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

[jerrymahoney]

13 hours ago, The Cyclist said:

13 hours ago, Mike Lister said:

I think everyone is jumping the gun on this issue and needs to sit back and wait a little while.

That comment Sir, whilst bang on the money, will give the doom-mongers heart palpitations.

Some on here were maybe pre-dated by former US President Ronald Reagan when he said at a 1986 Press conference:

 

" I think you all know that I've always felt the nine most terrifying words in the English language are: I'm from the Government, and I'm here to help. "

 

https://www.reaganfoundation.org/media/128648/newsconference2.pdf

 

 

 

 

[Mike Lister]

1 minute ago, uzynkotak said:

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. 

It helps build conspiracy theories that all governments are covertly united, with the global elites, to pimp the poor.

[SHA 2 BKK]

14 minutes ago, Mike Lister said:

It helps build conspiracy theories that all governments are covertly united, with the global elites, to pimp the poor.

I’m sure George Soros and Bill Gates are behind all this.  And this Crows I saw this morning were not real.  Robots sent to spy on us.  No more birds left I am afraid.  
 

Also I guess I shouldn’t worry about my Aussie taxes anymore because apparently Australia doesn’t exist.    

 

The internet has made the ramblings of nutters de rigueur unfortunately. 

[redwood1]

2 hours ago, Mike Lister said:

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. :))

So I can give 20 million each night to the ladys I bar fine...And I should be ok...

[Mike Lister]

37 minutes ago, redwood1 said:

So I can give 20 million each night to the ladys I bar fine...And I should be ok...

Shouldn't be a problem and I'm sure they wont mind.

[Thailand J]

Thai gift tax exemption  is 20M  to married spouse. 10M to others.

US gift tax exemption to non-citizen married spouse is $175,000 in 2023.

[beammeup]

Those gifts will need to be remitted. Is it clear that the remittance is tax exempt?

[Mike Lister]

12 minutes ago, beammeup said:

Those gifts will need to be remitted. Is it clear that the remittance is tax exempt?

https://thailand.acclime.com/guides/gift-tax/

[JimTripper]

On 10/13/2023 at 9:28 PM, Celsius said:

What about tax returns? If yes, buh bye

Fine at the airport when leaving from not doing tax returns?

 

Nobody would know the exact tax amount, but I could see a flat fine similar to an overstay fine. Say 20k baht and you are stamped out.

[freeworld]

9 minutes ago, JimTripper said:

Fine at the airport when leaving from not doing tax returns?

 

Nobody would know the exact tax amount, but I could see a flat fine similar to an overstay fine. Say 20k baht and you are stamped out.

Nah, it does not work like that for income tax.

Edited October 15, 2023 by freeworld

[redwood1]

6 minutes ago, JimTripper said:

Fine at the airport when leaving from not doing tax returns?

 

Nobody would know the exact tax amount, but I could see a flat fine similar to an overstay fine. Say 20k baht and you are stamped out.

20K ?...........I was thinking more like a 500 baht fine....

[freeworld]

54 minutes ago, beammeup said:

Those gifts will need to be remitted. Is it clear that the remittance is tax exempt?

If people are remitting money for gifts, not being resident in the country and moving money to not pay tax in the non resident country.

 

I think many govt and tax offices will not look favorably upon this kind of hiding the true intent of moving money.

[freeworld]

2 hours ago, Mike Lister said:

It helps build conspiracy theories that all governments are covertly united, with the global elites, to pimp the poor.

I can tell you in my home country they have caught a lot of people through CRS and taxes owed, fines and penalties approaching 100 Million dollars. They also now have all the banking information and accounts and know who and where to contact.

[redwood1]

3 minutes ago, freeworld said:

I can tell you in my home country they have caught a lot of people through CRS and taxes owed, fines and penalties approaching 100 Million dollars. They also now have all the banking information and accounts and know who and where to contact.

Well if I get in trouble I will just give them your name because I know you will pay up...

[Mike Lister]

5 minutes ago, freeworld said:

I can tell you in my home country they have caught a lot of people through CRS and taxes owed, fines and penalties approaching 100 Million dollars. They also now have all the banking information and accounts and know who and where to contact.

I can't comment on this with certainty, poster @stat touts himself as expert in this area, perhaps he can comment?

[freeworld]

4 minutes ago, redwood1 said:

Well if I get in trouble I will just give them your name because I know you will pay up...

Afraid you are wrong.

[retiree]

In the US, giver pays tax on gifts.  The limit for no reporting is $17,000 per recipient per year.  However, the giver has a lifetime exemption of $12.9 million, indexed to inflation.  You must file IRS form 709 to calculate and claim the exemption.  Conveniently, form 709 also gives the recipient proof of a gift's origin.

 

In Thailand recipient pays tax on gifts, with a 10 or 20 million baht exemption depending on circumstances.   If I: 

 -- remitted 20 million baht to my wife from overseas, and

 -- we were both Thai tax residents at the time, and 

 -- she was audited, and 

 -- she truthfully said that it was a gift from her spouse, using form 709 as evidence, then 

 -- I would not be surprised if I were audited, with the presumption that I had used the gift (instead of just remitting the money to myself) to evade (not just avoid) taxes on assessable income.  

Edited October 15, 2023 by retiree

[beammeup]

So theoretically if you wanted to buy a vehicle or condo, you could gift your wife the money (transferred from overseas) to do so as long as the purchase is in her name?

[Dogmatix]

18 hours ago, redwood1 said:

Alls anyone has to do is read through this 100 page thread to see how vastly complex it would be to tax the income of the many natioalities that live in Thailand....

Different languages, different tax treaties, different income streams, different ways to import money into Thailand....Bla bla bla bla bla

 

Like l have said before they are drowning and they have not even jumped in the water......I just dont see it happening....Retired expats on a pension are a piss poor source for tax money... 

The problem is do they care? The super cautious, conservative military style government has gone and you now have a return to the impetuous, autocratic bull in a china shop Thaksinite form of government with the finance portfolio held by his nominee Srettha, who is sent on permanent roadshows, like Yingluck before him, to allow Thaksin's backroom boys to manage everything. 

 

The RD announced a focus group to assess the impacts of its unlawful reinterpretation of the Revenue Code, having obviously not bothered to think about that beforehand and nothing has come of these focus groups. The thinking was just let's grab some more tax money and they don't want to draw attention to this superficial planning in focus groups.  The digital wallet is also not thought through as a macroeconomic policy. They just came up with it as a great way to buy votes to help shore up their flagging popularity vs MFP.   

 

They don't feel the need to translate tax return forms and guidances into a multitude of different languages.  They make no effort to make the Thai versions comprehensible to the layman. They are hopelessly confusing.  The English language versions that exist are often not updated other than to change the date while leaving the old versions as the text with numbers not even coinciding with the current tax return forms.  This is also apparent on the RD website which frequently omits important sections and details in English versions and fails to update things like tax allowances, so that it is dangerous to rely on their English materials which they make clear are just for guidance. 

 

Do they plan to cover all this complex situations that arise from different types of income and double tax treaties with different countries? No. You are a tax resident. You are under a legal obligation to file a tax return, if you have remitted assessable income. If you want to make a case for a foreign tax credit or some such, come along to the RD office and make your case. If the officer agrees with your interpretation, he'll then tell you what documents he will require you to bring in to verify this.  That is how it has worked for claiming tax credits against corporate income tax for decades.  So why would you expect them to set up a complex system for individual taxpayers facing exactly the same issues as corporates?

Edited October 15, 2023 by Dogmatix

[TroubleandGrumpy]

10 hours 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?

No mate.  Unless you stay 180 or more days total in Thailand in any tax year (Jan to Dec), then you are not a tax resident and you are not required to lodge a tax return.

I should have specified - my answer is for tax residents only.  My point being it would be very unwise to not lodge a tax return if you might have taxable income, because in the future the Thai RD can backdate their 'audit' and severely nail anyone for not loding a return, plus they can apply severe penalties to any money they determine is owing. 

[TroubleandGrumpy]

14 hours ago, stat said:

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

Exactly.  Exactly what is a Mutual Fund to the Thai RD - does that definition include Mutual Funds overseas. If I do have to lodge a tax return, how will I prove to Somchai that my Mutual Fund (Super) in Australia has already applied a 15% tax to all the earnings in the Super Fund. Will Thailand view the Super Fund 'earnings' as taxable. 

Obviously the only way to get those answers will be if/when Thai RD releases all the clarifications and details.

But at least I have a good grasp on what the questions are that I will need to ask. The thought of throwing everything over to a Thai lawyer/accountant, with no idea how things might affect my finances, is not my idea of a good strategy. 

[TroubleandGrumpy]

12 hours ago, stat said:

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.

Ditto. I have lived in 4 properties in Thailand (all rentals) - and only 1 of them I would even think about buying for all the normal reasons, but mainly because of the neighbours and dogs (very noisy). The only 'good' place was in an upmarketed gated community in Chiang Mai.  PS - dont forget that unlike in the west where you can sell your place while staying there, in Thailand it usually has to be vacant - which means renting somewhere while waiting for the property to sell - unless you really really trust your agent and lawyer.   

[Dogmatix]

2 hours ago, retiree said:

In the US, giver pays tax on gifts.  The limit for no reporting is $17,000 per recipient per year.  However, the giver has a lifetime exemption of $12.9 million, indexed to inflation.  You must file IRS form 709 to calculate and claim the exemption.  Conveniently, form 709 also gives the recipient proof of a gift's origin.

 

In Thailand recipient pays tax on gifts, with a 10 or 20 million baht exemption depending on circumstances.   If I: 

 -- remitted 20 million baht to my wife from overseas, and

 -- we were both Thai tax residents at the time, and 

 -- she was audited, and 

 -- she truthfully said that it was a gift from her spouse, using form 709 as evidence, then 

 -- I would not be surprised if I were audited, with the presumption that I had used the gift (instead of just remitting the money to myself) to evade (not just avoid) taxes on assessable income.  

The treatment of gifts is a very good point.  The gift tax is a fairly new amendment to the Revenue Code that was added only in 2017 to support the junta's new inheritance tax.  There was no inheritance tax before and therefore no need to put any limits on gifts.  I don't think there have been many cases to do with gift tax.  The initial limits were set high enough to not catch anyone but the PT government plans to tighten up inheritance tax and gift tax.  

 

In the context of this unlawful remittance tax, the the RD may come up with new interpretations of gifts.  (Since the PT government has given them the authority to amend a major part of the Revenue Code by themselves, why stop there?)  However, the RD Q&A on P 161/2566 gave the follow clarification in about gifts and inheritances in very badly written ambivalent Thai:

 

QUESTION #4

What are the types of assessed income that must be subject to income tax under Section 41?, the second paragraph of the Revenue Code?

ANSWER:

Money has not been assessed from foreign sources at If you stay, you are forced to pay income tax including assessable income according to Section 40 (1) to (8) of the Revenue Code.

However, if it is assessable income received that has received tax exemption according to law, taxpayers do not have to include it as assessable income to be taxed in Thailand, such as receiving an inheritance or receiving income received through the support of parents and trusted people, or from a spouse, as long as the money that is received does not exceed 20 millions of baht for the entire tax year.

 

It seems to allow tax residents to remit up to 20 million in spousal support to one's wife from local or foreign sources tax free, which although not specified, must be considered as a gift because there is nothing in the Revenue Code about spousal support. If it is just for spousal support, it can be argued that there is not need to account for it.  It can used for shopping at Tops, school fees, buying land, kept for a rainy day or used to buy a condo for hubby.  No doubt the RD will just clarify as it goes along by demanding back taxes, penalties and interest from tax residents it decides have misinterpreted the unsaid definition of a gift and it may also be left up to the whims of individual officers, leaving the taxpayer to sue in the Central Tax Court, if he doesn't agree.

Edited October 15, 2023 by Dogmatix

[Dogmatix]

19 minutes ago, TroubleandGrumpy said:

Exactly.  Exactly what is a Mutual Fund to the Thai RD - does that definition include Mutual Funds overseas. If I do have to lodge a tax return, how will I prove to Somchai that my Mutual Fund (Super) in Australia has already applied a 15% tax to all the earnings in the Super Fund. Will Thailand view the Super Fund 'earnings' as taxable. 

Obviously the only way to get those answers will be if/when Thai RD releases all the clarifications and details.

But at least I have a good grasp on what the questions are that I will need to ask. The thought of throwing everything over to a Thai lawyer/accountant, with no idea how things might affect my finances, is not my idea of a good strategy. 

The RD's definition of mutual funds is mutual funds registered in Thailand. Same for everything else that gets tax exemption or low flat rate tax, i.e. dividends, capital gains on stocks, interest, sales of property.  All foreign source income of any type is taxable at up to 35%. That is a fundamental inequity in this reinterpretation which was supposed to introduce fairness.

[TroubleandGrumpy]

3 hours ago, freeworld said:

I can tell you in my home country they have caught a lot of people through CRS and taxes owed, fines and penalties approaching 100 Million dollars. They also now have all the banking information and accounts and know who and where to contact.

Only a fool would deny that the Tax Depot in any country does not have the ability to monitor your money brought into that country if/when they want to.  

[TroubleandGrumpy]

1 hour ago, Dogmatix said:

The problem is do they care? The super cautious, conservative military style government has gone and you now have a return to the impetuous, autocratic bull in a china shop Thaksinite form of government with the finance portfolio held by his nominee Srettha, who is sent on permanent roadshows, like Yingluck before him, to allow Thaksin's backroom boys to manage everything. 

 

The RD announced a focus group to assess the impacts of its unlawful reinterpretation of the Revenue Code, having obviously not bothered to think about that beforehand and nothing has come of these focus groups. The thinking was just let's grab some more tax money and they don't want to draw attention to this superficial planning in focus groups.  The digital wallet is also not thought through as a macroeconomic policy. They just came up with it as a great way to buy votes to help shore up their flagging popularity vs MFP.   

 

They don't feel the need to translate tax return forms and guidances into a multitude of different languages.  They make no effort to make the Thai versions comprehensible to the layman. They are hopelessly confusing.  The English language versions that exist are often not updated other than to change the date while leaving the old versions as the text with numbers not even coinciding with the current tax return forms.  This is also apparent on the RD website which frequently omits important sections and details in English versions and fails to update things like tax allowances, so that it is dangerous to rely on their English materials which they make clear are just for guidance. 

 

Do they plan to cover all this complex situations that arise from different types of income and double tax treaties with different countries? No. You are a tax resident. You are under a legal obligation to file a tax return, if you have remitted assessable income. If you want to make a case for a foreign tax credit or some such, come along to the RD office and make your case. If the officer agrees with your interpretation, he'll then tell you what documents he will require you to bring in to verify this.  That is how it has worked for claiming tax credits against corporate income tax for decades.  So why would you expect them to set up a complex system for individual taxpayers facing exactly the same issues as corporates?

That is so very true mate - and it is so obvious to anyone that knows how things work in any Tax Dept, and how things work in Thailand. 

In Malaysia they recognised the disaster that was approaching when then did the same thing back in 2021. So they delayed the implementation for 5 years, and made exemptions for personal income tax returns.  Hopefully there will be anough complaints and blowback (Companies, Thais and Expats), that the Thai Govt will also make qualified exemptions for personal income taxes, and also delay the full implementation. But as you have said before, they are desperate for taxes - the cupboard has been stripped bare, tourism is not charging back, funds are leaving the country at record levels, and exports are continuing to stall, and they have a 500 Billion Baht vote bribe that they have to pay for.  Like you, I dont think they care who gets caught in their new 'tax net' - they are so desperate they are charging ahead like that bull you mentioned. Hopefully, sanity will prevail - Expats are not the main targets, but we could so easily get caught up in this new net. 

[Lorry]

37 minutes ago, Dogmatix said:

RD's definition of mutual funds is mutual funds registered in Thailand

Even that's not the wording of sec42 (23) and (24) of the RD code.

 

 

[retiree]

54 minutes ago, Dogmatix said:

However, if it is assessable income received that has received tax exemption according to law, taxpayers do not have to include it as assessable income to be taxed in Thailand, such as receiving an inheritance or receiving income received through the support of parents and trusted people, or from a spouse, as long as the money that is received does not exceed 20 millions of baht for the entire tax year.

 

It seems to allow tax residents to remit up to 20 million in spousal support to one's wife from local or foreign sources tax free,

In my opinion, the first sentence refers to a single taxpayer (but is poorly phrased / translated).  As you read it, It would allow the wife to then make a gift of that money back to her husband without tax consequences for either.  

 

If your interpretation were correct, then we'd expect there to be a "gift deduction" entry on the husband's tax return that would let him exempt this portion of his assessable income (just as there is a "charitable contribution" entry).  There isn't.  

 

In my opinion, the only circumstance under which he can transfer to his wife without one of them being liable for taxes is if either a) it wasn't assessable income for him, or b) he wasn't a tax resident when his assessable income was remitted to Thailand. 

 

Back in the day, when I gave my US accountant a hypothetical, his first question was always Will this pass the sniff test?   We each have our opinions about gifts,  but I'd imagine a Thai accountant would say much the same before agreeing with either of us. 

Edited October 15, 2023 by retiree

[redwood1]

1 hour ago, Dogmatix said:

The problem is do they care? The super cautious, conservative military style government has gone and you now have a return to the impetuous, autocratic bull in a china shop Thaksinite form of government with the finance portfolio held by his nominee Srettha, who is sent on permanent roadshows, like Yingluck before him, to allow Thaksin's backroom boys to manage everything. 

 

The RD announced a focus group to assess the impacts of its unlawful reinterpretation of the Revenue Code, having obviously not bothered to think about that beforehand and nothing has come of these focus groups. The thinking was just let's grab some more tax money and they don't want to draw attention to this superficial planning in focus groups.  The digital wallet is also not thought through as a macroeconomic policy. They just came up with it as a great way to buy votes to help shore up their flagging popularity vs MFP.   

 

They don't feel the need to translate tax return forms and guidances into a multitude of different languages.  They make no effort to make the Thai versions comprehensible to the layman. They are hopelessly confusing.  The English language versions that exist are often not updated other than to change the date while leaving the old versions as the text with numbers not even coinciding with the current tax return forms.  This is also apparent on the RD website which frequently omits important sections and details in English versions and fails to update things like tax allowances, so that it is dangerous to rely on their English materials which they make clear are just for guidance. 

 

Do they plan to cover all this complex situations that arise from different types of income and double tax treaties with different countries? No. You are a tax resident. You are under a legal obligation to file a tax return, if you have remitted assessable income. If you want to make a case for a foreign tax credit or some such, come along to the RD office and make your case. If the officer agrees with your interpretation, he'll then tell you what documents he will require you to bring in to verify this.  That is how it has worked for claiming tax credits against corporate income tax for decades.  So why would you expect them to set up a complex system for individual taxpayers facing exactly the same issues as corporates?

All very good points......The Srettha road show has been non-stop since he took office.......At this rate he will be running out of new countries to have photo-ops with........lol...........I am not quite sure how this smiling lackey got to rich in the first place? 

Edited October 15, 2023 by redwood1

[TroubleandGrumpy]

40 minutes ago, Dogmatix said:

The RD's definition of mutual funds is mutual funds registered in Thailand. Same for everything else that gets tax exemption or low flat rate tax, i.e. dividends, capital gains on stocks, interest, sales of property.  All foreign source income of any type is taxable at up to 35%. That is a fundamental inequity in this reinterpretation which was supposed to introduce fairness.

That is what I figured - and one of the many reasons I am trying to figure this all out and decide what course of action to take.  Still locked into Plan A at the minute = bring in extra this year - bring in minimum in 2024 - see how things pan out in 2025.  Plan B - move to another retiree friendly country nearby (Malaysia and Philippines look good).  Plan C - go back to Australia (much earlier than planned).