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

[retiree]

2 hours ago, Dogmatix said:

Sherrings' view that Section 41 was previously misinterpreted ... If you look at the Thai, it is quite clear that the RD original interpretation was correct and that that was parliament's intent. 

The RD's (non-binding, but looks accurate to me) English translation of 41 para 1 and 2 of the actual tax law is given here:  https://www.rd.go.th/english/37749.html#section41   

 

Section 41

A taxpayer who in the previous tax year derived assessable income under Section 40 from an employment, or from business carried on in Thailand, or from business of an employer residing in Thailand, or from a property situated in Thailand shall pay tax in accordance with the provisions of this Part, whether such income is paid within or outside Thailand.

 

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 in accordance with the provisions of this Part.

(emphasis added)

 

I don't see the second paragraph as waiving prior years' taxes -- it just delays their collection.  The definitive Thai phrase for "in the previous tax year", used in both paragraphs, is: ในปีภาษีที่ล่วงมาแล้ว  , which I think could also be read as "in a previous tax year" or "in previous tax years".   It does not say "the", and neither the Thai nor English say "... only if remitted income was earned in the current year."  (I'm assuming the Thai phrase is not a "term of art", or wording that is always used in legislation to refer to only the prior year.)

 

Now, Baker McKenzie et al have said that the pre-September interpretation was provided by Resolution 2/2528 (1985), which appears to be a type of tax court ruling -- not a piece of legislation.

 

https://insightplus.bakermckenzie.com/bm/tax/thailand-offshore-sourced-income-brought-into-thailand-from-1-january-2024-onward-will-be-subject-to-thai-personal-income-tax/

According to paragraph two of section 41 of the Revenue Code, Thai tax resident individuals, i.e., any person who stays in Thailand for at least 180 days in any calendar year, shall pay Thai personal income tax on the offshore-sourced income when they bring that income into Thailand. The Resolution of the Committee for the Consideration of Legal Issues and Appeals or Petitions of the Revenue Department No. 2/2528, dated 21 February 1985 ("Resolution No. 2/2528") ruled that the offshore-sourced income that was brought into Thailand after the calendar year of receipt was not subject to personal income tax.

 

Can you provide Thai text of Section 41 paragraph 2, or elsewhere in the code, that supports your belief that the original legislation was always intended to apply only to assessible income if remitted in the year it was earned?   Or, can you find something in the text of 2/2528 (which I don't have) that would indicate that this was a term of art, and the legislature did intend to waive taxes on assessible income from earlier years?

Edited October 1, 2023 by retiree

[homeseeker]

A poster above quotes a Revenue official who says:

"The collection of PIT on overseas income will be primarily based on the principle of self-declaration in conjunction with the use of digital technology and international information exchange systems …"

 

Assuming this quote is accurate what it means:
Unless a person living in Thailand is currently filing tax returns and paying tax it is not easy for the revenue department to get tax from that person who is outside the radar of the tax collectors.

Also privacy laws apply to banks and their customers.

The immigration department are not tax collectors and if a person applies for an annual extension that's' for the year ahead and the applicant may say he or she will be be spending less than 180 days in Thailand in the forthcoming year.

 

 

Edited October 1, 2023 by homeseeker

[TroubleandGrumpy]

46 minutes ago, Lemsta69 said:

I'm not smart enough to understand all of that tax code stuff, all I want to know is whether it is 179 days or 180 days before we become tax resident.

 

"What a difference a day makes" ????

More than 180 days (in total) is the official directive.

Personal Income Tax | The Revenue Department (English Site) (rd.go.th)

 

[Lemsta69]

2 minutes ago, TroubleandGrumpy said:

Yes you are right.  180 days from Jan 1 2024 is June 29th 2024.  That is the deadline date ????

 

Sorry man but that's 181 complete days. I'm erring on the side of caution and assuming the max. stay is 179 days therefore exit on 27 June 2024 if necessary.

[Lemsta69]

3 minutes ago, TroubleandGrumpy said:

More than 180 days (in total) is the official directive.

Personal Income Tax | The Revenue Department (English Site) (rd.go.th)

 

Yes I've seen that but I don't trust it because it's not in Thai. Not that I can read Thai, hence why I raised the matter albeit in a roundabout way. 

[redwood1]

24 minutes ago, TroubleandGrumpy said:

You and I and many others think the same - I will be avoiding paying any taxes in Thailand, mainly because I get absolutely nothing for them.  IMO what little I do get, is more than paid for by the amount of VAT I pay, which is well above what most Thais pay (and most Thais do not pay income tax either).  If they created a new category for long-tern Visa holders, and I was no longer subjected to all the 90 days, TM30s, Annual begging, etc etc., and I was provided with the same rights and services as Thais are - then I would be happy to pay income taxes in Thailand.

When we lived in Australia for a few years my Thai wife was required to pay income taxes. BUT she got what I asked for above - none of the Immigration khrapp and full rights and all services (including free hospitals and subsidised medinies). 

Being treated like a 3rd class person and being taxed for the privilege I agree just does not make sense... 

 

I say give absolutly nothing to farangs and expect nothing in return....

 

The only thing Thailand gives farangs is 90 day reports, TM 30, No buy beer in the afternoon....Dual pricing.....And loads of bureaucracy....

 

Zero in zero out..... Fair is fair......

Edited October 1, 2023 by redwood1

[TroubleandGrumpy]

10 minutes ago, Lemsta69 said:

Sorry man but that's 181 complete days. I'm erring on the side of caution and assuming the max. stay is 179 days therefore exit on 27 June 2024 if necessary.

180 Days From January 1, 2024 - Convert Dates (convert-dates.com)

According to that and several others (and my Outlook Calendar) the 180th day from January1 is June29th 2024

[spidermike007]

How would they account for taxes due? Would this relate only to funds wired into Thailand? Or all funds deposited into a bank account? What if funds are wired to a Thai spouses account? 

[Jingthing]

2 minutes ago, spidermike007 said:

How would they account for taxes due? Would this relate only to funds wired into Thailand? Or all funds deposited into a bank account? What if funds are wired to a Thai spouses account? 

They will have a record of your overseas income. 

[Jingthing]

27 minutes ago, redwood1 said:

Being treated like a 3rd class person and being taxed for the privilege I agree just does not make sense... 

 

I say give absolutly nothing to farangs and expect nothing in return....

 

The only thing Thailand gives farangs is 90 day reports, TM 30, No buy beer in the afternoon....Dual pricing.....And loads of bureaucracy....

 

Zero in zero out..... Fair is fair......

Yeah if we're taxed as residents we should at least be able to buy into the Thai health system.

Edited October 1, 2023 by Jingthing

[spidermike007]

3 minutes ago, Jingthing said:

They will have a record of your overseas income. 

How? Are we supposed to provide that? Never in a hundred years will they get that info. 

[Jingthing]

1 minute ago, spidermike007 said:

How? Are we supposed to provide that? Never in a hundred years will they get that info. 

You've been out of the loop.

There is international sharing. If you don’t tell them they'll know you're lying.  Brave new world. 

 

[TroubleandGrumpy]

17 minutes ago, homeseeker said:

A poster above quotes a Revenue official who says:

"The collection of PIT on overseas income will be primarily based on the principle of self-declaration in conjunction with the use of digital technology and international information exchange systems …"

Assuming this quote is accurate what it means:
Unless a person living in Thailand is currently filing tax returns and paying tax it is not easy for the revenue department to get tax from that person who is outside the radar of the tax collectors.

Also privacy laws apply to banks and their customers.

The immigration department are not tax collectors and if a person applies for an annual extension that's' for the year ahead and the applicant may say he or she will be be spending less than 180 days in Thailand in the forthcoming year.

Yes that is the interpretation I agree with - it will be based upon self-declaration.

Privacy laws do not exist in Thailand - in practice (same as riding a bike without a helmet is illegal).

 

IMO the 'wise' way to deal with this issue is not to do anything that could come back and bite you very hard in a year or two or five.  What I am doing is finding out as much as I can about exactly what is happenning, how the Thai RD will apply this change, and how that will affect me personally. 

That includes getting and giving thoughts and opinions on this forum, checking Thai RD website and many others, and when the time is right, getting advice. This is what I have so far:

I am going to be a tax resident if I am still in Thailand on 29th June 2024.

The new change/rules will affect me personally.

Thailand and Australia have a DTA and the pension I receive is excluded from Taxation by Thailand.

Under that same DTA the other money I bring into Thailand has already been taxed and is also exempt.

However I have no idea how the Thai RD will decide if the money I bring in is taxable in Thailand or not.

And I have no idea how and in what form the Thai RD would require 'proof' that I have already paid taxes in Australia on the money I bring into Thailand.

 

What I do know is that just because Thai/Aust have a DTA will not mean that any money from there will be automatically viewed as having been taxed.  Obviously because those 61 DTA countries would become the countries where those avoiding Thai taxation would invest their money and pay no taxes.

 

What I am also very very confident about is that this will be a cluster (#) and Thai RD will screw it up.

 

What I plan to do, if it looks like this will be a viable strategy, is to have everything sorted and filed and ready. 

I will not be completing a Thai Tax Return in 2025 - because I believe that I have no taxable income in Thailand.

If/when I am asked by the Thai RD why I have not done one (or they just send me a taxation bill), I will send them the documents etc. that I have alrerady sorted and filed through a taxation expert/accountant.

Another option is to pay a taxation expert to lodge my tax returns - but IMO in the the first few years of all this, that would be as unwise as sticking my head up lighting up a cigarette at night in the WW1 trenches. 

[TroubleandGrumpy]

10 minutes ago, spidermike007 said:

How would they account for taxes due? Would this relate only to funds wired into Thailand? Or all funds deposited into a bank account? What if funds are wired to a Thai spouses account? 

No one knows - not even the tax experts.

[Jingthing]

Just now, TroubleandGrumpy said:

No one knows - not even the tax experts.

The consensus seems to be it will be income based not remittance to Thailand based.

[freeworld]

7 minutes ago, TroubleandGrumpy said:

No one knows - not even the tax experts.

Exactly, let the big accounting companies and RD sort it out and then they will clarify.

Edited October 1, 2023 by freeworld

[TroubleandGrumpy]

Just now, Jingthing said:

The consensus seems to be it will be income based not remittance to Thailand based.

There are many opinions on that issue, but it does appear to me that tax is 'liable' on any income earned overseas in 2024 if you are a tax resident in 2024 - subject to all the exemptions and dediuctions and any DTAs in place between Thailand and the country where that income is earned. 

How and when that tax liability will be applied is very uncertain - immediately or only when the money is remitted back into Thailand.  Under the old way they only taxed income brought into Thailand in the year it was earned. Nopw it is 'taxable income' in any year earned (2024 onwards).

IMO it will be applied when the money is brought into Thailand, because that money overseas could/should be subject to local taxation. 

[quake]

One thing for sure.

New cars. bikes, condos, houses, and so on will take a nose dive in the expat community until we know all the facts about this.

TIT.

 

 

[freeworld]

6 minutes ago, Jingthing said:

The consensus seems to be it will be income based not remittance to Thailand based.

Where do you get that from? P161/2023 states it is remittance based.

[TroubleandGrumpy]

1 minute ago, freeworld said:

Exactly, let the big accounting companies and RD sort it out and then they will clarify.

Agree. However, it is unlikely to be sorted out by either in less than 3 months.

Hopefully it will be 'delayed' due to 'implementation issues'.

Maybe it will then die and go away quietly - like one of those 'Global Hubs' we keep hearing about.

[retiree]

5 minutes ago, Jingthing said:

The consensus seems to be it will be income based not remittance to Thailand based.

It is based on remittance.   The Thai-language announcement is here:

https://www.rd.go.th/fileadmin/user_upload/kormor/newlaw/dn161A.pdf

The relevant phrase is และได้นำเงินได้พึงประเมินนั้นเข้ามาในประเทศไทยในปีภาษีใดก็ตาม .

It can be translated as ... and has brought that assessable income into Thailand in any tax year.

The current pre-September interpretation would be current year's assessable income in the current year.

[Lemsta69]

35 minutes ago, TroubleandGrumpy said:

180 Days From January 1, 2024 - Convert Dates (convert-dates.com)

According to that and several others (and my Outlook Calendar) the 180th day from January1 is June29th 2024

Those type of calculators will give you the wrong answer as they don't include the start date as 1 day.

 

You either need to subtract one day from the final result, or subtract 1 from the number of days you wish to add. 

 

Me, I use Excel and the formula is always =StartDt + NoOfDays - 1.

 

Simple example: add one day to 1-Jan-2024 and that website will return 2-Jan-2024. But that is two complete days, not one.

[quake]

Fire sale.

3 scooters. 10,000 each. Baht.

Honda City. 450,000 baht

2 condos pattaya about 3 million. Baht the pair

House in Isan 2,000 baht.

Guitar collection 150,000 baht.

Wife,  500 baht. ( needs rebore and big end shaving down. )

All must go before 1st jan.

Job lot only, will not split.

No refunds. No time wasters.

[jerrymahoney]

The Thai Revenue Department Sept. 18 posted online Order No. P.161/2023, clarifying personal income tax on income from work duties or business conducted abroad, or arising from assets located abroad.

 

The clarification explains that, effective Jan. 1, 2024, income of residents earned or attributable to assets abroad is subject to personal income tax in Thailand for the year of assessment in which the income is brought into Thailand. [Thailand, Revenue Department, 09/18/23]

 

Reference: View Order No. P.161/2023. 

 

https://news.bloombergtax.com/daily-tax-report/thailand-tax-agency-clarifies-payment-of-personal-income-tax-on-income-from-abroad

 

Edited October 1, 2023 by jerrymahoney

[hotandsticky]

4 minutes ago, quake said:

Fire sale.

3 scooters. 10,000 each. Baht.

Honda City. 450,000 baht

2 condos pattaya about 3 million. Baht the pair

House in Isan 2,000 baht.

Guitar collection 150,000 baht.

Wife,  500 baht. ( needs rebore and big end shaving down. )

All must go before 1st jan.

Job lot only, will not split.

No refunds. No time wasters.

 

 

I'll take the lot  -  if you deliver,  and if the wife comes with a 6 month guarantee.

[quake]

Just now, hotandsticky said:

 

 

I'll take the lot  -  if you deliver,  and if the wife comes with a 6 month guarantee.

No guarantees. 

[hotandsticky]

Just now, quake said:

No guarantees. 

Shame............. deal breaker!  ????

[quake]

Just now, hotandsticky said:

Shame............. deal breaker!  ????

Dam, thought I had my way out.

looks like time to pay the tax man.

Oh no. 

 

[freeworld]

44 minutes ago, spidermike007 said:

How? Are we supposed to provide that? Never in a hundred years will they get that info. 

Fatca is reporting US citizens income from Thailand.

 

CRS is reporting and sharing most other countries (excl USA) financial accounts.

 

All this info is submitted by banks/financial institutions to the countries tax offices who then share the info.

 

You personally do not do anything until asked.

 

I assume somewhere in the world there is a huge central database affiliated with the OECD which allows country by country to access this summary of financial info.

Edited October 1, 2023 by freeworld

[Ricardo]

11 minutes ago, freeworld said:

Fatca is reporting US citizens income from Thailand.

 

CRS is reporting and sharing most other countries (excl USA) financial accounts.

 

All this info is submitted by banks/financial institutions to the countries tax offices who then share the info.

 

You personally do not do anything until asked.

When you say "most other countries", I rather doubt that the list includes places like the BVI or Panama or Channel-Islands. or Thai-elites and past-politicians would not be banking there.  ????

 

People of that ilk dislike having their finances on display  ...  period !  ????