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

[retiree]

1 hour ago, ThaiLawOnline said:

Tax residents earning incomes abroad will have to declare it.

I think this overstates the case.  With all due respect, can you point to a section of the tax code (or other RD announcement) that says that tax residents who do not bring post-2023 income into Thailand must file tax returns detailing their world-wide income?   Or that those who do have to report anything other than actual  remittances?  (additional info might be required to take advantage of a DTA, of course). 

 

Not to split hairs, but a person who does not work here, has no income here, and brings no money into Thailand may be a tax resident, but is not a taxpayer.  S/he has no tax liability, because there is nothing to tax or charge penalties on. 

 

It's certainly possible that there may be an explicit ruling or law requiring this in the future, but I don't see any reason to think we're there, or anywhere near there.  It would be prompted if Thailand eventually asserts that, like the US, it has the right to tax current world-wide income regardless of how it is disposed of.  

 

35 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.

The tax code is online in English here:   https://www.rd.go.th/english/38306.html

"Who must file?" is here:  https://www.rd.go.th/english/37749.html#section56

"Section 56 Every taxpayer except a minor or a person adjudged incompetent or quasi-incompetent shall, on or before the last day of March every year, file ... "

There is no reference to an upper age limit (reps for minors and incompetents are dealt with in section 57). 

 

[dingdongrb]

9 hours ago, Moonlover said:

The answer to your question is obvious @dingdongrb and it's already been answered:

 

'The pensioner doesn't need to instigate further actions'.

 

Whilst one is fit and healthy and has their smarts about them, transferring their own pensions from abroad is easy. I've been doing it myself for years.

 

Then the pensioner should suffer any consequences if he/she doesn't want to adapt to changes....... Things are changing every day and if you cannot adjust then you could become a victim. 

 

That's just part of life so get used to it or get left behind. One fine example is modern technology. If you only know how to use a dial phone to make a call then I guess it will be difficult for you to make a phone call these days.

[Neeranam]

43 minutes ago, aldriglikvid said:

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. 

Good post. 

Scaremongering by some who have alternate motives. 

[Lorry]

2 hours ago, Neeranam said:

I believe, but not sure, that the number on such a card is the tax ID number. 

For some people,  it is.

Others have 2 different numbers, one on the card, and another TIN.

[Neeranam]

1 minute ago, Lorry said:

For some people,  it is.

Others have 2 different numbers, one on the card, and another TIN.

 Thanks, probably depends on if the person got the ID card after working here, or not.

[Lorry]

43 minutes ago, aldriglikvid said:

The financial institution has an obligation to report to the customers established tax residency

That's correct. 

And tax residency is usually  where he has his residence. If there are reasons to doubt this, the financial institution has to dig further. 

But tax residency is not automatically the country of his nationality. 

The Polish guy in your post may be a tax resident of Madagascar, so he has to be reported to Madagascar. The FI should find out, it should not just choose the easy way and assume tax residency equals nationality. 

[aqua4]

Well lets see. If you make money abroad and live on your retirement visa. Since you are then paying taxes would you still need to play this 'money game' each year - 2 months before and 3 months after? Could you then just show your tax receipt? 

[deejai33]

On 10/2/2023 at 1:30 PM, ThaiLawOnline said:

 

 

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. 

...

On 10/2/2023 at 1:30 PM, ThaiLawOnline said:

 

 

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.

Seems misleading to me.  Where does the amendment say that ?

 

The amend refers to income remitted to thailand only.  Not about a persons worldwide income.  Very important difference.  

 

The OP should correct his mistake. He sounds like he's a professional adviser.

 

 

Edited October 3, 2023 by deejai33

[eisfeld]

On 10/2/2023 at 8:30 AM, ThaiLawOnline said:

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.

This overly broad statement does not represent the reality. There will be many foreigners who have had no tax liabilities for some of their income in Thailand and now suddenly they will have a considerable tax burden because income that wasn't taxed before now suddenly will be. Just an example: capital gains on US stocks for a non-US person that does not bring those gains into Thailand. Before he was exempt and now he suddenly will be faced with Thailand wanting to tax those gains.

 

As a lawyer you should know better to carefully phrase things that can have big ramifications.

Edited October 3, 2023 by eisfeld

[Lorry]

11 minutes ago, Neeranam said:

 Thanks, probably depends on if the person got the ID card after working here, or not.

No, it seems to depend on whether you got pink card first ( >  TIN will be the same) or TIN first (2 numbers).  Nothing to do with work,  I know  retirees who have never worked here can have both alternatives. 

[hotandsticky]

35 minutes ago, dingdongrb said:

Sorry if I hurt your feelers....

You are certainly not good enough to do that.....

[aldriglikvid]

13 minutes ago, Lorry said:

That's correct. 

And tax residency is usually  where he has his residence. If there are reasons to doubt this, the financial institution has to dig further. 

But tax residency is not automatically the country of his nationality. 

The Polish guy in your post may be a tax resident of Madagascar, so he has to be reported to Madagascar. The FI should find out, it should not just choose the easy way and assume tax residency equals nationality. 

It was an example, and it was correct - and I can't make an example for all possible situations, as my post would be miles long and thus not helpful at all. Next time, instead of just whining "it's wrong buhu" - contribute with something yourself. 

Edited October 3, 2023 by aldriglikvid

[Negita43]

26 minutes ago, retiree said:

A buddy just mentioned that Thai citizens and foreigners over 70 years are in any event exempt from Thai personal taxation.

As far as my experiencee is concerned - I worked here for several years whilst "over 70" and I declared my income every year and was told exactly that by the tax office BUT that does not clarify which "rule" overrides the other ie tax on income from abroad or tax for over 70's

[Lorry]

5 minutes ago, aldriglikvid said:

It was an example, and it was correct - and I can't make an example for all possible situations, as my post would be miles long and thus not helpful at all. Next time, instead of just whining "it's wrong buhu" - contribute with something yourself. 

What a lame excuse for posting something factually not correct.

[Neeranam]

9 minutes ago, Lorry said:

No, it seems to depend on whether you got pink card first ( >  TIN will be the same) or TIN first (2 numbers).  Nothing to do with work,  I know  retirees who have never worked here can have both alternatives. 

What I meant was that if you worked here, like me, then got a pink card, it would be the same as the Tax ID.

[Thailand J]

I was hoping to read something useful since it was written by a lawyer.

Was a waste of time.

 

Basically he is saying don't worry your income may be exempt, and don't ask me what will happen.

 

Current US-Thai Double Tax Treaty does not exampt income that has been taxed in the source country to be taxed again. You need to report the income in BOTH countries and claim foreign tax credit, and pay the difference. Unless the type of income is specifically stated, such as social security and pension.

 

 

 

 

Edited October 3, 2023 by Thailand J

[Bday Prang]

               So what would  happen at the departure gate  when  a tourist, turns up ready to go home, who  on the spur of the moment, decided to  extend their  current stay for a month and  when their current stay is   added to a previous trip to Thailand, earlier in the year, it exceeds 180 days.   They naturally didn't think to bring all their tax related documents on holiday with them, in fact ,  depending on their timing these documents may not even be available. How on earth are they to be expected to declare and prove their income back home and how on earth would a Thai official be able to check ?  If they funded their stay using credit cards (or cash) how could anybody prove what they had actually spent?      So realistically what could happen  to them ? |Sent on their way with an IOU? Locked up until they pay their tax ? That would be ridiculous,    Nothing will happen that's what, 

               Also  whoever suggested that banks might be able to withhold 15% of all monies originating from  abroad until the sender could prove whether any tax due had been paid  is taking scaremongering to a new level. 

              I doubt anybody has any reason to be worried,  except maybe those living here permanently, who receive some sort of dodgy tax free pension from the virgin islands  or similar, they might want to revue their arrangements

              

[Pattaya57]

Asean Now definitely the most scaremongering forum around

 

1. You can not fly into Thailand on a one way ticket if visa exempt as you'll be deported (except many of us do all the time)

 

2. If you do have an onward flight on visa exempt it must be within 30 days even though Thai embassies all over the World actively promote the 30 day extension and many people fly on 60 day flights, but yes, apparently you'll be deported if flight more than 30 days

 

3. You must always carry 20,000 baht, or equivelent, in cash when you arrive in Thailand, $1 million in bank account will not be of any use and you'll be deported as you obviously can't afford a holiday in Thailand if you can't scrape up $560 in cash in this cashless society

 

4. You can not stay more than 180 days in a year or you must register as Thai tax resident and declare all of your overseas income so that Thailand can double tax you, including if you transmit your already taxed pension or savings to Thailand (which people are unbelievably saying Thailand banks should withhold 15% for tax)

 

I don't know what's worse, the posters constantly scaremongering stating everything as fact, or the posters believing everything said here so much they make life decisions based on this crap (eg. I'm now leaving Thailand)

 

Edited October 3, 2023 by Pattaya57

[Maestro]

On 10/2/2023 at 10:30 AM, FritsSikkink said:

Because when you are a tax resident, you need to declare income, doesn't matter where you keep the money.

 

Correction:

Because when you are a tax resident, you need to declare assessible income, doesn't matter where you keep the money.

[Puccini]

On 10/2/2023 at 8:30 AM, ThaiLawOnline said:

...The new amendment to the Revenue Code in Thailand, which will come into effect on January 1, 2024...

There is now new amendment to the Revenue Code coming into effect on January 1, 2024

 

What comes into effect on 1 January 2024 is the Revenue Department Order 161/2566, which is, as its first paragraph says , "for revenue officers to use as a guideline in inspecting and advising persons residing in Thailand who have assessable income under Section 40 of the Revenue Code in the past tax year due to duties or business performed overseas or due to assets located overseas under Section 43 (2) of the Revenue Code"

 

The Revenue Code is not being amended, but an effort it being made to apply its section 40 more correctly in future.

[Puccini]

On 10/2/2023 at 8:30 AM, ThaiLawOnline said:

...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...

This not true. From the Revenue Department Order:

Quote

Section 1: A person who is a resident of Thailand under Section 41 (3) of the
Revenue Code and has assessable income due to duties or business performed
overseas or due to assets located overseas under Section 41 (2) of the Revenue
Code in the said tax year and has brought such assessable income into Thailand in
any tax year, shall be required to combine such assessable income for the purpose
of paying income tax under Section 48 of the Revenue Code in the tax year in which
such assessable income is brought into Thailand.

This means that if based on the Double Taxation Agreement the foreign-earned income is not assessible in Thailand, the foreigner must not declare it in his tax declaration to the Thai Revenue Department.

 

[Puccini]

On 10/2/2023 at 8:45 AM, quake said:

Op is not the RD

or the government

Read what you want into it all.

Happy tax Thailand.

 

I agree with that.

 

Pay no heed to quotations of obsolete text excerpts from obsolete versions of the Revenue Code. The most updated English translation of the Revenue Code I could find is this version I downloaded from krisdica.go.th with citation of all amendments:

https://drive.google.com/file/d/1zR9uui8btXvlMNlfbba4r4Y4Uc2hgQWX/view?usp=drive_link

 

Pay no heed to misquotations or faulty translations of the Revenue Department Order 161/2566.

The original Thai text is here:

https://drive.google.com/file/d/1EM9zzhFWVS8YNPamaMkl1_jKClbYE3Sz/view

The English translation I use is here:

https://drive.google.com/file/d/1MDPzd98gSCP5qFu8adZvqCW65qWDC8Dj/view?usp=drive_link

 

[Puccini]

4 hours ago, retiree said:

...The tax code is online in English here:   https://www.rd.go.th/english/38306.html...

The link https://www.rd.go.th/english/38306.html you posted does not lead to the "tax code", ie not to the Revenue Code, but to an undated Advisory Notice of the Revenue Department on a web page with the footnote "Last updated: 19.10.2017".  For all we know, this Advisory Note may be covered by Section 2 of the new Revenue Department Order, which reads as follows:

 

Quote

Section 2: Any regulations, rules, orders, letters in response to inquiries, or practices
that are inconsistent with this order shall be repealed.

 

[OJAS]

7 hours 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.

 

5 hours ago, retiree said:

The tax code is online in English here:   https://www.rd.go.th/english/38306.html

"Who must file?" is here:  https://www.rd.go.th/english/37749.html#section56

"Section 56 Every taxpayer except a minor or a person adjudged incompetent or quasi-incompetent shall, on or before the last day of March every year, file ... "

There is no reference to an upper age limit (reps for minors and incompetents are dealt with in section 57). 

In any event it wouldn't look too great presentationally, I would have thought, if a hiso aged 70, but not a loso aged 69, were exempted from paying income tax.

 

[Moonlover]

On 10/3/2023 at 2:00 AM, 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. 

 

 

I haven't filed a UK tax return for around 15 years. I was told by HMRC once I'd ceased working that they no longer required one from me and I've no intention of starting again.

 

I take the opposite view to you. I don't think we have anything to worry about. the DTA's have got our backs.

[Moonlover]

21 hours ago, hotandsticky said:

 

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

I think some folks measure their success by the number of 'sad emojis' they can attract. The ignore list is the best place for that one.

[OJAS]

On 10/2/2023 at 3:22 PM, RupertIII said:

Section 2: Any regulations, rules, orders, letters in response to inquiries, or practices that are inconsistent with this order shall be repealed.

IMHO we should all have our fingers firmly crossed that the RD's Director-General doesn't have in mind the various international double taxation agreements entered into by Thailand under this heading.......

[OJAS]

On 10/2/2023 at 3:34 PM, 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.   

The issues which you have highlighted could potentially arise in our dealings with not only the RD here in Thailand but also with the taxation authorities back in our home countries. For instance, we British expat retirees are, generally speaking, only required to file annual tax returns with HMRC if we are in receipt of non-pension sources of income such as rents on UK properties which we own. As I see things, though, all of us could be forced into filing such returns as a prerequisite to avoiding double taxation, with all which that would entail - for the first time ever in many cases, I strongly suspect.

 

Edited October 4, 2023 by OJAS

[Caldera]

The headline screams that foreigners don't need to worry, but then the article gives us plenty of reasons to be worried.

 

Best case scenario, you won't need to pay (more) tax, but it will be a bureaucratic nightmare to declare foreign-sourced income and to prove that it has already been taxed elsewhere.

 

Just looking at other departments of the Thai bureaucracy that I've already had the "pleasure" to deal with, that in itself would be a good reason to spend less than 180 days per year in Thailand from next year on.

[CTwelve]

20 hours ago, Puccini said:

This not true. From the Revenue Department Order:

This means that if based on the Double Taxation Agreement the foreign-earned income is not assessible in Thailand, the foreigner must not declare it in his tax declaration to the Thai Revenue Department.

 

This is my take on the situation. I expect there will be an annual form that will need to be completed. Foreigners will only have to declare any income that hasn't been subject to tax.

 

The whole purpose of the announcement is to close loopholes on tax evasion and make sure people are aware they need to to declare / pay income tax if they have not paid it.

 

Let's be honest. The Thai Inland Revenue service are not going to be capable of working through endless paper trails for the millions of foreigners who live in Thailand.

 

Edited October 4, 2023 by CTwelve