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

[redwood1]

3 hours ago, El Matador said:

I was very close to put 1 million bahts in a Thai Elite visa last year.

Glad I am avoiding the big tax headache. Still watching the mess from far away with easy tourist extensions in Philippines. Thailand is a good country to stay for less than 180 days at the moment ; much easier for visa and taxes if you just stay pure tourist. The rainy season is quite expensive now. 

Their timing was perfect : they annunced that tax change just after selling Thai Elite visas like hot cakes before doubling or tripling the price.

 

Probably there won't be any crystal clear answer before at least 2025. So this thread will live for a long time with partial answers.

 

The timing on raising the price on the Elite visa was 1,000% no accident....They knew of the tax announcement well ahead of time...The timing was just too perfect....

 

The Elite visa lost money almost every year since its creation.....It had done well for the last few years then this tax insanity came along....I bet they have sold very very few this year..

[TroubleandGrumpy]

3 hours ago, gamb00ler said:

Every Expat that falls into the "trap" you describe is solely responsible for their predicament.  Competent help is available for reasonable remuneration.  Ask the professional to explain every step.  Pay for such help once, then learn from the professional's filing and file on your own if needed.

 

I'm trapped for life now having chosen to live and work in USA and defer taxation through pre-tax retirement accounts.  I have to file every year despite having no taxable income..... Thanks, but don't worry.... I'm fine!

I am so glad to hear you are fine - but I was referring to the expectation that the TRD will expect your tax return every year going forward.

 

[Mike Lister]

1 hour ago, Mike Lister said:

For the sake of an easy to understand example: What about the extreme case of a UK  person who earns GBP 12,749 Pounds in the UK, all of which is not taxable in the UK but they file a UK self assessment regardless. When those funds are remitted to TH, the remitters TEDA are limited to THB 60k Personal Care Allowance plus the 150k zero rated band, which (at 45) totals THB 210k or 4.6K Pounds. That means 12,749 - 4,666 Pounds are liable to Thai tax, THB 363,700, 150k @ 5% and 213,700 @ 10% . Agreed also?

Nobody challenged it, come on guys, it's a test.

[JimGant]

5 hours ago, TroubleandGrumpy said:

If anyone think that the TRD requires, demands and enforces that all single Thailand tax residents who earn 60K Baht per year (or more), complete and lodge a tax return, then IMO they are very much mistaken.

 

This is starting to get tiresome. We KNOW they have such a requirement on the books -- but, NO, they don't enforce it -- because it's a stupid requirement, to enforce a requirement that generates no taxes or penalty income, if assessable income doesn't result in taxable income (i.e. assessable income that exceeds allowances, deductions, and the 150k freebie). And, it would be even harder for RD to think an expat is holding out on filing, because an expat has a DTA to negate any income as assessable, unlike a Thai citizen.

 

For my two-cents, I'd just put an asterisk on this paragraph saying, "Until further guidance, if any, from RD -- consensus and common sense suggest not filing a Thai tax return, unless your spreadsheet figures show you have taxable income."

[Mike Lister]

12 minutes ago, JimGant said:

 

This is starting to get tiresome. We KNOW they have such a requirement on the books -- but, NO, they don't enforce it -- because it's a stupid requirement, to enforce a requirement that generates no taxes or penalty income, if assessable income doesn't result in taxable income (i.e. assessable income that exceeds allowances, deductions, and the 150k freebie). And, it would be even harder for RD to think an expat is holding out on filing, because an expat has a DTA to negate any income as assessable, unlike a Thai citizen.

 

For my two-cents, I'd just put an asterisk on this paragraph saying, "Until further guidance, if any, from RD -- consensus and common sense suggest not filing a Thai tax return, unless your spreadsheet figures show you have taxable income."

Perhaps, just curious to understand how you know they don't enforce it?

[JimGant]

25 minutes ago, Mike Lister said:

Nobody challenged it, come on guys, it's a test.

Looks good to me. Is there a trick there we're supposed to see...?

[JimGant]

17 minutes ago, Mike Lister said:

Perhaps, just curious to understand how you know they don't enforce it?

Because it's unenforceable, or at least too ludicrous to enforce. Only if a too large a bank account suggests a tax return should have been filed -- might you get a knock on the door. That's why the expat needs to keep good accounts. How the fat cat rice farmer wiggles out of this -- I don't know. But I certainly can guess...

 

Why are you so insistent that we should file, even with no taxable income?

 

Oh, enforce how? There's no fine or penalty for failing to file, if no taxes owed. What are they going to do? (rhetorical question)

Edited April 11 by JimGant

[Mike Lister]

6 minutes ago, JimGant said:

Because it's unenforceable, or at least too ludicrous to enforce. Only if a too large a bank account suggests a tax return should have been filed -- might you get a knock on the door. That's why the expat needs to keep good accounts. How the fat cat rice farmer wiggles out of this -- I don't know. But I certainly can guess...

 

Why are you so insistent that we should file, even with no taxable income?

Re. the first part:

 

A more probable model is that it's not enforced for those who filed in the previous year but didn't owe tax but might be so for those that did....you filed and paid tax last year, why didn't you file this year...kinda thing.

 

Re. the second part:

 

I'm trying to interpret the rules the same as many others are here, no more no less. The evidence thus far is the PWC quote you provided which suggests people should file, because that's what the rules state. Am I insistent about people filing? I couldn't give a toss what others do but I do care that they understand what the rules are so they can make informed decisions based on the law, rather than on your guidance that they shouldn't file because the law is silly and not enforceable.

 

[Mike Lister]

24 minutes ago, JimGant said:

Looks good to me. Is there a trick there we're supposed to see...?

Well, I was kinda hoping somebody might have said, subject to exemption rules of the DTA, eg, government pensions or whatever else is treaty exempt. 

[JimGant]

14 minutes ago, Mike Lister said:

Well, I was kinda hoping somebody might have said, subject to exemption rules of the DTA, eg, government pensions or whatever else is treaty exempt. 

I assumed it was a State pension.

[Mike Lister]

Just now, JimGant said:

I assumed it was a State pension.

Just like you assumed the Revenue don't follow up and make people file?

 

🙂

[JimGant]

17 minutes ago, Mike Lister said:

but I do care that they understand what the rules are so they can make informed decisions based on the law, rather than on your guidance that they shouldn't file because the law is silly and not enforceable.

 

Informed decisions "based on the law," rather than common sense -- and a clear understanding that they're not subject to penalty? Ludicrous, from another angle.

[Mike Lister]

1 minute ago, JimGant said:

Informed decisions "based on the law," rather than common sense -- and a clear understanding that they're not subject to penalty? Ludicrous, from another angle.

If this were Kansas or anywhere else back home, I would agree. 

[UKresonant]

1 hour ago, Mike Lister said:

For the sake of an easy to understand example: What about the extreme case of a UK  person who earns GBP 12,749 Pounds in the UK, all of which is not taxable in the UK but they file a UK self assessment regardless. When those funds are remitted to TH, the remitters TEDA are limited to THB 60k Personal Care Allowance plus the 150k zero rated band, which (at 45) totals THB 210k or 4.6K Pounds. That means 12,749 - 4,666 Pounds are liable to Thai tax, THB 363,700, 150k @ 5% and 213,700 @ 10% . Agreed also?

 

Yes that is about it

UK Personal allowance is £12570 (still frozen at that  for a few years) and I could make it more extreme by for example adding Individual savings account dividends of say £1430 per annum, on which there is no tax. 

So perhaps comparing £14000 which is not Taxed in the UK,  against the under 65 allowance of as you say THB 201K £4600.  So £9400 potentially exposed to Thai Tax where it is tax free in the UK ( unless Thai RD expand on the vague statements on If Taxed in home country and if there is a DTA, don't worry 😊)

 

So say £24000 remitted to Thailand (and to simplify that was all income)

£10000 attracting tax at 20% in the UK (So in Theory there would be a £2000 credit relief).

 

In Thailand £24000 gross

£4600 not Taxed

150k @ 5% £3333  ~ £166 tax (th)

200k @ 10% £4444 ~ £444 tax (th)

250k @ 15% £5556   ~£833 tax (th)

250k@ 20% £5556   ~ £1111 tax (th)

 25% tax on £500      ~ £ 125 tax (th)

 

So about £2680 Thai tax bill in theory you could maybe obtain £2000 credit relief for or against tax paid in UK, but how complex or simple will that be at that level if you had to employ someone, pay for it getting stamped or such like that offset would erode rapidly, not to mention time taken.

 

So at the moment, under 65, I could only safely remit £4600 + £1600 taxed only in UK pension £6200 per annum simply?

 

So compared with the 'remit in the following year' now defunct totally simple situation, the simple solution is for me now £6200 per annum! (definitely no tax due)

To which I could add Pre-2024 savings (not easy to prove in a cash sense).

Savings and earnings whilst not Thai tax resident.

 

This is all from the perspective of always being UK Tax resident whilst overnight also having potential to have Thai Tax Residency over 179 days.

 

(There is the 50% expense thing of pension up to 100k THB potentially)

 

Some said their tax office said can be taxed in UK or Taxed in Thailand, along with the DTA don't worry etc but what will happen in practice Q1 2025.

 

For full timers Thai Tax is definitely cheaper than UK tax once your at the scale of remitting more than THB 2,100,000 😐 ,  income

 

 

 

 

 

 

[4myr]

Today I visited my local tax office in Prachuap Khiri Khan. Here a short summary of things that might interest you as well.

 

On tax credit documents:

1) they prefer the foreign sourced documents with stated paid taxes to be translated to Thai. Does not need to be a certified translator. Can also be machine translated. As long as the translation makes sense.

 

2) I showed them an Annual Salary Statement from NL with stated paid payroll tax, and a Final Tax Assessment report from the RD in NL. Both documents they accept and the tax credits mentioned can be deducted from the Thai tax amount.

 

3) However a tax credit cannot be used over multiple tax years. Suppose your payroll tax credit in 2023 is 500K baht. And in 2024 you transfered 1M baht. As a single you need to pay 83K baht tax wrt the 1M remittance. By using the tax credit of 500K you don't need to pay tax. However, the remainder tax credit amount of 500K - 83K = 417K cannot be used in future tax years.

 

In years of not being tax resident:

1) In the tax year that a person is not tax resident, you can transfer as much money as you can. You will not pay taxes. This is in accordance with https://www.rd.go.th/english/6045.html.  “A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.”

 

2) the Prachuap tax officer and her colleague next to her, gave the wrong interpretation of Question 9 from the Governments Q&A . According to the tax officer, she will only look if in the year that you remit the money, you are tax resident. If yes, then you need to pay taxes. Contrary to Q&A #9:

 

https://www.expattaxthailand.com/thailand-revenue-department-foreign-sourced-income/

Question 9: If a person lived and worked or conducts business in a foreign country for a long time but later returned and brought to Thailand his accumulated incomes earned overseas, will such a person have to pay taxes on these earnings?

Answer: No taxes need to be paid. This is because the said accumulated earnings came from assessable income that occurred in the tax year in which the person stayed in Thailand for less than 180 days.

 

Fortunately we have the Q&A in Thai https://www.expattaxthailand.com/wp-content/uploads/2024/03/Thailand-Revenue-Department-QA-Revenue-Deaprtment-Order-DI-No.161-2023-15-Seotember-2023.pdf to convince that she is wrong.

 

An example of how a tax officer can ignore exceptions in a DTA from Thai tax rules:

I showed her Art 14.1 of the NL-Thai Double Tax Agreement: 

https://wetten-overheid-nl.translate.goog/BWBV0003872/1976-06-09?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=nl&_x_tr_pto=wapp

" Article 14. Capital Gains.
1. Gains from the alienation of immovable property, as defined in Article 6, paragraph 2, may be taxed in the State in which such property is situated."

 

I told her - I will sell my house in NL in 2025 with profit. And I will transfer principal + profit in 2026. In 2025 and 2026 I will be tax resident. Do I need to pay taxes in Thailand in 2026. She said YES. 

[sherwood]

Tell em nothing and deny everything.

Seems to work for Thai's.

[Mike Lister]

Frightening, this is going vary massively between offices.

Edited April 11 by Mike Lister

[JohnnyBD]

8 minutes ago, 4myr said:

In years of not being tax resident:

1) In the tax year that a person is not tax resident, you can transfer as much money as you can. You will not pay taxes. This is in accordance with https://www.rd.go.th/english/6045.html.  “A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.”

Sounds good to me. I hope all tax officers see it the same way.

My question is, how would the Thai RD even know how much you remit to Thailand if you are not a tax resident that year and you DO NOT file a tax return?

[4myr]

2 minutes ago, JohnnyBD said:

Sounds good to me. I hope all tax officers see it the same way.

My question is, how would the Thai RD even know how much you remit to Thailand if you are not a tax resident that year and you DO NOT file a tax return?

Thai banks need to report to the RD. Even money exchange brokers will report your passport id and the cash money you changed. Money transfered by the SWIFT network will convey the sender being you and your foreign bank. However suppose you transfer thru Wise, the transfer is domestic. But I'd bet Wise need to report to Kasikorn Bank for the omnibus account they're using. And that KBank reports these to the Revenue Dept.

[Mike Lister]

5 minutes ago, 4myr said:

Thai banks need to report to the RD. Even money exchange brokers will report your passport id and the cash money you changed. Money transfered by the SWIFT network will convey the sender being you and your foreign bank. However suppose you transfer thru Wise, the transfer is domestic. But I'd bet Wise need to report to Kasikorn Bank for the omnibus account they're using. And that KBank reports these to the Revenue Dept.

I don't disagree that the things you mention are possible and even probable but are you stating assumption or things you were told by the Revenue?

Edited April 11 by Mike Lister

[JohnnyBD]

5 minutes ago, 4myr said:

Thai banks need to report to the RD. Even money exchange brokers will report your passport id and the cash money you changed. Money transfered by the SWIFT network will convey the sender being you and your foreign bank. However suppose you transfer thru Wise, the transfer is domestic. But I'd bet Wise need to report to Kasikorn Bank for the omnibus account they're using. And that KBank reports these to the Revenue Dept.

Ok... So, even if the Thai RD knows how much I remitted to Thailand by way of swift transfers (when not a tax resident), what will they do? Will they check with Immigration to verify that I was not a tax resident? What about the millions of other tourists that remit money into Thailand, will they check with Immigration on them too?

Edited April 11 by JohnnyBD
added

[4myr]

1 minute ago, JohnnyBD said:

Ok... So, even if the Thai RD knows how much I remitted to Thailand by way of swift transfers (when not a tax resident), what will they do? Will they check with Immigration verify that I was not a tax resident?

You have to proof to RD that you were not tax resident in that year, to avoid not paying taxes. And my local tax officer said that sofar your passport would suffices. As we know with the automatic lanes at airports, this is not the case. So be prepared to collect items e.g. tickets, boarding passes and 90-day reports.

[JohnnyBD]

1 minute ago, 4myr said:

You have to proof to RD that you were not tax resident in that year, to avoid not paying taxes. And my local tax officer said that sofar your passport would suffices. As we know with the automatic lanes at airports, this is not the case. So be prepared to collect items e.g. tickets, boarding passes and 90-day reports.

So, you're saying the millions of tourist who remit monies to Thailand will have to prove to RD that they were not a tax resident? I don't think so. Where are you getting this from?

[Mike Lister]

7 minutes ago, Mike Lister said:

I don't disagree that the things you mention are possible and even probable but are you stating assumption or things you were told by the Revenue?

Bump, ..... answer please 

[JohnnyBD]

2 minutes ago, Mike Lister said:

10 minutes ago, Mike Lister said:

I don't disagree that the things you mention are possible and even probable but are you stating assumption or things you were told by the Revenue?

Bump, ..... answer please 

So, he is saying the millions of tourists who remit monies to Thailand will have to go to RD and prove that they were not a tax resident? Where is he getting this from?

[Mike Lister]

1 minute ago, JohnnyBD said:

So, he is saying the millions of tourists who remit monies to Thailand will have to go to RD and prove that they were not a tax resident? Where is he getting this from?

I was hoping he would tell us. If he doesn't I will regard it as opinion and ignore it.

[4myr]

7 minutes ago, Mike Lister said:

I don't disagree that the things you mention are possible and even probable but are you stating assumption or things you were told by the Revenue?

In my original write up were told by RD tax officer.

 

The stuff wrt what banks need to reports is my experience in banking IT projects in NL, that Thailand started CRS reporting in 2023 and from this interview with a Thai tax lawyer 

 

[Yumthai]

2 minutes ago, JohnnyBD said:

So, he is saying the millions of tourists who remit monies to Thailand will have to go to RD and prove that they were not a tax resident? Where is he getting this from?

Anyone who is not tax resident in Thailand has nothing to prove to RD as his foreign-sourced remittances are tax-free and do not have to be declared.

[Mike Lister]

Just now, 4myr said:

In my original write up were told by RD tax officer.

 

The stuff wrt what banks need to reports is my experience in banking IT projects in NL, that Thailand started CRS reporting in 2023 and from this interview with a Thai tax lawyer 

 

Ok, got it, thanks for your opinion.

[JohnnyBD]

1 minute ago, Yumthai said:

Anyone who is not tax resident in Thailand has nothing to prove to RD as his foreign-sourced remittances are tax-free and do not have to be declared.

I agree with you whole-heartedly...