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

[SingAPorn]

12 minutes ago, dingdongrb said:

Sure, I pay ATM fees but that equates to only about $20-30 USD a month (1k THB). Worthwhile (ease of mind) for me to do than having $$ in a Thai bank. Besides I'm able to play the USD vs. THB game to try and get the best value....  ????

 

Maybe it's me, but I think those that elect to have their pensions direct deposited into a Thai bank are crazy.

I do not pay that much in my Thai Bank nor my bank in Europe for an ATM service so if you consider normal to pay that much per month to some scamming US bank who could end up bankrupt in the next US bank crisis...... "555555"

[Felt 35]

I wonder how this will unfold for those of us who already pay tax here on pensions as tax residents and are under a tax treaty with Thailand. (I guess more forms and personal confirmations????) Personally, I only transfer 60-70% of the pension annually via Bangkok Bank the rest is taxed back home. I never transfer interest or other amounts from savings accounts as larger investments have never been of interest here. Regardless, the way up to now has been paid here and checked here is that annually I get a statement for the taxable year from Bangkok Bank showing transfers to Thailand where each International transfer must be underlined, signed and delivered together with PND 91, plus a copy of all pages of passport, as well as a personal statement with count of days with all the periods written down that I have stayed in Thailand in total in the tax year. I fill in the sum from the Bank's total sum of international transfers and when filling in PND 91 deducts the same amount that a Thai citizen is entitled to do. After payment, all documents must be copied and a new application must be made to the regional head office of Thai Rd., for and to be issued the Tax payment certificate and Certificate of Residence in English. These certificates take some time and 2-3 weeks must be expected before you receive them in the post sent by EMS from Rd. I am then obliged to send these forms to the home country either by post or electronically together with the tax return to the home country. Will also add that "TIN" according to new rules from about 2018 (I think worldwide) now required by the Banks in the home country, so with that they, and the home country's tax authority have full access to all transactions and accounts. It's usually been no big problems, but I still think it's a lot of paperwork for elderly people but fortunately and at least for now its been allowed to have an authorized other party to take care of the practical payment at the tax office.

Felt

[foreverlomsak]

27 minutes ago, dingdongrb said:

Maybe it's me, but I think those that elect to have their pensions direct deposited into a Thai bank are crazy.

Some have no choice as UK banks are clamping down/closing accounts of people who are not resident in the UK and have been doing so for a while now, and to open another is next to/if not actually impossible without proof of UK residence.

[BE88]

1 hour ago, Sophon said:

I agree with you, that the problem will not be if you are actually going to owe taxes to Thailand, but rather what kind of documentation will be required from you to prove that you aren't liable for taxes.

 

Thailand has double taxation agreements with most major countries. The content varies from country to country, but one recurring theme is that you will not have to pay "double tax". So if an income stream is taxable in both Thailand and your home country, then you will get a tax rebate in Thailand for the tax you have paid in your home country (or vice versa). Since the taxation in most of our home countries are more severe than the taxation in Thailand, very few of us will actually have to pay taxes here, but what kind of documentation will be required by the Thai revenue department to prove that? They will not be able to read or understand our home country tax forms/receipts, so they will probably ask for all kinds of translations and certifications to be supplied from our home country RD and/or embassies here in Thailand - documentation that you probably won't be able to get.

 

We all know how ill thought out changes to the immigration requirements are. Does anyone really think that the implementation of this spur of the moment change without any previous studies performed will be any different? It will be a nightmare for the average expat to supply whatever documents the Thai revenue department decides it needs to prove that you don't owe tax here.

 

Personally, I retired here in 2010 and have had no income since then other than some capital gains and negligible tax income, all of which has been declared and taxed according to my home country's tax rules. So in reality I have been living on savings amassed during my working life, savings from income that have already been heavily taxed. But how am I supposed to prove that to the Thai tax authorities? 

 

If they go through with this change, then it will be a nightmare for anyone living here and making regular transfers to cover their living expenses. I already have funds here in Thailand and will transfer more this year to make sure that I have enough to live on for at least a few years, until they realize that what they propose in unworkable.   

Same but as a tourist under 180 days.

 

[dingdongrb]

26 minutes ago, SingAPorn said:

I do not pay that much in my Thai Bank nor my bank in Europe for an ATM service so if you consider normal to pay that much per month to some scamming US bank who could end up bankrupt in the next US bank crisis...... "555555"

My bank (Wells Fargo - USA) charges me $5 for an ATM transaction occurring here in Thailand. Thailand's ATMs charges me 220 THB.....  I generally make 1 or 2 transactions a month, each being the max allowable 25k THB.

 

No biggie for me and I feel feel that a percent or two in fees isn't going to affect my lifestyle as my US brokerage savings account more than makes up for that pitiful amount.

 

NOTE: Are you aware most US Banks as well as other institution's accounts are FDIC secured? I have been using US banks for well over 40 years and never had an issue losing money even with having an account back in the 80s that was affected by the Savings & Loan scandal then. (Silverado Savings dissolved and went to Wachovia. Wachovia dissolved and went to Wells Fargo.)

[BKKBike09]

56 minutes ago, ukrules said:

So they're going to repeal that act of parliament from the 80's which contradicts this new memo?

 

Good luck with that ????

Exactly. An RD 'Order' written on the back of a napkin after lunch one day cannot void all previous acts / regulations / interpretations / orders etc. There are various tax experts (e.g. head of tax practice at Baker & Mackenzie) saying that only the Tax Court can make such a ruling and that, as such, this latest RD Order can/should be ignored by taxpayers until it has been through due process of scrutiny etc. 

[PJ71]

1 hour ago, FritsSikkink said:

No, stay in a country more than 180 days per year.

Right, got it.

[Trippy]

The first 12k usd I make is tax exempt in the US. Am I now going to have to pay Thai taxes on that money?

[FritsSikkink]

1 hour ago, freeworld said:

Please now that is making stuff up.

 

IF it is remitted (ie brought into Thailand). If it is not remitted it does not have to be reported.

You are right about the remitted part

[BarstoolChang]

I guess prayut wasn't that bad after all.

 

Bring back the junta.

[dingdongrb]

26 minutes ago, foreverlomsak said:

Some have no choice as UK banks are clamping down/closing accounts of people who are not resident in the UK and have been doing so for a while now, and to open another is next to/if not actually impossible without proof of UK residence.

Bummer....  However, without looking I am sure there are other banks outside of Thailand a person could open an account and obtain a debit card to do ATM withdrawals internationally. Years ago I used to have an account with NetBank which had no brick & mortar locations. They provided me a debit card and I used it here in the USA, in Thailand, and as well as China when I lived there.

[scorecard]

4 hours ago, ThaiLawOnline said:

 

I have been asked about 10 times this week about the modifications regarding taxes. I am 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. But do not worry and I explain.

 

The new amendment to the Revenue Code in Thailand, which will come into effect on January 1, 2024, requires tax residents of Thailand to declare all of their overseas income, regardless of where it is earned. However, this does not necessarily mean that foreigners will have to pay more taxes in Thailand.

Under double taxation treaties (DTTs), Thailand has agreements with many countries to avoid double taxation on income. This means that if a foreigner is already paying taxes on their overseas income in another country, they may be exempt from paying taxes on that income in Thailand.

To take advantage of a DTT, foreigners will need to declare their overseas income to the Thai Revenue Department and provide documentation to prove that they have already paid taxes on that income in the other country.

 

Thailand has 61 double taxations treaties and they are here:

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

 

Difference between declaring and paying taxes

Declaring taxes means reporting your income to the tax authorities. Paying taxes means actually remitting money to the government.

Under the new amendment to the Revenue Code, all tax residents of Thailand will be required to declare their overseas income, regardless of whether or not they are exempt from paying taxes on that income. However, foreigners who are exempt from paying taxes on their overseas income will not actually have to pay any taxes to the Thai government.

 

Here are some examples:

• A foreigner who lives in Thailand and works for a company in Europe will need to declare their overseas income, even if that income is from a foreign employer. However, if the foreigner is already paying taxes on that income in their home country, they may be exempt from paying taxes on that income in Thailand.
• 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.
• A foreigner who lives in Thailand and invests in foreign stocks will need to declare the capital gains from those investments to the Thai Revenue Department. However, if the foreigner is already paying taxes on the capital gains in the country where the stocks are traded, they may be exempt from paying taxes on those capital gains in Thailand.
• If you earn incomes from crypto, it is obvious that the Thai government and other countries, what to control the gains and tax you. They also want to stop loopholes as you can live in Thailand, get money into your bank account and nobody checks where it comes from if you are under the radar, or limits the governments check.

 

Foreigners who live in Thailand should not be worried by the new modification to the revenue code. The new amendment simply requires tax residents of Thailand to declare all of their overseas income. However, foreigners who are exempt from paying taxes on their overseas income will not actually have to pay any taxes to the Thai government. A tax resident is someone living in the country to more than 180 days.

 

I have a work permit in Thailand for 19 years. Before I got permanent residency and after the years around 2010, immigration was checking if I was paying taxes in Thailand. I expect the same but it is too early to know what documents they will ask, or if we will have to translate these documents. I do foresee a lot of bureaucracy.

 

If you are unsure whether or not you are exempt from paying taxes on your overseas income in Thailand, you should consult with a qualified tax advisor. And I will be honest, I am not a tax advisor. If you do crypto or have large incomes and wish to stay under the radar, I can not advise you to setup a company in Dubai or Isle of Man, but let's say that many rich people do it.

 

Dot ask me what will happen, this is Thailand and you never know.  ????

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.

 

[scorecard]

2 hours ago, Happy happy said:

But you have not addressed the issue of persons living here long time with retirement visas?

And permanent residents.

[StayinThailand2much]

4 hours ago, ThaiLawOnline said:

I expect the same but it is too early to know what documents they will ask, or if we will have to translate these documents. I do foresee a lot of bureaucracy.

Many may not have to pay taxes, but may still be forced to pay for translations, and communicating with authorities in their home country. Plus, with all kinds of paper documents being reused in Thailand, expect everyone and their dog to be able to know your income and financial situation...

[StayinThailand2much]

1 hour ago, dingdongrb said:

Thailand can't even connect vehicle tax info, vehicle insurance info, and MV (motor vehicle) violation data.

They can't even figure out our data that were dozens of times keyed into their database. And from own experience I know that they cannot even track 30-day reports...

[Mavideol]

majority of Expats are not residents of Thailand, we are merely guests with a temporary permit to say that can be removed/revoked/cancelled and kicked out at any time or will we now be considered residents and will be given residency cards

[scorecard]

2 hours ago, Happy happy said:

But you have not addressed the issue of persons living here long time with retirement visas?

And permanent residents.

[GreasyFingers]

36 minutes ago, Trippy said:

The first 12k usd I make is tax exempt in the US. Am I now going to have to pay Thai taxes on that money?

That is a question that no one has answered.

[freeworld]

1 minute ago, Mavideol said:

majority of Expats are not residents of Thailand, we are merely guests with a temporary permit to say that can be removed/revoked/cancelled and kicked out at any time or will we now be considered residents and will be given residency cards

Perhaps this is the case. I would think Thailand just considers most foreigners to still be tax residents of their home countries. They will report the bank account income and balance in bank accounts info to RD, RD fill in the CRS form every year and then its up to the home country to sort out.

[GreasyFingers]

5 minutes ago, StayinThailand2much said:

They can't even figure out our data that were dozens of times put into their database. And from own experience I know, that they cannot even track 30-day reports...

But maybe they will be like the USA and employ 20000 new tax masters. Can you imagine the sht fight.

[david555]

11 minutes ago, freeworld said:

Perhaps this is the case. I would think Thailand just considers most foreigners to still be tax residents of their home countries. They will report the bank account income and balance in bank accounts info to RD, RD fill in the CRS form every year and then its up to the home country to sort out.

And so your home country find out you have a Thai bank account .....in case you did not reported that .....same for your maybe not reported Thai property in case not reported to your home country tax office ....

 

all this fun comes out of Thailand now full active  member of OESO with CRS reporting from 2024

 

PS : once more Cash stays King & Gold Emperor .....

[Thailand]

Would those that fund their extensions of stay by monthly deposits of 65K find that that money is taxable?

If so  would the deduction of tax make their annual income below the required level and as such invalidate the extension of stay?

[freeworld]

2 hours ago, NoDisplayName said:

For the same reason Americans (and I suppose anyone with tax residence in the good old USA) have to claim foreign income on their American taxes, whether or not they brought said funds into the USA.

 

Thailand is following the US example, claiming sovereignty over all global income.

I don't think that is the case. Thailand is taxing only income remitted into the country, like many countries do.

[david555]

5 minutes ago, Thailand said:

Would those that fund their extensions of stay by monthly deposits of 65K find that that money is taxable?

If so  would the deduction of tax make their annual income below the required level and as such invalidate the extension of stay?

That is already the risk case as now using monthly , just only 1 fault coding by the transferring institute and you'r I.O. can reject the whole year

 

Even not forgetting a to narrow exchange calculation ....

 

a very risky system against the very easy safe 800K on Thai bank system

[freeworld]

17 minutes ago, Thailand said:

Would those that fund their extensions of stay by monthly deposits of 65K find that that money is taxable?

If so  would the deduction of tax make their annual income below the required level and as such invalidate the extension of stay?

The banks are not going to tax your transfer or deposits.

 

Even now RD have to go through a procedure to get info about bank accounts from a bank about a delinquint tax payer.

 

Tax is handled by the RD at the end of a tax year following the law and the tax code.

[QuantumQuandry]

3 minutes ago, freeworld said:

Even now RD have to go through a procedure to get info about bank accounts from a bank about a delinquint tax payer

Just a note...they don't need to get my transfer info from the banks, they could also get it from immigration.

 

I have to bring my bank info to immigration every year in order to have a retirement visa.

[david555]

1 minute ago, QuantumQuandry said:

Just a note...they don't need to get my transfer info from the banks, they could also get it from immigration.

 

I have to bring my bank info to immigration every year in order to have a retirement visa.

the easiest way to have all of us if we have a TIN number ......just giving in the number on them  proves you have ...,or have not ..., no calculations to be done by them  ,

Simply 1 doc. more to bring for your case of whatever with them.........

[NoDisplayName]

33 minutes ago, freeworld said:

I don't think that is the case. Thailand is taxing only income remitted into the country, like many countries do.

This is from the original announcement
 

Quote

 

According to the document

 

“…those that have earnings from occupation or business abroad or wealth that is located abroad…and has brought these assets into Thailand…

 

must factor this into their personal income tax for the year.”

 

Quote

Thailand’s revenue departments has released new guidelines which will see all income from abroad taxed as personal income tax regardless of whether it was earned income or savings.

It seems, from the article at least, that any money that "comes in" to Thailand will/may be considered as "in-come."

 

At this point, don't nobody know nuttin'.

Hope for the bestest, plan for the worstest.

[NoDisplayName]

36 minutes ago, freeworld said:

The banks are not going to tax your transfer or deposits.

 

Even now RD have to go through a procedure to get info about bank accounts from a bank about a delinquint tax payer.

 

Tax is handled by the RD at the end of a tax year following the law and the tax code.

In some cases, they already do.

Your Thai broker credits your account for dividends, after deducting tax.

Your Thai bank credits your account for that splendifourous 0.5% interest, then deducts 15% tax.

 

"Only the shadow knows what evil lurks in the hearts of men."

[Celsius]

4 hours ago, freeworld said:

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.

 

Exactly.

 

I pay a very high 25% non resident tax to Canada Revenue Agency on my Toronto rental. What business it is to Thailand with what I do with my leftover money? Are they seriously expecting me to hire a consultant to deal with this and other issues when I am not even a legal resident of Thailand while doing my 90 day reports like a common criminal? Can the OP remind me as the when did I receive my PR card in the mail? HAHAHA!!!

 

I have never read anything dumber in my life. Thanks OP!

 

If I stay next year I will be complying a big fat zero. In other countries you have certain benefits for tax compliance.