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

[quake]

1 hour ago, Mike Lister said:

This thread may have been helpful at one point, if only to raise awareness and provide links. But as time has dragged on, this and other threads like it have degraded into waffle, navel gazing and what if's with some posters attempting to occupy the intellectual high ground and others becoming overnight experts! So if people are going to start ignoring each others posts, this can only be a good thing so the thread can die in peace. 

 

I have attempted to distill matters into a simple and practical test, in the form of four questions, which most people wish to not answer and also wish to avoid entirely..... that in itself is very telling. Nevertheless, time will tell as more aspects become clear and posters angst settles down, in a few months most people will wonder what all the fuss was about, some reached that point months earlier!

 

RiP thread.

 

No surprise. at all.

 

 

[MistyBlue]

1 hour ago, TravelerEastWest said:

 

The way you say my experience and views "doesnt count for anything here" you have gone from opinionated which is good and welcome - to rude

Sadly there is a point where continued discussion with this poster becomes futile, especially when the replies become rude.

 

I think that any reasonable person will see that your contributions have been worthwhile to read.

 

I think it's good that posters can discuss this topic, debate with respect and share information as the situation unfolds.

 

I will be continuing to take part in this topic and will discuss various claims and views made whenever I think I have something to contribute.

[The Cyclist]

13 minutes ago, TroubleandGrumpy said:

Liar liar pants on fire

 

Are you not very robust mentally ?

 

https://www.rsm.global/thailand/insights/new-change-and-effects-thailand-personal-income-tax

 

Read, digest and comprehend, although I have already posted the relevant parts just a few posts up.

 

But because you are very busy pavking and trying to find shipping Companies, I will help you out.

 

This is the good part.

 

Quote

 Generally, if you have paid income tax in another country that has signed a DTA with Thailand before bringing such income into Thailand in the same tax year that the income has been recognized, the tax paid in the other country can be used as a credit against Thai tax, subject to conditions set in each DTA

 

This is thenot so good part, especially for those that thought they would be able to buck the systemby claiming earnings as savings

 

Quote

It is noted that this credit relief may not be applied if you bring the income into Thailand in a different tax year from the year that the income has been recognized, in other words, you may have to pay tax in both countries. 

 

Think you might need to speed up the packing and batter shipping Companies for the best deal.

[jayboy]

15 minutes ago, The Cyclist said:

https://www.rsm.global/thailand/insights/new-change-and-effects-thailand-personal-income-tax

 

Thanks for posting this again which I had missed - very useful.It should be noted however that this RSM advice was issued before the Revenue Department issued the instruction on November 20th that Paw.161/2566 does not apply to foreign sourced income earned by Thai tax residents before 1 January 2024.

[stat]

7 hours ago, Mike Teavee said:

Whilst the original article posted in the Thaiger (and other places) stated people from countries that have a DTA with Thailand will be exempt, the original statement from the Revenue Department quoted in the article makes no mention of this. 

 

Revenue Department orders No. P.162/2023
Subject: Payment of income tax under Section 41, paragraph two of the Revenue Code.

For the revenue officers to consider as a practice guideline for inspecting and giving advice to those residing in Thailand. which has assessable income according to Section 40 of the Revenue Code In the past tax year Due to work duties or business conducted abroad or because of assets located abroad according to Section 41, paragraph two, of the Revenue Code The Revenue Department has ordered the following:

1. Clause 1: Persons who are residing in Thailand according to Section 41, paragraph three, of the Revenue Code. who have assessable income due to work duties or activities conducted abroad or because of property located in a foreign country according to Section 41, paragraph two of the Revenue Code In the said tax year and brought the assessable income Entering Thailand in any tax year That person has a duty to include that assessable income in the calculation. To pay income tax according to Section 48 of the Revenue Code In the tax year in which the assessable income was brought into Thailand
2. Article 2: All rules, regulations, orders, letters responding to consultations. or any practice that is contrary to or inconsistent with This order shall be cancelled
3. Article 3 This Order shall come into effect for assessable income imported into Thailand from 1 January 2024 onwards.

Ordered on 22 September 2023
(Mr. Lawan Saengsanit) Director-General of the Revenue Department

 

Edit: Playing Devils Advocate you could argue that Article 2 could include the cancellation of DTAs, I don't know about other countries but Thailand simply has to give the UK 6 months notice if it wanted to cancel the TH&UK DTA.

 

 

DTA's usually last decades. For example German Thai DTA is from the sixties. DTAs rarely get cancelled or changed.

[TravelerEastWest]

8 hours ago, 4MyEgo said:

 

Which means it's a dead duck, cabinet has to approve it, and until cabinet approves it, it's just another dead duck, lots of dead ducks in Thailand.

 

Just get on enjoying your time here, tax free, until you see a duck cross your path, simple really.

Great post! You are a wise man with a sense of humor...

[The Cyclist]

2 hours ago, jayboy said:

 

Thanks for posting this again which I had missed - very useful.It should be noted however that this RSM advice was issued before the Revenue Department issued the instruction on November 20th that Paw.161/2566 does not apply to foreign sourced income earned by Thai tax residents before 1 January 2024.

 

Sure.

 

I supplied the ' The bad news part ' for the benefit of certain posters who were asking questions about doing funny things with income / savings as a back door method of avoiding taxation.

 

I'm a do what you like kinda guy, but the same posters will no doubt cry loudly if / when they get caught and have to set up a gofundme page to try and bail them out.

 

Not sure what the tax avoidance / evasion penalties are in Thailand, but I have no intention of putting myself in a position where I might find out 

[4MyEgo]

13 hours ago, TroubleandGrumpy said:

Could be mate - here's hoping - but IMO it would be wise to plan as well (just in case). 

I am reminded of this quote from Ernst & Young about the Pillar 2 minimum tax change announced by the Thai Govt in March 2023, with plan being to draft the Legislation in 2023 and implement the change in 2025.

Even though the legislation is not yet enacted, in-scope MNEs should begin assessing its potential impacts from the implementation of global minimum tax rules and be ready for the anticipated law changes.   Thailand plans to implement global minimum tax rules under OECD BEPS 2.0 Pillar Two | EY - Global

 

If as you say this income tax change of methodology does require Cabinet approval, I hope like us all that they do not approve it.  If they do, I hope that they will wait a few years before applying tha change (like the above new tax change) - and I hope they direct Thai RD to provide detailed clarifications. 

 

Nothing to do with the average Joe mate. Carry on as usual until you see a duck cross your path, all I see and have been seeing is dead ducks.

 

Like I said before and posted a link to the Double Tax Agreement (DTA) that Australia has with Thailand, it was agreed that Ozzie Citizens who paid tax in Oz, won't pay tax in Thailand, visa versa, so we are covered, that said, depending on how your structured, e.g. bank account in Oz, withholding tax paid, so you won't be taxed, share portfolio, dividends and sales of shares (Dividends fully franked, already taxed) so no tax to be paid in Thailand, sale of shares are not subject to capital gains tax in Australia if you are a non resident, so the sale of those shares go into your bank account and you don't remit it here.

[TroubleandGrumpy]

32 minutes ago, 4MyEgo said:

Nothing to do with the average Joe mate. Carry on as usual until you see a duck cross your path, all I see and have been seeing is dead ducks.

 

Like I said before and posted a link to the Double Tax Agreement (DTA) that Australia has with Thailand, it was agreed that Ozzie Citizens who paid tax in Oz, won't pay tax in Thailand, visa versa, so we are covered, that said, depending on how your structured, e.g. bank account in Oz, withholding tax paid, so you won't be taxed, share portfolio, dividends and sales of shares (Dividends fully franked, already taxed) so no tax to be paid in Thailand, sale of shares are not subject to capital gains tax in Australia if you are a non resident, so the sale of those shares go into your bank account and you don't remit it here.

You carry on as usual - that is up to you.  I will plan ahead just in case - and IDTAs dont work that easily.

[Celsius]

42 minutes ago, 4MyEgo said:

 

Nothing to do with the average Joe mate. Carry on as usual until you see a duck cross your path, all I see and have been seeing is dead ducks.

 

Like I said before and posted a link to the Double Tax Agreement (DTA) that Australia has with Thailand, it was agreed that Ozzie Citizens who paid tax in Oz, won't pay tax in Thailand, visa versa, so we are covered, that said, depending on how your structured, e.g. bank account in Oz, withholding tax paid, so you won't be taxed, share portfolio, dividends and sales of shares (Dividends fully franked, already taxed) so no tax to be paid in Thailand, sale of shares are not subject to capital gains tax in Australia if you are a non resident, so the sale of those shares go into your bank account and you don't remit it here.

 

555 you are covered.

 

 

[Mike Lister]

Finally, something actually useful, practical and helpful, sadly not a product of this thread!

 

 

[Mike Teavee]

15 hours ago, The Cyclist said:

This is the not so good part, especially for those that thought they would be able to buck the system by claiming earnings as savings

 

Quote

It is noted that this credit relief may not be applied if you bring the income into Thailand in a different tax year from the year that the income has been recognized, in other words, you may have to pay tax in both countries. 

 

 

This would be a huge consideration as basically it would mean that instead of leaving it until the next Fiscal/Calendar year to bring (already taxed) income across, you would now have to bring it over in the same Fiscal/Calendar year as it was earned or you would be liable for tax on it again, even though you've already paid tax on it a previous year!

 

 

 

 

 

[beammeup]

This started out to be a small issue seems to be growing arms and legs.

[The Cyclist]

2 hours ago, Mike Teavee said:

 

This would be a huge consideration as basically it would mean that instead of leaving it until the next Fiscal/Calendar year to bring (already taxed) income across, you would now have to bring it over in the same Fiscal/Calendar year as it was earned or you would be liable for tax on it again, even though you've already paid tax on it a previous year!

 

 

 

 

 

 

How problematic it potentially could be remains to be seen.

 

It certainly cuts the legs of people, some of them on this thread who have been asking about remitting income as savings.

 

Ahhhh but Mr RD man, this is savings from 1995.

 

Is it really ? Then produce the paperwork proving that it has been taxed and we will refund the tax that you pay now.

 

All potential of course, not an avenue that I intend going down and chancing my arm.

[Dogmatix]

18 hours ago, TroubleandGrumpy said:

Could be mate - here's hoping - but IMO it would be wise to plan as well (just in case). 

I am reminded of this quote from Ernst & Young about the Pillar 2 minimum tax change announced by the Thai Govt in March 2023, with plan being to draft the Legislation in 2023 and implement the change in 2025.

Even though the legislation is not yet enacted, in-scope MNEs should begin assessing its potential impacts from the implementation of global minimum tax rules and be ready for the anticipated law changes.   Thailand plans to implement global minimum tax rules under OECD BEPS 2.0 Pillar Two | EY - Global

 

If as you say this income tax change of methodology does require Cabinet approval, I hope like us all that they do not approve it.  If they do, I hope that they will wait a few years before applying tha change (like the above new tax change) - and I hope they direct Thai RD to provide detailed clarifications. 

 

I am not if I missed something but my understanding is that the OECD's global minimum tax is 15% vs the Thai corporate income tax rate of 20%.  So no big problem to Thailand, except for BOI privileges that often complete corporate income tax exemption for a few years for a new project. This has been under fire for a few years but seems unfair, as the tax exemption only applies short term to start up investments in Thailand and only the the products and services generated in the business.  It can't be used for transfer pricing to avoid tax somewhere else.  The BOI doesn't have anything else substantial to offer start ups.  Since Thailand is too weak to stand up to this interference in its sovereignty from the rich OECD countries, I guess the day of the BOI being able to attract foreign investment are numbered, even though Thailand desperately needs it.  Help with work permits and stuff and temporary land ownership is not enough to compensate for loss of tax privileges. 

 

Anyway this doesn't seem to have anything to do with the topic, except to show how Thailand fails to stand up to OECD.

[The Cyclist]

1 hour ago, beammeup said:

This started out to be a small issue seems to be growing arms and legs.

 

You forgot the gathering black clouds of doom & gloom that are poised to unleash fire & brimstone on unsuspecting expats 

[Dogmatix]

I took a break from this thread for a few days to regain my sanity.  Now as the year is drawing to a close I am thinking of liquidating some long held shares overseas.  The question is does it seem likely that the RD would accept evidence of capital gains realised in 2023 as 'seasoned' income that can be remitted tax free any time in the future, regardless of what happened to the proceeds after that?

[Mike Teavee]

1 hour ago, The Cyclist said:

 

How problematic it potentially could be remains to be seen.

 

It certainly cuts the legs of people, some of them on this thread who have been asking about remitting income as savings.

 

Ahhhh but Mr RD man, this is savings from 1995.

 

Is it really ? Then produce the paperwork proving that it has been taxed and we will refund the tax that you pay now.

 

All potential of course, not an avenue that I intend going down and chancing my arm.

 

It seems anything you have (Income or not) before 2024 will be treated as savings but going forward they seem to be saying that if you had a 100K pension & only brought 50K over for the 2 years 2024 & 2025 and then brought over the 1.2Million you'd saved in 2026, then this would be taxed (approx. 200K)!

 

   

[tomkenet]

1 hour ago, Dogmatix said:

I took a break from this thread for a few days to regain my sanity.  Now as the year is drawing to a close I am thinking of liquidating some long held shares overseas.  The question is does it seem likely that the RD would accept evidence of capital gains realised in 2023 as 'seasoned' income that can be remitted tax free any time in the future, regardless of what happened to the proceeds after that?

I would keep those money on separate accounts only used for remittance to Thailand, trackable back to before 2024. No new deposits to these accounts except interests, which might be taxable.  

If and when Thailand introduces worldwide taxation in the future, new strategies must be obtained.

[tomkenet]

7 minutes ago, Mike Teavee said:

It seems anything you have (Income or not) before 2024 will be treated as savings

NOT if you have unrealized, potential  capital gains .

If realized after 2023, they will be taxed if remitted. That's why it's recommended to realize them before 2024

Edited December 6, 2023 by tomkenet

[The Cyclist]

6 minutes ago, Mike Teavee said:

 

It seems anything you have (Income or not) before 2024 will be treated as savings but going forward they seem to be saying that if you had a 100K pension & only brought 50K over for the 2 years 2024 & 2025 and then brought over the 1.2Million you'd saved in 2026, then this would be taxed (approx. 200K)!

 

   

 

At this stage, I am not really sure what they are saying, implying or what is set in stone.

 

I will remit income, that has been taxed in the UK, and is also covered by a DTA, until such times as something is set in stone ( With the requisite paperwork )

 

I am a big advocate of not poking hornets nests and that way you are unlikely to be stung ( in this case for tax in Thailand )

 

Play silly games and you are likely to win silly prizes.

[Mike Lister]

10 minutes ago, tomkenet said:

I would keep those money on separate accounts only used for remittance to Thailand, trackable back to before 2024. No new deposits to these accounts except interests, which might be taxable.  

If and when Thailand introduces worldwide taxation in the future, new strategies must be obtained.

They already have, what do you think the new tax law means.

[tomkenet]

3 minutes ago, Mike Lister said:

They already have, what do you think the new tax law means.

So far it is only the remittance of income to Thailand that is taxed.

[Mike Lister]

Just now, tomkenet said:

So far it is only the remittance of income to Thailand that is taxed.

So presumably what you mean to say is worldwide income in the year it was earned rather than world wide income, when it is remitted.

[Morch]

Would be a shame if they were to shelve the thing after all them posts made. But kinda funny too.

I like funny.

[tomkenet]

6 minutes ago, Mike Lister said:

So presumably what you mean to say is worldwide income in the year it was earned rather than world wide income, when it is remitted.

Yes, and presumably this obvious for most people.

[Mike Lister]

1 minute ago, tomkenet said:

Yes, and presumably this obvious for most people.

Worldwide income does not mean a specific timeframe, you were referring to time, not geography.

[jaywalker2]

New video up with a thai lawyer who specializes in thai tax law for foreigners.  If he's right and the law isn't amended, this could be a killer for a lot of people.

 

 

[The Cyclist]

1 hour ago, jaywalker2 said:

New video up with a thai lawyer who specializes in thai tax law for foreigners.  If he's right and the law isn't amended, this could be a killer for a lot of people.

 

 

 

I don't think I learned anything new from the video

 

I did post this a few hours ago 

 

Quote

Ahhhh but Mr RD man, this is savings from 1995.

 

Is it really ? Then produce the paperwork proving that it has been taxed and we will refund the tax that you pay now.

 

For some, that big black cloud has grown to Armageddon size.

[kuma]

On 12/5/2023 at 9:53 AM, TroubleandGrumpy said:

These are some quesations that I would like answered by Thai RD.  This is based upon an Expat that stays 180+ days, and does not earn any money in Thailand, and remits money into Thailand from overseas.   Anyone know how to ask them?

 

Does a long term Expat have to lodge an annual tax return from 2024 tax year onwards, in order to 'prove' that the money they have remitted into Thailand in that year, is not taxable or is exempt under an existing DTA ?

 

Can an Expat 'decide' that they do not have to lodge a return from 2024 tax year onwards, because they believe that the money they have remitted into Thailand in that year is not taxable or is exempt under an existing DTA ?

 

Can an Expat 'decide' that they do not have to lodge a return from 2024 tax year onwards, because they have calculated that some/all of the money they have remitted into Thailand in that year is 'taxable income', but it is below the Thai tax free threshold (with or without Allowances and Deductions) and therefore payment of income taxes is not required ?

 

Will/Does the Thai RD provide an English speaking (plus maybe Japanese, Korean, Chinese etc) call centre or service, whereby Expats as detailed above, can call and seek advice regarding their obligations to lodge income tax returns.  

My position is and has been clear from the start  - this is a very serious matter and discussing it and expressing opinions is not 'fear mongering'. If some people only erver want to hear good news and are wearing rose coloured glasses, then they should just stay away.  This new income tax rule means that unless Thai RD answers those questions above positively in our favour, then all Expats are going to be 'expected' to complete annual tax returns and pay income taxes if the Thai RD deems that applicable.  BUT - that has not been confirmed or denied by Thai RD - they are not answering our questions. 

I have tried contacting them in a few provinces to get some more details, but response has been scant. We found some online content where people were discussing the implications, I will post it if I can get the link again (in Thai) but it also left many questions unanswered. It is a significant topic and the rollout is lacking - so hopefully there will be some more time added to the clock to get things better sorted.

But this has got me off my butt and made a visit to Cambodia, next up is Laos then Vietnam...they are spots I used to visit more frequently and its about time I did again any way. Siem Reap has certainly changed in the past 13 years. Perhaps one of them have a similar program and there can find out how it works in those jurisdictions, among other things.