Proposed foreign income tax could harm small retail investors, warns Jitta CEO

[webfact]

 

A call has been issued to the government to reconsider the proposed foreign income tax, which could significantly impact retail investors with overseas investments, according to Jitta Wealth Asset Management.

 

Trawut Luangsomboon, Jitta’s chief executive, voiced his concerns about the Revenue Department’s plan to include assessed income from abroad in the personal income tax calculations. He pointed out that the notion of overseas investors being wealthy is largely misconstrued.

 

He said, ” In fact, over the years small investors have increasingly turned overseas because they see an opportunity to obtain better returns than in the domestic market, or they want to diversify their portfolio to lower risks.”

He highlighted that modern online platforms enable retail investors to commence their overseas investments with a meagre few hundred or thousand baht.

 

Trawut warned, ” If the department collects tax on investments in foreign stocks, small investors would be affected more than wealthy investors.”

 

by Alex Morgan

Image by Nataliya Vaitkevich from Pexels

 

Full story: The Thaiger 2023-09-21

 

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[TheAppletons]

And the hits just keep on coming....fools.

[Felton Jarvis]

Thai government never thinks about consequences.  The mindset is almost god-like. Only the people will suffer and they don’t count.

[hotchilli]

5 hours ago, webfact said:

He pointed out that the notion of overseas investors being wealthy is largely misconstrued.

Tax them and watch them invest elsewhere.

[khunPer]

Having Thai tax office to control capital gain of foreign stocks owned by foreigners will be an almost mission impossible...

The worst problem for foreigners living in Thailand more than 180 days a year is that their long term savings – which often already might have been highly taxed by their home country – as these money now might be taxed again if transferred to Thailand to cover living costs or "invested" in a home...????

[chickenslegs]

4 minutes ago, khunPer said:

Having Thai tax office to control capital gain of foreign stocks owned by foreigners will be an almost mission impossible...

The worst problem for foreigners living in Thailand more than 180 days a year is that their long term savings – which often already might have been highly taxed by their home country – as these money now might be taxed again if transferred to Thailand to cover living costs or "invested" in a home...????

List of countries having Double Taxation Treaties" with Thailand,

https://www.rd.go.th/english/766.html

[zig]

30 minutes ago, chickenslegs said:

List of countries having Double Taxation Treaties" with Thailand,

https://www.rd.go.th/english/766.html

It might be nearly impossible to find out what should be taxed and what should not be and what the formula should be. The savings or investment accounts might have thousands of transactions over great many years. If you transfer some of it to Thailand and the government wants to tax it, how can you possibly prove that this amount comes from some particular period of time of your earnings abroad and that it was already taxed at some specific rate? 

[Jenkins9039]

Likely hurt the white economy, and wipe out the grey economy around tourism

[jcmj]

They just can’t help shooting themselves in the foot. The once Land of Smiles has become a country that only wants your money and doesn’t really care about the expat community anymore, only the “rich” Chinese and Indians. 

[ukrules]

I almost expect a collapse of the coalition due to this issue.

 

I guess it depends on whether the PM consulted his coalition partners before announcing this change to pay for the 10k Baht digital money scheme.

 

[wwest5829]

1 hour ago, chickenslegs said:

List of countries having Double Taxation Treaties" with Thailand,

https://www.rd.go.th/english/766.html

Thanks for posting. Should ease the minds of those who are inclined to "skittishness".

[Purdey]

Wonder if the tax idea came up because they didn't realized they'd have to pay for the 10,000 Baht per person giveaway? 

[teutonian]

Double taxation treaty means that taxes paid in a treaty country on the source income will be applied against potential tax owing on the assessment by Thai Revenue department.  
 

RD says they want to tax overseas “savings”.  Normally savings are already taxed, sometimes years earlier.  In terms of capital gains, family gifts or inheritance, taxes in other developed nations might be quite low or nil and then will be assessed as income in Thailand, receiving a full hit (approx 35 percent or more).
 

Also “tax resident” doesn’t always mean a minimum 180 days of physical presence.  Tax authorities have the final say. It could, for instance, be determined that one is a tax resident merely by having a Thai work permit or another sort of permanent physical presence, such as a condo or a retirement visa. 
 

hanging your hopes on double tax treaty is foolish. 

[Everyman]

1 hour ago, teutonian said:

Double taxation treaty means that taxes paid in a treaty country on the source income will be applied against potential tax owing on the assessment by Thai Revenue department.  
 

RD says they want to tax overseas “savings”.  Normally savings are already taxed, sometimes years earlier.  In terms of capital gains, family gifts or inheritance, taxes in other developed nations might be quite low or nil and then will be assessed as income in Thailand, receiving a full hit (approx 35 percent or more).
 

Also “tax resident” doesn’t always mean a minimum 180 days of physical presence.  Tax authorities have the final say. It could, for instance, be determined that one is a tax resident merely by having a Thai work permit or another sort of permanent physical presence, such as a condo or a retirement visa. 
 

hanging your hopes on double tax treaty is foolish. 

“…such as a condo or retirement visa.” Or a Thai bank account. 

 

People are very concerned about this because in order to actually implement it they would have to do things like instruct Thai banks to withhold a certain percent of all transfers from outside the kingdom for the revenue department. You would then have to file and show that you are not a Thai tax resident, or prove that you have already paid taxes on the money abroad (in a DTA country) at a rate equal to or higher than the assessed rate in Thailand. Even in that case there is still likely to be money owed, since capital gains taxes are likely to be lower than the income tax rates assessed by Thailand.  

 

So the two ways out of this are that the government backs off or it is implemented in some ineffective manner. Both scenarios are quite likely, especially the former, so there is plenty of hope that the system doesht end up as I described. 

[mania]

On 9/21/2023 at 2:53 AM, Everyman said:

do things like instruct Thai banks to withhold a certain percent of all transfers from outside the kingdom for the revenue department. You would then have to file and show that you are not a Thai tax resident, or prove that you have already paid taxes on the money abroad (in a DTA country) at a rate equal to or higher than the assessed rate in Thailand.

That is really the only way they could do it & they already do in Thai bank savings after interest reaches x amount per year

 

Claiming it back wasn't that hard but did involve getting a Thai Tax ID number. Once they see your a foreigner of course your sent a check but what a unnecessary hassle.

 

In any case if they pull this next deal off it is quite large & in some ways seems more like a sanction,

So if it goes forward my hope is countries all over the world do the exact same to all monies coming in from Thailand

The real rulers of Thailand would shut it down very quickly at that point

Edited September 22, 2023 by mania

[persimmon]

Whilst I don`t like this new tax idea , I can`t say I`m surprised . This idea that money transferred in is not taxed if it`s held back for 1 year looks like a huge loophole that the wealthy can use to avoid paying tax . It`s also a big incentive for the wealthy to avoid investment in Thailand and send their money abroad .

Now , with large numbers of Russians and Chinese coming in , all with lots of income from abroad , maybe the revenue dept. realised they could be missing out on a huge amount of tax due .