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

[Mike Lister]

1 minute ago, NanLaew said:

I was unaware that one could open a bank account in Thailand as a non-resident.

 

Last century, I had a couple of US bank accounts that I was allowed to open as a non-resident visiting employee of an American company. I worked on their foreign operations but attended and eventually ran frequent training courses for their foreign clients in the US. Those two earlier accounts didn't have a tax ID as I didn't have or need a US Social Security Number at that time (paid overseas). Accordingly, they didn't attract any interest either. All legal and above board.

 

Later, as a full-time employee based in the US, I opened a new account that did have the SSN/TIN as I was paying taxes. Some time after 9/11, the Homeland Security Act tightened up on non-resident accounts and US banks were legally compelled to check on all accounts. Without contacting me or asking my permission, my non-resident "tax free" account suddenly had my SSN attached to them. I guess the basic name, date of birth and place of birth identity check was enough for them to make the link.

TBH I don't know if today that's still possible but I strongly suspect it is. I held a NR bank account for several years whilst residing here on an OA....but that was then and this is now!

[TroubleandGrumpy]

20 minutes ago, Mike Lister said:

This is going to be painful, I already know!

 

That's all fine and good from a RD tax perspective but the term "resident" has a broader meaning in the context of citizenship and residency. So when the likes of you and I or any other two non-Thai's use the term "resident", it need qualification. The fact the document above attempts to quantify the terms "resident" and "non-resident" and begins with a definition of Resident (capitalised) and then in the same sentence reverts back to "resident", shows even the RD is not consistent on this point and is slightly confused. A person is (a) Resident for citizenship and Immigration purposes, aka, a Thai national or a naturalised foreigner, or, they are on a visa or an extension of stay, in which case they are not Residents. Similarly, a foreign subject in Thailand can be resident for tax purposes or not-resident for tax purposes. Lastly, a person like you or I who are not Thai are not Residents but we are resident for tax purposes (presumably).

 

Lastly, if you keep your cool and stay polite, we can debate (or not), if you don't, we won't.

Mike - in one post you say you do your tax returns in Thailand. Does that mean you are a Resident or a Citizen?  I only ask because a Resident is not the same as a tax resident.  That is a fact and I cannot understand how you cannot accept that.  A tax resident in Thailand does not need to be a Resident or a Citizen of Thailand.  Maybe you should ask a lawyer.

PS - I am many others are very keen to see that 'advice' you received from Thai RD. 

 

 

 

 

[MeePeeMai]

4 minutes ago, bdenner said:

Tried searching 77 pages of this thread without an answer:-

Does anyone know how they intend to tax our incoming transfers (if this BS is to be believed)?

Do they expect my KBank to garnish xx% of the 65K Baht I bring in every month to satisfy my retirement extn. requirements in the form of with holding tax as they do with the piddily amount of interest I receive

Unknown at this point, we are all waiting for clarification from the Thai authorities.

[TroubleandGrumpy]

6 minutes ago, bdenner said:

Tried searching 77 pages of this thread without an answer:-

Does anyone know how they intend to tax our incoming transfers (if this BS is to be believed)?

Do they expect my KBank to garnish xx% of the 65K Baht I bring in every month to satisfy my retirement extn. requirements in the form of with holding tax as they do with the piddily amount of interest I receive

Wait - Hopefully the Thai RD will clarify any exemptions and details soon.

At the moment the new interpretation does include ALL foreign remittances into Thailand.

That does not mean that they will be taxing you/I - it means that money could be taxable income.

Good article in a newspaper online Postreded in Bangkok today covers the current situation very well.

I recommend you read it and then wait to see how things develop.

[Mike Lister]

2 minutes ago, TroubleandGrumpy said:

Mike - in one post you say you do your tax returns in Thailand. Does that mean you are a Resident or a Citizen?  I only ask because a Resident is not the same as a tax resident.  That is a fact and I cannot understand how you cannot accept that.  A tax resident in Thailand does not need to be a Resident or a Citizen of Thailand.  Maybe you should ask a lawyer.

PS - I am many others are very keen to see that 'advice' you received from Thai RD. 

 

 

 

 

I am neither a Resident nor a Thai citizen, I am a foreigner who remains in Thailand on  an extension of stay - I am a UK citizen. But because I stay in Thailand for more than 180 days per year, I am resident in Thailand for tax purposes.

 

PS I already told you it was verbal communications, perhaps you could go the Revenue office and ask them yourself and see what they say. 

 

 

[TroubleandGrumpy]

9 minutes ago, Mike Lister said:

It was verbal communication at the time I first completed the tax return at the Revenue Offices, reinforced verbally in the second year.

Not worth the paper it was written on.  Right - thanks for that mate. I will base my financial situation plans on what you were told by some Thai person - SURE.

Get it in writing and I will believe you.  

[NanLaew]

5 minutes ago, bdenner said:

Tried searching 77 pages of this thread without an answer:-

Does anyone know how they intend to tax our incoming transfers (if this BS is to be believed)?

Do they expect my KBank to garnish xx% of the 65K Baht I bring in every month to satisfy my retirement extn. requirements in the form of with holding tax as they do with the piddily amount of interest I receive

If they do, it will be facilitated in the coding of the transfer. If the transfer is coming from a bank account that has a tax ID for that country (indicating that tax has been assessed and paid), or coming from a government agency that has already deducted any tax (or is tax-exempt), this information is encoded in the remittance information. Nobody needs to front up anywhere with statements and pension letters, etc,, and argue the toss. It will be seamless and automatic. Note that the key to this is having a tax ID number or TIN associated with BOTH the accounts involved and this is not necessarily the person using or accessing the account, although in most instances it is.

 

I think those piddly 65k baht/month places you in the tax-exempt bracket for that receiving account. The Thai RD website has this sort of information in English, including what deductions you are entitled to claim.

[JackGats]

16 hours ago, stat said:

Germany did abolish bank secrecy versus the taxman without blinking an eye. Even the swiss abolished it vs the taxman.

Not fully. Bank secrecy only gets lifted in Germany when the revenue service is already suspecting or investigating someone. The revenue service cannot just phone or e-mail a bank in order to ask for data.

[JimTripper]

1 hour ago, TallGuyJohninBKK said:

Can you clarify what you mean with the above comment? In terms of following advice from the local RD...

 

Are you saying you did the Thai tax filing, included the social security amount, and then claimed it as exempt

 

or

 

Are you saying you did the Thai tax filing, and did NOT include any Social Security amounts in it, because they are exempt?

 

 

i remember reading somewhere (don't remember where) that you had to declare all income coming in and deduct it off later.

 

in other words, you would need to file the tax return and get a deduction for the social security and whatever else. so you may not owe money on it.

 

you may not need to file at all if the income is under a certain amount i'm guessing.

 

whether they can track it is another matter.

 

Edited October 8, 2023 by JimTripper

[jerrymahoney]

Yes I read the BP opinion peace this AM:

 

It clarifies that the those retirees, among others, need clarification of double taxation and other issues so they can make their plans on the government's forthwith clarification among other issues that need to be clarified. 

[TroubleandGrumpy]

2 minutes ago, JackGats said:

Not fully. Bank secrecy only gets lifted in Germany when the revenue service is already suspecting or investigating someone. The revenue service cannot just phone or e-mail a bank in order to ask for data.

Yes and No.  The only reason a tax dept anywhere will request that information, is because they have started an investigation.  Whenever they 'check' someone out it commences with a file/reference - it may continue and it may not - most do not. How that request is made is already in place - electronic request using approved forms and authority etc.  Somchai in Thai RD cannot just call XYZ bank and get your tranfers.

 

Some people need to read this - about USA but applicable everywhere in the world.

All international transfers are recorded - under International Laws.

Sending international wire transfers over $10,000: full guide - Wise

[Mike Lister]

5 minutes ago, JimTripper said:

i remember reading somewhere (don't remember where) that you had to declare all income coming in and deduct it off later.

 

in other words, you would need to file the tax return and get a deduction for the social security and whatever else. so you may not owe money on it.

 

you may not need to file at all if the income is under a certain amount i'm guessing.

 

whether they can track it is another matter.

 

When I set up my US SSc transfer to the local Bangkok Bank, I had to use a US SSc form that was duly signed and stamped by the bank and a copy sent to Manilla for processing. Bangkok Bank kept the form and said they needed it for their records. In answer to your query about whether it can be tracked, yes it can.

[TroubleandGrumpy]

9 minutes ago, JimTripper said:

i remember reading somewhere (don't remember where) that you had to drvlare all income coming in and deduct it off later.

 

in other words, you would need to file the tax return and get a deduction for the social security and whatever else.

 

That is one of the potential problems in this new rule - but we all hope that is not the case.

The vast majority of Thais do not lodge an income tax return - same with most Expats.

Clarifications are coming - but untiul then it is a worry - despite what some Expats are saying here.

Thai Government to Begin Taxing Foreign-Sourced Income as of 2024  - The Australian-Thai Chamber of Commerce (AustCham) (austchamthailand.com)

We all have to wait and see - we all have diffrent financial arrangements - hopefully before next year.

[Lorry]

1 hour ago, mokwit said:

What should I google to find the article?

Canno said on p71:

The link that was deleted above. Opinion piece in that which can not be linked here. Easy to find - New tax rules require clarification - todays date 08 Oct 2023

 

That article asks a question that many posters have asked: what do I as a foreigner get from taxes I pay here? Or does it just fill someone's bank account? BTW it asks the same question for Thai taxpayers.

 

The article also states that foreign remittances will have to be monitored closely. Quite obvious to me.

[Lorry]

1 hour ago, JimTripper said:

is it really taxation if you have to file in thailand, pay tax on it and then deduct it off later or get a refund?

Yes, it is.

"Pay tax on it" is called "taxation"

[Lorry]

28 minutes ago, JackGats said:

Not fully. Bank secrecy only gets lifted in Germany when the revenue service is already suspecting or investigating someone. The revenue service cannot just phone or e-mail a bank in order to ask for data.

This is not quite the reality. 

In reality,  the revenue service can suspect anybody.  They don't need a warrant. 

When Germany abolished banking secrecy,  not a whimper from anybody,  and of course not a global "blockbuster" as aldrig imagines. 

When Switzerland abolished banking secrecy,  that was of global interest as all the Marcoses and wannabe Marcoses  have their money there.  Global interest,  yes - global blockbuster? No.

When Austria abolished banking secrecy, there was no global reaction ("who cares about Australia, anyway? ")

When Sweden abolished banking secrecy - oh, they never had one in the first place.

[Chris Daley]

Put the business in a Thai persons name.

[freeworld]

13 hours ago, Mike Lister said:

Take a deep breath and read the post again, slowly.

 

"a resident of Thailand and a resident of Thailand for tax purposes are not the same. Someone here on a long stay visa is not a resident of Thailand, only a Thai citizen or a person who has been granted residency can be a Thai resident".

How do the foreign people working here do it then. They do not suit your analysis.

 

It is resident in thailand for tax purposes.

 

 

Edited October 8, 2023 by freeworld

[Mike Lister]

Just now, freeworld said:

How do the foreign people working here do it then. They do not suit your analysis.

Foreigners on Work Permits are not Residents, they are foreigners on visa's, extensions or temporary permission to remain.

[Neeranam]

2 hours ago, Mike Lister said:

Here's a conundrum:

 

What if a long stay expat, Thai resident for tax purposes, remits income to their bank account in Thailand but the account is a non-resident account? That means the account earns no interest and doesn't need permissions etc to repatriate the funds. As long as said expat has no income from inside Thailand, are those funds subject to Thai tax? I don't see how they can be, given that the account is specifically non-resident.

All bank accounts pay interest. If they don't, it's a scam by the bank officer/s,, wherein they get the interest. 

I once managed to get a former Minister of Finance to look into why I was not getting interest with my bank account. After his team investigated, I and all the other foreigners immediately started getting interest. The bank worker pleaded with me to not press charges against her as she would have gone to jail. 

[jerrymahoney]

1 hour ago, Mike Lister said:

PS I already told you it was verbal communications, perhaps you could go the Revenue office and ask them yourself and see what they say. 

 

Yes  it seems you went to the RD to ask about your particular situation. 

 

I may go to the local RD office here and do the same rather than waiting for the lawyers and chartered accounts to offer their "it depends" opinion.

[freeworld]

2 minutes ago, Mike Lister said:

Foreigners on Work Permits are not Residents, they are foreigners on visa's, extensions or temporary permission to remain.

As are people resident in thailand on non imm visas and extensions more than 180 days per annum.

Edited October 8, 2023 by freeworld

[Neeranam]

3 hours ago, jerrymahoney said:

So if e.g. you receive 50,000 baht per month in US Social Security and that is 100% of the  money you transfer to Thailand as a monthly deposit in a Thai bank, there is no need to file a Thai Income tax form. 

My current allowances allow about 40k tax free.

[Mike Lister]

1 minute ago, freeworld said:

As are people resident in thailand on non imm visas and extensions more than 180 days per annum.

er, yes! 

 

The point that was made earlier was that Resident and resident for tax purposes are not the same thing. A foreigner on a work permit/visa/temporary permission to remain, cannot be a Resident, only a Thai national or a naturalised foreigner can be that.

[Mike Lister]

8 minutes ago, Neeranam said:

All bank accounts pay interest. If they don't, it's a scam by the bank officer/s,, wherein they get the interest. 

I once managed to get a former Minister of Finance to look into why I was not getting interest with my bank account. After his team investigated, I and all the other foreigners immediately started getting interest. The bank worker pleaded with me to not press charges against her as she would have gone to jail. 

Non-resident bank accounts in Thailand do not pay interest on balances, neither can THB be deposited into the account.

Edited October 8, 2023 by Mike Lister

[jerrymahoney]

3 minutes ago, Neeranam said:

My current allowances allow about 40k tax free.

Thanks for that.

[Dogmatix]

I have had another look at the RD's Q&A sheet regarding RD Order P 161/2566. The way they write the Thai is pretty hard to read and the google translation comes out worse than usual because the original is in pdf format and the Thai characters get jumbled when cut and paste. Anyway it is only a superficial attempt to clarify a very few points that may arise for Thai taxpayers. 

 

But a couple of points are worth mentioning. 

 

Q 4. Like most of it the answer is rather garbled but it is does seem to say that inheritances from overseas will not be taxable as normal income.  Presumably this means they will be taxed at Thai rates if death took place after the Thai IHT Act came into force.  What it doesn't mention is that overseas inheritances are taxable in Thailand, if over the threshhold, whether remitted to Thailand or not. 

 

It also seems to say that gifts from overseas between direct relatives and married couples are tax free up to 20 million, which is consistent with Thai Gift Tax.  But it doesn't reference Gift Tax per se or say that gifts to non family up to 10 million are tax free, as per Thai Gift Tax law.  It also mentions very special situations like support of parents and spouse which implies this is another tax law not the Gift Tax Law. So much for clarification.  They are really a load of so and sos.

 

For those who have a Thai missus who has a foreign bank account, perhaps you could transfer money to her overseas and get her to gift the money to you in Thailand, rather sending money to the missus which you may not get back.

 

Q 10. This deals with a question about a Thai who moves back to Thailand and brings back money earned while spending several years living abroad.  The answer is vague but what they are saying seems to be that such a person had better make sure they bring in all the money in the year before they become tax resident again. Many Thais returning home will get caught by this unwittingly, if they move back before July in any year without understanding this, which is pretty disgusting.  But even more worrying, this doesn't offer any hope for foreigners who are already tax resident and want to remit savings from abroad going way back, if they say the Thai workers savings would taxable if they brought them back after becoming tax resident again.  It seems to imply tough luck, we'll tax your savings at 35%,m whereas the 2003 RD directive was that savings are not taxable.

RD Order 161 2566 Q&A.pdf

Edited October 8, 2023 by Dogmatix

[TroubleandGrumpy]

52 minutes ago, jerrymahoney said:

Yes  it seems you went to the RD to ask about your particular situation. 

 

I may go to the local RD office here and do the same rather than waiting for the lawyers and chartered accounts to offer their "it depends" opinion.

Be careful mate.  That will bring you to their attention.  

When I asked my wife why other Thai wives/GFs were not complkainig, she said because that will mean that they get 'noticed' and it is always better to not get noticed by any Thai Govt person or office.

[jerrymahoney]

10 minutes ago, TroubleandGrumpy said:

Be careful mate.  That will bring you to their attention.  

When I asked my wife why other Thai wives/GFs were not complkainig, she said because that will mean that they get 'noticed' and it is always better to not get noticed by any Thai Govt person or office.

Halloween is coming up -- is this your practice?

[TroubleandGrumpy]

44 minutes ago, Dogmatix said:

For those who have a Thai missus who has a foreign bank account, perhaps you could transfer money to her overseas and get her to gift the money to you in Thailand, rather sending money to the missus which you may not get back.

Thanks for that post - lost of good information.  As with all tax depts worldwide they will not tell you how to 'reduce' your taxes, but they will nail you if you avoid them.

 

That tactic could work in a rational rule-based country, but it will not work here.  And this is something that everyone needs to hear about - Thailand is NOT a rules-based society.  Saying 'but that is the rule' means nothing to any Thai who has been told the rule is applied 'this way'.  So if that tactic is found out about, the Thai Officer will (and can) decide that the Expat was deliberately avoiding taxes and hit them with a bill and fine. Good Luck getting his/her Superviser to reverse that decision. Good Luck appealing against that decision.  In fact Good Luck challenging anything any Thai RD Officer decides is the rule. Not only will an Expat not win, it will cost them money to find out that they cant win. That is the legal reality of Thailand for Expats - you have very little if any legal rights.  Now if an Expat has the ability to get a wife/friend to sit down with that Thai person and talk it out and through and do what is needed 'the Thai way' then that Expat might have success.  But if an Expat quotes the rules at an official Thai person and think that the rule matters - they are very wrong.