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

[The Cyclist]

4 minutes ago, Mike Lister said:

Additional Voluntary Contributions or Voluntary National Insurance Contributions are the same thing, it's semantics,

 

Obviously they are not, as my AVC's increased death benefits or increased my pension if I did not die. Which as the link provided above shows is not the case with VNI's and the State Pension.

 

6 minutes ago, Mike Lister said:

And yes, I did make voluntary NI contributions to increase my years paid to 29, just prior to retirement.

 

Rather odd that you did not mention this when I previously gave 2 examples of things that would effect the size of your State Pension payout.

 

Anyway, it is getting rather monotonous and the next thing people want to really hear about the UK State Pension is whether the Thai Gov / RD is going to tax it due to not being a Government Pension and therefore not covered by the UK - Thai DTA.

 

Keep your eyes peeled and you will be able to deliver the bad, or good news as the case may be.

[Danderman123]

Well, you guys have destroyed the usefulness of this topic with your off topic discussion.

 

I'm out.

[Mike Lister]

19 minutes ago, The Cyclist said:

 

Obviously they are not, as my AVC's increased death benefits or increased my pension if I did not die. Which as the link provided above shows is not the case with VNI's and the State Pension.

 

 

Rather odd that you did not mention this when I previously gave 2 examples of things that would effect the size of your State Pension payout.

 

Anyway, it is getting rather monotonous and the next thing people want to really hear about the UK State Pension is whether the Thai Gov / RD is going to tax it due to not being a Government Pension and therefore not covered by the UK - Thai DTA.

 

Keep your eyes peeled and you will be able to deliver the bad, or good news as the case may be.

 

What is getting to be rather monotonous is the degree to which you think you are never wrong about anything and also the degree to which you are pedantic about minutiae! Regrettably, my ignore list is where you must go because you add no value to the discussion, in fact, you detract value from it.

 

 

"How do I make additional voluntary contributions?

 

You can contact HMRC to obtain an 18 digit reference number. You can then use this number to pay online, at your bank, or via online banking. The contact number for HMRC is 0300 2003500, lines are open between 8am and 6pm. You can write to us, and include a cheque for the amount DWP have advised you can be paid".

 

https://community.hmrc.gov.uk/customerforums/sa/c8f2046b-4ab7-ed11-9ac4-00155d9c773d#:~:text=You can contact HMRC to,advised you can be paid.

 

"You can usually pay voluntary contributions for the past 6 years".

 

https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

 

 

 

 

 

[Mike Teavee]

57 minutes ago, The Cyclist said:

 

Call it what you will ' Opted out ' or ' contracted out ' The end result was the same.

 

 

Sure, but as AVC's haven't been mentioned, they were not really part of the discussion. I am not evenconvinced that you pay AVC's towards the State Pension, it is more a Private / Company Pension thing.

 

You can pay VNI's  towards your State Pension, but in some cases this will be a waste of money.

 

 

https://www.moneyhelper.org.uk/en/pensions-and-retirement/state-pension/voluntary-national-insurance-contributions-and-the-state-pension

 

You can pay VIN's  to make up your qualifying years if you are short of the 35 qualifying years to get the maximum State Pension.

 

I've been paying AVCs for the past 16 years, that's what HMRC called them so that's the term I use, this is the 1st time I've heard of VINs but a quick look on the government website seems to suggest they've adopted that terminology.

 

It doesn't matter to me as I stopped paying in April this year as I now have 40 years NI contributions which is what I need to get a full State Pension having been contracted out for 20 years, self employed for 2 years & working overseas the rest of the time. 

 

Edited November 14, 2023 by Mike Teavee

[Mike Lister]

16 minutes ago, Danderman123 said:

Well, you guys have destroyed the usefulness of this topic with your off topic discussion.

 

I'm out.

Yes, sorry, mea culpa! I got drawn by successive trolls, my apologies, now all three on my ignore list..

[jayboy]

1 hour ago, Mike Lister said:

And you need to stop following me around and delivering your one or two word answers, if you are able to formulate a sentence and have something to say, say it. In the meantime, if you have observations on this point, I suggest you read the post the adjacent post.

 

What a tangled web we weave when first we practise to deceive.

[The Cyclist]

2 hours ago, Mike Lister said:

"You can usually pay voluntary contributions for the past 6 years".

 

https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

 

 

The clue is the link you supplied Voluntary National Insurance Contributions ( VNIC's )  which allows you to add years to your NI contributions to uplift you to a full 30 or 35 years contributions to claim the State Pension in full.

 

Which is totally different to the AVC's that I paid, which either uplifted death benefits  or enhanced my pension payout.

 

2 hours ago, Mike Teavee said:

've been paying AVCs for the past 16 years, that's what HMRC called them so that's the term I use, this is the 1st time I've heard of VINs

 

Probably a bit like ' Opted out ' or ' Contracted out ''

 

As you are now aware, they are called VIN's and are somewhat different to the AVC's that I paid.

 

Much like some people call a lifetime annuity a pension, to simplify things for people who might not understand what a lifetime annuity is.

[wasabi]

After 137 pages is it still correct that no one can say with is happening with foreigner taxation in Thailand any better than they could when this thread began?

[jacob29]

3 hours ago, wasabi said:

After 137 pages is it still correct that no one can say with is happening with foreigner taxation in Thailand any better than they could when this thread began?

I wouldn't say that. I would say the entirety of the alarmist interpretations (that Thailand is going to implement some completely unique method not seen anywhere else in the world) have precisely zero to back them up.

 

I would bet money it's going to be largely similar to any other worldwide taxation regime in the region. With the key difference that for money doesn't enter Thailand, it's exempt. Not particularly complicated, remains favorable to an unconditional tax on worldwide income, and enforcement challenges are no different to any other country that has had this for decades.

[stat]

On 11/14/2023 at 5:22 AM, Danderman123 said:

Well, you guys have destroyed the usefulness of this topic with your off topic discussion.

 

I'm out.

Just ignore 2 people in this thread and all is good ;-)

[stat]

21 hours ago, jacob29 said:

I wouldn't say that. I would say the entirety of the alarmist interpretations (that Thailand is going to implement some completely unique method not seen anywhere else in the world) have precisely zero to back them up.

 

I would bet money it's going to be largely similar to any other worldwide taxation regime in the region. With the key difference that for money doesn't enter Thailand, it's exempt. Not particularly complicated, remains favorable to an unconditional tax on worldwide income, and enforcement challenges are no different to any other country that has had this for decades.

Pls read your post again. First you state that you consider it highly unlikely that TH implements a unique method in taxation. Then you state key difference (to all other countries) is that TH taxes only money remitted into the country which makes it exactly that, a unique method. Which other countries tax remitted money?

[stat]

On 11/14/2023 at 10:57 AM, wasabi said:

After 137 pages is it still correct that no one can say with is happening with foreigner taxation in Thailand any better than they could when this thread began?

Some people do understand the possible risks better or if they are at risk at all. Some people learned how to get around the tax with gifts to their wifes etc.

[Guavaman]

2 hours ago, stat said:

Which other countries tax remitted money?

In the UK, calculating the tax on your income involves two primary methods: the arising basis and the remittance basis. The arising basis is straightforward. You pay UK tax on your worldwide income and gains for the tax year (April 6th to the following April 6th). However, the remittance basis is more complex and requires deeper understanding.

 

What is the remittance basis of taxation?

 

Under the remittance basis of taxation, you will pay tax on UK sources of income and gains, plus any foreign incomes and gains that you remit to (bring into) the UK. In effect, you can exclude foreign incomes and gains from UK taxation – providing that those incomes and gains are kept offshore.

 

Qualifying for the remittance basis of taxation requires fulfilling three conditions. In order to claim the remittance basis of taxation and keep your foreign unremitted income tax-free in the UK, you must:

• Be a resident of the UK for tax purposes
• Classify as non-domiciled
• Have foreign income or gains¹

Here is an article about this:

 

https://brighttax.com/blog/uk-remittance-basis/#:~:text=Under%20the%20remittance%20basis%20of,and%20gains%20are%20kept%20offshore.

[stat]

1 hour ago, Guavaman said:

In the UK, calculating the tax on your income involves two primary methods: the arising basis and the remittance basis. The arising basis is straightforward. You pay UK tax on your worldwide income and gains for the tax year (April 6th to the following April 6th). However, the remittance basis is more complex and requires deeper understanding.

 

What is the remittance basis of taxation?

 

Under the remittance basis of taxation, you will pay tax on UK sources of income and gains, plus any foreign incomes and gains that you remit to (bring into) the UK. In effect, you can exclude foreign incomes and gains from UK taxation – providing that those incomes and gains are kept offshore.

 

Qualifying for the remittance basis of taxation requires fulfilling three conditions. In order to claim the remittance basis of taxation and keep your foreign unremitted income tax-free in the UK, you must:

• Be a resident of the UK for tax purposes
• Classify as non-domiciled
• Have foreign income or gains¹

Here is an article about this:

 

https://brighttax.com/blog/uk-remittance-basis/#:~:text=Under%20the%20remittance%20basis%20of,and%20gains%20are%20kept%20offshore.

It was more of a rhetorical question but thanks you are in the right UK does have non dom status!

[kkjjhhss]

On 11/14/2023 at 10:49 AM, Mike Lister said:

Additional Voluntary Contributions or Voluntary National Insurance Contributions are the same thing, it's semantics, just like opted out and contracted out is. And yes, I did make voluntary NI contributions to increase my years paid to 29, just prior to retirement.

 

Countries where foreign source income is not taxed are the Philippines and Georgia. Currently, many Japanese digital nomad workers are considering living in these countries. This is because Japanese people know that even if Thailand is no longer an option, those countries have schemes that allow them to be completely tax-free. Thanks to the tax-free benefits of Thailand, I have been able to save more than $4 million. Now I can live off stock dividends without having to work.

[Krit]

Finally there is some clarity. Foreign-sourced income earned before January 1, 2024, will be exempt in the future, irrespective of when it’s brought into the country.

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

[Mike Lister]

6 minutes ago, Krit said:

Finally there is some clarity. Foreign-sourced income earned before January 1, 2024, will be exempt in the future, irrespective of when it’s brought into the country.

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

Thanks for posting that, only the most sceptical and paranoid can be surprised that is the case.

[Morch]

9 minutes ago, Mike Lister said:

Thanks for posting that, only the most sceptical and paranoid can be surprised that is the case.

 

So move in cash/funds before end of year, then?

[Mike Lister]

Just now, Morch said:

 

So move in cash/funds before end of year, then?

Not necessarily, it depends on your holdings and situation. If you have overseas investments that are you are happy with and you don't need the cash here in Thailand, leave the investments where they are but make sure you get a year end valuation showing their worth. Every investment has a principal amount and an income or return amount. As long as you are able to separate those two things on paper, using the year end 2023 as a baseline, there isn't a problem.

[Morch]

8 minutes ago, Mike Lister said:

Not necessarily, it depends on your holdings and situation. If you have overseas investments that are you are happy with and you don't need the cash here in Thailand, leave the investments where they are but make sure you get a year end valuation showing their worth. Every investment has a principal amount and an income or return amount. As long as you are able to separate those two things on paper, using the year end 2023 as a baseline, there isn't a problem.

 

I find that dealing with my bank back home from afar is not very different than dealing with Thai authorities and government offices. Usually go with what's easiest, rather than what's best. The less hassles, the better - even if it costs a bit more. Not talking about moving everything here, obviously, just maybe a larger than ordinary lump - then see how things pan out end of next year.

[Enzian]

Not sure I understand yet, but if I do, not sure how this changes what has been understood so far. My question is, if I spend for personal expenses every year most of the profits spun off by my business/investments (in US), so in the following year have to remit current year excess cash flow/profits, are those remitted monies now to be subject to tax, as we've been assuming? 

[Mike Lister]

12 minutes ago, Enzian said:

Not sure I understand yet, but if I do, not sure how this changes what has been understood so far. My question is, if I spend for personal expenses every year most of the profits spun off by my business/investments (in US), so in the following year have to remit current year excess cash flow/profits, are those remitted monies now to be subject to tax, as we've been assuming? 

Potentially yes, if the profit was earned prior to 31 December 2023, it is potentially assessable for Thai tax, if earned before, no.

[tomkenet]

49 minutes ago, Mike Lister said:

Not necessarily, it depends on your holdings and situation. If you have overseas investments that are you are happy with and you don't need the cash here in Thailand, leave the investments where they are but make sure you get a year end valuation showing their worth. Every investment has a principal amount and an income or return amount. As long as you are able to separate those two things on paper, using the year end 2023 as a baseline, there isn't a problem.

The capital gain is normally booked when the asset is sold. I do not think you can claim profit prior to 2024 if the asset is sold later.

[Mike Lister]

2 minutes ago, tomkenet said:

The capital gain is normally booked when the asset is sold. I do not think you can claim profit prior to 2024 if the asset is sold later.

 

I'm not suggesting to claim or book profit early, only to track the principal amount. In the UK for example, a capital asset can't escape filing a capital gains return which will show the profit that is assessable to tax. I own a UK property that I rent out hence it is liable to UK CGT. The equity in that house comprises principle and profit. My transfer of an amount equal to the principle will always escape tax because it was earned before 1 January 2024. When I sell that house I can either use the UK CGT return to distinguish profit from capital or I can use the purchase price and keep the profit offshore.

 

Capital gains might be a different issue but I'm unsure, I imagine a year end valuation will still be useful.  

[tomkenet]

För stocks the best way might be to sell in 23, then buy them back. The profit will then be tax-free in addition to the principal. 

[Mike Lister]

2 minutes ago, tomkenet said:

För stocks the best way might be to sell in 23, then buy them back. The profit will then be tax-free in addition to the principal. 

Yes, bed and breakfast will work.

[samtam]

1 hour ago, Krit said:

Finally there is some clarity. Foreign-sourced income earned before January 1, 2024, will be exempt in the future, irrespective of when it’s brought into the country.

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

 

My interpretation, (correctly or incorrectly determined) of this new amendment is that there is essentially no change for me to that which previously existed. My overseas funds were accumulated previously to date over many years. If I draw from those savings for normal expenses in Thailand after 1 January 2024, they are exempt from Thai tax. If I transfer a large "capital" sum after 1 January 2024, I will have to show from which source, and if the source is recently acquired, it will be taxable. Currently I plan to do no such large "capital" transfers arising from assets or income after 1 January 2024.

[jts-khorat]

17 minutes ago, Mike Lister said:

Capital gains might be a different issue but I'm unsure, I imagine a year end valuation will still be useful.  

 

I love how there is an assumption that the Thai tax office will be able to understand complex forms in foreign languages.

 

At best, that might work in English, but what about French, German, Swedish, Slovakian, etc.?

 

Now you need an accredited office who is able to translate it properly into Thai, in a way the tax office will understand and accept. Good luck with that.

[FritsSikkink]

1 hour ago, Krit said:

 irrespective of when it’s brought into the country.

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

It doesn't say that at all. It says Foreign sourced income before next year will not be taxed. 

When you bring in money next year = Foreign sourced income, it will be taxed.

[Mike Lister]

7 minutes ago, jts-khorat said:

 

I love how there is an assumption that the Thai tax office will be able to understand complex forms in foreign languages.

 

At best, that might work in English, but what about French, German, Swedish, Slovakian, etc.?

 

Now you need an accredited office who is able to translate it properly into Thai, in a way the tax office will understand and accept. Good luck with that.

MOFA is that accredited office, there is a branch of MOFA in most cities and they alone are the sole source for translation approval and certification.