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

[khunjeff]

9 hours ago, Middle Aged Grouch said:

many house owners from Europe, the UK, the US who have not declared their real estate in Thailand are going to be in some serious hot soup......mainly in France and the USA

I can't speak for France or other countries, but the US has no requirement to "declare" foreign real estate holdings - only bank and financial accounts have to be reported. Any capital gains on sales of overseas property would have to be declared as income, but there is no Federal property tax.

[sandyf]

1 minute ago, persimmon said:

Something else to ponder - for long staying tourists , go significantly over 180 days , and they may not let you leave until you have filed a tax return !

With this sort of garbage I am surprised the mods haven't shut the thread down

[French mate]

50 minutes ago, khunjeff said:

I can't speak for France or other countries, but the US has no requirement to "declare" foreign real estate holdings - only bank and financial accounts have to be reported. Any capital gains on sales of overseas property would have to be declared as income, but there is no Federal property tax.

Its exactly the same for France, only your banks, financials accounts and any foreign income.

This of course only if you still a french tax resident (witch offert more variety that Thailand as their is various possibility to be resident there even when living less than 180 day a year. Living more than 180 days without becoming tax resident is also an option as they take in account your main finnancial (where the money come from)  and familly (where they live) interest to decide if you should be considered a tax resident or not).
 

[Dogmatix]

On 9/18/2023 at 11:05 AM, freeworld said:

They are going to tax it if brought into Thailand.

 

OECD, G20, G7 all want every bit of income on earth to be taxed and pressure all countries outside of those groups to comply with their financial and taxation agreements and hence all the meetings and agreements between governments to achieve this.

 

 

The RD spokesman was not being very truthful when he claimed there was international pressure on Thailand to do this. No other countries tax overseas income earned years ago on a remittance basis AFAIK and taxing on a remittance basis is virtually unheard of. The pressure from OECD, particularly the US and UK has been to set minimum corporate tax rates to make it harder for companies to avoid tax by shifting their domiciles to low tax jurisdictions like Ireland and Luxemburg but it is not the same for individuals because they have to actually live in a place to become a tax resident and the US which exerts most of the pressure re corporate tax doesn’t care what Thailand does te personal  tax anyway because it taxes its citizens on a global basis. You won’t see countries like Singapore, HK and the gulf states suddenly taxing offshore personal income under international pressure. Yes, there is international to collaborate with Common Reporting Standards (CRS) and FATCA etc and provide information on financial accounts of foreigners in Thailand, which in the case of FATCA ThAiland only complied with under threat of being cut off from the US correspondence banking system and thus international USD transactions. But it is huge distortion to blame international pressure for what they have just done.

 

It seems to be the usual Thai government approach to assume that all Thai people are morons incapable of accessing any information in English from overseas and to blame foreigners for all nasty things they do themselves (remember the unwashed foreigners spreading COVID).

[Dogmatix]

Something raised by a friend was the possibility of taxing international health insurance payouts in Thailand. If you claim for an operation in Thailand on your overseas insurance policy, will the remittance either to you directly or the hospital trigger off a tax demand due to income receive from overseas? Companies like AXA now use a Thai payment agent to make the payments to hospitals which would it even easier for the RD to track this “windfall” type of overseas income. 

[redwood1]

This whole thing is beond stupid.....

Why make a huge announcement  but give no details?

Everyone is like a chicken pressing random buttons trying to find the right answer....

 

 

 

They might as well have said in 3 months all expats living in Thailand will be billionairs......Then said nothing about how this is going to happen....

 

Then we could have 37 pages of speculation on how every one is going to be rich....

 

 

This whole thing sounds more like a psy-op to try and make people nuts through endless speculation......It makes no sense to give zero details with a huge announcement like this tax thing....

 

 

 

[jonny on the spot]

49 minutes ago, Dogmatix said:

The RD spokesman was not being very truthful when he claimed there was international pressure on Thailand to do this. No other countries tax overseas income earned years ago on a remittance basis AFAIK and taxing on a remittance basis is virtually unheard of. The pressure from OECD, particularly the US and UK has been to set minimum corporate tax rates to make it harder for companies to avoid tax by shifting their domiciles to low tax jurisdictions like Ireland and Luxemburg but it is not the same for individuals because they have to actually live in a place to become a tax resident and the US which exerts most of the pressure re corporate tax doesn’t care what Thailand does te personal  tax anyway because it taxes its citizens on a global basis. You won’t see countries like Singapore, HK and the gulf states suddenly taxing offshore personal income under international pressure. Yes, there is international to collaborate with Common Reporting Standards (CRS) and FATCA etc and provide information on financial accounts of foreigners in Thailand, which in the case of FATCA ThAiland only complied with under threat of being cut off from the US correspondence banking system and thus international USD transactions. But it is huge distortion to blame international pressure for what they have just done.

 

It seems to be the usual Thai government approach to assume that all Thai people are morons incapable of accessing any information in English from overseas and to blame foreigners for all nasty things they do themselves (remember the unwashed foreigners spreading COVID).

Well said that man !

[jonny on the spot]

43 minutes ago, Dogmatix said:

Something raised by a friend was the possibility of taxing international health insurance payouts in Thailand. If you claim for an operation in Thailand on your overseas insurance policy, will the remittance either to you directly or the hospital trigger off a tax demand due to income receive from overseas? Companies like AXA now use a Thai payment agent to make the payments to hospitals which would it even easier for the RD to track this “windfall” type of overseas income. 

And who is absorbing the shortfall if that happened? The hospital, the insurance company, no me.  Not even these people could be that stupid. Oh hang on they could call it an initiative to stimulate the Thai health insurance market.

Give all Thais a voucher for the first months cover ????

[Dogmatix]

1 hour ago, redwood1 said:

This whole thing is beond stupid.....

Why make a huge announcement  but give no details?

Everyone is like a chicken pressing random buttons trying to find the right answer....

 

 

 

They might as well have said in 3 months all expats living in Thailand will be billionairs......Then said nothing about how this is going to happen....

 

Then we could have 37 pages of speculation on how every one is going to be rich....

 

 

This whole thing sounds more like a psy-op to try and make people nuts through endless speculation......It makes no sense to give zero details with a huge announcement like this tax thing....

 

 

 

The difference is that they have made people frantic wondering how they are going to survive in Thailand with their overseas savings taxed as income by some greedy boneheads trying to make others pay for their vote buying, so they can stay in power enriching themselves with corruption.

[MartinL]

If this goes ahead, how likely is it that the requirements for a Thai Citizenship application would change to include '3 years of Thai income tax paid on income from overseas'?

 

Probably a rhetorical question.

[mokwit]

8 hours ago, sandyf said:

With this sort of garbage I am surprised the mods haven't shut the thread down

They did this before.

 

8 hours ago, sandyf said:

Something else to ponder - for long staying tourists , go significantly over 180 days , and they may not let you leave until you have filed a tax return !

 

[transam]

I don't know if this has been mentioned here or elsewhere, but there is even more cr@p for some in the pipeline with a Barklays Bank account, unless you have 100,000 quid to stash............????

 

https://uk.yahoo.com/style/barclays-debank-british-expats-134809331.html

[jacko45k]

1 minute ago, transam said:

I don't know if this has been mentioned here or elsewhere, but there is even more cr@p for some in the pipeline with a Barklays Bank account, unless you have 100,000 quid to stash............????

 

https://uk.yahoo.com/style/barclays-debank-british-expats-134809331.html

Or have £40. a month to pay for it. 

Was it Santander did this not long ago?

[transam]

4 minutes ago, jacko45k said:

Or have £40. a month to pay for it. 

Was it Santander did this not long ago?

Dunno, just read the story, things are closing in............????

[Maestro]

On 9/20/2023 at 5:48 AM, rabas said:

This is what they will do January 1, 2024.

 

Translation of the new rule:

Section 1: A person who is Persons residing in Thailand according to Section 41, paragraph three, of the Revenue Code who have assessable income due to work duties or activities conducted abroad or because the property is in Foreign countries according to Section 41, paragraph two of the Revenue Code In the said tax year and took that assessable income Entering Thailand in any tax year That person has a duty to include that assessable income in the calculation. To pay income tax according to Section 48 of the Revenue Code In the tax year in which the assessable income was brought in in Thailand.

 

From this coconut article:

The change announced September 15 is meant to close a loophole in the tax system that allows people to avoid paying income tax on foreign assets and earnings by leaving the income abroad until the next tax year.

 

 

The emphasis is on assessable income. The recent Revenue Department Order No. 161/2566 is about income earned abroad, ie outside Thailand, that is assessable in Thailand. 

 

If there is a Double Taxation Agreement (DTA) between Thailand and another country and if this DTA states that some income in that other country is assessable in that country, then that income is not assessable in Thailand. That's the purpose of a DTA, and it works both ways.

 

For the record, here is an English translation of the entire text of the Revenue Department Order No. 161/2566

Revenue Department Order 161-2566.pdf

 

And here is a link to the original Thai text of the Order, included in the news article linked to in the OP of this topic:

https://www.thaienquirer.com/wp-content/uploads/2023/09/IMG_3943.jpg

[pluto_manibo]

2 hours ago, Dogmatix said:

The difference is that they have made people frantic wondering how they are going to survive in Thailand with their overseas savings taxed as income by some greedy boneheads trying to make others pay for their vote buying, so they can stay in power enriching themselves with corruption.

I think this might cause;

• Thai investors to not repatriate their funds
• Foreigners to limit their time and spending in the country. More importantly forego any big expenditures(cars, surgeries, house purchase, medical expenses etc...)
• Foreigners to abandon their applications for LTR or Elite visa(as has been testified on Reddit by a handful of people)
• Real estate market to suffer

However, this has not been elaborated on and they might want to instill a sense of urgency in repatriating funds before the Tax  comes into effect, to boost the economy. I think this will discourage future investments and spending.

[redwood1]

10 minutes ago, pluto_manibo said:

I think this might cause;

• Thai investors to not repatriate their funds
• Foreigners to limit their time and spending in the country. More importantly forego any big expenditures(cars, surgeries, house purchase, medical expenses etc...)
• Foreigners to abandon their applications for LTR or Elite visa(as has been testified on Reddit by a handful of people)
• Real estate market to suffer

However, this has not been elaborated on and they might want to instill a sense of urgency in repatriating funds before the Tax  comes into effect, to boost the economy. I think this will discourage future investments and spending.

This is all 100% correct....

[James105]

25 minutes ago, pluto_manibo said:

I think this might cause;

• Thai investors to not repatriate their funds
• Foreigners to limit their time and spending in the country. More importantly forego any big expenditures(cars, surgeries, house purchase, medical expenses etc...)
• Foreigners to abandon their applications for LTR or Elite visa(as has been testified on Reddit by a handful of people)
• Real estate market to suffer

However, this has not been elaborated on and they might want to instill a sense of urgency in repatriating funds before the Tax  comes into effect, to boost the economy. I think this will discourage future investments and spending.

I'm 99.99% sure I am getting caught up in this as since I am no longer a UK tax resident and get income in the form of royalties for work I published years ago, I am not paying personal tax on this income as I use the loophole of only bringing in income earned overseas from prior years, and I have been in Thailand for over 3 years now so would be considered a tax resident.  I send myself 100k-200k a month for living expenses and whether the announcement was confusing or not, I am in no doubt this will become taxable from next year.   I do pay corporation tax via my UK Ltd so not completely avoiding tax before anyone gets uppity about what I am doing here.

 

This will leave me with 2 choices:

 

1. Suck it up and pay - I can afford it.

2. Leave the country and go elsewhere.

 

Option 2 is the most likely outcome and when my lease is up next February I will probably take the opportunity to relocate and explore another part of the world.   Hopefully the Phillipines has sorted out their internet by now :)

[Dogmatix]

4 hours ago, mokwit said:

They did this before.

 

 

Yes they did something like that before or even worse. You used to have to pay a fee to the RD to get a tax clearance certificate for a foreigner to show to Immigration to prove your tax was paid up to date to leave the country.  The YouTube presentation by a group of expat financial advisors earlier in the thread warns that they expect Immigration to demand tax receipts in order to renew retirement and marriage extensions and will probably require tax paid at least on the minimum of 67k a month.

[tomkenet]

I am considering Malaysia and Philippines. Malaysia did something similar to what Thailand is planning now 2 years ago, but it was postponed until 2027 du to protests and negative impacts on immigration. Not sure how the situation is in the Phillipines .

[Mike Teavee]

1 hour ago, James105 said:

I'm 99.99% sure I am getting caught up in this as since I am no longer a UK tax resident and get income in the form of royalties for work I published years ago, I am not paying personal tax on this income as I use the loophole of only bringing in income earned overseas from prior years, and I have been in Thailand for over 3 years now so would be considered a tax resident.  I send myself 100k-200k a month for living expenses and whether the announcement was confusing or not, I am in no doubt this will become taxable from next year.   I do pay corporation tax via my UK Ltd so not completely avoiding tax before anyone gets uppity about what I am doing here.

 

This will leave me with 2 choices:

 

1. Suck it up and pay - I can afford it.

2. Leave the country and go elsewhere.

 

Option 2 is the most likely outcome and when my lease is up next February I will probably take the opportunity to relocate and explore another part of the world.   Hopefully the Phillipines has sorted out their internet by now ????

I also think I'll be caught up on this as I do the same with Dividend Income in that as a Non-UK Resident it is treated as Disregarded/Excluded Income on my Tax Return so I do not have to pay anything (above the already Withheld Tax) on it. 

 

I am supposed to declare/pay it in the country I am resident in but as I don't bring the money over in same Tax Year there is nothing to declare/pay. 

 

This new rule could see me having to declare/pay tax on the Dividend when I eventually bring the money over (Which given I typically re-invest the Dividend could be several years later when I sell whatever investment I bought with it). 

 

Going to be a nightmare to try & keep track of it ????  

 

Oh and Capital Gains Tax will also be a problem, currently don't need to pay anything on profits from share sales, now going to have to try to keep track of when I bought each individual share, what money (Savings, Dividend, Income from House) I used to pay for it & how much I made/loss on it ????  

 

Thailand for < 180 days pa is looking better & better all the time. 

 

 

 

[Dogmatix]

There is a long letter in the Bangkok Post on this today which I am not allowed to post or link here. Among other things it implies that decreeing a new meaning of an existing law other than what was intended by parliament, rather than amending it in parliament is dubious legally. But I wonder if anyone would challenge it in court. On the other hand I would doubt that Srettha would feel confident about getting this through parliament. His “pro-dictatorship” friends have more seats than PT and many are likely to have accumulated substantial offshore funds through various mechanisms while in power. Also many PT MPs will not like it.

[pluto_manibo]

15 minutes ago, Mike Teavee said:

I also think I'll be caught up on this as I do the same with Dividend Income in that as a Non-UK Resident it is treated as Disregarded/Excluded Income on my Tax Return so I do not have to pay anything (above the already Withheld Tax) on it. 

 

I am supposed to declare/pay it in the country I am resident in but as I don't bring the money over in same Tax Year there is nothing to declare/pay. 

 

This new rule could see me having to declare/pay tax on the Dividend when I eventually bring the money over (Which given I typically re-invest the Dividend could be several years later when I sell whatever investment I bought with it). 

 

Going to be a nightmare to try & keep track of it ????  

 

Oh and Capital Gains Tax will also be a problem, currently don't need to pay anything on profits from share sales, now going to have to try to keep track of when I bought each individual share, what money (Savings, Dividend, Income from House) I used to pay for it & how much I made/loss on it ????  

 

Thailand for < 180 days pa is looking better & better all the time. 

 

 

 

I am planning on sucking it up for a few years and bring in the minimum in an acceptable tax bracket to add to the funds in Thailand. However my plans for the future have drastically changed. Having lived here since 1995, it will be a painful adjustment. I have been to all the neighboring countries and they do not appeal to me at all. I would hate to live there on standby for 183 days.

[TroubleandGrumpy]

19 hours ago, Dogmatix said:

At a guess I would say that this issue needs to be cleared up either by the Thai RD figuring it out by itself and issuing a regulation to cover it (highly unlikely) or by the Australian government negotiating an amendment to the Thai-Australia double tax treaty, which would take years.  Until either of those things happen, it seems unlikely you would be able to produce documentation to convince the RD to allow a tax credit. But Srettha doesn't care. He just wants short term fixes that he can tell TV reporters will be done in 3 or 6 months, just like he is going to get rid of cannabis and speed pills. When the time comes and nothing happens he hopes to have moved the newsflow on.

I agree - there is no solution to this issue, and the wise thing to do until it ever is solved (unlikely) is to keep a low profile and not draw the attention of the Thai RD by making any single large transfers into Thailand. I figure bringing in up to 400K at a time should be 'safe', because rather than getting the banks to total up what every tax resident brings into the country between Jan 1 and Dec31, they will 'notice' any large transfers and then request the bank to provide that person's total over the year. But that is logic and TiT - so who knows what they will do.

Hopefully they will just put all non-immigrant tax residents in the 'too hard' basket, unless we bring in a large amount of money in any one year. But if that did that, surely they would realise that will stop us all from buying a property in Thailand.  But - TiT.   

I will be watching what happens in 2024 and take notice if any Expat on a long-stay non-immigrant retired/married Visa is 'nailed' - I will then make a decison what to do going forward.   

[Geir Rasch]

On 9/22/2023 at 12:11 PM, thaibreaker said:

The percent you pay as a member of Folketrygden, called trygdeavgift, is not 7.4 percent for pensions. It is 5.1 percent.

This is not included in the zero tax graphics in the link. The tax is zero percent up to 250.000. The trygdeavgift of 5,1 percent is considered more as a membership of all the goods Norway offer.

 

I’m sorry to inform you that there is things about Folketrygden you have missed. 
It is correct that trygdeavgiften is 5,1% for retired people living in Norway, but when you move to Thailand you are imposed to register your address in Thailand to Folkeregisteret. Then, after 6 months you are no longer member of Folketrygden. Then you should no longer pay trygdeavgift, but tax Norway will continue to do so until you stop it. Trygdeavgiften they collect will give you no right in Folketrygden since you no longer live in Norway. 
Then there is a way to uphold membership, and that is to seek voluntary membership. If that is granted they will collect an extra 2,3% trygdeavgift in addition to the 5,1%, which give you a total of 7,4%.
If you have stayed in Thailand long time it is probably to late for voluntary membership. Since your tax deduction reduse your tax to 0, there is no trygdeavgift to reclame.

[Geir Rasch]

23 hours ago, thaibreaker said:

I never said I was living in Thailand. I wrote I was living in Norway.

Then you have confused me.  You stated that you would not pay tax to Thailand because it could not compete with your Norwegian tax. 
If you live in Norway you are not entitled to pay tax to Thailand, You should not act like living in Thailand. Or maybe you do live in Thailand, but not fullfilled your obligation to register your address in Thailand just to uphold your membership? I know many do, and so does nav.
Either way, you dont seems a serious and honest person, so I think we call that a day. Take care!

[Lorry]

1 hour ago, Dogmatix said:

Yes they did something like that before or even worse. You used to have to pay a fee to the RD to get a tax clearance certificate for a foreigner to show to Immigration to prove your tax was paid up to date to leave the country.  The YouTube presentation by a group of expat financial advisors earlier in the thread warns that they expect Immigration to demand tax receipts in order to renew retirement and marriage extensions and will probably require tax paid at least on the minimum of 67k a month.

Paying tax for 67000 (shouldn't he say 65000?) a month is probably preferable to spending 5 month a year running after documents about the DTA and visiting the RD. Especially if they grant all foreigners the same allowances as Thais (I would be surprised - I would expect them to grant the allowances only to foreigners with WP).

 

But you will definitely need some kind of tax clearance before exiting the country, and if you exit more than once a year (visa run anybody? FIFO?), this will be a lot of fun. 

 

"Thailand is getting more and more like Singapore,  it just doesn't work so well" someone has written. Immigration,  property tax, TDL, now taxation of remittances...all this didn't exist when I came here. I had no contact with Thai bureaucrats for many years. I didn't miss them. Now this may soon be my main occupation. 

 

 

[TroubleandGrumpy]

1 hour ago, Mike Teavee said:

I also think I'll be caught up on this as I do the same with Dividend Income in that as a Non-UK Resident it is treated as Disregarded/Excluded Income on my Tax Return so I do not have to pay anything (above the already Withheld Tax) on it. 

I am supposed to declare/pay it in the country I am resident in but as I don't bring the money over in same Tax Year there is nothing to declare/pay. 

This new rule could see me having to declare/pay tax on the Dividend when I eventually bring the money over (Which given I typically re-invest the Dividend could be several years later when I sell whatever investment I bought with it). 

Going to be a nightmare to try & keep track of it ????  

Oh and Capital Gains Tax will also be a problem, currently don't need to pay anything on profits from share sales, now going to have to try to keep track of when I bought each individual share, what money (Savings, Dividend, Income from House) I used to pay for it & how much I made/loss on it ????  

Thailand for < 180 days pa is looking better & better all the time. 

I am the same - as is any Expat tax resident who has savings or investments in their home country and brings money into Thailand.  Those Expats who only receive a Govt Pension will not be targetted.

My investments are taxed in Australia, and it is close but I have calcuated I would not owe money to Thailand on a year by year basis. But the problem will be proving that to Somchai at RD - my investments are taxed at the Super Fund level - not on an account by account basis - how would I prove it is taxed?

 

For those who think a DTA solves the problem for you - Wrong. What a DTA means is that Thailand and the other 61 countries have agreed not to double tax each others citizens/tax residents - it does not mean one cannot tax the other's.  How it works is that if you have paid taxes on earnings in your home country already, that means you have 'credits' for that paid amount against taxes applicable in Thailand. That is why the Thai RD has avoided getting into this area for all Expats - there is a lot of work involved because each DTA is different in both it's application and subsequent specific decisions. 

 

This new interpretation - taxing incoming remittances based on previous years earnings that are not taxed - is meant to cover Thais and other tax residents who have been sending money overseas ('seasoned') and then bringing it back years later with no taxes applicable.  That is the Govt's intention - but the concerns we all have is how it will actually be implemented - and how the local Somchais (RD Officers) will interpret this directive.

[John Drake]

My tax office isn't too far away. I haven't got anything else to do. So, if the time comes when I need to prove no tax payment, I will be the one doing the delaying, scheduling, and endlessly explaining. I will spend days, even weeks, getting the tax people to detail, examine, refer, cite, and detail my return. I'll clog up their system.

[TroubleandGrumpy]

12 minutes ago, Lorry said:

Paying tax for 67000 (shouldn't he say 65000?) a month is probably preferable to spending 5 month a year running after documents about the DTA and visiting the RD. Especially if they grant all foreigners the same allowances as Thais (I would be surprised - I would expect them to grant the allowances only to foreigners with WP).

But you will definitely need some kind of tax clearance before exiting the country, and if you exit more than once a year (visa run anybody? FIFO?), this will be a lot of fun. 

"Thailand is getting more and more like Singapore,  it just doesn't work so well" someone has written. Immigration,  property tax, TDL, now taxation of remittances...all this didn't exist when I came here. I had no contact with Thai bureaucrats for many years. I didn't miss them. Now this may soon be my main occupation. 

Thai tax payable on 65K per month (980K PA) is about 70K Baht.  Unlike Singapore where their bureaucrats are a lot better educated and trained (not saying they are great), in Thailand they are often under-educated and very badly 'trained'. If the Thai Govt was to continue down this path (becoming like Singapore in taxation enforcement), but expect that to happen with the same RD staff and systems (which they would), then it will be a disaster., not just for Expats but for any Investors.  And if anyone thinks MFP would be any better, IMO they would be worse. MFP have the clear intention to introduce a social welfare system in Thailand, and they will be needing a massive increase in taxation revenue to pay for that.