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

[ukrules]

12 minutes ago, Antti said:

Ah ok, thanks for pointing that out. Hopefully it will be clarified soon. Can't imagine there are many buyers for the Privilege visa before that happens.

It has been clarified elsewhere - there are ZERO tax benefits to the Elite visa itself, when it was promoted as having a potential for tax savings by over zealous agents they were relying on the 'bring it in next year' feature which is still built into the act of parliament since nearly 40 years ago - the one that they think they're going to change.

 

The Elite Visa itself is just a glorified tourist visa, they last for 5 years each time you get a new sticker in your passport and every entry / extension is for 1 year. So you're a tourist who can easily stay all year which means after 180 days you're a tax resident and if you haven't paid any tax on your income abroad then they are going to be looking for some from next year onward which means the tax return submitted in 2025.

 

 

[K2938]

4 hours ago, TroubleandGrumpy said:

IMO there are only three viable countries for most Expats - Malaysia, Philippines, Indonesia.

Why is Indonesia attractive from a tax point of view, please?

[K2938]

1 hour ago, Antti said:

The Elite Visa program was rebranded as Thai Privilege Visa and relaunched 1st of October. On the website in the FAQ section it says:

 

Do I have to pay income taxes in Thailand as a Thai Privilege visa holder?

The Thai Privilege Visa is a privilege visa which falls under the special tourist visa or privilege entry category. The Thai Privilege Visa holder does not need to pay income taxes especially when the income was derived abroad. There are instances where a Thai Privilege Visa holder may voluntarily pay income tax in Thailand.

You are misled by an agent website.  As you might know agents make a lot of money in commissions from selling Thai Elite visas and therefore have a great incentive to tell you anything to close a deal.  You will NOT find these statements on the OFFICIAL website of Thai Elite.  They are WRONG.

[Guavaman]

Inevitability:  It is only a matter of time until immigration links up with RD, not electronically, but first on paper. 

 

We each have our own version of Thai Tax Hell awaiting:

 

Immigration Officer: "You farang -- you have money in bank. How you live? Show me your Thai tax return for your visa extension of stay showing that you paid tax on monthly income of 35k (married) or 65k (single.)"

 

Immigration Officer: "You farang -- you have retirement income of 65k per month. Show me your Thai tax return for your visa extension of stay showing that you paid tax on income of 65k monthly. 

 

Revenue Department Officer: same dialogue

 

Pandora's Box of Worms!!

[Misty]

On 10/1/2023 at 10:05 AM, ballpoint said:

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.

Thanks very much for this, it's very helpful.

[Misty]

On 10/1/2023 at 12:11 PM, TroubleandGrumpy said:

As I indicated to another this was in an email from a legal firm in Isaan to all of its clients (I used them mnay years ago). As with all their legal advice/direction it is private and not for general public etc etc bla bla.

As I replied to another member - it was not one of the big legal/tax firms in Bangkok.

 

Thanks for the clarification, and understood.  Just trying to separate what has been publicly announced from inside information, rumor & speculation.

[Smokin Joe]

3 hours ago, Lorry said:

This is why Thais working abroad are upset, see my screenshot from tiktok above. 

Israel doesn't even have a DTA, Taiwan probably doesn't have one.

Korea may have one, but a DTA doesn't help illegal workers. 

Finland probably has one.

Every country you mentioned has a DTA.

 

There is no need to just guess. Go to the Revenue Department list of DTA's

 

https://www.rd.go.th/english/766.html

[Lorry]

1 hour ago, Smokin Joe said:

Every country you mentioned has a DTA.

 

There is no need to just guess. Go to the Revenue Department list of DTA's

 

https://www.rd.go.th/english/766.html

Thanks for the link. 

It seems like pretty much every country where Thais go to work has a DTA.

(Israel is quoted all over the place as not having a DTA, I just believed it without checking).

 

But still,  a DTA doesn't help illegals (like in Korea) and most probably won't help labourers. Someone who goes to pave the streets of Taipei doesn't have access to international tax advisers. 

[Puccini]

On 10/1/2023 at 9:06 AM, 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)...

The quoted text of Section 41 in the version of the Revenue Code to which the above link on the website of the Revenue Department leads appears to be outdated, as it does not reflect the amended text of the second paragraph introduced the by the Act Amending the Revenue Code (No. 8), B.E. 2496 (1953), which reads as follows:

Quote

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.

Source: http://web.krisdika.go.th/data//document/ext810/810212_0001.pdf

[Captain Monday]

10 hours ago, TroubleandGrumpy said:

Nail on the head hit !!  That is the problem - how Somchai the Thai RD Inspector will deal with this.

 

After much discussion and some debate I have formd my opinion and my course of action.

1.  I will be a Thailand tax resident on 28th June 2024.

2.  My 'income' from withion my Supoer Fund in Aust is already taxed at 15% - and therefore under the DTA between Aust/Thailand  I have no obligation to pay any tax to Thailand RD for that annual return.

3.  My 'income' in the form of my Aust Govt Pension is not taxable in Thailand - and therefore under the DTA between Aust/Thailand  I have no obligation to pay any tax to Thailand RD for that Pension.

4. All transfers into Thailand come from my savings (in Super) and my Pension payments - and therefore under the DTA between Aust/Thailand  I have no obligation to pay any tax to Thailand.

5.  I therefore have no obligation to complete an annual tax return in Thailand.

6.  That may well be the 'truth' - but that will not necessarily be easily accepted by Somchai the Thai RD Inspector who wants me to pay taxes on my 1 Million Baht in bank transfers into Thailand in 2024.

7.  Therefore I will be keeping as low a profile as possible to avoid meeting Somchai. My transfers into Thailand will all be in amounts well under the 'standard reporting' level of $10K USD.

8.  I will be calculating my Thailand tax details every year and keeping all associated documents in a file, just in case Somchai does in the future 'come knocking'.

9.  If Thailand ever makes incoming transfers into Thailand taxable, then we will be leaving the country. In order to facilitate that decision, we will not be purchasing any property in Thailand for the foreseeable future (renting only).

 

I have my course of action, and now it is a matter of wait and see how things pan out.  I hope all those saying it will be fine are right - but thanks to all those who decided to research and provided their thoughts and information, just in case they are wrong.

Looking at your point .2）Your super is already taxed at 15 percent.

People misubnderstand these agreements, they are tax equilization treaties.

You land these funds in Thailand and Thailand,  say for example,  determines a super fund distribution or pension payment at a higher rate like 20 percent. You may then be  held repsonsible for to make up the difference between the 15 and 20 percent you would have paid if the income stream originated within Thailand.

 

This is how it operates in other countries I have worked in with an agreement with the US. When and if Thailand goes down the tracks heading to this trainwreck we will see but many expats may be in for a some surprises!

[Lorry]

18 minutes ago, Captain Monday said:

You land these funds in Thailand and Thailand,  say for example,  determines a super fund distribution or pension payment at a higher rate like 20 percent. You may then be  held repsonsible for to make up the difference between the 15 and 20 percent you would have paid if the income stream originated within Thailand.

That could well be 

It depends on the relevant clauses of the DTA.

They often work like this. 

 

 

[jerrymahoney]

7 hours ago, Guavaman said:

Immigration Officer: "You farang -- you have retirement income of 65k per month. Show me your Thai tax return for your visa extension of stay showing that you paid tax on income of 65k monthly. 

For me, at least, my next extension of stay via retirement using the 65K method is in December 2023. So I will have a whole year before my following extension to observe the body count.

 

Thanks for the heads-up.

 

And once again this from the RD folks themselves:

 

9.    What is the method for elimination of double taxation provided in the agreement?  

- In a double taxation agreement, there are credit and exemption methods.  

 

https://www.rd.go.th/english/23520.html

[Dogmatix]

5 hours ago, Lorry said:

Thanks for the link. 

It seems like pretty much every country where Thais go to work has a DTA.

(Israel is quoted all over the place as not having a DTA, I just believed it without checking).

 

But still,  a DTA doesn't help illegals (like in Korea) and most probably won't help labourers. Someone who goes to pave the streets of Taipei doesn't have access to international tax advisers. 

Still no DTA with Saudi but relations I thawed, workers going back and DTA being discussed.

 

The China DTA surprisingly dates back to the mid 80s before China allowed tourists to come to Thailand. It seems to only deal with company tax, probably cos China was only concerned about its state enterprises then, as there was no large scale private enterprise. I don’t know how this will impact the monied Chinese families who have been moving to TH in large numbers. Their kids are filling up the international schools, so much so that one of the more prominent UK franchises recently put a 20% quota on Chinese students to avoid them contaminating the predominant Thai Chinese culture in the school. I have a feeling that this could have an impact on the new wave of China immigrants. Many allegedly bought Thai condos for money laundering in the past. 

[Conno]

According to this article even a Thai Privilege [Elite] spokesperson has no idea how this will impact their long term offerings. What a mess this is, left hand, right hand, clueless. 

 

Conclusion -  Thailand is not a solution for high net worth individuals. Which is exactly what Thai Privilege membership is all about. We have a problem Houston. 

 

https://www.imidaily.com/program-updates/thailands-tax-tightening-on-foreign-income-raises-questions-about-implementation/

[quake]

What a crazy Cluster Duck this is.

Carry on Thailand. what a laugh.

[Dogmatix]

50 minutes ago, Conno said:

According to this article even a Thai Privilege [Elite] spokesperson has no idea how this will impact their long term offerings. What a mess this is, left hand, right hand, clueless. 

 

Conclusion -  Thailand is not a solution for high net worth individuals. Which is exactly what Thai Privilege membership is all about. We have a problem Houston. 

 

https://www.imidaily.com/program-updates/thailands-tax-tightening-on-foreign-income-raises-questions-about-implementation/

Not just Thai Privilege/Elite. The million millionaires courted by the previous government with LTR visas now looks even more doubtful. They have an tax exemption via a Royal Decree from the date they get their LTRs but another Royal Decree could easily eliminate that in the interests of “fairness and equality” and the current exemption is not enough for many of them to be able to invest in condos etc without paying 35% remittance tax. They can just blame the Prayut government for any fall out from the LTR visas.

 

If capriciousness of this government is not scary enough, Move Forward Party is waiting to get into power with real social welfare policies, as opposed to Thaksin’s wasteful one-off vote buying schemes. Appalling economic management and atrocious public education for decades now condemns Thailand to permanently sluggish growth, desperately depending on low end Chinese tourism. It is impossible to generate enough tax revenue for the welfare expectations created by politicians without hugely increasing the tax take by whatever desperate means come to hand including a large increase in VAT m, first to 10% and then to European levels and wealth taxes, capital gains tax etc. The noose is tightening. 

[Conno]

2 hours ago, Dogmatix said:

Not just Thai Privilege/Elite. The million millionaires courted by the previous government with LTR visas now looks even more doubtful. They have an tax exemption via a Royal Decree from the date they get their LTRs but another Royal Decree could easily eliminate that in the interests of “fairness and equality” and the current exemption is not enough for many of them to be able to invest in condos etc without paying 35% remittance tax. They can just blame the Prayut government for any fall out from the LTR visas.

 

If capriciousness of this government is not scary enough, Move Forward Party is waiting to get into power with real social welfare policies, as opposed to Thaksin’s wasteful one-off vote buying schemes. Appalling economic management and atrocious public education for decades now condemns Thailand to permanently sluggish growth, desperately depending on low end Chinese tourism. It is impossible to generate enough tax revenue for the welfare expectations created by politicians without hugely increasing the tax take by whatever desperate means come to hand including a large increase in VAT m, first to 10% and then to European levels and wealth taxes, capital gains tax etc. The noose is tightening. 

Regarding the noose tightening, totally and it's a global phenomena lets not forget that. The reality is we live in a society and financial system that is designed with an architecture that perpetuates poverty for the majority. Taxes and inflation are the primary drivers of that. Lets face it, the current fractional reserve fiat currency system is completely broken, overburdened with debt. What we are currently discussing here is just a local symptom of a very global problem.  

[K2938]

2 hours ago, Dogmatix said:

Not just Thai Privilege/Elite. The million millionaires courted by the previous government with LTR visas now looks even more doubtful. They have an tax exemption via a Royal Decree from the date they get their LTRs but another Royal Decree could easily eliminate that in the interests of “fairness and equality” and the current exemption is not enough for many of them to be able to invest in condos etc without paying 35% remittance tax. They can just blame the Prayut government for any fall out from the LTR visas.

 

If capriciousness of this government is not scary enough, Move Forward Party is waiting to get into power with real social welfare policies, as opposed to Thaksin’s wasteful one-off vote buying schemes. Appalling economic management and atrocious public education for decades now condemns Thailand to permanently sluggish growth, desperately depending on low end Chinese tourism. It is impossible to generate enough tax revenue for the welfare expectations created by politicians without hugely increasing the tax take by whatever desperate means come to hand including a large increase in VAT m, first to 10% and then to European levels and wealth taxes, capital gains tax etc. The noose is tightening.

So the smart thing would be to exempt foreigners from the taxation of foreign earnings just as the Philippines does ("Resident citizens are taxed on their income from all sources. A person who is not a citizen of the Philippines (that is, someone who is defined as an alien), regardless of whether the person is a resident or a non-resident, is taxed only on the individual's income from Philippines sources.").  But who knows what will happen.

[K2938]

7 minutes ago, Conno said:

Regarding the noose tightening, totally and it's a global phenomena lets not forget that. The reality is we live in a society and financial system that is designed with an architecture that perpetuates poverty for the majority. Taxes and inflation are the primary drivers of that. Let's face it, the current fractional reserve fiat money system is completely broken, overburdened with debt. What we are currently discussing here is just a local symptom of a very global problem.  

No, Thailand would be much worse.  Truly rich people primarily live on income from investments with capital gains being the key driver of their wealth.  Capital gains according to most double taxation agreements are taxed in the country of residence, so no double taxation agreements will help to avoid Thai taxes.  And the Thai tax rate of 35% will be much higher than capital gains are taxed in many other countries where there are preferential rates for capital gains or, in some countries, capital gains are even tax free.  So unless one has a very strong family reason to be in Thailand, no truly rich foreigner would in the future choose to move to Thailand.

[redwood1]

9 minutes ago, K2938 said:

So the smart thing would be to exempt foreigners from the taxation of foreign earnings just as the Philippines does ("Resident citizens are taxed on their income from all sources. A person who is not a citizen of the Philippines (that is, someone who is defined as an alien), regardless of whether the person is a resident or a non-resident, is taxed only on the individual's income from Philippines sources.").  But who knows what will happen.

Perfect solution here....

[TroubleandGrumpy]

16 hours ago, bdenner said:

I posted early in this thread and not read it all - forgive me:-

Many years ogo I loaned my Thai brother in law 100 K Baht to get employment in Taiwan in tyre manufacturing business.

4 years down the track he sent everything he could back to his wife, paying me back and setting up a nice nest egg for his wife & kids.

Does this government intend to levy a TAX on the wives of these responsible, hard working Thai's earning a future for their families?

I am sure that is not their intention - they are after the 'big boys' - but clearly they failed (as always) to read the 'Laws of Unintended Consequences'.   How this is implemented by Thai (if it is) will be critical as to who they will 'catch'. 

[TroubleandGrumpy]

14 hours ago, Antti said:

The Elite Visa program was rebranded as Thai Privilege Visa and relaunched 1st of October. On the website in the FAQ section it says:

 

Do I have to pay income taxes in Thailand as a Thai Privilege visa holder?

The Thai Privilege Visa is a privilege visa which falls under the special tourist visa or privilege entry category. The Thai Privilege Visa holder does not need to pay income taxes especially when the income was derived abroad. There are instances where a Thai Privilege Visa holder may voluntarily pay income tax in Thailand.

 

This is promising but of course an official statement from the tax department is needed. I'd assume the same rules would apply to people who have Elite Visa.

IMO that 'condition' will eventually be withdrawn.  It appears thousands of (many chinese?) criminals and scammers paid for that Visa.   Another one of the stupid Junta's 'global hub' programs.  

[redwood1]

14 minutes ago, TroubleandGrumpy said:

I am sure that is not their intention - they are after the 'big boys' - but clearly they failed (as always) to read the 'Laws of Unintended Consequences'.   How this is implemented by Thai (if it is) will be critical as to who they will 'catch'. 

If they were after the Big Boys that would mean the top 1% that own 50% of Thailand....

Who most likely pay almost zero taxes....

 

The Big Boys dont want to see things change....They are more or less the real goverment of Thailand....And they are not going to tax their own Trillions of dollars.......

 

The little people can pay the taxes, like the farang....

[retiree]

8 hours ago, Puccini said:

The quoted text of Section 41 in the version of the Revenue Code to which the above link on the website of the Revenue Department leads appears to be outdated, as it does not reflect the amended text of the second paragraph

As the post notes I only quoted paragraphs 1 and 2 of section 41.  I think the third paragraph re 180 days tax residency dates back to the 1938 law. 

> 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  

 

I only mention this 'cause the RD website is indeed up to date and very useful.

 

 

[TroubleandGrumpy]

7 hours ago, Captain Monday said:

Looking at your point .2）Your super is already taxed at 15 percent.

People misubnderstand these agreements, they are tax equilization treaties.

You land these funds in Thailand and Thailand,  say for example,  determines a super fund distribution or pension payment at a higher rate like 20 percent. You may then be  held repsonsible for to make up the difference between the 15 and 20 percent you would have paid if the income stream originated within Thailand.

This is how it operates in other countries I have worked in with an agreement with the US. When and if Thailand goes down the tracks heading to this trainwreck we will see but many expats may be in for a some surprises!

Undoubtedly you could be correct, and that would be the case for many Expats who have paid some taxes in their home country.  In my case, after learning everything, I have gone through it all and the tax I paid in Australia on my Super is higher than the tax payable in Thailand. However, that does not mean I will not have a problem/s, or that in the future I will not be liable to pay income taxes in Thailand.

 

The main problem is Somchai at the Thai RD who believes that I (and all other Farangs) have to pay taxes in Thailand because I/we brought so much money into Thailand.  In that situation - what do I have to do to 'prove' that most of that money tarnsferred into Thailand is my Pension, plus my Savings, and that the 'earnings' on my Savings was already taxed in Aust, and that under the Thai/Aust DTA I do not have to pay him/Thailand any additional income tax.

 

Will that process be reasonable and logical and consitent - not an effin chance!  It will be a clear as mud and as complicated as a space rocket - and worse than dealing with the Immigration IOs who are at least experienced with Expats and most can speak English.  There will be no 'agents' I can pay that can slip them a little tea money and all will be fine - otherwise they would already be available to Thais.  I will have to pay an 'expert' to help me with all the khrapp that will fall on me from a great height - and every year thereafter - because once a tax agency 'sees' you, they will look at you again every year thereafter.

 

Those things above and many other issues that could/will arise over the years are the problem.  It is not just a matter of being taxed (although that could be bad enough) - it is complying with the ever changing annual 'bending over' processes that will be the problem. Especially so, if in 3-5 years Somchai (figuratively) knocks on my door and says 'you pay taxes and fines now please'. 

[TroubleandGrumpy]

3 hours ago, Dogmatix said:

Not just Thai Privilege/Elite. The million millionaires courted by the previous government with LTR visas now looks even more doubtful. They have an tax exemption via a Royal Decree from the date they get their LTRs but another Royal Decree could easily eliminate that in the interests of “fairness and equality” and the current exemption is not enough for many of them to be able to invest in condos etc without paying 35% remittance tax. They can just blame the Prayut government for any fall out from the LTR visas.

 

If capriciousness of this government is not scary enough, Move Forward Party is waiting to get into power with real social welfare policies, as opposed to Thaksin’s wasteful one-off vote buying schemes. Appalling economic management and atrocious public education for decades now condemns Thailand to permanently sluggish growth, desperately depending on low end Chinese tourism. It is impossible to generate enough tax revenue for the welfare expectations created by politicians without hugely increasing the tax take by whatever desperate means come to hand including a large increase in VAT m, first to 10% and then to European levels and wealth taxes, capital gains tax etc. The noose is tightening. 

The good news is that this Govt is continuing with policies that will dramatically lower the Baht, and ther next one (MFP) will drag the Baht down even more.   If the AUD/BHT gets back to what it was before the Junta took over, I will be very pleased.  Silver Lining and all that ????

[TroubleandGrumpy]

27 minutes ago, redwood1 said:

If they were after the Big Boys that would mean the top 1% that own 50% of Thailand....

Who most likely pay almost zero taxes....

The Big Boys dont want to see things change....They are more or less the real goverment of Thailand....And they are not going to tax their own Trillions of dollars.......

The little people can pay the taxes, like the farang....

I did not mean them - they will never be touched.

They are after those below them - the well off Thais (and others) who invest overseas.

[stat]

On 10/2/2023 at 11:48 AM, TroubleandGrumpy said:

Yes true. But if you look at Australia's and UK's and USA's as examples they are all very different in the details.

 

US is always the odd man out in terms of DBA, correct. However 90% of dba's are very similiar and follow the same template.

[BaanOz]

On 10/2/2023 at 3:56 PM, TroubleandGrumpy said:

I have stopped work, but I have not converted my Super to Retirement Phase. Therefore all earnings made by my Super Fund are taxed at 15%, before distribution to its members who like me have their money in the Accumulation Phase. I did not convert my Super Funds to the Retirement Phase for two reasons.

 

Number One - both the Government, the Super Funds, and a lot of 'Advisers' were saying that people should convert to Retirement Phase because their money in Super does not then get taxed.   I have been in and around Government and large corporate organisations for a long time, and they never do anything that is not in their own best interests - especially the Government - so I checked out the details and once I had done that the decision I made was not to do it (see 2).

 

Number Two - once you 'convert' your Super to Retirement Phase, it is classified as an income - by Centrelink, ATO and all other Govt Depts.  Additionally, once it is converted, you cannot go back to Accumulation Phase. 

 

I can stay in Accumulation Phase until I am 75 - and that is my plan. And (of course) I have a few plans for what to do after that time - but it is quite a few years away yet - things will change and meanhile I am staying across all the changes in Super rules. 

I always thought it was flexible and you could transfer it back into an Accumulation fund if you like: Converting super into retirement income: What are your options? (superguide.com.au) but as mentioned, while not paying tax in Retirement Phase, this may have some issue with paying Thai tax (to keep on topic!).

[TroubleandGrumpy]

2 hours ago, BaanOz said:

I always thought it was flexible and you could transfer it back into an Accumulation fund if you like: Converting super into retirement income: What are your options? (superguide.com.au) but as mentioned, while not paying tax in Retirement Phase, this may have some issue with paying Thai tax (to keep on topic!).

I started doing some research on that and it looks like it depends on the Super Fund which you are a member of, and what sort of member account you have, and how they are structured. I remember that my old Super Fund said once it was 'converted' to pension I could not bring it back to accumulation. They also said that once you 'convert' any/all of your account to pension, you cannot add any more funds into that account and must put that in your accumulation account or start a new one.  The ATO website gives good info and it is free - Superguide wants people to pay for giving their advice - many of their articles/reports require you to join before you can read it.  Super | Australian Taxation Office (ato.gov.au)