Why foreigners should not be worried by the new modification to the revenue code in Thailand

[Rimmer]

An off-topic post in violation of our Community Standards has been removed.

[TroubleandGrumpy]

9 hours ago, AlexRich said:

In the UK if the revenue (HMRC) send you a tax return you have to complete and send it on time irrespective of whether you have a tax liability or not. 

There have been numerous news articles about people being sent £1,500 fines and penalties for failing to send a return, when they had no tax liability in the first place! One guy was homeless! 

I'm afraid that expats have plenty to worry about, irrespective of what is said in the op piece above. 

Perhaps the smartest move for the mobile expat is to live under 180 days in Thailand and the rest of the time in a low tax jurisdiction. For those with families and jobs it is much more difficult. 

Thanks - I was not aware of that in UK. That is not the case in Australia (compulsory tax returns).  I have looked and cannot find anything that says if it is compulsory in Thailand or if it is not.   

 

Unfortunately, like you say, those in a position to stay outside Thailnd will do so if this goes ahead and Expats are nailed by the Thai RD based on incoming bank transfers.  However, I am not in that position - it is all in or all out.  Thai Wife agrees - no way she will allow 'those bast*****' to take my/our money because I get nothing for it.  Malaysia or Philippines looks likely options - so we can still cheaply visit Thailand (max 175 days to make sure <180) and other SEAsian countries. Airfares from Australia are very expensive - as is living there which is 3+ times the cost of living in Thailand. 

 

And your point about what happened in the UK is the biggest problem in all this - what if I/we are nailed in a few years.  Lets say I dont lodge any tax returns for 5 years and then Somchai at the Thai RD wants back taxes and fines - is that possible? and how the hell will I deal with that?  Quick exit - if stopped say at airport that I have to go home to attend a funeral - what letter from RD? 

 

If this does go ahead then this will be too much - I came here to retire, play golf, travel and enjoy my remaining years.  Reporting every 3 months, TM30s when we travel/move, and begging to stay another 12 months IOs every year, is bad enough.  But having to deal with the Thai RD every year - and having the threat of fines and jail hanging over my head - not gonna happen. Malaysia or Philippines.  

[TroubleandGrumpy]

3 hours ago, freeworld said:

This is many years ago now.

One year I had brought some income into Thailand which I thought was subject to tax in Thailand.

I went to my nearest tax office, quite friendly people, and they did not understand what I wanted to do. This was in about October month so they looked at my bank book with incoming deposits and suggested to sum up the whole lot of deposits and fill in the tax form and pay tax. I said no thats not how it works, I want to pay tax only on the income I had earned and brought into the country the same year it was earned and explained again. They were confused so sent me to another tax office where I spoke to a manager. They understood, took copies of all the relevant doc, i handed it over to them and they filled in the tax forms and I ended up paying something like 400 baht tax.

All in all it was quite a pleasant experience and nothing like the suspicion, grilling and unfriendly attitude of tax people in my home country.

I would not rely on that one experience to say that going forward (if this happens) that this will be dealt with the same by all RD staff for all Expats in all Locations. 

I would also say that now you have a TIN and have done a 'return', if this is introduced, then you will likely be 'checked out'. 

[Orac]

While most of the problems with this will probably shake out as the new rules are defined, the thing most concerning me at the moment is this bit in the op:

 

“ Iam not sure if it should be under immigration and visa but my experience tells me that immigration will ask for tax documents in the future.”

 

Though I can’t see the point of them asking for tax docs (that would be an issue for RD) it would make sense for them to require a TIN to be declared as proof you are registered for tax here if you have stayed more that 180 days in a tax year. From April 2025 they will obviously be able to see this on immigration system and a fairly simple link or check with RD would identify if a tax return had been received giving the option of immigration either insisting one is done or an explanation of why one is not required - simplification would suggest they just hand this off to RD.

 

Essentially this would mean everyone on one year extensions would need to do a tax return. 

[TroubleandGrumpy]

7 minutes ago, Orac said:

While most of the problems with this will probably shake out as the new rules are defined, the thing most concerning me at the moment is this bit in the op:

 

“ Iam not sure if it should be under immigration and visa but my experience tells me that immigration will ask for tax documents in the future.”

 

Though I can’t see the point of them asking for tax docs (that would be an issue for RD) it would make sense for them to require a TIN to be declared as proof you are registered for tax here if you have stayed more that 180 days in a tax year. From April 2025 they will obviously be able to see this on immigration system and a fairly simple link or check with RD would identify if a tax return had been received giving the option of immigration either insisting one is done or an explanation of why one is not required - simplification would suggest they just hand this off to RD.

 

Essentially this would mean everyone on one year extensions would need to do a tax return. 

Good Point.  If this goes ahead with RD, and if this happens with Immigration, it will probably be that we will need to provide a taxation certificate to prove we have lodged/paid an income tax return. 

 

As if there was not already enough to worry about due to this taxation change - there is potentially more !!

[Orac]

2 minutes ago, TroubleandGrumpy said:

Good Point.  If this goes ahead with RD, and if this happens with Immigration, it will probably be that we will need to provide a taxation certificate to prove we have lodged/paid an income tax return. 

 

As if there was not already enough to worry about due to this taxation change - there is potentially more !!

more likely an IT solution - TIN number blocked until return receive that they would need to manually overide.

 

As a bonus i would expect that the online 90 day reporting will in future allow you to view all expats bank and passport details.

[TroubleandGrumpy]

2 minutes ago, Orac said:

more likely an IT solution - TIN number blocked until return receive that they would need to manually overide.

As a bonus i would expect that the online 90 day reporting will in future allow you to view all expats bank and passport details.

Unfortunately that could happen - based upon the past proven track record of incompetence and idiocy with regards to IT security by Thai organisations. 

[GoFaster]

Will lump sums from an Australian Superannuation fund bought into Thailand once a year for living costs be subject to this proposal.

[Neeranam]

1 hour ago, DrJack54 said:

Mental note to self.

Never reply to fools

Sorry, I never notice you wrote 'her'. 

No need for the flames. 

[Neeranam]

54 minutes ago, Orac said:

While most of the problems with this will probably shake out as the new rules are defined, the thing most concerning me at the moment is this bit in the op:

 

“ Iam not sure if it should be under immigration and visa but my experience tells me that immigration will ask for tax documents in the future.”

 

Though I can’t see the point of them asking for tax docs (that would be an issue for RD) it would make sense for them to require a TIN to be declared as proof you are registered for tax here if you have stayed more that 180 days in a tax year. From April 2025 they will obviously be able to see this on immigration system and a fairly simple link or check with RD would identify if a tax return had been received giving the option of immigration either insisting one is done or an explanation of why one is not required - simplification would suggest they just hand this off to RD.

 

Essentially this would mean everyone on one year extensions would need to do a tax return. 

This has nothing to do with immigration and not targeting foreigners. 

The thread should be moved to another sub-forum. 

[transam]

2 minutes ago, Neeranam said:

This has nothing to do with immigration and not targeting foreigners. 

The thread should be moved to another sub-forum. 

What, just for you.....?..................

[Negita43]

23 hours ago, Neeranam said:

Exactly, I will be consulting a  Thai accountant, not a foreign lawyer. 

But the suggestion to consult a tax consultant was good wasn't it?

 

[hotandsticky]

2 hours ago, Neeranam said:

My wife would legally get everything in my bank accounts if I die.

Only after obtaining Probate.

[Neeranam]

22 minutes ago, Negita43 said:

But the suggestion to consult a tax consultant was good wasn't it?

 

Hmmmm, I would never have thought of that!

[ThaiLawOnline]

On 10/2/2023 at 2:38 PM, freeworld said:

"A foreigner who lives in Thailand and owns a rental property in another country will need to declare the rental income from that property to the Thai Revenue Department. However, if the foreigner is already paying taxes on the rental income in the other country, they may be exempt from paying taxes on that income in Thailand. I personally know people from a country X, having a property in country Y and getting the incomes from AirBNB in Thailand, the country Z. That might change things for people like that."

 

Why would the foreigner need to report the income from a foreign rental property if they do not bring the income to Thailand? Of course if that income is brought into Thailand it is taxable or if tax was already paid they would have some document to submit to RD at the end of the tax year.

i used an example of one client that I know who does it. 
He brings it in Thailand and does not declare it.

i know tons of people living in Thailand, that could be British, French, working in Hong Kong or India, money comes to Thailand and no incomes is paid anywhere. They do not have offshore companies.

[Neeranam]

8 minutes ago, ThaiLawOnline said:

 

i know tons of people living in Thailand, that could be British, French, working in Hong Kong or India, money comes to Thailand and no incomes is paid anywhere. They do not have offshore companies.

So if they are working online, do their companies not help them with their taxes? 

I think those working online are safe from Thai taxes, unless the Thai banks are instructed to report income from abroad. 

[ThaiLawOnline]

On 10/2/2023 at 2:38 PM, freeworld said:

On 10/2/2023 at 5:35 PM, scorecard said:

You kindly gave some examples but missed the scenario which interests a very large % of the foreigners living full-time in Thailand. The folks who receive state pensions every month / 4 weeks from a foreign government. 

 

Some further scenarios on this item:

 

- State pensions  transmitted to the LOS from governments which have double taxation agreements with Thailand.

- State pensions from government who have declared that their state pensions are exempt from their local taxes. That doesn't of course mean automatcally the same pension funds are exempt from Thai personal taxes.

- State pension receipts and /or company pension schemes from past employment which are under the Thai personal tax threshhold. Will these folks have to register for a Thai tax number?

 

Perhaps you might like to respond. Thanks, I'm sure your comments will be appreciated by many foreigners living in the LOS.

 

It is not my job to answer all examples and exceptions, but I wanted to assure foreigners that they need not worry too much. My previous statement seems to have had the opposite effect. I am really trying to provide accurate information to foreigners. I was one of the first talking about usufruct, or the Thai Pink ID card.

 

 

 

I used my common sense, experience, and knowledge of how things work in Thailand to make these predictions. However, the problem with Thailand is that sometimes, it does not make sense. For example, marijuana has been legalized, but you cannot buy beer between 2pm and 5pm at 7-11. Many things here are irrational, but we live here and must accept the rules. This does not mean that I love everything about Thailand or that you cannot contest things.

 

Around 2019, I decided to contest TM30. Immigration started to apply the old immigration law to the letter, which required property owners to declare foreigners within 24 hours of their arrival in a new province.

 

I thought this was unreasonable and excessive. Many people helped me, but many foreigners told me that I was stupid and that I would never be able to change Thai law. I even received threats. But in the end, the government backed off and changed TM30 in 2020. I was not lucky; I used common sense and the media's help. The Thaiger, Bangkok Post, and BBC all covered the story.

 

Do you remember the government backing off about the preferred shares modification of the law? Or when they backed off about not having people in the back of pickups just before Songkran?

 

I think immigration will probably ask foreigners for their tax documents in 2025. However, pensioners who are already taxed or exempt in their home countries should not be affected. I might be wrong, but we will see in 2025. Let’s not speculate.

[Neeranam]

12 minutes ago, ThaiLawOnline said:

I was one of the first talking about usufruct, or the Thai Pink ID card.

If someone has a Non-Thai Pink ID card, I suspect they will be scrutinized more than someone who doesn't. I believe, but not sure, that the number on such a card is the tax ID number. 

[MartinL]

1 minute ago, Neeranam said:

If someone has a Non-Thai Pink ID card, I suspect they will be scrutinized more than someone who doesn't. I believe, but not sure, that the number on such a card is the tax ID number. 

Yes, I've heard that too.

[TroubleandGrumpy]

5 hours ago, GoFaster said:

Will lump sums from an Australian Superannuation fund bought into Thailand once a year for living costs be subject to this proposal.

No one knows - is it savings and/or is it exempt as it is taxed by Aust - when your balance is still in the accumulation phase.  I intend to bring in smaller amounts, rather than 1-2 large amounts. I figure anything over say 250K might get looked at - or maybe 500K?

 

Hate to think that someone who sends over the 800K for the Retirement Visa, could later be required  by the Thai RD to advise where that money came from, and to prove that it is not taxable income.  Massive can of worms - and no one knows the details.

[scorecard]

36 minutes ago, ThaiLawOnline said:

It is not my job to answer all examples and exceptions, but I wanted to assure foreigners that they need not worry too much. My previous statement seems to have had the opposite effect. I am really trying to provide accurate information to foreigners. I was one of the first talking about usufruct, or the Thai Pink ID card.

 

I used some examples, and there will always be exceptions.

 

What we know:

• The law has been changed.
• The law applies in 2024.
• Tax residents earning incomes abroad will have to declare it.

The rest is pure speculation and guesswork. It will likely take a year before we know more.

 

The Thai government has backed off on laws many times in the past, but this is a significant change that will affect both foreigners and Thais. It is intended to cut loopholes, etc.

 

I will also make another guess: Thailand will not tax pensioners who receive money from abroad with a double taxation treaty in place. Why? Because it would cause a lot of people to leave the country.

 

I used my common sense, experience, and knowledge of how things work in Thailand to make these predictions. However, the problem with Thailand is that sometimes, it does not make sense. For example, marijuana has been legalized, but you cannot buy beer between 2pm and 5pm at 7-11. Many things here are irrational, but we live here and must accept the rules. This does not mean that I love everything about Thailand or that you cannot contest things.

 

Around 2019, I decided to contest TM30. Immigration started to apply the old immigration law to the letter, which required property owners to declare foreigners within 24 hours of their arrival in a new province.

 

I thought this was unreasonable and excessive. Many people helped me, but many foreigners told me that I was stupid and that I would never be able to change Thai law. I even received threats. But in the end, the government backed off and changed TM30 in 2020. I was not lucky; I used common sense and the media's help. The Thaiger, Bangkok Post, and BBC all covered the story.

 

Do you remember the government backing off about the preferred shares modification of the law? Or when they backed off about not having people in the back of pickups just before Songkran?

 

I think immigration will probably ask foreigners for their tax documents in 2025. However, pensioners who are already taxed or exempt in their home countries should not be affected. I might be wrong, but we will see in 2025. Let’s not speculate.

I apoogize if I upset you, that wasn't the intent of my post, not at all.

 

I agree 100% it's not your duty/resonsibility to have answers to every question/scenario. 

 

i agree, my guess is that foreigners receiving state pensions into Thailand will vey likley not be touched and in any case most (perhaps 99%) will be under the Thai personal tax threshhold.

 

A buddy just mentioned that Thai citizens and foreigners over 70 years are in any event exempt from Thai personal taxation. He's trying to find this in writing. I'll share a link If i get one.

 

Again, my apologies.

[CartagenaWarlock]

Just now, scorecard said:

i agree, my guess is that foreigners receiving state pensions into Thailand will vey likley not be touched and in any case most (perhaps 99%) will be under the Thai personal tax threshhold.

I don't think it's pension or any other incomes by foreigners or Thais. Any income that is not taxed by another country will have to pay taxes when they bring the money back to Thailand. There was a loophole that one could park their money outside Thailand for one year and get it the following year without paying any taxes and that loophole is closed. As it as simple as that. Now what immigration want for foreigners who live in Thailand using retirement extension, "wify visa" etc. are up in the air. 

[Neeranam]

22 minutes ago, scorecard said:

A buddy just mentioned that Thai citizens and foreigners over 70 years are in any event exempt from Thai personal taxation. He's trying to find this in writing. I'll share a link If i get one.

Interesting. 

[Lorry]

On 10/2/2023 at 3:59 PM, aldriglikvid said:

Here's how CRS/Fatca works: 

 

- Year of end balance, dividends and capital gains are shared in batch to country of nationality: not to all +110 countries that have signed up for CRS. Meaning, if a Thai national opens an account in Poland, the Polish bank will ask for passport and thus nationality. That Polish bank is then obliged to send Thai RD the aforementioned data, once per year.

Wrong.

This may very well be how some banks handle it, but it's not correct at all.

You can easily google "oecd crs" and read how the OECD wants it to be done.

[aldriglikvid]

I notice that some of the usual suspects claiming in this thread, as in all other threads, that Thailand have overhauled its banking laws and that the Thai RD will be able to see or analyze all incoming transfers. That's not the case now, and since it would be an absolute world-wide blockbuster move - I don't see that happening in the future. 

 

Thai RD will have your end of year balance, your capital gains (interest, mutual funds & stock market) and your dividends received (stock market).  

 

Joining the CRS earlier this year, this year will mark the first year the Thai RD gets a sizeable Excel batch of Thai nationals - living and enjoying life in Thailand - but at the same time receiving capital gains and dividends held offshore. For decades over decades, these Thais have been escaping tax. Rest assured, Thai RD will be busy - but they won't be occupied with chasing retirees already taxed €450 monthly transfer. 

 

I'd recommend everyone to relax one or two steps, and not repeat the absolute worst case in each and every thread: detained on the airport with a tax receipt, that the tax law is an explicit farang hitjob, Visa & Mastercard payment analysis straight into Thai RD, immigration police in hand with RD knocking on retirees door and asking for a QR payment on the spot. I can go on and on. These threads have it all, besides some common sense. 

[aldriglikvid]

5 minutes ago, Lorry said:

Wrong.

This may very well be how some banks handle it, but it's not correct at all.

You can easily google "oecd crs" and read how the OECD wants it to be done.

What's wrong? The financial institution has an obligation to report to the customers established tax residency - not to all 110 countries just for the fun of it. 

[dingdongrb]

8 hours ago, DrJack54 said:

Think you should double check your plan.

Often discussed in "banking finance" forum 

No need..... My wife as well as my daughter both have their own accounts that would be more than enough for them while waiting for my will to be acted upon. Besides if it was really a necessity my wife could sell one (or both) of our residences here sine they are in her name.

[Negita43]

6 hours ago, Neeranam said:

Hmmmm, I would never have thought of that!

Glad to have helped

[dingdongrb]

9 hours ago, hotandsticky said:

 

Do you not have an 'insincerity' emoji that you could add to your posts.

Sorry if I hurt your feelers....

[dingdongrb]

9 hours ago, Moonlover said:

Not everyone is in your 'lofty' position! Try being a little less arrogant and show some respect for other people's situations.

 

Arrogant.....lofty position.....  ????

 

Just being realistic and if someone has moved here without a backup plan then it's their stupidity.....maybe they should have thought some with the big head instead of always using the little one.