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

[Mike Lister]

6 minutes ago, Mangotango said:

For all you people arguing about who has to file a tax return, anybody with assessable income of more than 60,000 baht has to file a tax return.  Assessable income is defined as taxable income. 

Yes, but in practise there has never been any follow up if you don't file which has always been tacit approval not to file. Even last year when I filed at the RD District 1 Head office in Chiang Mai, the tax officer thought I was nuts for filing a return when I didn't have to pay tax and didn't get a refund. Her exact words were, "you don't have to do this".

[jerrymahoney]

3 hours ago, Dogmatix said:

Non-state pensions are not exempt in any of the DTAs I have looked at.

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. 

The phrase “pensions and other similar remuneration” is intended to encompass payments made by private retirement plans and arrangements in consideration of past employment.

 

https://www.irs.gov/pub/irs-trty/thaitech.pdf

[Lorry]

8 minutes ago, JimGant said:

assessable equals taxable

 

8 minutes ago, Mangotango said:

Assessable income is defined as taxable income. 

It's hard to believe what nonsense some people post here.

 

This thread is full with the necessary links, to the tax law, to the RD, to all kind of accountants' websites like Sherrings or PwC.

Why don't you take the effort to read these things before you post?

 

[Mangotango]

Mike Lister…..I agree.  For example, USA social security brought in (not taxable by dta, so not assessable) plus no more than 60,000 baht more, no need for return is a very resonable position to take.  Despite what everyone says on here, in my opinion the Thais are quite reasonable and will take this position as well.  Also much easier for them administratively.  But no guarantees unfortunately.  

[Lorry]

Just now, Mangotango said:

not taxable by dta, so not assessable

Very wrong,  see my latest post

 

1 minute ago, Mangotango said:

, in my opinion the Thais are quite reasonable and will take this position as well.

I think so, too.

 

2 minutes ago, Mangotango said:

Also much easier for them administratively.  But no guarantees unfortunately.  

Yes

[Mangotango]

Here is the general definition of assessable income.  Then they go on to list 8 types and various exemptions.  Not taxable, not assessable. 

[MJCM]

18 minutes ago, Mike Lister said:

Yes, but in practise there has never been any follow up if you don't file which has always been tacit approval not to file. Even last year when I filed at the RD District 1 Head office in Chiang Mai, the tax officer thought I was nuts for filing a return when I didn't have to pay tax and didn't get a refund. Her exact words were, "you don't have to do this".

How things have changed. Glad you were on the ball

[Mangotango]

Here is the provision of Thai law saying you need to file a tax return only if assessable income is more than 60,000

[Mangotango]

Here is the USA Thai dta provisionnsaying social security is “taxable only by the USA”.  And then you can find other provisions in Thai law saying the dta is part of their law. 
 

voila. 

[redwood1]

39 minutes ago, Mangotango said:

For all you people arguing about who has to file a tax return, anybody with assessable income of more than 60,000 baht has to file a tax return.  Assessable income is defined as taxable income. 

 

Boy I guess about 50-70% of Thais with income over 60,000 baht need to all be put in jail ASAP, for not filing taxes......

 

O-wait...Thats most working people in Thailand....lol   Who have NEVER filed a tax return..

Edited October 9, 2023 by redwood1

[noobexpat]

36 minutes ago, JimGant said:

'Cause assessable equals taxable -- and income excluded under a DTA is no longer assessable, for taxation purposes -- nor taxable, for assessable purposes. Thus, no tax return needed. Phew.

You don’t understand tax. 

[Mangotango]

Lorry… you are wrong I believe. You forgot to read the whole statute.  The actual rule right from the horse’s mouth is above.  Assessable income more than 60,000, you must file.  

[Mike Lister]

54 minutes ago, noobexpat said:

Whether its taxable is irrelevant...its assessable. So why wouldn't a tax return not be needed?

 

DTA is not the answer. That is the outcome, after the tax return.

 

You are quite correct, I agree with everything you have written.

 

However, the tax return is not needed because the RD don't want to see it because it's effectively a null return and nobody has to pay anyone. This is more an issue of practice rather than correct process.

[Mangotango]

Of course this is Thailand and up to now, and maybe forever, they will say mai pen rai no need to file if you actually owe no tax.  They can do anything they want.  And as I said, they are quite reasonable so why make anybody file if they do not owe? Somewhere in their tax code you will actually see a provision that says rd “will” waive any payment of 5 baht or less.  I just saw it but cannot find it again to post.  So, remember this is Thailand, which is actually a GREAT place. 

[noobexpat]

4 minutes ago, Mike Lister said:

You are quite correct, I agree with everything you have written.

 

However, the tax return is not needed because the RD don't want to see it because it's effectively a null return and nobody has to pay anyone. This is more an issue of practice rather than correct process.

But they won't know its null until they get it ...unless they identify USA citizen via pre-sorting or something ...??

[Mike Lister]

1 minute ago, noobexpat said:

But they won't know its null until they get it ...unless they identify USA citizen via pre-sorting or something ...??

That is not the way things are done here. If the RD doesn't receive a return from a person who has filed one in the past, the automatic assumption will be that there was no need for one to be filed. Unless of course there is significant information that makes them dig deeper and in the future that might just be bank transfer information where the transfer was sizeable or frequent and sizeable. In the US and the UK there are penalties for not filing, penalties here are not enforced. I have filed returns here some years, some years I haven't, every year the RD sends me a return to fill out but most years it has been ignored. For the past three years I have filed a return in person at the RD and nobody has ever been interested in missed returns from the past 25 years.

[Neeranam]

24 minutes ago, redwood1 said:

 

Boy I guess about 50-70% of Thais with income over 60,000 baht need to all be put in jail ASAP, for not filing taxes......

 

O-wait...Thats most working people in Thailand....lol   Who have NEVER filed a tax return..

Where are these numbers from? 

Maybe if you start paying tax on your pension or income from abroad, you'll get representation to change the Thai system????

[Lorry]

30 minutes ago, Mangotango said:

Lorry… you are wrong I believe. You forgot to read the whole statute.  The actual rule right from the horse’s mouth is above.  Assessable income more than 60,000, you must file.  

You are right about the 60000, retiree said that a couple of posts before yours (and he mentioned that for employees it's 120000).

 

What got me exasperated is when people say "assessable = taxable".

You haven't understood the taxonomy of the Thai PIT.

From your screenshot: "Assessable income means income that is taxable under this chapter" - the last 3 words are the important ones. 

The logic of Thai PIT goes like this:

Assessable income is not any income,  but only certain kinds of income specifically listed in the law. Other kinds of income, that are not in this list, cannot be assessed for PIT.

Taxable income is assessable income minus allowances and deductions.

The taxable income is then multiplied with the tax rate, and you get the payable tax.

 

For many purposes the difference doesn't matter. 

Where it matters,  for example,  is the calculation of those 60000 you mentioned. 

60000 is assessable income, see your screenshot.

60000 is NOT taxable income. 

If your assessable income from the income sources listed in the tax code is 10m, but you (think you) have deductions of 9,950,000, your taxable income is 50,000 and you don't have to pay any tax. But you have to file a tax return.

The same applies for tax credits based on a DTA. (it may be different if the DTA says something is not taxable in Thailand but in the other country - I am not sure about this)

 

BUT in practice,  see Mikes post (5 posts up from here). How this plays out when the amounts are not negligible remains to be seen.

Edited October 9, 2023 by Lorry

[MangoKorat]

20 hours ago, Mike Lister said:

Pensioners are in for a whammy though... State Pension is tax free as the State will have dealt with that,

Is that from an official Thai source?  If so, could you please give details as this is very important?

 

Just to clarify, UK state pension is not tax free, it is considered as taxable income and counts toward the total of any income you receive.  In reality, most people don't pay tax on their pensions as their total income falls below the tax threshold of £12570 per year. 

 

I know nothing about pensions, tax thresholds or income from other countries so commenting from a purely UK/Thailand position............................................................

 

The basic UK state pension is currently £203.85 per week or £10,200.20 per year. If your income from other sources i.e. employment takes your total income to over £12570, you pay tax on it.  Private pensions may have been taxed at source and therefore adjustments would have to be made. Income from property, i.e. rent, will also become taxable but will be subject to various allowances.

 

So (excluding income from private pensions or property because they depend on specific circumstances as per the above), you are living abroad and your UK pension is the basic £10,200 you will not pay any tax in the UK. It remains to be seen whether or not it will be taxable in Thailand where the threshold is way below £10,200. 

 

Those who have private UK pensions/other income from the UK in addition to their state pension may well be receiving a total of well over the UK tax threshold and will therefore be taxed in the UK.   Previously, my understanding of the double taxation agreement was that if income had been assessed and subject to tax in the UK, it would not be assessed or taxed in Thailand. I'm no accountant and it seems, from what I've read as a result of these new Thai tax laws, that UK income will form part of assessable income in Thailand but credit given for tax paid in the UK.  How that actually works out, I know not but if correct, it brings about the possibility that tax may well be payable in Thailand and the UK.

 

[noobexpat]

2 minutes ago, Mike Lister said:

That is not the way things are done here. If the RD doesn't receive a return from a person who has filed one in the past, the automatic assumption will be that there was no need for one to be filed. Unless of course there is significant information that makes them dig deeper and in the future that might just be bank transfer information where the transfer was sizeable or frequent and sizeable. In the US and the UK there are penalties for not filing, penalties here are not enforced. I have filed returns here some years, some years I haven't, every year the RD sends me a return to fill out but most years it has been ignored. For the past three years I have filed a return in person at the RD and nobody has ever been interested in missed returns from the past 25 years.

This would be for new folks who don't have a tax number or historical filings though. It could be: send a return and we'll agree its nil tax and don't send any more.

 

Or they could propose self certification, which appears to be your experience. The onus is on you to understand thai tax and international treaties. Consequences if you get it wrong and we find you.

 

[Mangotango]

8 minutes ago, Lorry said:

You are right about the 60000, retiree said that a couple of posts before yours (and he mentioned that for employees it's 120000).

 

What got me exasperated is when people say "assessable = taxable".

You haven't understood the taxonomy of the Thai PIT.

From your screenshot: "Assessable income means income that is taxable under this chapter" - the last 3 words are the important ones. 

The logic of Thai PIT goes like this:

Assessable income is not any income,  but only certain kinds of income specifically listed in the law. Other kinds of income, that are not in this list, cannot be assessed for PIT.

Taxable income is assessable income minus allowances and deductions.

The taxable income is then multiplied with the tax rate, and you get the payable tax.

 

For many purposes the difference doesn't matter. 

Where it matters,  for example,  is the calculation of those 60000 you mentioned. 

60000 is assessable income, see your screenshot.

60000 is NOT taxable income. 

If your assessable income from the income sources listed in the tax code is 10m, but you (think you) have deductions of 9,950,000, your taxable income is 50,000 and you don't have to pay any tax. But you have to file a tax return.

The same applies for tax credits based on a DTA. (it may be different if the DTA says something is not taxable in Thailand but in the other country - I am not sure about this)

Agree with everything you said.  The interesting question is going to be assume you have more than 60,000 baht of assessable but foreign-tax-creditable foreign remitted income, taxable income of 1000 baht but a dta tax credit of more than 1000 baht.  Do you have to file? 

[Lorry]

8 minutes ago, MangoKorat said:

Is that from an official Thai source?  If so, could you please give details as this is very important?

 

Just to clarify, UK state pension is not tax free, it is considered as taxable income and counts toward the total of any income you receive.  In reality, most people don't pay tax on their pensions as their total income falls below the tax threshold of £12570 per year. 

 

I know nothing about pensions, tax thresholds or income from other countries so commenting from a purely UK/Thailand position............................................................

 

The basic UK state pension is currently £203.85 per week or £10,200.20 per year. If your income from other sources i.e. employment takes your total income to over £12570, you pay tax on it.  Private pensions may have been taxed at source and therefore adjustments would have to be made. Income from property, i.e. rent, will also become taxable but will be subject to various allowances.

 

So (excluding income from private pensions or property because they depend on specific circumstances as per the above), you are living abroad and your UK pension is the basic £10,200 you will not pay any tax in the UK. It remains to be seen whether or not it will be taxable in Thailand where the threshold is way below £10,200. 

 

Those who have private UK pensions/other income from the UK in addition to their state pension may well be receiving a total of well over the UK tax threshold and will therefore be taxed in the UK.   Previously, my understanding of the double taxation agreement was that if income had been assessed and subject to tax in the UK, it would not be assessed or taxed in Thailand. I'm no accountant and it seems, from what I've read as a result of these new Thai tax laws, that UK income will form part of assessable income in Thailand but credit given for tax paid in the UK.  How that actually works out, I know not but if correct, it brings about the possibility that tax may well be payable in Thailand and the UK.

 

No guarantee that state pensions are tax free.

It depends on the DTA and it depends whether the relevant people in the RD actually know what's written in the DTA. I know from another DTA (not UK) that the  RD assumed state pensions were taxable here. They admitted they were wrong when a foreign tax adviser personally showed them the relevant sentences in the DTA.

It was not Somchai the RD inspector BTW.

[Lorry]

5 minutes ago, Mangotango said:

Agree with everything you said.  The interesting question is going to be assume you have more than 60,000 baht of assessable but foreign-tax-creditable foreign remitted income, taxable income of 1000 baht but a dta tax credit of more than 1000 baht.  Do you have to file? 

We will probably know in 2026.

[noobexpat]

11 minutes ago, MangoKorat said:

 Previously, my understanding of the double taxation agreement was that if income had been assessed and subject to tax in the UK, it would not be assessed or taxed in Thailand. 

 

Thats not correct, as you suspected. Both private and state pension is assessable under thai tax and could need to be taxed by thai instead of UK.

 

Neither private or state pension is referred to in our DTA. The only exclusion is government pension.

 

 

[Mangotango]

Yes unfortunately 2026 sounds about right.

[Mike Lister]

20 minutes ago, MangoKorat said:

Is that from an official Thai source?  If so, could you please give details as this is very important?

 

Just to clarify, UK state pension is not tax free, it is considered as taxable income and counts toward the total of any income you receive.  In reality, most people don't pay tax on their pensions as their total income falls below the tax threshold of £12570 per year. 

 

I know nothing about pensions, tax thresholds or income from other countries so commenting from a purely UK/Thailand position............................................................

 

The basic UK state pension is currently £203.85 per week or £10,200.20 per year. If your income from other sources i.e. employment takes your total income to over £12570, you pay tax on it.  Private pensions may have been taxed at source and therefore adjustments would have to be made. Income from property, i.e. rent, will also become taxable but will be subject to various allowances.

 

So (excluding income from private pensions or property because they depend on specific circumstances as per the above), you are living abroad and your UK pension is the basic £10,200 you will not pay any tax in the UK. It remains to be seen whether or not it will be taxable in Thailand where the threshold is way below £10,200. 

 

Those who have private UK pensions/other income from the UK in addition to their state pension may well be receiving a total of well over the UK tax threshold and will therefore be taxed in the UK.   Previously, my understanding of the double taxation agreement was that if income had been assessed and subject to tax in the UK, it would not be assessed or taxed in Thailand. I'm no accountant and it seems, from what I've read as a result of these new Thai tax laws, that UK income will form part of assessable income in Thailand but credit given for tax paid in the UK.  How that actually works out, I know not but if correct, it brings about the possibility that tax may well be payable in Thailand and the UK.

 

That was from another posters earlier post, I was trying to understand its validity also.

[stat]

1 hour ago, Mike Lister said:

 "Thailand is attempting to become a fully paid up member of CRS Reporting and fall in line with international standards on taxation",

Please read carefully what is written in your quote (Source?) . There is no logical implication in that quote that crs has anything to do with Thailand having to tax remitted income. Pls state where exactly crs demands an amount of tax? If you cannot then pls accept the fact that CRS is about a common reporting standard as the name suggests, not about assesable income or the amount of tax. BTW I am working in a regulatory environment in financial institutions just to avoid any confusion.

Edited October 9, 2023 by stat

[tomacht8]

Clear as dirt. if I for example transfer 800K Thai Baht from my home bank to a Thai bank for my Non O retierment visa in 2024. Are taxes then due?

[noobexpat]

3 minutes ago, Lorry said:

No guarantee that state pensions are tax free.

Uk state pension is never tax free. Its taxed at 0% if total income is within personal allowance. Its also paid gross, but taxable via adjustment to private pension tax code.

[Mike Lister]

Just now, stat said:

Please read carefully what is written in your quote (Source?) . There is no logical implication in that quote that crs has anything to do with Thailand having to tax remitted income. Pls state where exactly crs demands an amount of tax? If you cannot the accept the fact that CRS is about a common reporting standard as the name suggests not about assesable income or the amount of tax. BTW I am working in a regulatory environment in financial institutions.

I do not suggest that CRS and international taxation standards are connected, they are two different things.