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

[Guavaman]

8 minutes ago, Mike Lister said:

My Thai tax return shows income from the US SSc which I declare but exclude from the calculation, UK state pension income and Thai based savings income. I sometimes pay a small amount of tax, I mostly do not.

How do you declare SSc it on the tax form -- income from employment?

No. 1 Assessable Income Under Section 40 (1) (2)

 

How do you exclude it from calculation -- where on the tax form ภ.ง.ด.90?

[The Cyclist]

6 minutes ago, Mike Lister said:

I have filed for the past three years. If you file to reclaim tax with held on bank interest you are obliged to declare your income

I have 3 accounts in Thailand

 

* FCA. Last remittance Jan 2020 and would have had the RD doing somersaults with the amount of tax they could have collected.

 

* Extension money account. Amount has never changed since it was opened.

 

* Daily account where my pensions go. Which is about to drop to a single pension until clarity makes an appearance.

 

None of them pay interest.

[Mike Lister]

3 minutes ago, The Cyclist said:

I have 3 accounts in Thailand

 

* FCA. Last remittance Jan 2020 and would have had the RD doing somersaults with the amount of tax they could have collected.

 

* Extension money account. Amount has never changed since it was opened.

 

* Daily account where my pensions go. Which is about to drop to a single pension until clarity makes an appearance.

 

None of them pay interest.

OK. I use fixed deposits quite extensively here and all pay interest of course, that's the difference between us perhaps.

[Mike Lister]

4 minutes ago, Guavaman said:

How do you declare SSc it on the tax form -- income from employment?

No. 1 Assessable Income Under Section 40 (1) (2)

 

How do you exclude it from calculation -- where on the tax form ภ.ง.ด.90?

I prepare an income statement listing all the sources and the amounts and I take this to the local District RD office. I agree it with RD staff so they understand the sources etc and the very helpful young lady then enters into my online tax account which is in Thai. As long as the system bottom line agrees with the statement I have prepared, there's no issue...it always does. She prints off a copy of the return and I staple my statement to it....job done.

[Guavaman]

9 minutes ago, Mike Lister said:

I prepare an income statement listing all the sources and the amounts and I take this to the local District RD office. I agree it with RD staff so they understand the sources etc and the very helpful young lady then enters into my online tax account which is in Thai. As long as the system bottom line agrees with the statement I have prepared, there's no issue...it always does. She prints off a copy of the return and I staple my statement to it....job done.

Does the system bottom line include the amount from SSc?

Is it possible that she doesn't report SSc as income and then exempts it on the form -- that it does not show up on the tax return form?

[Mike Lister]

1 minute ago, Guavaman said:

Does the system bottom line include the amount from SSc?

Is it possible that she doesn't report SSc as income and then exempts it on the form -- that it does not show up on the tax return form?

The "bottom line" is the net tax due/refund which always agrees. 

 

Yes, for system purposes it is possible that she doesn't include the US SSc amount but this would be odd since it was the subject of some explanation. TBH I have never queried this previously because there was never a need, as long as the bottom line tallies.

 

Another odditie of the system is that you only enter one bank name/account number but you record all interest from all banks under that name/number. I have accounts with BBL/UOB/Kasi but only record the BBL account name/number, somehow that links to all account records from banks in Thailand bearing my name/tax number etc. 

[Guavaman]

3 minutes ago, Mike Lister said:

The "bottom line" is the net tax due/refund which always agrees. 

 

Yes, for system purposes it is possible that she doesn't include the US SSc amount but this would be odd since it was the subject of some explanation. TBH I have never queried this previously because there was never a need, as long as the bottom line tallies.

The tax filing forms do not appear to be set up to allow for implications of DTAs: untaxable pensions, social security, tax credits, etc. One can't claim exemption for untaxed income remitted, or even to show the amounts of remitted income, using the tax form.

[Dogmatix]

1 hour ago, Mike Lister said:

But the subject is income received from overseas, not income derived from transactions in Thailand.

The solution is simple. If you believe you have to declare income that is exempt, under a DTA, go ahead and declare it, enclosing a covering letter in Thai explaining why with supporting documentation. Don't file online because there is on way to claim a tax credit or exemption and the software will calculate the tax and make you pay it.  

[Guavaman]

The RD provided a hint of their way of thinking here:

#4 QUESTION:   Question: What types of assessable income are subject to income tax according to Section 41, paragraph two, of the Revenue Code?
ANSWER:  Assessable income from foreign sources that is subject to income tax is assessable income according to Section 40 (1) to (8) of the Revenue Code.

However, if it is assessable income that is exempt from tax according to law, taxpayer does not have to bring that assessable income to pay tax in Thailand, such as inheritance or income received from support from parent, descendant, or spouse, only for the amount of income that does not exceed twenty million baht throughout that tax year, for example.

 

Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation:

(27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year.

 

Gift income is assessable but not reported on the tax filing form unless the amount exceeds 20. So it is not reported as income on the tax form and then subtracted if it is exempt (<20m). 

 

It appears that RD needs to include another category under Section 42 for assessable income exempt from taxation under DTAs.

 

The gift tax example is practised as not reported unless the amount exceeds 20m.

[Guavaman]

9 hours ago, RupertIII said:

Thanks, I wasn't aware of that.

I have a Wise a/c where all my overseas monies are paid into. My wife also now has a Wise a/c into which I have been paying part of my UK pension into, really to keep her a/c active for the future, which she then transfers into her Thai a/c.

I assume that if I pay into her Wise a/c an additional amount at the end of each year to bring the total to an annual equivalent of THB210k (60k allowance + 150K at 0%) she can then transfer to her Thai a/c and we can then elect for separate filing, or might the taxman consider that evasion rather than legitimate avoidance, bearing in mind the transfers will show on her Wise statement as originating from my a/c?

It appears that she would be accepting a gift from her spouse. 

 

Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation:

(27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year.

 

You would have to gift her 20,210,000, then she would report 210K as non-exempt taxable income as per Section 42.

[stat]

23 minutes ago, Guavaman said:

It appears that she would be accepting a gift from her spouse. 

 

Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation:

(27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year.

 

You would have to gift her 20,210,000, then she would report 210K as non-exempt taxable income as per Section 42.

Thanks for your post! If this works out as it is stated then there should be no problem at all as long as you have family that can and is willing to "donate" to you without incurring gift tax in the other country i.e. their home country 🙂

 

This would be a very easy solution!

Edited October 18, 2023 by stat

[JimGant]

6 hours ago, Negita43 said:

since taking money out of an ISA is completely tax free (and doesn't have to be reported to the tax authorities) so if I then send this to Thailand what is the status of that money since it's not taxable in the UK

This from a few pages back; it's from a technical explanation of a US DTA, but most DTAs are similar, being based on the OECD Model:

 

Quote

And, based on this from the US technical explanation of US DTAs, if you remit cash flow to Thailand that is exempt from taxation in your source country -- well, then, it remains tax exempt in Thailand:

 

[Lorry]

3 hours ago, stat said:

Thanks for your post! If this works out as it is stated then there should be no problem at all as long as you have family that can and is willing to "donate" to you without incurring gift tax in the other country i.e. their home country 🙂

 

This would be a very easy solution!

No need for relatives if you can live on 800,000 a month (I know it's hard).

The paragraph right after the one quoted by guava reads

 

(28) Income derived from maintenances and support under moral purposes or gifts received in a ceremony or on occasions in accordance with custom and tradition from persons who are not ascendants, descendants or spouse, but only for the portion not exceeding ten million baht throughout the tax year.

 

The subject had been discussed in this thread before. 

Some posters suspect that a gift (from a gifter who is Thai tax resident) might be "remitting income to Thailand". So don't gift 10m to your wife.  But her mother in law, who lives abroad and is not a Thai tax resident, can gift her (or you) 10m.

 

Edited October 18, 2023 by Lorry

[jerrymahoney]

10 hours ago, Mike Lister said:

Yes, it's a justification. But before it can be justified it has to be exposed, declared and accounted for. A person can't simply import a million baht into their Thai bank account and not say anything to the RD, just because they know it is excluded under a DTA.

From Mazars as quoted prior:

 

According to the Revenue Department, it will seek opinions from the stakeholders affected by the new rule and issue guidelines to provide more clarity. The plan includes an amendment of the personal income tax return form to facilitate the foreign tax credit claim.

 

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Thailand-Tax-Foreign-Income-Taxable-from-2024

 

 

 

[Mike Lister]

7 hours ago, Guavaman said:

The tax filing forms do not appear to be set up to allow for implications of DTAs: untaxable pensions, social security, tax credits, etc. One can't claim exemption for untaxed income remitted, or even to show the amounts of remitted income, using the tax form.

I do not know if/how the online system differs from the paper based tax form because there is no English language version.

[Guavaman]

2 hours ago, Lorry said:

No need for relatives if you can live on 800,000 a month (I know it's hard).

The paragraph right after the one quoted by guava reads

 

(28) Income derived from maintenances and support under moral purposes or gifts received in a ceremony or on occasions in accordance with custom and tradition from persons who are not ascendants, descendants or spouse, but only for the portion not exceeding ten million baht throughout the tax year.

 

The subject had been discussed in this thread before. 

Some posters suspect that a gift (from a gifter who is Thai tax resident) might be "remitting income to Thailand". So don't gift 10m to your wife.  But her mother in law, who lives abroad and is not a Thai tax resident, can gift her (or you) 10m.

 

Beware of using gifts to evade taxes:

 

Thaksin’s wife Pojaman, her brother and her secretary Kanjanapa Hongheun were convicted in July 2008 of colluding to evade tax worth 546 million baht.  She claimed that a 1997 transfer of shares in Shinawatra Computer and Communication, which later became Shin Corp. was a wedding gift to her brother – a year after the wedding.

 

She and the maid were later acquitted -- two weeks after Thaksin’s sister was sworn in as Prime Minister in 2011; however, the court  found Potjaman’s brother, Bhanapot Damapong, guilty of tax evasion, but reduced his sentence to two years and a 100,000 baht fine.

[Dogmatix]

So you don’t even know what you declared on your tax return because you let someone do it for you online and you can’t read Thai. Since there is no way of deducting your SS income, if you enter it into the top line, she obviously doesn’t enter it at all. Proves the point that exempted or non-assessable income is not declared on PND91 whether it is SS income, land sales or whatever.

11 hours ago, Mike Lister said:

I prepare an income statement listing all the sources and the amounts and I take this to the local District RD office. I agree it with RD staff so they understand the sources etc and the very helpful young lady then enters into my online tax account which is in Thai. As long as the system bottom line agrees with the statement I have prepared, there's no issue...it always does. She prints off a copy of the return and I staple my statement to it....job done.

[Mike Lister]

5 minutes ago, Dogmatix said:

So you don’t even know what you declared on your tax return because you let someone do it for you online and you can’t read Thai. Since there is no way of deducting your SS income, if you enter it into the top line, she obviously doesn’t enter it at all. Proves the point that exempted or non-assessable income is not declared on PND91 whether it is SS income, land sales or whatever.

I know what I declare to the RD and that my calculation for tax due/refund agrees with their system, that's all I need to know.

[Dogmatix]

5 hours ago, Lorry said:

No need for relatives if you can live on 800,000 a month (I know it's hard).

The paragraph right after the one quoted by guava reads

 

(28) Income derived from maintenances and support under moral purposes or gifts received in a ceremony or on occasions in accordance with custom and tradition from persons who are not ascendants, descendants or spouse, but only for the portion not exceeding ten million baht throughout the tax year.

 

The subject had been discussed in this thread before. 

Some posters suspect that a gift (from a gifter who is Thai tax resident) might be "remitting income to Thailand". So don't gift 10m to your wife.  But her mother in law, who lives abroad and is not a Thai tax resident, can gift her (or you) 10m.

 

The gift tax amendment doesn’t say it only covers gifts from Thai sources, unlike the inheritance tax law that specifies inheritance from anywhere is taxable (making it the only foreign income taxable for individuals whether remitted to Thailand or not).

 

The Q&A reference to gift or maintenance income is disjointed because it is doesn’t specify this type of income from overseas being exempted up to 20m. But why mention it, in this context, if not? However, this is just a PR piece from RD not signed by anyone.

 

I would say it is somewhat encouraging that gifts can be used but another interpretation is possible that gifts of foreign source income by a tax resident are deemed assessable.

Edited October 19, 2023 by Dogmatix

[Lorry]

32 minutes ago, Dogmatix said:

possible that gifts of foreign source income by a tax resident are deemed assessable.

That's why a gift from someone who doesn't live in Thailand is preferable. 

 

Of course,  don't forget Guavaman's warning.

[The Cyclist]

5 hours ago, jerrymahoney said:

The plan includes an amendment of the personal income tax return form to facilitate the foreign tax credit claim.

 

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Thailand-Tax-Foreign-Income-Taxable-from-2024

 

 

 

Makes absolute sense and falls into a comment I made above saying that in the worse case, we might have to file a Nil Return or something similar.

 

To my way of thinking, remittances that are covered by a DTA will not fall under the bracket of assessable income. Assesable income being remittances that are subjuect to Thai taxation.

[Robin]

I have just had a telephone conversion with my Bank in Singapore, to organise transferring some money to my Thai account, and the person i spoke to said that she had heard  from another Dept. in he bank that the proposed tax law is not going to affect me as a person in Thailand on a Retirement Visa.  h had no details but was very sure of what she had heard.

Any new like this here.

Could it be that Srettha is finally seeing sense?

Regardless, I am organising a transfer of some money to Thailand before the proposed tax starts.  Better safe than sorry, and who knows what Srettha  will dream up next.

[Dogmatix]

2 hours ago, Mike Lister said:

I know what I declare to the RD and that my calculation for tax due/refund agrees with their system, that's all I need to know.

You know what you verbally discussed with someone you met at the RD but not what she declared on your tax return.

[Dogmatix]

27 minutes ago, Robin said:

I have just had a telephone conversion with my Bank in Singapore, to organise transferring some money to my Thai account, and the person i spoke to said that she had heard  from another Dept. in he bank that the proposed tax law is not going to affect me as a person in Thailand on a Retirement Visa.  h had no details but was very sure of what she had heard.

Any new like this here.

Could it be that Srettha is finally seeing sense?

Regardless, I am organising a transfer of some money to Thailand before the proposed tax starts.  Better safe than sorry, and who knows what Srettha  will dream up next.

You bank in Singapore is unlikely to have any more information than what we have, sitting in Thailand eagerly watching out for announcements. I don't think Srettha has anything to do with this.  He's too busy going on roadshows to meet dictators and war criminals and making speeches on the green silk road.  But he has to take responsibility as finance minister. 

[Dogmatix]

1 hour ago, The Cyclist said:

Makes absolute sense and falls into a comment I made above saying that in the worse case, we might have to file a Nil Return or something similar.

 

To my way of thinking, remittances that are covered by a DTA will not fall under the bracket of assessable income. Assesable income being remittances that are subjuect to Thai taxation.

There is no requirement to file a tax return, if you have no income or no assessable income over the threshold.  The workforce is 39 million but only 3.3 million pay tax.  They don't want to be inundated with tax returns from the other 35.7 million without being able to tax them.

 

Remittances that are covered by a DTA will definitely fall under assessable income unless the wording is very clear this income can only be taxed in the originated state, or there is a decree forthcoming exempting it.  The only types of income that are exempted in this way are US Social Security and government pensions of former civil servants in most countries.  Tax credits should be accepted, if you have already paid tax on that income, but you will have to pay the difference, if Thai tax is higher.  If the income has not be taxed in the originating country, you will have pay full Thai tax and claim the Thai credit against tax at home.

[TroubleandGrumpy]

14 hours ago, Mike Lister said:

I prepare an income statement listing all the sources and the amounts and I take this to the local District RD office. I agree it with RD staff so they understand the sources etc and the very helpful young lady then enters into my online tax account which is in Thai. As long as the system bottom line agrees with the statement I have prepared, there's no issue...it always does. She prints off a copy of the return and I staple my statement to it....job done.

150K to 200K Expats descending on their local Thai RD Office - ROFLOL.

 

[TroubleandGrumpy]

34 minutes ago, Dogmatix said:

You bank in Singapore is unlikely to have any more information than what we have, sitting in Thailand eagerly watching out for announcements. I don't think Srettha has anything to do with this.  He's too busy going on roadshows to meet dictators and war criminals and making speeches on the green silk road.  But he has to take responsibility as finance minister. 

Yes mate. And before he left for his junket 'World Tour of the smiling Thai PM', maybe he left clear instructions to those working on the details - 'Dont say anything until I get back'.   If so, then once he gets back and does the job he was elected to do (not just the job told to do), then maybe this issue will be addressed. 

[beammeup]

So we are clear, that it is not clear that gifts remitted from offshore to a spouse are assessable?

[The Cyclist]

1 hour ago, Dogmatix said:

There is no requirement to file a tax return, if you have no income or no assessable income over the threshold. 

You really need to stop speculating. How many expats do you think are living in Thailand that have no income or income that is below Baht 150,00" a year ?
 

Non I would wager unless they are working in the Thai Black economy.

 

Again, nothing but speculation.

 

1 hour ago, Dogmatix said:

if you have already paid tax on that income, but you will have to pay the difference, if Thai tax is higher.  If the income has not be taxed in the originating country, you will have pay full Thai tax and claim the Thai credit against tax at home.

Can you provide evidence for this ? Or is this another ' Somebody said it might / could happen ' so is now considered the gospel truth and nothing but the truth ?

 

1 hour ago, Dogmatix said:

Remittances that are covered by a DTA will definitely fall under assessable income unless the wording is very clear this income can only be taxed in the originated state,

Yes indeed. That would be why myself and others, continue to post that US SSC and Government Pensions are covered by DTA's and will not be subject to Thai taxes.

 

That is why everyone should have a look at the DTA that is pertinent to them and see if their income is covered by said DTA.

 

It really isn't rocket science.

 

 

[samtam]

8 hours ago, jerrymahoney said:

From Mazars as quoted prior:

 

According to the Revenue Department, it will seek opinions from the stakeholders affected by the new rule and issue guidelines to provide more clarity. The plan includes an amendment of the personal income tax return form to facilitate the foreign tax credit claim.

 

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Thailand-Tax-Foreign-Income-Taxable-from-2024

 

 

 

Thanks for the Mazars piece. I wish RD would get on with "seeking the opinions....and issuing guidelines to provide more clarity". Cart and horse etc.

This magnum opus thread has demonstrated the complexity of many people's individual income status, and I cannot imagine how RD propose to address that with any understanding, consistency or fairness, given the track record of Thai bureaucracy in every field. Obviously the confusion is not just confined to those who have contributed valuable and interesting pieces herein, but to all the major accounting firms, and legal firms that deal with Thai tax.