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

[jacob29]

4 hours ago, Dogmatix said:

It just tells RD officers to tax the b'Jezus out of each and every foreign remittance.  Here is a translation of the order

 

Revenue Department Order

No. P.161/2023

 

The order doesn't exactly say that. It appears to classify taxable income, as income earned abroad *while* you were a tax resident in Thailand. Not once does it use past tense, income earned before you were even a tax resident of Thailand. It explicitly states the opposite, foreign source income earned *while you are a tax resident*, will be taxed in future (without limitation) at the time it's remitted to Thailand.

 

In practice, and grandfathering aside, I expect it will mean from the point you become a tax resident, tax on remittances will be capped to whatever accumulated foreign income they have on record (from CRS) from current or previous years in which you were a tax resident. If you exceed this amount, it's not taxable as you weren't a tax resident, thus it wasn't assessible as per the order (given the order makes no mention of income earned while you were a non resident).

Edited October 12, 2023 by jacob29

[KannikaP]

3 minutes ago, Yumthai said:

Why do you have to pay 4K if your tax rate is 0%

Because I will have 5% of Bht 80,000  to pay

3 minutes ago, Yumthai said:

100K expenses deduction is only if you have income from employment.

The tax officer seemed to think it will apply to me as well

3 minutes ago, Yumthai said:

t seems you didn't understand my question.

Maybe, what question?

[Pib]

24 minutes ago, KannikaP said:

Just got back, with a Tax ID, same number as on my Pink Card. with assurance that, in my case, transferring 40k per month = 480k per annum, after 190k + 60k + 150k all at 0%, I shall have to pay Bht4000 for the year. There was some mention of 100k being deductible for expenses. As we are not married, I cannot claim 60k for my Mrs, but possibly some for the school fees I pay for my Mrs's son, he will let me know.

Where the money comes from, pension, interest, sister's immoral earnings, is of no matter. It is simply how much is/will be transferred from UK to Thailand in the specific tax year. 

As I am only getting UK State Pension @ £170 per week = £8840 and a small one from Norway, my total UK income is £10400, below the Tax Free Allowance, so no tax due in UK either. I am happy with this.

Was any of this money you are remitting covered/shielded by a DTA? 

 

I know you said your local RD didn't didn't seem to care about the the source of the income (i.e., pension, whatever, etc) of that Bt480K remitted which seems to imply at least with your local RD they could care less about a DTA.....like it taxable by Thailand....up to you to try to get an offsetting tax credit from your home country where the DTA may say it's only taxable by your home country and not taxable by your tax residence (Thailand in this case).   I don't believe Thailand is now disregarding DTAs as those are signed/agreed to at the highest levels of each government.

[KannikaP]

2 minutes ago, jacob29 said:

foreign source income earned *while you are a tax resident*, will be taxed in future (without limitation) at the time it's remitted to Thailand.

And what happens if ALL the income earned in foreign countries is not remitted.?

[KannikaP]

2 minutes ago, Pib said:

Was any of this money you are remitting covered/shielded by a DTA? 

 

I know you said your local RD didn't didn't seem to care about the the source of the income (i.e., pension, whatever, etc) of that Bt480K remitted which seems to imply at least with your local RD they could care less about a DTA.....like it taxable by Thailand....up to you to try to get an offsetting tax credit from your home country where the DTA may say it's only taxable by your home country and not taxable by your tax residence (Thailand in this case).   I don't believe Thailand is now disregarding DTAs as those are signed/agreed to at the highest levels of each government.

It is COULDN'T CARE LESS. 

I did say that MY UK income is below the tax threshold of £12570, so how can I get tax credit if I haven't paid any?

[Pib]

16 minutes ago, KannikaP said:

It is COULDN'T CARE LESS. 

I did say that MY UK income is below the tax threshold of £12570, so how can I get tax credit if I haven't paid any?

Until the Thai RD announces DTAs with around 61 other countries are void...not going to be complied with by Thailand...I just can't see what your local RD told you as being correct. 

 

Additionally, If I understand you right, you didn't really ask the RD a DTA question; instead, you asked about a UK 12,570 GBP tax threshold for paying taxes in the UK and if that might earn you a Thai tax exemption/reduction. 

 

Edited October 12, 2023 by Pib

[jacob29]

17 minutes ago, KannikaP said:

And what happens if ALL the income earned in foreign countries is not remitted.?

If it's never remitted it seems it won't ever be taxed. I highly doubt they will allow someone to decide whether a specific transfer is of past savings or assessable income, as I don't see how that's workable. I expect if you had past assessable income (e.g. earned while a tax resident) it will automatically be applied to any remittance. They will need to confirm this, but I don't see how it could work any other way.

 

In effect it aligns it more closely with other countries in the region. (except Philippines), where foreign income is taxed, with the caveat if that money never comes into Thailand, it remains untaxed.

 

A lot of people are discussing ways in which this change would tax people more than a country that simply taxes worldwide income (most countries), which I find highly unlikely.. as I don't think any country does this. It makes more sense that at its worst, you're taxed on full worldwide income like other countries do, while at best if you never remit more than you earned, that offshore part remains untaxed.

Edited October 12, 2023 by jacob29

[samtam]

3 hours ago, deejai33 said:

I agree, but it can be done since every transaction has a date.

 

As you say, few people seperate out their money neatly into different accounts based on tax status, or year earned.  I have a main account which money comes into and goes out of, and a 'savings' account that I transfer money to to gain interest.

 

So my main account has all sorts of transactions in it.  But each transaction has an origin and date made.  The account only has 1 balance maintained by the bank, which is the issue.  There's a technical term for such accounts such as mixed/combination. (Not sure)

 

You need to add some columns manually to the bank statement to be able to prove what each transactions status is and what the balance of that status is.

 

For example, if you want to show that in 2023 all of the money you sent to thailand existed before 2023 and so was untaxable under the 'loophole' you would add 2 columns to statement.  One called 2022 money, one called 2023 money.

 

Then look at end of 2022 balance and put it in 2022 column.  This is money available for tax free transfer.  Put zero in 2023 column.

 

Then examine each transaction starting jan 2023 and add or subtract it from either 2022, or 2023 column.  If its a transfer to thailand, subtract from 2022.  If its income in 2023 add it to 2023 column.  If its a bill from home country subtract from 2023, to keep as much avaiable of 2022 money.

 

If you run out of 2022 money, then you'll have to pay tax, unless the 2023 money is under dta.  You could have an extra column for that.

 

Not as complex as it sounds.  Doable for me with about 100 annual transactions.

 

 

 

 

 

 

 

 

 

Fungible.

 

 

3 hours ago, newnative said:

     It is my understanding--so far--that only taxable income brought into Thailand is considered 'accessible' income, meaning income that can be got at by Thailand and subject to possible Thai taxes.  Taxable, accessible income would be income sent to Thailand and not shielded by dual taxation agreements.  So, if I brought in USA social security money, or Virginia state government pension money, both shielded by the USA dual tax agreement, the money is not considered 'accessible' income and not subject to Thai tax.  There seems to be some uncertainty regarding pensions but I think state, not 'private',  'government' pensions are covered.  Could be wrong, but that's my thinking at this point.  One option I might consider is directly depositing my SS in a Thai bank, which now goes into my American bank.  This would establish a verifiable paper trail of specific, shielded money.

    Other income that I might bring in, such as dividend income, is 'accessible' for tax and I could be liable to pay that tax.  There seems to be several ways around that.  I could transfer the money in and designate it as a 'gift' to my Thai partner.  Apparently 10MB a year is allowed for that.  Could be one option I would consider if that is actually the case and allowed--and the paperwork is not too onerous.  

    There seems to be a number of deductions to use, should I decide to declare the taxable income brought in.  It looks like I can deduct 190,000 baht right off the top since I am over 65.  With the remaining amount, there seems to be another 150,000 baht deduction to lop off and that leaves you with a sum to be taxed on a sliding scale.  Possibly some other deductions, as well, that I have not looked into.  Once everything is figured in, the tax might be too much, depending on how much is brought in.  But, I'm still liking the 'gift' thing.

    Each year I earn approximately $11,000 in dividend income on stock I own, plus some interest income.  It is my understanding that this money can be subject to tax.  But, it is my further understanding that this money only becomes eligible for tax if it is remitted to Thailand, where it now becomes 'accessible'.  Left in the US, it is my current understanding that I would never be responsible to pay any Thai tax on it.  It remains inaccessible for Thai tax purposes.  If this is, indeed the case, i will not be sending any of this money to Thailand.

    I am one of the fortunate ones with a large chunk of cash already here in Thailand.  I could theoretically probably live off this money for the rest of my life--or a good part of it--without bringing in any money from abroad.  Left unanswered is whether the revenue department would come knocking on my door demanding an explanation on how I am supporting myself with no money coming in from broad--possibly with a deep dive into my finances; questioning when and where the money originally came from--and what type of money it was--interest, pension, social security, savings, etc.   A lot of concerns like this are still up in the air.

    Anyway, that's where I am at this point with my thinking, some 94 pages in on this thread.  I welcome any corrections or misconceptions on my part that I have made--I am definitely still learning.  I am still in the dark on what paperwork that might start to be required--whatever methods, schemes one chooses for their types of income and remittances.  I imagine to be determined at a later point.

"Assessable", not accessible, I think.

 

 

3 hours ago, Dogmatix said:

Nearly a month has past since Srettha promised there would be a focus group or focus groups to clarify the unlawful RD order reinterpreting an important part of the Revenue Code.  No sign of that yet.  Seems like that was another of his empty promises and those, for whom remittances are a key port of surviving, are hurtling towards a train wreck. 

An excellent point. Any other country making such a dramatic change would have of course made the clarification before the extremely unclear new interpretation.

 

 

48 minutes ago, KannikaP said:

Just got back, with a Tax ID, same number as on my Pink Card. with assurance that, in my case, transferring 40k per month = 480k per annum, after 190k + 60k + 150k all at 0%, I shall have to pay Bht4000 for the year. There was some mention of 100k being deductible for expenses. As we are not married, I cannot claim 60k for my Mrs, but possibly some for the school fees I pay for my Mrs's son, he will let me know.

Where the money comes from, pension, interest, sister's immoral earnings, is of no matter. It is simply how much is/will be transferred from UK to Thailand in the specific tax year. 

As I am only getting UK State Pension @ £170 per week = £8840 and a small one from Norway, my total UK income is £10400, below the Tax Free Allowance, so no tax due in UK either. I am happy with this.

Thank you for letting us know of your experience; not sure whether this interpretation it will be universally applied across all RD offices. Where is yours?

Edited October 12, 2023 by samtam

[KannikaP]

5 minutes ago, Pib said:

Until the Thai RD announces DTAs with around 61 other countries are void...not going to be complied with by Thailand...I just can see what your local RD told you as being correct. 

 

Additionally, If I understand you right, you didn't really ask the RD a DTA question; instead, you asked about a UK 12,570 GBP tax threshold for paying taxes in the UK and if that might earn you a Thai tax exemption/reduction. 

 

I give up. You DID NOT understand or read my posts correctly

I asked about being taxed on the Bht 480k I send to Thailand per year., which is all they need to know about.

And I think you meant 'I just CAN'T see what ............................'

.

[KannikaP]

5 minutes ago, samtam said:

Fungible.

 

 

"Assessable", not accessible, I think.

 

 

An excellent point. Any other country making such a dramatic change would have of course made the clarification before the extremely unclear new interpretation.

 

 

Thank you for letting us know of your experience; not sure whether this interpretation it will be universally applied across all RD offices. Where is yours?

Bang Rakam, Phitsanulok. Great tax office, great IO. 

[newnative]

5 minutes ago, KannikaP said:

Bang Rakam, Phitsanulok. Great tax office, great IO. 

It seems like if it is a 'great' tax office their first question to you should have been how much, if any, is this 480,000 baht shielded DTA income, not subject to Thai taxes.

[KannikaP]

4 minutes ago, newnative said:

It seems like if it is a 'great' tax office their first question to you should have been how much, if any, is this 480,000 baht shielded DTA income, not subject to Thai taxes.

Please read my previous posts again. MY UK income is at 0% as it is below £12570.

My Thai Tax man is only interested in what comes INTO Thailand. I did tell him that I live here permanently.

Edited October 12, 2023 by KannikaP

[Dogmatix]

38 minutes ago, Yumthai said:

Why do you have to pay 4K if your tax rate is 0%?

 

100K expenses deduction is only if you have income from employment.

 

Did you have the chance to ask the tax officer if you transfer as a gift up to 20M a year to your wife from abroad, it's tax-free?

 

It seems you didn't understand my question.

 

The 100k deduction is only for income under Section 40 (3).

 

(3) Fee of goodwill, copyright or any other rights, annuity or annual payment of income derived from a will, any other juristic act, or court decision.

 

You get the basic personal deduction of 60K and the over 65 deduction of 190k on pension and any type of income.  I have claimed those two on dividend income. 

[ukrules]

6 hours ago, The Cyclist said:

I think many people are panicking and doing Chicken Little impressions over nothing.

Even the O&G guys? There's quite a few of them and they only live here for one reason - no tax

[samtam]

10 minutes ago, KannikaP said:

Bang Rakam, Phitsanulok. Great tax office, great IO. 

You experience, as I said, is very interesting. I presume you are a regular Thai taxpayer. My own situation is more complicated by the fact that although over 65 my partner is also a foreigner, over 65 too, but we share all our finances and any monies brought into Thailand are from a joint account overseas. Therefore we would get 2x times the allowances you breakdown, THB150k + THB190k +THB60k, or a total of THB460k @ 0%. Trying to go through that with an RD officer would be an excruciating experience, dividing up which income is from whom, and how that is assessable.

[circa02]

4 minutes ago, KannikaP said:

Please read my previous posts again. MY UK income is at 0% as it is below £12570.

My Thai Tax man is only interested in what comes INTO Thailand. I did tell him that I live here permanently.

KannikaP,  How clear was he on "Where the money comes from, pension, interest, sister's immoral earnings, is of no matter. It is simply how much is/will be transferred from UK to Thailand in the specific tax year. "? There's a lot of ambiguity in the air at the moment and even the leading accounting firms are saying as much (i.e. wait and see), it surprises me that you've got a clear verdict here as that would mean dual tax would apply (not to your scenario but for many)...

[Pib]

7 minutes ago, KannikaP said:

I give up. You DID NOT understand or read my posts correctly

I asked about being taxed on the Bht 480k I send to Thailand per year., which is all they need to know about.

And I think you meant 'I just CAN'T see what ............................'

.

I think since DTAs must be considered (unless Thailand is going to ignore DTAs they signed) and how that remitted income may be shielded by  a DTA (like social security benefits being deposited to Thailand) that all funds remitted will not automatically be considered assessible (taxable) unless the individual self declares it as taxable. 

 

We really need clarification from headquarters Thai RD as to how DTAs will play....not only for us farangs but local RD offices.

 

Yeap...typo...meant to say can't...I went back and corrected...thanks for identifying.

[KannikaP]

1 minute ago, circa02 said:

KannikaP,  How clear was he on "Where the money comes from, pension, interest, sister's immoral earnings, is of no matter. It is simply how much is/will be transferred from UK to Thailand in the specific tax year. "? There's a lot of ambiguity in the air at the moment and even the leading accounting firms are saying as much (i.e. wait and see), it surprises me that you've got a clear verdict here as that would mean dual tax would apply (not to your scenario but for many)...

I personally do not want to 'wait & see', to know what my financial situation will be in less than three months and for the rest of my days in Thailand.

The Taxman seemed very informed and sure about what he told me, and it does make sense.

[KannikaP]

2 minutes ago, Pib said:

that all funds remitted will not automatically be considered assessible (taxable) unless the individual self declares it as taxable. 

[circa02]

8 minutes ago, KannikaP said:

I personally do not want to 'wait & see', to know what my financial situation will be in less than three months and for the rest of my days in Thailand.

The Taxman seemed very informed and sure about what he told me, and it does make sense.

That's fair enough, for yourself it's either 0 or 100 quid a year in tax, so you won't loose any sleep whatever happens, your amount in thai liabilities after allowances almost perfectly overlaps with 0% rate in the UK, but it doesn't take much to go over 12570, to be hit with 20% in the UK (nothing can do about that), but to then be smacked with an additional 15%-20% remittance tax on thai side (might as well call it if it's as stated), that's going to be a kicker for many as that can take tax up to 40% and not even a high earner at that point.... if it turns out as you state, I personally have my doubt it will happen like that, but thanks for sharing the insight

Edited October 12, 2023 by circa02

[TheAppletons]

12 hours ago, Pib said:

I think since DTAs must be considered (unless Thailand is going to ignore DTAs they signed) and how that remitted income may be shielded by  a DTA (like social security benefits being deposited to Thailand) that all funds remitted will not automatically be considered assessible (taxable) unless the individual self declares it as taxable. 

 

We really need clarification from headquarters Thai RD as to how DTAs will play....not only for us farangs but local RD offices.

 

Yes to all of the above.

 

Absurd to think that the only person who has the definitive answer is some local yokel up in Nakhon Nowhere who is undoubtedly making things up to avoid losing face.

[KannikaP]

11 minutes ago, KannikaP said:

14 minutes ago, Pib said:

that all funds remitted will not automatically be considered assessible (taxable) unless the individual self declares it as taxable. 

 

Of course the Thai Taxman can only assess you on what you tell him. Would he understand a UK Tax Assessment declaration in English. It's difficult enough for me!

Edited October 12, 2023 by KannikaP

[Mike Lister]

12 minutes ago, Pib said:

I think since DTAs must be considered (unless Thailand is going to ignore DTAs they signed) and how that remitted income may be shielded by  a DTA (like social security benefits being deposited to Thailand) that all funds remitted will not automatically be considered assessible (taxable) unless the individual self declares it as taxable. 

 

We really need clarification from headquarters Thai RD as to how DTAs will play....not only for us farangs but local RD offices.

 

Yeap...typo...meant to say can't...I went back and corrected...thanks for identifying.

This is exactly how I envisaged the system will work, it will be a voluntary declaration that will be communicated via a Thai tax return. The contents of the return will not be challenged, unless there is evidence to suggest it should be, such as frequent or large value transfers. Even then, only questions will be asked in the first instance. 

[KannikaP]

2 minutes ago, Mike Lister said:

This is exactly how I envisaged the system will work, it will be a voluntary declaration that will be communicated via a Thai tax return. The contents of the return will not be challenged, unless there is evidence to suggest it should be, such as frequent or large value transfers. Even then, only questions will be asked in the first instance. 

The best and most sensible of today's replies.

Thanks Mike.

Edited October 12, 2023 by KannikaP

[Dogmatix]

6 minutes ago, Mike Lister said:

This is exactly how I envisaged the system will work, it will be a voluntary declaration that will be communicated via a Thai tax return. The contents of the return will not be challenged, unless there is evidence to suggest it should be, such as frequent or large value transfers. Even then, only questions will be asked in the first instance. 

The RD usually sends a list of requested documents after you have submitted your tax return.  The list is normally documentary evidence of any income or deductions that is not submitted to them automatically. For example, in my case, I have to submit slips for each of my Thai dividend payments and for many deductions.  Thai insurance premiums and mainly sent directly to the RD these days as are some charitable donations. They are likely to want information on your offshore income and tax credits.  If you file manually at their office with the help of an officer, you may be able to submit all the documents they want at the time. If you submit online, you upload documents you think they want but either way they will write to you with a list of documents they want, if they still need any. I have always waited for their list because the dividend slips are too many to upload online and I take it all round to the office in hard copy, as my RD office is just up the road.  Last time the girl was really nice and checked the documents on the spot.  What docs will they want for overseas income and tax credit?  I have no idea. 

[Dogmatix]

39 minutes ago, samtam said:

You experience, as I said, is very interesting. I presume you are a regular Thai taxpayer. My own situation is more complicated by the fact that although over 65 my partner is also a foreigner, over 65 too, but we share all our finances and any monies brought into Thailand are from a joint account overseas. Therefore we would get 2x times the allowances you breakdown, THB150k + THB190k +THB60k, or a total of THB460k @ 0%. Trying to go through that with an RD officer would be an excruciating experience, dividing up which income is from whom, and how that is assessable.

You don't get the 150k threshold twice, if you file jointly with spouse.  You have to file separately, if you want that. But you do get all the allowances for each.  I have filed both jointly and separately. Filing jointly is advantageous if the spouse has little or no income of her own and thus has allowances that she couldn't use, if she filed alone.  If her income is significant, it might be better for her to file separately to get the 150k threshold for herself.

[newnative]

55 minutes ago, KannikaP said:

Please read my previous posts again. MY UK income is at 0% as it is below £12570.

My Thai Tax man is only interested in what comes INTO Thailand. I did tell him that I live here permanently.

Yes, your Thai tax man should only be interested in what comes into Thailand.  And, again, his first question should be to anyone, not just you, how much of that money coming into Thailand is shielded DTA and how much is not.

[Lorry]

2 hours ago, KannikaP said:

Where the money comes from, pension, interest, sister's immoral earnings, is of no matter. It is simply how much is/will be transferred from UK to Thailand in the specific tax year. 

So they feel like me: forget about DTA, too much trouble,  too complicated, just ignore it.

 

 

[UWEB]

58 minutes ago, ukrules said:

Even the O&G guys? There's quite a few of them and they only live here for one reason - no tax

BS, if you are working O&G ( I did 40 years) you are not become Tax Resident in Thailand. You are at least 7 month a year out of Country.

[Mike Lister]

17 minutes ago, Dogmatix said:

The RD usually sends a list of requested documents after you have submitted your tax return.  The list is normally documentary evidence of any income or deductions that is not submitted to them automatically. For example, in my case, I have to submit slips for each of my Thai dividend payments and for many deductions.  Thai insurance premiums and mainly sent directly to the RD these days as are some charitable donations. They are likely to want information on your offshore income and tax credits.  If you file manually at their office with the help of an officer, you may be able to submit all the documents they want at the time. If you submit online, you upload documents you think they want but either way they will write to you with a list of documents they want, if they still need any. I have always waited for their list because the dividend slips are too many to upload online and I take it all round to the office in hard copy, as my RD office is just up the road.  Last time the girl was really nice and checked the documents on the spot.  What docs will they want for overseas income and tax credit?  I have no idea. 

The RD has never asked me for any documentation but the only income I have ever had that arises in Thailand is via my bank, UOB, typically investment funds and interest and they of course have supplied copies of all relevant documentation directly to the RD.