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

[stat]

  On 4/18/2024 at 3:21 PM, JohnnyBD said:

I wonder, if someone borrowed $100,000 USD and remitted it to Thailand, would that be non-assessable income? If one could prove it with loan documents? What do you think?

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IMHO not taxable however if Thai TD does not accept your "prove" you may have a problem, same applies if you receive a 100K USD "gift" from your brother, parents etc.

[Cult of the Sun]

Eventually the pimp raises his price. The men are owned in the US outright. Husbands & wives my age, if they make it to my age, here have multiple bankruptcies.  They are also rolling out feminism in Se Asia. Just search it. The best thing all men could have done was to draw the line in the sand several decades ago. The thirst is real, and really fascinating.  It's fascinating how uncomfortable a man will make himself for what?

 

For many the sacrifice still ends up meaning they'll  be pushed off of a balcony anyway, whether it's figurative or literal.

[Driller]

  On 4/18/2024 at 3:12 PM, stat said:

There are several types of LTR where you do not need 80K passive income.

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Do you know the ones who do not require 80k? I would be interested.

[Mike Lister]

  On 4/18/2024 at 3:10 PM, stat said:

By stating your guesses as tax facts and providing a tax guide on these guesses while belittling (or worse) every one else you only have yourself to blame. What is wrong with starting your separate tax thread guide as you proposed several times yourself? Pls do so, much obliged!

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I knew it wouldn't be too long before the tag team leader in chief showed up!

 

Re: Guesses vs Facts: read the introduction, read the caveats, read what the Simple Guide says it is....nowhere does it say everything is fact, grow up for gods sake. Why ever on earth you don't contribute to the guide and help people instead of constantly trying to undermine its usefulness or get it closed down, is unfathomable. I  quote:

 

"What this guide will provide is, A STARTING POINT for readers to manage their own tax affairs, and it will also provide links to many of the answers for those with simple tax affairs, especially the average pensioner". 

 

Re: Separate Thread: We every comfortably had our own thread until your mob barged in and destroyed it with long rambling posts about Australian tax and refused to leave. We've already had this discussion, you know what you did.

 

You do not get to  dictate who posts what where in this this forum or who contributes to it. The fact that you want to organise things in a way that suits you is disturbing.

[Presnock]

  On 4/18/2024 at 7:17 PM, Driller said:

Do you know the ones who do not require 80k? I would be interested.

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all one has to do is google "LTR Board of Investment" and it will give one the 4 categories of "wealthy" folks.

[Captain Monday]

  On 4/18/2024 at 3:00 AM, JimGant said:

I saw somewhere that pensions are considered income by Thailand. No further elaboration, but I would think both defined benefit (employer paid) and defined contribution (paid from current income) would qualify.

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“Pensions are considered income”, There needs to be much more elaboration. Of course pension payments are taxable income in most countries. The DTAs specifically state Thailand cannot assume authority to tax a state pension of another country. Private pensions are another subject. 

[Mike Lister]

  On 4/19/2024 at 1:43 AM, Captain Monday said:

“Pensions are considered income”, There needs to be much more elaboration. Of course pension payments are taxable income in most countries. The DTAs specifically state Thailand cannot assume authority to tax a state pension of another country. Private pensions are another subject. 

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Are you certain about that and do you have a quote from a reliable source? 

 

The US/Thai DTA tells that US SSc cannot be taxed in Thailand and it also says that UK Government pensions cannot be taxed here either. But UK State Pension is not a government pension, that debate has been had many times and always concludes the same way..

[Captain Monday]

  On 4/19/2024 at 1:49 AM, Mike Lister said:

Are you certain about that and do you have a quote from a reliable source? 

 

The US/Thai DTA tells that US SSc cannot be taxed in Thailand and it also says that UK Government pensions cannot be taxed here either. But UK State Pension is not a government pension, that debate has been had many times and always concludes the same way..

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Sorry no I just read that in somewhere on another thread yesterday. I will never have any pension. State  public or private. only US Ssc. Everything I expect otherwise is  currently invested 401k plan and private assets.  All are taxable when distribution realized. At least partly, as 70 percent of Ssc and railroad annuity payments are not taxable 

 

Interesting, but why in the UK context is a State pension  not a government pension? 

 

 

 

 

[Mike Lister]

  On 4/19/2024 at 1:59 AM, Captain Monday said:

Sorry no I just read that in somewhere on another thread yesterday. I will never have any pension. State  public or private. only US Ssc. Everything I expect otherwise is  currently invested 401k plan and private assets.  All are taxable when distribution realized

 

Interesting, but why in the UK context is a State pension  not a government pension? 

 

 

 

 

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UK State Pension is for everyone who pays into the scheme, regardless of where they worked or how they were employed.

 

UK Government Pension is for civil servants, government workers, emergency services workers etc.

[Captain Monday]

  On 4/19/2024 at 2:04 AM, Mike Lister said:

UK State Pension is for everyone who pays into the scheme, regardless of where they worked or how they were employed.

 

UK Government Pension is for civil servants, government workers, emergency services workers etc.

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Similar then, but participation in US social security is mandatory. Mandatory in that the payments, which people call social security taxes but are actually *premiums are automatically deducted from paychecks and employer contributions. 
 

*I went to a retirement and investment forum sponsored by our Union  years ago. There the RI subject matter expert there  claimed that social security is not a government pension by definition but a type of insurance policy.  

[Mike Lister]

  On 4/19/2024 at 2:25 AM, Captain Monday said:

Similar then, but participation in US social security is mandatory. Mandatory in that the payments, which people call social security taxes but are actually *premiums are automatically deducted from paychecks and employer contributions. 
 

*I went to a retirement and investment forum sponsored by our Union  years ago. There the RI subject matter expert there  claimed that social security is not a government pension by definition but a type of insurance policy.  

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Participation in the UK State Pension scheme is also mandatory. The US has Social Security deductions, the UK has National Insurance deductions which covers a number of things including health (in part) and pensions ++. That fact notwithstanding, the UK scheme is still not regarded as a government pension.

[paddypower]

  On 4/18/2024 at 1:20 AM, Mike Lister said:

That seems to be closer to the horses mouth and seems more likely. But as always, the devil is in the detail. With all due respect to the earlier poster who is not unreasonably trying to get to the bottom of the matter, an agents interpretation of what is already cloudy and the subject of interpretation by everyone else, probably doesn't add value.

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Plus; I'd be particularly wary of unsolicited tax advice. The biggest international tax/legal public practices are prohibited from spamming, under ethical rules.

[freeworld]

  On 4/19/2024 at 1:43 AM, Captain Monday said:

“Pensions are considered income”, There needs to be much more elaboration. Of course pension payments are taxable income in most countries. The DTAs specifically state Thailand cannot assume authority to tax a state pension of another country. Private pensions are another subject. 

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Thailand uses Thai tax laws and income remitted to Thailand is subject to Thai tax law.

 

''Important Considerations with Double Taxation Agreements

Double tax treaties do not mean all taxpayers of both countries are granted tax relief. An individual or a business still has to go through the procedures of applying for tax relief under a DTA.''

 

OECD commentary document on the DTA articles may provide additional clarification.

https://www.oecd.org/berlin/publikationen/43324465.pdf

 

[paddypower]

  On 4/18/2024 at 10:52 AM, Mike Lister said:

It's all been said repeatedly, twenty, thirty fifty times over. We're not experts or even trained in Thai tax law, our objective has been to provide basic information about what we know and how the system operates. That's the Simple Guide and that's what it does. I recognise it has been well received and viewed nearly 80,000 times and frankly, that's really satisfying for us.

 

But still today, as we've seen very recently, there's a tag team of three or four members whose noses have been put out of joint some six months ago and who continue to look for ways to obstruct, be abusive, be uncooperative and generally hinder progress. You would imagine that professional and educated people might be able to debate pro's and con's at a sensible level, but no. No challenge is too small, no issue too insignificant, if it comes from me, it must be attacked, not the concept but the person! And if you think the forum picture of these things is ugly, the behind the scenes picture has been ten times more messy. Orchestrated letter writing, abusive PM's, complaints to the owners, dear god it's like being and adult back in ferkin kindergarten.

 

 

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don't worry, according to the tv show ''3 Body Problem'', the aliens will be here in 400 years and they have promised to do away with taxes (and anyone bugging you) completely. and thanks for all of the research, Mike.

[Presnock]

  On 4/19/2024 at 2:25 AM, Captain Monday said:

Similar then, but participation in US social security is mandatory. Mandatory in that the payments, which people call social security taxes but are actually *premiums are automatically deducted from paychecks and employer contributions. 
 

*I went to a retirement and investment forum sponsored by our Union  years ago. There the RI subject matter expert there  claimed that social security is not a government pension by definition but a type of insurance policy.  

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THE DTA between US and Thai specifically talks about Social Security payments  read the DTA

[paddypower]

  On 4/19/2024 at 2:25 AM, Captain Monday said:

Similar then, but participation in US social security is mandatory. Mandatory in that the payments, which people call social security taxes but are actually *premiums are automatically deducted from paychecks and employer contributions. 
 

*I went to a retirement and investment forum sponsored by our Union  years ago. There the RI subject matter expert there  claimed that social security is not a government pension by definition but a type of insurance policy.  

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I'm a shattered accountant (retired CPA). So, I tend to walk my dogs on the beach when the subject of anything to do with income tax comes up. Why? because some here seem to suffer from obsessive compulsive syndrome about the future landscape of Thai taxes. In your case, with respect, why in heavens name would you waste space quoting some non-expert your heard speak at a irrelevant forum? 

[paddypower]

I do have a modest request. MY wife gets 2 pensions from the Danish Government. One is an old age benefit and the other is from her contributions to the national pension plan. Are there any Danes on this thread? Hoping to share any thoughts about the situation, where there is no double taxation treaty between Denmark and Thailand.  tia

[Lacessit]

Please wake me up when someone has their retirement extension refused because they do not have a Thai tax number. Until then, it's all ifs, buts and maybes.

[Mike Lister]

  On 4/19/2024 at 3:03 AM, paddypower said:

I do have a modest request. MY wife gets 2 pensions from the Danish Government. One is an old age benefit and the other is from her contributions to the national pension plan. Are there any Danes on this thread? Hoping to share any thoughts about the situation, where there is no double taxation treaty between Denmark and Thailand.  tia

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If your wife were to file her own Thai tax return, rather than file jointly with you, that would entitle her to around 500k Baht in TEDA (allowances/deductions etc). Her filing that way would allow you to do the same and claim similar TEDA.

[JimGant]

  On 4/19/2024 at 1:43 AM, Captain Monday said:

The DTAs specifically state Thailand cannot assume authority to tax a state pension of another country. Private pensions are another subject. 

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Not all DTAs. All Norwegian pensions, govt and private, remitted to Thailand are taxable first by Thailand.

 

  Quote

Pensions (including Government pensions and payments under a social
security system) and annuities paid to a resident of a Contracting State shall be
taxable only in that State.”
The article gives the state of residence the sole taxing right to the pension income.
Therefore a Norwegian who received pension income from Norway and is a resident
of Thailand, either under the Article 4 paragraph 1 or paragraph 2 of the Thailand-
Norway DTC, shall be taxable only in Thailand.

https://www.rd.go.th/fileadmin/download/nation/Norwegian_answer.pdf

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[Guderian]

  On 4/19/2024 at 3:04 AM, Lacessit said:

Please wake me up when someone has their retirement extension refused because they do not have a Thai tax number. Until then, it's all ifs, buts and maybes.

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Yes, it's not very clear at the moment, and I was thinking of ignoring the whole nonsense and just continuing doing as I have for the last 20 years here.

 

However, say that you get to 2029, five years after the rule change and, not having heard anything from the TRD, or having had any problems with Immigration or anyone else, you assume that all's well and you're in the clear. Then, suddenly, you get a demand from the TRD to file tax returns for the last five years and bring all your supporting documentation to discuss your tax position with them. Depending on your personal situation, you may be in the clear, or you may get hit with having to pay five years in back taxes, plus penalties and interest. Does anyone really want to risk that?

 

Personally, I think the safest route is to carry on as usual, and pay an accountant to file a tax return in the first quarter of next year. At least within a few months you will know exactly how your local TRD office is applying the rules and how much you will be on the hook for in future years. It may be nothing, or a trivial amount, but surely it's best to know exactly where you stand rather than imitate an ostrich? Then you can decide what you want to do: grin and bear it, spend less than 180 days a year in Thailand, or move elsewhere that's not signed up to CRS.

[UKresonant]

  On 4/19/2024 at 2:04 AM, Mike Lister said:

  On 4/19/2024 at 1:59 AM, Captain Monday said:

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UK State Pension is for everyone who pays into the scheme, regardless of where they worked or how they were employed.

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Or perhaps not worked but had voluntary National insurance contributions, or credits from child benefit...

(Section 40 (1) of the TH RD code does not describe this benefit perhaps....))

 

 

 

 

[Presnock]

  On 4/19/2024 at 4:58 AM, Mike Lister said:

I’ve grown tired of waking up to new abusive posts and PM’s each morning so I’ve decided to withdraw completely from the tax threads and the Simple Tax Guide. The fact is, the satisfaction derived from compiling the guide and helping members is far outweighed by faux challenges, aggravation and abuse. I’ve talked this through with Admin who has very generously proposed alternate solutions but I think mine is the better alternative.

 

By means of this post, I handover responsibility for making any future updates to the tax guide and answering questions, to members @stat @TroubleandGrumpy and @JimGant who appear to think they can do a better job and I feel certain will want to do all they can to help members.

 

I will not be reading PM’s again.

 

I wish you all well.

 

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Mike did you read the news yesterday that Thailand is or has applied to join the OECD?  the report says 7 years, if you get the chance read the requirements for applicant country.  Funny and can only imagine the comments forthcoming on this forum.

 

[samtam]

  On 4/19/2024 at 5:33 AM, Presnock said:

Mike did you read the news yesterday that Thailand is or has applied to join the OECD?  the report says 7 years, if you get the chance read the requirements for applicant country.  Funny and can only imagine the comments forthcoming on this forum.

 

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This one?

[4myr]

Here a short summary of the 2nd meeting at the tax office in Prachuap Khiri Khan. First I planned to go to the office in Hua Hin, however I found out, Hua Hin has a much smaller branch office.

This time the topic is "exemptions" as specified in the Double Tax Agreement between NL and Thailand. Based on hardcopies in Thai and English. Both documents were retrieved from the Thai RD office.

 

We made an appointment with a lawyer from the Legal dept of the tax office. He asked his colleagues to join, 2 colleagues from the operational department. His female boss and a junior colleague who were in the room also listened to the conversation.

 

Focus of the meeting is the interpretation of Article 23.5 "exemptions" of the NL-Thai DTA from 1975:

https://wetten-overheid-nl.translate.goog/BWBV0003872/1976-06-09?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=nl&_x_tr_pto=wapp

 

"Where a resident of Thailand [i.e. tax resident] derives benefits and income or owns assets which are subject to the provisions of Articles 6, 7, 10(7), 11(5), 12(4), 14(1) and (2), 15(1) and (3) paragraphs, 16 , paragraphs 2, 17, 19  and 22, paragraphs 1 and 2, of this Agreement may be taxed in the Netherlands, Thailand shall exempt such benefits and income or those assets from tax, but may, in calculating the tax on the other income or capital of that resident, apply the tax rate that would have applied if the exempt income or capital had not been exempt."

 

The wording "shall exempt"  is very clear to me, and means no tax in Thailand, even if NL does not apply tax, for the following revenue items, which apply to me:

 

1) art 14.1 - in case I sell my house located in NL with profit and I remit this money. Capital gains are not taxed in NL.

2) art 16.2 - fees as a director of my company, which is based only in NL. Does not have a branch in Thailand

3) art 19 - when I retire in a couple of years, the state pension I will receive from government funds. 

 

Well in the meeting, the tax lawyer did not express his opinion. But his colleague from the operational dept was very clear and vocal. That in the history of tax filing cases, she did not come across exemptions being applied. Only tax credits are allowed.

 

Well I told her politely that I disagree with her, as the English version of 23.5, which I downloaded from the TRD website is quite clear, and when a dispute arises, between NL and TH, the English language version will be leading.

 

I also told her that the DTA is also clear about tax credits, which should be regarded differently than exemptions, in the subsequent article 23.6:

 

"Thailand shall grant a reduction in the tax calculated in accordance ..."

 

In case I do not agree with her answer, I can send the local tax office a written letter in Thai. Then they can open a case to request for advice to the head office in Bangkok. The officer said she will look into the matter again, if there were exemptions in the past, of tax not being applied in above mentioned cases.

 

Unfortunately the lawyer in the room did not say anything different than repeat what his colleague has said. His female boss printed out a case of a Swedish guy who filed tax about capital gains on stocks, however this does not match my case. I understand that gains on stocks does not get exemptions, also according to NL Thai DTA, as it is not fixed to a country similar to a property or a company.

 

At the end she had a simple advice, which will save time for me and the tax office. In the situation that I need to transfer sums of money, make sure I stay less than 180 days in that year in Thailand.

 

I also had a question about record keeping, in case an audit will check my records as evidence. The officer said that the RD got a lot of questions on this matter. She said that the RD head office will come with a document which list all these record keeping requirements. She could not say when. For example, on the day that I transfer money to Thailand, I need to keep a record of the euro-baht exchange rate of that day. [PS. I assume to convert a tax credit in euro to thai baht] 

 

 

[Yumthai]

  On 4/19/2024 at 7:38 AM, 4myr said:

At the end she had a simple advice, which will save time for me and the tax office. In the situation that I need to transfer sums of money, make sure I stay less than 180 days in that year in Thailand.

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That alone confirms that any remittance done in a year someone is non-resident for tax purposes is tax-free, regardless of tax residency when the money was earned.

[4myr]

  On 4/19/2024 at 7:52 AM, Yumthai said:

That alone confirms that any remittance done in a year someone is non-resident for tax purposes is tax-free, regardless of tax residency when the money was earned.

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From the FAQ of TRD case #1.

 

As I understand it, income remitted is only assessable income, in case both conditions apply:

 

[1] the income remitted was earned in a year that the person was tax resident

[2] at the time the money is remitted, the person is also tax resident

 

In case one of the 2 does not apply, that income remitted is not assessable income.

 

The simplest case to check for any person from the tax office is when [2] does not apply. I can also stay less than 180 days when I sell my stocks with profit [1], however this situation gives me more headache. To file tax in the year that I transfer the money and be dependent on a tax officer who will apply this rule correctly  

[JohnnyBD]

  On 4/19/2024 at 8:29 AM, 4myr said:

From the FAQ of TRD case #1.

 

As I understand it, income remitted is only assessable income, in case both conditions apply:

 

[1] the income remitted was earned in a year that the person was tax resident

[2] at the time the money is remitted, the person is also tax resident

 

In case one of the 2 does not apply, that income remitted is not assessable income.

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That's great news for me. I don't need to switch to a LTR visa . Thanks... Your report is greatly appreciated.

[gamb00ler]

  On 4/19/2024 at 8:29 AM, 4myr said:

The simplest case to check for any person from the tax office is when [2] does not apply. I can also stay less than 180 days when I sell my stocks with profit [1],

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I believe that you will only be subject to Thai tax on the capital gain since Dec. 31, 2023.... not the entirety of your gain.

[potless]

  On 4/19/2024 at 7:38 AM, 4myr said:

For example, on the day that I transfer money to Thailand, I need to keep a record of the euro-baht exchange rate of that day. [PS. I assume to convert a tax credit in euro to thai baht

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Was the lady referring to Thai baht being remitted to Thailand or euros that are remitted to a foreign currency deposit account in Thailand. If the money is remitted in foreign currency, I believe that you need to make a note of the exchange rate ( TT rate ?)at the close of business on the day the funds are received. For example, 5,000 euros and a rate of 40 baht per euro would be 200,000 baht. that would be the relevant figure for tax calculations irrespective of the exchange rate when you actually convert the euros to baht, which may be at a later date.