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

[ballpoint]

10 hours ago, Conno said:

I remember your audit post from before as it contained excellent advice, but I have one question. The previous legal way as you point out was to accumulate the funds in the holding account up to 31st Dec of the year it was earned but defer any remittance until the following year.  Come Jan 1st you can then transfer in the funds in that holding account but make sure you don't add anything further to that account until you have sent everything you wished to from it. You can then start adding to the holding account once again, accumulating up to 31st Dec and on and on it goes, I get all that. My question is regarding the new advice you have just been given. 

 

Surely if you top up the holding account [with income accrued in 2023]  but then transfer your living money for 2024 from that holding account BEFORE Dec 31st this year that will make those funds reportable for tax in early 2024? In other words you sent the funds into Thailand the year it was accrued by not waiting until after Jan 1st. Maybe the answer is to top up the account with savings before the end of the year for spending in 2024 and not anything from a taxable source? However that can't be the case as this directive only came out a couple of weeks ago, therefore you must have been adding earned funds to that holding account in 2023 already preparing for the usual Dec 31st - Jan 1st method. Cant quite work out why they would suggested that as it just seems to then fall within the old rules again i.e sending funds into Thailand the year it was earned. Unless I'm missing something, this just seems to place you between a rock and a hard place? I hope they are correct and it all falls apart [I think highly probable] However, what an absolute nightmare this all is while we wait for clarity. 

Yes.  I will have to account for the money I top up the holding account with this year - if required, however I can do so, even though it will be a pain.  I think it's better to face that pain in one chunk now than defer it until later, or worse, keep facing it every year.  The "if required" I added was because I now deal with a tiny Amphur Revenue office, where I am well known, (probably detested as a trouble maker to their otherwise peaceful existence, though they always act happy to see me), and my annual tax visits now consist of me bringing in my statements and them saying "no need to file a return", without really looking at them.

[samtam]

16 hours ago, mokwit said:

Offshore account or onshore high street bank? - if so which bank allows this - i am sure former Barclays customers might be interested.

HSBC UK (onshore), and I also have HSBC Expat (offshore).

[quake]

1 hour ago, freeworld said:

If a person has a bank account in Thailand the foreigners account details would then be reported to RD.

 

If at some point in the future the person became tax resident, any income transferred in previous years to Thailand would become taxable or it would need to be explained should RD detect it.

 

Sounds like avoiding tax bordering on tax evasion.

Your just throwing mud at the wall to see if you can get some to stick.

Thailand won't be getting 15-20% of me.

There having a laugh.

 

Ps Cash is still king over here.

 

Edited October 1, 2023 by quake

[hotandsticky]

2 minutes ago, samtam said:

HSBC UK (onshore), and I also have HSBC Expat (offshore).

Interesting.

 

 

Does that make your UK bank account more, or less, vulnerable to current activities by the UK banking industry?

 

 

Whilst I believe HSBC would be the last of the UK banks to take closure action against expats, they are subject to same regulatory pressures. You cannot rule out them taking the sheep approach.

[Dogmatix]

1 hour ago, freeworld said:

So then where does the foreigner declare himself tax resident?

 

Thailand is not a tax free jurisdiction.

This was some time ago before the RD computerised but when I became unemployed in Thailand and didn't work or have any Thai income for the whole of the next tax year, I was worried I had to continuing filing tax returns.  But I was advised by the RD there was no need to file a tax return, if income was under the minimal taxable amount. So I didn't file for a few years until I started working again and re-entered the tax net.  It is possible that nowadays with computerised systems they are more vigilant in tracking down people who exit the tax net and demanding an explanation. 

 

I think the rule about filing a tax return, is still the same.  If you have assessable income, you are under an obligation to file a  tax return. The allowances are a bit complicated but tax kicks in at 150,000 a year less basic allowances.  The most basic allowance is 60k and there is another that is 50% of income or 100k whichever is the less. However, the Prayut government issued some advisory statements encouraging people under the minimal assessable income to file tax returns anyway, BSing that this would be used to identify low income citizens in need of assistance from the government, although this has not been forthcoming 555.  The RD was obviously pushing for this ridiculous idea perhaps as a way to increase its budget and hire more staff with nothing to do. It can't be ruled out that the RD will overreach itself in future and demand tax returns from everyone regarded as of working age. 

 

With this new tax law plucked from thin air by the RD DG, the point at which a tax resident is obliged to do a tax return will become more important and will be more difficult to determine, viz Pensioner Mueller argued that he had not filed a Thai tax return because his income was below the assessable amount. The RD countered that it had to prosecute Mueller for not filing a tax return under Section bla bla bla of the Revenue Code because Mueller had made some assumptions of foreign tax credits that were not deemed allowable by the RD because he lacked the necessary notarised documents to prove his case and his funds had been comingled in a bank account in his home country prior to remittance to Thailand, making it impossible to determine exactly which inflows to Thailand were from taxed income allowable under the DTA. Therefore Mueller's assessable income was deemed over the minimum taxable amount and he was guilty of violating the Revenue Code by not filing a tax return.

Edited October 1, 2023 by Dogmatix

[TroubleandGrumpy]

22 hours ago, moogradod said:

Impossible. Must be a misinterpretation (or "misunderstanding" as they seem to call such mishaps), especially the part "whether it was remitted to Thailand". I rather believe that the earth is flat or the Orange One is an alien. What has Thailand to do with what I earned some years ago somewhere in this world when I was at the time neither resident nor tax resident here ? What is the next thing they "require"? Could be anything it seems. Ridiculous. I guess this could be safely disregarded.

I agree with your logic - and I also believe that this is 'probably' a misunderstanding - thus the reason I provided all those caveats with the firm's statement in my post.  They have still not answered me.

However, it is a legal/tax firm that has been in business for many years. If they can get it wrong and misunderstand things (whoever wrote the release) then there is also a likelihood that Somchai in the local Isaan That RD Office will too. 

I have found the 2023 Thai RD Tax Form and Guide - and (so far) I have not found anything in there that provides the details about income for foreigners from overseas Pensions and Savings remitted into Thailand.

080966Ins94.pdf (rd.go.th)

080966PIT94.pdf (rd.go.th)

Still no info from the Thai RD rtegarding this matter - maybe this year?

Home | The Revenue Department (English Site) (rd.go.th)

[Dogmatix]

2 hours ago, Lemsta69 said:

That's interesting because both these sources say that you become a tax resident if you stay "180 days or more", not "more than 180 days". 

 

If I have to flee the Kingdom to avoid tax next year I think I'll err on the side of caution and go with max 179 complete days...

 

https://kpmg.com/th/en/home/insights/2023/09/th-tax-news-flash-issue-145.html

 

https://sherrings.com/assessable-income-foreign-sources-thailand.html

 

I disagree with Sherrings' view that Section 41 was previously misinterpreted by the RD cine 1985 to mean that only funds remitted to Thailand were taxable and now the DG is correcting the error.  If you look at the Thai, it is quite clear that the RD original interpretation was correct and that that was parliament's intent.  The RD is now overstepping its authority by deliberately misinterpreting the Revenue Code to please a new government desperate for funding for popularist schemes. The Sherrings commentary, in common with most farang tax advisors, reads as if it was written by a farang who cannot read Thai and relies on translations.

[TroubleandGrumpy]

13 hours ago, Misty said:

Interesting. Could you post a link to the new rules stating this please?

As I indicated to another this was in an email from a legal firm in Isaan to all of its clients (I used them mnay years ago). As with all their legal advice/direction it is private and not for general public etc etc bla bla.

As I replied to another member - it was not one of the big legal/tax firms in Bangkok.

 

[TimeMachine]

The scene has been set. This government will be super strong. We must do everything they say.

[TroubleandGrumpy]

13 hours ago, Lorry said:

That is all your worldwide income,  remitted to Thailand or not

 

You do realize that this is a contradiction to what I just quoted?

 

What did the law firm actually mean?

Yes - the firm's interprtation of the statement was 'earned income' irrespective of whether remitted or not.  In the past (Thai RD decision) it was only 'taxable income' if/when it was remitted into Thailand in the same year that it was earned. Now it is taxable income whether remitted or not in the same year.  The big question, as asked by another poster is (changed to mean exact) - 'does this mean only income earned overseas after Jan 1 2024, or can they go backwards into the past?'.  My read is that it only applies to income earned from Jan 1 2024 onwards when this new interpretation started. However who knows how Somchai will decide.

 

Yes it is - and that is just one of the many current contradictions - the Thai RD have a lot of work to examione all the ramifications and provide detailed advice in order to get this right. 3 months means they aint gonna get it right - maybe a year or two I would say. 

 

I asked - they have not answered.

[TroubleandGrumpy]

11 hours ago, Maestro said:

 

Revenue Department Order 161-2566 - en.pdf 177.74 kB · 6 downloads

Revenue Depatment Order 161-2566 - th

1. a) Your tax expert:
   "The new rules state that if you spend more than 180 days in Thailand per year..."
   b) The Revenue Department Order 161/2566 dated 15 September 2023 (RD 161/2566):
   There is no mention of 180 days.
   c) Suggestion:
   Ask your tax expert where he got the 180 days from.
    
2. a) Your tax expert:
   "...required to declare all of your foreign income, regardless of when it was earned..."
   b) RD 161/2566:
   ..."assessable income under Section 40 of the Revenue Code in the past tax year due to duties or business performed overseas or due to assets located overseas..."
   c) Suggestion:
   Ask your tax expert to explain the difference between "all foreign income" and "assessable foreign income", and the difference between "regardless of when it was earned" and "in the past tax year"
    

The 180+ days is already done and dusted - you become a tax resdient of Thailand if you stay longer (in total) in any calendar year.

I am still waiting their answers to that and a few other questions I asked.  I think someone in the office did closely examine what words they were using - not a good thing for a legal/tax organisation. And I bet the only reply I will get is 'each poerson is different, you need to come in and speak to us (for a fee)'.

 

[TroubleandGrumpy]

5 hours ago, jacko45k said:

Sounds like a good scammer phone call to be made!

Never thought of that - you devious bugger ????   I bet that the scammers are already working through how to pretend to be Thai RD Officers, and that the calls and Facebook Posts will start early next year. 

Most Expats are too experienced to get caught - but the local Thais will be a target - especially since the majority of them have never paid income tax and would not know what a tax retrun is.  

[Dogmatix]

9 hours ago, Smokin Joe said:

Statement from Revenue Department official was in the paper that shall not be named. A Revenue Dept statement "should" be much more reliable than any statement from other offices.

 

Revenue Department Deputy Director-General and spokesperson Vinit Visessuvanapoom said the tax collection is to comply with international standards on the exchange of financial information to promote tax transparency...

 

The collection of PIT on overseas income will be primarily based on the principle of self-declaration in conjunction with the use of digital technology and international information exchange systems …

Therefore, if the government collected tax on income from abroad, the taxpayer would be subject to double taxation as tax must be paid to Thailand as well as paid to the country in which the income is being earned.

 

However, Thailand currently has 61 double tax agreements which prevent individuals or companies operating in more than one country being taxed twice on the same income.

The programme will begin on Jan 1, 2024 and apply only to tax residents in Thailand meaning tourists and short-term workers will be exempt. Also exempt will be those who have been taxed in a foreign country that has a standing double tax agreement with Thailand.

No real breaking news but it shows that they are taking the tax treaties into account. And in my opinion the Thai govt doesn't have a single person that can read and understand 61 different treaties.

Vinit's statement that "tax collection is to comply with international standards on the exchange of financial information to promote tax transparency..." was a complete non-sequitur.  International standards now require exchange of financial information and Thailand has now complied with that with much foot dragging 5 years behind schedule.  International standards do not require taxation of foreign source income and countries in SE Asia such as Singapore and HK don't tax it and have intention of taxing it.  Furthermore no countries I know of have a remittance tax on foreign source income like Thailand.  So how could they be under international pressure to be the only country to do what they are now trying to do? This is a total distortion of reality to justify the overreach of the RD's authority.

Edited October 1, 2023 by Dogmatix

[jerrymahoney]

18 minutes ago, Dogmatix said:

The Sherrings commentary, in common with most farang tax advisors, reads as if it was written by a farang who cannot read Thai and relies on translations.

FYI 3 of 4 listed Sherrings tax consultants are Thai.

 

https://sherrings.com/thailand-tax-advisors-consultants.html

[Dogmatix]

2 minutes ago, TroubleandGrumpy said:

Never thought of that - you devious bugger ????   I bet that the scammers are already working through how to pretend to be Thai RD Officers, and that the calls and Facebook Posts will start early next year. 

Most Expats are too experienced to get caught - but the local Thais will be a target - especially since the majority of them have never paid income tax and would not know what a tax retrun is.  

I think there will be scammer phone calls. There are already loads of Thai scammer phone calls to individuals and corporate taxpayers persuading to transfer money to the account of a fake RD officer to lose their file.  The accounts turn out to be in the name of some poor sod who was made to open the account for the scammers for a pittance and emptied out immediately. 

 

This could be a new business line for the expat financial services call centre scammers. It could also be a new line of business for RD inspectors who made unannounced visits to taxpayers' homes and indulge in extortion. We could start seeing tragic stories of elderly expats now verging on dementia getting cleaned out by RD and freelance scammers. 

[Dogmatix]

5 minutes ago, jerrymahoney said:

FYI 3 of 4 listed Sherrings tax consultants are Thai.

 

https://sherrings.com/thailand-tax-advisors-consultants.html

Yes, but are they the ones that came up with that commentary?

[jerrymahoney]

2 minutes ago, Dogmatix said:

Yes, but are they the ones that came up with that commentary?

I have no idea. But 2 of the 3 Thais have long experience in the Thai RD itself.

Edited October 1, 2023 by jerrymahoney

[TroubleandGrumpy]

3 hours ago, Lemsta69 said:

That's interesting because both these sources say that you become a tax resident if you stay "180 days or more", not "more than 180 days". 

If I have to flee the Kingdom to avoid tax next year I think I'll err on the side of caution and go with max 179 complete days...

https://kpmg.com/th/en/home/insights/2023/09/th-tax-news-flash-issue-145.html

https://sherrings.com/assessable-income-foreign-sources-thailand.html

 

June 30 2024 becomes the deadline if you stayed in Thailand since Jan 1 2024 - you are then a tax resident of Thailand for 2024.  That is the date I will be researching towards and planning about.

Will I still be here because it is all OK;  or will I be gone before then;  or will I wait and see how it goes year 1.

 

[mokwit]

1 hour ago, Dogmatix said:

So I didn't file for a few years until I started working again and re-entered the tax net.

Always wondered what hapened with people who were out of the tax system when they came back into it - Teachers working on WP then on a tourist visa and then back to WP, likewise people who worked and then didn't work for a few years.

[TroubleandGrumpy]

22 hours ago, aldriglikvid said:

Although I appreciate everyone's contributions in interpretating this upcoming tax law, there's little to none discussion on how they would practically implement and enforce these new law. As it stands now, Thailand is unable to automatically link a traffic ticket to a centralized database of driving licenses.

 

For this to be enforced properly they need to establish +180 days in the country i.e. tax subject

- Revenue Department links to Border Entry's?

 

Electronic monitoring of transactions

- If this would be implemented, it's quite unique in a global context. It's rare. Most countries have end-of-year balance sent to RD's and also dividends/capital gains as per CRS standards. 

 

I'll probably be heavily criticized here, but here's how I see this playing out: 
- Tax law postponed +6-12 months 

- First 2-3 years "the big fish" are targeted via KYC-like initiatives from Banks. Meaning, Banks are encouraged to investigate "large and recurring transactions". If these are not properly explained, they are sent to the RD for tax/further investigation. 

- +2-3 years everyone with a non-im (or similar) making yearly extensions are encouraged to show tax filing "back home" as per DTA, or be taxed in Thailand on the spot 

The idea that Thailand would be able, 4 months from now, to automatically monitor the bank accounts and transactions of approx. 80 million people (domestic + foreigner, non-TINs, TINs, Elite's, ED-visas, etc.) and smack a income tax on the aforementioned, just seems like a pipe dream. Send it by mail? IM knocking on the door? Deducted at the airport? 

I agee with most of what you are saying, but I will also point out that what you are saying is exactly why so many of us are very concerned.  The Thai RD is not well organised, efficient or rational - they will have a lot of trouble implementing this new rule - which means they will screw it all up - and I certainly do not want to be in the position of being 'in their sights' during the first year or two of this change.  They are going to be severely under pressure to 'get more tax money' and theu will be like a nasty IO on steroids. If you think they will have the time or inclination to patiently listen to your/my pleas that our 'income' (money transferred into Thailand and reported by the bank/s to them) is either exempt from taxation, or not subject to taxation under DTA, or any others claims you/I make, then you are very very mistaken.  Added to that is the potential that even if you/I start under the horizon for a year or two, the Thai RD will come knocking so to speak.

 

When it comes to all taxation departments, they have 3 main functions - they have many but 3 main ones.

1.  Processing the taxation returns given to them;

2.  Providing advice and directives in regards to taxation related definitions and interpretations;

3.  Investigating individuals and organisations that may have avoided taxes (now and in the past).

They are 3 different groups of people and you do not want to be 'targette' by group 3 staff, and I cannot imagine that in Thailand they would be as 'reasonable or skilled' as those in my home country.

 

 

[Lemsta69]

36 minutes ago, TroubleandGrumpy said:

June 30 2024 becomes the deadline if you stayed in Thailand since Jan 1 2024 - you are then a tax resident of Thailand for 2024.  That is the date I will be researching towards and planning about.

Will I still be here because it is all OK;  or will I be gone before then;  or will I wait and see how it goes year 1.

 

That's 182 complete days so over the threshold regardless of the differing interpretations I referred to in my earlier post.

[Lemsta69]

1 hour ago, Dogmatix said:

I disagree with Sherrings' view that Section 41 was previously misinterpreted by the RD cine 1985 to mean that only funds remitted to Thailand were taxable and now the DG is correcting the error.  If you look at the Thai, it is quite clear that the RD original interpretation was correct and that that was parliament's intent.  The RD is now overstepping its authority by deliberately misinterpreting the Revenue Code to please a new government desperate for funding for popularist schemes. The Sherrings commentary, in common with most farang tax advisors, reads as if it was written by a farang who cannot read Thai and relies on translations.

I'm not smart enough to understand all of that tax code stuff, all I want to know is whether it is 179 days or 180 days before we become tax resident.

 

"What a difference a day makes" ????

[jaideedave]

9 hours ago, Lorry said:

How do you think did they get those 61 treaties?

Maybe they had foreign translators on contract?

[zombie nights]

57 minutes ago, TroubleandGrumpy said:

June 30 2024 becomes the deadline if you stayed in Thailand since Jan 1 2024 - you are then a tax resident of Thailand for 2024.  That is the date I will be researching towards and planning about.

Will I still be here because it is all OK;  or will I be gone before then;  or will I wait and see how it goes year 1.

 

So that it can be understood is it being said the new  tax  rules on income will only be effective after 180 days from 1 January 2024, namely June 30 2024?

[TroubleandGrumpy]

13 hours ago, Somjot said:

Finally, back to topic:

I have read most of the posts here but not all of them.

Did anybody mention the money that has been taxed already?

I mean there is a reason, countries even bother agreeing on DTAs.

Because double taxation is against the law and must be avoided.

And if one thing is sure, our countries know every cent we earn and we must pay tax for it.

I can't imagine Thailand is going to make us pay tax one more time, if we wire that money into the country and can prove, that we have paid tax for it already.

Apologies, if this has been mentioned before.

Not sure if anyone has already answered - like you I am going throiugh them again today - waiting for the Rider Cup to start.

The Thai DTAs are an Agreement (not Law). 

Thai RD is not skilled in understanding all the DTAs it has with 61 countries.

There is no clear directive from Thai RD on how to prove money in another country has been taxed.

There is no clear advice from my home country about how I would go about giving proof to Thailand RD.

[jaideedave]

10 hours ago, Smokin Joe said:

Statement from Revenue Department official was in the paper that shall not be named. A Revenue Dept statement "should" be much more reliable than any statement from other offices.

 

Revenue Department Deputy Director-General and spokesperson Vinit Visessuvanapoom said the tax collection is to comply with international standards on the exchange of financial information to promote tax transparency...

 

The collection of PIT on overseas income will be primarily based on the principle of self-declaration in conjunction with the use of digital technology and international information exchange systems …

Therefore, if the government collected tax on income from abroad, the taxpayer would be subject to double taxation as tax must be paid to Thailand as well as paid to the country in which the income is being earned.

 

However, Thailand currently has 61 double tax agreements which prevent individuals or companies operating in more than one country being taxed twice on the same income.

The programme will begin on Jan 1, 2024 and apply only to tax residents in Thailand meaning tourists and short-term workers will be exempt. Also exempt will be those who have been taxed in a foreign country that has a standing double tax agreement with Thailand.

No real breaking news but it shows that they are taking the tax treaties into account. And in my opinion the Thai govt doesn't have a single person that can read and understand 61 different treaties.
I read the Thai/Canada tax treaty and had to lay down for a few minutes.Mostly legalese jargon and not easy to digest (for me)
 

 

[TroubleandGrumpy]

3 hours ago, Celsius said:

In other countries when you are a resident for tax purposes there are also certain "benefits" one enjoys.

Are you mugs seriously thinking about even paying 1 baht for in tax? 

Are you going to be staying in Thailand if that happens?

Please don't tell me you will be paying tax while doing your 90 day reports ????????

You and I and many others think the same - I will be avoiding paying any taxes in Thailand, mainly because I get absolutely nothing for them.  IMO what little I do get, is more than paid for by the amount of VAT I pay, which is well above what most Thais pay (and most Thais do not pay income tax either).  If they created a new category for long-tern Visa holders, and I was no longer subjected to all the 90 days, TM30s, Annual begging, etc etc., and I was provided with the same rights and services as Thais are - then I would be happy to pay income taxes in Thailand.

When we lived in Australia for a few years my Thai wife was required to pay income taxes. BUT she got what I asked for above - none of the Immigration khrapp and full rights and all services (including free hospitals and subsidised medinies). 

[jerrymahoney]

FYI from Thai Revenue Department FAQ:

 

https://www.rd.go.th/english/23520.html

 

Esp.  

9.    What is the method for elimination of double taxation provided in the agreement?  

- In a double taxation agreement, there are credit and exemption methods.  

[TroubleandGrumpy]

13 minutes ago, zombie nights said:

So that it can be understood is it being said the new  tax  rules on income will only be effective after 180 days from 1 January 2024, namely June 30 2024?

How it works is as follows.

Anyone who lives in Thailand for a total period of at least 180 days is a tax resident of Thailand.

The new rules/interpretation starts from January 1 2024.

Under this new rule/interpretation if you stay full-time from Jan 1 2024 to June 30 2024 you will be a tax resident (having stayed for 180 days) and the new rule/interpretation will apply to any income you have generated anywhere in the world.

There are many unanswered questions including the one that directly relates to what I wrote above - "Is that 'tax payable' applicable when I bring that income into Thailand, or is it applicable even if I do not bring that income into Thailand'. 

[TroubleandGrumpy]

47 minutes ago, Lemsta69 said:

That's 182 complete days so over the threshold regardless of the differing interpretations I referred to in my earlier post.

Yes you are right.  180 days from Jan 1 2024 is June 29th 2024.  That is the deadline date ????