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

[The Cyclist]

13 hours ago, Ricardo said:

 

And which sometimes even arrive here, when our local postie makes his weekly (if that) visit, to our village !  🙄

 

Not knocking Thailand, just making the point that the postal-service is sometimes imperfect.  😎

 

Mine take on average about 7 weeks coming by ' Par Avion '.

 

Sadly no date stamp for posting so cannot confirm how long it actually takes. Sending registered mail back to the UK usually takes about a week, so a bit of a toss up as to where the delay occurs, Thai side or UK side.

[The Cyclist]

13 hours ago, Shop mak said:

 

I assume most countries revenue office are online and send a report to tax payer, also available when one log into ones personal account there.

No??

 

No idea what other Countries do.

 

However, when I was previously using an accountant, he sent me an all inclusive

 

Earnings Xxxx Tax payable xxxx

 

Which I doubt would be much good in a discussion with RD if you were trying to fight your corner on what income had been taxed and what income had not been taxed.

 

On that note. Could any of the UK expats claiming the State Pension confirm if the DWP also send you an annual P60, bearing in mind that when I get too that age, and claim it, it will also be skelped for UK tax.

[TroubleandGrumpy]

Seems those people like myself and @Dogmatix and @stat and @Mike Lister and many others who have been 'discussing' this matter (not always in agreement), and the possible implications, and the possible counter measures - and who were called 'phrophets of doom' by the 'bar-boys' and 'emus' on this forum, have been doing the right thing when raising the issues and debating the negatives.

 

 

Well, who would have guessed - several Thai tax law exdperts have come out and said it too.  Maybe now the 'bar-boys' and 'emus' will realise that this is not an issue to be treated with disdain (and those discussing it), and that the  'She'll be right mate - have another beer'  is not going to be the right strategy in the long run. It might not become such a big issue - but it certainly can if things are not clarified and detailed explanations are not provided by the Thai RD.  As the post above says - we will have to 'report' remittances into Thailand and dfeclare them either taxabale or non-taxable income (as it stands), and good luck convincing Somchai in the Thai RD that your pension/savings are not 'income' that can be taxed in Thailand - and even more good luck when arguing with Pronchai that a DTA means you pay no taxes 🙂   

 

I can just see it now - in 2024/25 they will post a question - "What am I going to do now? Please help".  Well, they are welcome to read through all the posts written by blokes like myself and Dogmatrix and Stat and Mike and all the others who also think this deserves 'attention' and should not be ignored. And/Or take the advice we all have given that suits you and your situation. And/or go see an tax/legal expert. 

 

In this modern world of social media and its massive influence on all Govts (especially Thailand). It is only because of Expats like us 'complaining' on this forum, and other websites, and our Thai partners, that this issue is being 'responded to' by people that do have an influence in Thailand.  There are no guarantees either way, but these days it is very much that the 'squeky wheel' gets the oil - and the 'noisier' we are the better. So get active boys and put forward your thoughts and opinions - right or wrtong it does not matter.

 

And 'Good Luck Everybody'.  Forcing me to pay income taxes will mean my Thai wife and I will be leavbing Thailand - period.  My reasons for all that are in my previous posts (many times). 

[Puccini]

On 11/5/2023 at 2:41 AM, JimGant said:

...Thus, the UK has primary taxation rights on rental income. Thailand, however, can also tax this income (if remitted to Thailand), but must give a credit for the taxes paid to the UK. So, if Thai taxation has a higher effective tax rate on this rental income than that of the UK, then your total tax bill will be both the UK taxes and the Thai taxes that exceed the tax credit for the UK taxes. Thus, when you see may be taxed, and both countries decide to tax subject income, then your tax bill will equate to whichever country's effective tax rate is higher.

 

Thank you, Jim. This clears up an uncertainty I have had about the phrasing "may be taxed".

[Ricardo]

4 hours ago, The Cyclist said:

 

On that note. Could any of the UK expats claiming the State Pension confirm if the DWP also send you an annual P60, bearing in mind that when I get too that age, and claim it, it will also be skelped for UK tax.

 

Certainly, I've been getting the UK Old-Age-Allowance for a few years now, and have never had a P60 off the DWP  ...  apparently HMRC get the numbers from them direct, presumably linked to your NI-number, so don't need/want a P60 too  ...  and the thought that we customers (aka Old Farts ?) might also find one useful, well why care what we might want ?  

 

That's British customer-service at its finest !  😎

[Mike Teavee]

On 11/5/2023 at 8:41 AM, JimGant said:

Presumably such explanation would apply to UK DTAs, as they adhere basically to either the OECD Model or UN Model tax treaties, as do US DTAs.

Yes, UK has a similar clause in the DTA which can be found here... 

https://assets.publishing.service.gov.uk/media/5a80bddc40f0b623026953eb/uk-thailand-dtc180281_-_in_force.pdf

 

Page 12... Article 7, Income From Immovable Property, clause 1 

(1) Income from immovable property may be taxed in the Contracting State in which such property is situated.

 

The DTA also covers what happens if you are taxed on income in Thailand & the UK...  

 

Page 31... Article 23, Elimination of Double Taxation, clause 1 & 3   

(1) In the case of the United Kingdom and subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof):  

(a) Thai tax payable under the laws of Thailand and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Thailand (excluding, in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Thai tax is computed.  

 

(3) In the case of Thailand, United Kingdom tax payable in accordance with this Convention in respect of income from sources within the United Kingdom shall be allowed as a credit against Thai tax payable in respect of that income. The credit shall not, however, exceed that part of the Thai tax, as computed before the credit is given, which is appropriate to such item of income.  

 

 

(4) For the purposes of paragraphs (1) and (3) of this Article profits, income and capital gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention shall be deemed to arise from sources in that other Contracting State.  

 

 

[The Cyclist]

3 hours ago, Ricardo said:

 

Certainly, I've been getting the UK Old-Age-Allowance for a few years now, and have never had a P60 off the DWP  ...  apparently HMRC get the numbers from them direct, presumably linked to your NI-number, so don't need/want a P60 too  ...  and the thought that we customers (aka Old Farts ?) might also find one useful, well why care what we might want ?  

 

That's British customer-service at its finest !  😎

 

Thanks Ricardo

 

Depending on what happens after the 01 Jan, the DWP might have to extract the finger and start sending P60's to State Pensioners overseas, to assist them with overseas taxation.

 

Which might catch some people out, who might possibly be still claiming to be in the UK.

Edited November 6, 2023 by The Cyclist
Typo

[Mike Lister]

1 minute ago, The Cyclist said:

 

Thanks Ricardo

 

Depending on what happens after the 01 Jan, the DWP might have to extract the finger and start sending P60's to State Pensioners overseas, to assist them with overseas taxation.

 

Which might catch some people out, how might possibly be still claiming to be in the UK.

Oh no, there goes the heating allowance and the annual increase. :))

[The Cyclist]

1 minute ago, Mike Lister said:

Oh no, there goes the heating allowance and the annual increase. :))

 

To be fair. If I was trying to exist solely on a State Pension I have no doubt that I would probably be trying to game the system also.

 

If the Government can fork out a reported £ 5 - 8 million a day for hotels for people who have never paid a penny into the system, then they can unfreeze the State Pension for all State Pensioners.

[Ricardo]

58 minutes ago, The Cyclist said:

 

Thanks Ricardo

 

Depending on what happens after the 01 Jan, the DWP might have to extract the finger and start sending P60's to State Pensioners overseas, to assist them with overseas taxation.

 

Which might catch some people out, who might possibly be still claiming to be in the UK.

 

I'd predict the chances of the DWP doing that, in order to assist pensioners living out here with a purely-local tax-problem, are somewhere between Slim & None-at-all !

 

But would love to be pleasantly surprised.  😎

 

This is the government which, despite promises over-the-years, are still happy to dis-enfranchise its' citizens, once we've been overseas for 15+ years, don't forget.  Yet still wants to tax us on any/all income arising in-the-UK.  🙄

 

But I digress.

 

 

[The Cyclist]

14 minutes ago, Ricardo said:

'd predict the chances of the DWP doing that, in order to assist pensioners living out here with a purely-local tax-problem, are somewhere between Slim & None-at-all !

 

But would love to be pleasantly surprised.  😎

 

I agree with your sentiment, however it will become a DWP problem if State Pensioners start inundating them with claims for tax credits.

 

No idea how many UK State Pensioners there are in Thailand existing solely on a State Pension, but there will plenty who have other occupational pensions and their State Pension is taxed in the UK.

[scorecard]

On 9/18/2023 at 12:50 PM, NoDisplayName said:

How is the victim to 'prove' that a savings account has been taxed?

 

And can we expect that we must pay the tax, and only later will be permitted to submit a complicated application for a refund?

 

In my view what's still unexplained is money coming into Thailand from abroad which is a state pension entitledment from the home country.

 

Further, in some countries state pensions are specifically / totally exempt from tax. But I'm guessing that doesn't automatically mean these funds are not subject to Thai personal taxation and regardless of any double tax agreement.    

[bugger bognor]

Well I see the hysteria is heating up an another thread has been started on the same subject my prediction of 200 pages of crap will be an underestimate with the 2 threads! Another official making a statement on the previous officials INTERPRETATION of the 38 year old law! the only thing that will happen is a statement probably next year confirming nothing is going to change, when you all realise that enforcement of regulations would be nigh on impossible that the legal regulations would take years to pass into law it's laughable a huge amount of money is invested in property and buissines by foreign investors 20 %. of all property in Bangkok alone do you not tHINK about the massive bank run before he 1st July 2024 that would happen! it so simple to get Around even if it was applied here, and it will never be, only a complete tool couldn't work that out and of course the nice but dumb yanks 

[UKresonant]

13 hours ago, The Cyclist said:

 

Thanks Ricardo

 

Depending on what happens after the 01 Jan, the DWP might have to extract the finger and start sending P60's to State Pensioners overseas, to assist them with overseas taxation.

 

Which might catch some people out, who might possibly be still claiming to be in the UK.

 

I can't see a P60(s) being of much use as the don't align to the Thai Tax period. You would only be able to compile the info needed from pension payslips and your annual state pension letter, to submit a Thai tax return..

[The Cyclist]

10 hours ago, UKresonant said:

I can't see a P60(s) being of much use as the don't align to the Thai Tax period.

 

They will be of use to show that UK tax has already been paid on that Pension.

 

A P60 for financial year 2023 and 2024 will cover the Thai tax year of 01 Jan - 31 Dec 2024, married up with a bank printout of monthly deposits to Thai bank.

 

10 hours ago, UKresonant said:

You would only be able to compile the info needed from pension payslips

 

In 20 odd years of being paid my Government Pension and a further 3 years of Private Pension I have never had a pension payslip. P60 and Statement of Future payments come annually in the same envelope from both providers.

 

11 hours ago, UKresonant said:

to submit a Thai tax return..

 

It hasn't even been confirmed yet that I will need to file a Thai tax return.

 

For reasons known only to yourself, you are inventing problems that currently do not exist.

[hotandsticky]

16 hours ago, bugger bognor said:

Well I see the hysteria is heating up an another thread has been started on the same subject my prediction of 200 pages of crap will be an underestimate with the 2 threads! Another official making a statement on the previous officials INTERPRETATION of the 38 year old law! the only thing that will happen is a statement probably next year confirming nothing is going to change, when you all realise that enforcement of regulations would be nigh on impossible that the legal regulations would take years to pass into law it's laughable a huge amount of money is invested in property and buissines by foreign investors 20 %. of all property in Bangkok alone do you not tHINK about the massive bank run before he 1st July 2024 that would happen! it so simple to get Around even if it was applied here, and it will never be, only a complete tool couldn't work that out and of course the nice but dumb yanks 

 

 

You can see it, and I can see it.......................why do the idiots keep posting their scaremongering?

[freeworld]

On 11/5/2023 at 9:26 PM, stat said:

It does not solve the problem how to prove which funds have been taxed and which have not. As an example pls find attached a German Einkommensteuerbescheid. How will Somchai determine which funds have been taxed? Not even a German Wirtschaftsprüfer could tell because there are only cummulated resulted and taxes are not on an account or financial instrument level. Never mind that Somchai does not speak German or has the faintest idea of German tax law. As cyclist has correctly stated it is next to impossible to prove which funds have been taxed. However Thai RD could make some amends like in MY that if you ever had 100K USD in taxed income that would suffice to bring in 100K tax free.

Einkommensteuerbescheid_2019.pdf 9.03 MB · 4 downloads

Would this not prove it?

 

https://verwaltung.bund.de/leistungsverzeichnis/EN/leistung/99102057022000

 

Apply for a residence certificate in accordance with a treaty for the avoidance of double taxation

 

If you are a taxable (legal) person and generate foreign income from a country with which an agreement exists for the avoidance of double taxation, a certificate of residence may be required for submission to a foreign tax authority. may be required.

[Dogmatix]

On 11/5/2023 at 6:55 AM, Mike Lister said:

The national parks are financed by government out of tax revenue income. This is not different from any tourism based tax applied to nonresidents/non-tax payers in any country, be it Venice, Cornwall or Nepal.  In this case the tax is applied on each attraction rather than each country, city or town. The fact that 150,000 western expats feel aggrieved and left out, overlooks the fact that the other (potentially) 40 million tourists who visit these optional attractions in Thailand are the ones who pay the lions share. If you were government, you'd tax in exactly the same way. Do I like it? No! Is it mostly fair? Yes.

But only 3.3 million out of 70 million Thais pay income tax.  Granted all pay VAT but many foreign tourists pay more VAT during their trips than the average Thai does in a year. The taxation argument doesn't hold water.

[Mike Lister]

6 minutes ago, Dogmatix said:

But only 3.3 million out of 70 million Thais pay income tax.  Granted all pay VAT but many foreign tourists pay more VAT during their trips than the average Thai does in a year. The taxation argument doesn't hold water.

That is incorrect. The workforce is about 32 million people, the rest are old, very young, in prison, in hospital etc etc. Only 6% of the workforce pays taxes via PAYE equivalent, that doesn't mean the rest don't pay taxes or file a return, they do. Most people work as self employed or as a limited company, my wife works as self employed, for example. She runs a business that turns over in excess of 1 million baht every year and she files a tax return and pays taxes on her profits just as everyone else in a similar situation does.

[The Cyclist]

32 minutes ago, Dogmatix said:

But only 3.3 million out of 70 million Thais pay income tax.  Granted all pay VAT but many foreign tourists pay more VAT during their trips than the average Thai does in a year. The taxation argument doesn't hold water.

 

The Thai Government from 2022, page 7 explains the income tax debacle

 

https://www.nesdc.go.th/nesdb_en/ewt_dl_link.php?nid=4495&filename=social_dev_report#:~:text=The total number of personal,expenses%2C allowances and donations).

[retiree]

Most Thai taxpayers who have tax obligations file tax returns and pay taxes. 

 

The link given above (and below) to the NESDC article pdf (Thailand Social’s Outlook of Q4/2022 and overview of 2022) yields these relevant statistics: 

• "The total number of personal income taxpayers was 10.8 million persons, while only 4.2 million persons with net income subject to tax (disposable income after deducting expenses, allowances and donations)"
• "There are a total number of 38.8 million persons employed, of which 18.6 million receive wages and salaries, but only 10.8 million reach the tax filing criteria of the Revenue Department."

https://www.nesdc.go.th/nesdb_en/ewt_dl_link.php?nid=4495&filename=social_dev_report

 

Note that the average wage in Thailand is 15,400 baht/mo -- well below the amount that would require tax filing. 

https://tradingeconomics.com/thailand/wages

 

This is partly explained by the fact that about 32% of the population is in the agricultural sector, in which some 45% of all households have negative annual income.

https://www.pier.or.th/files/dp/pier_dp_204.pdf
(Financial lives and the vicious cycle of debt among Thai agricultural households Chantarat et al, 2023).  Note that almost half of all debt is due to direct agriculture costs, e.g. fertilizer; see Table 3 p47 sub B col 1, also Table 4. 

 

As a consequence, income distribution in Thailand is extremely uneven:  The top 20% of earners receive 50%+ of national income, while the bottom 40% receive just over 15%.  (Income distribution in Thailand is scale-invariant Sitthiyot 2023, citing data for 2021 from The Office of National Economic and Social Development Council:  Poverty and income distribution statistics; 2023.) 

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10335671
 

Given this distribution -- a flat line, with a very sudden rise at the high end -- I would guess that many tax scofflaws (including some retirees on this list) owe only minimal amounts, and are not cost-effective to pursue.  Again, most Thai taxpayers who have tax obligations file tax returns and pay taxes. 

 

Finally, I would point out that the Thais spend a lifetime contributing to their country by contributions and service to Buddhism, availability for military conscription, care for their children, and providing an absolutely essential social safety net for the disabled and aged.  Support for the country, and with it the right to enjoy the benefits of citizenship, does not derive solely from paying taxes or VAT.

Edited November 8, 2023 by retiree

[JimGant]

On 11/6/2023 at 7:50 PM, scorecard said:

Further, in some countries state pensions are specifically / totally exempt from tax. But I'm guessing that doesn't automatically mean these funds are not subject to Thai personal taxation and regardless of any double tax agreement.   

 

Well, I reported this earlier, in more detail, but here's a ruling on the latest US income tax model (2006) for DTAs. Whether such language applies to all/most DTAs is questionable, but there's a large commonality amongst DTAs, largely due to most countries following the Model language from the OECD and UN DTA boilerplate.

 

Quote

However, the State of residence, under subparagraph (b), must exempt from tax any amount of such pensions or other similar remuneration that would be exempt from tax in the Contracting State in which the pension fund is established if the recipient were a resident of that State.

https://home.treasury.gov/system/files/131/Treaty-US-Model-TE-2006.pdf

 

Now, if your DTA had this language, but Thailand decided to ignore it -- well, that's a whole different question. But it's doubtful Thailand would want to torpedo DTAs, as they seem to be, overall, in Thailand's favor.

Edited November 8, 2023 by JimGant

[UKresonant]

Just now, The Cyclist said:

 

They will be of use to show that UK tax has already been paid on that Pension.

 

A P60 for financial year 2023 and 2024 will cover the Thai tax year of 01 Jan - 31 Dec 2024, married up with a bank printout of monthly deposits to Thai bank.

 

 

In 20 odd years of being paid my Government Pension and a further 3 years of Private Pension I have never had a pension payslip. P60 and Statement of Future payments come annually in the same envelope from both providers.

 

 

It hasn't even been confirmed yet that I will need to file a Thai tax return.

 

For reasons known only to yourself, you are inventing problems that currently do not exist.

 

I'm not inventing problems, not tax resident and unlikely to be Thai Tax resident in 2024, will watch as you take point on this, and observe the outcome from afar.

Whilst remitting income generated in the UK to Thailand,  whilst you have been, year after year, over the 179 days per calendar threshold, can't see where it says you don't have to do a return.

Perhaps if your remitted income is below say 210k THB p.a. and the rest of your required resources are already in place there?

I'm just trying to anticipate a possible future scenario, since it's less likely over a number of years there, to classify everything remitted as savings, and therefore not Thai tax applicable, and start keeping possible appropriate info.  Before you just needed to ringfence alternate years or perhaps a previous pension lump sum.

Edited November 8, 2023 by UKresonant

[Andycoops]

On 11/6/2023 at 10:37 AM, The Cyclist said:

 

No idea what other Countries do.

 

However, when I was previously using an accountant, he sent me an all inclusive

 

Earnings Xxxx Tax payable xxxx

 

Which I doubt would be much good in a discussion with RD if you were trying to fight your corner on what income had been taxed and what income had not been taxed.

 

On that note. Could any of the UK expats claiming the State Pension confirm if the DWP also send you an annual P60, bearing in mind that when I get too that age, and claim it, it will also be skelped for UK tax.

 

[Andycoops]

Just now, Andycoops said:

 

I guess they would have to if your state pension breeches the tax threshold of 12570 GBP.

[The Cyclist]

9 minutes ago, UKresonant said:

'm not inventing problems,

 

Oh no ? What is this then ?
 

10 minutes ago, UKresonant said:

Whilst remitting income generated in the UK to Thailand,  whilst you have been, year after year, over the 179 days per calendar threshold, can't see where it says you don't have to do a return

 

Most of my income remitted to Thailand year after year did not come from the UK and neither would I have been classed as a Resident of Thailand for tax purposes.

 

So why would I need to file a tax return in Thailand ?
 

Just another example of the garbage posted on these related threads

 

Furthermore, as the changes only come into effect from 01 Jan 2024, prior years are irrelevant.

[UKresonant]

Just now, Andycoops said:

 

As far as I know it is only an annual pension letter,  stating a bit of calculation and what your Gross weekly pension amount from 10th April will be. I'll ask, but not seen him get a P60. Were normally waiting behind the letter box to get the letter to pin to the next visa application at that time of year 

Since the the state pension can potentially exceed the recently static 12570pa allowance, I think the tax may be pushed to affect any other pensions and show in their P60 via code  adjustment. Not sure what they do should you not have other pensions...Curious, will try and find out.

[The Cyclist]

12 minutes ago, Andycoops said:

I guess they would have to if your state pension breeches the tax threshold of 12570 GBP.

 

Not a lot of good for those on a State Pension below the threashold but it is still taxed due to other occupational / private pensions / other income.

[UKresonant]

Just now, The Cyclist said:

 

Oh no ? What is this then ?
 

 

Most of my income remitted to Thailand year after year did not come from the UK and neither would I have been classed as a Resident of Thailand for tax purposes.

 

So why would I need to file a tax return in Thailand ?
 

Just another example of the garbage posted on these related threads

 

Furthermore, as the changes only come into effect from 01 Jan 2024, prior years are irrelevant.

 

Then you should not worry, go and sit on the beach, and de-stress 

Edited November 8, 2023 by UKresonant

[The Cyclist]

2 minutes ago, UKresonant said:

 

Then you should not worry go and sit on the beach and de-stress 

 

You might have noticed, but it is not I who is worried or stressing.