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

[TallGuyJohninBKK]

Lots of details and issues remain very unclear, both in terms of the policy itself and how it will actually be implemented.

 

It also was unfortunate that even though the webinar was presented by the American Chamber of Commerce, the presenters gave almost no info on how the longstanding U.S.-Thai double taxation agreement likely will limit/curtail the new policy for Americans....

 

Such as the expected result that U.S. Social Security payments made to American citizens AND U.S. government pension payments are likely to be excluded from Thai taxation under the terms of that particular agreement, and can only be taxed by the U.S.

 

 

[StayinThailand2much]

4 hours ago, Ralf001 said:

4 hours ago, Danderman123 said:

The problem is that the 65K monthly deposit may be taxable in 2024.

 

Has tax been paid on that 65k in country of origin ?

 

Does country of origin have a DTA agreement with Thailand ?

 

No-one still seems to know whether any such transfers (monthly, or lump-sum) will be taxed at source (the receiving bank), requiring one to claim it back, or via filing a tax-return first. And who knows whether DTA agreements will be 'followed' like other laws in Thailand, i.e. "up to officers' discretion"...

[Mike Lister]

15 minutes ago, Steve2UK said:

That was also my experience when I did my retirement visa extension last September - except they (Immigration) wanted a bank statement covering the full year since my previous extension. Like you, I use the balance maintained at (at least) required level for required period route. I've long used an agent for the annual extensions and give them all the stuff they tell me to (same list as yours). IIRC they also made copies of all the pages in the bank book (or maybe just the last yearsworth?) - I certainly remember signing a vast number of them. Unlike you, I also use that one ('saver') Thai account for all my outgoings*. I do recall that the full year bank statements have been required for at least the last few extensions I've done. Incidentally, my bank balance at the time of that last September extension showed a bit over 18 million baht (remains of a personal property sale proceeds wired in from my UK account). Nothing was said about that during my last extension - but I can't help wondering whether I'll be grilled on "Why no TIN?" (been here since 2006 and never been asked/registered for one) come my September 2024 extension........

 

* I'm thinking about following your example and setting up a separate untouched deposit account for the 800k baht needed to cover that extension requirement. Does your local Imm office ask you for evidence (e.g. another bank account?) of what you're living on if you're not touching the deposit - or do (did?) they regard that as 'not their concern' providing you met their minimum balance/period maintained threshold? Same same next extension for you - or is the only realistic answer to that (for now) "Who TF knows?"....?

No, I'm not asked about other accounts and the money I live off during the year. At one point I did commingle the 400k and my spending money, that meant when the bank gave me a letter showing my balance it was in the millions. The Immi officer then asked me reconcile the total amount, back to the amount in the letter, rather than just the 400k. That resulted in me holding accounting 101 for the Immi officer because the total comprised fixed deposits, investments and savings. After that I decided that Immi money would have its very own account and book which didn't include anything else. I don't mind them going overboard by asking for a bank letter and the book but to require a statement also is so much overkill and plain unnecessary that it points towards stupidity rather than an excess of caution on their part..

[Danderman123]

28 minutes ago, Ralf001 said:

 

How can money spent be possibly be considered as income ?

Because the money originated in the UK.

[Mike Teavee]

33 minutes ago, Ralf001 said:

 

How can money spent be possibly be considered as income ?

Sorry, you seem to have missed the previous posts about Foreign ATM/Credit card charges potentially being considered as bringing money into Thailand as obviously you're either taking that money from (Potential) Income overseas or have to pay the bill (with potential Income) at some point.

 

 

[Mike Lister]

42 minutes ago, Ralf001 said:

 

How can money spent be possibly be considered as income ?

Seems like an odd remark. All money gets spent eventually, just because it's already been spent doesn't mean it wasn't income previously.

[beammeup]

Looks like we are going to have to play chicken with the RD as far as credit cards and ATM withdrawals go.

[Ralf001]

34 minutes ago, Mike Lister said:

Seems like an odd remark. All money gets spent eventually, just because it's already been spent doesn't mean it wasn't income previously.

 

The source of funds if from money earnt... will have already been taxed.

 

Seriously doubt Thailand will ignore a DTA... assuming country of origin has a DTA in place.

 

https://www.rd.go.th/english/766.html

[Steve2UK]

27 minutes ago, Mike Lister said:

No, I'm not asked about other accounts and the money I live off during the year. At one point I did commingle the 400k and my spending money, that meant when the bank gave me a letter showing my balance it was in the millions. The Immi officer then asked me reconcile the total amount, back to the amount in the letter, rather than just the 400k. That resulted in me holding accounting 101 for the Immi officer because the total comprised fixed deposits, investments and savings. After that I decided that Immi money would have its very own account and book which didn't include anything else. I don't mind them going overboard by asking for a bank letter and the book but to require a statement also is so much overkill and plain unnecessary that it points towards stupidity rather than an excess of caution on their part..

Many thanks for the prompt response. Can't help but 100% agree with the "....but to require a statement also is so much overkill...." part but I've long since given up even wondering about the "why?" of such things. I just mentally file it under 'TiT' and move on. My MO here is just "Tell me WTF you want/need and I'll comply.....". Incidentally, in a previous year I inadvertently let the bank balance drop about 200 baht below the threshold for all of two days. Courtesy of my well-connected agent, that little episode cost me 15k (cough) 'penalty' to avoid my very longstanding visa being cancelled......

 

Still and all, I've seen crazier stuff dished out by the UK's tax authority (HMRC).........

[The Cyclist]

6 hours ago, Danderman123 said:

The problem is that the 65K monthly deposit may be taxable in 2024.

 

Here we go again.

 

That 65k deposited monthly during 2024 will not be taxable until 2025, so will make no odds to the Immigration Department regarding extensions.

 

Neither will it be an issue with the Immigration Department in later years unless the financial requirements for extension changes.

 

12 monthly deposits of at least 65k is what the the Immigration Department require. It makes no odds to them if that 65k monthly deposit is spent on a Thai tax bill, 200 crates of the finest Chang or a daily indulgence of exotic dancers.

 

Stop with the garbage.

[puck2]

 

Introducing the planed new Thai tax system for foreigners is like pissing in their own trowsers! Why? There are many many reasons, Therefore I cannot mention all here, but some.

 

1. Every country has its own tax system. Different rules, different allowences, different tax laws concerning „income“ etc. Are all the Thai tax offices able to read and understand the American, Britisch, Irish, French, Italian, Chinese, Russian Australian, Indian, German, Dutch tax laws, to name only a few countries?

2. They want to tax all the money which is transfered to Thailand, although there are many DTAs (Double Tax Agreements). Do they want to change the DTAs?

3. To work with ALL the foreign tax laws it is necessary to understand all the foreign tax laws, I guess a very, very difficult problem for all the Tai tax offices!

4. If they want to tax the incoming money they have to compare the taxes between the 2 concerned states and tax it „only“, if the Thai tax would be higher than the „falang tax“.

5. To compare the tax rates of the concerned countries, i.e. US and Thai, they must or should understand all the details/differernces of the 2 states. Nearly impossible, even for the high ranking experts in the Finanial Ministry. I guess.

6. Every tax law uses special juristic terms, hard to understand in other/different languages.

7. Which documents would they ask for without violating falang laws.?

 

Only one example.

If I would transfer 2.000 Euros to Thailand, how to compare the tax rates (=which is higher). Would they compare the Tax rates by implementing the Thai allowences with free alowences of my German tax (althoug my German „income“ would be higher and therefore the taxing rate?

 

Neerly impossible for all the many Thai tax officers. An what about the paper work?

[JimGant]

1 hour ago, TallGuyJohninBKK said:

The expat tax advisors who did the presentation  also indicated they expected that foreign card ATM withdrawals and even foreign card (debit or credit) purchases made in Thailand likely will end up being considered importing foreign income -- though they acknowledged the Rev. Dept. hasn't specifically opined on that issue as yet.

 

Christ, here we go again. Until they abandon the "remittance" angle, they'll never be able to parse out money "sent" to Thailand (and an ATM pull could be construed as "sent") between savings and income. In my case, all money sent is from a Wise transfer from my savings account, which has money from inheritances, IRA drawdowns, direct deposits of gov't pensions, interest, stock sales, etc. It's a fungible pile of dollars -- and the only before-tax income in there is interest. Now, Thailand says they're going to tax "foreign source income." Fine -- if foreign source income is direct deposited into a Thai bank. Other cash flows coming into Thailand cannot have any income aspect separated from the whole. Thailand knows this -- and that's why we're occasionally hearing, 'we'll just tax all remittances.' I won't even honor that statement with the obvious. So, the only alternative is to identify foreign income at the source, which thru CRS and FATCA reporting, and info exchange language in DTAs -- is relatively easy, compared to the impossible task of identifying income in remittances. Heck, Thailand knows all my income from last year, when I presented a package of 1099 tax forms to BoI -- in my LTR application. Certainly, under the info exchange rules and avenues available today, Thai RD could suck up 1099's of all Americans (and similar for other nationalities).

 

No, the remittance avenue won't work. They'll have to abandon this approach, and go to the income scenario. Or, just abandon the whole thing (which may happen, if Thai fat cats have their say).

 

And, as far as how DTAs might be affected -- Thailand is not about to violate treaties protected by Vienna conventions. Heck, if things go where I think they will, the Thai-US DTA is to their advantage, as now Thailand will have "first dibs" on taxing my IRA proceeds, and other private type pensions. I won't be out any more money, as the Thai taxes will be a credit against my US taxes. But Thailand will now be able to use DTAs to their advantage.

 

[TallGuyJohninBKK]

9 minutes ago, JimGant said:

in my LTR application

 

And of course, according to the explanations given, all LTR visa holders are going to be exempt from the entire new foreign income taxation scheme.

 

[TallGuyJohninBKK]

17 minutes ago, puck2 said:

 

Neerly impossible for all the many Thai tax officers. An what about the paper work?

 

At one point in the chamber presentation, I believe, one of the panelists indicated that if foreigners here end up having to present financial documentation to the Revenue Department, that they'd be responsible for first having it translated into THAI!

 

 

[Mike Teavee]

1 hour ago, Ralf001 said:

 

The source of funds if from money earnt... will have already been taxed.

 

Seriously doubt Thailand will ignore a DTA... assuming country of origin has a DTA in place.

 

https://www.rd.go.th/english/766.html

 

How do you know the money has already been taxed & if it was taxed, at a rate similar/higher than Thailand would tax it. 

 

Simple example, let's say I sell some shares for £3,000. made a £1,000 capital gain and  there's no CGT in UK (Which there isn't as I'm non tax resident there).

 

I then use that £3,000 to purchase a BKK-MAN ticket on Qatar... 

 

If I used a UK Credit card then the money will go from my UK Stockbroker account to the UK credit card (Same company) & the only involvement Thailand has in this is I live here & the flight is from BKK, I'd fully expect there to be no tax to pay. 

 

If I used a Thai Credit Card & remitted the money over from the UK to pay the bill then I would expect it to be assessable for tax. 

 

If I buy that ticket using a company based in Thailand then surely I'm remitting the money to pay for it so it would be assessible for tax.

 

 

[Mike Teavee]

14 minutes ago, TallGuyJohninBKK said:

 

And of course, according to the explanations given, all LTR visa holders are going to be exempt from the entire new foreign income taxation scheme.

 

From what I've read, LTR holders are exempt for years that they hold an LTR so get one in 2026 (Which is my plan), you're still liable for tax on income earned in 2024/2025.

 

I plan on being Non-Tax Resident in 2006 (for other reasons), so hopefully I'll be able to bring enough funds over to support my LTR in that year & from then on not have to care about this stuff.

 

 

 

 

 

 

[TallGuyJohninBKK]

2 minutes ago, Mike Teavee said:

From what I've read, LTR holders are exempt for years that they hold an LTR so get one in 2026 (Which is my plan), you're still liable for tax on income earned in 2024/2025.

 

Yes, the exemption from foreign income tax liability in the future post Jan. 1, 2024 would only apply for the years / periods when the person actually held an LTR visa...

 

 

[Lorry]

9 hours ago, Danderman123 said:

I suggested one approach might be to use US bank cards to withdraw cash via Thai bank ATMs. The Revenue Department may not monitor the vast numbers of such transactions, due to the difficulty in matching the transactions against the Immigration Department database.

It works the other way round :

 

they don't have to check all ATM withdrawals done in Thailand. 

They will just have to ask all tax residents (ie people staying over 179 days) to list their ATM withdrawals. 

If they don't believe the answer they can ask the tax resident to provide the corresponding statements of  all his foreign bank accounts, translated into Thai and stamped by his embassy in BKK and the MFA. They know from CRS which banks he has accounts with.

If he won't provide this information,  they may just estimate the withdrawals. 

 

All the people here who think all this is too much work for the RD, maybe  have never filed taxes anywhere. It's generally not the RD, or his or her Majesty, the IRS or whoever, who does the work.  It's the taxpayer who has to do the work.

 

Unfortunately for the RD, a database of all people staying over 179 days does not exist yet.

 

[Lorry]

2 hours ago, TallGuyJohninBKK said:

 

At one point in the chamber presentation, I believe, one of the panelists indicated that if foreigners here end up having to present financial documentation to the Revenue Department, that they'd be responsible for first having it translated into THAI!

 

 

Of course

[Lorry]

2 hours ago, Mike Teavee said:

 

How do you know the money has already been taxed & if it was taxed, at a rate similar/higher than Thailand would tax it. 

 

Simple example, let's say I sell some shares for £3,000. made a £1,000 capital gain and  there's no CGT in UK (Which there isn't as I'm non tax resident there).

 

I then use that £3,000 to purchase a BKK-MAN ticket on Qatar... 

 

If I used a UK Credit card then the money will go from my UK Stockbroker account to the UK credit card (Same company) & the only involvement Thailand has in this is I live here & the flight is from BKK, I'd fully expect there to be no tax to pay. 

 

If I used a Thai Credit Card & remitted the money over from the UK to pay the bill then I would expect it to be assessable for tax. 

 

If I buy that ticket using a company based in Thailand then surely I'm remitting the money to pay for it so it would be assessible for tax.

 

 

Many posts earlier someone posted the corresponding regulations of the UK (isn't that even your home country).

In the UK, this would be a taxable remittance (for non-doms). Not so obvious at first sight, but if you think about it, there is some logic in it.

 

Whether the Thai RD will copy UK regulations or not is anyone's guess.

 

 

PS the fact that you flew into and out of BKK would be difficult to deny, easy to tax those flights

PPS IIRC in the UK only flights out are taxable wherever they have been bought.  Flights in are only taxable if bought in the UK. Makes sense. 

[Ralf001]

3 hours ago, JimGant said:

 

Thailand is not about to violate treaties protected by Vienna conventions. 

 

 

Thailand signed up to Vienna conventions treaty ?

 

[ukrules]

5 hours ago, beammeup said:

Looks like we are going to have to play chicken with the RD as far as credit cards and ATM withdrawals go.

 

Not really, tax avoidance quickly becomes tax evasion once you fill out and sign any kind of tax return with incorrect values.

 

In general you're often ok right up until you put pen to paper and sign something which is untrue. Then you're in trouble.

 

[beammeup]

The thing is we don't know if credit cards is income. Its a loan so grey area until they clarify it.

[Neeranam]

8 hours ago, TallGuyJohninBKK said:

The expat tax advisors who did the presentation  also indicated they expected that foreign card ATM withdrawals and even foreign card (debit or credit) purchases made in Thailand likely will end up being considered importing foreign income -- though they acknowledged the Rev. Dept. hasn't specifically opined on that issue as yet.

These guys are just after more business. 

They're is no way this will happen, IMO 

[Neeranam]

1 hour ago, ukrules said:

 

Not really, tax avoidance quickly becomes tax evasion once you fill out and sign any kind of tax return with incorrect values.

 

In general you're often ok right up until you put pen to paper and sign something which is untrue. Then you're in trouble.

 

Interesting, so better not to volunteer any info unless asked. 

 

[Neeranam]

8 hours ago, TallGuyJohninBKK said:

then the other interesting wrinkle is a provision in Thai tax regs that allow spouses to gift to their own LEGAL spouse up to 20 MILLION baht per year without that being subject to taxation, which if it stands would seem to be another way of moving foreign funds here without being subject to taxation (though those would have to be non-community property funds).

What are non community property funds? 

[Klonko]

12 minutes ago, Neeranam said:

What are non community property funds? 

Pre-marriage assets. Probably including income derived from such assets but I have not found respective confirmation.

[TallGuyJohninBKK]

30 minutes ago, Neeranam said:

What are non community property funds? 

 

Funds that a now married person had prior to their current marriage (meaning the current spouse isn't entitled to a community property share in the event of a future divorce), or otherwise legally exempt from community property status funds, such as inheritances, which always stay 100% with the inheritor.

 

 

[UKresonant]

1 hour ago, ukrules said:

 

Not really, tax avoidance quickly becomes tax evasion once you fill out and sign any kind of tax return with incorrect values.

 

In general you're often ok right up until you put pen to paper and sign something which is untrue. Then you're in trouble.

 

 

Yes, incorrect values, perhaps dependant on particular RD officer, implicitly correct values as far as person filing is concerned, possible translation of documents legalisation (less practical if up country). 

 

Home country deducts all my tax, they can "see everything" on their screen (purposely arranged to be that way).  Then to go from that, to this potential can of worms.

 

If it is as simple as throwing all pre-taxed pensions into home country account, only remit the net income from that to a Thailand account, declare it, take the tax paid off as as credit relief (when they issue a form), pay the few 10s of thousand of baht extra to Thai RD.  If it is so much more complex than that, or they go global, it is perhaps just not interesting any more  .

 

Not sà-nùk 

 

complexity, hurdles, administrative stress  (increasing volatility) /

Lovely country, good facilities, food  and climate (stable with some incremental progress)

 

The ratio has changed a lot since 2017 I think!

 

Just will re-arrange some things UK end and hope for a simple outcome. 

[Eudaimonia]

On 12/16/2023 at 7:43 PM, Ben Zioner said:

That's exactly my thinking. I have LTR but I have started moving my savings around so that I don't get caught with my pants down if they changed the rules that protect us now. Only, I am not targeting zero tax, I'll be ok to stay just under 5% [instead of 25%] of my total income. Doing thatI'd have to spend 6 months out of Thailand in 2028.

 

But LTR is still there.

 

That's a lot of money in the bank. And the spreadsheet shows 0% interest earnings. Isn't there quite a high opportunity cost for this plan?

 

Time deposits in Thailand yield around 1.7% p.a., considerably less than many investments abroad. One might pay 25% tax for a 6-8% yield and still be better off than remitting all that money to Thailand, where it earns much less.

 

It almost looks like you might achieve a <5% income tax rate but end up with a 5% wealth tax.

 

[Edit: I probably misunderstood what "Bangkok UBS" means – is it funds that are not in Bangkok?]