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

[Mike Teavee]

32 minutes ago, UKresonant said:

For myself I speculate;-

Under 65

  60000THB (personal allowance)

150000THB (nil tax band)

  70000THB (Taxed only in UK. Gov pension)

 

The above all net of tax, based on actual  remittance, landing in the Thai Bank Account.

 

Above 65 can add 190000 old age allowance!

 

Then there is the 50% of pension deductible (amongst others ) up to 100k Baht.

 

So for me generally, I think

380k THB Under 65

570k THB Over 65. 

 

Not nitpicking, just checking to see if I missed something... Did you mean 280K under 65 (60K PA +150K nil tax band + 70K from your government pension) & so 470K over 65?

 

For me the "Tax Free" number is 235K made up of:-

    - 60,000 Personal Allowance

    - 150,000 nil tax band 

    - 25K for Health Insurance

... which is exactly the amount I'll be xferring (to myself) this year 🙂 

[UKresonant]

9 hours ago, JohnnyBD said:

Mike,

People seem to be confusing what is assessable income versus what is non-assessable income. If someone is a Thai tax resident in 2024, and they sold a $500k house (rental or primary residence) in their home country in 2024 which they owned prior to 2024, and the original cost basis was $400k, they would have a $100k capital gain. If they remitted that $400k to Thailand, and left the $100k of capital gains in their home country, that $400k would be non-assessable income. If they remitted the entire $500k, only the $100k in capital gains would be assessable income. Isn't that correct? Also, for example, if I borrowed $ against my property, stock investments, or even my CC 2.9% cash advance offer and remitted that money to Thailand, then that money is also non-assessable because it's not earned income or income from investments. It's loan proceeds. For some reason, I seem to see things as being pretty straight-forward and simple. Am I looking at this wrong?

Remitting $400k, would make it $80k gain most probably, still a big tax bill.

Could always file on the 1st April perhaps...without losing face. .

[UKresonant]

11 hours ago, Mike Lister said:

Yes, I agree in bold above. The year of remittance alone is not enough, the year the income was earned is the other issue. 

Perhaps the the year the income is earned whilst Thai Tax resident, is the more important.

Exchange of information with home country tax authority approximate your in year income.

What if;-any income arising that year is assessable as it is remitted to Thailand at anytime (161), until that total in year total is cumulatively reached. 

"But it can't be I spent it or at least  the remainder of it, on overseas commitments in that year" 

'Prove that then'

 

Just sharing a recent nightmare 

[UKresonant]

1 hour ago, Mike Teavee said:

 

Not nitpicking, just checking to see if I missed something... Did you mean 280K under 65 (60K PA +150K nil tax band + 70K from your government pension) & so 470K over 65?

 

For me the "Tax Free" number is 235K made up of:-

    - 60,000 Personal Allowance

    - 150,000 nil tax band 

    - 25K for Health Insurance

... which is exactly the amount I'll be xferring (to myself) this year 🙂 

Is there not also a deductible of 50% of pension to a max of 100k baht ( not at PC currently  to check the detail )

[Mike Teavee]

9 minutes ago, UKresonant said:

Is there not also a deductible of 50% of pension to a max of 100k baht ( not at PC currently  to check the detail )

I believe there is a pension allowance of 50% up to a max of 100K so that’s probably the 100K I missed 👍🏻

[Mike Lister]

1 hour ago, UKresonant said:

Perhaps the the year the income is earned whilst Thai Tax resident, is the more important.

Exchange of information with home country tax authority approximate your in year income.

What if;-any income arising that year is assessable as it is remitted to Thailand at anytime (161), until that total in year total is cumulatively reached. 

"But it can't be I spent it or at least  the remainder of it, on overseas commitments in that year" 

'Prove that then'

 

Just sharing a recent nightmare 

I agree, I think it is.

[Mike Lister]

1 hour ago, Mike Teavee said:

I believe there is a pension allowance of 50% up to a max of 100K so that’s probably the 100K I missed 👍🏻

Yes, it is.

[Mike Lister]

I'm going to update the Simple Guide to correct two problems, the following will now appear:

 

At the end of Gift Tax....I have removed by previous opinion and set out what is known:

 

Note: Because Gift Tax is a domain of the wealthy and depends to a large extent on local practise, there is a shortage of confirmed information on this subject. One field of thought is that Gift Tax cannot be used to escape Thai tax by Gifting untaxed money from overseas. On the other hand, many Western countries, including the UK, do not tax gifts from overseas. Members wishing to exercise this option should seek qualified advice before using this option to Gift untaxed funds. Two additional points on this subject are: 1) Funds that are gifted, must be for the use of the person to whom they are gifted. 2) Gifts can be revoked later and reclaimed, under specific circumstances, such as if the receiver of the gift defames the Gifter or fails to take care of their serious medical needs. Issues arise here when the receiver is the spouse of the gifter and under marital law, the gift is regarded as conjugal property. Until this becomes more clear, it is critical that anyone wishing to use Gift Tax, seeks professional advice.

 

and,

 

 

OVERVIEW OF THE TAX LAW

 

3)   Thai tax laws require Foreigners who reside in Thailand for one or more periods, with at least 180 days in one tax calendar year and who receive income from inside or outside Thailand via:

 

a) Income from employment (wages, salaries, remuneration, etc.) assessable under Section 40 of the Revenue Code;

b) Income from business operations is assessable under Section 40.

c) Passive or property income (interest, dividends, rental income, goodwill, pension etc.) based on Article 41 paragraph 2 of the Revenue Code.

 

….…to assess their income for Thai tax and file a tax return, providing the  assessable income threshold has been exceeded.

[Mike Lister]

Here's another one that we can either agree or comment on:

 

INCOME FOR REAL ESTATE PURCHASE

 

1) The Thai Revenue Code does not consider the purpose of the funds that are imported, only whether the funds are assessable or not. For example, funds imported to buy real estate will be addressed in the same way that imported funds for any purpose will be, there's nothing special about the fact those funds are buying property versus anything else. Note: it seems improbable that the Thai Revenue would wish to constrain or damage the Thai property market by appearing to tax remitted funds that are intended to purchase real estate here but we don’t know currently how this aspect will be addressed. One potential solution might require property buyers to leave their funds invested in real estate, for a minimum period, after which the funds will be considered free of PIT.

[JohnnyBD]

3 hours ago, UKresonant said:

Remitting $400k, would make it $80k gain most probably, still a big tax bill.

Could always file on the 1st April perhaps...without losing face. .

I assume "most probably" means this is your best guess, right? Do you know if Thai RD issued any rules on real estate sale proceeds being remitted, where they consider an equal percentage of principal and capital gains are remitted, not just the prinicipal amount. I also wonder about any proceeds from stock sales that are remitted. What if I sold 100 shares of XYZ and remitted just my original investment amount and keep the capital gains in the US? Do we get to decide what money we remit, or does RD get to decide what money we are remit? This issue should have been clarified already.

[Yumthai]

1 hour ago, Mike Lister said:

OVERVIEW OF THE TAX LAW

 

3)   Thai tax laws require Foreigners who reside in Thailand for one or more periods, with at least 180 days in one tax calendar year and who receive income from inside or outside Thailand via:

 

a) Income from employment (wages, salaries, remuneration, etc.) assessable under Section 40 of the Revenue Code;

b) Income from business operations is assessable under Section 40.

c) Passive or property income (interest, dividends, rental income, goodwill, pension etc.) based on Article 41 paragraph 2 of the Revenue Code.

 

….…to assess their income for Thai tax and file a tax return, providing the  assessable income threshold has been exceeded.

It could be implied but maybe it would be worth indicating that Thai-sourced income (and define it vs foreign-sourced) is always taxable in Thailand wherever it is received and regardless of the tax residence status.

[Mike Lister]

7 minutes ago, Yumthai said:

It could be implied but maybe it would be worth indicating that Thai-sourced income (and define it vs foreign-sourced) is always taxable in Thailand wherever it is received and regardless of the tax residence status.

OVERVIEW OF THE TAX LAW

 

3)   Thai tax laws require Foreigners who reside in Thailand for one or more periods, with at least 180 days in one tax calendar year and who receive income from inside or outside Thailand via:

 

a) Income from employment (wages, salaries, remuneration, etc.) assessable under Section 40 of the Revenue Code;

b) Income from business operations is assessable under Section 40.

c) Passive or property income (interest, dividends, rental income, goodwill, pension etc.) based on Article 41 paragraph 2 of the Revenue Code.

 

….…to assess their income for Thai tax and file a tax return, providing the  assessable income threshold has been exceeded. Thai-sourced income is always taxable in Thailand, wherever it is received and regardless of tax residence status. Foreign sourced income is subject to remittance, tax residency and other factors such as terms of a DTA.

[Mike Lister]

13 minutes ago, JohnnyBD said:

I assume "most probably" means this is your best guess, right? Do you know if Thai RD issued any rules on real estate sale proceeds being remitted, where they consider an equal percentage of principal and capital gains are remitted, not just the prinicipal amount. I also wonder about any proceeds from stock sales that are remitted. What if I sold 100 shares of XYZ and remitted just my original investment amount and keep the capital gains in the US? Do we get to decide what money we remit, or does RD get to decide what money we are remit? This issue should have been clarified already.

The documented TRD rules on remittances from overseas remain vague in many areas, especially those on CG. The majority of the tax code deals with domestic tax, tax on foreign income is relatively new hence the shortage of documentation. Apportionment of CG however is well understood as a principle of international taxation and is widely used.

[redwood1]

This whole tax insanity is very much like most other murky unclear unenforced non respected laws in Thailand....

 

Take vaping its illegal but vaps are openly sold in markets everywhere... 

Or

The restricted alcohol selling hours....Its ignored by almost everyone except supermarkets and maybe 7-11 sometimes....etc etc

 

I dont remember even once in the USA a new law was murky unclear and open to all kinds of interpretations....

 

Something as vastly vastly massively complicated as this nonsense tax will NEVER be made clear Ever ....Everyone here will be 6 feet under the ground and this thread will still be going 50 years from now I predict.....

 

 

 

 

[Mike Lister]

8 minutes ago, redwood1 said:

This whole tax insanity is very much like most other murky unclear unenforced non respected laws in Thailand....

 

Take vaping its illegal but vaps are openly sold in markets everywhere... 

Or

The restricted alcohol selling hours....Its ignored by almost everyone except supermarkets and maybe 7-11 sometimes....etc etc

 

I dont remember even once in the USA a new law was murky unclear and open to all kinds of interpretations....

 

Something as vastly vastly massively complicated as this nonsense tax will NEVER be made clear Ever ....Everyone here will be 6 feet under the ground and this thread will still be going 50 years from now I predict.....

 

 

 

 

There is gradual change over time and then there is step change, this potentially is step change.

[JohnnyBD]

38 minutes ago, Mike Lister said:

The documented TRD rules on remittances from overseas remain vague in many areas, especially those on CG. The majority of the tax code deals with domestic tax, tax on foreign income is relatively new hence the shortage of documentation. Apportionment of CG however is well understood as a principle of international taxation and is widely used.

Sorry to say, but all of these vague TRD rules are leading me to plan on leaving Thailand for 6 1/2 months every year, so that I am not a tax resident, or either buying the LTR visa starting next year when I need to remit some big money to buy our new condo. It's a shame, because I'm married to a wonderful Thai lady for past 7 years. If I was single, I wouldn't be here.

[Mike Lister]

1 minute ago, JohnnyBD said:

Sorry to say, but all of these vague TRD rules are leading me to plan on leaving Thailand for 6 1/2 months every year, so that I am not a tax resident, or either buying the LTR visa starting next year when I need to remit some big money to buy our new condo. It's a shame, because I'm married to a wonderful Thai lady for past 7 years. If I was single, I wouldn't be here.

Somebody, somewhere, knows the answers to these questions, we just need to figure who it is. It may well be that the rules are all clearly documented in the Thai (master) copy of the Revenue Code and we don't know. It would be interesting to get the perspective of a Thai CPA into these discussions, somebody who really understood the whole picture and not merely trying to get new business. Do Thai CPA's know more than we do at this stage, I wonder sometimes! Knowledge is everything here.

[JohnnyBD]

6 minutes ago, Mike Lister said:

Somebody, somewhere, knows the answers to these questions, we just need to figure who it is. It may well be that the rules are all clearly documented in the Thai (master) copy of the Revenue Code and we don't know. It would be interesting to get the perspective of a Thai CPA into these discussions, somebody who really understood the whole picture and not merely trying to get new business. Do Thai CPA's know more than we do at this stage, I wonder sometimes! Knowledge is everything here.

Thanks for your very kind reply. Some days I feel like I have a handle on this tax thing, and then some days I get a little anxious when I think about the consequences of messing up due to the vague rules. I don't like to unknowingly cause myself misery.

[JimGant]

2 hours ago, JohnnyBD said:

I also wonder about any proceeds from stock sales that are remitted. What if I sold 100 shares of XYZ and remitted just my original investment amount and keep the capital gains in the US? Do we get to decide what money we remit, or does RD get to decide what money we are remit?

 

Yes, there's definitely a lack of information. And, if in fact, there is no definitive guidance in any official Thai documentation -- well, you're clear to follow omnipresent Thai guidance: It's up to you. So, in your example, use FIFO, which prioritizes the original investment over latter gains and earnings. If ever questioned, you certainly haven't violated any rules and regs not yet in evidence (to my knowledge).

 

But, if there are any adults riding herd on this, we probably will eventually get some guidance. And Thailand has only the UK to emulate, as they are the only other country (that I can find) that taxes remitted income. And here are their rules:

 

Quote

Once income, capital or gains enters a mixed fund it is usually considered to lose its ‘identity’ within the fund. So rules are needed to determine what any subsequent remittance from that fund represents. The practical effect of these rules is that a taxpayer cannot limit the amount of UK tax that may be due by saying, for example, that a remittance from a mixed fund was made out of a particular amount of capital within the fund (and so not taxable) in preference to income in the same fund.

https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm35240

 

And further reading in this UK pub shows that a mixed remittance is, indeed, income first, capital second. Hmmmm.

[Mike Lister]

1 hour ago, JimGant said:

 

Yes, there's definitely a lack of information. And, if in fact, there is no definitive guidance in any official Thai documentation -- well, you're clear to follow omnipresent Thai guidance: It's up to you. So, in your example, use FIFO, which prioritizes the original investment over latter gains and earnings. If ever questioned, you certainly haven't violated any rules and regs not yet in evidence (to my knowledge).

 

But, if there are any adults riding herd on this, we probably will eventually get some guidance. And Thailand has only the UK to emulate, as they are the only other country (that I can find) that taxes remitted income. And here are their rules:

 

 

And further reading in this UK pub shows that a mixed remittance is, indeed, income first, capital second. Hmmmm.

 

1 hour ago, JimGant said:

 

Yes, there's definitely a lack of information. And, if in fact, there is no definitive guidance in any official Thai documentation -- well, you're clear to follow omnipresent Thai guidance: It's up to you. So, in your example, use FIFO, which prioritizes the original investment over latter gains and earnings. If ever questioned, you certainly haven't violated any rules and regs not yet in evidence (to my knowledge).

 

But, if there are any adults riding herd on this, we probably will eventually get some guidance. And Thailand has only the UK to emulate, as they are the only other country (that I can find) that taxes remitted income. And here are their rules:

 

 

And further reading in this UK pub shows that a mixed remittance is, indeed, income first, capital second. Hmmmm.

Interesting and useful, thanks.

[UKresonant]

5 hours ago, JohnnyBD said:

I assume "most probably" means this is your best guess, right? Do you know if Thai RD issued any rules on real estate sale proceeds being remitted, where they consider an equal percentage of principal and capital gains are remitted, not just the prinicipal amount. I also wonder about any proceeds from stock sales that are remitted. What if I sold 100 shares of XYZ and remitted just my original investment amount and keep the capital gains in the US? Do we get to decide what money we remit, or does RD get to decide what money we are remit? This issue should have been clarified already.

I'm just trying to be optimistic, the paperwork to prove the capital principle, would also perhaps  throw up the detail of the gain (even if zero rated at home)? Remitting $400k will surely trigger the alarm bells, whilst your fiscally domicile (Normally DTA Article 4) under Thai RD priority taxation.

 

Any big transaction like that (with favorable home contry treatment) safer to be resident in home country that year. 

In 2018 I made sure when making pension transactions, co-incidentally in March, I delayed coming to Thailand until after the UK tax year concluded on April 5th and cumulatively was less than 180days in the calendar Thai Tax year (Returning to UK as non-O ME.. 

The difference between a sure thing and a debatable situation.

[El Matador]

23 hours ago, Mike Lister said:

My personal opinion is that the government will not want to allow this tax rule change to impact the Thai property market, hence the idea that imported funds used to buy real estate here, will be taxed, seems improbable. How this will be operationalised or what measures put in place to prevent a negative impact on the property market, is very unclear.

 

Well you are basically betting the Thai government will do something intelligent. It may happen but I never bet on politicians doing something which won't be annoying and bureaucratic. If the country was managed with a clear pro business mind, Thailand would be above China in terms of GDP per capita. So I always keep my expectations very low with them.

[UKresonant]

Just now, El Matador said:

 

Well you are basically betting the Thai government will do something intelligent. It may happen but I never bet on politicians doing something which won't be annoying and bureaucratic. If the country was managed with a clear pro business mind, Thailand would be above China in terms of GDP per capita. So I always keep my expectations very low with them.

I think it is more likely to be reactionary, than in anticipation.

Needs the train to hit the buffers on at least one busy inbound track in to the terminous, quick investigation and a special measure may materialise, to keep customer numbers up.. 

If it happens  for this year relatively contained, if next year 1st quarter folks are getting pummeled for Tax, and it's worldwide media time?? will see how it goes. 

[TroubleandGrumpy]

7 hours ago, Mike Lister said:

3)   Thai tax laws require Foreigners who reside in Thailand for one or more periods, with at least 180 days in one tax calendar year and who receive TAXABLE income from inside or outside Thailand via:

 

7 hours ago, Mike Lister said:

….…to assess their income for Thai tax and file a tax return IF THEY ARE REQUIRED TO PAY INCOME TAXES

Suggested changes in caps bold underlined.

[stat]

11 hours ago, UKresonant said:

Perhaps the the year the income is earned whilst Thai Tax resident, is the more important.

Exchange of information with home country tax authority approximate your in year income.

What if;-any income arising that year is assessable as it is remitted to Thailand at anytime (161), until that total in year total is cumulatively reached. 

"But it can't be I spent it or at least  the remainder of it, on overseas commitments in that year" 

'Prove that then'

 

Just sharing a recent nightmare 

There is no way via CRS to "approximate your income" with the home country tax authority as CRS only provides gross proceeds.

[Mike Lister]

1 minute ago, TroubleandGrumpy said:

 

Suggested changes in caps bold underlined.

The Revenue Code does not say that. If members wish to interpret that not filing a return is OK, just because no taxes are due and there is no penalty, that is their prerogative.

[stat]

9 hours ago, Mike Lister said:

I'm going to update the Simple Guide to correct two problems, the following will now appear:

 

At the end of Gift Tax....I have removed by previous opinion and set out what is known:

 

Note: Because Gift Tax is a domain of the wealthy and depends to a large extent on local practise, there is a shortage of confirmed information on this subject. One field of thought is that Gift Tax cannot be used to escape Thai tax by Gifting untaxed money from overseas. On the other hand, many Western countries, including the UK, do not tax gifts from overseas. Members wishing to exercise this option should seek qualified advice before using this option to Gift untaxed funds. Two additional points on this subject are: 1) Funds that are gifted, must be for the use of the person to whom they are gifted. 2) Gifts can be revoked later and reclaimed, under specific circumstances, such as if the receiver of the gift defames the Gifter or fails to take care of their serious medical needs. Issues arise here when the receiver is the spouse of the gifter and under marital law, the gift is regarded as conjugal property. Until this becomes more clear, it is critical that anyone wishing to use Gift Tax, seeks professional advice.

 

and,

 

 

OVERVIEW OF THE TAX LAW

 

3)   Thai tax laws require Foreigners who reside in Thailand for one or more periods, with at least 180 days in one tax calendar year and who receive income from inside or outside Thailand via:

 

a) Income from employment (wages, salaries, remuneration, etc.) assessable under Section 40 of the Revenue Code;

b) Income from business operations is assessable under Section 40.

c) Passive or property income (interest, dividends, rental income, goodwill, pension etc.) based on Article 41 paragraph 2 of the Revenue Code.

 

….…to assess their income for Thai tax and file a tax return, providing the  assessable income threshold has been exceeded.

I think capital gains should be included

 

c) Passive or property income (interest, dividends, capital gains, rental income, goodwill, pension etc.) based on Article 41 paragraph 2 of the Revenue Code.

[Mike Lister]

1 minute ago, stat said:

I think capital gains should be included

 

c) Passive or property income (interest, dividends, capital gains, rental income, goodwill, pension etc.) based on Article 41 paragraph 2 of the Revenue Code.

Done (on the master copy for next update)

[stat]

8 hours ago, JohnnyBD said:

I assume "most probably" means this is your best guess, right? Do you know if Thai RD issued any rules on real estate sale proceeds being remitted, where they consider an equal percentage of principal and capital gains are remitted, not just the prinicipal amount. I also wonder about any proceeds from stock sales that are remitted. What if I sold 100 shares of XYZ and remitted just my original investment amount and keep the capital gains in the US? Do we get to decide what money we remit, or does RD get to decide what money we are remit? This issue should have been clarified already.

No one knows currently if Lifo, Fifo or any other accounting method will be used. I would also love to know which method they intend to use but I think they are not even aware that they need to specify it.

[Mike Teavee]

5 minutes ago, stat said:

No one knows currently if Lifo, Fifo or any other accounting method will be used. I would also love to know which method they intend to use but I think they are not even aware that they need to specify it.

No idea about Thailand but UK uses LIFO which would seem to be the sensible option for calculating Capital Gains/Losses