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

[MartinBangkok]

This might sound like a stupid thought/question, but since this new tax rule comes into effect 1st January, 2024 (only three months from now) could it be possible that they will demand tax returns from all of us already in 2024 and consequently that we have to pay tax under the new rules for all income for the year we are in: 2023?

Edited September 23, 2023 by MartinBangkok
Addition

[Hummin]

3 hours ago, DudleySquat said:

180 days a year makes you a tax resident? 

 

• If you exit on day 179, does make it so you are considered a non-Tax Resident? 
• If I leave with a reentry permit, have I left, or does that assume a continuous stay? 
• Does the 180 days reset when you reenter Thailand? 

180 days in the calendar year, meaning total days in the year you stay in the country no matter how many times you leave and come back. 

 

 

Edited September 23, 2023 by Hummin

[jonny on the spot]

9 hours ago, Dogmatix said:

Capital gains will be a big problem for property sales too, if you need to remit the proceeds.  Thailand has no capital gains tax but taxes gains as income at the top marginal rate with no inflation indexing which would be more than the rate of capital gains tax paid in the UK in many cases.  Then there will cases of folk who planned to sell their primary UK residence, which is exempt in the UK, to buy a property and retire here.  If they are Thai tax resident or become tax resident during that tax year, they are in trouble and for most of those caught in the Thai tax net, it probably wouldn't be worth remitting the proceeds at all and maybe not worth staying in Thailand, if treated like that.

 

One thing that is not clear to me is how do tax credits work?  I pay tax on UK sourced income which is a combination of UK pension and rental income.  All I have to show for that is a copy of my tax return and electronic demands for tax on account or after the balancing amount from HMRC with no receipts.  I can't imagine this will be what the RD will accept to approve tax credits.  And if I remit a portion of my taxed income for a year, will they keep track of that and let me remit the balance later?

You are in the same boat as me 2 pensions and rental incomes from the UK.

Trouble is this year i wanted to get rid of 2 properties Spain and UK and just live happily ever after.

But i know as sure as i got a hole in my ass these people will <deleted> this up, the bureaucracy, every office a different outlook on what anything means, the 12 A4 copies of everything, the embassy trips to BKK, getting "proof" from institutions that dont normally supply documents, especially ones written in simple enough language for the average uneducated idiot working here. Because god knows they didnt get the job on merit but because his uncle in LT general.

Every time i go to a government office its like the zoo, immigration, land office, whatever its the same <deleted> show, 20 monkeys trying or not trying to do 4 jobs in between eating noodles and their phone activity.

These people will never make this work and thats more frightening than a functioning tax system.

[redwood1]

1 hour ago, MartinBangkok said:

This might sound like a stupid thought/question, but since this new tax rule comes into effect 1st January, 2024 (only three months from now) could it be possible that they will demand tax returns from all of us already in 2024 and consequently that we have to pay tax under the new rules for all income for the year we are in: 2023?

How on Gods green earth can they demand taxes when they cant even be azzed enough to tell us what they are.... 

Most likely because they are hopelessly confused themselves...

[jonny on the spot]

You know another thing that i never understand, for years.

They have a HUGE untapped source of revenue here in the idiots that drive. Make the police actually do what police are paid for.

When they see someone driving like a <deleted>, stop them fine them.

No helmet good fine.

They already pay the police a salary if you can call it that, make them earn it.

[kennw]

On 9/18/2023 at 9:58 AM, 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 more like a huge money grab by the government if it does, they should only be able to tax money earnt from Thailand not savings etc that were/are earned in other countries. 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 

How can they tax savings because tax would have been previously paid when the savings were earned?

[Mike Teavee]

12 hours ago, Dogmatix said:

Assuming that a a certified tax return or tax clearance certificate would be required, which is pure speculation at this stage, it would be very simple for Immigration. Tax returns have to be filed by 31 March. So from 1 April any visa renewal application of a one year visa would require the appropriate document from the RD.  What could be simpler?

If it did happen then I think the earliest they could do it would be from April 2025 (more like August/September by the time you get your processed return back) as any tax return done in 2024 would cover the 2023 Calendar/Tax year so the new "Rules" wouldn't apply.

 

[James105]

53 minutes ago, kennw said:

How can they tax savings because tax would have been previously paid when the savings were earned?

The problem is that many presume (as I do) that the onus of "proving" those savings have been taxed will be on the individual.   I just use a single personal UK bank account for example, and have funds in there that have and have not been taxed.   I have no idea how I could "prove" that one specific £ has been taxed versus one that has not been.   

 

My experience of dealing with Thai bureaucracy so far has been quite confounding and that is for simple tasks like buying a motor vehicle, extending my visa, changing address etc, so adding something as complex as tax into this mixture is quite a chilling prospect.

[Dogmatix]

3 hours ago, MartinBangkok said:

This might sound like a stupid thought/question, but since this new tax rule comes into effect 1st January, 2024 (only three months from now) could it be possible that they will demand tax returns from all of us already in 2024 and consequently that we have to pay tax under the new rules for all income for the year we are in: 2023?

It’s a reasonable question but no. Prior years foreign sourced earnings will only be assessable, if remitted from 1 Jan 2024 for which a tax return is required in 2024. The rule for tax returns is that you only have to file them, if you have assessable income over the tax free of 150,000 a year plus the standard taxpayer deduction. 
 

For 2021 only 3.3 million people filed tax returns and paid tax and the rest of the 71 million claimed by default to have income less than the threshold. Since they are effectively unable to tax their own people, you can see why the RD would feel it was a big win to rope a couple of hundred foreigners, who cannot complain or vote (other than with their feet) into their tax net. 
 

With all these Thaksinite popularist welfare schemes that will generate any sustainable growth and step up government debt what we are heading for as sure as God made little green apples is 10% VAT which is the mainstay Thailand’s tax collection with some help from import tax. Income tax is just a side show

Edited September 24, 2023 by Dogmatix

[blackshadow]

at what rate ???

[Mike Teavee]

14 hours ago, transam said:

Doesn't affect me, I leave every 90 days..........

But how long do you stay out of the country between visits? 

 

It's the total number of days in any 1 Calendar/Tax Year so if you did...

• 90 days in Thailand,
• 90 days out
• 90 Days in Thailand
• 90 days out
• 5 days (remainder of the year) in Thailand 

 

... You're Tax Resident. 

 

 

[transam]

1 minute ago, Mike Teavee said:

But how long do you stay out of the country between visits? 

 

It's the total number of days in any 1 Calendar/Tax Year so if you did...

• 90 days in Thailand,
• 90 days out
• 90 Days in Thailand
• 90 days out
• 5 days (remainder of the year) in Thailand 

 

... You're Tax Resident. 

 

 

You will have to show me the fine print on that...????

But in my case, I will not be looked at anyway....????

[Dogmatix]

4 minutes ago, James105 said:

The problem is that many presume (as I do) that the onus of "proving" those savings have been taxed will be on the individual.   I just use a single personal UK bank account for example, and have funds in there that have and have not been taxed.   I have no idea how I could "prove" that one specific £ has been taxed versus one that has not been.   

 

My experience of dealing with Thai bureaucracy so far has been quite confounding and that is for simple tasks like buying a motor vehicle, extending my visa, changing address etc, so adding something as complex as tax into this mixture is quite a chilling prospect.

It’s particularly disconcerting the way different offices and individual officials are allowed to interpret the law as they please or even just ignore it. We see this with Immigration, Customs, Land offices and District Offices regularly. No reason why RD should be different. Thailand is not a rule of law jurisdiction. It’s rule of incompetence and corruption.

[Mike Teavee]

8 minutes ago, transam said:

You will have to show me the fine print on that...????

But in my case, I will not be looked at anyway....????

It's not "Fine Print", it's been mentioned dozens of times on this thread already but if you Google "Tax Resident in Thailand" you'll find 100s/1000s of pages that all (well the correct ones anyway) state it is anybody who has spent 180+ days in Thailand in any one Tax/Calendar year... 

 

E.g. HSBC https://www.expat.hsbc.com/expat-explorer/expat-guides/thailand/tax-in-thailand/#:~:text=Residence status for tax purposes,more during a calendar year.

 

Residence status for tax purposes 

Individuals are considered resident if they reside in Thailand for a period or periods totaling 180 days or more during a calendar year. Income earned overseas by Thai residents is also subject to PIT if it is remitted to Thailand in the year it is earned.

 

 

 

The good news is that if their performance is anything like they've been so far with my Tax Return for last year, they'll only have the bandwidth to look at one person each... Bad news is that would probably be me ???? 

 

Edited September 24, 2023 by Mike Teavee

[transam]

Just now, Mike Teavee said:

It's not "Fine Print", it's been mentioned dozens of times on this thread already but if you Google "Tax Resident in Thailand" and you'll find 100s/100s of pages that all (well the correct ones anyway) state it is anybody who has spent 180+ days in Thailand in any one Tax/Calendar year... 

 

E.g. HSBC https://www.expat.hsbc.com/expat-explorer/expat-guides/thailand/tax-in-thailand/#:~:text=Residence status for tax purposes,more during a calendar year.

 

Residence status for tax purposes 

Individuals are considered resident if they reside in Thailand for a period or periods totaling 180 days or more during a calendar year. Income earned overseas by Thai residents is also subject to PIT if it is remitted to Thailand in the year it is earned.

 

 

 

Thank you, but as I said, it won't affect me.....????

[Hummin]

1 minute ago, transam said:

Thank you, but as I said, it won't affect me.....????

What visa do you have? Or just plain boarder crossing or a mix? 

[transam]

3 minutes ago, Hummin said:

What visa do you have? Or just plain boarder crossing or a mix? 

Not telling, that is my personal stuff, how about you........????

[JimTripper]

3 hours ago, MartinBangkok said:

This might sound like a stupid thought/question, but since this new tax rule comes into effect 1st January, 2024 (only three months from now) could it be possible that they will demand tax returns from all of us already in 2024 and consequently that we have to pay tax under the new rules for all income for the year we are in: 2023?

That would be ridiculous.

 

Personally, I am hesitant to do any type of tax return in a foreign country. It’s risky for my USA stuff and I don’t want to get audited in the USA. Would be a nightmare if I had to return to the states for an audit or had problems getting & sending  documentation back and forth. Staying under the radar is the way to go.

Edited September 24, 2023 by JimTripper

[Hummin]

1 minute ago, transam said:

Not telling, that is my personal stuff, how about you........????

Exemption, tourist visa, extension, fly out fly in, and now getting my third retirement. All depending on my work and travel.

 

I planned my renewal for future to be when Im for sure here, so from now retirement. 

 

 

[transam]

Just now, Hummin said:

Exemption, tourist visa, extension, fly out fly in, and now getting my third retirement. All depending on my work and travel.

 

I planned my renewal for future to be when Im for sure here, so from now retirement. 

 

 

Good for you...........????

[Hummin]

2 minutes ago, transam said:

Good for you...........????

Everything can change if they going to tax me for no benefits in return. 

 

Now I bring steady cash flow in for no cost at all, and have no rights which I accept for now. 

 

And thanks to the one who gave me the confused icon ???? You are an inspiration. 

[JimTripper]

I’m a man.

Edited September 24, 2023 by JimTripper

[Hummin]

1 minute ago, JimTripper said:

That icon means stupid, not confused.

Thank you for mentioning that, and as said earlier, small men who bother to use confused icons as it is, and call it stupid, have nothing to contribute with. Lazy bastards I would say with no honor. 

 

Do I care? Should I care? 

 

If you could be so nice to explain what you think was stupid to ask what his solution was?

 

To many different people on this board to care at all about a few nut heads. 

[Robin]

Taxing income from overseas, or capital transfers?  How is hat going to be sorted out?  

Say i put all my income into offshore bank account and transfer money from that once a year.  if income is taxed at source, do I pay tax again?

If money in overseas account is not income but capital, do I still pay tax?

Tax resident?  Say I spend 175 days a year in Thailand.  Not a tax resident?

175 days(nights) in UK; not a tax resident?

15 days holiday in Singapore/ Malaysia/ Vietnam?  Not a tax resident there?   

 

[JimTripper]

19 minutes ago, Hummin said:

Thank you for mentioning that, and as said earlier, small men who bother to use confused icons as it is, and call it stupid, have nothing to contribute with. Lazy bastards I would say with no honor. 

 

Do I care? Should I care? 

 

If you could be so nice to explain what you think was stupid to ask what his solution was?

 

To many different people on this board to care at all about a few nut heads. 

Sorry, I dunno. Wasn’t me who did it. ????????‍♂️

Edited September 24, 2023 by JimTripper

[jonny on the spot]

53 minutes ago, James105 said:

The problem is that many presume (as I do) that the onus of "proving" those savings have been taxed will be on the individual.   I just use a single personal UK bank account for example, and have funds in there that have and have not been taxed.   I have no idea how I could "prove" that one specific £ has been taxed versus one that has not been.   

 

My experience of dealing with Thai bureaucracy so far has been quite confounding and that is for simple tasks like buying a motor vehicle, extending my visa, changing address etc, so adding something as complex as tax into this mixture is quite a chilling prospect.

Well said.

[Mike Teavee]

18 minutes ago, Robin said:

Taxing income from overseas, or capital transfers?  How is hat going to be sorted out?  

Say i put all my income into offshore bank account and transfer money from that once a year.  if income is taxed at source, do I pay tax again?

If money in overseas account is not income but capital, do I still pay tax?

Tax resident?  Say I spend 175 days a year in Thailand.  Not a tax resident?

175 days(nights) in UK; not a tax resident?

15 days holiday in Singapore/ Malaysia/ Vietnam?  Not a tax resident there?   

 

As a UK Citizen, if you are not Tax Resident elsewhere, I believe the UK will treat you as Tax Resident in the UK for the purpose of any Tax Returns... 

 

 

That aside, UK Tax residency is not that as clear cut as number of days in-country, as a UK Citizen you can spend as little as 15 days in country & be Tax Resident... 

 

The automatic non-resident test

An individual will be non-resident for a tax year if they are present in the UK at midnight at the end of the day for less than a specified number of days in the tax year in question, as follows:

1. For an individual who was resident in the UK for one or more of the preceding three tax years the limit is 15 days or
2. For an individual who was resident in the UK for none of the preceding three tax years the limit is 45 days or
3. For an individual who works abroad ‘full-time’ throughout the tax year (broadly, 35 hours per week on average), without a significant break (more than 30 days, with exceptions for annual, sick or parenting leave), the limit 90 days. Such an individual must also have less than 31 days in the tax year on which he does more than three hours’ work in the UK.

Days of presence will be disregarded where an individual spends a day in the UK due to circumstances beyond their control or where it is a day spent in transit.

If none of the three tests above are met, the automatic resident tests must be considered.

 

The automatic resident test

An individual will be conclusively regarded as resident in the UK in a tax year if:

1. They are present in the UK for 183 days or more in that years or
2. They have a home in the UK for 91 consecutive days or more (where at least 30 days of that period fall within the tax year in question), are present there for some time on at least 30 days in the tax year, and during that 91 day period either have no home overseas, or have one or more such homes but are present for fewer than 30 days at each of those homes in the tax year or
3. They work full-time in the UK for a period of at least 365 days, all or part of which falls within the year, without a significant break. More than three quarters of the days in the 365 day period when they work for more than three hours must be days where they work in the UK.

Provided none of the automatic resident tests are satisfied, the sufficient ties test must then be considered.

 

The sufficient ties test

For individuals who want to spend more than 15 or 45 days a year in the UK and do not want to work full-time abroad, it is still possible to become non-resident. However, it will be necessary for them to substantially reduce both the amount of time they spend in the UK and the number of ‘ties’ they have with the UK.

The sufficient ties test combines the concept of UK ties with the number of days that the individual is present in the UK. There are many situational complexities to each of the five UK ties but, in outline, the ties are:

1. Family tie – the individual has a spouse, civil partner, unmarried partner or minor child resident in the UK. Children will not be taken into account if the individual sees the child in the UK on fewer than 61 days in the year or the child is only resident because they are in full-time education in the UK and they spend less than 21 days in the UK outside term time.
2. Accommodation tie – the individual has accommodation in the UK that is available to be used by them for a continuous period of at least 91 days in a tax year and they spend at least one night there in the year. If the accommodation is the home of a close relative the ‘one night’ test is extended to 16 nights. This tie does not require the individual to own the accommodation so holiday homes and even hotels may trigger this tie.
3. Work tie – the individual works in the UK for 40 or more days in a tax year, for at least three hours per day.
4. 90 day tie – the individual has been present in the UK for more than 90 days in either of the previous two tax years.
5. Country tie – the individual is present in the UK at midnight in the tax year as much as (or more than) they are present in any other single country. This tie applies to ‘leavers’ only (see below).

The more ties an individual has the less time they may spend in the UK if they wish to be regarded as non-resident. Please note that the table below only applies when the individual is a ‘leaver’ (an individual who was UK resident in one or more of the three previous tax years).

 

 

https://www.bdo.co.uk/en-gb/insights/tax/private-client/leaving-the-uk

 

Edited September 24, 2023 by Mike Teavee

[Hummin]

34 minutes ago, JimTripper said:

Sorry, I dunno. Wasn’t me who did it. ????????‍♂️

I dont think I pointed a finger at you either ????????

 

Just pointed a finger at small men with no honor 

 

 

[Aldo123]

On 9/18/2023 at 11:09 AM, NoDisplayName said:

Expats living on their savings and interest, not earning enough to pay tax in their home countries, may not find the relevant tax treaties to be relevant.

 

This is what I was wondering (about dual-tax treaties). For example, if you have savings income or an occupational pension income that is not sourced in either Thailand or your home country, but from a third-country, and you aren't paying any tax in your home country, can you just "refer" to the dual-taxation treaty with your home country? Or will they (Thai Revenue Dept) demand to see a tax return from your home country before letting you off the hook for Thai income tax? Aside from the US, most Western countries base their tax demands only on their nationals if they are 'residents' there. So many unknowns. But pity the farang pensioner here that is about to lose 15-25% of his small pension income. If he's living too close to the bone, he may need to leave. And if his only home was here (maybe bought a condo) then he's truly f'd? 

[BE88]

17 hours ago, GeorgeCross said:

well those who said it will curb investments in this country.. i can confirm, at least in my case, even the uncertainty will. 

 

after a long talk with my wife we've just shelved 2 property projects worth 15M baht until things are (much) clearer. i know its small beans to some but if we're doing this others are certainly considering it.

 

now looking at european property instead.

 

 

Agree, now we have no other choice.