Thailand’s new tax twist: Overseas earners spending 180 days face income tax

[webfact]

 

Thailand’s tax policy, as declared by the Revenue Department, recently stipulated that an individual spending up to 180 days a year in the country and earning income from overseas will be liable for personal income tax.

 

This decision, governed by Section 48 of the Revenue Code, is expected to primarily influence three groups: individuals involved in foreign stock market trading via overseas brokerages, cryptocurrency traders, and Thais who have previously utilised a tax loophole to bring foreign income into the country tax-free after holding it in an offshore account for over a year.

 

A source from the Finance Ministry, preferring to remain unidentified, revealed…

“The 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 the money is earned.”

 

Previously, residents earning income from abroad were taxed only if the money was transferred into Thailand the same year it was earned.

 

by Alex Morgan

Photo courtesy of iStock.

 

Full story: The Thaiger 2023-09-19

 

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[Crossy]

 

Key to this for many is whether pensions are to be classed as "earned income".

 

 

[Jingthing]

1 minute ago, Crossy said:

 

Key to this for many is whether pensions are to be classed as "earned income".

 

 

Also withdrawals from retirement accounts (such as IRA) which in the US are classed as taxable income.

[JBChiangRai]

46 minutes ago, webfact said:

Thais who have previously utilised a tax loophole to bring foreign income into the country tax-free after holding it in an offshore account for over a year.

 

 

Actually, it can be as short as 24 hours.

 

Money earned on 31/12 can be remitted to Thailand the following day tax-free.  It has to earned in a previous tax year.

[SooKee]

How many more topics does this story need? ????

[daveAustin]

I’ll pay tax if you give me residency and allow me to vote you out!

[VocalNeal]

That'll teach all the clever visa/extension system gamers who post on here, We are not the only ones reading posts on here????

[Humpy]

Must remember to tell anyone thinking of retiring here to think again. 

[retarius]

I believe Thailand has a tax treaty with the US that prevents double taxation. I receive tax credits in the US for all interest income earned here in Thailand. The money is withheld at source at a rate of 15%, but my marginal rate in the US is much higher than that, so I wind up paying 15% to Thailand and say 21% to the IRS. With FACTA it is difficult to cheat.

 

I man I know, claimed to have gotten a rebate from the local Thai tax office on all his withheld taxes. He seemed legit and encouraged me to do the same, but I am lazy with bureaucratic things, so I never checked it out. 

[kwilco]

I guess if you stay in a country and work or have income it is only fair you contribute to the countries up keep like everyone else here.

[kwilco]

1 hour ago, Crossy said:

 

Key to this for many is whether pensions are to be classed as "earned income".

 

 

It would also depend on what tax bracket you are in - the first portion of your income is tax free then it's the "average" amount onlt=y over a certain sum is taxed at the higher rate.

I can't remember what the earning "gateways" were off hnd but wen I earned a miilion baht only a small portion of that was subject to the higher tax rate.

[Ralf001]

 

[James Roderick]

From my quick reading of the new tax arrangements, it looks like money bought-in from overseas to support a retirement visa - either the monthly transfer and/or the lump sum - will now be subject to local tax - and be treated as assessable income here in Thailand.

 

 

[Enoon]

Rather difficult to make any assumptions based on the "quality" of this article, ie:

 

"recently stipulated that an individual spending up to 180 days a year in the country and earning income from overseas will be liable for personal income tax"

 

10 days vacation in Thailand and you're liable to pay income tax?

 

I suspect the issue is more about Thai people that anyone else.

 

 

[stat]

17 minutes ago, kwilco said:

I guess if you stay in a country and work or have income it is only fair you contribute to the countries up keep like everyone else here.

And here I am thinking I spend a lot of money on vat, visa fees, import duties etc but apparently that does not count in your book... Apparenty you are not aware than 90% of thai people do not pay any tax at all.

[Sheryl]

27 minutes ago, retarius said:

I believe Thailand has a tax treaty with the US that prevents double taxation. I receive tax credits in the US for all interest income earned here in Thailand. The money is withheld at source at a rate of 15%, but my marginal rate in the US is much higher than that, so I wind up paying 15% to Thailand and say 21% to the IRS. With FACTA it is difficult to cheat.

 

I man I know, claimed to have gotten a rebate from the local Thai tax office on all his withheld taxes. He seemed legit and encouraged me to do the same, but I am lazy with bureaucratic things, so I never checked it out. 

 

Yes, there is a tax treaty between US and Thailand and also 60 other countries.

 

This has been extensively discussed in this thread:

 

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

 

The treaty not only protects against double taxation on earned income but also explicitly states that Social Security  and similar retirement income can only be taxed by the US.

 

 

 

[Sheryl]

12 minutes ago, James Roderick said:

From my quick reading of the new tax arrangements, it looks like money bought-in from overseas to support a retirement visa - either the monthly transfer and/or the lump sum - will now be subject to local tax - and be treated as assessable income here in Thailand.

 

 

In most cases probably not.

 

61 countries have Tax Treaties with Thailand wehich (1) protect against double taxation and (2) in many  cases   explicitly exempt pensions and the like from being taxed by Thailand.

 

That aside, I doubt that pension payments and the like would be considered "income". It is pretty clear that the law is aimed at actual income, not pensions, annuities or for that matter savings from many years ago that were already taxed at time earned.

 

There are some retirees here who are bringing in money from things like property rentals, interest  on investments etc which would be classed as income. In that circumstance they might have to pay tax on it in either Thailand or their home country, but not (assuming a tax treaty) both.

 

Please see lengthy discussions in this thread
https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

[FritsSikkink]

13 minutes ago, stat said:

And here I am thinking I spend a lot of money on vat, visa fees, import duties etc but apparently that does not count in your book... Apparenty you are not aware than 90% of thai people do not pay any tax at all.

They pay VAT like you. There is a tax exempt value, if you earn very little, you don't have to pay income tax too. 

[Moonlover]

6 minutes ago, Sheryl said:

 

Yes, there is a tax treaty between US and Thailand and also 60 other countries.

 

This has been extensively discussed in this thread:

 

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

 

The treaty not only protects against double taxation on earned income but also explicitly states that Social Security  and similar retirement income can only be taxed by the US.

 

 

 

As an adjunct to your comment Sheryl, here's a website that address's this issue of Double Taxation Agreements.

 

https://thailand.acclime.com/guides/double-taxation/

[Raindancer]

22 minutes ago, James Roderick said:

From my quick reading of the new tax arrangements, it looks like money bought-in from overseas to support a retirement visa - either the monthly transfer and/or the lump sum - will now be subject to local tax - and be treated as assessable income here in Thailand.

 

 

Please re read the original article and particularly section 48.   I think people are over thinking this.  There is a DTA between Thailand and 60 other countries. 

 

AFAIK and agree with, pensions that have already been taxed in your home country, cannot be double taxed in a country that has a DTA with Thailand.

[Sheryl]

Please continue the discussion here

 

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

 

So that we can keep all comments on this important matter in one place.