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

[4MyEgo]

On 2/7/2024 at 2:20 PM, TroubleandGrumpy said:

They cannot exchange information as easily as you imply - laws relating to privacy may not be 'strong' here in Thailand, but they are very much both strong and enforced in countries like Australia.  What you say applies in Thailand, but not so much in other countries - they cannot and will not easily give personal information out to another country.

 

I did provide you with some information ON PAGE 229 that I believe contradicts what you posted in my opinion, have you read it, as I note you have replied to other posts since, but not mine.

 

Legislation is in writing, and is law, words fly and can lead others to believe the misinformation at hand, i.e. if it is not supported by a credible link or actual legislation, suffice to say, it is important that we all do our best to provide correct information to other readers so we get it right the first time around, and I will be the 1st one to admit that I was wrong, if I ever am, the same courtesy should always be reciprocated from others, but is seldom forthcoming IMO, and this is were some people on the forum lose credibility.

 

Nothing personal.

 

International Tax Agreements Act 1953

 

ARTICLE 24   Exchange of information  

 

1.    
The competent authorities shall exchange such information as is necessary for carrying out this Agreement or of the domestic law of each of the territories concerning taxes to which this Agreement applies insofar as the taxation under that law is not contrary to this Agreement. Any information received by the competent authority of a territory shall be treated as secret in the same manner as information obtained under the domestic law of that territory and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes to which this Agreement applies. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.

 

https://www.ato.gov.au/law/view/fulldocument?filename=PAC19530082#PAC/19530082/Sch30old-repealed-1

 

Edited February 8 by 4MyEgo

[samtam]

On 2/7/2024 at 2:28 PM, Mike Lister said:

 

 

I think it would be a mistake to try and link the tax issue with the economy, I just don't believe they are related or that they will be. One possible answer is the government is projecting into the future, the potential impact on Thailand of a change in US policy after the elections. Another possible angle is that we don't have sight of some key data or facts that might influence our view. 

 

 

Yes, we are in agreement on limited or no impact on the economy, but the impact on the Thai property market for foreign investors may be an issue, (depending on other factors, obviously). But with uncertainty about implications, it is likely to put some people off; I'm assuming this from what I've read, but my mind is muddled by the back and forth, and whether an inward remittance for property investment would be subject to the highest rate of tax of 35%. Certainly I know of an investor who was going to pay around THB50m for a condo, which is now in abeyance, until there is more clarity. With such an oversupplied market, it may be a beneficial delay, but then, to revisit another unknown, but speculated factor, the state of the economy, and the political risk, which could become a major factor in the coming months. 

[JimTripper]

[jwest10]

On 2/7/2024 at 12:04 PM, Mike Lister said:

 

There is no evidence that I have been able to find that confirm the Thai economy is broke, on the contrary, all the evidence points towards the opposite. I posted earlier today on this subject, it's worth considering, below. There is unbridled and unconstrained anxiety in the minds of some members  regarding the topic of Thai tax and the rule change. Some are imagining the absolute worst possible case possible, despite recent information suggesting the impact will be minimal or non-existent and this is unhelpful to the remaining posters. Posters need to get a grip!

 

Secondly, the concern that has been generated amongst expats has indeed been a concern, things could have been managed differently. But in the cold light of day, it is difficult to apportion too much blame on the Thai Revenue, just because some expats did not bother to learn about the system of taxation in the country they started to call home.

 

Attn Mike Lister Sorry in wrong area but some facts,

Many thanks for your posts and I also a member on Facebook of the Frozen Overseas Frozen Pension site or similar
Just yeterday and maybe helpful to users of LLoyds Bank Internet banking.
Absolutely no problem in doing a transfer but did notice in red at te top and think it was in red about an option HMRC and I think the UK as ever slyly passing an act in that without permission they can look in to your account details(how they can they do this?) but they know where we are.
Yes, the bank know where you are but wondered if anyone else has noticed this.
This new prospective Income tax and have seen the all the long explanations and yes very confusing.
My take originally is that those who have a business in Thailand and the UK  and receive rental income on their homes  would pay income tax in Thailand and of course seen even  basic state pensions would be taxed.
What they Thais Authorities have failed to notice is that many of us are married with  Thai family and in the main bring them  up and finance them and we also pay VAT 7% and also one petrol and everytime we go shopping and then there woud be even less for our families.
Like everywhere else they never go after the fithly rich and seem to have huge tax breaks and reding that US Ciizens are exempt from any tax.
We jusr have to wait to ee how things pan outm if at all,
Thoughts?  but it is too complicated for sure.

 

 

 

 

[Mike Lister]

8 minutes ago, jwest10 said:

 

The relevant part of your post seems to be this:

 

"My take originally is that those who have a business in Thailand and the UK  and receive rental income on their homes  would pay income tax in Thailand and of course seen even  basic state pensions would be taxed".

 

Assuming you are from the UK, any income that arises there, be it pensions and/or rental, is taxable there, that is mostly inescapable. But that means you should be able to import that money to Thailand, free of any Thai tax because your income has already been through the UK tax process and is considered taxed. 

[jwest10]

2 minutes ago, Mike Lister said:

The relevant part of your post seems to be this:

 

"My take originally is that those who have a business in Thailand and the UK  and receive rental income on their homes  would pay income tax in Thailand and of course seen even  basic state pensions would be taxed".

 

Assuming you are from the UK, any income that arises there, be it pensions and/or rental, is taxable there, that is mostly inescapable. But that means you should be able to import that money to Thailand, free of any Thai tax because your income has already been through the UK tax process and is considered taxed. 

 

2 minutes ago, Mike Lister said:

The relevant part of your post seems to be this:

 

"My take originally is that those who have a business in Thailand and the UK  and receive rental income on their homes  would pay income tax in Thailand and of course seen even  basic state pensions would be taxed".

 

Assuming you are from the UK, any income that arises there, be it pensions and/or rental, is taxable there, that is mostly inescapable. But that means you should be able to import that money to Thailand, free of any Thai tax because your income has already been through the UK tax process and is considered taxed. 

 

[jwest10]

Just now, jwest10 said:

 

 

Thanks, Mike and thought that but do go over the UK Tax allowance and my Frozen Statepension is transferred directly to my Thai account and do get a couple of small private pensions paid into my Lloyds bank account bank
I might just go over theUK personal tax allowance and then get a check later on.
So should be ok but who knows

[Mike Lister]

1 minute ago, jwest10 said:

Thanks, Mike and thought that but do go over the UK Tax allowance and my Frozen Statepension is transferred directly to my Thai account and do get a couple of small private pensions paid into my Lloyds bank account bank
I might just go over theUK personal tax allowance and then get a check later on.
So should be ok but who knows

Even if you do go over, you still have TEDA on the Thai side, Tax Exemptions, Deductions and Allowances which will buffer you.

[jwest10]

2 minutes ago, Mike Lister said:

Even if you do go over, you still have TEDA on the Thai side, Tax Exemptions, Deductions and Allowances which will buffer you.

Mike
Thanks ever so much

[jwest10]

Just now, jwest10 said:

Mike
Thanks ever so much

and do transfer these funds to Thailand periodically.

[JimGant]

2 hours ago, samtam said:

and whether an inward remittance for property investment would be subject to the highest rate of tax of 35%.

 

A little common sense would put this ridiculous rumor to rest. Why would any cash flow into Thailand automatically be considered "income," and not just a capital input for, say, Foreign Direct Investment, or for providing for living expenses. If this cash flow came from pre 2024 savings, or from DTA exempted income, it's not assessable income. But nobody's going to parse this cash flow to determine what it is, or isn't. It will be you, the tax resident, to parse this cash flow.

 

And, why in the world -- if RD decided all incoming cash flows were income -- would they tax it at the top marginal tax rate of 35%? Again, common sense says it would climb the laddered tax rate scale, zero, to five percent, etc. Come on, folks -- engage a little logic.

[Mike Lister]

2 hours ago, samtam said:

 

Yes, we are in agreement on limited or no impact on the economy, but the impact on the Thai property market for foreign investors may be an issue, (depending on other factors, obviously). But with uncertainty about implications, it is likely to put some people off; I'm assuming this from what I've read, but my mind is muddled by the back and forth, and whether an inward remittance for property investment would be subject to the highest rate of tax of 35%. Certainly I know of an investor who was going to pay around THB50m for a condo, which is now in abeyance, until there is more clarity. With such an oversupplied market, it may be a beneficial delay, but then, to revisit another unknown, but speculated factor, the state of the economy, and the political risk, which could become a major factor in the coming months. 

Sorry that I missed this earlier but I see that Jim has replied and I agree with what he has said. That inward remittance is not going to be taxed at source and certainly not at 35%. That said, how it might be taxed when/if the funds were declared on a tax return, is another story. It is solely down to the tax payer to make the declaration, nobody else so that person needs to understand the source of the funds and their classification. 

[UKresonant]

9 hours ago, Mike Lister said:

I wouldn't worry about it. There are lots of people similar to you who have spent their entire working lives never needing to understand tax because everything was taken care for them by the government and their employer.

As far as my own tax is concerned, I totally resemble that description! Totally spoiled!

 

But I had to be aware of Tax regimes only in relation to other subjects and duties.

[jayboy]

3 hours ago, JimGant said:

If this cash flow came from pre 2024 savings, or from DTA exempted income, it's not assessable income. But nobody's going to parse this cash flow to determine what it is, or isn't. It will be you, the tax resident, to parse this cash flow.

 

 

I was wondering whether it will be necessary to isolate the interest earned on pre-2024 savings.Most people with cash holdings tend to roll up the interest and capital on maturity of the deposit's term.Under the new dispensation pre 2024 savings are not taxable and indeed apparently do not even have to be declared on a Thai tax return if remitted.But the interest component is surely taxable and would be difficult to disentangle.

[Mike Lister]

2 minutes ago, jayboy said:

 

I was wondering whether it will be necessary to isolate the interest earned on pre-2024 savings.Most people with cash holdings tend to roll up the interest and capital on maturity of the deposit's term.Under the new dispensation pre 2024 savings are not taxable and indeed apparently do not even have to be declared on a Thai tax return if remitted.But the interest component is surely taxable and would be difficult to disentangle.

It wont be necessary to separate the two, for pre 1 January 2024 savings.

[UKresonant]

3 hours ago, jwest10 said:

Thanks, Mike and thought that but do go over the UK Tax allowance and my Frozen Statepension is transferred directly to my Thai account and do get a couple of small private pensions paid into my Lloyds bank account bank
I might just go over theUK personal tax allowance and then get a check later on.
So should be ok but who knows

If your UK State Pension exceeds the UK alliance they normally adjust the tax code and any taz comes off on your private pensions (from our experiences).

[UKresonant]

13 minutes ago, jayboy said:

 

I was wondering whether it will be necessary to isolate the interest earned on pre-2024 savings.Most people with cash holdings tend to roll up the interest and capital on maturity of the deposit's term.Under the new dispensation pre 2024 savings are not taxable and indeed apparently do not even have to be declared on a Thai tax return if remitted.But the interest component is surely taxable and would be difficult to disentangle.

Yes best to avoid any interest being added to the account after 1st Jan 2024. As this years interest will compromise the pre-2024's purity (assuming you shall be Thai tax resident for 2024 that is).

 

If it does get credited to the amount I will transfer it back out to another account before it compounds. 

[JimGant]

There's nothing in this remittance charade that dictates whether or not money sent from a bank account is "old" money (i.e., pre 2024) or "new" money (i.e., interest  earned post Jan 2024). And, even more, if you add earnings to this account post Jan 2024, these earnings can be either non assessable via the DTA, like gov't pensions -- or assessable, like private pensions. So, you send a chunk of money to Thailand from this account -- from which tranches does this money come from? There certainly aren't any rules regarding this -- at least as of now. So, as part of the whole self-assessment drill, it would seem it's up to you to identify which tranches you tapped for remittance. With good records, you certainly could make sure you're remittances are first tapping the non assessable funds in that bank account -- hey, your call. But, jeez, I can't imagine such a detailed reporting requirement, with all the associated costly manpower, ever occurring. Maybe a random compliance audit here and there. No, just another aspect of the necessary self-assessment aspect of this goat rope. Just be prepared to argue your methodology of identifying tranches for cash flow remitted.

Edited February 8 by JimGant

[UKresonant]

Just now, JimGant said:

There's nothing in this remittance charade that dictates whether or not money sent from a bank account is "old" money (i.e., pre 2024) or "new" money (i.e., interest  earned post Jan 2024). And, even more, if you add earnings to this account post Jan 2024, these earnings can be either non assessable via the DTA, like gov't pensions -- or assessable, like private pensions. So, you send a chunk of money to Thailand from this account -- from which tranches does this money come from? There certainly aren't any rules regarding this -- at least as of now. So, as part of the whole self-assessment drill, it would seem it's up to you to identify which tranches you tapped for remittance. With good records, you certainly could make sure you're remittances are first tapping the non assessable funds in that bank account -- hey, your call. But, jeez, I can't imagine such a detailed reporting requirement, with all the associated costly manpower, ever occurring. Maybe a random compliance audit here and there. No, just another aspect of the necessary self-assessment aspect of this goat rope. Just be prepared to argue your methodology of identifying tranches for cash flow remitted.

 

So do you think it is reasonable that we can truly pick what we remit, I am indeed hoping that is the case.

 

I'm trying to organise so that I have good records available later should I become tax resident in Thailand

 

E.G.

a. All pre-taxed at source UK Pensions, paid to one UK bank account.

b. All non taxed investment dividends and interest to another account

 

With the intention of only including items from "a" to be considered for transfer to Thailand, with associated paper trail, proof of taxation etc

 

However could it get complicated, and they could deem that they consider the items at "b" to be the remittance, though I would not wish to include them as they would be needed for expenditure in the UK and never be remitted to Thailand?

 

It was the Norwegian answer  link earlier on page 222 that raised my doubts, of course this was someone trying to detach from Norway's tax system and obtain a Thai Certificate of Residence to use against the Norwegian Tax. (Not a Scenario I would anticipate with the UK)  https://www.rd.go.th/fileadmin/download/nation/Norwegian_answer.pdf

 

But I'm hoping that Pension Payslip. P60 end of year tax certs, remittance to UK Bank and assoc. statement, amount remitted to Thai bank. Only items in the conversation? and all is well.

Edited February 8 by UKresonant

[stat]

On 2/7/2024 at 2:35 PM, Mike Lister said:

The Simple Tax Guide has been updated with the latest information and most errors fixed. If you spot anything that needs attention, please say:

 

 

There are very few if any expats on this forum that have ONLY income from employment... If the tax guide is only for those with ONLY income then it is not helping.

Edited February 8 by stat

[Mike Lister]

49 minutes ago, stat said:

There are very few if any expats on this forum that have ONLY income from employment... If the tax guide is only for those with ONLY income then it is not helping.

If you had read the guide you would understand that is not the case! Why that preview exists is not clear, I'll try and fix the problem.

[UKresonant]

3 hours ago, stat said:

There are very few if any expats on this forum that have ONLY income from employment... If the tax guide is only for those with ONLY income then it is not helping.

I think in a lot of cases it is the translation of the other things translating against the personal income tax at the Thai end that is the shock to the system perhaps. Also the differential caused due to the UK having a separate £3k allowance for capital gains. (or it will be in a few weeks if not held at £6k due to election year.)

[Mike Lister]

36 minutes ago, UKresonant said:

I think in a lot of cases it is the translation of the other things translating against the personal income tax at the Thai end that is the shock to the system perhaps. Also the differential caused due to the UK having a separate £3k allowance for capital gains. (or it will be in a few weeks if not held at £6k due to election year.)

If you look at where the Simple Tax Guide is linked, it shows in the link with a green banner that says, "For Tax payers with income only from employment" and then references the Revenue Code Section 40. I can't see in the document where the link gets that information, can you?

[Mike Lister]

5 hours ago, UKresonant said:

 

So do you think it is reasonable that we can truly pick what we remit, I am indeed hoping that is the case.

 

I'm trying to organise so that I have good records available later should I become tax resident in Thailand

 

E.G.

a. All pre-taxed at source UK Pensions, paid to one UK bank account.

b. All non taxed investment dividends and interest to another account

 

With the intention of only including items from "a" to be considered for transfer to Thailand, with associated paper trail, proof of taxation etc

 

However could it get complicated, and they could deem that they consider the items at "b" to be the remittance, though I would not wish to include them as they would be needed for expenditure in the UK and never be remitted to Thailand?

 

It was the Norwegian answer  link earlier on page 222 that raised my doubts, of course this was someone trying to detach from Norway's tax system and obtain a Thai Certificate of Residence to use against the Norwegian Tax. (Not a Scenario I would anticipate with the UK)  https://www.rd.go.th/fileadmin/download/nation/Norwegian_answer.pdf

 

But I'm hoping that Pension Payslip. P60 end of year tax certs, remittance to UK Bank and assoc. statement, amount remitted to Thai bank. Only items in the conversation? and all is well.

 

"So do you think it is reasonable that we can truly pick what we remit, I am indeed hoping that is the case".

 

This is absolutely the case, it is the basis of all self assessment in that you the assessor/taxpayer, determine what funds you remit and from where. You are innocent until proven guilty! It is the RD job to determine if the facts and supporting evidence you (may be required to) submit later are adequate or not. If they think they are not, they will have to disprove them.

 

[Mike Lister]

Another poster raised this point privately so I'll address it publicly:

 

I am both a poster and a Moderator in the Finance and Economics section, I am very clear about where my two roles start and end but I appreciate that some of you may not be. For the avoidance of doubt:

 

I am perfectly happy that any poster disagrees with anything I say that relates to the subject of the thread, but not the management of it, or violations of the forum rules. I am probably more aware of the forum rules than most posters because one of duties is to enforce them, rules 8, 9, 10 & 11 seem to be the ones that posters frequently overlook whilst posting and violations of them cause most friction.   https://aseannow.com/forum_rules/

 

From past experience, I think most posters already understood these things. Since the vast majority of posters are easily able to control themselves, post sensibly and operate within the rules, the above has not been, and is not, an issue for them. In fact, there has only been one single query on this point in the past four weeks! Site statistics confirm that we experience many hundreds of online viewers every minute, moderating a small percentage of posters consumes a lot of time and is a disproportionate activity that requires everyone's co-operation.

[Mike Lister]

Some of you may see a green banner/header on the top of the Simple Tax Guide that contains Revenue Department wording about Section 40, at least one person has complained suggesting that the contents of it are misleading. This appears to be a cache issue which goes away if you clear cache or use an incognito window, most people cannot see the banner or the wording. 

[The Cyclist]

Quote

Thai government to tax all income from abroad for tax residents starting 2024

 

Can we get the title changed ?
 

The source of all the drama and angst for some.

 

The latest Q&A session quite clearly stated " *** Incorrect quote removed by moderation "

 

Lost count of the number of times I have said " await further details from the RD "

 

Further details will also emerge during the course of the year.

Edited February 9 by Mike Lister
remove incorrect quote

[Mike Lister]

3 hours ago, The Cyclist said:

 

Can we get the title changed ?
 

The source of all the drama and angst for some.

 

The latest Q&A session quite clearly stated " *** incorrect quote removed by moderation "

 

Lost count of the number of times I have said " await further details from the RD "

 

Further details will also emerge during the course of the year.

I think we're a tad late in the day to start changing the title of a thread that is almost 5 months old.

 

I personally don't see a lot of angst amongst members about this subject. What I see is heightened awareness of the issues and individual members beginning to assess their own situation and tabling questions, I think all those things are very desirable at this stage.

 

But your quote from the latest Q&A is not correct. What that quote actually says is, "When residents of Thailand pay tax on income abroad, it can be credited against the tax payable  in Thailand according to the Double Tax Agreement that Thailand has entered into with foreign countries". That is very different, potentially, from saying what you misquoted!

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

Edited February 9 by Mike Lister
remove incorrect quote

[The Cyclist]

3 hours ago, Mike Lister said:

But your quote from the latest Q&A is not correct. What that quote actually says is, "When residents of Thailand pay tax on income abroad, it can be credited against the tax payable  in Thailand according to the Double Tax Agreement that Thailand has entered into with foreign countries". That is very different, potentially, from saying what you misquoted!

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

 

That might be because it has been updated since it was originally posted.

 

Quote

Question 15: If my foreign source income is assessable income on which I have paid tax abroad and I bring the income into Thailand, is tax payable in Thailand again? Won't there be double taxation? Can the tax paid abroad be credited for eliminating double taxation or not?
Answer: There's no double taxation for residents of Thailand. When residents of Thailand pay tax on income abroad, it can be credited against the tax payable in Thailand according to the Double Tax Agreements that Thailand has entered into with foreign countries.

 

And only applies to assessable income.

[Mike Lister]

13 minutes ago, The Cyclist said:

 

That might be because it has been updated since it was originally posted.

 

 

And only applies to assessable income.

No it hasn't been updated, my initial post on 2 February said:

 

"Q; a lengthy question about tax paid on income overseas.

A; There is no double taxation in Thailand, tax paid overseas can be credited against tax payable."