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

[hondoelsinore]

6 hours ago, stat said:

Every interest, capital gains on stock, cryptp you earned in the 8 month you stayed in TH could be taxed...

A country that struggles to translate languages, has major issues with simple math and cannot do anything in a precise or timely matter, and you believe that they would know every single transaction taking place by every single individual in another country? That would be a monumental task, even for superpower countries. Surely you mean only the amount of money brought into the country... right Chicken Little? 

[Maestro]

I put the Thai text of the Revenue Department Order through a machine translator (Google Bard), corrected some errors with numbers and dates, this is the result:
 

Quote

 

Revenue Department Order
Number P. 161/2566
Subject: Payment of Income Tax Under Section 41, Paragraph 2 of the Revenue Code

 

In order for the revenue officers to use as a guideline in inspecting and advising Thai residents who have assessable income under Section 40 of the Revenue Code in the past tax year due to their duties, businesses in foreign countries, or properties in foreign countries under Section 41, paragraph 2 of the Revenue Code, the Revenue Department hereby issues the following order:

 

Section 1. Any person who is a Thai resident under Section 41, paragraph 3 of the Revenue Code and has assessable income due to their duties, businesses in foreign countries, or properties in foreign countries under Section 41, paragraph 2 of the Revenue Code in the said tax year and has brought such assessable income into Thailand in any tax year, such person shall be required to include such assessable income in the calculation for the payment of income tax under Section 48 of the Revenue Code in the tax year in which such assessable income is brought into Thailand.

 

Section 2. Any regulations, rules, orders, letters in response to inquiries, or practices that are inconsistent with this order shall be deemed to be repealed.

Section 3. This order shall come into force for assessable income brought into Thailand from 1 January B.E. 2567 onwards.

 

Issued on 15 September B.E. 2566

 

(Mr. Saworn Sangsanit) 
Commissioner of the Revenue Department

 

 

The way I read this, it is not a change in the Revenue Code but a change in the practice of implementing Section 41, paragraph 2 of that law.

 

Does anyone have the text of Section 41, paragraphs 2 and 3 of the Revenue Code?

[hondoelsinore]

14 minutes ago, Maestro said:

I put the Thai text of the Revenue Department Order through a machine translator (Google Bard), corrected some errors with numbers and dates, this is the result:
 

 

The way I read this, it is not a change in the Revenue Code but a change in the practice of implementing Section 41, paragraph 2 of that law.

 

Does anyone have the text of Section 41, paragraphs 2 and 3 of the Revenue Code?

Section 41 A taxpayer who in the previous tax year derived assessable income under Section 40 from an employment, or from business carried on in Thailand, or from business of an employer residing in Thailand, or from a property situated in Thailand shall pay tax in accordance with the provisions of this Part, whether such income is paid within or outside Thailand.

A resident of Thailand who in the previous tax year derived assessable income under Section 40 from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax in accordance with the provisions of this Part.

Any person staying in Thailand for a period or periods aggregating 180 days or more in any tax year shall be deemed a resident of Thailand.

[khunjeff]

5 hours ago, rabas said:

Go here  https://international.schwab.com/open-account-intro

Click the [open account] button in the upper right.

Go down to [Select country/region] and choose Thailand. Enjoy.

The brokerage account you can open through that link does,  at least for expatriate US citizens, come with the much-loved Schwab debit card that refunds all ATM fees. Unlike the version for US residents, though, it requires that the account be funded with at least $25,000, which makes it of marginal utility for most people.

 

[Hummin]

6 hours ago, stat said:

Thats why I wrote could (happen) and you stated all no problem ignoring all the (possible) red flags . BTW the moment you will learn how this law will be handled is in 2025 and then you could be in deep deep <deleted>... That is what I pointed out no more no less

I believe this doesn't leave much for speculation for next year

 

"

According to the document, “…those that have earnings from occupation or business abroad or wealth that is located abroad…and has brought these assets into Thailand…must factor this into their personal income tax for the year.”

The program will begin January 1, 2024 and apply only to tax residents in Thailand meaning tourists and short term workers will be exempt. Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand"

[ukrules]

2 hours ago, hondoelsinore said:

Section 41 A taxpayer who in the previous tax year derived assessable income under Section 40 from an employment, or from business carried on in Thailand, or from business of an employer residing in Thailand, or from a property situated in Thailand shall pay tax in accordance with the provisions of this Part, whether such income is paid within or outside Thailand.

A resident of Thailand who in the previous tax year derived assessable income under Section 40 from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax in accordance with the provisions of this Part.

Any person staying in Thailand for a period or periods aggregating 180 days or more in any tax year shall be deemed a resident of Thailand.

Lets say I borrow £250,000 which is currently valued at 11 Million Baht, it's definitely not income in any way shape or form, it's a debt.

 

I then take this loan and transfer it to Thailand to purchase something like a house

 

In this scenario would there be any tax liability under these 'clear as mud' rules when moving the funds into Thailand.

 

No tax has been paid on this money because it's debt.

 

This might be a novel idea to many but I can assure you it's a mechanism that's widely used around the world and for some very good reasons.......

 

Thoughts?

Edited September 19, 2023 by ukrules

[Dogmatix]

On 9/18/2023 at 11:09 AM, scorecard said:

Could also be that the individual amount of pension received by some folks is under the Thai personl tax threshhold.

True but in other cases people get pensions that are below the threshold for tax in the country of origin but over the Thai tax threshold which is lower than in  farang countries.

[Dogmatix]

23 minutes ago, ukrules said:

Lets say I borrow £250,000 which is currently valued at 11 Million Baht, it's definitely not income in any way shape or form, it's a debt.

 

I then take this loan and transfer it to Thailand to purchase something like a house

 

In this scenario would there be any tax liability under these 'clear as mud' rules when moving the funds into Thailand.

 

No tax has been paid on this money because it's debt.

 

This might be a novel idea to many but I can assure you it's a mechanism that's widely used around the world and for some very good reasons.......

 

Thoughts?

I have done this in amounts large enough to require a report to Bank of Thailand just to have a means to re-export the money in future. The bank Fx person called to ask the purpose of the remittance. I say it’s a loan to purchase property. She says it can be booked as a loan because you are a foreigner. I say stuff you. I am a Thai citizen. Didn’t you look at the copy of my ID card I just sent you. A short argument about me still being a foreigner then she books it as a loan. 
 

It should be further explored whether foreigners are really prohibited from receiving offshore loans. Anyway the loan should be remitted by the lender not you and it needs a loan agreement made outside Thailand to avoid Thai stamp duty.

 

There could be a risk that the RD would follow and reclassify the loan as taxable income if never repaid and no interest paid. The Bank of Thailand used to track foreign loans. I once got a call from them asking about the servicing of a foreign loan but it was only for survey purposes. The RD would probably get on to it, if Thais started using this mechanism.

[jacko45k]

6 hours ago, LikeItHot said:

It says it would apply to tax residents which most of you are not.  If you are not working and earning and filing tax returns here this does not apply to you.  

I thought one only had to spend over 179 days in country a year to be a tax resident. 

[ukrules]

12 minutes ago, Dogmatix said:

It should be further explored whether foreigners are really prohibited from receiving offshore loans. Anyway the loan should be remitted by the lender not you and it needs a loan agreement made outside Thailand to avoid Thai stamp duty.

 

There could be a risk that the RD would follow and reclassify the loan as taxable income if never repaid and no interest paid. The Bank of Thailand used to track foreign loans. I once got a call from them asking about the servicing of a foreign loan but it was only for survey purposes. The RD would probably get on to it, if Thais started using this mechanism.

 

Interesting from the point of view of a foreigner like me.

 

If I were to take out a mortgage on a house in the UK or even just a reasonably large personal loan and send the funds here then I could prove that it's a loan (loan contract) but the transfer wouldn't be coming from the bank directly.

 

The funds would be credited to my UK bank account as is usual with any loan and I would then 'wire' however much I require using swift.

 

This is the first I'm hearing about foreigners being prohibited from receiving offshore loans, perhaps that restriction was only for the certificate allowing future repatriation of the funds - that's not something I would require. It's a for life kind of deal.

 

 

[Gknrd]

1 hour ago, khunjeff said:

The brokerage account you can open through that link does,  at least for expatriate US citizens, come with the much-loved Schwab debit card that refunds all ATM fees. Unlike the version for US residents, though, it requires that the account be funded with at least $25,000, which makes it of marginal utility for most people.

 

Kills me,  people can conjure up 25K to put in a Thai bank. But, cannot come up 25K to fund an investment account. And you wonder why a lot of people are in such bad financial shape..  

Edited September 20, 2023 by Gknrd

[khunjeff]

5 minutes ago, Gknrd said:

Kills me,  people can conjure up 25K to put in a Thai bank. But, cannot come up 25K to fund an investment account. And people wonder why people are in such bad financial shape..

The conversation was about getting a Schwab account in order to have a debit card that reimburses ATM fees, not for the purpose of investing in US securities. It wouldn't make much financial sense to tie up 25k USD just to get free ATM usage, even if that money was readily available. (The US version of the Schwab checking account requires you to open a brokerage account as well, but you don't have to fund it.) If someone actually wants to invest in the US market, of course, the math would be completely different.

[Gknrd]

22 minutes ago, khunjeff said:

The conversation was about getting a Schwab account in order to have a debit card that reimburses ATM fees, not for the purpose of investing in US securities. It wouldn't make much financial sense to tie up 25k USD just to get free ATM usage, even if that money was readily available. (The US version of the Schwab checking account requires you to open a brokerage account as well, but you don't have to fund it.) If someone actually wants to invest in the US market, of course, the math would be completely different.

I funded it for the card, it has saved me thousands over the years. Not only that but that  25K after I started investing is not to be laughed at anymore.. You are tying up 25K in a Thai bank, you are investing and earning money in an investment account.

But, everyone has their own priorities. Live and let live.

I have had that account for so many years now I cannot even remember when I started it. I was walking down the street today in Colombia and was running low. I popped in to the local bank ATM pulled out 1,500,000 pesos. Checked my account online 5 minutes after the transaction. I got the exact daily exchange rate and all fees are refunded once a month just like clockwork.   

Edited September 20, 2023 by Gknrd

[hotchilli]

13 hours ago, snoop1130 said:

However, the new rules have caused concern amongst many foreign expats even though the intention of the rules seem mainly targeted at Thais and dual tax agreements could avert some of the impact for some foreigners.

Tax my pension I'm outta here.

[daveAustin]

4 hours ago, hondoelsinore said:

Any person staying in Thailand for a period or periods aggregating 180 days or more in any tax year shall be deemed a resident of Thailand.

Cute how governments twist things when it suits them. I’ve always been told I’m a non-immigrant here and have practically no rights. If I’m deemed as being resident and forced to hand over taxes, should I not be afforded the benefits that residency and bring a tax payer brings? ???? Yeah, right. “Why, no sir, you are only resident for ‘tax purposes.’” Yuck!

[Isaan sailor]

We shall see how strong those tax treaties really are.  It’s their country, and they can do as they please.

[Jenkins9039]

6 hours ago, Antti said:

I bet the guys running the Elite Visa scheme are not thrilled about this. They just jacked up the prices of the Elite visas considerably and now this. They must be swarmed with emails and phone calls regarding this.

Crickets from them on the subject

[Expat68]

I would not have thought one country could alter rules (whatever they are) when they have a signed treaty with another 

[Hummin]

5 minutes ago, daveAustin said:

Cute how governments twist things when it suits them. I’ve always been told I’m a non-immigrant here and have practically no rights. If I’m deemed as being resident and forced to hand over taxes, should I not be afforded the benefits that residency and bring a tax payer brings? ???? Yeah, right. “Why, no sir, you are only resident for ‘tax purposes.’” Yuck!

You will get local entry fee at National parks. Congratulation

 

And free covid vaccine 

 

I will pay my taxed and be part of social security in my homeland, and if they going to tax me in Thailand, I'm not going to live here at retirement visa. 

 

It is completely out of question to pay tax to a country who doesn't give back one baht or reckoning us as a useful resource. I am not complaining about status Q, but I will I they going to tax me. 

 

Anyway, as far I can see, it doesn't seem to be realistic I'm going to be taxed as the new rules described in OP.

 

 

[redwood1]

15 minutes ago, Isaan sailor said:

We shall see how strong those tax treaties really are.  It’s their country, and they can do as they please.

I have one word for you......Hopewell....

[Henryford]

27 minutes ago, hotchilli said:

Tax my pension I'm outta here.

Exactly, if they tried it thousands of expats would be on the next plane out, with their 800k.

[quake]

1 minute ago, Henryford said:

Exactly, if they tried it thousands of expats would be on the next plane out, with their 800k.

They would be very happy about that.

They will cut off there nose to spite there own face here.

They care not about you or your money.

 

[jacko45k]

3 minutes ago, Henryford said:

Exactly, if they tried it thousands of expats would be on the next plane out, with their 800k.

Yes and the few hundred k to underpin my credit card. I know quite a few expats, mostly living away from the bright lights, who simply could not afford any tax burden. 

[Thaindrew]

7 hours ago, LikeItHot said:

It says it would apply to tax residents which most of you are not.  If you are not working and earning and filing tax returns here this does not apply to you.  

the point is over 180 days you are tax resident, now they are not enforcing tax returns, but now they are clearly saying money coming into the country needs to be included in an assessment of tax, thats likely to mean if you are here over 180 days you need to do a tax return

[klauskunkel]

I am just not convinced that the Thai government will honor the double tax agreements they signed. There will be loopholery and and changes in nomenclature to "legalize" their tax claims. 

[Thaindrew]

28 minutes ago, Jenkins9039 said:

Crickets from them on the subject

yep, still waiting for a reply .....

[lordgrinz]

25 minutes ago, quake said:

They would be very happy about that.

They will cut off there nose to spite there own face here.

They care not about you or your money.

 

Correction: They do indeed care about our money, just not us. They would prefer we fly in, hand over our money, then fly home. Expats are unwelcome here, evident by how they treat us, our money is actually all they care about.

[jonny on the spot]

Morning all,

Imagine this scenario, i live in ะhailand retirement visa for years.

I sell a house in London, previously used as an income stream from rental

The resulting 40 mil Baht i want here in Thailand, in a lump or dribs and drabs it matters not.

Does this become taxable? And at what rate?

Is there any benefit in getting it here before January 1?

[jaideedave]

On 9/19/2023 at 5:04 PM, El Matador said:

To give a bit of perspective.

Indonesia and Vietnam tax everyone on their worldwide income.

Malaysia only taxes local income. And Philippines only taxes local income IF YOU ARE FOREIGNER. But if you get a Filipino passport you will get taxed worldwide.

 

Seems Thai nationals will be taxed worldwide wherever their income comes from without any possible loophole as they are the main target according to the articles.

Still have to see the details if foreigners will be taxed exactly the same on their worldwide income. Although I doubt it will happen, a tax system like in the Philippines could be an option if they want to keep stable their base of expats. That would be a positive discrimination for once.

Tax treaties only offer a protection to avoid to pay twice a tax on the same income but can't avoid bureaucracy and potential increased taxes if the treaty is not that great. Some of them were written 30 years ago in a very different context.

 

"If they introduce someday a 90 days visa exemption (as some are thinking), you could do your 2 visa exemptions in a year and call it a day. Hassle free, and without all the bureaucratic nightmare, that would be an attractive alternative.

 

 

 

 

If they introduce a 90 days visa exemption (as some are thinking), you could do your 2 visa exemptions in a year and call it a day. Hassle free, and without all the bureaucratic nightmare, that would be an attractive alternative"

I currently have the 1 year Visa (Retirement stamp) Are you saying if they introduce the 90 Visa exemption one could get a 90 day and extend it once and do a border run and get 180 days total? I like that option if it becomes available.

[whiteman]

as I said b4 it is looking more like a lot of lump sums will be coming into Thailand just b4 the 1st of Jan to get around the new rules.  To get one at least the next few years worry free

Edited September 20, 2023 by whiteman