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

[Danderman123]

22 minutes ago, jerrymahoney said:

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.

That may be what I do if I hear horror stories about tax.

[jerrymahoney]

28 minutes ago, Danderman123 said:

That may be what I do if I hear horror stories about tax.

What I think is that expats with straight forward government or private pensions where a reputable plan administrator can provide an annual statement maybe not be any big trouble.

 

For those with more convoluted type incomes things, maybe more difficult.

[Danderman123]

1 minute ago, jerrymahoney said:

What I think is that expats with straight forward government or private pensions where a reputable plan administrator can provide an annual statement maybe not be any big trouble.

 

For those with more convoluted type incomes things, maybe more difficult.

As I mentioned, I plan to only transfer my US Social Security income. At year end, I will have a simple statement showing my Social Security annual income.

[jerrymahoney]

21 minutes ago, Danderman123 said:

As I mentioned, I plan to only transfer my US Social Security income. At year end, I will have a simple statement showing my Social Security annual income.

So unless you are doing it for extension purposes, I don't think it makes a big difference if you show monthly FTT  deposits to a Thai bank just that there is an annual amount.

Edited December 27, 2023 by jerrymahoney

[Enzian]

3 hours ago, Danderman123 said:

My plan for 2024 tax is almost complete:

The description you outline is close to what I've decided. I've bulked up my Thai account here to just over 1 mil. I use the 800K in the bank method. Conveniently my Non-O rolls over at the end of each December. Iirc after 3 months the figure can fall below 800K (but not below 400K) until 2 months before renewal. I already have plans to be gone Feb-March-April. I'll spend down the Thai account and use CCs as normally. I have one account in the US that virtually the only activity is Social Security deposits; when I do refresh the Thai account towards renewal it will be from that account, and that may be the first and only transfer during the year, baring something crazy in exchange rates.

[Danderman123]

4 minutes ago, jerrymahoney said:

So unless you are doing it for extension purposes, I don't think it makes a big difference if you show monthly FTT  deposits to a Thai bank just that there is an annual amount.

I will transfer money to my Thai bank account every month so that I have cash in my pocket.

 

But I will constrain the transfers to the amount paid by my Social Security so I don't have to pay Thai income tax.

[The Cyclist]

19 minutes ago, Danderman123 said:

I will transfer money to my Thai bank account every month so that I have cash in my pocket.

 

But I will constrain the transfers to the amount paid by my Social Security so I don't have to pay Thai income tax.

 

If you scroll back about 80 pages, you will see I said, from the 01 Jan 2024 only remit income that is

 

* Covered by a DTA.

 

* Money that you can easily prove has been taxed in your home Country.

 

It wasn't really rocket science

 

To quote @jerrymahoney

 

52 minutes ago, jerrymahoney said:

For those with more convoluted type incomes things, maybe more difficult.

 

These are exactly the people that will be under scrutiny.

 

[Happy happy]

Question: if someone is on a retirement visa and who is considered a tax resident how much income can that person bring in annually to Thailand before being liable to Thai tax? 

[jerrymahoney]

42 minutes ago, Happy happy said:

Question: if someone is on a retirement visa and who is considered a tax resident how much income can that person bring in annually to Thailand before being liable to Thai tax? 

Th simplest answer is that if age 65+ you get a 190,000 baht deduction and the first 150,000 baht for everyone is 0% so 340,000 baht.

 

Then you get into if/then territory

[Mike Teavee]

1 hour ago, Happy happy said:

Question: if someone is on a retirement visa and who is considered a tax resident how much income can that person bring in annually to Thailand before being liable to Thai tax? 

Everybody gets a 60K personal allowance & the 1st 150K is taxed at 0% so the bare minimum would be 210K 

 

Then add on additional allowances for things like > 65 (190K), buy health insurance (25K), Life assurance (100K), have kids (30K each) etc… 

 

[Mike Lister]

1 hour ago, Happy happy said:

Question: if someone is on a retirement visa and who is considered a tax resident how much income can that person bring in annually to Thailand before being liable to Thai tax? 

And yet a third version.

 

If retired and receiving a  pension:

 

60k personal allowance

190k for over age 65

(up to) 100k for pension received

first 150k zero rated for tax

 

So 500k, plus whatever other things you can add, some of which have been mentioned, kids, wife, insurance etc

 

 

[RupertIII]

1 hour ago, Mike Lister said:

(up to) 100k for pension received

 

Not seen this one before. Does this mean that the first THB100k pa of overseas pension rec'd is exempt from tax in addition to the various other allowances? Thanks.

[Mike Lister]

1 hour ago, RupertIII said:

Not seen this one before. Does this mean that the first THB100k pa of overseas pension rec'd is exempt from tax in addition to the various other allowances? Thanks.

NO! It means you are allowed a deduction of 100k off of your assessable income. Actually it's 50% of the pension received, up to 100k.

[jerrymahoney]

15 minutes ago, Mike Lister said:

NO! It means you are allowed a deduction of 100k off of your assessable income. Actually it's 50% of the pension received, up to 100k.

https://sherrings.com/personal-tax-deductions-allowances-thailand.html

click on PNG to enlarge

Edited December 27, 2023 by jerrymahoney

[Mike Lister]

4 minutes ago, jerrymahoney said:

https://sherrings.com/personal-tax-deductions-allowances-thailand.html

click on PNG to enlarge

Sorry Jerry, can I just check to make sure we agree here?

[The Cyclist]

11 minutes ago, Mike Lister said:

Sorry Jerry, can I just check to make sure we agree here?

 

@jerrymahoney is posting a Sherrings link backing up your 

 

31 minutes ago, Mike Lister said:

Actually it's 50% of the pension received, up to 100k.

 

[jakow]

17 hours ago, Guavaman said:

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.

 

@Guavaman THANK YOU!! That's great news. It's not a huge amount, but my family definitely needs it right now with the costs of airplane tickets for the funeral, so getting the full amount is extremely helpful. The USA death certificate should be issued by the embassy in the next few days, but the insurance claim almost certainly won't be processed until after the new year, so I'm not sure if the second part would apply here. But, it clearly stating in Section 42 that insurance income is exempt is a huge relief. I'm not sure why none of my google searches found anything related to that. Again, thank you so much!

[tomkenet]

57 minutes ago, jerrymahoney said:

https://sherrings.com/personal-tax-deductions-allowances-thailand.html

click on PNG to enlarge

I wonder if this deduction also can be used for foreign sourced dividends or capital gains remitted to Thailand 

 

 

Edited December 27, 2023 by tomkenet

[TroubleandGrumpy]

On 12/26/2023 at 12:25 PM, Ben Zioner said:

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.

That would certainly be great if it applied to ALL income earned before January 1 2024.  However, before I answer that statement, I will add this statement made by a tax expert: Important Updates on New Tax Regulations for Foreign Income in Thailand - FRANK Legal & Tax (franklegaltax.com)

A person is living in Thailand for more than 180 days a year but receives income outside of Thailand since the last 10 years and transfers this money into Thailand. Starting from 01. January 2024, this income will be subject to tax regardless of when it was earned. Due to the new clarification, the taxation does not apply to income he is transferring into Thailand, if he can prove that the income was earned before 2024. 

IF that is what the Thai RD statement meant (all income is not taxable if it was earned before 1 Jan 2024), then the issue then becomes one of compliance. Exactly HOW does an Expat 'prove' that the money they remitted into Thailand from 2024 onwards, was earned 5-10-20 years ago. Is it OK for an Expat to not lodge a tax return on that basis - or do they have to lodge an annual tax return and prove that every year going forward. 

 

Now - getting back to that Thai RD statement:  ประกาศ (rd.go.th)

 

The question is whether the Thai RD meant to exclude ALL income earned before 1 Jan 2024 and brought into Thailand in 2030 or 2040 etc etc, or was their meaning that any income earned in the 2023 year under the rules as they were in 2023, and then remitted into Thailand in the 2024 tax year, will be treated as per the previous rule and it is not taxable. Was the Thai RD statement meant to say that the old rule still applies in 2024 to income that was earned in the year 2023 (which would be fair).   But was it also meant to say that ALL income earned before 1 Jan 2024 is not taxable.  What is needed is a formal clarification from Thai RD that the Revenue Department Order No. 162/2023 released on 20 November 2023, did the Thai RD or did not the Thai RD mean that ALL income earned in any year before 1 Jan 2024 is not taxable income whenever it is remitted into Thailand in any year going forward. 

[Eudaimonia]

10 minutes ago, TroubleandGrumpy said:

IF that is what the Thai RD statement meant (all income is not taxable if it was earned before 1 Jan 2024), then the issue then becomes one of compliance. Exactly HOW does an Expat 'prove' that the money they remitted into Thailand from 2024 onwards, was earned 5-10-20 years ago. Is it OK for an Expat to not lodge a tax return on that basis - or do they have to lodge an annual tax return and prove that every year going forward. . 

 

All income earned before 2024. If you want to transfer some in 2040, keep it in a ring-fenced account with no incoming transfers and 0% interest until then. Otherwise, it will indeed become difficult or impossible to show what is from pre-2024.

[Ben Zioner]

7 minutes ago, TroubleandGrumpy said:

That would certainly be great if it applied to ALL income earned before January 1 2024.  However, before I answer that statement, I will add this statement made by a tax expert: Important Updates on New Tax Regulations for Foreign Income in Thailand - FRANK Legal & Tax (franklegaltax.com)

A person is living in Thailand for more than 180 days a year but receives income outside of Thailand since the last 10 years and transfers this money into Thailand. Starting from 01. January 2024, this income will be subject to tax regardless of when it was earned. Due to the new clarification, the taxation does not apply to income he is transferring into Thailand, if he can prove that the income was earned before 2024. 

IF that is what the Thai RD statement meant (all income is not taxable if it was earned before 1 Jan 2024), then the issue then becomes one of compliance. Exactly HOW does an Expat 'prove' that the money they remitted into Thailand from 2024 onwards, was earned 5-10-20 years ago. Is it OK for an Expat to not lodge a tax return on that basis - or do they have to lodge an annual tax return and prove that every year going forward. 

 

Now - getting back to that Thai RD statement:  ประกาศ (rd.go.th)

 

The question is whether the Thai RD meant to exclude ALL income earned before 1 Jan 2024 and brought into Thailand in 2030 or 2040 etc etc, or was their meaning that any income earned in the 2023 year under the rules as they were in 2023, and then remitted into Thailand in the 2024 tax year, will be treated as per the previous rule and it is not taxable. Was the Thai RD statement meant to say that the old rule still applies in 2024 to income that was earned in the year 2023 (which would be fair).   But was it also meant to say that ALL income earned before 1 Jan 2024 is not taxable.  What is needed is a formal clarification from Thai RD that the Revenue Department Order No. 162/2023 released on 20 November 2023, did the Thai RD or did not the Thai RD mean that ALL income earned in any year before 1 Jan 2024 is not taxable income whenever it is remitted into Thailand in any year going forward. 

I can't stop from overcomplicating  things, but I'll tell you what I did. For earnings/savings prior to 2023 I have moved for one part to Thailand, one part to a Swiss bank account that, for now, shows only that single credit, and left some funds in another UBS account to feed credit and debit cards. At the first business day of 2024 I'll move all my 2024 earning to my Thai FCD. This should allow me to ride out the storm until 2028. But I might be overly cautious as I have an LTR  visa...

[TroubleandGrumpy]

5 minutes ago, Eudaimonia said:

All income earned before 2024.

Maybe.  Maybe Not. I know many pundits are saying that is the case, and I certainly hope so, but I dont ever trust 100% when the 'experts' say when they say what they think a Government organisations meant.  But as per my prvious post, the real definitive problem is how to prove it.

 

So I transfer 5 million baht in 2028 to buy a propertry. What happens if the Thai RD does not accept what I have provided as 'proof' that the money was earned 10-20 years ago.  What happens is that I have to eithr pay 1 million in taxes, or I can lodge an appeal. The Appeal must be 100% written in Thai (with translated 'approved' documents) and any 'hearing' will be conducted in Thai (meaning I will have to use a translator).  That will be extremely expensive and the win rate of Expats in Thai Tribunals and Courts, is I believe about 1000+ for 1 or 2?  

[TroubleandGrumpy]

16 minutes ago, Ben Zioner said:

I can't stop from overcomplicating  things, but I'll tell you what I did. For earnings/savings prior to 2023 I have moved for one part to Thailand, one part to a Swiss bank account that, for now, shows only that single credit, and left some funds in another UBS account to feed credit and debit cards. At the first business day of 2024 I'll move all my 2024 earning to my Thai FCD. This should allow me to ride out the storm until 2028. But I might be overly cautious as I have an LTR  visa...

Sounds like a great idea - good planning.  I also see nothing wrong with being 'complicated' when it comes to planning finances.  Unfortunately, most of my money is held in a Superannuation Fund in Australia, and it is impossible to quarantine it.   Likewise, I get a small Pension payment each 2-4 weeks from the Aust Govt which is technically 'income' - but under the DTA should not be 'taxable'.  But exactly how do I prove all that.

 

Because of the uncertainty, I am planning ahead with Plan B and C (other countries). I have no intention of paying income taxes in a country that treats me like a parolee, and provides me with zero Govt services or benefits.  Happy to pay another small 'fee' - but I pay heaps more in VAT than the vast majority of Thais pay in VAT and income tax together - and I am happy to accept that as my 'contribution'.  The possibility that I will have to lodge an annual tax return and 'hope' that I am not financially punished for bringing money into Thailand, annoys me to the extreme.  I am OK with complexity - it is uncertainty that causes me grief.  There are lots of countries that will welcome me and my money as a retiree - and most of them do not require I report to the Police every 3 months, and pay/beg to stay another year, nor many other ridiculous impositions that Thailand imposes on Expats who live long term in the country. 

[Isaan sailor]

With a rapidly rising Baht, not too many will bother to bring in big money.  And that includes me.  More like subsistence living now.  I do believe it is better to pay for as many things as you can via home country based credit card.  Amounts never show up in a Thai bank.

[JimGant]

6 hours ago, Mike Lister said:

So 500k, plus whatever other things you can add, some of which have been mentioned, kids, wife, insurance etc

 

Nice round figure. So, my income is Air Force pension (not assessable, per DTA), Social Security (not assessable, per DTA), and a required minimum distribution from my IRA, last year being $11000 -- which is assessable, per DTA. BUT, when netted against my allowance/deduction/exemption of $15000 (500k baht), I have a Taxable Income of negative $4000, i.e, I have no taxable income thus should not be required to file a Thai tax return. Several takes on this, but the 'no need to file' makes the most sense.

 

Some say they're redesigning the tax return to be able to list tax credits. That's nice. But if you have no income from which to take tax credits from -- why would you list tax credits?

 

Anyway, I'll just be glad I have an LTR visa as insurance against idiocy in the Thai Revenue Department, however that might develop....

 

 

[Eudaimonia]

36 minutes ago, TroubleandGrumpy said:

Maybe.  Maybe Not. I know many pundits are saying that is the case, and I certainly hope so, but I dont ever trust 100% when the 'experts' say when they say what they think a Government organisations meant.  But as per my prvious post, the real definitive problem is how to prove it.

 

So I transfer 5 million baht in 2028 to buy a propertry. What happens if the Thai RD does not accept what I have provided as 'proof' that the money was earned 10-20 years ago.  What happens is that I have to eithr pay 1 million in taxes, or I can lodge an appeal. The Appeal must be 100% written in Thai (with translated 'approved' documents) and any 'hearing' will be conducted in Thai (meaning I will have to use a translator).  That will be extremely expensive and the win rate of Expats in Thai Tribunals and Courts, is I believe about 1000+ for 1 or 2?  

 

To be honest, I think the big money is either moving soon or being taken care of by lawyers and bankers who know how to prove these things later.

 

Grandfathering pre-2024 income was not part of the original Order or plan. It was announced later when they understood how complicated everything would otherwise become. Perhaps some influential people also mentioned that they will need at least one more year to repatriate their funds.

 

If you have the money and want to buy a condo, I would not wait until 2028.

[Dogmatix]

If we take the RD at its word, the reinterpretation is only a stopgap while they get the govt to amend the RC to provide for global taxation for tax residents, regardless of whether income is remitted or not. That would most likely remove the remittance tax element but require declaration of all income earned anywhere. In that case income earned before global taxation starts could probably be remitted tax free. But who can say what will really happen in this country where things are done on a whim with thinking them through.

[tomkenet]

37 minutes ago, Eudaimonia said:

 

To be honest, I think the big money is either moving soon or being taken care of by lawyers and bankers who know how to prove these things later.

 

Grandfathering pre-2024 income was not part of the original Order or plan. It was announced later when they understood how complicated everything would otherwise become. Perhaps some influential people also mentioned that they will need at least one more year to repatriate their funds.

 

If you have the money and want to buy a condo, I would not wait until 2028.

paw 162 is  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.

[Eudaimonia]

30 minutes ago, Dogmatix said:

If we take the RD at its word, the reinterpretation is only a stopgap while they get the govt to amend the RC to provide for global taxation for tax residents, regardless of whether income is remitted or not. That would most likely remove the remittance tax element but require declaration of all income earned anywhere. In that case income earned before global taxation starts could probably be remitted tax free. But who can say what will really happen in this country where things are done on a whim with thinking them through.

 

Yes. The ambitions are much higher.

 

For global taxation to work, lots of new laws are needed. People who do not want too much taxable income typically set up holding companies and so forth. Of course, the OECD countries provide great examples, so leapfrogging is possible.

[Guavaman]

3 hours ago, tomkenet said:

I wonder if this deduction also can be used for foreign sourced dividends or capital gains remitted to Thailand 

Interest and dividends come under Category 4 income in the Tax Code; no deductions are allowed.

 

Note: Deduction against Category 4 income does not appear in this table.

 

 

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.

 

(4) Income that is:

 

(a) Interest on a bond, deposit, debenture, bill, loan whether with or without security, the part of interest on loan after deduction of withholding tax under the law governing petroleum income tax, or the difference between the redemption value and the selling price of a bill or a debt instrument issued by a company or juristic partnership or by any other juristic person and sold for the first time at a price below its redemption value.

 

(b) Dividend, share of profits or any other gain derived from a company or juristic partnership, a mutual fund or a financial institution established under a specific law in Thailand for the purpose of providing a loan in order to promote agriculture, commerce or industry; the part of dividend or share of profits after deduction of withholding tax under the law governing petroleum income tax.