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


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4 minutes ago, jayboy said:

 

Agreed and you are in the vanguard of providing an excellent information base on this subject (future tax obligations of resident expatriates).

 

But in this instance the subject was past filings and here you have been misleading.The vast majority of resident pensioner expatriates with no Thai income have not been filing returns.None of the major accounting firms in Bangkok nor the RD itself recommended this.

 

Please give it a rest.Most of us know the technical position.

There is nothing misleading whatsoever about saying thousands do file, especially when I said there are 300k in country. Ben got it, others seem less good at math.

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1 minute ago, jayboy said:

 

Did these foreigners share their financial details with you? Many foreigners have Thai investments and business interests.Of course they would file tax returns.

 

 

Too funny.....er, no!

 

But of my aquaintences that do file, many, like, me, have a combo of rental inc, invest, and pension.

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13 minutes ago, Badrabbit said:

I was told by the Head man at my Tax office, "do you want to pay tax here" my answer "no as I pay tax in the UK" "you can pay tax here or your home country up to you"

Is he right or not?

It's not as simple as a yes or no answer.

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4 hours ago, Mike Teavee said:

Because the Revenue Department might want to check that you're calculations/allowances are correct E.g. are you sure you get another 120,000 for your wife? I thought this was 60,000 - But then again you haven't included the 60,000 that you are entitled to on top of the > 65 allowance.  

 

As an aside, I (via my accountant) have to file a Tax Return in the UK every year and every year it's either I don't need to pay any additional tax or they owe me a few pennies (literally like 12p or so) but it still costs me £240 for my accountant to file it :( 

UK tax prep for non resident expats is not vatable. My UK acct  charges me 180 to file

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35 minutes ago, Badrabbit said:

I was told by the Head man at my Tax office, "do you want to pay tax here" my answer "no as I pay tax in the UK" "you can pay tax here or your home country up to you"

Is he right or not?

The current Head man of your Tax office is always right. The next one too.

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

thats based on current tax law and applies to everyone, if the tax law changes its likely to change for everyone

The LTR visa, unlike other visas prohibits tax collection by the Thai government from the holder due to Royal Decree.  I do not agree that if the govt changes the law, that it will affect the holder of the LTR.  If the govt could and did change that law, then believe they would probably wipe out the DTA's also.  But these are my opinion only and there are too few people who really have any idea what is going to happen.

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6 minutes ago, JimGant said:

 

There's no place on a Thai tax return to include income that is not assessable income. Thus, you would not include monies excluded by your country's tax treaty with Thailand. And monies remitted in a later year than year earned (under the old rules). Or monies remitted from a bank account funded pre Jan 1, 2024 (under the new rules). Thus, for most of us retirees, very little, if any, assessable income to include on a tax return, except maybe interest from your Thai bank account. So, if you have no taxable income (assessable income minus allowances, deductions, 150k freebie), no reason to file a tax return, as there's no penalty for not filing, if no taxes owed.

 

As an aside, because of the weird remittance rule for what's assessable income -- it's best to filter all remittances to Thailand through a home country or off shore bank account. And one established and funded pre Jan 1, 2024, if possible. Then, have all your wire transfers come from this account, backfilling it with only treaty exempt income, like gov't pensions for most of us. Thus, if this new rule takes effect, you're covered under the pre 2024 income being exempt. And should post 2024 additions to this bank account -- like reinvested interest -- come into question (not likely) -- your answer is you draw from the oldest deposits first (FIFO). Nothing likely to challenge this.

I wish I could understand any of that.

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14 minutes ago, JimGant said:

 

There's no place on a Thai tax return to include income that is not assessable income. Thus, you would not include monies excluded by your country's tax treaty with Thailand. And monies remitted in a later year than year earned (under the old rules). Or monies remitted from a bank account funded pre Jan 1, 2024 (under the new rules). Thus, for most of us retirees, very little, if any, assessable income to include on a tax return, except maybe interest from your Thai bank account. So, if you have no taxable income (assessable income minus allowances, deductions, 150k freebie), no reason to file a tax return, as there's no penalty for not filing, if no taxes owed.

 

As an aside, because of the weird remittance rule for what's assessable income -- it's best to filter all remittances to Thailand through a home country or off shore bank account. And one established and funded pre Jan 1, 2024, if possible. Then, have all your wire transfers come from this account, backfilling it with only treaty exempt income, like gov't pensions for most of us. Thus, if this new rule takes effect, you're covered under the pre 2024 income being exempt. And should post 2024 additions to this bank account -- like reinvested interest -- come into question (not likely) -- your answer is you draw from the oldest deposits first (FIFO). Nothing likely to challenge this.

Except there really is no concept of non assessable income, in the revenue code, apart from that short list of odd or unusual income types, ergo, income is either excluded by dta or assessable (but not necessarily taxable)

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1 hour ago, JimGant said:

 

Well, the definitions do kinda muddy things. But for most of us reading this, we're concerned about foreign derived income, and what part of that is assessable, and thus subject to a Thai tax filing. So, we're mainly interested in income excluded by a DTA and income not remitted to Thailand. Both of these are "other-than-assessable" (how's that?) incomes and therefore are not includable on a tax return. But, don't follow the rule on remittance timing, you'll stumble into the 'assessable' bracket.

 

Bottom line: Your Thai tax return, if you don't work here, could easily be empty of numbers -- all legal, if you're familiar with your country's DTA -- and you're familiar with remittance timing. And you certainly wouldn't provide any "other-than-assessable" numbers to Thai RD, since they're probably not interested in numbers that don't provide taxes -- plus, more pragmatically, there are no lines on which to provide such information.

I think the groups are, remitted, excluded assessable and taxable. Everything that gets remitted is either excluded or assesses and that which passes assessment becomes taxable

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6 hours ago, topt said:

Of all the retired foreigners I know here and who I have spoken to about this none have ever filed a tax return other than the odd one to reclaim tax withheld on interest - which I think we all agree is not really filing as we are discussing. That's getting on for probably about 30 guys.

 

 

     Totally agree.  I don't know even one retiree who has ever filed a tax return here.  I think a big majority of the posters who have filed returns have worked here at some point, even if they now might be retired, a different breed from those of us who came here as retirees from the get-go.

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3 hours ago, Mike Lister said:

   the groups are, remitted, excluded assessable and taxable

 

Taxable, of course, is the remaining assessable income after subtractions of allowances, deductions, and the 150k freebie. Similar to the US definition of taxable income (TI), which is adjusted gross income (assessable income), less the standard deduction. No TI, no tax filing required.

 

But what is your "excluded assessable" category?

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6 minutes ago, JimGant said:

 

Taxable, of course, is the remaining assessable income after subtractions of allowances, deductions, and the 150k freebie. Similar to the US definition of taxable income (TI), which is adjusted gross income (assessable income), less the standard deduction. No TI, no tax filing required.

 

But what is your "excluded assessable" category?

Sorry, needs a comma after excluded, it's the fourth category and is anything excluded by virtue of a DTA. And then of course, anything remaining overseas that doesn't get transferred, is simply not considered. 

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4 hours ago, newnative said:

     Totally agree.  I don't know even one retiree who has ever filed a tax return here.  I think a big majority of the posters who have filed returns have worked here at some point, even if they now might be retired, a different breed from those of us who came here as retirees from the get-go.

And most don't even know about this recent "simple change" to the tax laws.

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13 hours ago, topt said:

Of all the retired foreigners I know here and who I have spoken to about this none have ever filed a tax return other than the odd one to reclaim tax withheld on interest - which I think we all agree is not really filing as we are discussing. That's getting on for probably about 30 guys.

 

 

Topt,

 

Not a scientific survey or anything similar, but I agree with you 100%.

 

I have lived in Thailand a long time and have not met even one retired foreigner who files taxes or who owes taxes and certainly none who are knowingly evading taxes.

 

Key point they are retired many with low incomes and some with high incomes - all who bring money in from past years. 

 

I pay personal and corporate taxes yearly in Thailand and individual taxes in America - but no corporate taxes in America ever - but I am required to file every year in America, even though I don't owe corporate taxes in America.

 

So for those in this thread who say you may have to file in Thailand even if you don't owe taxes - maybe they are right and maybe they are not correct - I don't know.

 

I am 99% certain (there are a couple of retired accountants on this thread with good solid ideas about Thai taxes- those are the only posters that should be listened to.) that the posters in this thread are well-meaning; but are not skilled enough with Thai taxes to render a reliable opinion. I have no idea why they don't consult a licensed Thai CPA who is bilingual... Again not expensive at all. If you are deep in the countryside find a good translator and then talk to a Thai CPA.

 

Note: I have friends who are not doctors who really and truly believe they know more than highly trained doctors with advanced degrees and modern science - so maybe I do understand hobbyists who think they know as much as or more than well-trained tax accountants and lawyers...

Edited by TravelerEastWest
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11 hours ago, jayboy said:

 

Did these foreigners share their financial details with you? Many foreigners have Thai investments and business interests.Of course they would file tax returns.

 

 

Exactly.

 

But normally foreigners with businesses here have their CPAs file for them.

 

The CPAs know the law well.

 

They file quickly and save the businessman time - which is money when you are working.

 

So I wonder why they are filing...?

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11 hours ago, Badrabbit said:

I was told by the Head man at my Tax office, "do you want to pay tax here" my answer "no as I pay tax in the UK" "you can pay tax here or your home country up to you"

Is he right or not?

I think he is correct.

 

If the Tax is paid in the UK at source, taxed  in the UK, I'm glad that is accepted as there is no route to claim the relief back in the UK if Thailand did fully tax you. I Think Thai RD  could still tax you on the difference, if the Thai Tax is higher.

 

It could be that someone has perhaps only say only a private pension paid to Thailand from the UK, and has applied for an NT tax code to not have it Taxed in the UK and then only pays the Thai Tax.

 

 

 

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4 hours ago, Mike Lister said:

Sorry, needs a comma after excluded, it's the fourth category and is anything excluded by virtue of a DTA. And then of course, anything remaining overseas that doesn't get transferred, is simply not considered. 

Just trying to catch up..

 

So if a Government Pension (UK), that is only taxed in the UK under an Article within the DTA, it should not be entered on a tax filing form. just don't list it anywhere. Is that the concensus ?

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13 hours ago, Badrabbit said:

I was told by the Head man at my Tax office, "do you want to pay tax here" my answer "no as I pay tax in the UK" "you can pay tax here or your home country up to you"

 

Updated response

Hope all the Tax Offices have that clear understanding!

 

If Thai RD  decided to tax it all , not just the excess over what had been deducted in the UK, for remitted  non-Government / Private Pensions taxed at source , and said get it back from the UK, there appears to be no path to do that...

https://www.gov.uk/government/publications/double-taxation-treaty-relief-form-dt-individual

"Part C.2: Work pensions and purchased annuities Enter details in Part C.2 if you receive a pension or purchased annuity from the UK. Most DT treaties provide for pensions and purchased annuities from the UK to be paid to a resident of the other country without UK tax taken off. The DT Digest gives information about whether relief from UK tax is available and if there are any special rules".taxdigest_thailandextract.jpg.af7ead2a984a1106589bd6e3beb8512b.jpg

It could be that someone has perhaps only say only a private pension paid to Thailand from the UK, and has applied for an NT tax code to not have it Taxed in the UK and then only pays the Thai Tax.

 

 

Edited by UKresonant
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2 hours ago, UKresonant said:

Just trying to catch up..

 

So if a Government Pension (UK), that is only taxed in the UK under an Article within the DTA, it should not be entered on a tax filing form. just don't list it anywhere. Is that the concensus ?

The reality is that there's nowhere to put it, on the current form but there may be on the new form.

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14 hours ago, TravelerEastWest said:

Exactly.

 

But normally foreigners with businesses here have their CPAs file for them.

 

The CPAs know the law well.

 

They file quickly and save the businessman time - which is money when you are working.

 

So I wonder why they are filing...?

People file taxes here because they interpret the rules to mean that they should file and the RD doesn't change this understanding when they do file, assessable income over 120k per year and Section 41.

 

"Under section 41 of the Revenue Code an individual Thai citizen or foreigner who lives in Thailand for one or more periods totaling at least 180 days in any tax (calendar) year is, for tax purposes, deemed a resident of Thailand and subject to tax on all assessable income derived from sources within the country, whether paid within or outside Thailand, on assessable income derived from foreign sources to the extent that it is brought into Thailand in a year in which income is received. A non-resident individual is subject to tax only on assessable income from Thai sources, regardless of payment location".

 

Many will be borderline cases as far as the tax calculation is concerned, I know I am and can make it go either way. A combination of income sources means I can vary my income, in some years, I pay a small amount of tax, because it's not worth the effort to explore evoking a DTA and I don't want the hassle. Neither do I, nor others that I know, not want to file and later be told that whilst regulations weren't being actively enforced at one time, later they were and they forgot to write and tell me! That sort of thing happens not infrequently here when dormant rules are recommissioned.

 

Your point about CPA's and qualified tax preparers is worth reinforcing, especially in a non-English native language speaking environment. BUT, for people with simple financial needs, such as retirees, those who have two or three simple income streams that are well understood, it is not unrealistic to think such people can do these things themselves. The PIT Code in Thailand is much more straight forward than its UK or US counterparts. For my part, I compile my own taxes in Thailand, the US and the UK every year. I've worked in Banking Finance and business for decades plus I worked for Deloitte in the City for four years, so tax is nothing new to me, I understand it and I'm not afraid of it, at my level of need. Others mileage will vary.

 

Thinking back to a business that I owned in the UK for 15 years, my accountant handled all the interfaces with HMRC. Not once in 15 years did HMRC audit me or challenge anything produced by my accountants (as far as I am aware). It's very likely to be similar here. If you have a Thai tax preparer with a decent reputation, you are unlikely to hear anything from the RD, year on year. But individuals are a different story, they are much easier targets to challenge and give the run around. I think it may be helpful in Thailand at some future time to have a track record of similar levels of income each year, all of which are recorded on tax returns.....but that's me.

 

I get that many foreigners want to avoid the entire tax business, it wasn't part of their original game plan so it shouldn't become so now. Some of them will be foreigners' who will try to escape tax in any country where they have assets but of course not everyone is like that. Many people who live in a foreign country, especially retirees, are keen to play by the rules, or at least be seen to be trying to do so. But it's laughable to think that just because the Code wording isn't iron clad in English language terms or that the form isn't up to date, means that they are excused duty. That's nothing more than confirmation bias rather than any objective assessment and it's not something I agree with.

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A friend contacted me as he knew I was worried about this Tax thing, he said.

"Don't worry it's not going to happen, they have discussed it and it's not going to happen, they know it will drive a large majority of ex-pat's away to other countries"

Hope its true.

Edited by Badrabbit
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17 hours ago, Mike Lister said:

People file taxes here because they interpret the rules to mean that they should file and the RD doesn't change this understanding when they do file, assessable income over 120k per year and Section 41.

 

"Under section 41 of the Revenue Code an individual Thai citizen or foreigner who lives in Thailand for one or more periods totaling at least 180 days in any tax (calendar) year is, for tax purposes, deemed a resident of Thailand and subject to tax on all assessable income derived from sources within the country, whether paid within or outside Thailand, on assessable income derived from foreign sources to the extent that it is brought into Thailand in a year in which income is received. A non-resident individual is subject to tax only on assessable income from Thai sources, regardless of payment location".

 

Many will be borderline cases as far as the tax calculation is concerned, I know I am and can make it go either way. A combination of income sources means I can vary my income, in some years, I pay a small amount of tax, because it's not worth the effort to explore evoking a DTA and I don't want the hassle. Neither do I, nor others that I know, not want to file and later be told that whilst regulations weren't being actively enforced at one time, later they were and they forgot to write and tell me! That sort of thing happens not infrequently here when dormant rules are recommissioned.

 

Your point about CPA's and qualified tax preparers is worth reinforcing, especially in a non-English native language speaking environment. BUT, for people with simple financial needs, such as retirees, those who have two or three simple income streams that are well understood, it is not unrealistic to think such people can do these things themselves. The PIT Code in Thailand is much more straight forward than its UK or US counterparts. For my part, I compile my own taxes in Thailand, the US and the UK every year. I've worked in Banking Finance and business for decades plus I worked for Deloitte in the City for four years, so tax is nothing new to me, I understand it and I'm not afraid of it, at my level of need. Others mileage will vary.

 

Thinking back to a business that I owned in the UK for 15 years, my accountant handled all the interfaces with HMRC. Not once in 15 years did HMRC audit me or challenge anything produced by my accountants (as far as I am aware). It's very likely to be similar here. If you have a Thai tax preparer with a decent reputation, you are unlikely to hear anything from the RD, year on year. But individuals are a different story, they are much easier targets to challenge and give the run around. I think it may be helpful in Thailand at some future time to have a track record of similar levels of income each year, all of which are recorded on tax returns.....but that's me.

 

I get that many foreigners want to avoid the entire tax business, it wasn't part of their original game plan so it shouldn't become so now. Some of them will be foreigners' who will try to escape tax in any country where they have assets but of course not everyone is like that. Many people who live in a foreign country, especially retirees, are keen to play by the rules, or at least be seen to be trying to do so. But it's laughable to think that just because the Code wording isn't iron clad in English language terms or that the form isn't up to date, means that they are excused duty. That's nothing more than confirmation bias rather than any objective assessment and it's not something I agree with.

Mike Lister,

 

You are a native speaker of English (I think) and you seem to have not understood my post.

 

My comment had nothing to do with tax rules. It was to why individuals would file themselves rather than having a Thai CPA file in Thai for them correctly, at a low cost, and quickly. Your post supports my thoughts that you need a high level of training and skill (both with languages and tax law) to advise on international tax matters.

 

As a side note working in banking and finance for many years does not in any way qualify anyone to prepare or advise on international tax returns especially when they are not a native (or near-native speaker) of the language. Working for Deloitte for years means you are probably very smart and hard-working but says nothing about your tax skills and you know this very well. If you have any doubt at all about this call a Deloitte tax partner and ask...

 

Now if you tell me that you were not a banking consultant or something like that for four years - but were a tax specialist and you have a recent education in taxation then all bets are off and I will ask you for advice on Thai tax matters. I believe that you are a nice person and want to help people but I think the possibility exists that you can cause more harm than good.

 

In America, we have lots of people who are convinced they know a lot about taxes to the point at times where they feel that Income taxes are not legal - and tax practitioners don't take them seriously. Sometimes they end up in jail...

 

I am not saying that you are that extreme - actually, you are quite reasonable and friendly.

 

PS If you don't see anywhere on a form a place to do something like rely on a DTA or exclude nontaxable money - this is something tax accountants are trained to do correctly in a way that won't trigger an audit. This is a very practical example of why not trained and educated (In taxation) individuals should not give tax advice.

 

 

 

 

Edited by TravelerEastWest
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