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

[Puccini]

5 hours ago, Mike Lister said:

...The whole point here is that PIT collection does NOT "depend on taxpayers faithful and full declaration", the banks have already decided that those direct deposits are income by default and they are reporting them to the RD as such...

Are you sure that the banks in Thailand are routinely reporting direct deposits of inward remittances of pension payments to the Thai Revenue Department?

 

Edited October 21, 2023 by Puccini
fixed a typo

[Mike Lister]

6 hours ago, TravelerEastWest said:

Interesting - how do you know what the banks report - do they send you a year end tax document?

 

4 hours ago, Puccini said:

Are you sure that the banks in Thailand are routinely reporting direct deposits of inward remittances of pension payments to the Thai Revenue Department?

 

NO, I do not know for certain that banks are reporting inbound remittances to the RD, but I do know for certain that other forms of income such as interest income (there's that word again) are because the RD knows these amounts when I go to do my tax return. Reporting that additional information would be a simple task.

 

But another poster quoted lamar's (or similar) earlier and wrote that the threshold criteria for banks to report inbound remittances is in the order of 2 mill Baht per year or hundreds of transactions, per customer. On that basis, no they are not being reported yet but to my mind it's on a matter of time. The banks labelling of those transactions is slightly suspicious, they could easily be savings transfers set up to meet the visa criteria.

 

 

Edited October 21, 2023 by Mike Lister

[jacko45k]

4 hours ago, Puccini said:

Are you sure that the banks in Thailand are routinely reporting direct deposits of inward remittances of pension payments to the Thai Revenue Department?

 

I am sure if not, they only have to ask. The police seem to get to Bank account information quite readily too. 

[Mike Lister]

14 hours ago, bugger bognor said:

still a lot of delusional expats debating a non story my prediction of 200 pages of crap by Xmas looks like an underestimate , the law HASTNT changed and has been in place for decades!!!! A Statement of 2 paragraphs by an Advisory board has got you loosing your small minds, nothing will change for 99,9% Of all expats, A top legal firm in Bangkok has quoted it would need up to 30000 pages of legislation written up to implement the kind of taxation you fear so much it would also need 1000s of new staff to deal with it is NOT GOING TO HAPPEN FOR ANOTHER DECADE AT LEAST mark my words,and even if t did happen if you can't work out how easy it would be to avoid tax you DESERVE TO PAY IT , 

10 posts all saying that posters are deluded idiots for wanting to better understand the way the Thai tax system is constructed and operated. Makes me wonder why you don't, apart from not have the ability that is.

[quake]

Oh no, we're all gonna die.

 

Oops wrong thread. 

 

 

Edited October 21, 2023 by quake

[bugger bognor]

18 hours ago, beammeup said:

Well he said 200 pages of crap when it is only 114 pages of crap so he does have a trend towards exaggeration.

I said by Xmas ?

 

 

[Mike Teavee]

On 10/19/2023 at 7:15 PM, Dogmatix said:

You asked for evidence that, in cases where the Thai tax is greater on foreign sourced income, the taxpayer will have to pay the difference.  Here is a ruling from the RD in a 2004 case relating to double taxation of individuals that embodies this principle. https://www.rd.go.th/24356.html 

Yet from Rule 5 in RD's own FAQ on DTAs... https://www.rd.go.th/english/23520.html

5.   What happens if the rate of tax stipulated in the Revenue Code is different from that of an agreement?  

- Apply the rate which is more beneficial to the taxpayer.  

 

Which to me says that anything that is covered by a DTA will not have additional tax applied to it even if the rate is higher in Thailand. 

[beammeup]

43 minutes ago, bugger bognor said:

I said by Xmas ?

 

 

The point is I am agreeing with you that its crap

[redwood1]

The Chinese, Indian, and Russian ex-pats....Are not going to lift a finger to understand or comply with any of this- ever .....Watch and see....

[TravelerEastWest]

1 hour ago, Mike Teavee said:

Yet from Rule 5 in RD's own FAQ on DTAs... https://www.rd.go.th/english/23520.html

5.   What happens if the rate of tax stipulated in the Revenue Code is different from that of an agreement?  

- Apply the rate which is more beneficial to the taxpayer.  

 

Which to me says that anything that is covered by a DTA will not have additional tax applied to it even if the rate is higher in Thailand. 

It does seem to say that - but a RD FAQ is only a department's interpretation of the law and normally it is about the lowest level authority far below an actual law or regulation. If the government wants more revenue at any moment it could change...

 

Note I could not read in English the above case.

Edited October 22, 2023 by TravelerEastWest
adding

[paddypower]

12 hours ago, Guavaman said:

Please reconsider and change your behavior for you own good.

 

Labelling your remittances as "medical expenses" is not only not advantageous regarding Thai income tax law, but could expose you to charges of tax evasion under Thai tax law. Every time that you authorize a remittance for "medical expenses", you are exposing yourself to a potential challenge by an RD Assessor to provide notarized evidence of the mythical "medical expenses" including receipts to the satisfaction of the Assessor. In other words, every time that you remit using an intentional false justification, you are committing perjury, while providing evidence of your crime. You are digging a hole, into which you may fall.

 

There is no exemption, deduction, or allowance for "medical expenses" under Thai tax law. One can claim a deduction for the premium of health insurance up to 25k. A proof of a valid Thailand health insurance policy is needed in order to claim the deduction. The insurance policy needs to be paid during the tax year for the deductible to be effective for the same year. For tax return purposes, the insurance payment date will be taken into account, not the policy start date. 

 

If you face an assessment of your tax liability, you are exposing yourself to intentional misrepresentation of the facts as evidenced in your remittance documentation. You have hung yourself.

 

Section 37 Any person who:

(1) intentionally notifies false statement or gives false statement or answers with a false statement or shows false evidence in order to evade taxes or request for tax refund under this Title, or

(2) by fault, fraud, scheme or any other method of similar nature, evades or attempts to evade tax or request for tax refund under this Title, shall be subject to an imprisonment from 3 months to 7 years and a fine from 2,000 Baht to 200,000 Baht.

 

Section 37 Bis Any person intentionally fails to file tax returns prescribed under this Title in order to evade or in an attempt to evade tax, shall be subject to a fine not exceeding 200,000 Baht or an imprisonment for a term not exceeding 1 year or both.

Thanks for your thoughtful suggestions. However, we are in our late 70's early 80's. Consequently, I am comfortable that the amount of pension receipts we remit to Thailand annually does not exceed the total of our personal health insurance premiums (inpatient only,) outpatient costs and prescription costs. I think we're ok, when filing our joint Thai tax returns annually. My tax research (admittedly from a few years ago) found that there was tax relief granted to foreign Pension income in Thailand, if NOT brought in the same year in which it is paid in the home country. Although I'm a retired CPA, alothou it will be in a humble way, I see a challenge to follow developments in this area continuously. One of my specialized areas, when in public practice was implementing tax  avoidance plans. Off topic, if I may; there are probably some foolish expats who do not report rental property or other income. The whole Thai tax system is, of course, dysfunctional.

[paddypower]

4 hours ago, Mike Lister said:

 

NO, I do not know for certain that banks are reporting inbound remittances to the RD, but I do know for certain that other forms of income such as interest income (there's that word again) are because the RD knows these amounts when I go to do my tax return. Reporting that additional information would be a simple task.

 

But another poster quoted lamar's (or similar) earlier and wrote that the threshold criteria for banks to report inbound remittances is in the order of 2 mill Baht per year or hundreds of transactions, per customer. On that basis, no they are not being reported yet but to my mind it's on a matter of time. The banks labelling of those transactions is slightly suspicious, they could easily be savings transfers set up to meet the visa criteria.

 

 

thanks for reminding me. ever year my tax account never asks me for the interest that the bank pays on my 800k. but, they do deduct 15% w/h tax, so screw it. In the immortal words of our formerly fugitive PM, 'it was an honest mistake'.

[paddypower]

34 minutes ago, redwood1 said:

The Chinese, Indian, and Russian ex-pats....Are not going to lift a finger to understand or comply with any of this- ever .....Watch and see....

agreed. If this clueless government invested in computerizing Thai tax returns; v.v. ID cards and all Immigration visas and develope a computer program to identify non-compliance, they would finance their helicopter money scheme in no time, without borrowing the money to do so. It is so frustrating, when you revert to logic.

[The Cyclist]

9 hours ago, Puccini said:

The credit entries for the pension payments arriving from the UK are listed by my Italian bank with the following text on the monthly bank statement:

 

 

 

Terefore, this is obviously a State Pension, not a Government pension.

Thanks for that. As Iam not in receipt of the State Pension I have no idea what the credit entry is, or would be.

 

It is not I, who thinks that the UK State is a Government Pension, but clearly there are posters who believe this to be the case.

 

Having said that, it will really come down to how the RD interprets ' State Pension ' and if they deem it as taxable in Thailand then I think some people are going to be really disappointed and up s**t creek without a paddle, if that is their only source of income.

[Mike Lister]

28 minutes ago, paddypower said:

agreed. If this clueless government invested in computerizing Thai tax returns; v.v. ID cards and all Immigration visas and develope a computer program to identify non-compliance, they would finance their helicopter money scheme in no time, without borrowing the money to do so. It is so frustrating, when you revert to logic.

Tax returns are computerised, they are completed online. 

 

Just to put things into perspective, it wasn't that long ago that Thailand was an Emerging Market country, today it is classified as Developing. It doesn't have all the things you might be used to from back home but they have come a long way in two decades.

[TroubleandGrumpy]

On 10/20/2023 at 9:38 PM, stat said:

"outlaws" will learn the hard way like Al Capone did IF RD holds up this directive.

And if the mentality of some Expats on this forum is to be believed, they are going to get a very serious wake up call if they believe that in Thailand things work like back 'home'. Example - to get access to my bank records back home the Police needs a court order - but not in Thailand.  Another - a bloke was detained in a Thai jail for 3 days because of a negative post he made about a Thai hotel (owner was realtive of a policeman?). There are so many other examples I could go for days.  Reality Check - If the Thai RD wants it - they get it - and if that means holding an Expat in detention for not filing a tax return for several years while they 'take' all his assets - then they just do it. Some Expats dont seem to realise that they aint in Kansas anymore and that they have SFA legal rights in Thailand. 

[hondoelsinore]

115 pages of having so many  answers for questions that no one is really sure about, and the four top posters that seem to have the most to lose, need some help mentally, or not much of a life... Methinks it's the latter. Good Luck with all of that. 😕

[The Cyclist]

17 minutes ago, TroubleandGrumpy said:

And if the mentality of some Expats on this forum is to be believed

Yes, it is astounding that in 15 years I have never been subjected to any of the nonsense claimed by others regarding Immigration or the Thai Police.

 

Which is why I poo-poo the doom & gloom merchants on this thread.

 

Are things going to change come 01 Jan ?
 

For some, yes. For others probably not. Until further details are promulgated, read, digested and understood. There is pages and pages of crap being posted.

 

Post number 02 on the 1st page sums it up perfectly and the thread should have been temporarily closed until a further announcement is made.

 

 

[TroubleandGrumpy]

2 minutes ago, The Cyclist said:

Yes, it is astounding that in 15 years I have never been subjected to any of the nonsense claimed by others regarding Immigration or the Thai Police.

 

Which is why I poo-poo the doom & gloom merchants on this thread.

 

Are things going to change come 01 Jan ?
 

For some, yes. For others probably not. Until further details are promulgated, read, digested and understood. There is pages and pages of crap being posted.

 

Post number 02 on the 1st page sums it up perfectly and the thread should have been temporarily closed until a further announcement is made.

 

 

Ditto my last comment - stay away if this bothers you - it is totally voluntary to participate. 

But I think maybe you like being ............... difficult.

[The Cyclist]

7 minutes ago, TroubleandGrumpy said:

Ditto my last comment - stay away if this bothers you - it is totally voluntary to participate. 

There is a massive difference between participating and posting hundreds of posts containing unfounded doom & gloom.

 

It is not difficult to read your countries / Thai DTA and coming up with a very good idea of what you will / will not be taxed on when remitted to Thailand.

 

You also have time, before the 01 Jan to take the appropriate steps to mitigate what you judge you might be taxed on after 01 Jan.

 

A further announcement from the RD / relevant authority should only be clarification on  what you have already deduced.

[Purdey]

It is a bit puzzling as the government is talking about income. I have a savings account that is so old money can’t be transferred electronically. So if I go and withdraw it as a cashiers cheque then how do I prove in Thailand that is not income from a job?

I doubt the Thai government will do its own research.

[Mike Lister]

5 minutes ago, Purdey said:

It is a bit puzzling as the government is talking about income. I have a savings account that is so old money can’t be transferred electronically. So if I go and withdraw it as a cashiers cheque then how do I prove in Thailand that is not income from a job?

I doubt the Thai government will do its own research.

Question is, are you going to file a tax return and declare it? Because if not, there probably isn't an issue, unless of course it's seriously big money. And if you and you declare it as savings, assuming you even need to do that, the fact the money has been in the account for a very long time should be sufficient to prove it was savings.

 

 

[JimGant]

On 10/21/2023 at 9:13 AM, Mike Lister said:

I would point out that all my overseas remittances into my Thai bank accounts is now clearly labelled as "Income"

Labelled by whom? If you send a Wise transfer, you're saying it's labelled as income? Makes no sense -- how would anybody in Thailand know it's income, if sent from one of your financial institution's accounts? Only if it's a direct deposit from, say, a pension payment -- would it have the flavor of income. But even here, it may not be income for Thai tax purposes (think: exempt due to DTA). So, labeling it "income" serves no purpose as far as the RD is concerned.

 

And, labeling all incoming remittances as "income" would push all FDI to other countries.

 

Quote

Thailand has been and continues to be one of the most successful countries in the region for attracting Foreign Direct Investment (FDI), due to its numerous advantages for foreign investors seeking to do business in Asia.

https://www.boi.go.th/index.php?page=thailand_rankings

So, no, they're not going to label all remittances as income (which, if the obvious escaped you, would include FDI's) So logic and logistical common sense would dictate they're restricted to: PIT collection depends on taxpayers' faithful and full declaration of income in their PIT returns. Yes, sample audits for compliance may occur in larger numbers. And, FATCA and CRS reporting may increase the spotlight on compliance.

 

But for Americans, nothing changes, since we're already taxed on our worldwide income. Possibly Thai RD may fine tune the DTA, and figure out that Thailand (per DTA) had "primary tax authority" on my IRA payout. Ok, then this is where "faithful and full declaration" comes in, and I need to file a Thai tax return, declaring my IRA payout as assessable income for Thai tax purposes. Then, I take this tax payment as a credit against my US taxes -- and break even in my overall tax payment situation (note: for high five figure income, Thai tax MAY BE higher than US, and the difference has to be eaten -- not a huge number, however).

 

So, fellow Yanks. Go watch the NFL, and let the others worry about, hey, there may be taxes in their future.

[Yumthai]

1 hour ago, TroubleandGrumpy said:

And if the mentality of some Expats on this forum is to be believed, they are going to get a very serious wake up call if they believe that in Thailand things work like back 'home'.

Totally agreed.

In my homecountry they strictly enforce tax laws and most of residents declare their income. Also, I can't bargain with any public servant and if I hand over a brown envelope in order to "ease things" I'm the one who goes to jail.

 

[JimGant]

3 hours ago, paddypower said:

thanks for reminding me. ever year my tax account never asks me for the interest that the bank pays on my 800k. but, they do deduct 15% w/h tax, so screw it. In the immortal words of our formerly fugitive PM, 'it was an honest mistake'.

You can treat the 15% as 'withhold at source/final payment.' Thus, not reportable on your Thai tax return. Obviously, if you're in a higher tax bracket than 15%, this would be to your advantage.

[The Cyclist]

10 minutes ago, Yumthai said:

Totally agreed.

In my homecountry they strictly enforce tax laws and most of residents declare their income

Does no-one in your home Country work cash in hand ?

 

Does your home Country not have a ' Black Economy ' ?

 

I find it difficult to accept that any Country does not have some sort of combination of the above.

 

The UK's ' Black Economy ' is estimated at over £200 Billion a year.

[Yumthai]

20 minutes ago, The Cyclist said:

Does no-one in your home Country work cash in hand ?

 

Does your home Country not have a ' Black Economy ' ?

 

I find it difficult to accept that any Country does not have some sort of combination of the above.

 

The UK's ' Black Economy ' is estimated at over £200 Billion a year.

Sure like everywhere there is a black economy but it's a minority (because of law enforcement and low corruption), unlike Thailand.

 

Edited October 22, 2023 by Yumthai

[The Cyclist]

5 minutes ago, Yumthai said:

Sure like everywhere there is a black economy but it's a minority (because of law enforcement and low corruption),

The minority in the UK's black economy is estimated at over £200 Billion. What is the size of your Countrys black economy ?

 

Compare and contrast with about £3 Billion in tax avoidance and a further £ 5 Billion in tax evasion.

 

That minority is rather sizeable in monetary terms.

 

I agree, Thailand needs to sort out its own internal tax problems, but lets not pretend that every other Country is squeeky clean.

[Mike Lister]

47 minutes ago, JimGant said:

Labelled by whom? If you send a Wise transfer, you're saying it's labelled as income? Makes no sense -- how would anybody in Thailand know it's income, if sent from one of your financial institution's accounts? Only if it's a direct deposit from, say, a pension payment -- would it have the flavor of income. But even here, it may not be income for Thai tax purposes (think: exempt due to DTA). So, labeling it "income" serves no purpose as far as the RD is concerned.

 

And, labeling all incoming remittances as "income" would push all FDI to other countries.

 

So, no, they're not going to label all remittances as income (which, if the obvious escaped you, would include FDI's) So logic and logistical common sense would dictate they're restricted to: PIT collection depends on taxpayers' faithful and full declaration of income in their PIT returns. Yes, sample audits for compliance may occur in larger numbers. And, FATCA and CRS reporting may increase the spotlight on compliance.

 

But for Americans, nothing changes, since we're already taxed on our worldwide income. Possibly Thai RD may fine tune the DTA, and figure out that Thailand (per DTA) had "primary tax authority" on my IRA payout. Ok, then this is where "faithful and full declaration" comes in, and I need to file a Thai tax return, declaring my IRA payout as assessable income for Thai tax purposes. Then, I take this tax payment as a credit against my US taxes -- and break even in my overall tax payment situation (note: for high five figure income, Thai tax MAY BE higher than US, and the difference has to be eaten -- not a huge number, however).

 

So, fellow Yanks. Go watch the NFL, and let the others worry about, hey, there may be taxes in their future.

As I wrote in a post a dozen or so posts later:

 

"I have no control over how those remittances are labelled and I cannot change them, both of my banks, Bangkok and UOB, label them as income. To be clear, these are direct deposits from the UK State Pension and the US SSc."  

 

To be even more crystal......Bangkok Bank labels my US SSc and my UK State Pension as Income, UOB meanwhile labels EVERY deposit into the account as income.

 

I don't do WISE.

 

Lastly, I doubt very much that FDI rarely if ever comes by way of simple transfers, it's far more likely to come in the form of BOI transfers, transfers via BOT or corporate transfers.

 

 

 

[Yumthai]

Some data:

 

https://www.worldeconomics.com/National-Statistics/Informal-Economy/United Kingdom.aspx

 

The size of United Kingdom's informal economy is estimated to be 10.3% which represents approximatly $358 billion at GDP PPP levels.

 

The size of Thailand's informal economy is estimated to be 46.2%.