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

[jayboy]

2 hours ago, Ben Zioner said:

Any money earned before that date  is subject to the old rule i.e taxed if remitted the year of earning.

 

What am I missing here? How in the future (ie from 1.1.24) can money earned before 1.1.24 be remitted in the year of earning?

[Eudaimonia]

38 minutes ago, Enzian said:

I won't even be in Thailand in March 2024; I have a flight out 1st week February and do not intend to reenter for about three months, possibly more. I've never earned money in Thailand and never filed a tax return here, and have never anticipated or been told that I have to file in 2024 to account for the various remittances I made with current income during 2023. Is this stated somewhere? That it is something that applies to everyone? Can someone clarify?

 

No worries. You can file in January as well. Of course, if you did not stay 180+ days in Thailand in 2023, you're not even a tax resident, so you do not need to file anything.

 

Overall, it looks like it's just me and maybe ten other foreigners in the country who have bothered to hire tax lawyers and auditors to structure their affairs and follow tax laws here and in every other country we have interests in. For 99% of expats in Thailand, it seems to be a big surprise that their foreign source income and remittances may have been taxable all along because they did not even follow the current rule and wait until the next calendar year to remit it.

 

I would not expect the Revenue Department to start investigating old remittances, but they do have the 2023 CRS data, so who knows.

[stat]

18 hours ago, Danderman123 said:

This tax stuff is way too complicated for retirees in Thailand. Unless filing a tax return is a mandatory requirement for visa renewal, this new regulation will go the way of motorcycle helmet laws.

If you mean Falang always pays a "big" fine for not wearing a motorcycle helmet then yeah this law will be the same.

[jakow]

Does anyone know if money from my father's life insurance policy (from the USA) would be taxed if sent to Thailand? He passed away in 2023 and the money would not be taxed in the USA.

[stat]

2 hours ago, daveAustin said:

What about bringing foreign cash in and exchanging say 150k baht worth at Superrich? Would they likely have that angle covered, too? I know you have to hand over your passport...

In theory, yes they could get that info, especially if in 2033 they decide to check all old tax filings, but not very likely. But then you refer to the 150K Baht that were gifted to you right?

[Mike Lister]

16 minutes ago, stat said:

If you mean Falang always pays a "big" fine for not wearing a motorcycle helmet then yeah this law will be the same.

What nonsense, again! Thailand may act somewhat xenophobically towards foreigners at times and view them as having deep pockets, but nickel and dime stuff, a fine here a small penalty there, is chicken feed, in the bigger picture of things. Let us not forget that Thailand finds it desirable to maintain a decent sized expat and retiree population in country, because it helps stimulate consumer spending, aids foreign currency reserves, is a source of income for many and aids the property market and private health care industries. Targeting foreign  residents for additional fines penalties and taxes will depend largely on how those residents behave. But if they are pushed too far, people will start to leave and fewer new expats will replace them, increasingly, Thailand will become known as Westerner unfriendly and that is not in their best interests and they know that. Lastly, of all the government departments I have interacted with, the RD is by far the easiest and the best. I have always found it possible to get any answers I needed and to discuss matters with them completely. I do not expect them to change very much as result of this new process.

[Celsius]

On 12/24/2023 at 8:28 AM, UKresonant said:

 

The problem may be having them accept pre 2023 savings, that it has been taxed already (non-LTR)

Just watched this at time 14:50 where a similar concern is raised. 

 My savings were configured for the old rule, to bring from previous year (if required), but were not isolated or documented for 6 years down the road to prove they were post-taxation.

 

 

Just wondering why did you post a video of this idiot?

 

Guy comes to Thailand wothoit obviously doing any research, packs his bags a year later, loses 50% of the value of his brand new truck and is now in a panic mode because he apparently bought some property with cash.

 

To top it of, he is bringing his Pattaya princess with him to Texas.

 

Real genius this one.

 

 

 

 

 

Edited December 25, 2023 by Celsius

[UKresonant]

Just now, JimGant said:

Nope, this scheme will either be dropped; or put on hold until they can regroup and tax foreign income, not remittances. FDI would be saved, and CRS and FATCA information, worthless for remittance reporting, could now be used to flush out tax avoiders. Stay tuned.

 

If they go to taxing global income the Median Golden Goose may transform to be a Median of Silver+ Goose perhaps, won't kill it though (will always be the first impression groups that are not thinking with the CPU bit of their chipset and also the massive pool of lottery winners). 

 

 

[UKresonant]

Just now, Enzian said:

I won't even be in Thailand in March 2024; I have a flight out 1st week February and do not intend to reenter for about three months, possibly more. I've never earned money in Thailand and never filed a tax return here, and have never anticipated or been told that I have to file in 2024 to account for the various remittances I made with current income during 2023. Is this stated somewhere? That it is something that applies to everyone? Can someone clarify?

 

Inbound overseas income, remitted during the same calendar tax year has always potentially had the need for a tax return. Depending what amount and type (certainly since I first looked at the subject in any detail back in 2017 / 2018). There was no way I would be over 179 days when taking some retirement benefits in 2018. It was by far a situation to be avoided, to be potentially asked to explain my financial transactions of 2018 in Thailand 

Always remitted previous years income / savings  2019 until we decided the son would return with me to do his high school in the UK (turned out to be just before COVID ), so a short experiment!  

 

What puzzled me was why it did not seem an issue in the past for people for folk directly crediting income in the same year.

 

Maybe the thinking before that was it was a good thing for money simply being sent and spent into the country! (not a bad concept). 

 

[ un-related ramble;-Now they feel, it is perhaps better to emulate the inefficiency of other countries politicians and systems, to be part of that social group. Why did they not just step the savings if past years to 24 months initially, rather than midnight at the end of the year. they could in the interim put an 0.25% admin on inward remittance  as a quick result, below say 20 million baht, supplemented with a few random checks.  Then concentrate on the potentially high yielding targets over 20 million inbound, with CRS etc.]

 

 

Edited December 25, 2023 by UKresonant

[UKresonant]

Just now, Celsius said:

Just wondering why did you post a video of this idiot?

 

Only for his reference to tax just following the timestamp noted. (perhaps his concern may be replicated by other totally character diverse individuals) But I would note that the channel owner noted his lack of concern over the issue, and seems very laidback about it, whilst "the chap" responded that his income was mainly pension related, that may influence his outlook on the subject.

 

Everything else, I make no judgement on him, excepting a comment of the hope she avoids socialising with Thai expat gamblers once in the US, in response to another commenter.

Edited December 25, 2023 by UKresonant

[Dogmatix]

7 hours ago, Sheryl said:

 

they have never said they do.

 

AFAIK there has been no change to reporting requirements, which remain that you do nto need to file if you owe no taxes (i.e. have AI below 210k).

 

Last thing the RD would want is an onslaught for re4turns from people owing no tax. Huge workload for them to no benefit.

 

It is expats on this forum who keep speculating about a requirement to file even if no tax owed.

 

Actually the government under Prayut starting telling Thais they wanted them to file tax returns whether they had suffiicient assessable income or not, saying it would help create a system for reverse taxation, i.e. paying money to people whose declared income is below a threshold, even though there is no sign of negative taxation.  Not sure, if they really want tax returns from foreigners below the tax threshold though.  They certainly won't pay them, if their income is low. 

Edited December 25, 2023 by Dogmatix

[Dogmatix]

9 hours ago, JimGant said:

 

..... or wants to buy a condo. No, the Thais aren't going to kill FDI, a golden goose, the pride of the BoI, who works directly for the Prime Minister's office. And to screen all remittances as income is not only self-defeating and stupid -- it's impossible to parse income from capital. Nope, this scheme will either be dropped; or put on hold until they can regroup and tax foreign income, not remittances. FDI would be saved, and CRS and FATCA information, worthless for remittance reporting, could now be used to flush out tax avoiders. Stay tuned.

 

 

It would make sense for them to give exemption for money remitted by foreigners to buy a condo that would have to be kept for, say, 5 years.  But strangely there has been no fuss made by condo developers.   Just silly articles saying things like sales of resort condos to foreigner to soar in 2024, as if the writers are living under a stone.

[TroubleandGrumpy]

21 hours ago, Jingthing said:

Now I'm confused.

Wasn't there a ruling that funds that were earned BEFORE Jan 1 2024 and remitted later are also exempt of the new rules?

There was a press release from RD  - but it only lead to more confusion.  Did they mean ALL income earned before Jan 1 2024, or were they in fact only referring to income earned before Jan 1 2024 (but after the annoucement) still being not subject to income taxes IF seasoned for over 12 months before being returned before Jan 1 2024.  Most tax 'experts' believe they means the latter, and not the former - as some 'pundits' have claimed.  RD has made no follow up clarification - that I have seen.   This is an example of how bad the Thai RD actually is - and yet another reason I believe that they will completely phark this all up - and more reasons for having a Plan B in 2024 and to hold back any large remittances into Thailand for at least a year or two. 

 

I have seen all the concerns and fears - everything from people who are running around like chicken little to those attacking anyone who even suggests that their money might be taxed.   No one knows exactly what is going to happen - No one. The Thai RD should IMO hold back the implementation of this 'change' like Malaysia did for a few years. Hopefully soon they will release their clarifications and excemptions.

 

Pensions are not taxable by Thailand from most countries that have a DTA. However, what is required by an Expat to 'claim' that excemption - will we all be automaticallt exempted or will we all have to lodge a tax return - no one knows.  How must that pension money be remitted into Thailand - what happens when someone gets the pension paid not directly to a Thai bank account, but to their own bank account and they once a month/quarter transfer the money into Thailand (when exchange rates better). etc etc etc.  

[TroubleandGrumpy]

21 hours ago, JimGant said:

 

..... or wants to buy a condo. No, the Thais aren't going to kill FDI, a golden goose, the pride of the BoI, who works directly for the Prime Minister's office. And to screen all remittances as income is not only self-defeating and stupid -- it's impossible to parse income from capital. Nope, this scheme will either be dropped; or put on hold until they can regroup and tax foreign income, not remittances. FDI would be saved, and CRS and FATCA information, worthless for remittance reporting, could now be used to flush out tax avoiders. Stay tuned.

 

I certainly hope so - BUT I will bot bring a large amount into Thailand until after it is clarified/dropped or whatever else you said.  IMO it would be unwise for anyone else to do so based on 'hope'.  The facts as they currently stand, are that foreign money brought into Thailand after 1 Jan 2024 is potentially taxable income under this new 'rule' - and proving it is not taxable rests with the taxpayers as Thia RD have not provided any excemptions or clarifications - nor have they said how to claim excemptions or apply clarifications.    

[TroubleandGrumpy]

21 hours ago, Ben Zioner said:

You haven't gotten this right it is: any money  earned and remitted after 1 jan 2024 will be  taxed. Any money earned before that date  is subject to the old rule i.e taxed if remitted the year of earning.

Exactly what I have said.  Read again.

[Ben Zioner]

1 hour ago, TroubleandGrumpy said:

Exactly what I have said.  Read again.

Nope. "Any money remitted into Thailand after 1 Jan 2024 is under the new rules/regulation." is what you wrote. It is any money earned and remitted to Thailand after Jan 1, 2024 that is under the new rule. There is a huge difference that made the whole thing a lot more civilised.

[Ben Zioner]

On 9/18/2023 at 9:57 AM, connda said:

Eventually someone is going to write, "Does that mean farang's pension income too."

Short answer would probably be "No," at least for those countries with bilateral tax agreements with Thailand.  If you're paying income tax in your home countries, then Thailand has no claim to tax the income twice.

I'd love to nominate this post, the first of this thread, as post of the year. Thanks to @connda, a visionary.

Edited December 26, 2023 by Ben Zioner

[JimGant]

1 hour ago, Ben Zioner said:

If you're paying income tax in your home countries, then Thailand has no claim to tax the income twice.

quote from connda

 

Strictly speaking, if the DTA says Thailand has primary taxing rights on said income, then they can tax it -- and as primary taxing authority, they get to keep all the tax collection but provide a credit to the home country's taxation. Of course, if you've already paid full up tax to your home country, you'd either have to file an amended return, or carry the credit over to the next year (at least under US tax guidance).

 

Pretty messy and involved. I like the original posts to all these threads that said, "If you have a DTA and you pay taxes in your home country, Thailand will leave you alone." But, I guess we never saw anything official along those lines. But that would be nice and simple, at least for those of us that do pay taxes in our home country.

[Dogmatix]

7 minutes ago, JimGant said:

 

Strictly speaking, if the DTA says Thailand has primary taxing rights on said income, then they can tax it -- and as primary taxing authority, they get to keep all the tax collection but provide a credit to the home country's taxation. Of course, if you've already paid full up tax to your home country, you'd either have to file an amended return, or carry the credit over to the next year (at least under US tax guidance).

 

Pretty messy and involved. I like the original posts to all these threads that said, "If you have a DTA and you pay taxes in your home country, Thailand will leave you alone." But, I guess we never saw anything official along those lines. But that would be nice and simple, at least for those of us that do pay taxes in our home country.

 

A lot of this stuff on DTAs is not even fixed between developed countries.  For example when my father died UK domiciled but owning a house in Spain, we were advised that the UK had a right to charge inheritance tax on the Spanish assets but that HMRC would allow the Spanish to tax assets situated in Spain and the UK would forego its right to tax them.  This was advantageous to us because Spain charges inheritance tax to the inheritors individually and has lower rates for property going to direct descendants, like Thailand does, rather than to the undistributed estate as the UK does.  HMRC didn't exercise its right to charge the difference, even though UK IHT would have been more.  

 

Thailand is starting from scratch with no tacit understandings with other countries on how to implement DTAs and no clue how to do things or how they work internationally.  Also they don't give a monkeys what damage they inflict on taxpayers or the Thai economy. They just want to do what they want to do and to hell with the consequences.  A spit the dummy outlook.

[Dogmatix]

 I have been busy created transactions by selling shares and funds prior to the year end.  Hopefully that will create a pool of funds generated from pre-2024 transactions that can be remitted tax free in future.  But it is anyone's guess how they will implement this..

[JimGant]

23 hours ago, Etaoin Shrdlu said:

In the instructions for form 8833 there appears to be a carve-out of reporting requirements for individuals who claim relief under a tax treaty for, among other things, pensions. What is your take on this? Does this mean that form 8833 is not required if claiming tax credits under form 1116 for Thai taxes paid on remittances of private pensions or IRA/401k withdrawals?

 

My read is that the Form 8833 would be required, if you filed the Form 1116, where you would check the box, "Income resourced by treaty." Doing so begs for a Form 8833.

 

If I ever have to do this, I'd probably be below $600 in Thai taxes as a credit, which (filing jointly) means no Form 1116 required -- only a single line item entry on Schedule 3, Form 1040.

 

If I had to file a Form 1116, with the Form 8833, I couldn't file electronically (at least with TurboTax). But, I love filing electronically, so I would; I'd just mail the Form 8833 separately, with an explanation (this avenue is not advertised, but you can mail a Form 8833 by itself, if you have no tax obligation but are taking advantage of a tax credit).

 

The following link is a good description of how a DTA treats an IRA. Just replace "Switzerland" with "Thailand" -- and you have a good picture of how things may become.

 

Quote

You claim the foreign tax credit on Form 1116.  Since all of this is happening by way of the income tax treaty between the United States and Switzerland, you attach Form 8833 to your Form 1040, making the relevant elections to invoke the treaty provisions to protect you from the IRS.

https://hodgen.com/ira-distribution-to-u-s-citizen-living-in-switzerland-which-country-taxes-it/

 

[jayboy]

20 hours ago, Celsius said:

 

Just wondering why did you post a video of this idiot?

 

Guy comes to Thailand wothoit obviously doing any research, packs his bags a year later, loses 50% of the value of his brand new truck and is now in a panic mode because he apparently bought some property with cash.

 

To top it of, he is bringing his Pattaya princess with him to Texas.

 

Real genius this one.

 

 

 

 

 

 

And good luck to him with the stringent medical examination required to resume his US commercial pilot license.

[Ben Zioner]

16 hours ago, Dogmatix said:

Actually the government under Prayut starting telling Thais they wanted them to file tax returns whether they had suffiicient assessable income or not, saying it would help create a system for reverse taxation, i.e. paying money to people whose declared income is below a threshold

Sounds like stealing money from the hard working to buy the votes of the sala wonkers. Some must love socialism.

[tomkenet]

1 hour ago, Dogmatix said:

 I have been busy created transactions by selling shares and funds prior to the year end.  Hopefully that will create a pool of funds generated from pre-2024 transactions that can be remitted tax free in future.  But it is anyone's guess how they will implement this..

I am in the same prosess.

My guess, you'll have to show documentation if they ask, which they probably will not.

[Guavaman]

5 hours ago, Dogmatix said:

I have been busy created transactions by selling shares and funds prior to the year end.  Hopefully that will create a pool of funds generated from pre-2024 transactions that can be remitted tax free in future.  But it is anyone's guess how they will implement this..

Baker MacKenzie: 

https://insightplus.bakermckenzie.com/bm/tax/thailand-offshore-sourced-income-received-before-1-january-2024-can-be-brought-into-thailand-in-2024-or-later-without-being-subject-to-thai-personal-income-tax/

 

What to do before 1 January 2024

 

For greater flexibility in bringing offshore-sourced income back to Thailand, Thai tax resident individuals may consider recognizing and receiving such income by 31 December 2023. For example, if the shareholders receive dividends paid from offshore investments or gains from the sale of offshore investments outside Thailand by 31 December 2023, they can bring these offshore dividends and gains to Thailand in or after 2024 without being subject to Thai personal income tax.

 

Alternatively, they may consider using that offshore-sourced income to reinvest offshore. In this case, the nature of offshore-sourced income should be changed to capital or costs of investment, and only the gains recognized from the reinvestment will be subject to Thai personal income tax upon remittance to Thailand.

 

Regarding US IRA accounts, Order 162 may offer an opportunity to exempt all funds in an IRA account from future Thai taxes upon remittance, if one realises gains by converting to cash before Dec. 31st and subsequently reinvests funds in 2024. This would provide a documented amount of pre-2024 tax exempt funds as capital that can be remitted at any time in the future as per Order 162. Future gains starting in 2024 will be taxable upon remittance, while clarification is still lacking regarding documentation required, FIFO, etc.

 

 

[Guavaman]

On 12/25/2023 at 5:03 PM, jakow said:

Does anyone know if money from my father's life insurance policy (from the USA) would be taxed if sent to Thailand? He passed away in 2023 and the money would not be taxed in the USA.

First, insurance payments are exempt from Thai income tax.

 

Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation:

(13) Compensation against wrongful acts, amount derived from insurance or from funeral assistance scheme.

 

Secondly, Under the new RD Order 162, income received prior to 2024 may be remitted tax-exempt forever.

 

Tax flash news: Further guidance from the Revenue Department on Foreign Sourced Income

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Further-guidance-on-Foreign-Sourced-Income

Further guidance on Foreign Sourced Income

On 20 November 2023, the Revenue Department issued Departmental Instruction no. Paw.162 ("DI Paw. 162"), which provides further guidance that the interpretation under the Departmental Instruction Paw.161/2566 ("DI Paw.161") shall not apply to any foreign-sourced income earned by Thai tax residents before 1 January 2024.

By virtue of this DI Paw. 162, Thai tax residents will not be required to include their foreign-sourced income earned before 1 January 2024 in their personal income tax returns, even if such income will be brought into Thailand from 1 January 2024 onwards. 

 

The challenge is in documenting the source of funds and the history of transfers and remittances.

 

[JimTripper]

Death & Taxes

[jerrymahoney]

7 hours ago, Guavaman said:

The challenge is in documenting the source of funds and the history of transfers and remittances.

I have done that for 4 years now with the FTT 65K+ baht monthly transfer and source-of-funds letter for the retirement extension of stay. Maybe have to get the thing(s) translated.

 

If there might still be taxes to be paid, might only be about $US 100 per year after all the available deductions for this age 65+ guy.

[Danderman123]

My plan for 2024 tax is almost complete:

 

I have transferred 1 million baht into my Thai baht.

 

I have scheduled a 2 month holiday abroad (Brazil) to start the year, while it is determined if these new rules stick.

 

I will use US bank cards to pay major expenses in Thailand (groceries, hotels, etc.).

 

I plan to transfer exactly the dollar amount of my US Social Security payment every month to my Thai bank. So, if I don't file a tax return, and the RD requires me to file retrospectively, my reported Thai income will be shielded by a DTA between Thailand and the US. This will be a last ditch maneuver if I am deemed to be a tax resident.

 

I hope this will be sufficient to save me from the RD.

[jerrymahoney]

2 hours ago, Danderman123 said:

This will be a last ditch maneuver if I am deemed to be a tax resident.

 

All you would have to do is to stay ex-Thailand 4+ more months after your Brazil sojourn and you won't be deemed to be a tax resident.