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

[V8M8]

On 9/18/2023 at 3:14 PM, ezzra said:

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

<deleted>. It will never happen so stop trying to create panic. This government, that government, whoever, have never had any control on taxation, in or out of the country. Sharpen your wits before making such consprational coments

[david555]

13 minutes ago, V8M8 said:

<deleted>. It will never happen so stop trying to create panic. This government, that government, whoever, have never had any control on taxation, in or out of the country. Sharpen your wits before making such consprational coments

"It will never happen so stop trying to create panic. "

 

That works only on those who are vulnerable to panic .... mostly those who could be serious targeted because .....their  many fiscal avoiding circumstances would / could  be stopped  ☺️

Edited September 29, 2023 by david555

[stat]

On 9/28/2023 at 12:17 PM, StayinThailand2much said:

We will only know for sure once a forum member transfers a larger sum to a Thailand bank in 2024...

I think the problem could show much much later like mid 2025 when your tax report is overedue but you did not hand in one...

[stat]

On 9/28/2023 at 1:14 PM, Somjot said:

This will probably be the least popular post in the whole thread and yet I have to get it off my chest:

 

It goes to all those “I'm not going to pay a single Satang of tax in this country” – guys.

How do you justify that?

 

Let's not discuss about corrupt politicians; they are there and we're not going to change that.

 

But think about schools or government universities. Somebody has to pay for that.

 

What about law enforcement? Yeah, I know, they're all very corrupt and bad, blah blah, but every time a foreigner is robbed by some Thai, the local police get that guy in less than 24 hours. Can't say the same thing about our law enforcement. If you should ever need them, you will be more than happy that they are there.

 

Or the justice system. Again, yeah, I know that old saying “If you need a lawyer in Thailand, you have lost already.” And yet you will be glad, in case you need it.

 

What about government hospitals. Many of you might have a high-class health insurance, but trust me when I say, most Farangs I met in Thailand do not have a health insurance at all.

 

That together with a small budget and the day will come when their life might depend on the existence of those government hospitals.

 

And even if you belong to that lucky group of people with a first-class health insurance.

What about the love of your life you met last month? Does she have one?

 

Paying her bills in a private hospital will make your holiday funds shrink faster than a snowman in the desert and I don't even want to start about that Buffalo, that seems to only get sick, when the lady has a new boyfriend.

 

And if all that doesn't bother you, my last point will:

 

Infrastructure!

 

Some of you might still remember the adventurous drive from Don Muang airport to Pattaya when there were no highways or motorways.

 

We're using their streets every day.

 

What makes you think, any of this should be free of charge for you and there is no reason to support this at least a little bit?

You do realize that the motorway to Pattaya is a toll motorway and so no tax money is involved? Not to mention that there was a long dispute between the German construction company and at first the Thais did not pay up and only did after they lost their case in a court.

 

https://www.pattayamail.com/thailandnews/german-court-rules-royal-jet-doesnt-belong-to-thai-government-thai-foreign-ministry-4913

 

I agree taxes are necessary but again you pay (a lot of) VAT taxes and very high import taxes on a lot stuff us expats use+ Visa costs+ 10 times entrance fee at national parks etc

 

[stat]

There seems to be some confussion in this thread about how much of a remitance is taxable. It is my understanding that ONLY gains are taxed. So if I have a separate account with 40K USD in it end of 2023 NO income tax should arise if I transfer to Thailand. I am only liable for the interest on these 40K when I transmit. The main point beeing it should be an account that is filled end of 2023 and only movement of funds is to Thailand to prevent any mixture of funds.

 

My other preferred option is to simply state that I have transmitted only very limited funds to Thailand like 10K Baht a months and withdraw the rest with cc from brother, sister, etc.

[Mike Teavee]

2 minutes ago, stat said:

There seems to be some confussion in this thread about how much of a remitance is taxable. It is my understanding that ONLY gains are taxed. So if I have a separate account with 40K USD in it end of 2023 NO income tax should arise if I transfer to Thailand.

It depends on where the 40K came from, if it came from income, dividends, capital gains etc from previous years then DTAs aside they seem to be saying you could be liable for tax on it. 
 

I used the example where I got £100K “Pension” handed back to me when I changed jobs in Singapore, transferred this money to the UK & invested it in shares to give me some income now I’m retired (without a pension for another 2.3 years)… No tax has been paid on the principle (Employer made all the contributions) so technically if I sold the shares & remitted the money to Thailand it looks like I could be liable for tax on all of it. 

[Puccini]

4 hours ago, Happy happy said:

Question:

What monies brought into Thailand by a tax resident living here in Thailand is NOT subject to Thai tax?

All money that is not assessable income, ie income that is not assessable in Thailand fot the calculation of income tax.

 

Check the DTA between Thailand and your country for for details about what income is taxable in which country.

Edited September 29, 2023 by Puccini

[Puccini]

1 hour ago, redwood1 said:

There is already about a 1% tax at ATMs with a 20,000 baht withdrawal.

Interesting. Are you sure about that?

 

Edited September 29, 2023 by Puccini

[Pib]

1 hour ago, redwood1 said:

There is already about a 1% tax at ATMs with a 20,000 baht withdrawal.

There is no tax!   Now there is a Bt220 Thai bank fee for use of a foreign card....and depending on your card-issuing bank they usually charge a 1 to 3% foreign transaction fee.   But no tax.  

[redwood1]

1 minute ago, Pib said:

There is no tax!   Now there is a Bt220 Thai bank fee for use of a foreign card....and depending on your card-issuing bank they usually charge a 1 to 3% foreign transaction fee.   But no tax.  

Well the 220 baht banking fee is just like a tax....

[Pib]

6 minutes ago, redwood1 said:

Well the 220 baht banking fee is just like a tax....

But it's not a tax....it just another ATM fee. 

 

In most any country they have various ATM fees...even when you are in your home country and use an ATM that is on a different network than your bank's network.  Banks love ATM fees....it's pure profit for them.

[TravelerEastWest]

On 9/19/2023 at 1:49 PM, Yumthai said:

Those happily married to a Thai national can transfer (in this case from abroad) to their spouse up to THB 20 million in value per calendar year tax free as a gift.

Very interesting...

[ukrules]

19 minutes ago, TravelerEastWest said:

Very interesting...

Right, I wouldn't try that with untaxed money at all.

[StayinThailand2much]

1 hour ago, stat said:

I think the problem could show much much later like mid 2025 when your tax report is overedue but you did not hand in one...

So, you think all expats will have to send in a tax report from next year on, whether or not they have any income in Thailand or abroad?

Edited September 29, 2023 by StayinThailand2much

[TroubleandGrumpy]

4 hours ago, Ben Zioner said:

AFAIC we know one thing: it will start on January 1, 2024. So until then money earned before December 2022 and transferred in 2023 isn't taxable. So plan ahead.

Also BOI interpretation is now that income earned abroad by LTR visa holders is not taxable  for the duration of the visa. i.e money earned before and after is.

We should read carefully the Thailand Revenue Code, and maybe discuss it with a tax agent, to assess the risks of doing or not doing certain things. (cash transfers, splitting income with your wife, etc..).

It starts 1 Jan 2024 - yes so money transferred after that is the issue.

BOI are not the PM or RD.

I have (both) and the tax expert does not know - needs more details on how they will implement this change.

 

[Ben Zioner]

3 minutes ago, TroubleandGrumpy said:

BOI are not the PM or RD.

BOI were quoting the RD.  For what it is worth.

[Yumthai]

1 hour ago, ukrules said:

Right, I wouldn't try that with untaxed money at all.

When we will see Thai Authority start taxing effectively all the money transferred via every payment channels to Thai nationals from their sponsors/relatives abroad, and that's a significant amount of cash, we can reasonably begin to worry... not before.

[K2938]

7 hours ago, redwood1 said:

Lets say you have 500,000 dollars you saved in a foreign bank. And you saved a little each year, over lets say 15-20-25 years..

 

How do you prove that each years deposit was taxed?  Well unless your a CPA superman......You will not be able to prove it....

 

This whole tax plan is like a ship that has sunk before it even got out of dry dock...

That is the whole intention of it????  Technically called contaminated/commingeled/mixed funds.  And if you cannot prove what is what which you most likely will not, then all gets taxed.  At least that is how it works in some other jurisdictions I am familiar with.

Edited September 29, 2023 by K2938

[stat]

3 hours ago, Mike Teavee said:

It depends on where the 40K came from, if it came from income, dividends, capital gains etc from previous years then DTAs aside they seem to be saying you could be liable for tax on it. 
 

I used the example where I got £100K “Pension” handed back to me when I changed jobs in Singapore, transferred this money to the UK & invested it in shares to give me some income now I’m retired (without a pension for another 2.3 years)… No tax has been paid on the principle (Employer made all the contributions) so technically if I sold the shares & remitted the money to Thailand it looks like I could be liable for tax on all of it. 

To my understanding all the money I have as principal i.e. cash is covered by DTA as it is existing and all gains have been realized before entering Thailand and so has been taxed in my home country (cash). Different scenario is if I have the money invested in stocks then I am liable to pay income tax on my profit from these holdings. Of course they can demand some nonsense proof which I cannot deliver but in my opinion this should be a safe route.

[K2938]

5 hours ago, Ben Zioner said:

Yes, and my gut makes me think  that  once they've explored all ramifications of their initiative they could  come up  with a two percent tax on all remittance and cash foreign card cash withdrawals with some tourists queueing at Suvarnabhumi to get their refunds...

Why only 2% if the marginal income tax rates in Thailand for many wealthy people are much higher.  2% would be a gift which will not happen

[stat]

6 hours ago, redwood1 said:

Lets say you have 500,000 dollars you saved in a foreign bank. And you saved a little each year, over lets say 15-20-25 years..

 

How do you prove that each years deposit was taxed?  Well unless your a CPA superman......You will not be able to prove it....

 

This whole tax plan is like a ship that has sunk before it even got out of dry dock...

Before you move to Thailand or before 2024 you transfer  a cash amount to a new account. Money in this account has been taxed as you lived in the jurisdiction of an DTA country. All cash balances have been taxed in your DTA jurisdiction. Again if they want to they can demand endless notarized proof of some nonsense that no one can deliver but this sceems to me the way to go forward in setting up isolated accounts with enough money for your stay. If you want to stay for several years this will be tricky and costly (opportunity costs etc).

Edited September 29, 2023 by stat

[Somjot]

4 hours ago, stat said:

You do realize that the motorway to Pattaya is a toll motorway and so no tax money is involved? Not to mention that there was a long dispute between the German construction company and at first the Thais did not pay up and only did after they lost their case in a court.

 

https://www.pattayamail.com/thailandnews/german-court-rules-royal-jet-doesnt-belong-to-thai-government-thai-foreign-ministry-4913

 

I agree taxes are necessary but again you pay (a lot of) VAT taxes and very high import taxes on a lot stuff us expats use+ Visa costs+ 10 times entrance fee at national parks etc

 

I was not trying to patronize anybody; I was just curious how are the members think about this matter.

 

Nobody wants to pay tax, yet it is necessary.

 

The points you mentioned are partially not quite correct:

 

Some of the motorways were financed by the Transport Ministry and some by the Highways Department but none of them primarily by toll as that money must be collected after those roads are finished and that takes many years.

 

I remember that case mentioned in your link very well, as the person, who owned the seized aircraft had to fly with a regular plane a few days later in which I coincidentally had booked a seat as well - that was a very interesting flight.

 

The German company was Wagner Bau and they had built the motorway to Don Muang. However, the Thai government refused to pay them, despite they lost that case in court, which finally led to the bankruptcy of that company.

The insolvency administrator in charge could have seized any plane of Thai Airways, but somehow, he thought it might be a good idea to seize that special one, so the whole story will not end up as marginalia in the newspapers and will make it to the headlines.

 

The VAT you mentioned is only 7%, so I would not call it “a lot of”.

 

The import tax on western food is very high, not to mention the expensive process to get the Thai FDA approval.

 

If you have ever asked yourself, why your favorite jam can be bought in Thailand but only a few sorts, the reason is they must go through that expensive approval process from the Thai FDA for every single flavor variety.

 

Nevertheless, it entirely depends on us if we buy the expensive imported stuff or not. It's not a necessity.

 

The renewal of the retirement visa costs only 1900, - Baht.

 

Compared to the millions of Baht of unpaid hospital bills from foreigners, this is not much.

 

The good news is no matter if we must pay double, triple or 100 times more entrance fee for National Parks, once you are a tax resident you pay the same fee as Thai people.

 

I'm living and working here for quite some time, and I pay taxes on my income; never had a problem with it.

 

What concerns me, is that I don’t want to pay tax twice.

 

I have some property in Germany, which I rent out and for which I must pay 30% ++ tax from the first Euro on, no special expenses or tax-free amount allowed, because I'm living in Thailand.

 

If I should retire one day and send this money to my Thai bank account for my living expenses and Thailand wants me to pay taxes for it again, then I'm out.

 

Anyway, I will tell you one perfect argument, why none of us should pay any taxes here - ever.

 

In order to get my work permit I had to go through a few exams, some of them taking place in the Chulalongkorn university in Bangkok.

 

The professors there were very nice and friendly and, on an evening out with them after, let's say not only a few glasses of beer, one of them told me an interesting story:

 

Some Ministry had asked for a comparative study. They wanted to know which factor had the greatest impact on the development of the rural region in Issan, the Thai government projects, the Thai NGO projects, or the money sent by foreigners to their Thai girlfriends or wives.

 

“And?” I asked “what was the result?”

 

“We were never allowed to publish it.” He answered.

 

“Why?”

 

“It was devastating” he said with a serious face, then he took a big sip and finished “Devastating for us.”

 

[Dogmatix]

Here's the first rebuttal (in Thai in Pdf file attached). l have seen from a Thai legal expert, Prof Kitipong Urapeepatanapong, who is or was chairman of Baker McKenzie and many other things. Here is a resume from 2019 https://www.psh.co.th/storage/content/about-us/management-structure/board/2021/kitipong.pdf.  I will summarize the salient points of Prof Kittipong's article.

 

Kittipong argues that the RD order is only a directive to RD staff and doesn't have the force of law.  So RD staff are ordered to tell taxpayers about the new distorted interpretation but taxpayers should follow the established tax law and ignore them. The RD doesn't have the power to reinterpret the law which has stood without challenge for 38 years.  If there is to a be a reinterpretation, this should be the role of the Tax Court.  

 

He says the reinterpretation flies in the face of established tax law principles which require that, if a law is unclear and has two possible meanings, it should be interpreted in the way that is more favorable to taxpayers.  He states that, if the government insists on changing the law, the correct way would be to amend it through a Royal Decree or an Act of Parliament. In this respect he urges a complete overhaul of the Revenue Code through parliament along principles similar to Singapore which incentivize taxpayers to pay tax by making laws fair and easy to comply with without excessive rates of tax that encourage taxpayers to avoid tax and keep money out of the country.  

 

If they insist on going ahead with a type of global taxation, it should be properly thought through with all types of income and overseas tax practices and DTAs thoroughly reviewed first.  He urges the government to consider carefully the potential revenue that can be collected from this reinterpretation vs the likely long term damage that would be caused to the Thai economy by discouraging taxpayers from bringing their money to Thailand due to the tax and general uncertainty caused by a suddenly hostile tax regime for investors. He also urges them to consider Thailand's competitiveness vs Singapore and Hong Kong that don't tax any foreign source income. He also said that wealthy Thais would avoid repatriating funds but would still be able invest in Thailand through back to back loans with offshore entities.  He concludes that, in his opinion, the proposed reinterpretation of the law will be a net negative for the Thai economy and recommends ditching the idea.  

Prof Kittipong on foreign source income taxation Sep 2023.pdf

Edited September 29, 2023 by Dogmatix

[redwood1]

1 hour ago, Somjot said:

I was not trying to patronize anybody; I was just curious how are the members think about this matter.

 

Nobody wants to pay tax, yet it is necessary.

 

The points you mentioned are partially not quite correct:

 

Some of the motorways were financed by the Transport Ministry and some by the Highways Department but none of them primarily by toll as that money must be collected after those roads are finished and that takes many years.

 

I remember that case mentioned in your link very well, as the person, who owned the seized aircraft had to fly with a regular plane a few days later in which I coincidentally had booked a seat as well - that was a very interesting flight.

 

The German company was Wagner Bau and they had built the motorway to Don Muang. However, the Thai government refused to pay them, despite they lost that case in court, which finally led to the bankruptcy of that company.

The insolvency administrator in charge could have seized any plane of Thai Airways, but somehow, he thought it might be a good idea to seize that special one, so the whole story will not end up as marginalia in the newspapers and will make it to the headlines.

 

The VAT you mentioned is only 7%, so I would not call it “a lot of”.

 

The import tax on western food is very high, not to mention the expensive process to get the Thai FDA approval.

 

If you have ever asked yourself, why your favorite jam can be bought in Thailand but only a few sorts, the reason is they must go through that expensive approval process from the Thai FDA for every single flavor variety.

 

Nevertheless, it entirely depends on us if we buy the expensive imported stuff or not. It's not a necessity.

 

The renewal of the retirement visa costs only 1900, - Baht.

 

Compared to the millions of Baht of unpaid hospital bills from foreigners, this is not much.

 

The good news is no matter if we must pay double, triple or 100 times more entrance fee for National Parks, once you are a tax resident you pay the same fee as Thai people.

 

I'm living and working here for quite some time, and I pay taxes on my income; never had a problem with it.

 

What concerns me, is that I don’t want to pay tax twice.

 

I have some property in Germany, which I rent out and for which I must pay 30% ++ tax from the first Euro on, no special expenses or tax-free amount allowed, because I'm living in Thailand.

 

If I should retire one day and send this money to my Thai bank account for my living expenses and Thailand wants me to pay taxes for it again, then I'm out.

 

Anyway, I will tell you one perfect argument, why none of us should pay any taxes here - ever.

 

In order to get my work permit I had to go through a few exams, some of them taking place in the Chulalongkorn university in Bangkok.

 

The professors there were very nice and friendly and, on an evening out with them after, let's say not only a few glasses of beer, one of them told me an interesting story:

 

Some Ministry had asked for a comparative study. They wanted to know which factor had the greatest impact on the development of the rural region in Issan, the Thai government projects, the Thai NGO projects, or the money sent by foreigners to their Thai girlfriends or wives.

 

“And?” I asked “what was the result?”

 

“We were never allowed to publish it.” He answered.

 

“Why?”

 

“It was devastating” he said with a serious face, then he took a big sip and finished “Devastating for us.”

 

So the winner was the money sent by foreigners to their Thai girlfriends or wives.......lol...............Thats hardly surprising......NGOs are pretty much  worthless, at least most of them....And many Goverment projects have loads of graft.....But money to the girlfriend goes straight to the people..

[MistyBlue]

1 hour ago, Dogmatix said:

Here's the first rebuttal (in Thai in Pdf file attached). l have seen from a Thai legal expert, Prof Kitipong Urapeepatanapong, who is or was chairman of Baker McKenzie and many other things.

Thanks for sharing this, very insightful.  I see that he also a Director/Governor of the Thai stock exchange so certainly one that may be heard in shaping policy.

Is there a link to the original source of his statement, please?

[Lorry]

2 hours ago, Somjot said:

millions of Baht of unpaid hospital bills from foreigners

Foreigners are fleeced in Thai hospitals to a degree you cannot imagine.  Billions of baht.

Everything costs much more than if you would pay out of pocket in a country like Germany. 

What we get for all this money is quite mediocre.

2 hours ago, Somjot said:

once you are a tax resident you pay the same fee as Thai people.

Sorry, wrong. Actually, it's a very strange idea.

Edited September 29, 2023 by Lorry

[ukrules]

2 hours ago, Dogmatix said:

The RD doesn't have the power to reinterpret the law which has stood without challenge for 38 years.

Yep

 

2 hours ago, Dogmatix said:

He states that, if the government insists on changing the law, the correct way would be to amend it through a Royal Decree or an Act of Parliament.

Makes sense

 

2 hours ago, Dogmatix said:

He also said that wealthy Thais would avoid repatriating funds but would still be able invest in Thailand through back to back loans with offshore entities.

This is exactly what would happen, it's exactly what I would do if I needed some money in a hurry

 

[stat]

3 hours ago, Somjot said:

I was not trying to patronize anybody; I was just curious how are the members think about this matter.

 

Nobody wants to pay tax, yet it is necessary.

 

The points you mentioned are partially not quite correct:

 

Some of the motorways were financed by the Transport Ministry and some by the Highways Department but none of them primarily by toll as that money must be collected after those roads are finished and that takes many years.

 

I remember that case mentioned in your link very well, as the person, who owned the seized aircraft had to fly with a regular plane a few days later in which I coincidentally had booked a seat as well - that was a very interesting flight.

 

The German company was Wagner Bau and they had built the motorway to Don Muang. However, the Thai government refused to pay them, despite they lost that case in court, which finally led to the bankruptcy of that company.

The insolvency administrator in charge could have seized any plane of Thai Airways, but somehow, he thought it might be a good idea to seize that special one, so the whole story will not end up as marginalia in the newspapers and will make it to the headlines.

 

The VAT you mentioned is only 7%, so I would not call it “a lot of”.

 

The import tax on western food is very high, not to mention the expensive process to get the Thai FDA approval.

 

If you have ever asked yourself, why your favorite jam can be bought in Thailand but only a few sorts, the reason is they must go through that expensive approval process from the Thai FDA for every single flavor variety.

 

Nevertheless, it entirely depends on us if we buy the expensive imported stuff or not. It's not a necessity.

 

The renewal of the retirement visa costs only 1900, - Baht.

 

Compared to the millions of Baht of unpaid hospital bills from foreigners, this is not much.

 

The good news is no matter if we must pay double, triple or 100 times more entrance fee for National Parks, once you are a tax resident you pay the same fee as Thai people.

 

I'm living and working here for quite some time, and I pay taxes on my income; never had a problem with it.

 

What concerns me, is that I don’t want to pay tax twice.

 

I have some property in Germany, which I rent out and for which I must pay 30% ++ tax from the first Euro on, no special expenses or tax-free amount allowed, because I'm living in Thailand.

 

If I should retire one day and send this money to my Thai bank account for my living expenses and Thailand wants me to pay taxes for it again, then I'm out.

 

Anyway, I will tell you one perfect argument, why none of us should pay any taxes here - ever.

 

In order to get my work permit I had to go through a few exams, some of them taking place in the Chulalongkorn university in Bangkok.

 

The professors there were very nice and friendly and, on an evening out with them after, let's say not only a few glasses of beer, one of them told me an interesting story:

 

Some Ministry had asked for a comparative study. They wanted to know which factor had the greatest impact on the development of the rural region in Issan, the Thai government projects, the Thai NGO projects, or the money sent by foreigners to their Thai girlfriends or wives.

 

“And?” I asked “what was the result?”

 

“We were never allowed to publish it.” He answered.

 

“Why?”

 

“It was devastating” he said with a serious face, then he took a big sip and finished “Devastating for us.”

 

Man you explictly talked about the pattaya motorway so why you talk then about other motorways! In absolute terms expats pay vat like 10 or 20 thais as you spend that amount more then average thais. You seen to have a lot of time on your hands to write so much ... BTW if you enjoy paying tax move to Germany ! A whooping 70% answered they want higher taxes in a poll 2 years ago.

[stat]

44 minutes ago, Lorry said:

Foreigners are fleeced in Thai hospitals to a degree you cannot imagine.  Billions of baht.

Everything costs much more than if you would pay out of pocket in a country like Germany. 

What we get for all this money is quite mediocre.

Sorry, wrong. Actually, it's a very strange idea.

Fully agree! I was offered a full body mri in BKK Hua Hin for 3 times the price then in a German hospital. Blood work was about the same as in Germany.

[jerrymahoney]

5 hours ago, Dogmatix said:

The RD doesn't have the power to reinterpret the law which has stood without challenge for 38 years.  If there is to a be a reinterpretation, this should be the role of the Tax Court.  

 

He says the reinterpretation flies in the face of established tax law principles which require that, if a law is unclear and has two possible meanings, it should be interpreted in the way that is more favorable to taxpayers.  <snip>

 

If they insist on going ahead with a type of global taxation, it should be properly thought through with all types of income and overseas tax practices and DTAs thoroughly reviewed first.

Thanks. Very helpful.