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

[Ralf001]

40 minutes ago, Danderman123 said:

The problem is that the 65K monthly deposit may be taxable in 2024.

 

Has tax been paid on that 65k in country of origin ?

 

Does country of origin have a DTA agreement with Thailand ?

[beammeup]

As far as ATM withdrawals, You guys seem to think  there is someone in a back room looking through the data. No. There is this new thing called AI. Can go through all the data in seconds.  The world is changing fast.

[Tarteso]

7 minutes ago, Ralf001 said:

Has tax been paid on that 65k in country of origin ?

It will be disappointing to see that, in my case, with a disability (accident) pension, I am exempt from taxes in Spain, and here I will have to pay it.

[Ralf001]

2 minutes ago, Tarteso said:

It will be disappointing to see that, in my case, with a disability (accident) pension, I am exempt from taxes in Spain, and here I will have to pay it.

 

Yes that is likely then.

[jerrymahoney]

1 hour ago, Danderman123 said:

The problem is that the 65K monthly deposit may be taxable in 2024.

Yes. But as of right now, with the available deductions to me including the age 65+, I figure my tax bill would be about $US 100 per month.

 

But with the US Thai DTA Article 20 Paragraphs 2 and 3, would be zero.

 

But I enjoy reading the posts on this and other topics as to how one can be a 180+ day tax resident in Thailand and have income that is not reported to the Revenue folks as income.

 

[jacko45k]

54 minutes ago, Ben Zioner said:

Could someone give us a  link to that  story. As I don't  see how it could be related to RD  fleecing Farangs?

Went off on sidetrack sorry... the RD taxation is really a 'where's the meat' story!

[2baht]

2 hours ago, jerrymahoney said:

How un-clever. I like the posts of how the quick-witted farang will out-maneuver the slow plodding Thai Revenue agent.

I'd say it's more clever than what you are doing! 🙏

[2baht]

1 hour ago, Mike Lister said:

I've just done an extension using a long standing fixed deposit account that has nothing else in it apart from my 400K visa money. This year they wanted copies of every page in the bank book, a statement of the account from my bank covering the past three months and a letter from the bank confirming the balance.  They've become paranoid beyond belief.

That was the case when I did my retirement extension in March, out in 1/2 an hour with the correct documents! 

[jerrymahoney]

4 minutes ago, 2baht said:

I'd say it's more clever than what you are doing! 🙏

I am not clever. I set up my finances 10+ years ago to conform to a monthly income of 65K+ baht even when all that was required was an affidavit from the US Embassy saying you do have it.

 

Not did that only make it easy for me to comply with the change 4 years ago that you actually had to document a monthly 65K+ FTT transaction and have a "Source of Funds" Letter to prove it, it now works that my financial structure totally conforms to the Article 20 US-Thai DTA.

 

So being not clever with the agent-assisted extension and other vapor-ware approaches is looking pretty good  heading into 2024.

[Danderman123]

58 minutes ago, beammeup said:

As far as ATM withdrawals, You guys seem to think  there is someone in a back room looking through the data. No. There is this new thing called AI. Can go through all the data in seconds.  The world is changing fast.

You are talking about theory, whereas the rest of us have to live with actual practice.

 

Unless, of course, you have information that RD is actually going to check immigration status of people withdrawing cash using foreign bank cards, then there should be no impact on tax status for such withdrawals.

 

But, since tax filing is done on the honor system, and your ATM transactions using foreign bank cards indeed are transfers from abroad, anyone here going to include them in your tax filings?

 

[Danderman123]

5 minutes ago, jerrymahoney said:

I am not clever. I set up my finances 10+ years ago to conform to a monthly income of 65K+ baht even when all that was required was an affidavit from the US Embassy saying you do have it.

 

Not did that only make it easy for me to comply with the change 4 years ago that you actually had to document a monthly 65K+ FTT transaction and have a "Source of Funds" Letter to prove it, it now works that my financial structure totally conforms to the Article 20 US-Thai DTA.

 

So being not clever with the agent-assisted extension and other vapor-ware approaches is looking pretty good  heading into 2024.

I presume you are currently filing taxes in Thailand?

[jerrymahoney]

6 minutes ago, Danderman123 said:

I presume you are currently filing taxes in Thailand?

Presume away.

[Danderman123]

12 minutes ago, jerrymahoney said:

Presume away.

So, you are going to continue to transfer in 65K a month, not file a Tax return (because you don't think you owe anything), and when or if the RD asks you about why you aren't paying taxes, you will tell them a story.

 

Your belief is that if you don't owe, you don't have to file.

 

Meanwhile, in the US, if you are generating reportable income, you use the filing process to prove you don't owe anything.

 

What's new in 2024 is that your 65K is now reportable.

[jerrymahoney]

5 minutes ago, Danderman123 said:

So, you are going to continue to transfer in 65K a month, not file a Tax return (because you don't think you owe anything), and when or if the RD asks you about why you aren't paying taxes, you will tell them a story.

 

Your belief is that if you don't owe, you don't have to file.

 

Meanwhile, in the US, if you are generating reportable income, you use the filing process to prove you don't owe anything.

 

What's new in 2024 is that your 65K is now reportable.

This is from the US DTA -Thailand technical report Article 20:

 

 3. Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State. The term “annuities” as used in this paragraph means a  sum paid periodically at stated times during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered).

 

If you think I haven't filed to-date when I should have filed, fine. Turn me in.

 

 

[Danderman123]

10 minutes ago, jerrymahoney said:

This is from the US DTA -Thailand technical report Article 20:

 

 3. Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State. The term “annuities” as used in this paragraph means a  sum paid periodically at stated times during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered).

 

If you think I haven't filed to-date when I should have filed, fine. Turn me in.

This forum exists to help people.

 

I am suggesting that the new regulation deeming foreign transfers into Thailand as taxable income has some implications. One being that the banks will report such foreign transfers. Another being that the RD will have the data on the transfers.

 

What they do with the data is unknown today.

 

But, at some point, the RD is bound to make inquiries. Some here have speculated that the RD is not going to worry about relatively small transfers.

 

If the RD does worry about your transfers, how would you educate the RD about the tax free nature of your money, except by filing out a tax form?

[Presnock]

2 hours ago, UKresonant said:

That's the over 179 days and you  get salt in the coffee version. Not so much of an incentive to exceed the threshold, if you are not permanently there anyway.

The tax system would become even more arrogant than my home countries system, as positive circumstance of being (tax) resident is perhaps substantially less. Except the temperature perhaps 

Final version anticipated, but when will they get round to it, is anybodys guess.

suggest all google "Thai examiner.com" for their inputs into this issue.  Several good articles.

[jerrymahoney]

14 minutes ago, Danderman123 said:

This forum exists to help people.

 

I am suggesting that the new regulation deeming foreign transfers into Thailand as taxable income has some implications. One being that the banks will report such foreign transfers. Another being that the RD will have the data on the transfers.

 

What they do with the data is unknown today.

 

But, at some point, the RD is bound to make inquiries. Some here have speculated that the RD is not going to worry about relatively small transfers.

 

If the RD does worry about your transfers, how would you educate the RD about the tax free nature of your money, except by filing out a tax form?

I expect the first line of inquiry may be when Immigration says they won't give you an extension of stay without a Thai tax number (TIN)

 

Also from Mazars:

 

According to the Revenue Department, it will seek opinions from the stakeholders affected by the new rule and issue guidelines to provide more clarity. The plan includes an amendment of the personal income tax return form to facilitate the foreign tax credit claim.

 

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Thailand-Tax-Foreign-Income-Taxable-from-2024

 

When or if that happens,  I will comply.

 

I am not on here asking questions as to "How will they find out if ..."

[topt]

1 hour ago, Danderman123 said:

What's new in 2024 is that your 65K is now reportable.

Arguably if it was "income" (pension payment or whatever) received in the year it was remitted it has always been potentially taxable so that bit isn't new at all.

 

Generally though the Thai RD, up to now, didn't chase up that money unless the individual brought themselves to the Thai RD attention in some way.

[TallGuyJohninBKK]

On 12/15/2023 at 3:44 PM, Dogmatix said:

I paid my 1,000 baht to listen in on the Amcham seminar this morning.  They had tax advisors from Mazars, KPMG and one other firm, the name of which I forget and the guy from Mazars led the discussion. It was very lucid and well done and they presented a very good overview of the story so far but emphasized that it is still work in progress at the RD, since they have launched the tax change at half cock. I not am sure there was anything new for many of us here who have read the print off everything that has come out on the issue so far but it was good to know we are on the same page on most aspects. Points arising that struck me are below.

 

Re gifts. They thought gifts from offshore to a spouse or other direct family member should be OK but cautioned that the RD could regard such a gift as conjugal property and, as such, interpret things so that only half of the tax is tax exempt because you own half the conjugal property.  Gifts to people other than direct family members should have a reason, e.g. wedding gift, according to the Mazars guy. I don't see anything in the RC saying gifts to non family members need a reason but I have seen cases like this, e.g. the transfer of SHIN shares free of payment by Potjaman to her brother was claimed to be a wedding gift (about 2 years after the wedding).  It was suggested that gifts should be documented.

 

They thought a 'genuine' loan from an offshore company controlled by a Thai tax resident to himself could not be construed as income as there is nothing in the RC to suggest that loans could be deemed to be income.  But they cautioned that this is not confirmed, rather that there is nothing in the RC or elsewhere that suggests a loan can be deemed to be income.

 

Re tax credits. The RD has told people verbally that tax credits will be recognized in respect of DTAs but has not clarified how this will be done.  It pointed out that the RD only accepts tax credits for corporate income tax the tax credit applies to foreign income earned in the same tax year the same tax year as it is remitted to Thailand. 

 

 

 

As mentioned above, the American Chamber of Commerce did host a webinar on Friday regarding the foreign income taxation scheme, and there were several clarifications / updates provided, including that there now will be a "grandfathering" clause to exclude foreign sourced income earned prior to Jan. 1, 2024.

 

I posted an audio file of the entire hourlong session, as well as copies of several of the info graphics that were presented, in a different thread on the topic here, as linked below:

 

 

 

[brianthainess]

Fake fearmongering news headline. ALL income is BS.

[BigStar]

1 hour ago, Danderman123 said:

Unless, of course, you have information that RD is actually going to check immigration status of people withdrawing cash using foreign bank cards, then there should be no impact on tax status for such withdrawals.

 

Of course not. We're merely engaged in a more-paranoid-than-thou p*ssing contest in this thread.

[TallGuyJohninBKK]

The expat tax advisors who did the presentation  also indicated they expected that foreign card ATM withdrawals and even foreign card (debit or credit) purchases made in Thailand likely will end up being considered importing foreign income -- though they acknowledged the Rev. Dept. hasn't specifically opined on that issue as yet.

 

 

The above comment is from a Thai tax attorney and chamber member who was answering participants' posted questions online during the presentation.

 

Though even if that ultimately were to become the Revenue Department's ultimate position, many of us remain skeptical about their ability to actually track and trace what clearly would be a huge number of such transactions, and separate out those belonging to expats vs. tourists -- especially since the current bank info sharing agreements internationally seem more aimed at tracking and sharing info on EARNINGS as opposed to SPENDING.

 

[Mike Teavee]

7 minutes ago, TallGuyJohninBKK said:

The expat tax advisors who did the presentation  also indicated they expected that foreign card ATM withdrawals and even foreign card (debit or credit) purchases made in Thailand likely will end up being considered importing foreign income -- though they acknowledged the Rev. Dept. hasn't specifically opined on that issue as yet.

 

 

 

Though even if that ultimately were to become the Revenue Department's ultimate position, many of us remain skeptical about their ability to actually track and trace what clearly would be a huge number of such transactions, and separate out those belonging to expats vs. tourists -- especially since the current bank info sharing agreements internationally seem more aimed at tracking and sharing info on EARNINGS as opposed to SPENDING.

 

 

So I spend £3,000 on a Qatar flight to the UK, book it on the Qatar website using my UK Credit Card (with a Bank that I've not registered myself as Thai Tax Resident) & Thailand is somehow going to see this as income? 

 

Just incase they can/do, I'll be using a VPN... 

[Ralf001]

2 minutes ago, Mike Teavee said:

 

So I spend £3,000 on a Qatar flight to the UK, book it on the Qatar website using my UK Credit Card (with a Bank that I've not registered myself as Thai Tax Resident) & Thailand is somehow going to see this as income? 

 

Just incase they can/do, I'll be using a VPN... 

 

How can money spent be possibly be considered as income ?

[Steve2UK]

3 hours ago, Mike Lister said:

I've just done an extension using a long standing fixed deposit account that has nothing else in it apart from my 400K visa money. This year they wanted copies of every page in the bank book, a statement of the account from my bank covering the past three months and a letter from the bank confirming the balance.  They've become paranoid beyond belief.

That was also my experience when I did my retirement visa extension last September - except they (Immigration) wanted a bank statement covering the full year since my previous extension. Like you, I use the balance maintained at (at least) required level for required period route. I've long used an agent for the annual extensions and give them all the stuff they tell me to (same list as yours). IIRC they also made copies of all the pages in the bank book (or maybe just the last yearsworth?) - I certainly remember signing a vast number of them. Unlike you, I also use that one ('saver') Thai account for all my outgoings*. I do recall that the full year bank statements have been required for at least the last few extensions I've done. Incidentally, my bank balance at the time of that last September extension showed a bit over 18 million baht (remains of a personal property sale proceeds wired in from my UK account). Nothing was said about that during my last extension - but I can't help wondering whether I'll be grilled on "Why no TIN?" (been here since 2006 and never been asked/registered for one) come my September 2024 extension........

 

* I'm thinking about following your example and setting up a separate untouched deposit account for the 800k baht needed to cover that extension requirement. Does your local Imm office ask you for evidence (e.g. another bank account?) of what you're living on if you're not touching the deposit - or do (did?) they regard that as 'not their concern' providing you met their minimum balance/period maintained threshold? Same same next extension for you - or is the only realistic answer to that (for now) "Who TF knows?"....?

[TallGuyJohninBKK]

There's another interesting wrinkle to that whole area which would be credit card cash advances taken here using a foreign credit card.  Normally that is a very expensive transaction because of cash advance and foreign currency conversion fees that most foreign banks charge.... But a few banks do allow those fee free.

 

A wrinkle because loan proceeds apparently are not likely to be considered importing income. And when someone does a credit card cash advance, they're basically borrowing money from the card issuer that later has to be repaid.... Thus presumably, not likely to be considered importing foreign income into Thailand.

 

At least, in theory.

 

And then the other interesting wrinkle is a provision in Thai tax regs that allow spouses to gift to their own LEGAL spouse up to 20 MILLION baht per year without that being subject to taxation, which if it stands would seem to be another way of moving foreign funds here without being subject to taxation (though those would have to be non-community property funds).

 

 

[TallGuyJohninBKK]

12 minutes ago, Ralf001 said:

 

How can money spent be possibly be considered as income ?

 

That's a good question... I suppose the answer would be....in theory... in order to spend money IN Thailand, you have to bring those funds into the country (via the act of spending here).

 

I'm not saying I agree with that view or that it makes sense... But that's the theory being given.

 

 

[jerrymahoney]

4 minutes ago, TallGuyJohninBKK said:

And then the other interesting wrinkle is a provision in Thai tax regs that allow spouses to gift to their own LEGAL spouse up to 20 MILLION baht per year without that being subject to taxation, which if it stands would seem to be another way of moving foreign funds here without being subject to taxation (though those would have to be non-community property funds).

At least according to the report in their seminar as referenced by K. Dogmatix, the (Mazars?) presenter said such foreign gifts 'should' be allowed, which leads me to infer, at least according to that presenter's experience , he does know that such a foreign tax-free gift transfer that has ever happened.

[TallGuyJohninBKK]

Lots of details and issues remain very unclear, both in terms of the policy itself and how it will actually be implemented.

 

It also was unfortunate that even though the webinar was presented by the American Chamber of Commerce, the presenters gave almost no info on how the longstanding U.S.-Thai double taxation agreement likely will limit/curtail the new policy for Americans....

 

Such as the expected result that U.S. Social Security payments made to American citizens AND U.S. government pension payments are likely to be excluded from Thai taxation under the terms of that particular agreement, and can only be taxed by the U.S.

 

 

[StayinThailand2much]

4 hours ago, Ralf001 said:

4 hours ago, Danderman123 said:

The problem is that the 65K monthly deposit may be taxable in 2024.

 

Has tax been paid on that 65k in country of origin ?

 

Does country of origin have a DTA agreement with Thailand ?

 

No-one still seems to know whether any such transfers (monthly, or lump-sum) will be taxed at source (the receiving bank), requiring one to claim it back, or via filing a tax-return first. And who knows whether DTA agreements will be 'followed' like other laws in Thailand, i.e. "up to officers' discretion"...