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

[PingRoundTheWorld]

35 minutes ago, Mike Lister said:

Every tax system is based on people being truthful and declaring their income that isn't taxed at source, if you don't declare it, you pay a penalty which could be very costly. And since the banks tell the RD that you've received funds from overseas anyway, you better declare it because they already know! Your choice.

By not declaring I mean declaring it as sourced from savings, gift, or other source that isn't income. Assuming we'll actually be required to file tax returns if we don't have taxable income - that remains to be seen.

[quake]

6 hours ago, lordgrinz said:

 

Everyone has their problems to deal with, I am going with not sending a dime over next year (2024). The plan is to see what the rest of you go thru first, let the guinea pigs work out the kinks first, then I can decided to bring in more money in 2025 and deal with taxes in 2026, or just move back to the states. 

 

Same here. 

[Mike Lister]

1 hour ago, PingRoundTheWorld said:

By not declaring I mean declaring it as sourced from savings, gift, or other source that isn't income. Assuming we'll actually be required to file tax returns if we don't have taxable income - that remains to be seen.

As with any system that's based on trust, you pay your money and take your chance......if you're dishonest and get away with it, good for you. But if you don't, well, you can't complain when you get heavily fined.

[jacko45k]

14 hours ago, stat said:

Immigration has it in their system that you are over 180 days in Thailand and thus a tax resident so there is no way to stay undecteted, period. If and how they will act upon it is another story time will tell.

I   really do not know what they have...I do know that for each and every Extension, Re-Entry permit, 90 day report (done at the office), certificate of residence etc etc, you have to produce copies of passport and most things under the sun, as if it is the first time they ever saw you. A person who has lived here a few decades is still expected to traipse all over soi 5 office with a thick wad of papers in hand. 

[tomkenet]

I am very curious how Thai RD is going to make this system work 

 

A tax resident foreigner holding a foreign account with income and savings from before 2024, proceeds with capital gains, dividends and pension etc. from after 2023, and proceeds with capital losses from after 2023.

All mixed together in 1 account.

 

Can the taxpayer choose which money he remits to Thailand or is it FiFo.

 

And how to sort out what money has already been remitted and what money is not yet remitted the following years.

 

This system might work for Thai citizens with limited economic activity outside Thailand, but for a foreigner with most of his economic activity outside Thailand this is very messy 

[Danderman123]

I am transferring money from the US to my Thai bank account, in tranches less than $10,000 per transfer.

 

For some 2024 expenses (like hotels), I can use a US credit card, and that shouldn't be treated as an incoming transfer, I hope. I guess I can use a US credit card at the supermarket.

 

The hope is by not transferring money into Thailand in 2024, I can stay in the country, but not be considered a tax resident.

[Danderman123]

What is the tax status of cash from an ATM in Thailand obtained via my US bank card? 

[Ricardo]

37 minutes ago, Danderman123 said:

The hope is by not transferring money into Thailand in 2024, I can stay in the country, but not be considered a tax resident.

Your tax-residency is determined by your having been in the country for more than 179 days, so I doubt that will work ?

 

On the other hand, having transferred-in little/no money during 2024, there ought to be nothing to declare or be assessed tax on, as we currently understand the new situation ?  So you can afford to await developments & clarification.

 

And if you're a US-citizen, as your post suggests, then your DTA should shield you from part of the effects ?

Edited December 15, 2023 by Ricardo

[daveAustin]

I wouldn't mind paying tax (again!) if it afforded me citizenship, or permanent residency, and voting rights in this country. Yeah right!

[Danderman123]

29 minutes ago, Ricardo said:

Your tax-residency is determined by your having been in the country for more than 179 days, so I doubt that will work ?

 

On the other hand, having transferred-in little/no money during 2024, there ought to be nothing to declare or be assessed tax on, as we currently understand the new situation ?  So you can afford to await developments & clarification.

 

And if you're a US-citizen, as your post suggests, then your DTA should shield you from part of the effects ?

There's 2 different components, as you suggest:

 

How long one is resident in Thailand per year, and

 

How much money is transferred into the country during that year.

 

The $64K question is: does residence for more than 179 days automatically require filing a tax return, or, if the income is zero, can filing the return be waived?

Edited December 15, 2023 by Danderman123

[Steve2UK]

19 minutes ago, Danderman123 said:

There's 2 different components, as you suggest:

 

How long one is resident in Thailand per year, and

 

How much money is transferred into the country during that year.

 

The $64K question is: does residence for more than 179 days automatically require filing a tax return, or, if the income is zero, can filing the return be waived?

Your "$64K question" also gets me wondering if the 'new' Thai RD rule/interpretation means that from January 2024 every tax resident foreigner must by default obtain a tax number and submit annual tax returns. I'm a Brit retiree here full-time (i.e. 365 days a year) since 2006. During all those years I've never been asked to register with Thai RD and, of course, never volunteered to do so. In all that time, I've transfered from my UK bank to a Thai bank numerous sums to pay rent etc (certainly totaling well over 150,000 baht a year) and 3 years ago about 10 million baht to fund a house purchase. My last retirement visa extension was with over 10 million baht showing in my Thai bank account. Immigation merely satisfied themselves that I had the minimum balance of 800,000 baht in my account for the relevant period - and duly extended my visa.

 

Should I be expecting them to ask for a tax (paid) certificate or somesuch come my 2024 extension?

[Misty]

1 hour ago, Danderman123 said:

What is the tax status of cash from an ATM in Thailand obtained via my US bank card? 

According to the AMCHAM Tax Committee online seminar today, the Thai Revenue Department has yet clarified if foreign credit card or ATM withdrawals would be considered a remittance and therefore taxable.  It was noted that other countries would consider use of a foreign credit card or ATM withdrawal as a remittance, so it's possible the RD would do so as well.

[Yumthai]

In a far away future, over the online dictionaries, this thread will be quoted as the perfect illustration of the epic and accurate Thai expression: "Farang fink too mutt".

[jaideedave]

15 hours ago, Guavaman said:

Regarding the tax exempt status of gifts of income from abroad:

 

According to the Q&A that the Revenue Department published on its website (translated by Mazars), income from abroad will not be subject to tax, if such income is eligible for tax exemption under the general rules.

 

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Q-A-published-on-foreign-sourced-income

 

Following the issuance of the Revenue Departmental instruction number Paw. 161/2566 ("DI. Paw. 161") in September 2023, the Revenue Department published on its website this month a Q&A concerning the concept, conditions and clarification of tax treatments on foreign-sourced income under the Revenue Code.

 

Q1: What kind of income shall be taxed upon bringing into Thailand, according to Section 41 and DI. Paw. 161?  

A: Foreign-sourced income subject to Thai personal income tax upon bringing into Thailand is an assessable income under Section 40(1) to (8) of the Thai Revenue Code.  

Assessable income under Section 40 of the Revenue Code: 

    1. Employment 

    2. Independent personal services 

    3. Goodwill, copyright and other (intangible) rights 

    4. Interest income, dividends and capital gains 

    5. Rental from property 

    6. Professional services 

    7. Hire of work (i.e., services contracts) 

    8. Business, commerce, agriculture, industry, transport, etc. 

 

However, if the income is eligible for tax exemption under the general rules, such income from abroad will not be subject to tax under DI. Paw. 161. For example, income regarded as a gift from parents, descendants, or spouses in an amount not over Baht 20 million per annum is exempt from personal income tax. 

Well Gman, that's it in a nutshell in plain English. No mention of pension income. Now let's all sit back and see how the RD f,s this up.

[Ricardo]

1 hour ago, Danderman123 said:

There's 2 different components, as you suggest:

 

How long one is resident in Thailand per year, and

 

How much money is transferred into the country during that year.

 

The $64K question is: does residence for more than 179 days automatically require filing a tax return, or, if the income is zero, can filing the return be waived?

 

You're tax-resident here, as many of us have been for years, but I don't think that necessarily means that you have to get a TIN or make a self-assessment return.  Why trouble the RD, if you don't actually owe them anything, until they say that they do now require that paper-shuffling process ?

 

I certainly haven't registered or filed previously, since I have always arranged my affairs so as to have no assessable-income, using the long-standing prior-year earnings route.  This has never been a problem.

 

Like you, I am now changing how I fund myself (plus family) for tax-year 2024, so that I will continue to not owe any tax here, until things become clearer (hopefully by mid-2025).  This seems only sensible, to me.  If it should become clear to me, that registration and a Nil-return are required in future, then I shall still have remained entirely legal.  

 

 

And I shall rearrange my affairs further, if it becomes necessary, as we learn more about what's expected of us.  

[bugger bognor]

10 hours ago, Misty said:

According to the AMCHAM Tax Committee online seminar today, the Thai Revenue Department has yet clarified if foreign credit card or ATM withdrawals would be considered a remittance and therefore taxable.  It was noted that other countries would consider use of a foreign credit card or ATM withdrawal as a remittance, so it's possible the RD would do so as well.

ATM withdrawals from a overseas bank information is not shared and is protected by law and untraceable by Thai government departments

[jayboy]

20 hours ago, kennypowers said:

Save yourself the hassle of speculation and read this: https://www.thethailandlife.com/expat-tax-thailand It has the facts and latest updates. Thank me later :)

 

Just a rehash by some beachcomber type of what is already known though missing out on chunks.Near useless.

[Dogmatix]

I paid my 1,000 baht to listen in on the Amcham seminar this morning.  They had tax advisors from Mazars, KPMG and one other firm, the name of which I forget and the guy from Mazars led the discussion. It was very lucid and well done and they presented a very good overview of the story so far but emphasized that it is still work in progress at the RD, since they have launched the tax change at half cock. I not am sure there was anything new for many of us here who have read the print off everything that has come out on the issue so far but it was good to know we are on the same page on most aspects. Points arising that struck me are below.

 

Re gifts. They thought gifts from offshore to a spouse or other direct family member should be OK but cautioned that the RD could regard such a gift as conjugal property and, as such, interpret things so that only half of the tax is tax exempt because you own half the conjugal property.  Gifts to people other than direct family members should have a reason, e.g. wedding gift, according to the Mazars guy. I don't see anything in the RC saying gifts to non family members need a reason but I have seen cases like this, e.g. the transfer of SHIN shares free of payment by Potjaman to her brother was claimed to be a wedding gift (about 2 years after the wedding).  It was suggested that gifts should be documented.

 

They thought a 'genuine' loan from an offshore company controlled by a Thai tax resident to himself could not be construed as income as there is nothing in the RC to suggest that loans could be deemed to be income.  But they cautioned that this is not confirmed, rather that there is nothing in the RC or elsewhere that suggests a loan can be deemed to be income.

 

Re tax credits. The RD has told people verbally that tax credits will be recognized in respect of DTAs but has not clarified how this will be done.  It pointed out that the RD only accepts tax credits for corporate income tax the tax credit applies to foreign income earned in the same tax year the same tax year as it is remitted to Thailand. 

 

 

Edited December 15, 2023 by Dogmatix

[kuma]

7 hours ago, Danderman123 said:

I am transferring money from the US to my Thai bank account, in tranches less than $10,000 per transfer.

 

For some 2024 expenses (like hotels), I can use a US credit card, and that shouldn't be treated as an incoming transfer, I hope. I guess I can use a US credit card at the supermarket.

 

The hope is by not transferring money into Thailand in 2024, I can stay in the country, but not be considered a tax resident.

If you stay more than 180 days in a calendar year you are a deemed tax resident, it matters not whether you import funds during that period

[PingRoundTheWorld]

4 hours ago, bugger bognor said:

ATM withdrawals from a overseas bank information is not shared and is protected by law and untraceable by Thai government departments

Source?

 

Whether ATM withdrawals and paying for goods and services with an overseas credit card will be considered remittance is hugely important (for those of us who use foreign cards for the majority of their expenses). Which also brings the question- how do you "decide" if a credit card purchase/ATM withdrawal is income or not? I could pay the credit card bill with income, or I could pay for it with savings. It would be difficult to keep records and prove it either way.

[Morch]

24 minutes ago, PingRoundTheWorld said:

Source?

 

Whether ATM withdrawals and paying for goods and services with an overseas credit card will be considered remittance is hugely important (for those of us who use foreign cards for the majority of their expenses). Which also brings the question- how do you "decide" if a credit card purchase/ATM withdrawal is income or not? I could pay the credit card bill with income, or I could pay for it with savings. It would be difficult to keep records and prove it either way.

 

 

My thinking is that (unfortunately) if they can 'see' the transfer then -

 

Quote

It would be difficult to keep records and prove it either way.

 

And will end up with 'you pay.'

 

Because bottom line they make the rules, and easy for them to make you responsible for showing it's not taxable, not the other way around.

Edited December 15, 2023 by Morch

[Danderman123]

3 hours ago, kuma said:

If you stay more than 180 days in a calendar year you are a deemed tax resident, it matters not whether you import funds during that period

My question is whether tax residents will be required to fill out tax returns if they have no transfers into Thailand during a tax year.

 

And whether ATM withdrawals in Thailand using a foreign bank card are considered transfers for income tax purposes.

 

Or, for example, purchases on Lazada using foreign credit cards.

[UKresonant]

4 hours ago, Dogmatix said:

I paid my 1,000 baht to listen in on the Amcham seminar this morning.  They had tax advisors from Mazars, KPMG and one other firm, the name of which I forget and the guy from Mazars led the discussion. It was very lucid and well done and they presented a very good overview of the story so far but emphasized that it is still work in progress at the RD, since they have launched the tax change at half cock. I not am sure there was anything new for many of us here who have read the print off everything that has come out on the issue so far but it was good to know we are on the same page on most aspects. Points arising that struck me are below.

 

Re gifts. They thought gifts from offshore to a spouse or other direct family member should be OK but cautioned that the RD could regard such a gift as conjugal property and, as such, interpret things so that only half of the tax is tax exempt because you own half the conjugal property.  Gifts to people other than direct family members should have a reason, e.g. wedding gift, according to the Mazars guy. I don't see anything in the RC saying gifts to non family members need a reason but I have seen cases like this, e.g. the transfer of SHIN shares free of payment by Potjaman to her brother was claimed to be a wedding gift (about 2 years after the wedding).  It was suggested that gifts should be documented.

 

They thought a 'genuine' loan from an offshore company controlled by a Thai tax resident to himself could not be construed as income as there is nothing in the RC to suggest that loans could be deemed to be income.  But they cautioned that this is not confirmed, rather that there is nothing in the RC or elsewhere that suggests a loan can be deemed to be income.

 

Re tax credits. The RD has told people verbally that tax credits will be recognized in respect of DTAs but has not clarified how this will be done.  It pointed out that the RD only accepts tax credits for corporate income tax the tax credit applies to foreign income earned in the same tax year the same tax year as it is remitted to Thailand. 

 

 

 

4 hours ago, Dogmatix said:

Re tax credits. The RD has told people verbally that tax credits will be recognized in respect of DTAs but has not clarified how this will be done.

So does that imply that they are going to allow tax credits against, for example, personal pension income and perhaps just have to add a form and procedure to to show such? T.B.A.?

 

 

 

 

[TheAppletons]

The mere idea that credit card transactions will somehow be taxed by Thai authorities as "income" is ludicrous enough that most people reading this thread should realize that we've moved into the Twilight Zone of logic, if we weren't already there.

 

Who knows what the end result will be - if anything - but the level of paranoia now is just beyond the realm of belief.

 

 

[UKresonant]

I was just thinking that observing the 179 days or less for Tax purposes, would perhaps coincidentally nullify any Thai issued Health Insurance policy?

 

Though the last time I went shopping after such a policy, 2018/2019, I was told by one of the major providers that since I could not be sure that I would be in Thailand more than 6months of 12month in any given period, the policy  would not be appropriate to be sold to me, as it may not provide cover.  Thought it would be a sensible addition to my 92 days per trip travel insurance that I had, after watching a Q&A session on youtube with one of the major providers in the Thai market.

 

Don't know if anything has change on that front?

 

[UKresonant]

8 minutes ago, TheAppletons said:

The mere idea that credit card transactions will somehow be taxed by Thai authorities as "income" is ludicrous enough that most people reading this thread should realize that we've moved into the Twilight Zone of logic, if we weren't already there.

 

Who knows what the end result will be - if anything - but the level of paranoia now is just beyond the realm of belief.

 

 

 

I thought you could use overseas cards to pay for the likes of buying Airlines tickets say from a non Thailand based source as the service and purchase are external 

 

Other service and purchases in Thailand perhaps a bit of a grey area. "spending into Thailand" on the Video below

 

But Cash advances of scale ATM / in branch would be (not thinking of the sporadic occasional, 10000 baht  cash advance if the Thai ATM card was at room).

 

That was also my view when I looked at it 5 years ago, under prevailing current rules (16 days to go) it would be far easier proving that funds SWIFTed in were savings, from the point of view then.

 

youtube  (1 year ago),  see time 07:00, for "spending in to Thailand" 

 

 

[PingRoundTheWorld]

1 hour ago, Morch said:

And will end up with 'you pay.'

 

Because bottom line they make the rules, and easy for them to make you responsible for showing it's not taxable, not the other way around.

It's not that simple. I pay nearly 50% tax on income in my home country, which has a DTA with Thailand. So even if it was deemed "income" we now enter the murky waters of DTA and how it will be applied: if tax credits - how do you calculate the tax credit for the small portion remitted to Thailand - is it based on my highest marginal rate? lowest rate? entire sum paid in taxes?? or will Thailand want me to pay full (Thai) tax on the remitted sums and go knocking on my home country's doors for a refund of those amounts?

 

That's kind of the whole point- I don't think I'll legally owe more tax either way - it's just the complexity and filing I want to avoid. Again remains to be seen if and how this is enforced...

[Dogmatix]

On 12/13/2023 at 12:44 PM, Steve2UK said:

Many thanks for the reply but........

 

Many thanks for the helpful reply.

There's a potential wrinkle in this. I actually owned 2 flats (in the same converted house) - one in my own name as main residence (and I already transfered sale proceeds from that one to a Thai bank account 2 years ago). The other flat was legally speaking owned by my own one-man-band company (I'm sole director). To keep things clean from an HMRC (UK tax) perspective, those proceeds from that sale went into my company's account. I eventually moved the funds from my company account into my (UK) personal account - in December 2023.

 

If I go for "remitting" them to Thailand at some point in 2024, I assume that just the transfer between the UK bank accounts should be solid enough proof that it's pre-2024 income. Conversely, if "remitting" them to Thailand this month (i.e. pre-1 January 2024) that 'proof' only argues that it's apparently 2023 income.

 

My instinct as per the November PAW 162 Thai RD Mazars translation (attached) is that "remitting" into Thailand after 1 January is the way to go (as you suggest). My worry is that Thai RD might soon pull yet another switcheroo that mucks up my assumptions/actions based on PAW 162 staying in force and being applied as evenly/straightforwardly as the wording strongly implies (TiT etc).

 

Incidentally, I have it in mind to transfer the new funds (about 16 million bahtsworth) into a separate Thai bank account - to keep it out of the one that I regularly use for extending my retirement visa; my last visa extension was September this year and my account details at that time showed a balance of about 18 million baht. No queries were raised by immigration about that - but I find myself wondering if immigration seeing a near doubling of the balance when it comes to next year's extension (and in the wake of the current tax fracas) might be a different matter (as in might they be minded to query it and/or decide to notify Thai RD? Worth saying again. as per my original post, that I am not registered with a Thai tax number and never have been since I first started living in Thailand full-time in 2006.

 

Grateful for any further thoughts.

 

That sounds fine in respect of Thai income tax but do you have UK tax liability on the transfer of the sales proceeds from the company that owned the flat to your personal account?  How will you book that transfer in the company's accounts?  It may depend on how you funded the company in the first place. I would guess it has to be booked either as a dividend, a director's bonus, repayment of a director's loan or a combination.  The first two would be taxable in the UK if it is a UK company.  If it is an offshore company, maybe not. 

[Guavaman]

10 hours ago, jaideedave said:

Assessable income under Section 40 of the Revenue Code: 

    1. Employment 

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.⁴

 

You need to seriously study the Thai RD tax laws -- pension income is included under the category of "employment."  This is the first thing that you need to understand + a lot more to deal with the new reality for foreign tax residents. 

 

[Guavaman]

6 hours ago, Dogmatix said:

Re gifts. They thought gifts from offshore to a spouse or other direct family member should be OK but cautioned that the RD could regard such a gift as conjugal property and, as such, interpret things so that only half of the tax is tax exempt because you own half the conjugal property.

 

The issue of a gift of "non-conjugal property" is an important issue for aliens who are married to Thais in this country which is a "community property" state, which is a legal fact, of which, many foreigner are not aware. 

 

The community property concept refers to assets that are owned jointly after accumulation after marriage. So assets accumulated by an expat prior to marriage, are deemed to be his assets. 

 

If a foreigner has accumulated financial assets prior to marriage, he retains his ownership of his personal assets such as his contributions to pensions, annuities, social security, etc.

 

It is only the assets that have been accumulated after marriage, that result in joint ownership with the spouse.

 

Important exceptions to this for Americans are the following; contributions to IRAs and life insurance annuities, whereby the sole ownership of these instruments lies with the owner of the contract for the IRA or the annuity. This means that foreign income from IRAs and life insurance annuities are exempt from Thai income tax.  Distributions of income from these instruments are NOT construed to be "conjugal property".