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

[Dogmatix]

2 hours ago, Tippaporn said:

I've yet to watch it but it's U.S. centric.  It features "Doctor Tax" Thomas Carden of American International Tax Advisers and he discusses the implications of this proposed tax scheme.  Perhaps it contains valuable information for other nationalities.  Not sure as I haven't watched it yet.
 

 

A bit rambling with a lot of advertising but they raise some interesting points. One thing they miss is that the intent is merely to reinterpret the Revenue Code and avoid amending it through due parliamentary process.  So it might actually come into effect abruptly  on 1 Jan 2024 without the detailed regulations that would be the case for a new law. 

[david555]

23 minutes ago, Lorry said:

You are a tax resident if you stay more than 180 days in one calendar year. 

You need to stay outside of Thailand for the other 185 days. 

Thanks ....

oh  dear they close all our gaps ????

Only my approx 6 month's silverSnowbird solution remains  ????

[FruitPudding]

On 9/18/2023 at 9:49 AM, webfact said:

Thailand’s revenue departments has released new guidelines which will see all income from abroad taxed as personal income tax regardless of whether it was earned income or savings.

This makes no sense.

 

Taxing all money you send to Thailand, even if it's not income/gains?

 

So, if you invested, for example, 10k abroad and you gained 1k profit.

 

Then, you send the whole lot to Thailand, they would tax you on the 11k? 

 

Is that what would happen? It would defeat the point in even investing.

[Dogmatix]

1 hour ago, FruitPudding said:

But what about savings?

 

You could have been taxed on that income years or decades ago and have no documents to prove it.

 

And what about savings you didn't earn (e.g. gifts)? Will Thailand tax that if you send it over?

This is the crux of the matter. They say they are going after Thai investing overseas and their outward and inward remittances are mainly traceable.  But this is not the case for foreigners whose assets start off overseas.  There is a high degree of probability that in normal Thai bureaucratic style they will require proof of overseas tax paid certified by overseas tax authorities with notarised translations. Unlike in Thailand you can't just roll up to an overseas tax office and get the last few years tax returns notarised. By default anything that doesn't meet their burden of proof standards may be taxed as income at the top marginal rate.  

[chang50]

The stress of all this will probably finish a few of us off.

[Dogmatix]

13 minutes ago, FruitPudding said:

This makes no sense.

 

Taxing all money you send to Thailand, even if it's not income/gains?

 

So, if you invested, for example, 10k abroad and you gained 1k profit.

 

Then, you send the whole lot to Thailand, they would tax you on the 11k? 

 

Is that what would happen? It would defeat the point in even investing.

Exactly.  Where did the 10k principle come from in the first place?  If you didn't remit it from Thailand, you must have earned it overseas somehow.  Therefore it is also taxable overseas income. That is the problem caused by distorting the interpretation of the existing law by saying that there are no longer any limitations on far back the  income can be to be taxable, rather than coming out with a new, tailor made law.

[TroubleandGrumpy]

3 hours ago, Tippaporn said:

I've yet to watch it but it's U.S. centric.  It features "Doctor Tax" Thomas Carden of American International Tax Advisers and he discusses the implications of this proposed tax scheme.  Perhaps it contains valuable information for other nationalities.  Not sure as I haven't watched it yet.
 

 

Thanks mate.  Everyone should watch the first 20 minutes at least - this could be huge.

Remember - forwarned means you can be forarmed (prepared).

This is IMO one of those situations where you should prepare for the worst, middle and best outcomes.

I will be bringing in about 1 million baht each year, and that means I will pay 70,000 Baht in VAT.

That IMO is enough tax paid by me - I get none of the Govt services that Thais do for free.

The big issue is how will this affect me - paying another 10-20K PA would be acceptable - another 100K PA NOT. 

 

It starts Jan 1 2024 so therefore I can stay living in Thailand until end June 2024, before you are officially a tax resident. 

I will be watching this issue very closely and deciding before June 2024 what course I will take - leave or stay.

[TroubleandGrumpy]

3 hours ago, stat said:

Your days in Thailand are easily trackable as you get an entry and exit stamp and all your data is in the immigration system the moment you get your passport back. Regarding the withdrawals I agree they should be difficult to track in the forseeable future. However in a country like Germany they will sue you for taxes up tp 15 years in arrears. So if they come up with a working Information exchange in the next 15 years there might a problem.

They already have and it starts on January 1 2024.  From that date onwards Thailand will be exchanging financial information on all tax residents with all signatory countries. They will give them your details and financial information in Thailand, and your home country (and others) will give Thailand your details and financial information there. 

 

As stated by one taxation expert - the days of easy living long term in Thailand and not having to even think about taxation issues is coming to an end. He reckons it is likely that all annual renewals sometime from 2024 onwards, will require a TIN to be provided.  

[JimTripper]

30 minutes ago, chang50 said:

The stress of all this will probably finish a few of us off.

Imagine having to deal with tax authorities in Thailand who don't know what they are doing. We thought immigration was a hassle but have not seen anything yet.

[TroubleandGrumpy]

3 hours ago, transam said:

So what is a "tax resident"...? 

Personal Income Tax | The Revenue Department (English Site) (rd.go.th)

 

1.Taxable Person

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

[TroubleandGrumpy]

42 minutes ago, Dogmatix said:

This is the crux of the matter. They say they are going after Thai investing overseas and their outward and inward remittances are mainly traceable.  But this is not the case for foreigners whose assets start off overseas.  There is a high degree of probability that in normal Thai bureaucratic style they will require proof of overseas tax paid certified by overseas tax authorities with notarised translations. Unlike in Thailand you can't just roll up to an overseas tax office and get the last few years tax returns notarised. By default anything that doesn't meet their burden of proof standards may be taxed as income at the top marginal rate.  

Nail on the head hit - again.

That is exactly the reason why so many of us are worried - how will it be implemented on Expats.

Thai public servants do not have a history of rational interpretation or implementation of any rules affecting Expats.

And their standard of proof, is both arbitrary and ridiculous, as you have clearly conveyed. 

 

And I would add this to your list/summary.

Unlike issues with Immigration or Offices or anyone in the Thai Bureaucracy that are a 'one off' situation, being audited about taxes due is something that can be backdated.  You can get away with not wearing a helmet for years, and if you are caught it is a fine on the spot.  But if they 'catch' you in taxation issues, they will go back as far as they can. Meanwhile your passport will likely be held so you cant leave, you then get hit with back taxes and huge fines, and then you are deported for a criminal offence.  I know - worst case scenario. But I always wear a helmet not because I might get caught, but because I might have an accident - worst case scenario. 

[TroubleandGrumpy]

On 9/18/2023 at 9:57 AM, connda said:

Eventually someone is going to write, "Does that mean farang's pension income too."

Short answer would probably be "No," at least for those countries with bilateral tax agreements with Thailand.  If you're paying income tax in your home countries, then Thailand has no claim to tax the income twice.

Sorry - Wrong.  How it works is that if you have paid tax in your home country, you have 'credits' to offset any taxes applicable in Thailand. Depending on the amount involved and how it was taxed at home, you can have 'credits' that completely cover the applicable Thai taxes, or you can still have to pay the balance of the tax debt to the Thailand Revenue Dept.

 

That is very detailed and complex and hopefully the Thailand RD does not go down that path when this is implemented. Hopefully the Thai Govt will issue a blanket exemption for those countries it has a tax agreement with, and declares that any income earned overseas in those countries on funds that were never in Thailand is exempt from being assessable income.  That is the rational and practical way to do this - but Thailand tends to do things their own way.  Until they make it clear what is assessable and what is not (if they ever do), we are all in the dark. They might just go ahead and see what happens, and then deal with the outcomes - remember when they  started fining Expats 900 Baht a day when the hotel did not submit a TM30? That was eventually pulled back (even though it is the Law), but those who were fined never got their money back (or an apology). 

[stat]

1 hour ago, TroubleandGrumpy said:

They already have and it starts on January 1 2024.  From that date onwards Thailand will be exchanging financial information on all tax residents with all signatory countries. They will give them your details and financial information in Thailand, and your home country (and others) will give Thailand your details and financial information there. 

 

As stated by one taxation expert - the days of easy living long term in Thailand and not having to even think about taxation issues is coming to an end. He reckons it is likely that all annual renewals sometime from 2024 onwards, will require a TIN to be provided.  

Your bank in the us or Europe is not exchanging data on how much money you have withdrawn from your bank account and brought into Thailand. Only money brought into Thailand could be taxed by Thailand.

[stat]

2 hours ago, TroubleandGrumpy said:

Thanks mate.  Everyone should watch the first 20 minutes at least - this could be huge.

Remember - forwarned means you can be forarmed (prepared).

This is IMO one of those situations where you should prepare for the worst, middle and best outcomes.

I will be bringing in about 1 million baht each year, and that means I will pay 70,000 Baht in VAT.

That IMO is enough tax paid by me - I get none of the Govt services that Thais do for free.

The big issue is how will this affect me - paying another 10-20K PA would be acceptable - another 100K PA NOT. 

 

It starts Jan 1 2024 so therefore I can stay living in Thailand until end June 2024, before you are officially a tax resident. 

I will be watching this issue very closely and deciding before June 2024 what course I will take - leave or stay.

Maybe consider using credit card to withdraw cash 33x30.000 Baht and you "should" be under the radar. Additional layer of security, use someone elses credit card (family member that does not live in Thailand if possible). I know not allowed by cc companies...

[stat]

5 hours ago, JimTripper said:

They would probably just nix the O-A visa eventually, solving that problem. I already heard a couple rumors about it being a black sheep of the visa options.

the problem arises if you are still in the country and have not paid millions of baht of taxes. You will not get out then, that is what is was refering to. OA Visa does not get tea money as it is made available outside of Thailand so i guess you are right, not the favorite visa of the IOs.

[K2938]

5 minutes ago, stat said:

Maybe consider using credit card to withdraw cash 33x30.000 Baht and you "should" be under the radar. Additional layer of security, use someone elses credit card (family member that does not live in Thailand if possible). I know not allowed by cc companies...

Thai ATMs are run by Thai banks.  And the data of Thai banks is accessible to the government if it so wishes.  So the "secret ATM withdrawal" route is unlikely to work if the government is determined enough.

[ukrules]

1 hour ago, K2938 said:

Thai ATMs are run by Thai banks.  And the data of Thai banks is accessible to the government if it so wishes.  So the "secret ATM withdrawal" route is unlikely to work if the government is determined enough.

They're going to be coming for the wealthy Thais way before they come after us lot.

[khunjeff]

14 hours ago, RafPinto said:

Do you know someone who is retired at 50 and is drawing a pension?

I retired with an immediate pension at age 51, and could have done so the day I turned 50 if I had wanted to. So it does happen. (I didn't get my LTR until age 59, but that's only because the program didn't exist before that.)

[K2938]

34 minutes ago, ukrules said:

They're going to be coming for the wealthy Thais way before they come after us lot.

It indeed would appear that foreigners are the unintended collateral damage in all this.  And the key difference they seem to have overlooked is that foreigners start with having all their money abroad whereas for Thais it is largely the opposite. 

However, Thais with money abroad might also be keen to withdraw some of their foreign funds via ATMs in Thailand, so there is absolutely no guarantee that this could be a "safe" method unmonitored by the authorities

[El Matador]

My understanding is they will simply delete the line "Foreign income is not taxed if remitted the next year" meaning any foreign income earned during the year will be taxed. And there will be tax credits according to the tax treaty.

 

Many people seem to extrapolate it would mean a tax on remittance.

I can't name any country taxing incoming transaction for income tax purpose. I know Thai do their own way but you can't logistically make an income tax with various brackets on all incoming transactions.

 

The simple common practise is to make an annual declaration with all income earned during the year.

Before, you had to include foreign income IF you were stupid enough to remit it the same year.

Now, you will have to include foreign income WHATEVER you do.

 

 

 

 

[Gknrd]

Wow, that guy "Doctor Tax" is in the right place at the right time. Cha Ching...

Bet he and his staff are on cloud nine about now. 

Steak and lobster every night now boys... hahaha

10-1 they won't leave anyone out now.. The 67K monthly will be a blanket tax. And your amount that has to be brought in will go up to cover the tax. 

 

 

 

[Gknrd]

2 hours ago, ukrules said:

They're going to be coming for the wealthy Thais way before they come after us lot.

Doesn't matter, you will be required to have a tax ID number and file a tax return. Just because you are not Thai and not wealthy does not mean they will not want their pound of flesh if owed to them. No way around it now.

 

Personally I don't buy the idea it is the wealthy Thai's that caused this.

China is loosing it foothold on manufacturing and thousands of company are relocating. Thailand is one country that is reaping the rewards of this. Now this comes into effect just at the right time. Yeah right...

[ukrules]

31 minutes ago, Gknrd said:

Doesn't matter, you will be required to have a tax ID number and file a tax return.

That's nonsense.

[Tippaporn]

7 hours ago, TroubleandGrumpy said:

Thanks mate.  Everyone should watch the first 20 minutes at least - this could be huge.

Remember - forwarned means you can be forarmed (prepared).

This is IMO one of those situations where you should prepare for the worst, middle and best outcomes.

I will be bringing in about 1 million baht each year, and that means I will pay 70,000 Baht in VAT.

That IMO is enough tax paid by me - I get none of the Govt services that Thais do for free.

The big issue is how will this affect me - paying another 10-20K PA would be acceptable - another 100K PA NOT. 

 

It starts Jan 1 2024 so therefore I can stay living in Thailand until end June 2024, before you are officially a tax resident. 

I will be watching this issue very closely and deciding before June 2024 what course I will take - leave or stay.

My current sentiment is "much ado about nothing."  It's not by any means the first idiotic scheme cooked up by the Thai government to be reversed rather quickly after they experience the disastrous results.

Take a close look at my avatar.  The dog is nowhere to be found and the cat understands well.  The cat does not react to imaginary situations but does react to very real ones.  As an analogy, up to now this is the Thai government posting the "Beware of the dog" sign.  I'll deal with it when an actual symbolic dog appears.

Colour me stupid or colour me wise.

 

[mokwit]

10 hours ago, Lorry said:

Somewhere in this thread someone said in Thailand it's 20 years. 

Hard to imagine this would really happen. 

Google: 'How long can a tax man go back in time to assess you' with name of aBangkok based newspaper.

 

2-5 years

 

10 years statute of limitations generally applies if you have not filed.

[jacko45k]

9 hours ago, david555 said:

A small visit to Phnomh Pehn or Sihanoukville before the 6 months "stay Thailand " kicks in could be a solution ....

 

Just a thought for some

A small visit which would need to be in excess of 169  days?

[zombie nights]

Many years ago i was summoned to my local tax office  in Thailand and asked about my income. I was told as I come from a country with a double tax agreement i was not liable to pay tax here. They issued me with a card and a number on it. I still have the card and they never contacted me again.

I presume when the new regulations come into force they cannot now claim I am liable to  pay back taxes?

 

 

[Skeptic7]

5 hours ago, K2938 said:

Thai ATMs are run by Thai banks.  And the data of Thai banks is accessible to the government if it so wishes.  So the "secret ATM withdrawal" route is unlikely to work if the government is determined enough.

You're giving them way too much credit. They can't even keep track of expats residing at the same address, whom are annually extended (some providing a map!), every 90-day reported, excessive copies of address, in need of countless certicates of residence for every little thing, home visits...and a smartcar❗????

 

So they can't possibly ever keep track of tens of thousands of ATM transactions by every foreigner...some residents, some not...and then track those transactions back to precisely the correct resident...whom they've already lost track of, despite their endless reporting requirements, countless copies and certificates. They're a joke. Inept and incapable. 

[mokwit]

11 minutes ago, Skeptic7 said:

You're giving them way too much credit. They can't even keep track of expats residing at the same address, whom are annually extended (some providing a map!), every 90-day reported, excessive copies of address, in need of countless certicates of residence for every little thing, home visits...and a smartcar❗????

 

So they can't possibly ever keep track of tens of thousands of ATM transactions by every foreigner...some residents, some not...and then track those transactions back to precisely the correct resident...whom they've already lost track of, despite their endless reporting requirements, countless copies and certificates. They're a joke. Inept and incapable. 

They will push the onus of proof onto us, and in a format specified by them.

[jas007]

Maybe it has already been said, but expats in Thailand receiving income from government pensions or Social Security type programs should check the provisions of the tax treaty between their country and Thailand. There may well be a section of the treaty that addresses government pensions and the like.  For example, the treaty with the USA specifically indicates that government pensions are to be taxed only in the country where earned.  It looks like Social Security benefits would be treated the same.  So, it’s simply a matter of only bringing into Thailand money from those types of sources. 
 

In my case, I get more money every month than I need, so even if I earn money from dividends or stock trading, I’ll just keep those earnings out of Thailand. I just hope I’ll be able to skip any income tax return filing in Thailand. That alone could be a pain in the neck, even if no tax is owed.