Calls for clarification of new Tax regime which appears to target expat foreign income sources

[webfact]

The announcement of a change to the tax code, with respect to taxation on the overseas income of foreigners who are resident in Thailand, is raising eyebrows and requires further clarification. Comments last week by Prime Minister Srettha Thavisin that the measure addressed chronic inequality will not assuage fears that a move is afoot to increase the tax liability of foreigners living in Thailand, raising questions about passive and possibly retirement income in the future.

The tax change which has already been defended by Prime Minister Srettha Thavisin as a move against income inequality, is coming with Thailand in talks with economic powers such as the European Union to put in place new trade and investment pacts.

 

It comes after the previous government had launched long-term visa regimes highlighting the zero tax imposed by the Thai government on income not generated in Thailand. This new move is already causing anxiety among foreigners living in the kingdom with passive income from abroad as well as retirees who are still thought to be exempt from tax. However, for the new tax regime to generate extra revenue to fund government stimulus efforts, some foreigners must end up paying more.

There are growing concerns among foreigners about moves by the new Thai government to widen the country’s tax base. They fear this could lead to all incomes earned by foreign residents in the kingdom being subject to tax. It follows an announcement by the Revenue Department in mid-September which is leading to calls for greater clarification and indeed for the government to make it clear that there will be no attempt to impose tax on retirement or pension income from abroad.

calls-for-clarification-of-new-regime-income-tax-foreigners-overseas-income

On September 15th, the Revenue Department in Thailand issued a clarification stating that from the 1st of January 2024, it planned to tax foreign income on all individuals in the kingdom who have been resident in the country for over 180 days.

 

by Joseph O' Connor

 

Full story: Thai Examiner 2023-09-26

 

- Cigna offers a range of visa-compliant plans that meet the minimum requirement of medical treatment, including COVID-19, up to THB 3m. For more information on all expat health insurance plans click here.

 

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[smedly]

it was stated that citizens of countries with a tax agreement would not be not be involved, my income (UK) is already taxed in the UK, my earnings over the years was already taxed, can't speak for everyone of course - some might be laundering money here which would never hit a bank anyway - good luck taxing that

 

perhaps concentrating on earners in Thailand Thai and foreign who have incomes here would be a better approach

[Captain Monday]

I do not care who is in the govt at this Point I would prefer Thailand get 100 percent of my income taxes instead of the US.

 

The failed state that confiscates a huge chunk of my wages automatically at the source, wasting it on who knows what.

[Lemsta69]

OK Thailand, see ya! For half the year anyway.

[StayinThailand2much]

31 minutes ago, smedly said:

perhaps concentrating on earners in Thailand Thai and foreign who have incomes here would be a better approach

Yes, if the prime minister is worried about "chronic inequality", he could do a lot against it addressing such inequality in country, rather than trying to screw a few expat pensioners...

[StayinThailand2much]

12 minutes ago, Captain Monday said:

I do not care who is in the govt at this Point I would prefer Thailand get 100 percent of my tax

instead of the US.

 

The failed state that confiscates a huge chunk of my wages automatically at the source, wasting it on who knows what

Not to worry, Thailand is aiming for some of what's left of your, already taxed, income...

[Captain Monday]

30 minutes ago, StayinThailand2much said:

Not to worry, Thailand is aiming for some of what's left of your, already taxed, income...

My working experience is With a tax equalization treaty in effect, There is nothing such as double taxation. If Thailand figures out a way otherwise, I am done. Plan B put in effect during covid. 

I am happy to pay any differences owed but I will not be double taxed.

 

Anyway　In two years The Monday family will be completely legitimate.

 

Ensconced in third country, with permanent residence.

[charmonman]

It would be great to hear an announcement from a Thai government that doesn’t require later ‘clarification’.

[FarangJon]

And Thaksin is already pulling the strings in the background. It was no different before, it has always made life difficult for foreigners. Dirty chinese gangster. 

[hotchilli]

1 hour ago, StayinThailand2much said:

Yes, if the prime minister is worried about "chronic inequality", he could do a lot against it addressing such inequality in country, rather than trying to screw a few expat pensioners...

Totally agree.... up the tax for the elites and raise the VAT by a couple of %

[Tom H]

1 hour ago, StayinThailand2much said:

Yes, if the prime minister is worried about "chronic inequality", he could do a lot against it addressing such inequality in country, rather than trying to screw a few expat pensioners...

The article is wrong written.

Of course he looks for Thais in first place because thats the big money…

[Dogmatix]

1 hour ago, StayinThailand2much said:

Yes, if the prime minister is worried about "chronic inequality", he could do a lot against it addressing such inequality in country, rather than trying to screw a few expat pensioners...

His way of addressing inequality is to aid and abet tax avoidance by billionaire families that sell him land. The hundreds of millions in tax avoided in that one deal is more than than the tax he will collect from all the exist pensioners.

[Lee4Life]

1 hour ago, Captain Monday said:

I do not care who is in the govt at this Point I would prefer Thailand get 100 percent of my income taxes instead of the US.

 

The failed state that confiscates a huge chunk of my wages automatically at the source, wasting it on who knows what.

If Thailand chooses to tax your income then the U.S. can't?

[Dogmatix]

As Baker McKenzie pointed out, this a major tax change that should be done through amending the Revenue Code in parliament which would give time for all to share views but Srettha might be defeated. Just reinterpreting an existing law that has stood for decades is a a dishonest sleight of hand tactic.
https://insightplus.bakermckenzie.com/bm/tax/thailand-offshore-sourced-income-brought-into-thailand-from-1-january-2024-onward-will-be-subject-to-thai-personal-income-tax/

[Dogmatix]

Just now, Lee4Life said:

If Thailand chooses to tax your income then the U.S. can't?

Under most tax treaties TH has a right to tax pensions other than government service pensions and US social security, Even the UK state pension is not protected. TH can demand the tax and tell you you claim a refund of tax paid to your home country. The UK’s HMRC has s very complicated form for this. 

[pluto_manibo]

The article is a bit misleading and xenophobic. The law is not only aimed at foreigners, all the Thai people who work abroad, invest abroad and want to remit funds, trying to survive in this difficult economic climate are the main targets. Unfortunately, foreigners are caught within the net. The majority of Thai people are not concerned about this law, their income is domestic, falls below the "heavy Tax " brackets or as most is not declared(numbers hover around 10% of population paying taxes). The foreign elements on fixed incomes/pensions seem to feel sheltered by the DTA(Double Tax Agreement) they might have and most fall to under the category of the heavier tax brackets. However, what the higher ups have not considered is that there is a whole economy reliant on these foreign remitted incomes which have been repatriated under the full structure of the law(income remitted not within the same year earned is not taxable, not a loophole!).

To impose such drastic changes, while the world is still suffering from important inflation, market volatility, declining investment possibilities, repercussions of the "Epidemic", loss of confidence in the economic, political climate and societal views; will not inspire confidence in the future. Neither will it induce spending! Some might fall in the ranks, complain and just accept it. However, many will look for greener pastures, value for money, more stable environments and better investments abroad. It will destroy families, communities which have developed an ecosystem from these remitted incomes, which outweighs by far any of the perceived benefits of future taxation of these foreign injected funds.

 

[Thailand J]

For US retirees, the tax treaty exempts SS and pension incomes but it does not  help with capital gain (CG) and dividend incomes.

 

Based on my limited knowledge I made a table below, I am sure it's full of mistakes and it is over simplified, but the idea is that if you have CG and dividends from US and if Thai gov decided to tax them, you can only deduct taxes paid in US.

 

I am going to get insurance and apply for 10 yr LTR if I have to pay income tax  here. I have met other requirements.

[Captain Monday]

16 minutes ago, Lee4Life said:

If Thailand chooses to tax your income then the U.S. can't?

I’m dreaming. There is no way that is possible while working for a US entity, 

Similarly if I since I have to pay taxes to Uncle Sam no matter what under my current circumstances   be nice if I could select where the money goes?

 

Zero for waepons and wars, 100 percent public housing, medical care, income support, and DEI programs.

[Thailand J]

2 hours ago, Captain Monday said:

I do not care who is in the govt at this Point I would prefer Thailand get 100 percent of my income taxes instead of the US.

 

The failed state that confiscates a huge chunk of my wages automatically at the source, wasting it on who knows what.

I cannot imagine the world without USA.

[BE88]

Definitely leaving Thailand is my option as a classified Thai rich taxpayer, all my remittances will no longer enter Thailand from next month and consequently my bank accounts in Thailand will go to zero.

[ukrules]

23 minutes ago, Dogmatix said:

As Baker McKenzie pointed out, this a major tax change that should be done through amending the Revenue Code in parliament which would give time for all to share views but Srettha might be defeated. Just reinterpreting an existing law that has stood for decades is a a dishonest sleight of hand tactic.
https://insightplus.bakermckenzie.com/bm/tax/thailand-offshore-sourced-income-brought-into-thailand-from-1-january-2024-onward-will-be-subject-to-thai-personal-income-tax/

Agreed, this order is nonsense. They should not be allowed to change major laws on a whim by issuing a memo.

 

[alanrchase]

16 minutes ago, Thailand J said:

For US retirees, the tax treaty exempts SS and pension incomes but it does not  help with capital gain (CG) and dividends incomes.

 

Based on my limited knowledge I made a table below, I am sure it's full of mistakes and it is over simplified, but the idea is that if you have CG and dividends from US and if Thai gov decided to tax them, you can only deduct taxes paid in US.

 

I am going to get insurance and apply for 10 yr LTR if I have to pay income tax  here. I have met other requirements.

If the money is from capital gains and dividends theoretically you would pay Thai capital gains and dividend tax on it not income tax.

Currently 15% and 10% I believe. A tax form would have to be filled out at some stage declaring where the money came from, it would be fraudulent to state it was income if it came from CG or dividends.

[4MyEgo]

As a foreign resident, I don't have to lodge a tax return in my old country, so good luck getting anything out of me ????

 

If ever queried, well, it's savings, see, look at my banks account, not bank accounts ????

 

[Tom H]

Foreigners in Thailand control 3.52% of bank funds.

That means round about 600 Billion Baht.

 

If they would have taxed this money they could build a bridge from Chumphon to Rayong and to Koh Samui on top of it.

 

Only a very small amount is related to retirement transfers. No statistics because too little.). 

They focus on Thais actually if you understand the one year income parking abroad clause which will fall.

 

Rich people have companies and other chanels.

 

Well, I see a boom in the 800k deposit for the visa and a cash inflow by planes instead of bank transfers.

 

Thai Bank accounts abroad plus Visa payments for bigger bills will be an option.

Paypal prohibited. Wise can follow but HSBC? I have doubts.

 

Many possibilities as it is always.

 

Transfers to our Thai ladies?

Well, then the banks might be the ones which automatically deduct the tax as a fee. Wont work in my opinion.

 

 No transfer to Thailand to own account—-> no tax? no implication?

 

Thats the questions in real life.

 

In case you have assets abroad and in your last will you benifit a Thai wife…

 

Thats the big money for Thailand.

No tax in i.e. Germany in case of the 10y abroad clause (not for real estate in Germany) but in the future taxed in Thailand when she wants the money:).

35% loss visible to me.

 

Well, if you have funds and insist to live in T. transfer in 2023:).

 

 

 

 

 

 

 

 

 

[findlay13]

Calls for clarification of new Tax regime [Good luck with that]

[Thailand J]

11 minutes ago, alanrchase said:

If the money is from capital gains and dividends theoretically you would pay Thai capital gains and dividend tax on it not income tax.

Currently 15% and 10% I believe. A tax form would have to be filled out at some stage declaring where the money came from, it would be fraudulent to state it was income if it came from CG or dividends.

May be you are referring to Capital gains and dividends from SET listed companies.

I don't know much about Thai tax rates at this point, I hope you are right.

[Nabbiex]

Out of curiosity,

if we, expats, may be taxed, then will we be entitled to receive any Thai benefits such as Thai state pension, Thai personal tax income, family benefits, disability allowance, and so forth?

[jacko45k]

Inclined to say shhhh. They might just forget all about the idea if we don't keep banging on about it. 

[Thailand J]

5 minutes ago, jacko45k said:

Inclined to say shhhh. They might just forget all about the idea if we don't keep banging on about it. 

shhhh? this is going to be another long thread. ????

[Thailand J]

11 minutes ago, Nabbiex said:

Out of curiosity,

if we, expats, may be taxed, then will we be entitled to receive any Thai benefits such as Thai state pension, Thai personal tax income, family benefits, disability allowance, and so forth?

at least stop the double pricing at state parks.