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

[Yumthai]

Some data:

 

https://www.worldeconomics.com/National-Statistics/Informal-Economy/United Kingdom.aspx

 

The size of United Kingdom's informal economy is estimated to be 10.3% which represents approximatly $358 billion at GDP PPP levels.

 

The size of Thailand's informal economy is estimated to be 46.2%.

 

 

[Lorry]

8 hours ago, Mike Lister said:

, I do not know for certain that banks are reporting inbound remittances to the RD, but I do know for certain that other forms of income such as interest income (there's that word again) are because the RD knows these amounts when I go to do my tax return.

Only if you have given your TIN to the bank.

Most people don't do that. 

[JimGant]

20 minutes ago, Mike Lister said:

UOB meanwhile labels EVERY deposit into the account as income.

Could you show us what the label looks like? Thanx.

[mokwit]

19 minutes ago, Lorry said:

Only if you have given your TIN to the bank.

Most people don't do that. 

You may at some point in the future need to give your bank your TIN to keep the account open bearing in mind the BoT being stricter about non resident accounts. SCB won't open a bank account now without a TIN. You may need a TIN in order to keep the account open in order to be able to show financial proof at extension time.

[Mike Lister]

59 minutes ago, Lorry said:

Only if you have given your TIN to the bank.

Most people don't do that. 

I did....:))

[Mike Lister]

54 minutes ago, JimGant said:

Could you show us what the label looks like? Thanx.

Yes, it's in English, it says INCOME!

 

I'd take a picture of showing the bank app but I only have one phone!! 

[Mike Lister]

1 hour ago, Lorry said:

Only if you have given your TIN to the bank.

Most people don't do that. 

If you want to stop with holding tax on the first 20k of interest, you must give the bank your TIN, at least I had to.

[Puccini]

7 minutes ago, Mike Lister said:

Yes, it's in English, it says INCOME!

 

I'd take a picture of showing the bank app but I only have one phone!! 

I was also wondering about that and thank you for this additional information.

 

I have a strong feeling that "INCOME" on your bank statement is UOB's shorthand for "incoming remittance" and that it is not used to mean "income" in the context of tax laws and regulations.

 

The systems of the Thai banks I currently use look quite advanced to me, but I hate the lack of clear and complete information I am given for incoming remittances. A couple of years ago, I got a deposit to my account without any clue to who the sender was. I wrote to the bank to ask for this information and was told that they could not give it to me. Also the message for the beneficiary the sender puts on his payment order to his bank is never transmitted to me.

[sometime]

Are they short sighted, the more they take off the expats in tax the less the expats will spend so less for the working Thai people, even bringing money in to buy a new car will be taxable.

[Puccini]

23 minutes ago, Mike Lister said:

If you want to stop with holding tax on the first 20k of interest, you must give the bank your TIN, at least I had to.

Yes, that's how it works.

 

In the cases where a bank is withholding tax — like in my case — they obviously have to report the amount of withheld tax to the RD and remit it to them. Sometimes, I wonder what additional information information, eg my name and the amount of interest paid to me, also gets sent to the RD.

Edited October 22, 2023 by Puccini

[Morch]

Would there be any upside to getting a Thai citizenship? Or is it basically same same? More hassle vs. tax authorities?

 

And

 

If one had three passports - two of countries having a tax agreement with Thailand, the other...don't think so - would you have to use the same passport for immigration and tax ?

 

[Guavaman]

10 hours ago, paddypower said:

I am comfortable that the amount of pension receipts we remit to Thailand annually does not exceed the total of our personal health insurance premiums (inpatient only,) outpatient costs and prescription costs. I think we're ok, when filing our joint Thai tax returns annually.

As previously mentioned, the allowance for health insurance premium paid (per actual expenditure) as documented by receipts from a health insurance company doing business in Thailand is 25k each per year. This amount is deductible from the amount of pension income remitted. But you can't short-cut the process by presenting payment for health insurance instead of pension income -- that is a false declaration = perjury. You remit assessable income from pension, then you pay for health insurance with those funds, which are then deduct from the amount of the income remitted.

 

If you directly remit funds to pay your health insurance premiums to a company doing business in Thailand, it could be characterized as income by the RD, if they interpret the remittance as the UK does under its' remittance-based taxation system. 

[Dogmatix]

7 hours ago, JimGant said:

Labelled by whom? If you send a Wise transfer, you're saying it's labelled as income? Makes no sense -- how would anybody in Thailand know it's income, if sent from one of your financial institution's accounts? Only if it's a direct deposit from, say, a pension payment -- would it have the flavor of income. But even here, it may not be income for Thai tax purposes (think: exempt due to DTA). So, labeling it "income" serves no purpose as far as the RD is concerned.

 

And, labeling all incoming remittances as "income" would push all FDI to other countries.

 

So, no, they're not going to label all remittances as income (which, if the obvious escaped you, would include FDI's) So logic and logistical common sense would dictate they're restricted to: PIT collection depends on taxpayers' faithful and full declaration of income in their PIT returns. Yes, sample audits for compliance may occur in larger numbers. And, FATCA and CRS reporting may increase the spotlight on compliance.

 

But for Americans, nothing changes, since we're already taxed on our worldwide income. Possibly Thai RD may fine tune the DTA, and figure out that Thailand (per DTA) had "primary tax authority" on my IRA payout. Ok, then this is where "faithful and full declaration" comes in, and I need to file a Thai tax return, declaring my IRA payout as assessable income for Thai tax purposes. Then, I take this tax payment as a credit against my US taxes -- and break even in my overall tax payment situation (note: for high five figure income, Thai tax MAY BE higher than US, and the difference has to be eaten -- not a huge number, however).

 

So, fellow Yanks. Go watch the NFL, and let the others worry about, hey, there may be taxes in their future.

I am not sure it matters whether the recipient Thai bank labels an inbound remittance as income or something else. That is an internal matter for the bank. The RD expects tax residents to declare income by themselves. They may get details of remittances from banks but I think the bank description of income probably just means inflow.  If it is over 50 USD or used to be that much, the bank has to ask you for the purpose, but not the source, and report to the BoT (not the RD).  The choices for foreigners are I think living expenses, purchase of condo etc.  I was told by the bank officer that loan was not acceptable for foreigners but OK for Thais. If under that amount, it seems to just slide straight into your bank acount with no questions asked.  Of course it will be very easy for the RD to get details of all remittances to individual accounts. 

[Dogmatix]

On 10/21/2023 at 3:32 PM, bugger bognor said:

still a lot of delusional expats debating a non story my prediction of 200 pages of crap by Xmas looks like an underestimate , the law HASTNT changed and has been in place for decades!!!! A Statement of 2 paragraphs by an Advisory board has got you loosing your small minds, nothing will change for 99,9% Of all expats, A top legal firm in Bangkok has quoted it would need up to 30000 pages of legislation written up to implement the kind of taxation you fear so much it would also need 1000s of new staff to deal with it is NOT GOING TO HAPPEN FOR ANOTHER DECADE AT LEAST mark my words,and even if t did happen if you can't work out how easy it would be to avoid tax you DESERVE TO PAY IT , 

It was not from an advisory board. It was from the director-general of the RD. 

[Karma80]

35 minutes ago, Dogmatix said:

It was not from an advisory board. It was from the director-general of the RD. 

That is of course true. However, it will be very interesting to see what happens in the legal challenges which will no doubt be filed in the tax court. A couple of paragraphs from the Director General of the RD, on the instruction of the PM, does not make law.

 

And this is perhaps the sad part about it all. An environment of uncertainty has been created, and all to pay for a promise of helicopter dumping cash on voters, even at the cost of economic pain for several years. Thailand has the opportunity to leverage its developing status, but instead is blowing it up.

[JimTripper]

Hello, Do I need to file taxes next year? Thanks for your help.

[Guavaman]

There might be some communication issues about "labelling" that could cause confusion.

 

When you transfer funds out of Thailand through a Thai bank, they are required to ask you the purpose of the transfer of funds -- to enter into a form to report to the Bank of Thailand.  So this way of labelling answers the question: What will the funds be used for?  For example: living expenses, education expenses, purchase condominium, etc.

 

When we do our own transfers to remit fund into Thailand, we can usually add notes to the wire transfer with SWIFT. So we could label according to the purpose of using the funds, or we could specify the source, such as: pension, annuity, etc.  

 

When documenting remittances, we need to be clear whether labelling by purpose or source of funds transferred.

[Mike Lister]

13 hours ago, sometime said:

Are they short sighted, the more they take off the expats in tax the less the expats will spend so less for the working Thai people, even bringing money in to buy a new car will be taxable.

Nobody other than the doom mongers have suggested that would happen, I think there is zero percent chance that it would.

[Mike Lister]

4 hours ago, JimTripper said:

Hello, Do I need to file taxes next year? Thanks for your help.

Without knowing your financial situation, your nationality, your age, how much money your transferred into Thailand, from what source or how many days you spent in Thailand this year, I'd say the answer is maybe!

[Mike Lister]

12 hours ago, Morch said:

Would there be any upside to getting a Thai citizenship? Or is it basically same same? More hassle vs. tax authorities?

 

And

 

If one had three passports - two of countries having a tax agreement with Thailand, the other...don't think so - would you have to use the same passport for immigration and tax ?

 

The Revenue Code doesn't distinguish between nationalities and set different rules for each of them, it only distinguishes between tax resident and not tax resident based on the number of days spent in Thailand each year. Obtaining Thai citizenship, if you could even get it in the first place, is therefore unlikely to change very much regarding your tax position.

[sidneybear]

16 hours ago, The Cyclist said:

Does no-one in your home Country work cash in hand ?

 

Does your home Country not have a ' Black Economy ' ?

 

I find it difficult to accept that any Country does not have some sort of combination of the above.

 

The UK's ' Black Economy ' is estimated at over £200 Billion a year.

I'm in Australia at the moment. Hardly anyone uses cash here. People are happy to tap and pay a higher price that includes a bank surcharge. Only 1 or 2 percent, but it adds up.

 

I insist on using cash. Some places love it (they probably don't declare it to the taxman). A couple of places offer a discount for using it. Other places refuse it.

[Morch]

1 hour ago, Mike Lister said:

The Revenue Code doesn't distinguish between nationalities and set different rules for each of them, it only distinguishes between tax resident and not tax resident based on the number of days spent in Thailand each year. Obtaining Thai citizenship, if you could even get it in the first place, is therefore unlikely to change very much regarding your tax position.

Thank you.

[Purdey]

20 hours ago, Mike Lister said:

Question is, are you going to file a tax return and declare it? Because if not, there probably isn't an issue, unless of course it's seriously big money. And if you and you declare it as savings, assuming you even need to do that, the fact the money has been in the account for a very long time should be sufficient to prove it was savings.

 

 

Thanks very much. 

[TroubleandGrumpy]

18 hours ago, Yumthai said:

Some data:

https://www.worldeconomics.com/National-Statistics/Informal-Economy/United Kingdom.aspx

The size of United Kingdom's informal economy is estimated to be 10.3% which represents approximatly $358 billion at GDP PPP levels.

The size of Thailand's informal economy is estimated to be 46.2%.

Thanks - I always suspected that.

If anyone thinks that the Thai Govt is not going to see that and try to get additional taxes from all tax residents in Thailand, to pay for all the election promises etc., then they are very much mistaken.  This new change is a step in that direction - and if any Expat thinks it will absolutely 'not apply to me', then they are very mistaken twice. Only if and when the Thai RD issues clarifications and exemptions that specifically state that money brought into Thailand by long-stay Expats is not taxable income (given certain conditions), such as Malaysia and Philippines and others have done, then it would be wise not to ignore this matter and assume it will go away. Hopefully the Thai RD clarifications and exemptions will be issued soon, or they delay implementation like Malaysia did, but until then IMO it is best to 'watch this space'. 

[Yumthai]

4 minutes ago, TroubleandGrumpy said:

If anyone thinks that the Thai Govt is not going to see that and try to get additional taxes from all tax residents in Thailand, to pay for all the election promises etc., then they are very much mistaken.

That is not the point. Their issue is law enforcement and corruption.

Until proven otherwise, numbers speak for themselves: Thailand is still not able to enforce tax laws nor get rid of "workarounds".

 

Anyone can speculate this will change in the coming years, Thailand becoming Singapore.

Choose your side and plan accordingly.

 

[TroubleandGrumpy]

17 hours ago, sometime said:

Are they short sighted, the more they take off the expats in tax the less the expats will spend so less for the working Thai people, even bringing money in to buy a new car will be taxable.

Yes they are very short sighted - both literally and figuratively. Hopefully someone in Thai RD and/or Cabinet will realise that 100,000 Expats bringing in an average of 1 Million Baht EVERY year, equates to 100 Billion Baht - or to put it another way - that equates to 2 Million 'high spending' Chinese Russian tourists they love so much for their money.  But according to some sites there are approx 200,000 non-working Expats living in Thailand (they dont keep official numbers), and that equates to 4 Million 'high spending' Chinese Russian tourists - which they spend a small fortune through TAT to get - and they  welcome with open arms, and 90 days exempt Visas, and the PM saying hello, etc etc etc. 

 

Meanwhile, in return for our 1 Million per year, we are all forced to 'report' every 90 days, complete TM30s, request 'permission to leave/re-enter and pay, request 'permission to stay another year. AND now it could be (not certain) that we are going to be forced to pay income taxes, unlike the Chinese Russian guests - but in return we get zero benefits or rights above what a Chinese/Russian tourist gets while they are in the country. 

 

Yes Thailand is short sighted and ignorant.  Meanhwile Malaysia and Philippines (and other countries nearby) are offering me so much more. They dont all do all this following list, but they all have no income taxes, no 90 day reporting, no annual begging to stay (auto renew 5 years, plus another 5).  Many of them also offer - customs duty exemptions on stuff brought into country, min sales tax on a new car, and a few others - and ............... wait for it (some countries) ............. the right to become a Resident and to buy a property with land (minimum value).

 

My Thai wife has made it very clear - we are not going to pay close to 2 Million baht in income taxes over 15 years to Thailand for nothing in return.  We will go live in a country nearby that gives me/us benefits in return for us living and spending all my money there. Or we will return to Australia and suck it up and just ignore all the woke left greenie crap. Although things may have started to turn in Australia - they just voted 'No Way' to giving the local Aborigines additional rights and benefits in the Constitution, despite all the MSM and all the woke lefty companies and organisations supporting it. Maybe we will go back earlier than planned. 

[Mike Lister]

To be clear, it is the stated objective of the RD to increase the size of the tax netm quite rightly too.

[Longwood50]

There is a basic law of economics. 

You subsidize things you want more of

You tax things you want less of

You  tax things like gas guzzling cars, cigarettes, alcohol, in part to reduce the purchase of them.  

There is an old adage that Be Careful What You Wish For Because It May Come True

About the time that there is a diminished expatriate population in Thailand and the taxi drivers, hospitals, restaurants, condo developements etc also don't have customers, only then will the politicians realize that for every action there is a reaction and in this case I suggest Thailand not the foreigner who chooses not to come will be the loser. 

[Mike Lister]

3 minutes ago, Longwood50 said:

There is a basic law of economics. 

You subsidize things you want more of

You tax things you want less of

You  tax things like gas guzzling cars, cigarettes, alcohol, in part to reduce the purchase of them.  

There is an old adage that Be Careful What You Wish For Because It May Come True

About the time that there is a diminished expatriate population in Thailand and the taxi drivers, hospitals, restaurants, condo developements etc also don't have customers, only then will the politicians realize that for every action there is a reaction and in this case I suggest Thailand not the foreigner who chooses not to come will be the loser. 

That was a quote from Reaganomics rather than long basic law of economics, In practise, in Thailand, subsidies are a way of supporting the poor and rural population, taxes are something that other people pay. Thailand's tax system has always been supported by the wealthy and by corporates, and of course the tax that everyone pays, VAT. 

[TroubleandGrumpy]

3 minutes ago, Yumthai said:

That is not the point. Their issue is law enforcement and corruption.

Until proven otherwise, numbers speak for themselves: Thailand is still not able to enforce tax laws nor get rid of "workarounds".

Anyone can speculate this will change in the coming years, Thailand becoming Singapore.

Choose your side and plan accordingly.

 

And that is exactly why it is probably so 'dangerous' for Expats - if they do it - because they will screw it all up. They will attempt to get that additinal money, and they will completely stuff it up, and some Expats will get caught in the net, and they will not be able to 'get out' - or at the very least they will have a lot of trouble and expenses and risk jail and deportation. Almost 50% of the Thai economy is 'black' - and they are desperate for money - they are very likely to screw it all up. 

 

Malaysia is far more 'organised' and when they implemented this same rule change back in 2021, then delayed implementation for personal income taxes for 5 years (2026), while they work out all the details and exemptions.  Will Thailand clarify details before 2024, or delay implementation - I dont know. 

 

But if it goes ahead as is and with no more details and exemptions, then I can assure you that the Thai RD in 2025 will be seeking details from all banks about any account or person that transferred over XYZ Baht into the country in 2024.  If they see anyone's account and no tax return, they will not hesitate to start asking questions - including for Expats. They will probably create a whole new team of Thai RD 'investigators' to check incoming remittances against tax returns - and just like the BS fed from TAT - they will justify their additional expenses by nailing as many people as they can - including Expats.

 

My plan is to bring forward incoming remittances to this year, and then bring in the absolute minimum in 2024. If they declare that Expats must all do a tax return - then I will submit one claiming all the exemptions etc. If they say I must pay income taxes on the money brought in for 2024 - then I will pay, and then we will leave.