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

[YankeeExpat]

I wanted to Thank Mike Lister for getting us all the Tax Guide information.

I appreciate the clarity.

[TroubleandGrumpy]

2 hours ago, Mike Lister said:

Anyone who stay in the country for more than 180 days in the same calendar year, is resident for tax purposes and is obliged to pay tax, regardless of their visa type. There is no if and or but about this, unless you want to provide a conclusive link to a reliable well established source, confirming otherwise. Calling somebody a tourist, a resident,  a holiday maker or any other name, doesn't change the fact of the matter. 

 

"Residents are defined as persons residing in Thailand at one or more times for an aggregate period of 180 days or more in any tax (calendar) year. Short-term residence is not defined under Thai tax regulations".

 

https://taxsummaries.pwc.com/thailand/individual/residence

Lets agree to disagree about what technically and legally is a resident and a tax resident and a Resident.

Hacing residence - as per a residence certificate - is not a Resident.

Staying in Thailand 180+ days a year is only a term used to 'claim' their income for tax purposes. 

Hopefully, the Thai RD will provide clarification at some point this year.

[TroubleandGrumpy]

1 hour ago, UKresonant said:

I think that my centre of vital interest will likely be the UK, with article 4 fiscal domicile. 

Non-resident non-O or tourist visa,  unlikely to be in Thailand more than 90 / 150 days on a single trip, unless there was a specific need.

Own nothing in Thailand, if the wife buys a property I had to sign it was nothing to do with me anyway. 

The only thing I have there is enough to maintain bank accounts. 

 

 

UK Ties

90 day tie likely will be there 92+ Most years. Valid at least 2 years anyway

Accommodation tie aways available and use it every year hopefully.

 

99.8 % of Income originates from the UK.

 

But don't wish to get to that level, that Article 4, fiscal domicile needs debating.

 

Should I  become tax resident in Thailand in the future. I would try and design things in initial years. 

 

1. Not having to file.

2. Not filing, whilst ensuring I'm absolutely not due any tax to Thai RD, article 4 may also help, Thailand not cetre of vital (tax) interest,  if questioned.

Would have to make sure bank interest never exceeds 60k THB ( not difficult probably)

3. If I was there all year in the more distant future, UK sufficient ties not in place, yes would file in Thainland etc

 

I have no tax assessable items for  Thailand currently  the one year I was perhaps Tax resident, was spent, and cannot still be mingled on the books. So I would be in the same situation as someone as a brand new arrival, despite having been every year since 1993 (except 21/22 Covid .)

 

Just don't want any hassle!

 

(Pray they never move to Global Tax, that would make things substantially problematic for me.....)

Yes indeed - a move to global taxation by Thailand will be a disaster for all Expats.

Under that arrangement it will be very hard if not impossible to avoid paying income taxes in Thailand.

 

[Mike Lister]

5 hours ago, TroubleandGrumpy said:

Lets agree to disagree about what technically and legally is a resident and a tax resident and a Resident.

Hacing residence - as per a residence certificate - is not a Resident.

Staying in Thailand 180+ days a year is only a term used to 'claim' their income for tax purposes. 

Hopefully, the Thai RD will provide clarification at some point this year.

Stop Press! The Revenue has already clarified matters:

 

1.Taxable Person

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

https://www.rd.go.th/english/6045.html#:~:text=1.Taxable Person,any tax (calendar) year.

[Mike Lister]

6 hours ago, UKresonant said:

I think that my centre of vital interest will likely be the UK, with article 4 fiscal domicile. 

Non-resident non-O or tourist visa,  unlikely to be in Thailand more than 90 / 150 days on a single trip, unless there was a specific need.

Own nothing in Thailand, if the wife buys a property I had to sign it was nothing to do with me anyway. 

The only thing I have there is enough to maintain bank accounts. 

 

 

UK Ties

90 day tie likely will be there 92+ Most years. Valid at least 2 years anyway

Accommodation tie aways available and use it every year hopefully.

 

99.8 % of Income originates from the UK.

 

But don't wish to get to that level, that Article 4, fiscal domicile needs debating.

 

Should I  become tax resident in Thailand in the future. I would try and design things in initial years. 

 

1. Not having to file.

2. Not filing, whilst ensuring I'm absolutely not due any tax to Thai RD, article 4 may also help, Thailand not cetre of vital (tax) interest,  if questioned.

Would have to make sure bank interest never exceeds 60k THB ( not difficult probably)

3. If I was there all year in the more distant future, UK sufficient ties not in place, yes would file in Thainland etc

 

I have no tax assessable items for  Thailand currently  the one year I was perhaps Tax resident, was spent, and cannot still be mingled on the books. So I would be in the same situation as someone as a brand new arrival, despite having been every year since 1993 (except 21/22 Covid .)

 

Just don't want any hassle!

 

(Pray they never move to Global Tax, that would make things substantially problematic for me.....)

Everyone's situation will be different of course but I do think there's more panic about this tax residency business than is warranted. The key issue for me is whether or not tax is being paid somewhere, if it is, the reporting part is simply overhead and effort but there will not be a financial burden for most people. 

 

I file three tax returns most years, at first this was a scary thought but later it became routine and is very quick and inexpensive. I file a US return to reclaim tax withheld on SSc income, a UK return because I have UK income and some years, a Thai tax return. I'm in a routine of recording my income from different sources so I can manage and control things if I'm getting into tax territory. There's only 365 days in a year, which means that whilst I have income that arises in in various countries and have to pay tax and file a return in different places, I can only be tax resident in two countries at a time, 180 +183, for me that's Thailand and the UK where tax returns are easy. In my younger days, things were more complex when I also had accounts in HK, Lux and Sing and that required effort, if you're in that situation, a tax advisor is a good idea.

[TroubleandGrumpy]

5 hours ago, Mike Lister said:

Stop Press! The Revenue has already clarified matters:

 

1.Taxable Person

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

https://www.rd.go.th/english/6045.html#:~:text=1.Taxable Person,any tax (calendar) year.

Within that same document is a Caluse which clearly states all foreigners leaving Thailand must have a tax clearance. 

And there are many other things that are either not applied, are 'over-ruled' by another section, or are just ignored by Thai RD.

There is a big difference between the Revenue Code and reality - same for all Government rules and regs.

[samtam]

12 hours ago, Mike Lister said:

Re. Number 1 - if it weren't for the existence of the Personal Allowance, that tax free zone, the State pension would be taxable. But because the PA does exist, the SP is taxable but effectively at a zero rated band. The net is that the SP has been thru the tax return process, if the PA were removed tomorrow, the SP would be taxed at 20%.

 

Re. Number 2 - I'm struggling with this. That income is not taxable in HK but when it is imported here it may be, you aren't a citizen (presumably) of HK, you only have an investment there so I don't think you can invoke a DTA, even if it were favorable to you. I think bottom line may be that it is Thai taxable but I'm not certain.

 

Re: pre 1 Jan 2024 income - correct.

 

 

 

Re. Number 2, I a Permanent Resident of Hong Kong with Right of Abode, so I don't know whether that affects this income.

[Mike Lister]

4 minutes ago, TroubleandGrumpy said:

Within that same document is a Caluse which clearly states all foreigners leaving Thailand must have a tax clearance. 

And there are many other things that are either not applied, are 'over-ruled' by another section, or are just ignored by Thai RD.

There is a big difference between the Revenue Code and reality - same for all Government rules and regs.

It's probably more difficult to make the Revenue stop enforcing rules that they chose to enforce than it is to make them enforce rules that they don't want to! Ultimately it's their decision, their rules their country, all we can do is to be aware. But ultimately, every country has laws on its books that exist but are never enforced, nobody has ever said that only actively enforced rules may exist.

 

https://brittontime.com/2020/11/09/10-weird-uk-laws-people-break-every-day/

 

https://eaglewools.com.au/weird-australian-laws-you-may-not-have-heard-of/aussie-fun/

 

https://forestgrove.pgusd.org/documents/Computer-Lab/Strange-State-Laws.pdf

 

 

[Mike Lister]

4 minutes ago, samtam said:

 

Re. Number 2, I a Permanent Resident of Hong Kong with Right of Abode, so I don't know whether that affects this income.

It might, I don't know. logically it should but I can't say, sorry. If it was me I think I would give it a try, the rationale is sound.

[samtam]

15 hours ago, Mike Lister said:

Number 1, the UK State Pension, is subject to the UK tax return process and even though no tax is paid on it, that means it is free of tax here. The key is that the income is subject to the process, not necessarily that tax is paid.

 

 

Oh I understand your comment. The UK State Pension (UKSP) is tax free based on the TEDA. My UKSP is THB431,800 and my TEDA is THB500,000.

 

What I find so odd about the situation in Thailand, is that for many of us, on visas, extended based on Retirement, we are strictly forbidden from working in Thailand, and so are totally reliant on income from abroad to meet daily necessities, such as food, accommodation etc. Holders of LTR for "wealthy retirees" are exempt from tax for inward remittances, and I venture to say this should be the default position for expat retirees. But what I think matters not a jot to the Thai government, and catering to the "desirable expat retirement destination" is not even on the radar.

[samtam]

1 hour ago, Mike Lister said:

It might, I don't know. logically it should but I can't say, sorry. If it was me I think I would give it a try, the rationale is sound.

 

"giving it try"....by getting a CPA? Maybe others in this situation, (HK investment income at zero tax at source), could chime in.

[redwood1]

17 minutes ago, samtam said:

 

Oh I understand your comment. The UK State Pension (UKSP) is tax free based on the TEDA. My UKSP is THB431,800 and my TEDA is THB500,000.

 

What I find so odd about the situation in Thailand, is that for many of us, on visas, extended based on Retirement, we are strictly forbidden from working in Thailand, and so are totally reliant on income from abroad to meet daily necessities, such as food, accommodation etc. Holders of LTR for "wealthy retirees" are exempt from tax for inward remittances, and I venture to say this should be the default position for expat retirees. But what I think matters not a jot to the Thai government, and catering to the "desirable expat retirement destination" is not even on the radar.

 

This tax has more holes in it than Swiss Cheese

 

Like you say the LTR visa is officially exempt.....A visa for pretty well off folks..

 

Or just stay 179 days wire in a zillion dollars...Leave then come back in 6 months and your zillion dollars is 100% tax free...

 

Or just become a Thai very few Thais pay any tax.....lol

 

Or just claim all your money was made before 2024

 

Or Or Or, bla bla bla

[samtam]

11 minutes ago, redwood1 said:

 

This tax has more holes in it than Swiss Cheese

 

Like you say the LTR visa is officially exempt.....A visa for pretty well off folks..

 

Or just stay 179 days wire in a zillion dollars...Leave then come back in 6 months and your zillion dollars is 100% tax free...

 

Or just become a Thai very few Thais pay any tax.....lol

 

Or just claim all your money was made before 2024

 

Or Or Or, bla bla bla

 

Yes, I have considered the LTR visa route, but not sure whether I qualify. I used a LTR visa "specialist agent" whose enquiries initially elicited a "yes", (with various "alternative requirements" to satisfy financials), but then there was a misunderstanding about my marital status, so it's a "maybe". I don't want to abandon the Extension based on Retirement, only to find out that the tax rules have change for LTR in 5 years, or the "maybe" becomes "maybe not", and I have to reapply for an "O" Visa, and all the pain in the derriere that entails.

[4MyEgo]

12 hours ago, UKresonant said:

I would certainly not want to rely on the tie breaker in article 4, as a principle reason for not filing, if you know you have remitted (especially) non pension , non-pre-taxed income . Very thin ice. UK HMRC or equivl. may not issue a "letter of confirmation" then your hung out to dry. Just have to file.....

 

All of my pensions are pre-taxed in the UK in any case.

 

The way I see it is, if you remit money from overseas to Thailand, after 1 January 2024 that you can prove have been savings prior to 1 January 2024 when the amendment to the code came in effect, then you are fine.

 

The above said, I can show that those savings have been there since I moved here, i.e. in the bank, so they are not taxable here as they are not considered as being income.

 

The shares that I buy and pay dividends, are already taxed in Oz, so they have Buckley's of taxing what has already been taxed.

[4MyEgo]

12 hours ago, TroubleandGrumpy said:

Fair enough - lets respectfully agree to disagree.

 

One point - the ATO will not and cannot provide financial details of Aust Citizens to another country - without an Aust Court order.  The banks can but only with due authority and approval under the rules/regulations. 

 

Your incorrect on that, they have an agreement to communicate information about citizens of each others countries that reside in each others countries for the purposes of ascertaining if they have lodged tax returns regarding residency clarification. 

 

No court orders required, however what I read was, that if it was not in the interest of public policy, then no such information would be transmitted.

 

At the end of the day, they write the legislation and agreements, and can basically do whatever they want.

 

We on the other have to educate ourselves on the legislation and agreements and find ways around them, if we can, after all, sitting on bar stools doesn't provide us with loopholes, only other holes.

[Ben Zioner]

49 minutes ago, samtam said:

A visa for pretty well off folks..

Dunno what you mean by "pretty well off". LTR, with an 80000 USD pension plus health cover requirement. It is for anyone who had a middle management career and retired at the "normal age", as defined by their pension funds. That's my case and there are probably 50 Million of other people in that situation in Europe alone. 

[CapraIbex]

@Mike Lister

Would you please have a look at my brief write-up if I understand the matter correctly.

Concerning my Tax exposure.
I am an Australian non-resident for tax purposes and a tax resident of Thailand. I am married to a Thai lady, and our marriage is child-free. While I do not have health insurance, I am able to pay private hospital bills using my AMEX card account.

Before January 1, '24, and by adhering to the 'one-year rule,' I loosely remitted funds to Thailand as needed.

My Australian private pension income and other financial benefits obtained from investments in Australia are tax-free, and I believe that they are regarded as assessable income in Thailand under some 'Internal Regulations'.

Since income that is remitted to Thailand is taxable here, regardless of the year it was earned, I should now be extra cautious and vigilant, avoiding or minimizing my tax exposure. Is my understanding of the above correct?

Concerning International Gift Tax Rules.
If I wish to purchase a new car, make renovations/improvements to my wife's house, or receive special treatments in a private hospital, and wish to remit, say, THB 2M to cover these extra costs, my tax exposure would be THB 262,500.00 (I used the spreadsheet provided by 'pauku1' posted January 26, https://aseannow.com/topic/1318120-revenue-department-contact-reports/#comment-18647010).

If this is indeed correct, could it be construed as a gift (a legitimate tax avoidance/minimization) by remitting the said funds directly from my Australian bank account to my wife's Thai bank account?
If this scenario is deemed acceptable, will my wife have to complete a tax form and notify the RD?  (Presently, Australia has no Gift Tax Rules).

Concerning International Inheritance Tax Rules
Presently, Australia has no Inheritance Tax. As I am now on a steep, slippery slope, I am wondering if my wife (the inheritor) will encounter inheritance tax implications once my considerable wealth is transferred from Australia to her Thai bank account(s)?

In one of your posts you mentioned "Inheritance and Gifts between certain family members in Thailand are free of tax, up to a maximum amount and subject to certain conditions." Are these conditions applicable for the above mentioned assumption? (Sherrings Tax Insights have no reference to Inheritance/Gift Taxes sourced from overseas).

[topt]

24 minutes ago, Ben Zioner said:

Dunno what you mean by "pretty well off". LTR, with an 80000 USD pension plus health cover requirement. It is for anyone who had a middle management career and retired at the "normal age", as defined by their pension funds. That's my case and there are probably 50 Million of other people in that situation in Europe alone. 

What you suggest makes sense however it does not seem to be borne out by available statistics from the UK -

https://www.gov.uk/government/statistics/pensioners-incomes-series-financial-year-2020-to-2021/pensioners-incomes-series-financial-year-2020-to-2021

 

[samtam]

1 hour ago, Ben Zioner said:

Dunno what you mean by "pretty well off". LTR, with an 80000 USD pension plus health cover requirement. It is for anyone who had a middle management career and retired at the "normal age", as defined by their pension funds. That's my case and there are probably 50 Million of other people in that situation in Europe alone. 

"pretty well off" not my words....@redwood1's

LTR visa is for "wealthy retirees"....LTR's words.

Edited February 6 by samtam

[Yumthai]

2 hours ago, 4MyEgo said:

The way I see it is, if you remit money from overseas to Thailand, after 1 January 2024 that you can prove have been savings prior to 1 January 2024 when the amendment to the code came in effect, then you are fine.

 

The way I see it: many foreigners live in Thailand for years getting yearly extensions of stay without actually meeting the financial requirements.

Likewise, there will be many foreigners stating (if ever asked) that all the money they remit in Thailand are savings prior 1 Jan 2024, gift/inheritance or already taxed income without actually getting proper documentation.

 

Thailand is unable to discern a genuine foreign document from an edited one.

Thailand has 0 power to enforce its tax law offshore and certainly can't require any docs from third-parties abroad.

 

[Mike Lister]

4 minutes ago, Yumthai said:

 

Thailand is unable to discern a genuine foreign document from an edited one.

Thailand has 0 power to enforce its tax law offshore and certainly can't require any docs from third-parties abroad.

 

I'm pretty sure they can, I think you under estimate the Revenue. The real question is, do they want to and are they likely to do so. They certainly do have the powers and they do have the abilities, those things are plainly clear. Whether or not they want to start checking small fry, detail level level paperwork of pensioners is highly questionable. The problem with all of this is the risk, if they decide to make an example or an exception, for whatever reason, the penalties are harsh. 

[Yumthai]

14 minutes ago, Mike Lister said:

The problem with all of this is the risk, if they decide to make an example or an exception, for whatever reason, the penalties are harsh. 

To me, the risk is significantly lower than in the West and can be avoided. Why? Because of corruption.

If you have the right connections or enough money you don't have to worry in Thailand.

Sure it needs "some" money, but if your are poor the good news is you don't have to pay tax.

 

[Ben Zioner]

1 hour ago, samtam said:

"pretty well off" not my words....@redwood1's

LTR visa is for "wealthy retirees"....LTR's words.

Fairy nuff. But the word "wealthy" associated to my visa makes me chuckle. I am totally "educated workers class". I reiterate: anyone from EU/US who keeps his life under control and studies/works hard until normal age of retirement would meet the LTR requirements. The reason why BOI don't get that many candidates is probably because most people in that group won't see much incentive in moving to Thailand. Many of my friends back home have a rather negative view of Thailand.

[Mike Lister]

5 minutes ago, Ben Zioner said:

Fairy nuff. But the word "wealthy" associated to my visa makes me chuckle. I am totally "educated workers class". I reiterate: anyone from EU/US who keeps his life under control and studies/works hard until normal age of retirement would meet the LTR requirements. The reason why BOI don't get that many candidates is probably because most people in that group won't see much incentive in moving to Thailand. Many of my friends back home have a rather negative view of Thailand.

The stereotype image will prevail amongst those back home for at least two more decades, I became tired of trying to correct perceptions and explain the reality.

[stat]

19 hours ago, UKresonant said:

If the dividends are distributed, whilst you are tax resident in Thailand, from 2024, they are Thai tax assesable whenever you remit them to Thailand. 

Dividends and interest tend to be taxed where you are (tax) resident, said a credible  YouTube channel, rather than where they arise.

 

(I would have the same situation with tax free in UK, Individual savings account, dividends. (As part of my UK end re-shuffle they will all trail to the account paying UK end essentials.) Dividends and gains taxable as just any other income in Thailand. So they will be a static income and growth  portfolios if I'm in Thailand for a while. 

Most countries levy a withholding tax on dividends at source (UK, Singapore and some others not) which could be set off against a potential thai tax. Otherwise correct you pay tax on dividends where you reside.

[stat]

2 hours ago, Ben Zioner said:

Fairy nuff. But the word "wealthy" associated to my visa makes me chuckle. I am totally "educated workers class". I reiterate: anyone from EU/US who keeps his life under control and studies/works hard until normal age of retirement would meet the LTR requirements. The reason why BOI don't get that many candidates is probably because most people in that group won't see much incentive in moving to Thailand. Many of my friends back home have a rather negative view of Thailand.

From a thai perspective you are wealthy and then there is also the marketing which gives you a warm feeling that you are wealthy that is why they call it that way🙂

[UKresonant]

5 hours ago, Ben Zioner said:

Dunno what you mean by "pretty well off". LTR, with an 80000 USD pension plus health cover requirement. It is for anyone who had a middle management career and retired at the "normal age", as defined by their pension funds. That's my case and there are probably 50 Million of other people in that situation in Europe alone. 

 

For many years, until only months ago the UK pension system had a total fund value cap of $1.34M life time allowance, with a 25% Tax free lump sum from that of circa $335k. Before they ran into punitive Tax on any Excess. The total cap is gone (for now), but the Tax free lump sum is still frozen at the $335k. The "plus healthcare" outside the UK perhaps not, would have to be a separate privately paid provision in most cases, as would be a sustainable pension above circa $53k p.a.. 

The UK state pension could add $15k to the $53k, still falls short. 

The UK state pension is below the provision in many similar countries and relies on the fact of Free healthcare, but that is generally only whilst still in the UK.

 

Falls short a bit.

 

Sympathy 😢

Edited February 6 by UKresonant

[UKresonant]

2 hours ago, Yumthai said:

 

The way I see it: many foreigners live in Thailand for years getting yearly extensions of stay without actually meeting the financial requirements.

Likewise, there will be many foreigners stating (if ever asked) that all the money they remit in Thailand are savings prior 1 Jan 2024, gift/inheritance or already taxed income without actually getting proper documentation.

 

Thailand is unable to discern a genuine foreign document from an edited one.

Thailand has 0 power to enforce its tax law offshore and certainly can't require any docs from third-parties abroad.

 

I'm hoping they would accept if checked, the payment advice slip from the pension, that payment on the receiving bank statement, and the net amount being SWIFT transferred to Thailand. and hopefully show them sample proof verification via online banking? the P60 is mainly a A4 print now.

 

Legalization, letter from Embassy, and all that guff would just would be totally impractical or even available perhaps.

 

(If RD recognise items for Tax, would it not be reasonable that Immigration then recognise it?) 

[NanLaew]

20 hours ago, TroubleandGrumpy said:

One point - the ATO will not and cannot provide financial details of Aust Citizens to another country - without an Aust Court order.  The banks can but only with due authority and approval under the rules/regulations. 

 

I am not sure how that legal protection of the individual will stand as the needs and demands of being a member nation of the OECD grow. It's assumed that Thailand's RD deciding to activate this decades-old, but previously unenforced ruling on assessable income is to assuage the requirements of OECD membership and demands of fellow member nations that may already have a more "worldly" revenue department.

 

Since the G20 'banned' banking secrecy in 2009, there's been steady growth of agreed, international rules and regulations that banks need to comply with in order to maintain their access to global banking networks. They have been legally bound to carry out KYC (know your customer) due diligence for over a decade already. Once they verify who you are and your tax ID number (TIN), your personal identity is reduced to that anonymous sequence of numbers and legally, that's all they need to share with other, foreign agencies. Nobody cares or needs to know if you are a single, retired bricklayer from Nuneaton, living outside Chiang Rai on a Retirement Extension and a part time job teaching English online to Chinese students.

[Ben Zioner]

1 hour ago, UKresonant said:

 

For many years, until only months ago the UK pension system had a total fund value cap of $1.34M life time allowance, with a 25% Tax free lump sum from that of circa $335k. Before they ran into punitive Tax on any Excess. The total cap is gone (for now), but the Tax free lump sum is still frozen at the $335k. The "plus healthcare" outside the UK perhaps not, would have to be a separate privately paid provision in most cases, as would be a sustainable pension above circa $53k p.a.. 

The UK state pension could add $15k to the $53k, still falls short. 

The UK state pension is below the provision in many similar countries and relies on the fact of Free healthcare, but that is generally only whilst still in the UK.

 

Falls short a bit.

 

Sympathy 😢

I would expect the typical retired UK middle manager to bridge that gap with a private pension. Look at @topt 's post.