink said:

It doesn't say that at all. It says Foreign sourced income before next year will not be taxed. 

When you bring in money next year = Foreign sourced income, it will be taxed.

The text from sherring is a bit confusing, but if you compare to this link that was posted earlier it makes more sense.

 

https://www.prachachat.net/finance/news-1432180

 

However, recently there was a report from the Revenue Department that It has been concluded that In the first phase, there will be relief in the case of income generated abroad before 2024, if it is not imported within the same tax year as the year in which the income was generated. It will not have to be checked.

[Mike Lister]

6 minutes ago, Morch said:

 

Haven't tried French, German or Mandarin, so these maybe different. For most others, I think you'll have to pay for a translation to English, then notarize and get it signed by relevant Embassy. The Embassy will usually have a list of  'approved' translators/notaries to pick from. Easier if it's a two-in-one combo. The Ministry of Foreign Affairs then signs/stamps/approve the English translation and you take all the paperwork to the relevant government office. If something is missing or not quite what asked for, need to restart process.

Exactly, which is similar to what many other countries do.

[jts-khorat]

9 minutes ago, Morch said:

 

Haven't tried French, German or Mandarin, so these maybe different. For most others, I think you'll have to pay for a translation to English, then notarize and get it signed by relevant Embassy. The Embassy will usually have a list of  'approved' translators/notaries to pick from. Easier if it's a two-in-one combo. The Ministry of Foreign Affairs then signs/stamps/approve the English translation and you take all the paperwork to the relevant government office. If something is missing or not quite what asked for, need to restart process.

 

Thanks, Morch, for your answer.

 

I assumed as much: you now will have a document twice translated with an additional travel to Bangkok, trying to make your embassy do something with it (if you even get a timely appointment), which will then need to be accepted as proof by the Thai tax office.

 

The same as with visa agents, I see a big opportunity for all kinds of "tax offices" in Thailand to boom, where for a more or less small part of this new tax obligation their creative translation makes those newly created problems go away.

 

Sorry, that I cannot begin to feel enthusiastic for this at all.

[Berkshire]

Perhaps this has been mentioned, but what if one has a foreign bank account and decides to bring money into Thailand by ATM.  How would the Thai gov tax THAT?  This is not a convenient way to bring in money, but certainly an option.  As a disclaimer, all of my income (mostly pension) goes to my US bank account and I wire it over when needed. 

[Morch]

15 minutes ago, Berkshire said:

Perhaps this has been mentioned, but what if one has a foreign bank account and decides to bring money into Thailand by ATM.  How would the Thai gov tax THAT?  This is not a convenient way to bring in money, but certainly an option.  As a disclaimer, all of my income (mostly pension) goes to my US bank account and I wire it over when needed. 

 

I do that quite a lot, for smaller sums. Again, easier vs. better, for me. So was actually wondering about that as well.

[Krit]

More mentions of the 20 November 2023 instruction:

 

DFDL: "The Instruction gives guidance that foreign-sourced income earned before 1 Jan 2024 and remitted into Thailand will not be subject to income tax."

https://www.dfdl.com/insights/legal-and-tax-updates/thai-revenue-department-issues-additional-guidance-on-foreign-sourced-income-rules/

 

Mazars: "By virtue of this DI Paw. 162, Thai tax residents will not be required to include their foreign-sourced income earned before 1 January 2024 in their personal income tax returns, even if such income will be brought into Thailand from 1 January 2024 onwards."

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Further-guidance-on-Foreign-Sourced-Income

 

The order and its (probably unofficial) translation

https://www.carlturnerfinancial.com/wp-content/uploads/2023/11/Revenue-Department-Order-No-P.162A-2023.pdf

 

[samtam]

13 minutes ago, Krit said:

More mentions of the 20 November 2023 instruction:

 

DFDL: "The Instruction gives guidance that foreign-sourced income earned before 1 Jan 2024 and remitted into Thailand will not be subject to income tax."

https://www.dfdl.com/insights/legal-and-tax-updates/thai-revenue-department-issues-additional-guidance-on-foreign-sourced-income-rules/

 

Mazars: "By virtue of this DI Paw. 162, Thai tax residents will not be required to include their foreign-sourced income earned before 1 January 2024 in their personal income tax returns, even if such income will be brought into Thailand from 1 January 2024 onwards."

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Further-guidance-on-Foreign-Sourced-Income

 

The order and its (probably unofficial) translation

https://www.carlturnerfinancial.com/wp-content/uploads/2023/11/Revenue-Department-Order-No-P.162A-2023.pdf

 

 

Mazars remark, (highlighted), seems to be their interpretation, not written in the translated RD Order.

 

More amendments to drip out perhaps?

[Metapod]

3 hours ago, Berkshire said:

Perhaps this has been mentioned, but what if one has a foreign bank account and decides to bring money into Thailand by ATM.  How would the Thai gov tax THAT?  This is not a convenient way to bring in money, but certainly an option.  As a disclaimer, all of my income (mostly pension) goes to my US bank account and I wire it over when needed. 

 

It is a remittance and would be assessable income. Transferring money or withdrawing from ATM is essentially the same here.

 

 

[jayboy]

9 minutes ago, Metapod said:

It is a remittance and would be assessable income. Transferring money or withdrawing from ATM is essentially the same here.

How would it be assessable income if someone in Thailand used an ATM to withdraw cash with a card issued in say London or New York? Who would know? Likewise any expenditure incurred in Thailand with such a card would not be known to the Thai authorities.Of course an upstanding paragon of virtue such as myself would declare such expenditure in my tax return but some would not.

[tomkenet]

30 minutes ago, Metapod said:

 

It is a remittance and would be assessable income. Transferring money or withdrawing from ATM is essentially the same here.

 

 

How would any other interpretation make sense.

[tomkenet]

56 minutes ago, samtam said:

 

Mazars remark, (highlighted), seems to be their interpretation, not written in the translated RD Order.

 

More amendments to drip out perhaps?

How would any other interpretation make sense.

[tomkenet]

More from Mazars

 

"Taxpayers with foreign-sourced income, which has yet to be realised, should consider realising income or gains before the end of this year so that such foreign-sourced income will not be taxable if remitted into Thailand on or after 1 January 2024."

 

I guess these money have to be kept in separate accounts for them  traceable back to 2023 when remitted , not to be mixed with income after 2023.

[Mike Lister]

23 minutes ago, tomkenet said:

More from Mazars

 

"Taxpayers with foreign-sourced income, which has yet to be realised, should consider realising income or gains before the end of this year so that such foreign-sourced income will not be taxable if remitted into Thailand on or after 1 January 2024."

 

I guess these money have to be kept in separate accounts for them  traceable back to 2023 when remitted , not to be mixed with income after 2023.

That is certainly one option but it's not the only one. For me personally, I have no intention of giving up my UK based investment accounts because they can't be fully emulated here, at the same cost, with all the same options and with the same low level of risk. But I will establish a year end valuation at that will have to serve to satisfy thew Thai RD.

[El Matador]

It seems the optimum way to optimize taxes is to remit as little as possible to Thailand. Or simply living 180 days max a year in Thailand.

 

It will be a financial loss for Thailand if things stay the same. 

[OzzBlizz]

https://youtu.be/WJHmc4XxmI4?si=FwnlF8X-K6Mzi5Ay

[MrMuddle]

Simple question - does this affect Retirees?

[scottiejohn]

3 hours ago, El Matador said:

It seems the optimum way to optimize taxes is to remit as little as possible to Thailand.

Just pay your big bills directly into your Thai Landlord's/Condo etc bank account (rent etc) and let them pay the tax rather than pay them imported cash!

 

 

 

 

 

[Dogmatix]

Mazars observation

 

"The Revenue Department appears to be aware of the challenges encountered by taxpayers from the new protocol concerning foreign-sourced income. DI Paw. 162 resolves the difficulties taxpayers may have in distinguishing assessable income and savings incurred in  years before 1 January 2024. Taxpayers with foreign-sourced income, which has yet to be realised, should consider realising income or gains before the end of this year so that such foreign-sourced income will not be taxable if remitted into Thailand on or after 1 January 2024"

 

That's a very polite way of putting it. More realistically the director general of of the RD issued the first order impulsively without thinking it through, with no idea of how much incremental tax it would raise, if any, certainly no concern about potential impacts on the Thai economy, condo developers, or any details of how it would be applied vis a vis DTAs or anything much else.  He was just told by underlings it was a good idea because CRS reporting will help them catch out cheaters.  Instead of passing it by the RD lawyers beforehand I guess the legal department only found out about it from the press and have spent the last couple of months giving it the once over.  One very obvious conclusion must have been that the impossibility of setting any fair guidelines for determining what constituted capital and what constituted income going back decades in some cases would probably have resulted in a plethora of cases in the Central Tax Court which the RD could very well have lost.  This is in addition to the fact that no legislative support has been forthcoming from the finance ministry under Srettha as finance minister, who has probably only set foot in the building to pray at the spirit house and is just leaving everything to the bureaucrats like the RD director general with zero ministerial input or oversight. This means that the new interpretation will start life on 1 Man 2024 as a mere instruction to RD staff that is not binding on taxpayers.  The risk remains that wealthy taxpayers will refuse to accept the unlawful reinterpretation and sue in the Tax Court even with the pre 2024 amnesty.

 

The fact that this new interpretation is totally inconsistent with PT's previous policy of regional tax competitiveness under Yingluck doesn't even seem to have registered while PT is so busy trying to dig itself out of its digital vote buying pledge.  The Yingluck government did a good job in making Thai corporate income tax competitive with HK and Singapore by reducing it from 30% 20%.  So why ruin that by making it unattractive for anyone to come and work, retire or invest as an individual in Thailand?  If regional taxation competitiveness, is no longer a policy of PT, why not go the whole hog and raise corporate income tax back up to 30%?  While this new remittance tax for individuals may only raise 10s of billions in incremental tax, if that, raising corporate income tax back to 30% would raise an incremental 300 billion, 60% of what they estimate is needed for the digital wallet, without any negative effect on the poor like an increase in VAT which is no doubt in Thailand's not too distant future.

 

The Prachachart Thurakit article suggested that amnestying pre 2024 income was just a stop gap and that legislation is planned to amend the Revenue Code to introduce global taxation of income whether remitted to Thailand or not. I would guess that PT finance functionaries, while not busy thinking up schemes to renege on the digital wallet and blame that on someone else, are probably thinking they can kick this can down the road.  Since they have left it all to the RD without the party taking full ownership of the policy, they keep their options open to either provide supporting legislation to amend the Revenue Code via a Royal Decree or even a parliamentary bill or to ditch the whole thing, if it proves too troublesome and blame it on the Revenue Department for failing to take into account the impacts on the Thai economy in the same way as they scrapped the transactional tax on SET stock trades and blamed the Finance Ministry for failing to understand the negative implications for market volumes. If it is successfully challenged in the Tax Court, they will be forced to take a stand but this government will probably be gone before that happens.  

 

I guess the RD will just leave it like this for now, since the orginal order came from the top of the RD and  their lawyers have now had time to think about it and Order P 162/2566 was all that resulted from this process, welcome though that was.  Other details like how to apply tax credits will be filled in later, possibly after problems become apparent following the submission of 2024 tax returns which will only be the tip of the iceberg since prior year income for 2024 will now no longer be a thorny issue.  While the UK HMRC has pages and pages of guidelines on taxation of remitted foreign source income for its non-doms, Thailand's RD is happy to introduce a similar tax with a 50 word instruction to staff that is not binding on taxpayers and wait and see where the gremlins appear.  Spot the Mickey Mouse tax authority,

[Dogmatix]

1 hour ago, OzzBlizz said:

https://youtu.be/WJHmc4XxmI4?si=FwnlF8X-K6Mzi5Ay

 

This woman's crooked grin is too much for me along with the conflict of interest inherent in her providing tax advise to persuade people to buy the cards, while working for an agent that makes its living from selling Thai Elite/Privilege cards. 

[Dogmatix]

1 hour ago, MrMuddle said:

Simple question - does this affect Retirees?

 

Simple answer.  Yes.

[Dogmatix]

15 minutes ago, scottiejohn said:

Just pay your big bills directly into your Thai Landlord's/Condo etc bank account (rent etc) and let them pay the tax rather than pay them imported cash!

 

Can you clarify this?  Do you mean remit rental payments (and school fees and the like) to the Thai service providers direct from offshore?  I am pretty sure, the RD would deem this as as assessable income to your account, if they became aware of it, which seems possible, if they are going to track all foreign remittances over a certain amount.  It is already clear in the Revenue Code that company payments of similar benefits direct to service providers on behalf of employees is assessable income for the employees.  It doesn't seem much different. I think that gifting is a better loophole if you have a spouse or partner, i.e. gift the money for these payments to a spouse or partner and let them pay. 

[OzzBlizz]

9 minutes ago, Dogmatix said:

Mazars observation

 

"The Revenue Department appears to be aware of the challenges encountered by taxpayers from the new protocol concerning foreign-sourced income. DI Paw. 162 resolves the difficulties taxpayers may have in distinguishing assessable income and savings incurred in  years before 1 January 2024. Taxpayers with foreign-sourced income, which has yet to be realised, should consider realising income or gains before the end of this year so that such foreign-sourced income will not be taxable if remitted into Thailand on or after 1 January 2024"

 

That's a very polite way of putting it. More realistically the director general of of the RD issued the first order impulsively without thinking it through, with no idea of how much incremental tax it would raise, if any, certainly no concern about potential impacts on the Thai economy, condo developers, or any details of how it would be applied vis a vis DTAs or anything much else.  He was just told by underlings it was a good idea because CRS reporting will help them catch out cheaters.  Instead of passing it by the RD lawyers beforehand I guess the legal department only found out about it from the press and have spent the last couple of months giving it the once over.  One very obvious conclusion must have been that the impossibility of setting any fair guidelines for determining what constituted capital and what constituted income going back decades in some cases would probably have resulted in a plethora of cases in the Central Tax Court which the RD could very well have lost.  This is in addition to the fact that no legislative support has been forthcoming from the finance ministry under Srettha as finance minister, who has probably only set foot in the building to pray at the spirit house and is just leaving everything to the bureaucrats like the RD director general with zero ministerial input or oversight. This means that the new interpretation will start life on 1 Man 2024 as a mere instruction to RD staff that is not binding on taxpayers.  The risk remains that wealthy taxpayers will refuse to accept the unlawful reinterpretation and sue in the Tax Court even with the pre 2024 amnesty.

 

The fact that this new interpretation is totally inconsistent with PT's previous policy of regional tax competitiveness under Yingluck doesn't even seem to have registered while PT is so busy trying to dig itself out of its digital vote buying pledge.  The Yingluck government did a good job in making Thai corporate income tax competitive with HK and Singapore by reducing it from 30% 20%.  So why ruin that by making it unattractive for anyone to come and work, retire or invest as an individual in Thailand?  If regional taxation competitiveness, is no longer a policy of PT, why not go the whole hog and raise corporate income tax back up to 30%?  While this new remittance tax for individuals may only raise 10s of billions in incremental tax, if that, raising corporate income tax back to 30% would raise an incremental 300 billion, 60% of what they estimate is needed for the digital wallet, without any negative effect on the poor like an increase in VAT which is no doubt in Thailand's not too distant future.

 

The Prachachart Thurakit article suggested that amnestying pre 2024 income was just a stop gap and that legislation is planned to amend the Revenue Code to introduce global taxation of income whether remitted to Thailand or not. I would guess that PT finance functionaries, while not busy thinking up schemes to renege on the digital wallet and blame that on someone else, are probably thinking they can kick this can down the road.  Since they have left it all to the RD without the party taking full ownership of the policy, they keep their options open to either provide supporting legislation to amend the Revenue Code via a Royal Decree or even a parliamentary bill or to ditch the whole thing, if it proves too troublesome and blame it on the Revenue Department for failing to take into account the impacts on the Thai economy in the same way as they scrapped the transactional tax on SET stock trades and blamed the Finance Ministry for failing to understand the negative implications for market volumes. If it is successfully challenged in the Tax Court, they will be forced to take a stand but this government will probably be gone before that happens.  

 

I guess the RD will just leave it like this for now, since the orginal order came from the top of the RD and  their lawyers have now had time to think about it and Order P 162/2566 was all that resulted from this process, welcome though that was.  Other details like how to apply tax credits will be filled in later, possibly after problems become apparent following the submission of 2024 tax returns which will only be the tip of the iceberg since prior year income for 2024 will now no longer be a thorny issue.  While the UK HMRC has pages and pages of guidelines on taxation of remitted foreign source income for its non-doms, Thailand's RD is happy to introduce a similar tax with a 50 word instruction to staff that is not binding on taxpayers and wait and see where the gremlins appear.  Spot the Mickey Mouse tax authority,

So... All the copy and paste puts your opinion in the same place it was before you attempted to have a fact... Which you don't. 

[OzzBlizz]

18 minutes ago, Dogmatix said:

 

This woman's crooked grin is too much for me along with the conflict of interest inherent in her providing tax advise to persuade people to buy the cards, while working for an agent that makes its living from selling Thai Elite/Privilege cards. 

If you are not a bot, then how do you even get out of bed each day? Over 5000 posts and suffering from extreme distrust and paranoia. Must be a real paradise for you living in Thailand. Anyone can tell me how to block people on here?

[OzzBlizz]

14 hours ago, samtam said:

 

Assessable if....

"from employment outside Thailand[,] a business outside Thailand[,] or property assets outside Thailand...."

This is not difficult... yet so many are clueless 😕

[The Cyclist]

7 hours ago, MrMuddle said:

Simple question - does this affect Retirees?

 

Simple answer

 

It might, then again it might not. It will depend on your individual circumstances.

[tomkenet]

10 hours ago, MrMuddle said:

Simple question - does this affect Retirees?

If you have used the loophole, transferring overseas income the year after, to save tax, it will affect you.