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

[deejai33]

9 minutes ago, CTwelve said:

 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.

 

 

Yes, quite possible.  Get expats to declare, warn of stiff penalties for lying, then check a few people and make examples of offenders.

 

Could even name it a 'tax-return'. 555.

[CTwelve]

9 minutes ago, deejai33 said:

Yes, quite possible.  Get expats to declare, warn of stiff penalties for lying, then check a few people and make examples of offenders.

 

Could even name it a 'tax-return'. 555.

It looks like Singapore are doing the same. It's just a general tax evasion clampdown for those that live there.

 

https://www.straitstimes.com/singapore/politics/foreign-sourced-disposal-gains-subject-to-tax-from-jan-1

[deejai33]

7 minutes ago, CTwelve said:

It looks like Singapore are doing the same. It's just a general tax evasion clampdown for those that live there.

 

https://www.straitstimes.com/singapore/politics/foreign-sourced-disposal-gains-subject-to-tax-from-jan-1

Yes, looks similar.  

 

But uses complex language about 'economic substance', 'disposal gain', and 'multinational groups'.   

 

SINGAPORE – Foreign-sourced disposal gains will be subject to tax in Singapore from Jan 1, 2024, if received by entities of multinational enterprise groups that do not have economic substance here.

 

Not sure that means you and me.   Sometimes I feel like I am a disposal gain. 555.

 

[Pattaya57]

I'm retired but nett about A$100k per year from bank interest, early superannuation payments and apartment rental. I offset this income by topping up my superannuation with legal tax deductible contributions. In all I paid only $722 tax last year.

 

But now I'm convinced by OP. I'll now declare my off shore 2,300,000 baht yearly income to the Thailand tax office  and let them decide how much tax I should pay over my already legally taxed income covered by a double tax agreement ????

 

OP maybe you are the one who needs to consult a tax accountant before you sprout such nonsense as fact. Fancy telling everyone they must declare all overseas income to Thai tax office ???? 

 

[DrJack54]

8 pages of rubbish in this thread 

[Pattaya57]

16 minutes ago, DrJack54 said:

8 pages of rubbish in this thread 

Yep, belongs in finance forum or better yet community pub where lots of made up BS is expected after a few coldies ????

 

[DrJack54]

24 minutes ago, Pattaya57 said:

Yep, belongs in finance forum or better yet community pub where lots of made up BS is expected after a few coldies ????

 

There needs to be forum below even rubbish "Pub forum"..

 

Not sure of best tag.

Perhaps "scared of own shadow" 

Or 

"Im  overactive and suffer from panic attacks" 

[atpeace]

On 10/3/2023 at 7:36 PM, retiree said:

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.  

 

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). 

 

This thread is insane.   People think the new rule applies to incoming transfers or income in their own country already taxed  because the new reg doesn't explicitly state they are excluded. 

 

The tax residency  regs in other countries I've read also don't explicitly state incoming transfers are excluded.  Why?  I think they feel it is common sense they won't be taxed and it would take a very paranoid individual to come to such an outlandish conclusion.

 

The OP on this thread was terrible and should never been made.  What type of person would come to the conclusion that the post would do anything but cause more fear.   If he just had one friend read it and tell him what he thought, it  would have caused him not to post it I would hope. 

 

In the end, the thread is entertaining so please ignore the above.

 

 

[Adumbration]

I came to SIMPLIFY my tax affairs.  The seething and rancid octopus that is the ATO already has it's tentacles up every orifice of my body.

 

If I am subjected to any of this nonsense in Thailand, I am out of here.

 

It is not my job to fund the trough of a corrupt government.

 

I have been selling off assets here for the last year now.  I still have a few biggies to go...but my bug out bag is nigh on complete.

[Adumbration]

Immigration is already a f**king nightmare here.  Just imagine what a sh!tshow it is going to be this year.

 

I envisage massive delays due to ineptitude, corruption and confusion at the Revenue department....and what happens if they don't supply the requisite documents on time....Overstay...?

 

 

[Maestro]

On 10/4/2023 at 3:10 PM, CTwelve said:

...Foreigners will only have to declare any income that hasn't been subject to tax...

 

Correction
Foreigners in Thailand with tax residence in Thailand only have to declare, in Thailand, foreign income that is assessable income in Thailand. 

 

Were a DTA exists, this DTA usually says in which country a particular type of income is assessable.

 

[OJAS]

On 10/4/2023 at 9:27 PM, DrJack54 said:

8 pages of rubbish in this thread 

I'm sure that any thread on here this time 5 years ago suggesting that the American, Australian and British embassies were about to discontinue their income confirmation services would similarly have been dismissed as rubbish.

 

But we all know what, in the event, happened just a few months later.

 

[AlexRich]

On 10/4/2023 at 1:30 AM, Moonlover said:

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.

If HMRC don't send you an annual return, you then only have to complete one if you have UK taxable income (presuming you are a tax resident of Thailand?). Unfortunately, they send me one annually, so I have to complete it, even though my UK taxable income is below the tax threshold. If I don't, even though I don't owe tax, they would impose fines and penalties. I mention this because some people might not be aware of it.

 

As for double taxation agreements, they work okay if the UK tax is equal to or higher than the Thai tax. However, if the Thai tax is 30% and the UK tax is 20%, you might find that Thailand is entitled to claim the 10% difference. Again, when this matter is clearly outlined in Thai tax law, this is something that expats need to get advice on.

[Moonlover]

9 hours ago, AlexRich said:

On 10/4/2023 at 7:30 AM, Moonlover said:

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.

 

9 hours ago, AlexRich said:

If HMRC don't send you an annual return, you then only have to complete one if you have UK taxable income

But I do have a UK taxable income, 3 pensions in fact. But the last word that I had from HMRC on this topic was that I don't need to file a return.  So they don't get one.

 

I check my tax codes and tax paid every year and it's always correct.

 

I do agree with you though. If they request a return, you should comply.

[TerraplaneGuy]

Hi all 2 questions:
 

1. Do we have to declare foreign income that remains abroad, or only if we bring it into Thailand?

 

2. Is there a link to an official English of this new rule?

[Maestro]

3 hours ago, TerraplaneGuy said:

Hi all 2 questions:
 

1. Do we have to declare foreign income that remains abroad, or only if we bring it into Thailand?

 

2. Is there a link to an official English of this new rule?

 

1. It depends on the DTA between your country and Thailand.

 

2. No. (I have this translation from somewhere: https://drive.google.com/file/d/1MDPzd98gSCP5qFu8adZvqCW65qWDC8Dj/view?usp=drivesdk )

[TerraplaneGuy]

2 hours ago, Maestro said:

 

1. It depends on the DTA between your country and Thailand.

 

2. No. (I have this translation from somewhere: https://drive.google.com/file/d/1MDPzd98gSCP5qFu8adZvqCW65qWDC8Dj/view?usp=drivesdk )

Thanks but what’s your authority for answer #1?  The translation you linked says flatly that foreign income brought into Thailand must be included in assessable income.  No exceptions for DTAs.  If they’d intended such an exception they should have said “subject to any DTA …” or words to that effect.  Also, I’ve never seen a DTA that says foreign income is or is not assessable in Thailand depending on when it is brought into Thailand.  That is an internal Thai question that wouldn’t make sense to be in a treaty because the foreign government couldn’t know if or when the income was moved and therefore the foreign tax treatment couldn’t turn on such an event. 

It looks to me like the big change here is foreign income is included even if brought into Thailand more than a year after receipt (whereas up to now such “delayed” income has not been required to be included). 

[Lorry]

6 hours ago, TerraplaneGuy said:

Hi all 2 questions:
 

1. Do we have to declare foreign income that remains abroad, or only if we bring it into Thailand?

 

2. Is there a link to an official English of this new rule?

After diligently studying maestro's pdf an's Section 48 of the revenue code,  I think the answer to your first question is clearly "only if we bring it into Thailand"

What worries me a bit is that maestro sees it differently - so how do we know how Somchai the RD inspector sees it?

[BritTim]

1 hour ago, TerraplaneGuy said:

Thanks but what’s your authority for answer #1?  The translation you linked says flatly that foreign income brought into Thailand must be included in assessable income.  No exceptions for DTAs.  If they’d intended such an exception they should have said “subject to any DTA …” or words to that effect.  Also, I’ve never seen a DTA that says foreign income is or is not assessable in Thailand depending on when it is brought into Thailand.  That is an internal Thai question that wouldn’t make sense to be in a treaty because the foreign government couldn’t know if or when the income was moved and therefore the foreign tax treatment couldn’t turn on such an event. 

It looks to me like the big change here is foreign income is included even if brought into Thailand more than a year after receipt (whereas up to now such “delayed” income has not been required to be included). 

I am not qualified to comment generally on this subject. However, I can make one comment with confidence. Any foreign treaty obligations will override the text of local laws whether the authorities want it or not. If wording in the DTA indicates that certain categories of income do not need to be declared, that will be the controlling law.

[Sheryl]

10 hours ago, BritTim said:

I am not qualified to comment generally on this subject. However, I can make one comment with confidence. Any foreign treaty obligations will override the text of local laws whether the authorities want it or not. If wording in the DTA indicates that certain categories of income do not need to be declared, that will be the controlling law.

Exactly. And Q&A ssurances from the RD make clear they plan to abide by DTAs.

 

Also make clear that savings brought into Thailand would be taxable only if from income earned while a resident of Thailand.

 

People are reading into this new regulation all manner of things not there. It does one thing and one thing only, which is to remove a prior provision that assessable income earned abroad while a resident of Thailand and remitted in a following year (not the year in which it was earned) is no longer exempt. Nothing else.

 

It does not alter what is assessable income and certainly does not override DTAs. Income earned prior to becoming a tax resident of Thailand (e.g. most Expat's savings) remains non-assessable. So does income earned abroad that is not transferred to Thailand. Government pensions, US SS etc remain exempted if so stated in the relevant DTA.

 

It does not make it mandatory to file a return in no taxes are owed.

 

It is not specifically aimed at foreigners let alone foreign retirees.

 

I cannot imagine the RD wanting to get several hundred thousand more tax filings to review from people owing no or very low amounts of tax. Last thing they would have any reason to want.

 

 

[Lorry]

1 hour ago, BritTim said:

Any foreign treaty obligations will override the text of local laws

It's exactly the opposite: a foreign treaty is not automatically local law, and sometimes is ignored by local law.

"Treaty override" is not so unusual when it comes to DTAs.

But it is usually done by more powerful countries,  like US or UK. Thailand has said they will follow the DTAs and I fully expect that. 

[Maestro]

3 hours ago, TerraplaneGuy said:

...The translation you linked says flatly that foreign income brought into Thailand must be included in assessable income...

 

I read it like this: if a tax resident has foreign income that is assessable in Thailand, this tax resident must include it in the Thai tax declaration.

 

The DTA says what income is assessable in what country.

[Maestro]

4 minutes ago, Lorry said:

It's exactly the opposite: a foreign treaty is not automatically local law, and sometimes is ignored by local law.

"Treaty override" is not so unusual when it comes to DTAs.

But it is usually done by more powerful countries,  like US or UK. Thailand has said they will follow the DTAs and I fully expect that. 

 

If the DTA does not override the local tax laws, then there is no need for a DTA. Therefore, where there is a DTA, it overrides the local tax law.

[Lorry]

1 minute ago, Maestro said:

 

If the DTA does not override the local tax laws, then there is no need for a DTA. Therefore, where there is a DTA, it overrides the local tax law.

Sorry,  it just isn't so. 

My country does have a DTA with Thailand (and many other countries).

About 15 years ago,  our RD decided to override the DTAs and tax income that, according to the DTAs, only the other state had the right to tax.

They just did it.

 

[MangoKorat]

On 10/2/2023 at 9:30 AM, FritsSikkink said:

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

Nope, only income brought into Thailand is taxable.

[Lorry]

2 hours ago, Sheryl said:

I cannot imagine the RD wanting to get several hundred thousand more tax filings to review from people owing no or very low amounts of tax.

I can imagine it.

Foreigners living here are now a sizable part of the population. They generally have more money than most Thais (and they don't vote,  easy prey.)

The tax advisor whose youtube video was posted in the main thread  reckons with no more than several thousand dollars tax per person. 

If one calculates the tax for 65000 B/month one arrives at similar figures. 

So this might result in a billion or two USD of additional taxes.  Not that much,  but better than nothing. 

 

BTW the timing of the Elite price rise has been mentioned by many posters.  It may have been coincidence, though

 

[Maestro]

8 minutes ago, Lorry said:

Sorry,  it just isn't so. 

My country does have a DTA with Thailand (and many other countries).

About 15 years ago,  our RD decided to override the DTAs and tax income that, according to the DTAs, only the other state had the right to tax.

They just did it.

 

 

Some people drive through a red traffic light. They just do it.

 

Some people go and kill somebody. They just do it.

 

Just doing it does not make it legal.

[Lorry]

2 minutes ago, Maestro said:

 

Some people drive through a red traffic light. They just do it.

 

Some people go and kill somebody. They just do it.

 

Just doing it does not make it legal.

You are right. 

But if the government just does it, what am I going to do about it? Call the police?

 

Actually,  there are legal justifications: they might say a treaty is not automatically local law, it has to be "transposed" to become local law.

 EU regulations often work like this. 

[ChaiyaTH]

Happy I signed a ZTA with myself, and then inject into economy directly.

 

Will pay a second 2br apartment in another country too.

[MangoKorat]

2 hours ago, Sheryl said:

People are reading into this new regulation all manner of things not there. It does one thing and one thing only, which is to remove a prior provision that assessable income earned abroad while a resident of Thailand and remitted in a following year (not the year in which it was earned) is no longer exempt. Nothing else.

People may well be reading things into the new rules which are not there Sheryl - however, for many it raises the prospect that income that they previously thought was not taxable - and indeed that they have been receiving into Thailand for many years thinking that they did not have to report it, at least to the RD, may well be taxable.

 

My understanding so far is that, using the example of, for example, a UK pensioner receiving only the basic state pension and no other income, that pension may now be taxable (in Thailand). I believe that the DTA between the UK and Thailand does not cover income that is not taxable in the UK (below the UK tax threshold)

 

The UK income threshold for taxation in £12570 per year. As the basic state pension is £10,200 per year there is no tax payable in the UK.  Although there are other allowances for spouses, life insurance, children etc, the basic Thai tax threshold is 150,000 baht or around £3410 at today's exchange rate.

 

I have not seen anything that states that if no tax is payable in the country in which the income is derived, there will also not be any tax payable in Thailand. So reading what I have read so far, which I accept may well be wrong, on the face of it a UK basic state pension which is not taxable in the UK (provided no other income takes the total over £12,570), will indeed now be taxed.

 

At today's exchange rate the basic UK state pension will = almost 450,000 so the taxable amount will be 300,000 less any other allowances that the taxpayer is entitled to but on the face of it - @ 10% tax (the rate for incomes between 300,000 and 500,00) the recipient could face a tax bill of 30,000 baht.  Not a fortune I accept but its 30,000 that would not be payable in the recipients home country.

 

If the above is correct, those affected the most will be single people.  There are other allowances such as the spouse allowance and children's allowances that may substantially reduce the tax payable.