5 minutes ago, Mike Lister said:

I also use a fixed deposit for this purpose but it's only 400k, it's on a rolling year by year fix in an account all by its lonesome. I use an agent to manage all my Immi interfaces and thus far he's not asked for anything further. But he also knows I keep high 7 figures in Baht in other accounts here, which will be my fall back response to the living expenses question, if it's ever asked, rather than screwing around with tax returns and statements et al.

I have had 800K on deposit ever since I first got a retirement visa, about 10 years ago. I did experiment with the 65K income method one year, and decided it was a PITA.

I have enough in other Thai accounts to last me for two years without drawing any funds from Australia, where there are plenty of pre-2024 savings to draw on.

Hopefully in 2 years time the experiences of others will be a guide.

My next extension is November, again there should be more information available on this thread.

15 hours ago, OJAS said:

 

Having taken another look at the TRD note, it strikes me that a fundamental flaw with it throughout is that it doesn't differentiate between foreign-sourced income which is assessable and that which is not.

If they issue a new / updated return form, fingers crossed it will clarify.

 

If obtaining "tax authority certificate" like a " letter of confirmation" from HMRC whether it would reflect any DTA provision or (more likely) not. If not, how does, for example .Gov pensions remain as 'Taxed only in the UK' It does ask the purpose for requesting, but is that a process tick box or (less likely perhaps ) Is it processed to suit the reason requested.

Will have to see if I can find.examples on the/ a tax forum.

 

23 hours ago, Mike Lister said:

I also use a fixed deposit for this purpose but it's only 400k, it's on a rolling year by year fix in an account all by its lonesome. I use an agent to manage all my Immi interfaces and thus far he's not asked for anything further. But he also knows I keep high 7 figures in Baht in other accounts here, which will be my fall back response to the living expenses question, if it's ever asked, rather than screwing around with tax returns and statements et al.

there are days when I wish I had taken up the offer of a Thai wife, upon arriving at the airport, in the 1990's 🙂

19 minutes ago, paddypower said:

there are days when I wish I had taken up the offer of a Thai wife, upon arriving at the airport, in the 1990's 🙂

Don't worry, plenty still around to "take care" in return for financial support.

Does Australia have a tax treaty with Thailand? Yes, Australia does have a tax treaty with Thailand. It's a Double Taxation Agreement (DTA) specifically designed to prevent residents of either country from being taxed twice on the same income.

bbbbbbboom boooommm!!!..

On 4/27/2024 at 5:39 PM, stat said:

 

Your guide does not answer the questions what accounting system will be used Lifo, Fifo or percentage of funds for TRD, so the issue is completly open and no one knows. The documentation of feeds only help when you know which accounting method can/should be used. This is the main problem.

 

There is yet another method, I think used in the UK for remittance tax on non-doms' remittance of income.  Income is remitted first, then capital.  For example you have 100k and earned 50K in capital gains and dividends in a tax year.  You want to remit 20k declaring it as 18k tax exempt principal and 2k taxable income.  No dice. HMRC requires you to remit all the 50k taxable income before you can remit the tax free principal. So First out income, last out principal FOILOP may be the new Thai accounting standard when they get around to it.

Khun Lavaron the DG of the RG who issued order P. 161/2566 just before being transferred is now elevated to permanent secretary at the finance ministry.  He has now announced that he will be getting rid of the exemption from VAT on small packages under 1,500 baht imported by post. Because it will take too long to do this using the normal democratic process of amending the customs law in parliament, he will order the Customs Dept DG to issue an order to short circuit the democratic process.  The Postal Customs department has no plans for how it will open and assess for tax an additional 15 million small packages a year, many of which are low cost items from China costing less than 100 baht.  The current system involves not delivering taxable packages but summoning recipients to post offices and often to the Postal Customs office in Laksi,, Bangkok, for clarification, even for quite common items like musical instrument accessories like reeds.  Often they challenge declarations and look up online to see if they can find a similar item selling for more than the declaration and use that value instead. 

 

It seems like this order introduced with no planning will create total chaos at post offices and cause huge backlogs.  Without doubt the cost of collecting under 7 baht in VAT on the packages under 100 baht will cost more to  collect than the tax raised, just like the 30 baht medical charge had to be scrapped because it cost more than 30 baht to collect. At the very least, they should set up a way to pay online and let the packages be delivered by the postmen as normal. They could just asses the items under 1,500 without opening them. But they have no online system and probably will want to open everything to check it is properly declared.

 

It seems like there is a patern with this government and Khun Lavaron in particlar. Rule by decree to avoid parliamentary scrutiny and public consultation. Introduce measures that require detailed planning without any planning or preparation, will likely cost more to administer than revenue collected and will cause chaos.  The same is true of the same official's plan to tax remittances. They have no plans of preparation for a far more complex issue than taxing international packages. But under the new Thaksin regime, the bureaucrats need to show they are getting things done.  No problem if the systems to implement it takes years to put in place or it turns out to be net money loser. 

 

The purpose of this post is not to generate replies about the postal tax (there is another thread for that) but to show that the new system in taxation is not introduce new taxes without thinking it through or caring what chaos it causes.  

6 hours ago, CARLO BALDASSARRE said:

Does Australia have a tax treaty with Thailand? Yes, Australia does have a tax treaty with Thailand. It's a Double Taxation Agreement (DTA) specifically designed to prevent residents of either country from being taxed twice on the same income.

bbbbbbboom boooommm!!!..

Not quite true, DTAs prevent double taxation on Income that is covered in the DTA so any income not covered can be taxed in Thailand even if you've already paid Tax on it in your home country. 

 

1 hour ago, Dogmatix said:

 

There is yet another method, I think used in the UK for remittance tax on non-doms' remittance of income.  Income is remitted first, then capital.  For example you have 100k and earned 50K in capital gains and dividends in a tax year.  You want to remit 20k declaring it as 18k tax exempt principal and 2k taxable income.  No dice. HMRC requires you to remit all the 50k taxable income before you can remit the tax free principal. So First out income, last out principal FOILOP may be the new Thai accounting standard when they get around to it.

Isn't that just LIFO (Last in First Out) which is what the UK typically uses for any kind of assets.  

29 minutes ago, Mike Teavee said:

Isn't that just LIFO (Last in First Out) which is what the UK typically uses for any kind of assets.  

 

I am not an expert on the UK's non-dom rules, which are LIFO ++ or modified LIFO.  HMRC demands that in remitting funds to the UK, a non-dom must prioritise the funds that will incur the greatest UK tax liability first. Roughly speaking and simplifying it the priority of types of funds would be something like this"

 

1. Foreign source income - foreign tax unpaid.

2. Foreign source cap gains - foreign tax unpaid.

3. Foreign source income - foreign tax paid.

4. Foreign cap gains - foreign tax paid.

5. Capital that is non-taxable in the UK.

 

Unsurprisingly they want to rig things so that they collect as much tax as possible.  In the UK cap gains are  subject to a lower maximum rate of tax and are filed separately, so they don't push you into a higher tax bracket like they do in Thailand.  In Thailand it will be mainly foreign cap gains that will cause a problem because there are special arrangements for individuals for cap gains from SET listed stocks )exempt) and property (taxed according a complex set of rules but not lumped in with regular income. 

 

Since there are not regulations in Thailand, I wouldn't be surprised, if the RD will start insisting that the income taxable in Thailand at the highest rate is deemed to have been remitted.  That will mean them demanding information on all sources of income in the account, so they can assess the correct priority of remittances.  In lieu of government certified documents in a format that is similar to what exists in Thailand that RD officers can understand, the line of least resistance will be to ask the taxpayer to submit it all and we will decided later, resulting in a decision to tax the whole lot without approving any tax credits. 

 

 

On 4/28/2024 at 8:28 AM, Mike Lister said:

I hadn't come across Area Office before. My previous understanding was that the country is divided into Regions which are then subdivided into Districts, a District being equal to an Amphur.

 

Looking at the TRD org chart is seems Regions are subdivided into Area Offices and Area branches. I interpret this to mean that the old District Offices are now Area offices  that may not map directly onto Amphurs in every case and that more remote locales have Area branches! 

 

Regardless, the largest and most capable office in any area  is the Regional Office but the District Offices (now Area offices) are where to file a return.

 

https://www.rd.go.th/english/6015.html

 

I read something in Thai a few weeks ago that said that taxpayers in areas not covered by an RD branch or sub branch and wishing to deal with RD officers face to face should go to their district office but I can't remember where that was.  I assume there are a handful of RD officers stationed in these district offices but have never encountered them.  Fiscal responsibilities upcountry are otherwise with the thesabans and thesaban tambons which cover areas that are not the same as tambons that are subdivisions of the amphurs.  Land and buildings tax is collected by the thesabans and the dividing lines are totally arbitrary.  I have two pieces of land in a medium sized town upcountry that are contiguous, in the same condition of unsuccessfully trying to grow bananas  and in the same amphur, with the same Treasury Dept appraisal prices but are in two separate thesabans that collect Land and Buildings Tax at different rates, based on their view of whether the land is utilised or vacant. 

 

That gives an idea of how whacky and inconsistent tax assessment can be upcountry.  Given no regulations or guidelines on the remittance tax, zero understanding of DTAs or anything "foreign" and limited command of English, there is no reason to assume that assessment of remittance tax will be any less whacky or less inconsistent upcountry that Land and Buildings tax.

On 4/27/2024 at 2:50 PM, Mike Lister said:

 

I agree that the method of accounting aspect is still open but I do not agree that the documentation of the feeder accounts is not important today, the fact the TRD accounting method is not known doesn't change that need.

 

If, for example, a person generates income from high interest savings,  equities investments and employment, and funds from each of those three areas are commingled into a single account, that person will understand and be able to prove, what amount each one contributed and when (assuming adequate documentation is retained).

 

If that person then remits X to Thailand, they are able to declare the source of those funds and provide a paper audit trail that confirms that.

 

At some point, the TRD will make it known what accounting method they utilise, in which case the documentation of the feeder accounts is essential. Or they may not. It may be that the TRD will not want that level of granularity and will be happy that in the event of an audit, the person can provide a paper audit trail and that is sufficient. Either way, the documentation relating to feeds is very important, either now or later.

One should absolutely have a paper trail at any cost agreed.

 

I was referring to one of our statement that the tax guide gives answers for conmingled accounts which it cannot. Your tax asseasable income could range from 0 to 100% if Lifo or Fifo are used.

 

 Example I have 1 M USD savings in Dec 2023, if Lifo is used I could transfer up to 1 M USD in 2024 or later without having any asseasable income. If Fifo is used and I have 100K new income in 2024 the whole 100K would be asseasble. That is why I stated the whole subject is wide open.

 

 

4 hours ago, Dogmatix said:

Khun Lavaron the DG of the RG who issued order P. 161/2566 just before being transferred is now elevated to permanent secretary at the finance ministry.  He has now announced that he will be getting rid of the exemption from VAT on small packages under 1,500 baht imported by post. Because it will take too long to do this using the normal democratic process of amending the customs law in parliament, he will order the Customs Dept DG to issue an order to short circuit the democratic process.  The Postal Customs department has no plans for how it will open and assess for tax an additional 15 million small packages a year, many of which are low cost items from China costing less than 100 baht.  The current system involves not delivering taxable packages but summoning recipients to post offices and often to the Postal Customs office in Laksi,, Bangkok, for clarification, even for quite common items like musical instrument accessories like reeds.  Often they challenge declarations and look up online to see if they can find a similar item selling for more than the declaration and use that value instead. 

 

It seems like this order introduced with no planning will create total chaos at post offices and cause huge backlogs.  Without doubt the cost of collecting under 7 baht in VAT on the packages under 100 baht will cost more to  collect than the tax raised, just like the 30 baht medical charge had to be scrapped because it cost more than 30 baht to collect. At the very least, they should set up a way to pay online and let the packages be delivered by the postmen as normal. They could just asses the items under 1,500 without opening them. But they have no online system and probably will want to open everything to check it is properly declared.

 

It seems like there is a patern with this government and Khun Lavaron in particlar. Rule by decree to avoid parliamentary scrutiny and public consultation. Introduce measures that require detailed planning without any planning or preparation, will likely cost more to administer than revenue collected and will cause chaos.  The same is true of the same official's plan to tax remittances. They have no plans of preparation for a far more complex issue than taxing international packages. But under the new Thaksin regime, the bureaucrats need to show they are getting things done.  No problem if the systems to implement it takes years to put in place or it turns out to be net money loser. 

 

The purpose of this post is not to generate replies about the postal tax (there is another thread for that) but to show that the new system in taxation is not introduce new taxes without thinking it through or caring what chaos it causes.  

OMG they really try hard to screw up! Thanks for this info!

 

PS: In Germany they did the same with small value parcels but they forced the sender to register with the Ger tax authorities and now the seller adds the VAT at the checkout when you buy the item.

 

 

2 hours ago, stat said:

OMG they really try hard to screw up! Thanks for this info!

 

PS: In Germany they did the same with small value parcels but they forced the sender to register with the Ger tax authorities and now the seller adds the VAT at the checkout when you buy the item.

 

 

 

Thailand's first effort was to go after large tech companies like Netflicks selling into Thailand without a permanent establishment to try to avoid tax. Made them register for VAT which I think has been fairly successful. The small packages tax was originally in the same bill but was dropped by the Prayut government. 

4 hours ago, stat said:

Example I have 1 M USD savings in Dec 2023, if Lifo is used I could transfer up to 1 M USD in 2024 or later without having any asseasable income. If Fifo is used and I have 100K new income in 2024 the whole 100K would be asseasble. That is why I stated the whole subject is wide open.

Your example has confused me.  It would make sense to me if you reversed your use of LIFO and FIFO. 

 

Using FIFO your first 1M of remittances would not be assessable as those funds existed before 2024.  Using LIFO the first 100K of remittance would be assessable and the remaining 1M would not.

3 minutes ago, gamb00ler said:

Your example has confused me.  It would make sense to me if you reversed your use of LIFO and FIFO. 

 

Using FIFO your first 1M of remittances would not be assessable as those funds existed before 2024.  Using LIFO the first 100K of remittance would be assessable and the remaining 1M would not.

My bad you are correct thx 4 pointing it out.

 

It should read:

 

Using LIFO your first 1M of remittances would not be assessable as those funds existed before 2024.  Using FIFO the first 100K of remittance would be assessable and the remaining 1M would not.

The statement in the guide regarding commingled funds remains broadly the same, but now makes it explicitly clear  that the account holder must wait until the TRD makes its prefered method of account management known. Until that time, there are only two options available and that documentation and audit trail alone, may not be sufficient. 

 

 

70) Some tax authorities have policies regarding commingled funds, policies such as LIFO, (last in, first out) which is primarily an inventory management technique but could be used with commingled fund accounts. The UK says that capital and gain entering a mixed or commingled account, loses its identity and that any remittance from the fund, is income first, capital second. Yet another option might be that any remittance is viewed as comprising interest/gain or income first and capital second. We are not aware of the TRD policy regarding commingled funds or even if one exists. If you hold funds in this way, until such time as the TRD policy on this is made clear, you only have two options open to you. The first is to keep detailed records that describe all the feeds into the commingled account and hope that will be sufficient, or separate the sources into their own accounts.

I have updated the tax guide document to include various things, including:

 

- greater clarity of some points

- sample completed tax return link

- map of TRD regions/districts

- described the tax return filing process more fully

- clarified that TRD fines for not filing a return when no tax is due are not always levied

- linked the TRD e-filing site where lists of agents can be founds

- described the TIN process more fully.

 

I continue to have ad-hoc problems with some links, all of which work fine in the master copy of the guide on my desktop but sometimes fail when the document is uploaded. Even after checking the links, once the document is uploaded, they work fine for me but not so for others!  This is WIP. 

Thank you all for a very good thread on this rather confusing issue.

 

I’ve tried my best to read through the comments regarding taxes when selling property before moving to Thailand. I’ve not been able to find anything that fully answers my concerns.

 

I plan to move to Thailand sometime next year (O visa with 800k in the bank) and before I do so, to sell my apartment. There will be a considerable gain from doing so and these gains are not taxable where I live (Denmark, which has a tax treaty with Thailand).

Does anyone know when there will be full clarity on this situation?

 

My plan is to get a TIN as I will have income from stock investments in the future. I have no issues paying tax on that income to Thailand.

An off topic post has been removed

6 hours ago, Mike Lister said:

…. We are not aware of the TRD policy regarding commingled funds or even if one exists. If you hold funds in this way, until such time as the TRD policy on this is made clear, you only have two options open to you. The first is to keep detailed records that describe all the feeds into the commingled account and hope that will be sufficient, or separate the sources into their own accounts.

Given your general cautious approach for example as regards gifts, I consider it quite aggressive to recommend the keeping records option even with the hope caveat. I would recommend keeping detailed records in order to be able to use the TRD accepted accounting method once, if ever, TRD has made up its mind, but in the meantime, segregated accounts are the only valid option.

1 minute ago, Klonko said:

Given your general cautious approach for example as regards gifts, I consider it quite aggressive to recommend the keeping records option even with the hope caveat. I would recommend keeping detailed records in order to be able to use the TRD accepted accounting method once, if ever, TRD has made up its mind, but in the meantime, segregated accounts are the only valid option.

For many, the records keeping approach will be the only solution because the funds will have been commingled for a long time and there is little opportunity to separate them and/or, open additional accounts. In a worst case scenario where the funds are commingled and the return is made that is subsequently audited and proof becomes necessary, a trail of sound documentation that clearly sets out events is better than the alternative in that situation, which is nothing....at that point there's nothing to lose and potentially a win to be had. And who knows, we may yet find out that TRD doesn't have a policy on commingled accounts and decides against having one, wouldn't that be nice!

4 minutes ago, Mike Lister said:

… And who knows, we may yet find out that TRD doesn't have a policy on commingled accounts and decides against having one, wouldn't that be nice!

Nice if the TRD officer is lazy from a tax collection point of view. Less nice if the TRD officer chooses the accounting method which is maximising tax collection. I do not expect TRD to establish consistent rules on accounting and DTA. I would be happy to be proven wrong.

I'm curious about Capital gains.

 

E.g. If I bought £10,000 of shares in 2023 & on the 31/12/2023 they were worth £12,000 but I sold them today for £11,000 then I've made £1,000 Capital Gains as far as the UK is concerned but could I claim to Thailand that I've lost £1,000 as the shares were worth £12,000 on the 1/1/2024 deadline? 

 

Similar point with selling my UK property, in the UK I'm liable for gains since 6th April 2015 (& have a valuation at that date) so will pay Tax only on the gains since then, for Thailand could I get a valuation as at 31/12/2023 & claim that as the capital starting point for any gains?

 

46 minutes ago, Mike Lister said:

For many, the records keeping approach will be the only solution because the funds will have been commingled for a long time and there is little opportunity to separate them and/or, open additional accounts.

I have been assuming that commingling of funds before Jan. 1, '24 is irrelevant.  If I'm right, then it's not possible as of yet to have funds that "have been commingled for a long time".  Is my original thinking correct?

 

While writing this post I may have thought of one advantage of commingled funds.  If you have diverse assets in an account, you may have some assets that appreciate and some that fall in value.  It seems likely that you can easily offset the gains of the former with losses from the latter.  If the assets are in separate accounts it may not be easy to offset the gains with losses from a different account.   I'm referring to the total funds that would be assessable upon remittance.

1 hour ago, gamb00ler said:

I have been assuming that commingling of funds before Jan. 1, '24 is irrelevant.  If I'm right, then it's not possible as of yet to have funds that "have been commingled for a long time".  Is my original thinking correct?

 

While writing this post I may have thought of one advantage of commingled funds.  If you have diverse assets in an account, you may have some assets that appreciate and some that fall in value.  It seems likely that you can easily offset the gains of the former with losses from the latter.  If the assets are in separate accounts it may not be easy to offset the gains with losses from a different account.   I'm referring to the total funds that would be assessable upon remittance.

You are correct, yes. The point I was trying to make is that commingling was likely a standard practise for many, for many years, not that there is a tax downside that results from doing so, because of the 1 January 2024 rule. 

2 hours ago, Mike Teavee said:

I'm curious about Capital gains.

 

E.g. If I bought £10,000 of shares in 2023 & on the 31/12/2023 they were worth £12,000 but I sold them today for £11,000 then I've made £1,000 Capital Gains as far as the UK is concerned but could I claim to Thailand that I've lost £1,000 as the shares were worth £12,000 on the 1/1/2024 deadline? 

 

Similar point with selling my UK property, in the UK I'm liable for gains since 6th April 2015 (& have a valuation at that date) so will pay Tax only on the gains since then, for Thailand could I get a valuation as at 31/12/2023 & claim that as the capital starting point for any gains?

 

I saw a document stating explicitly that losses will not be recognized. That did not make sense to me now and then but I fear for the worst, that they only want to tax your gains. Make sure you only transmit the loss making transactions and you should be fine.

 

I highly doubt (99.9999%) that you could make the claim for a higher value end of 2023 without having actually sold the UK property.

2 minutes ago, stat said:

I saw a document stating explicitly that losses will not be recognized. That did not make sense to me now and then but I fear for the worst, that they only want to tax your gains. Make sure you only transmit the loss making transactions and you should be fine.

 

I highly doubt (99.9999%) that you could make the claim for a higher value end of 2023 without having actually sold the UK property.

 

How can a income tax only recognize gains but ignore any losses of income?

Done some more reading and I have a more specific question now.

I've read the guide and if I understand this correctly, as long as the increase in price on my apartment took place before 2024, it will not be taxable in Thailand. There was a huge price jump in about 2020 when the appraisal process was changed. I would be able to document this with reports from the "cooperative apartment" complex I live in. I have not yet sold my apartment, but plan to do so later this year or early next year. This is the uncertain part for me, i.e. whether it needs to have been sold before 2024 or not. Any comments appreciated.

 

https://aseannow.com/topic/1324294-intr … e_vignette

 

48) The proceeds from the sale of a capital item such as overseas property, where funds are remitted to Thailand, is one popular source of expat funds, the sale of some investment products such as stocks, shares and bonds is another. Those proceeds typically comprise two parts, capital and profit (or gain). If the capital and/or gain was acquired before 1 January 2024, it is free of Thai tax. If they were acquired after that date, they are potentially subject to Thai tax at PIT rates.

36 minutes ago, JontS said:

Done some more reading and I have a more specific question now.

I've read the guide and if I understand this correctly, as long as the increase in price on my apartment took place before 2024, it will not be taxable in Thailand. There was a huge price jump in about 2020 when the appraisal process was changed. I would be able to document this with reports from the "cooperative apartment" complex I live in. I have not yet sold my apartment, but plan to do so later this year or early next year. This is the uncertain part for me, i.e. whether it needs to have been sold before 2024 or not. Any comments appreciated.

 

https://aseannow.com/topic/1324294-intr … e_vignette

 

48) The proceeds from the sale of a capital item such as overseas property, where funds are remitted to Thailand, is one popular source of expat funds, the sale of some investment products such as stocks, shares and bonds is another. Those proceeds typically comprise two parts, capital and profit (or gain). If the capital and/or gain was acquired before 1 January 2024, it is free of Thai tax. If they were acquired after that date, they are potentially subject to Thai tax at PIT rates.

There are several issues here.

 

A capital gain is not realised until the asset is sold, until that time, there is no gain. The crystalised gain is measured against the purchase price, or in the case of Thai tax, potentially against the value on 31 December 2023, if that can be measured. It's fairly straight forward to measure the value of say investments that can be marked to market, as of a certain date, but the value of property on a particular date is much more difficult to assess.  

 

If the gain has been realised (as in crystalised) prior to 1 January 2024, both capital and gain would be free of Thai tax, if the funds were imported into Thailand. If the gain is realised after 1 January 2024, we do not know how the TRD will want to measure the gain, against what valuation point.

 

The next major obstacle is the way that TRD will treat the importation of the combined capital and gain, will they say that gain comes first, capital comes second or will they pro rata all remittances.

 

In both of these issues we need to hear from the TRD to understand what their preferred treatment will be of CG valuation points, relative to 1 January 2024 and also the treatment of the combined capital and gain, when they are remitted.