180 day rule and filing TAXES

[Marky Mark Mark]

Can someone explain whats going on. I hear its way past the conjecture stage.   Its a done deal.

 

 

I make way too much money in USA.....im concerned i have to limit myself to 180 days in Thailand, 

[Crossy]

Don't panic (yet), it's only money brought into Thailand that's taxable and you may be protected by the Thai-US double taxation agreement.

 

[Ben Zioner]

16 minutes ago, Marky Mark Mark said:

I make way too much money in USA.....im concerned i have to limit myself to 180 days in Thailand, 

If  you make that much money you ought to consider an LTR visa.

 

And yes it is  done deal, but implementation hasn't been worked out. This being Thailand the worst can happen. Damage to certain sectors of the economy will be real but probably limited. Corruption will be thriving once more.

[AVWB]

Bragging rights ? If you are a USA citizen, the USA taxes on world wide income, it will not make a difference for you. 

Edited October 10, 2023 by AVWB

[Gottfrid]

1 hour ago, Marky Mark Mark said:

Can someone explain whats going on. I hear its way past the conjecture stage.   Its a done deal.

 

 

I make way too much money in USA.....im concerned i have to limit myself to 180 days in Thailand, 

If you, as an American, makes way too much money in the States, then you would also be aware of how the tax treaty works.

[retarius]

Not time to worry. I plan to be non tax resident here. Fortunately I have other nice places to live and can, and will spend time there. My situation is simpler perhaps, insofar as I don't work at all and earn no income. My income is all from pensions and from investments, all in the US, and taxed there. But until the situation clarifies and the rules and processes are fully known I'm not risking bringing money into Thailand. I have enough here to last me until I die anyway. 

The only money I have paid directly is US SS because if I ever need to this covers the income method rule for my visa. 

[PJ71]

Surely the money you already have before these new rules come in to play cannot be touched?

 

For example if one had say 10m baht in a bank, it cannot be touched if all brought into country before this new set of rules?

[DineshR]

It's only money that is brought into Thailand that is taxed. That said, social security payments and annuity payments are exempt from Thai tax per the US-Thailand dual taxation treaty agreement (DTA). If you bring in any other type of income starting 1/1/24, then you will be taxed. Suggest you read the DTA - https://www.irs.gov/pub/irs-trty/thailand.pdf. Even if taxed, you can take a credit of Thai taxes paid against your Federal tax obligation.

[wwest5829]

4 hours ago, Marky Mark Mark said:

Can someone explain whats going on. I hear its way past the conjecture stage.   Its a done deal.

 

 

I make way too much money in USA.....im concerned i have to limit myself to 180 days in Thailand, 

All of us Americans are required by law to report our worldwide income on which we are under USA taxation law. As we already are subject to taxation on that income, where the USA has taxation treaties with other countries, we are protected from double taxation on that same income. From all that I am reading and listening to from companies filing our tax returns from here in Thailand, our US- Thai tax treaty remains covering us. My only income is derived from US retirement sources, I anticipate no change in my annual US tax return. If you are in Chiang Mai, the last Saturday of the month, a speaker from American International Tax Advisors will address this at the meeting of the Chiang Mai Expats club scheduled for 10:00 at the Melia Hotel.

[Time Traveller]

4 hours ago, Crossy said:

Don't panic (yet), it's only money brought into Thailand that's taxable and you may be protected by the Thai-US double taxation agreement.

 

Don't bet on it.   The Thai government are very terrible at communicating effectively and it's my belief that they intend to adopt a residence based  worldwide taxation system like what many western countries have for their own tax residents.  Meaning no matter whether you bring the money into Thailand or not, if it is income then they tax it.

 

If they only taxed money coming into Thailand then how would they be able to distinguish between money that was income and money (savings) that was not income. They couldn't. That system wouldn't work or be practical.

 

Also why would they be making a major announcement if they intended to keep offshore income untaxed as long as it was not remitted into Thailand. Because that's the system they already have now.

 

I'm afraid to say this but it's likely the OP will get taxed on his offshore income. Thailand definitely isn't a low tax country. So you'll get a tax credit for any US income taxes paid but since Thai income tax rates are higher then you'll probably get taxed on the difference in rates that Thailand has.

 

Sucks for high income earners, but there might be a positive for low income earners as a yearly tax filing with Thailand may open doors for immigration to accept that as proof of income for extension of stay purposes

[Time Traveller]

38 minutes ago, wwest5829 said:

All of us Americans are required by law to report our worldwide income on which we are under USA taxation law. As we already are subject to taxation on that income, where the USA has taxation treaties with other countries, we are protected from double taxation on that same income. From all that I am reading and listening to from companies filing our tax returns from here in Thailand, our US- Thai tax treaty remains covering us. My only income is derived from US retirement sources, I anticipate no change in my annual US tax return. If you are in Chiang Mai, the last Saturday of the month, a speaker from American International Tax Advisors will address this at the meeting of the Chiang Mai Expats club scheduled for 10:00 at the Melia Hotel.

You're confusing what double taxation is.   It doesn't mean you are exempt from income tax if you are resident in another country. It only means you're not taxed double.  Let me explain.

 

For example, if you're American and your effective income tax rate paid in the US is 20%, but the country you live in assess the same income amount should pay an income tax rate of 30%.   Then you'll get a 20% tax credit for the taxes paid to the IRS, but you''ll still have to cough up the 10% difference to the taxation department of the resident country that you live in 

There are very few exceptions to this rule and most relate to pension or social security income and the details are specific to each treaty.

 

BTW,  if you're using a tax treaty about your income you are required specifically to state that on seperate forms when you file your taxes. It isn't automatically assumed by the taxation agencies.

Edited October 10, 2023 by Time Traveller

[Time Traveller]

 

 

2 hours ago, PJ71 said:

Surely the money you already have before these new rules come in to play cannot be touched?

 

For example if one had say 10m baht in a bank, it cannot be touched if all brought into country before this new set of rules?

Correct. Any accumulated savings or capital is not income so would not be taxed.

If that happened then that's effectively capital controls tax which happened very briefly in (I think) 2007 and was quickly reversed.

 

[Time Traveller]

4 hours ago, AVWB said:

Bragging rights ? If you are a USA citizen, the USA taxes on world wide income, it will not make a difference for you. 

Wrong.  Being a US Citizen who is a tax resident of another country does not make you exempt from taxes in that country. As stated previously there are a few exceptions which are generally related to pension or social security income that is sourced from USA. Other types of income such as salaries, investment income, capital gains, royalties, rents would like still be considered as taxable income in the country where you live.  

[tandor]

5 hours ago, Marky Mark Mark said:

Can someone explain whats going on. I hear its way past the conjecture stage.   Its a done deal.

 

 

I make way too much money in USA.....im concerned i have to limit myself to 180 days in Thailand, 

why the need to state that

[Lemsta69]

21 minutes ago, tandor said:

why the need to state that

to justify why he started a new topic and expects to be spoonfed when there are at least 3 other threads on the very same subject? ????????

[quake]

5 minutes ago, Lemsta69 said:

to justify why he started a new topic and expects to be spoonfed when there are at least 3 other threads on the very same subject? ????????

Yeah, about time AN started a new sub forum,  just for this tax issue.

[Lemsta69]

2 minutes ago, quake said:

Yeah, about time AN started a new sub forum,  just for this tax issue.

Well more topics means more clicks which means potentially more ad revenue so I doubt that will happen. 

 

Even in the other threads there's so much misinformation and errors that your have to sift through it like you're panning for gold. Stuffed if I'm going to try and condense it all for the lazy OP ????

[quake]

1 minute ago, Lemsta69 said:

Well more topics means more clicks which means potentially more ad revenue so I doubt that will happen. 

 

Even in the other threads there's so much misinformation and errors that your have to sift through it like you're panning for gold. Stuffed if I'm going to try and condense it all for the lazy OP ????

It's all been said already.

No new information.

Just some posters, puking on there keyboards all day long. 

so yes put in new sub forum. it's boring now.

like most of the top posters on them threads.

 

[gamb00ler]

1 hour ago, wwest5829 said:

If you are in Chiang Mai, the last Saturday of the month, a speaker from American International Tax Advisors will address this at the meeting of the Chiang Mai Expats club scheduled for 10:00 at the Melia Hotel.

If you're going to listen to AITA's representative take a sizeable salt shaker with you.

 

In the past at least one of their senior staff has represented to US expats that withdrawals from 401K's and IRA accounts can be done tax free if you live in Thailand.  This is not the view held by the IRS as seen here:

https://www.irs.gov/pub/irs-trty/thaitech.pdf

 

[Ben Zioner]

46 minutes ago, quake said:

It's all been said already.

No new information.

Just some posters, puking on there keyboards all day long. 

so yes put in new sub forum. it's boring now.

like most of the top posters on them threads.

 

But we could start exchanging on competent Tax agents, avoidance strategies, etc..

[Sheryl]

2 hours ago, Time Traveller said:

 it's my belief that they intend to adopt a residence based  worldwide taxation system like what many western countries have for their own tax residents.  Meaning no matter whether you bring the money into Thailand or not, if it is income then they tax it.

 

 

 

Absolutely nothing in the new regulation says this, quite the opposite.

[Sheryl]

1 hour ago, Time Traveller said:

Wrong.  Being a US Citizen who is a tax resident of another country does not make you exempt from taxes in that country. As stated previously there are a few exceptions which are generally related to pension or social security income that is sourced from USA. Other types of income such as salaries, investment income, capital gains, royalties, rents would like still be considered as taxable income in the country where you live.  

It is a bit more complicated than that, if you read the US-Thailand DTA for example, since all US citizens resident ibn Thailand 180 days or more are dual citizens =for tax purposes other criteria then come into play to decide which income can be taxed where. People with a "permanent home available to them" in the US and none in Thailand (e.g. renters etc) can be considered, under the terater, as residents oif the US nto Thailand.

 

Though that will not necessarily reduce their taxes. Had they paid/if they pay any tax in Thailand that then becomes a tax credit on the US return.

[Presnock]

I queried "greenbacktaxservice.com" that sent me an ad for doing my ex-pat taxes and FBAR but I do my own without any problems and they indicated that if I had any tax or FBAR questions, they would respond within 24 hours or so.  I asked about the double-taxation on US pensions and international agreement with

Thailand.  They answered the next day saying that even with the agreements, the resident country could still tax those pension funds but that then the US would lower the US tax dollar for dollar.  And on any earned funds, the US has a lower tax for overseas residents paying taxes to the US.  That is their website and you can just email them and ask your tax questions or FBAR questions if any too.  SO, it appears to me that if the Thai govt does insist on my paying any tax on my pension funds sent here then my US tax will make up for it.  But what I would probably do is use my US credit card more than I do now or plan to do so that I would be sending fewer US dollars here and that will cut the amount that they would normally get from me.  Their loss for my troubles.  For all, good luck with whatever the "next" scheme will be.  Whenever you exit the country, you'll give them an extra 300 baht!!!!  

[UKresonant]

2 hours ago, Time Traveller said:

 

 

Correct. Any accumulated savings or capital is not income so would not be taxed.

If that happened then that's effectively capital controls tax which happened very briefly in (I think) 2007 and was quickly reversed.

 

I think it was mid December 2006, at the time of my Buhdist wedding in Bangkok, as I went to the ATM and it was giving 75baht for one British pound 

[Guavaman]

4 hours ago, DineshR said:

It's only money that is brought into Thailand that is taxed. That said, social security payments and annuity payments are exempt from Thai tax per the US-Thailand dual taxation treaty agreement (DTA). If you bring in any other type of income starting 1/1/24, then you will be taxed. Suggest you read the DTA - https://www.irs.gov/pub/irs-trty/thailand.pdf. Even if taxed, you can take a credit of Thai taxes paid against your Federal tax obligation.

DineshR, please get clear on this and refrain from posting misinformation that may cause misunderstanding for other people.

ARTICLE 20

Pensions and Social Security Payments

      3. Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State. The term “annuities” as used in this paragraph means a stated sum paid periodically at stated times during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered).

 

This means that for people who are tax residents of Thailand (>180 days), annuities "shall be taxable only in that State" where they are resident = Thailand.

 

Annuities are taxable in Thailand under the DTA.

 

[UKresonant]

I think generally the change could affect what you thought are savings. As would they not assume it all comes from income in the past? Savings were up until 31st Dec 23, that money that existed in a ring fenced bank account or similar. and brought in the following Thai Tax / calendar year.

 

Pending clarification, how will they want you to prove they are "savings" brought into the country? So it is not taxed.

[retiree]

1 hour ago, Presnock said:

They answered the next day saying that even with the agreements, the resident country could still tax those pension funds but that then the US would lower the US tax dollar for dollar.  And on any earned funds, the US has a lower tax for overseas residents paying taxes to the US.  

You are getting bad advice.

 

https://www.irs.gov/pub/irs-trty/thaitech.pdf

[Article 20] Paragraph 1 provides that private pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence State of the recipient.

 

... [including] The phrase “pensions and other similar remuneration” is intended to encompass payments made by private retirement plans and arrangements in consideration of past employment. In the United States ...  qualified plans under section 401(a), individual retirement plans (including individual retirement plans that are part of a simplified employee pension plan that satisfies section 408(k), individual retirement accounts and section 408(p) accounts), non-discriminatory section 457 plans, section 403(a) qualified annuity plans, and section 403(b) plans.

 

Quote

... and on any earned funds, the US has a lower tax for overseas residents paying taxes to the US.  

Yes -- the FEIE will reduce income tax on the first $120,000 to $0.00 by excluding it because you are not using US services and infrastructure.  And that is exactly the amount of credit -- $0.00 -- that will be applied to your income tax in Thailand, whose services and infrastructure you are using. 

 

It will be levied on any assessable income that was earned while you are a Thai tax resident, if and when the assessable income is brought into Thailand while you are a tax resident.

[UKresonant]

22 minutes ago, Guavaman said:

DineshR, please get clear on this and refrain from posting misinformation that may cause misunderstanding for other people.

ARTICLE 20

Pensions and Social Security Payments

      3. Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State. The term “annuities” as used in this paragraph means a stated sum paid periodically at stated times during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered).

 

This means that for people who are tax residents of Thailand (>180 days), annuities "shall be taxable only in that State" where they are resident = Thailand.

 

Annuities are taxable in Thailand under the DTA.

 

Under the UK treaty only pensions from Government service are covered in the DTA. Also when I was talking to the UK tax authority (3/2018), she said that they may ask you to pay the double tax and then they would be obliged to refund it.

 

What I'm not clear on (amongst many other things  ) is would they use that DTA applicable income, to push other income further up the progressive tax bands, so you would be paying more on that? What is their 'custom and practice' ?

 

Then the.UK tax year does not align with the Thai tax year....

Edited October 10, 2023 by UKresonant

[MikeN]

So, if somebody has to pay Thai tax when this is all sorted out, just what is the procedure ? Step #1 would be get a Thai tax number, but can you do your tax return here online, or what ? Back home I can do it online, with most of the data prefilled as employers, banks, etc report all your salary, interest and dividends to the tax office. I've never seen any tax agents here like back home, and my wife has never paid any income tax in her life apparently so she is no help !

[Mike Lister]

3 minutes ago, MikeN said:

So, if somebody has to pay Thai tax when this is all sorted out, just what is the procedure ? Step #1 would be get a Thai tax number, but can you do your tax return here online, or what ? Back home I can do it online, with most of the data prefilled as employers, banks, etc report all your salary, interest and dividends to the tax office. I've never seen any tax agents here like back home, and my wife has never paid any income tax in her life apparently so she is no help !

Tax year is 1 Jan to 31 Dec

File tax return between 1 Jan and 31 Mar

Obtain TIN, register to file tax return online.

NO DATA IS PREFILLED ONLINE