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

[Guavaman]

4 hours ago, paddypower said:

Section 56 Every taxpayer except a minor or a person adjudged incompetent or quasi-incompetent shall, on or before the last day of March every year, file to the official appointed by the Minister a tax return reporting the assessable income received in the preceding tax year in the form prescribed by the Director-General, if such person-

(1) has no spouse and has the assessable income of the preceding tax year exceeds 60,000 baht,

(2) has no spouse and has the assessable income of the preceding tax year under only Section 40 (1) exceeds 120,000 baht,

(3) has a spouse and the assessable income of the preceding tax year exceeds 120,000 baht, or

(4) has a spouse and the assessable income of the preceding tax year under only Section 40 (1) exceeds 220,000 baht.

 

That 60K figure I think is 'lost in translation' as 150K is the tax free threshold.

Section 40 is all about Assesable Income.

The requirement to file a return is based upon the thresholds for assessable income: (1) 60,000 and (3) 120,000 include all sources of assessable income, while (2) 120,000 and (4) 220,000 refer to income from employment only under Section 40 (1).

 

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 filing thresholds for (2) and (4) do not include income under 40 (2)-(8), e.g. interest (4)a, dividends (4)b, rent of property (5)a, etc.

 

The tax filing form for (1) and (3) above is different than the filing form for (2) and (4) above.

In both cases there are exemptions, deductions of expenses, and allowances which reduce the assessable income in the computation of the net income subject to taxation. Then, the tax rate on the first 150,000 of net taxable income is 0%.

 

[K2938]

2 hours ago, stat said:

Thanks for your post! I fully agree one has to follow the situation very closely as the Thais could come up with the "easy" solution that every penny is taxable that does not come with a translated certificate signed in person by Joe Biden and the Pope that Mr. Stat has paid withholding tax in the US. I very much doubt that Thai RD will provide anything remotely similar to the UK non-dom remittance rules if they provide any further explanation at all. My guess would be they leave the final decision to the individual RD inspector, which would a nightmare scenario.

In the UK it is basically such that once you have mixed funds it is often impossible to separate them again and so you are taxed

[dontpanic]

24 minutes ago, quake said:

 

Maybe we will get some more info after the 1st of Jan next year.

 

I'm nearly 100% certain that nothing will be said and it will just appear in the gazette. Ostrich head in the sand, we've told you all what has changed now just give us your money and be happy.

[K2938]

Just now, dontpanic said:

I'm nearly 100% certain that nothing will be said and it will just appear in the gazette. Ostrich head in the sand, we've told you all what has changed now just give us your money and be happy.

It will not even appear in any gazette as it is not a law, but just a new interpretation of existing regulations

[dontpanic]

Just now, K2938 said:

It will not even appear in any gazette as it is not a law, but just a new interpretation of existing regulations

It's perfect, they'll never have to admit loss of face or what they've done and just carry on regardless come Jan 1st.

[stat]

4 hours ago, dontpanic said:

It's perfect, they'll never have to admit loss of face or what they've done and just carry on regardless come Jan 1st.

Or they just wait and only tax those that submit a tax return... No one will know for sure before mid 2025 and then again for tax year 2025 it could all be different again.

[Puccini]

14 hours ago, paddypower said:

you've raised an interest topic - if you live in Thailand for more than 180 days in a given year - are there regulations describing what your tax status is ? (never mind the Immigration rules).

 

It is in Thailand's Revenue Code, ie a law, ot just a regulation.

[RupertIII]

On 10/26/2023 at 4:51 PM, freeworld said:

 

Capital gains and investment income earned by a resident from sources outside Thailand are not taxable unless remitted to Thailand in the year of receipt.

 

Would this not change come 1st Jan 2024?

[Flyguy330]

13 hours ago, Puccini said:

 

It is in Thailand's Revenue Code, ie a law, ot just a regulation.

Just for info - in case anyone is considering a move to Malaysia in order to gain Tax Residency there to avoid tax residency in Thailand.

You only have to spend 180 days in Malaysia in your first year. After that you can maintain tax residency by only spending 90 days there in a year.

This might be of value to folks who want to lose their Thai tax residency, but need to have a 'Tax Residence' somewhere nearby, and don't really want to move full time to Malaysia.

[stat]

5 hours ago, RupertIII said:

Would this not change come 1st Jan 2024?

No, only income (cap gains, pensions, dividends, rental income etc)remitted to Thailand will be taxed!

[RupertIII]

13 minutes ago, stat said:

No, only income (cap gains, pensions, dividends, rental income etc)remitted to Thailand will be taxed!

Thanks stat. My confusion (hope!) arose due to the OP quoting are not taxable unless remitted to Thailand in the year of receipt, inferring that cap gains and investment income would still be excluded (from tax) if remitted the year after receipt. I think he must have meant unless remitted to Thailand.

 

[Misty]

3 hours ago, Flyguy330 said:

Just for info - in case anyone is considering a move to Malaysia in order to gain Tax Residency there to avoid tax residency in Thailand.

You only have to spend 180 days in Malaysia in your first year. After that you can maintain tax residency by only spending 90 days there in a year.

This might be of value to folks who want to lose their Thai tax residency, but need to have a 'Tax Residence' somewhere nearby, and don't really want to move full time to Malaysia.

 

Except that you can have more than one tax residency at the same time.  Unfortunately gaining Malaysian tax residency doesn't mean you automatically lose Thai tax residency.

[Guavaman]

3 hours ago, Misty said:

 

Except that you can have more than one tax residency at the same time.  Unfortunately gaining Malaysian tax residency doesn't mean you automatically lose Thai tax residency.

 

If you're not careful, you could be paying taxes in 3 countries in the same year!

[tomkenet]

Will there be a problem moving out of Thailand for 7 months, remit to Thailand that year necessary funds for several years forward. 

Then live tax free for those years.

 

 

[stat]

26 minutes ago, tomkenet said:

Will there be a problem moving out of Thailand for 7 months, remit to Thailand that year necessary funds for several years forward. 

Then live tax free for those years.

 

 

According to the current law (including the new directive from 01.01.2024) you are not a tax resident in TH if you are not in TH for more then 180 days in a calendar year, so no tax payment on remitted funds in that year and no payment on those transferred funds in any future year (if law will not be changed again in the future).

Edited October 31, 2023 by stat

[Flyguy330]

17 hours ago, Misty said:

 

Except that you can have more than one tax residency at the same time.  Unfortunately gaining Malaysian tax residency doesn't mean you automatically lose Thai tax residency.

Yes Misty, the way I'd do it is to spend 179 days in Thailand (if that's the preferred main base) then do 90 days (or as much extra as desired) in Malaysia, that gives you Malaysian Tax residencey.

Then you can use the other 90 (or less) days to travel the region, or visit home. Or just stay put in Malaysia the remainder of the tax year.

Rinse and repeat.

Maybe not everyones cup of tea, but if the tax savings are significant I'd be doing it.

It's good to have options.

 

By the way - these 'days in country' don't have to be consecutive, or in blocks. So you could just hop back and forth every couple of months if preferred. Just need to keep close tabs on the dates. You can then remit all you like to TH tax free. Bring up to 10K USD cash into Malaysia every trip, tax free.

Edited November 1, 2023 by Flyguy330

[Mike Teavee]

25 minutes ago, Flyguy330 said:

Yes Misty, the way I'd do it is to spend 179 days in Thailand (if that's the preferred main base) then do 90 days (or as much extra as desired) in Malaysia, that gives you Malaysian Tax residencey.

Then you can use the other 90 (or less) days to travel the region, or visit home. Or just stay put in Malaysia the remainder of the tax year.

Rinse and repeat.

Maybe not everyones cup of tea, but if the tax savings are significant I'd be doing it.

It's good to have options.

 

As the Thai Tax Year is Jan 1st - Dec 31st & the UK Tax Year is Apr 6th - Apr 5th, I was thinking of doing 1 year none Tax Resident in Thailand whilst I bring over the proceeds from the sale of my house by spending...

1. Jan - Apr in UK* (am only allowed 90 days before I become UK Tax Resident due to having 2 "Economic Ties" in the UK).  
2. Apr - June in UK (This would be in a different Tax Year so am allowed another 90 days)
3. July - Dec in Thailand 
4. The next year spend a full year in Thailand but not bring over any money above the tax free allowances (235K for me).
5. Any year I need to replenish funds or bring over large chunks of cash (Tax free element of my pension in 2026) I repeat steps 1-3. 

*NB by UK I mean outside of Thailand, in reality it would be more like a month in Bali, a month in Europe & a month in UK during Jan-Apr & a month in Europe, 2 months in UK during Apr-June, the idea is to maintain my Non-UK Tax Resident status at the same time as being Non-Thai Tax Resident. 

 

Edit: I stay with my parents when I visit the UK so no rental costs there & have friends with apartments in Spain who would happily put me up for a month or 2 as both of them spent at 6 months staying with me when they were working in SG. 

 

Edited November 1, 2023 by Mike Teavee

[jayboy]

I understand that a Thai national's Tax Identity Number is the same at his/her 13 figure national identity number as issued by the Ministry Of Interior.

 

For foreigners with PR I wonder whether the same applies - ie the 13 figure number on the tabien baan/driving license/pink card etc - or is there a different method used?

[Arkady]

1 hour ago, jayboy said:

I understand that a Thai national's Tax Identity Number is the same at his/her 13 figure national identity number as issued by the Ministry Of Interior.

 

For foreigners with PR I wonder whether the same applies - ie the 13 figure number on the tabien baan/driving license/pink card etc - or is there a different method used?

 

Yes.  A PR's 13 digit ID number, which remains the same, if he upgrades to citizenship, should be used as his TIN. However, in cases where they or their company continue to use their old foreigner TIN, it doesn't seem to cause a problem. As a PR I filed for tax under my 13 digit number for years.  Then I moved to a company that ignored me when I told them to use my TIN.  They applied for a new foreigner TIN for me and insisted on using that the 3 years I worked there.  I filed my tax return under my 13 digit number as usual submitting the documentation from the company with the foreigner number.  The RD had no problem with this.

[Dogmatix]

On 10/30/2023 at 12:02 PM, TroubleandGrumpy said:

 

That is not my read of the Thai RD guidline - but it could be correct in how the Thai RD actually acts:

 

Section 56 Every taxpayer except a minor or a person adjudged incompetent or quasi-incompetent shall, on or before the last day of March every year, file to the official appointed by the Minister a tax return reporting the assessable income received in the preceding tax year in the form prescribed by the Director-General, if such person-

(1) has no spouse and has the assessable income of the preceding tax year exceeds 60,000 baht,

(2) has no spouse and has the assessable income of the preceding tax year under only Section 40 (1) exceeds 120,000 baht,

(3) has a spouse and the assessable income of the preceding tax year exceeds 120,000 baht, or

(4) has a spouse and the assessable income of the preceding tax year under only Section 40 (1) exceeds 220,000 baht.

 

That 60K figure I think is 'lost in translation' as 150K is the tax free threshold.

Section 40 is all about Assesable Income.

Chapter 3 Income Tax | The Revenue Department (English Site) (rd.go.th)

 

All Thai Laws (Tax, Immigration, etc etc) and the Thai RD Guidelines, are very 'interpretable'.  The reason is because the Thai Legal System (Courts) are not based on what we call 'Common Law' and they do not base their rulings on past 'Precedents'.  Unlike our systems which are very rigid and defined, with rulings going back hundreds of years, the Thai legal system is basically a case by case situation.  Perhaps I have not explained that enough before, when trying to explain to some posters that 'those words do not mean what you think they mean'.  That is the reason why in Thailand any Immigration Officer or Policeman can make a decision - within certain limits.

 

I personally like some parts of that legal system - IMO a 1960 Toyota rustbucket with balding tyres being driven by a 70 year old woman and going at 100Kms is far more dangerous than a brand new Mercedes SL500 driven by a 40 year old man going at 130Km.  In Thailand you can talk to the Policeman and 'sort things out' (even slip a few baht) - but it the west the very dangerous Toyota is ignored and the Mercedes is impounded - because the legal definition of dangerous driving is 20+km over the limit. 

 

 

 

Thailand's legal system is based on the European Roman law system, as opposed to Anglo Saxon common law. It relies on statutory laws, fleshed out with ministerial regulations, Royal Decrees etc but much is left open to interpretation which is what creates problems of similar cases being interpreted in different ways and ultimately makes it a not rule of law jurisdiction as laws are applied more or less favorably depending your status, connections and how much you can pay. It is wrong to say that precedents carry no weight at all.  They do, especially at the supreme courts level but far less so than in common law. 

 

 

 

 

 

[Dogmatix]

On 10/30/2023 at 5:27 PM, dontpanic said:

Exactly and unfortunately we are all at the mercy of their interpretation which has literally just changed a 40 odd year tax rule 🤣

 

If no further documentation has been released by next month they've got no hope or maybe we've got no hope. It's like they had a few beers one night, decided they wanted some more of the folding stuff and announced this hairbrain idea while they where still half cut. Now they're in it up to their necks and can't get out. 

 

I think you are not far from the truth. The RD was placed under great pressure from PM and absentee finance minister Pink Sox to find some quick ways to boost revenue to show how he was going to fund the digital wallet.  So they blurted out this little gem without giving it much thought and nor did the finance minster or deputy finance minister. They were unable to say how much incremental tax would be raised, if any, or what impact it might have on the economy but said they would form focus groups to assess it.

 

Much the same has happened with the digital wallet which is now dying a slow death of a thousand cuts, as they slowly realise that it is not fundable in its original form and start proposing bigger and bigger exclusion groups.  

[samtam]

1 hour ago, Dogmatix said:

 

I think you are not far from the truth. The RD was placed under great pressure from PM and absentee finance minister Pink Sox to find some quick ways to boost revenue to show how he was going to fund the digital wallet.  So they blurted out this little gem without giving it much thought and nor did the finance minster or deputy finance minister. They were unable to say how much incremental tax would be raised, if any, or what impact it might have on the economy but said they would form focus groups to assess it.

 

Much the same has happened with the digital wallet which is now dying a slow death of a thousand cuts, as they slowly realise that it is not fundable in its original form and start proposing bigger and bigger exclusion groups.  

 

"OK, I'm ready for my clarification now Mr DeMille.", to paraphrase Gloria Swanson.

[stat]

6 hours ago, Flyguy330 said:

Yes Misty, the way I'd do it is to spend 179 days in Thailand (if that's the preferred main base) then do 90 days (or as much extra as desired) in Malaysia, that gives you Malaysian Tax residencey.

Then you can use the other 90 (or less) days to travel the region, or visit home. Or just stay put in Malaysia the remainder of the tax year.

Rinse and repeat.

Maybe not everyones cup of tea, but if the tax savings are significant I'd be doing it.

It's good to have options.

 

By the way - these 'days in country' don't have to be consecutive, or in blocks. So you could just hop back and forth every couple of months if preferred. Just need to keep close tabs on the dates. You can then remit all you like to TH tax free. Bring up to 10K USD cash into Malaysia every trip, tax free.

According to several sources you would pay taxes on remittance in Malaysia then instead of Thailand. What is it you hope to gain? One tax year out of TH and then transfer 5 years worth of monies? I would rather spend 170 days in each country and the rest in a 3rd country. You do not need a tax certificate to circumvent TH taxes just staying below 180 is sufficient.

[El Matador]

35 minutes ago, stat said:

According to several sources you would pay taxes on remittance in Malaysia then instead of Thailand. What is it you hope to gain? One tax year out of TH and then transfer 5 years worth of monies? I would rather spend 170 days in each country and the rest in a 3rd country. You do not need a tax certificate to circumvent TH taxes just staying below 180 is sufficient.

I guess he's talking about Malaysian residency because of its territorial tax system which makes things much easier and optimized as you don't pay any tax on income not coming from Malaysian source. If you only need 90 days every year there and don't do more than 180 days in other countries, it gives some flexibility to move around without worrying too much about tax residency.

Edited November 1, 2023 by El Matador

[Flyguy330]

2 hours ago, stat said:

According to several sources you would pay taxes on remittance in Malaysia then instead of Thailand. What is it you hope to gain? One tax year out of TH and then transfer 5 years worth of monies? I would rather spend 170 days in each country and the rest in a 3rd country. You do not need a tax certificate to circumvent TH taxes just staying below 180 is sufficient.

Stat, the crucial thing for me is to maintain Malaysian tax residency, which means the Irish taxman can't tax my Irish pension at source. The rest is just about arranging my location to reduce tax on remittances - or reduce the remittances to zero.

[Flyguy330]

1 hour ago, El Matador said:

I guess he's talking about Malaysian residency because of its territorial tax system which makes things much easier and optimized as you don't pay any tax on income not coming from Malaysian source. If you only need 90 days every year there and don't do more than 180 days in other countries, it gives some flexibility to move around without worrying too much about tax residency.

Correct!

[stat]

1 hour ago, Flyguy330 said:

Stat, the crucial thing for me is to maintain Malaysian tax residency, which means the Irish taxman can't tax my Irish pension at source. The rest is just about arranging my location to reduce tax on remittances - or reduce the remittances to zero.

To my understanding Malaysia will start to tax your pension as well... If possible just do not transfer your pension to Thailand and keep it offshore and transfer other monies.

Edited November 1, 2023 by stat

[TroubleandGrumpy]

On 10/31/2023 at 10:33 PM, tomkenet said:

Will there be a problem moving out of Thailand for 7 months, remit to Thailand that year necessary funds for several years forward. 

Then live tax free for those years.

One problem is that funds in a Thai bank are only 'Govt Guaranteed' up to a total of 1 Million Baht.

It used to be 15 Million, but the Junta gradually reduced the guarantee over the years.

 

[Flyguy330]

12 hours ago, K2938 said:

The rule is actually as follows:  "The individual is in Malaysia for a total of 90 days or more in the basis year and in any 3 out of 4 immediately preceding basis years, the individual was either resident or in Malaysia for at least 90 days."

There are at least FOUR different ways to become tax resident in Malaysia. Check them out on this page; https://taxresidents.com/malaysia-my-second-home/

The 180/90 day rule is the one I personally used. On first arrival in Malaysia I spent 6 months settling in. That also established tax residency.

After that I went off travelling, and doing contract jobs around Asia. But I made sure to return to Malaysia on at least 90 days in every subsequent year.

Got my residency certs every year on that basis.

Edited November 2, 2023 by Flyguy330

[Flyguy330]

14 hours ago, stat said:

To my understanding Malaysia will start to tax your pension as well... If possible just do not transfer your pension to Thailand and keep it offshore and transfer other monies.

Are you confusing Malaysia and Thailand in that post Stat?

Malaysia DOES NOT tax residents foreign income - unless you remit it to Malaysia from a non DTA country (and/or with no tax paid proof).

The 'tax paid proof' is extremely lenient, as I described above.

Edited November 2, 2023 by Flyguy330