Opinion: Thailand’s ambitious plan to tax incoming funds risks falling flat due to lack of clarity

[Adumbration]

14 hours ago, John Drake said:

My impression is that these guys get together, sit around some table while drinking a lot, and somebody says, "hey, let's try this!" And then they all sort of nod and, say, "yeah! sounds great. We'll write the rule tomorrow morning."

You give these corrupt retards way too much credit.  They have no capacity whatsoever to innovate or come up with any new ideas themselves whatsoever.  The only thing Thais are good at is copying.

 

Last week they saw the Junta in Myanmar introduce a scheme to steal a minimum of 25% of all funds remitted into the country and decided to copy it.

[hotchilli]

17 hours ago, webfact said:

The banking sector’s alarm has cascaded down to individual clients who now face a predicament about the future of their investments. Without clear directives on how the new tax structure will be implemented, the government risks inciting a fiscal exodus or, at the very least, a chilling effect on future investments

Those Thais who keep money in overseas  accounts but periodically have a transfer back home will be displeased.

Also those working overseas ending monthly welfare payments home to family would not like paying tax twice.

[Tom H]

3 hours ago, david555 said:

"Key question is:

How do you prove your money abroad has been taxed 11 years ago when you dont have any paper:). "

 

 

Well online on my Gov. pension site i can see how much my Gov. deducted from my monthly pension , and  for the whole year i get an official statement how much pension i received and the total of tax money is whit held .......clear as mud ...and needed for filling in  my tax declaration 

 

This for a E.U country pension

Another guy who cant overview the whole picture.

ASSETS  on your account you have earned in your life.

Retention obligation ends after 10y in many counties! 

 

[david555]

24 minutes ago, Tom H said:

Another guy who cant overview the whole picture.

ASSETS  on your account you have earned in your life.

Retention obligation ends after 10y in many counties! 

 

just i answered your question how to proof your taxed pension .....

 

keep your documents for whatever range of years in order ....????

 

 

 

 

[Tom H]

I didnt ask for pension???? but understood your point. 

Some people like me dont get a pension.

 

Details in reading and in life???? 

[jacko45k]

16 hours ago, lordgrinz said:

Its at 35.945 ......that took only minutes.....this is hilarious! 555

At 36 dead this morning. I thought it was the news of taxing foreigners that was weakening the baht, caused a 1% drop. So not popular with markets. 

[spidermike007]

13 hours ago, MartinBangkok said:

Same with the Norwegian Crown :-0

Side note: Considering the appalling treatment we Farangs are subject to in this land of fake smiles (think 90 days reporting, notify police/immigration every single day you are out of your registered province, double pricing, rip offs, beuraucratic hell), I have already decided: I am out of here if I have to pay a single Baht in tax. We are treated worse than hard-line criminals/rapist's are in my home country.

Really? In my country rapists are sentenced to a decade or more in a high security prison. Ever been in one? They are subject to frequent anal rape. Are you still going with your rather extreme and bizarre statement? Unhappy, are we? You need some perspective. 

[JBChiangRai]

7 hours ago, ukrules said:

No it's not, many people live in Thailand only because of this rule.

 

It's not a loophole either, it's enshrined in law.

I don't think you understand what they are trying to do.

 

Their sole intention is to be able to challenge large transfers into the country for that party to prove tax has been paid.  They have zero interest in foreigners unless you are transferring huge sums into the country.

 

You are right in saying it's not a loophole, it is enshrined in law, but it leads to a loophole.  Let me give you an example, Major shareholder in profitable Thai business transfers (say) 100M baht to a company he owns in the UK which is backed up by a consultancy invoice from that UK Co. to Thai Co.  Same major shareholder invoices UK company personally for 100M baht in consultancy fees but UK Co remits the following year to major shareholder.

 

No UK tax is paid as company broke even,

No company tax is paid in Thailand because invoice from UK Co. soaked up all the profit. 

Major shareholder pays no tax in Thailand because it was remitted to him the following year. 

 

I deliberately gave the example of a country with a dual taxation agreement though probably most Thai users of this scheme choose a zero tax country with privacy laws which is actually a mistake as it screams "I'm using this loophole".

 

This is most definitely a loophole and it's things like this they want to stop.  Tax accountants probably know of another dozen ways to avoid paying tax using this loophole.

 

It's possible that your Thai bank may ask you to sign something on arrival of large funds from overseas for you to state tax was paid in another country.  They are opening the doors so they can challenge those they suspect, but we are not the target group.

 

According to the letter of the law, this will also affect those clever Digital Nomads who use this scheme to pay no tax, however in reality, they are unlikely to be challenged as they are not the target group.

[LukKrueng]

15 hours ago, Mr Meeseeks said:

There's a proper pathway to citizenship for those inclined and qualified.

 

With that pathway comes certain tax requirements. 

 

What there will be in Thailand, appears to be the tax requirements of a resident yet with annual and very temporary (non-immigrant) visa renewals with no residency pathway (for most).

 

Do you not understand the difference?

1.There's a proper pathway to citizenship in Thailand as well. It's not simple, not so easy, but there is. You have to accept and understand that Thailand is not an immigrant country by choice, and seeing what happens in Europe it is understandable.

2. There is such a thing as tax resident in every country, it in most countries AFAIK. it has nothing to do with immigrant residence. Here in Thailand, up until about 30 years ago anyone (tourists included) who stayed in Thailand for more than 180 days in a calendar year had to go to the tax department, declare income and pay tax. The "income" for tourists was calculated by the amount they declared spending in the country.

3. Most Western countries tax their citizens\permanent residents for money earned out of the country. In case of double taxation agreements they charge the balance between what was paid in the country of earning to the amount that would have been charged in country. Most people manage to avoid it by not declaring the out of country earnings.

4. The USA IRS tax Americans and green card holders on everything in and out of country. 

 

I understand the difference, I hope you do too

 

[LukKrueng]

13 hours ago, MartinBangkok said:

Yes, that's how it works in my home country Norway. Google it. You obviously don't know much about civilized nations.

So in Norway, a person that comes to retire, doesn't learn the language and the culture, use all public facilities with the only contribution is his pension money coming in to support himself is automatically on the path to citizenship? I think not, but I'm not going to Google it as I have no desire to retire in Norway.

[redwood1]

20 minutes ago, JBChiangRai said:

I don't think you understand what they are trying to do.

 

Their sole intention is to be able to challenge large transfers into the country for that party to prove tax has been paid.  They have zero interest in foreigners unless you are transferring huge sums into the country.

 

You are right in saying it's not a loophole, it is enshrined in law, but it leads to a loophole.  Let me give you an example, Major shareholder in profitable Thai business transfers (say) 100M baht to a company he owns in the UK which is backed up by a consultancy invoice from that UK Co. to Thai Co.  Same major shareholder invoices UK company personally for 100M baht in consultancy fees but UK Co remits the following year to major shareholder.

 

No UK tax is paid as company broke even,

No company tax is paid in Thailand because invoice from UK Co. soaked up all the profit. 

Major shareholder pays no tax in Thailand because it was remitted to him the following year. 

 

I deliberately gave the example of a country with a dual taxation agreement though probably most Thai users of this scheme choose a zero tax country with privacy laws which is actually a mistake as it screams "I'm using this loophole".

 

This is most definitely a loophole and it's things like this they want to stop.  Tax accountants probably know of another dozen ways to avoid paying tax using this loophole.

 

It's possible that your Thai bank may ask you to sign something on arrival of large funds from overseas for you to state tax was paid in another country.  They are opening the doors so they can challenge those they suspect, but we are not the target group.

 

According to the letter of the law, this will also affect those clever Digital Nomads who use this scheme to pay no tax, however in reality, they are unlikely to be challenged as they are not the target group.

Who says who the target group is?......You?.....A wild guess pulled from nowhere....... i will tell you who the target group is....Its who ever is in the target......If farangs were not targeted why not give frangs a exemption?

[lordgrinz]

Either the new PM is a complete moron, based on the fact that any intelligent person would have foreseen what this would do to the market, BHT exchange rates, and investor confidence, or he did it on purpose. The MFP should ask if the new PM has made any stock or monetary moves in the last few days, maybe he is an evil genius and just made millions/billions off this scare tactic. However, I'm going with him being just a complete moron.

[jacko45k]

So is the sensible solution to put all my money into my Thai wife's account before 1st January, and get a monthly allowance from her... or maybe a bi-monthly if the law requires it.  

[JBChiangRai]

1 minute ago, redwood1 said:

Who says who the target group is?......You?.....A wild guess pulled from nowhere....... i will tell you who the target group is....Its who ever is in the target......If farangs were not targeted why not give frangs a exemption?

I know the loophole well, my accountant told me a long time ago it will stop at some time and why.

 

They are in effect giving farangs an exemption, any farang who has paid tax overseas.  same exemption to Thais.

 

What they have said is quite clear, you pay tax here if your money has not been taxed overseas, so if you're holding it in a tax haven offshore, get ready to prove you paid tax.

 

A major red flag is going to be incoming transfers from tax havens.

 

 

[JBChiangRai]

3 minutes ago, jacko45k said:

So is the sensible solution to put all my money into my Thai wife's account before 1st January, and get a monthly allowance from her... or maybe a bi-monthly if the law requires it.  

You don't need to if it was taxed at source.

[jacko45k]

1 minute ago, JBChiangRai said:

You don't need to if it was taxed at source.

Saudi Arabia.......

[wasabi]

21 hours ago, Enzian said:

Several times I've stated on forums that the fact that this government (even more than others) is perfectly capable of changing any rule in any way at any time is why I will never buy a condo here, or contemplate any other long term commitments for that matter. Even if this particular issue quickly blows over (or just doesn't apply to me personally), the point is only reinforced. Myself, if needed, can have everything wrapped up and be out of here for good within two months at most. Caveat emptor.

Every dollar I earn through passive income investing at a US brokerage has been remitted to Thailand and has benefited Thailand and Thai citizens. The only effect increased taxation would have on me is I will only remit what is essential to live in Thailand and like you will not purchase a condo or anything that made it difficult to leave. If all of my income were taxed (again) whether or not I remit it to Thailand than I would have to leave. Increased taxes worldwide rarely benefit citizens or investors in a nation.

[Neeranam]

20 hours ago, Adumbration said:

@Neeranam this should accelerate the flow of funds into crytpo nicely.

Crypto is the place to be. 

[lordgrinz]

3 minutes ago, wasabi said:

Every dollar I earn through passive income investing at a US brokerage has been remitted to Thailand and has benefited Thailand and Thai citizens. The only effect increased taxation would have on me is I will only remit what is essential to live in Thailand and like you will not purchase a condo or anything that made it difficult to leave. If all of my income were taxed (again) whether or not I remit it to Thailand than I would have to leave. Increased taxes worldwide rarely benefit citizens or investors in a nation.

I make sure everything in Thailand stays in my wifes name, everything in the USA stays in my name. This way it makes things easier to handle in these types of situations. No matter what they do, at least she is Thai and can handle things, or liquidate assets without any complex issues with foreign ownership. 

[Neeranam]

This is for Thais, nothing for expats to worry about. 

Almost every day now, I get a tax form sent from Bitkub. ????

[JBChiangRai]

4 minutes ago, jacko45k said:

Saudi Arabia.......

I guess you're already transferring it in the year it was earned, so the law is no change for you.

 

You should be paying tax here if you stay more than 180 days per tax year if you earn it tax free in SA.

[jacko45k]

4 minutes ago, JBChiangRai said:

I guess you're already transferring it in the year it was earned, so the law is no change for you.

 

You should be paying tax here if you stay more than 180 days per tax year if you earn it tax free in SA.

I retired here after quitting work.  

[JBChiangRai]

1 minute ago, jacko45k said:

I retired here and the money made prior. 

Hopefully you already have it here or don't hold it in a suspicious country (i.e. Saudi Arabia)

[redwood1]

You can bet your last baht the very rich will not be paying this tax one way or another......And the poor will not be paying this tax......But they for sure want the people in the middle paying.......As usual...

[JonnyF]

23 minutes ago, redwood1 said:

Who says who the target group is?......You?.....A wild guess pulled from nowhere....... i will tell you who the target group is....Its who ever is in the target......If farangs were not targeted why not give frangs a exemption?

That's not really how they do it here. They make blanket laws that in effect cover everyone. Then they selectively apply it to the groups that the law was intended to apply to. Keeps it simple for them in terms of drafting the law, and also keeps their options open if they wish to apply it to more groups in the future they don't need to amend the law.

 

There is no way they are going to apply this to Brian Smith from Rotherham and his meagre pension spent in the bars of Pattaya.

 

I'd expect a clarification/reassurance from them pretty shortly. Misunderstood this blah blah misinterpreted that blah blah.

[lordgrinz]

3 minutes ago, redwood1 said:

You can bet your last baht the very rich will not be paying this tax one way or another......And the poor will not be paying this tax......But they for sure want the people in the middle paying.......As usual...

That's true in any country, taxes on the rich and businesses just gets handed down to citizens and customers.

[BenStark]

I don't complain.

 

I have still lots of USD in and FCD, and today get 1.20 baht more for every dollar, than on August 31.

 

Keep on going with your populism Srettha

[lordgrinz]

2 hours ago, jacko45k said:

At 36 dead this morning. I thought it was the news of taxing foreigners that was weakening the baht, caused a 1% drop. So not popular with markets. 

36.12 and climbing!  LMAO!

[lordgrinz]

1 minute ago, Darren8888 said:

Dude. These forecasts are like money throwing darts. If you backtest what they have predicted in the past, their prediction are basically random and most of the time plainly wrong. I do hope the baht get weaker and weaker though. 

While you are ranting, its now at 36.25.......LMAO!

[connda]

And yet from a different article published on AN:

"In a related development, the Revenue Department has modified its notification on tax imposition on certain foreign-sourced income. This change will be effective from January 1, 2024."

Yeah, ambiguous and as clear as mud, but we don't care - eat it - commoners.