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

[BobBKK]

On 1/3/2024 at 8:43 PM, Mike Lister said:

Likelihood of pensions being taxed is extremely low for Americans because of their tax treaty but high if UK pensions. That said, UK pensioners over age 65 years of age will be allowed a minimum of 500k Baht in deductions and allowances meaning the first 500k baht per year is tax free, thereafter, the remainder will be taxed in bands, starting at 5%.

 

It's still double-taxed. The UK government doesn't let us get pensions without taxing us if we are over the personal allowance. My pensions are largely public sector.

[BobBKK]

On 1/4/2024 at 4:29 AM, Mike Lister said:

You will always be taxed on any income that arises in the UK, for example, rental income, pension, state pension etc. You will also always be taxed on any income that arises in Thailand, bank interest, investment interest, rental income and others. In the case of the UK, tax residency rules are slightly more complex but generally speaking, you are tax resident there, if you remain for more than 183 days per tax year, in which case, you must file as tax resident. But if you remain in the UK for under 183 days per year, OR, the residency rules allow you, you can file as not UK tax resident which means you do not have to declare any income that does not arise in the UK.

 

Moving on to the Thai tax side of things. If you remain in Thailand for under 180 days per year, you are not Thai tax resident and you do not need to file a Thai tax return. But if you remain here for more than 180 days, you must file a return and declare all assessable income that was imported and all income that arose here.

 

As a general rule, it is not possible to be tax resident in the UK and Thailand, in the same tax year, 180 days plus 183 days is 363 days, but days are counted based on where you are at midnight and if you are on a plane, you are not counted on either side. Having said that, The UK rule regarding Ties to the UK, after the first year overseas are complex and I don't intend to go into them in any depth here, other than to say you need to look at them closely if you intend to split your year.

 

Because I'm a Brit, I'll use myself as a real example, I live in Thailand year round so I am tax resident here and here alone. But I have rental property income, investment income and state pension income, all of which arise in the UK. That mean I must file a UK tax return to declare that income although because I am not UK tax resident, my income that arises elsewhere in the world, does not need to be reported on the UK return. The UK allows me 12,750 Pounds per year in a Personal Allowance so much of my UK sourced income falls within that allowance.

 

I also have income that arises in the US which means I must file a US tax return but I do so as a non-resident which means all my other worldwide income is ignored. My income is also below the threshold for filing a return which I do in order to reclaim tax deducted at source only.

 

My Thai tax return reports my US and UK pensions, both of which have been the subject of tax returns hence they are considered to have been taxed and are tax free. But just in case, Thailand allows me deductions and allowances of 500k baht per year that is effectively tax free.

 

I hope those things help

 

But... As you are, I am a full-time resident in Thailand; I have an NHS pension and will be getting the old-age pension soon. UK tax authorities tax me in the UK; obviously, how can Thailand justify taxing me on pension income here?  I think many think they will wake up and smell the coffee soon and have jumped the gun - many will leave if they do not.

[jerrymahoney]

REDUX from me:

 

In addition to examples of scenarios in which taxpayers should be exempt from Thai tax on foreign-sourced income, the FAQ also clarifies several points, including:
• “Remittance of income into Thailand” is defined as any action in bringing the income sourced abroad into Thailand, including wiring money from a bank account, transferring money via e-banking, or physically carrying cash into Thailand.

 

However, the FAQ did not confirm whether spending money in Thailand from an offshore bank account, credit card, or debit card could be considered a remittance of income into Thailand.

(my italics)

 

https://www.mazars.co.th/content/download/1175616/59807824/version//file/Technical-update-November-2023.pdf

 

If ATM withdrawals and credit card purchases/advanced cash from foreign based banks are NOT to be considered as remittance, then, for many, it's all over anyway.

Edited January 6 by jerrymahoney

[norbra]

My monthly transfers, consisting of pension and savings, via Wise for long term stay in Thailand ,my deposits in Kasikorn account are shown as "Travel expenses, tourist".

I will be changing Wise purpose of transfer to "sending money home for family".

As travel expenses are not exempt in Aus Thai DTA.

This is only my interpretation of my circumstances with the hope of tax exemption.

[RubbaJohnny]

Instead of transfer to self would sending to thai family as gift mean it would not need to be declared as imported income. i.e.donate to wife and kids via wise rather than distribute it once already here in my wn account?  If transfers in to buy condos folks will go elsewhere, the uncertainty deters investment surely?

 

I fear they will make an assssesssment at a high level for all and theonus will be on uss to disprove appeal , clain refund due to dul tax, an awkward time consuming processs with different tax years rates.The only winners will be accountantss and copy shops.

For pensioners on fixed incomes monies taken by the regime will not be spent in the real economy or remitted to relatives.

 

 

Edited January 6 by RubbaJohnny
typo

[newnative]

   This may be a dumb question and might have already been answered somewhere back in the 200+ pages but I can't remember. The question came up this morning.  I have a Thai brother-in-law working abroad who is planning to return to Thailand in April or early May 2024.  He might be transferring a large sum of money to Thailand due to a condo sale in 2024, before he returns. 

   The question, if he stays out of Thailand for more than 180 days in 2024 will he be considered a 'non-tax resident' for tax purposes even though he is a Thai citizen?  Or, does that designation just apply to foreigners?  Thank you!

[RubbaJohnny]

You can see how attractive simply taxing all Int transfers and use of ATM cards at say 35% would be RD and what a disaster for tourism.I cannot see how the ATM network will know how many days a person has been in the kingdom in the current year?

 

If immigration, who else? will have the work and time to provide letters, confirming their own entry and departure stampss posssibly in multiple passports  for every single foreigner here over 18 days I can well see they'll reciprocrate by asking us to prove we have made a tax return or proved a tax number.

 

The uncertainty is counter productive and will deter the very invetors who spend big.

Even if they nab every penioner with a meagrre 50,000 a month it will not net much and ceate mase of work for little reward.Others will just remit their monthly needss and keep offsshore for other savingss  investments  etc.

Edited January 6 by RubbaJohnny

[JimGant]

How about a straw man that we can critique......

 

1. Assessable foreign source income is PRIMARILY determined by one's DTA. Fortunately, most DTAs are fairly explicit as to which contracting country, source or residence, has primary taxing authority.

     -- But I use the word PRIMARILY because Thailand has its remittance clause as to taxability; so even if the DTA says it has primary taxing authority, if it is NOT remitted, it is NOT assessable income for Thai taxation purposes.

 

2. So, if the DTA gives Thailand primary taxing authority on certain foreign income (and under the new proposal, is earned and remitted AFTER Jan 1, 2024), then this is assessable income subject to being reported on a Thai tax return.

       --  But if this assessable foreign income, plus Thai based income, like the interest on your savings account, is less than 60,000 baht -- no tax filing is required.

 

3. Thai RD is NOT interested in non assessable income (again, income exempted by treaty, like gov't pensions for most OECD countries -- or, again, any income not remitted). Thus, if you have enough assessable income requiring you to file a Thai tax return, you would NOT include line items of non assessable income. And, for sure, if you didn't have enough assessable income to require you to file, you certainly wouldn't file a tax return containing only line items on non assessable income (or worse, line items on non income cash flow into Thailand, like savings, just to show how you're being forthcoming in reporting all your money transfers).

 

4. Banks aren't going to attempt to determine what part of your wire transfers into Thailand are assessable income, non assessable income, or savings. Impossible. I couldn't even tell the make up of my chunk of cash flow into Thailand, derived from a savings account containing old direct deposits of income, inheritances, new deposits of gov't pensions, i.e., non assessable via treaty, etc. How are the banks going to do this?

 

    -- And since they can't parse out income, the Thai RD isn't about to treat all cash flows into Thailand as assessable income. This will all have to come down to self assessment.

 

         --- And there are enough honest folks here that will comply, making for some new revenue, particularly as RD won't have the extra cost of hiring more folks for compliance investigations (well maybe a few, for random audits).

 

              ---- And these "honest folks", if paying tax at home on this same income, won't have a tax increase, due to the tax credit from the Thai taxation.

 

All additions or corrections welcomed.

 

[RubbaJohnny]

All above would be fine in Scandanavia where tax officer wont welcome an envelope to fix things by his friend the 'agent'.

[jerrymahoney]

25 minutes ago, RubbaJohnny said:

All above would be fine in Scandanavia where tax officer wont welcome an envelope to fix things by his friend the 'agent'.

As to the 'bendability' of Thailand Immigration vs. Thailand Revenue Department, note the below:

 

The one picture is the Khon Kaen Immigration office located on the 2nd floor of the area bus terminal and the other is the Khon Kaen area Revenue Department office:

 

 

Edited January 6 by jerrymahoney

[Mike Lister]

4 hours ago, BobBKK said:

 

It's still double-taxed. The UK government doesn't let us get pensions without taxing us if we are over the personal allowance. My pensions are largely public sector.

Public sector is government, UK government pensions are covered by the DTA which I have been told (but haven't checked for myself) are tax free in Thailand. Plus ant double taxation can be reclaimed under DTA rules, that's what DTA's are for to ensure nothing is double taxed!!!

Edited January 6 by Mike Lister

[Mike Lister]

1 hour ago, RubbaJohnny said:

You can see how attractive simply taxing all Int transfers and use of ATM cards at say 35% would be RD and what a disaster for tourism.I cannot see how the ATM network will know how many days a person has been in the kingdom in the current year?

 

If immigration, who else? will have the work and time to provide letters, confirming their own entry and departure stampss posssibly in multiple passports  for every single foreigner here over 18 days I can well see they'll reciprocrate by asking us to prove we have made a tax return or proved a tax number.

 

The uncertainty is counter productive and will deter the very invetors who spend big.

Even if they nab every penioner with a meagrre 50,000 a month it will not net much and ceate mase of work for little reward.Others will just remit their monthly needss and keep offsshore for other savingss  investments  etc.

Pure speculation that is completely unfounded and without any basis, it's the stuff of fantasy that inbound transfers would be taxed at 35%, why even bring it up, it's not even close to reality.

[Mike Lister]

4 hours ago, BobBKK said:

 

But... As you are, I am a full-time resident in Thailand; I have an NHS pension and will be getting the old-age pension soon. UK tax authorities tax me in the UK; obviously, how can Thailand justify taxing me on pension income here?  I think many think they will wake up and smell the coffee soon and have jumped the gun - many will leave if they do not.

I think you don't understand what a DTA is, you should read up on its purpose. Perhaps somebody already mentioned it somewhere in the previous 200 pages of nonsense.

[Mike Lister]

1 hour ago, newnative said:

   This may be a dumb question and might have already been answered somewhere back in the 200+ pages but I can't remember. The question came up this morning.  I have a Thai brother-in-law working abroad who is planning to return to Thailand in April or early May 2024.  He might be transferring a large sum of money to Thailand due to a condo sale in 2024, before he returns. 

   The question, if he stays out of Thailand for more than 180 days in 2024 will he be considered a 'non-tax resident' for tax purposes even though he is a Thai citizen?  Or, does that designation just apply to foreigners?  Thank you!

Everyone, not just foriegners..

[Danderman123]

6 hours ago, Mike Lister said:

Here's a description of assessible income in Thailand for any one who needs it:

 

https://sherrings.com/personal-income-tax-in-thailand.html#:~:text=Section 40 of Thailand's Revenue,Pensions%3B and

 

The most important point is section 8(3), which basically says everything is taxable.

[Felt 35]

2 hours ago, JimGant said:

This will all have to come down to self assessment

Hear hear...

[newnative]

1 hour ago, Mike Lister said:

Everyone, not just foriegners..

Thank you!

[Mike Lister]

Here's a first cut of the FIRST PART of a simple explanation that I had in mind....thoughts?

 

If you stay in Thailand for more than 180 days, between 1 January and 31 December each year, you will be considered a Tax Resident in Thailand, regardless of they type of visa you have. It doesn’t matter that you may be Tax Resident in your home country or elsewhere or that you pay tax in those countries, Thailand will still regard you as Tax Resident.

 

Because you are Tax Resident, YOU must assess your income to determine if Thai income tax is due. In the case of a foreigner in Thailand, income is defined as any money paid to them inside Thailand, AND, importantly, any money that is transferred to them from overseas, both types are potentially taxable for tax residents.

 

Income that is received within Thailand is fairly clear, if you work and have a job and you are a Tax Resident, your income is assessable for tax.  Interest that is paid on bank accounts is regarded as income, as is income from investments such as stocks and bonds. A more complete list of the types of income that may be derived from within Thailand are linked below.

LINK

Money that is received from overseas is not always easy to assess for tax because there are many potential sources of those funds. Overseas income has to pass several tests to determine if it is assessable to Thai tax or not.

 

If we take the simplest type of funds and say that you transfer personal savings that were earned before 1 January 2024 to Thailand, those funds are not taxable but savings earned after that date,  potentially are, so the date when the income is earned is very important, even savings account interest.   

 

Another common type of income is pensions which can be complicated, depending on the type of pension and the country that it comes from. That is important because there are over 60 different types of Dual Tax Agreements (DTA’s) between Thailand and those 60 countries and each one is different. US Social Security payments for example, a form of pension paid to older people, can only be taxed by the US and Thailand is forbidden from taxing them, this means those payments are NOT assessable income. UK State pension on the other hand is not covered by a DTA so it is assessable income in Thailand yet Government or Civil Service pensions are not!

 

 

 

 

[scottiejohn]

14 minutes ago, Mike Lister said:

Here's a first cut of the FIRST PART of a simple explanation that I had in mind....thoughts?

Good start IMO!

Please continue to expand it.

I hope to hell it is not highjacked and as I am sure it will be please ignore the highjackers and complete a very worthwhile contribution to this very important subject!

 

PS;  Have you thought about creating a "stand alone thread"?

 

[stat]

On 1/4/2024 at 10:04 PM, Lorry said:

Yes, possibe, I know some Germans do this German pensions

Correct the majority of Germans that life fulltime in TH currently get their pension tax free as TH is not exercising its DTA right to tax German persions. Some company pensions are taxed in Germany.

 

NB: Anyway the vast amount of German pensions is generated by taxed income and is just a principal payment.

Edited January 6 by stat

[Isan Farang]

1 hour ago, Mike Lister said:

Here's a first cut of the FIRST PART of a simple explanation that I had in mind....thoughts?

 

If you stay in Thailand for more than 180 days, between 1 January and 31 December each year, you will be considered a Tax Resident in Thailand, regardless of they type of visa you have. It doesn’t matter that you may be Tax Resident in your home country or elsewhere or that you pay tax in those countries, Thailand will still regard you as Tax Resident.

 

Because you are Tax Resident, YOU must assess your income to determine if Thai income tax is due. In the case of a foreigner in Thailand, income is defined as any money paid to them inside Thailand, AND, importantly, any money that is transferred to them from overseas, both types are potentially taxable for tax residents.

 

Income that is received within Thailand is fairly clear, if you work and have a job and you are a Tax Resident, your income is assessable for tax.  Interest that is paid on bank accounts is regarded as income, as is income from investments such as stocks and bonds. A more complete list of the types of income that may be derived from within Thailand are linked below.

LINK

Money that is received from overseas is not always easy to assess for tax because there are many potential sources of those funds. Overseas income has to pass several tests to determine if it is assessable to Thai tax or not.

 

If we take the simplest type of funds and say that you transfer personal savings that were earned before 1 January 2024 to Thailand, those funds are not taxable but savings earned after that date,  potentially are, so the date when the income is earned is very important, even savings account interest.   

 

Another common type of income is pensions which can be complicated, depending on the type of pension and the country that it comes from. That is important because there are over 60 different types of Dual Tax Agreements (DTA’s) between Thailand and those 60 countries and each one is different. US Social Security payments for example, a form of pension paid to older people, can only be taxed by the US and Thailand is forbidden from taxing them, this means those payments are NOT assessable income. UK State pension on the other hand is not covered by a DTA so it is assessable income in Thailand yet Government or Civil Service pensions are not!

 

 

 

 

 

Each year i collect a paper from B-Bank that indicates what tax was removed from my TD accounts, and then i hand this to my local tax office and wait for the refund, last year i never went to the tax office as the refund was not worth the hassle.

 

Due to the supposed new regulations do you think its better not to go near the tax office this year and wait to check how things pan out, as i am thinking this would perhaps put me on the radar for any new plans they might have. If i am correct you can submit the refund papers going back 3 years

[stat]

8 hours ago, JonnyF said:

Personally I am amazed that people are taking this seriously. 

 

People booking flights in advance, planning 6 month holidays in Mexico etc. 

 

To me this sounds like another dumb announcement by some dumb minister that is impossible to enforce. 

 

Worse case scenario a few thousand baht to an agent will get around this,  same as it does with the 800k in the bank. 

 

It's designed to catch the big fish, political opponents. Not Dave from Rotherham and his 800 pound a month pension with 30 quid tax owed.

 

Calm down people. It will disappear like so many stupid policies do.

While I agree that there is a 50% percent chance (just my gut feeling) that TH will not tax 2024 remittances because they cannot tax it or they do not want to tax it, the problem remains that some people could be liable to pay half a million or more of USD in taxes and no agent could rid you LEGALLY of this obligation. I fail to understand why you think there are no "rich" guys on this forum or in TH. Just check the LTR thread and read the requirements for the HNWI.

 

If you "only" send 15-20K USD a year, the risk is not that big as you stand to lose less, but this money could be a lot for people who rely on this money to pay for their well earned retirements.

[stat]

5 hours ago, RubbaJohnny said:

You can see how attractive simply taxing all Int transfers and use of ATM cards at say 35% would be RD and what a disaster for tourism.I cannot see how the ATM network will know how many days a person has been in the kingdom in the current year?

 

If immigration, who else? will have the work and time to provide letters, confirming their own entry and departure stampss posssibly in multiple passports  for every single foreigner here over 18 days I can well see they'll reciprocrate by asking us to prove we have made a tax return or proved a tax number.

 

The uncertainty is counter productive and will deter the very invetors who spend big.

Even if they nab every penioner with a meagrre 50,000 a month it will not net much and ceate mase of work for little reward.Others will just remit their monthly needss and keep offsshore for other savingss  investments  etc.

There is simply no way to tax 35% on every ATM transaction, as you become retroactively tax liable only after living 180 days in TH. However very very slim chance of taxing after day 180. There is not much more to do or say after Thai RD gives further clarifications either by statements or by their work in 2025.

Edited January 6 by stat

[JimGant]

1 hour ago, Mike Lister said:

UK State pension on the other hand is not covered by a DTA so it is assessable income in Thailand yet Government or Civil Service pensions are not!

 

 

Yes, gov't pensions (paid for services of past gov't employment) of most OECD countries are taxable exclusively by the country paying them. But for some countries, at least for Norway, this is not true. Norway requires (via DTA) its expats in Thailand to have their gov't pensions primarily taxable by Thailand -- thus those pensions remitted to Thailand are assessable income for Thai tax purposes. But this is not a simple credit to Norway for taxes paid to Thailand -- this is, if you have all your Norwegian pension earnings taxed by Thailand, and can show a tax return proving it -- a complete nullification of your Norway tax obligation on same pension payments. Thus, pay Thailand 1000 baht in taxes, and get relief from a Norwegian tax of 10000 baht equivalency (exaggeration, but you get the idea).

 

Years ago, when I read this info on this forum, was the interesting part, where Norwegian expats were kicking and screaming to, first, be able to get Thai TINs -- then to declare their Norwegian pensions as taxable by the Thais. The Thai RD was throwing them out the door, saying, "We don't tax foreign pensions."

Seriously. But, things did change, and if you wanted Thailand to tax your pension, I guess someone with authority decided, 'why not collect it.'

 

Anyway, I mention this to emphasize that everyone should become familiar with their DTA with Thailand, as the new remittance rules (if implemented) will re-define assessable foreign source income.

[JimGant]

53 minutes ago, stat said:

While I agree that there is a 50% percent chance (just my gut feeling) that TH will not tax 2024 remittances

 

How about 100% chance? If they, or the banks, or whoever, find it impossible to parse out income remittance from capital remittances, you really think they're going to tax my 100% capital remittance to buy a condo?

[Mike Lister]

1 hour ago, Isan Farang said:

 

Each year i collect a paper from B-Bank that indicates what tax was removed from my TD accounts, and then i hand this to my local tax office and wait for the refund, last year i never went to the tax office as the refund was not worth the hassle.

 

Due to the supposed new regulations do you think its better not to go near the tax office this year and wait to check how things pan out, as i am thinking this would perhaps put me on the radar for any new plans they might have. If i am correct you can submit the refund papers going back 3 years

You are already on the RD "radar". When you went to their offices and handed them the slip from BBL bank, they completed a tax return for you in order for you to get your tax refund, that's the only way you get your tax back.. 

[Mike Lister]

1 hour ago, stat said:

While I agree that there is a 50% percent chance (just my gut feeling) that TH will not tax 2024 remittances because they cannot tax it or they do not want to tax it, the problem remains that some people could be liable to pay half a million or more of USD in taxes and no agent could rid you LEGALLY of this obligation. I fail to understand why you think there are no "rich" guys on this forum or in TH. Just check the LTR thread and read the requirements for the HNWI.

 

If you "only" send 15-20K USD a year, the risk is not that big as you stand to lose less, but this money could be a lot for people who rely on this money to pay for their well earned retirements.

 

10 minutes ago, JimGant said:

 

How about 100% chance? If they, or the banks, or whoever, find it impossible to parse out income remittance from capital remittances, you really think they're going to tax my 100% capital remittance to buy a condo?

I on the other hand believe there is zero percent chance that remittances will be taxed at source or by the banks ever. I further believe the chances that money imported to buy real estate in Thailand stands a negative chance of being taxed, if that's even possible.

[Mike Lister]

20 minutes ago, JimGant said:

 

Yes, gov't pensions (paid for services of past gov't employment) of most OECD countries are taxable exclusively by the country paying them. But for some countries, at least for Norway, this is not true. Norway requires (via DTA) its expats in Thailand to have their gov't pensions primarily taxable by Thailand -- thus those pensions remitted to Thailand are assessable income for Thai tax purposes. But this is not a simple credit to Norway for taxes paid to Thailand -- this is, if you have all your Norwegian pension earnings taxed by Thailand, and can show a tax return proving it -- a complete nullification of your Norway tax obligation on same pension payments. Thus, pay Thailand 1000 baht in taxes, and get relief from a Norwegian tax of 10000 baht equivalency (exaggeration, but you get the idea).

 

Years ago, when I read this info on this forum, was the interesting part, where Norwegian expats were kicking and screaming to, first, be able to get Thai TINs -- then to declare their Norwegian pensions as taxable by the Thais. The Thai RD was throwing them out the door, saying, "We don't tax foreign pensions."

Seriously. But, things did change, and if you wanted Thailand to tax your pension, I guess someone with authority decided, 'why not collect it.'

 

Anyway, I mention this to emphasize that everyone should become familiar with their DTA with Thailand, as the new remittance rules (if implemented) will re-define assessable foreign source income.

Thanks, @CartagenaWarlock please note.

[The Cyclist]

9 hours ago, Mike Lister said:

Yes, most of them spent correcting other posters nonsense rather than being argumentative over minutiae and jumping in to answer every question asked by anyone, of any one else!

 

Thought you put me on ignore yesterday ?
 

With nearly 600 posts on the thread, were you looking in a mirror when you. typed the above ?
 

Keep up the good work. The RD are apparently taking on people, might be a job opportunity for you.

[quake]

1 hour ago, Mike Lister said:

You are already on the RD "radar". When you went to their offices and handed them the slip from BBL bank, they completed a tax return for you in order for you to get your tax refund, that's the only way you get your tax back.. 

 

I would think there are many many xpats,  who went and got a TIN number,  to clam that bit of tax back from the banks,  whilst importing money into Thailand in the same year as earned.

so basically,  have been making a fraudulent tax declaration in Thailand.

Bet, a few are laying cables now. 

A 100% on the RD radar.