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

[Mike Lister]

1 minute ago, scorecard said:

DTA is a positive for many but here's one exception (or maybe it's not an exception).

 

The Aussie Old Age Pension is by specific law exempt from all taxation. The Aussie War Vets pension and war disability pension is also, by specific law, exempt fom taxation.

 

Australia has had a DTA with Thailand for decades.

 

So does the fact there's an existing DTA in place between the 2 countries mean all state pensions automatically forwarded (by inter. funds transfers) to Thailand forwarded to Thailand are exempt from Thai taxes and no need to lodge a Thai personal tax return?

 

Or is the above 'cancelled' if the state pension received is above the Thai peronal tax threshold?

 

 

None of us can confirm many of those things because not enough has been decided yet. But I agree, many DTA's are very positive for the taxpayer. One point in your post that I can answer is that just because funds are exempt from tax under a DTA, doesn't mean a return doesn't need to be filed. The RD doesn't know what those funds are, until the taxpayer tells them and confirms things. In my case, my US SSc is tax exempt in Thailand under a DTA. The receiving bank in Thailand, Bangkok Bank, has a copy of the funds transfer agreement that was set up at the outset so the source can be proven. But RD doesn't know that, because nobody has told them.

[The Cyclist]

23 minutes ago, scorecard said:

Or is the above 'cancelled' if the state pension received is above the Thai peronal tax threshold?

The UK / Thai DTA can only be ' cancelled ' by the Thai / UK Government. The actual wording states something like ' In writing with 6 months notice '

 

I'm sure that every other Country / Thai DTA will have wording to the same effect. I am also sure that we would have heard by now if the Thai Government had made moves to ' cancel ' these DTA's.

 

I think 1 of 2 things will happen.

 

1. A blanket amnesty will be announced, something to the effect that all persons on retirement visa / extensions that are from Countries with a DTA with Thailand are exempt these changes from the 01 January.

 

2. The worst case scenario is that we might have to file ' Nil Returns ' with the RD or some other method where we have to file paperwork with the RD, but being exempt Thai taxes.

 

This would only cover income ( Pensions and such like ) that are specified in the relevant DTA.

 

Do I think there is any need to panic - No

 

Do I think that there is any need to make plans to flee Thailand - No

 

Do I think much will change for most retirees - No

 

Do I think that there are certain posters who are trying to spread fear and alarm - Abso@#$&*%&#lutely.

 

Perhaps they could post the DTG of their next face to face with the Head of the RD and we can all rock up at the meeting and hear the doom & gloom straight from the horses mouth.

[homeseeker]

Does anyone know when we will actually learn of what will occur on 01 January 2024?

Maybe they will wait until new year's eve. Or better still announce it on 24 or 25 Dec to maximize matters for farangs?!

[JimGant]

2 hours ago, scorecard said:

The Aussie Old Age Pension is by specific law exempt from all taxation. The Aussie War Vets pension and war disability pension is also, by specific law, exempt fom taxation.

And, based on this from the US technical explanation of US DTAs, if you remit cash flow to Thailand that is exempt from taxation in your source country -- well, then, it remains tax exempt in Thailand:

 

Quote

However, the State of residence, under subparagraph (b), must exempt from tax any amount of such pensions or other similar remuneration that would be exempt from tax in the Contracting State in which the pension fund is established if the recipient were a resident of that State. Thus, for example, a distribution from a U.S. "Roth IRA" to a resident of the other Contracting State would be exempt from tax in the other Contracting State to the same extent the distribution would be exempt from tax in the United States if it were distributed to a U.S. resident.

US DTAs are based on the OECD Model, as are most of the world's DTAs. Yes, there are minor differences -- but doubtful Australia's tax exempt payments are NOT included in the OECD boilerplate language that dictates tax exempt income maintains its flavor in both contracting states.

 

For a Yank, where govt pensions and social security are "exclusively" taxable only by the US -- I guess if these two sources weren't enough for my annual cash flow to Thailand, I'd establish a separate bank account with these two sources, plus my Roth distribution. Then, there could be no doubt of the non taxable source of my money wired to Thailand.

 

And, since this wired money is non taxable by Thailand, then, I have no assessable income subject to Thai taxation, per the DTA -- and thus no need to file a Thai tax return (current rules, for single filers, is the requirement to file -- IF your assessable income exceeds 60000 baht ). Anyway, no tax avoidance/evasion here; thus, any knock on the door by khaki dressed revenuers would only result in possibly more paperwork, but no fines. But, unless RD hires 10000 more clerks, this ain't gonna happen.

[JimGant]

2 hours ago, Mike Lister said:

In my case, my US SSc is tax exempt in Thailand under a DTA. The receiving bank in Thailand, Bangkok Bank, has a copy of the funds transfer agreement that was set up at the outset so the source can be proven. But RD doesn't know that, because nobody has told them.

You owe no Thai taxes on this -- in fact, it's excluded from Thai taxes per DTA. So, why would you file a tax return, that pays no taxes -- you really think that Thai RD resources, even if beefed up hugely, are going to sniff out all remittances into Thailand for income potential? Suggest you wait 'til they knock on your door -- before you knock on theirs.

[RupertIII]

On 10/12/2023 at 4:36 PM, Dogmatix said:

You don't get the 150k threshold twice, if you file jointly with spouse.  You have to file separately, if you want that. But you do get all the allowances for each.  I have filed both jointly and separately. Filing jointly is advantageous if the spouse has little or no income of her own and thus has allowances that she couldn't use, if she filed alone.  If her income is significant, it might be better for her to file separately to get the 150k threshold for herself.

Thanks, I wasn't aware of that.

I have a Wise a/c where all my overseas monies are paid into. My wife also now has a Wise a/c into which I have been paying part of my UK pension into, really to keep her a/c active for the future, which she then transfers into her Thai a/c.

I assume that if I pay into her Wise a/c an additional amount at the end of each year to bring the total to an annual equivalent of THB210k (60k allowance + 150K at 0%) she can then transfer to her Thai a/c and we can then elect for separate filing, or might the taxman consider that evasion rather than legitimate avoidance, bearing in mind the transfers will show on her Wise statement as originating from my a/c?

[Negita43]

I did ask this q before but the thread is so big I cannot find it again to see if there were any opinions on it.

In the UK citizens can put up to 20K each year in an ISA (this can be a cash ISA or stock and shares) - all income, profit and withdrawals are not subject to UK tax and indeed do not have to be declared on a tax return. Equally if you are out of the UK for a time abroad the ISAs you have can be retained but you cannot add more money during your period of absence. So does anyone have an opinion as to how this will fit in with the new rules effective Jan 1 2024

[The Cyclist]

4 minutes ago, Negita43 said:

Equally if you are out of the UK for a time abroad the ISAs you have can be retained but you cannot add more money during your period of absence. So does anyone have an opinion as to how this will fit in with the new rules effective Jan 1 2024

The rules from the 01 January will have absolutely no effect on what you do in the UK regarding ISA's etc.

 

They might be effected if you decide to remit that money to Thailand after the 01 Jan 2024.

[Jim1000]

I always believed that a frozen UK pension could not logically go below zero but I am starting 
to wonder about that ! 

[Mike Lister]

1 hour ago, JimGant said:

You owe no Thai taxes on this -- in fact, it's excluded from Thai taxes per DTA. So, why would you file a tax return, that pays no taxes -- you really think that Thai RD resources, even if beefed up hugely, are going to sniff out all remittances into Thailand for income potential? Suggest you wait 'til they knock on your door -- before you knock on theirs.

Because I have income from other countries also that must be declared, including the UK where the DTA doesn't cover and including from Thailand. I have filed a Thai tax return for the past three years and at various points in the past 20 years before that. I also file a return because the rules ay that anyone with assessible income over 60k per year has to. Even SSc income is assessible income, until you file a return and declare that it is excluded income, under the DTA. Not filing a return and assuming the RD knows that transfer you receive every month is excluded under some DTA of other, is not a valid assumption.

[Felt 35]

On 10/17/2023 at 12:05 AM, stat said:

So far it is my understanding that only remitted income to TH will be taxed. However if you have not paid taxes on your interest in the other country then you cannot claim DTA shelter when you transmit.

Thanks, I was in contact with my country's Revenue head office yesterday and one International tax consultant office here and one consultant office back home and my understanding now is that Thai tax of foreign source interest income is the same as on foreign source pension income.  It is taxable income in Thailand  when it is remitted / brought into Thailand.  If it is not brought in, it is not taxable income here.

Felt

 

[Felt 35]

On 10/17/2023 at 12:05 AM, stat said:

So far it is my understanding that only remitted income to TH will be taxed. However if you have not paid taxes on your interest in the other country then you cannot claim DTA shelter when you transmit.

Apologize for double posting. Mod welcome to delete last post.

Felt

 

[retiree]

34 minutes ago, Mike Lister said:

I also file a return because the rules say that anyone with assessible income over 60k per year has to.

Can you point to any place that sets out the Thailand penalty for failure to file independently of tax being due?  or when no tax is due?   Or to a publicized instance of somebody being penalized when no tax was due?

[stat]

On 10/17/2023 at 6:44 AM, Mike Lister said:

 

I'm just amazed that anyone actually reads my post, now I know this I'll pay more attention to what I write in future.

That ist exactly the problem that you do not care what you write. 

[redwood1]

12 minutes ago, retiree said:

Can you point to any place that sets out the Thailand penalty for failure to file when no tax is due?   Or to a publicized instance of somebody being penalized when no tax was due?

In the USA they ask you not to file if your income is under taxable levels..

 

And Thailand has not given a rat's azz if the huge numbers of Thais filed or not..

[scorecard]

On 9/18/2023 at 1:04 PM, Conquerbrqvilok said:

Is it like this Thailand thanks us for bringing money and helping their bankrupt economy?? I was on a mission during covid 2019-2021 and opened an account it an IBAN is also a multicurrency account after 6 months I checked my account as I was receiving money from Italy i found they added 22% interest on my principal amount, simply I earned 22% of what o received without doing nothing

This country become disgusting and shameful, they barely think once a year, and once they think they vomit ideas that make you sick

 

22% really?

[Mike Lister]

47 minutes ago, stat said:

That ist exactly the problem that you do not care what you write. 

That was a joke, humour, you didn't get it because you seem not to have a sense of one or you've had it surgically removed!

[Mike Lister]

51 minutes ago, retiree said:

Can you point to any place that sets out the Thailand penalty for failure to file independently of tax being due?  or when no tax is due?   Or to a publicized instance of somebody being penalized when no tax was due?

No, that's not my job!

 

But because I feel sorry for you, here:

 

A fine of THB 2,000 applies for failure to file a tax return by the deadline. Late payment penalties (below) also apply. Intentionally failing to file in an attempt to evade tax will result in a fine of up to THB 5,000, and imprisonment of up to 6 months.

 

https://orbitax.com/taxhub/countrychapters/TH/Thailand/c06c8ef5784b4a4f838cc0c82f0e9c19/Interest-and-Penalties-580

[quake]

5 hours ago, The Cyclist said:

Do I think there is any need to panic - No

Do I think that there is any need to make plans to flee Thailand - No

Do I think much will change for most retirees - No

Do I think that there are certain posters who are trying to spread fear and alarm - Abso@#$&*%&#lutely.

You think to Mut. 

 

 

[Dogmatix]

5 hours ago, The Cyclist said:

The UK / Thai DTA can only be ' cancelled ' by the Thai / UK Government. The actual wording states something like ' In writing with 6 months notice '

 

I'm sure that every other Country / Thai DTA will have wording to the same effect. I am also sure that we would have heard by now if the Thai Government had made moves to ' cancel ' these DTA's.

 

I think 1 of 2 things will happen.

 

1. A blanket amnesty will be announced, something to the effect that all persons on retirement visa / extensions that are from Countries with a DTA with Thailand are exempt these changes from the 01 January.

 

2. The worst case scenario is that we might have to file ' Nil Returns ' with the RD or some other method where we have to file paperwork with the RD, but being exempt Thai taxes.

 

This would only cover income ( Pensions and such like ) that are specified in the relevant DTA.

 

Do I think there is any need to panic - No

 

Do I think that there is any need to make plans to flee Thailand - No

 

Do I think much will change for most retirees - No

 

Do I think that there are certain posters who are trying to spread fear and alarm - Abso@#$&*%&#lutely.

 

Perhaps they could post the DTG of their next face to face with the Head of the RD and we can all rock up at the meeting and hear the doom & gloom straight from the horses mouth.

I really can't see the RD making any concessions for foreigners and certainly not based on what type of visa they are on.  Everything in the Revenue Code is based on tax residence, not whether you are a Thai or a foreigner. The only concession to foreigners I have ever heard of is the Royal Decree for LTR visa holders and that was obviously pushed by the BOI as a marketing tool and the RD probably had its arm twisted to agree to its principle of equal taxation for all nationalities. Who would be championing the course of retirement extension holders against the RD and finance ministry?  The BOI champions the cause of LTR visas and Thai Elite champions the cause of Elite Card holders but no part of the government champions the cause of retirement extension holders who seem to be merely tolerated along with marriage extension holders and no one in government cares whether they stay or go. 

 

Hopefully there will be a rethink or at least a clarification of this but, if anything happens, I would expect it to be applicable to all tax residents.  One exception could money remitted to buy a condo, if the resort condos make enough noise but we haven't heard a peep out of them so far.

[Sigmund]

Time to sell and relocate in a more friendly country in Asia that welcome foreigners with less hassles for visas, less hassles to open bank accounts or converting a driver licence, cheaper prices, hot ladies, cheaper booze  etc. No more reporting,  TM' forms to fill for anything etc etc....Why do you think that the markets are flooded with properties to sell all over Thailand ?

[Dogmatix]

On 10/17/2023 at 8:50 AM, TroubleandGrumpy said:

No - never lodged a return in Thailand - and hope never to have to do that. 

I am going off the online lodgement document and the online lodgement guide.

080966PIT94.pdf (rd.go.th)

080966Ins94.pdf (rd.go.th)

If I have misread those documents and they do not work in practice, please let me know.

The PND94 forms you linked is for businesses to file their their half yearly tax returns.  Those are English forms that can be filled out online and printed out for reference but can't be filed.  There will be a Thai version you can fill out online and print out to file manually with the RD, To file online, you have to register online and fill out an interactive form in Thai which does the calculations for you. If you have Thai dividend income, you can even have that transmitted directed to RD and it will all be printed out and calculated on the form. 

[JimGant]

1 hour ago, Mike Lister said:

Even SSc income is assessible income, until you file a return and declare that it is excluded income, under the DTA. Not filing a return and assuming the RD knows that transfer you receive every month is excluded under some DTA of other, is not a valid assumption.

Where did you come up with that? I would argue that assessable (taxable) income that is excluded from Thai taxation, due to the DTA, is NOT to be included on your tax return. If it were, on what line would you back it out with a negative number? Or, would you attach a note saying, "Forget X amount of income on page one, since it's really not taxable income, due to a DTA with the US." Or, do you just not include it at all on your return? One, two, or three -- give my your best choice.

[K2938]

4 hours ago, homeseeker said:

Does anyone know when we will actually learn of what will occur on 01 January 2024?

Maybe they will wait until new year's eve. Or better still announce it on 24 or 25 Dec to maximize matters for farangs?!

You are an eternal optimist if you believe these things concerning life from 01 January 2024 will be fully announced BEFORE 01 January 2024😎

[stat]

51 minutes ago, Mike Lister said:

That was a joke, humour, you didn't get it because you seem not to have a sense of one or you've had it surgically removed!

I did get it, however the joke is on you as you already posted several "misunderstandings" or errors and you simply do not care to admit them.

[JimGant]

45 minutes ago, Mike Lister said:

A fine of THB 2,000 applies for failure to file a tax return by the deadline.

And if your assessable income is above 60000 baht, and you're single -- you're supposed to file? Minimum wage is 300 baht per day, meaning if you work 6 days a week, 52 weeks a year -- 93600 baht is your annual income. Wow, a lot of minimum wagers, and sub minimum wagers, are subject to a 2000 baht fine. Can you define "ludicrous"?

[stat]

5 minutes ago, K2938 said:

You are an eternal optimist if you believe these things concerning life from 01 January 2024 to be fully announced BEFORE 01 January 2024😎

I fully agree! Maybe there will never be an official "clarification" and you just have to live with whatever the tax man makes out of it. Of course it will vary from department to department and from year to year....

[Mike Lister]

11 minutes ago, JimGant said:

Where did you come up with that? I would argue that assessable (taxable) income that is excluded from Thai taxation, due to the DTA, is NOT to be included on your tax return. If it were, on what line would you back it out with a negative number? Or, would you attach a note saying, "Forget X amount of income on page one, since it's really not taxable income, due to a DTA with the US." Or, do you just not include it at all on your return? One, two, or three -- give my your best choice.

Whilst I would argue that unless you declare the excluded income on the return and then exclude it for the reason stated, perhaps with a note, you haven't declared it and the RD is none the wiser as to what's going on. Another way to look at things is that the DTA can't be invoked for income you haven't declared. The DTA is not a super front end power that filters out unnecessary income, it is an agreement that is referenced and cited as the reason for excluding income. The underlying theme here is communicating what you think and know, to the RD, via your tax return. Just because you know what that income is, where it comes from and the DTA excludes that income, you have to explain that to the RD so that they know also.

[Chelseafan]

4 hours ago, homeseeker said:

Does anyone know when we will actually learn of what will occur on 01 January 2024?

Maybe they will wait until new year's eve. Or better still announce it on 24 or 25 Dec to maximize matters for farangs?!

My moneys on 10th Jan 2024.

 

[Mike Lister]

6 minutes ago, JimGant said:

And if your assessable income is above 60000 baht, and you're single -- you're supposed to file? Minimum wage is 300 baht per day, meaning if you work 6 days a week, 52 weeks a year -- 93600 baht is your annual income. Wow, a lot of minimum wagers, and sub minimum wagers, are subject to a 2000 baht fine. Can you define "ludicrous"?

Look, I don't make up the rules, I just offer up my interpretation of what is said and offer evidence to support it. Somebody asked me if I could cite fines etc, I did, don't blame me for them, I didn't make them!!!