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


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Posted
1 minute ago, TroubleandGrumpy said:

And that is exactly why it is probably so 'dangerous' for Expats - if they do it - because they will screw it all up. They will attempt to get that additinal money, and they will completely stuff it up, and some Expats will get caught in the net, and they will not be able to 'get out' - or at the very least they will have a lot of trouble and expenses and risk jail and deportation. Almost 50% of the Thai economy is 'black' - and they are desperate for money - they are very likely to screw it all up. 

 

Malaysia is far more 'organised' and when they implemented this same rule change back in 2021, then delayed implementation for personal income taxes for 5 years (2026), while they work out all the details and exemptions.  Will Thailand clarify details before 2024, or delay implementation - I dont know. 

 

But if it goes ahead as is and with no more details and exemptions, then I can assure you that the Thai RD in 2025 will be seeking details from all banks about any account or person that transferred over XYZ Baht into the country in 2024.  If they see anyone's account and no tax return, they will not hesitate to start asking questions - including for Expats. They will probably create a whole new team of Thai RD 'investigators' to check incoming remittances against tax returns - and just like the BS fed from TAT - they will justify their additional expenses by nailing as many people as they can - including Expats.

 

My plan is to bring forward incoming remittances to this year, and then bring in the absolute minimum in 2024. If they declare that Expats must all do a tax return - then I will submit one claiming all the exemptions etc. If they say I must pay income taxes on the money brought in for 2024 - then I will pay, and then we will leave.

In your first two sentences you made eight assumptions that can't be substantiated, it's dangerous,  they'll screw it up, they'll attempt to get additional money, they' ll stuff it up, expats will get caught in the net, they wont be able to get out, they risk jail, deportation and lots of expense. Later in your post you make even more!

 

Face it, you don't like Thailand and will find any unsubstantiated excuse to put it down and frighten off expats.

 

Earlier you talked about not wanting to pay tax here but if you live here, or anywhere else, you have an obligation to do so. Do you not see that. 

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Posted
Just now, Longwood50 said:

With respect to my comments it was not about fairness, it is about financial reality.  You want people with money coming to your country and investing.  Anything you do to discourage that has negatives.  

Like it or not, those big homes are purchased in large part by expatriates.  However it is the Thai worker who builds them.  You discourage the expatriate from settling in Thailand or residing here full time, the home doesn't get built and the Thai worker is unemployed. 

That expatriate that comes to Thailand spends money here and all of that is taxed at the 7% VAT.  They stay outside of Thailand for 180 days or don't come at all and all those new taxes you thought you were getting suddenly are diminished or don't happen at all. 

The real questions is what is good for your economy.  I am a proponent of you want your country to be the most attractive for elements you want inside your borders and the least attractive for elements you don't want.  Taxing expatriates is a negative and people will take action to avoid them.  The policy is truly a statement that expatriates are not welcome in Thailand 

 

As to your comment about he tax system in Thailand being targeted with the wealthy paying. Everyones tax system is supported by the wealthy.  Though much maligned the top 1% of tax payers in the USA pay more income tax than the bottom 90% combined. Poor people don't have money and hence you can not get money from someone who does not have it. 



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Which is why I wrote that.

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Posted
13 hours ago, Dogmatix said:

I am not sure it matters whether the recipient Thai bank labels an inbound remittance as income or something else. That is an internal matter for the bank. The RD expects tax residents to declare income by themselves. They may get details of remittances from banks but I think the bank description of income probably just means inflow.  If it is over 50 USD or used to be that much, the bank has to ask you for the purpose, but not the source, and report to the BoT (not the RD).  The choices for foreigners are I think living expenses, purchase of condo etc.  I was told by the bank officer that loan was not acceptable for foreigners but OK for Thais. If under that amount, it seems to just slide straight into your bank acount with no questions asked.  Of course it will be very easy for the RD to get details of all remittances to individual accounts. 

When transferring money over to my bank in Thailand, I am asked by Wise to declare the 'reason'. I cannot remember all of them, but it appears on the Thai bank statement/book as 'Foreign TT'.  I always keep the amount under US$10K because that is the amount that triggers some 'reporting' requirements (post 9/11). 

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Posted
3 hours ago, sidneybear said:

I'm in Australia at the moment. Hardly anyone uses cash here. People are happy to tap and pay a higher price that includes a bank surcharge. Only 1 or 2 percent, but it adds up.

 

I insist on using cash. Some places love it (they probably don't declare it to the taxman). A couple of places offer a discount for using it. Other places refuse it.

If/when you move to Thailand - then I recommend you do the same - use cash only.

Here everyone takes it and some places (vendors, markets) just dont use cards. 

Just be aware that an ATM withdrawal at any other bank outside your Province will charge 15 Baht, so make the withdrawal a large amount (same fee no matter amount of withdrawal).

 

Posted
33 minutes ago, TroubleandGrumpy said:

but they will never never ever blame themselves or their decisions. 

Is that any different than any governement  Not to get into politics but take Donald Trump he was in office for 1 term 4 years and Biden spent 36 years in the Senate, 8 years as VP and now over 2 years as president but somehow he lays the blame on almost everything on Trump's doorstep.  No politician will ever step up and take the blame for their actions 

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Posted
Just now, Longwood50 said:

Is that any different than any governement  Not to get into politics but take Donald Trump he was in office for 1 term 4 years and Biden spent 36 years in the Senate, 8 years as VP and now over 2 years as president but somehow he lays the blame on almost everything on Trump's doorstep.  No politician will ever step up and take the blame for their actions 

True. But it is an artform here in Thailand 🙂

 

Posted
34 minutes ago, TroubleandGrumpy said:

f you think it will simply be a matter of you/I saying 'IMO this is not taxable under DTA' then you are very wrong.

I am stating that under the UK / Thai DTA my Government pension is not taxable in Thailand.

 

I can provide annual P60's and Statements of Future Payments to the RD if they wish to inspect them.

 

My Private Pension does not appear to be covered by the UK / Thai DTA  ( Even though it is taxed in the UK ) This is why it will no longer come into Thailand after the 01 Jan 2024.

 

Proactively removing a potential source of conflict with the RD.

 

Could you tell me where I have misunderstood the UK / Thai RD ?

 

The only confirmation that I require from the RD is whether I need to submit an annual ' Nil Return " or if I am exempt.

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Posted
37 minutes ago, TroubleandGrumpy said:

How the DTA works is that when compiling our tax returns, we have to claim a 'credit' for taxes already paid in our DTA country - and substantiate that the tax has already been paid.

The language "shall be taxable only in that (issuing) State" occurs in the US-Thailand DTA.

 

Even if some income is tax-free in the US and no US tax paid, it still could not be taxed in Thailand if so remitted.

 

Such income, even if required to be declared, would be exempt as in the RD FAQ:

 

9.    What is the method for elimination of double taxation provided in the(DTA)  agreement?  
- In a double taxation agreement, there are credit and exemption methods.  

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Posted
56 minutes ago, The Cyclist said:

I am stating that under the UK / Thai DTA my Government pension is not taxable in Thailand.

I can provide annual P60's and Statements of Future Payments to the RD if they wish to inspect them.

My Private Pension does not appear to be covered by the UK / Thai DTA  ( Even though it is taxed in the UK ) This is why it will no longer come into Thailand after the 01 Jan 2024.

Proactively removing a potential source of conflict with the RD.

Could you tell me where I have misunderstood the UK / Thai RD ?

The only confirmation that I require from the RD is whether I need to submit an annual ' Nil Return " or if I am exempt.

 

You have misunderstood how the Thai tax system works - it is not simply a matter of you deciding anything.  IF you decide you are exempt and do not lodge a tax return - the Thai RD has the right and can review that decision - and they can do it going  backwards for many years (7 I believe, but maybe more).  IF you decide to lodge a tax return and IF the Thai RD does not agree with your 'decisions', they may decide to check further and review the matter - they could either let it go, or they will calculate what they think you owe, and either send you a bill (maybe), or request more information (more likely).  From there it would be wise for anyone to seek legal/tax advice before responding.

 

Under most tax laws, in most countries (not USA), a tax resident living in any country full-time is required to pay taxes on any earnings they have received anywhere in the world - using the DTAs to offset taxes alreasdy paid on earnings received in the source country. You can say 'but I did not bring that part to Thailand' , but that may still be liable to be taxed, and/or the Thai RD can decide 'no - you pay income tax'. 

 

Like yourself, I have a private source of money - savings and private super/pension fund. I will be seeing how things go going forward - and it could go either way.  But I do know that it is not my decision - it is the Thai RD's decision. And right now, according to most pundits, any remittance into Thailand could be viewed as taxable income - and where it goes from there with the appliucation of DTAs and clarifications and exemptions is anyone's guess.  

 

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Posted
1 hour ago, jerrymahoney said:

The language "shall be taxable only in that (issuing) State" occurs in the US-Thailand DTA.

Even if some income is tax-free in the US and no US tax paid, it still could not be taxed in Thailand if so remitted.

Such income, even if required to be declared, would be exempt as in the RD FAQ:

9.    What is the method for elimination of double taxation provided in the(DTA)  agreement?  
- In a double taxation agreement, there are credit and exemption methods.  

 

That is not your/my decision - the Thai RD is the sole arbitrator of what and what is not taxable income.

If you disdagree with their decision you can appeal (must be 100% in Thai) and even then take it to Court (also 100% in Thai).

 

One last time - BUT - if you are a USA Citizen  ....... , then your income worldwide is taxed in USA, and the IRS enforces (imposes) that arrangement very strongly on all other countries (do not tax our citizens or else).  This does not apply to citizens of any other country, that I am aware of.  So you are fine (assuming you are American), but all other DTAs are not structured the same way (that I am aware of).

 

Posted

Bit of a long thread to go through, has it been discussed if UK state pensions will be affected by this, or what the treshhold is?

Posted
2 hours ago, The Cyclist said:

I do not think that there is many who are declaring ' This will not apply to me '

 

The issue at the moment is that we do not know ' what will apply to whom '

 

As has been pointed out repeatedly. DTA's will apply, and what is covered is covered is dependant on the Your Country / Thailand DTA.

 

Thailand has 61 DTA's with other Countries. Which will encompass a barrowload of work for the RD when they have to go through those DTA's for every single expat covered by a DTA.

 

So it would come as no surprise to hear a blanket statement being issued stating that X, Y and Z incomes ( probably pensions / social security etc ) are exempt for people from those Countries are exempt.

 

As I said yesterday. It would be prudent to abide by your Country / Thailand DTA and limit your exposure before 01 Jan 2024 to potentially being skelped with Thai taxation.

 

You do not require a further announcement from the RD to put this into practice.

 

Common sense tells you to continue remitting to Thailand income / money covered by a DTA and stop remitting income / money to Thailand that is not covered by a DTA.

 

Absolutely no point in typing a 3000 word dissertation above about what you are going to do if Thailand does X. Take proactive steps to reduce the risk of X.

Again - what you are deciding is 'applicable' or 'taxable' under any DTA is exactly that - what you have decided.  What matters is what the Thai RD decides - and they have not provided that information or details.  

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Posted
7 minutes ago, TroubleandGrumpy said:

 

That is not your/my decision - the Thai RD is the sole arbitrator of what and what is not taxable income.

If you disdagree with their decision you can appeal (must be 100% in Thai) and even then take it to Court (also 100% in Thai).

 

One last time - BUT - if you are a USA Citizen  ....... , then your income worldwide is taxed in USA, and the IRS enforces (imposes) that arrangement very strongly on all other countries (do not tax our citizens or else).  This does not apply to citizens of any other country, that I am aware of.  So you are fine (assuming you are American), but all other DTAs are not structured the same way (that I am aware of).

 

American.

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Posted
7 minutes ago, jerrymahoney said:

American.

Thought so - lucky bugger 😉

The rest of us are in limbo until this is clarified.

It can be a pain having to pay taxes to USA when not even living there, but as this issue shows, having the 'big boy' on your side can be a huge advantage. 

 

Posted
19 hours ago, Guavaman said:

As previously mentioned, the allowance for health insurance premium paid (per actual expenditure) as documented by receipts from a health insurance company doing business in Thailand is 25k each per year. This amount is deductible from the amount of pension income remitted. But you can't short-cut the process by presenting payment for health insurance instead of pension income -- that is a false declaration = perjury. You remit assessable income from pension, then you pay for health insurance with those funds, which are then deduct from the amount of the income remitted.

 

If you directly remit funds to pay your health insurance premiums to a company doing business in Thailand, it could be characterized as income by the RD, if they interpret the remittance as the UK does under its' remittance-based taxation system. 

Understood. I'm not into perjury btw.

let me rephrase what I wrote - my exemptions cover my taxable income, including pension. but thanks for all the info. that you have quoted. very useful. 

Posted
8 hours ago, TroubleandGrumpy said:

Yes they are very short sighted - both literally and figuratively. Hopefully someone in Thai RD and/or Cabinet will realise that 100,000 Expats bringing in an average of 1 Million Baht EVERY year, equates to 100 Billion Baht - or to put it another way - that equates to 2 Million 'high spending' Chinese Russian tourists they love so much for their money.  But according to some sites there are approx 200,000 non-working Expats living in Thailand (they dont keep official numbers), and that equates to 4 Million 'high spending' Chinese Russian tourists - which they spend a small fortune through TAT to get - and they  welcome with open arms, and 90 days exempt Visas, and the PM saying hello, etc etc etc. 

 

Meanwhile, in return for our 1 Million per year, we are all forced to 'report' every 90 days, complete TM30s, request 'permission to leave/re-enter and pay, request 'permission to stay another year. AND now it could be (not certain) that we are going to be forced to pay income taxes, unlike the Chinese Russian guests - but in return we get zero benefits or rights above what a Chinese/Russian tourist gets while they are in the country. 

 

Yes Thailand is short sighted and ignorant.  Meanhwile Malaysia and Philippines (and other countries nearby) are offering me so much more. They dont all do all this following list, but they all have no income taxes, no 90 day reporting, no annual begging to stay (auto renew 5 years, plus another 5).  Many of them also offer - customs duty exemptions on stuff brought into country, min sales tax on a new car, and a few others - and ............... wait for it (some countries) ............. the right to become a Resident and to buy a property with land (minimum value).

 

My Thai wife has made it very clear - we are not going to pay close to 2 Million baht in income taxes over 15 years to Thailand for nothing in return.  We will go live in a country nearby that gives me/us benefits in return for us living and spending all my money there. Or we will return to Australia and suck it up and just ignore all the woke left greenie crap. Although things may have started to turn in Australia - they just voted 'No Way' to giving the local Aborigines additional rights and benefits in the Constitution, despite all the MSM and all the woke lefty companies and organisations supporting it. Maybe we will go back earlier than planned. 

Errr it was a voice to Parliament only to the people that lived in Australia for 65,000 years before white settlement that was voted on.  No extra rights. Most Australians said no.  
 

But it don’t mean it’s woke to give em them a say - they looked after the country far better than most whities I know.  Best you stay in Thailand Cobber.  Pay your tax and look down on the locals.  Enough said. 

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Posted
1 hour ago, Guavaman said:

Here is a thought exercise: “substitute ‘Thailand’ for ‘UK’ in the following examples” from HMRC Residence, Domicile and Remittance Basis Manual:

 

If the thought exercise comes to fruition and Thaland adopts the UK system then @bugger bognor is absolutely correct and we have had a 100 and odd pages of crap.

 

Which brings us on to the UK / Thai DTA

 

Income from property situated in the UK.

 

Article 7

 

( 1 )  Income from immoveable property may be taxed in the contracting State where the property is located.

 

Which means that if you are paying tax in the UK on a rental property it should not be taxable in thailand.

 

Article 19

 

( 2 ) (a ) Any Pension paid by the contracting State ( Blah Blah Blah )  shall only be taxable in that State.

 

https://assets.publishing.service.gov.uk/media/5a80bddc40f0b623026953eb/uk-thailand-dtc180281_-_in_force.pdf

 

Article 19 Is referring to Government Pensions. I make no comment on whether a State Pension is classed as a Government Pension.

 

But that in itself throws up another interesting conundrum for the people who are claiming the State Pension and being taxed on it in the UK due to other Occupational Pensions.

 

 

Posted
39 minutes ago, The Cyclist said:

 

If the thought exercise comes to fruition and Thaland adopts the UK system then @bugger bognor is absolutely correct and we have had a 100 and odd pages of crap.

 

Which brings us on to the UK / Thai DTA

 

Income from property situated in the UK.

 

Article 7

 

( 1 )  Income from immoveable property may be taxed in the contracting State where the property is located.

 

Which means that if you are paying tax in the UK on a rental property it should not be taxable in thailand.

 

Article 19

 

( 2 ) (a ) Any Pension paid by the contracting State ( Blah Blah Blah )  shall only be taxable in that State.

 

https://assets.publishing.service.gov.uk/media/5a80bddc40f0b623026953eb/uk-thailand-dtc180281_-_in_force.pdf

 

Article 19 Is referring to Government Pensions. I make no comment on whether a State Pension is classed as a Government Pension.

 

But that in itself throws up another interesting conundrum for the people who are claiming the State Pension and being taxed on it in the UK due to other Occupational Pensions.

 

 

 

"May be taxed in the contracting state where the property is located" does not mean taxing the income in Thailand is prohibited in Thailand. That would only be the case, if the wording were "....shall be taxed in the contracting state where the property is located."  That allows Thailand to choose between: not taxing it at all; allowing a tax credit and collecting the difference between Thai and UK tax, if Thai tax is higher; and charging full Thai tax and giving a Thai tax credit. The RD has already suggested it would allow tax credits.

 

The UK DTA is very clear in saying that only civil service and local government service pensions shall only be taxed in the UK. The state pension is not covered by this. 

 

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Posted
12 minutes ago, Dogmatix said:

"May be taxed in the contracting state where the property is located" does not mean taxing the income in Thailand is prohibited in Thailand.

 

What is the purpose of a DTA, and by extension, specific items covered in the DTA ?
 

15 minutes ago, Dogmatix said:

The UK DTA is very clear in saying that only civil service and local government service pensions shall only be taxed in the UK. The state pension is not covered by this. 

 

UK State Pension have been covered repeatedly, as has Government Pensions.

 

Just for a laugh, lets play the doom and gloom game, even though the UK State Pension is not specifically  covered by the DTA, who says Thailand is going to tax UK State Pensions ?
 

Do you have written confirmation from the DTA headshed ?
 

After all, if they can decide to tax rental income ( tax paid in the UK ) they can also decide not to tax UK State Pensions, if they so choose.

 

Yet again I have to repeat myself. Best wait until the DTA confirms what exactly comes under assessable income, before getting knickers twisted and doing yourself damage.

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