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

[stat]

14 hours ago, redwood1 said:

What will be funny is when this whole stupid idea is droped...And all this speculation will be for nothing...

I side with you and the probability is like 90% they will drop it altogether and 99% they will postpone at least for a year. Nevertheless I will closely follow the development.

[stat]

6 hours ago, Happy happy said:

It is my understanding that those with a retirement visa and subject to a double taxation agreement will be unaffected by the new provisions. Even if monies are brought into a Thai Bank unless it exceeds 2 million baht in 1 year the banks in Thailand will not alert the Revenue Dept.

If of course you are currently filing tax returns here the situation may be different...

 

Interesting post! Can you elaborate pls on the 2 Million threshold, thanks!

[stat]

4 hours ago, RafPinto said:

What will suffer the most is the property market.

If you bring in your hard earned money and will be taxed here, many will think twice before buying anything here plus there are hundreds of new condo towers going up. Who is buying all those apartments?
The Chinese? Forget about. I read that they are selling everywhere their properties, US, Canada, Europe and Thailand.

The new PM, ex CEO of a real estate company will get soon some calls to relax.
Interesting times ahead.

To be honest I never understood why people bought condos here. You can never be sure that you will be allowed to take your money out of Thailand again. Granted the same applies to every country but TH strikes me as more risky then other countries, but this is just my opinion.

[stat]

14 minutes ago, Irrumator said:

Let's see what happens, they have a habit of making announcements then quietly dropping them when it becomes clear they are shooting themselves in the foot and it suddenly fades away into the ether.
Otherwise I will be well and truly fahcked as will many others, probably in the high thousands.
Bye bye Thailand, hello Vietnam.  

Vietnam taxes your capital gains as regular income, you would likely be much better off in Thailand even under the new directive.

[stat]

3 hours ago, Dogmatix said:

I feel that looking at gifts is a dead end, if the money doesn't come from already taxed income in Thailand. Anyway the limit is 20 mil for family members and 10 mil for others, not 100 mil, which is inheritance tax.

20 Mil per family member is still enough, if you do not want to buy a top end villa or condo. Can you name a source for the 20 Mil limit gift tax, much obliged!

[Misty]

1 hour ago, Dogmatix said:

You raise a good point.  The English version of Royal Decree 743 translates it as "in the previous tax year", presumably to match the translation of Section 41 of the Revenue Code.  The Thai is ในปีภาษีที่ล่วงมาแล้ว which is indeed exactly the same wording as the Thai version of Section 41. Literally it means "in tax year that passed already" which is a bit vague but, since Thai has no definite articles and the drafters would have been more specific, had they really meant "in any past tax years" it is obvious that parliament intended "in the previous tax year", as per the translated versions.  

 

I don't know if the RD has to issue another order saying its reinterpretation of ในปีภาษีที่ล่วงมาแล้ว also applies to Royal Decree 743 or whether that will be left to LTRs' and RD inspectors' imaginations.  But I think I now have to walk back my interpretation that the Royal Decree doesn't exempt past years, even though that was clearly the intent of the drafter who had no idea the RD would start taxing past years anyway. It would be hard even for the RD to apply two opposing interpretations to the same phrase in two related pieces of legislation just to collect more tax, although mental gymnastics of that type are not out of the question for Thai bureaucrats.

Text from an email from the BOI LTR Unit:

 

"Please be informed that normally, your overseas income will be subject to Thai personal income tax only when you are a tax resident (staying in Thailand 180 days or more in a tax year) and have brought such overseas income into Thailand in the same tax year that you are a tax resident and have received such overseas income. Please refer to Section 41 of the Revenue Code. If the aforementioned conditions aren’t all met, your overseas income won’t be subject to Thai personal income tax and you won’t need personal income tax exemption under Royal Decree No. 743.

If those conditions are all met and you have been granted a Long-Term Resident Visa for Wealthy Global Citizens, Wealthy Pensioners, or Work-from-Thailand Professionals, you will receive personal income tax exemption on your overseas income under such Royal Decree even if you have brought overseas income into Thailand in the same tax year.

Royal Decree No.427 Link (Thai): https://www.rd.go.th/fileadmin/user_upload/kormor/newlaw/dg427KA.pdf

Royal Decree No.743 Link (Thai):

https://www.rd.go.th/fileadmin/user_upload/kormor/newlaw/dc743.pdf"

 

 

[tomkenet]

9 minutes ago, stat said:

Vietnam taxes your capital gains as regular income, you would likely be much better off in Thailand even under the new directive.

Which retirement countries would be the best in your opinion?

[Happy happy]

53 minutes ago, stat said:

Interesting post! Can you elaborate pls on the 2 Million threshold, thanks!

Thailand Bank Reporting of Deposit Transactions - SHERRINGS

[moogradod]

46 minutes ago, tomkenet said:

Which retirement countries would be the best in your opinion?

Monaco maybe ? Or the Caymen Islands ? Depends on your financial reserves if tax is overly important. You may as well negotiate a tax deal with one of the Swiss Cantons (corresponds to the Thai Provinces, but they have own tax regimes). This is why so many real rich people live in the Canton of Zug where all the big Commodity Traders gather. The Cantons have very different views on this topic.

 

And if you can affort to have a nice villa on the Cote d' Azur you might as well have a house on the Caymans or in Geneva

Edited September 26, 2023 by moogradod

[Ricardo]

1 hour ago, moogradod said:

But I want to leave it like that, my stash of medicine has nearly run out, too.

 

Thank-you for your devotion to research, hopefully that was single-malt-whisky-medicine, and Good-Luck with the hangover !  ????

[aldriglikvid]

1) In the earlier reporting I read an article/screeenshot in some thread here, that Capital Gains & Dividends already taxed abroad in one of the countries with a DTA would be exempt from this new legislation. Is that still the case? I understand that all details are not out yet. 

2) How till this be enforced, in practice? Many of us, me at least, don't declare any tax in this country and thus don't carry a tax number. Will they simply put a % tax on all the international transfers into my Thai bank account? It seems like a big undertaking, operationally, for a short set of time. 

[jonny on the spot]

56 minutes ago, tomkenet said:

Which retirement countries would be the best in your opinion?

This Thailand was always best of the lot in south east Asia, in many ways probably still is, but this latest abortion is a game changer, even if you want to pay these people a bit of tax the rigmarole you gonna go through dont bear thinking about.

Maybe think about splitting you time between a couple of places, thats what i am going to do.

[K2938]

1 hour ago, Misty said:

"Please be informed that normally, your overseas income will be subject to Thai personal income tax only when you are a tax resident (staying in Thailand 180 days or more in a tax year) and have brought such overseas income into Thailand in the same tax year that you are a tax resident and have received such overseas income.

Thank you for posting this very useful email from the BOI.  May I ask if you received this email before or after the announcement of the new taxation of foreign remittances from Jan 1, 2024 onwards?  If it was after, then it seems rather weird that the BOI continues to claim that "normally, your overseas income will be subject to Thai personal income tax only when you... have brought such overseas income into Thailand in the same tax year that you... have received such overseas income" which obviously will not be the case any longer from Jan 1, 2024 onwards.

[Dogmatix]

1 hour ago, moogradod said:

As soon as a will is involved, the inheritance situation changes anyway. Do yourself a favour and spare worries and money for tranquilizers for the moment. Probably you will need them later.

 

I had to look into details of inheritance and tax before we moved here. You have little chance to filter out the truth by yourself. So I engaged a NUMBER of the most renown internationally operating consulting firms - and I BELIEVE that I got it right in the end - of course based on the existing rules at the time. From what I read here about any planned new future rules there must be more than a bug in it - some things are misinterpreted for sure. Cannot be otherwise. There are as well contradictions. But I want to leave it like that, my stash of medicine has nearly run out, too.

 

There probably are some future rules for inheritance tax because Srettha told the RD to propose ways of raking in more tax from it and from the Land and Buildings tax.  Inheritance tax was reintroduced by the junta government, saying it was a symbolic gesture not intended to raise much revenue but was clearly the thin end of the wedge. Gift tax usually goes together, so they will certainly review that at the same time. .

 

I might have to walk back what I said about gift tax not being a fruitful line of enquiry, at least under existing rules.  The exemptions do seem to apply to gifts between spouses and I can't see anything about the exemptions not applying to gifts from overseas. You can give 20 mil a year to your spouse for maintenance purposes and the same to your child.  But RD officials visit to see, if it looks like that much is being spent on maintenance in a poor Isaan village for example?  There seems very little written about gift tax and I can't even find the law in English or Thai.  I thought it was included in the Inheritance tax law but it is not.  

 

So perhaps you can make tax free gifts from offshore to your Thai spouse up to 20 mil a year tax free.  It probably has to stay with her thought.  If they see it was transferred to your account, they might it was not a gift but could she transfer it back to you as a gift some time later?  If she has an overseas account, the initial gifting could be done there and gifted back to you in Thailand. 

[Dogmatix]

If you have an offshore company with an overseas bank account, could it make a gift to you tax free up to 10 mil.  Probably not but it might be able to make a loan.  Would the RD check to see that you are paying interest with tax being withheld on the interest and repaying the principle?  And would they assess it as income, if it is not repaid within a certain time period.  I have made a number of offshore company loans to myself of relatively large amounts to buy property, so as to have the ability to remit out again, if necessary, without triggering any enquiries from the RD but under the old rules, they had no reason to take an interest. 

[jonny on the spot]

7 minutes ago, Dogmatix said:

There probably are some future rules for inheritance tax because Srettha told the RD to propose ways of raking in more tax from it and from the Land and Buildings tax.  Inheritance tax was reintroduced by the junta government, saying it was a symbolic gesture not intended to raise much revenue but was clearly the thin end of the wedge. Gift tax usually goes together, so they will certainly review that at the same time. .

 

I might have to walk back what I said about gift tax not being a fruitful line of enquiry, at least under existing rules.  The exemptions do seem to apply to gifts between spouses and I can't see anything about the exemptions not applying to gifts from overseas. You can give 20 mil a year to your spouse for maintenance purposes and the same to your child.  But RD officials visit to see, if it looks like that much is being spent on maintenance in a poor Isaan village for example?  There seems very little written about gift tax and I can't even find the law in English or Thai.  I thought it was included in the Inheritance tax law but it is not.  

 

So perhaps you can make tax free gifts from offshore to your Thai spouse up to 20 mil a year tax free.  It probably has to stay with her thought.  If they see it was transferred to your account, they might it was not a gift but could she transfer it back to you as a gift some time later?  If she has an overseas account, the initial gifting could be done there and gifted back to you in Thailand. 

Well that might be the way forward, for example i spend about 2.5 mil a year not including cars big purchases etc. But surely they will close that gap?

[JimTripper]

2 minutes ago, Dogmatix said:

If you have an offshore company with an overseas bank account, could it make a gift to you tax free up to 10 mil.  Probably not but it might be able to make a loan.  Would the RD check to see that you are paying interest with tax being withheld on the interest and repaying the principle?  And would they assess it as income, if it is not repaid within a certain time period.  I have made a number of offshore company loans to myself of relatively large amounts to buy property, so as to have the ability to remit out again, if necessary, without triggering any enquiries from the RD but under the old rules, they had no reason to take an interest. 

Seems like it would be easier to just move to Siem Reap ????

[jonny on the spot]

3 minutes ago, JimTripper said:

Seems like it would be easier to just move to Siem Reap ????

Yea or that, but im 58 i really dont want to have to  up camp unless i have to, plus i got a family who sure as <deleted> aint moving to Cambodia

[redwood1]

6 minutes ago, jonny on the spot said:

Yea or that, but im 58 i really dont want to have to  up camp unless i have to, plus i got a family who sure as <deleted> aint moving to Cambodia

Cambodia blows big time....I like Laos  much better....

[jonny on the spot]

7 minutes ago, redwood1 said:

Cambodia blows big time....I like Laos  much better....

Bad food but cheap beer ????

[vukovar77]

11 minutes ago, jonny on the spot said:

Bad food but cheap beer ????

Yeah,and nice women ,but very dangerous country (Phnom Phen,Siam Riep).So much poverty,robbery and pickpoketing.I was robbery victim as well in Phnom Phen.You need to take with You not more than 30-50USD in a in small denominations.Food is not tasty like here.Laos is nice and with good food,but visa policy is pretty much difficult.

Edited September 26, 2023 by vukovar77

[jonny on the spot]

3 minutes ago, vukovar77 said:

Yeah,and nice women ,but very dangerous country (Phnom Phen,Siam Riep).So much poverty,robbery and pickpoketing.I was robbery victim as well in Phnom Phen.You need to take with You not more than 30-50USD in a in small denominations.Food is not tasty like here.Laos is nice and with good food,but visa policy is pretty much difficult.

Im pretty much sold on Malaysia for my 6 months a year if this tax thing happens. I suppose its just a case of being careful, it can happen in London if you unlucky just as easy.

[tomkenet]

Malaysia sounds much better than Laos and Cambodia, but mm2h visa has become expensive. It might change I've heard. Do you know how overseas income (not taxed at source) is taxed in Malaysia.

[K2938]

33 minutes ago, jonny on the spot said:

Im pretty much sold on Malaysia for my 6 months a year if this tax thing happens. I suppose its just a case of being careful, it can happen in London if you unlucky just as easy.

The problem with Malaysia is that the conditions of their Second Home Visa are very onerous and expensive and if you go there for 6 months without a visa you will probably get into trouble even if you leave some time between the different stays.  Or what visa are you thinking about using for Malaysia?

[JimTripper]

Possible to do Cambodia half time and new Vietnam 90 day other half of the year?? I did not think cambodia and Vietnam were really “dangerous” but you need some street smarts and not be a total goofball.

 

i ruled out Malaysia, what was it you need a million or so, I don’t remember. Loas is too weird for me and would not be comfortable living there long term, although the people were friendly. Burma is out, don’t want to get shot in the head.

 

Theres also Guam, us citizens can stay forever, no visa. I just checked it, rents are high, about the same as the USA. Nice island, beaches and clean water.

Edited September 26, 2023 by JimTripper

[jonny on the spot]

15 minutes ago, tomkenet said:

Malaysia sounds much better than Laos and Cambodia, but mm2h visa has become expensive. It might change I've heard. Do you know how overseas income (not taxed at source) is taxed in Malaysia.

I havent even looked yet but im guessing if i am only there 6 months i am a visitor not a resident. But i gotta tell you property is good value there.

[jonny on the spot]

23 minutes ago, K2938 said:

The problem with Malaysia is that the conditions of their Second Home Visa are very onerous and expensive and if you go there for 6 months without a visa you will probably get into trouble even if you leave some time between the different stays.  Or what visa are you thinking about using for Malaysia?

As far as i can see if you have a condo RM 1.5 

mil and an income you are golden. I will obviously look into this properly if i have to.

Sorry for the edit

Dont forget property there is an investment, you aint actually throwing money away.

 

Edited September 26, 2023 by jonny on the spot

[JimTripper]

1 hour ago, vukovar77 said:

Yeah,and nice women ,but very dangerous country (Phnom Phen,Siam Riep).So much poverty,robbery and pickpoketing.I was robbery victim as well in Phnom Phen.You need to take with You not more than 30-50USD in a in small denominations.Food is not tasty like here.Laos is nice and with good food,but visa policy is pretty much difficult.

Can you give detail and exact location of the robbery? Was it a mugging?

[jonny on the spot]

4 minutes ago, JimTripper said:

Can you give detail and exact location of the robbery? Was it a mugging?

You asking did he get his moneys worth out of the malaysia police ????

[BE88]

20 hours ago, Dogmatix said:

Saw an old friend today who said he had been harassed by the RD a few years ago.  He was based in TH for years but worked offshore and had no Thai sourced income.  Then after he retired in Bkk he was employed for a couple of years by the Bkk office of an international firm as an advisor which landed him in the Thai tax net for the first time. After his contract expired he stopped filing income tax returns as his only income was a European pension already taxed at source.  So he assumed no assessable income, no more  tax returns.

 

Suddenly one day a delegation from the RD shows up unannounced at his house demanding that he file tax returns again and pay tax on his foreign sourced income. His Thai daughter dealt with them and they ended up agreeing that his pension was not assessable because it was already taxed at source in a DTA country.  The next year they showed up again with the same demands.  My friend is very irascible and was visibly upset with the RD officers since his his assessable tax situation was still the same as the previous year. Eventually his daughter gave the boss man 1,000 baht to go away and not come back.  So far they haven't.

Thank you for the information about this experience that many of us here believe will come.

It's a sword of Damocles that I want to avoid