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

[scorecard]

43 minutes ago, Mike Teavee said:

Less than 150,000b pa! - How do you live on 12,500b pm! (No don't answer that)!!!

 

For anybody who's interested here are the current Thai Tax Rate bands... 

 

Is this table per year or per month?

 

[lordgrinz]

Just now, In the jungle said:

If you get mugged on the sidewalk here it is usually by the police.

...then the Hospital.

[maddox41]

If your not a Thai resident  and have a retirement visa   

I dont believe you pay tax 

Australia has a agreement with ????????

That Australians living in Thailand cant be taxed twice as they have already paid tax in Australia and they are using their after tax  money in  Thailand ???????? 

Be surprised if they do it? if so  a big hit in the pocket to expats  

If thats the case i be paying 50 % income tax to live in Thailand.

25% in Australia 

25% Thailand 

Time to move to Vietnam then 

 

 

[jacknorman]

The program will begin January 1, 2024 and apply only to tax residents in Thailand meaning tourists and short term workers will be exempt. Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand.

(For list of countries with Double Tax Agreement please click here)

It is unclear at this point how this will apply to foreigners living in Thailand on a retirement visa.

[tgw]

taxing savings is horrible.

 

[gearbox]

9 minutes ago, Sheryl said:

Again, as I explained:  if you are from a country with a double Tax Agreement, and if the money you bring in has already been taxed (at the time earned) in your home country or is currently subject to tax there, it cannot be taxed in Thailand.

 

 

Hopefully it is true, but usually this is not how the double tax agreements work. You are not exempt, but pay the difference in the tax rates. As both govt and private pensions in Australia are tax free, there is a difference between the Thai tax rate in the appropriate tax bracket, and the zero tax rate from Australia. I always pay the tax rate differences for dividends earned in foreign countries which have double tax treaty with Australia.

[GreasyFingers]

What a wonderful new government!

[Nabbiex]

My friend, Bard says....

 

Whether or not it is a good idea to tax expatriates is a complex question with no easy answer. There are both pros and cons to consider.

Pros of taxing expatriates:

• It can generate revenue for the government, which can be used to fund public services and programs.
• It can discourage people from renouncing their citizenship or residency to avoid paying taxes.
• It can ensure that all citizens and residents contribute their fair share to the tax burden.

Cons of taxing expatriates:

• It can discourage people from living and working abroad, which can harm the economy.
• It can be difficult to enforce, as expatriates may be living and working in countries with which the home country does not have tax treaties.
• It can be unfair to expatriates who are already paying taxes in the country where they live and work.

Ultimately, the decision of whether or not to tax expatriates is a political one. Each country must weigh the pros and cons and decide what is best for its own citizens and economy.

 

In the case of the United States, the government taxes its citizens and resident aliens worldwide, regardless of where they live or work. This is one of the few countries in the world that does so. The US government argues that this is necessary to ensure that all US citizens contribute their fair share to the tax burden, regardless of where they live. However, many US expats argue that this is unfair, as they are already paying taxes in the country where they live and work.

 

In recent years, there has been some discussion in the US Congress about repealing the expatriation tax, but no concrete action has been taken.

 

It is important to note that the tax rules for expatriates vary widely from country to country. Some countries, such as the United Kingdom and Australia, only tax expatriates on their income from domestic sources. Other countries, such as Germany and Japan, tax expatriates on their worldwide income for a certain number of years after they leave the country.

 

If you are considering becoming an expatriate, it is important to consult with a tax advisor to understand the tax rules of your home country and the country where you plan to live and work.

[brianthainess]

2 hours ago, webfact said:

“…those that have earnings from occupation or business abroad or wealth that is located abroad…and has brought these assets into Thailand…

 

2 hours ago, seajae said:

so does this mean all incoming money transfers from abroad, if so will they will be taxing pensions as well when they are transferred from other countries, sounds

 

[Tom H]

Then I pay from my Wise bank account abroad in Thai currency with the credit card all bills:).

 

Savings in Thailand ?

800k on saving account they can tax and they do already.

 

Youtubers might get a problem with their “work” in Thailand.

 

Transfer of funds?

Will be reduced same as FDI

 

Option:

Vietnam

 

I dont care

Why?

I am not a tax resident so as many others are also not

 

[freeworld]

20 minutes ago, gamb00ler said:

Are you including Thai Immigration's Inquisition-like examinations as a government "service" we are using?

Yes, I'm sure the income from applicants fees do not entirely cover the huge bureaucracy, infrastructure and maintenance costs in and around immigration.

[Taboo2]

2 hours ago, ezzra said:

For all we know, that could open the flood gates for other money grabs by the government now...

They are learning from the American IRS....which is the world's # 1 crooks and thieves on the planet.  No one can compete with the American IRS...they worship money...it is their God!

[kimamey]

1 hour ago, doctormann said:

I believe that there is also a tax treaty between UK and Thailand.

Yes there is.

[QuantumQuandry]

A lot of people are saying you can't be taxed in Thailand if you paid taxes back home and there is a tax treaty.  Some thoughts on that:

 

1. Thailand doesn't know if you paid tax on the money, they only know you are transferring money into a Thai bank account.  You might be able to prove that you paid taxes in your home country but the onus could now be on you.

 

2. Not all retirement money is taxed in home countries.  Disability or tax-exempt bonds, for example.  Other money is taxed but not in a normal manner (Roth IRAs, for example).  Will Thailand be up on the tax rules of other countries?  Will they even try to honor them?  Can't see that ending well.

 

3. Getting knickers in a twist...yeah, it probably won't happen.  But if it does, it has a massive impact.  It's smart to at least be aware of low probability, high impact events.  Not saying you should freak out about them but worth being aware of them before tax time cometh.

 

[freeworld]

How does everybody like feeling free in this world.....as long as you comply with all the rules of government and pay what they want.

[Hokeus]

If the subject of the OP is a correct interpretation of the new guideline, which includes the words “tax residents”, then it only applies to residents in Thailand who regularly pay tax on their income in Thailand.
 

Thus, mainly it would apply to Thai citizens and foreigners working in Thailand who do pay tax on income and are defined as “tax residents”. Therefore, that would not apply to foreign retirees who are not tax residents and who are not earning an income in Thailand.
 

It could eventually apply to retired foreigners who show a pension income to satisfy the financial

requirements for retirement visas, but that remains to be seen. 
 

If they change the classification of “tax residents” to include retirees who reside in Thailand for over 183 days per year then that could change things a bit more, but seemingly unlikely. 
 

Also, unlikely any new legislation would ever apply to money transferred into Thai bank accounts by foreigners from a source abroad or the money would simply stop coming in. 

[Cadan]

Simple solution - fly back home and bring allowed cash I believe 20,000$ per trip - banks will make less transfer fees - another way is the cash transfer or ATM 

[Hokeus]

Just now, Cadan said:

Simple solution - fly back home and bring allowed cash I believe 20,000$ per trip - banks will make less transfer fees 

Or live mainly from an overseas debit card and never physically bring much money in. 

[foreverlomsak]

2 hours ago, webfact said:

must factor this into their personal income tax for the year.”

This assumes you are registered with the Thai Revenue Department and have a current Thai Tax ID, will every expat living here on an annual extension be required to register, along with those on Work Permits.

It has the potential to be as onerous as dealing with Immigration, with each office having it's own interpretation/application of the rules.

[scorecard]

2 hours ago, Mike Teavee said:

I've always thought that the guys using the >65K pm income method for their retirement extensions are leaving themselves open to having to pay tax on it.

 

Obviously some income streams like state pensions may be exempt but private pensions would seem to be fair game, even if they've already paid tax on the income in their home countries. 

Good question here:

 

- How does this affect state pensions being sent into Thailand, especially if it's a pension not subject to personal tax in the home country?

[4MyEgo]

So those of us who have dividend paying shares which are taxed and those of us who pay withholding tax via our savings in bank accounts don't have to worry, subject to our country having a tax treaty with Thailand.

 

So not a problem for me, and I can't see them taxing pensioners either.

 

Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand.

 

 

[Time Traveller]

2 hours ago, webfact said:

wealth that is located abroad…and has brought these assets into Thailand…

 

must factor this into their personal income tax for the year.”

This is a really concerning statement because wealth is not the same thing as income. Simply having cash in a foreign account and then transferring it into Thailand is not income and therefore should not be taxable.   If they do try something like  (they did once before with capital controls in 2007) it will be a complete disaster.  

 

In any case, if they adopt a system similar to other countries that tax worldwide income then I don't think it should be of much concern for Americans as the tax treaty means that most of their retirement or investment income won't be taxable in Thailand.  Other countries will need to check their tax treaty.  

 

On a separate note, one thing I never understood about Thailand immigration is that they never considered foreign income tax filings as part of the evidence of income for visa extensions.  Because no one ever is going to declare to the IRS that their income higher than what it truly is.  It's definitely a much more reliable indicator for proof of income than some Embassy witnessed statement.

[1happykamper]

How convenient... for tax purposes all of a sudden I'm "resident" 555. Yeh right. No chance. I'm a tourist living year to year on a long stay visa. 

 

Can't play that game both ways 5555

[freeworld]

Just now, Hokeus said:

Or live mainly from an overseas debit card and never physically bring much money in. 

Visa cards and others taking transaction fees would approve of this message.

[ChasingTheSun]

2 minutes ago, Hokeus said:

Or live mainly from an overseas debit card and never physically bring much money in. 

Overseas debit cards usually charge between 7% to 10% FX fees/commissions  for thai baht transactions.

Almost as bad as any tax Thailand would likely charge for many people.

[RhysFast]

Itsoynds like this would only apply to people that are already working and paying taxes in Thailand. They would add the incoming funds to your Thai income. 

It shouldn't affect anyone that is retired.

However if you have a work permit you will have to pay taxes even if these funds are from a retirement plan back home. 

 

That would suck big time.

[billd766]

1 hour ago, doctormann said:

I believe that there is also a tax treaty between UK and Thailand.

But the UK HMRC only taxes UK based income. The US taxman taxes ALL income worldwide for US taxpayers.

[Thaindrew]

"Could also be that the individual amount of pension received by some folks is under the Thai personl tax threshhold."

 

---

 

if lower tax limit is 150K baht a year then to qualify for a retirement visa you would have to bring in more than that on an annual basis.

 

But it could get even more complicated, say you transfer 800k for the visa application, which is taxed in HK at 15%, will they want to tax it again at the differential rate? Will they be purely looking at "transfer in" values to determine tax liabilities.

 

What if you transferred in 15m Baht to buy property and those funds were taxed in HK at 15%, will they want to tax you at the differential rate if you are living here over 180 days? Again, Will they be purely looking at "transfer in" values to determine tax liabilities. That could kill the property market.

 

One of the issues in Thailand is that there is never clarity in the law or its application.

 

 

[JackGats]

2 hours ago, seajae said:

... This will be challenged as it is outright theft if the money has nothing to do with Thailand earnings, only the country where it is earned or banked have the right to any taxes from it, the finer details are needed to make sure what they plan to do is legal and not jut a way to rip farangs off 

Outright theft? Alas no, because that's what most countries do these days, ie tax the world-wide income of tax residents (typically people who live in the country more than 183 days). There are few countries left that do not apply the world-wide income principle. One that I can think of is Uruguay. Some countries taxing world-wide income have special provisions that favour of foreign pensions though (Peru, Colombia, Cyprus, Portugal, ...).

 

As regards Thailand, all will depend on what is meant by "brought into the country" and by "resident". If the provision regarding the seasoning of "savings" continues to apply, it may be business as usual for most.

 

Reading this news I'm glad my LTR visa includes a non-tax clause for anything earnt out of Thailand. It couldn't have come at a better time.

[mokwit]

9 minutes ago, Hokeus said:

If they change the classification of “tax residents” to include retirees who reside in Thailand for over 183 days per year then that could change things a bit more, but seemingly unlikely. 

It already DOES apply to us, it is just that they have not enforced it as enforcing it is more trouble than it is worth. They often tell people with no local income they do not need to register for Thai tax and maybe if you are not eligible to pay that is the case in law, but of you are eligible to pay you must register. Likely it will be that we are required to register and then prove no eligibility.