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

[Marco100]

What about the loophole for Citizens owning BVI's and generating savings after a year ? Next year with the AEOI CRS the Beneficiary of the BVI will be reported to his country of residence by the bank ....

[NanLaew]

1 hour ago, Puccini said:

14 hours ago, Schuimpge said:

To end all confusion, the correct interpretation is: "The law is aimed at all Thai tax-residents with overseas funds/income/earnings"...

Not quite.

 

The Revenue Department Order being discussed here is not a law.

 

The order is guideline for Revenue Department officials.

Wasn't it also published in the Royal Gazette? That's usually as official as anything gets around here.

[jerrymahoney]

12 hours ago, Billpro785 said:

I highly suggest all US expats go to the IRS website and read the agreement. It is written in plain English and will answer all your questions. 

I posted this elsewhere but this, in part, is what is referenced above:

https://www.irs.gov/pub/irs-trty/thailand.pdf

(click on jpg to enlarge)

 

 

[flexomike]

11 hours ago, Darren8888 said:

I guess you are mathematically challenge ????, look at the Op's original post. Yes, you would be paying roughly USD 17K in Thailand tax for a small income USD 80k/year.  The key takeaway is Thailand's tax is much more expensive compared to US (with a few exceptions for NYC or Cali residents). 

you forgot to factor in all of the deductions allowed, yes I realize that the tax rate gets higher quicker, but nothing was factored in the post saying you would have to pay $17,000 dollars tax

[BTB1977]

Many thai families will be left without their financial supporters as we all leave this land behind. Neighboring countries looking much better year after year. 

[Moonlover]

8 hours ago, NanLaew said:

And you know what retirement visa holders and yearly extension holders have in common?

 

Living and breathing.

 

Whether it is obtained from an embassy or consulate outside Thailand or from an Immigration Office inside Thailand, the immigration entitlement of a person living in Thailand has no bearing on tax their liability. None whatsoever.

Yes, I get your point. We on this forum often get the terms confused don't we. However I raise the point because the author of the article in the Thai Enquirer chose to draw a distinction which I'm sure is causing confusion amongst some folks:

 

'Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand'.

 

'It is unclear at this point how this will apply to foreigners living in Thailand on a retirement visa'.

 

There would seem to a contradiction there.

[Derek B]

On 9/26/2023 at 2:58 AM, webfact said:

The tax change which has already been defended by Prime Minister Srettha Thavisin as a move against income inequality

So the plan is to achieve income equality is by making foreigners' disposable income less...............well the average Thai wife or partner has beaten him to it long ago. I cannot see them wanting to loose out to the Thai tax man and still not receive any state benefits.

[hwas]

Greetings from the LTR Visa Unit.

 

We want to clarify that the tax exemption for overseas income will commence from the month you receive the LTR Visa onward, which typically falls within the next tax year. 

 

Any income earned in the period prior to holding the LTR Visa will not be considered for tax exemption.

 

 

[Schuimpge]

33 minutes ago, hwas said:

Greetings from the LTR Visa Unit.

 

We want to clarify that the tax exemption for overseas income will commence from the month you receive the LTR Visa onward, which typically falls within the next tax year. 

 

Any income earned in the period prior to holding the LTR Visa will not be considered for tax exemption.

 

 

Thanks for that info. Very useful. 

Question: Let's say I apply and be granted an LTR Visa in 2024. I have my savings/investments from working, it's outside Thailand. I put my savings in Fixed Deposits and they start generating interest.

 

Would the generated interest then be considered Tax Exempt?

[JimboB4]

23 hours ago, freeworld said:

Not true, the visa is with immigration, nothing to do with tax residence.

 

Tax residence have their own tax residency rules, they have a 180 day rule in Thailand, less in other countries. If you are over 180 days in a tax year you are tax resident in thailand and subject to Thai tax laws for income accrued in or remitted to Thailand, according to the tax department.

Not true applies to residents as it says. PR not non-immigrant. I called my bank and confirmed. 

[Ben Zioner]

5 hours ago, BTB1977 said:

Many thai families will be left without their financial supporters as we all leave this land behind. Neighboring countries looking much better year after year. 

Well I'd expect you to take your family with, or at least support them from wherever you'd go?

[freeworld]

13 hours ago, Marco100 said:

What about the loophole for Citizens owning BVI's and generating savings after a year ? Next year with the AEOI CRS the Beneficiary of the BVI will be reported to his country of residence by the bank ....

What is BVI? Off shore not paying tax in that jurisdiction? If you choose to be and are tax resident in Thailand according to tax residency and will be remitting income then it will be taxable according to Thai tax law and the DTA with your home country.

[freeworld]

2 hours ago, JimboB4 said:

Not true applies to residents as it says. PR not non-immigrant. I called my bank and confirmed. 

Try the tax dept and their rules on tax residency and remitting income. A visa and immigration status has nothing to do with tax residency, the bank seems to not know what tax residency means.

[freeworld]

4 hours ago, Schuimpge said:

Thanks for that info. Very useful. 

Question: Let's say I apply and be granted an LTR Visa in 2024. I have my savings/investments from working, it's outside Thailand. I put my savings in Fixed Deposits and they start generating interest.

 

Would the generated interest then be considered Tax Exempt?

If you bring that passive income dividends or interest into Thailand and it has not been taxed abroad then it will be taxable according to Thai tax law but as it is income if it is below the marginal tax rate and minus the deductions it may not be taxable.

[redwood1]

2 minutes ago, freeworld said:

If you bring that passive income dividends or interest into Thailand and it has not been taxed abroad then it will be taxable according to Thai tax law but as it is income if it is below the marginal tax rate and minus the deductions it may not be taxable.

 

Generally earnings/income from employment for non resident are not taxable but passive (interest, dividends and capital gains) income is excluded from that.

What ever......Unless they have a investigative team of tax experts to check every one out.....This whole train wreck is DOA...

 

Save face and kill the beast...

[freeworld]

6 hours ago, Moonlover said:

Yes, I get your point. We on this forum often get the terms confused don't we. However I raise the point because the author of the article in the Thai Enquirer chose to draw a distinction which I'm sure is causing confusion amongst some folks:

 

'Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand'.

 

'It is unclear at this point how this will apply to foreigners living in Thailand on a retirement visa'.

 

There would seem to a contradiction there.

Everyone residing in Thailand over the tax residency period should be obliged to submit a tax return, they just need to implement a law if it does not yet exist.

[freeworld]

On 9/26/2023 at 3:34 PM, StayinThailand2much said:

Still not clear, whether:

 

1. They intend to tax a second time already (in other countries) taxed income, and

2. What they define as 'income' (e.g. will they just slap a tax on all incoming funds, or not)?

3. If 2.) how to claim back such a tax if one doesn't have income in Thailand.

1. No, if it is taxed in another country then the DTA will cover that.

2. Income is salary, interest, dividends and capital gains (applies for most people)

3. If you have no untaxed income arising in or remitted to Thailand you will have no tax to pay.

[SuperSaiyan]

On 9/26/2023 at 12:07 AM, FarangJon said:

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. 

Actually Thaksin's policies were all lenient towards foreigners. Anyone remember overstaying for years and then just paying 20k and return?

[redwood1]

17 minutes ago, freeworld said:

Everyone residing in Thailand over the tax residency period should be obliged to submit a tax return, they just need to implement a law if it does not yet exist.

Or better yet scrap the whole unworkable and stupid idea..

[SuperSaiyan]

14 hours ago, Marco100 said:

What about the loophole for Citizens owning BVI's and generating savings after a year ? Next year with the AEOI CRS the Beneficiary of the BVI will be reported to his country of residence by the bank ....

 

Please show me government proof of 1 years rule.

 

Also, just keep your yearly 0 tax filing slip you get from your local tax authority. ????

[redwood1]

8 minutes ago, freeworld said:

1. No, if it is taxed in another country then the DTA will cover that.

2. Income is salary, interest, dividends and capital gains (applies for most people)

3. If you have no untaxed income arising in or remitted to Thailand you will have no tax to pay.

Unless your very rich then you will never pay taxes....lol.... Only the little people pay taxes...

[metisdead]

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

[freeworld]

17 minutes ago, redwood1 said:

Unless your very rich then you will never pay taxes....lol.... Only the little people pay taxes...

Very rich people also pay tax. It's a fallacy that they do not.

 

Of course they could pay less tax if they get professional advice in the lawful use of the rules in force, everyone could do the same.

[SpaceKadet]

How do the Tax Resident rules work? If I, say after 170 days in Thailand leave abroad and come back a month later, am I no longer tax resident? 

[freeworld]

16 minutes ago, SpaceKadet said:

How do the Tax Resident rules work? If I, say after 170 days in Thailand leave abroad and come back a month later, am I no longer tax resident? 

No, if you come back and say, spend 10 days more, so 170+10 in the same tax year, you will be considered tax resident.

[Felt 35]

1 hour ago, freeworld said:

If you bring that passive income dividends or interest into Thailand and it has not been taxed abroad then it will be taxable according to Thai tax law but as it is income if it is below the marginal tax rate and minus the deductions it may not be taxable.

What if you are a tax resident already and on a DTA. Pay tax on pension here but keep savings which generate interest abroad! The interest is following the DTA not taxed. However, it's also never brought to Thailand. Will Thailand still have the right to demand to tax the interest?

Felt

[SpaceKadet]

1 minute ago, freeworld said:

No, if you come back and say, spend 10 days more, so 170+10 in the same tax year you will be considered tax resident.

Ok, understand, thanks. So it's minimum 180 days in a tax year.

[freeworld]

4 minutes ago, Felt 35 said:

What if you are a tax resident already and on a DTA. Pay tax on pension but keep savings which generate interest abroad! The interest is following the DTA not taxed. However, it's also never brought to Thailand. Will Thailand still have the right to demand to tax the interest?

Felt

No, if you do not bring the interest to Thailand it will not be taxed. Any way if that was the only income which you earned it would probably fall far below the tax threshold of 150000 baht before one starts to pay tax on income.

[Felt 35]

Just now, freeworld said:

No, if you do not bring the interest to Thailand it will not be taxed.

????

[Mr Meeseeks]

50 minutes ago, SuperSaiyan said:

Actually Thaksin's policies were all lenient towards foreigners. Anyone remember overstaying for years and then just paying 20k and return?

Not true. Under Thaksin, visas became increasingly more difficult to obtain.

 

During Thaksin's time in office, they stopped the agents sending your passport out of the country for visas and stamps, raised the departure tax from 500 to 700thb, raised the extension fees from 500thb to 1,900thb and raised the overstay fee from 200thb per day to 500thb.

 

There were other initiatives that began in his first term of office as well, those are the ones I can distinctly remember.