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

[Terek]

9 hours ago, Mike Lister said:

What obstacles, for example, plese?

 

My observations are that the tax system here heavily favors the poor in several areas, for example: 

 

1) the average monthly wage is around Baht 15,000 per month which is Baht 180k per year. The combination of the 60k per allowance and the 150k zero tax band means anyone on the average national salary, avoids ALL personal income tax. By comparison, the mean average wage in the UK is 33k Pounds per year, that's nearly three times the personal allowance hence around 20k Pounds is taxed at 20%.

 

2) The self employed are allowed to take a standard deduction of 60% of the value of their sales as the value of their costs (until recently it was 70%). No receipts are necessary, just take the deduction. If they turnover 1 million baht in sales each year, 600k is excluded as costs which means initial assessable income is 400k. Deduct from that 400k the usual allowances such as 60k each for husband and wife and child for personal care allowances, mortgage interest costs, social security costs, health/life insurance costs, etc etc and then apply the 150K zero rated tax band, the effect is the self employed earning 1 million per year, pay virtually no tax, despite having sales of 1 million per year and an income that is almost 6 times the national average, 

Exactly these obstacles, all system with it's rates are aimed for not prosperity but to keeping poor in these miserable profit amounts and kill any desire to earn more. All this system is rigged in favour or already rich people who pays mostly small capital gains tax. Rates should be fixed for everyone with some big zero tax allowance. But I  would go even further and dismantle all personal income tax altogether and focus on different taxes, because it's too much hassle for everyone, a lot of people are waisting their time on all it, including all the consulting  business, instead of doing some real productive job.

Edited November 9, 2023 by Terek

[Mike Lister]

40 minutes ago, Terek said:

Exactly these obstacles, all system with it's rates are aimed for not prosperity but to keeping poor in these miserable profit amounts and kill any desire to earn more. All this system is rigged in favour or already rich people who pays mostly small capital gains tax. Rates should be fixed for everyone with some big zero tax allowance. But I  would go even further and dismantle all personal income tax altogether and focus on different taxes, because it's too much hassle for everyone, a lot of people are waisting their time on all it, including all the consulting  business, instead of doing some real productive job.

Nonsense 

[redwood1]

12 minutes ago, Mike Lister said:

Nonsense 

 

Dont Cry...

[BobBKK]

On 11/8/2023 at 7:56 PM, Dah fahrang said:

Hi,  UK State Pension recipients. You will never get a P60 from HMRC! Don't hold your breath!

Reason is that the UK State Pension is not taxable. It is considered by HMRC as a state benefit.

Example: if you are lucky to receive the full basic UK State Pension - about £200 per week, that is about £10,400 a year. It is below the £12,570 2023 HMRC Personal Income Tax Allowance threshold. 

However... your UK State Pension is counted as income. So, if you receive additional UK sourced private pension(s), the UK State Pension of £10,400 is added to whatever ££ you receive from your UK sourced private pension(s).

If the aggregated money from the UK State Pension plus private pension(s) exceeds the 2023 Personal Income Tax Allowance of £12,570, then any/all income you receive above the £12,570 is liable to UK tax at the relevant current tax rates. HMRC, via a 'Notice of Coding' will instruct your private pension provider(s) to deduct tax at source from any amount above £12,570 from your private pension but definitely never from the UK State Pension. Your private pension provider will receive the relevant tax code from HMRC for the tax year, and will deduct tax at the source. It is your private pension provider(s) that must, by law, issue an annual P60, but never HMRC!

 

You may find link this helpful. I was quite astonished by it. If you register to use the UK Government Gateway, you will find both notice of coding and tax deducted information from all your private pension(s). The information goes back several years, and is downloadable. 

https://www.gov.uk/check-income-tax-current-year

 

It is taxable and is counted as income if it takes you over the personal allowance.

[Mike Lister]

2 minutes ago, BobBKK said:

 

It is taxable and is counted as income if it takes you over the personal allowance.

The state pension is still under the PA threshold, even after the increase in April.

[Mike Teavee]

19 minutes ago, Mike Lister said:

The state pension is still under the PA threshold, even after the increase in April.

Interesting article on Frozen Personal Allowances (Frozen until 2027/28) & the impact on State Pension.... 

https://theprogenygroup.com/blog/how-the-personal-allowance-freeze-might-impact-you/#:~:text=If the OBR's projections are,personal allowance in 2027%2F28.

 

If the OBR’s projections are accurate, then by 2027/28 the difference between the new state pension and personal allowance will be about £360 – less than a tenth as much. The OBR’s estimate only needs to undershoot by 0.8% a year for the new state pension to be larger than the personal allowance in 2027/28

 

 

 

I think it would make too much "Noise" if the government allowed the State Pension to go above the Personal Allowance & pensioners started to be taxed on it, so if the OBR did get their predictions wrong & it looked like it was going to go over it, I'd expect them to either limit the Pension increase OR increase the allowance. 

 

 

 

 

[Mike Lister]

28 minutes ago, Mike Teavee said:

Interesting article on Frozen Personal Allowances (Frozen until 2027/28) & the impact on State Pension.... 

https://theprogenygroup.com/blog/how-the-personal-allowance-freeze-might-impact-you/#:~:text=If the OBR's projections are,personal allowance in 2027%2F28.

 

If the OBR’s projections are accurate, then by 2027/28 the difference between the new state pension and personal allowance will be about £360 – less than a tenth as much. The OBR’s estimate only needs to undershoot by 0.8% a year for the new state pension to be larger than the personal allowance in 2027/28

 

 

 

I think it would make too much "Noise" if the government allowed the State Pension to go above the Personal Allowance & pensioners started to be taxed on it, so if the OBR did get their predictions wrong & it looked like it was going to go over it, I'd expect them to either limit the Pension increase OR increase the allowance. 

 

 

 

 

Exactly, and you know which it will be.

[Flyguy330]

21 hours ago, Terek said:

Exactly these obstacles, all system with it's rates are aimed for not prosperity but to keeping poor in these miserable profit amounts and kill any desire to earn more. All this system is rigged in favour or already rich people who pays mostly small capital gains tax. Rates should be fixed for everyone with some big zero tax allowance. But I  would go even further and dismantle all personal income tax altogether and focus on different taxes, because it's too much hassle for everyone, a lot of people are waisting their time on all it, including all the consulting  business, instead of doing some real productive job.

Have to say I agree with Terek. The amount of wasted time and energy spent shuffling bits of paper around by civil servants amounts to little more than jobs for the boys in many areas. I'm referring here to personal taxation on individuals, not corporate or wealth taxes. Think of the cost to the state of running this whole system. I've tried looking for figures, but with no success. If anyone can find some hard numbers I'd like to see them.

 

High personal income taxes are an obstacle to employment. Many people in western nations see no point in taking a job when - after tax deduction - it earns them only a few quid more than they'd make on the dole.

 

The personal tax system is convoluted and opaque, and as Terek rightly said, it helps create more jobs for 'tax advisors' and 'specialists'. Just read the comments in this thread and you'll see how well liked and trusted they are.

 

Have you guys ever heard of the 'Robin Hood Tax'? It was a UK campaign inspired by the scandals of the global banking crisis in 2010, where big banks were bailed out by taxpayers, and the bankers continued paying themselves million pound bonuses throughout.

The campaign proposed a small tax on all banking transactions that did not include members of the public (Bonds, Derivatives, Currency speculation etc). The tax amount proposed was a piffling .005% of the banks revenues on these transactions. The sum it would raise was reckoned to be in excess of 100 Billion GBP per annum. Almost half the total UK Income tax intake.

 

If you doubled it to .010% (and fired all the income tax collectors and paper pushers) it would  probably approach the total income tax take in the UK, meaning wages could be zero rated for tax.

 

Of course the proposal was met with derision and disgust from the bankers, and eventually ran out of support. Even the website the campaigners set up is dead. But there's still one great video left on Youtube, featuring Bill Nighy as a banker being grilled about the proposal. One of my all time faves.

Check it out here;

 

In a world where AI is predicted to replace all jobs in the not too distant future, and where Universal Basic Income (UBI) is again being proposed for that scenario - perhaps Income Tax is a dead duck anyway.

Edited November 10, 2023 by Flyguy330

[Dogmatix]

An article in yesterday's Prachachart Thurakit suggests the RD is starting to walk this back a bit but not giving up on it https://www.prachachat.net/finance/news-1432180?fbclid=IwAR0FtCbDVifNc-atDT8uHGklrCLP5PNOva3VrsaHFX9W_kjEm-bKQBnqEKc .  It sounds like they are planning to exempt all foreign source income earned before 1 January 2024.  It also sounds like they are thinking of moving to a global taxation model involving taxation of foreign source income in the year it arises, regardless of whether it is remitted to Thailand or not.  They seem to have realised that that they need to amend the Revenue Code, which could take a couple of years, and not just let the RD issue a directive to staff that is not binding on taxpayers. However, they could still go for a stop gap solution to try to raise some more tax from income earned in 2024.   

 

The whole thing smacks of stupidity and incompetence from politicians and civil servants alike.  If you want to make major changes to the tax regime, it needs careful study beforehand and then proper legislation in parliament, not just let a bureaucrat blurt out a nonsensical unlawful order and threaten everyone.  Huge damage has already been done by that.  At least they are likely to give expats more time to make arrangements to sell up and get out of the country.

 

Here is a rough google translate.

 

Stocks-Finance

The Revenue Department delays "taxing" foreign income before 2024, adhering to the same criteria.

November 9, 2023 - 6:32 a.m.

 

levy taxes

The Revenue Department has called in the capital market department to understand the tax collection methods from people who earn money abroad. which when imported must be subject to tax inspection No matter what year it was imported. Previously, imports over a year would not be taxed. After the announcement was made Many parties are still concerned about the lack of clarity.

 

Permanent Secretary of the Treasury insists that loopholes must be closed.

Mr. Lawan Saengsanit, Permanent Secretary of the Ministry of Finance, said that the Ministry of Finance has confirmed that there will definitely be taxation of income from foreign countries. The law will be amended to allow collection as soon as the money is received. Only, amending the law must pass through Parliament, so it probably won't be done quickly. But insist that you have to do it. Because it meets international criteria

 

“People who have already paid taxes from abroad need not worry. Because you don't have to pay twice. But you must understand that In the past, there have been large companies that have used this channel to manage taxes. We have to close this gap.”

 

              

Investors complain about riding elephants to catch grasshoppers.

Mr. Anurak Bunsawaeng (Jo Luk Isaan), a major investor and former president of the Value Investors Association (Thailand), said that major investors Should be taxed at the personal income tax rate. The highest rate is 35%.

 

Therefore, I believe that no one will definitely accept being taxed. Therefore, you may see large investors 1. Stop investing abroad. 2. Do not take money back to the country and 3. Use gray methods to find various loopholes, which will make the opportunity for the government to collect a lot of revenue from this tax probably not be possible.

 

“It will definitely create a lot of problems. Because it will cause difficulties for investors. Including in practice through brokers Must collect documents for incoming and outgoing money. To separate profits to prove tax payments each year. which creates a lot of difficulties

 

So it is like riding an elephant to catch grasshoppers. This means that taxes cannot be collected. Because the chance that there will be very few people willing to pay But it creates many negative effects. It's not just big investors. but also private funds or a group of magnates who invest money abroad.”

 

Mr. Anurak said I want the government to change its perspective. Because it's not that investors don't want to pay taxes. But if taxes are collected at a reasonable rate or at the level of 10-15%, it is still acceptable.

 

“Tax collection should require people to act honestly. But if you keep it that high I believe that there will definitely be a lot of corruption. Right now, I mostly invest in China, Vietnam, and the United States, and have prepared several defensive plans.”

 

Begin to charge money from 2024.

However, recently there was a report from the Revenue Department that It has been concluded that In the first phase, there will be relief in the case of income generated abroad before 2024, if it is not imported within the same tax year as the year in which the income was generated. It will not have to be checked. Because finding document evidence will be difficult. It is considered to be releasing the ghost.

 

“Income generated before 2024 will use the old rules. That is, if it is not imported in the same tax year. The department will not collect it. As for imports across the year, they are no longer collected according to the original criteria. But income generated abroad from January 1, 2024 onwards, imported at any time will be subject to tax.

 

In the future, Section 41 of the Revenue Code will be amended to immediately calculate tax in the year in which income is earned abroad. Regardless of whether money is brought into the country or not, however, it may take 1-2 years to amend the law.”

 

Set "Pichai" to see private offers

Special Professor Kitipong Urapeepattanaphong, director of the Stock Exchange of Thailand (SET) and former chairman of the board of Baker & McKenzie Company Limited, told "Prachachat Turakij" that the collection of such taxes is being developed. Let's discuss in order for the government to postpone enforcement for now

 

Because I believe it's not worth it. It will affect the overall tax picture of Thailand as a whole. It is understood that now Mr. Settha Thavisin, Prime Minister and Minister of Finance, has assigned Mr. Pichai Chunhavajira, Advisor to the Prime Minister. is in charge of this matter

 

“And according to the Revenue Department Order No. 161/2023 that was issued, it is a practice. It cannot be interpreted outside of the law. Therefore, if such taxes are to be collected The tax structure must be restructured. which is a big deal The law must be amended, repealed Section 41, paragraph two, and issued a new law in its place. In the future, taxes will be collected similar to the United States. That is, all income in this world must be taxed. But in general, taxes should not exceed 15%.”

 

The Revenue Department announces income from abroad over the year must be taxed starting 1 Jan. 2024.

Revenue Department discusses new order “Income earned from abroad over the year” is subject to tax.

Is collecting foreign investment tax worth it? Question from "Kitipong Urapeepattanapong" tax law guru

[Flyguy330]

Mr. Anurak? Is that really his name?

[Metapod]

global taxation like the united states? thats even worse....

 

then i'm 100% gone from thailand. <deleted> that

[retiree]

56 minutes ago, Dogmatix said:

An article in yesterday's Prachachart Thurakit suggests

A longish response to this important post is on the "short" thread:

https://aseannow.com/topic/1311285-change-in-the-tax-law-does-target-expats-living-in-thailand-and-extends-reporting-obligations/?do=findComment&comment=18491090

 

[Dogmatix]

1 hour ago, Flyguy330 said:

Mr. Anurak? Is that really his name?

 

Anurak has a positive meaning something like conservation.

[Flyguy330]

8 hours ago, Dogmatix said:

 

Anurak has a positive meaning something like conservation.

Maybe in Thai.

But in the UK/IRL it has a rather different translation.

Maybe you're not a Brit and don't get that.

Lighten up FFS.

[Puccini]

15 hours ago, Mike Lister said:

The state pension is still under the PA threshold, even after the increase in April.

 

What does PA mean in the context of your post? (Not all countries use the same terminology and acronyms in matters of income taxation and this topic is not specific to one country)

[Mike Lister]

1 hour ago, Puccini said:

 

What does PA mean in the context of your post? (Not all countries use the same terminology and acronyms in matters of income taxation and this topic is not specific to one country)

Sorry, PA = Personal Allowance.

[Basch]

3 hours ago, Flyguy330 said:

Maybe in Thai.

But in the UK/IRL it has a rather different translation.

Maybe you're not a Brit and don't get that.

Lighten up FFS.

 

Why lighten up?

 

He simply explained to you what Anurak means, without any ill will. 

 

 

 

 

[Jingthing]

An interesting perspective.

Expats are confused?

You think? 

 

 

 

[hondoelsinore]

13 minutes ago, Jingthing said:

An interesting perspective.

Expats are confused?

You think? 

 

 

 

Yep that's a perspective all right. interesting? Uh no.... Did Twinkle Toes tell me anything I didn't already know? Uh no.... Imagine what kind of hero you could be if you had clear and distinct information about a certain subject that people could actually use? then you have Youtube. 

[oldhippy]

This may have been posted before, in which case SORRY.

 

But I thought that many European countries have a "no double taxing" treaty with foreign countries?

Which is how most rich Europeans / companies escape high home taxes, in favor of low foreign taxes?

[Flyguy330]

7 hours ago, Jingthing said:

An interesting perspective.

Expats are confused?

You think? 

 

 

 

I get this guys emails on a near daily basis. That's really too often IMHO.

Last week he sent one out reccomending Malaysia as a retirement destination - fair enough. But one of the points made was 'Pensions are not taxed in Malaysia'.

If you're a Malaysian receiving a Malaysian pension that may be true. But his emails are aimed at Expats. Expat pensions being remitted to Malaysia are NOT tax exempt, as he sweepingly stated. They MAY be tax exempt under certain conditions, primarily if they've ALREADY been taxed in a DTA partner nation.

I wrote to him pointing this out.

Still waiting on a retraction or correction.

[Jingthing]

7 hours ago, hondoelsinore said:

Yep that's a perspective all right. interesting? Uh no.... Did Twinkle Toes tell me anything I didn't already know? Uh no.... Imagine what kind of hero you could be if you had clear and distinct information about a certain subject that people could actually use? then you have Youtube. 

Twinkle toes?

[WhatsNext]

23 hours ago, Dogmatix said:

A real long read about the changes that are happening

 

Hey thanks for this, very interesting and it shows that it won't be that bad as the previous 149 pages are predicting. 

[Jingthing]

My take is at the very least eventually most Thailand tax resident expats are going to at least be required to FILE a Thai tax return even if they will owe nothing.

I find this very not thrilling. 

[Jingthing]

55 minutes ago, WhatsNext said:

 

Hey thanks for this, very interesting and it shows that it won't be that bad as the previous 149 pages are predicting. 

I read the same thing and really don't get why you think  that post is so positive.

[hotandsticky]

1 minute ago, Jingthing said:

My take is at the very least eventually most Thailand tax resident expats are going to at least be required to FILE a Thai tax return even if they will owe nothing.

I find this very not thrilling. 

 

 

I disagree - if you are describing full time expats as 'tax residents'.

 

DTA's protect the vast majority - and can you really imagine the Thai authorities can handle a million? new tax returns in 2024?

[The Cyclist]

5 minutes ago, Jingthing said:

I read the same thing and really don't get why you think  that post is so positive.

 

I got as far as

 

Quote

An article in yesterday's Prachachart Thurakit suggests the RD is starting to walk this back a bit but not giving up on

 

The word ' suggests ' was enough for me.

[Jingthing]

3 minutes ago, hotandsticky said:

 

 

I disagree - if you are describing full time expats as 'tax residents'.

 

DTA's protect the vast majority - and can you really imagine the Thai authorities can handle a million? new tax returns in 2024?

That's ridiculous!

The definition of Thailand tax resident is very simple.

At least 180 days or more of the year being in Thailand.

Having a DTA is a thing but it's not magic.

The Thai tax authorities would need to see your foreign details to see in which way you qualify or not.

Each nation that has one has a different one.

This is going to be a field day for expat tax consultants here.

[hotandsticky]

5 minutes ago, Jingthing said:

That's ridiculous!

The definition of Thailand tax resident is very simple.

At least 180 days or more of the year being in Thailand.

Having a DTA is a thing but it's not magic.

The Thai tax authorities would need to see your foreign details to see in which way you qualify or not.

Each nation that has one has a different one.

This is going to be a field day for expat tax consultants here.

 

 

DTA does not need to be magic  -  it is the law.

 

I repeat, I will never pay tax in Thailand - and nothing that I have read tells me  that I will need to.

[Jingthing]

Just now, hotandsticky said:

 

 

DTA does not need to be magic  -  it is the law.

 

I repeat, I will never pay tax in Thailand - and nothing that I have read tells me  that I will need to.

You're conflating paying tax in Thailand with being required to FILE a tax return in Thailand.