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

[kuma]

2 hours ago, The Cyclist said:

 

But that is exactly what you have been doing over the course of this thread.

 

 

Well blow me down with a feather. I suppose that big black cloud of negativity drowning you, stopped you seeing that the potential negatives migh not even happen.

 

 

Yes, you could be. And you might have been better waiting for official advice to come from the RD, before making 270 posts of negativity, with a liberal dash of doom & gloom.

 

That's just me though, glass half full rather than glass half empty kinda guy.

being frustrated by a "potentially" impactful change in financial status, on Dec 7, when the change is due to implement on Jan 1, is not being unreasonable, imo. Wait for official advice...? there are only 16 working days left before this comes into effect and people need time to absorb it, understand impact, discover alternatives, make choices and then implement decisions....what is your turn around on that? What is the timing you need to understand from the RD what are the ROTR, and accomplish those tasks? If you can do it in a meaningful way in the days left in 2023, then I suspect a lot of companies may be interested in your skill set - or if its just that you are not cognizant of the steps, then well they would'nt be. A thinking person with options has a lot to get thru once the policy is formulated and delivered, in detail.

[kuma]

1 hour ago, ukrules said:

 

Indeed, this was alarming and would possibly catch a lot of people out if implemented, especially people who bought a house as a primary residence say 20 to 30 years ago for next to nothing compared to the current 'value' and sell it now to fund their retirement.

There's zero tax on that in the UK as it's the house you lived in all your life as opposed to an investment property. Nobody will want to pay any tax on that money in Thailand so if they know about it they simply will not come - unless they plan it as follows they might fall into a trap and be liable :

 

I might bring a reasonably large amount of money into Thailand at some point in the next couple of years. Lets say 10 million Baht although it could be more.

 

In order to do this I would need to sell some of my long term holdings which date back at least a decade, this will be a very profitable sale and there will be no tax paid anywhere.

For me the only way to ensure zero tax is paid on this would be to be non resident (<180 days) in Thailand during the year that I do the following :

1 - Sell the assets to get the 10 million Baht equivalent in USD

2 - Remit it to Thailand via wire transfer

 

All while being non resident - the key part is that you need to be non resident in both the year when you sell it (realise the profit) and the year when you remit it, with a little planning, two 90 day trips plus a long weekend somewhere else I could do that in one year and proving it would be simple. Passport stamps would prove non residence and asset sale / wire transfer records would prove profit made and remitted while non resident during the same year.

 

Now that's a lot of hassle but it would save a whole chunk of tax. It is tax avoidance (a healthy practice for any man), not evasion.

I think I got that right.

Another concern is that they might want to tax the rest of my money made outside of Thailand as they are looking to tax global income in the future - which sounds like a pipedream and I will be very surprised if it ever happens, but if it does then that is going to be a problem as I'm definitely never going to stop making money outside of Thailand and I'm not going to pay them any tax on that if I don't bring it here - not a chance. I will incorporate to avoid that and nothing will belong to me if they take this step.

Also I don't mind paying some tax on the money I use for day to day living but I won't be sending 100k Baht a month any more, in the future that would be reduced to 50k a month resulting in a negligible (21,500 Baht) tax bill for me.

 

What document did you refer to to come up with 21,500thb of tax on 600K of inward remittance? Cheers

[The Cyclist]

1 hour ago, TroubleandGrumpy said:

 

 

Not sure why you posted this video when quoting me.

 

I replied to it when it was posted yesterday.

 

Learned nothing new from the video yesterday.

[The Cyclist]

8 minutes ago, kuma said:

there are only 16 working days left before this comes into effect and people need time to absorb it, understand impact, discover alternatives, make choices and then implement decisions.

 

You then have another 180 days of 2024 before any of it affects you. 

 

Plenty of time to come up with a plan and then execute that plan.

 

Took me about 10 minutes to decide to stop remitting certain income to Thailand and about another week to get the paperwork, fill in the paperwork, send back the paperwork.

 

And unless some drastic announcement, that is yet unknown comes forth from the RD, that will be the limit of any decisions that I need to make.

[ukrules]

37 minutes ago, kuma said:

What document did you refer to to come up with 21,500thb of tax on 600K of inward remittance? Cheers

 

I used the tax calculator here : https://www.uobam.co.th/en/tax-calculation

 

Note that I applied no additional allowances and am single - some people will qualify for age based allowances (quite a bit I think) but I'm only about 50 years old.

Edited December 7, 2023 by ukrules

[Mike Lister]

11 minutes ago, ukrules said:

 

I used the tax calculator here : https://www.uobam.co.th/en/tax-calculation

 

Note that I applied no additional allowances and am single - some people will qualify for age based allowances (quite a bit I think) but I'm only about 50 years old.

That's correct. The combination of being single and under age 65 means you are not eligible for the two major deductions of 190k and 100k that retired pensioner are..

[stat]

On 12/6/2023 at 6:40 AM, Dogmatix said:

I took a break from this thread for a few days to regain my sanity.  Now as the year is drawing to a close I am thinking of liquidating some long held shares overseas.  The question is does it seem likely that the RD would accept evidence of capital gains realised in 2023 as 'seasoned' income that can be remitted tax free any time in the future, regardless of what happened to the proceeds after that?

If you are currently tax resident in TH I would recommend liquidating those shares. The only thing you can lose is the spread and comission. You can rebuy the next second if you want to. The potential tax upside is enormous. Good luck!

[Krit]

4 minutes ago, stat said:

If you are currently tax resident in TH I would recommend liquidating those shares. The only thing you can lose is the spread and comission. You can rebuy the next second if you want to. The potential tax upside is enormous. Good luck!

 

I wonder if Thailand has wash sale rules that would apply. In the US, for example, one cannot rebuy the next second but would need to wait 30 days before buying back the same securities.

[bikerlou47]

Just a quick mention..

The  USA has a tax treaty with Thailand..so any taxable income in the states can NOT be taxed in Thailand.

[UKresonant]

25 minutes ago, bikerlou47 said:

Just a quick mention..

The  USA has a tax treaty with Thailand..so any taxable income in the states can NOT be taxed in Thailand.

It's still only money you bring in/ remit to Thailand (the tax folks may look at from next year)  thankfully.

DTA is not a blanket exemption, some better wording in the US one for the likes of pensions and Social Security than some other DTAs pperhaps..

Edited December 7, 2023 by UKresonant

[jerrymahoney]

2 hours ago, bikerlou47 said:

Just a quick mention..

The  USA has a tax treaty with Thailand..so any taxable income in the states can NOT be taxed in Thailand.

No quick answer to your quick mention. Read it here:

 

https://www.irs.gov/pub/irs-trty/thailand.pdf

Edited December 7, 2023 by jerrymahoney

[DrPhibes]

2 hours ago, jerrymahoney said:

No quick answer to your quick mention. Read it here:

 

https://www.irs.gov/pub/irs-trty/thailand.pdf

Agree, no quick answers.  Ex: If you look at Articles 10, 11, 12 for dividends, interest, and royalties, they may be taxed by the country you live in as a tax resident but there are provisions on how that taxation works. 

[Mike Teavee]

6 hours ago, bikerlou47 said:

Just a quick mention..

The  USA has a tax treaty with Thailand..so any taxable income in the states can NOT be taxed in Thailand.

A few examples of where Thailand could tax US citizens (I'm British & don't even pretend to understand how US Tax works so please excuse me).

1. Any Income you've "Earned" that is Tax Exempt, Thailand might Tax you on it
2. Any Income that you've paid Tax in the US but Tax is higher in Thailand, Thailand might tax you on the difference
3. Any Income that you've "Earned" & already paid tax on in the US but you remit in a later year, Thailand might tax you on it.   

 

 

 

[Jingthing]

6 hours ago, bikerlou47 said:

Just a quick mention..

The  USA has a tax treaty with Thailand..so any taxable income in the states can NOT be taxed in Thailand.

Wrong.

The treaty gives tax credits on what you paid if anything in the US.

Not what you said.

[TroubleandGrumpy]

16 hours ago, ukrules said:

It's all foreign income and transactions can happen at any time of my choosing - for example, while I'm out of the country and by definition they would be done offshore.

But for sure I would consult with an accountant before making any such move and let the dust settle after any law changes before doing so.

This is something I will not take lightly, without clarity on the issue no money is coming to Thailand other than day to day expenses from Jan 1, 2024.

No clarification = no remittance.

I feel exactly the same as you - and will be doing the same going forward.

As things stand now the chances of me remitting money to buy a property in Thailand - ZERO.

As things stand now chance that we will move out of Thailand - PROBABLY.

 

My plan is to remit into Thailand additional money before 31 December 2023 (before new rule takes effect).

From 1 January 2024 I will remit into Thailand only my Pension payments - no bank savings or superannuation funds.

Some time during 2024 this will be cleared up - one way or the other.

If cleared up the 'right way' - no income taxes on pensions, savbings or super funds - we will stay in 2025.

If Thailand applies income taxes on all my money remitted into Thailand - we will be leaving Thailand before June 2025.

 

And that is not just me talking - my Thai wife is very angry - if there was an election today she would vote Junta.

Keep in mind that the MFP are more 'progressive' and they will need much more taxation to pay for their social programs.

I note that MFP has not said a word about this issue - will they tax Expats money when in power?

[TroubleandGrumpy]

16 hours ago, The Cyclist said:

Not sure why you posted this video when quoting me.

I replied to it when it was posted yesterday.

Learned nothing new from the video yesterday.

This video spelt it all out in detail.  You obviously missed the main points made very clearly by the lawyer. He stated that this is real and it is happenning, and unless the Thai RD changes things, this is going to happen.  It is not a matter of 'maybe' wait and see - it is now the rule - and that rule starts on January 1 2024 - 24 days from now.

 

Under the rule change all income earned now (including pensions) and all income earned in the past and is now savings or super funds, is now 'assessable income' when remitted into Thailand after Jan 1 2024 and subject to income taxes.  How an Expat tax resident can 'claim' tax credits or exemptions under the various DTAs Thailand has, is extremely difficult and cannot be done using the standard pro-forma. The lawyer stated that Expats will probably have to engage a tax accountant/lawyer to do that, because it is an extremely complex matter that is currently done businesses.  He stated that he hopes the Thai RD soon clarifies things, because they have been approached by a lot of 'representative bodies and people' - he believes that the Thai RD greatly under-estimated the impact of this decision. 

 

There are several posters on this thread who have made a lot of posts like myself going way back to the start - Mike, Dogmatix, Stat, Jerry etc. - and although we have not always agreed, we discuss our views openly and freely. We are not fearmongers as you keep accusing us of being. And as I have said before, Thailand made one rule change about mary-jane (broccili) 2 years ago and now there are shops everywhere selling the stuff and they are still tryting to close them down. This income tax rule change is looking very much like another one of those, and anyone stating that this is not a problem as all will be OK, is either greatly under-estimating the problem, or is being obstuse and argumentative.  As the lawyer said, lets hope the Thai RD clarifies things quickly and eases all the concerns they have created - because if they dont this will be bad.

 

But I note that you dont care - all you want to do is abuse other posters for talking about this matter - you are IMO argumentative and abusive with nothing to contribute.  BLOCKED. 

[TroubleandGrumpy]

56 minutes ago, Jingthing said:

Wrong.

The treaty gives tax credits on what you paid if anything in the US.

Not what you said.

Thank you mate.  I hope that people realise this situation is very serious, and dont just ignore it thinking it will go away, or believe the posters who keep claiming this will be OK - have another beer/girl.  This might be resolved by Thai RD soon - and it might not be - but either way it is very serious.  Taxation is serious - way more serious than Immigration issues.

[The Cyclist]

56 minutes ago, TroubleandGrumpy said:

This video spelt it all out in detail.  You obviously missed the main points made very clearly by the lawyer. He stated that this is real and it is happenning, and unless the Thai RD changes things, this is going to happen.  It is not a matter of 'maybe' wait and see - it is now the rule - and that rule starts on January 1 2024 - 24 days from now.

 

I have no idea what your major malfunction is. Yes, I know it is happening, I also know that it is real, and I also know that it starts on the 01 Jan 2024.

 

Hope that is clear enough for you to understand. I have tried  to keep it really simple.

 

What no-one is clear on is how it will effect them as it is not yet set in concrete and liable to further changes. As highlighted by the lawyer from about the 9 minute mark.

 

Is that clear enough for you ? Is there anyway that I can make that even more simple for you to understand.

 

1 hour ago, TroubleandGrumpy said:

ut I note that you dont care

 

But I do, that is why I have stopped my Private Pension being remitted to Thailand, until I get further clarity on whether it is going to be taxed in the UK and then taxed again in Thailand.

 

What I do not care for is the doom & gloom from some posters, which is absolutely unwarranted as no-one knows the details and the ones we think we might know, are liable to change.

 

Your issue to deal with if you think that is argumentative.

[tomkenet]

1 hour ago, TroubleandGrumpy said:

Under the rule change all income earned now (including pensions) and all income earned in the past and is now savings or super funds, is now 'assessable income' when remitted into Thailand after Jan 1 2024 and subject to income taxes. 

Not according to:

 

Ernst & Young:

This provision aims to limit the scope of foreign-sourced income subject to Thai personal income tax and exempts income earned before 1 January 2024. 

As per Paw.162 instruction, only foreign-sourced income earned from 1 January 2024 onwards, and the individual having been a Thai tax resident in the year of earning, would be subject to Thai personal income tax in the year whenever it is brought into Thailand.

 

Mazars:

 shall not apply to any foreign sourced income earned by Thai tax residents before 1 January 2024.

Thai tax residents will not be required to include their foreign sourced income earned before 1 January 2024 in their personal income tax returns, even if such income will be brought into Thailand from 1 January 2024 onwards. 

 

 

Baker McKenzie:

The new order does not apply to foreign sourced income received by a Thai tax resident before 1 January 2024.

[TroubleandGrumpy]

13 minutes ago, tomkenet said:

Not according to:

 

Ernst & Young:

This provision aims to limit the scope of foreign-sourced income subject to Thai personal income tax and exempts income earned before 1 January 2024. 

As per Paw.162 instruction, only foreign-sourced income earned from 1 January 2024 onwards, and the individual having been a Thai tax resident in the year of earning, would be subject to Thai personal income tax in the year whenever it is brought into Thailand.

 

Mazars:

 shall not apply to any foreign sourced income earned by Thai tax residents before 1 January 2024.

Thai tax residents will not be required to include their foreign sourced income earned before 1 January 2024 in their personal income tax returns, even if such income will be brought into Thailand from 1 January 2024 onwards. 

 

Baker McKenzie:

The new order does not apply to foreign sourced income received by a Thai tax resident before 1 January 2024.

 

Correct - and therein lies the problem and the misinformation and the opinion - and why some think this is not a problem when it is.

The lawyer in the video I posted makes clear and precise explanations in response to 'real world' situations, as put to him by the interviewer.  Those statements you quote are made not is repsonse to examples, but as general statements of opinion and may not apply to you/me.

 

In the past, a Thailand tax resident did not have to pay income taxes on earnings received overseas, unless that money was remitted into Thailand in the current taxation year. Those using that loophole would prove that the money was earned in the past (over 1 year ago) and no tax was payable. The onus was on the Thai RD to prove the money was brought into Thailand the same year it was earned. It was under this 'loophole' that the Thai RD did not pursue money being remitted into Thailand by Thais and Expats, because the onus was on them to prove the money was earned in that same taxation year - so they let it go.  That was the rule for 38 years - and it had been verified in the Courts.  It is extremely likely that this rule change will be challenged in Court - but who knows how long that will take and there is no guarantee of success - the Govt needs money.

 

The rule change now means the complete opposite - all money remitted into Thailand is now assessible as taxable income and the onus is now on the taxpayer to prove (to the Thai RD) that the money earned in the past has already had taxes applied to it, or that it is exempt from taxation in Thailand.  As the lawyer said, that is not what the Thai RD intended as they are after the 'big fish' who pay no income tax overseas and also none in Thailand, under the current loophole.  What is needed is a clear statement from Thai RD detailing what is exempt and what is not exempt from this new rule change - particularly for Expats, but also for Thais who have savings held overseas, and those sending money home to their families from overseas, and may other situations this new rule now catches out.

 

The change by Thai RD to this long standing rule means that all money remitted into Thailand after Jan 1 2024 is technically 'assessible', and the onus is on the taxpayer to prove otherwise.  The problem the Thai RD has in making any clarification, is that they dont want to make any exemptions that will allow those they are targetting (the big fish) to also get out of the net using those exemptions.

 

Remember - one rule change 2 years ago created all the cannabis shops, and they are still trying to fix that.  Thailand has a history of changes not well thought through or planned, that led to unintended consequences. Hopefully this change will be addressed and resolved quickly, but while I am hoping they will do that, I am not depending on them to do that  - I am planning ahead.  

[tomkenet]

10 minutes ago, TroubleandGrumpy said:

In the past, a Thailand tax resident did not have to pay income taxes on earnings received overseas, unless that money was remitted into Thailand in the current taxation year 

Not only in the past, also income received this year, 2023 which will be the last year this loophole can be used.

12 minutes ago, TroubleandGrumpy said:

 

 

[The Cyclist]

Despite 280 posts on this thread  of hysterical doom and gloom, 10 minutes ago you post this

 

15 minutes ago, TroubleandGrumpy said:

What is needed is a clear statement from Thai RD detailing what is exempt and what is not exempt from this new rule change - particularly for Expats,

 

Comedy Gold.

 

[JoeyMac]

Cany anyone summarise what is going to happen ?

 

 

[Mike Lister]

16 minutes ago, JoeyMac said:

Cany anyone summarise what is going to happen ?

 

 

It would be easier to predict the weather on 9 May 2024.

[Morch]

17 minutes ago, JoeyMac said:

Cany anyone summarise what is going to happen ?

 

 

 

I think this topic might be the short version....

[kuma]

17 hours ago, stat said:

If you are currently tax resident in TH I would recommend liquidating those shares. The only thing you can lose is the spread and comission. You can rebuy the next second if you want to. The potential tax upside is enormous. Good luck!

So lol most of the shares I hold are under water rn, does that mean I can claim the loss and get a refund with this new proposed tax regimen? Or is it a case of 'we are interested in your gains not your losses, you get to keep those'?

[kuma]

1 hour ago, JoeyMac said:

Cany anyone summarise what is going to happen ?

 

 

Thailand | Tax & Legal | 24 November 2023
TAX Alert
Foreign source income Tax Update under The
Revenue Department's Instruction
No. Paw.162/2566 ("Paw. 162")

In September, TRD released Paw.161, indicating its intention to impose Personal Income
Tax (PIT) on foreign-sourced income, generated in any calendar tax year, and brought
into Thailand from calendar tax year 2024 onward. However, with the introduction of
Paw.162, TRD has reevaluated its previous position presented in Paw.161. The revised
focus is on collecting taxes from foreign-sourced income generated on or after January
1, 2024. Given this change, taxpayers need to engage in careful planning, including
determining whether the income meets the definition of assessable income subject to
Thai taxation, deciding when to bring in foreign-source income, and developing
strategies to distinguish between income generated before and after January 1, 2024

[kuma]

1 hour ago, Morch said:

 

I think this topic might be the short version....

https://www.rd.go.th/fileadmin/user_upload/kormor/newlaw/dn162A.pdf

In Thai so get a friend to help you if required.

[Morch]

4 minutes ago, kuma said:

https://www.rd.go.th/fileadmin/user_upload/kormor/newlaw/dn162A.pdf

In Thai so get a friend to help you if required.

 

No, thanks.

I'm in the wait-and-see club.

Given precedent, they might shelve the whole thing, delay it indefinitely, or change various elements.

At the very least, we'll (hopefully) get more details on how things stand and what they mean, sometime next year.

Tried to ask Bangkok Bank and immigration about this - they don't really know either.

An acquaintance tried to question RD - no real answer.

 

 

 

[jerrymahoney]

24 minutes ago, kuma said:

https://www.rd.go.th/fileadmin/user_upload/kormor/newlaw/dn162A.pdf

In Thai so get a friend to help you if required.

via Translate.com:

 

In order for the Revenue Officer to be considered as a guideline for inspecting and recommending those in Thailand whose income is assessable under Section 40 of the Revenue Code in the previous tax year due to job duties or business done abroad or due to assets located abroad according to Section 41 paragraph two of the Revenue Code.

 

Therefore, the Revenue Department has ordered as follows:

 

The following shall be added to the second paragraph of clause 1 of the Revenue Department Order No. 161/2023 re:

 

Income tax payment pursuant to Section 41 paragraph 2 of the Revenue Code dated September 15, 2023

 

"The provisions of paragraph one shall not apply to assessable income incurred before January 1, 2024."

 

Order dated 20 November 2023

 

(my bold)

Edited December 8, 2023 by jerrymahoney