More details on Thai taxation of overseas income

[webfact]

 

The Thai Revenue Department has in a press release explained more about the taxation of income overseas which will affect both some foreigners and some Thai people.

 

The basic idea is, that when money is transferred into Thailand it should be taxed in Thailand if it is income. If the income has been received in another country and later within the same tax year is being transferred to the taxpayer’s account in Thailand it must be taxed in Thailand. If Thailand has a double tax agreement with the country where the money comes from, the tax paid in that foreign country can be deducted in Thailand according to the rules in the double tax agreement.

 

According to Mr. Winit Wisetsuvarnabhumi  Deputy Director General and Spokesperson of the Revenue Department, the new rule basically follows the many international tax treaties, which Thailands is a signatory to. 

 

by Gregers Møller 

 

Full story: ScandAsia 2023-10-04

 

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[Bday Prang]

Well that certainly addresses most concerns expressed by others on here, Not !

All sounds a bit surreal to me, how on earth can they tell what year any money I send here was originally earned?

Cannot see it ending well though, not without a loss of face somewhere along the line and probably by somebody quite important

[Smokin Joe]

The most interesting part of the linked article:

 

"Savings is not classified as income"

[MangoKorat]

13 minutes ago, Bday Prang said:

All sounds a bit surreal to me, how on earth can they tell what year any money I send here was originally earned?

Well that law already exists - you don't pay Thai tax on money earned in the previous tax year.  I have no idea but I'd guess they can request proof of when the money was earned. For those with substantial savings/wealth abroad - that should be fairly easy to do but for those living month to month...............somewhat more difficult.

 

Don't forget, there are a subsantial amount of people that do live from month to month - many move abroad on retirement because their pensions go further.

 

Don't panic though - just sit back and see what happens in the next few months.

[daveAustin]

It could all fall flat but is unsettling them going down this road. 

[hondoelsinore]

Too many cooks spoil the broth... This subject has been all over the place, especially by the many that are in a panic. I believe the RD and the new Nit-Wit running things now cannot begin to fathom the end results of this, but in the typical Thai fashion, they only see dollar signs right now. Tackling taxes is a politicians dream, but taking from the many that will never be represented by their burden will turn into a nightmare. It's always nice to have a plan, but it is a catastrophic train wreck when not completely thought through. 

[NanLaew]

1 hour ago, webfact said:

If Thailand has a double tax agreement with the country where the money comes from, the tax paid in that foreign country can be deducted in Thailand according to the rules in the double tax agreement.

That is NOT the way a "double tax agreement" works.

 

If tax has already been paid in the country where the money comes from, it does not need to be deducted again on receipt in Thailand.

 

I am sure that in their mangling of their language means to say that the amount of tax paid in the source country can be deducted from the amount of any tax owed in Thailand.

[ukrules]

2 minutes ago, NanLaew said:

I am sure that in their mangling of their language means to say that the amount of tax paid in the source country can be deducted from the amount of any tax owed in Thailand.

Yes, that's my take on it as well.

[ChasingTheSun]

Part of it sounds like they are just reiterating existing tax rules.

 

However, there is still ZERO clarification on any potential changes to tax rules.

 

 

[daejung]

32 minutes ago, NanLaew said:

That is NOT the way a "double tax agreement" works

True. Tax agreement says where each type of revenue is taxed.

[alanrchase]

My take on it is that the only thing that is changing is that money bought into Thailand by a person who is here long enough each year to be considered tax resident will have to be declared on a yearly tax form. If it is declared as income it will be liable for tax, if it is declared as savings it won't. 

[Thailand J]

If you file tax in US on US source capital gain or dividends, there is a standard deduction of $13850 and another $44625 taxed at 0%. $58475 tax free.

There is no tax credit you can claim if you bring that into Thailand and will have to pay tax in full.

[hotchilli]

I'll wait for January 1st... see what the final outcome is.

Tax my pension I'm out of here.

[dontpanic]

2 hours ago, webfact said:

If the income has been received in another country and later within the same tax year is being transferred to the taxpayer’s account in Thailand it must be taxed in Thailand.

So basically nothing has changed regarding the current year earned and remitted the following year which I thought was the loophole they where trying to close but clearly the hiso/higher up's/money men have made sure that stays. Lol TIT 

[swm59nj]

Nothing much new.  Certain countries have tax treaties with other countries regarding expats. 

[Thailand J]

3 minutes ago, hotchilli said:

Tax my pension I'm out of here.

US pension and SS are covered by the tax treaty, no double tax.

For Dividends and Capital gains, savings from 15+ years ago, tax credit is not enough relief. 150,000B exemption is a joke.

If you are US citizen who live overseas, US IRS will tax your foreign income but they allow a generous $120,000 foreign income tax free. How does 150,000B compare?

[Puccini]

From the news article liked to in the OP:

 

...the new rule is in the Revenue Department Order No. P.363/2017 regarding payment of income tax according to Section 47, paragraph two of the Revenue Code, dated September 15, 2023,

 

Isn't there something wrong with the quoted number 363/2017?

[Dogmatix]

Is this a new statement from Mr Vinit? It sounds very similar to the one he issued over a week ago. Where is the actual press release?

[TheFishman1]

I’m still very confused TIT

[Thailand J]

With my very high networth, I can live anywhere I want to. Thailand can kiss my $ goodbye.

 

[Puccini]

I suspect that there has been an error in translation. Machine translators — Google Translate, ChatGPT, Google Bard, etc — have a problem with the translation of Thai numerals.

[jacko45k]

2 minutes ago, Thailand J said:

With my very high networth, I can live anywhere I want to. Thailand can kiss my $ goodbye.

 

I really hope you do not believe Thailand cares..... because I suspect not. 

[BE88]

In short, I haven't understood anything yet.

[Thailand J]

For an US citizen living and working in Thiland, the US tax exclusion is $120,000.

For a Thai citizen working and living in US, who brings his income to Thailand, what i sthe exclusion allowed by Thai RD?  is it 150,000B.

 

 

 

https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

[quake]

All sorted then.

Glad we don't have to think anymore about this.

Thank you the tax department, your so cool. 

 

 

 

[AhFarangJa]

1 hour ago, NanLaew said:

That is NOT the way a "double tax agreement" works.

 

If tax has already been paid in the country where the money comes from, it does not need to be deducted again on receipt in Thailand.

 

I am sure that in their mangling of their language means to say that the amount of tax paid in the source country can be deducted from the amount of any tax owed in Thailand.

Yes, your last paragraph is how I read it too.

[Srikcir]

21 minutes ago, alanrchase said:

My take on it is that the only thing that is changing is that money bought into Thailand by a person who is here long enough each year to be considered tax resident will have to be declared on a yearly tax form. If it is declared as income it will be liable for tax, if it is declared as savings it won't. 

The logic can be twisted endlessly.

What is "income?"

If you transfer foreign funds to your Thai savings account (which most foreigners are only able to open), do the funds then become "savings" regardless of their foreign origins, ie., pension, social security, dividends, employment compensation?

What if you "save" part of your foreign monetary monthly distributions into a foreign bank and then in whole or partially disbursed into your Thai bank account (vs direct deposit to Thai bank)?

Why can't Thai Tax Revenue simply state that funds generated by foreign pensions and/or social security and transferred in whole or in part to Thailand are exempt from Thai taxation as they are not "earned taxable income"? You receive those funds simply because you exist and stop when you die. You do not participate in any manner for those funds to be generated. In fact US tax revenue distinguishes "earned income" from "income."

In my case, by Thai royal promulgation my foreign pension transfers to Thailand are exempt from Thai taxation due to the nature of my LTR visa. How does my Thai bank and Thailand Revenue agency know that, particularly if Thai banks might be expected (more clarification?) to withhold Thai taxes from such transfers automatically (currently unspecified) as they do when when you are paid Thai savings account interest?

 

[jacko45k]

Just now, Srikcir said:

The logic can be twisted endlessly.

What is "income?"

It would all get rather difficult if one was required to 'prove it' by Thai authorities. Prove it comes from savings, prove tax has been paid on it..  etc etc. We will tax it until you can prove it should not be taxed!

[mania]

3 hours ago, webfact said:

If Thailand has a double tax agreement with the country where the money comes from, the tax paid in that foreign country can be deducted in Thailand according to the rules in the double tax agreement.

Sadly that sounds like the tax it all & we will sort it later approach many feared

But.....Even this from article which in itself is equally bad

 

Quote

Savings is not classified as income – but a part of it may be identified as interest income that must be taxed in Thailand regardless of the year it was earned when transferred into Thailand.

Jeez I can imagine them trying to suss that out....Interest on your savings was income so we will tax it

 

But again what seems the worse part of all this is how it would be implemented. It seems only one way would be possible....Tax all incoming transfers & then let the foreigners prove it should not be taxed

[BE88]

29 minutes ago, jacko45k said:

It would all get rather difficult if one was required to 'prove it' by Thai authorities. Prove it comes from savings, prove tax has been paid on it..  etc etc. We will tax it until you can prove it should not be taxed!

In other words I would be taxed on the amount you import into Thailand and it will be up to you to prove that it has already been taxed in your country of origin so as not to be taxed in Thailand, so all this when you go to ask for an extension of your visa. Good luck with this.