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

[jerrymahoney]

3 minutes ago, Dogmatix said:

Apples and oranges. Jenkins was referring to UK state pensions. You quoted from US DTA.

He was also referring to non-state pensions. 

[StayinThailand2much]

8 hours ago, Dogmatix said:

I hope they leave the Burmese alone.

As if they had ever cared about the Burmese. That is unless Ayutthaya was sacked...

[Jenkins9039]

1 hour ago, jerrymahoney said:

He was also referring to non-state pensions. 

Second part refers to non-state pensions, UK, EU, AUS, can't speak for America, not really on my radar...

 

 

[jerrymahoney]

Well non-state employment related pensions are on the US-Thai DTA as I noted in case some Yank was casually reading this and not aware of the minutia.

 

But as long as there is some hiatus here, I would just like to note I have been on the receiving end of 2 doomsday scenarios:

 

1. Immigration Officer: "You farang -- you have retirement income of 65k per month. Show me your Thai tax return for your visa extension of stay showing that you paid tax on income of 65k monthly. 

 

2. Be careful mate.  That will bring you to their (RD) attention.  
... and it is always better to not get noticed by any Thai Govt person or office.

 

I wish you scaremongers were better coordinated.

Edited October 9, 2023 by jerrymahoney

[Mike Lister]

4 minutes ago, jerrymahoney said:

Well non-state employment related pensions are on the US-Thai DTA as I noted in case some Yank was casually reading this and not aware of the minutia.

 

But as long as there is some hiatus here, I would just like to note I have been on the receiving end of 2 doomsday scenarios:

 

1. Immigration Officer: "You farang -- you have retirement income of 65k per month. Show me your Thai tax return for your visa extension of stay showing that you paid tax on income of 65k monthly. 

 

2. Be careful mate.  That will bring you to their (RD) attention.  
... and it is always better to not get noticed by any Thai Govt person or office.

 

I wish you scaremongers were better coordinated.

Any foreigner who has previously reclaimed withholding tax on their bank accounts has filed a tax return and is on the RD radar, like it or not.

[jacko45k]

Just now, Mike Lister said:

Any foreigner who has previously reclaimed withholding tax on their bank accounts has filed a tax return and is on the RD radar, like it or not.

Yes I believe I am...... maybe also everyone who has ever made an international transfer into a Thai Bank, or submitted a Non-Imm Permission Extension application, that included banking details.

[SHA 2 BKK]

10 hours ago, Dogmatix said:

The problems with this, as I see it are:

 

1. LTR visas don't provide any exemption for earnings earned before the LTR visa was issued.  Therefore someone coming in with a new LTR visa and wiring funds to buy a condo will have to pay up to 35% tax, if they can't prove they earned the money after the LTR visa was issued, which is unlikely, if they earned the money somewhere else.

 

2. The Royal Decree was announced last year under the previous government and the whole LTR scheme was the brainchild of that government, one guy in particular who didn't get a job in this government. although he hoped to be a minister or at least a deputy minister. So the Srettha government feels no particular obligation to this project.  The LTR tax exemption didn't seem like a big deal when anyone could just wait till the next tax year and get the same exemption. Now resentment will build up from Thais who will see the LTR visas holders like British people used to see the non-domiciled foreigners who got exemption from foreign source income, like Rishi Sunak's rich Indian wife. Now the non-dom tax privileges are being gradually whittled away to nothing. Even though no one cares about expats, Srettha said this is being done in the interest of fairness and equality which will look odd when he gives tax exemption only to rich foreigners while taxing the butts off Thais and less well off foreign retirees who are often struggling to support Thai families. I predict the LTR tax exemption won't survive long term. Another Royal Decree or an amendment to the Revenue Code would eliminate it. Those with 10 year LTR visas are unlikely to get this privilege with their first renewal and it might not even last that long. The first Elite cards came with the right to buy land but that was axed in the first few months with an offer of a refund.  LTR visa holders would probably get their 50k baht back pro-rata, if the tax exemption went mid stream, i.e. a 25k refund if it went after 5 years and you no longer want the visa on that basis.

 

Obviously the BOI people who write that stuff have to sound upbeat because they are still selling the LTR scheme and will judged on their sales numbers.  But they have no power and are part of the PM's office.

Interesting take cobber.  I've done 8 years in the LOS and yes know that laws and rules are changed at the drop of a hat.  Though I'm a "glass half full" type of bloke and reckon they will keep this as is.  Anyway always have Plan B in the back pocket.  It won't mean a full bug out for me, family, cats and dogs.  But appreciate your views.  Let's see how this plays out.

[jerrymahoney]

7 minutes ago, Mike Lister said:

Any foreigner who has previously reclaimed withholding tax on their bank accounts has filed a tax return and is on the RD radar, like it or not.

20 years full-time in Thailand including 16 years on extension via retirement 65k/month method and I have yet to file any tax return.

 

Obviously only 3 years so-far on the full bank account detail method -- via US Embassy affidavit prior to that.

Edited October 9, 2023 by jerrymahoney

[Mike Lister]

1 minute ago, jacko45k said:

Yes I believe I am...... maybe also everyone who has ever made an international transfer into a Thai Bank, or submitted a Non-Imm Permission Extension application, that included banking details.

The RD began sending me paper copies of tax forms to complete each year, the year after I first reclaimed tax with held on savings, that was 15 years ago. Many people will have moved house so perhaps not realised the forms are being sent out, many will simply discard them. When the coin finally dropped with me, I stopped reclaiming tax on interest paid and three years ago began filing complete tax returns that declared savings interest and pensions income, even though I'm usually under the income threshold. The tax office thought I was crazy for wanting to file because there was no point but for me it began to establish a pattern of income and filing. I was also able to use my past year tax returns as ID to open a bank account, an odd but useful side benefit.

[Mike Lister]

12 minutes ago, jerrymahoney said:

20 years full-time in Thailand including 16 years on extension via retirement 65k/month method and I have yet to file any tax return.

 

Obviously only 3 years so-far on the full bank account detail method -- via US Embassy affidavit prior to that.

I can see the potential for Immigration to require confirmation of taxes paid/tax return filed, before a long term visa is extended, I think that's a very real possibility.

[Conno]

Oh boy this new PM really going for it now. Come back Big TU all is forgiven. 

 

Once again, the article is in the publication that can not be linked. Inheritance tax rejig mulled, todays date 9th Oct 2024

 

This won't really affect the average expat posting on here, but it does give us all a vivid insight into the way this new government is thinking. Never forget that the current global currency system is on its last legs. Desperate people, do desperate things. Politicians especially.  

[jerrymahoney]

1 minute ago, Mike Lister said:

I can see the potential for Immigration to require confirmation of taxes paid/tax return filed, before a long term visa is extended, I think that's a very real possibility.

All my income qualifies under Article 20 US-Thai DTA and cannot be taxed in Thailand.

[MartinL]

10 hours ago, Dogmatix said:

 

That means only pensions occupational pensions paid to former civil servants and local government people shall only be taxable in the UK.  There is not even any mention of the UK state pension which means it can be taxed in Thailand and the RD can tax the different between UK tax on it and Thai tax, if the Thai tax is higher, which it will be, if the taxpayer has no other income and has only basic Thai tax deduction. This won't be so bad for over 65s who get an additional 190k deduction.

 

I know there's mention of 190k for those of 65+ but I see it as replacing the 150k zero-rated for income tax, not as an additional allowance. Perhaps I'm wrong. It would be great if it was 'in addition' but I seriously doubt that.

 

Both Sherrings and Pricewaterhouse Coopers have paragraphs to the effect that, for those of 65+, there is 'a personal income tax exemption for income up to 190k ฿'. Note 'exemption' not 'additional allowance'.

 

PwC uses the phrase 'resident of Thailand'. The distinction between 'resident' and 'tax resident' has been discussed elsewhere among these tax threads. I wonder whether this could apply only to those with legal residency.

 

More mud in the already muddy waters. 

 

https://sherrings.com/personal-tax-deductions-allowances-thailand.html

See p. 6/7 of the PwC document attached.

 

PwC thai-tax-2022-23-booklet.pdf

Edited October 9, 2023 by MartinL

[atpeace]

2 hours ago, jerrymahoney said:

Early morning edit: Private employment related pensions is 1. in US-Thai DTA.

IRA?  I will have have IRA disbursements in  a few years and plan on taking SS at full retirement age which is over 10 years from now.

[jerrymahoney]

9 minutes ago, atpeace said:

IRA?  I will have have IRA disbursements in  a few years and plan on taking SS at full retirement age which is over 10 years from now.

All I will say is that IRA is not specifically mentioned in US-Thai DTA technical manual.

https://www.irs.gov/pub/irs-trty/thailand.pdf

 

Personally, I will only be taking minimum required distributions from IRA as it is available as payable-on-death no probate to my Thai wife.

Edited October 9, 2023 by jerrymahoney

[Pib]

13 hours ago, Mike Lister said:

Some clarification on those things here, from Sherrings

 

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

After reading above sherrings.com article and disregarding any possible DTA exclusions am I correct in saying the article is saying only the amount of assessable (taxable) income you "remit", repeat, remit to Thailand would be taxable if you are a Thailand tax resident?

 

Example: say a person who stays in Thailand for at least 180 days per year and is considered a Thailand tax resident has a total foreign source income of $100K with that total income being from foreign wages (work), dividends, savings, capital gains, rent, maybe even pensions, etc.,  BUT, repeat, BUT only remits $10K of that $100K to Thailand during the tax year then only that remitted $10K is taxable by Thailand and not the entire $100K?    OR, is the entire $100K taxable assuming there are no exclusions (like a DTA) to shield it from taxes? 

 

Edited October 9, 2023 by Pib

[Mike Lister]

2 minutes ago, Pib said:

After reading above sherrings.com article and disregarding any possible DTA exclusions am I correct in saying the article is saying only the amount of assessable (taxable) income you "remit", repeat, remit to Thailand would be taxable if your are a Thailand tax resident?

 

Example: say a person who stays in Thailand for at least 180 days per year and is considered a Thailand tax resident has a total foreign source income of $100K with that total income being from foreign wages (work), dividends, savings, capital gains, rent, maybe even pensions, etc.,  BUT, repeat, BUT only remits $10K of that $100K to Thailand during the tax year then only that remitted $10K is taxable by Thailand and not the entire $100K?    OR, is the entire $100K taxable assuming there are no exclusions (like a DTA) to shield it from taxes? 

 

Only the funds that are remitted to Thailand are liable to Thai tax, at the time they are remitted.

[Pib]

6 minutes ago, Mike Lister said:

Only the funds that are remitted to Thailand are liable to Thai tax, at the time they are remitted.

So, just to reconfirm/clarify if that farang living in Thailand with a $100K foreign sourced income only remits $10K of that $100K to Thailand to live on (i.e., he lives cheap in Thailand) then only that $10K would possibly be taxable by Thailand?

[Mike Lister]

Just now, Pib said:

So, just to reconfirm/clarify if that farang living in Thailand with a $100K foreign sourced income only remits $10K of that $100K to Thailand to live on (i.e., he lives cheap in Thailand) then only that $10K would possibly be taxable by Thailand?

Correct.

 

 

[TroubleandGrumpy]

9 hours ago, stat said:

As they joined CRS they should be able to collect all those data. BTW Germany has a witholding system on capital gains so you cannot pay to little taxes on dividends in a German account.

I sure hope this Thai Govt does not think they should do the same. 

I know a little bit about German's 'tax system' and they are the 'worst' in Europe - extremely bureacratic and very fragmented.  You would think that they are so 'organised' - you know making cars, machines, and being so 'German' - but no - that is not how their Govt organisations are.  They are very authoritarian - but they are not very organised and efficient. 

I was told many decades ago that the two worst people to run an organisation were Salespeople and Engineers.  The Salespeople would make the company go through a series of booms and busts, because they are always chasing a new deal and not making things work well.  But the Engineers would implement and reinforce rigourous 'quality controls' over all the organisation's systems, such that over time no one would be able to do anything without changing the whole system - that is the German bureacracy today.  A decade or so after getting that advice, I witnessed first hand the takeover of many organisations by the beancounters (accountants) and realised they are just basically just 'money engineers'.  

[Longwood50]

No matter how much money any government takes in, taxes are like a cancer that government  wants to expand. 

I believe the government is being short sighted and not realizing that taxing foreigners is not without some very real negative consequences to Thailand and its citizens. 

Businesses in Thailand are in part created and exist to support the expatriate population.  Remove a portion of the population either entirely or for more than 1/2 the year to escape the taxation and the taxi's, grab, restaurants, supermarkets, whose customers include expatriates will be impacted.  That results in fewer jobs and less income for native Thai's.

Also, the foreigners who reside in Thailand  purchase cars, condominiums, homes, and use services to maintain those purchases.  If enacted it will likely result in a significant number of expatriates to sell their homes and possessions here and move elsewhere.  That will depress the already depressed real estate market, and hurt the banks who lent money on property that they may well find is now worth less than the loan they have on the property.  It most definitely would impact the building of new condos, apartments, and single family homes.  Those structures are built by locals.  So the local Thai who lays the block, installs the tile, puts on the roof will have a much diminished income.  

Finally, while the tax derived on income may be a higher amount, it will be partially offset by fewer expatriates and those who now choose to reside in Thailand less than 6 months a year.  Those people spend money and pay the 7% VAT on their purchases.  The money the local businesses receive and their workers then in turn spend the money they receive from the foreigners and likewise pay 7% VAT.  It is called the multiplier effect where money spent, is respent in the economy many times.  If the foreigner is not here to spend the money that VAT money is not going to be generated.  

One way or another Thailand does not operate in a vacuum.  Future expatriates considering where to relocate may well find Thailand less attractive and choose to reside elsewhere.  Perhaps I view the world differently but I believe whether it is a company or a country's economy everyone benefits when government sets conditions making it attractive.  That generates people and people spend money, and money spent is good for everyone in that nations economy. 

 

 

[Pib]

34 minutes ago, Mike Lister said:

Correct.

Thanks.   One thing I didn't fully understand the meaning of (and maybe still don't) was what the word "accessible" really meant under the Thai tax code. 

 

Based on how the sherrings.com article refers to accessible as meaning taxable if I mentally replace the word "accessible" with the word "taxable" then that makes it easier for me to grasp and also changes things. 

 

Instead of just assuming "all" your income is considered taxable a person must look at what the Thai RD considers taxable and the sherrings.com article is saying only the amount of income that is "remitted" to Thailand is taxable. 

 

Which means if a farang leaves the great majority of his income in their home country financial accounts (i.e., banks, investment firms, etc) that shields the income from Thai tax until "maybe" one day in the future you might want to remit all of your home country money to your Thailand accounts.  Until that possible day then only whatever amount you remit to Thailand to live on is considered taxable excluding any exclusions such as DTA which might shield even that remitted income.   Correct?

Edited October 9, 2023 by Pib

[TroubleandGrumpy]

15 hours ago, Jenkins9039 said:

I actually phoned the revenue office (bangkok).

 

Money earned overseas, and or as a business owner overseas regardless of tax overseas or not, is tax free unless remitted and then taxed, this includes companies which say are overseas in tax havens, and say don't have substance in the overseas location (otherwise hire someone on Fiverr on a permanent contract and use their home as the office). 

 

Money from property (rent / sale) overseas will be treated as Income when remitted (this will <deleted> a few people).

 

Money in the form of 'not in the bank account' - say cash or even stablecoins (thankfully public) whereby savings and remitted, is tax free *IF* it was earned before and/or tax was collected, having said that any funds earned in 2023 and remitted will be taxed as Income, evidence to support it is savings is a must, for pre-2023.

 

Money extracted from stock market activities, principle is tax free, ROI is treated as Income if remitted to Thailand.

 

Elite Visa holders 'reportedly' spend around 30,000$ a year (such a low number and I am one of them so not sure where they are getting that from) anyway they will be taxed as Income like everyone else.

 

Pensioners are in for a whammy though... State Pension is tax free as the State will have dealt with that, your private pensions on the other hand will be treated as Income and taxed, note some countries charge tax anyway, the terms of some of the treaties outline that Thailand will provide a credit for the tax paid, what you need to recognise is that is specifically on the $ (equivalent) amount 'earned' and 'remitted' meaning in some countries (say the UK) there is something like a tax exemption of 13/14,000 GBP, whereas in Thailand there is a tax exemption of 150,000 THB + (60,000 THB - needs verification), so from the 150,000 THB onwards you'd be taxed at the standard Thai rates.

 

Note the Government is pushing through higher income for Thais, with luck they also increase the Tax levels upwards... also note 96%+ of Thais don't pay tax (and earn enough just they do not declare it or feel they should not be productive members of society) - the Government has commenced populistic politics which is what specifically has led to the downfall of our own countries (deficit spending and populistic appeal) - in this latest move we are the ones, alongside the productive members of Thai society paying for the populistic policies such as a free 10,000 THB bribe etc.

 

This appears to be the start of the road our own Governments went down, and will need to be factored in before individual property appraisals and tax there etc.

 

Likewise I am somewhat surprised no one has complained that for example, in the time i've been in Thailand, i've seen not one but two exit taxes created, and not one but three entry taxes created under the promise of this or that and then folded into the flight ticket.

 

Somewhere the Thai Government has some major economic hurdles that haven't revealed themselves as of yet, and they are appearing to consolidate into causing more long-term hardship (like our own debasing currencies) by compounding what ever the issue is with populistic vote buying. 

Wow. What you said is exactly what worries many Expats about howe this change is going to happen.  Lets hope they back down and this is not implemented that way.  But if it is implemented that wau, it means that not only will my 'private' money I earned/saved years ago be taxed - unless I can 'prove' it was already taxed (not possible I am sure), but also my Govt pension - because the Aust Govt does not tax a pension payment - it is tax free. 

I agree about what you stated regarding their move to do exactly what screwed up our societies - looking after the poor and disadvantaged by throwing money at them. I know - because that is a 'black hole' of tax money wastage - both the target people and the all public servants administering the programs.  Plus I can see any future MFP Govt doubling down on this social safety khrapp and even more new taxes being paid by Thais - and including Expats.  Lets hope they get such negative feedback that they back away from taking the road to progressive disaster.

[TroubleandGrumpy]

14 hours ago, MangoKorat said:

Interesting.  I wonder how this would work then...........................

 

Let's say you are from a country that has a double taxation agreement with Thailand that means tax is paid where it is earned but in that country your income, say a state pension, is below the tax threshold meaning you pay no tax.  Is that money then classed as tax paid?

 

It is highly likely that many expats in such positions will not get sufficient pension for it to be over the tax threshold in the country where its paid but it will almost certainly be over the Thai tax threshold.  Will that income be classed as taxable in Thailand or assesed for tax in the country where it was paid and therefore exempt?

My understanding is that under the DTA the 'tax paid' in the home country (the Home Contracted State) is credited against the tax due to be paid in Thailand. If no tax is paid (because tax free) then technically the tax has to be paid in Thailand.  The DTAs were not made for Retirees living abroad - they were made for business operating in both countries, and the people who work in any businesses overseas, and those who invest in businesses overseas.

That is why it is imperative that Thai RD provides exact details regarding how the Personal Income Taxes are to be applied for long term Retirees and Married people. 

[vukovar77]

2 hours ago, Mike Lister said:

Any foreigner who has previously reclaimed withholding tax on their bank accounts has filed a tax return and is on the RD radar, like it or not.

Not important at all.All foreigners will be "on the RD radar" if they stay in country more than 180 days per year.Immigration will provide data to RD.

[Mike Lister]

3 minutes ago, Pib said:

Thanks.   One thing I didn't fully under the meaning of (and maybe still don't) was what the word "accessible" really meant under the Thai tax code. 

 

Based on how the sherrings.com article refers to accessible as meaning taxable if I mentally replace the word "accessible" with the word "taxable" then that makes it easier for me to grasp and also changes things. 

 

Instead of just assuming "all" your income is considered taxable a person must look at what the Thai RD considers taxable and the sherrings.com article is saying only the amount of income that is "remitted" to Thailand is taxable. 

 

Which means if a farang leaves the great majority of his income in their home country financial accounts (i.e., banks, investment firms, etc) that shields the income from Thai tax until "maybe" one day in the future you might want to remit all of your home country money to your Thailand accounts.  Until that possible day then then only whatever amount you remit to Thailand to live on is considered taxable excluding any exclusions such as DTA which might shield even that remitted income.   Correct?

I think you must mean "assessable", not accessible, correct? If that is the case, the Sherrings article provides a link to assessible income, highlighted in blue, which it then defines. Assessible income is that income that is liable to Thai tax, when it is remitted, not all income is. Both Sherrings and the Thai RD agree that income is only liable to tax, when it is remitted. Your last paragraph is correct. 

 

 

 

 

[TroubleandGrumpy]

12 hours ago, hotandsticky said:

Yes, I can see them stopping all the Cambodians returning through Poipet.

Blocked

[Pib]

2 minutes ago, Mike Lister said:

I think you must mean "assessable", not accessible, correct? If that is the case, the Sherrings article provides a link to assessible income, highlighted in blue, which it then defines. Assessible income is that income that is liable to Thai tax, when it is remitted, not all income is. Both Sherrings and the Thai RD agree that income is only liable to tax, when it is remitted. Your last paragraph is correct. 

Thanks.  And yea....assessable is what I meant....spelling champion I never was.  And maybe before although my eyes saw assessable my brain then changed it to accessible (and associated Webster's definition) which was causing my confusion. 

[TroubleandGrumpy]

2 hours ago, jerrymahoney said:

Well non-state employment related pensions are on the US-Thai DTA as I noted in case some Yank was casually reading this and not aware of the minutia.

But as long as there is some hiatus here, I would just like to note I have been on the receiving end of 2 doomsday scenarios:

1. Immigration Officer: "You farang -- you have retirement income of 65k per month. Show me your Thai tax return for your visa extension of stay showing that you paid tax on income of 65k monthly. 

2. Be careful mate.  That will bring you to their (RD) attention.  
... and it is always better to not get noticed by any Thai Govt person or office.

I wish you scaremongers were better coordinated.

I think the perfect word for the opposite of “fearmongering” is something like apathetic or complacent. Apathetic, adj: showing no interest or energy, or unwilling to take action, especially over something important. Fear-mongers make a mountain out of a molehill, and apathetes make a molehill out of a mountain.

[MJCM]

I wonder how the RD going to deal with this situation

 

I am still too young to get a Pension and just live of Savings (sold my house etc etc many moons ago) and I am not a registered Citizen in my Home Country any more. Most of my assets (accounts) are still there though.

 

Money for Immigration is in a Fixed Deposit account since ages and I just transfer money in (declared as living expenses) once in a while (when we need it).

 

But just to be on the safe side I will stay (in 2024) out of Thailand for approx 6 months at least till the dust settles.

Edited October 9, 2023 by MJCM