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

[Ben Zioner]

13 minutes ago, Mike Lister said:

For example, the effective tax rate in Thailand is now known to be very low.

30% insn't exactly "very low"..

[Mike Lister]

2 minutes ago, Ben Zioner said:

30% insn't exactly "very low"..

30% is the tax rate for the tax band 2 mill. to 5 mill., it is not the effective tax rate which also takes into consideration allowances and deductions. The effective tax rate on that mind is, from memory, circa 22%. Also, anyone who intends to transfer between 2 and 5 million baht per year will have to pay tax but they are gong to be the exception. The vast majority of expat retirees in Thailand live on fixed income, far far below that level, as I think you know!

[Klonko]

2 hours ago, retiree said:

Note that the IRS 709 form verifying the gift is not filed until the next year.  In my opinion, when the money enters Thailand it is still the husbands.  If it is assessable, and if he is resident in that year, then it is taxable to the husband (subject to DTA).  

Do I understand  you correctly, that the money is as long the husband's money as long it has not been assessed for IRS?  In my home country, I do not incur any tax on gifts to my wife regardless of my tax domicile and ownership passes to my wife when money is credited to her account. Question remains if Thai RD can require gifts to be transferred from a Thai account.
 

2 hours ago, retiree said:

What?  I was very much looking forward to the no-show job and no-show wife that Klonko might provide me to test his contention.   Let's not be hasty here.

Sorry, I wait for my tax lawyer's response before I would send monthly gifts of < THB 100k to my wife, who is not required to file taxes. If the tax issues are not clarified in due time, I may leave two weeks earlier for Christmas in my home country and transfer the money for two to three years living expenses this year under the 179 days rule.

[Mike Lister]

Here's Thailand tax calculator, a salary of 2 mill per year attracts tax at 16%

 

https://www.uobam.co.th/en/tax-calculation

 

A person over aged 65 years would see an even lower rate because they are allowed a further 190k deduction.

Edited October 15, 2023 by Mike Lister

[retiree]

1 hour ago, Ben Zioner said:

This doesn't answer my question: will it be assessed as her income (ok for me), or as mine (not ok, 20% more)?

It can only be taxable to you if you:

 -- are a Thai tax resident when you earn it,

 -- are a Thai tax resident when you remit it.

If the answer to either is no, it can be a non-taxable gift to her.

 

If the answer to both is yes, and if one of you is audited, there are arguments earlier up re why it might or might not qualify as a gift to her.  Choose your fighter.

 

You can probably ensure that it will be assessed as income to her by hiring her from overseas to do some kind of consulting.  For this small amount (1m) she doesn't have to be a business or collect VAT.   I think she'd get the automatic 30% deduction as an independent contractor -- see the guides here:

https://www.rd.go.th/english/63902.html

Edited October 15, 2023 by retiree

[atpeace]

8 minutes ago, Mike Lister said:

30% is the tax rate for the tax band 2 mill. to 5 mill., it is not the effective tax rate which also takes into consideration allowances and deductions. The effective tax rate on that mind is, from memory, circa 22%. Also, anyone who intends to transfer between 2 and 5 million baht per year will have to pay tax but they are gong to be the exception. The vast majority of expat retirees in Thailand live on fixed income, far far below that level, as I think you know!

SO what is the tax that we have confirmed on 65k transfer?  Will there be exclusions?  We know very little and that will blatantly obvious next year.  This thread is a futile attempt to calm our fears but in the end just adds to them.  I'm not insulting posters and I myself have read many pages of ramblings confused posts.  Just telling it how I see it.  Nice to know you have a much better understanding and in the end that is why you are participating on this thread????

[retiree]

14 minutes ago, Klonko said:

Do I understand  you correctly, that the money is as long the husband's money as long it has not been assessed for IRS?

No.  Form 709 is the IRS gift tax exemption form filed by the giver.  It might be used to argue that the money belonged to the wife as soon as that form was filled and filed, even though it remained in the husband's account.  It is due Apr 15 of the next year, and I think it is filed in that year as well. 

[Mike Lister]

10 minutes ago, atpeace said:

SO what is the tax that we have confirmed on 65k transfer?  Will there be exclusions?  We know very little and that will blatantly obvious next year.  This thread is a futile attempt to calm our fears but in the end just adds to them.  I'm not insulting posters and I myself have read many pages of ramblings confused posts.  Just telling it how I see it.  Nice to know you have a much better understanding and in the end that is why you are participating on this thread????

This thread has thrashed out many of the details, I strongly suggest you read the last ten pages or so. And yes, there are allowances and deductions in the Thai tax system there always has been and these are set out in the RD tax tables, PWC, mazzars and sherrings web sites, all of which have been linked many times in the thread, all the information is right there and easy to understand. A big part of the problem here is that people can't be bothered to read the threads and think they can get personalised answers....you gotta read the thread if you want to know. BTW, I posted link further up this page to a tax calculator, you may have seen it, use that calculate tax on your 65k perhaps.

Edited October 15, 2023 by Mike Lister

[Dogmatix]

41 minutes ago, The Cyclist said:

What is worrying about it ?

 

That newsletter refers specifically to " Taxation on Foreign Dividends "

 

Tax paid in another Country will be offset against any tax liability in Thailand.

 

Part 3, sub section B.
 

That newsletter really only affects people who might be transferring Dividends into Thailand and not paying the appropriate taxes where they should be paying them.

 

If you are paying the appropriate taxes the "Meh"

What I meant was that there is no reason to expect the RD to issue copious guidance on foreign tax credits under DTAs, as many are expecting, since the RD has been dealing with cases of foreign tax credits for individual taxpayers for decades and has issued some rulings on the subject going back 20 years.  Also it doesn't seem to be a problem to the RD that there is no place to submit foreign tax credits on the tax return forms. Presumably you have to write them (in Thai) and make your case for the deduction.  That would preclude online filing. What a PITA.

 

The topic of the Lorenz partners article was indeed  re taxation on foreign dividends but the RD ruling the author referenced, 0706/7556 from 2009, was actually about earned income.  You can read the ruling here https://www.rd.go.th/24356.html .  It is about employees of a Thai company who were sent to work on an assignment in the Philippines for an unspecified period of time but they must have remained Thai tax residents.  The company continued paying their salaries into bank accounts in Thailand after deducting  Thai withholding tax and it seems that Filipino withholding tax was also charged, possibly paid by the company.  So they were double taxed anyway.  The ruling allowed them to claim tax credits for the Filipino tax payments and get a refund of the excess Thai tax paid under the treaty.  I couldn't find the other ruling but it was probably something similar.  I don't understand why the RD had to make this ruling for the employees to claim the tax credit after being double taxed or why Lorentz said that was wrong, unless it is something specific to the Filipino treaty but that is not what they said.

 

Anyway the point is that RD most likely feels under no obligation to provide any guidance on foreign tax credits for individuals or amend tax return forms to accommodate them, even though their capricious and unlawful reinterpretation is going to mean that tens of thousands of foreign tax residents, most of whom are illiterate in Thai and have never had to file a Thai tax return before, are now going to have claim foreign tax credits vs probably 5 or 10 a year who had their company accountants do it for them.

[The Cyclist]

6 minutes ago, atpeace said:

SO what is the tax that we have confirmed on 65k transfer? 

That will depend on where that 65k comes from and if it is covered by a DTA.

 

Someone above posted that this amount would incur Thai Tax of around Baht 10k a year.

 

As yet, nothing has been confirmed and people will pay different amounts of tax depending on their personal circumstances.

 

 

[atpeace]

2 minutes ago, Mike Lister said:

This thread has thrashed out many of the details, I strongly suggest you read the last ten pages or so. And yes, there are allowances and deductions in the Thai tax system there always has been and these are set out in the RD tax tables, PWC, mazzars and sherrings web sites, all of which have been linked many times in the thread, all the information is right there and easy to understand. A big part of the problem here is that people can't be bothered to read the threads and think they can get personalised answers....you gotta read the thread if you want to know.

If it was so easy, I think you would have answered my question.  It is far from easy and reading the entire thread would only verify that nobody knows.  

[atpeace]

2 minutes ago, The Cyclist said:

That will depend on where that 65k comes from and if it is covered by a DTA.

 

Someone above posted that this amount would incur Thai Tax of around Baht 10k a year.

 

As yet, nothing has been confirmed and people will pay different amounts of tax depending on their personal circumstances.

 

 

Thanks and this confirms what I thought. We know little.  BTW, I'm not being sarcastic.

[Mike Lister]

Just now, atpeace said:

If it was so easy, I think you would have answered my question.  It is far from easy and reading the entire thread would only verify that nobody knows.  

After 150 posts on the subject, I'm done giving personal tax calculations for people who are too lazy to read the thread!

[Mike Lister]

Just now, atpeace said:

Thanks and this confirms what I thought. We know little.  BTW, I'm not being sarcastic.

Again untrue. If you're from the USA and that 65k/month is Social Security income, the tax is zero. If however you are from the Uk you will be taxed on all of the 65k, subject to allowances and deductions. It's all there in the thread.

[atpeace]

Just now, Mike Lister said:

After 150 posts on the subject, I'm done giving personal tax calculations for people who are too lazy to read the thread!

OK and may I ask why you are still participating?  You already know how our income will be taxed and seems like a waste of time. 

 

[The Cyclist]

6 minutes ago, Dogmatix said:

Anyway the point is that RD most likely feels under no obligation to provide any guidance on foreign tax credits for individuals or amend tax return forms to accommodate them,

I would have thought it would be far more sensible to await further clarification from the RD before getting too excited about what they might, or might not do.

 

I might get hit on the head tomorrow by a stray golf ball and killed, should I cancel the round of golf ?

 

Or perhaps get smashed into by a lunatic driver on the way to the golf course, perhaps I should just stay and bed and ruin my life by worrying about things that might, or might not happen.

[Mike Lister]

1 minute ago, atpeace said:

OK and may I ask why you are still participating?  You already know how our income will be taxed and seems like a waste of time. 

 

Because there are other aspects of taxation that remain unclear and these are still being discussed. Also, I thought it useful to point out to people asking questions that have already been answered a dozen times, where those answer are.

[atpeace]

2 minutes ago, Mike Lister said:

Because there are other aspects of taxation that remain unclear and these are still being discussed. Also, I thought it useful to point out to people asking questions that have already been answered a dozen times, where those answer are.

OK, makes sense.  Where are you from and what further details about the tax code do you have questions about?  Perfect opportunity to get answers - yes?

[Mike Lister]

3 minutes ago, atpeace said:

OK, makes sense.  Where are you from and what further details about the tax code do you have questions about?  Perfect opportunity to get answers - yes?

I'm already following other discussions discussing these things, thanks.

[atpeace]

1 minute ago, Mike Lister said:

I'm already following other discussions discussing these things, thanks.

OK, just trying to throw some assistance your way.  Cheers

[Klonko]

44 minutes ago, Mike Lister said:

Here's Thailand tax calculator, a salary of 2 mill per year attracts tax at 16%

 

https://www.uobam.co.th/en/tax-calculation

Mea maxima culpa, my calculation was using the wrong bracket and resulted in too low tax rates. My 5% become 7.8%.

Following corrected table consistent with UOB:

 

 

[topt]

6 minutes ago, Klonko said:

Mea maxima culpa, my calculation was using the wrong bracket and resulted in too low tax rates. My 5% become 7.8%.

Following corrected table consistent with UOB:

 

 

Yes a not inconsequential amount.............especially if currently paying zero.......

[atpeace]

11 hours ago, beammeup said:

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?

I did this and regretted it when I wanted to sell. Most expats expect a big discount if the condo is not in a foreigner's name if they are interested at all. This is why IMO you should wait to see how the code is implemented.

Edited October 15, 2023 by atpeace

[K2938]

1 hour ago, retiree said:

It can only be taxable to you if you:

 -- are a Thai tax resident when you earn it,

 -- are a Thai tax resident when you remit it.

If the answer to either is no, it can be a non-taxable gift to her.

I do not think that based on the current state of knowledge this is necessarily true.  That you have to be a Thai tax resident when you earn it, is clear.  That you also have to be a Thai tax resident when you remit it to Thailand, is not clear at all (which by the way was also discussed in this thread further up).

[K2938]

1 hour ago, Dogmatix said:

Anyway the point is that RD most likely feels under no obligation to provide any guidance on foreign tax credits for individuals or amend tax return forms to accommodate them, even though their capricious and unlawful reinterpretation is going to mean that tens of thousands of foreign tax residents, most of whom are illiterate in Thai and have never had to file a Thai tax return before, are now going to have claim foreign tax credits vs probably 5 or 10 a year who had their company accountants do it for them.

While the lack of details on the precise working of the remittance tax is deplorable, I do not think we can also blame the Thai Revenue Department for not accepting or providing tax returns in English.  I do not think there is any Western non-English speaking country either which would allow tax returns in any language apart from its official one.

[retiree]

33 minutes ago, K2938 said:

That you also have to be a Thai tax resident when you remit it to Thailand, is not clear at all ... 

Always happy to be corrected.  However, the relevant law appears to single out residents for taxation of income earned abroad (paragraph numbers mine).   Is there an alternative?

 

https://www.rd.go.th/english/37749.html

Section 41 

[1] A taxpayer who in the previous tax year derived assessable income under Section 40 from an employment, or from business carried on in Thailand, or from business of an employer residing in Thailand, or from a property situated in Thailand shall pay tax in accordance with the provisions of this Part, whether such income is paid within or outside Thailand.

 

[2] A resident of Thailand who in the previous tax year derived assessable income under Section 40 from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax in accordance with the provisions of this Part.

 

[3] Any person staying in Thailand for a period or periods aggregating 180 days or more in any tax year shall be deemed a resident of Thailand.

[benHH]

could someone kindly answer me this please

 

is savings from the uk going to be taxed if brought into thailand ( not a pension , not earnings , just money saved over the last 15 years ) ?

 

many thanks

 

[Dogmatix]

2 hours ago, The Cyclist said:

I would have thought it would be far more sensible to await further clarification from the RD before getting too excited about what they might, or might not do.

The point I was making was the strong possibility that there will be no further clarification from the RD and no change to the RD order.

Edited October 15, 2023 by Dogmatix

[K2938]

24 minutes ago, retiree said:

Always happy to be corrected.  However, the relevant law appears to single out residents for taxation of income earned abroad (paragraph numbers mine).   Is there an alternative?

If you have time and are interested, then please read the Q&A provided by the Thai Revenue Department at the beginning of October.  And you will see that interestingly in all their examples they always only talk about the condition of being tax resident at the time of earning the income.  This looks highly suspicious and is unlikely to just be a coincidence.  However, at the moment there is no certainty on this like on so many other things.

[Guavaman]

58 minutes ago, K2938 said:

  1 hour ago, retiree said:

It can only be taxable to you if you:

 -- are a Thai tax resident when you earn it,

 -- are a Thai tax resident when you remit it.

If the answer to either is no, it can be a non-taxable gift to her.

The Thai tax law on gifts does not mention anything about the one who gives the gift other it must be an ascendant, descendant, or spouse.  No mention of tax residency of the giftor or where the gift occurs. There is no tax implication to the giftor.  The giftee has the liability to pay tax, if any.

#4 QUESTION:   Question: What types of assessable income are subject to income tax according to Section 41, paragraph two, of the Revenue Code?
 

ANSWER:  Assessable income from foreign sources that is subject to income tax is assessable income according to Section 40 (1) to (8) of the Revenue Code. However, if it is assessable income that is exempt from tax according to law, taxpayer does not have to bring that assessable income to pay tax in Thailand, such as inheritance or income received from support from parent, descendant, or spouse, only for the amount of income that does not exceed twenty million baht throughout that tax year, for example.

 

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 parent, descendant or spouse.