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

[kuma]

10 hours 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.

I wonder if the actual legislation will also exempy cap gains taxes...ie are they trying to replicate (as much as possible) the tax regimes of countries they sign DTA with? Or are they looking for pools of income that they can tax - claiming that since your country does not tax you , we will? If there is to be an increase in tax like ths, there has to be additional services/privileges offered to long term residents, not just here pay more, everything else is static...imo

[beammeup]

So I guess the thing to do would be to sell your offshore assets and remit to Thailand on a year you you are not a resident. Kind of inconvenient!

[Ben Zioner]

Void

[metisdead]

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[Ben Zioner]

4 hours 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.

 

 

Wrong from the onset, only income earned after Jan 1, 2024 will be taxable

[stat]

8 hours ago, Dogmatix said:

 

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.

Minimum tax. At the end of 2021, the OECD countries agreed to subject companies with a consolidated group turnover of 750 million euros or more to an internationally applicable minimum tax. So no problem with 0% tax for startups

[MistyBlue]

5 hours 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.

 

 

 

Thanks for posting this.

 

I was astounded to hear it mentioned that income/gains/profits earned before becoming a tax resident potentially *could* be taxed when remitted later as a tax resident, based on the technicality and grey areas of the current laws and orders.

 

I can't see that actually happening due to the massive implications that would entail, but... the lack of clarity is killing.  Let's hope something clearer materialises in the not too distant future.

[Dogmatix]

On 12/5/2023 at 12:18 PM, 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.

 

 

 

You could argue that position because there is a RD ruling that held that employees of a Thai company but temporarily assigned to the Philippines could claim a tax credit for tax withheld in the Philippines. Otherwise there is nothing in the RC or rules or regulations that says that DTAs need to be taken into account in respect of personal income tax. On the other hand international treaties take precedence over statutory law which the director general of the RD doesn't have the authority to amend through P orders anyway. 

[Krit]

5 hours 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.

 

 

 

This informative video has been posted today, but when was it filmed? Order Paw. 162 issued by the Revenue Department on November 20 has already made most of this information obsolete by exempting foreign-sourced income earned before 1.1.2024.

[UKresonant]

59 minutes ago, Krit said:

 

This informative video has been posted today, but when was it filmed? Order Paw. 162 issued by the Revenue Department on November 20 has already made most of this information obsolete by exempting foreign-sourced income earned before 1.1.2024.

 

Even with that amendment it may be problematic anticipating which documentation they will accept to prove the previous taxation happened on funds from previous years, we could store all the pay advice / pay slips, showing tax deducted, but will they dream of some other document that is impossible to produce and tax you anyway? No confidence.

 

That would perhaps leave it  in a position of only remitting the same in (Thai) tax year UK pensions received and then remitted, being already taxed in the UK to get credit relief on the Thai Taxation, if over 179 days that particular year.

 

Then is it practical to put the return into Thai RD if then not in Thailand when it is due., Apparently they don't even currently have a form to list the taxation in respect to credit relief (as noted by  UK HMRC).

 

I think if they would only bring out a 10 year multi entry visitor visa, up to 180 days per visit, then the wife could be in the UK 180 days (<183) and I could be in Thailand up to 179 days . Just as likely as the lottery coming up I suppose, which is another solution, as I'm only tight with money I've earned 

[tomacht8]

A friend now has the following idea:

His daughter is studying in Europe and will definitely be in Thailand less than 180 days per year. The daughter has two passports (Thai/Europe), her primary residence for her studies is in Europe. His daughter has her own online bank accounts in Europe and Thailand. My friend deposits his money in Europe into his daughter's European account. The daughter then transfers the money from her European account to her Thai account. After his daughter transfers then the money from her Thai account to the father's Thai account. My friend's idea sounds logical or is he missing something?

[tomkenet]

1 hour ago, tomacht8 said:

A friend now has the following idea:

His daughter is studying in Europe and will definitely be in Thailand less than 180 days per year. The daughter has two passports (Thai/Europe), her primary residence for her studies is in Europe. His daughter has her own online bank accounts in Europe and Thailand. My friend deposits his money in Europe into his daughter's European account. The daughter then transfers the money from her European account to her Thai account. After his daughter transfers then the money from her Thai account to the father's Thai account. My friend's idea sounds logical or is he missing something?

Illegal tax evasion but difficult to discover.

RD might question his livelihood, does he work illegally in Thailand 

[Mike Teavee]

15 hours ago, kuma said:

If there is to be an increase in tax like ths, there has to be additional services/privileges offered to long term residents, not just here pay more, everything else is static...imo

<Rant On>

 

Why does there need to be additional services & privileges? 

 

Does your home country offer these to non-citizens/permanent residents just because they pay taxes, I know mine (UK) doesn't....

 

Sh!t I pay Tax (& Voluntary National Insurance contributions) & I don't even get free health care, instead I get to pay 1.5X what anybody who's not British would pay... And people talk about Thailand's dual pricing! at least they look after their own. 

 

<Rant Off>

 

[Mike Teavee]

12 hours ago, MistyBlue said:

I was astounded to hear it mentioned that income/gains/profits earned before becoming a tax resident potentially *could* be taxed when remitted later as a tax resident, based on the technicality and grey areas of the current laws and orders.

 

Thailand has no claim to anything you've earned in any year you are not Thai Tax Resident... BUT you might have to prove that you you weren't Tax Resident when you earned that income.

 

 

 

[Yumthai]

33 minutes ago, tomkenet said:

Illegal tax evasion but difficult to discover.

RD might question his livelihood, does he work illegally in Thailand 

Gift received by an ascendant, descendant or a spouse is subject to a tax on the amount of the gift received in excess of 20M THB in a tax calendar year (giftee is tax resident in Thailand and liable of the gift tax if any).

 

A daughter financially supporting her father is not illegal, but gift may be subject to rules depending on gifter tax residence.

[Mike Teavee]

12 hours ago, Dogmatix said:

 

You could argue that position because there is a RD ruling that held that employees of a Thai company but temporarily assigned to the Philippines could claim a tax credit for tax withheld in the Philippines. Otherwise there is nothing in the RC or rules or regulations that says that DTAs need to be taken into account in respect of personal income tax. On the other hand international treaties take precedence over statutory law which the director general of the RD doesn't have the authority to amend through P orders anyway. 

 

I think you're wrong on this point...  A country's "Statutory Law" is what counts, if that breaks an International Treaty then so be it, but no country is going to allow another country to dictate what it can & can't do.

 

[Yumthai]

36 minutes ago, Mike Teavee said:

Thailand has no claim to anything you've earned in any year you are not Thai Tax Resident... BUT you might have to prove that you you weren't Tax Resident when you earned that income.

The year(s) you are not tax resident in Thailand, you don't (have to) file any tax return (unless you have Thai source assessable income), so nothing to prove because you declare nothing.

[Mike Teavee]

5 minutes ago, Yumthai said:

Gift received by an ascendant, descendant or a spouse is subject to a tax on the amount of the gift received in excess of 20M THB in a tax calendar year (giftee is tax resident in Thailand and liable of the gift tax if any).

 

A daughter financially supporting her father is not illegal, but gift may be subject to rules depending on gifter tax residence.

No Tax up to 20Million and then 5% tax after that... 

 

[Ben Zioner]

43 minutes ago, tomkenet said:

RD might question his livelihood, does he work illegally in Thailand 

This is why, people here shouldn't  think about evading tax altogether but only to minimise it in a sensible way.  For  instance my apparent lifestyle: wife, two kids, house, two cars, no swimming pool, can easily fit into a 2 million lifestyle, so that's I would show. I'd pay no  more than 10% of  my real income, which is twice that amount. Holidays, dining out, wine,  etc won't be paid from my Thai bank accounts anymore. Holidays will be mostly out of Thailand anyway, hence enabling cash imports...

 

Paying 5 weeks of earnings in income tax sounds about right to me.  But as long as  the LTR exemption stands I am  not going to volunteer.

[Mike Teavee]

Just now, Yumthai said:

The year(s) you are not tax resident in Thailand, you don't (have to) file any tax return (unless you have Thai source assessable income), so nothing to prove because you declare nothing.

Exactly...

 

But the post I replied to does have a very valid point... Let's say I'm normally Tax Resident in Thailand & in 2024 take a lot of holiday's so I end up spending only 150 days here, so whilst anything I earn (& remit) that year is not taxable, the onus is on me to prove that's the case when if I were to remit any earnings from 2024 in a later tax year. 

[Yumthai]

4 minutes ago, Mike Teavee said:

No Tax up to 20Million and then 5% tax after that... 

Well if you are able to remit more than 20M THB (US$570K) a year in Thailand I assume you can afford the 5% exceeding tax. 

[Mike Teavee]

7 minutes ago, Ben Zioner said:

This is why, people here shouldn't  think about evading tax altogether but only to minimise it in a sensible way.  For  instance my apparent lifestyle: wife, two kids, house, two cars, no swimming pool, can easily fit into a 2 million lifestyle, so that's I would show. I'd pay no  more than 10% of  my real income, which is twice that amount. Holidays, dining out, wine,  etc won't be paid from my Thai bank accounts anymore. Holidays will be mostly out of Thailand anyway, hence enabling cash imports...

 

Paying 5 weeks of earnings in income tax sounds about right to me.  But as long as  the LTR exemption stands I am  not going to volunteer.

 

Sucks to be you (I am joking here :D ) 

 

Seriously I think anybody who is on a small budget won't be impacted, anybody on a large budget will find (legal) ways around it & anybody on a medium budget needs to plan carefully... 

 

Unfortunately "Medium" budget is me, Fortunately I already know what I'm going to do so have the necessary "Plans" in place :)

 

 

[Yumthai]

7 minutes ago, Mike Teavee said:

Exactly...

 

But the post I replied to does have a very valid point... Let's say I'm normally Tax Resident in Thailand & in 2024 take a lot of holiday's so I end up spending only 150 days here, so whilst anything I earn (& remit) that year is not taxable, the onus is on me to prove that's the case when if I were to remit any earnings from 2024 in a later tax year. 

I don't get your point.

Anything you will remit in a later tax year (meaning you are tax resident) will be indeed taxable, but not if remittance occurs in any later year you are not resident for tax purposes (and then declare nothing).

[tomkenet]

On 12/2/2023 at 11:51 AM, Dogmatix said:

Some up dated advisories in the light of P 162/2566 from BM, EY and SCB for interest.  

 

The BM document is just in slide form.  One slide gives the idea of using an offshore company to remit a "genuine loan" to the company's 100% owner who is tax resident in Thailand.  It says this is not assessable but doesn't define "genuine loan".

 

SCB reiterates the point from the Prachachart Thurakit article that a RD source said they want to amend the Revenue Code to tax all foreign source income in the year it arises, regardless of whether remitted to Thailand or not. I guess that is where we are headed eventually and a future MFP government with plans for enhanced welfare funded by an iniquitous wealth tax and other new taxes would probably make that more likely. 

Baker McKenzie 24 Nov 2023.pdf 1.21 MB · 23 downloads EY 28_Nov_2023[1].pdf 248.91 kB · 21 downloads

Thank you for a very interesting post. It seems like many people have not read or understood these important updates:

 

Ernst & Young:

This provision aims to limit the scope of foreign-sourced income subject to Thai personal income tax and exempts income earned before 1 January 2024. 

As per Paw.162 instruction, only foreign-sourced income earned from 1 January 2024 onwards, and the individual having been a Thai tax resident in the year of earning, would be subject to Thai personal income tax in the year whenever it is brought into Thailand.

 

Mazars:

 shall not apply to any foreign sourced income earned by Thai tax residents before 1 January 2024.

Thai tax residents will not be required to include their foreign sourced income earned before 1 January 2024 in their personal income tax returns, even if such income will be brought into Thailand from 1 January 2024 onwards. 

 

 

Baker McKenzie:

The new order does not apply to foreign sourced income received by a Thai tax resident before 1 January 2024.

 

[beammeup]

So my take is, have a clean account offshore with zero deposits after Jan 1 2024 = zero tax when remitted. use bank statements for that account as proof if required.

[beammeup]

What about cash advance using a offshore credit card? Is credit assessable income?

[tomkenet]

4 minutes ago, beammeup said:

So my take is, have a clean account offshore with zero deposits after Jan 1 2024 = zero tax when remitted. use bank statements for that account as proof if required.

Exactly my Strategy too

[TravelerEastWest]

17 hours ago, The Cyclist said:

 

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

 

I did post this a few hours ago 

 

 

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

But good to hear it again clearly explained

[Mike Teavee]

1 hour ago, Mike Teavee said:

 

I think you're wrong on this point...  A country's "Statutory Law" is what counts, if that breaks an International Treaty then so be it, but no country is going to allow another country to dictate what it can & can't do.

 

For some reason it seems I'm not able to post a reaction to this post so what it's worth mine was a "Like"

 

[Mike Teavee]

1 hour ago, Yumthai said:

I don't get your point.

Anything you will remit in a later tax year (meaning you are tax resident) will be indeed taxable, but not if remittance occurs in any later year you are not resident for tax purposes (and then declare nothing).

 

NO... Let me explain this to you in simple terms...

 

If you earn income in a year you're not tax resident in Thailand, no tax to pay

If you remit income in any year you're not tax resident in Thailand, no tax to pay

If you earn income when you're Thai Tax resident, take a few years break & bring the money over when you are again Thai Tax Resident, you need to pay tax on it. 

 

You get my point now?