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

[jayboy]

28 minutes ago, lordgrinz said:

 

As to obtaining a TIN, not sure if my wife did so, but not to my knowledge at least. However, she has filed our Thai Taxes as a married couple with my Pink ID in the Tax ID field for years now. I am on a Non-O (Family) Visa, not PR.

 

Interesting.Maybe once a TIN has been accepted for a number of years nobody is going to check to see whether it was properly authorized or not.It's also quite possible my initial assumption was wrong - ie no problem in using Pink Card number and no separate application for a TIN is necessary.

 

 

[Mike Teavee]

1 hour ago, gamb00ler said:

Since investment opportunities in Thailand suffer in comparison to most of the world, you could keep those funds outside Thailand.  It would seem likely that those funds would remain as non-assessable even after remittance to Thailand because they were earned/received when you were not a Thai tax resident.

True, but I want to bring over at least $250,000 to Invest (Buy a Condo) so I can get the LTR "Wealthy Pensioner" Visa, my pension (coupled with rental/investment income) may take me over the $80,000 PA threshold but I'm assuming it won't, plus I'd have to wait 2 years from my pensions kicking in (2026).

 

Either way if I can get the LTR then it seems my future Tax "Problems" will have gone away assuming current regulations don't change. 

 

Another option is the 25% lump sum will give me the $250K but, the UK Government is making it so difficult for small landlords (I only have the house that I bought to live in) that I'm leaning towards selling up anyway.

 

 

 

Edited March 14 by Mike Teavee

[Mike Lister]

10 minutes ago, jayboy said:

 

Interesting.Maybe once a TIN has been accepted for a number of years nobody is going to check to see whether it was properly authorized or not.It's also quite possible my initial assumption was wrong - ie no problem in using Pink Card number and no separate application for a TIN is necessary.

 

 

The length of the TIN was changed to 13 digits to match the length of the Thai ID number, as I recall that was done around 2012. Pre-2012 TIN's must be changed to the new format.

[Mike Lister]

A racist post removed

[Mike Lister]

I've removed an illogical post recommending against a particular Thai bank for SSc direct deposit purpose. I asked the poster to clarify but he did not.

 

My experience of setting up a US SSc direct deposit to a Thai bank is that SSc Manilla requires that the bank sign the direct deposit form (SSA-1199), a copy of which is kept by the bank whilst the original is returned to Manilla. This process appears to be true of all Thai banks where enrollment in the IDD scheme is done manually. All Thai banks report to the Central Bank and to the Thai Revenue in the same way, the same information is required of all banks. In those respects, there is no difference regarding which Thai bank is used to receive the US SSc deposit, certainly not from a bank reporting or tax reporting standpoint.

[Yumthai]

Found this recent Thailand PIT memo that could be somehow useful: 

https://www.luther-lawfirm.com/fileadmin/user_upload/PDF/Broschueren/Geschaeftsaktivitaeten_im_Ausland/Thailand/Memo_Personal_Income_Tax_in_Thailand_V8_01.pdf

 

 

[JimGant]

On 2/10/2024 at 8:15 PM, Mike Lister said:

On 2/10/2024 at 7:58 PM, JimGant said:

Uh, this doesn't track with most DTAs. Take the US-Thai DTA. Private pensions are exclusively taxable by Thailand, the country of residence. That the US also taxes these pensions, as secondary taxation authority, means that, in the interest of avoiding double taxation, the US has to absorb a Thai taxation credit. As such, the US may realize no taxes, should the Thai credits exceed the US tax bill. And Thailand, as exclusive taxation authority, gets to keep the whole tax collection, without any offset from US tax credits.

 

Thus, to say that all Thai taxation will be offset by taxes paid to the home country on this income -- in all situations -- is pure baloney. Thailand, if they have any gumption, will apply the DTA to their benefit, and apply full taxation to those monies indicated by the DTA -- and provide a tax credit for this full taxation to the home country.

 

How this will work out in practice, I don't know. Amended tax returns, maybe, to slip that Thai tax credit into home country taxation? I just know Thailand probably will not give up taxes by absorbing tax credits that the DTA says should go the other way. 

 

Whatever. For most of us, this just means our total tax bill will be the same, only, if Thailand is smart, they'll monitor what's due them via the DTAs. And tax appropriately.

Expand  

It may seem like baloney from a DTA perspective but that is what the RD confirmed in the Sherrings Q&A, Q15 below

 

 

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

 

You know for a fact this is what RD confirmed to Sherrings? You're in contact with them?

 

If true, this says Thailand will forego a lot of tax collection from income the DTAs say is theirs exclusively. Why? Because Sherrings is saying tax credits will only go one way -- from home country taxation to Thailand taxation; meaning, the home country gets to keep all taxation, since they have no credits to absorb. But Thailand gets to keep only taxes left after netting out the home country credits.

 

Only where home country taxes are slight, or even nil -- will Thailand get some tax collections in their coffers ('cause there would be no, or slight, home country credits -- per the Sherring report -- against Thai taxation). For countries like the US, where taxation on income remitted to Thailand will probably exceed what the Thai taxation would be on same -- Thailand collects zip -- even tho' the DTA says they have exclusive taxation rights.

 

So, for Thailand to get what the DTA says they deserve, the credit granting needs to be reversed: Thailand gets first taxation rights on the income stipulated by the DTA; as such, they get to keep every satang of that tax collection; and the home country has to absorb a tax credit for the taxes paid to Thailand. For most taxpayers, this will just mean less taxes paid to home country, more to Thailand -- but totaling up the same. No net difference financially -- just more paperwork involved, what with having to file a Thai tax return.

 

But, per Sherring (who hopefully is in the know with Thai RD), Thailand is not interested in collecting taxes they're due via a DTA. Instead, just allow the home country to keep all taxes, and issue a credit against any Thai taxes. There, Double Taxation Question solved.

 

Ridiculous. [But easy to fix, so we probably haven't heard the end of this Again, same total tax bill, but now with country A getting more, and country B getting less -- per the DTA.]

 

[Mike Lister]

17 minutes ago, JimGant said:

 

You know for a fact this is what RD confirmed to Sherrings? You're in contact with them?

 

If true, this says Thailand will forego a lot of tax collection from income the DTAs say is theirs exclusively. Why? Because Sherrings is saying tax credits will only go one way -- from home country taxation to Thailand taxation; meaning, the home country gets to keep all taxation, since they have no credits to absorb. But Thailand gets to keep only taxes left after netting out the home country credits.

 

Only where home country taxes are slight, or even nil -- will Thailand get some tax collections in their coffers ('cause there would be no, or slight, home country credits -- per the Sherring report -- against Thai taxation). For countries like the US, where taxation on income remitted to Thailand will probably exceed what the Thai taxation would be on same -- Thailand collects zip -- even tho' the DTA says they have exclusive taxation rights.

 

So, for Thailand to get what the DTA says they deserve, the credit granting needs to be reversed: Thailand gets first taxation rights on the income stipulated by the DTA; as such, they get to keep every satang of that tax collection; and the home country has to absorb a tax credit for the taxes paid to Thailand. For most taxpayers, this will just mean less taxes paid to home country, more to Thailand -- but totaling up the same. No net difference financially -- just more paperwork involved, what with having to file a Thai tax return.

 

But, per Sherring (who hopefully is in the know with Thai RD), Thailand is not interested in collecting taxes they're due via a DTA. Instead, just allow the home country to keep all taxes, and issue a credit against any Thai taxes. There, Double Taxation Question solved.

 

Ridiculous. [But easy to fix, so we probably haven't heard the end of this Again, same total tax bill, but now with country A getting more, and country B getting less -- per the DTA.]

 

I don't understand where you're coming from, you're asking me about a statement The Cyclist made a month ago regarding double taxation. Cyclist's response was that you should take that up with Sherrings because it was their Q&A that said there would be bo double taxation and I merely repeated that. Now you're asking me if I am in contact with Sherrings, the answer is no, I'm using the same published inputs as everyone else:

 

gs, 

[JimGant]

4 minutes ago, Mike Lister said:

Now you're asking me if I am in contact with Sherrings, the answer is no, I'm using the same published inputs as everyone else:

 

Ok, per my entry, and in your opinion -- is Sherrings, as presumably a rep of RD, correct that tax credits will only be one-way, i.e., from home country to Thailand? If you agree with that, does that make any sense in light of what a DTA grants Thailand in taxation exclusivity? Just curious.

[Mike Lister]

20 minutes ago, JimGant said:

 

Ok, per my entry, and in your opinion -- is Sherrings, as presumably a rep of RD, correct that tax credits will only be one-way, i.e., from home country to Thailand? If you agree with that, does that make any sense in light of what a DTA grants Thailand in taxation exclusivity? Just curious.

I don't believe that Sherrings is a rep of the RD, I think Sherrings is an independent tax consultancy that has contacts within the RD, as might be expected.

 

No, I don't believe that tax credits will only flow one way, I've never thought that, I would expect tax credits to be two way.

 

I do believe there will be no double taxation, which is what Sherrings and their Q15 in the linked Q&A confirmed.

 

I have no particular expertise in understanding global DTA's, I especially have none when it comes to the US/Thai DTA. That is a matter for individuals to research and I have always viewed your expertise in that area to be useful to people doing that, which is why I have always referred US citizens with tax queries to  you. If you ask me about it, I will suggest that where the tax arises is key and fundamental. Income that is taxed at source in the country where the asset or source exists is primary, what comes afterwards is squabbling over differences. You sell an asset in the US and you pay tax at source, the IRS has possession. When you import those funds to Thailand and declare them on your Thai tax return, the Thai RD notes (potentially) that it is owed tax money on that transaction that has already been paid to the IRS. The TRD doesn't ask the taxpayer for the credit, it raises a request to the IRS and either gets paid or doesn't.

 

 

 

.

[proton]

I'm still confused 🤫

[Mike Lister]

9 minutes ago, proton said:

I'm still confused 🤫

How can we help clarify?  Ask a question perhaps?

[proton]

33 minutes ago, Mike Lister said:

How can we help clarify?  Ask a question perhaps?

Lets say you wanted to bring in a million to buy a car, or you are terminally ill and want to transfer several million from back home into the mrs account, how can you do that without paying tax? I know you can gift one million a year, but in the case of dying or death that would not be enough.

[Mike Lister]

29 minutes ago, proton said:

Lets say you wanted to bring in a million to buy a car, or you are terminally ill and want to transfer several million from back home into the mrs account, how can you do that without paying tax? I know you can gift one million a year, but in the case of dying or death that would not be enough.

OK good, perhaps you can answer a few questions first, yes, no or short answers are OK:

 

1) what country is the money coming from?

2) Do you live in Thailand year round?

3) How was the money earned, savings, income, rent, dividends sale of property etc?

4) How many children do you have in Thailand

5) Was the money that you want to send to Thailand, taxed in your home country?

 

 

[proton]

23 minutes ago, Mike Lister said:

OK good, perhaps you can answer a few questions first, yes, no or short answers are OK:

 

1) what country is the money coming from?

2) Do you live in Thailand year round?

3) How was the money earned, savings, income, rent, dividends sale of property etc?

4) How many children do you have in Thailand

5) Was the money that you want to send to Thailand, taxed in your home country?

 

 

 

UK

Yes

savings

no kids

some taxed some not- personal allowance

[Mike Lister]

1 minute ago, proton said:

 

UK

Yes

savings

no kids

some taxed some not- personal allowance

Cool!

 

It looks like most of the money would be from savings, presumably, the majority of it would have been earned before 1 January 2024. If that's the case, there's no Thai tax to pay when you bring those savings into Thailand. But any UK interest that is earned on those savings, from 1 January onwards, may be assessible to Thai tax, unless they are taxed in the UK, in which case the UK tax paid can offset any Thai tax that is due, probably resulting in zero tax due here.

 

Clear or did I not explain it well enough?

[proton]

20 minutes ago, Mike Lister said:

Cool!

 

It looks like most of the money would be from savings, presumably, the majority of it would have been earned before 1 January 2024. If that's the case, there's no Thai tax to pay when you bring those savings into Thailand. But any UK interest that is earned on those savings, from 1 January onwards, may be assessible to Thai tax, unless they are taxed in the UK, in which case the UK tax paid can offset any Thai tax that is due, probably resulting in zero tax due here.

 

Clear or did I not explain it well enough?

 

So what reason to select when transferring money with wise?

[Mike Lister]

2 minutes ago, proton said:

 

So what reason to select when transferring money with wise?

 

I don't know, something like living expenses or family support I guess.

 

There is no relationship per se between the reason you give to Wise for your money transfer and your tax return, the two things are quite separate. The reason you give to Wise for sending the funds to Thailand, is useful if ever you want to repatriate those funds, at a later date but they don't have any bearing on tax. You will still need to provide proof later, if ever asked by the Thai Revenue, that the funds you transfered are from savings.

 

 

 

 

[proton]

Thanks, any letters from the tax people go straight in the bin

[Mike Lister]

Just now, proton said:

Thanks, any letters from the tax people go straight in the bin

Probably not the best thing but each to their own.

[TheAppletons]

3 hours ago, proton said:

Lets say you wanted to bring in a million to buy a car, or you are terminally ill and want to transfer several million from back home into the mrs account, how can you do that without paying tax? I know you can gift one million a year, but in the case of dying or death that would not be enough.

 

  If I were terminally ill, the last thing I would worry about is whether - some time, some day, some year, when they get around to it - the Thai RD wanted to look at my financials.  

 

  (Note: I am not making light of terminally ill people here.....just that they have other priorities.)

[Mike Teavee]

3 hours ago, proton said:

Lets say you wanted to bring in a million to buy a car, or you are terminally ill and want to transfer several million from back home into the mrs account, how can you do that without paying tax? I know you can gift one million a year, but in the case of dying or death that would not be enough.

You can gift your wife up to 20Million per year & I believe that there’s no inheritance Tax on anything you leave to your wife. 
 

https://taxsummaries.pwc.com/thailand/individual/other-taxes#:~:text=The inheritance tax rate is,are exempt from the tax.

[UKresonant]

10 hours ago, JimGant said:

 

You know for a fact this is what RD confirmed to Sherrings? You're in contact with them?

 

If true, this says Thailand will forego a lot of tax collection from income the DTAs say is theirs exclusively. Why? Because Sherrings is saying tax credits will only go one way -- from home country taxation to Thailand taxation; meaning, the home country gets to keep all taxation, since they have no credits to absorb. But Thailand gets to keep only taxes left after netting out the home country credits.

 

Only where home country taxes are slight, or even nil -- will Thailand get some tax collections in their coffers ('cause there would be no, or slight, home country credits -- per the Sherring report -- against Thai taxation). For countries like the US, where taxation on income remitted to Thailand will probably exceed what the Thai taxation would be on same -- Thailand collects zip -- even tho' the DTA says they have exclusive taxation rights.

 

So, for Thailand to get what the DTA says they deserve, the credit granting needs to be reversed: Thailand gets first taxation rights on the income stipulated by the DTA; as such, they get to keep every satang of that tax collection; and the home country has to absorb a tax credit for the taxes paid to Thailand. For most taxpayers, this will just mean less taxes paid to home country, more to Thailand -- but totaling up the same. No net difference financially -- just more paperwork involved, what with having to file a Thai tax return.

 

But, per Sherring (who hopefully is in the know with Thai RD), Thailand is not interested in collecting taxes they're due via a DTA. Instead, just allow the home country to keep all taxes, and issue a credit against any Thai taxes. There, Double Taxation Question solved.

 

Ridiculous. [But easy to fix, so we probably haven't heard the end of this Again, same total tax bill, but now with country A getting more, and country B getting less -- per the DTA.]

 

Info (not dividends or interest) on the theme, not conclusive perhaps.

 

UK/THAILAND DOUBLE TAXATION CONVENTION SIGNED 18 FEBRUARY 1981

'Article 23

Elimination of Double Taxation....

'3) In the case of Thailand, United Kingdom tax payable in accordance with this Convention in respect of income from sources within the United Kingdom shall be allowed as a credit against Thai tax payable in respect of that income. The credit shall not, however, exceed that part of the Thai tax, as computed before the credit is given, which is appropriate to such item of income.'

 

Can't claim relief at source on UK pension income taxation (except at their discretion), it does seem to suggest tax charged overseas may be able to be reclaimed on non Gov pensions perhaps.

 

Double taxation agreements do not apply to tax on gains from https://www.gov.uk/capital-gains-tax-for-non-residents-uk-residential-property

 

Still positive to Thailand, VAT at 7%(10% in Sept), very minor reinforcement of balance of payments / FX rate and GDP?

 

27th of June creeping ever closer, it was cold last night but I had a really good sleep.....

Edited March 14 by UKresonant

[Kenny202]

Any Australians have a handle on the new tax rules? I am about to bring in my yearly living expenses from my Superannuation account in Australia. The money is in the original Super account, I am of maturity age and the funds / interest are non taxable in Australia. I believe Australia has some sort of tax agreement with Australia. Am I going to be liable for 10% tax in Thailand on this transfer?

[Mike Lister]

25 minutes ago, Kenny202 said:

Any Australians have a handle on the new tax rules? I am about to bring in my yearly living expenses from my Superannuation account in Australia. The money is in the original Super account, I am of maturity age and the funds / interest are non taxable in Australia. I believe Australia has some sort of tax agreement with Australia. Am I going to be liable for 10% tax in Thailand on this transfer?

Fellow Aussie poster @TroubleandGrumpy may be up to speed on this, I have no doubt he'll be along soon.

[Kenny202]

Just now, Mike Lister said:

Fellow Aussie poster @TroubleandGrumpy may be up to speed on this, I have no doubt he'll be along soon.

Thank you once again Mike 🙂

[Celsius]

remember guys, no tin no tax

 

 

[Kenny202]

2 minutes ago, Celsius said:

remember guys, no tin no tax

 

 

Meaning?

[Mike Lister]

1 minute ago, Kenny202 said:

Meaning?

A TIN (Tax Identification Number) must be applied for from the Thai Revenue before you can file a tax return. The poster might be hinting that if you never get a TIN, you can transfer the money and they wont know who you are so you wont have to pay tax or file a return. (like your Bank and Immigration don't know!!!))

[JimGant]

19 hours ago, Mike Lister said:

If you ask me about it, I will suggest that where the tax arises is key and fundamental. Income that is taxed at source in the country where the asset or source exists is primary, what comes afterwards is squabbling over differences. You sell an asset in the US and you pay tax at source, the IRS has possession. When you import those funds to Thailand and declare them on your Thai tax return, the Thai RD notes (potentially) that it is owed tax money on that transaction that has already been paid to the IRS. The TRD doesn't ask the taxpayer for the credit, it raises a request to the IRS and either gets paid or doesn't.

 

First and foremost, as least regarding US taxes, the only "at source" taxation I know of is for payments to non resident aliens. This is a final tax, with a fixed rate, which would make no sense for a US taxpayer, subject to a graduated tax scale. Thus, forget the "at source" stuff -- the US taxpayer figures out his taxable income via 1099 reports or from a spreadsheet, where sales proceeds minus basis, arrives at a taxable gain. At any rate, he files a tax return with this information.

 

Let's use my IRA annual payment (called a Required Minimum Distribution - RMD) as one example source of income. Per the DTA, if I remit this income to Thailand, Thailand has exclusive taxation rights on this income, and the US secondary rights, per the saving clause in the DTA. This will only show up on a Thai tax return -- if I so declare, as they won't know what part of my cash flow into Thailand from my bank account is assessable income. And Thai RD has no way of knowing whether or not I paid US taxes on this income, nor, probably what the DTA says about this income, i.e., whether or not it gets a US tax credit against it -- or whether the US gets a Thai tax credit against it. Again, it is my self-assessment in reporting this. And, per the DTA, with Thailand having exclusive taxation rights, I declare the whole amount as assessable income, i.e., not offset by a US tax credit. This is probably all, or most, transparent to Thai RD, who maybe has no interest in or knowledge of any related DTA. Or, maybe I just take Sherring's advice, and don't even declare this on a Thai tax return, since according to Sherring, as it's taxed by the home country, double taxation is avoided by just not paying Thai taxes on it (a spreadsheet would show US tax credits completely wipe out any Thai taxation).

 

But, if I follow the DTA treaty rules, I pay Thailand full fare taxes on this RMD, and take the Thai taxes as a credit against my US taxes. Again, this is all done with information I collect. Thailand doesn't send any information to the IRS. And they're completely oblivious to the fact that their taxes are being used as a tax credit on a US tax return. Why would they care -- it doesn't affect the taxes they collect.. Oh, I could even figure out what my Thai taxes would be on this RMD, long before I even file a Thai tax return, via a little spreadsheet work. Nothing official need be provided the US on this Thai tax credit. I just plug the numbers into Form 1116 -- and realize a one for one offset in my US tax bill, i.e., no extra taxes paid anyone in this scenario. But, the DTA rules are at least followed in this scenario.

 

Anyway, Sherring doesn't agree. But here's a better take on tax credits:

https://www.cpasforexpats.com/post/us-thailand-tax-treaty

 

Quote

The Thailand US tax treaty provides mechanisms for relief from double taxation, ensuring that income earned in one country by residents or citizens of the other is not taxed twice. To avoid double taxation, the treaty allows U.S. citizens to claim a foreign tax credit for the income tax they pay on Thailand sourced income to Thailand against their U.S. tax liability. Conversely, Thailand offers a credit for U.S. taxes paid on U.S. sourced income against it's own tax liabilities.