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

[jerrymahoney]

This is all speculation on my part . Maybe Revenue will say any 180+ day tax resident with 3 million baht of any type foreign-derived income we don't care.

 

Or they might better define what they might consider to be a tax cheat for which they already have the regs in place.

[The Cyclist]

24 minutes ago, jerrymahoney said:

This is all speculation on my part . Maybe Revenue will say any 180+ day tax resident with 3 million baht of any type foreign-derived income we don't care.

 

This is all about tax avoidance / evasion

 

I dont think the OECD would accept this. This new interpretation of the rules is being instigated by Thailand joining CRS.

 

If it was up to the Thais, nothing would be changing on the 01 Jan 2024 and it would be carry on as before.

[jerrymahoney]

1 minute ago, The Cyclist said:

 

This is all about tax avoidance / evasion

 

I dont think the OECD would accept this. This new interpretation of the rules is being instigated by Thailand joining CRS.

 

If it was up to the Thais, nothing would be changing on the 01 Jan 2024 and it would be carry on as before.

All this OECD CRS acronym stuff is beyond me. All I know is the change that was published SEP 2023.

 

And a lot of comments to me early on  to wit:

 

Oh you use that 65K per month stuff for retirement extension? Boy are you gonna be in trouble!

[The Cyclist]

1 minute ago, jerrymahoney said:

All this OECD CRS acronym stuff is beyond me. All I know is the change that was published SEP 2023.

 

Thailand joined the Common Reporting Standard ( CRS ) this was set up by  the Office of Economic Cooperation and Development ( OECD)

 

If you get bored, knock yourself out 

 

https://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/crs-by-jurisdiction/guidance/Jersey-guidance-notes-crs.pdf

 

https://www.oecd.org/tax/automatic-exchange/common-reporting-standard/

 

The Thai Gov / RD will have to comply with OECD rules and standards.

 

How this will play out in reality is anyones guess. But I will have a stab in the dark that Thailand is not updating the tax filing forms because they are bored and have nothing better to do.

 

I'm hoping that by limiting my income to a pension that is covered by a DTA and only taxable in the UK, this income might not be classed as assessable income,  which would negate the need to file a tax return. My head tells me that I will need to get a TIN and file a tax return even though I will have no tax to pay.

[jerrymahoney]

14 minutes ago, The Cyclist said:

 

If you get bored, knock yourself out

Yes I am bored with the reasonable speculation now that witching day is imminent.

 

And a lot of people who have said nothing will every happen made big deposits before year end.

 

And one workaround I have yet to see is a drone service flying cash bundles across the Mekong from Laos.

Edited December 28, 2023 by jerrymahoney

[stat]

35 minutes ago, jerrymahoney said:

All this OECD CRS acronym stuff is beyond me. All I know is the change that was published SEP 2023.

 

And a lot of comments to me early on  to wit:

 

Oh you use that 65K per month stuff for retirement extension? Boy are you gonna be in trouble!

Just ignore the cyclist. CRS is all about each country identifying their OWN tax residents. It is not about forcing other countries to tax their residents. Example: Germany does not care if a German national that is a only thai tax resident pays any tax in Thailand or how much. The only exception are the US guys as the IRS taxes you even if you have never lived in the US.

Edited December 28, 2023 by stat

[stat]

8 hours ago, DonniePeverley said:

 

It will only be time before Phillipines and Malaysia go down this route too. India did this a few years ago. 

Even if they do there is still a way to not pay taxes. You only have to live 1 year with 179 days in 2 countries each and some days in a 3rd country. In this year you realize your capital gains. Then the next year you can transfer tax free to Thailand. Of cours only works if you have cap gains, more difficult with pension, rental income etc.

 

 

[jerrymahoney]

REDUX My New New Year's prayer with apologies to Dr. Niebuhr:

 

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

courage to change the things I can; ...

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

 

 

 

[JimGant]

3 hours ago, DrPhibes said:

The question is the things taxed on the Thai side, will they allow a credit for what you paid in the US.

 Not up to Thailand for this determination. If Thailand has "exclusive" taxation rights per the DTA on certain incomes, like private pensions and IRAs (which "only may be taxed in the country of residence"), then they get to keep all the taxes they collect under their tax rules. Only the US, in this example, determines whether or not to allow a tax credit in order to eliminate double taxation; but of course the US only realizes any taxes collected, if the US tax bill exceeds the allowed credits. And the only reason the US can tax this income, which is the exclusive taxation right of Thailand, is because of the saving clause, which says, the US may tax all incomes as if the DTA didn't exist -- with a few exceptions, like alimony and child support.

 

But, the DTA is not the sole reason double taxation is avoided -- the US Revenue Code has always allowed tax credits to avoid double taxation; but, it's only for foreign taxes on foreign income -- not foreign taxes on US income subject to Thai taxes. But, because of the DTA, the Revenue Code can be trumped, to allow credits for Thai taxes on US income. The kicker here is that a Form 8833 needs to submitted with your US tax filing, explaining how the DTA overrides the Code.

 

Hey, I'm not making this sh**** up.

 

 

 

[whiteman]

brought a big lump sum in when I got 21.9 bhat to the nz $ too late to do anything now just hang on in their guy's new year's present for some.

[The Cyclist]

1 hour ago, stat said:

Just ignore the cyclist. CRS is all about each country identifying their OWN tax residents.

 

Showing your ignorance again.

 

CRS is about clamping down on Tax avoidance / Evasion

 

Quote

The purpose of the CRS is to combat perceived offshore tax evasion, provide minimum set of standards and framework to increase efficiency and decrease cost associated with exchange of information

 

To do that a Country ( In this case Thailand ) needs to identify anyone who is Resident for Tax Purposes.

 

Why else do you think this thread exists and is full of doom & gloom ?
 

And you claim to be some sort of expert

 

 

1 hour ago, stat said:

It is not about forcing other countries to tax their residents.

 

Best get your eyes tested as well, you are seeing things that I have never written.

[K2938]

9 hours ago, TroubleandGrumpy said:

Indonesia has been making changes recently and they dont tax the 'imported' income of retirees - as it stands they dont require retired expats to lodge a tax return and although they technically could impose taxes on Retired Expats - they do not. 

Indonesia plans sweeping tax reforms for 'expatriate' income, dividends, penalties - Business - The Jakarta Post

Income Tax For Foreign Retirees ? - Living In Indonesia Expat Forum (livinginindonesiaforum.org)

 

One thing to keep in mind when researching all this stuff is that a search for Expats Tax - even Retired Expats Tax - will give most responses targetted at Working Expats (either employed or in a business) because those companies pay Google.  Retired Expats are a completely different kettle of fish - their Visa prohibits working or running a business so they dont earn money in any country and are therefore 'excluded' from having to lodge a tax return.  But most websites offering advice and services refer to 'Expats' when in fact they are only talking about those who work or have a business - who do obviously have to pay income taxes.

Thank you for this, but the Jakarta Post article you quoted is from 2019 and these changes have not been implemented as is also mentioned in your second link.  That some poor pensioners might get away with not declaring taxes might well be true just as countless farang in Thailand have without penalty not declared foreign income submitted in the year it was earned, but I do not think this is the law unfortunately. 

 

 

[DonniePeverley]

I think some of us are in major denial here.

 

From my experience in India, they will hit you at the source of the banks. 

[JackGats]

On 12/24/2023 at 2:05 AM, Ben Zioner said:

That's correct. But since I am a cautious guy, I'll do as if RD 743 wasn't there. I'll reassess by mid 2025.

 

Also, everyone seems to think that under RD 743 income must be seasoned one year, is that correct?

I was thinking that under RD 743 foreign income was tax-free, period. No seasoning required.

[Mike Lister]

The picture regarding taxation of Foreign Currency Accounts (FCA) for Residents vs Non-Residents (NR), still has not been made perfectly clear to everyone's satisfaction. Perhaps someone else can find the right form of words to paint a clearer picture for everyone else's benefit? My take on this subject is as follows:

 

An FCA for a NR in Thailand, behaves in a similar manner to an offshore account. except, the NR account here is ALWAYS onshore. Unlike a fully offshore account, it is the residency of the account holder that determines their liability to tax, not the behaviour of the account itself. Put differently, a Resident and NR account are identical and held in the same location onshore, the only difference between the two accounts is the continued eligibility of the account holder to own the account. 

 

If a NR opens a Foreign Currency Account here as a Non-Resident (they remain here for less than 180 days per tax year), the account is free of tax and the funds in it and any interest earned, do not need to be reported for Thai taxation. BUT, if the account holder remains here for more than 180 days, their eligibility for a Non-Resident account ends on the 181st day and the interest earned by the account becomes taxable in Thailand and the capital in the account will be deemed to have been imported (even if the bank has not formally notified them of any change because these are RD rules, not just banking rules).

 

There is then a third scenario that has been reported, that I can neither confirm or deny, because I have not seen independent proof. This is where a NR holds a NR FCA that is populated with foreign currency that is sent back overseas again. In the report, it was said that the bank would exchange the foreign currency, into THB and then exchange it back to foreign currency , before it could be exported. I've never heard or even imagined anything like that before, normally the account holder would pay a fee in lieu of exchange if currency was exported, but this aspect is not really relevant to this discussion. Assuming the bank does make that dual exchange, my take on this is that even though the account holder might be NR, the funds are imported into Thailand, the moment they are exchanged into THB by the bank, even though they are immediately exchanged a second time and re-exported. Why? Because there are strict criteria governing the deposit of THB, into a FCA which includes supporting documentation. 

[jerrymahoney]

11 hours ago, The Cyclist said:

13 hours ago, stat said:

Just ignore the cyclist. 

That's OK Cycle guy has backed me up plenty enough times.

[Mike Lister]

13 hours ago, stat said:

Just ignore the cyclist. CRS is all about each country identifying their OWN tax residents. It is not about forcing other countries to tax their residents. Example: Germany does not care if a German national that is a only thai tax resident pays any tax in Thailand or how much. The only exception are the US guys as the IRS taxes you even if you have never lived in the US.

Why do you think you have the right to tell others to ignore posters comments? I mean, it's not as though you've proved yourself to be the expat you claim to be!

[The Cyclist]

3 hours ago, Mike Lister said:

Why do you think you have the right to tell others to ignore posters comments? I mean, it's not as though you've proved yourself to be the expat you claim to be!

 

Or the expert that he claims to be.

[Mike Lister]

1 minute ago, The Cyclist said:

 

Or the expert that he claims to be.

Thanks, corrective type at its worst. expat vs expert

[The Cyclist]

4 hours ago, Mike Lister said:

If a NR opens a Foreign Currency Account here as a Non-Resident (they remain here for less than 180 days per tax year), the account is free of tax and the funds in it and any interest earned, do not need to be reported for Thai taxation.

 

My FCA opened when i was NR does not pay any interest.

 

4 hours ago, Mike Lister said:

BUT, if the account holder remains here for more than 180 days, their eligibility for a Non-Resident account ends on the 181st day and the interest earned by the account becomes taxable in Thailand and the capital in the account will be deemed to have been imported (even if the bank has not formally notified them of any change because these are RD rules, not just banking rules).

 

I will be doing a round robin of my accounts next week to update passport details and I will be sure to let the banks know that I am now Resident for tax purposes and see what they have to say.

 

Perhaps the FCA will start to pay interest 

[samtam]

12 minutes ago, The Cyclist said:

 

My FCA opened when i was NR does not pay any interest.

 

 

I will be doing a round robin of my accounts next week to update passport details and I will be sure to let the banks know that I am now Resident for tax purposes and see what they have to say.

 

Perhaps the FCA will start to pay interest 

 

Let me predict, (as it's New Year-ish): they wont have a clue.

[The Cyclist]

1 minute ago, samtam said:

 

Let me predict, (as it's New Year-ish): they wont have a clue.

 

As nothing was said by immigration when I renewed my extension 5 weeks ago, I am expecting the same results 

[Mike Lister]

5 hours ago, Mike Lister said:

The picture regarding taxation of Foreign Currency Accounts (FCA) for Residents vs Non-Residents (NR), still has not been made perfectly clear to everyone's satisfaction. Perhaps someone else can find the right form of words to paint a clearer picture for everyone else's benefit? My take on this subject is as follows:

 

An FCA for a NR in Thailand, behaves in a similar manner to an offshore account. except, the NR account here is ALWAYS onshore. Unlike a fully offshore account, it is the residency of the account holder that determines their liability to tax, not the behaviour of the account itself. Put differently, a Resident and NR account are identical and held in the same location onshore, the only difference between the two accounts is the continued eligibility of the account holder to own the account. 

 

If a NR opens a Foreign Currency Account here as a Non-Resident (they remain here for less than 180 days per tax year), the account is free of tax and the funds in it and any interest earned, do not need to be reported for Thai taxation. BUT, if the account holder remains here for more than 180 days, their eligibility for a Non-Resident account ends on the 181st day and the interest earned by the account becomes taxable in Thailand and the capital in the account will be deemed to have been imported (even if the bank has not formally notified them of any change because these are RD rules, not just banking rules).

 

There is then a third scenario that has been reported, that I can neither confirm or deny, because I have not seen independent proof. This is where a NR holds a NR FCA that is populated with foreign currency that is sent back overseas again. In the report, it was said that the bank would exchange the foreign currency, into THB and then exchange it back to foreign currency , before it could be exported. I've never heard or even imagined anything like that before, normally the account holder would pay a fee in lieu of exchange if currency was exported, but this aspect is not really relevant to this discussion. Assuming the bank does make that dual exchange, my take on this is that even though the account holder might be NR, the funds are imported into Thailand, the moment they are exchanged into THB by the bank, even though they are immediately exchanged a second time and re-exported. Why? Because there are strict criteria governing the deposit of THB, into a FCA which includes supporting documentation. 

One point to add to the above: an exchange of foreign currency, into THB, is often shown by the bank as a Foreign Currency Exchange Transaction. It is a normal everyday type of banking transaction that does not imply remittance from overseas or anything else, just that foreign currency was bought or sold. 

[TroubleandGrumpy]

13 hours ago, K2938 said:

Thank you for this, but the Jakarta Post article you quoted is from 2019 and these changes have not been implemented as is also mentioned in your second link.  That some poor pensioners might get away with not declaring taxes might well be true just as countless farang in Thailand have without penalty not declared foreign income submitted in the year it was earned, but I do not think this is the law unfortunately. 

 

 

No person in Indonesia under their Retirement Visa has ever been charged/required to lodge a tax return for any money they brought into the country.  I hear you and understand that 'technically' they have tax laws that could be interpreted the way you say, but I understand that the Indonesia Tax Dept previously stated (over 10 years ago) that Retired Expats who bring money into Thailand do not have to pay income tax.  I have given up trying to find that - but when I was comparing Retirement Visas for Thailand, Philippines, Malaysia and Indonesia back in 2010, that was the case back then.  Since then Malaysia has implemented these tax changes, but have also excluded Retired Expats in their MM2H Visa. Thailand has implemented these tax changes - and the issue is - will they exclude retired/married Expats or not - because if they do not then we are included. The Philippines has not implemented these tax changes, but they have stated in their PRA Visa that retired Expats will never be taxed on money they bring into the country - I think that is as good as you are going to get to show if/when they make the tax changes they will exclude retired Expats.   Thailand never specifically stated that retired/married (non working) Expats on long term Visas were excluded from income tax - it was just a matter of 'precedence'. But now they need to state it, because if they do not state it, that means they will apply income taxes to all money Expats remit into Thailand - unless that Expat can prove the money was from a source and/or in a form, that is not taxable.

 

Until the Thai RD provides clarifications on Compliance and Enforcement as far as this change effects retired/married Expats, then that means that we are liable to pay income tax on money rtemitted into Thailand. While I almost agree with many people who say they will, I am not making my financial decisions for 2024 based on that hope.  I will not be bringing into Thailand during 2024 the amount of money that I normally do each year (I have already brought in extra money this month). My Pension payments will be remitted into Thailand in 2024 but nothing else - and I will see how that pans out, before deciding whether to stay or leave before July 2025.  If the Thai RD during 2024 releases clarifications that mean retired/married Expats brining money into Thailand are not subject to income tax, then all will be good. 

[quake]

I'm sure  the RD will keep us all informed,  come 1st of Jan 2024. 

 

 

[jerrymahoney]

From the Billy Wilder screenplay for Some Like It Hot (1959:

 

(The 1929 annual meeting 'Friends of the Italian Opera aka 'The Mafia')

 

And what's good for the
country is good for us. In the last
fiscal year, our income was a hundred
and twelve million dollars before
taxes --

 

only we ain't paying no taxes.

 

(The delegates applaud.)
 

Edited December 29, 2023 by jerrymahoney

[K2938]

4 hours ago, TroubleandGrumpy said:

No person in Indonesia under their Retirement Visa has ever been charged/required to lodge a tax return for any money they brought into the country.  I hear you and understand that 'technically' they have tax laws that could be interpreted the way you say, but I understand that the Indonesia Tax Dept previously stated (over 10 years ago) that Retired Expats who bring money into Thailand do not have to pay income tax.  I have given up trying to find that

Based on our discussion I have today contacted some Indonesian firm providing immigration and tax advice.  They confirmed that if a retired person is in Indonesia more than 183 days, he or she is taxable on global income.  Without any caveats, without any exceptions.  Sorry.  So if you find some more evidence supporting what you say, then please let me know. But - unfortunately - I do not think it is true. 

[stat]

32 minutes ago, K2938 said:

Based on our discussion I have today contacted some Indonesian firm providing immigration and tax advice.  They confirmed that if a retired person is in Indonesia more than 183 days, he or she is taxable on global income.  Without any caveats, without any exceptions.  Sorry.  So if you find some more evidence supporting what you say, then please let me know. But - unfortunately - I do not think it is true. 

It is also my understanding that Indonesia has the right to tax your worldwide income. However I do not know if they follow through. I read an article in the economist some years ago that in Indonesia no one was paying any taxes on their offshore income but that was about to change thanks to the fact that CRS will deliver all the data and tax evasion was no longer possible. That is why I never considered Indonesia as a tax heaven and expat destination if taxes play any part in your consideration.

Pls correct me if I am wrong, alsways happy to learn if there is a way to live tax free (within the law) in Indonesia.

Edited December 29, 2023 by stat

[UKresonant]

Just now, TroubleandGrumpy said:

Only after March 2025 I will know if the money I brought into Thailand in 2024 will be taxed.  Uncertainty at its extreme - hope at its utmost.    Plus of course - if I do pay income taxes - what do/will I get for that?? Answer = ZERO. 

 

That would be the theme I would be feeling, not even a pass to avoid multiple entry fees at various venues, national parks and maybe even some health facilities. The ticket vendors may say that I'm still just on a slightly extended visitors visa, for which I couldn't really dispute that aspect I suppose  .

[UKresonant]

On 12/28/2023 at 6:50 AM, anrcaccount said:

The "income that was earned the year before" exemption is the only things that's changing. 

 

If you're worried about this new interpretation, you should have been worried every year for the past 10! 

 

I did worry about it for the last 6 years.

 

Within that period, only one year that I exceeded 179 days, and that relied on the remittance from previous years. Potentially and likely an end to simplicity is the way I see it, implemented in just over 50hrs time, with effect sometime in June.  (99.9% of my income is automatically taxed, or does not require tax deducted,  in home country, so not any avoidance concern). 

 

P.s. also,  everyone, remember the leap year extra day for counting the threshold