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

[Dogmatix]

On 11/26/2023 at 1:08 AM, neil324 said:

 

Nearly all other countries tax global wealth. So seems fair in that respect.

 

The problem is, Thailand has grown, being the way it is. That has now changed, in a massive way. What will the affected do about the change.

 

Other countries tend to tax global income. Wealth taxes do exist, eg 0.5% of total wealth over a threshold but don't often work out very well and have been walked back in some countries like France, where a lot of wealthy people simply left. 

 

I take the position of Prof Kitipong that it would make more sense for the economy to avoid doing this so as to be competitive with HK and Singapore, which is what the previous PT government of Yingluck strove to do by reducing corporate income tax from 30% to 20%, a theoretical sacrifice in today's terms of about 300 billion or close to 2% of GDP, whereas this new approach is unlikely to raise anything like that. But, if you have to do it, try to make tax rates more in line with Thai tax rates in order to incentivise repatriation of capital, eg 10% on dividends, 0% on equities capital gains, 15% on interest. Also give more time to investors to adjust before implementation and legislate the change, rather than leave it to the RD to reinterpret the law in a way that is non-binding on taxpayers and subject to legal challenges. 

 

Re global income tax of Thai tax residents, the Prachachart Thurakit article said the RD wants to amend the Revenue Code to introduce this.  So this may be only a stop gap. Whichever way you look at it, Thailand has a fairly low tax take and will need to increase that to meet the growing expectations of welfare, given that GDP growth is expected to continue to underperform due to lack of competitiveness.  That probably means higher personal and corporate tax rates, higher VAT, higher inheritance and gift taxes with lower thresholds, as well as global income tax collection. 

Edited November 27, 2023 by Dogmatix

[sqwakvfr]

37 minutes ago, spidermike007 said:

Some time ago when I was living on Samui I had an issue with an air conditioner that I had just bought from Homepro. I went into Homepro asking for service and got no satisfaction at all. I asked for the manager which is something that I usually do, when I am not getting anywhere, and she had a terrible attitude and was very unhelpful.

 

I got her name, went home, looked up the head office in Bangkok, sent them a quick email explaining the situation calling her out by name and within an hour I got a phone call from a vice president telling me that everything would be addressed, and he said that I should go back into the store the following morning. When I did I got a deep bow from the manager, I'm so sorry I misunderstood yesterday. What can I do to make you happy? It was the exact response I wanted the first time around but that I got after she had been scolded by the VP, and likely her job had been threatened if her attitude didn't improve.

 

Sometimes we just have to escalate things to a more senior employer or manager in order to get things done here, sometimes the fools on the floor just don't know what service looks like.

 

My Thai wife was shocked when I first started doing this, as she tried to explain to me that they do not have customer service in Thailand. I explained to her that they sure do! Now she realizes that service does exist, can exist, and will exist if the right amount of will, force and action is brought to the table.

 

I did not reach out to a VP. I simply sent an articulate note to the email contact on the website. And, it was responded too quickly. Might have helped that I added that I was averaging 100,000 to 200,000 baht a year in Home Pro expenditures with my hilltop villa, at the time. A VP took it upon himself, called me that day, speaking perfect English, and asked me if I would be kind enough to visit the store again tomorrow. 

 

I suppose with any service anywhere, it comes down to the approach one uses, negotiating skill and fortitude. I do not let these things go. You can lay down and die, like a submissive sheep in this life, or you can defend your dignity and put up a fight. 

 

I usually choose the latter. Don't consider myself to be a dog or a doormat, and prefer not to let others that I do business with treat me like either. 

 

My Thai wife has been astonished a dozen times when things like this have come up, and she has seen me wage battle. She just shakes her head and says great job. I had no idea!

I have tried the email escalation tactic several times and I am batting a bout .500.  Had a lengthy exchange with the manager of a high end hotel in CNX this year.  She acknowledged that many of her employees were lacking.  She offered a half ass apology and asked me to come back for another visit.  I have never been back to this hotel.

[The Cyclist]

6 minutes ago, Dogmatix said:

whereas this new approach is unlikely to raise anything like that.

 

This new approach is not about raising revenues as such.

 

It is about being a member of the Big Boys Club known as the EOCD. If it was up to Thailand this new approach would not be getting adopted.

[TroubleandGrumpy]

4 hours ago, Robin said:

If the money you bring in ha s not been subject to any tax, i.e. is not taxable at the source, how does the DTA work?

For example, I bring in money from the sale of my house in UK, which has a capital gain, but exempt from UK tax as it is my 'principle dwelling'  Is that going to be subject to this Thai Tax?   That would destroy my retirement in Thailand plans, and probably for others as well

That is exactly the point - and only one of many scenarios that make the same point and the same question:

"Is that going to be subject to this Thai Tax" 

No one really knows - and the Thai RD is not saying anything (yet)..

[UKresonant]

6 hours ago, Robin said:

If the money you bring in ha s not been subject to any tax, i.e. is not taxable at the source, how does the DTA work?

For example, I bring in money from the sale of my house in UK, which has a capital gain, but exempt from UK tax as it is my 'principle dwelling'  Is that going to be subject to this Thai Tax?   That would destroy my retirement in Thailand plans, and probably for others as well

I still think the only sure way is to limit yourself to be non tax resident at that point <179days in that Calendar year. You could also set up savings accounts for any cash retained in the UK with the interest credited, to a different account, to keep the principle "clean" as savings from a year you are non Thai resident for tax, to send to Thailand later (provide they keep the remittance basis in future).

[RupertIII]

1 hour ago, Dogmatix said:

Re global income tax of Thai tax residents, the Prachachart Thurakit article said the RD wants to amend the Revenue Code to introduce this.  So this may be only a stop gap. Whichever way you look at it, Thailand has a fairly low tax take and will need to increase that to meet the growing expectations of welfare, given that GDP growth is expected to continue to underperform due to lack of competitiveness.  That probably means higher personal and corporate tax rates, higher VAT, higher inheritance and gift taxes with lower thresholds, as well as global income tax collection. 

Interesting.  The Prachachart Thurakit article refers solely to income (รายได้) as opposed to also capital gains. As Thailand has no CGT as such and taxes capital gains as income I would be interested in knowing if the RD's proposed amendment is purely in respect of global income or would also likely encompass global capital gains, e.g. equities, investment funds, etc. If so if that would be only in respect of realized gains or also unrealized?

Edited November 27, 2023 by RupertIII

[redwood1]

So let us see who is exempt (so Far)

 

 

About 80-90% of Thais that dont file taxes..

 

The very very very rich Thais you can be sure they will exempt themselves...

 

Anyone who stays less than 179 days.....They can import 100 million baht a year with no problem....

 

Anyone with a LTR visa with a strong possibility for the elite too..

 

Anyone who has money from before 2024

 

Anyone at least from the USA who lives off social security....This can not be taxed...

 

Any Country with a double taxation agreement at least for the no double tax part.....

 

Anyone who imports under a certain amount.... 

 

 

Edited November 27, 2023 by redwood1

[sirineou]

25 minutes ago, redwood1 said:

Anyone at least from the USA who lives off social security....This can not be taxed...

The way that I read it, it's Social Security. Private pensions and Annuity income can only be taxed in the US.  

[Mike Lister]

36 minutes ago, redwood1 said:

So let us see who is exempt (so Far)

 

 

About 80-90% of Thais that dont file taxes..

 

The very very very rich Thais you can be sure they will exempt themselves...

 

Anyone who stays less than 179 days.....They can import 100 million baht a year with no problem....

 

Anyone with a LTR visa with a strong possibility for the elite too..

 

Anyone who has money from before 2024

 

Anyone at least from the USA who lives off social security....This can not be taxed...

 

Any Country with a double taxation agreement at least for the no double tax part.....

 

Anyone who imports under a certain amount.... 

 

 

74% don't file tax returns.

[The Cyclist]

1 hour ago, redwood1 said:

So let us see who is exempt (so Far)

 

 

About 80-90% of Thais that dont file taxes..

 

The very very very rich Thais you can be sure they will exempt themselves...

 

Anyone who stays less than 179 days.....They can import 100 million baht a year with no problem....

 

Anyone with a LTR visa with a strong possibility for the elite too..

 

Anyone who has money from before 2024

 

Anyone at least from the USA who lives off social security....This can not be taxed...

 

Any Country with a double taxation agreement at least for the no double tax part.....

 

Anyone who imports under a certain amount.... 

 

 

 

It would have been easier and quicker to say who is going to get caught up in this.

 

* People who have been using loopholes to avoid paying taxes.

 

Done and dusted 

[TravelerEastWest]

4 hours ago, spidermike007 said:

 

For many of us expats we have a very good life here, I was referring to the quality of life of the average Thai person, which is very difficult right now, they're not living on a pension, they're trying to make ends meet. 

 

As far as immigration goes, I have to assume that you're not here on a marriage visa, because if you were you would know how ridiculously difficult the whole process is, and how many hurdles they put in your way. I abandoned the marriage visa and went with a retirement visa, because I just don't need the grief. 

 

Point number six was about the previous administration sabotaging tourism, and deliberately trying to destroy the nightlife. That was not an accident nor was that about covid, that was diabolical and intentional. 

 

Point number 8 was about a bunch of goons who consider themselves to be holier than thou, trying to clean up the country. There's no question that they're trying to get rid of "the industry", and there's no question that they're trying to get rid of nightlife, clean the place up and make it into a family destination. However, in the process they are sanitizing the place and they're getting rid of some of the flavor that we love so much. 

You are correct some Thai people are struggling to make ends meet but this is the same in many places including the US.

 

I have been here on a marriage visa until this month when I switched to a LTR 10 year visa. I had no problems with a marriage visa ever very easy. The first year I did it myself - after that I paid a small fee to a service that did my paperwork and got me an appointment.

 

 I love your Home Pro story! Sometimes I win like you did other times I lose... Recently we lost 3,000 baht with a discount airline  but its not worth it to pursue it further...

[ukrules]

4 hours ago, spidermike007 said:

Some time ago when I was living on Samui I had an issue with an air conditioner that I had just bought from Homepro.

Let me stop you there, you bought an Air Con from HomePro

 

Buy any AC units from a well known local AC service / repair man and you can't go wrong.

 

Edited November 27, 2023 by ukrules

[Dogmatix]

3 hours ago, The Cyclist said:

 

This new approach is not about raising revenues as such.

 

It is about being a member of the Big Boys Club known as the EOCD. If it was up to Thailand this new approach would not be getting adopted.

 

That is the excuse or an exaggeration given by the RD but not very convincing. I think the real pressure was to join the CRS reporting which they have just done 5 years after other major players in the region. HK and Singapore have been under pressure from the EU to prevent double non-taxation of multinationals receiving passive income such as from sales of shares.  That seems aimed at multinationals that structure things so that untaxed foreign sourced gains go into a HK or Singapore subsidiary.  Singapore has actually just introduced legislation to tax this on a remittance basis with certain exemptions and HK is likely to soon. The idea is probably to discourage these structures, so EU multinationals will pay tax on the income at home. But there is no obvious pressure from OECD on HK and Singapore to introduce tax on foreign source income for individuals.  No particular reason for them to care about it, since individuals cannot easily shift notional tax residencies of certain pools of income around like multinationals. As long as they get the CRS information on their own tax residents, I don't think there will much pressure from OECD on Thailand to tax its own tax residents' foreign source income. 

 

Srettha said it was about equality but I expect that was an opportunistic rebranding by him after the RD informed him they were doing it, while the RD's reason was mainly that they thought they may as well put the information they will receive from CRS to some useful purpose and see how much incremental tax it brings in. 

[K2938]

10 hours ago, Misty said:

I hope you are right. It isn't clear how this will work in practice.  For example, if you bring the income to Thailand and then need to file a Thai tax return to claim the foreign (UAE) tax credit against any Thai tax due, you might find you only get a foreign tax credit of 0%.  So you'd still owe Thai tax.

Moreover, if you are paying yourself a fictitious salary via a UAE company while permanently living in Thailand, then this fictitious salary will most likely be considered to be Thai income anyway, regardless of where it is paid.  People got away with this in the past due to lack of reporting.  But these times are probably over.  So this is unlikely to work for many reasons.

[K2938]

10 hours ago, spidermike007 said:

10 hours ago, Mike Lister said:

So where will you spend the majority of the year?

 

Here, as I have for a long time now. However, I have never been a tax resident. And I do not plan on becoming one.

How are you NOT a Thai tax resident if you do spend the majority of the year and thereby more than 179 days p.a. in Thailand?

Edited November 27, 2023 by K2938

[Morch]

2 minutes ago, K2938 said:

How are you NOT a Thai tax resident if you do spend the majority of the year and thereby more than 179 days p.a. in Thailand?

 

Maybe like 150 days here, 100 there, and 115 somewhere else.

[stat]

12 hours ago, spidermike007 said:

Anyone who is wealthy or even affluent, would have little interest in retiring here. So, it is mostly about affordability. And I agree with that. It is reasonable here. Most of us live well, on a relatively modest income or pension. I plan to stay. But, a good part of this decision is financial, and ties to my Thai wife and family. If I were wealthy, my time here might be limited to a few months per year. 

There are at least a dozen good reasons why someone without our financial limitations would NOT pick Thailand. Do they need to be repeated? We all know what they are. And these are part of the reasons why there is a mass exodus of expats leaving Thailand over the past few years. No question the number of expats here is dropping.

 

I used to have more issues than I do now. I worked on my attitude, which was getting in the way of appreciating Thailand for what it is, and was clouding my experience here. Used to stress over stupid stuff, as you can see from some of my past posts. Used to allow the politics to make me angry. Now it is not something I take seriously, just something I comment on, without anger or an emotional investment. Now, I just tend to laugh it off. Spent some real time back in the US recently, and it allowed some clarity and perspective, that I am very grateful for. Now, I just chuckle at most of the nonsense. Water off a duck's back, so to speak.

 

Woe is Thailand. Where is the hope for the future? Just a few issues that an ex-pat would consider.


1. Overall, a declining quality of life.

2. An oppressive government that was not sincere about letting go of power. Ever.

3. High prices on most import goods and wine. Crappy selection of beer.

4. Rampant xenophobic on the part of the government goons and immigration.

5. A nation in reverse. No hope for a better future here.

6. Extreme timidity and destruction of the economy, many lives and businesses. Please, don't blame Covid. That was only one element.

7. Little in the way of good education available for kids.

8. The sanitization of Thai society, the elimination of anything that resembles character, and the tired, insincere, increasingly fake purity campaigns.

9. The continued environmental destruction and worsening air quality, coupled with no intent of effort to fix anything.

10. The worsening dependence on China. Will Thailand eventually be a communist colony?

 

11. The dinosaur creeps are moving this nation backwards at a breakneck pace. Truly regressive reptilian leadership.

With all due respect I have to disagree. Up to now you paid zero tax on your capital gains and you can rent a nice villa for 1000 to 3000USD. That is a decent value proposition for a lot of rich expats (besides the US guys who still have to pay tax to Uncle Sam). A lot of people live in Monaco just for the privelege of not paying income tax on their cap gains. You tend not to see the "rich" guys in TH because they prefer not to be seen and if you see them you would not think they are rich (aside from some expats).

Edited November 27, 2023 by stat

[Metapod]

holding out hope Thai Elite gets some special rules

[huyuli]

If I didn't transfer any money into Thailand but made monthly withdrawals at the ATM with a foreign debit card, would I be able to avoid local taxes? Thanks for your input.

[Metapod]

15 minutes ago, huyuli said:

If I didn't transfer any money into Thailand but made monthly withdrawals at the ATM with a foreign debit card, would I be able to avoid local taxes? Thanks for your input.

 

If you stay more than 180 days a year, no.

 

You will be required to fill a yax return and pay tax on any money remitted per the DTA agreements with any other tax jurisdiction you also fall under

[UKresonant]

54 minutes ago, huyuli said:

If I didn't transfer any money into Thailand but made monthly withdrawals at the ATM with a foreign debit card, would I be able to avoid local taxes? Thanks for your input.

"any money" can't explain what you are living on? ( if your there most of the time) Think you would at least want to transfer a plausible amount?

Edited November 27, 2023 by UKresonant

[Mike Lister]

5 minutes ago, UKresonant said:

"any money" can't explain what you are living on? ( if your there most of the time) Think you would at least want to transfer a plausible amount?

Indeed, otherwise somebody will suspect you are working here illegally.

[Mike Lister]

43 minutes ago, Metapod said:

 

If you stay more than 180 days a year, no.

 

You will be required to fill a yax return and pay tax on any money remitted per the DTA agreements with any other tax jurisdiction you also fall under

Er, yes and no. You are only required to file a tax return if you have assessable income of more than 60,000 baht per year(I think it is) and a transfer in itself is not necessarily assessable income. It's entirely possible that a person makes transfers of several hundred thousand baht which are adjudged to not be assessable and that they don't file a tax return as a result. All of that is legal and above board, the judgement is in the hands of the individual. BUT, if the RD checks later, for whatever reason, the income will need to be proven to not be assessable. There have been years when I have filed a return and yohers when I haven;t but the RD has never asked me why I haven't.

[jerrymahoney]

9 hours ago, sirineou said:

The way that I read it, it's Social Security. Private pensions and Annuity income can only be taxed in the US.  

[jerrymahoney]

15 hours ago, spidermike007 said:

I think the headline says it all. Are you a tax resident? I am not. And do not think I will become one.

So where are you going to live the other 180+ days per year ex-Thailand?

[The Cyclist]

11 hours ago, Dogmatix said:

That is the excuse or an exaggeration given by the RD but not very convincing. I think the real pressure was to join the CRS

 

An excuse or exaggeration ? You really think so ?
 

Quote

The Common Reporting Standard (CRS), developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. 

 

You can read more here

 

https://www.oecd.org/tax/automatic-exchange/common-reporting-standard/standard-for-automatic-exchange-of-financial-account-information-in-tax-matters-second-edition-9789264267992-en.htm

 

https://www.oecd.org/tax/international-standards-for-automatic-exchange-of-information-in-tax-matters-896d79d1-en.htm

 

https://www.oecd.org/tax/exchange-of-tax-information/oecd-releases-international-exchange-framework-for-crs-related-mandatory-disclosure-rules-updates-xml-schemas-for-exchange-of-crs-cbc-and-tax-ruling-information.htm

 

CRS and OECD go hand in hand. No excuses by the Thai Government 

or the Thai RD. If Thailand wants to play in the Big Boys Playground, it has to adopt the BIg Boys rules.

 

[Metapod]

fewer and fewer places in the world where you can escape the globalists. 

[spidermike007]

18 hours ago, sqwakvfr said:

I have tried the email escalation tactic several times and I am batting a bout .500.  Had a lengthy exchange with the manager of a high end hotel in CNX this year.  She acknowledged that many of her employees were lacking.  She offered a half ass apology and asked me to come back for another visit.  I have never been back to this hotel.

 

I agree that it would tend to be hit and miss with a hotel. They know that there's a good chance that you'll never be back, so there's a limited amount of motivation for them to go out of their way. With the company like home Pro, or a big box retailer, they know that you're likely to come back, especially if you're spending a lot of money like I was doing for a villa that I had on Samui. So it's definitely a circumstantial kind of thing, but there is good service to be had if you really push for it, and you step up the chain of authority. 

[Misty]

12 hours ago, K2938 said:

Moreover, if you are paying yourself a fictitious salary via a UAE company while permanently living in Thailand, then this fictitious salary will most likely be considered to be Thai income anyway, regardless of where it is paid.  People got away with this in the past due to lack of reporting.  But these times are probably over.  So this is unlikely to work for many reasons.

 

Agreed.  And if you establish it was a "real" salary for work you are doing - if you were physically in Thailand doing the work, then it is Thai source income, not foreign source income. In that case, all of your salary is taxable in Thailand - whether or not you ever remit it.

[Dogmatix]

3 hours ago, The Cyclist said:

 

An excuse or exaggeration ? You really think so ?
 

 

You can read more here

 

https://www.oecd.org/tax/automatic-exchange/common-reporting-standard/standard-for-automatic-exchange-of-financial-account-information-in-tax-matters-second-edition-9789264267992-en.htm

 

https://www.oecd.org/tax/international-standards-for-automatic-exchange-of-information-in-tax-matters-896d79d1-en.htm

 

https://www.oecd.org/tax/exchange-of-tax-information/oecd-releases-international-exchange-framework-for-crs-related-mandatory-disclosure-rules-updates-xml-schemas-for-exchange-of-crs-cbc-and-tax-ruling-information.htm

 

CRS and OECD go hand in hand. No excuses by the Thai Government 

or the Thai RD. If Thailand wants to play in the Big Boys Playground, it has to adopt the BIg Boys rules.

 

 

I can see the advantage to Thailand of joining in CRS reporting.  Countries that don't will get shunned and even Switzerland had to join after years of resistance, while former tax havens like the British Virgin Islands now provide information such as beneficial owners and directors of companies (and from 2024 unaudited accounts) to foreign tax authorities on request.  But what advantage will Thailand get from OECD by taxing foreign source personal income on remittance? What disadvantages do Singapore and HK get from joining CRS but continuing their policies not to tax individuals' foreign source income?