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

[thaitanic]

7 hours ago, Mike Teavee said:

The table needs an additional column "Tax Resident in the year the income was remitted" - If "Yes" then I agree it would be Scenario 1 & Tax would be payable, if "No" then no Tax would be due. 

 

How about a flowchart version?

It might not be correct. I'm trying to get my head around this myself. I'm sure I'll be told if it isn't.

Obviously it doesn't make reference to dual tax treaties at all.

[4MyEgo]

12 minutes ago, thaitanic said:

How about a flowchart version?

It might not be correct. I'm trying to get my head around this myself. I'm sure I'll be told if it isn't.

Obviously it doesn't make reference to dual tax treaties at all.

 

For those of us that have savings in the bank, separate to our online trading accounts, it's a no brainer.

 

Sawadee Krup Mr Taxman, the money was taken out of my bank account from overseas, it is savings which I live on, it is not an income in any financial year, therefor is not taxable, so if you like, you an kiss my left one, or the right one, up to you.

[Mike Lister]

25 minutes ago, quake said:

 

Is that not, what was said, as maybe a way round it all,  about a 140  pages ago. 

 

 

Dunno, but if you want to show us where it was, feel free to quote it.

[The Cyclist]

1 hour ago, TroubleandGrumpy said:

Absolute rubbish

 

What part of this did you not understand ?
 

22 hours ago, The Cyclist said:

I think the paragraph from the original September statement is quite clear and concise.

 

Persons from a Country with a DTA with Thailand will be exempt.

 

I then caveated that by saying

 

22 hours ago, The Cyclist said:

* I will make an assumption, an assume that this will cover income that has already been taxed, and will not cover income that has not been taxed.

 

Just for good measure, I will throw another one at you.

 

What is the purpose of the CRS, designed by the OECD, at the request of the G20 ?
 

Is it to

 

1. Catch people using loopholes to avoid paying tax.

 

2. Ensure that people who have paid tax are stung for further tax in another tax jurisdiction ?
 

Remember. This is OECD led not Thailand led.

[Mike Lister]

Sorry to be boring but I can't get to the bottom of this one, despite several posters suggesting they know the answer but never confirming it.

 

It has been said that there is a standard deduction for pensions that equals 50% of the pension received, up to 100k. The first I heard of this was a couple of days ago. The question is, does that standard deduction, replace other deductions such as the 190K and the Personal allowance or is it in addition to?

 

My wife works as self employed and she has a choice between taking a standard deduction for costs or taking the total of actual costs but she can't take both, it's one or the other. In the case of pensions where it's said this 100k deduction against pensions received exists, I can't see why it exists since there are no costs involved, no pension contributions from earnings, no nothing. It's even more odd that it exists for pensions that arise from overseas!

 

Granted, there is a difference between a deduction and an allowance so maybe the answer exists in that subtle difference. the 190K for over age 65 year olds is an age related allowance, the 60k is a Personal Care Allowance, noether are deductions.

 

A most helpful poster posted an extract from Sherrings earlier but it was unclear if the example was only for Civil Servants and Military or whether it applies equally to everyone. Any clarifications, gratefully receievd.

 

 

 

 

[Yumthai]

1 hour ago, Mike Lister said:

Sorry to be boring but I can't get to the bottom of this one, despite several posters suggesting they know the answer but never confirming it.

 

It has been said that there is a standard deduction for pensions that equals 50% of the pension received, up to 100k. The first I heard of this was a couple of days ago. The question is, does that standard deduction, replace other deductions such as the 190K and the Personal allowance or is it in addition to?

 

My wife works as self employed and she has a choice between taking a standard deduction for costs or taking the total of actual costs but she can't take both, it's one or the other. In the case of pensions where it's said this 100k deduction against pensions received exists, I can't see why it exists since there are no costs involved, no pension contributions from earnings, no nothing. It's even more odd that it exists for pensions that arise from overseas!

 

Granted, there is a difference between a deduction and an allowance so maybe the answer exists in that subtle difference. the 190K for over age 65 year olds is an age related allowance, the 60k is a Personal Care Allowance, noether are deductions.

 

A most helpful poster posted an extract from Sherrings earlier but it was unclear if the example was only for Civil Servants and Military or whether it applies equally to everyone. Any clarifications, gratefully receievd.

 

I'll post it again.

Please read carefully the Personal Income Tax Return for taxpayer with income not only from employment (Tax Year 2022)

along with the Guide to Personal Income Tax Return 2022 (ภ.ง.ด.90)

You will need the Income Exemption Entitlement Form to be used with ภ.ง.ด.90 as well.

 

All related documents can also be found here on the RD website.

 

If you take the time to read all the docs trying to file step by step your 2022 tax return as an example you will understand.  

 

Pension needs to be filled on Tax Return form page 2:

No. 1 - Item 1. fill your yearly pension total amount (including salary, wage if any)

No. 1 - Item 2. fill if you are concerned

No. 1 - Item 3. fill if you are concerned

No. 1 - Item 4. Balance calculation

No. 1 - Item 5. Less expense (50 percent but not exceeding 100,000 baht)

No. 1 - Item 6. Final Balance calculation

 

Read the guide along, everything is in plain English and it's not that complicated.

 

There is nowhere said that you can't deduct expense on foreign pension or that foreign pension need to be treated differently.

There is nowhere said that this expense deduction replaces other deductions/allowances.

 

Trying to interpret or use you western minded common sense in Thailand is counterproductive, just follow written instructions.

 

[Mike Lister]

15 minutes ago, Yumthai said:

 

I'll post it again.

Please read carefully the Personal Income Tax Return for taxpayer with income not only from employment (Tax Year 2022)

along with the Guide to Personal Income Tax Return 2022 (ภ.ง.ด.90)

You will need the Income Exemption Entitlement Form to be used with ภ.ง.ด.90 as well.

 

All related documents can also be found here on the RD website.

 

If you take the time to read all the docs trying to file step by step your 2022 tax return as an example you will understand.  

 

Pension needs to be filled on Tax Return form page 2:

No. 1 - Item 1. fill your yearly pension total amount (including salary, wage if any)

No. 1 - Item 2. fill if you are concerned

No. 1 - Item 3. fill if you are concerned

No. 1 - Item 4. Balance calculation

No. 1 - Item 5. Less expense (50 percent but not exceeding 100,000 baht)

No. 1 - Item 6. Final Balance calculation

 

Read the guide along, everything is in plain English and it's not that complicated.

 

There is nowhere said that you can't deduct expense on foreign pension or that foreign pension need to be treated differently.

There is nowhere said that this expense deduction replaces other deductions/allowances.

 

Trying to interpret or use you western minded common sense in Thailand is counterproductive, just follow written instructions.

 

Oh please!

 

What is the pension expense that the taxpayer has incurred to warrant the deduction, it's a simple enough question? Expat pensioners in Thailand who recieve pension income from overseas, there is NO expense involved so why is there a deduction and for what?

 

If you don't know, don't tell everyone to read copious pages of RD documents and try to decide the answer for ourselves, an answer that you clearly don't know, otherwise you would have posted something along the lines of:

 

The person who is in receipt of a pension is entitled t deduction for expenses such as, a)...example  b)  example etc etc.

 

 

Edited December 3, 2023 by Mike Lister

[Yumthai]

30 minutes ago, Mike Lister said:

What is the pension expense that the taxpayer has incurred to warrant the deduction, it's a simple enough question? Expat pensioners in Thailand who recieve pension income from overseas, there is NO expense involved so why is there a deduction and for what?

 

If you don't know, don't tell everyone to read copious pages of RD documents and try to decide the answer for ourselves, an answer that you clearly don't know

 

All information that you need to fill your tax is in these documents, up to you if don't wanna read.

Now if you can't find answers it's maybe you're asking the wrong questions or just thinking too much. 

  

Ia there any expense on local pension? Not more not less than on foreign pension, but still you can deduct expense from it.

 

 

Edited December 3, 2023 by Yumthai

[Mike Lister]

1 minute ago, Yumthai said:

 

All information that you need to fill your tax is in these documents, up to you if don't wanna read.

Now if you can't find answers it's maybe you're asking the wrong questions or just thinking too much. 

 

I have filed taxes here for several years already, I know how to file taxes, I just don't understand this deduction that you claim exists which I don't think is real for foreigners in receipt of an overseas pension in Thailand.

 

You clearly don't know the answer to the question and are trying to convince us that you do. You've become boring, I'm putting you on my ignore list because your contribution is extremely unhelpful for everyone. Byee.

[Yumthai]

5 minutes ago, Mike Lister said:

I have filed taxes here for several years already, I know how to file taxes, I just don't understand this deduction that you claim exists which I don't think is real for foreigners in receipt of an overseas pension in Thailand.

I claim nothing I just read and fill accordingly. What you think is again irrelevant.

[Felt 35]

I have done as Yumthai says for more than 15 years and got the deductions to which I am entitled. I think its important to remember that tax filing in Thailand follows Thailand's internal tax rules so by that if it's a foreign pension remitted to Thailand doesn't really matter.

Felt

 

 

[Krit]

16 hours ago, beammeup said:

Question: If you have foreign income in 2024 and are tax resident but do not remit the money until 2025 at which time you are not tax resident, Is it taxable?

Yes. Foreign income earned after 1.1.2024 (while tax resident) will be taxable even if it is remitted in a later year of not being a tax resident. Tax residency status in the year of remittance is irrelevant.

 

Edited December 3, 2023 by Krit

[Hans99]

Hello, I'm an American retiree on an Elite visa living most of each year in Thailand as of this year (2023) and plan to continue doing so.  I have no financial accounts in Thailand or anywhere outside the US.  The only money I bring into Thailand is by way of (a) ATM withdrawals on a US bank account and (b) usage of a credit card issued by a US bank.  Do (a) and (b) count as "remitted" money?  My only income is in the US (just interest and retirement plan payouts, and I pay income tax on that in the US and in my state).  Will I have to file tax returns in Thailand and/or pay tax in Thailand?  Do I need to keep all my ATM withdrawal slips and credit card charge slips?

 

Also, what if my US-based bank account contains money earned previously and also current income (i.e., current-year interest and current-year retirement plan payouts)?  Do I have to say "well, at the time of this-or-that ATM withdrawal, 90% of the dollars in the account were from prior to 2024, and 10% was paid in during 2024, so I'm declaring 10% of the ATM withdrawal to be 2024 taxable income remitted to Thailand"...?

[tomkenet]

4 hours ago, Krit said:

Yes. Foreign income earned after 1.1.2024 (while tax resident) will be taxable even if it is remitted in a later year of not being a tax resident. Tax residency status in the year of remittance is irrelevant.

 

So what you're saying:

A person who is not a tax resident (but was a previous year) will have to file a tax report showing the origin of the funds he remitted to Thailand the year he is not tax resident.  

Sounds unlikely.

Edited December 3, 2023 by tomkenet

[Mike Lister]

4 hours ago, Krit said:

Yes. Foreign income earned after 1.1.2024 (while tax resident) will be taxable even if it is remitted in a later year of not being a tax resident. Tax residency status in the year of remittance is irrelevant.

 

Nonsense, income of non-residents/non-citizens is not assessed on when it arose but on when it was remitted, that is perfectly clear from the tax regulations and is explicitly stated as such. If the tax filer was not resident when the funds were remitted, he/she has no obligation to file a return in that year  and declare the funds.

[tlcwaterfall]

5 hours ago, Krit said:

Yes. Foreign income earned after 1.1.2024 (while tax resident) will be taxable even if it is remitted in a later year of not being a tax resident. Tax residency status in the year of remittance is irrelevant.

 

Really? I was of the understanding that while you are not a tax resident your remittances will not be taxable.

[K2938]

4 hours ago, Hans99 said:

Hello, I'm an American retiree on an Elite visa living most of each year in Thailand as of this year (2023) and plan to continue doing so.  I have no financial accounts in Thailand or anywhere outside the US.  The only money I bring into Thailand is by way of (a) ATM withdrawals on a US bank account and (b) usage of a credit card issued by a US bank.  Do (a) and (b) count as "remitted" money?

Currently undefined, but likely

 

[TroubleandGrumpy]

15 hours ago, The Cyclist said:

What part of this did you not understand ?
I then caveated that by saying

Just for good measure, I will throw another one at you.

What is the purpose of the CRS, designed by the OECD, at the request of the G20 ?
Is it to

1. Catch people using loopholes to avoid paying tax.

2. Ensure that people who have paid tax are stung for further tax in another tax jurisdiction ?
Remember. This is OECD led not Thailand led.

Mate - you need to take a Bex and calm down and go and have a lie down.

Did you read what I wrote about how DTAs work? Do you understand basic English?

There are no 'exemptions' because you have paid taxes under DTAs - you can claim 'tax credits' under a DTA for taxes already paid. And in Australia the tax free threshold is $18K or 400K - in Thailand the threshold is 180K (please dont go on about 'allowances' - they have them in Australia too).

 

The CRS requires financial institutions to identify the tax residency of all customers and report information on customers who are tax resident outside of the country where they hold their accounts.  Similar to FATCA, the purpose of CRS is to aid automatic exchange of information between bilateral treaty partner countries about account holders/investors maintaining accounts in foreign jurisdictions so as to avoid tax evasions on the funds parked in such countries.

 

 

[Krit]

3 hours ago, Mike Lister said:

Nonsense, income of non-residents/non-citizens is not assessed on when it arose but on when it was remitted, that is perfectly clear from the tax regulations and is explicitly stated as such. If the tax filer was not resident when the funds were remitted, he/she has no obligation to file a return in that year  and declare the funds.

Thank you for kindly correcting me. I was momentarily confused by the Baker McKenzie presentation that was linked here earlier:

 

Edited December 4, 2023 by Krit

[Mike Lister]

9 minutes ago, Krit said:

Thank you for kindly correcting me. I was momentarily confused by the Baker McKenzie presentation that was linked here earlier:

 

The slide presumably refers to  a Thai person or citizen, in which case it is correct, it is not however relevant to non Thai citizens or foreigners.

[Morch]

21 minutes ago, Mike Lister said:

The slide presumably refers to  a Thai person or citizen, in which case it is correct, it is not however relevant to non Thai citizens or foreigners.

 

But it's in very large font, though.

[jerrymahoney]

1 hour ago, TroubleandGrumpy said:

There are no 'exemptions' because you have paid taxes under DTAs - you can claim 'tax credits' under a DTA for taxes already paid.

9.    What is the method for elimination of double taxation provided in the agreement?  

- In a double taxation agreement, there are credit and exemption methods.  

 

https://www.rd.go.th/english/23520.html

 

[The Cyclist]

1 hour ago, TroubleandGrumpy said:

Mate - you need to take a Bex and calm down and go and have a lie down.

 

You're a funny guy

 

It is not I, who has 260 posts on this thread alone, professing doom & gloom and the sky is falling in.

 

Methinks it is you that needs a lie down and some form of medication.

 

Yes, I know how DTA's work. That is why I have stopped 1 pension being remitted to Thailand, the other pension will continue being remitted direct to Thailand.

 

25 minutes ago, jerrymahoney said:

- In a double taxation agreement, there are credit and exemption methods.  

 

Yet again, I will refer you to the paragraph in the original announcement ( that you fastudiously ignore, or are incapable of understanding ) that people from Countries that have a DTA with Thailand will be exempt.

 

Not rocket science. But it will make life rather unpleasant for people who have been using loopholes to avoid paying tax.

 

Do you fall into that bracket, and could that be the reason that you have 260 posts in this thread alone?

 

The lady doth protest too much springs to mind.

 

Edited December 4, 2023 by The Cyclist
Typo

[Krit]

2 hours ago, Mike Lister said:

The slide presumably refers to  a Thai person or citizen, in which case it is correct, it is not however relevant to non Thai citizens or foreigners.

 

I now asked Baker MacKenzie for clarification about the text "Tax residency status in the year of remittance is irrelevant."

 

"This has caused some confusion. Does it indeed mean that foreign-source income earned after 1.1.2024 (while being tax resident) will be taxable even if it is remitted in a later year of not being a tax resident?"

 

Their reply:

 

"Thai personal income tax is based on cash basis - receiving income. A year in which a person receives offshore income is relevant, saying that it must be a year that the person is a Thai tax resident. Whether that person is a Thai tax resident in a year in which he or she actually brings income into Thailand is not relevant."

[Mike Lister]

30 minutes ago, Krit said:

 

I now asked Baker MacKenzie for clarification about the text "Tax residency status in the year of remittance is irrelevant."

 

"This has caused some confusion. Does it indeed mean that foreign-source income earned after 1.1.2024 (while being tax resident) will be taxable even if it is remitted in a later year of not being a tax resident?"

 

Their reply:

 

"Thai personal income tax is based on cash basis - receiving income. A year in which a person receives offshore income is relevant, saying that it must be a year that the person is a Thai tax resident. Whether that person is a Thai tax resident in a year in which he or she actually brings income into Thailand is not relevant."

Yes, for Thai nationals but not for non-citizens.

[Krit]

14 minutes ago, Mike Lister said:

Yes, for Thai nationals but not for non-citizens.

 

I would not bet too many million dollars on this belief, when experts advise otherwise.

 

Remittances do not generate income and are therefore not taxable. Bank transfers do not result in taxable income under Thai laws. The tax burden arises when income is paid to a foreign bank account of a Thai tax resident (national or not).

[Sato]

1 hour ago, Krit said:

 

I now asked Baker MacKenzie for clarification about the text "Tax residency status in the year of remittance is irrelevant."

 

"This has caused some confusion. Does it indeed mean that foreign-source income earned after 1.1.2024 (while being tax resident) will be taxable even if it is remitted in a later year of not being a tax resident?"

 

Their reply:

 

"Thai personal income tax is based on cash basis - receiving income. A year in which a person receives offshore income is relevant, saying that it must be a year that the person is a Thai tax resident. Whether that person is a Thai tax resident in a year in which he or she actually brings income into Thailand is not relevant."

What Baker MacKenzie write makes sence to me.

Overseas income is in Thailand taxable when you are Tax Resident in Thailand.

But you have to pay the tax just then when you bring the money into Thailand.

Therefore it's logical that it is irrelevant if you are in the year of remittance not a Thai Tax Resident.

Otherwise it would be a loophole to avoid paying taxe's.

 

In addition, I do not belive, that Thai national will be treated differently to foreigner's in this matter.

[tomkenet]

1 hour ago, Krit said:

 

I now asked Baker MacKenzie for clarification about the text "Tax residency status in the year of remittance is irrelevant."

 

"This has caused some confusion. Does it indeed mean that foreign-source income earned after 1.1.2024 (while being tax resident) will be taxable even if it is remitted in a later year of not being a tax resident?"

 

Their reply:

 

"Thai personal income tax is based on cash basis - receiving income. A year in which a person receives offshore income is relevant, saying that it must be a year that the person is a Thai tax resident. Whether that person is a Thai tax resident in a year in which he or she actually brings income into Thailand is not relevant."

Does this mean a person can be taxed on remittance even he is not a tax resident that year if the money is earned a previous year when he was a tax resident.

[The Cyclist]

2 hours ago, Krit said:

I now asked Baker MacKenzie for clarification about the text "Tax residency status in the year of remittance is irrelevant."

 

As Baker MacKenzie is freely throwing about advice.

 

Could you ask them a really simple question, that will not throw up more ambiguity.

 

If I remit money to Thailand that has already been taxed in my home Country, something like a pension, will it get taxed again in Thailand ?

 

It should really be a yes  or no answer.

[Mike Lister]

1 hour ago, Krit said:

 

I would not bet too many million dollars on this belief, when experts advise otherwise.

 

Remittances do not generate income and are therefore not taxable. Bank transfers do not result in taxable income under Thai laws. The tax burden arises when income is paid to a foreign bank account of a Thai tax resident (national or not).

Krit, I'm a Brit., if I go back to the UK to live for a year, my connection with Thailand no longer exists and because I have no income that arises in Thailand, I have no obligation  to file a Thai tax return. If during that year, say after 9 months of being in the UK, I decide to transfer some funds to an account in Thailand, I am under no obligation to file a Thai tax return because I am not a Thai subject and I am not tax resident in Thailand. Now, are you seriously suggesting that the money I have transferred under those circumstances described above, are taxable in Thailand and must be reported on a Thai tax return....I don't think so.

 

The fact that a transfer has been made is not an issue in itself, the subsequent reporting of that transfer might be, based on the source of those funds, AND, based on my tax residency at any point in time. If, following the transfer described above, I decide to return to Thailand but only remain for 175 days in that tax year, I could chose to spend those funds but not report them on a Thai tax return, because I was not tax resident in Thailand, when the funds were transfered, nor when they were spent.