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

[Mike Lister]

43 minutes ago, Mike Teavee said:

I hope so, but it's a good example of where I need to have more clarity about how it's going to work before I make concrete plans. 

 

For CGT the DTA says:-

(1) Capital gains from the alienation of immovable property, as defined in paragraph (2) Article 7, may be taxed in the Contracting State in which such property is situated. - Which I read as only the UK can tax any CGT made on the sale of the property. 

 

Worth noting that for Rent, the DTA says:-

(1) Income from immovable property may be taxed in the Contracting State in which such property is situated.  - Which again suggests any rental income brought over is not-taxable (or is taxable & you get Tax Credits). 

 

I'm thinking there are 3 ways this could go:-

1. They accept CGT has been paid & so nothing to pay in Thailand (That's what I'm hoping for, but my Plan B if that's not the case is to become Non-Tax Residence for either the year I sell the property OR the year I bring the money over).
2. I need to pay the difference between CGT paid in the UK & what it would have been in Thailand & I get Tax Credits for this in the UK which would be of no use to me as I don't pay CGT on any of my other assets (Shares) 
3. They tax me on all of the profit made, again giving me useless Tax Credits.  

 

Key point is the money will only be taxed when it's remitted so I've got some time next year before I sell the house to get clarification, if I don't have this by May (I plan on being out of Thailand for 1.5 - 2 months before end of May anyway) then I'll need to make a decision whether to complete the 6 months outside of Thailand, or park the money until 2026 & bring it over with my 25% Tax Free Pension lump sum when I will be spending 6 months outside of Thailand.    

My guess is it will be option number 1, for a few reasons.

 

Firstly, Thailand still wants foreigners to bring foreign currency into the country, not as badly as they used to be they still want that. And I'm pretty sure that they want that money to flow in, more than they want the tax revenue they could potentially get. 

 

Secondly, the property market in Thailand is reliant on foreign buyers to a greater degree than not, trying to tax capital from prior sales overseas would decimate that industry.

 

Thirdly, the value of bank account savings is dropping for the first time in over 10 years, the banking system needs cash deposits from foreigners.

 

And in worst case scenario, there is still an effective workaround, which you have spelled out.

 

FWIW, I also have property to sell in the UK but the potential for Thai tax on the proceeds, doesn't concern me at all.

[Mike Lister]

1 hour ago, quake said:

Spreading the love. 

 

The national parks are financed by government out of tax revenue income. This is not different from any tourism based tax applied to nonresidents/non-tax payers in any country, be it Venice, Cornwall or Nepal.  In this case the tax is applied on each attraction rather than each country, city or town. The fact that 150,000 western expats feel aggrieved and left out, overlooks the fact that the other (potentially) 40 million tourists who visit these optional attractions in Thailand are the ones who pay the lions share. If you were government, you'd tax in exactly the same way. Do I like it? No! Is it mostly fair? Yes.

[freeworld]

8 hours ago, Lorry said:

Even the BTS charges foreign retirees more than Thai retirees

Same with the SRT red line in Bangkok.

[beammeup]

9 hours ago, Mike Teavee said:

I must admit that I didn't know about the updated Q&A Statement https://thelegal.co.th/2023/10/18/qa-statement-issued-by-revenue-department-clarifying-taxation-applied-on-foreign-sourced-income/

 

This added very little information except for the point about income earned in a year when the person was Non-Tax Resident would not be liable for tax whenever it was brought into the country.  This is really good news for me as I plan on selling my house next year & taking the 25% Tax Free lump sum from my Pension in 2026, so as long as I stay no more than 180 days in Thailand during those years, I'm free to bring the proceeds in tax free at any point in the future. 

 

Exactly, this is very important new info. I am glad the dude made this video, it sums up what has been hashed out here plus adds this new info. Also there are new questions like if I was non resident and but became resident could I bring in earnings from 2 years ago or 3?

[freeworld]

2 hours ago, Mike Teavee said:

Key point is the money will only be taxed when it's remitted so I've got some time next year before I sell the house to get clarification

You are going to sell your house to get clarification?

[quake]

48 minutes ago, Mike Lister said:

The national parks are financed by government out of tax revenue income. This is not different from any tourism based tax applied to nonresidents/non-tax payers in any country, be it Venice, Cornwall or Nepal.  In this case the tax is applied on each attraction rather than each country, city or town. The fact that 150,000 western expats feel aggrieved and left out, overlooks the fact that the other (potentially) 40 million tourists who visit these optional attractions in Thailand are the ones who pay the lions share. If you were government, you'd tax in exactly the same way. Do I like it? No! Is it mostly fair? Yes.

 

If your dumb enough to think 40 baht Thai and 400 baht foreigner

is fair.

More power to you. 

Let alone the message that sign sends out to Thais and foreigners. 

 

 

[Ben Zioner]

1 hour ago, Mike Lister said:

Is it mostly fair? Yes.

Absolutely not, if the foreigner is compelled to pay incom tax in Thighland.

 

And, just for info, in Malaysia I get free entrance to  the  parks and many other places because I am over 60.

[redwood1]

21 minutes ago, Ben Zioner said:

Absolutely not, if the foreigner is compelled to pay incom tax in Thighland.

 

And, just for info, in Malaysia I get free entrance to  the  parks and many other places because I am over 60.

 

And what wonderful and amazing things are they offering to farangs for paying a tax...

 

Reduced prices to Parks  NOPE

No 90 day reporting         NOPE

Easer house ownership    NOPE 

Easer Visa                         NOPE

Residency                         NOPE

Being able to buy beer

between 3-5                     NOPE

 

Not even a bloody soap on a rope...lol......

 

The only thing a farang gets is a kick in the azz......But there will extra charge for that too.....

[UKresonant]

So you move to Thailand for more than the 179 Days, bring in money earned or tax assessed in previous years out-with Thailand,

They want a tax return, because you remitted money (?), but none of it is assessable. This RD Q&A updates the initial announcement, which did not mention the previous years of earnings as non-resident can still be considered savings as at present?

So shall you get a penalty for not declaring that you have nothing to declare?

[Mike Lister]

3 minutes ago, redwood1 said:

 

And what wonderful and amazing things are they offering to farangs for paying a tax...

 

Reduced prices to Parks  NOPE

No 90 day reporting         NOPE

Easer house ownership    NOPE 

Eaaer Visa                         NOPE

Residency                         NOPE

Being able to buy beer

between 3-5                     NOPE

 

Not even a bloody soap on a rope...lol......

 

You get a kick in the azz......But there will extra charge for that too.....

You guys are amazing, why ever would you link any of those so called benefits to paying tax, there's zero rationale! This is not a case of people needing to be incentivised to pay tax, it's a legal responsibility to pay. Oh wait, he's a tax payer, he can buy beer between 3-5....really!!!

[JimGant]

10 hours ago, Puccini said:

On 11/3/2023 at 10:50 PM, UKresonant said:

...(1) Income from immovable property may be taxed in the Contracting State in which such property is situated...

 

How does this "...may be..." work out in real life? Do representatives of the UK and Thailand throw dice every year to decide which country gets to tax this type of income for that year?

 

Here's some information from the Technical Explanation of the US-Thai DTA:

 

The first paragraph of Article 6 states the general rule that 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.

 

Presumably such explanation would apply to UK DTAs, as they adhere basically to either the OECD Model or UN Model tax treaties, as do US DTAs.

 

Thus, the UK has primary taxation rights on rental income. Thailand, however, can also tax this income (if remitted to Thailand), but must give a credit for the taxes paid to the UK. So, if Thai taxation has a higher effective tax rate on this rental income than that of the UK, then your total tax bill will be both the UK taxes and the Thai taxes that exceed the tax credit for the UK taxes. Thus, when you see may be taxed, and both countries decide to tax subject income, then your tax bill will equate to whichever country's effective tax rate is higher.

[Mike Lister]

Y'all gonna die early deaths from the stress of worrying about this and trying to second guess what might happen, jeeze, sit back and chill and wait and see what's announced.

[quake]

26 minutes ago, Mike Lister said:

Y'all gonna die early deaths from the stress of worrying about this and trying to second guess what might happen, jeeze, sit back and chill and wait and see what's announced.

 

You have made 237 posts in this thread.

Bit rich, that one mate. 

 

 

[Mike Lister]

4 minutes ago, quake said:

 

You have made 237 posts in this thread.

Bit rich, that one mate. 

 

 

Yep, but very little after half way through and even then, all mostly to refute other peoples nonsense.

[redwood1]

39 minutes ago, Mike Lister said:

You guys are amazing, why ever would you link any of those so called benefits to paying tax, there's zero rationale! This is not a case of people needing to be incentivised to pay tax, it's a legal responsibility to pay. Oh wait, he's a tax payer, he can buy beer between 3-5....really!!!

 

Anyone who stays in Thailand for over 180 days is a RESIDENT of Thailand....

So should receive some benefits.....

 

Name one country in the world that has ZERO benefits for residents...

You can't, because there are none....

[Mike Lister]

5 minutes ago, redwood1 said:

 

Anyone who stays in Thailand for over 180 days is a RESIDENT of Thailand....

So should receive some benefits.....

 

Name one country in the world that has ZERO benefits for residents...

You can't, because there are none....

You're absolutely hilarious, but not in a good way

[quake]

10 minutes ago, redwood1 said:

Name one country in the world that has ZERO benefits for residents...

You can't, because there are none....

 

North Korea.

[Celsius]

12 minutes ago, redwood1 said:

 

Anyone who stays in Thailand for over 180 days is a RESIDENT of Thailand....

So should receive some benefits.....

 

Name one country in the world that has ZERO benefits for residents...

You can't, because there are none....

 

That's what I have been saying.

 

But no..... I am guessing that people who depend on prostitutes will still gladly line up for visa extensions and do 90 day reports while being expected to file a tax return. Truly a sad state of Farang expat... literlaly begging for sex.

 

Someone posted a national park price list. Surely they could start from this. File a tax return and don't get overcharged 1000%.

 

Yeah... i do not think so

 

 

[Mike Lister]

3 minutes ago, Celsius said:

 

That's what I have been saying.

 

But no..... I am guessing that people who depend on prostitutes will still gladly line up for visa extensions and do 90 day reports while being expected to file a tax return. Truly a sad state of Farang expat... literlaly begging for sex.

 

Someone posted a national park price list. Surely they could start from this. File a tax return and don't get overcharged 1000%.

 

Yeah... i do not think so

 

 

 

That old cliche about Thailand, foreigners and prostitutes is so banal. Do you really think retirees are here just for that or are you just taking the moral high ground because you're not (or at least you imply you're not, perhaps you're here for the temples), goodness me!!

 

 

 

[Aldo123]

21 hours ago, The Cyclist said:

 

Yes, they have closed a loophole that was being exploited.

 

What is not clear. for ius farangs is if Thailand is going to tax foreign income, in our case, UK income, which has already been taxed by HMRC.

 

So for the time being I will continue to have my Government Pension ( taxed in the UK and covered by a DTA ) remitted to Thailand.

 

Until clarity is gained, I have stopped my Private Pension ( Taxed in the UK, not covered by a DTA ) from being remitted to Thailand.

 

That is my bases covered until the powers that be clarify things and drain the muddy water.

Yes, I think that sums up the situation for many here. Can I ask why your Private Pension is taxed in the UK? I'm assuming you are non-resident of UK. Is it taxed at source, regardless of your residency status, then you file a tax return as a non-resident? Or does the UK consider you a factual resident if you have assets there - even if you haven't lived there at all for years? I know the rules changed a few years ago.. but they still are not clear to me.

[Celsius]

6 minutes ago, Mike Lister said:

 

That old cliche about Thailand, foreigners and prostitutes is so banal. Do you really think retirees are here just for that or are you just taking the moral high ground because you're not (or at least you imply you're not, perhaps you're here for the temples), goodness me!!

 

 

 

 

 

So, please do tell why would any sane person want to stay in Thailand that requires him to file a tax return while still doing 90 day reports and annual visa extensions that you literally have to beg for?

 

It must be for the amazing temples you mentioned.

[Mike Lister]

Just now, Celsius said:

 

 

So, please do tell why would any sane person want to stay in Thailand that requires him to file a tax return while still doing 90 day reports and annual visa extensions that you literally have to beg for?

 

It must be for the amazing temples you mentioned.

I can only speak for myself of course so here's why:

 

Because I've lived here for the past 25 years, my wife, family and friends are here, I like the climate, I like the people, I like the scenery, I like the low cost of living, I like the easy access to beaches, plus I'm 74 years old and don't feel like I want to up sticks, relocate and start all over again. After all, my agent takes care of my visa and 90 reporting needs for around 6k Baht per year so that's not an issue; I've filed tax returns here for the past three years so that's not a big deal either; I wont have to pay more tax under the suggested worst case new world rules than I do already, in other words, nothing changes for me. TBH, nothing much is likely to change for lots of posters yet here they are, getting all upset, imagining the worst and making all manner of exaggerated claims about what's going to happen. Y'all need to chill, and then some..

[Celsius]

26 minutes ago, Mike Lister said:

I can only speak for myself of course so here's why:

 

Because I've lived here for the past 25 years, my wife, family and friends are here, I like the climate, I like the people, I like the scenery, I like the low cost of living, I like the easy access to beaches, plus I'm 74 years old and don't feel like I want to up sticks, relocate and start all over again. After all, my agent takes care of my visa and 90 reporting needs for around 6k Baht per year so that's not an issue; I've filed tax returns here for the past three years so that's not a big deal either; I wont have to pay more tax under the suggested worst case new world rules than I do already, in other words, nothing changes for me. TBH, nothing much is likely to change for lots of posters yet here they are, getting all upset, imagining the worst and making all manner of exaggerated claims about what's going to happen. Y'all need to chill, and then some..

 

Yea... I got a wife too.

 

She has been paying tax for the past 20 years and got F all in return. including the 3 health insurance that she has through her employer and privately. Every time she has a health issue she also has to beg insurance companies for approval which often does not happen. 

 

Before this tax I decided to give her a Canadian PR where at least for the taxes she pay (or don't pay) she will get something in return.

 

Remember those posts about always overcharging foreigners for national parks entrance fees? That stuff and dual pricing never bothered me. I actually like to stay here.

 

One thing I will not be doing is filing a tax return in the country where I am treated worse than a tourist. Yes, I have that much pride and self respect.

 

 

[Mike Lister]

7 minutes ago, Celsius said:

 

Yea... I got a wife too.

 

She has been paying tax for the past 20 years and got F all in return. including the 3 health insurance that she has through her employer and privately. Every time she has a health issue she also has to beg insurance companies for approval which often does not happen. 

 

Before this tax I decided to give her a Canadian PR where at least for the taxes she pay (or don't pay) she will get something in return.

 

Remember those posts about always overcharging foreigners for national parks entrance fees? That stuff and dual pricing never bothered me. I actually like to stay here.

 

One thing I will not be doing is filing a tax return in the country where I am treated worse than a tourist. Yes, I have that much pride and self respect.

 

 

Once again, it's an attempt to compound and confuse the issues. Health insurance claims acceptance are not in any way related to the tax issue, ditto dual pricing in national parks. But if you're really saying that the tax issue is the one straw that broke the camels back, wouldn't it be a good idea to wait and see what the real story is regarding taxation, before you go reorganisation your life. Just a thought!

[Celsius]

14 minutes ago, Mike Lister said:

Once again, it's an attempt to compound and confuse the issues. Health insurance claims acceptance are not in any way related to the tax issue,

 

Actually it is related.

 

If Farang buys health insurance will he get a tax discount? What about life insurance?

 

Surely he should be allowed to use a 30 baht scheme?

[Misty]

14 hours ago, Mike Teavee said:

I must admit that I didn't know about the updated Q&A Statement https://thelegal.co.th/2023/10/18/qa-statement-issued-by-revenue-department-clarifying-taxation-applied-on-foreign-sourced-income/

 

This added very little information except for the point about income earned in a year when the person was Non-Tax Resident would not be liable for tax whenever it was brought into the country.  This is really good news for me as I plan on selling my house next year & taking the 25% Tax Free lump sum from my Pension in 2026, so as long as I stay no more than 180 days in Thailand during those years, I'm free to bring the proceeds in tax free at any point in the future. 

 

 

Thanks for posting the link above. At the bottom of the text it says the new criteria "will become enforced on 1 July 2024."  Is that a change or a typo?  I thought the effective date was 1 Jan 2024.

[Misty]

On 11/1/2023 at 11:15 AM, Flyguy330 said:

Yes Misty, the way I'd do it is to spend 179 days in Thailand (if that's the preferred main base) then do 90 days (or as much extra as desired) in Malaysia, that gives you Malaysian Tax residencey.

Then you can use the other 90 (or less) days to travel the region, or visit home. Or just stay put in Malaysia the remainder of the tax year.

Rinse and repeat.

Maybe not everyones cup of tea, but if the tax savings are significant I'd be doing it.

It's good to have options.

 

By the way - these 'days in country' don't have to be consecutive, or in blocks. So you could just hop back and forth every couple of months if preferred. Just need to keep close tabs on the dates. You can then remit all you like to TH tax free. Bring up to 10K USD cash into Malaysia every trip, tax free.

Okay, I understand what you mean and why you'd need to have a tax residency somewhere to not be subject to your home country's tax. As a US citizen, I wouldn't get a benefit from gaining a tax residency in Malaysia and so didn't initially understand.

[Lorry]

1 hour ago, Mike Lister said:

But if you're really saying that the tax issue is the one straw that broke the camels back, wouldn't it be a good idea to wait and see what the real story is regarding taxation, before you go reorganisation your life. Just a thought!

Agreed.

This seems to be what TaG thinks,  he is just a bit more grumpy. 

And it is what I think, too.

[The Cyclist]

1 hour ago, Aldo123 said:

Yes, I think that sums up the situation for many here. Can I ask why your Private Pension is taxed in the UK? I'm assuming you are non-resident of UK. Is it taxed at source, regardless of your residency status, then you file a tax return as a non-resident? Or does the UK consider you a factual resident if you have assets there - even if you haven't lived there at all for years? I know the rules changed a few years ago.. but they still are not clear to me.

 

I have no idea what the current UK rules are.

 

I am still a resident of the UK, but I am non - dom for tax purposes.

 

The benefit for me is that my overseas income ( O&G ) would not be taxable inthe UK, but income derived in the UK is still taxable in the UK.

 

When I became non-dom the rules were 90 days or less  a year in the UK, averaged over 5 years. There was slack in the system. About 2012 the rules changed to a straight 90 days a year or less.  What the rules are today I do not know ( or care 😀😀 ) I officially retired in 2019 and no longer have overseas income.

 

Only speculation on my part, but when the muddy waters are cleared, I think that income taxed in your home Country and then remitted to Thailand will not be subject to Thai taxation.

 

[Lorry]

15 minutes ago, Misty said:

 

Thanks for posting the link above. At the bottom of the text it says the new criteria "will become enforced on 1 July 2024."  Is that a change or a typo?  I thought the effective date was 1 Jan 2024.

Typo.

 

BTW this text understands the QnA, that "both conditions have to be met" to be taxable:

1. You must be tax resident here (i.e. 180 days a year or more) in the year you bring the income into Thailand

2. You also were a tax resident in Thailand in the year you earned that income. 

 

1. is not 100% clear in the QnA, and some posters - me included -  found that suspicious