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

[h3ith]

The Google translation refers to (A) "income due to work duties or business conducted abroad" or (B) "because of property". 

 

A) Section 40 of the revenue code:

A1) Any of us is a tax resident of TH if we stay more than 180 days. Tax residency has nothing to do with the immigration status or the type of extension. 

 

A2) "Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, ..." 

"Pension" among all these types of income seems to refer to private pensions paid by an employer, (perhaps) not government pensions.

The double-tax treaty between your country and TH regulates where government pensions and private pensions are taxable. In previous years, many retirees could not even get a Thai Tax ID even when they asked for one. 

 

B) Section 41 paragraph 2: capital gains, interest, dividends. "A resident of Thailand who in the previous tax year derived assessable income under Section 40 from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax." 

This decree does not change the current tax law, which only imposes tax on financial income if you transfer it into TH in the same calendar year when it was earned.

Employment income is different - it's always taxable in TH if you earn it while you are in TH, even if you receive it from a foreign employer and park it in a foreign bank account. 

 

(C) Income tax on capital, i.e. on the savings you transfer from your foreign savings account to TH: No, cannot happen. If you transfer 5mil THB of savings to buy a condo and TH were to impose 25% income tax on the incoming 5mil, then the real estate market would implode. This decree does not change the tax law, which only taxes income but not the substance or capital.

In the worst case, the revenue office may demand proof of how much financial income was included in the 5mil, e.g. 200,000 interest income in the months before it was transferred. Then they could impose a 5% tax on the 50,000 of interest that exceeds 150,000. That's not a new tax law. It was just not enforced. 

 

(D) TH has signed up for the Automatic Exchange of Information with most other countries. So if an account owner is registered with a TH residence address with his bank in the EU, ANZ or UK, then the TH revenue department will receive data about incoming payments the next year. In 2025, a foreigner who received a 2024 stream of payments from some Western business in his Western bank account may be asked to explain the source: "We've got these data from your foreign bank. Did you earn foreign business or employment income while you lived (and apparently worked) in TH?"  

[blackcab]

9 hours ago, jvs said:

On the other hand,if you have to pay tax here it should also give you some rights?

 

Legitimate expat employees in Thailand pay tax. The government benefits gained are:

 

1. Entry into the social fund system so they can receive state provided medical care, a small pension if they pay in for enough years, etc.

 

2. The ability to apply for permanent residency after 3 years and later on citizenship (assuming they can meet all required criteria).

 

If pensioners, etc. pay similar levels of tax then will they receive the same benefits?

[Thorgal]

5 minutes ago, blackcab said:

 

Legitimate expat employees in Thailand pay tax. The government benefits gained are:

 

1. Entry into the social fund system so they can receive state privided medical care, a small pension if they pay in for enough years, etc.

 

2. The ability to apply for permanent residency after 3 years and later on citizenship (assuming they can meet all required criteria).

 

If pensioners, etc. pay similar levels of tax then will they receive the same benefits?

No, you need a work permit related to a Thai company to be able to apply for Permanent Residency.

Edited September 18, 2023 by Thorgal

[tomazbodner]

1 minute ago, FlorC said:

Starts on jan 1st 2024 . So on tax day 2024 , they are going to look at your income of 2023 ?
Or what you brought in the country in tax year 2023. 
So bringing in more money before 31 dec 2023 , could bite you in the behind ?

What about living from an inheritance ? 
And the cash sniffer dogs at the airport , because I will bring in cash .
One poster  showed that from 150k to 300k = 5% . Worst case for me 15.000 tax a year .
I wouldn't leave for that . 
If they had gone through with the mandatory health insurence , which would cost 40k and up , then I'm out.

Well, it depends if you have any other income. Someone working in Thailand on work permit would have to have 50 or 60k baht a month for annual extensions. So minimum salary would already be 600 or 740k per year. Someone with say 200k per month would have 2.4m per year base. If you now add that 300k, then it will be taxed at 30% it would mean taxed at about 100k.

 

To me, all that this announcement shows is that Thailand is effectively bankrupt in pretty much the same way as Myanmar, demanding 25% share of all earnings their citizens make abroad. While I don't mind paying my fair share of taxes here, and yes, this would probably make me sell off the shares abroad, it is unclear whether this is effective for 2023 taxes or for FY 2024 taxes - meaning, does it need to be declared in 2023 tax filing in Q1 of 2024, or for 2024 financial year, declared in first quarter of 2025? If the latter, I'll probably get rid of all foreign savings and investments and keep them away from Thai government, but if it's former, then it's already too late anyway.

 

That said - I was told that in any case, Thailand didn't only tax earnings but entire amounts even now. There was someone in this forum claiming that. For example - I pay tax on 1 million baht income. With it, I buy 1 million baht stock say in Singapore. Leave them for 5 years. And now they are worth say 1.1 million baht (for the figure). Normally, I should only be taxed on 100k that value increased. But apparently, transferring the amount back to Thailand, I'd need to pay tax on entire 1.1 million baht, which would make investment there a total loss. If taxed at say 30%, that would mean a loss of over 200k. If I just transfer money to a friend in another country and that person returns to me the same amount a month later, I need to declare entire amount as my personal income and pay tax on it.

 

That's pretty much lunatic.

[dayo202]

UK resident.

I'm 57 years of age non taxpayer (Personal Allowance of £12,570 before paying any tax) I live off my interest on my ISAs accounts and interest off saving bonds back in the UK..

because I don't pay any tax back in the UK because I'm below the tax threshold, does this mean i will have to pay tax here in Thailand.

I'm have a non O imm based on married visa 

Edited September 18, 2023 by dayo202

[Thorgal]

3 minutes ago, dayo202 said:

UK resident.

I'm 57 years of age non taxpayer (Personal Allowance of £12,570 before paying any tax) I live off my interest on my ISAs accounts and interest off saving bonds back in the UK..

because I don't pay any tax back in the UK because I'm below the tax threshold, does this mean i will have to pay tax here in Thailand.

I'm have a non O imm based on married visa 

If your overseas money is transferred to Thailand from a private bank account it won't be considered in Thailand as "world income". So, no Thai income tax.

 

Edited September 18, 2023 by Thorgal

[jaideedave]

1 hour ago, chang50 said:

Seems every 6 months to a year a nightmare scenario appears to disturb our tranquility in the LOS but rarely does anything come of it.I'm guessing/hoping this is just another

Funny you mentioned that.Take me back a couple years and rumor was that if expats weren't jabbed they wouldn't be able to renew the 1yr extension.

There was me Central Mall with my sleeves rolled up. Dam it to hell. All done for not. At least no serious side effects yet.

[Dialemco]

This has been applied by U S Tax Authorites for years so why not Thailand. Reading the article appears need to bring the revenue into Thailand before it is taxed so if you leave it outside Thailand no tax will be incurred unlike other countries who tax world wide income regardless where it is kept.

[h3ith]

28 minutes ago, ThomasThBKK said:

 

It says assets, that's literally everything including stocks, cash in bank, dividends, bonds... 

But Sections 40 and 41 of the revenue code refer to assessable income. That's interest, dividends, capital gains. But not the capital stock that generates this financial income. If any cash that is transferred into TH would be subject to income tax (30% for 2 - 5mil THB, 20% for 1mil), the real estate market would collapse because that would be a wealth tax. No country imposes a 20% wealth tax on incoming payments.

And this decree does not change the current tax law. Currently, only foreign income (as opposed to foreign capital) that is transferred into TH in the same calendar year when it was earned is subject to TH income tax. That's not new, it was just not much enforced. 

But from 2024, TH will get data from foreign bank accounts that are held by people who registered their Thai address with a foreign bank: Automatic Exchange of Information. So the TH revenue office probably plans to comb through these data and look for incoming payments from foreign businesses. "You live in TH all year long. How do you earn so much from a foreign business?"

[Metapod]

wow, this might be the one thing that forces me to move out of Thailand. I'm shocked.

[h3ith]

11 minutes ago, dayo202 said:

does this mean i will have to pay tax here in Thailand.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/507424/uk-thailand-dtc180281_-_in_force.pdf   This is the double taxation treaty.

1) "Interest ... may be taxed in that other state", i.e. Thailand. That's the case for most European countries. 

2) But if you season your interest income in your UK bank acount and transfer it in the next calendar year, it would not be taxable in TH.  https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income   

The new decree may mean that the TH revenue office will try to verify that you have not transferred current-year interest but only past-year interest income.

[Thaindrew]

1 hour ago, dannyb123 said:

Instantly reconsidering the elite visa I applied for last week. Easier to stay under the 180 days and split the remaining 6 months between Bali and home.

The Thailand Elite Visa is listed as exempt from Tax on the IRS website

[Thorgal]

10 minutes ago, Metapod said:

wow, this might be the one thing that forces me to move out of Thailand. I'm shocked.

Back in 2021 I submitted my Tax form and all required documents to receive the legal incentives. 

 

I had first to pay the income tax based on the money that I brought in to Thailand.

 

They've called me back and they've paid me back because my incoming money originated from an overseas private account. I had a discussion with the deputy director of the province and he confirmed me that I was exempted to pay income tax in Thailand in my case. 

 

If the money transfers originated from an overseas company, then it would be subjected to Thai income tax. 

Even the 183-day rule (from double tax treaty) is not applicable for "world income".

 

 

Edited September 18, 2023 by Thorgal

[scorecard]

1 hour ago, kevinsan said:

In the 80s if one stayed longer than 180 days, you needed to get a tax clearance before being allowed to leave the country. Always interesting negotiations. I believe the tax department burned to the ground in one of those 90s coups.

I recall that era. Had to get a Thai tax clearance document and present it at check-in  immigration on departure from LOS.

 

As mentioned at the tax office it was a strange negotiation. Many foreigners hadn't worked or had worked in hourly paid teaching jobs and similar with no records. Others in mainstram employment with their multinationals.

 

Tell either of the initial cases above to the tax clearance man and instant respone "I don't believe you." Often then 'farang get big money, I think you got 200,000Baht since last tax clearance. Then a cat and mouse game until the tax man would agree a number very probably requiring payment of tax. 

 

Then suddenly the whole process was totally cancelled. 

 

[GiveMeAColdOne]

4 hours ago, freeworld said:

Its not a money grab if it follows the law or new laws are implemented for govt to get new sources of income.

 

No doubt foreigners residing in Thailand and making use of govt services and infrastructure should be paying tax in Thailand, this is a fuction of the world order.

 

I thought everyone is agreeable to paying their fair share? This is the mantra spewed by many.

 

Its all about being free.

Let's not forget the 7% VAT that we all pay (and fuel tax, etc..)

[Metapod]

1 hour ago, John Drake said:

Prayuth, please come back!

no kidding. 3 weeks into new government and they completely <deleted> me over

[scorecard]

15 minutes ago, h3ith said:

But Sections 40 and 41 of the revenue code refer to assessable income. That's interest, dividends, capital gains. But not the capital stock that generates this financial income. If any cash that is transferred into TH would be subject to income tax (30% for 2 - 5mil THB, 20% for 1mil), the real estate market would collapse because that would be a wealth tax. No country imposes a 20% wealth tax on incoming payments.

And this decree does not change the current tax law. Currently, only foreign income (as opposed to foreign capital) that is transferred into TH in the same calendar year when it was earned is subject to TH income tax. That's not new, it was just not much enforced. 

But from 2024, TH will get data from foreign bank accounts that are held by people who registered their Thai address with a foreign bank: Automatic Exchange of Information. So the TH revenue office probably plans to comb through these data and look for incoming payments from foreign businesses. "You live in TH all year long. How do you earn so much from a foreign business?"

And I guess from your comment that state pensions would be a completely different category and exempt (hopefully).

 

Further to that point, I don't know about other countries but Australian tax regularions exempts the Oz Old Age Pension from taxation.

 

Also some Oz war veterans receive a Permanent Disability Compensation payment which is exempt from taxation. (Until about six months ago this was labelled as War Veterans Disability Pension.)

[dayo202]

15 minutes ago, h3ith said:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/507424/uk-thailand-dtc180281_-_in_force.pdf   This is the double taxation treaty.

1) "Interest ... may be taxed in that other state", i.e. Thailand. That's the case for most European countries. 

2) But if you season your interest income in your UK bank acount and transfer it in the next calendar year, it would not be taxable in TH.  https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income   

The new decree may mean that the TH revenue office will try to verify that you have not transferred current-year interest but only past-year interest income.

Sounds strange forward !!!!.

 

[BE88]

As always chaos and the norm in Thailand.

 

I can simply point out that Thailand is desperate for more money to enter the state coffers, so we will all be taxed in the near future on our income and capital brought Farang into Thailand. 

 

LOS A long time ago, now where your money Farang ?

[JonnyF]

This will never happen. It would be complete lunacy to deter people bringing money into Thailand by forcing them to pay tax on it. It would destroy the retirement market, the real estate market, foreigners supporting Thai families from overseas etc.

 

I predict there will be a roll back on this fairly shortly. It will all be a "misunderstanding" and whoever dreamt it up will be sent to Yala to work as a parking warden. And rightly so.

[andre47]

Persons who are residing in Thailand according to Section 41, paragraph three, of the Revenue Code. who have assessable income due to work duties or activities conducted abroad or because of property located in a foreign country according to Section 41, paragraph two, of the Revenue Code In the said tax year and brought the assessable income Entering Thailand in any tax year That person has a duty to include that assessable income in the calculation. To pay income tax according to Section 48 of the Revenue Code In the tax year in which the assessable income was brought into Thailand

Section 41, paragraph two means: In the case where the ownership or possessory right in an immovable property is transferred without any consideration, the transferor shall be treated as a taxpayer and pay tax in accordance with the provisions of this Part.7

 

As I understand the Thai text, the only thing that has changed is that in the future you have to pay tax on profits from work, from commercial activities, or from the sale of real estate in Thailand if you bring these profits to Thailand, regardless of the year. Previously, you had to pay tax on these profits, but only if you bring them to Thailand in the same year in which they were earned.
 

It is explicitly spoken of profits/income. It does not mean existing assets.

[Dogmatix]

4 hours ago, jvs said:

More info needed for sure but if it means retirees have to pay tax here

there will be not enough airplanes going back to Europe and other countries.

It will be a total disaster for many people including me.

Lets just wait for the small print before getting all worried and hope for the best.

On the other hand,if you have to pay tax here it should also give you some rights?

Probably not.

Technically your pension income from most European countries will be exempt due a double tax treaty since it is normally taxable there already. However the devil is in the details and we don't know how they will attempt to enforce this. If just up to you to declare and you don't have to declare or file a tax return, if you are covered by a tax treaty, then OK. But if banks are forced to report all incoming remittances to the RD and you have to provide burdensome documentation avoid tax or get tax back, then it will be a disaster.

[carlyai]

Reminds me of when they taxed tourist on a guestimate of what they spent a month. 

So you'd go to the revenue building to pay your tax (looking really like a down and out looser) and say you spent B1000/month. They would then argue and assess your tax.

[gaucan]

4 hours ago, Isaan sailor said:

Thailand to tourists—please come.

Thailand to expats—please leave.

Tourists to expats-- cry me a river

[QuantumQuandry]

3 minutes ago, JonnyF said:

This will never happen. It would be complete lunacy to deter people bringing money into Thailand by forcing them to pay tax on it.

You are *probably* right.  There is one possible reason you are wrong, though.  And that is..."because Thailand". ????

[ukrules]

2 hours ago, paddypower said:

I've always found it odd that even though you are no longer residing in the US, you are taxed on your world income, based on your citizenship. although of course the upside is you qualify for US social security benefits...

They don't tax all income earned abroad, it doesn't kick in until you cross a certain threshold which is not really that low.

 

It's known as the 'Foreign Earned Income Exclusion' - when I say it's not that low I'm taking about $100,000 a year or there abouts but it seems to change on a regular basis.

 

Of course this income would need to be taxed locally in Thailand

 

Quote

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude your foreign earnings from income up to an amount that is adjusted annually for inflation ($107,600 for 2020, $108,700 for 2021, $112,000 for 2022, and $120,000 for 2023).

Source - straight from the IRS : https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

 

 

[747man]

5 hours ago, connda said:

Eventually someone is going to write, "Does that mean farang's pension income too."

Short answer would probably be "No," at least for those countries with bilateral tax agreements with Thailand.  If you're paying income tax in your home countries, then Thailand has no claim to tax the income twice.

Eventually someone is going to write, "Does that mean farang's pension income too......I Haven't Written it Down, But it what I was Thinking !!!

[Thorgal]

15 minutes ago, Dogmatix said:

Technically your pension income from most European countries will be exempt due a double tax treaty since it is normally taxable there already. However the devil is in the details and we don't know how they will attempt to enforce this. If just up to you to declare and you don't have to declare or file a tax return, if you are covered by a tax treaty, then OK. But if banks are forced to report all incoming remittances to the RD and you have to provide burdensome documentation avoid tax or get tax back, then it will be a disaster.

1. Your pension will be automatically taxed in the country of origin.

2. If you reside more than 183 days in Thailand you can claim back the taxes you've paid in your home country

3. Your monthly pension in Thailand can be seen as "world income" if you pay it directly from your pension fund to Thailand. In that case you will have to pay income tax in Thailand based on your pension brought into Thailand.

4. If your pension has been first paid on your private overseas bank account, then it won't be considered as "world income" and not be subjected to Thai income tax.

 

Thai "world income" tax ruling is a different specific case and not subjected to the double tax treaty with other countries.

 

Edited September 18, 2023 by Thorgal

[747man]

5 hours ago, webfact said:

Thailand’s revenue departments has released new guidelines which will see all income from abroad taxed as personal income tax regardless of whether it was earned income or savings.

 

A senior official at the Ministry of Finance confirmed a document released by the revenue department over the weekend was accurate.

 

According to the document

 

“…those that have earnings from occupation or business abroad or wealth that is located abroad…and has brought these assets into Thailand…

 

must factor this into their personal income tax for the year.”

 

by Thai Enquirer

 

Full story: THAI ENQUIRER 2023-09-18

 

- Cigna offers a range of visa-compliant plans that meet the minimum requirement of medical treatment, including COVID-19, up to THB 3m. For more information on all expat health insurance plans click here.

 

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Which Bank is Giving Those Rates ?? I Must Hurry Along with my GBP !!

[quake]

This has got Cluster Duck written all over it.

 

Should be a right laugh watching all the headless chickens on AN