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

[Misty]

36 minutes ago, ukrules said:

At what rate do Americans pay tax on for the first $120k ?

 

It's zero isn't it......

It depends. If the income is wages Americans can chose to exclude up to $120k in 2023 from their tax calculation. However, they'll still owe tax on other types of income, such as capital gains, interest, dividends. Or if it makes more sense, they choose not to exclude $120k, but instead take a foreign tax credit against any US tax owed. The latter can work out better in cases where Americans earn and pay foreign tax on substantially more than $120k in non-US wages.

[Somjot]

This will probably be the least popular post in the whole thread and yet I have to get it off my chest:

 

It goes to all those “I'm not going to pay a single Satang of tax in this country” – guys.

How do you justify that?

 

Let's not discuss about corrupt politicians; they are there and we're not going to change that.

 

But think about schools or government universities. Somebody has to pay for that.

 

What about law enforcement? Yeah, I know, they're all very corrupt and bad, blah blah, but every time a foreigner is robbed by some Thai, the local police get that guy in less than 24 hours. Can't say the same thing about our law enforcement. If you should ever need them, you will be more than happy that they are there.

 

Or the justice system. Again, yeah, I know that old saying “If you need a lawyer in Thailand, you have lost already.” And yet you will be glad, in case you need it.

 

What about government hospitals. Many of you might have a high-class health insurance, but trust me when I say, most Farangs I met in Thailand do not have a health insurance at all.

 

That together with a small budget and the day will come when their life might depend on the existence of those government hospitals.

 

And even if you belong to that lucky group of people with a first-class health insurance.

What about the love of your life you met last month? Does she have one?

 

Paying her bills in a private hospital will make your holiday funds shrink faster than a snowman in the desert and I don't even want to start about that Buffalo, that seems to only get sick, when the lady has a new boyfriend.

 

And if all that doesn't bother you, my last point will:

 

Infrastructure!

 

Some of you might still remember the adventurous drive from Don Muang airport to Pattaya when there were no highways or motorways.

 

We're using their streets every day.

 

What makes you think, any of this should be free of charge for you and there is no reason to support this at least a little bit?

[Isaan sailor]

3 minutes ago, Somjot said:

This will probably be the least popular post in the whole thread and yet I have to get it off my chest:

 

It goes to all those “I'm not going to pay a single Satang of tax in this country” – guys.

How do you justify that?

 

Let's not discuss about corrupt politicians; they are there and we're not going to change that.

 

But think about schools or government universities. Somebody has to pay for that.

 

What about law enforcement? Yeah, I know, they're all very corrupt and bad, blah blah, but every time a foreigner is robbed by some Thai, the local police get that guy in less than 24 hours. Can't say the same thing about our law enforcement. If you should ever need them, you will be more than happy that they are there.

 

Or the justice system. Again, yeah, I know that old saying “If you need a lawyer in Thailand, you have lost already.” And yet you will be glad, in case you need it.

 

What about government hospitals. Many of you might have a high-class health insurance, but trust me when I say, most Farangs I met in Thailand do not have a health insurance at all.

 

That together with a small budget and the day will come when their life might depend on the existence of those government hospitals.

 

And even if you belong to that lucky group of people with a first-class health insurance.

What about the love of your life you met last month? Does she have one?

 

Paying her bills in a private hospital will make your holiday funds shrink faster than a snowman in the desert and I don't even want to start about that Buffalo, that seems to only get sick, when the lady has a new boyfriend.

 

And if all that doesn't bother you, my last point will:

 

Infrastructure!

 

Some of you might still remember the adventurous drive from Don Muang airport to Pattaya when there were no highways or motorways.

 

We're using their streets every day.

 

What makes you think, any of this should be free of charge for you and there is no reason to support this at least a little bit?

Good points.  But I would counter that the USA and other expat countries have signed tax treaties in force.  And in the USA, the Internal Revenue Service has absolute power over our tax situation, wherever we live.

[K2938]

1 hour ago, StayinThailand2much said:

The prime minister was quoted as saying that 'foreigners in Thailand are the target due to some "inequalities". (A post on this news forum quoted a related newspaper article a few days ago.)

I do not recall this and it would be silly since taxing the few foreigners will not lead to huge tax revenue.  Can you please check the quote you refer to and post it here, if it exists?  The only thing which the prime minister said I think is (quoted from Bloomberg):

“Some people may not be happy that I am digging in to this area, but inequality is a big issue,” Srettha said, referring to the growing wealth gap because of tax loopholes. “The principle of tax is that you must pay tax on income your earn no matter how you earn it.”

So nothing about foreigners.  They are not the prime target, but the unintended collateral damage.
 

[Lorry]

58 minutes ago, K2938 said:

I do not recall this and it would be silly since taxing the few foreigners will not lead to huge tax revenue.  Can you please check the quote you refer to and post it here, if it exists?

The article in the Thai Examiners has multiple quotes meaning pretty much the same.

 

https://www.thaiexaminer.com/thai-news-foreigners/2023/09/25/calls-for-clarification-of-new-regime-income-tax-foreigners-overseas-income/

 

So who do you think the government is targeting?

To say the PM is targeting rich Thais is ridiculous.  He is one of them. 

The money of the Thai middle class is mostly tied up in their condos and cars.

 

[StayinThailand2much]

1 hour ago, K2938 said:

I do not recall this and it would be silly since taxing the few foreigners will not lead to huge tax revenue (...)

https://aseannow.com/topic/1307547-calls-for-clarification-of-new-tax-regime-which-appears-to-target-expat-foreign-income-sources/

[K2938]

16 minutes ago, StayinThailand2much said:

https://aseannow.com/topic/1307547-calls-for-clarification-of-new-tax-regime-which-appears-to-target-expat-foreign-income-sources/

Thank you for this.  Without wanting to be disrespectful of the article, I would suggest that this is more in the clickbait category.  Moreover, the article does not claim that the prime minister said this measure would particularly target foreigners and any potential interpretation of the situation given in this article by the journalist is not what the prime minister said.  So rest assured that foreigners are not the target, but the unintended collateral damage.  But thank you for posting this.

[hotandsticky]

3 hours ago, david555 said:

would be easy if they wish it to so ..... just an extra document demanded by I.O. when doing whatever connection to your Stay Thailand status .... TIN  number by example ...

I don't believe that it would be anything like as easy as you suggest.

 

The Thai authorities can't even connect traffic offences with road tax/licence renewal.

[JimGant]

38 minutes ago, K2938 said:

So nothing about foreigners.  They are not the prime target, but the unintended collateral damage.

Oh, yawn. As an American, nothing changes in my total tax bill, in sum between the two countries. All my income is already taxed by Uncle Sam, who has first dibs on most of it (Air Force pension, Social Security) under the US-Thai tax treaty. Only my Required Minimum Distribution on my IRA is first dibs by Thailand; but under current rules, this remitted RMD to Thailand is several years old, under FIFO rules when sent by Wise from my savings account. So, not remitted in year received. All of this, of course, supported by 1099's, showing amounts paid and and amounts of tax withheld -- should Thai tax folks ever care.

 

But, under the new rules, they may finally come after my IRA RMD remittance. Fine and good, as this is what they're entitled to under the tax treaty. So, I'll just take a tax credit against my US taxes on this RMD, which is in the 22% tax bracket -- well above the Thai tax bracket. Thus, Thailand gets full benefit from taxation of this RMD, with the remainder tax bill paid to Uncle Sam. Total amount of taxes paid by me between both countries is same as if I just paid the US; but now, Thailand gets some tax dollars they're entitled to under the treaty; and I provide some support to the tax base of the country I now live in. Seems fair.

 

And I got a LTR WP visa. But it wasn't because of any tax advantage -- my US tax bill hadn't changed, and the LTR visa didn't give me any relief against Thai taxes, which I didn't have to pay due to the "remitted in later year" policy. Now, per the above paragraph, I may end up paying Thai taxes on my IRA RMD. But, again, my total tax bill won't change.... And I'll feel good about some of my taxes finally supporting my adopted country.

 

So, as a Yankee, nothing much going on here to affect me. But I can feel the pain (NOT!) for those Europeans that now may finally have to pay somebody some taxes. Just sorry you haven't been paying your mother country all these years -- so maybe they could have paid their NATO bill.....

 

 

 

 

[Puccini]

On 9/27/2023 at 10:14 AM, redwood1 said:

Does any country tax a retired person on spending their savings?...After they have already been taxed many times to get that savings?

A lot of countries do that with the Value Added Tax (VAT), in some countries called other names, eg General Sales Tax and similar names.

[redwood1]

25 minutes ago, JimGant said:

Oh, yawn. As an American, nothing changes in my total tax bill, in sum between the two countries. All my income is already taxed by Uncle Sam, who has first dibs on most of it (Air Force pension, Social Security) under the US-Thai tax treaty. Only my Required Minimum Distribution on my IRA is first dibs by Thailand; but under current rules, this remitted RMD to Thailand is several years old, under FIFO rules when sent by Wise from my savings account. So, not remitted in year received. All of this, of course, supported by 1099's, showing amounts paid and and amounts of tax withheld -- should Thai tax folks ever care.

 

But, under the new rules, they may finally come after my IRA RMD remittance. Fine and good, as this is what they're entitled to under the tax treaty. So, I'll just take a tax credit against my US taxes on this RMD, which is in the 22% tax bracket -- well above the Thai tax bracket. Thus, Thailand gets full benefit from taxation of this RMD, with the remainder tax bill paid to Uncle Sam. Total amount of taxes paid by me between both countries is same as if I just paid the US; but now, Thailand gets some tax dollars they're entitled to under the treaty; and I provide some support to the tax base of the country I now live in. Seems fair.

 

And I got a LTR WP visa. But it wasn't because of any tax advantage -- my US tax bill hadn't changed, and the LTR visa didn't give me any relief against Thai taxes, which I didn't have to pay due to the "remitted in later year" policy. Now, per the above paragraph, I may end up paying Thai taxes on my IRA RMD. But, again, my total tax bill won't change.... And I'll feel good about some of my taxes finally supporting my adopted country.

 

So, as a Yankee, nothing much going on here to affect me. But I can feel the pain (NOT!) for those Europeans that now may finally have to pay somebody some taxes. Just sorry you haven't been paying your mother country all these years -- so maybe they could have paid their NATO bill.....

 

 

 

 

There are huge numbers of expats who are not in your tidy ever so smug tax position that you seem to love to yap about in a condescending manner......Maybe try thinking of others beside yourself...

Edited September 28, 2023 by redwood1

[Wongkitlo]

On 9/18/2023 at 12:08 PM, Robert Tyrrell said:

Good afternoon, 

 

So apparently it seems Thai Nationals who travel abroad for better Jobs and Wages and education , Even less attractive for them to travel abroad to expand there education and finances !! Thai government shooting themselves in the foot again !! ???? Don’t they understand that a very large percentage of Thai Nationals income abroad comes back home to Thailand !!! And it’s economy  !! ???? 
 

TIT 555555555 ???? Lol ???? 

It is hard to see how it will work. Will the bar girls  waiting at WU get taxed on their weekly payments and likewise overseas workers sending from Wise. How will the government work out what is income not subject to tax treaties and what  level of yax has already been paid. I am not an accountant but thecimplementation seems fraught with trouble. 

[david555]

32 minutes ago, hotandsticky said:

I don't believe that it would be anything like as easy as you suggest.

 

The Thai authorities can't even connect traffic offences with road tax/licence renewal.

So why then all the fuzz on it , if not possible  by Thailand to enforcing it ...... also WHY 56 pages about it here .....?

I.O. officers are most possible key players for control .....let's hope  they don't like to assist Tax office on just asking a TIN  numbers ????

 

 

[Yumthai]

9 minutes ago, Wongkitlo said:

It is hard to see how it will work. Will the bar girls  waiting at WU get taxed on their weekly payments and likewise overseas workers sending from Wise. How will the government work out what is income not subject to tax treaties and what  level of yax has already been paid. I am not an accountant but thecimplementation seems fraught with trouble. 

Moreover Wise transfers, as many other P2P money remittance solutions, are local transfers not international inward wire transfers.

[hotandsticky]

5 minutes ago, david555 said:

So why then all the fuzz on it , if not possible  by Thailand to enforcing it ...... also WHY 56 pages about it here .....?

I.O. officers are most possible key players for control .....let's hope  they don't like to assist Tax office on just asking a TIN  numbers ????

 

 

 

Because some people like scaremongering - and some people like to panic at the slightest whiff of trouble.

 

Nothing concrete, nothing official about it happening, keep a watching brief.

[quake]

2 hours ago, Somjot said:

This will probably be the least popular post in the whole thread and yet I have to get it off my chest:

It goes to all those “I'm not going to pay a single Satang of tax in this country” – guys.

How do you justify that?

Yes that's me.

What so the government can buy a submarine, aircraft carrier, to fight what war.

What so some government officials can syphon the money off for them and there families.

Yes right on man.

Everyone pays tax every time you buy anything in Thailand.

that's enough for me. as an expat, with no Thailand income generated here.

All money that I spend here is generated in a different country.

and it all goes to the Thai economy.

So in a word,  F, the tax department here.

I will get round it one way or another.

 

But good luck to you. get your wallet out for the revenue department. 

 

[Mike Teavee]

3 hours ago, Somjot said:

How they count the 180 days?

Quite simple, let's say you arrive in Thailand on the 5th of March 11:00 PM and leave on the 25th of March at 03:00 AM.

They will count 21 days and not 20.

Every day you stay in the Kingdom counts and they will tell it from the stamps in your passport.

It doesn't make a difference if you arrived in Thailand at 11:00 PM on the 5th of March, as long as the arrival stamp in your passport says 5th of March, you have been in Thailand since the 5th of March.

In the UK it’s where you are at midnight that counts, so if you landed at 23:55pm but didn’t get through border control until 00:05am you weren’t in the UK on that date 

[david555]

1 minute ago, Mike Teavee said:

In the UK it’s where you are at midnight that counts, so if you landed at 23:55pm but didn’t get through border control until 00:05am you weren’t in the UK on that date 

i would think people would not put it tooo sharp when trying to avoid a rule from ANY gov.

 

i always take a safe gap for whatever .....

[Lorry]

9 minutes ago, quake said:

What so the government can buy a submarine, aircraft carrier, to fight what war.

Much better than the governments of America and Western Europe who buy weapons and use them in actual wars. I much prefer weapons that are only toys, like submarines without engines. 

 

11 minutes ago, quake said:

What so some government officials can syphon the money off for them and there families.

In my country (considered squeaky clean),  lots of politicians sold masks to the goverment for inflated prices. The head of our government is involved in a multi-billion dollar fraud - but he doesn't recall,  so all is well.

 

16 minutes ago, quake said:

Everyone pays tax every time you buy anything in Thailand.

Wrong, in the informal sector of the economy (street stalls) there is no VAT.

[Puccini]

On 9/27/2023 at 1:32 PM, ukrules said:

Exactly - depending on how it's implemented there should be massive warnings that nobody should ever retire to Thailand and remit funds before at least July 10 for this reason.

 

This includes those depositing 800k.

 

It expect the Revenue Department Order 161/2366 to be implemented exactly the way it is written: starting from 1 January 2024, if you are a tax resident in Thailand you must include in your annual Thai tax declaration any part of your foreign-earned income for that year that is assessable income, ie income assessable for the Thai tax calculation.

 

Where a DTA is in place, that DTA says in what country the foreign-earned income is assessable and that's the end of the story. If the DTA says that the income is assessable in your country, you must not include it in your Thai tax declaration, regardless whether you transfer any part or all of it to Thailand at any time.

[quake]

33 minutes ago, Lorry said:

Much better than the governments of America and Western Europe who buy weapons and use them in actual wars. I much prefer weapons that are only toys, like submarines without engines. 

 

In my country (considered squeaky clean),  lots of politicians sold masks to the goverment for inflated prices. The head of our government is involved in a multi-billion dollar fraud - but he doesn't recall,  so all is well.

 

Wrong, in the informal sector of the economy (street stalls) there is no VAT.

 

Yes funny about subs with no engines, but is it, just a gross waste of money.

 

But we are talking about Thailand not other countries. who cares about what the uk or usa are doing , its not relevant , we live here, not there.

 

(Wrong, in the informal sector of the economy (street stalls) there is no VAT.)

 

But everything they have bought to make and sell to you has been taxed already in some way.

 

But anyway, feel free to get your wallet out for the tax department.

good luck to you.

 

 

Edited September 28, 2023 by quake

[Dogmatix]

10 hours ago, FritsSikkink said:

From a business partner:

 

"This new guideline presents significant challenges for Thai tax residents with both Thai and foreign-sourced incomes.  While the department's instruction is not law, it represents the enforcement directive of the tax authority.  The tax authority still needs to investigate several issues relating to how they will enforce this new rule.  For instance, the applicable tax rates (whether they will impose a flat tax rate, different tax rates specifically applied for foreign-sourced income, or at the standard progressive tax rate), how to distinguish between principal (funds from legacy investments, inheritance, original investment principal) versus earnings (interest, dividends, remuneration) from comingled funds, determination of applicable foreign currency exchange rates for tax assessment, etc. At the time of writing this, XXXXXXXXXX is actively following up on further developments on this matter. We hope to provide additional updates and clarifications on this topic soon. "

One wonders whether they will bother with any of this. If they say nothing, which IMHO is quite possible, everything remitted that was earned from the year dot onwards is taxable at the progressive rates going up to 35% on 4 million plus.  That would just leave it up to tax residents to file in 1Q25 using their own judgement , or choose not to file, and see what happens.

 

There are definitely many things to do with investment income that need clarification and which apply to Thai overseas investors as well as foreigners. Since Thai investors are a main target group, they ought to have a stab at make things clearer  ASAP but no guarantee they will bother.

 

Thailand has no specific capital gains tax and treats all capital gains as income in the period they arise.  But this is not particularly onerous on domestic investors for two reasons: 1) capital gains on listed Thai stocks sold by individual investors are tax free; 2) Property sales in Thailand are taxed on a transactional basis at the time of transfer at the Land Office based on appraisal price or declared sales price, whichever is the higher, regardless or gain or loss.  This is not overly burdensome as the total tax on a property sale is rarely more than 5% and, being done on a separate transactional basis it has no effect on the progressive tax rate you pay on your other income for the year.  Capital gains taxes in other countries are usually at a lower rate than the top marginal rates of tax (eg CGT in the UK 28% flat rate vs, top rate of income tax 45%) and often allow inflation indexing of the purchase price in calculating the gain.  That means that, if the RD just applies the top rate of income tax to an overseas capital gain that has already been taxed, the Thai taxpayer is likely to have more Thai tax to pay, even if the RD accepts his overseas tax credit.  This would hit Thais who invest in overseas property (a lot of rich Thais buy property for their kids to live in while studying in England and then sell they graduate and the UK now charges CGT to non-residents) and stocks. Similarly with overseas dividends and interest.  Thailand charges a flat rate of withholding tax of 10% on Thai dividends and 15% interest but offers no such beneficial rates on overseas dividends and interest.  So an overseas dividend with a tax credit of 10% could be charged another 25% by the RD. 

 

Thai investors who invest overseas have never complained about high Thai tax rates because they haven't had to worry about it under the existing rules, if they can wait a year to remit gains. But now they seem to making representations about the unfairness vis a vis domestic investors of a system that is being touted with political spin as a way to introduce equality.  Let's hope they can shout loud enough.

[Dogmatix]

36 minutes ago, Puccini said:

It expect the Revenue Department Order 161/2366 to be implemented exactly the way it is written: starting from 1 January 2024, if you are a tax resident in Thailand you must include in your annual Thai tax declaration any part of your foreign-earned income for that year that is assessable income, ie income assessable for the Thai tax calculation.

 

Where a DTA is in place, that DTA says in what country the foreign-earned income is assessable and that's the end of the story. If the DTA says that the income is assessable in your country, you must not include it in your Thai tax declaration, regardless whether you transfer any part or all of it to Thailand at any time.

That is indeed the implication of the order.  Just self-declare remittances that you consider income and pay tax on them at the highest progressive rate. Then wait for the RD to visit your house, possibly a few years later.  However, most of the DTAs are unclear about where income is to be taxed.  They often say "XYZ type of income may be taxed by the other contracting state". That means that a Thai resident investor can be taxed again in Thailand after paying withholding tax.  It also can mean that Thailand can tax income from which income has been withheld at the full Thai rate and tell the taxpayer to claim tax refunds from the jurisdiction that deducted the tax.

[FritsSikkink]

6 hours ago, Dogmatix said:

 Market are not convinced that about ramping up govt debt for stuff like digital wallets, debt moratorium, mass transit prices that are unlikely to have any sustained impact on productivity or growth. 

Giving about 50 million people 10K thb will give the local economy a boost. Not very good for government debt though. 

[FritsSikkink]

7 hours ago, hotandsticky said:

For what?

Do you have any qualifications? You are very good at talking Thai people down, what have you achieved yourself in life? 

[Puccini]

35 minutes ago, Dogmatix said:

...However, most of the DTAs are unclear about where income is to be taxed.  They often say "XYZ type of income may be taxed by the other contracting state"...

I've looked at a few DTAs, because of this topic and others on this subject, Germany, Canada, UK, USA, Italy, and I found them to be very clear. How's it with the DTA of your country?

[Lorry]

48 minutes ago, Puccini said:

I've looked at a few DTAs, because of this topic and others on this subject, Germany, Canada, UK, USA, Italy, and I found them to be very clear. How's it with the DTA of your country?

555

"Very clear"

Yes, my country's DTA seems very clear to a layman (it's one of those you mention).

Unfortunately,  our tax authorities interpret it VERY different from you and me.

 

Actually, they don't interpret it differently,  they deliberately ignore it. And I have explained earlier,  that you as an individual have no right to demand that your government follows the DTA. The DTA is a treaty between two parties (the two states), only these two parties can demand that the other party (i.e. the other state) observe the treaty. 

A DTA gives the citizens of these states no individual rights if a government chooses to breach this treaty. 

Edited September 28, 2023 by Lorry

[Dogmatix]

6 hours ago, Puccini said:

I've looked at a few DTAs, because of this topic and others on this subject, Germany, Canada, UK, USA, Italy, and I found them to be very clear. How's it with the DTA of your country?

If a DTA says “shall be taxed in that contracting state”, it is very clear, eg  US social security and most pensions of former government employees” But in most cases the wording is “may be taxed in that contracting state” which allows governments to tax anything, including already taxed income. The mechanism to avoid double taxation can be accepting tax credits and just charging incremental tax where the tax rate is higher or taxing the lot and telling the taxpayer to claim a refund from the other country. Either method may satisfy the obligation to avoid double taxing citizens of the contracting states.

Edited September 28, 2023 by Dogmatix

[jacko45k]

20 hours ago, JimTripper said:

I wonder if immigration can refuse exit from the country if back taxes were not paid?

 

They do that in the USA in exceptional cases, the IRS invalidates your passport so you can’t leave.

Many years ago tax certificates were required for people who had been ini country, presumably over 6 months. My pals passport was blocked in USA because his ex was disputing the alimony!

[hotandsticky]

9 hours ago, FritsSikkink said:

Do you have any qualifications? You are very good at talking Thai people down, what have you achieved yourself in life? 

You haven't answered the question.

 

I only talk down the idiots - Thai or Farang.

 

Yes, very successful.