Failure to file Annual Tax return = 200% penalty? (180 days)

[TPDH]

Hey

"If a taxpayer fails to file a return, additional penalties apply. For failure to file the annual return, a penalty equal to 2 times the amount of tax payable is imposed. For failure to file the mid-year return, a 20% surcharge on half the tax payable for the year is imposed"

https://orbitax.com/taxhub/countrychapters/TH/Thailand/c06c8ef5784b4a4f838cc0c82f0e9c19/Interest-and-Penalties-580

 

With the new 180 days rules starting in 2 months I started reading more about tax filings here in Thailand. Is it true that if you fail to file your annual tax return, you'll have to pay a penalty of 2 times the tax you owe? For example, if you owe $30K in tax but you didn't file your annual tax return, you'll get $60K in penalties? 2x seems absurdly high. I would have imagined a penalty of a few % per month or year of tax owed, not an immediate and instant penalty of 200% without a cap. 

 

If this is true, with the new rules starting soon, this could mean bankruptcy for thousands of foreigners. 

 

 

Edited October 31, 2023 by TPDH

[KannikaP]

16 minutes ago, TPDH said:

Is it true that if you fail to file your annual tax return, you'll have to pay a penalty of 2 times the tax you owe? For example, if you owe $30K in tax but you didn't file your annual tax return, you'll get $60K in penalties?

Yes, your maths is perfectly correct. But does it mean you pay the 30k PLUS the 2 x penalty?

Edited October 31, 2023 by KannikaP

[KannikaP]

17 minutes ago, TPDH said:

For failure to file the mid-year return, a 20% surcharge on half the tax payable for the year is imposed"

That sounds like 10% to me!

[treetops]

21 minutes ago, TPDH said:

If this is true, with the new rules starting soon, this could mean bankruptcy for thousands of foreigners.

Most foreigners are not taxpayers and it's not clear if the new law will affect them, despite the amount of discussion going on about it.

[Mike Lister]

Hay

 

There's a work around....file your taxes on time!

[Guavaman]

42 minutes ago, TPDH said:

With the new 180 days rules starting in 2 months I started reading more about tax filings here in Thailand. Is it true that if you fail to file your annual tax return, you'll have to pay a penalty of 2 times the tax you owe? For example, if you owe $30K in tax but you didn't file your annual tax return, you'll get $60K in penalties? 2x seems absurdly high. I would have imagined a penalty of a few % per month or year of tax owed, not an immediate and instant penalty of 200% without a cap. 

 

Section 89/1

Any person fails to pay or remit tax within the time prescribed in this Chapter shall be liable to surcharge on 1.5 percent of payable or remittable tax excluding fine per month or fraction thereof;

 

[federicoP]

44 minutes ago, TPDH said:

For example, if you owe $30K in tax but you didn't file your annual tax return, you'll get $60K in penalties? 2x seems absurdly high.

 

In my country (Italy) if you fail to file the annual return the penalty to pay is from 120% to 240% of the amount of payable taxes.

 

If somebody fails completely to file and to pay his taxes, it does not seem to be an absurd penalty.......

[Shop mak]

Taxpayer have 3 months 1/1 - 31/3 to file the tax return,  if implemented for foreigners. Should be more than enough time.

 

Dual Tax Agreement will be respected, if ever implemented from 1/1/2024.

 

My local Revenue office have still not received any final directives.

Relax.

 

[Gottfrid]

3 hours ago, TPDH said:

If this is true, with the new rules starting soon, this could mean bankruptcy for thousands of foreigners. 

Yeah, possibly! But, it´s actually just to remember to file the tax return. Can´t be that hard, can it?

[topt]

4 hours ago, TPDH said:

With the new 180 days rules starting in 2 months

The 180 days rule is not new. So theoretically anybody living here for more than 180 days should arguably be filing anyway............but of course most don't......

 

2 hours ago, Shop mak said:

Taxpayer have 3 months 1/1 - 31/3 to file the tax return,  if implemented for foreigners. Should be more than enough time.

Regarding the potential change removing the loophole about previous years income you will not be filing specifically for that until 2025..........

[Guavaman]

3 minutes ago, topt said:

The 180 days rule is not new. So theoretically anybody living here for more than 180 days should arguably be filing anyway............but of course most don't......

 

The minor change in taxation upon remittance will only affect Thais and expats who were holding income offshore during one year, to remit in the following year. 

 

If the truth were to be told, one would expect that only a very few of the expats residing in Thailand for more than 180 days in a calendar/tax year were stashing away their income for a year like squirrels hiding acorns, only to then remit those funds for use in the following year.

 

Rhetorical Question:  How many expat friends do you know, who held their income offshore for a year before bringing it into Thailand for living expenses during the following year?

 

So what has actually happened?  The truth may have been exposed that more than 100,000 expat tax residents have neither filed tax returns, nor paid income tax in Thailand for the past -- decade or more, joining the 65m Thais who neither file, nor pay income tax. 

[freeworld]

Who cares, if taxable income is to be declared and taxes to be paid then it should be done, that will be the law for all law abiding people, just like it is in most countries.

 

Then the govt will have more revenue to improve govt services and infrastructure to upgrade Thailand to version 2.0 so it can be like Western Europe or Singapore.

 

Suggest the govt also introduce fines, penalties and interest for not submitting tax returns if income was to be declared.

[thesetat]

14 hours ago, treetops said:

Most foreigners are not taxpayers and it's not clear if the new law will affect them, despite the amount of discussion going on about it.

If I am not mistaken.. The new tax laws only apply to those foreigners who generate income in another country and transfer it to Thailand. Those who get retirement benefits as their source of income will not be required to pay tax.. Those who paid tax already in their country where the income was earned can not be charged 2 times so will not have to pay tax also. So most foreigners who have retired to Thailand will not need to worry about paying this tax. This was my understanding of it when I read the new laws. 

Someone is welcome to correct me if i am mistaken

[freeworld]

3 minutes ago, thesetat said:

If I am not mistaken.. The new tax laws only apply to those foreigners who generate income in another country and transfer it to Thailand. Those who get retirement benefits as their source of income will not be required to pay tax.. Those who paid tax already in their country where the income was earned can not be charged 2 times so will not have to pay tax also. So most foreigners who have retired to Thailand will not need to worry about paying this tax. This was my understanding of it when I read the new laws. 

Someone is welcome to correct me if i am mistaken

Are there new tax laws?

[thesetat]

1 minute ago, freeworld said:

Are there new tax laws?

They are being drafted to begin January 1.. 

[freeworld]

Just now, thesetat said:

They are being drafted to begin January 1.. 

Thanks.

[Celsius]

Not enough.

 

No file tax return within 30 days - 1 year ban from Thailand.

 

60 days - 2 year ban

90 days - 3 year ban

Over 90 days - lifetime ban

[freeworld]

Just now, Celsius said:

Not enough.

 

No file tax return within 30 days - 1 year ban from Thailand.

 

60 days - 2 year ban

90 days - 3 year ban

Over 90 days - lifetime ban

That is going to be worse than prison.

[Ben Zioner]

14 hours ago, Shop mak said:

Relax.

Yep, don't  think we'll see any foreigners arrested before June 2025.

[thesetat]

27 minutes ago, freeworld said:

Who cares, if taxable income is to be declared and taxes to be paid then it should be done, that will be the law for all law abiding people, just like it is in most countries.

 

Then the govt will have more revenue to improve govt services and infrastructure to upgrade Thailand to version 2.0 so it can be like Western Europe or Singapore.

 

Suggest the govt also introduce fines, penalties and interest for not submitting tax returns if income was to be declared.

Hahaha you surely are misguided if you believe this is what that money would go for. 

[Ben Zioner]

1 minute ago, thesetat said:

Hahaha you surely are misguided if you believe this is what that money would go for. 

Indeed, admirals get 60% on the purchase of submarines, they want a whole fleet now.

[topt]

17 minutes ago, thesetat said:

If I am not mistaken..

Yes and no.

17 minutes ago, thesetat said:

Someone is welcome to correct me if i am mistaken

All depends on the final interpretation. If you haven't seen it knock yourself out with this thread to see a multitude of different takes.....

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

 

[mfd101]

22 minutes ago, thesetat said:

If I am not mistaken.. The new tax laws only apply to those foreigners who generate income in another country and transfer it to Thailand. Those who get retirement benefits as their source of income will not be required to pay tax.. Those who paid tax already in their country where the income was earned can not be charged 2 times so will not have to pay tax also. So most foreigners who have retired to Thailand will not need to worry about paying this tax. This was my understanding of it when I read the new laws. 

Someone is welcome to correct me if i am mistaken

The question then is: Will we nevertheless still have to file a return?

[Mike Lister]

Just now, mfd101 said:

The question then is: Will we nevertheless still have to file a return?

If you have income of over THB 120k per year in Thailand, including imported income that is assessable to tax in Thailand and, you were resident here for more than 180 days in the tax year, yes.

[mfd101]

2 minutes ago, Mike Lister said:

If you have income of over THB 120k per year in Thailand, including imported income that is assessable to tax in Thailand and, you were resident here for more than 180 days in the tax year, yes.

Oh dear. I better get used to the idea then.

[Mike Lister]

1 minute ago, mfd101 said:

Oh dear. I better get used to the idea then.

It's a simple enough process, albeit we don't know yet what issues the new rules might bring.

[mfd101]

1 minute ago, Mike Lister said:

It's a simple enough process, albeit we don't know yet what issues the new rules might bring.

If simple superannuants/pensioners are going to have to lodge a return (and 120K per year is absurdly small), I guess the Thai tax/revenue department is going to be overwhelmed with work requiring English-language skills (amongst others).

 

Net outcome: Swollen bureaucracy even more swollen. No benefit to the nation (except for lower middle class employment opportunities).

[Mike Lister]

1 minute ago, mfd101 said:

If simple superannuants/pensioners are going to have to lodge a return (and 120K per year is absurdly small), I guess the Thai tax/revenue department is going to be overwhelmed with work requiring English-language skills (amongst others).

 

Net outcome: Swollen bureaucracy even more swollen. No benefit to the nation (except for lower middle class employment opportunities).

It's all online, you can do it from home once registered. In a worst case scenario, we're all obliged to file a return, that doesn't mean the RD will do anything with them. But if the tax filer completes a return that shows they owe money and offers to pay, great. Or if the banks records throw up dubious imported income that wasn't declared, maybe they'll have a peek. There's lots of possible scenarios.

[topt]

2 minutes ago, Mike Lister said:

It's all online, you can do it from home once registered.

But all in Thai?

[Mike Lister]

Just now, topt said:

But all in Thai?

Yes, for now.