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

[JimTripper]

2 minutes ago, samtam said:

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. 

Visit bangcock.

[Negita43]

14 hours ago, stat said:

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

So long term partner would have to pay tax on monetary gifts

[Negita43]

Came across this about the UK Thai DTA

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/507424/uk-thailand-dtc180281_-_in_force.pdf

 

Articles 1 to 4 maybe relevant.

[Mike Lister]

3 hours ago, Dogmatix said:

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

I sat there with the Revenue Officer whilst she entered the information in the screen and we went through my return in detail, that's enough for me. I don't care how the RD accounts for things internally, I only care about the bottom line. I also know that the RD system bottom line tallied with my manual calculation. Those things are sufficient for me, I am very comfortable that what she entered into the system reflected accurately the information I provided, very comfortable. Now, go argue with somebody else, if you don't like what I did I can't help you.

Edited October 19, 2023 by Mike Lister

[Dogmatix]

6 hours ago, The Cyclist said:

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.

 

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 ?

 

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.

 

 

You asked for evidence that, in cases where the Thai tax is greater on foreign sourced income, the taxpayer will have to pay the difference.  Here is a ruling from the RD in a 2004 case relating to double taxation of individuals that embodies this principle. https://www.rd.go.th/24356.html 

[Guavaman]

7 hours ago, beammeup said:

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

Assessable but exempt from tax -- if under 10m or 20m.

 

#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.

[The Cyclist]

31 minutes ago, Dogmatix said:

You asked for evidence that, in cases where the Thai tax is greater on foreign sourced income, the taxpayer will have to pay the difference.  Here is a ruling from the RD in a 2004 case relating to double taxation of individuals that embodies this principle. https://www.rd.go.th/24356.html 

Did you understand that link you supplied ?

 

It covers-
 

Company employees, working in the Philipines, bringing the money back into Thailand, where they have other Thai income in the same tax year.

 

The tax credit must not exceed the amount of tax paid.

 

I don't think the above will apply to too many expats, especially retirees.

 

The above is covered in the initial announced and the the very first post in the thread, under the 3 sources of income that will be covered as ' Assessable income ' coming into Thailand.

 

* Income from employment

 

How many retired expats remit income to Thailand that comes from employment ?

 

 

[Dogmatix]

15 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

 

The Mazars piece didn't mention anything about the impact on expats remitting money to buy condos which I would think will be extremely negative for developers and the economy as well as the RD which will miss on transfer tax and land tax. Not a peep out of any of the developers either. 

[Guavaman]

42 minutes ago, The Cyclist said:

Did you understand that link you supplied ?

 

It covers-
 

Company employees, working in the Philipines, bringing the money back into Thailand, where they have other Thai income in the same tax year.

 

The tax credit must not exceed the amount of tax paid.

 

I don't think the above will apply to too many expats, especially retirees.

 

The above is covered in the initial announced and the the very first post in the thread, under the 3 sources of income that will be covered as ' Assessable income ' coming into Thailand.

 

* Income from employment

 

How many retired expats remit income to Thailand that comes from employment ?

 

 

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

 

(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.

[The Cyclist]

19 minutes ago, Guavaman said:

ncome derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance,

The link supplied will not apply to many expat retirees in Thailand. Very few to none will be earning money in Thailand whilst working in the Philipines.

 

For retirees the main bone of contention will be Pensions.

 

Government Pensions are non taxable in Thailand due to the UK / Thai DTA.

 

Private pensions are another story. Which is why I have removed mine from the equation and stopped it being remitted to Thailand

 

Any other retiree who has any of the rest of the list being remitted to Thailand, might want to reconsider, until the muddy waters become clearer.

 

Of course, people who are on retirement extensions and still working are a different kettle of fish.

 

Edited October 19, 2023 by The Cyclist
Typo

[Guavaman]

For US citizens, under the DTA private pensions also includes IRAs, 401ks, and annuities; all are considered assessable income taxable upon remittance to Thailand.

[Jinxed1]

Does anyone know if money remitted from now to 1st Jan 2024 will be taxable at next tax-filing according to the new law, or is it still exempt?

Thanks

[stat]

17 hours ago, Guavaman said:

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.

I do not understand your warning. The limit is 10 or 20 Million Baht per year. It is obvious that over 10 M. per year you have a problem. I assume not many people here will receive more then 10 M Baht per! year.

Edited October 19, 2023 by stat

[stat]

10 hours ago, beammeup said:

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

My understadning is under 10M or 20 M Baht per year is free when coming from a relative.

Edited October 19, 2023 by stat

[Guavaman]

1 hour ago, stat said:

I do not understand your warning. The limit is 10 or 20 Million Baht per year. It is obvious that over 10 M. per year you have a problem. I assume not many people here will receive more then 10 M Baht per! year.

Potjaman was the giftor and she was convicted of colluding in tax evasion; it was not about the amount, although she was acquitted for lack of evidence. Her brother as the giftee was not acquitted. 

 

We wouldn't want to find ourselves in the role of the giftor, who might be acquitted, while our wife who was the giftee, was convicted. It is not about the amount. It is about the allowability of the gift and remittance.

[stat]

27 minutes ago, Guavaman said:

Potjaman was the giftor and she was convicted of colluding in tax evasion; it was not about the amount, although she was acquitted for lack of evidence. Her brother as the giftee was not acquitted. 

 

We wouldn't want to find ourselves in the role of the giftor, who might be acquitted, while our wife who was the giftee, was convicted. It is not about the amount. It is about the allowability of the gift and remittance.

Thanks for your post! Ok so this would "only" apply if you give something to your thai wife or son.

I was talking about receiving money from a relative giftor that lives outside of Thailand. Of course if you set up a formal contract like money will be gifted for the reason not to pay taxes you would run into trouble (maybe).

[jerrymahoney]

5 hours ago, Guavaman said:

For US citizens, under the DTA private pensions also includes IRAs, 401ks, and annuities; all are considered assessable income taxable upon remittance to Thailand.

From US-Thai DTA Article 20

 

3.         Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State. The term "annuities" as used in this paragraph means a stated sum paid periodically at stated times during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered).

[Dogmatix]

5 hours ago, Guavaman said:

Potjaman was the giftor and she was convicted of colluding in tax evasion; it was not about the amount, although she was acquitted for lack of evidence. Her brother as the giftee was not acquitted. 

 

We wouldn't want to find ourselves in the role of the giftor, who might be acquitted, while our wife who was the giftee, was convicted. It is not about the amount. It is about the allowability of the gift and remittance.

 

I think the Potjaman case may be misleading, as I seem to recall it was about whether a taxable unrealized capital gain had arisen on SHIN shares transferred to her brother without putting the trade through the SET which would have made it tax exempt. Thai tax case law makes clear that such unrealized gains are taxable, as in the case of grants of shares or options given to employees of listed firms.

The case of Thaksin’s children who received an off market transfer of SHIN shares in Singapore was similar. In a surprising flip flop ruling months before the May 2023 election the Supreme Court reversed the rulings of the first two courts and returned 17 billion in tax to Thaksin arguing that transfer of shares to the children never really happened as the children were Thaksin’s nominees. It is unusual for Thai courts to take a sunbstance over form view that favours tax avoiders but Thaksin got 17 billion for the PT election campaign and delivered admirably in return in terms of maintaining the elite in power and joining it. I can’t remember exactly the logic used to overturn Potjaman’s conviction (or why her brother’s wasn’t) but the cases against her and the children looked absolutely water tight with many precedents supporting the convictions.

[Guavaman]

28 minutes ago, Dogmatix said:

 

I think the Potjaman case may be misleading, as I seem to recall it was about whether a taxable unrealized capital gain had arisen on SHIN shares transferred to her brother without putting the trade through the SET which would have made it tax exempt. Thai tax case law makes clear that such unrealized gains are taxable, as in the case of grants of shares or options given to employees of listed firms.

The case of Thaksin’s children who received an off market transfer of SHIN shares in Singapore was similar. In a surprising flip flop ruling months before the May 2023 election the Supreme Court reversed the rulings of the first two courts and returned 17 billion in tax to Thaksin arguing that transfer of shares to the children never really happened as the children were Thaksin’s nominees. It is unusual for Thai courts to take a sunbstance over form view that favours tax avoiders but Thaksin got 17 billion for the PT election campaign and delivered admirably in return in terms of maintaining the elite in power and joining it. I can’t remember exactly the logic used to overturn Potjaman’s conviction (or why her brother’s wasn’t) but the cases against her and the children looked absolutely water tight with many precedents supporting the convictions.

Mr Bhanapot made the purchase using $15m that his sister gave him, ostensibly as a wedding gift, and bought the shares from a family maid. At the time officials judged the share transfer a gift to mark a special occasion and thus not taxable. But after the coup, authorities called it a handout and liable for tax.

 

The court said there was insufficient evidence against Potjaman Na Pombejra and her secretary, who along with her brother were found guilty in August 2008 of evading 546 million baht ($18 million) in taxes.

 

The court upheld Bannapot's guilty verdict for not paying tax on his earnings from the share acquisition. But it reduced his sentence from three years in jail to two years' suspended.

[The Cyclist]

@Mike Lister

 

Something you ( and any other UK State Pension holders ) might want to consider, which came about during a conversation I had yesterday.

 

Government Pensions will increase by 6.7% in April. The September CPI figure released on Wednesday. Just as it has done so, for the last 20 odd years I have had a Government Pension.

 

The State Pension will increase by either 8.5% or 7.9% in April ( ignore that it is frozen for pensioners in Thailand ) due to the triple lock. Which suggests that the State Pension is not a Government Pension or it would be increasing by 6.7%.

 

Info only and not a suggestion or inferrence on how the RD will classify the State Pension for tax purposes after 01 January. Just something to be aware of.

[Mike Lister]

2 hours ago, The Cyclist said:

@Mike Lister

 

Something you ( and any other UK State Pension holders ) might want to consider, which came about during a conversation I had yesterday.

 

Government Pensions will increase by 6.7% in April. The September CPI figure released on Wednesday. Just as it has done so, for the last 20 odd years I have had a Government Pension.

 

The State Pension will increase by either 8.5% or 7.9% in April ( ignore that it is frozen for pensioners in Thailand ) due to the triple lock. Which suggests that the State Pension is not a Government Pension or it would be increasing by 6.7%.

 

Info only and not a suggestion or inferrence on how the RD will classify the State Pension for tax purposes after 01 January. Just something to be aware of.

I have never suggested or thought that UK STate pension is a government pension.

[The Cyclist]

37 minutes ago, Mike Lister said:

I have never suggested or thought that UK STate pension is a government pension.

I tagged you in because it was something that we had previously discussed.

 

There has been others on the thread that appear to think that UK State Pensions are a Government Pension.

 

They may well be correct, when the RD makes the distinction. I would prefer to err on the side of caution ( If it concerned me ) and expect it to be taxed and perhaps get a bonus if / when it is not.

 

Rather than think It is a Government Pension and get shafted with a tax bill I was not expecting.

[stat]

8 hours ago, Guavaman said:

Mr Bhanapot made the purchase using $15m that his sister gave him, ostensibly as a wedding gift, and bought the shares from a family maid. At the time officials judged the share transfer a gift to mark a special occasion and thus not taxable. But after the coup, authorities called it a handout and liable for tax.

 

The court said there was insufficient evidence against Potjaman Na Pombejra and her secretary, who along with her brother were found guilty in August 2008 of evading 546 million baht ($18 million) in taxes.

 

The court upheld Bannapot's guilty verdict for not paying tax on his earnings from the share acquisition. But it reduced his sentence from three years in jail to two years' suspended.

So nothing to do with gift tax then right?

[Guavaman]

3 hours ago, stat said:

So nothing to do with gift tax then right?

Investigators say the share transfers were liable for capital-gains tax and that the family misrepresented them as a gift. 

 

Tax Break Article_November 2008

 

Gifts May be Taxed under a Catch All Provision

The defense argument that shares were tax free as they were transferred as a wedding gift did not work as the Court deemed that gifts are assessable. This is despite section 42(1) of the Revenue Code which states that “maintenance income derived under moral obligation, corpus of a legacy or inheritance, or gifts made in a ceremony or on occasions in accordance with established custom” are exempt from tax.

 

Invocation of Previously Unused Section of the Revenue Code

Section 37 is particularly onerous and decrees that as a result of knowingly making false statements or producing false evidence with a view to evading tax, there is a punishment of between 3 months to 7 years and / or a fine of Bt 200,000.

-----

Note:  These cases took place prior to the Revenue Code Amendment Act (No. 40) B.E. 2015 on gift tax.

 

A failed attempt to claim exemption of tax on a "gift" by the recipient.

[Guavaman]

It is advisable for expat tax residents to know the consequences of intentional actions to evade taxes in Thailand:

 

Section 37 Any person who:

(1) intentionally notifies false statement or gives false statement or answers with a false statement or shows false evidence in order to evade taxes or request for tax refund under this Title, or

(2) by fault, fraud, scheme or any other method of similar nature, evades or attempts to evade tax or request for tax refund under this Title, shall be subject to an imprisonment from 3 months to 7 years and a fine from 2,000 Baht to 200,000 Baht.

Section 37 Bis Any person intentionally fails to file tax returns prescribed under this Title in order to evade or in an attempt to evade tax, shall be subject to a fine not exceeding 200,000 Baht or an imprisonment for a term not exceeding 1 year or both.

 

[The Cyclist]

6 minutes ago, Guavaman said:

 

It is advisable for expat tax residents to know the consequences of intentional actions to evade taxes in Thailand:

 

Indeed, thanks for posting.

 

Hopefully further information will be forthcoming in the not too distant future, that will dispense with a lot of speculation and bring absolute clarity.

 

No issues with filing a ' Nil Return ' or something similar should it be required.

[stat]

2 hours ago, Guavaman said:

... 42(1) of the Revenue Code which states that “maintenance income derived under moral obligation, corpus of a legacy or inheritance, or gifts made in a ceremony or on occasions in accordance with established custom” are exempt from tax.

 

Invocation of Previously Unused Section of the Revenue Code

Section 37 is particularly onerous and decrees that as a result of knowingly making false statements or producing false evidence with a view to evading tax, there is a punishment of between 3 months to 7 years and / or a fine of Bt 200,000.

-----

Note:  These cases took place prior to the Revenue Code Amendment Act (No. 40) B.E. 2015 on gift tax.

 

A failed attempt to claim exemption of tax on a "gift" by the recipient.

Makes me one wonder if a normal gift is OK. Lets say I reveive 100K Baht per month from a family member however I myself do not "need" the gift as I have "enough" money. Maybe I can invoke birthday or xmas and get 600K on each occasion ?

[redwood1]

Does anyone think the Russians or Chinese will be lining up to pay taxes on money brought into the country?......I sure dont....I think the only long-stayers that give a rats azz about any of this are about 50 or so farangs who have made many posts in this thread...

Edited October 20, 2023 by redwood1

[JimTripper]

i'm a man

[Guavaman]

23 minutes ago, stat said:

Makes me one wonder if a normal gift is OK. Lets say I reveive 100K Baht per month from a family member however I myself do not "need" the gift as I have "enough" money. Maybe I can invoke birthday or xmas and get 600K on each occasion ?

In that case, the annual total should not exceed 10m Baht.

 

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.

 

(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 issue of remittance and evidence of the gift remains. If you receive the gift offshore, and then remit to Thailand, then you have remitted assessable income that is exempt under 42 (27) or (28), so it would not be reported on the tax filing form unless the amount exceeds 10m or 20m. 

 

If the RD assessor looks at your bank book remittances, you need to be prepared to document the gift to their satisfaction. Maybe a signed note from the giver of the gift stating that it was a birthday present?, for example. It is up to the taxpayer to convince the assessor, somehow.