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

[atpeace]

9 hours ago, Guavaman said:

Think about this: When you purchase with a debit card, you are authorizing instant payment to a vendor in Thailand with funds REMITTED to the vendor in Thailand.

 

On the other hand: When you purchase with a CREDIT card or withdraw a cash advance from a bank or ATM, you are authorizing a LOAN = debt with the bank issuing the CREDIT card, subject to payment of interest.  

 

The Baht that you are spending is a LOAN from a bank offshore, where you must repay the loan subject to interest. You have not remitted income into Thailand; rather, you have incurred a debt by the transaction in Thailand. Thus, not assessable nor taxable income. 

Thanks and I was wondering about this and enjoyed your easy to understand explanation.  In either case it wouldn't be assessable unless you kept all your receipts and volunteered the information.  As far as I know, there is no means for the Thailand to track the transaction.  Merchants get a name, last 4 digits on card and really nothing they can do with that information.  Am I wrong?

[KannikaP]

16 hours ago, tomacht8 said:

What does it depend on? The money comes from savings investments for which, for example, I paid taxes in my home country 7 years ago. How will the Thai tax officials check this? Or will it be such a mess again that you'll have to pay an unofficial processing fee under the table?

My State Pension UK, comes from money I gave to the UK Govt way back in the 1980/90s when I was working. So NOT earned in this year, let alone this Century.

[retiree]

1 hour ago, KannikaP said:

Rubbish. I live here 365 days a year, I pay for all Government Services regarding Immigration and Government Hospital, and pay for infrastructure as in using the roads, by paying my road tax disc every year.

All money I send to Thailand, either in my name or my GFs, is spent in Thailand so incurs VAT.

How much more should I pay?

If I had to estimate, I'd say about the same amount as any other middle or upper-middle class Thai taxpayer who works in an office, pays income tax and VAT, makes a mandatory payroll contribution to the Social Security fund, and -- to head this off at the pass -- may even buy health insurance so that his family can get the best health care possible as quickly as possible.    

 

Re health care:  even the comparatively moderate government hospital bill you pay now is indirectly subsidized by training, and building of facilities that have been massively subsidized by Thailand for decades, and continue to be subsidized by younger taxpayers who use fewer services (just as you probably did in your home country). 

 

You haven't spent your working lifetime as a Thai taxpayer / VAT-payer, helping to build up the national infrastructure.   I can imagine that taxpayers would think it was unfair if you were able to parachute in as a senior non-citizen with greater needs than the average Thai.  

 

Quote

My State Pension UK, comes from money I gave to the UK Govt way back in the 1980/90s when I was working. So NOT earned in this year, let alone this Century.

It does not come from money you gave the government.  Younger UK residents are paying your pension, just as you paid for the old folks in the 80/90s.

 

The UK State Pension is unfunded, which means that its obligations are not underpinned by an actual fund or funds. Such schemes are often referred to as “Pay As You Go” (PAYG).  The pension payments made by the government for unfunded pensions are financed on an ongoing basis from National Insurance contributions and general taxation.

https://www.ons.gov.uk/aboutus/transparencyandgovernance/freedomofinformationfoi/statepensionfunds

 

You earned the rights you have as a UK citizen because you spent your working life helping to support other UK citizens.  It may not seem fair to some, but I would imagine that very few citizens of any country feel that all non-citizen taxpayers, residing on temporary visas, are necessarily entitled to full government benefits.   

Edited October 10, 2023 by retiree

[KannikaP]

4 minutes ago, retiree said:

If I had to estimate, I'd say about the same amount as any other middle or upper-middle class Thai taxpayer who works in an office, pays income tax and VAT, makes a mandatory payroll contribution to the Social Security fund, and -- to head this off at the pass -- may even buy health insurance so that his family can get the best health care possible as quickly as possible.    

 

Re health care:  even the comparatively moderate government hospital bill you pay now is indirectly subsidized by training, and building of facilities that have been massively subsidized by Thailand for decades, and continue to be subsidized by younger taxpayers who use fewer services (just as you probably did in your home country). 

 

You haven't spent your working lifetime as a Thai taxpayer / VAT-payer, helping to build up the national infrastructure.   I can imagine that taxpayers would think it was unfair if you were able to parachute in as a senior non-citizen with greater needs than the average Thai.  

 

It does not come from money you gave the government.  Younger UK residents are paying your pension, just as you paid for the old folks in the 80/90s.

 

The UK State Pension is unfunded, which means that its obligations are not underpinned by an actual fund or funds. Such schemes are often referred to as “Pay As You Go” (PAYG).  The pension payments made by the government for unfunded pensions are financed on an ongoing basis from National Insurance contributions and general taxation.

https://www.ons.gov.uk/aboutus/transparencyandgovernance/freedomofinformationfoi/statepensionfunds

 

It may not seem fair to some, but I would imagine that very few citizens of any country feel that all non-citizen taxpayers, residing on temporary visas, are necessarily entitled to full government benefits.  

OK, thanks. Good points made. I shall stop whining then and find another way around this income tax, as are many many expiates.

[Aldo123]

22 hours ago, MeePeeMai said:

If too many folks dodge the 180 day rule by leaving for 6+ months a year (to avoid being a tax resident), then I would eventually expect to see a new rule (or law) that forces those with an O or O-A type long stay visa to spend at least 180 days in Thailand per calendar year or lose your current status/extension.

 

Malaysia has a rule that those with an MM2H retirement visa must spend at least 90 days per year in Malaysia to be eligible (so don't say that it couldn't happen in Thailand).

 

I hope all this worrying is for naught but I am also one who likes to have a back-up plan or two in case things go sour (this is the main reason I have not cut all ties with my motherland) and I am always running scenarios in my mind to be prepared and ready if a push comes to a shove.

Me too. Could jump ship and return if necessary. That's also why I never bought anything other than a car here. Never trusted them, and as you point out above, they could change the rules yet again - and at any time without much notice - as we have seen. The LTR Wealthy Pension Visa will probably get axed next.

[Aldo123]

While this has been thrashed out a hundred times here, and while it is now generally agreed that only money remitted to Thailand will be taxed, we also generally agree a yearly income tax return will be required by Thailand. It doesn't take much imagination to guess that form will also ask "what was your global income in 2024?" So if it's 3 million baht annually (Pension or whatever) and you only remitted 1 million baht, will the RD then say "attach the DTA form that indicates where and when the rest was taxed in the other country?" Then what (if it wasn't taxed?)

[beammeup]

Also will we have to declare worldwide assets ex: stocks bonds real estate crypto assets etc...???

[Dogmatix]

41 minutes ago, Aldo123 said:

While this has been thrashed out a hundred times here, and while it is now generally agreed that only money remitted to Thailand will be taxed, we also generally agree a yearly income tax return will be required by Thailand. It doesn't take much imagination to guess that form will also ask "what was your global income in 2024?" So if it's 3 million baht annually (Pension or whatever) and you only remitted 1 million baht, will the RD then say "attach the DTA form that indicates where and when the rest was taxed in the other country?" Then what (if it wasn't taxed?)

This is not what is planned at this point. There is no amendment to the Revenue Code, just an administrative order to RD staff.  So they can only demand what is currently demanded, i.e. a tax return showing assessable income which in the case of foreign source income remitted to Thailand. What they might, if they amend the law in future, is anyone's guess.

[Photoguy21]

I assume they have taken into consideration taxation agreements with other countries? For example the UK has a tax agreement with Thailand as I am sure many other countries do.

A further thought, there is quite a lot of Thai's working in the Middle East, an area of the world that is tax free. If they tax them in Thailand I think they may well decide to come home. No Thai is going to go to work in say Saudi and then get taxed on their earnings back home. The reason they go abroad is for the tax free and higher income status.

[Dogmatix]

2 hours ago, atpeace said:

Thanks and I was wondering about this and enjoyed your easy to understand explanation.  In either case it wouldn't be assessable unless you kept all your receipts and volunteered the information.  As far as I know, there is no means for the Thailand to track the transaction.  Merchants get a name, last 4 digits on card and really nothing they can do with that information.  Am I wrong?

 Yes. The credit card companies and/or banks in Thailand that process the transactions can get access to more information than that, I guess. The government was at one time talking about getting Thai banks to report e-commerce transactions by Thais buying stuff abroad to charge them VAT.  Foreign card holders could be traced by the banks by contacting their overseas counterparts. The question is would they bother to set this up?  Tax residents using foreign cards in Thailand must be small beer.  Only foreigners and Thais who have lived overseas, buried in a sea of tourist transactions. Not impossible but unlikely to be a priority.  lt might be asking for trouble to put large recurrent items on a foreign card though, e.g. international school fees.  One offs like hospital bills probably OK. 

[redwood1]

3 minutes ago, Photoguy21 said:

I assume they have taken into consideration taxation agreements with other countries? For example the UK has a tax agreement with Thailand as I am sure many other countries do.

A further thought, there is quite a lot of Thai's working in the Middle East, an area of the world that is tax free. If they tax them in Thailand I think they may well decide to come home. No Thai is going to go to work in say Saudi and then get taxed on their earnings back home. The reason they go abroad is for the tax free and higher income status.

 

How about the countless workers in Thailand from Burma......

 

Whats the tax rape their goverment announced...

Some thing like 25% of income must be sent back at 50% discounted exchange rate and a 10% tax on top of that...

 

And what if Thailand wants a 15-35%  tax on top of their wages too......After expenses the Burmese will have absolutly no money and be in debt just for working....

 

If it was not so sad it would be funny....

[Dogmatix]

15 hours ago, K2938 said:

While the Thai tax authorities will not get the older data automatically, they can ask for it from most tax jurisdictions in case of need based on various mutual assistance agreements.  So if they find something which makes them want to investigate, they will in most cases be able to do so.  The data will just not be received automatically.

Good point. Time was that foreign governments could only get information from Swiss banks when investigating a crime that was also a crime in Switzerland but CRS ended that.  I am sure they can request records, at least in the same forward, going back longer and more detail, if they have a good reason. 

[Dogmatix]

BTW does Thailand tax gains on sales of gold bullion, other precious metals and collectibles?  I can't see them specifically mentioned in Section 40.  But even if not taxed onshore, I guess it would be too much to hope that foreign gains would not be assessable.  The UK doesn't tax gains on wasting assets like wine with an expected life of less than 50 years but I think taxes all other collectibles. Don't suppose Thailand exempts wine.

Edited October 10, 2023 by Dogmatix

[Karma80]

21 minutes ago, Dogmatix said:

 Yes. The credit card companies and/or banks in Thailand that process the transactions can get access to more information than that, I guess. The government was at one time talking about getting Thai banks to report e-commerce transactions by Thais buying stuff abroad to charge them VAT.  Foreign card holders could be traced by the banks by contacting their overseas counterparts. The question is would they bother to set this up?  Tax residents using foreign cards in Thailand must be small beer.  Only foreigners and Thais who have lived overseas, buried in a sea of tourist transactions. Not impossible but unlikely to be a priority.  lt might be asking for trouble to put large recurrent items on a foreign card though, e.g. international school fees.  One offs like hospital bills probably OK. 

The Thai government talks about a great many things, including the impractical, impossible or just downright illegal from an international legal standpoint. Passing of information from Thai banks about Thai citizens to the Thai RD is one thing, but the passing of detailed transactional and customer information cross border is illegal beyond the scope of ratified agreements between countries. For example CRS. 

[Lorry]

2 hours ago, retiree said:

If I had to estimate, I'd say about the same amount as any other middle or upper-middle class Thai taxpayer who works in an office, pays income tax and VAT, makes a mandatory payroll contribution to the Social Security fund, and -- to head this off at the pass -- may even buy health insurance so that his family can get the best health care possible as quickly as possible.    

 

Re health care:  even the comparatively moderate government hospital bill you pay now is indirectly subsidized by training, and building of facilities that have been massively subsidized by Thailand for decades, and continue to be subsidized by younger taxpayers who use fewer services (just as you probably did in your home country). 

 

You haven't spent your working lifetime as a Thai taxpayer / VAT-payer, helping to build up the national infrastructure.   I can imagine that taxpayers would think it was unfair if you were able to parachute in as a senior non-citizen with greater needs than the average Thai.  

 

It does not come from money you gave the government.  Younger UK residents are paying your pension, just as you paid for the old folks in the 80/90s.

 

The UK State Pension is unfunded, which means that its obligations are not underpinned by an actual fund or funds. Such schemes are often referred to as “Pay As You Go” (PAYG).  The pension payments made by the government for unfunded pensions are financed on an ongoing basis from National Insurance contributions and general taxation.

https://www.ons.gov.uk/aboutus/transparencyandgovernance/freedomofinformationfoi/statepensionfunds

 

You earned the rights you have as a UK citizen because you spent your working life helping to support other UK citizens.  It may not seem fair to some, but I would imagine that very few citizens of any country feel that all non-citizen taxpayers, residing on temporary visas, are necessarily entitled to full government benefits.   

Thank you for taking the effort to write such an elaborate answer. 

Unfortunately,  as you can see from the immediate answer,  the posters who should read and understand it don't care - they just don't want to pay tax, use the Thai infrastructure and complain that it's not as good as in their home country. 

 

Pay 7% VAT? That's laughable.  In a typical Western European country, income tax plus social security is more than 50%, and VAT 10-20%

[Lorry]

1 hour ago, Karma80 said:

passing of detailed transactional and customer information cross border is illegal

Please quote the law that makes it illegal.

 

[Celsius]

2 hours ago, beammeup said:

crypto assets etc...???

What crypto azzsets? I thought Do, Alex and Sam stole everything?

Edited October 10, 2023 by Celsius

[NanLaew]

23 hours ago, Neeranam said:

First I've heard of this. 

I see Bangkok bank pays interest on non resident account. 

 

Are these like offshore accounts? 

 

https://www.bangkokbank.com/en/Personal/Save-And-Invest/Save/FCD-Account-for-Non-residents

No, my US accounts were regular onshore accounts in 'high street' branches set up as a walk-in customer. This was many decades ago when governments and authorities hadn't embarked on the current, relentless cash grab because they are all fundamentally broke.

 

@Mike Lister can give you the details of his non-resident Thai bank account but from what's been stated, it was not recent.

[NanLaew]

2 hours ago, Karma80 said:

The Thai government talks about a great many things, including the impractical, impossible or just downright illegal from an international legal standpoint. Passing of information from Thai banks about Thai citizens to the Thai RD is one thing, but the passing of detailed transactional and customer information cross border is illegal beyond the scope of ratified agreements between countries. For example CRS. 

When the TIN is attached to otherwise anonymous bank account(s), no "detailed transactional and customer information" crosses anywhere. The account holder gets notified if they need to include that transaction in their personal income tax declaration.

[Mike Lister]

On 10/9/2023 at 3:37 PM, Neeranam said:

First I've heard of this. 

I see Bangkok bank pays interest on non resident account. 

 

Are these like offshore accounts? 

 

https://www.bangkokbank.com/en/Personal/Save-And-Invest/Save/FCD-Account-for-Non-residents

That link is to a Foreign Currency Deposit account and not to a regular non-resident bank account. No, they are domestic accounts, they are not offshore.

 

Now that I've looked on the internet, I don't see much information regarding their use today but linked below is a write up about them from the law firm, tilleke & gibbons, note the article is quite old.

 

https://www.tilleke.com/insights/banking-thailand-resident-or-non-resident-account/

 

It might well be that domestic banks in Thailand don't offer that type of account any longer, I don't know for certain. It might also be that the non-resident FCD account replaces the old style account and that would make sense.

[Dogmatix]

2 hours ago, Karma80 said:

The Thai government talks about a great many things, including the impractical, impossible or just downright illegal from an international legal standpoint. Passing of information from Thai banks about Thai citizens to the Thai RD is one thing, but the passing of detailed transactional and customer information cross border is illegal beyond the scope of ratified agreements between countries. For example CRS. 

Another issue would be that farangs don't have unique family names like Thais.  So tracking down transactions by all the John Smiths who are tax residents might be challenging.  On the other hand, if you have a debit or credit card issued by your overseas bank that is already providing CRS data, it would be very easy for the bank to provide information on transactions, if the RD should ask for it.

Edited October 10, 2023 by Dogmatix

[Dogmatix]

31 minutes ago, NanLaew said:

When the TIN is attached to otherwise anonymous bank account(s), no "detailed transactional and customer information" crosses anywhere. The account holder gets notified if they need to include that transaction in their personal income tax declaration.

HMRC now sends notices to taxpayers informing them that they are aware they received some income from overseas and that they should declare it. They don't give you any more details.  So, if you received foreign income from several sources, you don't know which one they have nailed. I received one of these notices last year, obviously from CRS reporting from HK or somewhere else I have an account, even though I got out of the UK tax net over 30 years ago.  If you are not a tax resident, you are obliged to write to them and inform them or they will keep harassing you.  They are too lazy to look up your file and check whether you are a tax resident or not.

 

Since Thailand will continue to use the remittance basis, at least at first, this kind of notification would be pointless.  However, what they might do is send you a notice every time you receive a remittance or a remittance over a certain amount. 

[TroubleandGrumpy]

On 10/9/2023 at 2:18 PM, K2938 said:

It gets even worse than this.  While the Thai tax authorities have not really much focused on remittances from foreigners in the past, they of course will do now.  And in the course of complaining about your transfers in 2024, they will then probably also ask you a lot of questions about transfers you made in the past and also start complaining about those because maybe they were not really tax-free according to their logic even under the old tax regime.  And they can demand back taxes from you for up to 10 years.  So this will be real fun.

That is definitely possible -  And I thought I was being the worst case scenario ???? 

I could say that is extremely unlikjely to happen - but who knows.

[Mike Lister]

3 minutes ago, TroubleandGrumpy said:

That is definitely possible -  And I thought I was being the worst case scenario ???? 

I could say that is extremely unlikjely to happen - but who knows.

I will say that won't happen, current law cannot be made retroactive or pre-dated. As long as you comply with the law of the day, all will be well. If that law changes, comply with the law of the day and all will be well.

[ukrules]

7 hours ago, Yumthai said:

Now, if you mean you think that they will start taxing debts, this is a very speculative and unreal opinion.

Indeed, when you think about it - they should tax the debt repayments each year as they happen - that would be a nightmare to administer.

[ukrules]

7 hours ago, KannikaP said:

How much more should I pay?

Apparently they want up to 35% more.

[TroubleandGrumpy]

On 10/9/2023 at 3:59 PM, JimGant said:

Negative. You're not required to file a Thai tax return if you don't have income that's taxable. So, my Air Force pension and Social Security payment are "exclusively" taxable by the US. Thus, it's not taxable by Thailand, and so no income tax return required.

I agree with what you are saying, but technically it is not up to you to make that decision. Only the Thai RD can decide that your pensions are not taxable in Thailand under the Thai/USA DTA. Sure, it should merely be a formality and perhaps a quick contact with Thai RD can give you that assurance and advise you that you dont need to lodge a tax return and make that claim. But who knows what the Govt is going to do about those remittanmces into Thailand by Expats, that are covered under the DTAs and not taxable in Thailand.  Maybe they will say 'dont lodge a tax return' - but maybe they will you still have to lodge a tax return and claim exemption/s under the DTA. 

 

In the past the Thai RD just did not want to bother with it - lots of work and trouble for them in dealing with Expats, and they knew that the majority of Expat's payments are exempted. But if they are told that we must all lodge returns and claim the exemptions, then they will have no choice. 

[TroubleandGrumpy]

20 hours ago, Puccini said:

It depends on the DTAs of Thailand with the individual countries.

Please see my last post in reply to another guy.  It is techncially up to the Thai RD to decide what is and what is not exempted under any DTA - I just hope they dont make us all lodge a return and make the claim (and wait while they decide).  

[stat]

4 hours ago, redwood1 said:

 

How about the countless workers in Thailand from Burma......

 

Whats the tax rape their goverment announced...

Some thing like 25% of income must be sent back at 50% discounted exchange rate and a 10% tax on top of that...

 

And what if Thailand wants a 15-35%  tax on top of their wages too......After expenses the Burmese will have absolutly no money and be in debt just for working....

 

If it was not so sad it would be funny....

The Burmese will not earn enough to fall in a tax bracket...

Edited October 10, 2023 by stat

[stat]

5 hours ago, Aldo123 said:

Me too. Could jump ship and return if necessary. That's also why I never bought anything other than a car here. Never trusted them, and as you point out above, they could change the rules yet again - and at any time without much notice - as we have seen. The LTR Wealthy Pension Visa will probably get axed next.

The LTR visa will not get axed, they will simply increase the price by a large amount.