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

[Moonlover]

2 hours ago, jerrymahoney said:

Well for a simple analysis, if you are on an exension via marriage at 40,000 baht per month that is 480,000 baht per year which would put you in the 10% bracket.

 

So 4000 baht per month for taxes or $US 100+ per month even assuming  ALL of the 40K per month is taxable.

 

The problem for extension via retirement is that the 65K per month would likewise put you in the 20% bracket. OUCH. Hopefully at least Social Security would be exempt and you would only pay tax on the difference between your SocSec and the 65K which you could try to keep in the 5% bracket.

On the other hand:

 

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

 

Your over thinking this pal. Just relax and see what transpires, if anything.

 

https://www.thaienquirer.com/50744/thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

[Irrumator]

On 9/26/2023 at 6:54 AM, jacko45k said:

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

Very true.  Don't let's start any hares running.

[Irrumator]

I spoke to my wife about this and she said not to worry, Srettha will soon be gone.

It seems there are already plots to oust him because he is highly unpopular in the places and with the people that matter.

Knowing the lack of forethought and inability to estimate consequences, plus the constant volatility here, I would not be in the slightest bit surprised.

The sooner the better, IMHO.

 

 

 

[jerrymahoney]

 

 

21 minutes ago, Moonlover said:

On the other hand:

 

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

 

Your over thinking this pal. Just relax and see what transpires, if anything.

 

https://www.thaienquirer.com/50744/thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

I just put in a simple worst case scenario. But for me I am on a retirement extension and want to know, after my next extension whether, I should switch to marriage. No big deal.

[sirineou]

4 minutes ago, jerrymahoney said:

 

 

I just put in a simple worst case scenario. But for me I am on a retirement extension and want to know, after my next extension whether, I should switch to marriage. No big deal.

It all depends on the country you are from. You need to check the tax agreement your country has with Thailand.

If you are from the US (I think you are since you mentioned SSI) then it seems that you are in luck.The agreement states that income from SSI, private pensions and annuities can only be taxed at the country of origin. 

 

 

"ARTICLE 20:

Pensions and Social Security Payments 1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State. 2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State. 3. Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State. The term “annuities” as used in this paragraph means a stated sum paid periodically at stated times during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). 4. Alimony paid to a resident of a Contracting State shall be taxable only in that State. The term "alimony" as used in this paragraph means periodic payments made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support, which payments are taxable to the recipient under the laws of the State of which he is a resident. 5. Periodic payments, not dealt with in paragraph 4, for the support of a child made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support, paid by a resident of a Contracting State to a resident of the other Contracting State, shall be taxable only in the first-mentioned State. ARTICLE 21 Government Service "

ARTICLE 20 Pensions and Social Security Payments 1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State. 2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State. 3. Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State. The term “annuities” as used in this paragraph means a stated sum paid periodically at stated times during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). 4. Alimony paid to a resident of a Contracting State shall be taxable only in that State. The term "alimony" as used in this paragraph means periodic payments made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support, which payments are taxable to the recipient under the laws of the State of which he is a resident. 5. Periodic payments, not dealt with in paragraph 4, for the support of a child made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support, paid by a resident of a Contracting State to a resident of the other Contracting State, shall be taxable only in the first-mentioned State. ARTICLE 21 Government Service

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

[Irrumator]

On 9/26/2023 at 7:46 AM, ThaiFelix said:

You have no understanding of Thailands approach to decision making.  Usually research is performed on a subject, data is collected, decisions made on the data and an announcement made.  However in Thailand the opposite is true.  Here a brain fart decision and announcement is made first, followed by public outcry which is researched and finally the decision reversed.  This approach is also useful for the government to gauge just how much it can get away with without affecting front row at the trough.

 

A good example a few years ago was the announcement, just as people were climbing into the back of their pickups for the annual run home to Isaan for Songkran, that it was now illegal to tavel in the back of pick-ups.  Obviously, to everybody else, this without notice decision puts a huge spanner in the works for millions of people as all other forms of transport are talken, booked, unavailable etc.  Fortunately one good soul lifting his head from the trough for air, somehow heard the outcry, and possibly concerned the turmoil may affect his revenue stream somewhere, reversed the law just in the nick of time and they all lived happily ever after (well,  sort of).

True.  I remember that.

It was a Prayut brain fart spur of the moment decision, quickly reversed when there was an outcry.  

There were quite a few of those during his tenure. 

[jerrymahoney]

24 minutes ago, sirineou said:

It all depends on the country you are from.

Yes . I have posted that Article 20 before. That all assumes that the Thai RD honors it.

[Schuimpge]

2 hours ago, jerrymahoney said:

Well for a simple analysis, if you are on an exension via marriage at 40,000 baht per month that is 480,000 baht per year which would put you in the 10% bracket.

 

So 4000 baht per month for taxes or $US 100+ per month even assuming  ALL of the 40K per month is taxable.

 

The problem for extension via retirement is that the 65K per month would likewise put you in the 20% bracket. OUCH. Hopefully at least Social Security would be exempt and you would only pay tax on the difference between your SocSec and the 65K which you could try to keep in the 5% bracket.

No, it would put you in the 15% bracket, which puts your monthly tax at 145 USD.

 

example tax.xlsx

[Irrumator]

On 9/26/2023 at 9:12 AM, Moonlover said:

Oh for heaven's sake, here we go again!

 

From the original article and for the umpteenth time:

 

'The program will begin January 1, 2024 and apply only to tax residents in Thailand meaning tourists and short term workers will be exempt. Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand'.

 

What could be clearer than that?

 

Thai government to tax all income from abroad for tax residents starting 2024 - Thai Enquirer Main News

What about residents from a country in which their income is low enough that they  fall into the tax exempt band?

So does that mean they will also be tax exempt here? 

[Schuimpge]

1 minute ago, Irrumator said:

What about residents from a country in which their income is low enough that they  fall into the tax exempt band?

So does that mean they will also be tax exempt here? 

Guess not, it's money that's not taxed before.. but that situation would likely mean that you're also in the tax-exempt bracket over here, assuming that you're from a low-income country in such situation and working here to support your family at home.
 

[jerrymahoney]

13 minutes ago, Schuimpge said:

No, it would put you in the 15% bracket, which puts your monthly tax at 145 USD.

 

example tax.xlsx 39.91 kB · 1 download

65,000 x 12 = 780,000

[Orac]

6 minutes ago, Irrumator said:

What about residents from a country in which their income is low enough that they  fall into the tax exempt band?

So does that mean they will also be tax exempt here? 

No details given yet so unknown.

 

The principal idea of a DTA is to stop people paying tax twice on the same income  so  worst case scenario could be pay tax in Thailand but can use overseas tax return to reclaim any tax already paid so no guarantee that having a passport from a country with a DTA will give you any protection.  Indeed there are a number of us here that relied on the difference between tax policies to avoid some taxes so potentially those gaps could be closed.

 

best bet is wait for further clarification or the whole idea to be scrapped as too controversial as it will certainly be watered down and loopholes/get rounds appear as it gets defined.

 

 

[sirineou]

31 minutes ago, jerrymahoney said:

Yes . I have posted that Article 20 before. That all assumes that the Thai RD honors it.

They have no choice than to honor it, they sign it. Breach of treaty can have severe repercussions that would hurt Thailand a lot more than the collection of tax from US pensioners would help.  

[Schuimpge]

26 minutes ago, jerrymahoney said:

65,000 x 12 = 780,000

Your Calculation is correct, but you forget the 60,000 taxpayer allowance deduction. So the taxable income would be 720,000 THB.

[jerrymahoney]

Once I read of what happens when you are registered in BVI I said this is getting way beyond just a simple analysis which is all that interests me. And it was some other guy that said that an individual has no enforcement rights on any treaty.

[Yumthai]

 

4 minutes ago, Schuimpge said:

Well for a simple analysis, if you are on an exension via marriage at 40,000 baht per month that is 480,000 baht per year which would put you in the 10% bracket.

 

So 4000 baht per month for taxes or $US 100+ per month even assuming  ALL of the 40K per month is taxable.

 

The problem for extension via retirement is that the 65K per month would likewise put you in the 20% bracket. OUCH. Hopefully at least Social Security would be exempt and you would only pay tax on the difference between your SocSec and the 65K which you could try to keep in the 5% bracket.

3 minutes ago, Schuimpge said:

No, it would put you in the 15% bracket, which puts your monthly tax at 145 USD.

Actually even less .

 

480K THB - 60K (Self allowance) = 420K THB taxable imcome = 19,500 THB PIT = 4.1% average tax rate

 

If wife has no income:

480K THB - 60K (Self allowance) - 60K (Wife without income allowance) = 360K THB taxable imcome = 13,500 THB PIT = 2.8% average tax rate

 

A taxpayer of 65 years old or older is entitled to up to 190K THB of income exemption from his total income, so first non-exempt PIT tier rate (5%) will start at 190K not 150K. That could reduce even more the average tax rate.  

 

If taxpayer has income from employment:

480K THB - 100K (Expenses) - 60K (Self allowance) - 60K (Wife without income allowance) = 260K THB taxable imcome = 5,500 THB PIT = 1.1% average tax rate

 

Updated 2023 information on Thailand PIT and deductions:

https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income

 

https://taxsummaries.pwc.com/thailand/individual/deductions

[Irrumator]

50 minutes ago, Orac said:

No details given yet so unknown.

 

The principal idea of a DTA is to stop people paying tax twice on the same income  so  worst case scenario could be pay tax in Thailand but can use overseas tax return to reclaim any tax already paid so no guarantee that having a passport from a country with a DTA will give you any protection.  Indeed there are a number of us here that relied on the difference between tax policies to avoid some taxes so potentially those gaps could be closed.

 

best bet is wait for further clarification or the whole idea to be scrapped as too controversial as it will certainly be watered down and loopholes/get rounds appear as it gets defined.

 

 

I always wait to see what will happen after some back of a cigarette packet announcement by some idiot who can't ever see the consequences of what they are saying.

 

Thailand - land of the consistently inconsistent. 

[Schuimpge]

20 minutes ago, Yumthai said:

 

Actually even less .

 

480K THB - 60K (Self allowance) = 420K THB taxable imcome = 19,500 THB PIT = 4.1% average tax rate

 

If wife has no income:

480K THB - 60K (Self allowance) - 60K (Wife without income allowance) = 360K THB taxable imcome = 13,500 THB PIT = 2.8% average tax rate

 

A taxpayer of 65 years old or older is entitled to up to 190K THB of income exemption from his total income, so first non-exempt PIT tier rate (5%) will start at 190K not 150K. That could reduce even more the average tax rate.  

 

If taxpayer has income from employment:

480K THB - 100K (Expenses) - 60K (Self allowance) - 60K (Wife without income allowance) = 260K THB taxable imcome = 5,500 THB PIT = 1.1% average tax rate

 

Updated 2023 information on Thailand PIT and deductions:

https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income

 

https://taxsummaries.pwc.com/thailand/individual/deductions

Thanks for the detailed breakdown. Yep, indeed with more allowances and exemptions, tax becomes very reasonable in Thailand. My calculation was based on 65k p/month with no deductions as a maximum tax payment example.

I divert some of my monthly income between my wife and myself, so that I stay in a lower tax-bracket for example. if there's parents or grandparents, that would also give you deductibles, but only for one child (if there's more than one that pay tax). 

Put some money in an RMF or SFF. Not the highest returns, but it's a maximum of 600k THB that you don't give to the tax-man, instead you create a nice savings account. Do that for a couple years and you don't have to worry about health-insurance so much, instead consider paying cash if anything happens and maybe use the cheapest health-insurance available.

[Ben Zioner]

52 minutes ago, Schuimpge said:

Your Calculation is correct, but you forget the 60,000 taxpayer allowance deduction. So the taxable income would be 720,000 THB.

And what is worse is that those who got their pensions paid into a Thai bank account,  or who couldn't prove that the money remitted to Thailand was  earned in years prior to the tax year under consideration, could be liable to pay arrears for two years or even 5 years in the worst case.

[jerrymahoney]

Well, once again, if any or all of this goes thru, my plan would be to switch to marriage extension which my current Social Security almost covers with a top-up per month less than 150K per year 0% bracket.

[freeworld]

43 minutes ago, Ben Zioner said:

And what is worse is that those who got their pensions paid into a Thai bank account,  or who couldn't prove that the money remitted to Thailand was  earned in years prior to the tax year under consideration, could be liable to pay arrears for two years or even 5 years in the worst case.

Do people really think they can live in another country, being tax resident and not be liable to pay tax somewhere.

[TroubleandGrumpy]

2 hours ago, Irrumator said:

What about residents from a country in which their income is low enough that they  fall into the tax exempt band?

So does that mean they will also be tax exempt here? 

Nail on the head HIT.

Tax exmpt in Australia means less than $18,200 (427K Baht today).

Tax exempt in Thailand is 150K Baht.

Which one applies under the DTA?  Thai RD does not respond, and website useless, as expected. 

Do I have to pay to ask a Thai tax accountant?  Anyone here know the answer?

[John Drake]

4 hours ago, Irrumator said:

I spoke to my wife about this and she said not to worry, Srettha will soon be gone.

It seems there are already plots to oust him because he is highly unpopular in the places and with the people that matter.

Knowing the lack of forethought and inability to estimate consequences, plus the constant volatility here, I would not be in the slightest bit surprised.

The sooner the better, IMHO.

 

 

 

Would not be surprised at all. The guy is jumping heels first on everybody's toes in a country where most people wear flip flops.

[redwood1]

1 hour ago, freeworld said:

Do people really think they can live in another country, being tax resident and not be liable to pay tax somewhere.

If a Thai retired to America.....Did not work, no investments in the USA, did not own a house and only lived off savings.....They would not pay 1 penny in taxes in the USA besides sales tax...

[TroubleandGrumpy]

8 minutes ago, redwood1 said:

If a Thai retired to America.....Did not work, no investments in the USA, did not own a house and only lived off savings.....They would not pay 1 penny in taxes in the USA besides sales tax...

Same in Australia.

[redwood1]

15 minutes ago, John Drake said:

Would not be surprised at all. The guy is jumping heels first on everybody's toes in a country where most people wear flip flops.

Mr Smiles Srettha has managed to upsetet a lot of people and become very disliked in just a few weeks time.....I think the honeymoon only lasted a whopping 2-3 days.....

[John Drake]

1 minute ago, redwood1 said:

Mr Smiles Srettha has managed to upsetet a lot of people and become very disliked in just a few weeks time.....I think the honeymoon only lasted a whopping 2-3 days.....

A 14 party coalition in which how many members are going to be gouged by his tax policy? Man is incompetent.

[jerrymahoney]

Liz Truss made it 50 days. Maybe a new record?

[freeworld]

3 hours ago, TroubleandGrumpy said:

Nail on the head HIT.

Tax exmpt in Australia means less than $18,200 (427K Baht today).

Tax exempt in Thailand is 150K Baht.

Which one applies under the DTA?  Thai RD does not respond, and website useless, as expected. 

Do I have to pay to ask a Thai tax accountant?  Anyone here know the answer?

Ask a tax accountant.

 

Very obvious RD is not going to reply to random emails from foreigners asking them questions.

 

Tax exempt in australia is Australia's rules. You bring that money to Thailand and are tax resident in thailand it is Thailand tax rules. Check your DTA it states who has taxing rights and may be taxed in the other jurisdiction so if it is tax free in your home country bring it to Thailand it may be taxed in Thailand.

[liddelljohn]

I have worked in 23 countries , not payed tax in any of them for 36 years  all legally done  , only now I am officially retired  do i pay any tax  in UK  but I wont be paying any in Thailand  I have dual citizen ship in EU and with  that  , even the UK taxes can be minimised all legally