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

[redwood1]

14 minutes ago, hwas said:

I received a follow up telephone call from BOI. I asked the specific question regarding transferring money earned from prior employment outside of Thailand and received the response that it would not be exempt

Does any country tax a retired person on spending their savings?...After they have already been taxed many times to get that savings?

 

Sorry this rubish is just not going to fly....

 

 

[scorecard]

On 9/19/2023 at 11:36 AM, Thaindrew said:

I have asked Thailand elite / privilege to clarify and will advise if they respond

Did they respond? Anything to share?

[ukrules]

4 minutes ago, scorecard said:

Did they respond? Anything to share?

I read elsewhere that having the TE visa makes zero difference to your tax residence status, why would it?

 

It was sold as being a way to stay in Thailand long term, one of the benefits of which coicidentally was the remittance timing thing where you don't pay tax on previous years income - but it relied on the same rules which have just been changed.

 

There is a long thread about Thailand on the 'OffshoreCorpTalk' forum which is elsewhere on the internet.

[redwood1]

9 minutes ago, ukrules said:

I read elsewhere that having the TE visa makes zero difference to your tax residence status, why would it?

 

It was sold as being a way to stay in Thailand long term, one of the benefits of which coicidentally was the remittance timing thing where you don't pay tax on previous years income - but it relied on the same rules which have just been changed.

 

 The decent thing to do would be to grandfather all the elites would it not?

 

OR

 

They could raise the price of the elites dramatically......And try and sell as many as possible before the announcement........lol

[Bvor]

On 9/18/2023 at 1:55 PM, ThaiFelix said:

the Australian Government, has taken my pension even though I have followed all the rules

Centrelink (sic) is just as bad as TIT so i ask you........ when was your age pension payment granted and when was it "taken" - have you considered appealling to the AAT who can and do overturn unreasonable Centrelink decisions.

my understanding is that only the supplementary component of approved age pension payments are "taken" after 6 weeks abroad as happens to me.

given Centrelink/ATO/TIT attitudes i intend to stay in TIT no longer then 180 days per year.

 

cheers 

ps - apologies if i have failed to see the forest for the trees. 

[ukrules]

42 minutes ago, redwood1 said:

 The decent thing to do would be to grandfather all the elites would it not?

 

OR

 

They could raise the price of the elites dramatically......And try and sell as many as possible before the announcement........lol

I think the point is - the previous year/years tax benefit which has often erroneously been referred to as 'the loophole' was never ay any point anything to do with the Thailand Elite visa.

 

The Thailand Elite visa is just a way to stay here permanently and take advantage of those tax rules.

 

Well the tax rules are apparently changing due to this proposal (we shall see on that) by a new previously non politician PM who's been in office for several weeks but it's certainly nothing to do with TE and I'll bet the folks over at TE were just as surprised and annoyed by this new proposal as the rest of us.

 

Lets face it - it will destroy their entire business model.

 

Oh yeah, my point - there's nothing to grandfather for TE as the tax thing was unrelated. It's like saying get a TE visa and take advantage of cheap 'insert cheap thing here' in Thailand - then the prices increase - nothing to do with TE.

 

[JackGats]

4 hours ago, K2938 said:

Thank you for posting this.  So if I read this correctly, this would unfortunately mean that the tax exemption under the LTR visa - if even this is maintained - is really of the minimal possible amount as it ONLY covers income earned while holding the LTR visa.  So if you now get a LTR visa and then transfer let's say 250k USD from your foreign savings to Thailand to buy some real estate or fund your general living expenses, then this will NOT be exempted as these 250k USD are NOT income only received AFTER holding a LTR visa.

In other words if you get paid a pension of say 8k dollars a months as from January 2024, under the LTR you're allowed to remit 8k x 12 dollars worth taxfree in 2024.

[Felt 35]

On 9/26/2023 at 11:25 AM, 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.

Hmm????...well, I'm planning to buy a new (used) car so was just thinking about transfer to the better half before New year, to me, no I will be taxed and Rd, will see that next year on the bank statement I provide annually when paying tax for this year.

Felt

[stat]

On 9/26/2023 at 10:17 AM, tomkenet said:

Which retirement countries would be the best in your opinion?

Thailand (up to 2023), Philippines, Malaysia,Costa Rica etc all countries with a territorial tax system.

[stat]

5 hours ago, K2938 said:

Thank you for posting this.  So if I read this correctly, this would unfortunately mean that the tax exemption under the LTR visa - if even this is maintained - is really of the minimal possible amount as it ONLY covers income earned while holding the LTR visa.  So if you now get a LTR visa and then transfer let's say 250k USD from your foreign savings to Thailand to buy some real estate or fund your general living expenses, then this will NOT be exempted as these 250k USD are NOT income only received AFTER holding a LTR visa.

Great post pointing out a vital difference!

[stat]

21 hours ago, Puccini said:

The Revenue Department Order 161/2566 is not a new law.

 

The Revenue Department Order 161/2566 does not declare any other law null and void.

 

The Revenue Department Order 161/2566 is a guideline for officials of the Revenue Department to apply and implement Section 40 of the revenue Code correctly.

 

Article 2: In line with the issuance of this order, all existing rules, regulations, orders, responses to inquiries, or any practices that contradict or oppose the provisions laid out in Order No. 16/2023 shall be void.

 

This directive represents a significant change in the tax obligations of residents in Thailand who earn income abroad or possess overseas assets. Affected individuals are now required to ensure that their foreign earnings are accurately reported and appropriately taxed in accordance with Thai tax laws. The order aims to enhance transparency and compliance with tax regulations among residents in Thailand who engage in international economic activities.

 

https://franklegaltax.com/thailands-new-tax-rules-reporting-foreign-income-for-residents/?lang=de

 

Thanks for validly pointing out that the order is not a law. However it does not change much IMHO (with the possible exception of the LTR visa) if it is a law or a directive.  The end result could be that you are getting taxed on your remittance if this directive holds.

[Dogmatix]

5 hours ago, RupertIII said:

Can anyone confirm that the 190k tax exemption for those aged 65+ is in addition to the 60k personal allowance or is it instead of? Thanks.

Yes. I have claimed the 190K in addition to the 60k.  No problem.

[pluto_manibo]

18 minutes ago, stat said:

Thailand (up to 2023), Philippines, Malaysia,Costa Rica etc all countries with a territorial tax system.

List of Foreign source income tax free country for Expat

Angola
Anguilla
Belize
Bermuda
Bhutan
Bolivia
Botswana
British Virgin Islands
Costa Rica
Democratic Republic of the Congo
Djibouti
Eswatini
Georgia
Guatemala
Guinea-Bissau
Hong Kong
Lebanon
Libya
Macau
Malawi
Malaysia
Marshall Islands
Micronesia
Namibia
Nauru
Nicaragua
Palau
Palestine
Panama
Paraguay
Saint Helena,
Seychelles
Singapore
Somalia
Syria
Tokelau
Tuvalu
Zambia

[stat]

2 minutes ago, pluto_manibo said:

List of Foreign source income tax free country for Expat

Angola
Anguilla
Belize
Bermuda
Bhutan
Bolivia
Botswana
British Virgin Islands
Costa Rica
Democratic Republic of the Congo
Djibouti
Eswatini
Georgia
Guatemala
Guinea-Bissau
Hong Kong
Lebanon
Libya
Macau
Malawi
Malaysia
Marshall Islands
Micronesia
Namibia
Nauru
Nicaragua
Palau
Palestine
Panama
Paraguay
Saint Helena,
Seychelles
Singapore
Somalia
Syria
Tokelau
Tuvalu
Zambia

https://en.wikipedia.org/wiki/International_taxation

[Dogmatix]

2 hours ago, hwas said:

I received a follow up telephone call from BOI. I asked the specific question regarding transferring money earned from prior employment outside of Thailand and received the response that it would not be exempt

Thanks for the clarification, So the LTR visa will not allow someone to come and transfer their nest egg here to buy property and car etc, unless they earn all that after getting the LTR visa, which is unlikely to retirees. It could be that LTRs will be subject to less scrutiny than others due to the Royal Decree but the RD got nasty on seeing a large remittance coming through to a foreigner, whom they might not know at first had an LTR visa,  If they demanded evidence it was earned after getting the visa, it might be all over.  Move back home and forget about the LTR visa and Thailand before being assessed for back tax, interest and penalties. This now has the look of being the reverse of the previous policy that taxed income in the prior year only left alone savings from before that. How ironic.

[Dogmatix]

Perhaps the BOI should add this gem to the LTR website. Bring in your past savings to buy a condo and car and other stuff and you will be subjected to an attractive remittance tax rate of only 35%.  This will make them really competitive compared to Malaysia My Second Home and the the Philippines.  The Malaysian scheme is much more expensive but lets you import your own car (I think it still does) and buy residential land.  I think you can import your own maid too, if a married couple, or presumably a male butler, if single male.

 

Of course you can still make sure you don't become tax resident in the tax year you bring in your nest egg.  But that applies to all retirees with no special benefits for LTR visas.  Some may not understand the Catch 22 of the tax exemption and bring everything in their first tax year and stay over 180 days. They could find out when RD officials with outstretched hands arrive at their sea view condo or infinity pool villa. Others may come and spend some time renting before they decide to buy and find it is already too late as they have become tax resident and would need to leave the country for an extended period to shake that off.

[K2938]

1 hour ago, ukrules said:

I think the point is - the previous year/years tax benefit which has often erroneously been referred to as 'the loophole' was never ay any point anything to do with the Thailand Elite visa.

 

The Thailand Elite visa is just a way to stay here permanently and take advantage of those tax rules.

 

Well the tax rules are apparently changing due to this proposal (we shall see on that) by a new previously non politician PM who's been in office for several weeks but it's certainly nothing to do with TE and I'll bet the folks over at TE were just as surprised and annoyed by this new proposal as the rest of us.

 

Lets face it - it will destroy their entire business model.

 

Oh yeah, my point - there's nothing to grandfather for TE as the tax thing was unrelated. It's like saying get a TE visa and take advantage of cheap 'insert cheap thing here' in Thailand - then the prices increase - nothing to do with TE.

Indeed.  But there is a strong incentive for the authorities to work out some sort of special exemption for the TE visa because otherwise the number of further TE visas sold will most likely totally collapse as many people justified the high TE visa fees by the tax advantages.  And since the Thai government makes big money from selling TE visas, they have an incentive to work out some sort of special exemption to keep this money flowing.  But strong incentive does not mean it will necessarily happen, so we will see what the future brings.

[redwood1]

35 minutes ago, Dogmatix said:

Perhaps the BOI should add this gem to the LTR website. Bring in your past savings to buy a condo and car and other stuff and you will be subjected to an attractive remittance tax rate of only 35%.  This will make them really competitive compared to Malaysia My Second Home and the the Philippines.  The Malaysian scheme is much more expensive but lets you import your own car (I think it still does) and buy residential land.  I think you can import your own maid too, if a married couple, or presumably a male butler, if single male.

 

Of course you can still make sure you don't become tax resident in the tax year you bring in your nest egg.  But that applies to all retirees with no special benefits for LTR visas.  Some may not understand the Catch 22 of the tax exemption and bring everything in their first tax year and stay over 180 days. They could find out when RD officials with outstretched hands arrive at their sea view condo or infinity pool villa. Others may come and spend some time renting before they decide to buy and find it is already too late as they have become tax resident and would need to leave the country for an extended period to shake that off.

 

I got to give you credit for having a very good understanding of all the little details of this tax mess......I personally think the whole mess belongs in the garbage.......But I have learned much from your posts.....

[ukrules]

42 minutes ago, Dogmatix said:

Some may not understand the Catch 22 of the tax exemption and bring everything in their first tax year and stay over 180 days. They could find out when RD officials with outstretched hands arrive at their sea view condo or infinity pool villa. Others may come and spend some time renting before they decide to buy and find it is already too late as they have become tax resident and would need to leave the country for an extended period to shake that off.

Exactly - depending on how it's implemented there should be massive warnings that nobody should ever retire to Thailand and remit funds before at least July 10 for this reason.

 

This includes those depositing 800k.

 

[MistyBlue]

6 hours ago, K2938 said:

So if you now get a LTR visa and then transfer let's say 250k USD from your foreign savings to Thailand to buy some real estate or fund your general living expenses, then this will NOT be exempted as these 250k USD are NOT income only received AFTER holding a LTR visa.

But isn't that only if you derive the full 250k (the income/profit etc. that was made excluding initial capital) in the assessable year.  You would have to be a tax resident in the assessable year the income was made for it to taxable, it would only be tax on the profit/income made during that assessable year.  The tax would then only be paid in the year it is actually remitted.

[RafPinto]

If they really go back 1 or 2 tax years, that would be a very dirty game.
Isn't it law that said that money earned but not brought in the same tax year is tax free in Thailand.

How could they suddenly say that money earned years ago is suddenly taxable here.
I know a few people who bought last year and this year properties worth between 6 and 20 million Baht plus a lot of new cars. If they suddenly want 35% of this money, sent and invested in Thailand, then goodbye Thailand.

If now from 01/01/24, the new tax year 24/25 starts and in 2025 they want a piece of the cake, we can at least plan.
 

In regards of Malaysia, yes, it's much more money but from the 2nd year, you can withdraw 50% of the money you had to pay if it is for education, health or buying a property.
You can buy land and build a house on it plus you can bring in your own car.

That's a massive plus compared with Thailand.
Penang get's more attractive by the day.

[MistyBlue]

3 hours ago, hwas said:

I received a follow up telephone call from BOI. I asked the specific question regarding transferring money earned from prior employment outside of Thailand and received the response that it would not be exempt

Yes but only if you derived/made that money in an assessable year whilst you were a tax resident of Thailand.

[RafPinto]

They should go after all those working for the government. Police, military, land office etc.
From top to the bottom. Their salary are rarely over 70k Baht (a very high salary if working for the government). Check all their bank details for the past 10 years. Check where they live, how expensive property and cars were. This surely doesn't match their salaries.

 

But easier and better to sell, chasing Farangs.

[MartinL]

7 hours ago, RupertIII said:

Can anyone confirm that the 190k tax exemption for those aged 65+ is in addition to the 60k personal allowance or is it instead of? Thanks.

 

1 hour ago, Dogmatix said:

Yes. I have claimed the 190K in addition to the 60k.  No problem.

Confirmed on pages 6 & 7 of this booklet:-

 

https://www.pwc.com/th/en/tax/assets/thai-tax/thai-tax-2022-23-booklet.pdf

 

although I read elsewhere - can't find it now - that this is for income from employment after 65 only.

 

A number of people here say or imply that all transfers from overseas will be taxed at 35%. On what basis is this claim made? Too many pages here to read the lot and find out so I might have misunderstood. No graduated taxation for incoming foreign transfers?

 

 

[K2938]

24 minutes ago, MistyBlue said:

But isn't that only if you derive the full 250k (the income/profit etc. that was made excluding initial capital) in the assessable year.  You would have to be a tax resident in the assessable year the income was made for it to taxable, it would only be tax on the profit/income made during that assessable year.  The tax would then only be paid in the year it is actually remitted.

@MistyBlue, I happily admit that I cannot guarantee you the validity of my answer at this point of time where many things are still in flux.  I can only say how I would interpret what the BOI has said.  And this is now moreover not only my evil suspicion, but has also been confirmed by @hwas post above about his conversation with the BOI:

 

 

So based on what we know today I would answer your question with a clear no.

As it would appear that the authorities have not really thought through all this and as this would greatly decimate the number of wealthy foreigners living in Thailand and bringing in money which is something the authorities should be interested in (read: LTR and Elite visa holders), things might change again in the future.  But right now my best guess to the answer to your question unfortunately would be a very clear no.

[JimGant]

3 hours ago, hwas said:

So if you now get a LTR visa and then transfer let's say 250k USD from your foreign savings to Thailand to buy some real estate or fund your general living expenses, then this will NOT be exempted as these 250k USD are NOT income only received AFTER holding a LTR visa.

Oh, come on. You think all cash flow into Thailand will be looked at as taxable income? First and foremost, this would kill foreign direct investment by individuals -- and FDI is a major item in a strong economy. And guess who rides herd on FDI? Why, no other than BoI. So, their new golden boy on the street -- the LTR visa -- isn't going to be torpedoed, as long as BoI maintains its substantial horsepower.

 

But forget just LTR visas. Remember, one of the "get out of jail free" cards was having a DTA between your home country and Thailand -- and there are 61 of those. But the kicker is that you have to pay taxes (they don't say what kind) to your home country. I would presume such taxes would be income taxes against income taxable by both Thailand and your home country. For Yanks, you're home free with this, as you're already paying Uncle Sam taxes on your worldwide income. For Europeans not paying tax to anyone -- well, you may now become part of what the OECD wants, namely, everyone paying taxes to someone.

 

But back to FDI: Thailand is NOT going impede cash flow into Thailand for investment, by branding all wire transfers, and similar, as "taxable income." That would be ludicrous. And for Yanks, they'll probably just leave us alone. For Europeans, well, maybe a peak at their tax returns -- or maybe not. But don't expect too much until CRS and FATCA reporting are more mature -- and Thailand can finally have a clear look at income that should be, but has not, been reported. And somewhere down the road, the stupid "remitted" requirement for delineating income will be cancelled -- and Thailand can join the rest of the world on how to tax foreign income.

 

Anyway, if you're about to transfer 250k USD to buy some real estate, and this is easily identifiable as from after-tax entities in your transfer account (or probably even not ---), have at it, as Thailand is not going to shoot themselves in both feet by screwing around with your transfer, as regards FDI. 

 

 

[MistyBlue]

32 minutes ago, K2938 said:

So based on what we know today I would answer your question with a clear no.

I inadvertently phrased my response as a question rather than a statement, apologies I wasn't asking a question.

 

I disagree with your interpretation.  Thailand does not have a remittance tax.  It has a tax on income that is earned in an assessable year whilst a tax resident, which is then payable when that income is remitted to Thailand (this is not the same as a remittance tax and may not actually end up being payable depending on the tax treaties).   This seems consistent to me with the BOI responses being quoted, I just think you're interpreting the responses incorrectly.

 

Time will tell...

 

 

[MistyBlue]

21 minutes ago, JimGant said:

Anyway, if you're about to transfer 250k USD to buy some real estate, and this is easily identifiable as from after-tax entities in your transfer account (or probably even not ---), have at it, as Thailand is not going to shoot themselves in both feet by screwing around with your transfer, as regards FDI. 

Exactly this.  There is nothing in the tax code to say they tax capital remittance.  Only income/gains during an assessable year is taxable.

[stat]

To put the importance of the LTR Visa for Thailand in perspective.

 

A programme by the last government which targeted one million high-spending foreigners coming to live in Thailand over 5 years by offering long-term visas to the ultra wealthy and high earners was launched in 2022.

Figures released this March show that it only drew a limited response with 2,920 applicants including 195 high-net-worth individuals, 1,011 foreign retirees with a level of assets and income, 771 working executives who moved to Thailand and 943 individuals who qualified through having specialist skills or sponsored employment in Thailand.

 

https://www.thaiexaminer.com/thai-news-foreigners/2023/09/25/calls-for-clarification-of-new-regime-income-tax-foreigners-overseas-income/

[Yumthai]

4 hours ago, JackGats said:

In other words if you get paid a pension of say 8k dollars a months as from January 2024, under the LTR you're allowed to remit 8k x 12 dollars worth taxfree in 2024.

Easy workaround with savings earned prior getting LTR Visa:

If you want to transfer $100K to Thailand, just buy an S&P500 ETF for $100K, then sell your shares right away or any time you need it (with good timing you could even realize some capital gain).

You then have proof of the ETF sale and can transfer sale proceed tax free the same year in Thailand.

If you worry about volatility just select a less volatile ETF/Stock of your choice or any other asset.