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

[Eudaimonia]

4 hours 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!

 

 

 

 

 

Great initiative.

 

"Note that if you are generating income by working while staying in Thailand, it is (and has always been) irrelevant where that money is paid and whether you bring the money into the country or keep it offshore."  

[Mike Lister]

1 minute ago, Eudaimonia said:

 

Great initiative.

 

"Note that if you are generating income by working while staying in Thailand, it is (and has always been) irrelevant where that money is paid and whether you bring the money into the country or keep it offshore."  

An excellent point I hadn't considered, I'll include it in the write up.

[Mike Lister]

Here's a second draft on the document, it is still WIP but any comments are welcome.....I'll pick then up in the morning.

 

This guide has been compiled in an attempt to provide readers with the simplest over view possible of Thai Personal Income Tax (PIT). The scope of this document is limited to PIT.

 

You may have heard that new tax laws came into effect on 1 January this year. In fact, that is not true, the old tax rules still exist and remain valid, albeit one minor change to them was made in November last year. Previously, anyone who earned money overseas and remitted it to Thailand in a different tax year, received that money free of Thai tax. That loop hole has been overly exploited by wealthy Thai’s and is now closed hence any money earned overseas and remitted to Thailand in any year, is now liable to Thai tax.

 

This guide is an overview of the key parts of the PIT system, it is not designed to be exhaustive and cover all aspects, nor is it intended to  override anything produced by the Thai Revenue or specialist tax companies such as Sherings or Mazzars. This guide does not address all types of income or the rules relevant to people from every country. There are also certain types of visa that fall outside of the tax rules. The LTR visa got its tax exempt status by royal decree hence visa holders not to be assessed for Thai tax and they are specifically excluded from this explanation.

 

If you stay in Thailand for more than 180 days, between 1 January and 31 December each year, you will be considered to be Tax Resident in Thailand during that year, 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, money that is received from overseas, both types are potentially taxable for tax residents. There are many types of income that can be classed as assessable, a list of some of them is linked below but is not exhaustive:.

LINK

 

There are also classes or types of income that the Thai Revenue does not regard as assessable and these are linked below also:

LINK

 

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.  You should note that if you are generating income by working while staying in Thailand, it is (and has always been) irrelevant where that money is paid and whether you bring the money into the country or keep it offshore. That money arises in Thailand hence it is taxable here.

 

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 income and say that you transfer personal savings to Thailand that were earned before 1 January 2024, those funds are not taxable. But savings earned after that date,  potentially are, so the date when the income is earned is very important. A word of caution, you may be asked to provide proof that savings were earned before 1 January 2024.  

 

Another common type of income is pensions which can be complicated, depending on the type of pension and the country that it comes from. The country of origin is important because there are over 60 different types of Dual Tax Agreements, (sometimes called Double Taxation Agreements) (DTA’s) between Thailand and those 60+ countries and each one is different. As a general rule, most private or company pensions from most countries appear to be taxable here but YOU will need to confirm that yours is or is not. If that is true, private and company pension income IS assessable income in Thailand.

 

US Social Security payments, a form of pension paid to some older people, can only be taxed under DTA rule 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!

 

It is still early days and all the rules are not yet clear. It has been said that tax residents who import funds from countries that have a Dual Tax Agreement with Thailand, will not be effected. Exactly how that will work leaves many questions unanswered hence this note attempts to look at only the most popular types of income based on what is known and does not speculate what may happen, other than in the segment at the end concerning likely future Immigration rules.

 

The proceeds from the sale of a capital item such as overseas property where funds are remitted to Thailand is one popular source of funds, the sale of some investment products such as stocks, shares and bonds is another. Those proceeds typically comprise two parts, capital and profit. If the capital was acquired before 1 January 2024, it is free of Thai tax. If the profit has been the subject of a Capital Gains return in the home country, that also may be free of Thai tax but this cannot be guaranteed at this time, until things are made more clear and are once again subject to the terms of any DTA. YOU will need to review the DTA between Thailand and your home  country to fully understand what particular clauses affect you.

 

It appears as though most property rental income that is remitted to Thailand is considered to be assessable income and is taxable here, unless of course it has been taxed in the home country and/or the DTA prohibits its taxation (which seems unlikely).

 

YOU are responsible for determining if you have the minimum assessable income in Thailand each year which means you must file a tax return. That assessable income might comprise, pension payments, investment returns, rental income or any of the other types of income listed in the link above. If you have assessable income of over 120,000 baht per year, you must file a tax return (60,000 baht if your sole source of assessable income is bank interest paid in Thailand).

 

Completing a tax return is a simple affair for most people, if you have difficulty, the Revenue Department staff are extremely helpful. Tax returns must be filed between 1 January and 30 March each year, if you file later than that, penalties will apply.

 

The Thai tax system contains a series of Allowances, Deductions and Exemptions that will help you reduce your tax bill and they are very generous. It is easily possible for the average expat foreign retire to reduce their taxable income by 500,000 baht or more each year. For example, a retiree aged 65 years of age, married and living here full  time, supporting a Thai wife who has no income, is allowed the following:

 

LIST EXAMPLE DEDUCTIONS ETC HERE

 

A complete list of deductions, allowances and exemptions can be found here

LINK

 

The Thai Revenue  tax filing system is online but is only in Thai language at present. The tax forms are however available in English and they can be downloaded from the link below:

LINK

 

A simple sample completed tax form for a person aged over 65 years is shown below.

SAMPLE FORM

 

Tax filing in Thailand is based on the honor system, it relies on you declaring all the right information every year and there are severe penalties for avoiding Thai tax. It cannot be ruled out that at some point, a link will be established between tax filings and visa extensions, along with tax clearance certificates required to leave the country because similar things have been adopted in several countries in the past, including the US.

 

There are several sources of detailed tax information and these web sites are linked below:

LINKS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[UKresonant]

11 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.

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

 

If your NHS pension is classed as Government (Check the list for who pays it), that might not be a problem?  May only be taxed in UK?

Then

It's been said you can get up to about 350k-400k with over 65years of age allowances, for  that sent to Thailand, which could cover the UK state pension before tax is paid?

 

I kinda share your sentiment on the subject though, especially as I've never been full-time in Thailand.

 

I'm hoping they accept that pension,  if taxed in the UK, that tax is offset with credit relief against Thai Tax (DTA article 23 3), waiting to see what they actually do. As it may cause me some difficulties! My Gov pension is relatively small, would only be a nice to have, I'm 4 years + away from the additional allowances, 6 years away from State Pension!

 

Edited January 6 by UKresonant

[Mike Lister]

3 minutes ago, UKresonant said:

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

 

If your NHS pension is classed as Government (Check the list for who pays it), that might not be a problem?  May only be taxed in UK?

Then

It's been said you can get up to about 250k-400k with over 65years of age allowances sent to Thailand, which could cover the UK state pension before tax is paid?

 

I kinda share your sentiment on the subject though, especially as I've never been full-time in Thailand.

 

I'm hoping they accept that pension,  if taxed in the UK, that tax is offset with credit relief against Thai Tax (DTA article 23 3), waiting to see what they actually do. As it may cause me some difficulties! My Gov pension is relatively small, would only be a nice to have, I'm 4 years + away from the additional allowances, 6 years away from State Pension!

 

500k for over age 65 years pensioner

[UKresonant]

6 minutes ago, Mike Lister said:

If you stay in Thailand for more than 180 days, between 1 January and 31 December each year, you will be considered to be Tax Resident in Thailand during that year,

 

It's clear, but you could add Cumulative Total of 180 days, as I've seen some think it's a block of 180 days, that are not in depth with the subject.  just a suggestion

[Guavaman]

19 hours ago, jerrymahoney said:

nd this is for non-Assessable income:

 

Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation:

 

https://www.rd.go.th/english/37749.html (scroll down)

Regarding "non-assessable" income:

 

ASSESSABLE VS TAXABLE INCOME

All personal income tax (PIT) in Thailand is collected upon the basis of ASSESSABLE INCOME.

https://www.rd.go.th/english/37749.html

 

Section 38 Income tax is an assessment tax. An assessment official shall make assessment on tax under this Chapter.

 

This means that the taxpayer must compile their income-related information and use that information to prepare and submit a tax return to the RD summarizing the amount of their income that meets the characteristics as assessable income. The taxpayer, after calculating according to the characteristics, methods, conditions, rates set, and the burden of paying taxes, gives it to the tax assessor to determine the correctness of the taxable amount and the practice of duties of the taxpayer.

 

http://www.smlaudit.com/%E0%B9%80%E0%B8%87%E0%B8%B4%E0%B8%99%E0%B9%84%E0%B8%94%E0%B9%89%E0%B8%9E%E0%B8%B6%E0%B8%87%E0%B8%9B%E0%B8%A3%E0%B8%B0%E0%B9%80%E0%B8%A1%E0%B8%B4%E0%B8%99

 

Section 39 In this Chapter, unless the context otherwise requires:

Assessable income means income that is taxable under this Chapter. Such income also includes an asset [property] or any other benefit received which may be computed into a monetary value, any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer and tax credit under Section 47 Bis.

 

https://www.rd.go.th/english/37749.html

 

So what is non-assessable income? 

 

This does not appear in the Thai tax code. One could imagine that it would be an asset [property] or any other benefit received which may NOT be computed into a monetary value; however, that would only be an imagination, because the concept of non-assessable income is absent from the tax code.

 

A search of the The Thai Revenue Department website results in 0 results for “non-assessable”.

 

The “non-assessable income” Straw Man does not exist.

 

What does this mean for expat Thai tax residents?

 

The RD defines 8 categories of assessable income.  All of your “assessable income” falls within one of these 8 categories.

 

ASSESSABLE INCOME EXEMPT FROM INCOME TAX CALCULATION

 

Under Section 42, The assessable income of some categories are exempt for the purpose of income tax calculation; however, the tax code has no references to income derived under DTAs , although  the content of DTAs specifically state that some categories of income are exempt from taxation in Thailand.

 

Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation:

 

(1) Per diem or transport expenses (2) Transport expenses and traveling per diem at the rates prescribed by the Government in the Royal Decree governing the rates of transport expenses and traveling per diem.

(3) The part of traveling expenses paid by the employer to the employee which the employee spent wholly and necessarily in traveling …

(4) Where a contract of employment which was bona fide entered into before the entry into force of the Royal Act on Income Tax B.E. 2475 …

 (5) Special post allowance, house rent allowance and rent free residence granted to an official of a Thai embassy or consulate abroad.

(6) Income from a sale or discount received from purchase stamp duties or government postage stamps.

(7) Board or committee meeting allowance and teaching and examination fees paid by the government or public educational institutions.

(8) The following interest:

(a) Interest from Government savings lotteries, or interest on demand deposit with the Government Savings Bank;

(b) Interest on savings deposit with a cooperative;

(c) Interest on savings deposit with a bank in Thailand which is repayable on demand;

(9) Sale of a movable property acquired from inheritance …

 (10) Income derived from an inheritance.¹¹

 (11) Award for the purpose of education or technical research, government lottery and government savings prize, prize given by government authority in contest or competition to a person other than a professional contestant or competitor, or reward paid by government authority for the purpose of prevention of wrongdoing.

(12) Special pension, special gratuity, inherited pension or inherited gratuity.

(13) Compensation against wrongful acts, amount derived from insurance or from funeral assistance scheme.

 (15) Income of a farmer from sale of rice cultivated by the farmer and/or his family.

(16) Income derived from an undivided estate liable to tax under Section 57 Bis.

(17) Income prescribed for exemption by Ministerial Regulations.¹²

 (18) Red Cross lottery prize, income from a sale or discount received from purchase of Red Cross lotteries.

(19) Interest received under Section 4 Decem.¹³

 (23) Income from sale of investment units in a mutual fund.

(24) Income of a mutual fund.

(25) Compensatory benefit received by the taxpayer from the social security fund under the law governing social security.

(26) Income derived from the transfer of ownership or possessory right in an immovable property without any consideration to a legitimate child …

 (27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year.

(28) Income derived from maintenances and support under moral purposes or gifts received in a ceremony or on occasions in accordance with custom and tradition from persons who are not ascendants, descendants or spouse, but only for the portion not exceeding ten million baht throughout the tax year.

(29) Income derived from gifts whereby a donor has expressed his or her intention or appeared to have an intention of using the gifts for religious, educational or public benefit activities in accordance with the rules and conditions as prescribed by a Ministerial Regulation.

 

So there is assessable income that is taxable and assessable income that is exempt from tax, but "non-assessable" income is not a "thing".

 

You can stop thinking and claiming that that some of your income is non-assessable.

 

 

[jerrymahoney]

7 hours ago, Mike Lister said:

Tax filing in Thailand is based on the honor system, it relies on you declaring all the right information every year and there are severe penalties for avoiding Thai tax

'Avoiding' tax is fine i.e. by deductions. 'Evading' tax is criminal.

[jerrymahoney]

20 minutes ago, Guavaman said:

So there is assessable income that is taxable and assessable income that is exempt from tax, but "non-assessable" income is not a "thing".

 

You can stop thinking and claiming that that some of your income is non-assessable.

 

If you do a search for 'non-assessable' you will find plenty have also used that term

 

Including this from Mr. Gant: 3. Thai RD is NOT interested in non assessable income (again, income exempted by treaty, like gov't pensions for most OECD countries --

 

(tricky he leaves out the hyphen)

 

 

Edited January 6 by jerrymahoney

[Guavaman]

10 minutes ago, jerrymahoney said:

If you do a search for 'non-assessable' you will find plenty have also used that term

Yes, that is a problem: we don't have the luxury of defining Thai tax law terms as we wish. The RD sets the rules and definitions. We can't just say: "My social security benefit payment is non-assessable income, so it doesn't count for the income threshold for filing a tax return", or  "I already paid tax on my pension in my home country, so it is non-assessable income in Thailand".

 

It is ALL assessable income when remitted, although some of it may be EXEMPTED from taxation by the RD. 

[jerrymahoney]

4 minutes ago, Guavaman said:

Yes, that is a problem: we don't have the luxury of defining Thai tax law terms as we wish. The RD sets the rules and definitions. We can't just say: "My social security benefit payment is non-assessable income, so it doesn't count for the income threshold for filing a tax return", or  "I already paid tax on my pension in my home country, so it is non-assessable income in Thailand".

 

It is ALL assessable income when remitted, although some of it may be EXEMPTED from taxation by the RD. 

So how about this from the esteemed Mr. Gant:

 

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).

 

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/?do=findComment&comment=18599827

 

[sirineou]

Perhaps buried in these thousands of replies there is an answer to my question, but unfortunately I have neither the time or inclination to read  hundreds of pages of mostly arguing,  

I am sur I am not the only one who is wondering. 

Is there a precise easy to understand source of what is required of me as a retired American here on extensions to stay based on marriage , all income remitted to Thailand from SSI and private pension. 

[Mike Lister]

24 minutes ago, jerrymahoney said:

So how about this from the esteemed Mr. Gant:

 

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).

 

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/?do=findComment&comment=18599827

 

I think that is an opinion rather than fact. Unless the Thai RD is made aware of the nature of the income, it does not know whether it is assessible or not.

[Mike Lister]

13 minutes ago, sirineou said:

Perhaps buried in these thousands of replies there is an answer to my question, but unfortunately I have neither the time or inclination to read  hundreds of pages of mostly arguing,  

I am sur I am not the only one who is wondering. 

Is there a precise easy to understand source of what is required of me as a retired American here on extensions to stay based on marriage , all income remitted to Thailand from SSI and private pension. 

Yes, you can read the following because your answer is in there, if you can find the time and the inclination that is! Otherwise you're relying on others to find the time and inclination to provide you with a tailor made custom answer!

 

For everyone else, this is draft version 3 of the document that describes the tax system.....all comments and observations are welcome.

 

 

 

 

This guide has been compiled in an attempt to provide readers with the simplest possible over view of Personal Income Tax (PIT) in Thailand. The scope of this document is limited to PIT.

 

You may have heard that new tax laws came into effect on 1 January this year. In fact, that is not true, the old tax rules still exist and remain valid, albeit one minor change to them was made in November last year. Previously, anyone who earned money overseas and remitted it to Thailand in a different tax year, received that money free of Thai tax. That loop hole in the Revenue Department (RD) tax code has been extensively exploited by wealthy Thai’s and is now closed, hence, any money earned overseas and remitted to Thailand in any year, is now liable to Thai tax. The purpose of the new rule was to prevent tax avoidance, unfortunately it now means that overseas funds transfers by foreigners in Thailand also have an increased risk of being taxed in Thailand.

 

This guide is an overview of the key parts of the PIT system. It is not designed to be exhaustive and it doesn’t cover all aspects, nor is it intended to  override anything produced by the Thai Revenue or specialist tax companies such as Sherrings or Mazzars. This guide also does not address all types of income or the rules relevant to people from every country. What this guide will give to readers is a starting point to manage their own tax affairs and it will also provide most of the answers for those with simple tax affairs, people such as the average pensioner.

 

There are also certain types of visa that fall outside of the RD tax code. The LTR visa for example received its tax exempt status by royal decree hence visa holders not to be assessed for Thai tax and they are specifically excluded from this explanation.

 

Terminology: this document uses the word “assessable” often. Assessable in the context of this document means income that is liable to tax and must be included on a Thai tax return. Not all income is assessable, some is excluded from tax assessment by its very nature or because of the terms of a specific tax agreement.

 

Dual Tax Agreement/Double Tax Agreement (DTA): is an agreement between two countries that sets out which of the two countries has the right to tax specific types of income and all the associated rules. It’s purpose, in part, is to ensure that the same funds are not taxed twice and provides a means by which tax that is paid twice, can be recovered, how and from where.

 

If you stay in Thailand for more than a cumulative 180 days, between 1 January and 31 December each year, you will be considered to be Tax Resident in Thailand during that year, regardless of the 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. Tax Residency and Immigration status (and the visa you hold) are different things. Tax residency is based solely on the number of days you spend in Thailand and where you are at midnight on each day.

 

Because you are Tax Resident, YOU must review your income each year to determine if it is regarded as assessable to tax in Thailand, nobody else will do this for you. If your income does not exceed 120,000 baht per year, you do not need to file a tax return (60,000 baht if your only income is bank interest paid to you by a bank in Thailand). If your income is over 120,000 baht per year, you must file a Thai tax return between 1 January and 31 March.

 

Your income in Thailand is defined as any money paid to you inside Thailand, as well as, any money you receive from overseas, both types are potentially assessable income for Tax Residents. There are many types of income that can be classed as assessable, the Thai RD lists some of them and is linked below, however, the list is not exhaustive:.

LINK

 

There are also classes or types of income that the RD does not regard as assessable and these are also linked below:

LINK

 

Income that is derived from  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 to you on Thai bank accounts is regarded as income, as is income from investments such as stocks and bonds within Thailand.  You should note that if you are generating income by working while staying in Thailand, it is (and has always been) irrelevant where that money is paid and whether you bring the money into the country or keep it offshore. That money arises in Thailand hence it is taxable here.

 

It is not possible to give the same blanket rule to everyone to determine whether income is assessable or not because of the variables involved. Overseas income has to pass several tests to determine if it is assessable to Thai tax or not. It is still early days and all the rules are not yet clear. It has been said that tax residents who import funds from countries that have a DTA with Thailand, will not be effected. Exactly how that will work leaves many questions unanswered hence this document attempts to look at only the most popular types of income based on what is known at present. This document does not speculate as to what may happen in the future, other than in the segment at the end concerning likely future Immigration rules.

 

If we take the simplest type of income and say that you transfer personal savings from overseas to Thailand and those savings  were earned before 1 January 2024, those funds are not assessable but savings earned after that date are, hence the date when the income is earned is extremely important. A word of caution, you may be asked to provide proof that savings were earned before 1 January 2024.  

 

Another common type of income is pensions, which can be complicated, depending on the type of pension and the country that it comes from. The country of origin is important because there are over 60 different types of Dual Tax Agreements, sometimes called Double Taxation Agreements (DTA’s), between Thailand and those 60+ countries and each one is different. As a general rule, most private or company pensions from most countries appear to be assessable here but YOU will need to confirm that yours is or is not. If that is true, private and company pension income IS assessable income in Thailand.

 

US Social Security payments, a form of pension paid to some older people, can only be taxed by the US under DTA rules 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 whilst UK Government or Civil Service pensions are not!

 

The proceeds from the sale of a capital item such as overseas property, where funds are remitted to Thailand, is one popular source of funds, the sale of some investment products such as stocks, shares and bonds is another. Those proceeds typically comprise two parts, capital and profit. If the capital was acquired before 1 January 2024, it is free of Thai tax. One way to separate capital and profit may bee to have an official valuation or statement that is dated 1 January 2024 since anything earned before that date, is not assessable. Also, if the profit has been the subject of a Capital Gains return in the home country, that also may be free of Thai tax but this cannot be guaranteed at this time, until things are made more clear and are once again subject to the terms of any DTA. YOU will need to review the DTA between Thailand and your home  country to fully understand what particular clauses affect you.

 

It appears as though most property rental income that is remitted to Thailand is considered to be assessable income and is taxable here, unless of course it has been taxed in the home country and/or the DTA prohibits its taxation (which seems unlikely).

 

YOU are responsible for determining if you have the minimum assessable income in Thailand each year which means you must file a tax return. That assessable income might comprise, pension payments, investment income, rental income or any of the other types of income listed in the link above. If you have assessable income of over 120,000 baht per year, you must file a tax return (60,000 baht if your sole source of assessable income is bank interest paid in Thailand).

 

Completing a tax return is a simple affair for most people, if you have difficulty, the Revenue Department staff are extremely helpful. Tax returns must be filed between 1 January and 30 March each year, if you file later than that, penalties will apply.

 

The Thai tax system contains a series of Allowances, Deductions and Exemptions that will help you reduce your tax bill and they are very generous. It is easily possible for the average expat foreign retiree to reduce their taxable income by 500,000 baht or more each year. For example, a retiree aged 65 years of age, married and living here full  time, supporting a Thai wife who has no income, is allowed the following:

 

LIST EXAMPLE DEDUCTIONS ETC HERE

 

A complete list of deductions, allowances and exemptions can be found here

LINK

 

The Thai Revenue  tax filing system is online but is only available in Thai language at present. The tax forms are however available in English and they can be downloaded from the link below:

LINK

 

A simple sample completed tax form for a person aged over 65 years is shown below.

SAMPLE FORM

 

Tax filing in Thailand is based on the honor system, it relies on you declaring all the right information every year and there are severe penalties for evading Thai tax. It cannot be ruled out that at some point, a link may be established between tax filings and visa extensions, along with tax clearance certificates required to leave the country. This is possible because similar things have been adopted in several countries in the past, including the US.

 

There are several sources of detailed tax information and these web sites are linked below:

LINKS

 

Edited January 6 by Mike Lister

[Mike Teavee]

1 hour ago, Guavaman said:

You can stop thinking and claiming that that some of your income is non-assessable.

 

Technically

Not sure why people would think there would be a list of "Non-Assessable Income" as all Income is Tax Assessable & the fact that there is no tax due on it can only be ascertained after assessing it for tax. 

 

E.g. If income from an Inheritance is not taxable Thailand, then that's fine the income is assessed as being from an Inheritance & not taxed... It's still Tax assessable. 

 

Another example, UK Government Pensions, US SS etc... are not taxable in Thailand, again the income would be assessed as being a Government Pension/SS & would not taxed... It's still Tax Assessable.   

 

Practically

I am not saying the income has to be or will be assessed, things like advisory notices from the RD & DTAs allow us to short circuit the process & not declare certain incomes, but if the RD came to audit you, any Inheritance or Government Pensions/SS will be assessed & if found to be such, deemed not taxable. 

Edited January 6 by Mike Teavee

[Mike Lister]

6 minutes ago, Mike Teavee said:

 

Technically

Not sure why people would think there would be a list of "Non-assessable Income" as all Income is Tax Assessable & the fact that there is no tax due on it can only be ascertained after assessing it for tax. 

 

E.g. If income from an Inheritance is not taxable Thailand, then that's fine the income is assessed as being from an Inheritance & not taxed... It's still Tax assessable. 

 

Another example, UK Government Pensions US SS etc... are not taxable in Thailand, again the income would be assessed as being a Government Pension/SS & would not taxed... It's still Tax Assessable.   

 

Practically

I am not saying the income has to be or will be assessed, things like advisory notices from the RD & DTAs allow us to short circuit the process & not declare certain incomes, but if the RD came to audit you, any Inheritance or Government Pensions/SS will be assessed & if found to be such deemed not taxable. 

Yes I agree, there is definitely a problem with the over use of the word assessible and its context in the RD documentation which is now being picked up by others here. Assessible means to review, as you quite correctly point out. The problem though is that is the word in their official vocabulary so I was reluctant to change it in my write up. I have decided to continue to use the word assessible in the write up  but have qualified it up front under Terminology.

Edited January 6 by Mike Lister

[Guavaman]

34 minutes ago, jerrymahoney said:

3. Thai RD is NOT interested in non assessable income

Same problem -- nothing personal. Many posters have used the term "non-assessable" according to their personal idiosyncratic definition of the term. What is assessable is up to the RD tax code and the tax assessor, not up to the opinion of the taxpayer. 

 

The problem has arisen due to so many posters using the term according to their own individual definition of the term, most often confusing the concept of exemption to mean non-assessment. With so many pages of posts with misuse of the term, it has taken on its' own meaning in this thread as defined by the crowd, rather than by the RD.

[jacko45k]

10 hours ago, The Cyclist said:

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

Haven't heard that in a while, not from an adult!

[Mike Lister]

1 minute ago, Guavaman said:

Same problem -- nothing personal. Many posters have used the term "non-assessable" according to their personal idiosyncratic definition of the term. What is assessable is up to the RD tax code and the tax assessor, not up to the opinion of the taxpayer. 

 

The problem has arisen due to so many posters using the term according to their own individual definition of the term, most often confusing the concept of exemption to mean non-assessment. With so many pages of posts with misuse of the term, it has taken on its' own meaning in this thread as defined by the crowd, rather than by the RD.

Exactly. But I think it's still useful to let people know what the Thai considers not assessible income to be hence I propose to leave it in my wrote up, unless others disagree.

[Mike Lister]

Here's a numbered version of the document which will make it easier to comment.

 

 

1. This guide has been compiled in an attempt to provide readers with the simplest possible over view of Personal Income Tax (PIT) in Thailand. The scope of this document is limited to PIT.

 

2. You may have heard that new tax laws came into effect on 1 January this year. In fact, that is not true, the old tax rules still exist and remain valid, albeit one minor change to them was made in November last year. Previously, anyone who earned money overseas and remitted it to Thailand in a different tax year, received that money free of Thai tax. That loop hole in the Revenue Department (RD) tax code has been extensively exploited by wealthy Thai’s and is now closed, hence, any money earned overseas and remitted to Thailand in any year, is now liable to Thai tax. The purpose of the new rule is to prevent tax avoidance. Unfortunately, it now means that overseas funds transfers by foreigners living in Thailand, also have an increased risk of being taxed.

 

3. This guide is an overview of the key parts of the PIT system. It is not designed to be exhaustive and it doesn’t cover all aspects, nor is it intended to  override anything produced by the Thai Revenue or specialist tax companies such as Sherrings or Mazzars. This guide also does not address all types of income or the rules relevant to people from every country. What this guide will give to readers is a starting point to manage their own tax affairs and it will also provide most of the answers for those with simple tax affairs, people such as the average pensioner.

 

4. There are also certain types of visa that fall outside of the RD tax code. The LTR visa for example received its tax exempt status by royal decree hence visa holders will not to be assessed for Thai tax and they are specifically excluded from this explanation.

 

5. Terminology: this document uses the word “assessable” often. Assessable in the context of this document means income that is liable to tax and must be included on a Thai tax return. Not all income is assessable, some is excluded from tax assessment by its very nature or because of the terms of a specific tax agreement.

 

6. Dual Tax Agreement/Double Tax Agreement (DTA): is an agreement between two countries that sets out which of the two countries has the right to tax specific types of income and all the associated rules. It’s purpose, in part, is to ensure that the same funds are not taxed twice and provides a means by which tax that is paid twice, can be recovered, how and from where.

 

7. If you stay in Thailand for more than a cumulative 180 days, between 1 January and 31 December each year, you will be considered to be Tax Resident in Thailand during that year, regardless of the 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. Tax Residency and Immigration status (and the visa you hold) are different things. Tax residency is based solely on the number of days you spend in Thailand and where you are at midnight on each day.

 

8. Because you are Tax Resident, YOU must review your income each year to determine if it is regarded as assessable to tax in Thailand, nobody else will do this for you. If your income does not exceed 120,000 baht per year, you do not need to file a tax return (60,000 baht if your only income is bank interest paid to you by a bank in Thailand). If your income is over 120,000 baht per year, you must file a Thai tax return between 1 January and 31 March.

 

9. Your income in Thailand is defined as any money paid to you inside Thailand, as well as, any money you receive from overseas, both types are potentially assessable income for Tax Residents. There are many types of income that can be classed as assessable, the Thai RD lists some of them and is linked below, however, the list is not exhaustive:.

10. LINK

 

11. There are also classes or types of income that the RD does not regard as assessable and these are also linked below:

12. LINK

 

13. Income that is derived from  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 to you on Thai bank accounts is regarded as income, as is income from investments such as stocks and bonds within Thailand.  You should note that if you are generating income by working while staying in Thailand, it is (and has always been) irrelevant where that money is paid and whether you bring the money into the country or keep it offshore. That money arises in Thailand hence it is taxable here.

 

14. It is not possible to give the same blanket rule to everyone to determine whether income is assessable or not because of the variables involved. Overseas income has to pass several tests to determine if it is assessable to Thai tax or not. It is still early days and all the rules are not yet clear. It has been said that tax residents who import funds from countries that have a DTA with Thailand, will not be effected. Exactly how that will work leaves many questions unanswered hence this document attempts to look at only the most popular types of income based on what is known at present. This document does not speculate as to what may happen in the future, other than in the segment at the end concerning likely future Immigration rules.

 

15. If we take the simplest type of income and say that you transfer personal savings from overseas to Thailand and those savings  were earned before 1 January 2024, those funds are not assessable but savings earned after that date are, hence the date when the income is earned is extremely important. A word of caution, you may be asked to provide proof that savings were earned before 1 January 2024.  

 

16. Another common type of income is pensions, which can be complicated, depending on the type of pension and the country that it comes from. The country of origin is important because there are over 60 different types of Dual Tax Agreements, sometimes called Double Taxation Agreements (DTA’s), between Thailand and those 60+ countries and each one is different. As a general rule, most private or company pensions from most countries appear to be assessable here but YOU will need to confirm that yours is or is not. If that is true, private and company pension income IS assessable income in Thailand.

 

17. US Social Security payments, a form of pension paid to some older people, can only be taxed by the US under DTA rules 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 whilst UK Government or Civil Service pensions are not!

 

18. The proceeds from the sale of a capital item such as overseas property, where funds are remitted to Thailand, is one popular source of funds, the sale of some investment products such as stocks, shares and bonds is another. Those proceeds typically comprise two parts, capital and profit. If the capital was acquired before 1 January 2024, it is free of Thai tax. One way to separate capital and profit may bee to have an official valuation or statement that is dated 1 January 2024 since anything earned before that date, is not assessable. Also, if the profit has been the subject of a Capital Gains return in the home country, that also may be free of Thai tax but this cannot be guaranteed at this time, until things are made more clear and are once again subject to the terms of any DTA. YOU will need to review the DTA between Thailand and your home  country to fully understand what particular clauses affect you.

 

19. It appears as though most property rental income that is remitted to Thailand is considered to be assessable income and is taxable here, unless of course it has been taxed in the home country and/or the DTA prohibits its taxation (which seems unlikely).

 

20. YOU are responsible for determining if you have the minimum assessable income in Thailand each year which means you must file a tax return. That assessable income might comprise, pension payments, investment income, rental income or any of the other types of income listed in the link above. If you have assessable income of over 120,000 baht per year, you must file a tax return (60,000 baht if your sole source of assessable income is bank interest paid in Thailand).

 

21. Completing a tax return is a simple affair for most people, if you have difficulty, the Revenue Department staff are extremely helpful. Tax returns must be filed between 1 January and 30 March each year, if you file later than that, penalties will apply.

 

22. The Thai tax system contains a series of Allowances, Deductions and Exemptions that will help you reduce your tax bill and they are very generous. It is easily possible for the average expat foreign retiree to reduce their taxable income by 500,000 baht or more each year. For example, a retiree aged 65 years of age, married and living here full  time, supporting a Thai wife who has no income, is allowed the following:

 

23. LIST EXAMPLE DEDUCTIONS ETC HERE

 

24. A complete list of deductions, allowances and exemptions can be found here

25. LINK

 

26. The Thai Revenue  tax filing system is online but is only available in Thai language at present. The tax forms are however available in English and they can be downloaded from the link below:

27. LINK

 

28. A simple sample completed tax form for a person aged over 65 years is shown below.

29. SAMPLE FORM

 

30. Tax filing in Thailand is based on the honor system, it relies on you declaring all the right information every year and there are severe penalties for avoiding Thai tax. It cannot be ruled out that at some point, a link may be established between tax filings and visa extensions, along with tax clearance certificates required to leave the country. This is possible because similar things have been adopted in several countries in the past, including the US.

 

31. There are several sources of detailed tax information and these web sites are linked below:

32. LINKS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[jerrymahoney]

14 minutes ago, Mike Lister said:

30. Tax filing in Thailand is based on the honor system, it relies on you declaring all the right information every year and there are severe penalties for avoiding Thai tax.

Self-assessment and self-reporting is how it works in the USofA. No sane person will want to play games with the I-R-S (Internal Revenue Service).

 

No one, as might happen in Thailand with the Thai RevDept., ever asks themselves as to the IRS: 

 

How will they ever find out if ...

[Mike Lister]

1 minute ago, jerrymahoney said:

Self-assessment and self-reporting is how it works in the USofA. No sane person will want to play games with the I-R-S (Internal Revenue Service).

 

No one, as might happen in Thailand with the Thai RevDept., ever asks themselves as to the IRS: 

 

How will they ever find out if ...

A very valid point, especially given that many expats regard Thailand as third world with third word capabilities. I shall find a form of words! Thanks

[jerrymahoney]

54 minutes ago, Mike Lister said:

Exactly. But I think it's still useful to let people know what the Thai considers not assessible income to be hence I propose to leave it in my wrote up, unless others disagree.

While I will agree that Thai Rev does not seem to use the term "non-assessable" it's not like it isn't ever used elsewhere:

Amounts you don't include
You may receive money that you don't need to include as assessable income in your tax return. You may still need to report these amounts so we can work out your tax losses or eligibility for tax offsets or benefits.

 

Amounts you don’t include as assessable income fall into 3 categories:

 

exempt income
non-assessable, non-exempt income
other non-taxable amounts.

 

https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/amounts-you-do-not-include-as-income

[sirineou]

1 hour ago, Mike Lister said:

if you can find the time and the inclination that is!

55555

Thank you for taking the time to post the above, your effort is appreciated. 

I certainly have the time and inclination to read the article you posted, what I did not have the time was to mine hundreds of paged of arguments concerning things that do not apply . 

I would appreciate a link to the actual web page, because the links to more specific information in your post do not work, I suspect you pastes as plain text, which made the links inoperable. something that I often also do. 

  It seems to me that a new industry of expat tax specialist is about to join the ranks of visa agents. 

It seems that I am fortunate that my SSI and private pension are excluded and since the funds remitted by me do not exceed that income I fall below the “assessable”

I wonder how I would have to prove , if required that my income is derived from those sources and not other available to me . 

Anyway Thank you again.  

 

[Mike Lister]

1 minute ago, sirineou said:

55555

Thank you for taking the time to post the above, your effort is appreciated. 

I certainly have the time and inclination to read the article you posted, what I did not have the time was to mine hundreds of paged of arguments concerning things that do not apply . 

I would appreciate a link to the actual web page, because the links to more specific information in your post do not work, I suspect you pastes as plain text, which made the links inoperable. something that I often also do. 

  It seems to me that a new industry of expat tax specialist is about to join the ranks of visa agents. 

It seems that I am fortunate that my SSI and private pension are excluded and since the funds remitted by me do not exceed that income I fall below the “assessable”

I wonder how I would have to prove , if required that my income is derived from those sources and not other available to me . 

Anyway Thank you again.  

 

There are no links at this stage, I haven't inserted them. I'm trying to agree the narrative first.

[Mike Lister]

5 minutes ago, jerrymahoney said:

While I will agree that Thai Rev does not seem to use the term "non-assessable" it's not like it isn't ever used elsewhere:

Amounts you don't include
You may receive money that you don't need to include as assessable income in your tax return. You may still need to report these amounts so we can work out your tax losses or eligibility for tax offsets or benefits.

 

Amounts you don’t include as assessable income fall into 3 categories:

 

exempt income
non-assessable, non-exempt income
other non-taxable amounts.

 

https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/amounts-you-do-not-include-as-income

Agreed. Somebody did post a link to Thai RD Non-assessible income that forms part of the RD tax code so the term is in use here which is why I think it should be included in the write up.

[jerrymahoney]

1 hour ago, Guavaman said:

Same problem -- nothing personal.

As I was directly quoting Mr. Gant, I will presume that he will not take it personal -- although maybe he will.

[sirineou]

11 minutes ago, Mike Lister said:

There are no links at this stage, I haven't inserted them. I'm trying to agree the narrative first.

I saw this : "

24. A complete list of deductions, allowances and exemptions can be found here

25. LINK"

and thought that 

 item 25 was a link to the above mentioned deductions. 

[UKresonant]

Suggestion, add "of the following year" to the tail of "8"

 

38 minutes ago, Mike Lister said:

and those savings  were earned before 1 January 2024, those funds are not assessable but savings earned after that date are, hence the date when the income is earned is extremely important.

 

The proof the savings principle has previously been taxed may also become relevant / useful going forward?

 

(I'm thinking of, for example I [whilst non-resident] save £1000 from taxed income in 2024 and put it in an isolated savings account, any interest is either not credited or immediately transferred out and I remit the principle to Thailand in 2030 [whilst resident]. Obviously would remit savings when non-resident if the opportunity & anticipation was prevailing.)

 

[Mike Lister]

3 minutes ago, sirineou said:

I saw this : "

24. A complete list of deductions, allowances and exemptions can be found here

25. LINK"

and thought that 

 item 25 was a link to the above mentioned deductions. 

It's a place holder in the draft link