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

[Lorry]

8 hours ago, Klonko said:

AFAIK Thai tax residents are subject to inheritance tax on inheritances received regardless of the domicile of the testator, the country of inherited real estate (often not protected by DTA), and the remittance of inherited funds to Thailand. However, exemption thresholds are high and inheritance tax rates low. Better to file for inheritance taxes if necessary, at least when you plan to remit inherited funds to Thailand.

Thanks a lot, a very clear answer.

Threshold for inheritance tax is 100,000,000 THB.

The inheritances I was taking about are less than that. 

So we arrive again at the question whether to file if no tax due. This question has been discussed in this thread ad infinitum...

[Mike Teavee]

6 hours ago, Lorry said:

Thanks a lot, a very clear answer.

Threshold for inheritance tax is 100,000,000 THB.

The inheritances I was taking about are less than that. 

So we arrive again at the question whether to file if no tax due. This question has been discussed in this thread ad infinitum...

It's very clear that if you earn/remit > 120,000 THB (220,000 if doing a joint filing with your spouse) then Technically you have to file a Tax return whether tax is due or not.  

 

Practically it's up to you whether you to file a return or not (TRD won't tell you that you have to file a return), I'll only be remitting 235K (to me + 210K to the GF) & won't be filing a return, if didn't already have savings in Thailand & needed to remit how much I actually spend then I would file a tax return. 

 

 

Edited May 5 by Mike Teavee

[Danderman123]

On 5/4/2024 at 11:25 AM, Mike Teavee said:

 

I think the fact that it is getting more attention will mean TRD are more likely to enforce it but I don't believe they have the capacity to go after everybody that hasn't filed so will use a cut-off number above the 220K and/or randomly select people who haven't filed. 

 

How would the Revenue Department possibly know who has income over 220K?

 

Yes, I know the RD could do all sorts of forensic accounting that they have never done before, but what are the odds that RD is going to check on credit card transactions for some Brit living in the village in Isaan? Or ATM transactions for some Farang living in Pattaya?

[Mike Teavee]

34 minutes ago, Danderman123 said:

How would the Revenue Department possibly know who has income over 220K?

 

Yes, I know the RD could do all sorts of forensic accounting that they have never done before, but what are the odds that RD is going to check on credit card transactions for some Brit living in the village in Isaan? Or ATM transactions for some Farang living in Pattaya?

I’m referring to what you bring in from overseas so it’s really easy for them to ask all the banks to submit details of any foreign transfers, set a limit & flag people who bring in more than that. 

 

I plan on remitting 235,000 (my allowances +150K zero tax) & not filing a return but if I was remitting 2,350,000 I’d file a return as there’s a much greater chance that they’d flag me. 
 

 

Edited May 5 by Mike Teavee

[Danderman123]

30 minutes ago, Mike Teavee said:

I’m referring to what you bring in from overseas so it’s really easy for them to ask all the banks to submit details of any foreign transfers, set a limit & flag people who bring in more than that. 

 

I plan on remitting 235,000 (my allowances +150K zero tax) & not filing a return but if I was remitting 2,350,000 I’d file a return as there’s a much greater chance that they’d flag me. 
 

 

Likewise, it would be very easy for the Thai police to flag anyone on a motorcycle not wearing a helmet.

 

Anyway, I won't be a tax resident in 2024, and will monitor what happens in 2025 to those people who don't file a return.

Edited May 5 by Danderman123

[Yumthai]

28 minutes ago, Mike Teavee said:

it’s really easy for them to ask all the banks to submit details of any foreign transfers, set a limit & flag people who bring in more than that. 

No it's not that easy. Even if technically feasible, these actions if implemented could bring more damages than benefits for Thailand either political, social or financial.

[Mike Teavee]

22 minutes ago, Yumthai said:

No it's not that easy. Even if technically feasible, these actions if implemented could bring more damages than benefits for Thailand either political, social or financial.

It's very easy (Worked in IT for Global Banks for >30 years & it would take longer to get the permission to share the data than to do the technical side of things)... & I can't think of any downsides of them doing that. 

 

I believe that the main target of this (not really) change to tax regulations is Thai Companies & individuals that were using the next year loop hole to repatriate money so the fact that us "Foreigners" been caught up in it probably doesn't even register with them. 

 

 

[Mike Teavee]

35 minutes ago, Danderman123 said:

Likewise, it would be very easy for the Thai police to flag anyone on a motorcycle not wearing a helmet.

 

Anyway, I won't be a tax resident in 2024, and will monitor what happens in 2025 to those people who don't file a return.

I filed one last year (long story short I needed to get a TIN for the Bank that has my UK Mortgage so after jumping through all the hoops thought why not reclaim the 4K that I'd paid in withheld tax, still haven't received it), I haven't done one this year (remitted well above the 120K limit last year) & won't file one next year.

 

In 2026 I plan on bringing over enough money to meet the $250K needed to support my LTR application all of which will be realised & remitted in a year that I'm none tax resident, after that I'm planning (hoping) that tax on remitted income will be irrelevant. 

[JimGant]

20 hours ago, Klonko said:

TRD has publicly stated that, while foreign income of a Thai tax resident remitted to himself is tax assessable, traditional gifts [remitted from the benefactor's foreign account to the beneficiary's Thai account] are not subject to income tax.

They've never said that. Assessable income, whether remitted to your bank account, your GF's bank account, a PO Box, or a shelter for soi dogs -- is still remitted assessable income, subject to Thai taxes, if it exceeds exemptions and allowances.

 

Where folks are getting confused is -- unlike in the US (and I assume other Western countries), the gifter is the one who pays the gift tax (or gets a credit towards a final estate tax). And it is a gift tax, not income tax, on after-tax income, i.e., disposable income now inclusive in the estate. Thailand, however, apparently taxes the recipient, not the gifter:

Quote

As a countermeasure for possible avoidance of the inheritance tax, the Thai Revenue Code was amended to include a new gift tax which came into effect on the same date as the ITA. In brief, an individual receiving certain types of gifts in excess of the tax-free thresholds will be subject to personal income tax at the rate of 5 percent of the exceeding portion with an option to exclude such income from annual income tax computation.

https://www.thanathippartners.com/insights/legal-update/inheritance-tax-and-gift-tax-t2u2.html?show=4

 

Thus, a gift to your GF is totally divorced from your taxability on this money -- that action is separate from the gifting action. Now, your GF is in an interesting situation. If she gave nothing of value for the receipt of that gift, then, yes, it is a gift -- and she'll have to file a personal income tax return to declare an amount over 10M baht. However, if she gave several really superb hum jobs, she gave value for the money received -- so now she has to declare the whole enchilada as income. In both situations, she's the one filing a tax return for the money you gave her, not you adding this on to any tax return you had to file. But if that gift you gave was assessable remitted income to Thailand -- you've got to declare it on a tax return, as it has no exclusionary aspects by later becoming a gift (or income for rendered services). Sorry, folks. The gift aspect doesn't seem to be a viable tax avoidance. 

[JimGant]

2 hours ago, Mike Teavee said:

I’m referring to what you bring in from overseas so it’s really easy for them to ask all the banks to submit details of any foreign transfers, set a limit & flag people who bring in more than that. 

--then check with Immigration to see whether or not these high money folks actually stayed in Thailand for 180 days. And, also, whether their country's DTA with Thailand also excluded many categories of income as non assessable income. Blah, blah.

 

Not to say a high remitter wouldn't draw attention -- and might actually end up paying for the time and effort. Or probably not... Can't really see any new action, but maybe a few random compliance audits. Nothing to lose any sleep over.

[Mike Teavee]

3 minutes ago, JimGant said:

--then check with Immigration to see whether or not these high money folks actually stayed in Thailand for 180 days. And, also, whether their country's DTA with Thailand also excluded many categories of income as non assessable income. Blah, blah.

 

They (TRD) don’t need to check with anybody, they just need to ask you about your Tax affairs & it’s you that will need to prove you were non-tax resident & explain why you don’t need to pay any tax. 

Edited May 5 by Mike Teavee

[JimGant]

2 minutes ago, Mike Teavee said:

They (TRD) don’t need to check with anybody, they just need to ask you about your Tax affairs

So, TRD will use expensive resources to screen all farangs, not just tax residents -- in order to determine who's a tax resident, or a tourist, so they can then restrict their questions to just tax residents?

[stat]

On 5/4/2024 at 9:46 AM, Klonko said:

TRD will probably set up a system to tap the broader tax base after the the following year remittance loophole has been closed. I do not expect strict enforcement because the cost outweighs the benefits for TRD. I consider a THB 220k remittance hurdle not to be efficient. A non tax paying Thai tax resident remitting THB ≥ 1m per year could be a promising target and better does some tax planning. May be the retirees with the minimum required income will fall out of scope, but nothing is granted.

Maybe you should mention a source for "TRD will probably set up a system to tap the broader tax base after the the following year remittance loophole has been closed". Otherwise pls label your view as gut feeling. Nothing, absolutley nothing points in the direction you mentioned. If they wanted to go to ww income they could have done that this year already.

Edited May 5 by stat

[Etaoin Shrdlu]

31 minutes ago, JimGant said:

They've never said that. Assessable income, whether remitted to your bank account, your GF's bank account, a PO Box, or a shelter for soi dogs -- is still remitted assessable income, subject to Thai taxes, if it exceeds exemptions and allowances.

 

Where folks are getting confused is -- unlike in the US (and I assume other Western countries), the gifter is the one who pays the gift tax (or gets a credit towards a final estate tax). And it is a gift tax, not income tax, on after-tax income, i.e., disposable income now inclusive in the estate. Thailand, however, apparently taxes the recipient, not the gifter:

 

Thus, a gift to your GF is totally divorced from your taxability on this money -- that action is separate from the gifting action. Now, your GF is in an interesting situation. If she gave nothing of value for the receipt of that gift, then, yes, it is a gift -- and she'll have to file a personal income tax return to declare an amount over 10M baht. However, if she gave several really superb hum jobs, she gave value for the money received -- so now she has to declare the whole enchilada as income. In both situations, she's the one filing a tax return for the money you gave her, not you adding this on to any tax return you had to file. But if that gift you gave was assessable remitted income to Thailand -- you've got to declare it on a tax return, as it has no exclusionary aspects by later becoming a gift (or income for rendered services). Sorry, folks. The gift aspect doesn't seem to be a viable tax avoidance. 

 

I think that if the amount given is less than 10 million baht and the gift can be completed outside Thailand, then the gift could be remitted by the recipient without incurring a Thai tax liability. This would require the recipient to have a bank account outside of Thailand.

[stat]

40 minutes ago, JimGant said:

They've never said that. Assessable income, whether remitted to your bank account, your GF's bank account, a PO Box, or a shelter for soi dogs -- is still remitted assessable income, subject to Thai taxes, if it exceeds exemptions and allowances.

 

Where folks are getting confused is -- unlike in the US (and I assume other Western countries), the gifter is the one who pays the gift tax (or gets a credit towards a final estate tax). And it is a gift tax, not income tax, on after-tax income, i.e., disposable income now inclusive in the estate. Thailand, however, apparently taxes the recipient, not the gifter:

 

Thus, a gift to your GF is totally divorced from your taxability on this money -- that action is separate from the gifting action. Now, your GF is in an interesting situation. If she gave nothing of value for the receipt of that gift, then, yes, it is a gift -- and she'll have to file a personal income tax return to declare an amount over 10M baht. However, if she gave several really superb hum jobs, she gave value for the money received -- so now she has to declare the whole enchilada as income. In both situations, she's the one filing a tax return for the money you gave her, not you adding this on to any tax return you had to file. But if that gift you gave was assessable remitted income to Thailand -- you've got to declare it on a tax return, as it has no exclusionary aspects by later becoming a gift (or income for rendered services). Sorry, folks. The gift aspect doesn't seem to be a viable tax avoidance. 

Again Germany takes the cake as it taxes either the giftor or receiver. However gifts are feasible on the foreign site at least as Germany and many other countries have high limits at least to cover your daily living. (German 400 K EUR or 430K USD per 10 years if gifted by your parents)

[JimGant]

5 minutes ago, stat said:

Maybe you should mention a source for "TRD will probably set up a system to tap the broader tax base after the the following year remittance loophole has been closed". Otherwise pls label your view as gut feeling. Nothing absolutley nothing points in the direction you mentioned.

Of course there's no source -- this whole thread is mainly conjecture. And, actually, Eta's conjecture makes a lot of sense. Pretty impressive gut feeling, IMO.

[JimGant]

10 minutes ago, Etaoin Shrdlu said:

I think that if the amount given is less than 10 million baht and the gift can be completed outside Thailand, then the gift could be remitted by the recipient without incurring a Thai tax liability. This would require the recipient to have a bank account outside of Thailand.

Yeah, seems like a doable filtering, er laundering scheme.

[Yumthai]

39 minutes ago, JimGant said:

But if that gift you gave was assessable remitted income to Thailand

 

Gifts are exempted for the purpose of income tax calculation according to RD Section 42 (27) (28) (29). No mention of remittance.

https://www.rd.go.th/english/37749.html#section42

 

[Etaoin Shrdlu]

35 minutes ago, JimGant said:

Yeah, seems like a doable filtering, er laundering scheme.

 

I think that for laundering statutes to kick in, at least in Thailand, the source of the funds has to be an illegal activity.

[JimGant]

1 hour ago, Etaoin Shrdlu said:

I think that for laundering statutes to kick in, at least in Thailand, the source of the funds has to be an illegal activity.

You're right. Good catch.

[JimGant]

2 hours ago, Yumthai said:

Gifts are exempted for the purpose of income tax calculation according to RD Section 42 (27) (28) (29). No mention of remittance.

Yes, but again it is the recipient, not the giver, who's on the hook for taxation above a certain amount of gift:

Quote

Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year.

 Or ten million baht, for GF's.

 

Nothing in this about how, why, or when taxation takes place for the amount gifted. Meaning, amounts of assessable income remitted to Thailand for the initial, or subsequent, purpose of being gifted -- are treated without consideration of their final gift purpose.

[Klonko]

3 hours ago, JimGant said:

They've never said that. Assessable income, whether remitted to your bank account, your GF's bank account, a PO Box, or a shelter for soi dogs -- is still remitted assessable income, subject to Thai taxes, if it exceeds exemptions and allowances.

 

Where folks are getting confused is -- unlike in the US (and I assume other Western countries), the gifter is the one who pays the gift tax (or gets a credit towards a final estate tax). And it is a gift tax, not income tax, on after-tax income, i.e., disposable income now inclusive in the estate. Thailand, however, apparently taxes the recipient, not the gifter:

 

Thus, a gift to your GF is totally divorced from your taxability on this money -- that action is separate from the gifting action. Now, your GF is in an interesting situation. If she gave nothing of value for the receipt of that gift, then, yes, it is a gift -- and she'll have to file a personal income tax return to declare an amount over 10M baht. However, if she gave several really superb hum jobs, she gave value for the money received -- so now she has to declare the whole enchilada as income. In both situations, she's the one filing a tax return for the money you gave her, not you adding this on to any tax return you had to file. But if that gift you gave was assessable remitted income to Thailand -- you've got to declare it on a tax return, as it has no exclusionary aspects by later becoming a gift (or income for rendered services). Sorry, folks. The gift aspect doesn't seem to be a viable tax avoidance. 

The Deputy Director of the Legal Affairs Division of the TRD (Swiss Embassy Townhall February 27, 2024):

Edited May 5 by Klonko

[JimGant]

56 minutes ago, Klonko said:

The Deputy Director of the Legal Affairs Division of the TRD (Swiss Embassy Townhall February 27, 2024):

Bottom line? I couldn't quite understand the thick accents.

[Mike Teavee]

4 hours ago, JimGant said:

So, TRD will use expensive resources to screen all farangs, not just tax residents -- in order to determine who's a tax resident, or a tourist, so they can then restrict their questions to just tax residents?

Who said that? Not me.
 

I suggested that they would flag people who are reported as having brought in a significant amount of money, what that limit is, I’ve no idea. 

 

As I said, I’m planning on bringing in 235K & not filing but if I brought in 2,350K then I’d file. 

Edited May 5 by Mike Teavee

[Lorry]

4 hours ago, Etaoin Shrdlu said:

 

I think that if the amount given is less than 10 million baht and the gift can be completed outside Thailand, then the gift could be remitted by the recipient without incurring a Thai tax liability. This would require the recipient to have a bank account outside of Thailand.

That answers my question above about gifts gifted (given and received) outside Thailand. 

Yes, I think the same. 

 

A gift sent from the gifters foreign bank account to the receivers Thai bank account is tax free up to 10 resp. 20m, thank you for the video @Klonko

 

It may be a good idea to ask your local RD office if you want to send gifts to a Thai wife or your children in Thailand: is it ok to send the money from your foreign account to the receivers Thai account?  Or should it be sent to a receiver's foreign bank account?

I could imagine that different RD offices will give different answers and that you can find offices that will not accept one or the other. I cannot imagine that an office would refuse both methods.  That would mean foreigners cannot give tax-free gifts to their Thai family. 

Edited May 5 by Lorry

[Lorry]

4 hours ago, stat said:

Again Germany takes the cake as it taxes either the giftor or receiver. However gifts are feasible on the foreign site at least as Germany and many other countries have high limits at least to cover your daily living. (German 400 K EUR or 430K USD per 10 years if gifted by your parents)

10m resp. 20m per 1 year in Thailand

[UKresonant]

5 hours ago, JimGant said:

So, TRD will use expensive resources to screen all farangs, not just tax residents -- in order to determine who's a tax resident, or a tourist, so they can then restrict their questions to just tax residents?

I wonder at what level the expensive resources shall be deployed at, what anticipated yield shall be considered worth while. Not under a million surely, more likely at least 2 million remitted I would have thought. unless they want a random example.

[stat]

7 hours ago, JimGant said:

Of course there's no source -- this whole thread is mainly conjecture. And, actually, Eta's conjecture makes a lot of sense. Pretty impressive gut feeling, IMO.

 

*** Off topic sniping comment removed***

 

TRD would need to change to law and there is no indication whatsoever this is going to happen, especially not in 2025.

 

But then again maybe they will impose a wealth tax of 100% on ww assets on all farangs starting July first 2024. Every foreigner in the country for one day will have to pay. Maybe also applied retroactively...

[stat]

1 hour ago, Lorry said:

10m resp. 20m per 1 year in Thailand

Exactly this is why IMHO you can live without tax in TH by receiving gifts and neither paying in TH or GER or any other country that does impose a gift tax on their side.

[Yumthai]

7 hours ago, JimGant said:

Yes, but again it is the recipient, not the giver, who's on the hook for taxation above a certain amount of gift:

Quote

Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year.

 Or ten million baht, for GF's.

 

Nothing in this about how, why, or when taxation takes place for the amount gifted. Meaning, amounts of assessable income remitted to Thailand for the initial, or subsequent, purpose of being gifted -- are treated without consideration of their final gift purpose.

To me, unless officially stated otherwise, gift prevails over remittance (if any).

If gifter decides to give $1,000 (money abroad) to giftee, gift is acted then remittance (tax-free up to THB10M/20M since it's a gift) will occur for the giftee not the gifter.