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

[KannikaP]

Just now, stat said:

I did not intent to offend you my apologies! With how many foreigners does he deal per year. He is bound by the directions BKK gives him (or maybe he is not but I assume he is).

I got the impression that I am the only Farang he deals with, which is why he asked whether he could phone me occasionally to practise his English. I told him it is OK if I am not busy, other wise I shall teach him a very useful two-word phrase. He laughed

[stat]

6 hours ago, KannikaP said:

Agreed. After reading several tax documents, it all seems fairly straightforward to me. OK, my situation is a lot simpler than others but it is not University standard maths.

It cannot be any more complicated than say the UK system, or USA for that matter.

Some countries introduced a flat rate income tax of 25% and ended up getting more revenue in than previously, and a lot easier & cheaper to administrate.

Tax is anything but simple...

[KannikaP]

Just now, stat said:

Tax is anything but simple...

480k in per year. Minus 190k + 60k. The first 150k @ 0%, the next 150k @ 5%, the next 200k @ 10%. There may be a 100k expenses allowance and 15k for my step son's school

That's it for me.

[stat]

4 hours ago, The Cyclist said:

What is the purpose of DTA's ?
 

If the answer is to ensure that people are not double taxed on the same income, most people will be fine.

 

If the alternative answer is, that they were made up by bored bureaucrats and not worth the paper they are written on, then we will all have problems.

 

If you are a tax dodger, your dodging days are coming to end, certainly in Thailand.

Income not transmitted in the same year was tax free so no dodging was needed or possible . 7 posts in this forum no understanding of DTAs but calling out tax dodgers, amazing.  However nice forum name!????

Edited October 13, 2023 by stat

[samtam]

3 minutes ago, KannikaP said:

480k in per year. Minus 190k + 60k. The first 150k @ 0%, the next 150k @ 5%, the next 200k @ 10%. There may be a 100k expenses allowance and 15k for my step son's school

That's it for me.

I don't know why, but I misread one of your earlier posts that seemed to suggest that over 65s had a threshold of THB150k PLUS THB190k PLUS THB60k.

[Mike Lister]

37 minutes ago, JimGant said:

Invoked where? If my US govt pension is "exclusively" taxed by the US, who cares what year I bring it over to Thailand..... per treaty, it never plays any part in the Thai tax scheme, meaning: no reference to it is required in the filing of Thai taxes.

Yes Jim, we understand Jim that the US provision to exclusively tax SSc/gov income is extremely helpful to Americans. Clearly, I was not making reference to excluded US income, I was referring to countries that don't have such an agreement in place, eg the UK and other countries. When a UK citizen for example (historically) imported funds from the UK, into Thailand, in the year the money was earned, technically speaking that money was always taxable in Thailand. Whether or not the taxpayer chose to report it in a tax return and pay tax on it is another matter but if they had, that would invoke the DTA. I have to believe that at least one person in the history of time has done that and that the DTA has been invoked before at least once. So the process is there, it's in place, it's just that not many have used it before. 

[KannikaP]

2 minutes ago, samtam said:

I don't know why, but I misread one of your earlier posts that seemed to suggest that over 65s had a threshold of THB150k PLUS THB190k PLUS THB60k.

Read my post again please.

[The Cyclist]

16 minutes ago, stat said:

Income not transmitted in the same year was tax free so no dodging was needed or possible . 7 posts in this forum no understanding of DTAs but calling out tax dodgers, amazing.

It was a loophole that is being closed from 01 Jan 2024.

 

Loopholes are generally used ( in the tax sense ) to dodge paying tax, under most tax jurisdictions, not just Thailand.

 

Perhaps you could point out what I have not understood about the UK - Thai DTA ? I think I understand it enough to stop my Private pension being sent direct to Thailand and allowing my Government pension to continue being sent direct to Thailand.

 

How sad are you that you counted my posts.

[stat]

34 minutes ago, KannikaP said:

480k in per year. Minus 190k + 60k. The first 150k @ 0%, the next 150k @ 5%, the next 200k @ 10%. There may be a 100k expenses allowance and 15k for my step son's school

That's it for me.

Have you ever seen a brokerage account statement with 5000 option and future trades? In my home country there are probably 1000 people that know how to tax them. Have you ever send in proof that your pension was qualified for exemption of an DTA fully notarized with an apostile etc? They COULD make this hell if they want to. Of course if your income is not high you will not have too many problems.

 

Our only hope besides this whole directive not beeing applied is that they accept your declaration without further proof (with or without tea money).

Edited October 13, 2023 by stat

[stat]

1 minute ago, The Cyclist said:

It was a loophole that is being closed from 01 Jan 2024.

 

Loopholes are generally used ( in the tax sense ) to dodge paying tax, under most tax jurisdictions, not just Thailand.

 

Perhaps you could point out what I have not understood about the UK - Thai DTA ? I think I understand it enough to stop my Private pension being sent direct to Thailand and allowing my Government pension to continue being sent direct to Thailand.

 

How sad are you that you counted my posts.

It was not a loophole it was the law. Good for you that you think you have understood your DTA...

 

BTW you number of posts is displayed directly under you name now that is sad.

[KannikaP]

2 minutes ago, stat said:

BTW you number of posts is displayed directly under you name now that is sad.

He only joined in on Monday with now, 8 posts.

[The Cyclist]

5 minutes ago, stat said:

Good for you that you think you have understood your DTA...

I asked you to explain where I didn't understand the UK /. Thai DTA in respect to the 2 pensions I currently have paid direct to Thailand.

 

Pension 1 Government, covered by DTA ( No tax in Thailand )

 

Pension 2 Private, liable to tax in Thailand and will no longer be paid direct to Thailand.

 

Where did I get the DTA wrong ?

[stat]

Just now, The Cyclist said:

I asked you to explain where I didn't understand the UK /. Thai DTA in respect to the 2 pensions I currently have paid direct to Thailand.

 

Pension 1 Government, covered by DTA ( No tax in Thailand )

 

Pension 2 Private, liable to tax in Thailand and will no longer be paid direct to Thailand.

 

Where did I get the DTA wrong ?

I am only giving advice to unfriendly people that pay for my services. ????

[The Cyclist]

1 minute ago, stat said:

I am only giving advice to unfriendly people that pay for my services. ????

I provided the answer above, with regards to my pensions and the UK / Thai DTA

 

I asked you to clarify where I had the answer wrong.

 

The above quote speaks volumes.

[MartinL]

37 minutes ago, The Cyclist said:

I asked you to explain where I didn't understand the UK /. Thai DTA in respect to the 2 pensions I currently have paid direct to Thailand.

 

Pension 1 Government, covered by DTA ( No tax in Thailand )

 

Pension 2 Private, liable to tax in Thailand and will no longer be paid direct to Thailand.

 

Where did I get the DTA wrong ?

The attached HMRC doc. has been posted before but you might have missed it, being new here.

Look at p. 34, under Thailand, the far right column, Note 4 in particular.

Your 'Government pension' might or might not be the State Pension, I don't know your circumstances. State Pension is NOT protected by the UK/Thai DTA.

DT_Digest_April_2018 p.34.pdf

Edited October 13, 2023 by MartinL

[Mike Lister]

42 minutes ago, The Cyclist said:

I asked you to explain where I didn't understand the UK /. Thai DTA in respect to the 2 pensions I currently have paid direct to Thailand.

 

Pension 1 Government, covered by DTA ( No tax in Thailand )

 

Pension 2 Private, liable to tax in Thailand and will no longer be paid direct to Thailand.

 

Where did I get the DTA wrong ?

Government pension is not the same as State pension so really there should be three on the list, Government, State and Private. Since there aren't three, State pension is classed with private pensions.

[BE88]

On 10/12/2023 at 4:53 PM, Dogmatix said:

One problem the wording raises appears to be that income earned in a tax year you are tax resident is assessable when remitted to Thailand in any tax year.  That appears to cut off the loophole to stay out of Thailand for over 180 days in a tax year to become non tax resident and make some large tax free remittances.  With that wording they can argue that the remittance was taxable because the money was earned while you were tax resident, since the year it was earned is key, not the year of remittance, as it is not assessable income whenever remitted in any tax year. That would be odd, if you were not required to file a tax return in the the year you are not a tax resident but that appears to be what it says, whether intentionally or not. If not intentional, they would still be happy to close a loophole that many here have suggested they would use.

I don't agree with what you say. Not being a tax resident for less than 180 days per year is not a flaw as you say because then if this general rule applied in many countries were excluded it would mean that a simple tourist who would stay a few weeks in Thailand would be subject to a residence tax and that would be ridiculous .

 

[Dogmatix]

5 hours ago, TroubleandGrumpy said:

Thanks for that detailed explanation - now I understand - no you had not detailed that before. IMO you should be careful if/when they make this change - I suggest getting advice from a tax lawyer/accountant. The reason I say that is because while you are a tax resident in Thailand, the rental money you recieve in UK is taxable income in Thailand. 

In answer to your question. My Thai lawyer told me that a tax return in Thailand using a DTA for exmeption or credits is a complex matter and it would not be easy or cheap.  Likewise, I have seen two vlogs by lawyers in Thailand who both say any tax return involving DTAs is complex - and one that at this point in time they are only used for companies tax returns (not personal income tax).

So please tell me Mike - given that you have never done a tax return involving DTA exemptions and credits - what make you think that they will be easy?

It is also my sense that tax returns claiming tax credits under DTAs have been largely or even exclusively used by companies up until now, not by individuals. Thai companies have been liable to tax on their foreign source income for decades, regardless of whether they remit the income to Thailand.  However, there has not been any real for individuals to claim tax credits and there is no space to do so on the PND 91 form which you would think would have been added, if a large number of taxpayers were declaring foreign source income.  Anyone with enough foreign source income to make it worth paying a tax accountant to do the filing could afford to wait till the end of the tax year and remit the money tax free. Most people who needed the money before the end of the tax year are expat pensioners, whom the RD has not bothered up until now, probably assuming the incremental tax they could collect by harassing expat pensioners would not be worth the trouble. But all this seems likely to change.

Edited October 13, 2023 by Dogmatix

[stat]

1 hour ago, The Cyclist said:

I provided the answer above, with regards to my pensions and the UK / Thai DTA

 

I asked you to clarify where I had the answer wrong.

 

The above quote speaks volumes.

You are the living proof of the dunning krueger effect. After admitting that you do not know much about DTAs and how they are handled and what documentation is needed you claim you have it all figured out that your pension will be excluded under the DTA.

[BE88]

5 hours ago, Negita43 said:

Just a question:

Surely whatever means they use for "collecting" what they see as their rightful dues ???? cannot start until 180 days into 2024  as only then can they ascertain the length of a persons stay and hence if they are a tax resident and even then people may take trips out of the country during the course of the year.

So I don't see how they are going to collect the tax until at least 2025

Of course they could collect via banks receiving money and them tell you to request a repayment depending on your tax statusat the end of the year - ho ho

If the law comes into force on 1 January 2024 they could also ask all residents for the tax relating to the year 2023 as the law in force is in May 2024 to present the declaration of the previous year in which the tax declaration must be presented every year .

 

[TroubleandGrumpy]

5 hours ago, Mike Lister said:

Enough, I don't exist here to respond to your every challenge and to present you with detailed explanation of everything I say, do or you ask for! Get your tax advice from your lawyers, their blogs and the internet, if that's your thing, the debates between us here are simply not productive useful or interesting for me or the wider audience any more. We be done here.

Agree - lets agree to disagree.

[TroubleandGrumpy]

36 minutes ago, Dogmatix said:

It is also my sense that tax returns claiming tax credits under DTAs have been largely or even exclusively used by companies up until now, not by individuals. Thai companies have been liable to tax on their foreign source income for decades, regardless of whether they remit the income to Thailand.  However, there has not been any real for individuals to claim tax credits and there is no space to do so on the PND 91 form which you would think would have been added, if a large number of taxpayers were declaring foreign source income.  Anyone with enough foreign source income to make it worth paying a tax accountant to do the filing could afford to wait till the end of the tax year and remit the money tax free. Most people who needed the money before the end of the tax year are expat pensioners, whom the RD has not bothered up until now, probably assuming the incremental tax they could collect by harassing expat pensioners would not be worth the trouble. But all this seems likely to change.

I agree - but some think it will all be fine.   Each to his own - I would prefer to know now, rather than find out later when fines and interest penalties could get involved. 

[The Cyclist]

1 hour ago, MartinL said:

The attached HMRC doc. has been posted before but you might have missed it, being new here.

Look at p. 34, under Thailand, the far right column, Note 4 in particular.

Your 'Government pension' might or might not be the State Pension, I don't know your circumstances. State Pension is NOT protected by the UK/Thai DTA.

DT_Digest_April_2018 p.34.pdf 543.01 kB · 1 download

As you seem to take great delight in examining  my posts, you should have seen the that my Government  Pension, is a Forces Pension and that I am not old enough to claim the State Pension.

 

My Private pension could very well fall under the Thai tax system, which is why it will no longer be paid to Thailand after the 01 Jan.

 

I do not need you to post things for me to read. I asked to explain where my understanding of the UK / Thai DTA was wrong.

[Middle Aged Grouch]

So the checks and harassment will start to harass foreigners at the airport carrying cash ? With this no more foreigners will want to risk comming to Thailand.

[The Cyclist]

1 hour ago, Mike Lister said:

Government pension is not the same as State pension so really there should be three on the list, Government, State and Private. Since there aren't three, State pension is classed with private pensions.

That is how I read the situation, and cancelled my Private pension to Thailand.

 

Few years to go yet to claim the State Pension.

[Middle Aged Grouch]

With all this new racket on tax, people should start shifting/investing to other more foreigner friendly nations in Asia and next to Thailand.

[redwood1]

18 minutes ago, BE88 said:

If the law comes into force on 1 January 2024 they could also ask all residents for the tax relating to the year 2023 as the law in force is in May 2024 to present the declaration of the previous year in which the tax declaration must be presented every year .

 

Sure and they could go back to the Vietnam  War.....I bet plenty of GIs in Thailand back then who were skipping out on paying tax.....Tax dogers they were and countless expat tax dogers......

Make them all pay up  with penalties and intrest...

 

Heck I bet 100 dollars owed then would be 200-300 hundred thousand by now....

Edited October 13, 2023 by redwood1

[The Cyclist]

26 minutes ago, stat said:

You are the living proof of the dunning krueger effect. After admitting that you do not know much about DTAs

I never admitted anything. You made an assumption.

 

28 minutes ago, stat said:

you claim you have it all figured out that your pension will be excluded under the DTA.

Yes, I believe I have on the wording of the DTA

 

Yet again. I will ask you to show me where I have made a misunderstanding.

[redwood1]

 

PAGE  NUMBER

 

[TroubleandGrumpy]

44 minutes ago, Dogmatix said:

It is also my sense that tax returns claiming tax credits under DTAs have been largely or even exclusively used by companies up until now, not by individuals. Thai companies have been liable to tax on their foreign source income for decades, regardless of whether they remit the income to Thailand.  However, there has not been any real for individuals to claim tax credits and there is no space to do so on the PND 91 form which you would think would have been added, if a large number of taxpayers were declaring foreign source income.  Anyone with enough foreign source income to make it worth paying a tax accountant to do the filing could afford to wait till the end of the tax year and remit the money tax free. Most people who needed the money before the end of the tax year are expat pensioners, whom the RD has not bothered up until now, probably assuming the incremental tax they could collect by harassing expat pensioners would not be worth the trouble. But all this seems likely to change.

Exactly.   If the RD is directed to go forward under this new 'method', then without any exclusions for retired/married Expats (like in Malaysia, Philippiones, and other countries) that means all Expat remittances into Thailand can (will?) be viewed as taxable income.  In the past we were put in the one of many 'too hard' baskets by the Thai RD - not worth the efforts. Clearly the Govt is pushing them to close the loopholes, and to also pursue all taxable income. 

 

I do expect that there will be some sort of clarification for all people who could be affected under this change, not just Expats, prior to the end of December this year.  I just cannot fathom Expats who think they can decide themselves what the tax office will decide is and is not taxable, and how DTAs can and will be applied by the RD.  I also think they dont realise that claim (I thought it was not taxable), is not a valid response when/if they are audited in the future.  

 

As I have said before, my plan in response to this new reality in Thailand, is to bring in extra funds before end December this year (because I will not be a tax resident this year).  Then I plan in 2024 to will only bring in my Pension (audit trial included) and some small withdrawals from my Super savings (again audit trail included). I will then lodge a tax return in 2025 and see how it goes.  However, depending on how things pan out, I may change that strategy.  If Thailand Govt/RD provides a clear direction that my money will not be taxable income, and that I do not need to lodge a tax return, then it will be business as usual going forward.  If the Thailand Govt/RD states that all Expat remittances into Thailand over XYZ Baht are taxable income, and each Expat has to claim exemptions and/or credits in their annual tax returns, then I will probably be leaving Thailand (depends on how much I might have to pay) depending on how my 2025 tax return goes.