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

[KhunHeineken]

8 hours ago, TheAppletons said:

 

  Uh, no, it isn't.  If that's the foundation of your argument then there's little reason to listen to anything else you have to say.

The policy was implemented on the 1st January 2024.  The initial 180 days to qualify as a Thai resident for tax purposes isn't even up yet.  If that's not "new" then what is? 

[KhunHeineken]

13 hours ago, stat said:

I used cash withdrawal at the bank counter and saved the 220 Baht per ATM transaction. Just walk up with your passport and credit card. Limit at Bangkok Bank is around 150.000 baht per transaction. NB you need a cc that does not change extra for cash withdrawal. Works like a charm at Bangkok Bank and yellow bank Krungsri usually 2-5mins if you come at the right time. Yellow bank charges a little extra if you use a Visa Card but free with Mastercard.

I can't see the Thai government allowing it to be that easy to access funds, without paying the tax, but that is the topic of compliance / enforcement and will no doubt be discussed in the future when we will all see how the Thai government ensures the payment of this tax. 

[Enzian]

2 hours ago, JohnnyBD said:

Chase doesn't charge me an outgoing wire fee when I send USD, so I will only do wires from now on.

This makes sense and is encouraging on a couple of fronts. One, Stat above (if I read correctly) suggests using a credit (not debit?) card to withdraw baht from a teller at Krungsri (my bank also), which I thought was always a no-no (though with Chase there might be some frequent flyer points advantage, not sure). Second, I've long had a question of whether to tell my son to send X number of bhat, or X number of dollar; we've always sent a round dollar figure and not tried the baht alternative. The result has seemed to be .5 or .6 below Google spot, which is discouraging but perhaps inevitable. The fee is usually $40 (or $5 sometimes if he does it on his phone). Perhaps it would be $0 if we moved larger figures, idk. Any comments on this will be appreciated.

Finally, I will remark that by loading up my local baht account a bit before the end of '23, I think I can get through '24 by transferring funds only from a US account wherein the only activity is US SS deposits (in other words, no US business profits, taxed or not). That's my simple plan. And watch developments here.

[Mike Lister]

16 minutes ago, KhunHeineken said:

I can't see the Thai government allowing it to be that easy to access funds, without paying the tax, but that is the topic of compliance / enforcement and will no doubt be discussed in the future when we will all see how the Thai government ensures the payment of this tax. 

Accessing funds and filing a tax return to report assessable income are not necessarily the same thing, which I believe you already understand. We have had the full and complete discussion regarding compliance and enforcement, both in this thread and between you and I, please drop it!

[KhunHeineken]

15 hours ago, Fat is a type of crazy said:

But what you leave out is that residency is not as simple as 180 days in many cases. I may go to Thailand and other places for 250 days but then return to my home in Australia. I don't think the rules are going to be as you say and I think the new rules if they do happen at some point in the future are more concerned with making sure individuals cannot say they are non resident when they residents. Things change stuff happens it is one small factor and if I did become a non resident it is not the end of the world or mean less options as such. 

But back to Thai tax it feels better to know that there is no tax even if that tax would not be substantial. 

Deleted.

 

Post moved to appropriate thread in Home Country Forum. 

Edited May 15 by KhunHeineken

[Mike Lister]

5 minutes ago, KhunHeineken said:

The 90 year old tax residency laws are modernizing from "domiciled" based law to a physical presence and time based model.  If you are outside of Australia for 183 days, you will be automatically deemed to be a non resident for tax purposes.  It will not matter if you did 1 month in Fiji, 2 months in France etc etc.  All that will matter is you have been outside of Australia for 183 days and will then be a non resident for tax purposes.  No reviews.  No appeals.  The days are proven through immigration records.  

 

The first tax bracket in non resident tax is $0 to $120,000 at 32.5%.  No tax free threshold, for any, and all of your income.  

 

Thailand, and many other countries, have moved to a physical presence and time based tax residency model, and in my opinion, Australia also will in the near future.  

 

If you plan on doing the 6 months in Australia and just short of the 6 months in Thailand in order to minimize your taxes, just remember Australia uses the financial year and Thailand uses the calendar year. 

 

Immigration records take away the current loopholes and can not be disputed. 

 

I agree with you the new laws are designed to deem people as residents, rather than non residents, but it's a double edged sword.  Inside Australia 183 days, resident.  Outside Australia for 183 day, non resident.  It's as simple as that.  

 

The loopholes that many expat Australians have been using, including myself, will close in the near future. 

 

None of us want to do 6 months back in Australia, but if one was to stay 183 days in Australia, and less then 180 days in Thailand, they will go a long way to minimizing their tax in both countries.

There is a thread dedicated to discussing Australian Tax issues, please do not extend that conversation here. Thanks.

[Mike Lister]

It is not unreasonable that tax avoidance measures are referenced as a bi-product of discussing the broader Thai Tax system and the changes that have been made to it. We are reluctant however to encourage focussed discussions about tax avoidance, because they very quickly lead into discussions about tax evasion. If everyone can show some restraint and common sense in this area, it will be greatly appreciated. 

[Mike Teavee]

14 hours ago, Dogmatix said:

 

That would be the case with a UK tax return reporting foreign income for global taxation. But current Thai tax returns done online compute the tax payable after deductions for you and foreign source income must be entered in the spaces provided under the various sections of the Revenue Code that the income arose. Thus pension income must be entered in the section for income from employment.  Once you have done that, the system will add it to the total of assessable income.  It is possible that new forms will be designed with lengthy sections dealing with foreign source income and spaces to apply for tax credits incorporating the nuances of all 61 DTAs. In this case they might ask taxpayers to enter gross pre-tax foreign source income without taxing the gross amount. But I think this is a fantasy and for now you should only declare assessable income.

I honestly think TRD are just looking for you to do all of the calculations & declare what Tax you believe you owe, that way they don't need to update their systems to add sections for different kinds of income &, more importantly, don't need to understand the nuances of how various incomes are taxed in different countries... They'll just apply basic Tax fundamentals & assess whether what you are telling them passes the "Sniff Test".

 

If it doesn't pass the "Sniff Test" they can audit you & check your calculations but again, I think they'll just be looking to see if what you're saying looks correct based on their local Tax knowledge & maybe a cursory knowledge of your countries tax, I don't believe they're going to become Tax Experts in all of the 61 countries that Thailand has DTA's with.

 

Using my hobbyhorse of CGT as an example, I don't believe TRD cares about what cost basis you used to do the calculation from they just want to see the remitted income/what percentage of it was gains and as long as if audited you can show how you did the calculations & justify using that method (e.g. as a Brit dealing in British Assets I can argue the case for using Average Cost but couldn't legitimately argue a case for LIFO unless I was dealing in US Assets) then I don't think you'll have a problem passing the "Sniff Test".

 

 

Edited May 15 by Mike Teavee

[JohnnyBD]

4 hours ago, Mike Lister said:

Thanks for that. You know I kinda thought that was the case but since I haven't used ATM's for international transfers or withdrawals in over two decades so I really couldn't be sure. I'm pretty sure if I used my HSBC UK debit card in a Thai ATM that I'd get hammered for charges but I'm not about to run a test and find out. 🙂

Mike,

Something with my ATM withdrawal yesterday didn't seem right. I never got such a bad exchange rate before using my US Chase debit card, so we went back and we found the problem. It was us, OPERATOR error. I didn't have my glasses on, and my wife was doing the steps for me, and in the last step, it asked if we wanted to use the exchange rate of 36.53, so she hit the "YES" button. We didn't notice the mark up note 5.20% (below & to left on SCB). We also didn't see the smaller "No, do not convert" button below the big "YES" button, so we were charged a 5.20% fee by SCB to convert to USD. It had nothing to do with my US Chase bank. I did another smaller withdrawal today and got 36.50 THB exchange rate by letting Chase convert THB to USD. Hopefully, this is a lesson I won't ever forget, because I paid for it.

Edited May 15 by JohnnyBD

[JohnnyBD]

5 hours ago, JohnnyBD said:

I tried my US Chase bank debit card yesterday as a test at a SCB ATM and when I checked my Chase acct to see how much USD they deducted from my acct, I was shocked. The conversion rate was only 34.65.

Please disregard my previous post. We went back and found the problem. It was us, OPERATOR error. I didn't have my glasses on, and my wife was doing the steps for me, and in the last step, it asked if we wanted to use the exchange rate of 36.53, so she hit the "YES" button. We didn't notice the mark up note for 5.20%, below and to left on the SCB screen. We also didn't notice the "No, continue without conversion" button right below the "YES" button, so we were charged 5.20% by SCB for the conversion. It had nothing to do with my US Chase bank. I did another withdrawal today and we selected the "No, continue without conversion" button, and when it posted in my Chase account, I got a 36.50 THB exchange rate by letting Chase do the conversion. Chase will also reimburse me for the 220B access fee. I hope this is a lesson I won't easily forget, because I paid for it.     😉

Edited May 15 by JohnnyBD

[redwood1]

5 minutes ago, JohnnyBD said:

Please disregard my previous post. We went back and found the problem. It was us, OPERATOR error. I didn't have my glasses on, and my wife was doing the steps for me, and in the last step, it asked if we wanted to use the exchange rate of 36.53, so she hit the "YES" button. We didn't notice the mark up note for 5.20%, below and to left on the SCB screen. We also didn't notice the "No, continue without conversion" button right below the "YES" button, so we were charged 5.20% by SCB for the conversion. It had nothing to do with my US Chase bank. I did another withdrawal today and we selected the "No, continue without conversion" button, and when it posted in my Chase account, I got a 36.50 THB exchange rate by letting Chase do the conversion. Chase will reimburse me for the 220B access fee. I hope this is a lesson I won't easily forget, because I paid for it. 😉

 

So when you do a ATM withdrawal in Thailand from a US bank you should press the No button instead of the Yes button to get a better conversion rate ? 

[Pib]

58 minutes ago, redwood1 said:

 

So when you do a ATM withdrawal in Thailand from a US bank you should press the No button instead of the Yes button to get a better conversion rate ? 

 

 

The vague, somewhat misleading wording will vary from bank to bank...read the wording closely...and be sure to select the option where you continue "without" the conversion offer.  Or said another way you are "not" accepting the conversion/exchange rate the ATM is offering...a rate which will be in the ballpark of 5 to 6% lower (worst) that than the Visa/Mastercard/UnionPay/AmEx/etc., exchange rate.   

 

By "not" accepting the offered conversion rate (which is officially called Dynamic Currency Conversion (DCC)) you are not cancelling the transaction but just saying you are declining the ATM's pis%-poor exchange rate offer and you want the Visa/Mastercard/UnionPay/etc., exchange rate. 

 

And keep in mind "if" your home country bank card has a foreign transaction fee/cross boarder fee that fee might still be applied by your card-issuing bank even if you accepted the DCC transaction because the transaction in "whatever currency" occurred outside your home country.  If that occurs, don't blame the ATM; blame your home country card-issuing bank.

 

See below post of some DCC ATM screen examples.

 

 

Edited May 15 by Pib

[stat]

13 hours ago, Mike Lister said:

I stand corrected, maybe I'm not up to date with ATM based ex rates.

Most people use "bad" credit cards with 2% mark up. Only if one has the right cc it is a viable option like schwab checking account credit card or dkb cc etc. Using the cash withdrawal at the teller is the icing on the cake to not pay the 220 Baht per transaction. Always use BKK or yellow bank to get 30K baht or above per transaction if you want to use ATM.

Edited May 15 by stat

[Mike Lister]

Please be aware that the latest version of the Introduction to Thai Tax is version 12 Rev B dated 13 May 2024 and is linked below. If you try to locate the document using a google search you are likely to find old versions of the original thread and document dated January that are now locked and unused for several months and are woefully out of date, unfortunately I am unable to delete them. The correct document and thread below are pinned as the first thread in the Jobs, Economy, Banking, Business, Investments forum. 

 

 

 

[JohnnyBD]

29 minutes ago, Mike Lister said:

Please be aware that the latest version of the Introduction to Thai Tax is version 12 Rev B dated 13 May 2024 and is linked below. If you try to locate the document using a google search you are likely to find old versions of the original thread and document dated January that are now locked and unused for several months and are woefully out of date, unfortunately I am unable to delete them. The correct document and thread below are pinned as the first thread in the Jobs, Economy, Banking, Business, Investments forum. 

 

 

 

Mike,

I'm married, tax resident and over 65. How much assessable income can I remit without having to file a tax return. Is it 60k, 120k or 220k or something else? I don't want to file a tax return this year. I plan to get a LTR visa later this year, but I don't want to go over the limit before I can get it. Thanks again.

[Mike Lister]

8 minutes ago, JohnnyBD said:

Mike,

I'm married, tax resident and over 65. How much assessable income can I remit without having to file a tax return. Is it 60k, 120k or 220k or something else? I don't want to file a tax return this year. I plan to get a LTR visa later this year, but I don't want to go over the limit before I can get it. Thanks again.

I'm about to go for dinner so I'll leave this unanswered for a short while to see what other will say. I would ask you to consider whether you want an answer that complies with the TRD tax rules as we know them today or do you want an answer that is considered safe by many but doesn't necessarily align with the rules? 

[JohnnyBD]

21 minutes ago, Mike Lister said:

I'm about to go for dinner so I'll leave this unanswered for a short while to see what other will say. I would ask you to consider whether you want an answer that complies with the TRD tax rules as we know them today or do you want an answer that is considered safe by many but doesn't necessarily align with the rules? 

Enjoy your dinner. No hurry. I want to be in compliance with the tax rules as we know them. No stretching the rules. Thanks 

Edited May 15 by JohnnyBD

[Mike Teavee]

1 hour ago, JohnnyBD said:

Mike,

I'm married, tax resident and over 65. How much assessable income can I remit without having to file a tax return. Is it 60k, 120k or 220k or something else? I don't want to file a tax return this year. I plan to get a LTR visa later this year, but I don't want to go over the limit before I can get it. Thanks again.

The technically correct answer is 120K if filing a single Return, 220K if filing a joint return, you don't take your allowances into consideration when it comes to whether you should be filing a return or not, it's just the assessable income that counts.  

 

Practically I'm remitting up to my total tax free number (235K for me) and if asked to file a return I'll plead ignorance & pay the 2,000B fine out of the 5,000B they'd owe me from withheld tax on interest in my Thai Bank account.

 

 

Edited May 15 by Mike Teavee

[Dogmatix]

8 hours ago, Mike Teavee said:

I honestly think TRD are just looking for you to do all of the calculations & declare what Tax you believe you owe, that way they don't need to update their systems to add sections for different kinds of income &, more importantly, don't need to understand the nuances of how various incomes are taxed in different countries... They'll just apply basic Tax fundamentals & assess whether what you are telling them passes the "Sniff Test".

 

If it doesn't pass the "Sniff Test" they can audit you & check your calculations but again, I think they'll just be looking to see if what you're saying looks correct based on their local Tax knowledge & maybe a cursory knowledge of your countries tax, I don't believe they're going to become Tax Experts in all of the 61 countries that Thailand has DTA's with.

 

Using my hobbyhorse of CGT as an example, I don't believe TRD cares about what cost basis you used to do the calculation from they just want to see the remitted income/what percentage of it was gains and as long as if audited you can show how you did the calculations & justify using that method (e.g. as a Brit dealing in British Assets I can argue the case for using Average Cost but couldn't legitimately argue a case for LIFO unless I was dealing in US Assets) then I don't think you'll have a problem passing the "Sniff Test".

 

That is possible but my experience with the RD is that they request documentation on anything in the tax return they don't already have direct inputs for. So it would be a departure from their current practice to let declared foreign source income go by on the nod. It could be that they will take the approach you suggest for practical reasons for the first few years.  Another issue will be foreigners who show up at RD officers to let the staff do their tax returns for them.  Unless there is direct order not to request any supporting documentation, it will be hard to restrain these folk from demanding it.  

[Mike Lister]

19 minutes ago, Dogmatix said:

 

That is possible but my experience with the RD is that they request documentation on anything in the tax return they don't already have direct inputs for. So it would be a departure from their current practice to let declared foreign source income go by on the nod. It could be that they will take the approach you suggest for practical reasons for the first few years.  Another issue will be foreigners who show up at RD officers to let the staff do their tax returns for them.  Unless there is direct order not to request any supporting documentation, it will be hard to restrain these folk from demanding it.  

What basis can there be to think that TRD staff who prepare or assist with tax prep will begin to require supportive documentation at that early stage, a combined filing and audit all in one perhaps! Unless you can provide a sound reasoning for that, I think that's scaremongering and runs the risk of intimidating people into not filing when they ought to.

[proton]

No worries, all we have to do is 'gift' it to the mrs and no tax up to 20 mil a year., They cannot check what it's spent on if she takes it out in cash.

[Lorry]

16 hours ago, JohnnyBD said:

I'm not so sure you and him are talking apples to apples. He may be talking about using Thai bank debit card at ATM or exchanging cash.

I was talking about withdrawing Thai baht from a Thai ATM, using a European credit card

[RupertIII]

I have been under the understanding that there is no tax liability on inheritance from parents up to 100m THB., nor is there any tax on income derived from inheritance, up to certain limits, under Section 42 Para. [10].

 

My wife has today been speaking with our Thai lawyer who has advised that this is only the case if the inheritance was remitted to Thailand in the year it was received and if not then tax will be due as when all or any of the monies are remitted into Thailand.

 

Is anyone able to confirm this one way or the other? 

Edited May 16 by RupertIII

[Mike Lister]

I have removed seven posts that discussed tax evasion strategies, further posts on this subject will be removed without notice.

 

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[ExpatOilWorker]

Does the source of the funds make a difference, if International School fees for own child is transferred from abroad directly to the (Thai) schools account?

From a tax point of view, would it be better to use A or B, or it makes no difference?

A. Long term savings account with funds dating back before January 1, 2024 

B. Overseas salary account with funds mostly from 2024.

[stat]

On 5/15/2024 at 5:19 AM, KhunHeineken said:

I can't see the Thai government allowing it to be that easy to access funds, without paying the tax, but that is the topic of compliance / enforcement and will no doubt be discussed in the future when we will all see how the Thai government ensures the payment of this tax. 

I was only refering to a relative easy and cheap way to get cash. They even take a photocopy of your passport which you have to sign so it is very clear who is withdrawing the money. At an ATM as a John Smith it would be far more difficult to find the one and only John Smith from Birminghan for TRD.

[jayboy]

On 5/15/2024 at 10:19 AM, KhunHeineken said:

I can't see the Thai government allowing it to be that easy to access funds, without paying the tax

 

I would seriously doubt that the Thai Government cares or will care about this.It is so marginal/irrelevant to what is planned for tax in initiatives in Thailand, and furthermore impossible to police/monitor given the millions of non residents who use ATM's here.

[Mike Lister]

8 minutes ago, ExpatOilWorker said:

Does the source of the funds make a difference, if International School fees for own child is transferred from abroad directly to the (Thai) schools account?

From a tax point of view, would it be better to use A or B, or it makes no difference?

A. Long term savings account with funds dating back before January 1, 2024 

B. Overseas salary account with funds mostly from 2024.

It doesn't matter who receives the funds in Thailand, only that they were remitted from overseas to Thailand, by a Thai tax resident, in which case they are regarded as YOUR assessible income.

 

From a Thai tax perspective, point A would be the better option, because the funds are not assessible to Thai tax.

[stat]

20 hours ago, Lorry said:

I was talking about withdrawing Thai baht from a Thai ATM, using a European credit card

I was talking German cc withdrawing from Thai ATM. There is a very good thread here at Aseannow about creditcard withdrawals. You absolutley have to check or test your cc conditions and get a good cc, preferably mc as they offer slightly better rates then visa on average.

[UKresonant]

5 hours ago, RupertIII said:

I have been under the understanding that there is no tax liability on inheritance from parents up to 100m THB., nor is there any tax on income derived from inheritance, up to certain limits, under Section 42 Para. [10].

 

My wife has today been speaking with our Thai lawyer who has advised that this is only the case if the inheritance was remitted to Thailand in the year it was received and if not then tax will be due as when all or any of the monies are remitted into Thailand.

 

Is anyone able to confirm this one way or the other? 

Did the lawyer elaborate on what they would anticipate it would be taxed as, if not brought in same year.

 

I could anticipate any interest, Divs or the like being taxed, which were derived from the inheritance principle.  But seems a bit curious about the principle inherited.

 

Not knowledgeable enough to confirm anything unfortunately.