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

[beammeup]

7 minutes ago, Krit said:

We now know that offshore income earned in 2023 and earlier will not be subject to personal income taxation when brought into Thailand in 2024 or later.

 

One more link to confirm this:

https://www.lexology.com/library/detail.aspx?g=017cd161-512b-4f56-94d3-3f942a23fc4d

 

A hypothetical scenario: Let’s assume that a Thai tax resident has a foreign brokerage account and has bought Apple stock for $60,000 a few years ago. The value of that investment is now $100,000. It looks like it would make sense to sell the shares in 2023 to realise a non-taxable profit of $40,000. The whole amount can then be brought into Thailand in 2024 tax free. Correct?

 

If this investment is only sold in 2024 and remitted to Thailand, the profit of $40,000 would be taxable as capital gains in 2024.

 

Now let’s assume that the investment is sold in 2023 but the proceeds are left on a bank account abroad. The bank pays 4% interest and no withholding tax is deducted. For clarity, the account will not have any other transactions. By January 2025 the balance would have grown to $104,000, of which $100,000 is old capital from 2023 and $4,000 taxable income from 2024. A sum $100,000 is then remitted to Thailand, leaving $4,000 abroad.

 

Is this amount of $100,000 considered to be

a) entirely tax-free capital from 2023,

b) $96,000 tax-free capital from 2023 + $4,000 taxable interest income from 2024, or

c) 96.15% (100/104) tax-free capital and 3.85% (4/104) taxable income?

 

 

 

 

 

This is pretty much the question I was asking earlier, although more thoroughly laid out. You better hope they have some very smart people working at the RD, and that they are all on the same page. Bottom line is that we need much more clarity. Like quickly!!

[The Cyclist]

141 pages and 4200 posts in to this thread and this needs reposted

 

Quote

Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand.

 

Printed on the very day that the initial announcement was made.

 

If you are from a Country that has a DTA with Thailand, you will be exempt if that income has already been taxed in your home Country.

 

Possibly why I wasn't slapped in handcuffs and my gonads wired to a 12 volt battery, and interrogated about TIN's and filing tax returns last Friday, both at the bank and immigration.

[Solrac1]

41 minutes ago, Krit said:

We now know that offshore income earned in 2023 and earlier will not be subject to personal income taxation when brought into Thailand in 2024 or later.

 

One more link to confirm this:

https://www.lexology.com/library/detail.aspx?g=017cd161-512b-4f56-94d3-3f942a23fc4d

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

I still don't understand>> so if i have an offshore account in HK HSBC with my hard-earned savings as i do, am i going to be taxed? I am with a retirement visa and i only transfer money for the emigration requirements when needed.

 

[Krit]

1 hour ago, beammeup said:

This is pretty much the question I was asking earlier, although more thoroughly laid out. You better hope they have some very smart people working at the RD, and that they are all on the same page. Bottom line is that we need much more clarity. Like quickly!!

 

They have actually produced a detailed guide with examples on how to calculate cryptocurrency trading profits.

 

https://www.rd.go.th/fileadmin/user_upload/lorkhor/newsbanner/2022/03/Instructions_for_paying_personal_income_tax.pdf

 

Translation: "Use methods certified by accounting standards such as first-in, first-out (FIFO) or moving average cost methods."

"Income earners can choose a method of payment. When choosing a method If you calculate costs using any method, you must use that method throughout the tax year."

Hopefully there will be a similar guide for foreign-sourced income soon.

[UKresonant]

11 hours ago, neil324 said:

 

UK pays a full state pension with 35 years of NI contributions. 

 

Also a UK resident with 0 years NI contributions can get Pension Credit, which is the same amount as the state pension.

If only the state pension was given so simply.  The 35 years is the headline but many are then affected by the small print. I've 40 full years of NI, but need 46 years to get the FULL new state pension  which either 6 years of voluntary circa £5k or via employment!

[neil324]

4 minutes ago, UKresonant said:

If only the state pension was given so simply.  The 35 years is the headline but many are then affected by the small print. I've 40 full years of NI, but need 46 years to get the FULL new state pension  which either 6 years of voluntary circa £5k or via employment!

 

It's 35 years,

 

https://www.gov.uk/new-state-pension/your-national-insurance-record-and-your-state-pension

[neil324]

11 hours ago, Mike Lister said:

There is no 2 year seasoning period, where did you come up with that!

 

The criteria for filing a Thai tax return is income (including remittances) of over 120k Baht per year.

 

What you get in return for filing taxes is exactly what you get when you don't, plus, if ever a tax clearance certificate is required, you'll be eligible to get one.

 

I was confusing it with the previous rule.

 

Very hard to see this being positive for economy.

[ukrules]

4 hours ago, Krit said:

We now know that offshore income earned in 2023 and earlier will not be subject to personal income taxation when brought into Thailand in 2024 or later

 

I read that somewhere else as well and the first thing that came to mind is that they've rolled it (the proposed rule change) back a year.

 

They have, haven't they?

Edited November 25, 2023 by ukrules

[Solrac1]

3 hours ago, Solrac1 said:

 

I still don't understand>> so if i have an offshore account in HK HSBC with my hard-earned savings as i do, am i going to be taxed? I am with a retirement visa and i only transfer money for the emigration requirements when needed.

[sirineou]

1 minute ago, Solrac1 said:

I still don't understand>> so if i have an offshore account in HK HSBC with my hard-earned savings as i do, am i going to be taxed? I am with a retirement visa and i only transfer money for the emigration requirements when needed.

No one knows how this thing will be structured. I suspect that they do not know also.

I suspect that it will be some mechanism to tax income earned by expats and brought into Thailand, and would entail double taxation exclusions. 

I can believe that they will be as stupid as to tax savings that someone wants to bring to Thailand , and spend here , thus investing in the Thai economy .  At which point some will move to greener pastures, and others will import the bare minimum. If all moneys I bring to Thailand are taxed, I will simply move to Greece where there is tax reciprocity with the US, there is a tax reduction for income imported into Greece  and  you get permanent residence with a pathway to citizenship. 

But I trolly don't believe they will that stupid , so don't worry, nothing is written is tone yet, and it might even never be, Thai politicians are big at making announcements. 

[deejai33]

4 hours ago, Solrac1 said:

 

I think this November 23rd clarification, or ruling will make quite a few expats happier.

 

Money you've saved, had invested for a long period, or simply had before end of 2023 will not be taxed when remitted to thailand.

 

That suits me, as I have sufficient assets that clearly fit that criteria and its proveable.  I'm alright jack ! 555.

 

I just need to show I'm only remitting pre-2024 money to thailand.  Maybe setup new account for 2024+ new money.

 

However, I can see that another group of expats who are not flush with savings/assets will not be re-assured.  Expats who mostly rely on income arising in 2024 will not be assisted by this ruling.   They will still have to rely on DTAs etc.  

 

Thailand wants to now consider if  your new income made in 2024 and remitted is taxable.   OK, up to them, we know now.

 

That a pretty good clarification.    Forget about pre-2024, thailand is looking at 2024 income.  You are fully aware if this now !

 

 

Edited November 25, 2023 by deejai33

[redwood1]

1 hour ago, deejai33 said:

I think this November 23rd clarification, or ruling will make quite a few expats happier.

 

Money you've saved, had invested for a long period, or simply had before end of 2023 will not be taxed when remitted to thailand.

 

That suits me, as I have sufficient assets that clearly fit that criteria and its proveable.  I'm alright jack ! 555.

 

I just need to show I'm only remitting pre-2024 money to thailand.  Maybe setup new account for 2024+ new money.

 

However, I can see that another group of expats who are not flush with savings/assets will not be re-assured.  Expats who mostly rely on income arising in 2024 will not be assisted by this ruling.   They will still have to rely on DTAs etc.  

 

Thailand wants to now consider if  your new income made in 2024 and remitted is taxable.   OK, up to them, we know now.

 

That a pretty good clarification.    Forget about pre-2024, thailand is looking at 2024 income.  You are fully aware if this now !

 

 

 

By the time all the many soon-to-be exclusions are figured in I think it will make more sense just to trash the whole thing.....

 

 

 

[Dogmatix]

15 hours ago, Mike Lister said:

That is simple not correct. A substantial portion of those 6 million returns that do not pay tax are returns that are required to be filed, because the filer is self employed, the most common filing status in Thailand. My wife for example is self employed and operates a business that turns over 1 million baht per year. She, like all others in her category, must file an interim return at 6 months and a full return at year end. She is allowed to deduct 60% of her sales as input costs, that means she has assessable income of say 400,000 baht. Deduct from that amount, 60,000 for her Personal allowance, 60,000 for her mother who she supports, circa 5,000 in social security payments, 100,000 she pays into a retirement mutual fund each year and that leaves taxable income of 175,000. The first 150k is zero rated so is not taxable, that leaves her with 5% tax due on 25,000 or 1,250 baht tax per year. In reality, her income is over 600k per year but the generous tax deductions mean she pays virtually no tax. It's really not difficult to legally earn 600k per year and pay zero tax.

 

EDIT TO ADD: My numbers above are approximate, before somebody takes me to task on minutiae. I think the mutual fund deduction is  capped at something like 30% of assessible income so may be lower but nevertheless, the example overall makes the point well.

 

So she had assessable income and paid tax and was in the category of about 4 million tax payers, not in the 6 million who filed tax returns but didn't have to pay tax. 

 

The question was whether you have to file a tax return, if you have no assessable income and my response was no. The Thai workforce is estimated at 39 million. So with only 10 million tax returns filed 29 workers didn't file tax returns without getting into those with income who are not working.

Edited November 25, 2023 by Dogmatix

[Metapod]

7 hours ago, The Cyclist said:

141 pages and 4200 posts in to this thread and this needs reposted

 

 

Printed on the very day that the initial announcement was made.

 

If you are from a Country that has a DTA with Thailand, you will be exempt if that income has already been taxed in your home Country.

 

Possibly why I wasn't slapped in handcuffs and my gonads wired to a 12 volt battery, and interrogated about TIN's and filing tax returns last Friday, both at the bank and immigration.

 

No, that isn't how it works. A DTA doesn't make you tac exempt. You still have reporting requirements in 2 places and will need to fill tax returns in Thailand. This means translating documents, hiring an accountant, submitting tax forms every year to RD.

 

Have you read your specific DTAs? Many of them just specify who has first rights to tax, not exclusive taxation rights. In many DTAs you will pay tax in both countries and rhe country with first rights on tax will provide a credit you can apply to the second country to prevent being taxed on the same income twice. If the rates in the second country are different, you pay the difference. Thaikand has much lower income bands than a lot of other countries, so many people will pay twice in both areas. It all depends on the DTAs but regardless, everyone will have a burden of dealing with more paperwork and beauracracy 

 

Also a lot of people have income that isn't covered by a DTA

[Dogmatix]

On 11/24/2023 at 5:33 PM, Mike Lister said:

And? So?

 

Anyone who has lived here for any period of time, understands fully that this announcement is classic Thai government, get the message out there and we'll deal with the detail later. If people don't understand that or if they want the government to behave differently, in a more structured and complete manner, probably shouldn't even consider being/coming here because it wont happen in this decade and perhaps not in the next. They understand all that, most posters here don't, that's the problem, it's all about expectations management.

 

Many Thais feel the same way as I do.  Read Prof Kitipong's article. I am Thai myself and, along with 14 million others I didn't vote for the party that lost the election but is now in power and in charge of the finance ministry, overseeing this utterly shameful and unlawful tax rule change. Suggesting that Thais shouldn't come to or be in their own country because they expect a lawful and structured approach to tax reform that doesn't risk driving foreign investment away and harming the economy is not constructive.

 

 

[neil324]

Seems to be targeting people on fixed incomes. The wealthy can just bring money accured before 2024. Anyone receiving income hand to mouth, gets rinsed.

[neil324]

1 hour ago, Dogmatix said:

 

Many Thais feel the same way as I do.  Read Prof Kitipong's article. I am Thai myself and, along with 14 million others I didn't vote for the party that lost the election but is now in power and in charge of the finance ministry, overseeing this utterly shameful and unlawful tax rule change. Suggesting that Thais shouldn't come to or be in their own country because they expect a lawful and structured approach to tax reform that doesn't risk driving foreign investment away and harming the economy is not constructive.

 

 

 

Nearly all other countries tax global wealth. So seems fair in that respect.

 

The problem is, Thailand has grown, being the way it is. That has now changed, in a massive way. What will the affected do about the change.

[Mike Lister]

1 hour ago, Dogmatix said:

 

Many Thais feel the same way as I do.  Read Prof Kitipong's article. I am Thai myself and, along with 14 million others I didn't vote for the party that lost the election but is now in power and in charge of the finance ministry, overseeing this utterly shameful and unlawful tax rule change. Suggesting that Thais shouldn't come to or be in their own country because they expect a lawful and structured approach to tax reform that doesn't risk driving foreign investment away and harming the economy is not constructive.

 

 

The subject is taxation, not politics, stay on topic.

[Mike Lister]

2 hours ago, Dogmatix said:

 

So she had assessable income and paid tax and was in the category of about 4 million tax payers, not in the 6 million who filed tax returns but didn't have to pay tax. 

 

The question was whether you have to file a tax return, if you have no assessable income and my response was no. The Thai workforce is estimated at 39 million. So with only 10 million tax returns filed 29 workers didn't file tax returns without getting into those with income who are not working.

The point I was so very obviously making was that she could, so very easily, have been in the other group and not paid any tax at all, despite having significant income, surely you see and understand that.

[neil324]

17 hours ago, Mike Lister said:

There is no 2 year seasoning period, where did you come up with that!

 

The criteria for filing a Thai tax return is income (including remittances) of over 120k Baht per year.

 

What you get in return for filing taxes is exactly what you get when you don't, plus, if ever a tax clearance certificate is required, you'll be eligible to get one.

 

They can shove that where the sun don't shine.

 

179 days or less or maybe nothing for the me then.

[UKresonant]

7 hours ago, Solrac1 said:

I still don't understand>> so if i have an offshore account in HK HSBC with my hard-earned savings as i do, am i going to be taxed? I am with a retirement visa and i only transfer money for the emigration requirements when needed.

It does not appear that it would be. 

That stack of savings would be good to keep ring fenced perhaps. Have all interest generated  paid  to a different account, so it is pure pre-2024 savings (with no new taxable income/interest credited within the account). Perhaps use a new account for new year, until it is shown how things actually work in practice.

[neil324]

27 minutes ago, UKresonant said:

It does not appear that it would be. 

That stack of savings would be good to keep ring fenced perhaps. Have all interest generated  paid  to a different account, so it is pure pre-2024 savings (with no new taxable income/interest credited within the account). Perhaps use a new account for new year, until it is shown how things actually work in practice.

 

The interest paid in 2024 will be income earned in 2024, so will be taxed in 2024 and every year after. The fact the capital/savings accured before is not relevant. No country taxes people on savings, that would be a wealth tax. The fact money has accured does not sheild any yeild it generates from income tax, you would need a tax wrapper like ISA's in the UK or a pension.

 

[UKresonant]

8 minutes ago, neil324 said:

 

The interest paid in 2024 will be income earned in 2024, so will be taxed in 2024 and every year after. The fact the capital/savings accured before is not relevant. No country taxes people on savings, that would be a wealth tax. The fact money has accured does not sheild any yeild it generates from income tax, you would need a tax wrapper like ISA's in the UK or a pension.

 

The interest, as you say would be 2024 income, but if it is paid to the other account in HK HSBC which is not remitting money to Thailand, it would not be relavant to a Thai tax return. Any tax would only concern Hong Kong.

The pre2024 capital when  remitted, does not need proof of taxes paid in the past etc (or so I've read)

Thankfully for now they appear to be retaining the remittance basis in Thailand 

 

If they moved to global tax it will be a concern. ( a disaster for many )

[Captain Monday]

2 hours ago, neil324 said:

Seems to be targeting people on fixed incomes. The wealthy can just bring money accured before 2024. Anyone receiving income hand to mouth, gets rinsed.

I think you are right.

 

Elite Programme or LTR visa like with the $USD 500,000 investment in Thailand will be exempt.

 

Hand to mouth pensioner driven out.

 

Thai Wife? Pay up.  Or, "take her and your dependents back to your country".

 

This is how it will play out in my opinion. Everyone who is an expat without PR or citizenship  needs a plan B.

 

So, what's in your bug out bag?

 

[jerrymahoney]

24 minutes ago, Captain Monday said:

Thai Wife? Pay up.  Or, "take her and your dependents back to your country".

 

This is how it will play out in my opinion. Everyone who is an expat without PR or citizenship  needs a plan B.

 

So, what's in your bug out bag?

REDUX:

 

Again -- for the retirement coterie who brings in 65K+ baht every month -- it would be right now with available deductions about $US 100 per month income tax bill without any DTA-type exclusions.

 

-- And with DTA US-THAI Article 20 Pensions & Social Security Payments maybe zero income tax due in Thailand.

[Captain Monday]

15 minutes ago, jerrymahoney said:

REDUX:

 

Again -- for the retirement coterie who brings in 65K+ baht every month -- it would be right now with available deductions about $US 100 per month income tax bill without any DTA-type exclusions.

 

-- And with DTA US-THAI Article 20 Pensions & Social Security Payments maybe zero income tax due in Thailand.

That very good, but my problem is fairness. Thailand will also flaunt the dta agreements imho.

 

I am a US person and thus not a tax resident of any country. Let alone Thailand as I do not spend 180 days in any country due to constant international travel.

 

When I did work in non-US countries where I was legally resident I had access to all the benefits and provisos of a citizen as far as I could tell (medical insurance, social programs, local discounts, public housing, etc. ) except for voting or public service jobs. I am not saying there was no racism but certainly no dual pricing or these other blatant scams, discriminations, and daily microaggressions.

 

I would not pay income tax to live as a second class citizen

Edited November 25, 2023 by Captain Monday

[jerrymahoney]

20 minutes ago, Captain Monday said:

I am a US person and thus not a tax resident of any country. Let alone Thailand as I do not spend 180 days in any country due to constant international travel.

So this is all moot point for you.

 

And at least per Mazars:

 

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

Edited November 25, 2023 by jerrymahoney

[Captain Monday]

Just now, jerrymahoney said:

So this is all moot point for you.

Not after retirement which I am mulling. Right now I am in the mood to sell my condo in and buy a larger more expensive one in a better location, but that idea is on hold. Half-baked  announcements from a government that has organs constantly working at cross purposes has consequences don't you think?

[jerrymahoney]

3 minutes ago, Captain Monday said:

Not after retirement which I am mulling. Right now I am in the mood to sell my condo in and buy a larger more expensive one in a better location, but that idea is on hold. Half-baked  announcements from a government that has organs constantly working at cross purposes has consequences don't you think?

Well at least as far as the new house goes, my wife's family bought it last year. I just rent it from them.

[Mike Lister]

3 hours ago, neil324 said:

 

They can shove that where the sun don't shine.

 

179 days or less or maybe nothing for the me then.

Cuts off leg to spite small toe!