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

[Dogmatix]

1 hour ago, SHA 2 BKK said:

Hi matey 

 

1.  Only money brought into Thailand not Global Income (not sure but I think only the Yanks do that) and that’s for Tax Paying Residents (over 180 days)

 

2.   I’ve got one of the LTR Pensioner Visas.   I asked about these changes.  Posted this earlier but this was the response from the BOI LTR Team.  They are pretty adamant there won’t be any change for this type of Visa.  Though they don’t mention Pensions in particular which as you point out could be seen as passive income.  Personally I get mine paid in Australia and bring it in only when needed - in the following tax year.  It’s taxed in Australia and I would consider it savings after that.  
 

“Thank you for your inquiry. On the note of the recent Revenue Department announcement on the new conditions for oversea income that generate from business/ asset or work abroad to be subject for personal income tax. 

 

We would like to address that for the LTR tax benefits: the revenue department has already announced a royal decree to exempt the LTR- Wealthy Global/ Wealthy Pension/ Work from Thailand from paying the income tax derived from oversea business/ work and assets. Therefore the change in conditions will not effect the exemption of the LTR mentioned group. 

 

Therefore, we can assure you that the incentive of the LTR visa is still the same. We also believe the revenue department will shortly give an official clarification also as it is their main responsibility and we will work with them to get the procedure for future assistance i.e. to address when you wire in the money that it is from the work remotely (same as in LTR application)- the revenue can cross check with us if they want, don't worry. 

 

If you have any further inquiry or find any obstacles, please let us know so we can address the issue with revenue department on your behalf.”

The problems with this, as I see it are:

 

1. LTR visas don't provide any exemption for earnings earned before the LTR visa was issued.  Therefore someone coming in with a new LTR visa and wiring funds to buy a condo will have to pay up to 35% tax, if they can't prove they earned the money after the LTR visa was issued, which is unlikely, if they earned the money somewhere else.

 

2. The Royal Decree was announced last year under the previous government and the whole LTR scheme was the brainchild of that government, one guy in particular who didn't get a job in this government. although he hoped to be a minister or at least a deputy minister. So the Srettha government feels no particular obligation to this project.  The LTR tax exemption didn't seem like a big deal when anyone could just wait till the next tax year and get the same exemption. Now resentment will build up from Thais who will see the LTR visas holders like British people used to see the non-domiciled foreigners who got exemption from foreign source income, like Rishi Sunak's rich Indian wife. Now the non-dom tax privileges are being gradually whittled away to nothing. Even though no one cares about expats, Srettha said this is being done in the interest of fairness and equality which will look odd when he gives tax exemption only to rich foreigners while taxing the butts off Thais and less well off foreign retirees who are often struggling to support Thai families. I predict the LTR tax exemption won't survive long term. Another Royal Decree or an amendment to the Revenue Code would eliminate it. Those with 10 year LTR visas are unlikely to get this privilege with their first renewal and it might not even last that long. The first Elite cards came with the right to buy land but that was axed in the first few months with an offer of a refund.  LTR visa holders would probably get their 50k baht back pro-rata, if the tax exemption went mid stream, i.e. a 25k refund if it went after 5 years and you no longer want the visa on that basis.

 

Obviously the BOI people who write that stuff have to sound upbeat because they are still selling the LTR scheme and will judged on their sales numbers.  But they have no power and are part of the PM's office.

Edited October 8, 2023 by Dogmatix

[moogradod]

9 minutes ago, Mike Lister said:

That was my understanding also. But if you see Jenkins post earlier on this page he says he spoke with RD in Bangkok and he wrote, "UK State Pension is tax free as the State will have dealt with that". So, dunno, really. It would make sense that State pension would be disregarded but that's just me.

That makes this thread so difficult to interpret - the US and UK seem to have special rules (as well as DTA) as others of the 60+ (or is it more) other countries and sometimes even the wording in the DTA differ. Only chance is to wait for a precise ruling applicable for all (I think it will be for all then, doubt they make 60+ versions of their order).

[moogradod]

3 hours ago, TroubleandGrumpy said:

........................................  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.

Great post  and spot on.

[Dogmatix]

9 minutes ago, moogradod said:

...........unless it was remittance to the wife totalling not less than 20 Mio per year, from savings (provable but difficult) and on top taxed fully at the point of origin in the year before the remittance (in the past before 01.01.2024 the old rules apply).

My understanding from the clear as mud RD Q&A was that any remittance to wifey under 20 mil in a tax year is not assessable for tax and doesn't need to be declared.  But Srettha has told the RD to review Inheritance Tax and any review would also include Gift Tax.

[MartinBangkok]

2 hours ago, Jenkins9039 said:

I actually phoned the revenue office (bangkok).

 

Money earned overseas, and or as a business owner overseas regardless of tax overseas or not, is tax free unless remitted and then taxed, this includes companies which say are overseas in tax havens, and say don't have substance in the overseas location (otherwise hire someone on Fiverr on a permanent contract and use their home as the office). 

 

Money from property (rent / sale) overseas will be treated as Income when remitted (this will <deleted> a few people).

 

Money in the form of 'not in the bank account' - say cash or even stablecoins (thankfully public) whereby savings and remitted, is tax free *IF* it was earned before and/or tax was collected, having said that any funds earned in 2023 and remitted will be taxed as Income, evidence to support it is savings is a must, for pre-2023.

 

Money extracted from stock market activities, principle is tax free, ROI is treated as Income if remitted to Thailand.

 

Elite Visa holders 'reportedly' spend around 30,000$ a year (such a low number and I am one of them so not sure where they are getting that from) anyway they will be taxed as Income like everyone else.

 

Pensioners are in for a whammy though... State Pension is tax free as the State will have dealt with that, your private pensions on the other hand will be treated as Income and taxed, note some countries charge tax anyway, the terms of some of the treaties outline that Thailand will provide a credit for the tax paid, what you need to recognise is that is specifically on the $ (equivalent) amount 'earned' and 'remitted' meaning in some countries (say the UK) there is something like a tax exemption of 13/14,000 GBP, whereas in Thailand there is a tax exemption of 150,000 THB + (60,000 THB - needs verification), so from the 150,000 THB onwards you'd be taxed at the standard Thai rates.

 

Note the Government is pushing through higher income for Thais, with luck they also increase the Tax levels upwards... also note 96%+ of Thais don't pay tax (and earn enough just they do not declare it or feel they should not be productive members of society) - the Government has commenced populistic politics which is what specifically has led to the downfall of our own countries (deficit spending and populistic appeal) - in this latest move we are the ones, alongside the productive members of Thai society paying for the populistic policies such as a free 10,000 THB bribe etc.

 

This appears to be the start of the road our own Governments went down, and will need to be factored in before individual property appraisals and tax there etc.

 

Likewise I am somewhat surprised no one has complained that for example, in the time i've been in Thailand, i've seen not one but two exit taxes created, and not one but three entry taxes created under the promise of this or that and then folded into the flight ticket.

 

Somewhere the Thai Government has some major economic hurdles that haven't revealed themselves as of yet, and they are appearing to consolidate into causing more long-term hardship (like our own debasing currencies) by compounding what ever the issue is with populistic vote buying. 

This confirms a previous post of mine, where I put forward the notion that they might, already next year, in 2024, demand a tax return for the year 2023 from everybody. So for many this will mean get out of Thailand before 1st. January 2024 (2,5 month's  from now) or before your Visa expires in 2024, or before tax return is due in Thailand in the spring 2024. Difficult to say which alternative is best, as in worst case scenario they won't let you leave after 1st January without a tax return for 2023.

Edited October 8, 2023 by MartinBangkok
Addition

[moogradod]

2 minutes ago, Dogmatix said:

My understanding from the clear as mud RD Q&A was that any remittance to wifey under 20 mil in a tax year is not assessable for tax and doesn't need to be declared.  But Srettha has told the RD to review Inheritance Tax and any review would also include Gift Tax.

This may well be, but only applicable from 2024 on if there are changes. Everything else would not be possible from a juristic viewpoint.

[Mike Lister]

5 minutes ago, MartinBangkok said:

This confirms a previous post of mine, where I put forward the notion that they might, already next year, in 2024, demand a tax return for the year 2023 from everybody. So for many this will mean get out of Thailand before 1st. January 2024 (2,5 month's  from now) or at the latest before your Visa expires in 2024.

That is simply incorrect, the proposed new rules begin effective January 1, 2024 for the tax return that is due Jan/Mar 2025.

[hotandsticky]

3 minutes ago, MartinBangkok said:

This confirms a previous post of mine, where I put forward the notion that they might, already next year, in 2024, demand a tax return for the year 2023 from everybody. So for many this will mean get out of Thailand before 1st. January 2024 (2,5 month's  from now) or at the latest before your Visa expires in 2024.

 

Do you normally panic over everything?

 

 

Do you actually think about what you write? 

 

 

The Thai authorities couldn't put together a system for all foreigners to complete a tax return. Do you have ANY idea how many foreigners are in Thailand?

 

I can guarantee that I will never need to complete a tax return in Thailand - nor will I ever pay a Satang in income tax, nor will I consider leaving on the whim of some idiot who thinks this will happen.

[Mike Lister]

4 minutes ago, hotandsticky said:

 

Do you normally panic over everything?

 

 

Do you actually think about what you write? 

 

 

The Thai authorities couldn't put together a system for all foreigners to complete a tax return. Do you have ANY idea how many foreigners are in Thailand?

 

I can guarantee that I will never need to complete a tax return in Thailand - nor will I ever pay a Satang in income tax, nor will I consider leaving on the whim of some idiot who thinks this will happen.

Er, you might change your mind if they decide to enforce that foreigners need tax clearance certificates before leaving the country. Those certificates are already on the books but not enforced.

 

https://www.rd.go.th/english/23518.html

Edited October 8, 2023 by Mike Lister

[MartinBangkok]

6 minutes ago, hotandsticky said:

 

Do you normally panic over everything?

 

 

Do you actually think about what you write? 

 

 

The Thai authorities couldn't put together a system for all foreigners to complete a tax return. Do you have ANY idea how many foreigners are in Thailand?

 

I can guarantee that I will never need to complete a tax return in Thailand - nor will I ever pay a Satang in income tax, nor will I consider leaving on the whim of some idiot who thinks this will happen.

Thanks for calling me an idiot..

[hotandsticky]

1 minute ago, MartinBangkok said:

Thanks for calling me an idiot..

Your words - you did it yourself.

[hotandsticky]

6 minutes ago, Mike Lister said:

Er, you might change your mind if they decide to enforce that foreigners need tax clearance certificates before leaving the country. Those certificates are already on the books but not enforced.

 

https://www.rd.go.th/english/23518.html

Yes, I can see them stopping all the Cambodians returning through Poipet.

[Dogmatix]

41 minutes ago, Mike Lister said:

That was my understanding also. But if you see Jenkins post earlier on this page he says he spoke with RD in Bangkok and he wrote, "UK State Pension is tax free as the State will have dealt with that". So, dunno, really. It would make sense that State pension would be disregarded but that's just me.

The only reference to pensions in the UK Thai tax treaty is in Section 19:

 

(2) (a) Any pension paid by the Contracting State or a political subdivision or a local authority thereof to any individual in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State.

 

That means only pensions occupational pensions paid to former civil servants and local government people shall only be taxable in the UK.  There is not even any mention of the UK state pension which means it can be taxed in Thailand and the RD can tax the different between UK tax on it and Thai tax, if the Thai tax is higher, which it will be, if the taxpayer has no other income and has only basic Thai tax deduction. This won't be so bad for over 65s who get an additional 190k deduction.  

 

The UK wasn't very aggressive in negotiating this.  They should have got the state pension exempted like the yanks did and the Thais wouldn't have cared in those days, so I guess the Brits were too lazy to ask.  There was no retirement visa at that time and therefore the only British retirees were expats with PR who retired in Thailand after spending the latter part of their career in the Kingdom.  Anyway the large numbers of recently arrived wealthy Chinese are in worse shape, as their DTA is only for companies, as it was negotiated in the early 80s, not long after the Cultural Revolution, when there was no private enterprise and no private wealth 555.

Edited October 8, 2023 by Dogmatix

[Mike Lister]

1 minute ago, Dogmatix said:

The only reference to pensions in the UK Thai tax treaty is in Section 19:

 

(2) (a) Any pension paid by the Contracting State or a political subdivision or a local authority thereof to any individual in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State.

 

That means only pensions occupational pensions paid to former civil servants and local government people shall only be taxable in the UK.  There is not even any mention of the UK state pension which means it can be taxed in Thailand and the RD can tax the different between UK tax on it and Thai tax, if the Thai tax is higher, which it will be, if the taxpayer has no other income and has only basic Thai tax deduction. This won't be so bad for over 65s who get an additional 190k deduction.  

 

The UK wasn't very aggressive in negotiating this.  They should have got the state pension exempted like the yanks did and the Thais wouldn't have cared in those days, so I guess the Brits were too lazy to ask.  There was no retirement visa at that time and therefore the only British retirees were expats with PR who retired in Thailand after spending the latter part of their career in the Kingdom.  Anyway the large numbers of recently arrived wealthy Chinese are in worse shape, as their DTA is only for companies, as it was negotiated in the early 80s, not long after the Cultural Revolution, when there was no private enterprise and no private wealth 555.

I think Jenkins quote may have been forward looking rather than historic practise.

[Mike Lister]

2 minutes ago, hotandsticky said:

Yes, I can see them stopping all the Cambodians returning through Poipet.

You've been here long enough to know there are many sets of rules that apply to different nationalities and different means of inbound/outbound transportation. No farang retiree is going to go back to the UK for a holiday and walk across the border at Poipet, Immi/RD worked that out already.

[Dogmatix]

9 minutes ago, Mike Lister said:

Er, you might change your mind if they decide to enforce that foreigners need tax clearance certificates before leaving the country. Those certificates are already on the books but not enforced.

 

https://www.rd.go.th/english/23518.html

I remember these - a right PITA, if you had to go on a trip at short notice.  Secretaries sent messengers to get them but retirees would have to flog over to the RD themselves, if they re-introduced them in the same format.  They must have suspended the requirement with an RD order and another RD order would bring them back. A dictatorial Thaksinite government would love this and Immigration also loves anything that causes grief to foreigners whom they regard as all criminals. 

[hotandsticky]

7 minutes ago, Mike Lister said:

You've been here long enough to know there are many sets of rules that apply to different nationalities and different means of inbound/outbound transportation. No farang retiree is going to go back to the UK for a holiday and walk across the border at Poipet, Immi/RD worked that out already.

I would 

 

Siem Reap is only a couple of hours away.

[yozah]

So I can make 10 million baht foreign income but if I only bring 1 million to Thailand I still only pay tax on that 1 million?

[Dogmatix]

7 minutes ago, hotandsticky said:

Yes, I can see them stopping all the Cambodians returning through Poipet.

I hope they leave the Burmese alone.  Their desperate junta government has just introduced a foreign income tax of 10% and made them remit 25% of their salaries home every month to be exchanged at the official rate which is half the black market rate. They can't get new work permits approved by the junta, if they don't pay.  So that is another 12.5% tax.  Junta cronies have the foreign exchange licenses, so they will get all change all the foreign currency remitted by Burmese workers at the official rate and then change it at the black market, taking 50% of all the remittances for themselves which they can then change back to dollars at the official exchange rate and deposit in their Singapore bank accounts.  Talk about rape of a nation but nice work, if you can get it.

[Dogmatix]

2 minutes ago, yozah said:

So I can make 10 million baht foreign income but if I only bring 1 million to Thailand I still only pay tax on that 1 million?

Yes. It's just on a remittance basis for now but who knows what the future might bring.

[Lorry]

51 minutes ago, Dogmatix said:

will look odd when he gives tax exemption only to rich foreigners while taxing the butts off Thais and less well off foreign retirees who are often struggling to support Thai families

Yep.

Rich foreigners are tax exempt, only poor foreigners must pay tax, same as Thais.

Probably the only people who think this state of affairs is normal are those 2900 LTR visa holders. 

[Lorry]

29 minutes ago, Dogmatix said:

They must have suspended the requirement with an RD order

"Revenue Department issued the Notification of the Director-General of the Revenue Department on 7 May 1991 stipulating that foreigners departing Thailand do not have to apply for a Tax Clearance Certificate"

 

at the given link, just continue reading until 3. (2)

[stat]

7 hours 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.

https://www.lohi.de/news/article/zahl-der-kontenabrufe-durch-die-finanzaemter-steigt-rapide.html

 

1.2 million accounts got checked by the tax inspector per year. If you think the tax man still has to call a bank you lived under a rock the last 10 years, no offense.

[stat]

7 hours ago, TroubleandGrumpy said:

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

As they joined CRS they should be able to collect all those data. BTW Germany has a witholding system on capital gains so you cannot pay to little taxes on dividends in a German account.

[stat]

5 hours ago, Jenkins9039 said:

I actually phoned the revenue office (bangkok).

 

Money earned overseas, and or as a business owner overseas regardless of tax overseas or not, is tax free unless remitted and then taxed, this includes companies which say are overseas in tax havens, and say don't have substance in the overseas location (otherwise hire someone on Fiverr on a permanent contract and use their home as the office). 

 

Money from property (rent / sale) overseas will be treated as Income when remitted (this will <deleted> a few people).

 

Money in the form of 'not in the bank account' - say cash or even stablecoins (thankfully public) whereby savings and remitted, is tax free *IF* it was earned before and/or tax was collected, having said that any funds earned in 2023 and remitted will be taxed as Income, evidence to support it is savings is a must, for pre-2023.

 

Money extracted from stock market activities, principle is tax free, ROI is treated as Income if remitted to Thailand.

 

Elite Visa holders 'reportedly' spend around 30,000$ a year (such a low number and I am one of them so not sure where they are getting that from) anyway they will be taxed as Income like everyone else.

 

Pensioners are in for a whammy though... State Pension is tax free as the State will have dealt with that, your private pensions on the other hand will be treated as Income and taxed, note some countries charge tax anyway, the terms of some of the treaties outline that Thailand will provide a credit for the tax paid, what you need to recognise is that is specifically on the $ (equivalent) amount 'earned' and 'remitted' meaning in some countries (say the UK) there is something like a tax exemption of 13/14,000 GBP, whereas in Thailand there is a tax exemption of 150,000 THB + (60,000 THB - needs verification), so from the 150,000 THB onwards you'd be taxed at the standard Thai rates.

 

Note the Government is pushing through higher income for Thais, with luck they also increase the Tax levels upwards... also note 96%+ of Thais don't pay tax (and earn enough just they do not declare it or feel they should not be productive members of society) - the Government has commenced populistic politics which is what specifically has led to the downfall of our own countries (deficit spending and populistic appeal) - in this latest move we are the ones, alongside the productive members of Thai society paying for the populistic policies such as a free 10,000 THB bribe etc.

 

This appears to be the start of the road our own Governments went down, and will need to be factored in before individual property appraisals and tax there etc.

 

Likewise I am somewhat surprised no one has complained that for example, in the time i've been in Thailand, i've seen not one but two exit taxes created, and not one but three entry taxes created under the promise of this or that and then folded into the flight ticket.

 

Somewhere the Thai Government has some major economic hurdles that haven't revealed themselves as of yet, and they are appearing to consolidate into causing more long-term hardship (like our own debasing currencies) by compounding what ever the issue is with populistic vote buying. 

Thanks for your post! The main point for me is the difference in taxation between ROI and principal if that is correct I am off the hook. How they want to calculate this is is a mystery to me especially if you have thousands of trades in a year. I will setup a seperate account which I will be filling up with "losers" over the year and then liquidate them and then transfer the proceeds i.e. principal.

[noobexpat]

3 hours ago, Mike Lister said:

That was my understanding also. But if you see Jenkins post earlier on this page he says he spoke with RD in Bangkok and he wrote, "UK State Pension is tax free as the State will have dealt with that". So, dunno, really. It would make sense that State pension would be disregarded but that's just me.

Look at the UK to spain expat situation for clues on the state pension. It is taxed locally under spains laws, apparently. It is also not addressed in the uk/spain DTA, same as the uk/thai DTA.

 

That doesn't mean its taxed twice of course!

 

[Lorry]

1 hour ago, stat said:

difference in taxation between ROI and principal

In Q5 of the QnA this is stated for interest

[jerrymahoney]

10 hours ago, Jenkins9039 said:

Pensioners are in for a whammy though... State Pension is tax free as the State will have dealt with that, your private pensions on the other hand will be treated as Income and taxed,

See 3. (click jpg to enlarge)

Edited October 8, 2023 by jerrymahoney

[jerrymahoney]

Early morning edit: Private employment related pensions is 1. in US-Thai DTA.

[Dogmatix]

1 hour ago, jerrymahoney said:

See 3. (click jpg to enlarge)

Apples and oranges. Jenkins was referring to UK state pensions. You quoted from US DTA.