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

[Puccini]

1 hour ago, Dogmatix said:

...I am not sure if Section 41 dates back to the original Revenue Code of 1938...

There was a section 41 already in the original Revenue Code of 1939 and it has been amended once, by the Act Amending the Revenue Code (No. 8), B.E. 2496 (1953)

 

Link: Revenue Code 1939, as amended

 

[Puccini]

5 minutes ago, Dogmatix said:

No. That is resolution 7/2528 (not 2/2528) regarding taxation of interest paid to foreign bank branches by their head offices overseas.

Oops. Forgot to double-check the number in the search results.

[retiree]

12 minutes ago, Puccini said:

There was a section 41 already in the original Revenue Code of 1939 and it has been amended once, by the Act Amending the Revenue Code (No. 8), B.E. 2496 (1953)

 

Link: Revenue Code 1939, as amended

This is the 1938 code.  It has Section 41 paragraph 1 (local income), but not 2 (overseas income), at the bottom of page 39, to wit: 

 

Section 41.  ¹⁰⁴ A person who has made assessable income as defined by section 40 in the
past tax year, be it by reason of employment or operation of a business situated in Thailand, or from
an employer who is situated in Thailand, or from assets situated in Thailand, shall pay tax in
accordance with the provisions of this Part, whether such income is paid within or outside of the
country.

Any person who is in Thailand for a period or periods, aggregating to a total of one
hundred and eighty days or more in any one tax year shall be deemed a resident of Thailand.

 

      ¹⁰⁴    Section 41 was amended by the Act Amending the Revenue Code (No. 8), B.E. 2496 (1953).

 

An additional section 41 bis is about immovable property.

 

I think the two current questions are:

 

-- what is the text and/or history of 2/2528?

--  is the current text of Section 41 (2) the same as the Act Amending the Revenue Code (No. 8), B.E. 2496 (1953) that footnote 104 refers to, or was the 1953 text different from the current text? 

[Captain Monday]

4 hours ago, redwood1 said:

Yes for years on end...There has been a endless flood of press releases about how Thailand wants RICH RICH RICH very well to do expats......And the expats on a modest buget need to be shown the door.......And this tax would just hammer their precious RICH expats......lol

Various organs of the Thai govt working at cross purposes, nothing new.

TAT beckons RICH RICH tourists then Immigration denies them entry for 

”coming too many times”　Get ready for a backpedal on this trainwreck

[swissie]

Many open questions. But one thing we already know. Next to the visa situation, one more worry for Farang residents has been created.

- It will turn out to be a complicated nightmare, that the individual Farang can not sort out without the help of Thai Tax experts, specialising in this new field.

- Next to existing "Visa Agencies", a new branch of legal services will mushroom into existance. Agencies specialising in "International Taxation for foreighn residents in Thailand". A new branch within the Thai legal system was just created. Needless to say, the Farang will have to pay for those sevices.

[Guavaman]

8 hours ago, retiree said:

The RD's (non-binding, but looks accurate to me) English translation of 41 para 1 and 2 of the actual tax law is given here:  https://www.rd.go.th/english/37749.html#section41   

 

Section 41

A taxpayer who in the previous tax year derived assessable income under Section 40 from an employment, or from business carried on in Thailand, or from business of an employer residing in Thailand, or from a property situated in Thailand shall pay tax in accordance with the provisions of this Part, whether such income is paid within or outside Thailand.

 

A resident of Thailand who in the previous tax year derived assessable income under Section 40 from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax in accordance with the provisions of this Part.

(emphasis added)

 

I don't see the second paragraph as waiving prior years' taxes -- it just delays their collection.  The definitive Thai phrase for "in the previous tax year", used in both paragraphs, is: ในปีภาษีที่ล่วงมาแล้ว  , which I think could also be read as "in a previous tax year" or "in previous tax years".   It does not say "the", and neither the Thai nor English say "... only if remitted income was earned in the current year."  (I'm assuming the Thai phrase is not a "term of art", or wording that is always used in legislation to refer to only the prior year.)

 

Now, Baker McKenzie et al have said that the pre-September interpretation was provided by Resolution 2/2528 (1985), which appears to be a type of tax court ruling -- not a piece of legislation.

 

https://insightplus.bakermckenzie.com/bm/tax/thailand-offshore-sourced-income-brought-into-thailand-from-1-january-2024-onward-will-be-subject-to-thai-personal-income-tax/

According to paragraph two of section 41 of the Revenue Code, Thai tax resident individuals, i.e., any person who stays in Thailand for at least 180 days in any calendar year, shall pay Thai personal income tax on the offshore-sourced income when they bring that income into Thailand. The Resolution of the Committee for the Consideration of Legal Issues and Appeals or Petitions of the Revenue Department No. 2/2528, dated 21 February 1985 ("Resolution No. 2/2528") ruled that the offshore-sourced income that was brought into Thailand after the calendar year of receipt was not subject to personal income tax.

 

Can you provide Thai text of Section 41 paragraph 2, or elsewhere in the code, that supports your belief that the original legislation was always intended to apply only to assessible income if remitted in the year it was earned?   Or, can you find something in the text of 2/2528 (which I don't have) that would indicate that this was a term of art, and the legislature did intend to waive taxes on assessible income from earlier years?

Please see this ข้อหารือภาษีอากร – Consultation on Tax regarding Article 4 Section 56 from 2003.

 

The key issue that you raised regarding Thai language comes down to this:

 

What does ๆ mean? It’s called ไม้ยมก (mai-ya-mok), a symbol to use for repeating the word before it. For example, จริงๆ (read จริงจริง), the ๆ in this context is จริง.  In this case, เงินได้ของปีก่อน ๆ means income from previous year, previous year = previous years.

 

ข้อหารือภาษีอากร – Consultation on Tax regarding Article 4 Section 56

 

GOOGLE TRANSLATION

Book number:  Kor Khor 0811/7454

Date:  1 August 2003

Subject:  Personal income tax In the case of foreign tourists coming to stay for a long period of time in Thailand

Legal matters:  Section 4 bis, Section 56

Discussion:  In the case of elderly tourists or retirees who are 50 years of age or older coming to travel in Thailand and can stay in Thailand for 1 year, which such tourists cannot do career or earning money in Thailand.  Instead, they will come to use the savings and pensions they receive from their home country.

Therefore discussed that –

1. Long-stay tourists and retirees who come to stay in the country for 1 year by not working or earning income in Thailand will they have to pay personal income tax?

2. In the case of paying tax, what type of tax must be paid and where?

Diagnostic guidelines

Tourists have no income from sources in Thailand but has assessable income from the source income abroad by bringing savings or pensions received from abroad to spend in Thailand.

There are tax burdens as follows:

1. In the case where tourists use their accumulated savings, which is income from previous years, to spend in Thailand is not subject to personal income tax at all.

2. In the case of tourists bringing pensions received from their home country come to spend in Thailand, the pension is income received in that tax year (calendar year) and brought into Thailand in that tax year.

The same if the tourist comes to reside or stay in Thailand for a period of time or several periods in total, total time up to one hundred and eighty days in the tax year.  Income received and imported into Thailand is mandatory to pay personal income tax by submitting the P.N.D.91 form at the office Area Revenue Branch within March of the following year. In the case of tourists leaving Thailand before deadline for filing returns according to Section 56 of the Revenue Code. Submit the P.N.D.93 form, payment of taxes (if any) must be completed before departure according to Section 4 bis of the Revenue Code.

Cabinet number:  66/32602

 

เลขที่หนังสือ	: กค 0811/7454
วันที่	: 1 สิงหาคม 2546
เรื่อง	: ภาษีเงินได้บุคคลธรรมดา กรณีนักท่องเที่ยวต่างประเทศเข้ามาพำนักระยะยาวในประเทศไทย
ข้อกฎหมาย	: มาตรา 4 ทวิ, มาตรา 56
ข้อหารือ	: กรณีนักท่องเที่ยวที่เป็นผู้สูงอายุหรือผู้เกษียณอายุที่มีอายุตั้งแต่ 50 ปีขึ้นไปเดินทางมาท่องเที่ยว ในประเทศไทย และพำนักในประเทศไทยได้เป็นเวลา 1 ปี ซึ่งนักท่องเที่ยวดังกล่าวไม่สามารถประกอบ อาชีพ หรือหารายได้ในประเทศไทย แต่จะเข้ามาใช้จ่ายเงินออมและบำนาญที่ได้รับจากประเทศของตน จึงหารือว่า 1. นักท่องเที่ยวพำนักระยะยาวผู้เกษียณอายุซึ่งมาพำนักอยู่ในประเทศเป็นเวลา 1 ปี โดย ไม่ได้ประกอบอาชีพหรือหารายได้ในประเทศไทย จะต้องเสียภาษีรายได้ส่วนบุคคลหรือไม่ 2. กรณีต้องเสียภาษีจะต้องเสียภาษีประเภทใด และที่ใด
แนววินิจฉัย	: นักท่องเที่ยวไม่มีเงินได้จากแหล่งเงินได้ในประเทศไทย แต่มีเงินได้พึงประเมินจากแหล่ง เงินได้ในต่างประเทศ โดยนำเงินออมหรือเงินบำนาญที่ได้จากต่างประเทศเข้ามาใช้จ่ายในประเทศไทย มีภาระภาษีดังนี้ 1. กรณีนักท่องเที่ยวนำเงินออมที่เก็บสะสมไว้ซึ่งเป็นเงินได้ของปีก่อน ๆ เข้ามาใช้จ่ายใน ประเทศไทย ไม่อยู่ในบังคับต้องเสียภาษีเงินได้บุคคลธรรมดาแต่อย่างใด 2. กรณีนักท่องเที่ยวนำเงินบำนาญที่ได้รับจากประเทศของตน เข้ามาใช้จ่ายในประเทศไทย โดยเงินบำนาญนั้นเป็นเงินได้ที่ได้รับในปีภาษี (ปีประดิทิน) นั้น และนำเข้ามาในประเทศไทยในปีภาษี เดียวกัน หากนักท่องเที่ยวนั้นเข้ามาพำนักหรืออยู่ในประเทศไทยชั่วระยะเวลาหนึ่ง หรือหลายระยะรวม เวลาทั้งหมดถึงหนึ่งร้อยแปดสิบวันในปีภาษี เงินได้ที่ได้รับและนำเข้ามาในประเทศไทยดังกล่าว อยู่ใน บังคับต้องเสียภาษีเงินได้บุคคลธรรมดา โดยให้ยื่นแบบแสดงรายการ ภ.ง.ด.91 ณ สำนักงาน สรรพากรพื้นที่สาขาภายในเดือนมีนาคมของปีถัดไป กรณีนักท่องเที่ยวออกจากประเทศไทยก่อน กำหนดเวลายื่นรายการตามมาตรา 56 แห่งประมวลรัษฎากร ให้ยื่นแบบแสดงรายการ ภ.ง.ด.93 ชำระภาษีอากร (ถ้ามี) ให้เสร็จสิ้นก่อนออกเดินทางตามมาตรา 4 ทวิ แห่งประมวลรัษฎากร
เลขตู้	: 66/32602

 

It appears that in 2003, foreign source income that was earned and neither spent nor remitted in the same calendar/tax year was deemed to be accumulated savings while it remained offshore prior to remittance.

 

 

[K2938]

5 hours ago, Dogmatix said:

For a PM and finance minister from Pheua Thai, a party that prides itself on upholding democracy and democratic principles, to support this arbitrary style of imposing illegal changes to long standing laws rather than going through proper parliamentary procedures is nothing short of extraordinary.

Well, they need the money to fund their electoral gifts and would not have the parliamentary majority to do things properly as was pointed out in various commentaries

[DavisH]

On 9/24/2023 at 6:20 PM, Thingamabob said:

It may be entirely wrong but I was told by a Thai lawyer some years ago that pensions were not taxed in Thailand. 

My wife's Thai civil servant pension certainly is taxed. 

[stat]

6 hours ago, aldriglikvid said:

What you're saying here are the main bulletpoints of the fear-mongering that has been going on in the last 60 threads back. And I don't argue that indiscriminate random taxation on the spot is impossible, but it's not probable in my base case scenario. The essence of my post was, if Thailand is to enforce the law in the way that most people are presenting it here on the forums, the following is needed: 

- Banks sharing not only year-end balances as per Fatca/CRS standards but sharing all transactions throughout a year

- Flat income tax % on all transactions throughout a year

- Automatic border entry/exit communication with RD (land, sea and air)  

- IF +180 days in country, RD automatically prints a TIN and send it (via mail?). TIN is granted without prior request or underlying documents. 

- Access to international card issuers banks and requesting Mastercard and Visa transaction details breaking all banking standards developed since WW2 

- Flat income tax % on aforementioned Visa and Mastercard transactions

- Banks in Europe, MENA, Singapore and the US sharing capital gains, transaction details and dividends to Thailand RD in an elaborate new system 

Everything implemented 4 months from now. 

 

Yes, of course I'm overdoing it here - but hopefully you get the point: it will take a long time before this is implemented. If you have a very cynical view of Thailand, you might buy into the idea that RD personell will bang on your door demanding QR payment on the spot. Personally, I'm not in that camp. 

 

I stand my ground and saying that the first transition years will almost only be 1) "chasing the big fish" via LARGE transactions from self reporting banks (similar to KYC reporting) and 2) Self declaring income that is rightly to be taxed 

 

 

IF I'm being flat taxed on all international transfers in to Thailand this coming February, I'm willing to repost this very post and give you all a "you were right!" 

 

Your point

 

- Banks in Europe, MENA, Singapore and the US sharing capital gains, transaction details and dividends to Thailand RD in an elaborate new system 

 

is already happening with crs and fatca TODAY!

[stat]

5 hours ago, spidermike007 said:

Who do uou suppose provides this information? Employers? The IRS? The treasury department? Our banks around the world? Or Google? And who compensates them for this billion dollar task? 

Just google crs. Already in place since several years mate. Thailand gets info from all relevant jurisdictions like EU UK USA etc 2023 as it joined very late. https://nomadcapitalist.com/de/finance/non-crs-countries-banking/

Edited October 1, 2023 by stat

[swissie]

48 minutes ago, Guavaman said:

Please see this ข้อหารือภาษีอากร – Consultation on Tax regarding Article 4 Section 56 from 2003.

 

The key issue that you raised regarding Thai language comes down to this:

 

What does ๆ mean? It’s called ไม้ยมก (mai-ya-mok), a symbol to use for repeating the word before it. For example, จริงๆ (read จริงจริง), the ๆ in this context is จริง.  In this case, เงินได้ของปีก่อน ๆ means income from previous year, previous year = previous years.

 

ข้อหารือภาษีอากร – Consultation on Tax regarding Article 4 Section 56

 

GOOGLE TRANSLATION

Book number:  Kor Khor 0811/7454

Date:  1 August 2003

Subject:  Personal income tax In the case of foreign tourists coming to stay for a long period of time in Thailand

Legal matters:  Section 4 bis, Section 56

Discussion:  In the case of elderly tourists or retirees who are 50 years of age or older coming to travel in Thailand and can stay in Thailand for 1 year, which such tourists cannot do career or earning money in Thailand.  Instead, they will come to use the savings and pensions they receive from their home country.

Therefore discussed that –

1. Long-stay tourists and retirees who come to stay in the country for 1 year by not working or earning income in Thailand will they have to pay personal income tax?

2. In the case of paying tax, what type of tax must be paid and where?

Diagnostic guidelines

Tourists have no income from sources in Thailand but has assessable income from the source income abroad by bringing savings or pensions received from abroad to spend in Thailand.

There are tax burdens as follows:

1. In the case where tourists use their accumulated savings, which is income from previous years, to spend in Thailand is not subject to personal income tax at all.

2. In the case of tourists bringing pensions received from their home country come to spend in Thailand, the pension is income received in that tax year (calendar year) and brought into Thailand in that tax year.

The same if the tourist comes to reside or stay in Thailand for a period of time or several periods in total, total time up to one hundred and eighty days in the tax year.  Income received and imported into Thailand is mandatory to pay personal income tax by submitting the P.N.D.91 form at the office Area Revenue Branch within March of the following year. In the case of tourists leaving Thailand before deadline for filing returns according to Section 56 of the Revenue Code. Submit the P.N.D.93 form, payment of taxes (if any) must be completed before departure according to Section 4 bis of the Revenue Code.

Cabinet number:  66/32602

 

เลขที่หนังสือ	: กค 0811/7454
วันที่	: 1 สิงหาคม 2546
เรื่อง	: ภาษีเงินได้บุคคลธรรมดา กรณีนักท่องเที่ยวต่างประเทศเข้ามาพำนักระยะยาวในประเทศไทย
ข้อกฎหมาย	: มาตรา 4 ทวิ, มาตรา 56
ข้อหารือ	: กรณีนักท่องเที่ยวที่เป็นผู้สูงอายุหรือผู้เกษียณอายุที่มีอายุตั้งแต่ 50 ปีขึ้นไปเดินทางมาท่องเที่ยว ในประเทศไทย และพำนักในประเทศไทยได้เป็นเวลา 1 ปี ซึ่งนักท่องเที่ยวดังกล่าวไม่สามารถประกอบ อาชีพ หรือหารายได้ในประเทศไทย แต่จะเข้ามาใช้จ่ายเงินออมและบำนาญที่ได้รับจากประเทศของตน จึงหารือว่า 1. นักท่องเที่ยวพำนักระยะยาวผู้เกษียณอายุซึ่งมาพำนักอยู่ในประเทศเป็นเวลา 1 ปี โดย ไม่ได้ประกอบอาชีพหรือหารายได้ในประเทศไทย จะต้องเสียภาษีรายได้ส่วนบุคคลหรือไม่ 2. กรณีต้องเสียภาษีจะต้องเสียภาษีประเภทใด และที่ใด
แนววินิจฉัย	: นักท่องเที่ยวไม่มีเงินได้จากแหล่งเงินได้ในประเทศไทย แต่มีเงินได้พึงประเมินจากแหล่ง เงินได้ในต่างประเทศ โดยนำเงินออมหรือเงินบำนาญที่ได้จากต่างประเทศเข้ามาใช้จ่ายในประเทศไทย มีภาระภาษีดังนี้ 1. กรณีนักท่องเที่ยวนำเงินออมที่เก็บสะสมไว้ซึ่งเป็นเงินได้ของปีก่อน ๆ เข้ามาใช้จ่ายใน ประเทศไทย ไม่อยู่ในบังคับต้องเสียภาษีเงินได้บุคคลธรรมดาแต่อย่างใด 2. กรณีนักท่องเที่ยวนำเงินบำนาญที่ได้รับจากประเทศของตน เข้ามาใช้จ่ายในประเทศไทย โดยเงินบำนาญนั้นเป็นเงินได้ที่ได้รับในปีภาษี (ปีประดิทิน) นั้น และนำเข้ามาในประเทศไทยในปีภาษี เดียวกัน หากนักท่องเที่ยวนั้นเข้ามาพำนักหรืออยู่ในประเทศไทยชั่วระยะเวลาหนึ่ง หรือหลายระยะรวม เวลาทั้งหมดถึงหนึ่งร้อยแปดสิบวันในปีภาษี เงินได้ที่ได้รับและนำเข้ามาในประเทศไทยดังกล่าว อยู่ใน บังคับต้องเสียภาษีเงินได้บุคคลธรรมดา โดยให้ยื่นแบบแสดงรายการ ภ.ง.ด.91 ณ สำนักงาน สรรพากรพื้นที่สาขาภายในเดือนมีนาคมของปีถัดไป กรณีนักท่องเที่ยวออกจากประเทศไทยก่อน กำหนดเวลายื่นรายการตามมาตรา 56 แห่งประมวลรัษฎากร ให้ยื่นแบบแสดงรายการ ภ.ง.ด.93 ชำระภาษีอากร (ถ้ามี) ให้เสร็จสิ้นก่อนออกเดินทางตามมาตรา 4 ทวิ แห่งประมวลรัษฎากร
เลขตู้	: 66/32602

 

It appears that in 2003, foreign source income that was earned and neither spent nor remitted in the same calendar/tax year was deemed to be accumulated savings while it remained offshore prior to remittance.

 

 

This confirms my post above. A complete chaos in the making. Not possible for a Farang to sort it out without the help of well connected Thai "Legal-Eagles" . Well connected to the Thai Tax Authorities, this time around. A new income source has just been created for a good number of Thai "Legal Eagles".

[aldriglikvid]

55 minutes ago, stat said:

Your point

 

- Banks in Europe, MENA, Singapore and the US sharing capital gains, transaction details and dividends to Thailand RD in an elaborate new system 

 

is already happening with crs and fatca TODAY!

You quoted me out of context here, mate. First: 

 

1) CRS doesn't share transactions (nor FATCA). Transactions are not even shared domestically to 99% of Tax Agencies - and I see no risk Thailand of all countries will be the first. 

 

2) Let's say my home country is Norway, nationality Norwegian - that means according to CRS Thailand (or other countries) will send end of year info to Norway. Norway has no obligation, and certainly no "automatic", information disclosure to ALL +110 CRS MEMBERS. 

 

So my original point still stands: if you tax in your home country (income, pension, capital gains, dividends etc.) I see no risk for you to have your assets confiscated by Thai authorities the coming years. If you don't tax anywhere - which is their target - and all these countries send THAILAND info of your big accounts offshore - prepared to get the temperature up a couple of degrees. 

 

It's a huge difference. This fear mongering that Thai Authorities will be able to see your bank transactions in a couple of months is just silly, if not mean to all the people it worries and creates anxiety for. 

Edited October 1, 2023 by aldriglikvid

[retiree]

2 hours ago, Guavaman said:

Please see this ข้อหารือภาษีอากร – Consultation on Tax regarding Article 4 Section 56 from 2003.

Thank you for locating and posting this article. 

 

a) I think we all know how to form plurals in Thai.  However, translating 41(2) as below does not require a plural.  Afaik it can -- and I'm certainly willing to be corrected -- reasonably be read as: 

 

A resident of Thailand who in a [not the] previous tax year derived assessable income under Section 40 from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax in accordance with the provisions of this Part.

 

b) the explanation you cited is consistent with the pre-September interpretation of 41(2), and may offer some insight into the reasoning behind 2/2528.    It appear to address a specific framing of the question:

 - a foreigner has just become a tax resident of Thailand.  He lives on prior years' income, remitted to Thailand this year.  Is this taxable?  No, those are savings. 

- a foreigner has just become a tax resident of Thailand.  He lives on his current pension, remitted to Thailand as it accrues.  Is this taxable.?   Yes, this is income.

 

c) It does not address the framing that the RD is surely asking, or will ultimately present to, the Tax Court: 

- a Thai national has been an overseas consultant for many years.  Each year he is careful to remit only the prior year's income.  He lives in Thailand at least 180 days per year, but he has never paid Thai taxes.  This would appear to be a unique and unfair treatment vis a vis the ordinary Thai taxpayer. 

 

   Is it the intent of Section 41 paragraph 2 that each prior year's income never be taxed, and that he will never pay Thai taxes, even though he is a Thai tax resident the entire time?   Or is the legislative intent that the tax is only deferred until the assessable income is finally remitted, and then allowed credits or exemptions derived from any double-taxation agreement?  

 

Me, I'd sorely d'ruther the first version stood.  But I can't help thinking that the second phrasing holds more water. 

 

Edited October 1, 2023 by retiree

[ukrules]

5 hours ago, aldriglikvid said:

1) CRS doesn't share transactions (nor FATCA). Transactions are not even shared

Correct - there's a lot of hysteria and absolute nonsense about CRS being circulated by people who obviously know absolutely nothing about it i and I'm seeing a lot of it in this thread.

 

Edited October 1, 2023 by ukrules

[jerrymahoney]

4 hours ago, retiree said:

 a foreigner has just become a tax resident of Thailand.  He lives on his current pension, remitted to ThaThiiland as it accrues.  Is this taxable.?   Yes, this is income.

This is going way  above my pay-grade but would not a DTA e.g. US -Thai have something to say about this?

 

[BaanOz]

On 9/22/2023 at 4:54 PM, TroubleandGrumpy said:

I have calculated that the tax already paid in Australia is higher than the amount that would be taxed in Thailand, and therefore I do not need to lodge a tax return.  If I got that wrong, I am so sorry.

Australian superannuation, if you have stopped work, over 60 and converted your superannuation to Retirement phase (formerly called pension phase) you pay zero tax.

So I'd assume that money brought into Thailand would be taxed but as you mentioned in your post, good luck working that out!

[Guavaman]

See this:

DEPARTMENT OF THE TREASURY TECHNICAL EXPLANATION OF THE CONVENTION BETWEEN

THE GOVERNMENT OF THE UNITED STATES OF AMERICA 

AND

THE GOVERNMENT OF THE KINGDOM OF THAILAND 

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION 

WITH RESPECT TO TAXES ON INCOME

SIGNED AT BANGKOK ON NOVEMBER 26, 1996

 

Article 20 (Pensions and Social Security Payments)

Article 20 deals with the taxation of private (i.e., non-government) pensions, annuities, social security, and similar benefits.

 

Paragraph 1

Paragraph 1 provides that private pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence State of the recipient.

 

It is understood that the rules of this paragraph apply even if the payee of the pension is not the person who performed the past employment.  For example, a pension paid to a surviving spouse who is a resident of Thailand would be exempt from tax by the United States on the same basis as if the right to the pension had been earned directly by the surviving spouse.  A pension may be paid periodically or in a lump sum.   The rules of this paragraph do not apply to government service pensions, which are dealt with in paragraph 2 of Article 21 (Government Service), nor do they deal with social security benefits, which are dealt with in paragraph 2 of Article 20.

 

The phrase “pensions and other similar remuneration” is intended to encompass payments made by  private retirement plans and arrangements in consideration of past employment.  In the United States, the plans encompassed by Paragraph 1 include:  qualified plans under section 401(a), individual retirement plans (including individual retirement plans that are part of a simplified employee pension plan that satisfies section 408(k), individual retirement accounts and section 408(p) accounts), non-discriminatory section 457 plans, section 403(a) qualified annuity plans, and section 403(b) plans. 

Treaty-Thailand-Technical Explanation-11-26-1996.pdf

[Lemsta69]

14 hours ago, stat said:

I would not go 179 days you never know how exactly they count those days. Example plan leaves at 5 mins after midnight was scheduled 2 hours earlier etc.

Yes i was just thinking that myself. IF i'm forced into tax exile then it won't be something i'll leave until the last minute due to potential flight delays etc. Hopefully it won't come to that but maybe i do it anyway, i'm getting a bit bored of Thailand so maybe six months plus in another part of the region might get me out of my rut ;-)

 

[freeworld]

7 hours ago, swissie said:

This confirms my post above. A complete chaos in the making. Not possible for a Farang to sort it out without the help of well connected Thai "Legal-Eagles" . Well connected to the Thai Tax Authorities, this time around. A new income source has just been created for a good number of Thai "Legal Eagles".

Seems like the only chaos is a lot of what is being discussed endlessly here.

[jerrymahoney]

1 hour ago, Guavaman said:

Article 20 (Pensions and Social Security Payments)

Article 20 deals with the taxation of private (i.e., non-government) pensions, annuities, social security, and similar benefits.

Fine Social Security is paragraph 2. but don't forget paragraph 3 on annuities as annuities are defined for the purpose of the DTA.

https://home.treasury.gov/system/files/131/Treaty-Thailand-TE-11-26-1996.pdf

 

Edited October 2, 2023 by jerrymahoney

[metisdead]

Some posts and replies in violation of our Community Standards have been removed.

[Middle Aged Grouch]

Why all the bother ? Just start looking to move to Vietnam or Cambodia or Malaysia, the Philippines, or even India...

[jacko45k]

4 minutes ago, Middle Aged Grouch said:

Why all the bother ? Just start looking to move to Vietnam or Cambodia or Malaysia, the Philippines, or even India...

India.... for heaven's sake. 

[Middle Aged Grouch]

Just now, jacko45k said:

India.... for heaven's sake. 

Many many happy westerners live in the southern beach states like Goa or Kerala and farangs are better treated there then in Thailand many say...for "heaven's or hell's sake"....????

[homeseeker]

The following information is widely being advertised right now on the internet:

 

"The good news is, if you move to Thailand to retire, you will not be taxed on income you receive from overseas. These include pension, interest or any other source of income from your home country.

Tax in Thailand only applies to money earned within the country. It’s crucial to note, however, that you can’t work while on a retirement visa in Thailand."

 

https://thethaiger.com/guides/retire-in-thailand/do-you-need-to-pay-income-taxes-when-retiring-in-thailand

[hotandsticky]

4 minutes ago, homeseeker said:

The following information is widely being advertised right now on the internet:

 

"The good news is, if you move to Thailand to retire, you will not be taxed on income you receive from overseas. These include pension, interest or any other source of income from your home country.

Tax in Thailand only applies to money earned within the country. It’s crucial to note, however, that you can’t work while on a retirement visa in Thailand."

 

https://thethaiger.com/guides/retire-in-thailand/do-you-need-to-pay-income-taxes-when-retiring-in-thailand

 

 

 

....and I don't see how it could ever be anything different to that.

[redwood1]

9 minutes ago, homeseeker said:

The following information is widely being advertised right now on the internet:

 

"The good news is, if you move to Thailand to retire, you will not be taxed on income you receive from overseas. These include pension, interest or any other source of income from your home country.

Tax in Thailand only applies to money earned within the country. It’s crucial to note, however, that you can’t work while on a retirement visa in Thailand."

 

https://thethaiger.com/guides/retire-in-thailand/do-you-need-to-pay-income-taxes-when-retiring-in-thailand

Look at the date here Wednesday, August 23, 2023

[Happy happy]

18 minutes ago, homeseeker said:

The following information is widely being advertised right now on the internet:

 

"The good news is, if you move to Thailand to retire, you will not be taxed on income you receive from overseas. These include pension, interest or any other source of income from your home country.

Tax in Thailand only applies to money earned within the country. It’s crucial to note, however, that you can’t work while on a retirement visa in Thailand."

 

https://thethaiger.com/guides/retire-in-thailand/do-you-need-to-pay-income-taxes-when-retiring-in-thailand

-Well, its correct. Nothing in the proposed new regulations say anything about changing the current practice towards retirees living here long time  in Thailand. Hence the date of the article is irrelevant.

Edited October 2, 2023 by Happy happy

[Lorry]

53 minutes ago, Happy happy said:

-Well, its correct. Nothing in the proposed new regulations say anything about changing the current practice towards retirees living here long time  in Thailand. Hence the date of the article is irrelevant.

The whole thread is about the proposed changes. 

You should read the OP and the RD order that's the subject of this thread. 

[JimGant]

1 hour ago, homeseeker said:

Tax in Thailand only applies to money earned within the country.

What a misleading article. If a Tax Resident (180 days or more cumulative), then worldwide income is taxable in Thailand, if brought into the country in the year paid. That may change, of course, and is the subject of this thread. And, per DTA, not all worldwide income is subject to Thai tax -- things like gov't pensions and social security are exempt per treaty.

 

But to flat out say, Thai tax only applies to money earned within the country -- is just bad info, and I'm surprised Thaiger published it. Yes, if you're here for less than 180 days, your worldwide income is exempt. But this article is aimed at folks planning their retirement -- and I doubt they plan to only retire for 179 days, or less.....