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

[Mike Lister]

11 minutes ago, Ricardo said:

 

How it usually works, when the bank update my own savings-account passbooks, they show entries for interest-earned and tax-deducted, on the trivial sums involved.  I've never bothered to get a TIN, or file a self-assessment return, to reclaim the tax  ...  life's too short already.  

 

As you say, I don't yet see that principle being extended to automatically deduct 15% from all remittances received by individual expat tax-residents, in the current proposals  ...  but who knows what the future holds, with a mildly-socialist impoverished-government anxious to fund its promised-agenda ?

 

Confuscious might have said, if contributing to this thread, "May you live in interesting, but less-taxing, times !"  

 

ps  Apologies Mike, I was typing as you posted, you're correct IMO

Just one point, the government is not impoverished, some people are saying it is but there's no proof of that, all the evidence is to the contrary. Exports, tourism, government debt, reserves, they are all in very very positive territory so linking this tax initiative with impoverishment is inappropriate. The IMF is actually urging them to increase deficit spending to build out infrastructure, in other words, borrow more! That is not to say they wont blow their current position with these 10k giveaways which could turn the whole thing on its head.

 

The realties are that the tax net in Thailand is the smallest one in ASEAN and the numbers have been falling for years. Revenue from direct taxation is less than 2% of the budget whereas in the West it is in excess of 35%. The stated desire has long been to increase the number of people in the net, now they are extended the size of the net as well. But it will be several years before any real financial benefit is seen, by which time the current financial giveaway proposals will be history. 

[paddypower]

this may have been covered already - but I cannot find a reference to it. I am switching from the 800k TD to the income method for my OA retirement visa extension, early next year. An IO officer quotes one set of requirements and the official IO website quotes another set of rules:

IO: (i) to prove your pension income, you must present copies of the foreign bank account into which the pension payments are received.

(ii) not interested in copies of Thai bank account, showing incoming funds for the 12 months

(iii) not interested in Inward Remittance Notices for the year

(iv) your Thai dividend income does not count in the earnings calculation.

(v) from another source (my Thai tax accountant) rental income from a Thai property does qualify, if it is a professionally managed property, if not you are classified as working and risk losing your retirement visa status

Note: this is irrelevant to me - I have rental income but I do not need to include it in my income calculation. I just mention it, because it was surprising to learn this.

IO publised regulations: documents required, as proof -

          proof of 800TD, or a combination of TD and income equalling at least 800k in the previous year.

          ''income'' is defined as  - ''pension, interest & dividend income'' .

any feed-back would be appreciated.

          

[paddypower]

13 minutes ago, Mike Lister said:

Just one point, the government is not impoverished, some people are saying it is but there's no proof of that, all the evidence is to the contrary. Exports, tourism, government debt, reserves, they are all in very very positive territory so linking this tax initiative with impoverishment is inappropriate. The IMF is actually urging them to increase deficit spending to build out infrastructure, in other words, borrow more! That is not to say they wont blow their current position with these 10k giveaways which could turn the whole thing on its head.

 

The realties are that the tax net in Thailand is the smallest one in ASEAN and the numbers have been falling for years. Revenue from direct taxation is less than 2% of the budget whereas in the West it is in excess of 35%. The stated desire has long been to increase the number of people in the net, now they are extended the size of the net as well. But it will be several years before any real financial benefit is seen, by which time the current financial giveaway proposals will be history. 

agreed. the tax collection system is antiquated, riddled with loopholes, as simple as just not keeping records, not issuing receipts (try going to a private medical clinic! )

[Mike Lister]

1 minute ago, paddypower said:

agreed. the tax collection system is antiquated, riddled with loopholes, as simple as just not keeping records, not issuing receipts (try going to a private medical clinic! )

Ah, you're talking about VAT receipts, I'm talking personal income tax, the tax on income from people working. VAT is an indirect tax, income tax is a direct tax.

[Mike Teavee]

15 minutes ago, paddypower said:

this may have been covered already - but I cannot find a reference to it. I am switching from the 800k TD to the income method for my OA retirement visa extension, early next year. An IO officer quotes one set of requirements and the official IO website quotes another set of rules:

IO: (i) to prove your pension income, you must present copies of the foreign bank account into which the pension payments are received.

(ii) not interested in copies of Thai bank account, showing incoming funds for the 12 months

(iii) not interested in Inward Remittance Notices for the year

(iv) your Thai dividend income does not count in the earnings calculation.

(v) from another source (my Thai tax accountant) rental income from a Thai property does qualify, if it is a professionally managed property, if not you are classified as working and risk losing your retirement visa status

Note: this is irrelevant to me - I have rental income but I do not need to include it in my income calculation. I just mention it, because it was surprising to learn this.

IO publised regulations: documents required, as proof -

          proof of 800TD, or a combination of TD and income equalling at least 800k in the previous year.

          ''income'' is defined as  - ''pension, interest & dividend income'' .

any feed-back would be appreciated.

          

Do you have a link to the IO Website you quoted?

 

I thought for the income method you had to prove you were remitting at least 65K every month from overseas (Income earned in Thailand doesn't count).

 

Different IO offices may have different policies about whether they ask you to support this with proof of overseas income but some are only interested in the 65K being remitted (i.e. You could be sending it from savings).

 

 

[jerrymahoney]

To the above: I have used the 65K per month retirement extension method since the game change 4 years ago -- in 2 different offices.

 

They both want to see a statement from my Thai bank with monthly FTT deposits. No US (in my case) statement required.

 

And they both have requested (demanded?) a Source-of-funds letter which I have provided showing a monthly transfer -- which in my case -- meets the definition of" monthly income retirement pension" AND 'annuity' under Article 20 Par. 3 US-Thailand DTA.

 

[Steve2UK]

11 hours ago, ukrules said:

Not paying any tax is more common than people tend to believe, for example you sell that family house you bought 40 years ago and end up with 500k pounds - you're not paying any tax on that and if you're tax resident in Thailand during that year then good luck with that!

 

That's near enough my* situation. Given that I received the sale proceeds into my UK bank account way earlier in 2023, I'm currently relying on the Paw 162 'clarification' (Mazar's version attached) that when remitting it to my Thai bank account even after January 1st 2024** it won't be taxable. Pure luck - if I sold in 2024, I'd be . My fingers are crossed that Paw 162 stays in place and gets applied.

 

* Retired and Thailand tax resident year after year.

** Which I see as basically an RD amnesty 'concession'...... and very necessary for many.

[paddypower]

3 hours ago, Mike Lister said:

Ah, you're talking about VAT receipts, I'm talking personal income tax, the tax on income from people working. VAT is an indirect tax, income tax is a direct tax.

actually,  I was referring to personal tax on the self employed, e.g. professionals, etc.

[Dogmatix]

6 hours ago, The Cyclist said:

 

Thankfully, by luck rather than design ( and the wise advice of an older guy ) the bulk of my money was remitted between 2009 and 2019.

 

What will be coming in from the 01 Jan is more than enough to live on and any big ticket items will be gatting paid from the FCA.

 

On that note. My 1st remittance od 2024 will hit my bank on the 03 Jan, it will be interesting to see if the much vaunted 15% withholding tax will be applied or whether I will be instructed to present my butt to the bank with a TIN.

 

I'm guessing neither will happen, which will be sad news for the doomers & gloomers.

 

 

Sure, some estimates are as high as 200 Billion a year for individuals and at least double that for Corporations

 

The RD auditors have a big backlog. My company was audited for stuff they found suspicious that had happened 6 years earlier.  They couldn't notice anything until the after the end March 2025 deadline passes for 2024 tax returns.  If they follow up on your remittance and think you should have paid tax on it, or just want to query it could easily take take them till 2030 but the problem is that they add on heaps of interest and penalties. If they are going that route with expat retirees, many of them may be dead before they catch up with them.

[Mike Lister]

3 minutes ago, paddypower said:

actually,  I was referring to personal tax on the self employed, e.g. professionals, etc.

Now I understand. Yes, that is an issue. There's usually a clue when they ask, "do you want a receipt" or failing that, simply don't give you one. There is no ethos here that people should pay their fair share or contribute, I think much of that stems from corruption further up the chain and the thinking that is government can do it, so can I..

[Dogmatix]

On 12/19/2023 at 2:18 AM, Lorry said:

Not sure this would help.

 

As for tickets out of Thailand: someone (Guavaman?) earlier posted the British rules for non-doms, who have to pay taxes only for money remitted into the UK. Tickets out of the UK are taxable,  no matter how and where they were paid for.

 

In the AmCham webinar it was said: it is a remittance whenever you get the service or goods (that you paid for) in Thailand. Method and location of payment doesn't matter at all. This makes a lot of sense. 

 

 

I was in the Amcham call and didn't understand it exactly like that. I think he said that paying for services received in Thailand should be taxable, eg you remit school fees to a Thai school from overseas.  So an air ticket out of Thailand would qualify but, if you are sitting in Thailand and use a foreign credit card to pay for your hotel overseas or kids college tuition overseas, that would not IMHO. Anyway it would rely on overseas banks and tax authorities reporting it to the RD which is probably a long way off. Probably goods ordered abroad to be shipped to Thailand should be taxable but it would be more difficult to trace that, since the seller is not in Thailand.  Paying for goods from a Thai supplier with a foreign credit card would be easier to trace but, if small amounts, it might get lost.

[paddypower]

3 hours ago, Mike Teavee said:

Do you have a link to the IO Website you quoted?

 

I thought for the income method you had to prove you were remitting at least 65K every month from overseas (Income earned in Thailand doesn't count).

 

Different IO offices may have different policies about whether they ask you to support this with proof of overseas income but some are only interested in the 65K being remitted (i.e. You could be sending it from savings).

 

 

2 sources: one is <https://www.tratimmigration.com/retirement-visa-requirements/> which is not a national website. the other is: https://www.immigration.go.th/en/?p=14714.

workig on the basis that the requirement is for foreign pension income, is there anything which specifically describes which documentary evidence I am  supposed to present to IO. what I plan to do it is: get copies of 12 months of my 2 foreign bank accounts, ditto for 12 months of Remittance Advice Receipts and ditto for 12 months of my Thai bank statements. In other words - be prepared. there is one unknown - my wife piggybacks on my visa extension, based on our marriage cert (notarized by the Embassy and the Thai Dept Foreign Affairs (our Thia visa advisor calls it ''bridging'' ). Under those circumstances,  can I include her pension with mine?

[paddypower]

11 minutes ago, Mike Lister said:

Now I understand. Yes, that is an issue. There's usually a clue when they ask, "do you want a receipt" or failing that, simply don't give you one. There is no ethos here that people should pay their fair share or contribute, I think much of that stems from corruption further up the chain and the thinking that is government can do it, so can I..

isn't there an old song with lyrics some-wheres along those lines.?

[whiteman]

I bet a lot of money will flow into Thailand just b4 the end of this month mine included then I will just sit back with 2 years expenses already here till the dust settles. In two years, the Thais will just about have got it right by then.

[jayboy]

7 minutes ago, Dogmatix said:

I think he said that paying for services received in Thailand should be taxable, eg you remit school fees to a Thai school from overseas

 

Many people don't pay school fees from current income.If one remitted school fees to a Thai school funded from (for example) investments/cash deposits held prior to 1.1.24, that presumably would not be subject to tax

11 minutes ago, Dogmatix said:

So an air ticket out of Thailand would qualify

 

Maybe.But I can't see how for the life of me see how an international air ticket purchased with a foreign credit card on an international airline website could be tracked down by the RD.(Well, obviously it could but it would require a disproportionate effort)

[The Cyclist]

45 minutes ago, Dogmatix said:

If they follow up on your remittance and think you should have paid tax on it, or just want to query it could easily take take them till 2030 but the problem is that they add on heaps of interest and penalties.

 

I was never a tax resident between 2009 and 2019, so they can query away to their little hearts content.

 

In addition, I have seen nothing that this new interpretation of the rules starting 01 Jan 2024 is retrospective. It starts, and covers remittances from 01 Jan 2024.

[AlexRRR]

On 9/18/2023 at 11:09 AM, jaideedave said:

I don't know about others but I survive here on my pension income from abroad. Its taxed at source.Maybe more red tape for expats proving that their income is already taxed.A big can of worms if instituted. BTW how much is a 1 way ticket to Phnom Phen these days? With the predicted increases in the 800k in the bank rule and all this crap it may spur some to consider another country for retirement.

Albeit too soon to react.

Talk is cheap, twice to Cambodia, not a place id like to spend more than a week..

[bugger bognor]

The Thai tourist tax has just been shelved after 2 years of unsuccessful implementation! Pray tell me if they couldn't sort that as I predicted they wouldn't or couldn't! How the hell are they going to implement and enforce these already existing regulations ? 

[Mike Lister]

1 hour ago, jayboy said:

 

Many people don't pay school fees from current income.If one remitted school fees to a Thai school funded from (for example) investments/cash deposits held prior to 1.1.24, that presumably would not be subject to tax

 

Maybe.But I can't see how for the life of me see how an international air ticket purchased with a foreign credit card on an international airline website could be tracked down by the RD.(Well, obviously it could but it would require a disproportionate effort)

All of this is so OTT, school fees, plane tickets, it is not natural to speculate on these things at this stage, some of you guys will put yourselves in early graves, seriously!

[tomkenet]

3 hours ago, Steve2UK said:

That's near enough my* situation. Given that I received the sale proceeds into my UK bank account way earlier in 2023, I'm currently relying on the Paw 162 'clarification' (Mazar's version attached) that when remitting it to my Thai bank account even after January 1st 2024** it won't be taxable. Pure luck - if I sold in 2024, I'd be . My fingers are crossed that Paw 162 stays in place and gets applied.

 

* Retired and Thailand tax resident year after year.

** Which I see as basically an RD amnesty 'concession'...... and very necessary for many.

Is there any doubt Paw 162 will not be applied? It is actually quite logical, it is just previous loophole continued for the rest of current year.

Not applying Paw 162 would be for  Paw 161 to be  retroactive from 1 January 2023.

[stat]

18 hours ago, Klonko said:

There is political pressure to have the rich pay a minimum amount of taxes and not to use legal structures to reduce their tax rate below many taxpayers'. Such ideas emerged from the U.S. which have a habit to persuade other countries to follow up. It is not a written number yet like 15%, but I dare to say that there is a common view that the tax rate should not be lower anywhere for private persons and could be implemented globally in the longer term. Global taxation is one step towards a minimum tax and is likely to be applied everywhere as many tax consultants say now. As I said, many countries will deliberately create loopholes to attract targeted clienteles and I hope that 10 years from now I will not pay more than  15% tax in Thailand. It also is likely to become increasingly difficult to avoid any tax domicile. There are countries which may determine as domicile the country with the closest relationship irrespective of nights spent.

 

I can adapt to even the worst case scenarios of the upcoming changes to Thai RD practice, but paying a marginal tax rate of 35% or more while preserving my wealth would have a material impact on my living standard, and I am afraid fleeing to another country will not solve the problem and/or lower my quality of life.

Again there is no pressure on personal income tax rates worldwide. Income tax rates are set by national governments for THEIR tax residents. There is no international pressure for the Bahamas, Monaco etc to implent an income tax at all or other states to raise their respective rate.

 

FYI I work as a tax consultant and (no offense) stongly suspect you do not work in the industry.

 

[Mike Lister]

1 minute ago, stat said:

Again there is no pressure on personal income tax rates worldwide. Income tax rates are set by national governments for THEIR tax residents. There is no international pressure for the Bahamas, Monaco etc to implent an income tax at all.

 

FYI I work as a tax consultant and stongly suspect you do not work in the industry.

 

Are you a CRS expert?

[stat]

4 minutes ago, Mike Lister said:

Are you a CRS expert?

I do not answer any of your questions Mike. I gave up on you a long time ago no offense.

[Mike Lister]

2 minutes ago, stat said:

I do not answer any of your questions Mike. I gave up on you a long time ago no offense.

I'm going to do a cut and paste on the things you said, just looking for the right place. You like to announce in grand style all the things you (say you) are but I think you're a phoney, a Walt.

[Dogmatix]

3 hours ago, jayboy said:

 

Many people don't pay school fees from current income.If one remitted school fees to a Thai school funded from (for example) investments/cash deposits held prior to 1.1.24, that presumably would not be subject to tax

 

Maybe.But I can't see how for the life of me see how an international air ticket purchased with a foreign credit card on an international airline website could be tracked down by the RD.(Well, obviously it could but it would require a disproportionate effort)

 

An air ticket going overseas purchased from an overseas airline website would be more difficult to trace. Agreed.

 

if remitting fees to a Thai school from investments held overseas prior to 2024, I guess the investments may have to sold and realised to show income realised before 2024. but no one really knows the answer to such questions. If you have a child at private school in Thailand and you are also living with a wife, remittance of gift to spouse might be a good way to handle school fees. 

[jayboy]

58 minutes ago, Dogmatix said:

If you have a child at private school in Thailand and you are also living with a wife, remittance of gift to spouse might be a good way to handle school fees. 

 

As matters stand if one paid school fees from a cash bank account which existed prior to 1.1.2024 ( memo to self: get accountant friendly record of year end cash balances), I don't think the question of Thai income tax would arise at all - so no need to gift spouse.

 

But as one member correctly observed this kind of discussion is a bit daft and there's a danger of overthinking on paltry evidence.Let's wait and see.

 

 

[Lorry]

8 hours ago, Dogmatix said:

 

I was in the Amcham call and didn't understand it exactly like that. I think he said that paying for services received in Thailand should be taxable, eg you remit school fees to a Thai school from overseas.  So an air ticket out of Thailand would qualify but, if you are sitting in Thailand and use a foreign credit card to pay for your hotel overseas or kids college tuition overseas, that would not IMHO. Anyway it would rely on overseas banks and tax authorities reporting it to the RD which is probably a long way off. Probably goods ordered abroad to be shipped to Thailand should be taxable but it would be more difficult to trace that, since the seller is not in Thailand.  Paying for goods from a Thai supplier with a foreign credit card would be easier to trace but, if small amounts, it might get lost.

This is what I meant to say. Sorry for my English. 

[Lorry]

6 hours ago, Mike Lister said:

Are you a CRS expert?

The global minimum tax for corporations has nothing to do with CRS.

2 different things.

 

CRS means common reporting standard,  aka AEOI automatic exchange of information. It's not more than this,  an exchange of information. Useful to find people with bank accounts abroad they don't tell the taxman.

 

The global minimum tax aims at corporations who, using transfer prices and other accounting gimmicks,  shift their profits into low-tax jurisdictions. They are very open about their bank accounts. No secrets,  no AEOI needed. 

 

Edited December 20, 2023 by Lorry

[Mike Lister]

10 minutes ago, Lorry said:

The global minimum tax for corporations has nothing to do with CRS.

2 different things.

 

CRS means common reporting standard,  aka AEOI automatic exchange of information. It's not more than this,  an exchange of information. Useful to find people with bank accounts abroad they don't tell the taxman.

 

The global minimum tax aims at corporations who, using transfer prices and other accounting gimmicks,  shift their profits into low-tax jurisdictions. They are very open about their bank accounts. No secrets,  no AEOI needed. 

 

It was a private joke Lorry which referenced a prior conversation. The poster gad previously presented as a CRS guru but was subsequently shown to be the opposite.

[Danderman123]

So, will RD monitor incoming transfers from abroad, or will tax reporting be on the honor system (self reporting)?