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

[Mike Lister]

4 minutes ago, redwood1 said:

Retired expats on a pension are a piss poor source for tax money... 

100% agreed. The risk however is unintended damage, the shell might just clip a few friendlies on its way to the intended target.

[TroubleandGrumpy]

3 hours ago, Klonko said:

Flying under the radar with less than THB 2m annual account turnover may remain an appropriate strategy for easy living in Thailand. I expect that workable solutions are also in the interest of Thai RD and doubt they will link IO extensions to tax filing. 

Yes that could be so. But it will not be clear until the Thai RD provide guidelines and details.  It is only on that basis that it is wise to 'stay under radar' and not lodge a tax return. If the Thai RD guidelines and details (when they are provided), make it clear that we must do a tax return and that we must prove the money is not income, then to not lodge a tax return is very dangerous. If you break the tax laws and dont file a return, they can audit you for up to 7 or 10 years (not sure which). And their penalties can include veryu serious fines, interest of 1.5% on any amounts owing, jail terms, and then of course deportation.  Dont mess with the Tax Office is my strong advice to anyone - anywhere in the world. 

[vukovar77]

3 hours ago, stat said:

I just read that apparently cap gains from trading in Thai stocks on thai stock exchange are tax exempt according to Mazars:

 

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

 

can someone confirm this?

Yes at the moment cap. gains are tax exempt "if any".Just check out SET performance in a last few years.It is very bad and it is very hard to have any profit here.And trade here on stock-market is pretty costly as well.I am out of this market for about 3-4 months and it was good decision.You can check out trading data and how much is sell off for foreigner investors in a last few months.Besides we are only protected in Thai banks to amount 1 million BHT per account and interest rates are very poor.In EU banks I have about 3% interest on EUR per 6 months .So that makes me clear with this "tax change policy" that is much better to have money abroad.

Edited October 14, 2023 by vukovar77

[TravelerEastWest]

11 hours ago, Yumthai said:

It's called a bribe not a tax.

No it's called being told to file a tax return not pay a bribe. And file regularly. This is a normal activity for tax agents. everything was done in the open and explained to me in English by the local tax manager.

 

Interestingly Al Capone the famous Chicago criminal was arrested and put in jail in a similar way - Federal tax agents investigated his spending and he had not paid his taxes... next stop Alcatraz - famous American jail for this who haven't heard of it...

[moogradod]

6 hours ago, Klonko said:

 

 

Cf. following clarifying post:

 

Flying under the radar with less than THB 2m annual account turnover may remain an appropriate strategy for easy living in Thailand. I expect that workable solutions are also in the interest of Thai RD and doubt they will link IO extensions to tax filing. 

I am actually scared to do that. My problem is not my own tax - easy peasy even on the considerably high state pension I get (but below 1.8 m - have to give a portion to my divorced first wife). But I never understood why they do not approach my Thai wife which transfers between her accounts amounts far above 2m per year (for example to optimize risk and she recently bought a house). From all interest 15% withholding tax is deducted. So if I file so must she even if the interest earned per year might not be much after the deductioons (I actually never calculated it, but will do so tomorrow) and I am uncertain what this could mean (only in the case something goes really pear shaped with the new regulations - money I gifted her was always done under strict observance of the tax laws at the time, some even while she was not tax resident). And then there is still the risk that the IO wants proof of payment. Maybe not now, but maybe in 3 years. Even worse. So I more and more conclude that I have to file a tax return already for 2023. Need to find a good tax accountant (as well because of the language barrier). My wife does not understand these matters and can translate but probably not really make sense all the time.

[stat]

5 hours ago, Lorry said:

Mutual funds are tax free (doesn't matter if money market funds or others)

Mutual Funds are a difficult beast... How are dividends taxed on Fund Level etc... , Ter, spreads etc

[Dogmatix]

22 hours ago, TravelerEastWest said:

100% correct.

 

I saw a district RD manager in the countryside watch a street vendor and estimate sales and taxes based on sales volume - the street vendor was then forced to pay taxes.

 

It is a myth that all street vendors don't pay taxes in Thailand.

They do make random checks on businesses that are run as sole proprietorships, particularly restaurants because they are accessible to the public. They sit inside or nearby and estimate the number of diners and average spend and send them a tax bill.

[stat]

2 hours ago, vukovar77 said:

Yes at the moment cap. gains are tax exempt "if any".Just check out SET performance in a last few years.It is very bad and it is very hard to have any profit here.And trade here on stock-market is pretty costly as well.I am out of this market for about 3-4 months and it was good decision.You can check out trading data and how much is sell off for foreigner investors in a last few months.Besides we are only protected in Thai banks to amount 1 million BHT per account and interest rates are very poor.In EU banks I have about 3% interest on EUR per 6 months .So that makes me clear with this "tax change policy" that is much better to have money abroad.

I was only thinking of investing the amount I would transfer into Thailand. Can you recomment a brokerage or Bank in Thailand? Thanks

[Klonko]

36 minutes ago, moogradod said:

I am actually scared to do that. My problem is not my own tax - easy peasy even on the considerably high state pension I get (but below 1.8 m - have to give a portion to my divorced first wife). But I never understood why they do not approach my Thai wife which transfers between her accounts amounts far above 2m per year (for example to optimize risk and she recently bought a house). From all interest 15% withholding tax is deducted. So if I file so must she even if the interest earned per year might not be much after the deductioons (I actually never calculated it, but will do so tomorrow) and I am uncertain what this could mean (only in the case something goes really pear shaped with the new regulations - money I gifted her was always done under strict observance of the tax laws at the time, some even while she was not tax resident). And then there is still the risk that the IO wants proof of payment. Maybe not now, but maybe in 3 years. Even worse. So I more and more conclude that I have to file a tax return already for 2023. Need to find a good tax accountant (as well because of the language barrier). My wife does not understand these matters and can translate but probably not really make sense all the time.

While I am flying under the radar as plan A, I have retained a Thai tax lawyer (recommended by my home country tax lawyer) to get professional assessment of my personal situation and have plan B (DTA), C (paying 5% tax) and D (179 days) ready. Flying under the radar is fine as long as I am able to land safely.

[K2938]

44 minutes ago, stat said:

I was only thinking of investing the amount I would transfer into Thailand. Can you recomment a brokerage or Bank in Thailand? Thanks

Even though there might be tax advantages with this, I would be very careful if it were significant amounts as you might well have trouble getting the money again out of Thailand and as your funds are much better protected in Western institutions

Edited October 14, 2023 by K2938

[K2938]

16 minutes ago, Klonko said:

C (paying 5% tax)

What is your plan C with 5% tax or is this just what it comes out for you if you were taxed?

Edited October 14, 2023 by K2938

[Klonko]

23 minutes ago, K2938 said:

What is your plan C with 5% tax or is this just what it comes out for you if you were taxed?

Splitting living expenses 50/50% payments to my account and gifts to my wife, gifts for larger purchases in the name of my wife and forgetting DTA (100% offset). Allows for THB 2.44m living expenses.

Edited October 14, 2023 by Klonko

[JimTripper]

4 hours ago, Mike Lister said:

Let's hope they are not too minor!

 

Seriously though, nearly 200 lengthy posts on this subject from one poster alone and not a positive or constructive word of advice or useful informational link in any of them. They are all worst case and many are doomsday scenario's. It's as though people want to perpetuate the myths about all the very worst of Thailand and I just don't understand why they would behave that way. In a worst case scenario, if nobody knows, remain neutral and wait for more information.

Probably because people are already tired of all the BS and when you add more it gets a disproportionate response.

[stat]

1 hour ago, K2938 said:

Even though there might be tax advantages with this, I would be very careful if it were significant amounts as you might well have trouble getting the money again out of Thailand and as your funds are much better protected in Western institutions

Fully agree, that is why up to now I never had a penny in TH ???? Always wondered why so many people bought villas here as you never know if you will be able to enter TH (Covid for example) or sell your place and then take your money with you... Thinking about transfering 10 to 30 K EUR max.

Edited October 14, 2023 by stat

[uzynkotak]

Someone mentioned that most, if not all, other SEA countries already tax foreigners on foreign sourced income. How does it work in practice? Even if those tax rules exist, i have never heard of any foreigners, who don't do business in those countries, paying income tax on foreign income. 

Another example is Mexico. The tax laws are ambiguous and can be interpreted as "residents have to pay tax on all foreign income". However, in reality nobody pays and the government doesn't seem to care. 

[stat]

19 minutes ago, uzynkotak said:

Someone mentioned that most, if not all, other SEA countries already tax foreigners on foreign sourced income. How does it work in practice? Even if those tax rules exist, i have never heard of any foreigners, who don't do business in those countries, paying income tax on foreign income. 

Another example is Mexico. The tax laws are ambiguous and can be interpreted as "residents have to pay tax on all foreign income". However, in reality nobody pays and the government doesn't seem to care. 

Philippines and Malaysia do not tax foreign sourced income in SEA (P. only for foreigners). CRS is now in nearly all place so there are not many execptions where the government does not see ALL your accounts and revenue from those off shore accounts. There COULD be a lot of surprises in the near future as tax office learn how to use the crs data even in places like Mexico, Indonesia etc. Currently a lot of tax offices still cannot use the crs data from an IT perspective, that will change.

Edited October 14, 2023 by stat

[Guavaman]

2 hours ago, Klonko said:

Splitting living expenses 50/50% payments to my account and gifts to my wife, gifts for larger purchases in the name of my wife and forgetting DTA (100% offset). Allows for THB 2.44m living expenses.

Here is a translation of the law on gift tax:

Google Translate

Revenue Code Amendment Act (No. 40) B.E. 2015

1. In the case of giving movable property

  (1) Person liable to pay taxes:

(a) a natural person who receives money from support or from a gift from parents, descendants or spouse

(b) a natural person who receives money from patronage out of duty of morality; or from giving by affection during ceremonies or on occasions of customs and traditions From another person who is not parents, descendants, or partners

Married

  (2) Property subject to tax:

  All types of movable property that can be calculated in terms of money

  (3) Income that is exempt:

·         Income received from support or from gifts from parents, descendants, or married spouses, only income that does not exceed 20 million baht throughout that tax year.

·         Income received from patronage as a duty of moral conduct or from gifts given in ceremonies, or according to customary occasions, from persons who are not parents, descendants, or spouses, only money received in an amount not exceeding 10 million baht throughout that tax year.

·         Income received which the giver expresses or is seen to intend to use for the benefit of the business, religion, educational affairs, or public interest affairs According to the criteria and conditions specified in the ministerial regulations.

  (4) Tax rate:

  The rate is 5 percent of the value of the property received in excess of 20 million baht or 10 million baht.

  (5) Filing of tax returns:

 The taxpayer has a duty to file a personal income tax return (P.N.D. 90) within deadline for filing personal income tax returns which can choose to pay tax at the rate 5 percent of the value of assets in excess of 20 million baht or 10 million baht or will be included in the calculation with other income.

  (6) Withholding tax: none

2. In the case of giving real estate

  (1) Person liable to pay taxes:

  Parents who transfer ownership or possession rights in real estate to their children are also eligible.

Laws which do not include adopted children

  (2) Property subject to tax:

  All types of real estate

  (3) Income that is exempt:

Income from the transfer of ownership or possession of real estate without compensation given to legitimate children, which does not include adopted children Only income that does not exceed 20 million baht throughout the tax year.

(4) Tax rate:

  The rate is 5 percent of the value of the real estate in excess of 20 million baht.

  (5) Filing of tax returns:

 The taxpayer has a duty to file a personal income tax return (P.N.D. 90) within deadline for filing personal income tax returns . You can choose to pay income tax at the rate of 5 percent of the value of assets exceeding 20 million baht or will be included in the calculation with other income.

  (6) Withholding tax:

  Withholding tax must be deducted in the case of transfer of ownership or possession rights in real estate at the same time with a value exceeding 20 million baht, withholding tax will be deducted at the rate of 5 percent of property value exceeding 20 million baht

3. Effective date

  The Revenue Code Amendment Act (No. 40) B.E. 2015 comes into force after the expiration of the deadline 180 days from the date of announcement in the Royal Gazette

-------------------------------------------------- -----------

 

[MJCM]

7 hours ago, TroubleandGrumpy said:

Yes that could be so. But it will not be clear until the Thai RD provide guidelines and details.  It is only on that basis that it is wise to 'stay under radar' and not lodge a tax return. If the Thai RD guidelines and details (when they are provided), make it clear that we must do a tax return and that we must prove the money is not income, then to not lodge a tax return is very dangerous.

Question please.

 

Does that mean that it is better that you do a tax return even if you only stay in the Country less then 180 days in the year?

Edited October 14, 2023 by MJCM
Changed some wording

[uzynkotak]

1 hour ago, stat said:

Philippines and Malaysia do not tax foreign sourced income in SEA (P. only for foreigners). CRS is now in nearly all place so there are not many execptions where the government does not see ALL your accounts and revenue from those off shore accounts. There COULD be a lot of surprises in the near future as tax office learn how to use the crs data even in places like Mexico, Indonesia etc. Currently a lot of tax offices still cannot use the crs data from an IT perspective, that will change.

I am not familiar with CRS data but I have some experience with data/analytics, particularly payments/transactions. Based on my experience, I find it hard to believe that a Thai (or Mexican etc) tax official will be able to see my income, account balances etc. Even matching the data to someone's name and DOB is not an easy task given that one of the datasets would include basically every person in all the countries that participate in this exchange. Even if a tax official can see my accounts and balances at a certain point in time, they won't be able to figure out my income just based on that. Not to mention that this kind of analysis at this scale requires top 1% intelligence. something that the Thai government is clearly lacking. 

[Mike Lister]

1 hour ago, MJCM said:

Question please.

 

Does that mean that it is better that you do a tax return even if you only stay in the Country less then 180 days in the year?

If less than 180 days, you are not tax resident and not required to file.

[Mike Lister]

47 minutes ago, uzynkotak said:

I am not familiar with CRS data but I have some experience with data/analytics, particularly payments/transactions. Based on my experience, I find it hard to believe that a Thai (or Mexican etc) tax official will be able to see my income, account balances etc. Even matching the data to someone's name and DOB is not an easy task given that one of the datasets would include basically every person in all the countries that participate in this exchange. Even if a tax official can see my accounts and balances at a certain point in time, they won't be able to figure out my income just based on that. Not to mention that this kind of analysis at this scale requires top 1% intelligence. something that the Thai government is clearly lacking. 

CRS data is high level consolidated data,  there is nothing at the micro level.

[MJCM]

23 minutes ago, Mike Lister said:

If less than 180 days, you are not tax resident and not required to file.

Thx.

My plan (already set in motion) is to stay in LoS less then 180 days in 2024, this to wait and see what these new rules will bring.

 

 

Edited October 14, 2023 by MJCM

[Mike Lister]

Just now, MJCM said:

Thx.

My plan (already set in motion) is to stay in LoS a max of 180 days in 2024, this to wait and see what these new rules will bring.

Unless you import more than around 65K Baht a month, you are most unlikely to have any tax to pay. I predict there will be a turn around in opinion and attitude once the coin drops that the effective tax rates in Thailand are much much lower than back home.

[MJCM]

1 minute ago, Mike Lister said:

Unless you import more than around 65K Baht a month, you are most unlikely to have any tax to pay.

You are completely right but I am staying out of the Country until the following comes true ????

 

2 minutes ago, Mike Lister said:

I predict there will be a turn around in opinion and attitude once the coin drops that the effective tax rates in Thailand are much much lower than back home.

Ps: I was already planning on going out (of LOS) in 2024, but I am just staying out a little bit longer.

[Mike Lister]

2 minutes ago, MJCM said:

You are completely right but I am staying out of the Country until the following comes true ????

 

Ps: I was already planning on going out (of LOS) in 2024, but I am just staying out a little bit longer.

I'm a Brit, if I went back there to stay I would get my State pension uprated but that would push me into the 20% tax band plus my US income would become taxable. If I stay here, I don't get uprated plus my US income is not taxable under the treaty. I don't like Marstons Pedigree that much! :))

[MJCM]

@Mike Lister

 

I am still too young to get a Pension.

 

May I ask another question?

 

How will (in 2024) incoming transfers from me to my Thai Wife be dealt with?

 

I am already sending Money (Via WISE) to my Wife and use sending Money to Family,

 

Will she need to file a tax return? (She doesn't work)

[Mike Lister]

1 hour ago, MJCM said:

@Mike Lister

 

I am still too young to get a Pension.

 

May I ask another question?

 

How will (in 2024) incoming transfers from me to my Thai Wife be dealt with?

 

I am already sending Money (Via WISE) to my Wife and use sending Money to Family,

 

Will she need to file a tax return? (She doesn't work)

Gifts from husband to wife are not taxable as I understand, I think there's an upper limit of 20 million per year so be sure to stay under that. :))

[Thailand J]

I am not married. I can only transfer up to $17,000 per year to any individual without having to pay gift tax in USA.

Edited October 14, 2023 by Thailand J

[KhunLA]

59 minutes ago, Thailand J said:

I am not married. I can only transfer up to $17,000 per year to any individual without having to pay gift tax in USA.

There are ways around that, simplist is write up a loan agreement, zero interest balloon payment in 10 or 20 years and give that to the bank when you transfer large sums, and it will avoid any tax.

[uzynkotak]

4 hours ago, Mike Lister said:

CRS data is high level consolidated data,  there is nothing at the micro level.

So then there is absolutely nothing to worry about for an individual. I don't know why so many people even mention CRS while discussing the new tax rules.