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

[mokwit]

3 hours ago, jacko45k said:

And where might you be seeing that?

The BoT has tightened up on non resident accounts as an anti money laundering policy. that is why it is so hard to open an account now, and presumably SCB sees requesting a TIN as the best way of ascertaining residency.  There has been something like this with non resident accounts in the UK with suspected non resident accounts being frozen, possibly in accordance with the same international agreements. SO, it is not impossible that you may have a situation in the future where your Thai bank account is frozen until you produce a TIN.

 

I am just looking at possible scenarios and knock on effects.

[Celsius]

4 minutes ago, mokwit said:

The BoT has tightened up on non resident accounts as an anti money laundering policy. that is why it is so hard to open an account now, and presumably SCB sees requesting a TIN as the best way of ascertaining residency.  There has been something like this with non resident accounts in the UK with suspected non resident accounts being frozen, possibly in accordance with the same international agreements. SO, it is not impossible that you may have a situation in the future where your Thai bank account is frozen until you produce a TIN.

 

I am just looking at possible scenarios and knock on effects.

 

Some people need ro read this a few times. 

 

Game Over.

[paddypower]

23 hours ago, Mike Teavee said:

Think it’s supposed to be ROTFLOL…

 

Rolling On The Floor Laughing Out Loud 

thanks for correcting me. 🙂

[paddypower]

7 hours ago, freeworld said:

I bet all Thais have a TIN.

 

It is their ID number.

 

so?? I'm in the middle of a corporate restructuring, involving share redemptions. i asked one of my shareholders if she filed a tax return. her answer was '' no - because I OWN nothing'' . I guarantee you, the TIN and ID are not correlated here, for tax purposes. if the Thais compared personal tax returns with individual TIN (call it ID card numbers, if you will) the figure of 90% non compliance would not be there. I never cared about this before and I'm not going to start now. TIT. 

[paddypower]

23 hours ago, stat said:

I wonder what will be the tax mans take if I agree with the owner to pay my rent to his off shore account. So I never brought the money into thailand 🙂

I dount that your 'average' Thai condo/house landlord has an offshore account - and if he hasn't, it is highly unlikley he would be able to open one now, under the New World Order 😉 

[freeworld]

1 hour ago, redwood1 said:

 

Thailands population is 69 million...

If only 4 million are paying taxes

That means 94% of the Thai population

pays NO tax on income....

 

Let that sink in.....

 

And they want farangs to pay their fair share...lol

 

This is beyond a joke....

Well for many it does depend upon the level of income.

 

Many Thais are not wealthy as most people assume.

 

Although there is the black economy to which many foreigners contribute payments. Taxes I assume are not collected on that.

[freeworld]

43 minutes ago, paddypower said:

so?? I'm in the middle of a corporate restructuring, involving share redemptions. i asked one of my shareholders if she filed a tax return. her answer was '' no - because I OWN nothing'' . I guarantee you, the TIN and ID are not correlated here, for tax purposes. if the Thais compared personal tax returns with individual TIN (call it ID card numbers, if you will) the figure of 90% non compliance would not be there. I never cared about this before and I'm not going to start now. TIT. 

Don't know what "own nothing" means?

 

I don't know, when I went with my wife to the tax office here in Bangkok some years ago to get her TIN, we were told by the tax office manager that for Thais her ID number is her tax number. IE TIN is a 13 digit number and a Thai ID number is a 13 digit number.

 

 

Capital gains

Most types of capital gains are taxable as ordinary income. However, the following capital gains are exempt from tax:

Capital gains on the sale of shares in a company listed on the Stock Exchange of Thailand, provided that the sale is made on the Stock Exchange of Thailand, and on the sale of investment units in a mutual fund.

Gains on the sale of non-interest bearing debentures, bills, or debt instruments issued by a corporate entity, except in the case where the bonds or debt instruments were sold for the first time at a price lower than their redemption price to an individual.

Gains on the sale of securities listed on stock exchanges in the Association of Southeast Asian Nations (ASEAN) member countries and traded through the ASEAN Link, excluding securities in the form of treasury bills, bonds, bills, or debentures.

Capital gains and investment income earned by a resident from sources outside Thailand are not taxable unless remitted to Thailand in the year of receipt.

Capital losses may not be offset against capital gains.

 

Dividend income

Dividends received from a company incorporated in Thailand are subject to withholding tax (WHT) at a flat rate of 10%. A resident of Thailand receiving dividends from companies incorporated in Thailand may elect to exclude this income from the computation of income tax and waive the tax credit referred to in the Other tax credits and incentives section.

Edited October 26, 2023 by freeworld

[stat]

18 minutes ago, freeworld said:

Don't know what "own nothing" means?

 

I don't know, when I went with my wife to the tax office here in Bangkok some years ago to get her TIN, we were told by the tax office manager that for Thais her ID number is her tax number. IE TIN is a 13 digit number and a Thai ID number is a 13 digit number.

 

 

Capital gains

Most types of capital gains are taxable as ordinary income. However, the following capital gains are exempt from tax:

Capital gains on the sale of shares in a company listed on the Stock Exchange of Thailand, provided that the sale is made on the Stock Exchange of Thailand, and on the sale of investment units in a mutual fund.

Gains on the sale of non-interest bearing debentures, bills, or debt instruments issued by a corporate entity, except in the case where the bonds or debt instruments were sold for the first time at a price lower than their redemption price to an individual.

Gains on the sale of securities listed on stock exchanges in the Association of Southeast Asian Nations (ASEAN) member countries and traded through the ASEAN Link, excluding securities in the form of treasury bills, bonds, bills, or debentures.

Capital gains and investment income earned by a resident from sources outside Thailand are not taxable unless remitted to Thailand in the year of receipt.

Capital losses may not be offset against capital gains.

 

Dividend income

Dividends received from a company incorporated in Thailand are subject to withholding tax (WHT) at a flat rate of 10%. A resident of Thailand receiving dividends from companies incorporated in Thailand may elect to exclude this income from the computation of income tax and waive the tax credit referred to in the Other tax credits and incentives section.

Great post thanks a lot! So another good tax avoidance is to invest in the thai stock market, as the capital gains are excluded. As no one knows if US stocks or thai stocks will perform better in the future a small investment in SET index shares does make sense, at least for me. Can you advise on asean link? Is that a stock exchange or broker? Thanks!

Edited October 26, 2023 by stat

[Dogmatix]

38 minutes ago, freeworld said:

Don't know what "own nothing" means?

 

I don't know, when I went with my wife to the tax office here in Bangkok some years ago to get her TIN, we were told by the tax office manager that for Thais her ID number is her tax number. IE TIN is a 13 digit number and a Thai ID number is a 13 digit number.

 

 

Capital gains

Most types of capital gains are taxable as ordinary income. However, the following capital gains are exempt from tax:

Capital gains on the sale of shares in a company listed on the Stock Exchange of Thailand, provided that the sale is made on the Stock Exchange of Thailand, and on the sale of investment units in a mutual fund.

Gains on the sale of non-interest bearing debentures, bills, or debt instruments issued by a corporate entity, except in the case where the bonds or debt instruments were sold for the first time at a price lower than their redemption price to an individual.

Gains on the sale of securities listed on stock exchanges in the Association of Southeast Asian Nations (ASEAN) member countries and traded through the ASEAN Link, excluding securities in the form of treasury bills, bonds, bills, or debentures.

Capital gains and investment income earned by a resident from sources outside Thailand are not taxable unless remitted to Thailand in the year of receipt.

Capital losses may not be offset against capital gains.

 

Dividend income

Dividends received from a company incorporated in Thailand are subject to withholding tax (WHT) at a flat rate of 10%. A resident of Thailand receiving dividends from companies incorporated in Thailand may elect to exclude this income from the computation of income tax and waive the tax credit referred to in the Other tax credits and incentives section.

 

That's right. There is also a flat rate of 15% on interest applied in exactly the same way as dividends. The other important concession is on Thai immoveable property sales on which there is a complex formula to charge tax at the Land Office on a transactional basis.  It is not a capital gains tax and you also have to pay, if you made a loss but in most cases the tax is not more than about 5% of the appraisal price which may be a lot less than the actual transaction case, as sellers and buyers routinely understate the price. Take an example where a seller sells property he bought for 100 million for a 30% profit.  Tax would be around 6.5 million, assuming the actual sales price were declared.  But if that were proceeds on an overseas property remitted to Thailand, the profit would taxed at 35% and tax would be 10.5 million.

 

Taxing all overseas income at up to 35% is an incredibly stupid thing to do, especially when they give concessionary rates on all types of investment income in Thailand. There is just no incentive to remit money and reinvest.

Edited October 26, 2023 by Dogmatix

[paddypower]

1 hour ago, freeworld said:

Don't know what "own nothing" means?

 

I don't know, when I went with my wife to the tax office here in Bangkok some years ago to get her TIN, we were told by the tax office manager that for Thais her ID number is her tax number. IE TIN is a 13 digit number and a Thai ID number is a 13 digit number.

 

 

Capital gains

Most types of capital gains are taxable as ordinary income. However, the following capital gains are exempt from tax:

Capital gains on the sale of shares in a company listed on the Stock Exchange of Thailand, provided that the sale is made on the Stock Exchange of Thailand, and on the sale of investment units in a mutual fund.

Gains on the sale of non-interest bearing debentures, bills, or debt instruments issued by a corporate entity, except in the case where the bonds or debt instruments were sold for the first time at a price lower than their redemption price to an individual.

Gains on the sale of securities listed on stock exchanges in the Association of Southeast Asian Nations (ASEAN) member countries and traded through the ASEAN Link, excluding securities in the form of treasury bills, bonds, bills, or debentures.

Capital gains and investment income earned by a resident from sources outside Thailand are not taxable unless remitted to Thailand in the year of receipt.

Capital losses may not be offset against capital gains.

 

Dividend income

Dividends received from a company incorporated in Thailand are subject to withholding tax (WHT) at a flat rate of 10%. A resident of Thailand receiving dividends from companies incorporated in Thailand may elect to exclude this income from the computation of income tax and waive the tax credit referred to in the Other tax credits and incentives section.

I am getting a pain in my head - trying to make a simple point. What I am saying is most ordinary Thais do NOT file tax returns. in this situation the lady (an unemployed teacher) is saying she does NOT file a tax return although she has income. HER  logic (not mine) is she does not own land - so no need to file a tax return. Her husband operates a mobile phone shop which he owns. He does not file a tax return.

I am providing 2 examples of fairly ordinary Thais who make up that 90% of non-filers. Ok?

I don't need to attend yet another lecture on tax law; what is and is not supposed to be taxed. If you read my posts, you will see that I'm a retired CPA (incidentally, having practiced tax law in 3 different countries). this whole thread is becomming a headache - and, as usual, we being treated like mushrooms. 🙂

[Lorry]

14 minutes ago, paddypower said:

I am getting a pain in my head - trying to make a simple point. What I am saying is most ordinary Thais do NOT file tax returns. in this situation the lady (an unemployed teacher) is saying she does NOT file a tax return although she has income. HER  logic (not mine) is she does not own land - so no need to file a tax return. Her husband operates a mobile phone shop which he owns. He does not file a tax return.

I am providing 2 examples of fairly ordinary Thais who make up that 90% of non-filers. Ok?

I don't need to attend yet another lecture on tax law; what is and is not supposed to be taxed. If you read my posts, you will see that I'm a retired CPA (incidentally, having practiced tax law in 3 different countries). this whole thread is becomming a headache - and, as usual, we being treated like mushrooms. 🙂

It's correct to say 90 or whatever percent of Thais don't file a tax return.

But it's not correct to assume that the same 90% don't pay taxes on their income. 

There is a withholding tax on salaries, and the bulk of the population gets a salary. 

(As for farmers, the income from selling rice is tax-free)

BTW in my home country it's similar: the salaried pay most taxes. The self-employed pay very little. But they do file lots of paperwork, proving that,  unfortunately,  they have almost zero taxable income. It's just a bit simpler here.

[JimTripper]

On 10/25/2023 at 4:22 PM, stat said:

I wonder what will be the tax mans take if I agree with the owner to pay my rent to his off shore account. So I never brought the money into thailand 🙂

maybe if you are using cash. if you are transfering money bank to bank it can be a red flag for a frozen account.

[stat]

2 hours ago, JimTripper said:

maybe if you are using cash. if you are transfering money bank to bank it can be a red flag for a frozen account.

What makes you think a rent payment will freeze an account? Why on earth should a german account be froozen by making a 1500€ transferral every month? This is ludicrous sorry.

Edited October 26, 2023 by stat

[JimTripper]

18 minutes ago, stat said:

What makes you think a rent payment will freeze an account? Why on earth should a german account be froozen by making a 1500€ transferral every month? This is ludicrous sorry.

Well, i won't do it from my usa account. i get cash out of the atm and deposit into landlords account. the banks are already very strict about addresses on the account and expats have been reporting frozen accounts for no reason.

[stat]

1 hour ago, JimTripper said:

Well, i won't do it from my usa account. i get cash out of the atm and deposit into landlords account. the banks are already very strict about addresses on the account and expats have been reporting frozen accounts for no reason.

Jim no offense you post about acc freezing and then divert to another topic like adress on account as reason for being frozen. What do you mean by adress on an account, the  holders adress? I think you are confusing a lot of things here. If you take cash out of your thai account you have it already transferred to Thailand so not helpful.

[Puccini]

9 hours ago, JimGant said:

The DTAs with Thailand already give Thailand the right to tax certain foreign income belonging to foreign tax residents of Thailand (like, as a Yank, my IRA payout or my pension from Boeing, etc).

Not all DTA's between Thailand and other countries are the same. Let's say, therefore, that your post is with reference to the DTA between Thailand and the USA.

[JimTripper]

18 minutes ago, stat said:

Jim no offense you post about acc freezing and then divert to another topic like adress on account as reason for being frozen. What do you mean by adress on an account, the  holders adress? I think you are confusing a lot of things here. If you take cash out of your thai account you have it already transferred to Thailand so not helpful.

 

I'm talking about my United States account. I never got a Thai bank account. International transfers are red flags in the Usa, you may get away with it, but I'm not interested in causing waves. Cash out of the atm like I'm on vacation and still living in the Usa is the way to go.

[Lorry]

42 minutes ago, JimTripper said:

 

I'm talking about my United States account. I never got a Thai bank account. International transfers are red flags in the Usa, you may get away with it, but I'm not interested in causing waves. Cash out of the atm like I'm on vacation and still living in the Usa is the way to go.

And cash out of the (foreign) ATM is no red flag?

Especially if again and again,  throughout the year, every year. 

It was for my home country's bank computer: after cashing out of Thai ATMs for 20 years,  the computer said no and didn't give me any more money. 

Of course,  international transfers are even more suspicious.  

I quote a member of AN: "only criminals have need for a Thai bank account"

[stat]

1 hour ago, JimTripper said:

 

I'm talking about my United States account. I never got a Thai bank account. International transfers are red flags in the Usa, you may get away with it, but I'm not interested in causing waves. Cash out of the atm like I'm on vacation and still living in the Usa is the way to go.

Basically the same if you cash out of ATM for years or transfer money. ATM even more suspicious because you get cash in hand in Thailand IMHO. An international transfer is no red flag in itself, if it is not to a dubious country which Uncle Sam does not like. I got my german credit card frozen because I was withdrawing too much money and too often , but they were concerned that I do no longer live in Germany (which was correct at that time BTW):-)

[jerrymahoney]

On 10/25/2023 at 4:24 PM, Metapod said:

So from all of this, my take away for my situation is to simply remit less money into Thailand and pay tax on what I remit.

As for my 65K+ plus per month monthly FTT deposit for retirement exension of stay, I will say to the above:

 

... and pay tax -- if any -- on what I remit.

[jacko45k]

15 hours ago, TroubleandGrumpy said:

In Australia and most western countries, banks require a Tax Number or they withold part of the 'earnings' and report that to their Tax Dept.

Likely that one day Thailand will also adopt the same practice - if directed by Thai Govt (very suprised if SCB has already done that).

Also a possibility that in order to receive an extension in the future, a TIN and last year's tax certificate/return will be required (years away). 

Well I specifically opened one account here in Thailand to allow me to get a refund on withholding tax, as it seemed obligated to use them.... not sure if they kept the details. One UK bank asked my for TIN for Thailand once....(no threat implied). The association of needing a TIN to get an extension is not rumoured that I know of, and could be construed as fear mongering. But 'never say never' I suppose.

[JimTripper]

6 hours ago, Lorry said:

And cash out of the (foreign) ATM is no red flag?

Especially if again and again,  throughout the year, every year. 

It was for my home country's bank computer: after cashing out of Thai ATMs for 20 years,  the computer said no and didn't give me any more money. 

Of course,  international transfers are even more suspicious.  

I quote a member of AN: "only criminals have need for a Thai bank account"

 

5 hours ago, stat said:

Basically the same if you cash out of ATM for years or transfer money. ATM even more suspicious because you get cash in hand in Thailand IMHO. An international transfer is no red flag in itself, if it is not to a dubious country which Uncle Sam does not like. I got my german credit card frozen because I was withdrawing too much money and too often , but they were concerned that I do no longer live in Germany (which was correct at that time BTW):-)

I have several home country bank accounts and debit cards in case that happens. If a debit card is blocked, I transfer money within the Usa and I move to the unused account. That would give me time to maybe setup a thai bank account if i needed to.

 

Btw transfers to a thai bank account in my name from my home country bank account i dont see as a problem. its when i start transfering to other individuals in a foreign country that i get worried.

 

one of the reasons i never setup a thai bank account is because of the reporting to the irs. i did not want that. would rather just have it appear on paper that i'm on extended vacation.

 

how did you solve the problem when the atm stopped giving out money?

Edited October 26, 2023 by JimTripper

[Mike Teavee]

On 10/26/2023 at 7:28 AM, redwood1 said:

 

Yea right, how many Thais have a TIN?.....I bet most Thais do not have one....

I thought all Thai's had a TIN, it's their National Identity Number

[paddypower]

13 hours ago, Lorry said:

It's correct to say 90 or whatever percent of Thais don't file a tax return.

But it's not correct to assume that the same 90% don't pay taxes on their income. 

There is a withholding tax on salaries, and the bulk of the population gets a salary. 

(As for farmers, the income from selling rice is tax-free)

BTW in my home country it's similar: the salaried pay most taxes. The self-employed pay very little. But they do file lots of paperwork, proving that,  unfortunately,  they have almost zero taxable income. It's just a bit simpler here.

I agree - and then there are other taxes they pay, such as VAT and so on. altho i detested what he did mostly, after becoming PM, Thaksin's policies for the poorer Thais was the best thing that ever happened to them.

[Klonko]

DTA tax credits on transferred foreign taxed income must be provable with certified translation of foreign RD tax assessment. If such documentation is not possible in time, full Thai tax is payable first and refund of DTA tax credit possible later on. I am still waiting for my foreign RD tax assessment for 2020.

 

Because my foreign taxed income is not tax exempt in Thailand under DTA, I have given up on the DTA route and will use transfer of segregated foreign funds not qualifying as income, gifts to my wife and sporadically non-Thai tax residency.

 

This setup is  compliant with Thai tax law even if there will not be favourable clarifications for foreign retirees being tax resident in Thailand.

[FritsSikkink]

17 hours ago, paddypower said:

so?? I'm in the middle of a corporate restructuring, involving share redemptions. i asked one of my shareholders if she filed a tax return. her answer was '' no - because I OWN nothing'' . 

In a tax declaration you declare what your active / passive income is. What you own is something else.

[stat]

8 hours ago, JimTripper said:

 

 

 

how did you solve the problem when the atm stopped giving out money?

I have about 10 credit and debit cards for this exact reason that banks tend to freeze your account or scammers get hold of you cc details🙂 You cannot have enough cards in my opinion...

[stat]

5 hours ago, Klonko said:

DTA tax credits on transferred foreign taxed income must be provable with certified translation of foreign RD tax assessment. If such documentation is not possible in time, full Thai tax is payable first and refund of DTA tax credit possible later on. I am still waiting for my foreign RD tax assessment for 2020.

 

Because my foreign taxed income is not tax exempt in Thailand under DTA, I have given up on the DTA route and will use transfer of segregated foreign funds not qualifying as income, gifts to my wife and sporadically non-Thai tax residency.

 

This setup is  compliant with Thai tax law even if there will not be favourable clarifications for foreign retirees being tax resident in Thailand.

It is usually a hell of a lot of work to claim DTA tax credit even in Germany where they sometimes accept english documents, sometimes not. I would not bother if it is not 2000 USD or above in taxes owed.

[Mike Lister]

On 10/26/2023 at 3:07 PM, redwood1 said:

 

Thailands population is 69 million...

If only 4 million are paying taxes

That means 94% of the Thai population

pays NO tax on income....

 

Let that sink in.....

 

And they want farangs to pay their fair share...lol

 

This is beyond a joke....

Thailand's population may be 69 million but the work force is only 39 million, children, old people and the sick infirm tend not to wok much. And Thailand is a rapidly ageing society hence that 39 mill will continue to shrink.

 

Also, the tax net spans about 12% of the population but only about 4% pay tax via a PAYE equivalent. The rest may or may not file a tax return but many are under the threshold to pay tax. Self employed workers  such as my wife turn over close to a million baht in business each year selling bakery products. But because of the generous tax deduction on the cost side (60% of sales) , she very nearly escapes paying PT. 

[JimGant]

2 hours ago, stat said:

It is usually a hell of a lot of work to claim DTA tax credit even in Germany where they sometimes accept english documents, sometimes not. I would not bother if it is not 2000 USD or above in taxes owed.

 

Interesting. For taking a Thai tax credit on my US tax return, no supporting documentation is required. So far, I've only taken a credit for taxes withheld on my Bangkok Bank savings account. As this has been below $600, I only need to plug in the figure I arrived at on a single line on the tax return. Maybe in the future, if the new rules mean I have to declare my IRA payment on a Thai tax return, per DTA -- then if this is above $600, I'll need to fill out a Form 1116. Again, no Thai supporting paperwork required -- and a straightforward process, especially if using TurboTax.

 

I know you Old World folks get tired of hearing this -- but if Thailand's new rules require me to declare my IRA payment, there will be no additional cost to me, as Thailand gets to keep my taxes to fix pot holes, and the US loses the equivalent in taxes, due to tax credits. Finally, fairness: I now pay to fix a pot hole in Doi Saket, and no longer pay to fix a pot hole in East Jesus, Iowa.

 

Yawn.