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. 

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.

 

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.

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.

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

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.

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"
    

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

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

 

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.

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?

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.

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!

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.

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.   "

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. 

 

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

 

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.

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.

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.

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...

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 ????????

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.

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.

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.

 

 

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.

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.

16 hours ago, mokwit said:

Offshore account or onshore high street bank? - if so which bank allows this - i am sure former Barclays customers might be interested.

HSBC UK (onshore), and I also have HSBC Expat (offshore).

1 hour 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.

Your just throwing mud at the wall to see if you can get some to stick.

Thailand won't be getting 15-20% of me.

There having a laugh.

 

Ps Cash is still king over here.

 

2 minutes ago, samtam said:

HSBC UK (onshore), and I also have HSBC Expat (offshore).

Interesting.

 

 

Does that make your UK bank account more, or less, vulnerable to current activities by the UK banking industry?

 

 

Whilst I believe HSBC would be the last of the UK banks to take closure action against expats, they are subject to same regulatory pressures. You cannot rule out them taking the sheep approach.