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

[4myr]

2 hours ago, Yumthai said:

 

https://www.rd.go.th/fileadmin/user_upload/lorkhor/newspr/2024/FOREIGNERS_PAY_TAX2024.pdf

 

Foreign-sourced income
If a foreigner derives income from sources outside Thailand, such income is subject to income tax if the two following conditions are met:
- such income has been earned in any tax year starting from 1 January 2024 onward by a foreigner who stays in Thailand for 180 days or more in a tax (calendar) year, and;
- such income earned has been remitted to Thailand (wholly or partially), even if that remittance occurs in a later tax year.

 

The second condition does not precise what the individual tax residency status is (or has to be) when the remittance occurs.

 

Either it is interpreted like CC 1161 i.e.: tax residence does not matter, then this will override the current law stating "A non-resident is, however, subject to tax only on income from sources in Thailand.",

OR

it is interpreted like the tax filing service company, CC 1111, and Prachuap i.e.: Thai tax residence is implied when the remittance occurs, matching with the current law stating "A non-resident is, however, subject to tax only on income from sources in Thailand."

 

Choose your side, I vote for the majority.

 

Thanks for this English link! It answers my case clearly.

 

According to this TRD leaflet, my case is the 2nd 1st of the table, so ANSWER should be NO YES! 

 

Unfortunately this leaflet is one-sided on the DTA:

1) does not mention exemptions, if permitted in DTA

2) only mention tax credits, if permitted in DTA

 

On evidence of tax credits, "Tax Payment Certificate issued by foreign tax authority is recommended." I was not even aware that my country's RD issues such certificates.

 

 

[pj123]

Well this is good news for me as all the money I intend to bring to Thailand over the next few years has been earned before 1 Jan 2024.

[Danderman123]

I had a conversation with a bar manager about the 2024 tax rule changes. He had no idea what I was talking about, and could care less.

 

Since the manager knows hundreds of Farang residents, I was surprised that he didn't know about the rule changes.

 

He certainly had no plans to file a tax return.

 

This seems to be typical of many Farang s.

[Mike Lister]

10 minutes ago, Danderman123 said:

I had a conversation with a bar manager about the 2024 tax rule changes. He had no idea what I was talking about, and could care less.

 

Since the manager knows hundreds of Farang residents, I was surprised that he didn't know about the rule changes.

 

He certainly had no plans to file a tax return.

 

This seems to be typical of many Farang s.

It doesn't get much more anecdotal than that!

[Yumthai]

1 hour ago, 4myr said:

According to this TRD leaflet, my case is the 2nd 1st of the table, so ANSWER should be NO YES! 

The issue with this leaflet is they nowhere mention the tax residency status of the individual who remits the income, as if it does not matter. But it does.

 

That is inconsistent and in contradiction with the current law: "A non-resident is, however, subject to tax only on income from sources in Thailand."

 

However, the leaflet title may refer to Thai tax residents only: "HOW DO FOREIGNERS LIVING IN THAILAND PAY TAX?", implying that a foreigner who lives in Thailand spend de facto 180+ days in the country then is obviously tax resident.

 

[Danderman123]

8 minutes ago, Mike Lister said:

It doesn't get much more anecdotal than that!

The plural of "anecdote" is anecdotes.

 

But I suspect this position of ignorance is common out in the Real World, apart from the small number of Farangs working in Thailand and paying tax now 

[Mike Lister]

20 minutes ago, Danderman123 said:

The plural of "anecdote" is anecdotes.

 

But I suspect this position of ignorance is common out in the Real World, apart from the small number of Farangs working in Thailand and paying tax now 

Never mind

[4myr]

For anyone wanting confirmation from Central TRD Legal dept about DTA exemptions and tax credits, you can direct your specific questions to [email protected]. 

 

I got this email address by calling the Legal dept of Central TRD, that is published on the rd website.

[Dogmatix]

6 hours ago, Yumthai said:

 

https://www.rd.go.th/fileadmin/user_upload/lorkhor/newspr/2024/FOREIGNERS_PAY_TAX2024.pdf

 

Foreign-sourced income
If a foreigner derives income from sources outside Thailand, such income is subject to income tax if the two following conditions are met:
- such income has been earned in any tax year starting from 1 January 2024 onward by a foreigner who stays in Thailand for 180 days or more in a tax (calendar) year, and;
- such income earned has been remitted to Thailand (wholly or partially), even if that remittance occurs in a later tax year.

 

The second condition does not precise what the individual tax residency status is (or has to be) when the remittance occurs.

 

Either it is interpreted like CC 1161 i.e.: tax residence does not matter, then this will override the current law stating "A non-resident is, however, subject to tax only on income from sources in Thailand.",

OR

it is interpreted like the tax filing service company, CC 1111, and Prachuap i.e.: Thai tax residence is implied when the remittance occurs, matching with the current law stating "A non-resident is, however, subject to tax only on income from sources in Thailand."

 

Choose your side, I vote for the majority.

 

 

At least the linked document from the RD says documents to show tax paid overseas can be in English or Thai but, since this is a PR release, and not an order to RD officers, they may choose to demand certified translations to Thai, notarised by the MOFA anyway. 

 

They say ominously that tax documents certified by the foreign government are "recommended" which no doubt means obligatory in many RD offices.  Actually demanding government certified documents will save the officers a lot of trouble, given that most Western countries will not supply them.  A perfect solution for RD officers. 

[Dogmatix]

It occurs to me that I have two Thai staff at my company earning 15k a month each who have never filed tax returns in their lives. One of them has been with me for about 15 years and will have several years worth of 2,000 baht fines and interest to pay, if she is ever tracked down for one of those 10 year audits.  Our accountant has always said their was no need for them file because they have no tax to pay.  Perhaps I need to check she is still of this opinion.

[Mike Teavee]

56 minutes ago, Dogmatix said:

It occurs to me that I have two Thai staff at my company earning 15k a month each who have never filed tax returns in their lives. One of them has been with me for about 15 years and will have several years worth of 2,000 baht fines and interest to pay, if she is ever tracked down for one of those 10 year audits.  Our accountant has always said their was no need for them file because they have no tax to pay.  Perhaps I need to check she is still of this opinion.

My GF used to earn a similar amount (more with commission but <the 210K pa where tax may be due) working at a Central Mall & I doubt she or any of her co-workers would have any idea how to go about filing a Tax Return so I've always assumed that the Company either filed their (Nil) returns or would file a return if they did earn > 210K.   

[Mike Lister]

29 minutes ago, Mike Teavee said:

My GF used to earn a similar amount (more with commission but <the 210K pa where tax may be due) working at a Central Mall & I doubt she or any of her co-workers would have any idea how to go about filing a Tax Return so I've always assumed that the Company either filed their (Nil) returns or would file a return if they did earn > 210K.   

I quizzed my wife about similar, years ago. It turns out she was recruited as freelance hence responsible for her own taxes, although I don't think she understood that at the time.

[OJAS]

On 4/24/2024 at 6:35 PM, UKresonant said:

The TH-UK DTA  does have a clause at 23 (3) that says UK source tax will be allowed as a credit against Thai Tax.

 

Interesting point, of which I wasn't previously aware. It would appear to indicate that the State Pension COULD, in certain circumstances, be said to be covered by the DTA - which, in turn, might have ramifications on whether or not it needs, in theory, to be covered in any TRD tax return.

[Mike Lister]

2 minutes ago, OJAS said:

 

Interesting point, of which I wasn't previously aware. It would appear to indicate that the State Pension COULD, in certain circumstances, be said to be covered by the DTA.

Except the UK State pension is not taxed

[OJAS]

1 minute ago, Mike Lister said:

Except the UK State pension is not taxed

 

It is in my case. I pay tax on my Civil Service pension through my tax code (which takes account of the £12,570 personal allowance). And, in the tax returns I still file with HMRC, I always check the 2 boxes instructing them not to make any deductions through my tax code - meaning that they then require me to pay tax on account equal to 20% of my State Pension income. Could provide evidence of this to the TRD, in the hopefully highly unlikely event of ever being challenged, in the form of paper versions of my SA100 returns plus HMRC tax demands.

 

[4myr]

12 minutes ago, OJAS said:

 

It is in my case. I pay tax on my Civil Service pension through my tax code (which takes account of the £12,570 personal allowance). And, in the tax returns I still file with HMRC, I always check the 2 boxes instructing them not to make any deductions through my tax code - meaning that they then require me to pay tax on account equal to 20% of my State Pension income. Could provide evidence of this to the TRD, in the hopefully highly unlikely event of ever being challenged, in the form of paper versions of my SA100 returns plus HMRC tax demands.

 

did you check 19 where civil service pensions can be exempted? 

[hunkidori]

8 hours ago, TroubleandGrumpy said:

 - which will inevitably just quietly get sidelined and 'go away' - which is what any silly Expat who contacts/visits a TRD office asking help to lodge a tax return about his Pension will be told to do. 

No farang is going to get taxed on money from overseas.

 

Sometimes I think certain people are trying to force the issue when there is no issue there

[JimGant]

2 hours ago, Dogmatix said:

Our accountant has always said their was no need for them file because they have no tax to pay.

Nice to see common sense brought into the equation.

[MistyBlue]

1 hour ago, Mike Lister said:

Except the UK State pension is not taxed

This is not correct.  The UK state pension is taxed.  You might be getting confused with the method in which the tax is collected on a state pension, often through other streams of income.

[Mike Lister]

1 hour ago, MistyBlue said:

This is not correct.  The UK state pension is taxed.  You might be getting confused with the method in which the tax is collected on a state pension, often through other streams of income.

Yes I agree, it's at the bottom of the pile.

[Neeranam]

In Thailand nowadays you can cash bitcoin easily, P2P. I wonder if there's any way the government can keep track of cryptocurrency transactions?

[UKresonant]

8 hours ago, OJAS said:

 

It is in my case. I pay tax on my Civil Service pension through my tax code (which takes account of the £12,570 personal allowance). And, in the tax returns I still file with HMRC, I always check the 2 boxes instructing them not to make any deductions through my tax code - meaning that they then require me to pay tax on account equal to 20% of my State Pension income. Could provide evidence of this to the TRD, in the hopefully highly unlikely event of ever being challenged, in the form of paper versions of my SA100 returns plus HMRC tax demands.

 

Still a bit unsure how to express the Civil Service "only taxed in UK" DTA article 19 pension, on a Thai RD tax return. As it was mentioned that an office said there is only credit relief for tax paid.

 

Which to me would suggest the entire amount and it's associated tax deducted from it, not applied as credit, and should all be excluded before TH RD computation. Because I'm looking as mine being all fully taxed as well above the UK Personal Allowance. ( the other bit of my occupational pension uses the PA up, hopefully the state pension will come along in about 6 years)

 

It seems they may wish to include it and could push the remainder into a higher band. 

 

I would nly would wish Civil Service pension listed as an explanation of the remittance, and that it's been through the mill. 

 

I don't do returns in the UK, as they said, they can see everything on their screen.

 

Interesting that that option is available, applicable family members just let them fix it all with the Tax coding.

[Mike Lister]

A member asked in another thread (now unfortunately closed):

 

"please explain how the Thai tax authorities can differentiate between income and savings in an Australian bank account".

 

The answer is, they can't and they won't, it's not their role to do that, that's your job!

 

YOU have to declare on a tax return, exactly what the funds represent, savings or income. If you say savings, and only you know, you must be prepared to prove that fact with documentation, if subsequently asked. @Lacessit

[stat]

19 hours ago, TroubleandGrumpy said:

Godspeed indeed - this whole income taxes on remittances scenario reminds me of the TM30 rules and their sudden over the top pedantic implementation by Immigration Police some years ago.  They started enforcing the 24 hour reporting period for TM30s and fining Expats when hotels did not report them staying and leaving, and some Expats had annual extensions denied/delayed. I recall it all blew up so much that it was front page Bangkok Post and on social media (not so big back then). There was a meeting at Journalists Club? that was broadcast online after 100s of signatures on a protest, and I recall the Head of BKK Immi Police 2 and a few of his other lackeys were there (and not enjoying it). He was asked at one stage 'why should an Expat pay 2000 Baht fine if he shows Passport etc but the hotel fails to report him'.  His arrogant smug answer was 'because that the law'.  That pretty much summed them up - ignorant arrogant little-hitlers. Anyway, it was a short period later when the whole thing was dropped and strict enforcement was 'abandoned' (but never publicly stated and the law is still on the books).  IMO the taxing of Expat's foreign sourced money is the in the same ball park, and it will be the same type of clusterphar... that is best avoided - which will inevitably just quietly get sidelined and 'go away' - which is what any silly Expat who contacts/visits a TRD office asking help to lodge a tax return about his Pension will be told to do. 

Great example. It highlights another major problem all of us could face. Maybe they do not enforce the new directive in 2024 but in 2025 or 2026 they do. No one will know before the TRD sends you a letter after the tax year has passed stating you have to pay big time, which brings me back to my point of several layers of insulation or protection from this clusterpha...

[stat]

15 hours ago, pj123 said:

Well this is good news for me as all the money I intend to bring to Thailand over the next few years has been earned before 1 Jan 2024.

No one knows if they will accept your documentation. Good luck if you have a mingled account.

[stat]

15 hours ago, Danderman123 said:

I had a conversation with a bar manager about the 2024 tax rule changes. He had no idea what I was talking about, and could care less.

 

Since the manager knows hundreds of Farang residents, I was surprised that he didn't know about the rule changes.

 

He certainly had no plans to file a tax return.

 

This seems to be typical of many Farang s.

I still think the group that should be concerned are residents that have 100K above in capital income, not so much the "average" pensioner that goes bar hoping (no disrespect in any way). If the guy is a bar owner he has to file IMHO anyway or is he working for free?

[stat]

13 hours ago, Dogmatix said:

 

At least the linked document from the RD says documents to show tax paid overseas can be in English or Thai but, since this is a PR release, and not an order to RD officers, they may choose to demand certified translations to Thai, notarised by the MOFA anyway. 

 

They say ominously that tax documents certified by the foreign government are "recommended" which no doubt means obligatory in many RD offices.  Actually demanding government certified documents will save the officers a lot of trouble, given that most Western countries will not supply them.  A perfect solution for RD officers. 

Thanks! So any non ENG documents will not be accepted, bummer. To translate the german tax documents will cost easily several 1000 Euros besides the fact that some words are untranslatable . Lucky me I am banking mainly in the US 🙂

[stat]

1 hour ago, Mike Lister said:

A member asked in another thread (now unfortunately closed):

 

"please explain how the Thai tax authorities can differentiate between income and savings in an Australian bank account".

 

The answer is, they can't and they won't, it's not their role to do that, that's your job!

 

YOU have to declare on a tax return, exactly what the funds represent, savings or income. If you say savings, and only you know, you must be prepared to prove that fact with documentation, if subsequently asked. @Lacessit

The question will be what accounting system to use: Lifo, Fifo etc. If one could chose that would be great.

[Lacessit]

3 hours ago, Mike Lister said:

A member asked in another thread (now unfortunately closed):

 

"please explain how the Thai tax authorities can differentiate between income and savings in an Australian bank account".

 

The answer is, they can't and they won't, it's not their role to do that, that's your job!

 

YOU have to declare on a tax return, exactly what the funds represent, savings or income. If you say savings, and only you know, you must be prepared to prove that fact with documentation, if subsequently asked. @Lacessit

I have taken screenshots of every asset in Australia as at 31/12/2023, as proof of savings.

 

I don't have to declare anything on a tax return if I don't have a Thai tax number.

 

Until an IO tells me I need one to get my extension, or someone posts to that effect, I see no reason to get one.

 

Statements I am evading tax appear to be arguing in a circle.

 

[Danderman123]

2 hours ago, stat said:

I still think the group that should be concerned are residents that have 100K above in capital income, not so much the "average" pensioner that goes bar hoping (no disrespect in any way). If the guy is a bar owner he has to file IMHO anyway or is he working for free?

The "guy" in question is a bar manager, not an owner. 

 

More to the point, he is required to file a tax return as he lives in Thailand. But he has no idea about this requirement. I haven't found anyone who knows about the new rules.