More details on Thai taxation of overseas income

[Brickleberry]

I haven't paid taxes in years, and I don't plan to start paying now. The Thai government has no way of enforcing these rules, and no way to confirm where your money comes from. The only way they could potentially monitor and screw us over, is if they made tax return forms a requirement for long term visas.

[bkk6060]

You can bring $20,000 usd cash into Thailand without reporting anything at immigration.   So, if worried buy a good safe, and live off cash every year.

[hotandsticky]

  On 10/4/2023 at 6:47 AM, bkk6060 said:

You can bring $20,000 usd cash into Thailand without reporting anything at immigration.   So, if worried buy a good safe, and live off cash every year.

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Sound advice.

 

If necessary I will transfer funds to my missus and say that she is supporting me/us from her/our farming income.

[retiree]

  On 10/4/2023 at 6:01 AM, Iamloki said:

... does Thailand have a standard deduction in lieu of itemized deductions?

Or, do they consider the taxable income as that amount taxed in the source country?

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Yes, there are a variety of standard deductions and exemptions.  Google is your friend ???? 

No, the "amount taxed in the source country" is not an issue.  It is the amount brought into Thailand, if it was generated in a year (2024 on) in which you had "assessable income" (tbh pretty much all kinds of income). 

 

Summary: 

 -- It has to have been assessable income from 2024 on in the first place (this is the new rule).

 -- Only the amount of that income brought into Thailand is taxable.

 -- Both standard and itemized deductions, and any existing DTA, are available to help reduce or zero out your Thai tax bill.

[Srikcir]

  On 10/4/2023 at 6:13 AM, grubman said:

then spend 2 months in Thailan

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Ptoposed tax applies to foreign residents defined as living in Thailand an aggregate of 180 days a year. Your time in Thailand is 60 days a year, so you would not be considered a resident. 

[deejai33]

  On 10/4/2023 at 6:07 AM, kwak250 said:

So if I took say 20,000 out of the ATM linked to my Halifax account and did that every day for a week how would this be taxed?

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If you are tax resident in thailand (180 days+), then the RD could audit you.  

 

Ask you to provide details of your income.   How do you support yourself in thailand ?  

 

You could lie.  Or you could say you withdraw thai baht from Halifax using ATM.   The money may or may not be taxable in thailand

 

If you lie you are taking a risk.

 

Maybe one day halifax will provide a list of baht withdrawls to RD.

 

It could happen.  Up to you what risks you take.

 

[jaideedave]

  On 10/4/2023 at 3:30 AM, bugger bognor said:

Anyone who believes that there pension will be taxed is deluded it's not going to happen, this will affect 0000.1 of expats, international transfers will never be automatically taxed on arriving to your bank account and then you have to claim it back what are you smoking! This will turn out To be a nothing burger, you really think that All expats are going to register for tax here and file tax returns and prove where when and how and what year the income and savings has come from !  

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bb, yes a very good assessment you've made in my opinion. Can you imagine the headlines of an expat forum ( LOS is now taking a ?% witholding tax on all incoming funds to Thai bank accounts) > all foreigners will now have to file a tax return to show proof that tax has been paid and claim it back < 555

Laughable really.

[pedro01]

UK has no double taxation  agreement with Thailand. So Brits will theoretically be taxed twice.

[lordgrinz]

If requiring everyone to file tax returns in Thailand to stay on visa extensions is the way forward, you can expect a mass exodus.

[CTwelve]

  On 10/4/2023 at 7:02 AM, pedro01 said:

UK has no double taxation  agreement with Thailand. So Brits will theoretically be taxed twice.

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Come on man.. You need to do better. ????

 

Yes, the UK has a tax treaty with Thailand. It is called the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Kingdom of Thailand for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income¹. It was signed on 18 February 1981 and entered into force on 20 November 1981². It is effective in Thailand from 1 January 1981 and in the UK from 1 January 1981 for Petroleum Tax, 1 April 1981 for Corporation Tax and development tax, and 6 April 1981 for Income Tax and Capital Gains Tax². The treaty covers the taxes on income that are imposed by both countries, such as income tax, corporation tax, petroleum revenue tax, capital gains tax, etc¹. The treaty aims to avoid double taxation and prevent fiscal evasion by providing rules for allocating taxing rights between the two countries and reducing tax rates¹. You can find more information about the treaty and related documents on the GOV.UK website³ or here.

 

[Karma80]

  On 10/4/2023 at 7:02 AM, pedro01 said:

UK has no double taxation  agreement with Thailand. So Brits will theoretically be taxed twice.

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It does. https://www.gov.uk/government/publications/thailand-tax-treaties

[JimTripper]

  On 10/4/2023 at 7:05 AM, lordgrinz said:

If requiring everyone to file tax returns in Thailand to stay on visa extensions is the way forward, you can expect a mass exodus.

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to where, cambodia?

[lordgrinz]

  On 10/4/2023 at 7:09 AM, JimTripper said:

to where, cambodia?

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Back home in my case, mainly because I hate this place, but also sick of the paperwork and constantly feeling like an ATM to Thai's.

[Smokin Joe]

  On 10/4/2023 at 7:08 AM, Karma80 said:

It does. https://www.gov.uk/government/publications/thailand-tax-treaties

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It's also on the Thai Revenue Dept Website (all 61 of the agreements)

 

[TroubleandGrumpy]

  On 10/4/2023 at 5:27 AM, CTwelve said:

But it wouldn't be money laundering if those accounts are registered via the originating country (not Thailand) and they are just using the app..

The only way they could know would be to require all businesses to report every transactions for every person. 

 

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Yes and No - and I would recommend avoiding taking such a course of action.

 

How it works is that once they 'look at you', the Thai RD can request all banking details related to yourself be provided to them by the banks and all financial institutions in Thailand. Sure it is no problem until they 'find you' - same for anyone not getting annual renewals - it is all good until caught. But unlike Immigration, the RD will look to take their 'pound of flesh' going back for years, and they will jail you if you dont pay, and then deport you.  This is not the west where tax avoidance is a fine and a slap on the wrist - here they send you to jail - to a Thai jail - and you do not want to go there just for a few 10s of thousand baht. 

[CTwelve]

  On 10/4/2023 at 7:08 AM, Karma80 said:

It does. https://www.gov.uk/government/publications/thailand-tax-treaties

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The more I read into this the more it seems to be a none issue.

 

As long as you paid tax on the income (either at home or in Thailand) then there's surely no issue. I suspect those who live in Thailand for over 180 days may have to fill a tax return and declare all inbound income for the year.

 

They probably wont even ask for proof that you paid tax abroad, but may ask if they want more details. 

 

For those who are not evading tax then there's going be no issues at all. Pensions or Savings already have had tax paid.

 

[VBF]

  On 10/4/2023 at 12:13 AM, BE88 said:

It's impossible for it to work because the tax or immigration authorities will ask you "What income or earnings do you live on?"

 

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Logically (yes, I know, TIT) IF savings are not taxable, then the answer to that question is "I live on my savings, some of which i transfer to Thailand as needed"

Therefore, even if one is in receipt of a pension or dividend income, or interest, the money transferred to Thailand is from SAVINGS and (apparently) exempt from taxation.

Or am I being too logical?

[VocalNeal]

  On 10/4/2023 at 6:42 AM, Srikcir said:

Regardless needs definition. Hope is not a strategy.

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Neither is believing in fairies. which is what this thread is based upon.

[TroubleandGrumpy]

  On 10/4/2023 at 6:45 AM, Brickleberry said:

I haven't paid taxes in years, and I don't plan to start paying now. The Thai government has no way of enforcing these rules, and no way to confirm where your money comes from. The only way they could potentially monitor and screw us over, is if they made tax return forms a requirement for long term visas.

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If this does not go away, they could require it to be a condition of annual renewal to provide a tax clearnace/return (like those foreigners that work here). 

 

Plus they could also require all banks to provide to them with the financial details of any Expat that they suspect of avoiding taxes. If you have had international deposits totalling over 150K they could request you provide details of what the money came from, and ask why you have not done any tax returns (after 2024).

 

I am not saying this will happen, I am saying it could happen, and it would be wise for all Expats getting overseas money/payments into Thailand (all of us) to carefully consider this matter and watch how things develop over the next year or so.

 

Unlike, say Philippines, where they have a specific tax definition for Expats on long term retirement Visas, Thailand has no 'allowance' for Expats - you are either a tax resident or you are not in Thailand.

[Lingba]

well I guess this means more paper work at the immigration office

[TroubleandGrumpy]

  On 10/4/2023 at 6:47 AM, bkk6060 said:

You can bring $20,000 usd cash into Thailand without reporting anything at immigration.   So, if worried buy a good safe, and live off cash every year.

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That is the only way to 'avoid' this problem that I have seen so far.  However, you could be asked one day 'where you get money to pay for things' - but that is extremely unlikely. If you do that - keep it to yourself - people talk too much and one day some Thai might report you.  And yes - cash is taxable, depending on how you obtained it. 

[TroubleandGrumpy]

  On 10/4/2023 at 6:49 AM, hotandsticky said:

Sound advice.

If necessary I will transfer funds to my missus and say that she is supporting me/us from her/our farming income.

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Careful - international deposits are recorded - and the wife might be required to pay income tax on all of that money she was 'paid' by you.  I thought the same thing - but it also has hairs on it.

[retiree]

This thread should be retitled:

    More details on taxation of remittances to Thailand

There is no plan to tax overseas income.

 

Overseas income is only taxed for Thai residents who work in Thailand, but happen to be paid overseas (41(1)).

Section 41 A taxpayer who in the previous tax year derived assessable income under Section 40 from an employment, or from business carried on in Thailand, or from business of an employer residing in Thailand, or from a property situated in Thailand shall pay tax in accordance with the provisions of this Part, whether such income is paid within or outside Thailand..    https://www.rd.go.th/english/37749.html#section41

 

If you do not work in Thailand, only the portion of any overseas income you bring into Thailand (starting with income earned in 2024) might be subject to tax, if it is not already reduced by local exemptions / deductions, or offset by credits or exemptions specified by a country-specific DTA. 

 

[TroubleandGrumpy]

  On 10/4/2023 at 7:02 AM, jaideedave said:

bb, yes a very good assessment you've made in my opinion. Can you imagine the headlines of an expat forum ( LOS is now taking a ?% witholding tax on all incoming funds to Thai bank accounts) > all foreigners will now have to file a tax return to show proof that tax has been paid and claim it back < 555

Laughable really.

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Not when/if the Immigration requires an annual tax clearance as one of the conditions for renewal.

And there are so many other ways thius can go wrong for Expats.

However, wait until mid-late 2024 when (hopefully) Thai RD has provided clarifications and details of the process.

 

PS - some say I am over-reacting. Yes that is probably true. BUT I have had many years of expoerience in dealing with Govt Depts in Aust (especially ATO) and I know about many people who got caught out.  And you do not want to get caught out by the Thai RD - much harsher penalties than ATO.

Stay across it and stay informed - by end 2024 we will know how bad or good it really is.

[BE88]

  On 10/4/2023 at 7:17 AM, VBF said:

Logically (yes, I know, TIT) IF savings are not taxable, then the answer to that question is "I live on my savings, some of which i transfer to Thailand as needed"

Therefore, even if one is in receipt of a pension or dividend income, or interest, the money transferred to Thailand is from SAVINGS and (apparently) exempt from taxation.

Or am I being too logical?

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In principle, savings are not taxable in the West, while interest and dividends are taxable in every country.

Now it will be your tax declaration if you are resident in Thailand which will indicate to the taxman which part is taxable and the big question that remains is whether the government will also tax your savings that you transfer to Thailand and which you will indicate that it is instead your savings?

And how could you prove that it is only a saving from previous years and not a profit????

 

[deejai33]

  On 10/4/2023 at 7:17 AM, VBF said:

Logically (yes, I know, TIT) IF savings are not taxable, then the answer to that question is "I live on my savings, some of which i transfer to Thailand as needed"

Therefore, even if one is in receipt of a pension or dividend income, or interest, the money transferred to Thailand is from SAVINGS and (apparently) exempt from taxation.

Or am I being too logical?

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I think the word 'savings' is a bit misleading.   All your money starts out as income from some source.  Might be taxed, or might not be.

 

You spend that money.  Money you don't spend 'magically' turns into savings !  Maybe stored in a savings account.

 

The question, has that 'savings' been taxed yet can be asked.   Tax collectors look for untaxed money.

 

The relevant question is has tax been paid.  Not is the money 'savings'.

 

Probably most expats money in savings accounts has already been taxed.   But its not always true.  

 

 

[TroubleandGrumpy]

  On 10/4/2023 at 7:09 AM, JimTripper said:

to where, cambodia?

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Maybe. Other options are Vietnam, Malaysia, Philippines, Indonesia (Bali for the Aussies).

Cheap airfares back to Thailand to visit family, friends, girls - stay less than 180 days in total any calendar year.

 

[CTwelve]

  On 10/4/2023 at 7:33 AM, TroubleandGrumpy said:

Not when/if the Immigration requires an annual tax clearance as one of the conditions for renewal.

And there are so many other ways thius can go wrong for Expats.

However, wait until mid-late 2024 when (hopefully) Thai RD has provided clarifications and details of the process.

 

PS - some say I am over-reacting. Yes that is probably true. BUT I have had many years of expoerience in dealing with Govt Depts in Aust (especially ATO) and I know about many people who got caught out.  And you do not want to get caught out by the Thai RD - much harsher penalties than ATO.

Stay across it and stay informed - by end 2024 we will know how bad or good it really is.

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No need to worry imo. This is only going to be a concern for those who are legit evading paying income tax. 

 

The announcement only suggests they are aiming to close the loophole that allows Thai Tax residents including foreigners to avoid paying any income tax by leaving that income outside of the country for a year. That is it.

 

They might eventually require foreigners to file / declare yearly income, but they haven't announced that.

 

[VBF]

  On 10/4/2023 at 2:45 AM, Mike Teavee said:

Depends where the money came from that you Transferred, e.g. If you got a $20,000 dividend & added it to $80,000 savings to transfer $100,000 for a Condo purchase then the $20,000 is taxable (DTAs & Tax already paid aside). 

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Except that, if the $100,000 you transferred into Thailand all came as one "lump" you could declare it all as savings. Perhaps it would be sensible to put it all in a savings account and then transfer it, as, logically, at the time of transfer, it was demonstrably savings and you could show that your money in USA (or UK, Europe etc) was held in the savings account for a period of time.

[BE88]

  On 10/4/2023 at 7:37 AM, deejai33 said:

I think the word 'savings' is a bit misleading.   All your money starts out as income from some source.  Might be taxed, or might not be.

 

You spend that money.  Money you don't spend 'magically' turns into savings !  Maybe stored in a savings account.

 

The question, has that 'savings' been taxed yet can be asked.   Tax collectors look for untaxed money.

 

The relevant question is has tax been paid.  Not is the money 'savings'.

 

Probably most expats money in savings accounts has already been taxed.   But its not always true.  

 

 

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I don't agree, if I have a bank account in my country and the certainty that all taxes have been paid, only if you have an undeclared account in some tax haven it is very likely that you have not paid taxes.

But generally for people with a normal standard of living the question doesn't even arise.