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

[Guavaman]

3 hours ago, Guavaman said:

Important exceptions to this for Americans are the following; contributions to IRAs and life insurance annuities, whereby the sole ownership of these instruments lies with the owner of the contract for the IRA or the annuity. This means that foreign income from IRAs and life insurance annuities are exempt from Thai income tax.  Distributions of income from these instruments are NOT construed to be "conjugal property". 

Correction: Contributions to IRAs and life insurance annuities are not conjugal/community property. So gifts of income from these sources can be made to a spouse as a gift of personal property to a spouse. 

 

Income from life insurance annuities are exempt from Thai income tax, while IRA withdrawals are taxable under the DTA between Thailand and the US. 

[mlkik]

167 pages of drivel based on nothing but speculation.

[jerrymahoney]

13 hours ago, Dogmatix said:

Re gifts. They thought gifts from offshore to a spouse or other direct family member should be OK

So I will infer that, at least per the knowledge of whoever is 'they' and the word 'should', since the new gift tax regs came into force FEB 2016, it has never happened.

[PingRoundTheWorld]

4 hours ago, mlkik said:

167 pages of drivel based on nothing but speculation.

And you came to add to the party? pointless post.

[Dogmatix]

On 12/10/2023 at 1:08 PM, jayboy said:

 

Interesting question to which I don't know the answer.It does occur to me to wonder whether honest, English speaking, competent and intelligent firms of tax advisers exist in Thailand who would process expatriates tax returns for a reasonable fee.

 

I also wonder what would be the position if one was able to ring fence investments made prior to 31.12.2023 and only make remittances to Thailand from this source,thus presumably without being liable for Thai tax.But would be the tax status of dividends or interest on cash deposits? Would they count as current income and thus eligible to be taxed?

 

I am thinking that it may make sense to sell shares and funds in overseas accounts that may be needed for remittance to Thailand in the remaining trading days before New Year.  The proceeds could be reinvested, even in the same investments afterwards but safest might be to remit to TH in the early days of Jan, if you are sure you want or need the money here. They would probably not bother trying to argue that all income arose in  a few days in Jan 2024. 

 

According to the two P. orders, all divs, interest and cap gains arising from 1 Jan 2024 onwards is assessable income. You should be able to remit tax free anything you can show was realised prior to that, regardless of what happened to it subsequently. But Gods knows how they will attempt to police all this.

[Dogmatix]

14 hours ago, UKresonant said:

 

So does that imply that they are going to allow tax credits against, for example, personal pension income and perhaps just have to add a form and procedure to to show such? T.B.A.?

 

Unfortunately they have not said anything other than that they intend to avoid double taxation according to the treaties. But this still needs a lot of clarification and maybe some new rulings.  The RC doesn't even mention that DTAs have to be taken into account for PIT but there is one ruling from I think the 80s that said they would.  Treaties are normally held to have higher force than statutory law but statutory law normally explicitly states that treaties will be adhered to, eg the Land Code. 

 

It could be a serious problem, if the RD decides to only accept tax credits issued in respect of the same tax year that the income is remitted, as it does for corporate income tax. In this case there a mismatch of tax years, e.g. the UK's April to April tax year could create problems.  

[Dogmatix]

12 hours ago, Guavaman said:

 

The issue of a gift of "non-conjugal property" is an important issue for aliens who are married to Thais in this country which is a "community property" state, which is a legal fact, of which, many foreigner are not aware. 

 

The community property concept refers to assets that are owned jointly after accumulation after marriage. So assets accumulated by an expat prior to marriage, are deemed to be his assets. 

 

If a foreigner has accumulated financial assets prior to marriage, he retains his ownership of his personal assets such as his contributions to pensions, annuities, social security, etc.

 

It is only the assets that have been accumulated after marriage, that result in joint ownership with the spouse.

 

Important exceptions to this for Americans are the following; contributions to IRAs and life insurance annuities, whereby the sole ownership of these instruments lies with the owner of the contract for the IRA or the annuity. This means that foreign income from IRAs and life insurance annuities are exempt from Thai income tax.  Distributions of income from these instruments are NOT construed to be "conjugal property". 

 

 

Basically the section oh gifts in the RC which talks about gifts to "provide patronage" to a direct family member being exempted up to 20 million is at odds with the concept of conjugal property in the Civil and Commercial Code.  There are no specific exemptions for Americans or any other nationality in the CCC but it is worth noting that Thai courts have never attempted exercise jurisdiction on property overseas which has effectively meant that any assets held overseas are not conjugal property. 

[Dogmatix]

5 hours ago, jerrymahoney said:

So I will infer that, at least per the knowledge of whoever is 'they' and the word 'should', since the new gift tax regs came into force FEB 2016, it has never happened.

 

I expect gifts have been made to spouses from offshore but there is no record of any test cases or rulings on this. 

[jerrymahoney]

1 hour ago, Dogmatix said:

 

I expect gifts have been made to spouses from offshore but there is no record of any test cases or rulings on this. 

Maybe. But at least it seems that the tax lawyers and accountants running the show at AMCHAM and with their high-end clientele aren't familiar with them and have never processed such a tax form as submitted to the Revenue Department.

 

From the Mazars Thailand website:

 

Mazars specialises in audit, accounting, tax and advisory services across a range of markets and sectors. We offer specialist skills beyond the reach of most regional firms.

https://www.mazars.co.th/

 

But if anyone has (ever) since FEB 2016 made a tax-free maintenance gift to a spouse in Thailand up to 20 million baht per annum from an offshore account, we don't know about it.

[decline]

I’ve not had time to read the thread but planning to transfer 400k THB in January for a a Non-O

 

Is there a chance it will get taxed? I would send it in December if so but not in the country at that time so not comfortable with it..

[JimTripper]

1 minute ago, decline said:

I’ve not had time to read the thread but planning to transfer 400k THB in January for a a Non-O

 

Is there a chance it will get taxed? I would send it in December if so but not in the country at that time so not comfortable with it..

Yep, it could get taxed.

[Dogmatix]

Earlier in the thread there was a lot of discussion about standard deductions for Thai income tax which is quite important for determining whether you will have assessable income and estimating tax on it.

 

What is most confusing is the 100,000 standard deduction up to a maximum amount of 50% of income.  Although not expressed clearly on the RD's own website this 100,000 deduction is only for those earning income from employment. 

 

The standard deductions are:

 

60,000 personal allowance

30,000 for a spouse, if filing jointly

30,000 for a minor child

190,000 for being over 65. 

 

There are many more deductions for charitable donations, life and health insurance premiums, RMF investment etc but the standard deduction for a pensioner over 65 will be 250,000.  

[Dogmatix]

2 hours ago, decline said:

I’ve not had time to read the thread but planning to transfer 400k THB in January for a a Non-O

 

Is there a chance it will get taxed? I would send it in December if so but not in the country at that time so not comfortable with it..

 

If you remit this month, the old rules apply, i.e. it is assessable if the income was earned this year.  Of course it depends on your deductions and how much other income you have remitted or earned on shore.

[Neeranam]

On 12/15/2023 at 9:48 AM, daveAustin said:

I wouldn't mind paying tax (again!) if it afforded me citizenship, or permanent residency, and voting rights in this country. Yeah right!

Do any countries allow PR or Citizenship just because you pay tax?

[Neeranam]

9 minutes ago, Dogmatix said:

Earlier in the thread there was a lot of discussion about standard deductions for Thai income tax which is quite important for determining whether you will have assessable income and estimating tax on it.

 

What is most confusing is the 100,000 standard deduction up to a maximum amount of 50% of income.  Although not expressed clearly on the RD's own website this 100,000 deduction is only for those earning income from employment. 

 

The standard deductions are:

 

60,000 personal allowance

30,000 for a spouse, if filing jointly

30,000 for a minor child

190,000 for being over 65. 

 

There are many more deductions for charitable donations, life and health insurance premiums, RMF investment etc but the standard deduction for a pensioner over 65 will be 250,000.  

I get 60,000 allowance for my spouse(wife).

 

I expect there will be a lot of activity at temples if this law is enforced!

As you know, a common method of tax avoidance here.

[Mike Teavee]

11 minutes ago, Dogmatix said:

 

If you remit this month, the old rules apply, i.e. it is assessable if the income was earned this year.  Of course it depends on your deductions and how much other income you have remitted or earned on shore.

(Technically) if you remit Income earned this year in December it's liable for Tax under the old rules so it might be a better idea to remit on 1/1/24 as clearly anything sent on that day could not have been earned in 2024.

[Mike Teavee]

1 hour ago, Mike Teavee said:

(Technically) if you remit Income earned this year in December it's liable for Tax under the old rules so it might be a better idea to remit on 1/1/24 as clearly anything sent on that day could not have been earned in 2024.

For the "Confused" amongst us... 

 

Any income that you remit to Thailand in the same year that it was earned is liable for Tax, so remit income this month that was earned this year & (technically, ignoring any relief from DTAs) you should be paying tax on it. 

 

On 1/1/24 any income you've earn prior to that date would not be liable for tax so send over as much as you like as it was clearly earned in a previous tax year before the new rule came into place. 

 

 

It's not rocket science... 

[Mike Teavee]

1 hour ago, Neeranam said:

I get 60,000 allowance for my spouse(wife).

 

I expect there will be a lot of activity at temples if this law is enforced!

As you know, a common method of tax avoidance here.

You do get 60K if you're wife doesn't file her own Tax Return 

[Mitkof Island]

A mass exodus is coming ! see ya!

[Mike Teavee]

15 minutes ago, Mitkof Island said:

A mass exodus is coming ! see ya!

 

I doubt many guys will be too impacted by this & so few will leave. 

 

Besides, if you did leave where are you going to go? 

[John Drake]

12 minutes ago, Mike Teavee said:

I doubt many guys will be too impacted by this & so few will leave. 

 

Besides, if you did leave where are you going to go? 

 

From what I can tell, for peons like me, there isn't going to be much impact, if any. But the guys and gals with income levels that meet, for example, the Long Term Visa or Elite Visa, those people are going to get taken to the cleaners.

[ukrules]

35 minutes ago, John Drake said:

 

From what I can tell, for peons like me, there isn't going to be much impact, if any. But the guys and gals with income levels that meet, for example, the Long Term Visa or Elite Visa, those people are going to get taken to the cleaners.

 

I doubt that very much. Firstly, most of the long term visas are income tax exempt and secondly we can choose how much money to remit, and that does not need to be very much compared to our overall income.

 

Lets say I have an income of 300k Baht a month but only spend 100k a month in Thailand, I will send 50k a month to Thailand and send 50k to the woman I live with who I'm not married to, we would both pay about 20k tax a year which is almost nothing.

 

The rest including all investments stays outside Thailand and there are ways to remit very large amounts of money by leaving the country for a single year, the same year when the shares, etc were sold which would result in zero tax that year.

 

We're not stupid and plan for such scenarios with accountants and lawyers, so it is very possible to bring tens of millions of Baht of untaxed money into Thailand and not be taxed.

If they do change it to taxing worldwide income (something else to this current change which they are also talking about) then there will be a mass exodus of anyone who has any significant wealth and income resulting from it.

[Mike Teavee]

31 minutes ago, John Drake said:

 

From what I can tell, for peons like me, there isn't going to be much impact, if any. But the guys and gals with income levels that meet, for example, the Long Term Visa or Elite Visa, those people are going to get taken to the cleaners.

The guys who meet the LTR visa are exempt from Tax for income earned while they have the LTR Visa & I'm sure they're smart enough to order their remittances accordingly 

 

The guys on an Elite Visa (I guess) will either move to the LTR or order their affairs so they pay minimum tax... 

 

I'm honestly in the middle of "Peon" (No/Little Tax) & cannot afford the LTR but I have a very simple plan where I don't need pay any taxes Thailand... 

 

Put simply I'll do 6 months outside of Thailand when I remit funds to last me the next 3 years... I appreciate not everybody has the flexibility to do this but I'm the kind of guy who will travel at the opening of an envelope... 

 

 

 

 

 

 

 

 

 

 

[Neeranam]

1 hour ago, Mike Teavee said:

You do get 60K if you're wife doesn't file her own Tax Return 

Indeed. They're are so many ways I can think of now to avoid paying tax( also evade come to mind 🤣) 

For example, money from my company in the UK to my wife, money from my German company to one my kids at uni, etc. 

I doubt the money I send to my wife, through Tranferwise, from UK bank will be tta able as income, will it? If it is, just make it a gift? 

Doubt it will ever come to anything though.. 

[John Drake]

38 minutes ago, ukrules said:

 

I doubt that very much. Firstly, most of the long term visas are income tax exempt and secondly we can choose how much money to remit, and that does not need to be very much compared to our overall income.

 

Lets say I have an income of 300k Baht a month but only spend 100k a month in Thailand, I will send 50k a month to Thailand and send 50k to the woman I live with who I'm not married to, we would both pay about 20k tax a year which is almost nothing.

 

The rest including all investments stays outside Thailand and there are ways to remit very large amounts of money by leaving the country for a single year, the same year when the shares, etc were sold which would result in zero tax that year.

 

We're not stupid and plan for such scenarios with accountants and lawyers, so it is very possible to bring tens of millions of Baht of untaxed money into Thailand and not be taxed.

If they do change it to taxing worldwide income (something else to this current change which they are also talking about) then there will be a mass exodus of anyone who has any significant wealth and income resulting from it.

 

Seems like a lot of work to me. Sometimes I'm happy to be a peon and satisfied with my station in life. Obviously you know how to protect yourself and have given it a lot of thought. Which leads to the question: just exactly who is going to pay? If everybody like you has it protected, what's the purpose of the new tax law? Who are they going after?

[ukrules]

5 minutes ago, John Drake said:

what's the purpose of the new tax law? Who are they going after?

 

People who can't be bothered or don't have the time / freedom from responsibility to take a 7 month holiday - which when you think about it is going to be most people - also Thai nationals are the main target.

 

I believe we're just small fish getting caught in the nets.

 

[Neeranam]

51 minutes ago, ukrules said:

If they do change it to taxing worldwide income (something else to this current change which they are also talking about) then there will be a mass exodus of anyone who has any significant wealth and income resulting from it.

I thought the whole/only point of the change was to tax worldwide income. 

[herfiehandbag]

15 hours ago, mlkik said:

167 pages of drivel based on nothing but speculation.

Sorry, are you referring to the Thai Tax Code?😀

[JackGats]

30 minutes ago, Neeranam said:

I thought the whole/only point of the change was to tax worldwide income. 

This has precisely not been the point of the change, as discussed many times in this thread.

[Neeranam]

9 minutes ago, JackGats said:

This has precisely not been the point of the change, as discussed many times in this thread.

What is the point of the new tax law then, in your opinion?