Thai government to tax all income from abroad for tax residents starting 2024

[Dogmatix]

3 hours ago, Mike Lister said:

Please bear in mind that not all readers of this thread have the same academic stamina and qualifications that you do and the average members ability to understand the Revenue Code or a DTA is not what yours might be. My biggest criticism of the thread previously is that the conversations were too complex and hi brow for many to understand, which is why a more simpler dialogue became so popular. Expat blogs and any other reasonable form of narrative that puts things simply and provides anecdotal evidence, is usefully deployed here for many, this is not a court of law or a debate in the Supreme Court!

 

I also think we can get a good indication from looking at what other countries Revenue departments do, if we want to understand how the TRD might behave in the future. Looking at gold standards or best practise or even most common practise, in the absence of first hand confirmation of local practise, is extremely helpful.

 

I think members should be allowed to choose their own level of discourse without requiring them to dumb down discussions to only address the lowest common denominator. If that is the case, it is hardly likely that any gold nuggets of information will ever be found in any of the threads.  As for whether RD policy makers look at gold standards from other jurisdictions as best practice they should emulate, we can only speculate on that.  Probably some do and others never even look at what happens outside the four walls of their own room. 

[Mike Lister]

1 minute ago, Dogmatix said:

 

I think members should be allowed to choose their own level of discourse without requiring them to dumb down discussions to only address the lowest common denominator. If that is the case, it is hardly likely that any gold nuggets of information will ever be found in any of the threads.  As for whether RD policy makers look at gold standards from other jurisdictions as best practice they should emulate, we can only speculate on that.  Probably some do and others never even look at what happens outside the four walls of their own room. 

You said lowest common denominator, I said average members ability! My recommendation is that the discourse stop taking place over the heads of most posters, if it is to be useful to most.

[Mike Lister]

My compromise amendment to that para:

 

OVERVIEW OF THE TAX LAW

 

3)   Thai tax laws require Foreigners who reside in Thailand for one or more periods with at least 180 days in one tax calendar year and who receive income from inside or outside Thailand via:

 

a) Income from employment (wages, salaries, remuneration, etc.) assessable under Section 40 of the Revenue Code;

b) Income from business operations is assessable under Section 40.

c) Passive or property income (interest, dividends, rental income, goodwill, etc.) based on Article 41 paragraph 2 of the Revenue Code.

 

Everyone happy now?

Edited April 7 by Mike Lister

[topt]

3 minutes ago, Mike Lister said:

My compromise amendment to that para:

 

OVERVIEW OF THE TAX LAW

 

3)   Thai tax laws require Foreigners who reside in Thailand for one or more periods with at least 180 days in one tax calendar year and who receive income from inside or outside Thailand via:

 

a) Income from employment (wages, salaries, remuneration, etc.) assessable under Section 40 of the Revenue Code;

b) Income from business operations is assessable under Section 40.

c) Passive or property income (interest, dividends, rental income, goodwill, etc.) based on Article 41 paragraph 2 of the Revenue Code.

 

Everyone happy now?

Do you want to specifically include the word "pension" in c somewhere to ensure those of all abilities understand that income includes pensions?

[Mike Lister]

2 minutes ago, topt said:

Do you want to specifically include the word "pension" in c somewhere to ensure those of all abilities understand that income includes pensions?

We certainly can do that:

 

OVERVIEW OF THE TAX LAW

 

3)   Thai tax laws require Foreigners who reside in Thailand for one or more periods with at least 180 days in one tax calendar year and who receive income from inside or outside Thailand via:

 

a) Income from employment (wages, salaries, remuneration, etc.) assessable under Section 40 of the Revenue Code;

b) Income from business operations is assessable under Section 40.

c) Passive or property income (interest, dividends, rental income, goodwill, pension etc.) based on Article 41 paragraph 2 of the Revenue Code.

 

to assess their income for Thai tax and file a tax return, providing the assessable income threshold has been exceeded.

[TroubleandGrumpy]

On 4/4/2024 at 8:04 PM, ukrules said:

I watched that, was a complete waste of time.

One of the morons in the audience thought he could transfer in as much money as he wanted until he had stayed for 180 days in a given year and taxation only kicked in after he crossed the 180 day threshold and only for money received after the 180 days. What a genius 🙄

Anyway due to personal circumstances over the next couple of years I've decided that I will almost certainly move to Cambodia for just under 6 months of each year as I want to avoid becoming tax resident in Cambodia as well. They have a 182 day rule down there.
I'll then take a short holiday somewhere else for a couple of weeks to top up the number of days so I remain non resident anywhere, perhaps Malaysia or Vietnam or maybe I'll even head back over to Europe for a couple of weeks.

I do plan to remit a large sum of money during this period and I absolutely must be able to prove without any doubt for 10 years to come that I was non resident when it is 'earned' and remitted or I will get hit with a massive tax bill of millions of Baht so this is well worth it I think.

I think I'll pop down to Phnom Penh for a week later this month and rent an apartment or house with the intention of keeping it for about 2 years.

Thanks for saving me the time.  What you have said is what a lot of Expats are thinking of doing (Cambodia, Vietnam and Philippines seem the most popular options) - and it is clear that many will pull the pin on Thailand too if they start nailing Expats. Surely the Thai Govt will realise that Malaysia and Philippines (maybe others too) have stated that they do not want to tax the Pensions of retired Expats brought into their country - they have been specifically exempted. Is your foreign-sourced income exempted from tax? (pwc.com)

 

There are (I am told) almost 500K of Expats in Thailand - working and retired and married. I dont know how many working versus married/retired, but even if only half (250K) were retired/married, that is worth a lot of money every year to Thailand.  How much Baht does the average Expat bring into the country? 500K? 1Million?  Someone on the Australian Pension alone (no other savings) brings in about $26KAUD (630K Baht) and at that rate the total money brought into Thailand would be over 150Billion Baht. Why put that at risk by trying to tax it?? Surely they will soon make it clear, one way or the other, if they will tax Expats bringing in their Govt Pensions and other money/savings all ready taxed in their home country. Hopefully, they will also not force them to prove it has been taxed, by excessive and unachievable documentation demands that will make complying with all the Immigration documentation requirements look easy.

[El Matador]

23 hours ago, Mike Lister said:

The numbering in the Overview is wonky but the content remains valid, it should read as follows:

 

OVERVIEW OF THE TAX LAW

 

1) Thai tax laws require a person to pay income tax to the Thai Revenue Department under the following conditions:

 

Individuals, who are categorized as:

a) Thai citizens;

b) A Thai resident who filed taxes in the previous tax year;

c) Foreigners who reside in Thailand for one or more periods with at least 180 days in one tax calendar year.

 

And who receive income inside or outside Thailand via:

 

a) Income from employment (wages, salaries, remuneration, etc.) assessable under Section 40 of the Revenue Code;

b) Income from business operations is assessable under Section 40.

c) Passive or property income (interest, dividends, rental income, goodwill, etc.) based on Article 41 paragraph 2 of the Revenue Code.

 

I have updated the master copy and will update the forum version before long.

 

I haven't checked that subject in a while.

 

So the new tax system is not based on remittance anymore but a classic worldwide tax system where you have pay taxes wherever you receive your income if you are Thailand tax resident ? Am I correct ?

Edited April 7 by El Matador

[Mike Lister]

3 minutes ago, El Matador said:

 

I haven't checked that subject in a while.

 

So the new tax system is not based on remittance anymore but a classic worldwide tax system where you have pay taxes wherever you receive your income if you are Thailand tax resident ? Am I correct ?

No!

 

The word "from" is missing in that statement, as identified shortly after the document was posted and as discussed on the preceding page. Tax is still based on remittance, nothing has changed. That sentence should read, "And who receive income from inside or outside Thailand 

Edited April 7 by Mike Lister

[El Matador]

20 minutes ago, Mike Lister said:

No!

 

The word "from" is missing in that statement, as identified shortly after the document was posted and as discussed on the preceding page. Tax is still based on remittance, nothing has changed. That sentence should read, "And who receive income from inside or outside Thailand 

Thanks for the clarification. The sentence was very confusing.

 

Well I did a bit of simulation.

(Without taking into account double tax treaties) Transfering 1 million bahts every year would cost 8,3% in Thai taxes. I think it is the most simple strategy to minimize taxes (before going into he 25+ % tax income bracket) without going into difficult accounting.

That being said transfering a big amount of money into Thailand before becoming tax resident is probably the best strategy for those who plan to leave long term in Thailand, especially if you wanna buy a condo. Buying a condo when you are tax resident really sucks now.

[Mike Lister]

1 minute ago, El Matador said:

Thanks for the clarification. The sentence was very confusing.

 

Well I did a bit of simulation.

(Without taking into account double tax treaties) Transfering 1 million bahts every year would cost 8,3% in Thai taxes. I think it is the most simple strategy to minimize taxes (before going into he 25+ % tax income bracket) without going into difficult accounting.

That being said transfering a big amount of money into Thailand before becoming tax resident is probably the best strategy for those who plan to leave long term in Thailand, especially if you wanna buy a condo. Buying a condo when you are tax resident really sucks now.

Just checking that you understand the tax tax tables are stepped, only the mount of income that falls within that step is taxed at that level of the step.

 

There is an open issue about the tax on funds remitted when not tax resident and whether they could be taxed later, despite not being tax resident at the time of remittance. That issue is logged at the end of the Simple Tax Guide and is awaiting clarification.

 

My personal opinion is that the government will not want to allow this tax rule change to impact the Thai property market, hence the idea that imported funds used to buy real estate here, will be taxed, seems improbable. How this will be operationalised or what measures put in place to prevent a negative impact on the property market, is very unclear.

[UKresonant]

2 hours ago, Dogmatix said:

get.  That means there is no statutory low, ministerial regulations or Revenue Department regulations on how DTAs should be applied. That leaves room for a great deal of inconsistent discretion by individual RD officers and the possibility that many applications for tax credits will be rejected due to lack of acceptable documentation or due to out of synch tax years, leaving tax payers to pay the total Thai tax due and try to get a refund of the total tax paid overseas on foreign source income.

The out of sync tax year is potentially a problem for UK Tax docs.

 

Knowing what documents will be asked for consistantly would be more than useful. Don't want the 'need stamped by your Embassy'  when that is just not a possibility, as that service is not offered and such like.

 

Perhaps the only segment of income, that may not be an issue is the 'taxed only in UK' .Gov pension. I'm thinking the net value could be remitted as soon as the P60 end of year Tax Cert is issued (April/May) Only legitimate source, (and tax paid maybe) needs demonstrated hopefully. May have to be declared somehow, but not as part of the tax calculation. Therefore only declared as explanation, and does not logically need to align to Thai tax year. Pretty small component of my income though.

 

 

 

 

 

 

Edited April 7 by UKresonant

[Dogmatix]

10 minutes ago, Mike Lister said:

Just checking that you understand the tax tax tables are stepped, only the mount of income that falls within that step is taxed at that level of the step.

 

There is an open issue about the tax on funds remitted when not tax resident and whether they could be taxed later, despite not being tax resident at the time of remittance. That issue is logged at the end of the Simple Tax Guide and is awaiting clarification.

 

My personal opinion is that the government will not want to allow this tax rule change to impact the Thai property market, hence the idea that imported funds used to buy real estate here, will be taxed, seems improbable. How this will be operationalised or what measures put in place to prevent a negative impact on the property market, is very unclear.

 

It is very clear from the RD's Q&A (Q9 attached) that income remitted while not yet tax resident doesn't retroactively become taxable when the remitter becomes tax resident. They give an example of a Thai person living in Taiwan and planning to remit money saved in China and return home. They say clearly that they remit the money before coming tax resident again, it is not taxable and they don't say that it becomes taxable retroactively after the person moves back. It would be rather impracticable to try to tax it retroactively anyway without any regulations to specify how far back they could go. If you remitted money to Thailand 20 years ago and then became tax resident, would that be taxable? Obviously not.  So why would it taxable, if remitted the year before you become tax resident?

 

I was expecting an outcry from resort condo developers and some sort of exemptions to be made for purchase of property but we are now well into the tax year and there has been no outcry from developers and nothing has happened.  It would make sense to give an exemption on income remitted to buy a condo, as long as it was owned for about 5 years, but it doesn't look like this is going to happen.  Apart from the fact no one has publicly asked for this, I would see some difficulties from the RD's perspective.  Tax in Thailand is nationality neutral.  I can think of no part of the Revenue Code that taxes Thais and foreigners differently and promotion of tourism is not the RD's job.  Any exemption would have to be applied equally to Thais and foreigners and and the RD would view allowing people exemption on income remitted to buy land and other property as an undesirable loophole.  Many Thais would rather buy a piece of land with their investment profits and hold it for 5 years than pay 35% tax on it. They will most likely get another round of profit from the land. Another issue is that an exemption would require an amendment to the Revenue Code. The government would probably just say they have already amended the Revenue Code with the Royal Decree to give complete exemption on remittances to LTR visa holders and these are the only foreigners they want to attract to stay long term.  If the others don't buy condos or leave, they don't care because they believe there are plenty more rich foreigners queuing for LTRs and this will be consistent with their long term stay policy of rich guys in, poor guys out. 

RD Order 161 2566 Q&A TH.pdf

[Dogmatix]

8 minutes ago, UKresonant said:

The out of sync tax year is potentially a problem for UK Tax docs.

 

Knowing what documents will be asked for consistantly would be more than useful. Don't want the 'need stamped by your Embassy'  when that is just not a possibility, as that service is not offered and such like.

 

Perhaps the only segment of income, that may not be an issue is the 'taxed only in UK' .Gov pension. I'm thinking the net value could be remitted as soon as the P60 end of year Tax Cert is issued (April/May) Only legitimate source, (and tax paid maybe) needs demonstrated hopefully. May have to be declared somehow, but not as part of the tax calculation. Therefore only declared as explanation, and does not logically need to align to Thai tax year. Pretty small component of my income though.

 

I think it will be a problem for guys who get their state pensions remitted direct to Thailand monthly or quarterly. If you get it paid to a UK bank account and remit once a year or so, you can argue it was the pension amount reflected in your P60 for the previous tax year.  That is assuming they accept an uncertified P60 of course.  I think that having private pensions remitted direct to Thailand will also be problematic.  It would be better not to have any regular income remitted direct but I know that some people have had their UK bank accounts closed down, eg Barclays, which leaves them little flexibility to time remittances.

 

Pensions from UK government jobs are of course exempt from Thai tax under the DTA.  The British government didn't bother to make state pensions exempt like the US did.  The exemption was probably to be had for the asking at the time but no one asked.  

[Mike Lister]

19 minutes ago, Dogmatix said:

 

It is very clear from the RD's Q&A (Q9 attached) that income remitted while not yet tax resident doesn't retroactively become taxable when the remitter becomes tax resident. They give an example of a Thai person living in Taiwan and planning to remit money saved in China and return home. They say clearly that they remit the money before coming tax resident again, it is not taxable and they don't say that it becomes taxable retroactively after the person moves back. It would be rather impracticable to try to tax it retroactively anyway without any regulations to specify how far back they could go. If you remitted money to Thailand 20 years ago and then became tax resident, would that be taxable? Obviously not.  So why would it taxable, if remitted the year before you become tax resident?

 

I was expecting an outcry from resort condo developers and some sort of exemptions to be made for purchase of property but we are now well into the tax year and there has been no outcry from developers and nothing has happened.  It would make sense to give an exemption on income remitted to buy a condo, as long as it was owned for about 5 years, but it doesn't look like this is going to happen.  Apart from the fact no one has publicly asked for this, I would see some difficulties from the RD's perspective.  Tax in Thailand is nationality neutral.  I can think of no part of the Revenue Code that taxes Thais and foreigners differently and promotion of tourism is not the RD's job.  Any exemption would have to be applied equally to Thais and foreigners and and the RD would view allowing people exemption on income remitted to buy land and other property as an undesirable loophole.  Many Thais would rather buy a piece of land with their investment profits and hold it for 5 years than pay 35% tax on it. They will most likely get another round of profit from the land. Another issue is that an exemption would require an amendment to the Revenue Code. The government would probably just say they have already amended the Revenue Code with the Royal Decree to give complete exemption on remittances to LTR visa holders and these are the only foreigners they want to attract to stay long term.  If the others don't buy condos or leave, they don't care because they believe there are plenty more rich foreigners queuing for LTRs and this will be consistent with their long term stay policy of rich guys in, poor guys out. 

RD Order 161 2566 Q&A TH.pdf 418.36 kB · 0 downloads

There has been much discussion over several months about remittance and residency but some aspects have yet to conclude satisfactorily. The open item at the end of the Simple Guide has existed for three months and is this:

 

L) - income that is earned in a year when the taxpayer is tax resident but not remitted until a year when they are not tax resident, is it later tax assessable in Thailand?

 

Assuming the taxpayer in question is a foreigner: one field of thought is that the person could be Thai Tax Resident in Year 1 and store earned untaxed income overseas. In Year 2 they  become not tax resident in Thailand and remit those funds to Thailand in the same year. In Year 3 they return to take up Thai residency again and are taxed on Year 1 earnings/Year 2 remittances. 

 

Maybe that's possible but it doesn't pass the sniff test at first glance. If it is possible, it means that all anyone has to do is to take a 186 days holiday outside Thailand and remit their income whilst away to escape all Thai tax!

 

 

Edited April 7 by Mike Lister

[Mike Lister]

10 minutes ago, Dogmatix said:

 

I think it will be a problem for guys who get their state pensions remitted direct to Thailand monthly or quarterly. If you get it paid to a UK bank account and remit once a year or so, you can argue it was the pension amount reflected in your P60 for the previous tax year.  That is assuming they accept an uncertified P60 of course.  I think that having private pensions remitted direct to Thailand will also be problematic.  It would be better not to have any regular income remitted direct but I know that some people have had their UK bank accounts closed down, eg Barclays, which leaves them little flexibility to time remittances.

 

Pensions from UK government jobs are of course exempt from Thai tax under the DTA.  The British government didn't bother to make state pensions exempt like the US did.  The exemption was probably to be had for the asking at the time but no one asked.  

If the UK State pension is remitted to Thailand monthly or quarterly, it is frozen at the same rate, every month for every year, the P60 will be largely irrelevant as the amount swill always be the same, as will the unmatched tax years. The only variable in there is the exchange rate.

[ukrules]

7 minutes ago, Mike Lister said:

If it is possible, it means that all anyone has to do is to take a 186 days holiday outside Thailand and remit their income whilst away to escape all Thai tax!

 

Yes, the constant emphasis on 180 days to be liable for PIT by the RD themselves seems to indicate that no tax will be due on remittances but in my opinion and based on the few online seminars I've watched with either tax professionals or RD accountants / representatives you also need to be non resident in the year the profit was realised.

 

So if you sell your some or all of your foreign untaxed assets in 2024 and remit them in 2025 then you probably better be non resident in both 2024 and 2025 just in case, or do it all inside a single year whilst non resident.

But I may be wrong on that and you might only need to be non resident in the year the profit is realised - for example - sell 2 million dollars of shares in 2024 whilst being non resident, then dump all that in a new bank account showing no movement and it can be remitted in any subsequent year even if resident (over 180 days) without being taxed as it's savings from a year when you were not resident.

Some solid clarification on this is required, until that comes I'm out of her for 6 months a year until I've moved all the untaxed funds I need for the next X years.

 

An example was given in one of the videos where someone might sell a house and not pay any tax on it as it's your primary residence, the country was Canada but many other countries also tax at zero percent the sale of a primary residence. If you sold the property in January 2024, paid zero tax of course as that's completely normal, moved to Thailand in March 2024, sent eh money in April 2024 and remained in Thailand for more than 180 days - then you will be taxed on the difference between 0% and the Thai tax rate, being a house or apartment from a country where these things routinely cost $500k and up will result in a very significant tax bill, if you don't declare it then they may come looking at any point in the future - and that's the problem - people will get caught up in this in the future, perhaps 5 years down the road when they've spent most of it - and the interest and penalties will be massive.

 

[Mike Lister]

6 minutes ago, ukrules said:

 

Yes, the constant emphasis on 180 days to be liable for PIT by the RD themselves seems to indicate that no tax will be due on remittances but in my opinion and based on the few online seminars I've watched with either tax professionals or RD accountants / representatives you also need to be non resident in the year the profit was realised.

 

So if you sell your some or all of your foreign untaxed assets in 2024 and remit them in 2025 then you probably better be non resident in both 2024 and 2025 just in case, or do it all inside a single year whilst non resident.

But I may be wrong on that and you might only need to be non resident in the year the profit is realised - for example - sell 2 million dollars of shares in 2024 whilst being non resident, then dump all that in a new bank account showing no movement and it can be remitted in any subsequent year even if resident (over 180 days) without being taxed as it's savings from a year when you were not resident.

Some solid clarification on this is required, until that comes I'm out of her for 6 months a year until I've moved all the untaxed funds I need for the next X years.

 

An example was given in one of the videos where someone might sell a house and not pay any tax on it as it's your primary residence, the country was Canada but many other countries also tax at zero percent the sale of a primary residence. If you sold the property in January 2024, paid zero tax of course as that's completely normal, moved to Thailand in March 2024, sent eh money in April 2024 and remained in Thailand for more than 180 days - then you will be taxed on the difference between 0% and the Thai tax rate, being a house or apartment from a country where these things routinely cost $500k and up will result in a very significant tax bill, if you don't declare it then they may come looking at any point in the future - and that's the problem - people will get caught up in this in the future, perhaps 5 years down the road when they've spent most of it - and the interest and penalties will be massive.

 

Yes, I agree in bold above. The year of remittance alone is not enough, the year the income was earned is the other issue. 

[CANSIAM]

If you are here 180 days plus, how much money can you transfer here and be exempt ? 

[Mike Lister]

1 minute ago, CANSIAM said:

If you are here 180 days plus, how much money can you transfer here and be exempt ? 

It depends on the source of those funds, whether or not they are already taxed, when they were earned, etc etc.

 

Suggest you read the following:

 

 

[CANSIAM]

5 minutes ago, Mike Lister said:

It depends on the source of those funds, whether or not they are already taxed, when they were earned, etc etc.

 

Suggest you read the following:

 

 

It would be interest from term deposits and savings from employment earned before 2021 

[Mike Lister]

Just now, CANSIAM said:

It would be interest from term deposits and savings from employment earned before 2021 

Not taxable here. Anything earned before 1 January 2024 is exempt from Thai tax.

[JohnnyBD]

1 hour ago, Mike Lister said:

Not taxable here. Anything earned before 1 January 2024 is exempt from Thai tax.

2 hours ago, ukrules said:

If you sold the property in January 2024, paid zero tax of course as that's completely normal, moved to Thailand in March 2024, sent eh money in April 2024 and remained in Thailand for more than 180 days - then you will be taxed on the difference between 0% and the Thai tax rate, being a house or apartment from a country where these things routinely cost $500k and up will result in a very significant tax bill, if you don't declare it then they may come looking at any point in the future

Mike,

People seem to be confusing what is assessable income versus what is non-assessable income. If someone is a Thai tax resident in 2024, and they sold a $500k house (rental or primary residence) in their home country in 2024 which they owned prior to 2024, and the original cost basis was $400k, they would have a $100k capital gain. If they remitted that $400k to Thailand, and left the $100k of capital gains in their home country, that $400k would be non-assessable income. If they remitted the entire $500k, only the $100k in capital gains would be assessable income. Isn't that correct? Also, for example, if I borrowed $ against my property, stock investments, or even my CC 2.9% cash advance offer and remitted that money to Thailand, then that money is also non-assessable because it's not earned income or income from investments. It's loan proceeds. For some reason, I seem to see things as being pretty straight-forward and simple. Am I looking at this wrong?

Edited April 7 by JohnnyBD
typos

[Mike Lister]

22 minutes ago, JohnnyBD said:

Mike,

People seem to be confusing what is assessable income versus what is non-assessable income. If someone is a Thai tax resident in 2024, and they sold a $500k house (rental or primary residence) in their home country in 2024 which they owned prior to 2024, and the original cost basis was $400k, they would have a $100k capital gain. If they remitted that $400k to Thailand, and left the $100k of capital gains in their home country, that $400k would be non-assessable income. If they remitted the entire $500k, only the $100k in capital gains would be assessable income. Isn't that correct? Also, for example, if I borrowed $ against my property, stock investments, or even my CC 2.9% cash advance offer and remitted that money to Thailand, then that money is also non-assessable because it's not earned income or income from investments. It's loan proceeds. For some reason, I seem to see things as being pretty straight-forward and simple. Am I looking at this wrong?

Taking the house sale example:

 

If the house was sold before 1 January 2024, the proceeds, including any CG, are free of Thai tax, when remitted to Thailand.

 

If sold after 1 January 2024, the picture is not as clear cut. If there was a reliable valuation dated 31 December 2023 and the split between capital and the gain could be easily and reliably calculated, remitting the capital would, as you correctly state, be free of Thai tax.

 

There are two problems here. 

 

The first is obtaining a reliable valuation as of 31 December 2023, that can be done easily with financial instruments but it's far harder to do with an asset such as real estate. 

 

The second problem is whether the Thai Revenue would accept that valuation or whether in the case of a capital gain, they will insist that the gain is apportioned. Since we don't know what the Thai Revenue position is on this, (although Dogmatix might because he seems to have some insight into RD working/thinking) we're very much into assumption. The key is in the ability separate capital and gain, precisely and reliably and the TRD acceptance of the method used.

 

Next is the Credit Card option you mention:

 

There's a short write up in the Simple Guide that describes foreign credit card usage overseas and the assessability of those transactions. It lists the salient points in the debate and says that it has not concluded, the answer at this point is there is a good possibility they might be. 

 

Last up is the accessibility of borrowed funds that are remitted:

 

I have no idea on this point, sorry.

 

 

 

[Yumthai]

3 hours ago, ukrules said:

Yes, the constant emphasis on 180 days to be liable for PIT by the RD themselves seems to indicate that no tax will be due on remittances but in my opinion and based on the few online seminars I've watched with either tax professionals or RD accountants / representatives you also need to be non resident in the year the profit was realised.

Even if they wanted this is unenforceable according to the current Thai tax and residence law. The year you are tax resident you declare and pay tax on the previous year (1 single year) income. The year you are not tax resident remitted foreign-sourced income is not to be declared nor taxable.

[Mike Lister]

2 minutes ago, Yumthai said:

Even if they wanted this is unenforceable according to the current Thai tax and residence law. The year you are tax resident you declare and pay tax on the previous year (1 single year) income. The year you are not tax resident remitted foreign-sourced income is not to be declared nor taxable.

For me, the solution for this is pointing more and more towards the role of the banks and reporting transfers to the Revenue, who then follow up or don't.

[JohnnyBD]

1 hour ago, Mike Lister said:

The first is obtaining a reliable valuation as of 31 December 2023, that can be done easily with financial instruments but it's far harder to do with an asset such as real estate. 

I'm not sure valuation has anything to do with it. As per the IRS (US gov't), the original cost basis (what I paid for the house in 2015), is my actual cost basis and that is not taxable. Only the capital gain (the profit) is taxable. How can the RD say my original investment from 2015 is now taxable if I remit it? The US gov't will not give me a tax credit for any taxes I have to pay in Thailand for that. And, as for borrowing money and remitting those loan proceeds for example to buy a condo, how can that be assessable income? That money is a loan, not income. What about withdrawals from a Roth IRA, the IRS states that the first distributions are your original contributions which may be from 20 years ago, and what about 401ks & Traditional IRAs? When people take their RMDs, that money could be from 1983 for example. We definitely need more clarification from RD before we assume the worse.

Edited April 7 by JohnnyBD
typos

[Mike Lister]

2 minutes ago, JohnnyBD said:

I'm not sure valuation has anything to do with it. As per the IRS (US gov't), the original cost basis (what I paid for the house in 2015), is my actual cost basis and that is not taxable. Only the capital gain (the profit) is taxable. How can the RD say my original investment from 2015 is now taxable if I remit it? The US gov't will not give me a credit for that. And, as for borrowing money and remitting those loan proceeds for example to buy a condo, how can tha be assessable income? That money is a loan, not income. What about withdrawals from a Roth IRA, the IRS states that the first distributions are your original contributions which may be from 20 years ago, and what about 401ks & Traditional IRAs? When people take their RMDs, that money could be from 1983 for example. We definitely need more clarification from RD before we assuming the worse.

If you want to go back to 2015, as in your example, that would be a clear valuation. But doing so, forgoes the gain from 2015 to 2023 which is also tax free. I was trying to see a way to maximise the transfer and keep the gain to the minimum.

[JohnnyBD]

3 minutes ago, Mike Lister said:

If you want to go back to 2015, as in your example, that would be a clear valuation. But doing so, forgoes the gain from 2015 to 2023 which is also tax free. I was trying to see a way to maximise the transfer and keep the gain to the minimum.

I understand now what you were saying. Any gains from 2015 to Dec 31, 2023 that were remitted would not be taxable in Thailand if there was a way to qualify that. I got it. Thanks for clarifying.

Edited April 7 by JohnnyBD
typos

[topt]

5 hours ago, Mike Lister said:

My personal opinion is that the government will not want to allow this tax rule change to impact the Thai property market, hence the idea that imported funds used to buy real estate here, will be taxed, seems improbable. How this will be operationalised or what measures put in place to prevent a negative impact on the property market, is very unclear.

Respectfully Mike you seem to reversed your opinion on this back to your original view. 

 

I queried this with you when appeared to revise your view a month or 2 ago and I think you said you could see no reason it would be different as income was income even for a property purchase (I can't remember the exact phraseology but I hope you know what I mean). I tended to agree with you.

We had both originally been of the opinion that with Srettha's background it would be surprising if there was not some measure to mitigate the potential impact. Nothing has thus far been forthcoming from the government or RD yet you now appear to believe it will happen at some point?

 

If you take  @Dogmatix 's view on focusing on LTR holders then they won't of course need to do anything.......

[stat]

Great exchange of ideas and risks!

 

From a general standpoint even if we get the understanding correct how has TH RD trackrecord been in the past regarding a coherent interpretation of for example the gift tax or PIT? I have no understanding nor experience in dealing with TH RD thanks for some information.