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

[Lorry]

9 hours ago, TroubleandGrumpy said:

if you spend more than 180 days in Thailand per year, you will be required to declare all of your foreign income, regardless of when it was earned or whether it was remitted to Thailand. This is a significant change from the previous rules, which only required you to declare foreign income that was remitted to Thailand

That is all your worldwide income,  remitted to Thailand or not

 

9 hours ago, TroubleandGrumpy said:

legally required to report/declare all of my 'foreign income' to the Thai RD (meaning all my transfers into my Thai bank account)

You do realize that this is a contradiction to what I just quoted?

 

What did the law firm actually mean?

[Misty]

59 minutes ago, ballpoint said:

I live off of totally legal overseas tax free investments, and transfer a fair amount here every year.  I get around the current laws by transferring my money to an offshore holding account prior to the end of the year, then remitting it to Thailand at the start of the next year.  I am thus able to show that the money was in the holding account on January 1st, and no further money was deposited into that account prior to my Thailand remittance.  They don't care what happens to the holding account after the last transfer to Thailand that year, but every single cent deposited into that account between January 1st and the date of the remittance (or last remittance if multiple ones are done) that year must be accounted for.  I previously posted this on another topic, but I was selected for audit a few years ago.  (I only found out about this when a 90 day report was rejected because the Revenue Department had flagged my passport, and I had to go to the local immigration office where they informed me of this, and then had to call the local Revenue Department office to arrange the audit).  The method I have described satisfied the auditors, but my understanding of the new directive is that it will no longer do so - as long as you are a tax resident here, every deposit made after January 1st 2024 to the overseas account you remit your money from will need to be accounted for, no matter what year it is made.

 

When I worked here (I'm now retired), the company I worked for used a multinational tax accountancy firm to handle its expat taxes.  I contacted them regarding this, as I would be liable for the maximum 35% rate if I carry on the same way as now, and their advice is:

 

Top up the overseas holding account and transfer next year's money before the end of this year.  IF this scheme goes ahead, (which they doubt it will), my tax filing for 2024 (in early 2025), will show no income at all that year - no tax. 

Only spend 179, or fewer, days in Thailand in 2025.  Transfer enough money for the half of that year I'll be here, and for all of 2026, from any source.  No need to file a tax return for 2025 (in early 2026), as I won't be a tax resident that year. 

My tax return for 2026, filed early 2027 will again show no income at all that year - no tax.

Rinse and repeat.

 

Learnings from this are:

The Revenue Department can, and do, link your tax situation to your immigration status here - until I had the audit done I would not have been able to leave the country.

They don't care if you have a TIN or not.  I obviously do, as I worked here for some years, but those who spend over 180 days a year here (not necessarily consecutive) and say the new directive (again, I stress, IF it goes ahead), doesn't affect them because they don't have a TIN, might just as well argue that they don't have to follow the road laws because they don't have a driver's licence.

The accountant pointed out that it is compulsory in most, if not all, Western countries to file a tax return if you are a tax resident - I even have to file one in Australia because I have a bank account and some non taxable Australian property there, even though I'm not a tax resident, and should this scheme go ahead they'd expect Thailand to issue the same demand, so be prepared to start doing one.

 

Thanks for the excellent post and suggestions from your tax adviser.  Since you had worked for a multinational previously, does the tax adviser think that you also produce PND90/91s establishing that you have paid Thai tax and are simply remitting that principle at this time?

[Somjot]

22 hours ago, Somjot said:

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.

 

19 hours ago, Lorry said:

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

The reason why many parks or other public places built and maintained by the government with tax money and entrance fees ask foreigners for higher rates, is because they assume that they have more money than the average Thai.

 

I think it is safe to say, that in most cases, surely not in all, this is the truth.

 

Interestingly we seem to have a huge problem with it despite the same system is applied in our countries since before we were born.

 

Most public libraries / community swimming pools in our countries ask retirees, students, and pupils for lower rates to get a membership / to enter the pool area.

Why?

 

Because they assume the average citizen or adult has more money than them, which again is the truth in most cases, surely not in all.

 

Why do we easily accept lower prices for elderly and young citizen with assumed lower income status in our societies but feel discriminated and scream “racism”, when Thai nationals get a lower price than us.

 

Why are we unable to understand that their history and ours is completely different.

Racism has led to horrible things up to genocide in our past, but not in theirs, and even if, never in the same dimensions.

 

They are not sensitized for racism as we are, so we cannot expect them to think and feel like us.

 

However, they realized our issues with that, so the official policy is that, Thai nationals and tax residents get the same price.

 

Always worked for me, when I show my tax ID card and speak a little Thai, never had to pay more than any Thai.

 

19 hours 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.

 

18 hours ago, stat said:

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.

Guys, you don't know what you're talking about.

 

Medical services being more expensive than in Germany might be the case when extremely expensive medical devices are used, as some of them are produced in Germany, while Thailand must import them, so to the regular price you have to add transportation, the specialists who install and regularly maintain it plus the greedy customs.

 

But generally, most medical services are much cheaper in Thailand compared to Germany.

 

A full ceramic crown costs more than 1200,- € in Germany, while only 16.000,- Baht (421,- €) in Thailand, a PFM crown more than 1000,- € in Germany but only 13.000,- Baht (342,- €) in Thailand.

The mentioned prices compare crowns of the exact same quality, produced with German metal and ceramics.

 

But this is by far not the worst part.

 

It's the service. Or better the lack of it.

 

Last year in October my girlfriend felt a lump in her right breast.

 

We went to Bangkok hospital Pattaya, immediately got an appointment with a gynecologist, who arranged all the necessary examinations, like ultrasonic, X-ray, etc. and told us about his diagnosis in both languages English and Thai - thanks God nothing life threatening - and suggested a minor surgery.

 

They suggested a few appointments within the next days and asked which one would suit us, my answer being “yesterday”.

The surgery took place a few days later, everything went great, the lump was analyzed afterwards, and we got the confirmation, that it was not malignant a few days later.

 

The whole thing cost less than 50,000 Baht, most of it was paid buy her health insurance.

 

Coincidentally a schoolmate of my girlfriend, now living in Germany for some years, had the same problem last year early November.

Her worried German husband called the nearest hospital asking for an examination.

 

Guess what they answered. “We can offer you an appointment by the end of January.”

 

I don't know how the whole thing ended but I witnessed another incident, and it still eats away at me.

 

A friend in his mid-60s, rich guy living in Thailand with his Thai wife was diagnosed terminal esophageal cancer last March in Bangkok hospital Pattaya.

 

They told him, that he probably has about six weeks to live and they can assist him, ease his pain, with doctors and nurses at his service 24 hours a day, but not save him.

 

He sent all his examination results to a hospital in his hometown, Dortmund, in Germany and they basically told him the same (except the part with the 24 hour service).

 

As he did not speak Thai maybe he thought it would be easier to communicate in German with the doctors or maybe he hoped for a better treatment there.

 

However, he made an appointment with the German hospital, took care of his wife and said farewell to her, both knowing, they will never see each other again.

 

When he arrived at the hospital in Germany, he was told (and I know the exact dialogue, because he told me):

 

“Sorry, we can't take you, we are on strike now.”

 

“But I am dying.”

 

“Yeah, but you are not an emergency.”

 

Go figure! So much for German medical services.

 

With a lot of luck a hospital in Berlin, the Charite, took him and a few weeks later he died – all alone in his room.

 

So please, don't get me started on the German healthcare system.

 

And trust me, I know a lot about it.

 

Why?

 

I am a doctor from Germany.

[Conno]

1 hour ago, ballpoint said:

 

Top up the overseas holding account and transfer next year's money before the end of this year.  IF this scheme goes ahead, (which they doubt it will), my tax filing for 2024 (in early 2025), will show no income at all that year - no tax. 

Only spend 179, or fewer, days in Thailand in 2025.  Transfer enough money for the half of that year I'll be here, and for all of 2026, from any source.  No need to file a tax return for 2025 (in early 2026), as I won't be a tax resident that year. 

My tax return for 2026, filed early 2027 will again show no income at all that year - no tax.

Rinse and repeat.

 

I remember your audit post from before as it contained excellent advice, but I have one question. The previous legal way as you point out was to accumulate the funds in the holding account up to 31st Dec of the year it was earned but defer any remittance until the following year.  Come Jan 1st you can then transfer in the funds in that holding account but make sure you don't add anything further to that account until you have sent everything you wished to from it. You can then start adding to the holding account once again, accumulating up to 31st Dec and on and on it goes, I get all that. My question is regarding the new advice you have just been given. 

 

Surely if you top up the holding account [with income accrued in 2023]  but then transfer your living money for 2024 from that holding account BEFORE Dec 31st this year that will make those funds reportable for tax in early 2024? In other words you sent the funds into Thailand the year it was accrued by not waiting until after Jan 1st. Maybe the answer is to top up the account with savings before the end of the year for spending in 2024 and not anything from a taxable source? However that can't be the case as this directive only came out a couple of weeks ago, therefore you must have been adding earned funds to that holding account in 2023 already preparing for the usual Dec 31st - Jan 1st method. Cant quite work out why they would suggested that as it just seems to then fall within the old rules again i.e sending funds into Thailand the year it was earned. Unless I'm missing something, this just seems to place you between a rock and a hard place? I hope they are correct and it all falls apart [I think highly probable] However, what an absolute nightmare this all is while we wait for clarity. 

Edited September 30, 2023 by Conno

[Somjot]

1 hour ago, stat said:

Socialist you are if you think someone with more money should pay more. You pay more vat in absolute terms if you spend more. But then again you are German and therefore have no common understanding of money as anyting about it was never teached in Germany and Germans love to be taxed as a form of debt for starting WW2. No one here cares what you think about that the people should pay a "little tax", amounting to an additional millions of baht per year... Me for sure I have paid enough in my lifetime.

Oh my God, what have I done.

You call the logic most tax systems in the modern world are based upon socialism.

In addition, you are the top authority on what all Germans don't know and what all Germans love.

And as if that is not enough, you also exactly know, what the whole forum here cares about and what not.

Why haven`t I realised that earlier.

What an unforgivable mistake even to think about opposing you.

What a terrible waste of time.

It won't happen again.

 

[Somjot]

Finally, back to topic:

 

I have read most of the posts here but not all of them.

 

Did anybody mention the money that has been taxed already?

 

I mean there is a reason, countries even bother agreeing on DTAs.

 

Because double taxation is against the law and must be avoided.

 

And if one thing is sure, our countries know every cent we earn and we must pay tax for it.

 

I can't imagine Thailand is going to make us pay tax one more time, if we wire that money into the country and can prove, that we have paid tax for it already.

 

Apologies, if this has been mentioned before.

[freeworld]

7 minutes ago, Somjot said:

Finally, back to topic:

 

I have read most of the posts here but not all of them.

 

Did anybody mention the money that has been taxed already?

 

I mean there is a reason, countries even bother agreeing on DTAs.

 

Because double taxation is against the law and must be avoided.

 

And if one thing is sure, our countries know every cent we earn and we must pay tax for it.

 

I can't imagine Thailand is going to make us pay tax one more time, if we wire that money into the country and can prove, that we have paid tax for it already.

 

Apologies, if this has been mentioned before.

No you will not pay tax on it again if it has already been taxed. The DTA would cover that.

[freeworld]

This is basically the jist of the new rules:

 

I think also the regulation to which they refer to in the article below is wrong, it should be P161/2023

 

September 28 2023

The Thai Tax Office has issued Regulation No. 16/2023, which includes a significant change in tax obligations for residents who earn income or own foreign assets abroad. This directive, signed by the Director General of the Tax Office, prescribes the criteria that must be met by persons living in Thailand who must now report their foreign income and pay taxes on it.

The main focus of Tax Authority Regulation No. 16/2023 is on the taxation of taxable income earned abroad by Thai residents. This directive refers to Section 41, Paragraph 2, of the Tax Law, which states that individuals must declare their income earned abroad if their professional duties, business activities or assets are outside Thailand and such income was brought into the country in a particular tax year .

Important provisions of the regulation

Clause 1: The Regulation applies to persons falling within Section 41, Paragraph 3, of the Tax Act who have taxable income arising from professional duties, business activities or assets abroad, as defined in Section 41, Paragraph 2, in the taxable year and this bring taxable income into Thailand in any tax year. Such persons are required to report this taxable income and include it in their income tax calculations in accordance with Section 48 of the Tax Act. The tax valuation should match the tax year in which the income was brought into Thailand.

Article 2: In accordance with the publication of this Regulation, any existing rules, regulations, ordinances, responses to inquiries or practices that contradict or conflict with the provisions of Regulation No. 16/2023 are invalid.

Article 3: The regulation comes into force from January 1, 2024 for taxable income imported into Thailand.

Conclusion

This directive represents a significant change to the tax obligations of residents in Thailand who earn income or own foreign assets abroad. Affected individuals are now required to ensure that their foreign income is correctly reported and appropriately taxed in accordance with Thai tax laws. The regulation aims to increase transparency and tax compliance among residents in Thailand involved in international economic activities.

 

Here is a google translation of the RD order P161/2023

Revenue Department orders No. P.161/2023 Subject: Payment of income tax according to Section 41, paragraph two of the Revenue Code. In order for revenue officials to consider this as a practice guideline for inspecting and giving advice to those residing in Thailand. which has assessable income according to Section 40 of the Revenue Code In the past tax year Due to work duties or business conducted abroad or because of assets located abroad according to Section 41, paragraph two of the Revenue Code The Revenue Department has ordered the following: Clause 1: Persons who are residing in Thailand according to Section 41, paragraph three, of the Revenue Code. who have assessable income due to work duties or activities conducted abroad or because the property is in Foreign countries according to Section 41, paragraph two of the Revenue Code In the said tax year and brought the assessable income Entering Thailand in any tax year That person has a duty to include that assessable income in the calculation. To pay income tax according to Section 48 of the Revenue Code In the tax year in which the assessable income was brought in in Thailand Article 2: All rules, regulations, orders, letters of response to consultations. or any practice that is contrary to or inconsistent with This order shall be cancelled. Article 3 This order shall come into force for assessable income imported into Thailand from the date 1 January 2024 onwards Ordered on 15 September 2023

Edited September 30, 2023 by freeworld

[freeworld]

2 hours ago, K2938 said:

But NOT if they only tax REMITTED foreign income as is the case in Thailand

Yes, in Thailand it would only be remitted earned or passive income from abroad.

 

If one is resident in Thailand, the foreign jurisdiction is going to report that income and financial assets to Thailand under CRS, the onus would be on the tax resident to declare and pay taxes on that income that was remitted and if they do not the Thai tax authorities would know.

[Maestro]

11 hours ago, TroubleandGrumpy said:

I just got another 'nightmare' scenario just sent to me by a legal/tax expert:

Quote: "The new rules state that if you spend more than 180 days in Thailand per year, you will be required to declare all of your foreign income, regardless of when it was earned or whether it was remitted to Thailand. This is a significant change from the previous rules, which only required you to declare foreign income that was remitted to Thailand. The Thai Revenue Department is still working out the details of the new rules, so it is not yet clear what additional paperwork or translations will be required. However, it is important to be aware of the new rules and to start planning for how you will comply with them."

 

Revenue Department Order 161-2566 - en.pdf

Revenue Depatment Order 161-2566 - th

1. a) Your tax expert:
   "The new rules state that if you spend more than 180 days in Thailand per year..."
   b) The Revenue Department Order 161/2566 dated 15 September 2023 (RD 161/2566):
   There is no mention of 180 days.
   c) Suggestion:
   Ask your tax expert where he got the 180 days from.
    
2. a) Your tax expert:
   "...required to declare all of your foreign income, regardless of when it was earned..."
   b) RD 161/2566:
   ..."assessable income under Section 40 of the Revenue Code in the past tax year due to duties or business performed overseas or due to assets located overseas..."
   c) Suggestion:
   Ask your tax expert to explain the difference between "all foreign income" and "assessable foreign income", and the difference between "regardless of when it was earned" and "in the past tax year"
    

[freeworld]

31 minutes ago, Maestro said:

 

Revenue Department Order 161-2566 - en.pdf 177.74 kB · 0 downloads

Revenue Depatment Order 161-2566 - th

1. a) Your tax expert:
   "The new rules state that if you spend more than 180 days in Thailand per year..."
   b) The Revenue Department Order 161/2566 dated 15 September 2023 (RD 161/2566):
   There is no mention of 180 days.
   c) Suggestion:
   Ask your tax expert where he got the 180 days from.
    
2. a) Your tax expert:
   "...required to declare all of your foreign income, regardless of when it was earned..."
   b) RD 161/2566:
   ..."assessable income under Section 40 of the Revenue Code in the past tax year due to duties or business performed overseas or due to assets located overseas..."
   c) Suggestion:
   Ask your tax expert to explain the difference between "all foreign income" and "assessable foreign income", and the difference between "regardless of when it was earned" and "in the past tax year"
    

The 180 days is on the general RD website and is in section 41 of the revenue code.

 

Here is clarification on RD website.

Document number: 406939

Subject: Counting the duration of stay in Thailand for 180 days.

Category: 1. Personal income tax > 1.01 Persons liable to pay personal income tax > 1.01.01 Individuals

 ask:

In the case of foreigners traveling in and out of Thailand, how is the period of stay in Thailand that completes 180 days counted?

 reply:

To be considered to be in Thailand for up to 180 days in any tax year, that person must be in Thailand in the same tax year for a period or periods totaling up to 180 days, according to Section 41 of the Revenue Code . If living consecutively but for an overlapping period during the tax year That is, staying for less than 180 days in a given tax year is not considered to be a resident of Thailand. By looking at the passport stamped by the Immigration Office with the date of entry. Until the date of departure

[daejung]

On 9/26/2023 at 10:07 AM, stat said:

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

Not true for french citizens.

 

All this depends on bilateral tax treaties.

 

And if Thailand wants to tax everybody, they will have to renegotiate all tax treaties worldwide,  with an impact on thai citizens too.

 

Tax treaty France-Vietnam

 

Tax treaty France-Thailand

 

[Smokin Joe]

Statement from Revenue Department official was in the paper that shall not be named. A Revenue Dept statement "should" be much more reliable than any statement from other offices.

 

Revenue Department Deputy Director-General and spokesperson Vinit Visessuvanapoom said the tax collection is to comply with international standards on the exchange of financial information to promote tax transparency...

The collection of PIT on overseas income will be primarily based on the principle of self-declaration in conjunction with the use of digital technology and international information exchange systems …

Therefore, if the government collected tax on income from abroad, the taxpayer would be subject to double taxation as tax must be paid to Thailand as well as paid to the country in which the income is being earned.

However, Thailand currently has 61 double tax agreements which prevent individuals or companies operating in more than one country being taxed twice on the same income.

The programme will begin on Jan 1, 2024 and apply only to tax residents in Thailand meaning tourists and short-term workers will be exempt. Also exempt will be those who have been taxed in a foreign country that has a standing double tax agreement with Thailand.

No real breaking news but it shows that they are taking the tax treaties into account. And in my opinion the Thai govt doesn't have a single person that can read and understand 61 different treaties.

[Lorry]

3 minutes ago, Smokin Joe said:

in my opinion the Thai govt doesn't have a single person that can read and understand 61 different treaties.

How do you think did they get those 61 treaties?

[Lorry]

5 hours ago, ballpoint said:

Only spend 179, or fewer, days in Thailand in 2025.  Transfer enough money for the half of that year I'll be here, and for all of 2026, from any source.  No need to file a tax return for 2025 (in early 2026), as I won't be a tax resident that year. 

My tax return for 2026, filed early 2027 will again show no income at all that year - no tax.

Rinse and repeat.

The obvious solution for those who have no problem staying out of Thailand for 6 months in some calendar years.  In these years they are not tax resident, and can remit - tax free - as much as they want, enough for the next year(s).

 

I would not want to rely on this method in the long run. Smells like a loophole waiting to be closed.

Edited September 30, 2023 by Lorry

[jacko45k]

17 hours ago, TroubleandGrumpy said:

OK - Thanks.  I will change my post to:-   "That is what seriously worries me. In 5-8-10 years time I receive a letter from Thai RD claiming that I owe millions of baht in back taxes, advising me that my passport has been 'held' and any attempt to leave Thailand before finalisation of the issue is a criminal offence and will be severely punishable (and will be an admission of guilt). 

 

10 years it is - I guess that is better than 12 years or more ????

 

Sounds like a good scammer phone call to be made!

[mokwit]

8 hours ago, ballpoint said:

(I only found out about this when a 90 day report was rejected because the Revenue Department had flagged my passport, and I had to go to the local immigration office where they informed me of this, and then had to call the local Revenue Department office to arrange the audit). 

Anybody else had similar experiences? Maybe the RD contacted you e.g. by post but you did not see it or overlooked it. I find it hard to believe that they would freeze a passport in advance of contacting you. Did you only in the last few years stop working here? Maybe a failure to file could have triggered it? I think the fact that you worked and paid tax here may play a large part in this.

Edited September 30, 2023 by mokwit

[homeseeker]

One view is that this new provision is aimed at taxpayers  in Thailand to fix a loophole re assessable taxes.

Exemption to those who are subject to a double taxation agreement and especially retirees who will be unaffected by this.

 

Too much scaremongering in many of the postings here.

See article  below from KPMG.

-Nothing about taxing income earned abroad and not brought into Thailand.

-Nothing to cancel double taxation agreements, etc.

 

 

"KPMG’s observations

Previously, Section 41 Paragraph 2 of the Thai Revenue Code was interpreted differently: the assessable income derived by a Thai tax resident from employment, a business carried on overseas, or from a property situated overseas, would have been subject to Thai personal income tax only if the said taxable income was brought into Thailand in the same tax year. However, the new interpretation means that foreign-sourced income brought into Thailand from 1 January 2024 onwards will be subject to Thai personal income tax, regardless of the tax year in which the income was derived.

Affected taxpayers should be aware of the Thai personal income tax implications and take this new interpretation and their tax residency into consideration when planning to repatriate foreign-sourced income into Thailand.   "

Edited October 1, 2023 by homeseeker

[quake]

5 hours ago, Lorry said:

The obvious solution for those who have no problem staying out of Thailand for 6 months in some calendar years.  In these years they are not tax resident, and can remit - tax free - as much as they want, enough for the next year(s).

 

I would not want to rely on this method in the long run. Smells like a loophole waiting to be closed.

One loophole closes, one new one opens.

This is the new one, I think. 

 

[Lemsta69]

20 hours ago, TroubleandGrumpy said:

I just got another 'nightmare' scenario just sent to me by a legal/tax expert:

Quote: "The new rules state that if you spend more than 180 days in Thailand per year, you will be required to declare all of your foreign income, regardless of when it was earned or whether it was remitted to Thailand. This is a significant change from the previous rules, which only required you to declare foreign income that was remitted to Thailand. The Thai Revenue Department is still working out the details of the new rules, so it is not yet clear what additional paperwork or translations will be required. However, it is important to be aware of the new rules and to start planning for how you will comply with them."

Please note that this is advice and may not be pertinent or correct or apply to everyone. 

But if I/we are now legally required to report/declare all of my 'foreign income' to the Thai RD (meaning all my transfers into my Thai bank account) this is going to be a nightmare. 

 

 

That's interesting because both these sources say that you become a tax resident if you stay "180 days or more", not "more than 180 days". 

 

If I have to flee the Kingdom to avoid tax next year I think I'll err on the side of caution and go with max 179 complete days...

 

https://kpmg.com/th/en/home/insights/2023/09/th-tax-news-flash-issue-145.html

 

https://sherrings.com/assessable-income-foreign-sources-thailand.html

 

[freeworld]

15 minutes ago, quake said:

One loophole closes, one new one opens.

This is the new one, I think. 

 

If a person has a bank account in Thailand the foreigners account details would then be reported to RD.

 

If at some point in the future the person became tax resident, any income transferred in previous years to Thailand would become taxable or it would need to be explained should RD detect it.

 

Sounds like avoiding tax bordering on tax evasion.

[beammeup]

12 minutes ago, freeworld said:

If a person has a bank account in Thailand the foreigners account details would then be reported to RD.

 

If at some point in the future the person became tax resident, any income transferred in previous years to Thailand would become taxable or it would need to be explained should RD detect it.

 

Sounds like avoiding tax bordering on tax evasion.

You will only be taxes on the years you are tax resident.

[ballpoint]

10 hours ago, K2938 said:

Thank you for sharing the excellent advice you got from your tax advisors.  Now separately from this, just in case the current system remains, why for your remittances do you take the intermediate step via the "offshore holding account" and not just transfer directly whatever you want to transfer from abroad on Dec 31, meaning that the money will arrive in the following year then anyway without the "offshore holding account"?

That would work if you do one remittance early January.  If you remit the money in a number of chunks over the year, or even just one chunk later that year (maybe because you think the exchange rate will improve later, or just to try and catch a high in the rate), that will not work.  You would need to account for any money deposited into the other account over the previous year.  I use the other overseas account for multiple purposes, and money is often transferred in and out of it that would be a hassle to account for. (Even though it's entirely legal).

 

They are interested in every deposit made to your local account(s) over the full year, and every deposit made into your overseas account, between Jan 1st and the last remit date.  I print a statement from each and highlight every deposit in Thailand, and link it with every withdrawal from my offshore holding account.  I also do keep additional funds in that account from year to year, which is emergency money, as I can remit it to my KBank account here in minutes using the offshore bank's phone app.

[ballpoint]

6 hours ago, Lorry said:

The obvious solution for those who have no problem staying out of Thailand for 6 months in some calendar years.  In these years they are not tax resident, and can remit - tax free - as much as they want, enough for the next year(s).

 

I would not want to rely on this method in the long run. Smells like a loophole waiting to be closed.

I think it would be tough for them to try to tax money brought into the country by non residents.  That would open a whole can of worms regarding how much tourists bring into the country and spend here.  Rather like Burma in the 90s.  However, nothing would surprise me.  I think things will be back to the current status in a year or two anyway, if they even get that far, so this will tide me over till then.  If not, there will be another loophole to exploit.  The glass is always half full...

[Celsius]

16 minutes ago, beammeup said:

You will only be taxes on the years you are tax resident.

In other countries when you are a resident for tax purposes there are also certain "benefits" one enjoys.

 

Are you mugs seriously thinking about even paying 1 baht for in tax? 

 

Are you going to be staying in Thailand if that happens?

 

Please don't tell me you will be paying tax while doing your 90 day reports ????????

[ballpoint]

10 hours ago, Misty said:

Thanks for the excellent post and suggestions from your tax adviser.  Since you had worked for a multinational previously, does the tax adviser think that you also produce PND90/91s establishing that you have paid Thai tax and are simply remitting that principle at this time?

In part, yes.  I was able to produce income tax receipts for the years I worked here (even though it's supposedly one big Revenue Department, even the different Bangkok divisions don't seem to know what the others are doing, let alone different provinces), and that helped the audit, by accounting for the original money in my offshore account.  But the majority of what I earned has been invested in other means, and no longer exists in cash, so I doubt they would accept tax receipts from five or more years ago for much longer.

[jerrymahoney]

The 2 links above KPMG and Sherrings as well as multiple other reports I have read from various sources reference Section 41 Par.2 of the Thai Revenue code. However, for those +/- 70 age expats staying 180+ days in the Kingdom, most if not all their income would be under Par. 3 Section 41 namely:

 

(3) Fee of goodwill, copyright or any other rights, annuity or annual payment of income derived from a will, any other juristic act, or court decision.

 

... which at least for US citizens is excluded under Article 20 Par. 1-3 of the Dual Tax Agreement.

 

Or at least as my simplistic reading would show.

[ballpoint]

3 hours ago, mokwit said:

Anybody else had similar experiences? Maybe the RD contacted you e.g. by post but you did not see it or overlooked it. I find it hard to believe that they would freeze a passport in advance of contacting you. Did you only in the last few years stop working here? Maybe a failure to file could have triggered it? I think the fact that you worked and paid tax here may play a large part in this.

There was no letter sent to me, or my former employer.  In fact, I had a hell of a time even trying to find out just where the flag came from.  The Revenue office where I now live knew nothing about it, neither did the Bangkok District 3 office nearest my old place of work.  In the end I tried another District 3 office, and was passed around from person to person until I finally got the right one.

 

And, yes, my change in status from employed to retired brought me to their attention, however, the auditing process is exactly the same for anyone.  I was just pointing it out to the forum.  When I first contacted my local immigration office and asked what the problem was, since I am now retired, they said they had a number of flagged passports, not all of who were previously employed here.  As I said in my original post on the other thread, the majority of retirees will likely get away with doing what they.ve always done, but if you do come to their attention, that was my solution.  Luckily, I had already adopted that process, under advice from my old employer's tax advisors when I retired.

 

I should add that I had even got a new passport, with a different number, a year after I retired, so the flag is on the name of the holder, and not the passport number.

 

 

Edited October 1, 2023 by ballpoint

[freeworld]

36 minutes ago, beammeup said:

You will only be taxes on the years you are tax resident.

So then where does the foreigner declare himself tax resident?

 

Thailand is not a tax free jurisdiction.

[ballpoint]

10 hours ago, Conno said:

I remember your audit post from before as it contained excellent advice, but I have one question. The previous legal way as you point out was to accumulate the funds in the holding account up to 31st Dec of the year it was earned but defer any remittance until the following year.  Come Jan 1st you can then transfer in the funds in that holding account but make sure you don't add anything further to that account until you have sent everything you wished to from it. You can then start adding to the holding account once again, accumulating up to 31st Dec and on and on it goes, I get all that. My question is regarding the new advice you have just been given. 

 

Surely if you top up the holding account [with income accrued in 2023]  but then transfer your living money for 2024 from that holding account BEFORE Dec 31st this year that will make those funds reportable for tax in early 2024? In other words you sent the funds into Thailand the year it was accrued by not waiting until after Jan 1st. Maybe the answer is to top up the account with savings before the end of the year for spending in 2024 and not anything from a taxable source? However that can't be the case as this directive only came out a couple of weeks ago, therefore you must have been adding earned funds to that holding account in 2023 already preparing for the usual Dec 31st - Jan 1st method. Cant quite work out why they would suggested that as it just seems to then fall within the old rules again i.e sending funds into Thailand the year it was earned. Unless I'm missing something, this just seems to place you between a rock and a hard place? I hope they are correct and it all falls apart [I think highly probable] However, what an absolute nightmare this all is while we wait for clarity. 

Yes.  I will have to account for the money I top up the holding account with this year - if required, however I can do so, even though it will be a pain.  I think it's better to face that pain in one chunk now than defer it until later, or worse, keep facing it every year.  The "if required" I added was because I now deal with a tiny Amphur Revenue office, where I am well known, (probably detested as a trouble maker to their otherwise peaceful existence, though they always act happy to see me), and my annual tax visits now consist of me bringing in my statements and them saying "no need to file a return", without really looking at them.