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

[Eric Loh]

53 minutes ago, connda said:

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.

According to legal experts, the policy modification appears to have 3 specific targets. Residents trading in foreign stock markets through foreign brokerages, cryptocurrency trader and Thais who have been exploiting a loophole that allowed them to bring foreign earnings into the country tax-free after keeping it in an offshore account for more than a calendar year. The basic principle of tax is that you must pay tax on income you earn from abroad no matter how you earn it and regardless of the tax year in which money is earned. Seem the new government is simply tightening tax loopholes. The danger though is more regulations may alienate private bankers and financial institutions. 

[lordgrinz]

3 minutes ago, Eric Loh said:

According to legal experts, the policy modification appears to have 3 specific targets. Residents trading in foreign stock markets through foreign brokerages, cryptocurrency trader and Thais who have been exploiting a loophole that allowed them to bring foreign earnings into the country tax-free after keeping it in an offshore account for more than a calendar year. The basic principle of tax is that you must pay tax on income you earn from abroad no matter how you earn it and regardless of the tax year in which money is earned. Seem the new government is simply tightening tax loopholes. The danger though is more regulations may alienate private bankers and financial institutions. 

The danger might also (probably will) make the paper trail mess even worse/impossible for foreigners.

[Eric Loh]

8 minutes ago, lordgrinz said:

The danger might also (probably will) make the paper trail mess even worse/impossible for foreigners.

Baht recent decline could be a result of the perceived danger and outflow of funds by bank clients who are not certain of their investments. Clear directives on how the tax reforms will be implemented should be the order of the day. 

[Adumbration]

3 hours ago, Neeranam said:

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

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

Yes.  That is correct.  It is the same strategy as the Junta in Myanmar has implemented.  They want to tax all the massive remittances from the little ghosts working in Korea, Taiwan, Israel, et al...

[jonny on the spot]

Everything they do here falls flat due to lack of clarity.

But thats ok because thats exactly the result they were looking for, lack of clarity.

[Skeptic7]

21 hours ago, tgw said:

why don't they say so then ?

Because they haven't a clue. They can't even buy one. Never have...never will. Total imbeciles running this country. Always just premature oral ejaculation, then retract or rectify later due to their own misunderstanding (ineptitude) and lack of forethought/foresight. 

[kimamey]

On 9/19/2023 at 10:50 AM, Dmaxdan said:

From the original article...

 

This ambitious tax reform agenda needs to be more than just a headline. It should be a meticulously crafted policy that serves its constituents — both the haves and the have-nots — without sacrificing economic stability. As it stands, the proposed taxation on incoming funds is a well-intended but half-baked plan, a ship sailing into murky waters without a compass.

 

This just sums up the whole scheme in a nutshell.

I suspect this is the timeline.

Someone is waiting whilst their S Class is being serviced.

They're thinking, 'I haven't made any announcements lately. I'm not getting noticed.'

They write down 'Tax incoming funds?'

Someone says, "Your vehicle is ready sir."

A policy is born

[Tom H]

The fall of the Baht has begun.

 

The all time Gold high in Thailand proves it whereby the Gold price all time high in USD is over 100 USD away:).

 

Got it?

 

Once the US exchange rate is by 42 your tax for 1 M Baht with 20% is equall.

 

Amazing how such a paper from the Financial Department damages a whole country.

 

Any experts visible?

[jonny on the spot]

57 minutes ago, kimamey said:

I suspect this is the timeline.

Someone is waiting whilst their S Class is being serviced.

They're thinking, 'I haven't made any announcements lately. I'm not getting noticed.'

They write down 'Tax incoming funds?'

Someone says, "Your vehicle is ready sir."

A policy is born

Thought of monday, law on wednesday and in the bin on friday.

[mosan]

7 hours ago, BenStark said:

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

You get nothing until you decide to convert some of those USD to Baht.  But then, you probably knew that already. The ignorant are the only ones that don't know the real story... 

[Skeptic7]

...the policy appears to have three specific targets: residents trading in foreign stock markets through foreign brokerages, cryptocurrency traders, and Thais who have been exploiting a loophole that allowed them to bring. foreign earnings into the country tax-free after keeping it in an offshore account for more than a calendar year.

[FruitPudding]

On 9/19/2023 at 10:47 AM, JBChiangRai said:

 

There is currently a loophole where funds earned overseas (eg tax free) can be brought in 1st January of the following year, still tax free.

 

This clause has been exploited by Thailand's rich and savvy digital nomads.  Thailand's rich are even sending money overseas from their companies as a deductible expense and then returning it to themselves personally tax free, all perfectly legal.

 

So, we can still use this loophole?

 

Or are they finally tying that knot?

Edited September 20, 2023 by FruitPudding

[FruitPudding]

15 minutes ago, Skeptic7 said:

...the policy appears to have three specific targets: residents trading in foreign stock markets through foreign brokerages, cryptocurrency traders, and Thais who have been exploiting a loophole that allowed them to bring. foreign earnings into the country tax-free after keeping it in an offshore account for more than a calendar year.

So, we can't continue to do this?

 

Are they just going to tax all deposits regardless?

[MartinBangkok]

On 9/20/2023 at 7:47 AM, spidermike007 said:

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. 

Check the reporting requirements of convicted criminals in your home country..

[spidermike007]

16 hours ago, MartinBangkok said:

Check the reporting requirements of convicted criminals in your home country..

Very stringent. In the US, if you are convicted of a sex crime, your life is essentially over. Best to leave the country at that point, if you can. 

[xtrnuno41]

On 9/20/2023 at 3:18 PM, FruitPudding said:

So, we can't continue to do this?

 

Are they just going to tax all deposits regardless?

Nope, if im correct. If you read what they are planning, they tax all income of funds from abroad in Thailand. Thai elite evade tax income by having offshore accounts and they want to end that, but in the same time all other citizens are at the same level.

Then banks should have a part (if not already working) in this and have to reveal all transactions from abroad to government. As you first make a model and test it and then it becomes final.

Or banks even have software, where automatically the tax will be send to revenue department?

 

If they call it "wealth tax" then maybe also pensions are charged, despite taxed already in homeland?!

It will be completely separated is my guess. For instance people of "my" country cant do tax handling in Thailand anymore(or still in negotiation). Thailand made an agreement, homeland takes care and that is already bad.

But with this, then all farangs have again to deal with revenue department Thailand? All back in Thai system with tax id's? You tell me, no clue at all.

They say, no tourists will be taxed. But it is money from abroad, if you use ATM.

So they make a special code for tourist, depending on your visum? Some AI has to check that? 

 

I woudlnt be surprised if they had some guidelines from other, western countries.

Global it looks like countries are closing, the global system wants you to stay where you are and all because of the money. Changes in visa, changes in money handling. And all for the real rich ones. 

[metisdead]

Some posts in violation of our Community Standards have been removed.

[Lorry]

9 hours ago, xtrnuno41 said:

Global it looks like countries are closing, the global system wants you to stay where you are and all because of the money. Changes in visa, changes in money handling. And all for the real rich ones

True, but not new. 

 

[Puccini]

On 9/20/2023 at 3:29 AM, JBChiangRai said:

...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...

I don't know whom you mean with "they", but this is definitely not what the Revenue Department Order No. 161/2566 issued on 15 September 2023, about which several topics are currently running on this forum, says.

 

For a start, the Order says that it does not apply to foreign income earned in a country with which Thailand has a Double Taxation Agreement  (DTA). In this case, the DTA spells out which of the two contracting countries assesses tax on what income. If one country fails to collect the tax on some income earned and assessable in that country, the other country has no right to to add that foreign income to the assessable income in its own country. 

 

Then there are the tax residents in Thailand who earn foreign income in countries with which Thailand has no DTA. In this case, each  country can make its own laws and regulations about the assessment and tax collection as it pleases, without regard to how the other country treats this income for tax purposes.

 

These new guidelines regarding the treatment in Thailand of income earned in foreign countries do not change th current law, the Revenue Code. They merely clarify the correct implementation of the relevant section of the law, which perhaps has not always been applied correctly in the past.

[rabas]

On 9/20/2023 at 8:39 AM, Neeranam said:

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

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

No, this is for anyone who is a tax resident of Thailand, always was.

 

I have personally used this tax loophole, at the suggestion of the Revenue Department, when I sent collections overseas for sale. In the future I will not be able to use it.

 

There are in fact no new tax laws or taxation. Only the removal of a timing loophole, to wit, legitimately taxable overseas income is no longer exempt by waiting to the next calendar year after it is earned, if and when it is brought into Thailand. Anyway, there are many double taxation treaties.

 

Here is a copy of the Thai Tax code wrt Thailand assessable Income and Income Tax

https://www.thailandlawonline.com/revenue-code/income-tax-law-in-the-revenue-code#ii

 

[Neeranam]

2 hours ago, rabas said:

No, this is for anyone who is a tax resident of Thailand, always was.

 

I have personally used this tax loophole, at the suggestion of the Revenue Department, when I sent collections overseas for sale. In the future I will not be able to use it.

 

There are in fact no new tax laws or taxation. Only the removal of a timing loophole, to wit, legitimately taxable overseas income is no longer exempt by waiting to the next calendar year after it is earned, if and when it is brought into Thailand. Anyway, there are many double taxation treaties.

 

Here is a copy of the Thai Tax code wrt Thailand assessable Income and Income Tax

https://www.thailandlawonline.com/revenue-code/income-tax-law-in-the-revenue-code#ii

 

Thanks, I think I need an accountant! 

[JBChiangRai]

6 hours ago, Puccini said:

I don't know whom you mean with "they", but this is definitely not what the Revenue Department Order No. 161/2566 issued on 15 September 2023, about which several topics are currently running on this forum, says.

 

For a start, the Order says that it does not apply to foreign income earned in a country with which Thailand has a Double Taxation Agreement  (DTA). In this case, the DTA spells out which of the two contracting countries assesses tax on what income. If one country fails to collect the tax on some income earned and assessable in that country, the other country has no right to to add that foreign income to the assessable income in its own country. 

 

Then there are the tax residents in Thailand who earn foreign income in countries with which Thailand has no DTA. In this case, each  country can make its own laws and regulations about the assessment and tax collection as it pleases, without regard to how the other country treats this income for tax purposes.

 

These new guidelines regarding the treatment in Thailand of income earned in foreign countries do not change th current law, the Revenue Code. They merely clarify the correct implementation of the relevant section of the law, which perhaps has not always been applied correctly in the past.

I think there will be a clarification.  The issue is this deferred transfer of earnings from a previous year.  They won't be able to investigate every transfer, but they want the right to ask "Explain that you paid tax on this inbound transfer somewhere".  As usual they mess up the message and it wouldn't surprise me, the law too.

[jaideedave]

On 9/20/2023 at 8:02 PM, Skeptic7 said:

...the policy appears to have three specific targets: residents trading in foreign stock markets through foreign brokerages, cryptocurrency traders, and Thais who have been exploiting a loophole that allowed them to bring. foreign earnings into the country tax-free after keeping it in an offshore account for more than a calendar year.

S7..Your is one of the only responses that makes sense. I'm thinking the bar stool warmers aren't their primary target not the berry pickers in Finland who probably seldom trade in foreign stock markets.