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

[Mike Lister]

4 minutes ago, rainwater said:

Do I have to pay taxes on cryptocurrency I buy with Thai baht then transfer to another wallet and lending platform to earn interest and then bring it back in through coins.th.com? How is the government going to know I even have an account with this company? I don't have a tax ID number like in America we have a social security numbers where all of our taxes are tracked, what's the deal how is this going to work is it going to affect our retirement visas somehow are we going to have to start showing more paperwork to immigration what a nightmare?

I don't know the answers to your questions but what I do know is that it's becoming almost impossible for a foreigner in Thailand to perform a banking related transaction, unless they produce their passport.

[JimGant]

4 hours ago, Yumthai said:

Is there any country that taxes its non-residents on foreign-sourced remittances?

 Only the UK, that I can find. Their explanation is somewhat convoluted to my reading; but it seems to say that a Brit citizen or permanent resident who expatriates (takes up a foreign domicile) and has foreign income while living in that domicile -- and who remits that income to the UK -- now has to pay UK taxes on it. Fair enough. Unlike the US, who would tax this income, remitted or not, the UK exempts its expats from paying UK taxes on foreign income -- unless remitted.

 

Should the Thais emulate this example, her citizens/permanent residents, who take up a new domicile for over a half year, wouldn't be able to escape Thai taxes on remitted foreign income, by saying they weren't tax residents in the year the foreign income was remitted. Per the Brit example, if you're a citizen or permanent resident, who expatriated -- remitted foreign income to the home country is taxable. Period.

 

Now, if the new Thai tax laws really are aimed at Thai citizens, not expats -- then emulating this Brit example would be great news for the expat, who *could* remit money tax free in a year when he's not a Thai tax resident -- 'cause he's not a Thai citizen or permanent resident either.

 

Pure speculation, of course. But if there's anyone home in the creative section of Thai RD, looking at the Brits makes solid sense.

[JohnnyBD]

1 hour ago, JimGant said:

6 hours ago, Yumthai said:

Is there any country that taxes its non-residents on foreign-sourced remittances?

 Only the UK, that I can find.

Jim,

I read his comment as meaning "Is there any country that taxes non-resident non-citizens on foreign-sourced remittances?" In other words, does the UK tax Americans who are non-residents and who remit money into the UK from the US while there? I think the answer to that is probably, no. I don't know of any country that does that.

[Yumthai]

1 hour ago, JimGant said:

Only the UK, that I can find. Their explanation is somewhat convoluted to my reading; but it seems to say that a Brit citizen or permanent resident who expatriates (takes up a foreign domicile) and has foreign income while living in that domicile -- and who remits that income to the UK -- now has to pay UK taxes on it. Fair enough. Unlike the US, who would tax this income, remitted or not, the UK exempts its expats from paying UK taxes on foreign income -- unless remitted.

Source?

 

Official information I can find online seems to indicate UK non-residents do not pay UK tax on their foreign-sourced income.

 

Your UK residence status affects whether you need to pay tax in the UK on your foreign income.

Non-residents only pay tax on their UK income - they do not pay UK tax on their foreign income.

 

https://www.gov.uk/tax-foreign-income/residence

 

[topt]

2 hours ago, JimGant said:

Only the UK, that I can find. Their explanation is somewhat convoluted to my reading; but it seems to say that a Brit citizen or permanent resident who expatriates (takes up a foreign domicile) and has foreign income while living in that domicile -- and who remits that income to the UK -- now has to pay UK taxes on it.

Not trying to be pedantic but I think you are using words like domicile in a somewhat free and easy way. It is very difficult for  UK citizen to lose their domicile in the UK - especially as regards IHT.

As a non resident I can earn offshore income and not be taxed on it and as long as away, I think for 5 years, I can remit back to the UK and not pay any tax on it as well - as long as still non resident when doing so. My domicile does not change.

The domicile bit I think is to do with resident for tax in UK but have foreign domicile and then they can pay in different ways - sorry if this is not what you were referring to. 

 

Agree with @Yumthai above.

[JimGant]

46 minutes ago, Yumthai said:

Official information I can find online seems to indicate UK non-residents do not pay UK tax on their foreign-sourced income.

 As I said, the terminology is somewhat convoluted. In particular when they say, "If you're a UK resident but not domiciled in the UK..." -- the term "resident" here seemingly applies more to citizenship than to physical presence, since to me "resident" suggests physical presence.

 

Quote

 If you’re UK resident but not domiciled in the UK there are special rules which might apply to your foreign income and gains. In these circumstances you’ve a choice of whether to use the arising basis of taxation or the remittance basis of taxation. If you choose to use the remittance basis for a tax year you will pay UK tax on:

    any of your income and gains which arise/accrue in the UK
    any of your foreign income and gains that you, or another relevant person, brings (or remits) to the UK, even if that remittance occurs in a later tax year

https://www.gov.uk/government/publications/residence-domicile-and-remittance-basis-rules-uk-tax-liability/guidance-note-for-residence-domicile-and-the-remittance-basis-rdr1

 

In your reference link, you forgot to go to the next paragraph, which says:

"Residents normally pay UK tax on all their income, whether it’s from the UK or abroad. But there are special rules for UK residents whose permanent home (‘domicile’) is abroad."

And that's where they go on to explain taxes on remitted income.

 

Anyway, my point was that Thailand, having only one other country that taxes remittances to imitate, may very well dictate new guidance, following the Brits, on the taxation of remittances from Thai citizens/permanent residents who took a long holiday in the hopes of avoiding taxation on their remittances.

 

But, I admit, my knowledge of Brit taxation is not thoroughly researched -- ever since we threw the tea into Boston Harbor.

 

[Driller]

What would the tax look like for 440,000 baht a year, to my wife's Thai account from a US Mutual Fund monthly distribution into my US bank account and sent via Wise. Will be a supplement to my US Social Security. 

[gamb00ler]

4 minutes ago, Driller said:

What would the tax look like for 440,000 baht a year, to my wife's Thai account from a US Mutual Fund monthly distribution into my US bank account and sent via Wise. Will be a supplement to my US Social Security. 

The following discussion assumes the funds transferred are not considered a gift.  I have no understanding of how remittances declared to be gifts are going to be treated by the TRD.

 

The answer depends upon the exact nature of the monthly distribution.  If it is comprised of only current income from the mutual fund it will be classified as assessable income.  If a portion of the funds are proceeds from sales of the mutual fund shares, then that portion may not be classified as assessable and may not be subject to Thai tax.  Also relevant is your choice of using FIFO (first in, first out) or LIFO (last in, first out) classification of withdrawals.

 

If you want to make the source of the remittances very clear, I suggest you don't co-mingle your funds before sending them to Thailand.

[Mike Lister]

49 minutes ago, Driller said:

What would the tax look like for 440,000 baht a year, to my wife's Thai account from a US Mutual Fund monthly distribution into my US bank account and sent via Wise. Will be a supplement to my US Social Security. 

 

Further to GambOOler's reply above, all of which I agree with:

 

If those two things, your SSc and your mutual fund disbursements are your sole source of remittances to Thailand and you earn no other income here, your Thai tax deductions and allowances (TEDA) under Revenue rules will far exceed your assessable income hence there would be no tax to pay. Your SSc is exempt by treaty and your mutual fund payments of 440k are under the approximately 450k deductions I expect you would receive. Lastly, any tax paid on your mutual funds in the US, could be offset against any tax due in Thailand. (without understanding your circumstances, it's difficult to be precise about your level of TEDA)

 

Reading the following may help:

 

https://aseannow.com/topic/1324294-the-simple-tax-guide/?do=findComment&comment=18829674

[Mike Lister]

Coming back to basics for a moment, the core issue is that the TRD has reinterpreted their income rule to prevent tax evasion overseas. Why have Thai's invested overseas rather than in Thailand and what has been the impact of that? 

 

The why is probably very easy to assess. Investment returns in Thailand are poor, banks rates are low, bank charges are high and brokers fees are high. An offshore investment in an S&P tracker will return on average over 11% per year, every year. An onshore investment in the SET over the past 10 years has been very poor. (see below). Similarly, CDs or TD's in the West might expect 6% over 3 years, in Thailand it will be half of that, if you're lucky.

 

Perhaps the most important aspect is the Thai bond market which is the highest yielding and safest onshore option of any, it's also the vehicle by which BOT and MOF finances government debt. US treasuries currently offer almost twice the yield of their Thai counterparts which means the bond market is hurting. I couldn't be bothered trying to wade through the bond sites statistical data but I'd be willing to bet there's been a decline in domestic sales. My guess is that the TRD rule change is in response to loss of captive market buyers, which, when interest rates normalise once again, should alleviate the problem (not that the tax rule will be changed back of course). If you're government and you're operating a budget deficit of some size and borrowing heavily to fund populist policies, you need buyers for the bonds that finance those things and who better than the native population.

 

 https://tradingeconomics.com/thailand/stock-market-return-percent-year-on-year-wb-data.html

 

https://www.thaibma.or.th/EN/Market/SummaryStatistics.aspx

 

[Yumthai]

10 hours ago, JimGant said:

In your reference link, you forgot to go to the next paragraph, which says:

"Residents normally pay UK tax on all their income, whether it’s from the UK or abroad. But there are special rules for UK residents whose permanent home (‘domicile’) is abroad."

And that's where they go on to explain taxes on remitted income.

 

What you quote refers to UK (tax) residents having domicile outside UK, not UK people being non-residents for tax purposes.

 

I think all non-residents for tax purposes Brits as @topt mentioned can confirm that they do not pay tax on their foreign-sources income even remitted in UK.

 

11 hours ago, JimGant said:

Anyway, my point was that Thailand, having only one other country that taxes remittances to imitate, may very well dictate new guidance, following the Brits, on the taxation of remittances from Thai citizens/permanent residents who took a long holiday in the hopes of avoiding taxation on their remittances.

 

I get your point. Thailand will have to amend its current tax and residence law in order to tax non-residents for tax purposes on their foreign-sourced income.

 

https://en.wikipedia.org/wiki/International_taxation#cite_note-tj1-129

 

When sorting by "Taxes foreign income of non-resident citizens" column, few countries appear to tax foreign income under certain specific conditions/exceptions.

 

[JimGant]

3 hours ago, Yumthai said:

I think all non-residents for tax purposes Brits as @topt mentioned can confirm that they do not pay tax on their foreign-sources income even remitted in UK

Understood. My point was that, if UK can designate a certain kind of person as a 'resident,' because he meets certain parameters -- and this 'resident,' who moves abroad, must pay UK taxes on foreign income remitted to UK -- then Thailand can designate a certain kind of person subject to taxes on foreign income remitted, even if living abroad. I say, let them designate Thai citizens and permanent residents as the equivalent of the Brit "resident." And, of course in the new Thai directive, treat expat foreigners here on visas the same as the UK tax man treats his non-residents. Sounds good to me -- so I guess it will never happen.

[Dogmatix]

I see some posters allude to the UK's regulations for remittance based taxation of non-doms who are wealthy foreigners living in the UK and taking advantage of the dregs of the UK's long standing, controversial scheme to attract them to take up residence in the UK and feel that the RD might draw some inspiration from the copious HMRC regulations relating to taxation of foreign source remittances for non-doms.  Originally the scheme allowed foreigners to take up residence in the UK and avoid paying tax on global income and gains like common or garden UK tax residents and pay tax only UK source income and remitted foreign source income indefinitely. Now non-dom status has to be purchased by paying a standing tax charge on foreign source income which makes it only worthwhile to those would otherwise pay more than the standing charge and the status is no longer indefinite. The government has always claimed it attracted a lot of rich foreigners to come and spend oodles of cash and invest in the UK but it has always been wildly unpopular with Brits who have to pay their taxes on global income and gains in full whether remitted or not.  Rishi Sunak's wealthy Indian wife, who has a vast private income from dividends in India, took advantage of the scheme and was effectively a poster girl for those who wish to abolish the scheme.

 

In the latest budget the Conservative government announced further restrictions to the non-dom scheme which was already on its last legs.  Since the new regulations will apply in April 2025 and the Conservative government will almost certainly have been ousted by Labour in an election before then, it is unlikely that these new restrictions will ever be applied.  Instead, it is more likely that a Labour government will announce the complete abolition of the non-dom privileged system of taxation and all UK tax residents will have to pay tax on their global income and gains, regardless or whether remitted to the UK or not.  Whether or not the RD will seek inspiration from the non-dom scheme, once it has been abolished remains to be seen.  Anyway, it is certainly highly unlikely that Thailand would ever adopt a non-dom scheme, other than the tax privilege for LTR visa holders which probably would never have seen the light of day post P. 161/2566, and may eventually be scrapped, if there is a proper reform to the tax of foreign source income via an act of parliament.  If they study the history of the UK's non-dom system, the RD will understand that it has been deeply unpopular with locals and would certainly cause a backlash from Thais investing overseas.  The RD claimed (somewhat disingenuously) that the purpose of P. 161/2566 was to promote fairness and ensure that all Thai tax residents would be treated fairly.  

 

 

[proton]

How does this million baht a year un taxed gift to the Mrs work? and how can you prove its a gift rather than expenses for the family for a year.

[Dogmatix]

19 hours ago, rainwater said:

Do I have to pay taxes on cryptocurrency I buy with Thai baht then transfer to another wallet and lending platform to earn interest and then bring it back in through coins.th.com? How is the government going to know I even have an account with this company? I don't have a tax ID number like in America we have a social security numbers where all of our taxes are tracked, what's the deal how is this going to work is it going to affect our retirement visas somehow are we going to have to start showing more paperwork to immigration what a nightmare?

 

If you have earned interest overseas on the crypto that you transferred overseas and then remit that interest back to Thailand, the RD will consider it assessable income. Capital gains on the crypto would also be taxable, if they arise in Thailand, or if they arise overseas and are remitted to Thailand. Whether you have to pay Thai tax on this assessable income depends on whether you are Thai tax resident and have overall assessable income in excess of the threshold and personal deductions. 

 

How the RD will track this sort of income is another matter. They say they are using AI to detect tax avoidance but so far this seems directed at the vast number of Thais who doing personal business online and offline without filing tax returns.  They are analysing bank account data and sifting through Facebook accounts that Thais use to sell stuff online.  Bitkub states on its website that the RD has so far not requested account data, nor has it come up with a means of implementing the 15% withholding tax on crypto capital gains that is already on the books but not yet enforced.  Most likely in the fullness of time, the RD will come up with ways of tracking crypto income. .

 

[Dogmatix]

33 minutes ago, proton said:

How does this million baht a year un taxed gift to the Mrs work? and how can you prove its a gift rather than expenses for the family for a year.

 

It is 20 million baht a year, not 1 million.  The gift tax law was introduced in 2015 in tandem with the revived inheritance tax.  The law appears very broad and doesn't place any particular restrictions on gifts to spouses or what they may do with them.  There is only one known case where the RD has challenged gifts remitted from overseas and that was on the basis that the couple were not officially married.  So the gifts were deemed not to qualify as exempt gifts on that basis. I attach the law and the case.  In lieu of more detailed information or regulations on this from the RD, you need to use your own imagination to interpret this regulation, as many posters have already done copiously here.

Gift Tax 2015 EN.docx Gift Tax Case RD KK0702-530 11 Feb 2023.docx

[UKresonant]

24 minutes ago, proton said:

How does this million baht a year un taxed gift to the Mrs work? and how can you prove its a gift rather than expenses for the family for a year.

Headline;-

Can gift up to THB 20 million to spouse (option for 5% tax).

She can't use it for property purchase (most likely), and it must be a true gift. Interest on the gift will be taxable. 

[Dogmatix]

36 minutes ago, UKresonant said:

Headline;-

Can gift up to THB 20 million to spouse (option for 5% tax).

She can't use it for property purchase (most likely), and it must be a true gift. Interest on the gift will be taxable. 

 

 

A 5% tax rate on gifts to spouses or ascendant or descendant next of kin is applied, only if the gifting exceeds 20 million in a tax year.

 

What makes you think a spouse cannot use a gift to buy property?  And what do you think are the criteria the RD uses to determine hat a spousal gift is a true gift or otherwise, particularly given that all assets acquired by either spouse after marriage are immediately deemed common conjugal property under the Civil & Commercial Code.  The law has been on the books for 9 years now.  So you should be able to find ample evidence to support your interpretations.

[Ben Zioner]

On 4/11/2024 at 5:52 PM, redwood1 said:

 

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..

Glad I put 50000 into an LTR visa. It is obvious to me that now Elite's customer base are true millionaires. LTR catches the middle class. And that leaves the others...

[UKresonant]

1 hour ago, Dogmatix said:

all assets acquired by either spouse after marriage are immediately deemed common conjugal property under the Civil & Commercial Code

Have when the wife is buying properties (the land being include) perhaps signed a form in the land office when transacting to say that it is not conjugal property? There was / is a form, no sure what its specific reference is....

 

The gift would be useful for everything else for receivers use and they could use their own resources for the property purchases.

 

Same issue when your wife is getting a mortgage perhaps I remember back late 90's an aquantaince getting a mortgage at the extreme limit for her Thai salary and had to convince the bank the transaction was using her own money, (not her UK national husband's).

 

Would be drifting into nominee territory other wise perhaps.

[Yumthai]

1 hour ago, Ben Zioner said:

LTR catches the middle class

LTR catches the upper middle class of the top tier countries with the highest incomes.

[Klonko]

2 hours ago, Ben Zioner said:

Glad I put 50000 into an LTR visa. It is obvious to me that now Elite's customer base are true millionaires. LTR catches the middle class. And that leaves the others...

LTR is also for true millionaires which do not need to show off and can still walk to the fast track line. I expect many existing Privilege holders to switch to LTR upon membership expiry. You do not become and stay millionaire wasting money.

[stat]

2 hours ago, Ben Zioner said:

Glad I put 50000 into an LTR visa. It is obvious to me that now Elite's customer base are true millionaires. LTR catches the middle class. And that leaves the others...

1 M. USD needed for some of the LTR visa + 2 years 80K passive income is not middleclass according to the usual definitions neither in TH nor in the west. I do not see any reason to opt for an elite visa over a LTR visa.

[redwood1]

2 hours ago, Ben Zioner said:

Glad I put 50000 into an LTR visa. It is obvious to me that now Elite's customer base are true millionaires. LTR catches the middle class. And that leaves the others...

 

The LTR requires a whole whole lot more hoop jumping than Elite does....

 

The LTR  wants a whole lot from retirees who may just want to lead a simple life in their sunset years...

[4myr]

On 4/13/2024 at 5:57 AM, Mike Lister said:

Regarding the following point from the list of unknowns:

 

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?

 

I have now read a second report where members have asked the TRD about this point and the answer has been that the money is free of tax. Member @4myr reported the following a few days ago in this thread.

 

 

In years of not being tax resident:

1) In the tax year that a person is not tax resident, you can transfer as much money as you can. You will not pay taxes. This is in accordance with https://www.rd.go.th/english/6045.html.  “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. 

 

The above seems to add weight to the idea that funds remitted whilst not tax resident, are free of Thai tax but it doesn't tell us what the situation is if they were earned whilst the person was tax resident also. I think it is clear that funds earned and remitted whilst not Thai tax resident, are free of Thai tax, the above takes us one step closer to  closing the gap in our understanding.

Please read the FAQ question 1
https://www.expattaxthailand.com/thailand-revenue-department-foreign-sourced-income/

 

The year that you remit the money, 1) you are obliged to file tax, and 2) the income you remit was earned when you were tax resident.

 

When do you need to file a tax return:
1) as tax resident and your remitted income & Thai income > 120K as a single, or
2) as non tax resident your Thai income > 60K as a single. However filing tax return in the 2) case, you don't need to file remitted money as assessable income.

 

Something I have not asked the tax office yet, but I saw a foreigner tax lawyer speaking about this situation. In an audit, they can ask you whether the income you earned in case 2 has been tax filed in the country that you were tax resident at that time. So they can ask you for a tax assessment from the RD of that country. I don't know if this is correct. For example in my country I don't need to file capital gains, as they are not taxed.

 

[Mike Lister]

9 minutes ago, 4myr said:

Please read the FAQ question 1
https://www.expattaxthailand.com/thailand-revenue-department-foreign-sourced-income/

 

The year that you remit the money, 1) you are obliged to file tax, and 2) the income you remit was earned when you were tax resident.

 

When do you need to file a tax return:
1) as tax resident and your remitted income & Thai income > 120K as a single, or
2) as non tax resident your Thai income > 60K as a single. However filing tax return in the 2) case, you don't need to file remitted money as assessable income.

 

Something I have not asked the tax office yet, but I saw a foreigner tax lawyer speaking about this situation. In an audit, they can ask you whether the income you earned in case 2 has been tax filed in the country that you were tax resident at that time. So they can ask you for a tax assessment from the RD of that country. I don't know if this is correct. For example in my country I don't need to file capital gains, as they are not taxed.

 

That information has been available via the Sherrings site since January and has been posted many times previously. I would caution you to get your information from sources closer to the horses mouth, PWC, Sherrings, Mazzars etc. There are a number of offshore IFA run businesses that have teamed up with Thai CPA's to sell paid for tax preparation packages to expats here. Once you dig into them the costs can be as high as 10k baht per hour and are a lead in to selling financial services products such as pensions, investments etc. If these are the things you want, great, but everyone needs to understand what they are buying into.

 

 

[4myr]

19 minutes ago, Mike Lister said:

That information has been available via the Sherrings site since January and has been posted many times previously. I would caution you to get your information from sources closer to the horses mouth, PWC, Sherrings, Mazzars etc. There are a number of offshore IFA run businesses that have teamed up with Thai CPA's to sell paid for tax preparation packages to expats here. Once you dig into them the costs can be as high as 10k baht per hour and are a lead in to selling financial services products such as pensions, investments etc. If these are the things you want, great, but everyone needs to understand what they are buying into.

 

 

Agree. I'm in the process of discovery right now. Double tax treaty and remittance rules seems to be clear now.

 

Only scare is if my local tax officer is willing to spend time to learn the exemptions from my country's DTA stated in non plain Thai language. Also in discovery with my tax office is to find out the specific records that need to be kept for each income type and whether credit can be obtained.

 

For example dividend income from a company where I am a significant UBO is called in Dutch tax law "box 2" income tax: "Tax on substantial interests (box 2) In box 2, you pay tax on any substantial interests. You have a substantial interest if you, or you and a tax partner together, own at least 5% of the shares, options or profit-sharing certificates in a company. You pay 25% tax on income from substantial interests."

 

Try to explain to a tax officer such a type of income. Because there is also dividend income from stocks under box 3, which is called the wealth tax.

 

 

[Ben Zioner]

2 hours ago, redwood1 said:

The LTR requires a whole whole lot more hoop jumping than Elite does....

I dispute that, a lot less effort than a yearly extension. No need to print any document, 2 hours at home, a few emails, and 90 minutes at Chamchuri. But it is true that I didn't have to fiddle anything  and had all my docs in english. 

[Mike Lister]

21 minutes ago, 4myr said:

Agree. I'm in the process of discovery right now. Double tax treaty and remittance rules seems to be clear now.

 

Only scare is if my local tax officer is willing to spend time to learn the exemptions from my country's DTA stated in non plain Thai language. Also in discovery with my tax office is to find out the specific records that need to be kept for each income type and whether credit can be obtained.

 

For example dividend income from a company where I am a significant UBO is called in Dutch tax law "box 2" income tax: "Tax on substantial interests (box 2) In box 2, you pay tax on any substantial interests. You have a substantial interest if you, or you and a tax partner together, own at least 5% of the shares, options or profit-sharing certificates in a company. You pay 25% tax on income from substantial interests."

 

Try to explain to a tax officer such a type of income. Because there is also dividend income from stocks under box 3, which is called the wealth tax.

 

 

Don't forget that you only need to explain these things, if you are audited or asked for additional supportive information, after you have filed.

[Seeall]

On 3/27/2024 at 5:48 PM, Letseng said:

My husband recently needed a new ATM card. BKK Bank asked for his Thai TIN. 

My mum sends me. One million every year. How you gonna argue with her?