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

[Mike Lister]

Just now, Danderman123 said:

You don't think there's a chance that people with retirement visas will be asked to provide a copy of their tax return upon renewal? Note that bank passbooks are requested at visa renewal, so checking for incoming cash is easy.

Yes, I think there's a reasonable chance of that or something similar, in time. Banks have become agents of Immigration and now teller staff check passports and visa's for validity, no visa, no service, that's not to say such people can't use ATM's. So why not have the banks act as agents for the RD also? It's a sure way to make people comply, tie up their funds.. 

[jerrymahoney]

I agree. Also that Revenue Department may become vigilant about persons who have received retirement-based extensions of stay but have no apparent bank account as per the current Police Order.

[topt]

32 minutes ago, Danderman123 said:

You don't think there's a chance that people with retirement visas will be asked to provide a copy of their tax return upon renewal? Note that bank passbooks are requested at visa renewal, so checking for incoming cash is easy.

There is always a chance but what about people who have retirement extensions and spend less than 180 days a year actually in Thailand - and I know a few like that.

[topt]

31 minutes ago, Mike Lister said:

Yes, I think there's a reasonable chance of that or something similar, in time. Banks have become agents of Immigration and now teller staff check passports and visa's for validity, no visa, no service, that's not to say such people can't use ATM's. So why not have the banks act as agents for the RD also? It's a sure way to make people comply, tie up their funds.. 

Are you saying that your bank checks your visa validity before making any transaction......

For people wanting to open a new account possibly but not my experience dealing with the banks I have accounts in.

[Mike Lister]

6 minutes ago, topt said:

Are you saying that your bank checks your visa validity before making any transaction......

For people wanting to open a new account possibly but not my experience dealing with the banks I have accounts in.

I only occasionally use the branch at UOB but every time I do, my passport is checked and the person flips to the latest visa page. I once asked them if they actually knew what a visa looked like, which they certainly did. I also have an account at Bangkok Bank and I go inside their branches even less often. But the same thing happens when I do, I've made a point of watching. Perhaps this varies by location, I can imagine in the more remote locations there is less interest because people are well known. There again, my branch has known me for 15 years!

 

EDIT TO ADD: I even wrote to the CEO of UOB on this point years ago and asked if the bank was now an agent of Immigration, I received an acknowledgement but no reply, unlike previous times I had written on different subjects.

Edited December 21, 2023 by Mike Lister

[topt]

14 minutes ago, Mike Lister said:

There again, my branch has known me for 15 years!

Yes but still same staff? In Pattaya the staff seem to change at least every couple of years in the branches I use.

[Mike Lister]

Just now, topt said:

Yes but still same staff? In Pattaya the staff seem to change at least every couple of years in the branches I use.

UOB seems to rotate them between branches every six months, knowing this I follow the English speakers from branch to branch, fortunately there are only four branches.

[Schnicnac]

1 hour ago, Danderman123 said:

So, will RD monitor incoming transfers from abroad, or will tax reporting be on the honor system (self reporting)?

 

Certainly a possibility... some people tax resident here may face the reasonable question from the authorities how they could live in Thailand all the time or drive that nice car or stay in that nice hotel in Phuket without filing a return/ paying a bhat...it can also be expected the "gift to spouse" may be questioned...

[EVENKEEL]

Many here give the powers that be, wayyyyyyy toooooo much credit. Like coming up with a tax system for all the various type incomes. It'll never work.

[noobexpat]

On 12/19/2023 at 9:48 AM, The Cyclist said:

 

C'mon then Mr Tax Expert

 

Please enlighten all the British readers / posters how they can avoid UK Tax on their

 

Pensions

Rental income

UK based earnings

Interest on Savings.

 

You will manage at a stroke to solve an issue that I have spent the best part of 20 years tryng to solve, with the assistance and advice of various. Tax Experts and accountants.

 

You must be a really special person, special in the window licker sense of the word.

 

Its a slightly dumb question ...but 20 years? 555

 

How about venture capital trusts or enterprise investment schemes.

There you go. Took me 2 minutes.

They use business property relief. Now run to google.

[noobexpat]

On 12/18/2023 at 10:05 PM, noobexpat said:

 

No, thats the intended outcome.

What is the principal purpose of a DTA? @The Cyclist will tell us.

 

(But only if he can find it on google 555)

 

 

Still waiting...

 

@The Cyclist

[jerrymahoney]

38 minutes ago, EVENKEEL said:

Many here give the powers that be, wayyyyyyy toooooo much credit. Like coming up with a tax system for all the various type incomes. It'll never work.

Well then, no big deal. Last lines from The Untouchables movie:

Scoop: Word is they're going to repeal Prohibition. What'll you do then?
Ness: [jokingly] I think I'll have a drink.

[Steve2UK]

1 hour ago, Mike Lister said:

I only occasionally use the branch at UOB but every time I do, my passport is checked and the person flips to the latest visa page.

 

That matches my experience(s) with SCB - along with the obligatory photocopying/signing of the picture page, natch.

[Danderman123]

2 hours ago, topt said:

There is always a chance but what about people who have retirement extensions and spend less than 180 days a year actually in Thailand - and I know a few like that.

The super sharp Immigration Dept won't ask such people for tax returns at visa renewal time.

[Yumthai]

2 hours ago, Danderman123 said:

You don't think there's a chance that people with retirement visas will be asked to provide a copy of their tax return upon renewal?

Unreal, just because there are several countries where there is no tax or where residents, according to their profile/income type, are legally exempted to file and pay tax.

[Mike Lister]

2 minutes ago, Yumthai said:

Unreal, just because there are several countries where there is no tax or where residents, according to their profile/income type, are legally exempted to file and pay tax.

US green card holders are/were required to obtain a tax clearance certificate before they could leave the country, even for a holiday, I did that for many years. So why not Thailand also?

[JimGant]

In one of these threads, someone asked about Thailand's taxation rights on Roth IRA distributions (which are tax exempt in the US), since Thailand has exclusive taxation rights on ordinary IRA distributions (remitted, of course -- for now). Here, in the first quote, is what the IRS says:

 

Quote

As a general rule, the pension/annuity article of most income tax treaties allows for exclusive taxation of pensions or annuities under the domestic law of the resident country (as determined by the residence article). This is generally true unless a treaty provision specifically amends that treatment. For example, some treaties provide that the country of residence may not tax amounts that would not have been taxable by the other country if you were a resident of that country.

https://www.irs.gov/businesses/the-taxation-of-foreign-pension-and-annuity-distributions

 

Well, unfortunately, there's nothing in the US-Thai DTA covering this, unlike in the US-UK DTA, where this, from the tech explanation, is said:

 

Quote

However, the State of residence must exempt from tax any amount of such pensions or other similar remuneration that would be exempt from tax in the State in which the pension scheme is established if the recipient were a resident of that State.
Thus, for example, a distribution from a U.S. "Roth IRA" to a U.K. resident would be exempt from tax in the United Kingdom to the same extent the distribution would be exempt from tax in the United States if it were distributed to a U.S. resident.

https://home.treasury.gov/system/files/131/Treaty-UK-Protocol-TE-7-22-2002.pdf

 

I mention this, even tho' the Thai-US DTA doesn't have such exemption language, so that folks with Roth distributions, and the like, can, with full integrity, assume the treaty intended (or would under a protocol) such exemptions. In fact, the latest OECD Model treaties include such language, meaning, if the Thai-US treaty had been written under current OECD guidance, such language would have been included.

 

Hey, it's never going to come to this. Thailand doesn't have the resources, but does have the smarts, to know dissecting every DTA out there for what's what in taxation priority wouldn't be worth the cost or effort. Instead, self-assessment seems to be the way forward, at least as a first step. In my case, I'd now declare my IRA distros to Thailand for taxation, take a tax credit against my US taxes, and have the same total overall tax bill as before. Multiply me by thousands of others, and Thailand could reap some impressive new tax income -- without hiring a zillion new clerks and treaty lawyers. Yeah, a little more paperwork for me -- but not much.

 

So, if you've got a Roth distribution, use the OECD consensus that it's not taxable in Thailand (and that the DTA just hasn't caught up). No integrity issues here -- and it would be an interesting Perry Mason moment if it ever got to that, which it wouldn't.

 

[paddypower]

On 12/20/2023 at 1:29 PM, jerrymahoney said:

To the above: I have used the 65K per month retirement extension method since the game change 4 years ago -- in 2 different offices.

 

They both want to see a statement from my Thai bank with monthly FTT deposits. No US (in my case) statement required.

 

And they both have requested (demanded?) a Source-of-funds letter which I have provided showing a monthly transfer -- which in my case -- meets the definition of" monthly income retirement pension" AND 'annuity' under Article 20 Par. 3 US-Thailand DTA.

 

thanks for that link, Jerry.  what exactly do you mean by a ''source of funds letter'', please? Thanks. Hopefully, there a a few more posters following this single issue of what constitutes acceptable documentary proof of income. Judging by the topics discussed, on this thread, all 176 pages - there must be a fair % of posters who have been reporting for a visa extension,  on the pension income basis. Surely a few of you can make the time to kindly describe what proof of income you have been asked for in the past?  To be brutally honest,  it appears to me that there is so much space devoted to the proposed tax. Yet, I bet anyone that it will get dropped (either by way of a public back-tracking, or by the usual Thai way - inertia). 

[paddypower]

1 minute ago, paddypower said:

thanks for that link, Jerry.  what exactly do you mean by a ''source of funds letter'', please? Thanks. Hopefully, there a a few more posters following this single issue of what constitutes acceptable documentary proof of income. Judging by the topics discussed, on this thread, all 176 pages - there must be a fair % of posters who have been reporting for a visa extension,  on the pension income basis. Surely a few of you can make the time to kindly describe what proof of income you have been asked for in the past?  To be brutally honest,  it appears to me that there is so much space devoted to the proposed tax. Yet, I bet anyone that it will get dropped (either by way of a public back-tracking, or by the usual Thai way - inertia). 

taking to myself - I'm worried that showing IO any foreign paperwork will put the kibosh on my application, b/c each money transfer that comes in to my Thai bank account (it's in my name only) is made up of 2 sets of pensions, my wife and I. tks

[jerrymahoney]

28 minutes ago, paddypower said:

thanks for that link, Jerry.  what exactly do you mean by a ''source of funds letter'', please?

Without getting into my personal situation, borrowing from this definition from the US DTA Article 20 works fine:

 

A source of funds letter indicates " ...  a stated sum paid periodically at stated times during a specified number of years, under (some) obligation to make the payments. "

[The Cyclist]

3 hours ago, noobexpat said:

Its a slightly dumb question ...but 20 years? 555

 

3 hours ago, noobexpat said:

Still waiting...

 

And I am still waiting on an answer on how I can get a NT tax code and pay Zero tax on my Government Pension by filling in a P85

 

 

3 hours ago, noobexpat said:

How about venture capital trusts or enterprise investment schemes.

 

For a Government Pension, a small income and some Interest on savings.

 

Setting up venture capital trusts or enterprise investment is going way beyond filling in a P85 as you previously claimed.

 

Now who is being dumb ? 

 

And it never took me 7 days to come up with an answer either, or resort to google

Edited December 21, 2023 by The Cyclist
Add text

[Mike Teavee]

1 hour ago, paddypower said:

there must be a fair % of posters who have been reporting for a visa extension,  on the pension income basis. Surely a few of you can make the time to kindly describe what proof of income you have been asked for in the past?  To be brutally honest,  it appears to me that there is so much space devoted to the proposed tax. Yet, I bet anyone that it will get dropped (either by way of a public back-tracking, or by the usual Thai way - inertia).

Hi Paddy, 

 

As this thread is about Tax & is not in the Extension Forum (https://aseannow.com/forum/1-thai-visas-residency-and-work-permits/) it could be a lot of the guys who are using the 65K Income method might not be reading it. 

 

I'm sure if you started a topic in that forum (Or maybe a Mod could use your above post to start a topic on your behalf) you'd get a much better response to your questions.

 

FWIW everybody I know that's on a Retirement Extension either uses the 800K in the Bank or uses an agent to "Assist With The Finances" but I did look into switching to the 65K pm Income method when it was first announced & decided it wasn't for me as I don't have a regular/monthly income so I would need to amortize it from other Income.  At that time I don't recall Jomtien IO wanting to see anything more than the monthly Xfers but I could be wrong and/or it could have changed since then. 

 

 

HTH

 

 

MTV

[jerrymahoney]

But as has been noted way earlier this topic  anyone using the 65K baht / month extension modus maybe may be sitting duck for someone who might need to file for taxes just to get another extension.

[stat]

15 hours ago, Lorry said:

The global minimum tax for corporations has nothing to do with CRS.

2 different things.

 

CRS means common reporting standard,  aka AEOI automatic exchange of information. It's not more than this,  an exchange of information. Useful to find people with bank accounts abroad they don't tell the taxman.

 

The global minimum tax aims at corporations who, using transfer prices and other accounting gimmicks,  shift their profits into low-tax jurisdictions. They are very open about their bank accounts. No secrets,  no AEOI needed. 

 

Spot on your post! However some people (not you) in this forum do not want to understand the most basic tax principles i.e. the difference between corporate taxes and personal taxes or what is reported in CRS or what purpose CRS serves. They just read one line in the tax code and claim to have understood it all.

[UKresonant]

6 hours ago, topt said:

There is always a chance but what about people who have retirement extensions and spend less than 180 days a year actually in Thailand - and I know a few like that.

 

Cross reference with Immigration database, passport as primary key.

[Mavideol]

5 hours ago, EVENKEEL said:

Many here give the powers that be, wayyyyyyy toooooo much credit. Like coming up with a tax system for all the various type incomes. It'll never work.

if all the mic mac about taxing foreigners, it's obvious Thailand (who relies a lot on foreigners for their economy) don't want foreigners, this taxation intention clearly indicates they want us out of here

[topt]

6 minutes ago, Mavideol said:

f all the mic mac about taxing foreigners, it's obvious Thailand (who relies a lot on foreigners for their economy) don't want foreigners, this taxation intention clearly indicates they want us out of here

As has been said before it is not a specific tax on foreigners and if that is your take than I suggest you go back and read the original news article........

[Mavideol]

2 minutes ago, topt said:

As has been said before it is not a specific tax on foreigners and if that is your take than I suggest you go back and read the original news article........

having a bad day mate ???

[topt]

1 minute ago, Mavideol said:

having a bad day mate ???

No but if you are suggesting your post was some sort of satire I am afraid it went completely over my head.

[Mavideol]

3 minutes ago, topt said:

No but if you are suggesting your post was some sort of satire I am afraid it went completely over my head.

sad to hear that, should I understand the tax will be for ALL tax residents and that will include Thais, correct???, besides  maybe I did miss something

Edited December 21, 2023 by Mavideol