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

[ukrules]

6 hours ago, Dogmatix said:

There is a long letter in the Bangkok Post on this today which I am not allowed to post or link here. Among other things it implies that decreeing a new meaning of an existing law other than what was intended by parliament, rather than amending it in parliament is dubious legally. But I wonder if anyone would challenge it in court. On the other hand I would doubt that Srettha would feel confident about getting this through parliament. His “pro-dictatorship” friends have more seats than PT and many are likely to have accumulated substantial offshore funds through various mechanisms while in power. Also many PT MPs will not like it.

Indeed, many people seem to be referring to this as a 'loophole' as if it's an accidental / unintended consequence of a vaguely worded regulation.

 

The current year thing is not and never has been a loophole - it's by design and enshrined in law.

 

I have a feeling this whole incident will amount to nothing in the end and the talk of people having their '67k' taxed is absolute hysterical nonsense - I think they did say that would be a worst case scenario though.

 

 

Edited September 23, 2023 by ukrules

[John Drake]

5 minutes ago, ukrules said:

I have a feeling this whole incident will amount to nothing in the end and the talk of people having their '67k' taxed is absolute hysterical nonsense - I think they did say that would be a worst case scenario though.

There seem to be a few people posting "worst case scenarios" over and over. Starting to wonder if there are some vested interests at work. People leaving links to tax firms' advertisements already popping up too. I certainly don't know how this will play out. Whichever way it goes, it's not a ringing endorsement for the new government, which looks haphazard and desperate.

[Puccini]

6 hours ago, Mike Teavee said:

7 hours ago, James105 said:

Expand  

I also think I'll be caught up on this as I do the same with Dividend Income in that as a Non-UK Resident it is treated as Disregarded/Excluded Income on my Tax Return so I do not have to pay anything (above the already Withheld Tax) on it...

The withholding tax is the income tax, correctly assessed and collected from you under the double tax agreement between the UK and Thailand. 

[Puccini]

2 hours ago, DudleySquat said:

Not one person here has asked the proper question: What is a tax resident?

Someone posted the section from the Revenue Code giving details of what makes a person a tax  resident in Thailand. If I remember correctly, it is Section 40.

[transam]

3 hours ago, DudleySquat said:

Not one person here has asked the proper question: What is a tax resident?

Having your feet on the ground in LOS for over 180 days.........I fink...????

[Hummin]

2 minutes ago, transam said:

Having your feet on the ground in LOS for over 180 days.........I fink...????

Almost correct, but, I'm tired to follow up now, and the best thing id to wait and see. 

 

If you do not pay tax in any country, you most likely have to pay tax to Thailand if resident here 180 days a year or more. If you tax to another country, you have to check the tax deal your country have with Thailand.

 

Good luck

[stat]

Regarding LTR Visa: It is "only" stated in the description that money earned out of Thailand is tax free. There is no mentioning of money send into TH to be tax free.

[transam]

3 minutes ago, Hummin said:

Almost correct, but, I'm tired to follow up now, and the best thing id to wait and see. 

 

If you do not pay tax in any country, you most likely have to pay tax to Thailand if resident here 180 days a year or more. If you tax to another country, you have to check the tax deal your country have with Thailand.

 

Good luck

Doesn't affect me, I leave every 90 days..........

[nglodnig]

 

13 minutes ago, Puccini said:

Someone posted the section from the Revenue Code giving details of what makes a person a tax  resident in Thailand. If I remember correctly, it is Section 40.

https://www.rd.go.th/english/37749.html#section40

 

From my (non-expert) PoV it appears that COMPANY pensions are taxable income, but there is no mention of STATE pensions.

[Dogmatix]

2 hours ago, Sheryl said:

2003 not 2023.

 

And as the latest ruling makes no statement about overseas savings of foreign residents I can't see how it would be rescinded. 

The problem is where do savings come from?  It is hard to argue they were not earned at some point in time and the RD has now given itself the right to tax foreign sourced income going back indefinitely.  The 1987 tax ruling that effectively deemed income earned in prior tax years as savings is now rescinded by the latest order.  So what savings are now exempted by the 2003 ruling, if it still stands? The RD can decide that the 2003 on savings is also automatically rescinded because it contradicts the new order making foreign sourced income earned at any time in the past assessable.  Otherwise they will have the same problem as before with people saying the money they have remitted was savings. Who's then to say what is savings and what isn't?

Edited September 23, 2023 by Dogmatix

[ThomasThBKK]

44 minutes ago, nglodnig said:

 

https://www.rd.go.th/english/37749.html#section40

 

From my (non-expert) PoV it appears that COMPANY pensions are taxable income, but there is no mention of STATE pensions.

Most likely, many DTAs like the german one only mention state/land/gov pensions. 

[Dogmatix]

1 hour ago, ukrules said:

Indeed, many people seem to be referring to this as a 'loophole' as if it's an accidental / unintended consequence of a vaguely worded regulation.

 

The current year thing is not and never has been a loophole - it's by design and enshrined in law.

 

I have a feeling this whole incident will amount to nothing in the end and the talk of people having their '67k' taxed is absolute hysterical nonsense - I think they did say that would be a worst case scenario though.

 

 

I agree that it was not a loophole, or if so, it was a loophole intended by parliament.  However, the 2003 ruling made clear there was only at that time an intention to tax foreign sourced income not savings.  The prior year rule which is very clear in the Revenue Code but now being ignored was an effective mechanism to prevent taxing foreign sourced savings. 

 

But I think taxing of pensions is very likely and, indeed, as things stand they are now taxable in most cases whenever they are remitted.  In fact they have always been taxable, if remitted in the prior tax year, meaning that pensions remitted in 2023 are already taxable when you do your tax return in 2024.  So it would need a specific ruling to exclude pensions, rather than a ruling to make them assessable. The UK DTA only prohibits Thai tax on a government pension for services rendered to that government but that doesn't exclude the UK state pension or private pensions.  So Thailand has the right to demand that pensioners file tax returns and submit tax credits in whatever form the RD deems acceptable (notarised, translated or whatever).  The RD has probably never bothered to do this because pensioners could avoid tax by having pensions paid into an account at home and remit prior year pensions instead.  Those who have to show pensions of 65k a month or a lump sum of 800k or 400k will be low hanging fruit for the RD. The government would waffle about the pensioners using roads and services and stuff, so needing to pay a contribution.  The LTR visa holders are exempted and maybe Elite card holders I am not sure.  So they wouldn't feel they were losing pensioners they cared about it, if there were an exodus.  It would take a big outcry from activists representing Thai families to counter this but by and large the average Thai voter wouldn't give a stuff.  However, it is possible they will decide that it is all too much trouble as the DTAs might reduce their tax take on pensioners to be not worth it and carve out an exemption. But as the law stands pensions are taxable.

[redwood1]

2 minutes ago, Dogmatix said:

I agree that it was not a loophole, or if so, it was a loophole intended by parliament.  However, the 2003 ruling made clear there was only at that time an intention to tax foreign sourced income not savings.  The prior year rule which is very clear in the Revenue Code but now being ignored was an effective mechanism to prevent taxing foreign sourced savings. 

 

But I think taxing of pensions is very likely and, indeed, as things stand they are now taxable in most cases whenever they are remitted.  In fact they have always been taxable, if remitted in the prior tax year, meaning that pensions remitted in 2023 are already taxable when you do your tax return in 2024.  So it would need a specific ruling to exclude pensions, rather than a ruling to make them assessable. The UK DTA only prohibits Thai tax on a government pension for services rendered to that government but that doesn't exclude the UK state pension or private pensions.  So Thailand has the right to demand that pensioners file tax returns and submit tax credits in whatever form the RD deems acceptable (notarised, translated or whatever).  The RD has probably never bothered to do this because pensioners could avoid tax by having pensions paid into an account at home and remit prior year pensions instead.  Those who have to show pensions of 65k a month or a lump sum of 800k or 400k will be low hanging fruit for the RD. The government would waffle about the pensioners using roads and services and stuff, so needing to pay a contribution.  The LTR visa holders are exempted and maybe Elite card holders I am not sure.  So they wouldn't feel they were losing pensioners they cared about it, if there were an exodus.  It would take a big outcry from activists representing Thai families to counter this but by and large the average Thai voter wouldn't give a stuff.  However, it is possible they will decide that it is all too much trouble as the DTAs might reduce their tax take on pensioners to be not worth it and carve out an exemption. But as the law stands pensions are taxable.

Well.....They should just bloody come out and bloody say what the real situation is then.....Would you not agree?

[K2938]

8 hours ago, Mike Teavee said:

Oh and Capital Gains Tax will also be a problem, currently don't need to pay anything on profits from share sales, now going to have to try to keep track of when I bought each individual share, what money (Savings, Dividend, Income from House) I used to pay for it & how much I made/loss on it

And on top of this there is no certainty that you might actually be able to separate these components.  They could also say that partially contaminated funds are to be entirely taxed or they could even say that any remittances regardless of their components are taxable.  Currently, nobody knows.

[beammeup]

3 hours ago, GeorgeCross said:

well those who said it will curb investments in this country.. i can confirm, at least in my case, even the uncertainty will. 

 

after a long talk with my wife we've just shelved 2 property projects worth 15M baht until things are (much) clearer. i know its small beans to some but if we're doing this others are certainly considering it.

 

now looking at european property instead.

 

 

I have also scrapped a condo and vehicle purchase until things become clear. Who knows when that will be, maybe 2026??

 

[StayinThailand2much]

1 hour ago, transam said:

Having your feet on the ground in LOS for over 180 days.........I fink...????

Imagine the banks had to figure that out, before withholding ...% from international transfers to Thailand! Will be interesting to watch early next year.  

[beammeup]

1 minute ago, StayinThailand2much said:

Imagine the banks had to figure that out, before withholding ...% from international transfers to Thailand! Will be interesting to watch early next year.  

Its not up to the banks. like every country its up to you to declare what you have earned and what you owe. Why bis this so freaking complicated. just pay tax on what you remitt into thailand.

[StayinThailand2much]

41 minutes ago, redwood1 said:

So Thailand has the right to demand that pensioners file tax returns and submit tax credits in whatever form the RD deems acceptable (notarised, translated or whatever) (...)

And this may very well be the outcome, with banks automatically deducting a tax rate upon receiving funds from abroad...

[hwas]

1 hour ago, stat said:

Regarding LTR Visa: It is "only" stated in the description that money earned out of Thailand is tax free. There is no mentioning of money send into TH to be tax free.

Read Royal Decree 743-

The Tax Incentives under Royal Decree (No 743)

The Royal Decree (No 743) gazetted on 23 May 2022 prescribes the income tax incentives for foreigners to come and reside in Thailand under an LTR Visa, as follows:

Wealthy Citizen, Retired and Work-from-Thailand Foreigners

For Wealthy Citizen, Retired and Work-from-Thailand foreigners who come and reside in Thailand under an LTR Visa:

• A right to exemption from tax on income that's derived from a post or an office outside Thailand or business outside Thailand or property outside Thailand and brought into Thailand (i.e. an exemption from the Foreign Source Income Law).

 

 

[StayinThailand2much]

7 minutes ago, beammeup said:

Its not up to the banks. like every country its up to you to declare what you have earned and what you owe. Why bis this so freaking complicated. just pay tax on what you remitt into thailand.

Yes, of course. Doing all the paperwork with Thai forms, any requested forms from the home country, translated into Thai, etc., will be the fund owner's responsibility. It will be a bonanza for Thai tax accountants and translation services.

Edited September 23, 2023 by StayinThailand2much

[Dogmatix]

55 minutes ago, redwood1 said:

Well.....They should just bloody come out and bloody say what the real situation is then.....Would you not agree?

I agree.  The incompetence of what they have done boggles the mind.  They have a right to do whatever they think fit but it should have been at least a year in the making with copious guidelines probably running into hundreds of pages for taxpayers and RD staff. 

[Dogmatix]

7 hours ago, redwood1 said:

So whats the deal is immigration going to all the sudden be experts on international tax law?........These folk will be absolutely snowed under on the first hour of the first day..

Assuming that a a certified tax return or tax clearance certificate would be required, which is pure speculation at this stage, it would be very simple for Immigration. Tax returns have to be filed by 31 March. So from 1 April any visa renewal application of a one year visa would require the appropriate document from the RD.  What could be simpler?

[Dogmatix]

9 hours ago, Mike Teavee said:

Oh and Capital Gains Tax will also be a problem, currently don't need to pay anything on profits from share sales, now going to have to try to keep track of when I bought each individual share, what money (Savings, Dividend, Income from House) I used to pay for it & how much I made/loss on it ????  

Capital gains will be a big problem for property sales too, if you need to remit the proceeds.  Thailand has no capital gains tax but taxes gains as income at the top marginal rate with no inflation indexing which would be more than the rate of capital gains tax paid in the UK in many cases.  Then there will cases of folk who planned to sell their primary UK residence, which is exempt in the UK, to buy a property and retire here.  If they are Thai tax resident or become tax resident during that tax year, they are in trouble and for most of those caught in the Thai tax net, it probably wouldn't be worth remitting the proceeds at all and maybe not worth staying in Thailand, if treated like that.

 

One thing that is not clear to me is how do tax credits work?  I pay tax on UK sourced income which is a combination of UK pension and rental income.  All I have to show for that is a copy of my tax return and electronic demands for tax on account or after the balancing amount from HMRC with no receipts.  I can't imagine this will be what the RD will accept to approve tax credits.  And if I remit a portion of my taxed income for a year, will they keep track of that and let me remit the balance later?

[flexomike]

46 minutes ago, beammeup said:

Its not up to the banks. like every country its up to you to declare what you have earned and what you owe. Why bis this so freaking complicated. just pay tax on what you remitt into thailand.

why would anyone want to do that, what a stupid comment

[Dogmatix]

Dear Director General, 

Your Order No. Por 161/2566 has created a great of interest and excitement amongst the expatriate community in Thailand. As a result of the order many expatriates are now eagerly anticipating their opportunity to file .a PND 90 tax return for the first time in 2025. But before they can do that, they will need answers to a large number questions that have been posted in this thread.

 

Please feel free to leave the answers to all the questions below.

 

 

 

[redwood1]

6 minutes ago, Dogmatix said:

Dear Director General, 

Your Order No. Por 161/2566 has created a great of interest and excitement amongst the expatriate community in Thailand. As a result of the order many expatriates are now eagerly anticipating their opportunity to file .a PND 90 tax return for the first time in 2025. But before they can do that, they will need answers to a large number questions that have been posted in this thread.

 

Please feel free to leave the answers to all the questions below.

 

 

 

Well some of us absolutly dont want taxes and will avoid them at any cost...

[thaibreaker]

14 hours ago, Geir Rasch said:

Then you have confused me.  You stated that you would not pay tax to Thailand because it could not compete with your Norwegian tax. 
If you live in Norway you are not entitled to pay tax to Thailand, You should not act like living in Thailand. Or maybe you do live in Thailand, but not fullfilled your obligation to register your address in Thailand just to uphold your membership? I know many do, and so does nav.
Either way, you dont seems a serious and honest person, so I think we call that a day. Take care!

Seriously, it was you who took it for granted that I lived in Thailand. I never said I did. I do balance my days well, spend months at the time in Thailand, but pay taxes in Norway, and have my home address there. For now. That might change, I will see.

 

Again, my original post had nothing to do with you, it was a comment to the Brit, as I have stated. I asked him a question, and got the answer I needed from him. Then you came rushing in. Then I was only explaining to you how small the tax percent is in Norway for a 250k income. You did not seem to know. Zero percent.

It is a reason every link and website does not include the trygdeavgift into the tax percent they present, as it is not considered a tax in that form. More of a membership of Norway, with all benefits, like free health care.

 

There has been no fault in anything I have posted.

 

If I strike you as not serious, you strike me as not a pleasant person. I did not need the lecture, nor did I ask for it. I am perfectly aware of Norwegian tax rules, and everything you have written. None of it was news to me.

Edited September 23, 2023 by thaibreaker

[DudleySquat]

180 days a year makes you a tax resident? 

 

• If you exit on day 179, does make it so you are considered a non-Tax Resident? 
• If I leave with a reentry permit, have I left, or does that assume a continuous stay? 
• Does the 180 days reset when you reenter Thailand? 

Edited September 23, 2023 by DudleySquat

[Dogmatix]

1 hour ago, DudleySquat said:

180 days a year makes you a tax resident? 

 

• If you exit on day 179, does make it so you are considered a non-Tax Resident? 
• If I leave with a reentry permit, have I left, or does that assume a continuous stay? 
• Does the 180 days reset when you reenter Thailand? 

This can be contentious. I recall that Ung Ing, the Thaksin daughter who is currently a PM candidate, was assigned to take a capital gain by her dad when she went to London to take a short course in home economics or something. The anti Thaksinite yellow camp found out about it and argued that she hadn’t qualified to be non-tax resident that year and should cough up the tax.
 

For ordinary citizens and foreigners, if the RD decided you are a tax resident, you pay.

[Karma80]

I was considering keeping Thailand my home in the long term. But, until the impact of this is actually settled as to how it will be implemented in practice, I will keep my options open and my money offshore.