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

[Mike Teavee]

1 hour ago, Mike Teavee said:

 

I think you're wrong on this point...  A country's "Statutory Law" is what counts, if that breaks an International Treaty then so be it, but no country is going to allow another country to dictate what it can & can't do.

 

For some reason it seems I'm not able to post a reaction to this post so what it's worth mine was a "Like"

 

Edited December 7, 2023 by Mike Teavee

[Mike Teavee]

1 hour ago, Yumthai said:

I don't get your point.

Anything you will remit in a later tax year (meaning you are tax resident) will be indeed taxable, but not if remittance occurs in any later year you are not resident for tax purposes (and then declare nothing).

 

NO... Let me explain this to you in simple terms...

 

If you earn income in a year you're not tax resident in Thailand, no tax to pay

If you remit income in any year you're not tax resident in Thailand, no tax to pay

If you earn income when you're Thai Tax resident, take a few years break & bring the money over when you are again Thai Tax Resident, you need to pay tax on it. 

 

You get my point now?

 

 

 

[Mike Teavee]

1 hour ago, tomkenet said:

Exactly my Strategy too

Wow, I wish I could do that but have you tried to open a Bank Account in your home country after being (Fully) Expat for a few years?

 

I know in the UK you've got no chance... I personally wouldn't even talk to my bank about opening a separate account in case they decided to "Look" at my accounts.

[Yumthai]

37 minutes ago, Mike Teavee said:

NO... Let me explain this to you in simple terms...

 

If you earn income in a year you're not tax resident in Thailand, no tax to pay

If you remit income in any year you're not tax resident in Thailand, no tax to pay

If you earn income when you're Thai Tax resident, take a few years break & bring the money over when you are again Thai Tax Resident, you need to pay tax on it. 

 

You get my point now?

I think we misunderstood each others because you write exactly what I said.

 

"If you earn income when you're Thai Tax resident, take a few years break & bring the money over when you are again Thai Tax Resident, you need to pay tax on it."

 

Indeed, you never have to pay tax on foreign source remittance in a year you are not tax resident in Thailand regardless of you tax residence status when you earned this money. You have to pay tax only if remittance occurs a year you are Thai tax resident.

 

The initial condition to pay tax is to be tax resident.

 

"If you earn income in a year you're not tax resident in Thailand, no tax to pay"

For savings prior 2024 but it's not clear for income generated from 01/01/2024 onwards

Edited December 7, 2023 by Yumthai

[tomkenet]

35 minutes ago, Mike Teavee said:

Wow, I wish I could do that but have you tried to open a Bank Account in your home country after being (Fully) Expat for a few years?

 

I know in the UK you've got no chance... I personally wouldn't even talk to my bank about opening a separate account in case they decided to "Look" at my accounts.

I know it can be a problem to open an account in a new bank, but if you are an old customer from before you emigrated, and you have a TIN from  Thailand it should not be a problem if you have maintained the relationship with your bank well.

 

Edited December 7, 2023 by tomkenet

[Mike Teavee]

30 minutes ago, Yumthai said:

I think we misunderstood each others because you write exactly what I said.

 

"If you earn income when you're Thai Tax resident, take a few years break & bring the money over when you are again Thai Tax Resident, you need to pay tax on it."

 

Indeed, you never have to pay tax on foreign source remittance in a year you are not tax resident in Thailand regardless of you tax residence status when you earned this money. You have to pay tax only if remittance occurs a year you are Thai tax resident.

 

The initial condition to pay tax is to be tax resident.

 

"If you earn income in a year you're not tax resident in Thailand, no tax to pay"

For savings prior 2024 but it's not clear for income generated from 01/01/2024 onwards

100% agree 👍🏻, sorry if I misunderstood your previous post. 

[Mike Teavee]

24 minutes ago, tomkenet said:

I know it can be a problem to open an account in a new bank, but if you are an old customer from before you emigrated, and you have a TIN from  Thailand it should not be a problem if you have maintained the relationship with your bank well.

 

I spent 38 years working for my bank (Barclays) & they know I’m not UK Resident as they were the ones who posted me overseas (India, then Pakistan & finally Singapore) so I’d rather not “Rock The Boat” by asking them for a new account.
 

Especially as you can see from threads on here (& UK News) that they’re actively looking to close down expat accounts. 
 

Fly low & don’t get burnt… 

[jaywalker2]

Areas of concern: According to the lawyer in the video I posted, pensions are taxable. If they're not taxed in your home country, you will be liable for the full tax rate in Thailand.

 

Apparently, if I understood this correctly, remittances for the purposes of buying condos will be taxable unless it can be proven an exclusion applies. Even then, if the amount of income exceeds the allowed exclusion, a tax must be paid on the excess.

 

The burden of proof for when income was earned falls to the taxpayer. So even if the new law applies only to income earned after Jan. 1 2024, you must be able to prove the income was earned before this.

 

Same with the tax credit. If a country has a tax treaty with Thailand, in pinciple tax paid in the home country earns a credit in Thailand. However, the taxpayer must be able to prove the tax was paid and in cases when the tax rate differs, the taxpayer must pay the difference. (For example, if the tax rate in your country is 30 percent and in Thailand it's 35 percent, you have to pay 5 percent.)

 

This will be a headache in terms of calculating tax rates, credits, and providing proof for the sources of income. The lawyer noted that negotiations with the revenue department are ongoing but the problem is the government has a habit of implementing unworkable legislation and only backing down once there's a public outcry. Let's hope

[TroubleandGrumpy]

On 12/6/2023 at 12:37 PM, Dogmatix said:

 

I am not if I missed something but my understanding is that the OECD's global minimum tax is 15% vs the Thai corporate income tax rate of 20%.  So no big problem to Thailand, except for BOI privileges that often complete corporate income tax exemption for a few years for a new project. This has been under fire for a few years but seems unfair, as the tax exemption only applies short term to start up investments in Thailand and only the the products and services generated in the business.  It can't be used for transfer pricing to avoid tax somewhere else.  The BOI doesn't have anything else substantial to offer start ups.  Since Thailand is too weak to stand up to this interference in its sovereignty from the rich OECD countries, I guess the day of the BOI being able to attract foreign investment are numbered, even though Thailand desperately needs it.  Help with work permits and stuff and temporary land ownership is not enough to compensate for loss of tax privileges. 

 

Anyway this doesn't seem to have anything to do with the topic, except to show how Thailand fails to stand up to OECD.

Very true - future investment in Thailand via BOI is not being helped. 

 

The reason for the post was to point out to another poster about another tax change being made in Thailand (this one for business) and the statement recoimmending that "Even though the legislation is not yet enacted, in-scope MNEs should begin assessing its potential impacts from the implementation of global minimum tax rules and be ready for the anticipated law changes"   My point being was that if they wish to totally ignore this potential income tax, that is up to them - but I will be doing what businesses are doing about the new minimum tax rule.

" assessing its potential impacts ........................ and be ready for the anticipated law changes"

[TroubleandGrumpy]

19 hours ago, kuma said:

I have tried contacting them in a few provinces to get some more details, but response has been scant. We found some online content where people were discussing the implications, I will post it if I can get the link again (in Thai) but it also left many questions unanswered. It is a significant topic and the rollout is lacking - so hopefully there will be some more time added to the clock to get things better sorted.

But this has got me off my butt and made a visit to Cambodia, next up is Laos then Vietnam...they are spots I used to visit more frequently and its about time I did again any way. Siem Reap has certainly changed in the past 13 years. Perhaps one of them have a similar program and there can find out how it works in those jurisdictions, among other things.

Yeh - the Thai RD have basically 'shut up the shop' and are not talking to anyone.  Most frustrating.

[Chris Daley]

The company that my gf works for just fired 3 workers.  And they only have like 7 to start with.

 

They are trying to give them an opportunity to resign first because the boss doesn't want to pay the leaving salary to them.

 

The boss spends all the money on big houses, nice cars, golf clubs and drinking.  So the slightest change and he is finished.

Edited December 7, 2023 by Chris Daley

[TroubleandGrumpy]

On 12/6/2023 at 12:31 PM, The Cyclist said:

How problematic it potentially could be remains to be seen.

It certainly cuts the legs of people, some of them on this thread who have been asking about remitting income as savings.

Ahhhh but Mr RD man, this is savings from 1995.

Is it really ? Then produce the paperwork proving that it has been taxed and we will refund the tax that you pay now.

All potential of course, not an avenue that I intend going down and chancing my arm.

No faeces Einstein ? I do not want to sound like a "fearmonger" but the above point is not the only potential problem. 

There are so many potential negatives that no one knows them all - and will not know until after it starts.

And then for some it will not be until it hits them and they realise they are not in Kansas anymore.

 

And then (dont ask me how I know this) in the future, because of all the negatives (like Expats leaving and very few new ones coming), the Thai RD/Govt will try to addess the matter - and they will make it worse.

I could be wrong of course - the Thai RD could publish official advice and alleviate all Expat's concerns soon - I hope so.

[Negita43]

I stopped reading this thread at 100 pages - it's too unwieldy to follow now.

 

Once the rules are known I suggest a new thread.

 

And I point you all to something called the Serenity prayer (not that I am religious but the sentiments are sound):

 

God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.
 

[jerrymahoney]

1 hour ago, Negita43 said:

God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.

With apologies to Dr. Niebuhr:

 

God grant me the serenity
to accept the things I cannot change;

courage to change the things I can;

 

... and the option to get out of the country before my 180 days are up if I can't tell the difference.
 

 

 

 

[MistyBlue]

5 hours ago, Yumthai said:

The year(s) you are not tax resident in Thailand, you don't (have to) file any tax return (unless you have Thai source assessable income), so nothing to prove because you declare nothing.

This what I thought too and might be a workaround for those who can take a 6 month holiday and remit several years living expenses in advance, during the year not tax resident.

[MistyBlue]

6 hours ago, Mike Teavee said:

Thailand has no claim to anything you've earned in any year you are not Thai Tax Resident... BUT you might have to prove that you you weren't Tax Resident when you earned that income.

 

 

 

I agree with you, which is why I was astounded to hear it suggested in the video that there might be a tax liability for gains made when not a tax resident when later remitted as a tax resident.  The example they gave in the video was selling a property in Canada when not Thai tax resident, but then later remitting the profits to Thailand there could be a tax liability if the tax had not been paid in Canada due to personal reliefs given in that country.  That just didn't seem right to me which is why I highlighted it for discussion.

[The Cyclist]

2 hours ago, TroubleandGrumpy said:

do not want to sound like a "fearmonger" but the above point is not the only potential problem. 

 

But that is exactly what you have been doing over the course of this thread.

 

2 hours ago, TroubleandGrumpy said:

There are so many potential negatives that no one knows them all - and will not know until after it starts.

 

Well blow me down with a feather. I suppose that big black cloud of negativity drowning you, stopped you seeing that the potential negatives migh not even happen.

 

2 hours ago, TroubleandGrumpy said:

could be wrong of course - the Thai RD could publish official advice and alleviate all Expat's concerns soon - I hope so.

 

Yes, you could be. And you might have been better waiting for official advice to come from the RD, before making 270 posts of negativity, with a liberal dash of doom & gloom.

 

That's just me though, glass half full rather than glass half empty kinda guy.

[ukrules]

2 hours ago, MistyBlue said:

I agree with you, which is why I was astounded to hear it suggested in the video that there might be a tax liability for gains made when not a tax resident when later remitted as a tax resident.  The example they gave in the video was selling a property in Canada when not Thai tax resident, but then later remitting the profits to Thailand there could be a tax liability if the tax had not been paid in Canada due to personal reliefs given in that country.  That just didn't seem right to me which is why I highlighted it for discussion.

 

Indeed, this was alarming and would possibly catch a lot of people out if implemented, especially people who bought a house as a primary residence say 20 to 30 years ago for next to nothing compared to the current 'value' and sell it now to fund their retirement.

There's zero tax on that in the UK as it's the house you lived in all your life as opposed to an investment property. Nobody will want to pay any tax on that money in Thailand so if they know about it they simply will not come - unless they plan it as follows they might fall into a trap and be liable :

 

I might bring a reasonably large amount of money into Thailand at some point in the next couple of years. Lets say 10 million Baht although it could be more.

 

In order to do this I would need to sell some of my long term holdings which date back at least a decade, this will be a very profitable sale and there will be no tax paid anywhere.

For me the only way to ensure zero tax is paid on this would be to be non resident (<180 days) in Thailand during the year that I do the following :

1 - Sell the assets to get the 10 million Baht equivalent in USD

2 - Remit it to Thailand via wire transfer

 

All while being non resident - the key part is that you need to be non resident in both the year when you sell it (realise the profit) and the year when you remit it, with a little planning, two 90 day trips plus a long weekend somewhere else I could do that in one year and proving it would be simple. Passport stamps would prove non residence and asset sale / wire transfer records would prove profit made and remitted while non resident during the same year.

 

Now that's a lot of hassle but it would save a whole chunk of tax. It is tax avoidance (a healthy practice for any man), not evasion.

I think I got that right.

Another concern is that they might want to tax the rest of my money made outside of Thailand as they are looking to tax global income in the future - which sounds like a pipedream and I will be very surprised if it ever happens, but if it does then that is going to be a problem as I'm definitely never going to stop making money outside of Thailand and I'm not going to pay them any tax on that if I don't bring it here - not a chance. I will incorporate to avoid that and nothing will belong to me if they take this step.

Also I don't mind paying some tax on the money I use for day to day living but I won't be sending 100k Baht a month any more, in the future that would be reduced to 50k a month resulting in a negligible (21,500 Baht) tax bill for me.

 

Edited December 7, 2023 by ukrules

[tomacht8]

4 hours ago, TroubleandGrumpy said:

Yeh - the Thai RD have basically 'shut up the shop' and are not talking to anyone.  Most frustrating.

It's sad when you go to your local tax office and don't get clear answers. If I want to buy a condo for 10 million in July 2024 and transfer the money from abroad? Do I have to pay up to 30% taxes on the 10 million in 2025 (tax return for 2024)?

 

The answer: I don't know, maybe.

 

What documents do I have to show that my 10 million has already been taxed in my home country? Especially if the 10 million have already been saved in your home country over years?

 

The answer: I don't know.

 

Against the background of such unclear statements, no sensible businessman will invest.

[TroubleandGrumpy]

1 hour ago, The Cyclist said:

But that is exactly what you have been doing over the course of this thread.

Well blow me down with a feather. I suppose that big black cloud of negativity drowning you, stopped you seeing that the potential negatives migh not even happen.

Yes, you could be. And you might have been better waiting for official advice to come from the RD, before making 270 posts of negativity, with a liberal dash of doom & gloom.

That's just me though, glass half full rather than glass half empty kinda guy.

 

[TroubleandGrumpy]

9 minutes ago, tomacht8 said:

It's sad when you go to your local tax office and don't get clear answers. If I want to buy a condo for 10 million in July 2024 and transfer the money from abroad? Do I have to pay up to 30% taxes on the 10 million in 2025 (tax return for 2024)?

The answer: I don't know, maybe.

What documents do I have to show that my 10 million has already been taxed in my home country? Especially if the 10 million have already been saved in your home country over years?

The answer: I don't know.

Against the background of such unclear statements, no sensible businessman will invest.

Exactly - all up in the air - but as it stands - yes that money is taxable income under the new interpretation, and under a DTA the person must lodge a tax return and prove they have either paid taxes already or the money is exempt.  Good luck with that - especially if the Thai RD disagrees and Somchai (Thailand Tax Officer delegate in your local Office) decides you will have to pay income taxes on the money you brough into Thailand. 

And I agree with you - no wise person should consider business investment or retirement in Thailand, as things stand now.  Hopefully the Thai RD will clarify all of this mess soon.

[TroubleandGrumpy]

19 minutes ago, ukrules said:

 

Indeed, this was alarming and would possibly catch a lot of people out if implemented, especially people who bought a house as a primary residence say 20 to 30 years ago for next to nothing compared to the current 'value' and sell it now to fund their retirement.

There's zero tax on that in the UK as it's the house you lived in all your life as opposed to an investment property. Nobody will want to pay any tax on that money in Thailand so if they know about it they simply will not come - unless they plan it as follows they might fall into a trap and be liable :

 

I might bring a reasonably large amount of money into Thailand at some point in the next couple of years. Lets say 10 million Baht although it could be more.

 

In order to do this I would need to sell some of my long term holdings which date back at least a decade, this will be a very profitable sale and there will be no tax paid anywhere.

For me the only way to ensure zero tax is paid on this would be to be non resident (<180 days) in Thailand during the year that I do the following :

1 - Sell the assets to get the 10 million Baht equivalent in USD

2 - Remit it to Thailand via wire transfer

 

All while being non resident - the key part is that you need to be non resident in both the year when you sell it (realise the profit) and the year when you remit it, with a little planning, two 90 day trips plus a long weekend somewhere else I could do that in one year and proving it would be simple. Passport stamps would prove non residence and asset sale / wire transfer records would prove profit made and remitted while non resident during the same year.

 

Now that's a lot of hassle but it would save a whole chunk of tax. It is tax avoidance (a healthy practice for any man), not evasion.

I think I got that right.

Another concern is that they might want to tax the rest of my money made outside of Thailand as they are looking to tax global income in the future - which sounds like a pipedream and I will be very surprised if it ever happens, but if it does then that is going to be a problem as I'm definitely never going to stop making money outside of Thailand and I'm not going to pay them any tax on that if I don't bring it here - not a chance. I will incorporate to avoid that and nothing will belong to me if they take this step.

Also I don't mind paying some tax on the money I use for day to day living but I won't be sending 100k Baht a month any more, in the future that would be reduced to 50k a month resulting in a negligible (21,500 Baht) tax bill for me.
 

Be careful - get professional advice before doing that.  As detailed by the lawyer in that video, even though you are not a tax resident in Thailand you can be hit for any money you earned in Thailand (such as for 90 days stay).  What that means is that being a non tax resident is not a blanket get out of jail card. The Thai RD could well decide (under the current definitions) that you did that to deliberately avoid paying income taxes, and maybe that gives them the right to tax you. I would get professional advice before taking that strategy involving such a large amount of money.  

[TroubleandGrumpy]

6 hours ago, Yumthai said:

I think we misunderstood each others because you write exactly what I said.

 

"If you earn income when you're Thai Tax resident, take a few years break & bring the money over when you are again Thai Tax Resident, you need to pay tax on it."

 

Indeed, you never have to pay tax on foreign source remittance in a year you are not tax resident in Thailand regardless of you tax residence status when you earned this money. You have to pay tax only if remittance occurs a year you are Thai tax resident.

 

The initial condition to pay tax is to be tax resident.

 

"If you earn income in a year you're not tax resident in Thailand, no tax to pay"

For savings prior 2024 but it's not clear for income generated from 01/01/2024 onwards

WRONG

 

[UKresonant]

On 12/6/2023 at 6:55 AM, tomkenet said:

I would keep those money on separate accounts only used for remittance to Thailand, trackable back to before 2024. No new deposits to these accounts except interests, which might be taxable.  

If and when Thailand introduces worldwide taxation in the future, new strategies must be obtained.

 

I'm going for separate Banks, never mind different accounts! (with any interest mandated to another account for pre-2024 small savings pots). One Bank will collect all taxed at source Pensions and annuities and I will try and not credit it with any other type of  income. Only source of money to send to Thailand.

(Which means the UK state pension & ISA income which have no tax deducted by design will go elsewhere)

 

I always expect to be UK tax resident. The possible situation that Thailand would go Global in future and expect tax for income that is by design and Gov approval, not taxable in the UK, only spent in the UK, for essential upkeep and family matters in the UK, would extremely go against the grain. It would always be a considered parameter to try and avoid being in Thailand over whatever threshold prevailed then.   But not the only parameter, life is never that simple.

[liddelljohn]

I have relocated all my money back to EU apart from some for spending and am now looking into shipping of my personal items that are sentimental and my motorcycle collection back to UK , after 30 years here I see the writing on the wall ,,, i only spend a few months here a year now in winter but  the shine fell off Thailand a while ago

 

Im not rushing but Thailand  is not the paradise it once was maybe this time next year I may be  done with it ????

Edited December 7, 2023 by liddelljohn

[ukrules]

16 minutes ago, TroubleandGrumpy said:

Be careful - get professional advice before doing that.  As detailed by the lawyer in that video, even though you are not a tax resident in Thailand you can be hit for any money you earned in Thailand (such as for 90 days stay).  What that means is that being a non tax resident is not a blanket get out of jail card. The Thai RD could well decide (under the current definitions) that you did that to deliberately avoid paying income taxes, and maybe that gives them the right to tax you. I would get professional advice before taking that strategy involving such a large amount of money.  

 

It's all foreign income and transactions can happen at any time of my choosing - for example, while I'm out of the country and by definition they would be done offshore.

 

But for sure I would consult with an accountant before making any such move and let the dust settle after any law changes before doing so.

 

This is something I will not take lightly, without clarity on the issue no money is coming to Thailand other than day to day expenses from Jan 1, 2024.

 

No clarification = no remittance.

 

Edited December 7, 2023 by ukrules

[Yumthai]

23 minutes ago, ukrules said:

All while being non resident - the key part is that you need to be non resident in both the year when you sell it (realise the profit) and the year when you remit it, with a little planning, two 90 day trips plus a long weekend somewhere else I could do that in one year and proving it would be simple. Passport stamps would prove non residence and asset sale / wire transfer records would prove profit made and remitted while non resident during the same year.

There is no clear statement saying that you have to be non tax resident in Thailand the year you sell to avoid a later tax in Thailand.

You just have to be non resident for tax purposes the year you remit money, simply because that year you declare nothing in Thailand.

How could RD check you a calendar year you are not tax resident and not filing any tax return?

 

Example:

- You sell your offshore house US$1M in 2024 while being tax resident in Thailand. You keep that money abroad.

- You file in 2025 any income earned in 2024 (including foreign remittance except house sale proceed because not remitted in Thailand) and pay tax (if any)

- In 2025 you stay less than 180 days in Thailand and become non resident for tax purposes

- Any money you remit in Thailand in 2025 including your house sale proceed US$1M will be tax-free because in 2026 you will not have to file any tax return related to 2025 income/remittance.

 

[UKresonant]

2 hours ago, MistyBlue said:

I agree with you, which is why I was astounded to hear it suggested in the video that there might be a tax liability for gains made when not a tax resident when later remitted as a tax resident.  The example they gave in the video was selling a property in Canada when not Thai tax resident, but then later remitting the profits to Thailand there could be a tax liability if the tax had not been paid in Canada due to personal reliefs given in that country.  That just didn't seem right to me which is why I highlighted it for discussion.

 

They need to be non tax resident at the transaction in Canada and non-tax resident in Thailand to remit it.

 

So say January - June sale transaction in Canada, (Maybe Jan-March if it were the UK) arrive in Thailand Mid July, and remit a bit of the money timing any purchase in Thailand with legal clause it MUST complete before 31st Dec of the year or contract is Void.

8th of July to 31st December the new high season for aspiring tax residents, even if you get mowed down at a road crossing you don't have to worry about the tax residence bit for that year, whilst in Hospital. (and no tax on your hospital bill remitted funds, apart from any tax on it)! By the following year they will be more aware of the risks at crossings, and could leave by June if they consider it too dangerous

[ukrules]

10 minutes ago, Yumthai said:

There is no clear statement saying that you have to be non tax resident in Thailand the year you sell to avoid a later tax in Thailand.

You just have to be non resident for tax purposes the year you remit money, simply because that year you declare nothing in Thailand.

How could RD check you a calendar year you are not tax resident and not filing any tax return?

 

Example:

- You sell your offshore house US$1M in 2024 while being tax resident in Thailand. You keep that money abroad.

- You file in 2025 any income earned in 2024 (including foreign remittance except house sale proceed because not remitted in Thailand) and pay tax (if any)

- In 2025 you stay less than 180 days in Thailand and become non resident for tax purposes

- Any money you remit in Thailand in 2025 including your house sale proceed US$1M will be tax-free because in 2026 you will not have to file any tax return related to 2025 income/remittance.

 

 

You're right - there's no clear statement which makes all our potential scenarios quite redundant unitl they do clarify.

People won't expose themselves to such risks until there's clarity.

[kuma]

3 hours ago, jerrymahoney said:

With apologies to Dr. Niebuhr:

 

God grant me the serenity
to accept the things I cannot change;

courage to change the things I can;

 

... and the option to get out of the country before my 180 days are up if I can't tell the difference.
 

 

 

 

Good point. I guess in 2024, if the new regs are too unfavourable, one has the option to get out by June 28ish and chill somewhere else for 6 months, whether one can or not is a very individual decision.