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

[Mike Lister]

1 minute ago, fusion58 said:

 

Just to make sure I've got this straight:  Tax on accessible income from 2024 would be due in 2025, correct?

Correct

[fusion58]

Just now, Mike Lister said:

Correct

 

Whew!

 

That's what I thought. Thank goodness I'll be out of here before then. 😎

[Mike Lister]

As far as I'm concerned the Simple Tax Guide project has finished,  barring major new developments. Maintenance work and minor updates, resulting from new developments' or information that emerges, or from proof reading efforts by members (or their challenges) is an ongoing background activity.

 

Statistically, the different issues of the Simple Tax Guide have been viewed over 100,000 times whilst the number of AN members who have read the guide and have been able to resolve their Thai tax concerns publically in tax related threads, is in excess of 100. The work started on 11 January, three months to the day.

 

A big thank you to all those people who participated in its construction and in helping members.

[Mike Teavee]

6 hours ago, stat said:

You are not required to get a TIN in TH and therefore the bank in your jurisdiction cannot force you to get a TIN.

I don't think that's true for the UK as some Banks put pressure on people to obtain a TIN under threat of closing the account (which is why I got one) & other banks just closed the accounts for not being tax/ordinarily resident in the UK.

  

[Geoffggi]

China, the country that keeps on giving even if you don't want it ...................LOL

[Mike Lister]

The answer to a number of important issues remain unclear and these are recorded at the end of the tax guide. I would like to keep those issue visible here because they are extremely important and its easy to forget or overlook them:

 

I) - Does the Thai RD consider remitted funds to Thailand that have been through the overseas tax process, to be tax free in Thailand. Or is it the case that overseas tax must be paid on every Pound or Baht that is remitted. In other words, will the Thai RD allow the UK Personal Allowance and other countries exemptions, to be part of the tax paid process.

 

J) - The US is not alone in not requiring certain sectors or classes of people to not file a tax return, even though they have tax paid income, the UK does exactly the same. The question is, how will these classes be able to prove their income is already taxed? 

 

k) - how to distinguish between principal (funds from legacy investments, inheritance, original investment principal) versus earnings (interest, dividends, remuneration) from comingled funds, determination of applicable foreign currency exchange rates for tax assessment, etc.

 

L) - income that is earned in a year when the taxpayer is tax resident but not remitted until a year when they are not tax resident, is it later tax assessible in Thailand?

 

M) - at least two members don’t believe that the Revenue Code is sufficiently explicit in stating who doesn’t need to file a tax return and instead only states who should! Most other members have been able to understand this issue but nevertheless, the search continues for a suitable form of RD words that will satisfy this point for everyone.

 

Progress in Resolving These Issues

 

Point K above seems the most clear, I think the options are:

 

Keep adequate records for every feeder account

Assume and adopt LIFO or FIFO

Assume comingled funds lose their identity hence income or gain is transferred first, followed by capital

Wait and see what the TRD has to say about this.

 

The ultimate solution however, is to not commingle funds in the same account.

 

Point M above is currently being viewed by many in the context of the PWC tax handbook which is linked a page or so back and strongly favours that taxpayers should file rather than not. Again, clarity is needed on this point, from TRD.

 

[Presnock]

On 9/18/2023 at 12:24 PM, Time Traveller said:

This is a really concerning statement because wealth is not the same thing as income. Simply having cash in a foreign account and then transferring it into Thailand is not income and therefore should not be taxable.   If they do try something like  (they did once before with capital controls in 2007) it will be a complete disaster.  

 

In any case, if they adopt a system similar to other countries that tax worldwide income then I don't think it should be of much concern for Americans as the tax treaty means that most of their retirement or investment income won't be taxable in Thailand.  Other countries will need to check their tax treaty.  

 

On a separate note, one thing I never understood about Thailand immigration is that they never considered foreign income tax filings as part of the evidence of income for visa extensions.  Because no one ever is going to declare to the IRS that their income higher than what it truly is.  It's definitely a much more reliable indicator for proof of income than some Embassy witnessed statement.

Well, when I would go for my yearly extension with the embassy letter until that ceased, I always included my monthly credited advisers from my US bank as proof of the funds I receive.  The IO's used to say"oh too much paperwork!" and then 2 years ago they immediately returned all my US bank statements, saying they only wanted the paperwork from the Thai bank.  This was CM.

[Presnock]

5 hours ago, Mike Lister said:

As far as I'm concerned the Simple Tax Guide project has finished,  barring major new developments. Maintenance work and minor updates, resulting from new developments' or information that emerges, or from proof reading efforts by members (or their challenges) is an ongoing background activity.

 

Statistically, the different issues of the Simple Tax Guide have been viewed over 100,000 times whilst the number of AN members who have read the guide and have been able to resolve their Thai tax concerns publically in tax related threads, is in excess of 100. The work started on 11 January, three months to the day.

 

A big thank you to all those people who participated in its construction and in helping members.

Mike et al providers of the tax information  - Thanks for your efforts and am sure it has been very time-consuming.  Hopefully the Thai RD will put out a final soon so that many others will realize they won't be affected by this or will be affected.  On to the next issue...

[Presnock]

On 9/18/2023 at 12:37 PM, ChasingTheSun said:

What visa is that which includes a non-tax clause?

LTR - wealthy pensioner! now 50,000K baht good for 10 years with other benefits also.  google it as there is plenty of information on it.  Board of Investment very helpful and patient.  Can be accomplished in 3 weeks.

[jayboy]

48 minutes ago, Mike Lister said:

Most other members have been able to understand this issue but nevertheless, the search continues for a suitable form of RD words that will satisfy this point for everyone.

 

This surprises me a little because the RD requirement is not complex.Taxpayers with assessable income are required to file returns even though (in their opinion) there is no tax to pay.

[Mike Lister]

1 minute ago, jayboy said:

 

This surprises me a little because the RD requirement is not complex.Taxpayers with assessable income are required to file returns even though (in their opinion) there is no tax to pay.

I agree entirely, as does everyone else I've encountered who has looked at this, baring two members above. Still, in the spirit of inclusivity!

[UKresonant]

1 hour ago, Mike Lister said:

will the Thai RD allow the UK Personal Allowance and other countries exemptions, to be part of the tax paid process.

 

Me thinks;  J) UK personal allowance irrelevant at the Thai end computation, except in DTA credit relief context, the total including the non taxed under the personal allowance (which is £12570).  So the credit relief is proportional to say £32570 not just to the £20000 taxed portion above the PA.

 

It only is legitimate in the sense that it has been through a tax process and not as tax haven non-taxed.

UK £12570 allowance irrelevant Thai PA of 60kTHB + others relavent.

 

(03:25hrs goodnight......źzzzz  )

 

 

[Mike Lister]

2 minutes ago, UKresonant said:

 

Me thinks;  J) UK personal allowance irrelevant at the Thai end computation, except in DTA credit relief context, the total including the non taxed under the personal allowance (which is £12570).  So the credit relief is proportional to say £32570 not just to the £20000 taxed portion above the PA.

 

It only is legitimate in the sense that it has been through a tax process and not as tax haven non-taxed.

UK £12570 allowance irrelevant Thai PA of 60kTHB + others relavent.

 

(03:25hrs goodnight......źzzzz  )

 

 

Methinks also. G'night.

[Presnock]

1 hour ago, Presnock said:

LTR - wealthy pensioner! now 50,000K baht good for 10 years with other benefits also.  google it as there is plenty of information on it.  Board of Investment very helpful and patient.  Can be accomplished in 3 weeks.

as an aside on this LTR - one can obtain a work permit also from the BOI when doing the LTR process.  However, the tax exempt if for foreign funds, not tax exempt if you are working in Thailand.  Requirements for such visa and benefits are provided by googling the LTR.

[gamb00ler]

15 hours ago, Ben Zioner said:

I couldn't see how this paper proves that no TIN is required, but reading it led me to think that there must be on-line resources to verify TINs, and indeed I found this one within a couple of minutes. It needs basic registration and you get five free shots. I could check my wife's as well as my own PIN numbers and they checked just fine.

 

So each country deploys it's own Web Service and all countries use a common WSDL (Web Service Definition Language), we used to say "weezdle", in our IT jargon. The documentation of the of the Thai service is here. The Tin Check application above just calls the relevant services based on country code, it passes the number and receives the status.

 

So lets be careful with assumptions that RD won't be able to corner us, the more I look into it the more I see that work has been done.

The web site you gave does nothing more than verify that the format of the entered TIN is valid.

 

Here is text from their description of the TIN check:

 

As long as the request itself is properly formatted, the response will always be returned with a 200 status code, even if the TIN number is not valid. If there is an issue with the request itself (for example, a missing country code) a 4XX or 5XX status code will be returned.

 

Response status codes:

200   OK. The operation was completed successfully.

 

[Ben Zioner]

7 minutes ago, gamb00ler said:

The web site you gave does nothing more than verify that the format of the entered TIN is valid.

 

Here is text from their description of the TIN check:

 

As long as the request itself is properly formatted, the response will always be returned with a 200 status code, even if the TIN number is not valid. If there is an issue with the request itself (for example, a missing country code) a 4XX or 5XX status code will be returned.

 

Response status codes:

200   OK. The operation was completed successfully.

 

They have a validation service and a lookup service. The validation service ensures that the ID entered matches the requirements of a given country. Just try to enter a number that isn't a Thai PIN or TIN. I have haven't tried the lookup service, obviously, as I don't have a file at the RD yet.

[gamb00ler]

22 minutes ago, Ben Zioner said:

They have a validation service and a lookup service. The validation service ensures that the ID entered matches the requirements of a given country. Just try to enter a number that isn't a Thai PIN or TIN. I have haven't tried the lookup service, obviously, as I don't have a file at the RD yet.

They don't provide the TIN lookup function for Thailand.  They do the lookup only for 7 countries, mostly in EU.

Edited April 11 by gamb00ler

[Ben Zioner]

15 minutes ago, gamb00ler said:

They don't provide the TIN lookup function for Thailand.  They do the lookup only for 7 countries, mostly in EU.

 

W.I.P

[TroubleandGrumpy]

4 hours ago, Mike Lister said:

M) - at least two members don’t believe that the Revenue Code is sufficiently explicit in stating who doesn’t need to file a tax return and instead only states who should! Most other members have been able to understand this issue but nevertheless, the search continues for a suitable form of RD words that will satisfy this point for everyone.

If anyone think that the TRD requires, demands and enforces that all single Thailand tax residents who earn 60K Baht per year (or more), complete and lodge a tax return, then IMO they are very much mistaken.  It is obvious they do not - despite what some well meaning Expats say.  There would not be many Expats who do not remit into Thailand over 60K Baht each year, and I am very worried that many Expats are going to get a TIN from TRD and then lodge a tax return (and be locked into doing that yearly for life here), because they think that is required by the TRD  and the Law - based on what people on this forum/thread have said and think. Or what some tax consultants have said, because they want your business every year. 

 

IMO Expats only have to lodge a tax return, if they are required to pay income taxes - after doing their self-determination (or paying someone to do it), and calculating how much tax they should pay. Unlike in the West, where you lodge a tax return and the Tax Office determines what taxes you pay (or get refunded), in Thailand you calculate it yourself and pay it yourself when lodging the return. Check it out. 

 

IMO if you have enough deductions, allowances and tax benefits, to not be required to pay income taxes, then you do not need to lodge a tax return. IMO that also applies if your home country DTA precludes you paying taxes in Thailand.  For some reason, some people think you have to prove that - I do not. Many reason for my opinion on that - main one being that 40+ million Thais would be getting chased by the TRD for their tax returns. Perhaps many Expats do not realise that only about 10 million Thais lodge personal income tax returns - and yet they all earn well over 60K Baht per year. 

 

However, having said that, if an Expat remits income money into Thailand and should pay income taxes, then I strongly advise them to lodge a tax return and do that (go see a specialist).  The penalties in Thailand for deliberate tax avoidance can be extreme (compared to the west), and that includes having Passport held until all fines and penalties are paid - including 1.5% per month penalty on any backdated taxes deemed due - and of course eventual deportation.  IMO the TRD is best avoided by all Expats unless absolutely necessary - there are so many provisions and powers that they have which most Expats will have no clue about. Example - Somchai in the local TRD can 'calculate' what income taxes are due, based upon an Expat's lifestyle (house, car, bank account) - many things like that are totally arbitrary with TRD - avoid at all costs is my advice. 

 

I have my tax strategy worked out and I do not have to pay any income taxes in Thailand, even though I will have remitted money into the country. The vast majority of my remittances is not income, and most of the rest is 'covered' due to deductions, allowances and tax benefits, and a small amount comes under the DTA provisions.  If/when TRD ever asks me in the future to justify my self-assessment decisions, I will have full records and calculations available.  Some Expats are deciding to leave before that happens - and I cannot criticise them - being married to a Thai gives me big additional benefits, deductions and tax benefits. If I was single I would certainly have everything in place for a quick exit stage left in Jan-March 2025 - probably then will be the time when it will become clear what the TRD is going to do with Expats. Over and Out.

[El Matador]

I was very close to put 1 million bahts in a Thai Elite visa last year.

Glad I am avoiding the big tax headache. Still watching the mess from far away with easy tourist extensions in Philippines. Thailand is a good country to stay for less than 180 days at the moment ; much easier for visa and taxes if you just stay pure tourist. The rainy season is quite expensive now. 

Their timing was perfect : they annunced that tax change just after selling Thai Elite visas like hot cakes before doubling or tripling the price.

 

Probably there won't be any crystal clear answer before at least 2025. So this thread will live for a long time with partial answers.

[Mike Lister]

Anything more than ten lines, aint getting read, even if it's from the Director of the TRD.

[gamb00ler]

1 hour ago, TroubleandGrumpy said:

I am very worried that many Expats are going to get a TIN from TRD and then lodge a tax return (and be locked into doing that yearly for life here), because they think that is required by the TRD  and the Law

Every Expat that falls into the "trap" you describe is solely responsible for their predicament.  Competent help is available for reasonable remuneration.  Ask the professional to explain every step.  Pay for such help once, then learn from the professional's filing and file on your own if needed.

 

I'm trapped for life now having chosen to live and work in USA and defer taxation through pre-tax retirement accounts.  I have to file every year despite having no taxable income..... Thanks, but don't worry.... I'm fine!

[Mike Lister]

FWIW i file some years and don't file in others. Nobody says anything although the TRD used to send me blank return forms just before the start of the following year, like many others I would ignore and discard them. I filed last year which resulted in me declining a sub 500 baht refund, it just wasn't worth the hassle plus I like the idea that gesture is on my record.

[stat]

10 hours ago, Mike Teavee said:

I don't think that's true for the UK as some Banks put pressure on people to obtain a TIN under threat of closing the account (which is why I got one) & other banks just closed the accounts for not being tax/ordinarily resident in the UK.

  

All the banks that I know of are compliant once they are provided with the correct information from the OECD. Did you provide the OECD information? There are a lot people in the compliance department who do not have a clue and just stick to the usual process.

 

Any bank can close the account if they wish to without any specific reason. Nothing you can do if the bank does not want to have foreign residence customers.

[stat]

6 hours ago, Presnock said:

Mike et al providers of the tax information  - Thanks for your efforts and am sure it has been very time-consuming.  Hopefully the Thai RD will put out a final soon so that many others will realize they won't be affected by this or will be affected.  On to the next issue...

If you think this issue is solved you are sadly mistaken as the whole amount of problems will start to surface in March 2025. Thai RD will not put anything clear out as that would involve hundreds of pages which translates to work and possible loss of face. TRD is quite happy with the opaqueness for a variety of reasons.

Edited April 11 by stat

[stat]

12 hours ago, fusion58 said:

 

Whew!

 

That's what I thought. Thank goodness I'll be out of here before then. 😎

Remember you can (maybe) never comeback to Thailand. In addition if you have an unforseen stop over in TH somewhere in the future you may be in trouble. I would rather ensure that you receive "gifts" in 2024. But up to you and yes the risk may be minimal.

[Presnock]

53 minutes ago, stat said:

If you think this issue is solved you are sadly mistaken as the whole amount of problems will start to surface in March 2025. Thai RD will not put anything clear out as that would involve hundreds of pages which translates to work and possible loss of face. TRD is quite happy with the opaqueness for a variety of reasons.

TIT so that could very well be the case here too, but I read ex-pat forums elsewhere and  their countries too are changing their taxation methods and for the most past seem to be totally ignoring any pensions for taxation.  But, since this taxation system is to be done on a volunteer system I am sure some will try to escape paying what they are required to do as usual.  Until something final is published, unless something really drastic comes out of it, then I am not concerned at all nor do I plan to leave this existence as it seems a better place for me.

[Mike Lister]

7 hours ago, UKresonant said:

 

Me thinks;  J) UK personal allowance irrelevant at the Thai end computation, except in DTA credit relief context, the total including the non taxed under the personal allowance (which is £12570).  So the credit relief is proportional to say £32570 not just to the £20000 taxed portion above the PA.

 

It only is legitimate in the sense that it has been through a tax process and not as tax haven non-taxed.

UK £12570 allowance irrelevant Thai PA of 60kTHB + others relavent.

 

(03:25hrs goodnight......źzzzz  )

 

 

For the sake of an easy to understand example: What about the extreme case of a UK  person who earns GBP 12,749 Pounds in the UK, all of which is not taxable in the UK but they file a UK self assessment regardless. When those funds are remitted to TH, the remitters TEDA are limited to THB 60k Personal Care Allowance plus the 150k zero rated band, which (at 45) totals THB 210k or 4.6K Pounds. That means 12,749 - 4,666 Pounds are liable to Thai tax, THB 363,700, 150k @ 5% and 213,700 @ 10% . Agreed also?

[redwood1]

3 hours ago, El Matador said:

I was very close to put 1 million bahts in a Thai Elite visa last year.

Glad I am avoiding the big tax headache. Still watching the mess from far away with easy tourist extensions in Philippines. Thailand is a good country to stay for less than 180 days at the moment ; much easier for visa and taxes if you just stay pure tourist. The rainy season is quite expensive now. 

Their timing was perfect : they annunced that tax change just after selling Thai Elite visas like hot cakes before doubling or tripling the price.

 

Probably there won't be any crystal clear answer before at least 2025. So this thread will live for a long time with partial answers.

 

The timing on raising the price on the Elite visa was 1,000% no accident....They knew of the tax announcement well ahead of time...The timing was just too perfect....

 

The Elite visa lost money almost every year since its creation.....It had done well for the last few years then this tax insanity came along....I bet they have sold very very few this year..

[TroubleandGrumpy]

3 hours ago, gamb00ler said:

Every Expat that falls into the "trap" you describe is solely responsible for their predicament.  Competent help is available for reasonable remuneration.  Ask the professional to explain every step.  Pay for such help once, then learn from the professional's filing and file on your own if needed.

 

I'm trapped for life now having chosen to live and work in USA and defer taxation through pre-tax retirement accounts.  I have to file every year despite having no taxable income..... Thanks, but don't worry.... I'm fine!

I am so glad to hear you are fine - but I was referring to the expectation that the TRD will expect your tax return every year going forward.