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

[The Cyclist]

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.

[Felt 35]

28 minutes ago, The Cyclist said:

what exactly comes under assessable income,

I 🤔think and IMO unfortunately we all will find that "assessable income" here will be any funds transferred from abroad. If not, Thailand have only 2 months to change dozens of DTA`s.

Felt

[stat]

1 hour ago, Felt 35 said:

I 🤔think and IMO unfortunately we all will find that "assessable income" here will be any funds transferred from abroad. If not, Thailand have only 2 months to change dozens of DTA`s.

Felt

They do not need to change the DTAs. If you can 100% prove that the income has been taxed or is exempted by DTA they will not tax it but good luck with that, as everything needs to be written in thai. If you have a complaint  all papers need to be perfect to Thai logic etc ...

[Karma80]

11 hours ago, Felt 35 said:

I 🤔think and IMO unfortunately we all will find that "assessable income" here will be any funds transferred from abroad. If not, Thailand have only 2 months to change dozens of DTA`s.

Felt

 

Quite probably. The system now mirrors Japan's non-permanent resident status, which you get for the first 5 years of moving there. Taxed on anything remitted into Japan in accordance with any DTA. Otherwise not.

Like everyone, I am waiting to understand exactly how this operates in practice, badly I am assuming, and shelved plans to buy a property or transfer significant funds into the country.

[paddypower]

11 hours ago, Felt 35 said:

I 🤔think and IMO unfortunately we all will find that "assessable income" here will be any funds transferred from abroad. If not, Thailand have only 2 months to change dozens of DTA`s.

Felt

Canuck here, filing NR T1's annually since 1996. . I started to read the DTA. got a headache, as the Thai side of the treaty seems to offer very little guidance, vv Thailand. anyone offering anything, about Canadian pensions, esp. in the situation where they are tax exempted under the 217 rules. thanks. and cheers to the OP for starting this topic.  

[paddypower]

5 minutes ago, Karma80 said:

 

Quite probably. The system now mirrors Japan's non-permanent resident status, which you get for the first 5 years of moving there. Taxed on anything remitted into Japan in accordance with any DTA. Otherwise not.

Like everyone, I am waiting to understand exactly how this operates in practice, badly I am assuming, and shelved plans to buy a property or transfer significant funds into the country.

if things go sour, hope you're young enough to move. or go NR. we're on Retirement visa extensions since 1996, so a bit over the hill to consider going NR.

Edited October 24, 2023 by paddypower
spell

[jerrymahoney]

7 minutes ago, paddypower said:

if things go sour, hope you're young enough to move. or go NR. we're on Retirement visa extensions since 1996, so a bit over the hill to consider going NR.

I am USofA citizen and the DTA should be very much in my favor. However, given the currently available deductions including the one for age 65+, I figure based upon my 65K+ baht monthly remittances to Thailand, my worst case case tax bill would be USD 100+ per month.

 

Not enough for me as the above to consider moving. 

[bamnutsak]

3 minutes ago, jerrymahoney said:

figure based upon my 65K+ baht monthly remittances to Thailand, my worst case case tax bill would be USD 100+ per month.

 

Can you elaborate on how you arrived at this ~3,600 THB per month tax figure?

 

At 65,000 per month that puts you in the 20% Thai RD bracket, which is more like 13,000 THB per month.

 

 

 

 

[Mike Lister]

7 minutes ago, bamnutsak said:

 

Can you elaborate on how you arrived at this ~3,600 THB per month tax figure?

 

At 65,000 per month that puts you in the 20% Thai RD bracket, which is more like 13,000 THB per month.

 

 

 

 

Minus Allowances and Deductions allowed under the Thai tax system, minus excluded income.

 

Also, there is a big difference between the Tax Band rate and the effective tax rate which factors in allowances and deductions. 

 

You should read the entire thread and some of the links from people such as Sherrings and Mazzars.

[The Cyclist]

Just now, Mike Lister said:

You should read the entire thread and some of the links from people such as Sherrings and Mazzars.

 

Or do the sensible thing, and await clarification from the RD as to

 

* what constitutes assessable income

 

* what requirements / actions / paperwork are required for income covered by a DTA's

 

Or perhaps one of the regular attendees at the DTA headsheds monthly briefings, could provide an update on

 

Quote

 

According to the document

 

“…those that have earnings from occupation or business abroad or wealth that is located abroad…and has brought these assets into Thailand…

 

must factor this into their personal income tax for the year.”

 

 

Now that would be really helpful.

[jerrymahoney]

37 minutes ago, bamnutsak said:

 

Can you elaborate on how you arrived at this ~3,600 THB per month tax figure?

 

At 65,000 per month that puts you in the 20% Thai RD bracket, which is more like 13,000 THB per month.

My simple calculations:

 

70k x 12= 840k

-190k = 650k  (age 65+)

- 100k = 550k (standard deduction)

150k 0% bracket = 400k remaining

150k @   5% = 7500

250k @10% = 25,000  = 33000 / year
 

[bamnutsak]

32 minutes ago, Mike Lister said:

You should read the entire thread and some of the links from people such as Sherrings and Mazzars.

 

Found the Sherrings link, but cannot find the Mazzars link. If you or anyone has that handy I'd appreciate a repost.

 

3 minutes ago, jerrymahoney said:

70k x 12= 840k

-190k = 650k  (age 65+)

- 100k = 550k (standard deduction)

150k 0% bracket = 400k remaining

150k @   5% = 7500

250k @10% = 25,000  = 33000 / year

 

Thank you VERY much. I did not realize that those brackets were stair-stepped. I should have deduced this based on the bracketing in the table.

 

 

Does anyone know if receiving banks will make any deductions upon remittance?

 

And will Immigration require a gross or net (after any potential tax deduction) monthly figure for the 65,000 requirement?

 

Is there any deduction for medical expenses?

 

 

 

[jerrymahoney]

1 hour ago, bamnutsak said:

Found the Sherrings link, but cannot find the Mazzars link. If you or anyone has that handy I'd appreciate a repost.

 

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Thailand-Tax-Foreign-Income-Taxable-from-2024

[paddypower]

1 hour ago, bamnutsak said:

 

Found the Sherrings link, but cannot find the Mazzars link. If you or anyone has that handy I'd appreciate a repost.

 

 

Thank you VERY much. I did not realize that those brackets were stair-stepped. I should have deduced this based on the bracketing in the table.

 

 

Does anyone know if receiving banks will make any deductions upon remittance?

 

And will Immigration require a gross or net (after any potential tax deduction) monthly figure for the 65,000 requirement?

 

Is there any deduction for medical expenses?

 

 

 

what if the banks are obligated to w/h tax, on foreign source remittances?. Currently, the banks and the public companies deduct a basic flat rate of w/h tax on interest and dividend distributions. . as already posted just now, would immigration classify the 65k a month income requirement as net of Thai tax?  (assuming you have other other income to declare) . a pandora's box. I wonder what % of wealthy Thais do not pay the correct amount of tax ? starting to feel grumpy 🙂

 

Edited October 24, 2023 by paddypower
spelling

[JimGant]

13 hours 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. 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.

Not exactly. The following quote is from the Technical Explanation for the Thai-US DTA. The second sentence is from another source, but gives further clarity:

Quote

"..... income of a resident of a Contracting State derived from real property situated in the other Contracting State may be taxed in the Contracting State in which the property is situated. This Article does not grant an exclusive taxing right to the situs State; the situs State is merely given the primary right to tax."

 

"Taxing rights granted by the agreements will be either primary or subsidiary. Primary rights give an unrestricted right to tax the property in question; subsidiary rights allow taxation, but only after giving credit for the tax on the property in the other country."

 Makes sense. If both contracting countries have taxing rights on the same income, one country has to have "first dibs," i.e., have primary taxing authority. You can't flip a coin to see which country gets to keep all its taxation, while the other country only gets to keep the taxation in excess of the subtracted-out credits -- if there is any left. Thus, if you have rental property in the UK (or US, wherever), the UK gets "first dibs" on taxation -- and on keeping all that taxation. Thailand can, if it wants, also tax this rental income (if remitted to Thailand, currently in same year). But it has to back out a credit for the UK taxes paid -- which probably means there's nothing left.

 

Now, if a country has exclusive taxation rights -- that's exactly what it says: The second country has no taxation rights, even if the country with exclusive taxation rights chooses not to exercise those rights....

... unless you're America, which has the "saving clause" in all its DTAs. This clause trumps the DTA's exclusivity clauses (with a few exceptions), allowing the US to tax all worldwide income, regardless of what the DTA says. Thus, if Thailand doesn't want to tax my IRA (or can't, because of their domestic law about remitting in the next calendar year), then Uncle Sam says, ok, we'll make sure this bugger pays taxes somewhere -- thanx, Thailand. (If Thailand does tax my IRA -- and maybe they'll start next year -- double taxation is avoided, with the US giving a tax credit for those taxes paid to Thailand. This would be a situation of Thailand having "first dibs.")

How do you think the US pays for all those wars..........

[hotandsticky]

1 minute ago, paddypower said:

what if the banks are obligated to w/h tax, on foreign source remittances?.  

 

 

 

Are you serious??  😂😂

[paddypower]

2 hours ago, jerrymahoney said:

I am USofA citizen and the DTA should be very much in my favor. However, given the currently available deductions including the one for age 65+, I figure based upon my 65K+ baht monthly remittances to Thailand, my worst case case tax bill would be USD 100+ per month.

 

Not enough for me as the above to consider moving. 

ok, this is just curiousity - can any expat live well in Thailand on 65k a month. wife, kids schooling, car, health ins. house maintenance (alternatively, rent) ? To me, this is the crux of the matter - this proposed new taxation regime is just not realistic. I forecast there will be retirees up and moving. Not to mention how the international retirement planning magazines and websites will re-evaluate the benefits of retiring to Thailand. .it is a cluster(deleted).

Edited October 24, 2023 by paddypower
grammar

[jerrymahoney]

6 minutes ago, paddypower said:

ok, this is just curiousity - can any expat live well in Thailand on 65k a month. wife, kids schooling, car, health ins. house maintenance (alternatively, rent) ?

65K is cash remittance to Thailand.

[paddypower]

4 minutes ago, jerrymahoney said:

65K is cash remittance to Thailand.

and you have a printing press? 😉 after so many years living here, any time I still get asked how much money I have, I just tell them I have a money tree. works like a charm.

Edited October 24, 2023 by paddypower
spell

[paddypower]

23 minutes ago, hotandsticky said:

 

 

Are you serious??  😂😂

this government is so desperate for new sources of funds that they are wiling to borrow helicopter money. we ain't seen anything yet (but then again, Thai stye, they may just set up a committee to study these new proposals).

[Des1]

I'm from Canada.

Do a google search for: -Convention Between Canada and the Kingdom of Thailand- and you will find the following…

 

Re: Contracting States. If he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national.

 

Article 18

 

Pensions

 

1. Pensions and other similar remuneration, whether they consist of periodic or non-periodic payments, for past employment, arising in a Contracting State and paid to a resident or the other Contracting State shall be taxable only in the first-mentioned State.

 

2. For the purpose of paragraph 1 such remuneration for past employment shall be deemed to arise in a Contracting State if the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying such income, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment, and such income is borne by such permanent establishment, then such income shall be deemed to arise in the Contracting State in which the permanent establishment is situated.

 

 

... so as I understand it, because of this agreement I am not required to pay tax in Thailand.

[JimGant]

25 minutes ago, Des1 said:

... so as I understand it, because of this agreement I am not required to pay tax in Thailand.

Sounds like it. And it seems Canada has exclusive taxation rights on both govt and private pensions -- unlike your southern cousins, where only govt pensions are exclusively the privilege of the IRS, not Thailand.

[JimTripper]

42 minutes ago, JimGant said:

Sounds like it. And it seems Canada has exclusive taxation rights on both govt and private pensions -- unlike your southern cousins, where only govt pensions are exclusively the privilege of the IRS, not Thailand.

 

another great guess!

[The Cyclist]

1 hour ago, JimGant said:

Not exactly. The following quote is from the Technical Explanation for the Thai-US DTA. The second sentence is from another source, but gives further clarity:

 

Wasting your time. The Doom & Gloom squad do not believe / cannot understand / misinterpret anything that might contradict the sky falling in.

[The Cyclist]

1 hour ago, Des1 said:

... so as I understand it, because of this agreement I am not required to pay tax in Thailand.

 

I would go a step further and suggest ( only a suggestion, not a fact or interpretation of a soundbite ) that any pension that is taxed in Home Country will not be taxed in Thailand, whether covered by a DtA or not.

[TroubleandGrumpy]

18 hours ago, SHA 2 BKK said:

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. 

It always amazes me how ignorant some people are about the facts - and how they usually resort to insuklting others that they disagree with because they have no logical argument based on facts - they tend to be all emotions.

Which aboriginals are you talking about exactly - which one of the 300+ separate tribes with different languages and no written records and buildings and no roads or paths and no villages and no crops or any other form of civilisation - before those evil white people arrived.

The first waves of aboriginals were wiped out completely by the second wave (save for a few left in Tasmania). 

The aborigines used to start fires that raged across the country - go back 20-30K years ago and the flora right across the country was vastly different before that last wave of genocidals arrived - which resulted in the plague of Eucalyptus trees taking over most of the continent.

Those same last wave of genocidal aboriginees made extinct hundreds of species of larger animals across the country - look it up.

I was born in UK and had no choice about living in Australia - but that does not mean my last 15-20 has to be there - I would much rather live with my lovely Thai wife for over 10 years and share her country with her. 

You can go visit the girlie bars and enjoy yourself mate - stay away from me thanks - enough said.

Edited October 24, 2023 by TroubleandGrumpy

[metisdead]

Some troll posts and inflammatory posts contravening our Community Standards have been removed.

[noobexpat]

2 hours ago, The Cyclist said:

 

I would go a step further and suggest ( only a suggestion, not a fact or interpretation of a soundbite ) that any pension that is taxed in Home Country will not be taxed in Thailand, whether covered by a DtA or not.

 

Then find an example of a country that enforces foreign income tax but voluntarily ignores all pension income.

 

No point devising narratives that just happen to suit you.

 

Edited October 24, 2023 by noobexpat
spelling

[The Cyclist]

1 minute ago, noobexpat said:

 

Tgen find an example of a country that enforces foreign income tax but voluntarily ignores all pension income.

 

No point devising narratives that just happen to suit you.

 

I don't think that you even came close to understanding my comment.

 

I suppose I should not be surprised when you consider this to be a narrative.

 

Quote

I would go a step further and suggest ( only a suggestion, not a fact or interpretation of a soundbite ) that any pension that is taxed in Home Country will not be taxed in Thailand, whether covered by a DtA or not.

 

To the best of my knowledge, Pensions are normally taxed in the Country where the pension originates.

 

Suggestion, only a suggestion, not a fact or an interpretation of a soundbite, is not, and never will be a narrative.

[noobexpat]

11 minutes ago, The Cyclist said:

To the best of my knowledge

 

Which is low. The rest of the sentence only applies if your tax residence hasn't changed.

 

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