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

[redwood1]

28 minutes ago, Dogmatix said:

Nope.  There is no mention of exemptions under DTAs in the order. It just tells RD officers to tax the b'Jezus out of each and every foreign remittance.  Here is a translation of the order

 

Revenue Department Order

No. P.161/2023

 

Subject: Payment of income tax according to Section 41, paragraph two of the Revenue Code.

It is intended for revenue officials to consider this as a practical guideline for inspecting and giving advice to those residing in Thailand who have assessable income according to Section 40 of the Revenue Code in the past tax year Due to work duties or business conducted abroad or because of assets located abroad according to Section 41, paragraph two of the Revenue Code. The Revenue Department has ordered the following:

 

Clause 1: 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 the property is in foreign countries according to Section 41, paragraph two of the Revenue Code In the said tax year and brought the assessable income into 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

 

Clause 2: All rules, regulations, orders, letters of response to consultations or any practice that is contrary to or inconsistent with this order shall be cancelled.

 

Clause 3: This order shall come into force for assessable income imported into Thailand from the date 1 January 2024 onwards

Ordered on 15 September 2023

 

  Lawan Saengsanit

 

(Mr. Lawan Saengsanit)

Director General of the Revenue Department

So your saying it appears that Thailand does not plan to honor tax treaties with other countries?.........

[deejai33]

15 hours ago, Lorry said:

 

Normal people constantly mix income and savings in the same bank accounts,  and there really isn't any way to separate these two again. 

I agree, but it can be done since every transaction has a date.

 

As you say, few people seperate out their money neatly into different accounts based on tax status, or year earned.  I have a main account which money comes into and goes out of, and a 'savings' account that I transfer money to to gain interest.

 

So my main account has all sorts of transactions in it.  But each transaction has an origin and date made.  The account only has 1 balance maintained by the bank, which is the issue.  There's a technical term for such accounts such as mixed/combination. (Not sure)

 

You need to add some columns manually to the bank statement to be able to prove what each transactions status is and what the balance of that status is.

 

For example, if you want to show that in 2023 all of the money you sent to thailand existed before 2023 and so was untaxable under the 'loophole' you would add 2 columns to statement.  One called 2022 money, one called 2023 money.

 

Then look at end of 2022 balance and put it in 2022 column.  This is money available for tax free transfer.  Put zero in 2023 column.

 

Then examine each transaction starting jan 2023 and add or subtract it from either 2022, or 2023 column.  If its a transfer to thailand, subtract from 2022.  If its income in 2023 add it to 2023 column.  If its a bill from home country subtract from 2023, to keep as much avaiable of 2022 money.

 

If you run out of 2022 money, then you'll have to pay tax, unless the 2023 money is under dta.  You could have an extra column for that.

 

Not as complex as it sounds.  Doable for me with about 100 annual transactions.

 

 

 

 

 

 

 

 

 

[Dogmatix]

Nearly a month has past since Srettha promised there would be a focus group or focus groups to clarify the unlawful RD order reinterpreting an important part of the Revenue Code.  No sign of that yet.  Seems like that was another of his empty promises and those, for whom remittances are a key port of surviving, are hurtling towards a train wreck. 

[newnative]

1 hour ago, Pib said:

 

 

Below is the beginning news article from this mega thread talking the new RD directive where I bolded one phrase of it. Go take a quick read below.

 

The article basically says if you are a Thailand tax resident and have foreign income assessable (taxable) by Thailand lets say like income from a private retirement acct, investment, private pension, etc., which is "not" shielded by a DTA do I have the correct understanding from the article such assessable (taxable) income would only be Thailand taxable "when/if" you remitted that income to Thailand; thereby meaning if you never remitted that specific income...say just left it in your home country  (and could prove it) then that specific income stream would remain untaxable by Thailand?   

 

Like say a person expended all that specific income on bills, stuff bought in the home country like upkeep of home/family member in the home country....or just flatout left it setting in a home country acct untouched....maybe saving it to be inherited/given to someone upon your death.....or just untouched as you might plan to repatriate to the home country in the future.   

 

Or is the article wrong/making an assumption and Thailand expects to tax that specific Thailand assessable (taxable) income--assuming you declare it to them--whether you remit it to Thailand or not?

 

Seems the more I read crossfeed/articles/posts on this subject the more I get wrapped around the axle on "remittance" part of the subject.   Thanks.

 

 

     It is my understanding--so far--that only taxable income brought into Thailand is considered 'accessible' income, meaning income that can be got at by Thailand and subject to possible Thai taxes.  Taxable, accessible income would be income sent to Thailand and not shielded by dual taxation agreements.  So, if I brought in USA social security money, or Virginia state government pension money, both shielded by the USA dual tax agreement, the money is not considered 'accessible' income and not subject to Thai tax.  There seems to be some uncertainty regarding pensions but I think state, not 'private',  'government' pensions are covered.  Could be wrong, but that's my thinking at this point.  One option I might consider is directly depositing my SS in a Thai bank, which now goes into my American bank.  This would establish a verifiable paper trail of specific, shielded money.

    Other income that I might bring in, such as dividend income, is 'accessible' for tax and I could be liable to pay that tax.  There seems to be several ways around that.  I could transfer the money in and designate it as a 'gift' to my Thai partner.  Apparently 10MB a year is allowed for that.  Could be one option I would consider if that is actually the case and allowed--and the paperwork is not too onerous.  

    There seems to be a number of deductions to use, should I decide to declare the taxable income brought in.  It looks like I can deduct 190,000 baht right off the top since I am over 65.  With the remaining amount, there seems to be another 150,000 baht deduction to lop off and that leaves you with a sum to be taxed on a sliding scale.  Possibly some other deductions, as well, that I have not looked into.  Once everything is figured in, the tax might be too much, depending on how much is brought in.  But, I'm still liking the 'gift' thing.

    Each year I earn approximately $11,000 in dividend income on stock I own, plus some interest income.  It is my understanding that this money can be subject to tax.  But, it is my further understanding that this money only becomes eligible for tax if it is remitted to Thailand, where it now becomes 'accessible'.  Left in the US, it is my current understanding that I would never be responsible to pay any Thai tax on it.  It remains inaccessible for Thai tax purposes.  If this is, indeed the case, i will not be sending any of this money to Thailand.

    I am one of the fortunate ones with a large chunk of cash already here in Thailand.  I could theoretically probably live off this money for the rest of my life--or a good part of it--without bringing in any money from abroad.  Left unanswered is whether the revenue department would come knocking on my door demanding an explanation on how I am supporting myself with no money coming in from broad--possibly with a deep dive into my finances; questioning when and where the money originally came from--and what type of money it was--interest, pension, social security, savings, etc.   A lot of concerns like this are still up in the air.

    Anyway, that's where I am at this point with my thinking, some 94 pages in on this thread.  I welcome any corrections or misconceptions on my part that I have made--I am definitely still learning.  I am still in the dark on what paperwork that might start to be required--whatever methods, schemes one chooses for their types of income and remittances.  I imagine to be determined at a later point.

[Dogmatix]

20 minutes ago, redwood1 said:

So your saying it appears that Thailand does not plan to honor tax treaties with other countries?.........

No. I just answered the question as to whether there was any reference to DTAs in the RD order and there wasn't. It doesn't mean that DTAs will not be honoured, it just means that the DG of the RD decided to use his non-existent authority to change the meaning of the Revenue Code in one short para without reference to DTAs and, to date, has not bothered to provide any further clarification about how DTAs are to be applied or anything else about this complete crock that is guaranteed to be net negative for Thailand's tax take and damaging to the Thai economy. The children(or bullies) are now running RD kindergarten.

[Dogmatix]

7 minutes ago, newnative said:

     It is my understanding--so far--that only taxable income brought into Thailand is considered 'accessible' income, meaning income that can be got at by Thailand and subject to possible Thai taxes.  Taxable, accessible income would be income sent to Thailand and not shielded by dual taxation agreements.  So, if I brought in USA social security money, or Virginia state government pension money, both shielded by the USA dual tax agreement, the money is not considered 'accessible' income and not subject to Thai tax.  There seems to be some uncertainty regarding pensions but I think state, not 'private',  'government' pensions are covered.  Could be wrong, but that's my thinking at this point.  One option I might consider is directly depositing my SS in a Thai bank, which now goes into my American bank.  This would establish a verifiable paper trail of specific, shielded money.

    Other income that I might bring in, such as dividend income, is 'accessible' for tax and I could be liable to pay that tax.  There seems to be several ways around that.  I could transfer the money in and designate it as a 'gift' to my Thai partner.  Apparently 10MB a year is allowed for that.  Could be one option I would consider if that is actually the case and allowed--and the paperwork is not too onerous.  

    There seems to be a number of deductions to use, should I decide to declare the taxable income brought in.  It looks like I can deduct 190,000 baht right off the top since I am over 65.  With the remaining amount, there seems to be another 150,000 baht deduction to lop off and that leaves you with a sum to be taxed on a sliding scale.  Possibly some other deductions, as well, that I have not looked into.  Once everything is figured in, the tax might be too much, depending on how much is brought in.  But, I'm still liking the 'gift' thing.

    Each year I earn approximately $11,000 in dividend income on stock I own, plus some interest income.  It is my understanding that this money can be subject to tax.  But, it is my further understanding that this money only becomes eligible for tax if it is remitted to Thailand, where it now becomes 'accessible'.  Left in the US, it is my current understanding that I would never be responsible to pay any Thai tax on it.  It remains inaccessible for Thai tax purposes.  If this is, indeed the case, i will not be sending any of this money to Thailand.

    I am one of the fortunate ones with a large chunk of cash already here in Thailand.  I could theoretically probably live off this money for the rest of my life--or a good part of it--without bringing in any money from abroad.  Left unanswered is whether the revenue department would come knocking on my door demanding an explanation on how I am supporting myself with no money coming in from broad--possibly with a deep dive into my finances; questioning when and where the money originally came from--and what type of money it was--interest, pension, social security, savings, etc.   A lot of concerns like this are still up in the air.

    Anyway, that's where I am at this point with my thinking, some 94 pages in on this thread.  I welcome any corrections or misconceptions on my part that I have made--I am definitely still learning.  I am still in the dark on what paperwork that might start to be required--whatever methods, schemes one chooses for their types of income and remittances.  I imagine to be determined at a later point.

The RD might come to visit you to do a random inspection, if they have reports of remittances coming to you. So far this has mainly happened to expats who started filing and then paused.  But we are going into uncharted territory and no one knows how they intend to enforce this unlawful order that is binding only on their staff, not taxpayers.

[jerrymahoney]

Well maybe there will be some reaction from the US Embassy - Bangkok if/when the Thai RD says NUTS! to your US-Thailand DTA  and we will be taxing all the US Social Security monies brought into Thailand regardless of SS being specifically exempted (only can be taxed in issuing country) in Article 20 of that silly DTA.

[redwood1]

13 minutes ago, jerrymahoney said:

Well maybe there will be some reaction from the US Embassy - Bangkok if/when the Thai RD says NUTS! to your US-Thailand DTA  and we will be taxing all the US Social Security monies brought into Thailand regardless of SS being specifically exempted (only can be taxed in issuing country) in Article 20 of that silly DTA.

Can anyone say Hopewell err I mean DTA........lol

[jerrymahoney]

30 minutes ago, redwood1 said:

Can anyone say Hopewell err I mean DTA........lol

Gordon Wu aside, how many Americans are there in Thailand for whom Social Security is the major part or all of the funds that they bring into Thailand each year and for whom such assistance would prove useful.

 

BTW from the US Embassy -  Bangkok website:

Economic Section

The Economic Section monitors economic, financial, energy, trade, investment, and labor trends in Thailand. The team presents U.S. views on bilateral and multilateral economic issues to the Thai government and the public.

[newnative]

1 hour ago, Dogmatix said:

The RD might come to visit you to do a random inspection, if they have reports of remittances coming to you. So far this has mainly happened to expats who started filing and then paused.  But we are going into uncharted territory and no one knows how they intend to enforce this unlawful order that is binding only on their staff, not taxpayers.

Thanks!

[Dogmatix]

21 hours ago, Mike Lister said:

Just because I don't know what the DTA reclaim process is and just because I have never needed to do it, doesn't mean that it wont be a simple process! Returns will still be done online, that is certain. Whether or not the online system will be modified to cater to the DTA process is far too early to say at this juncture. Personally, I expect the process might simply involve a declaration rather than any long detailed process where lots and lots of data is supplied to satisfy the terms of the DTA. I further expect the RD to test some of those declarations but we're now into guessing the future.

Even though they may be small numbers, people who have brought in income in the same year it was earned have been using the DTAs for decades. Since the system is already in place, the RD may not feel the need to modify tax forms to cater for it or issue any form of clarification on DTAs.  They may just wait until their offices are clogged with farangs coming in to get RD staff help fill out their tax returns. 

[Lorry]

1 hour ago, deejai33 said:

I agree, but it can be done since every transaction has a date.

 

As you say, few people seperate out their money neatly into different accounts based on tax status, or year earned.  I have a main account which money comes into and goes out of, and a 'savings' account that I transfer money to to gain interest.

 

So my main account has all sorts of transactions in it.  But each transaction has an origin and date made.  The account only has 1 balance maintained by the bank, which is the issue.  There's a technical term for such accounts such as mixed/combination. (Not sure)

 

You need to add some columns manually to the bank statement to be able to prove what each transactions status is and what the balance of that status is.

 

For example, if you want to show that in 2023 all of the money you sent to thailand existed before 2023 and so was untaxable under the 'loophole' you would add 2 columns to statement.  One called 2022 money, one called 2023 money.

 

Then look at end of 2022 balance and put it in 2022 column.  This is money available for tax free transfer.  Put zero in 2023 column.

 

Then examine each transaction starting jan 2023 and add or subtract it from either 2022, or 2023 column.  If its a transfer to thailand, subtract from 2022.  If its income in 2023 add it to 2023 column.  If its a bill from home country subtract from 2023, to keep as much avaiable of 2022 money.

 

If you run out of 2022 money, then you'll have to pay tax, unless the 2023 money is under dta.  You could have an extra column for that.

 

Not as complex as it sounds.  Doable for me with about 100 annual transactions.

 

 

 

 

 

 

 

 

 

This is how YOU think it would work.

 

Let's say, your balance on 31/12/22 is 100,000 

In 2023, you have only 2 transactions:

1/6/2023  income from inside your country 10,000

1/7/2023 remittance to your Thai bank account 5,000

Balance on 31/12/2023 is 105,000

 

I bet Somchai the RD inspector will say, your remittance to Thailand is obviously from your income (those 10,000)

Maybe his colleague Somkid in another province will see it differently,  though.

 

Have fun!

[deejai33]

11 minutes ago, Lorry said:

This is how YOU think it would work.

 

Let's say, your balance on 31/12/22 is 100,000 

In 2023, you have only 2 transactions:

1/6/2023  income from inside your country 10,000

1/7/2023 remittance to your Thai bank account 5,000

Balance on 31/12/2023 is 105,000

 

I bet Somchai the RD inspector will say, your remittance to Thailand is obviously from your income (those 10,000)

Maybe his colleague Somkid in another province will see it differently,  though.

 

Have fun!

Yes, I understand your point.   

 

But what I say my intention with the transfers has some kind of primacy over what Somchai says was my intention.  

 

Its my money, so I have the right to transfer it according to my plans. To minimize my tax burden.

 

Somchai has no reason to challenge my account of the transfers.  Its not his money.

 

I'm telling the truth, revealing my private account details, not trying to evade tax.  All above board.  But from a mixed account.

 

But yes, that's my view.  Presumably this has come up under existing rules, I wonder what the decision was.

 

[Lorry]

8 minutes ago, deejai33 said:

 

Somchai has no reason to challenge my account of the transfers.  Its not his money.

In my home country,  years ago there was a similar situation. 

And the RD decided which money was what. You couldn't decide it yourself. 

[Puccini]

5 hours ago, KannikaP said:

Does a DTA mean that if tax is paid in say , my country UK, I do not have to pay here.?

Every DTA neans exactly what the text in the DTA says.

[moogradod]

18 hours ago, KannikaP said:

Why are many members panicing?

Maybe not because of any payment that were due for current remittances but because the possible "reciprocal" not clarified nature of some of the rules that may on top interpreted differently by different officers.

 

As an analogy: Something like some IO does not let you enter the country even with a valid visa without any appearent reason.

 

Then there is always this talk about information exchange. When you say "to the homecountry" what do you mean exactly ? Me for example have no living adress in my country from where I got my passport and neither from the country from where I get my state pension. So who gets informed by who ? The only possibility which would make sense is that the institution that remits the pension informs the immigration department (which then does not know what to do with it, they have nothing to do with my tax).

 

Still too many open issues - who knows what the outcome will be ?

[Puccini]

5 hours ago, KannikaP said:

...My example is for money coming into Thailand irrespective of any DTA.

"money coming into Thailand" is an imprecise term in the context of tax matters.

 

In the unlikely event that a DTA has a section on the taxation of "money coming into Thailand", those rules will apply. Otherwise, the Thai government is free to do as it pleases under its national laws.

[Lorry]

4 hours ago, Yumthai said:

If the 190K "exemption" has the same impact on the calculation of the taxable income (being deducted before or after leads to the same result, doesn't it?) then it behaves like an allowance.

So why TRD did not simply put it on the allowance list, even adding an extra form to fill?

I'm wondering.

 

Something doesn't add up here... or is it again a Thai logic mystery that we Farangs cannot comprehend?  

 

My explanations on p91 are simplified for our purposes.

If you look at

 

No 6 

Income Exemption Entitlement Form to be used with ภ.ง.ด.90 for the year ....

(I referred to it on p91)

 

you see that the 190,000 is not treated like allowances and deductions. For example,  you can divide the 190,000 and use parts of them for different kinds of assessable income, if you wish.  This may have consequences as not all kinds of assessable income are treated equally,  see e.g. sec 47bis of the Revenue Code. But this is really too complicated for this board. 

[Jinxed1]

12 hours ago, Jinxed1 said:

Sorry couldn't read the whole 92 pages, is there an answer to what happens to capital gains remitted from now to before Jan 1st ?

 

Do i have to pay tax on those? or only if remitted AFTER Jan 1st ?

 

Thanks

any answer ?

[KannikaP]

5 hours ago, KannikaP said:

Thanks Mike. I hope this is correct. I am going to my local tax office right now to confirm it. If it is so, then I have no worries whatsoever.

Just got back, with a Tax ID, same number as on my Pink Card. with assurance that, in my case, transferring 40k per month = 480k per annum, after 190k + 60k + 150k all at 0%, I shall have to pay Bht4000 for the year. There was some mention of 100k being deductible for expenses. As we are not married, I cannot claim 60k for my Mrs, but possibly some for the school fees I pay for my Mrs's son, he will let me know.

Where the money comes from, pension, interest, sister's immoral earnings, is of no matter. It is simply how much is/will be transferred from UK to Thailand in the specific tax year. 

As I am only getting UK State Pension @ £170 per week = £8840 and a small one from Norway, my total UK income is £10400, below the Tax Free Allowance, so no tax due in UK either. I am happy with this.

[Yumthai]

3 minutes ago, Lorry said:

My explanations on p91 are simplified for our purposes.

If you look at

 

No 6 

Income Exemption Entitlement Form to be used with ภ.ง.ด.90 for the year ....

(I referred to it on p91)

 

you see that the 190,000 is not treated like allowances and deductions. For example,  you can divide the 190,000 and use parts of them for different kinds of assessable income, if you wish.  This may have consequences as not all kinds of assessable income are treated equally,  see e.g. sec 47bis of the Revenue Code. But this is really too complicated for this board. 

I still don't get the difference in outcome.

Could you please make 2 examples with numbers that show how the calculation results differ, whether using the described method or using the 190K exemption as a simple allowance deduction?

 

[KannikaP]

40 minutes ago, Puccini said:

"money coming into Thailand" is an imprecise term in the context of tax matters.

 

In the unlikely event that a DTA has a section on the taxation of "money coming into Thailand", those rules will apply. Otherwise, the Thai government is free to do as it pleases under its national laws.

I disagree. 'Money coming into Thailand' means exactly that. How much I leave in my home country bank, give to charities, spend on horse racing, is none of their business. And after a visit to my local tax office, nothing about the source was asked, simply how much I transfer. 

[KannikaP]

1 minute ago, Yumthai said:

I still don't get the difference in outcome.

Could you please make 2 examples with numbers that show how the calculation results differ, whether using the described method or using the 190K exemption as a simple allowance deduction?

 

Did you not do maths at school? So easy to do this calculation.

Example no.1 65k x 12 = 780k. Minus any allowances, say 190k = 590k, on which you should pay tax at the going rates of 150 @ 0%, next 150k @ 5%, then 10%.

Example no. 2, my case. 40k x 12 = 480, minus 190k - 60k = 230k, of which 150k is at 0%, leaving 5% tax to pay on 80,000 = 4000 per year.

[vukovar77]

On 10/10/2023 at 5:04 PM, KannikaP said:

Only on the top part of your transfers/earnings.

As said before  000 to 150k = 0%    (Some say 190k for over 65s)

150 - 300k = 5%

300 - 500k = 10% and so on. Easily found online. 

For over 65 s is 190k ,60k for Thai spouse and this is deductable for tax (and maybe 60K for tax payer).So 250-310 k. is exemt for tax.-plus 150K(tax 0) is 400-460 k.

[Mike Lister]

1 hour ago, Dogmatix said:

Even though they may be small numbers, people who have brought in income in the same year it was earned have been using the DTAs for decades. Since the system is already in place, the RD may not feel the need to modify tax forms to cater for it or issue any form of clarification on DTAs.  They may just wait until their offices are clogged with farangs coming in to get RD staff help fill out their tax returns. 

A very good point.

[KannikaP]

1 minute ago, vukovar77 said:

For over 65 s is 190k ,60k for Thai spouse and this is deductable for tax (and maybe 60K for tax payer).So 250-310 k. is exemt for tax.-plus 150K(tax 0) is 400-460 k.

The 60k is for the over 65 taxpayer, plus a further 60k for spouse. Un/fortunately we are not married, so maybe I shall have to pay 5% of 60k = 3000 more tax. Cheaper than a wedding!

[Celsius]

Under the law, my wife gets tax deductions for health insurance, life insurance and pension.

 

If farang mug buys health insurance will it be tax deductible then?

[Mike Lister]

7 minutes ago, Celsius said:

Under the law, my wife gets tax deductions for health insurance, life insurance and pension.

 

If farang mug buys health insurance will it be tax deductible then?

Yes, up to a max of 25k deduction per year.

[Yumthai]

23 minutes ago, KannikaP said:

Just got back, with a Tax ID, same number as on my Pink Card. with assurance that, in my case, transferring 40k per month = 480k per annum, after 190k + 60k + 150k all at 0%, I shall have to pay Bht4000 for the year.

Why do you have to pay 4K if your tax rate is 0%?

 

24 minutes ago, KannikaP said:

There was some mention of 100k being deductible for expenses.

100K expenses deduction is only if you have income from employment.

 

Did you have the chance to ask the tax officer if you transfer as a gift up to 20M a year to your wife from abroad, it's tax-free?

 

17 minutes ago, KannikaP said:

Did you not do maths at school? So easy to do this calculation.

Example no.1 65k x 12 = 780k. Minus any allowances, say 190k = 590k, on which you should pay tax at the going rates of 150 @ 0%, next 150k @ 5%, then 10%.

Example no. 2, my case. 40k x 12 = 480, minus 190k - 60k = 230k, of which 150k is at 0%, leaving 5% tax to pay on 80,000 = 4000 per year.

It seems you didn't understand my question.

 

[jacob29]

4 hours ago, Dogmatix said:

It just tells RD officers to tax the b'Jezus out of each and every foreign remittance.  Here is a translation of the order

 

Revenue Department Order

No. P.161/2023

 

The order doesn't exactly say that. It appears to classify taxable income, as income earned abroad *while* you were a tax resident in Thailand. Not once does it use past tense, income earned before you were even a tax resident of Thailand. It explicitly states the opposite, foreign source income earned *while you are a tax resident*, will be taxed in future (without limitation) at the time it's remitted to Thailand.

 

In practice, and grandfathering aside, I expect it will mean from the point you become a tax resident, tax on remittances will be capped to whatever accumulated foreign income they have on record (from CRS) from current or previous years in which you were a tax resident. If you exceed this amount, it's not taxable as you weren't a tax resident, thus it wasn't assessible as per the order (given the order makes no mention of income earned while you were a non resident).