Change in the tax law does target expats living in Thailand and extends reporting obligations

[khunpa]

12 minutes ago, Mike Lister said:

I'm very confident that nobody is going to get taxed on imported money to buy a house, the market would collapse.

Well no matter what any transfers into the country, could involve a risk of you having to prove where the money comes from.

 

So in theory you could face a nightmare in having to prove your transfer was already taxed.

 

Of course in practical terms the RD-Officer will properly just as for an envelope for your new problem to “go away”.

[NorthernRyland]

2 minutes ago, Mike Lister said:

Everyone is entitled to a 60k per YEAR tax deduction, plus, everyone over age 65 years is entitled to a 190k per YEAR tax deduction. In addition, the first 150k of income on the Thai tax tables is zero rated, that's the first 150K per YEAR. When all is said and done, the average over 65 year old pensioner will be entitled to over 400k in tax free money per YEAR. Please tell me you got that!

thanks got it now.

 

That's not a lot of money. At 400k annual then you're liable on taxes for anything over 33k/month. I still don't see how this will affect most people because you've already been taxed on the total sum which is in excess of 33k/month anyways and the rate is gong to be great than 5% I think.

 

Correct me if I wrong but the problems come if you're earning something like 2+ mil year and your tax rate in your home country is less than the Thai maximum so now I sounds like you're liable for the difference on all money imported in to the country. 

[Karma80]

3 hours ago, alanrchase said:

 

You may want to read this first. Depending on your nationality it may or may not affect you.

 

https://www.linkedin.com/pulse/tax-resident-nowhere-kathleen-di-paolo?utm_source=share&utm_medium=member_mobile_web&utm_campaign=copy

 

I couldn't agree more. Being a tax resident of a place with the lowest tax obligations is a no-brainer and forms part of my own strategy, and thousands of others no doubt. The problem with the RDs new (forced) interpretation is it makes Thailand far less competitive. Nobody wants to live through a learning period in a country with a really poor reputation for bureaucracy, flip-flops, implementation, corruption and policy instability. Not when your tax liability is on the line.

 

Double taxation agreements or not, I choose not to have to dance through the hoops of fire to prove things to Somchai at the local RD. Anyone living in Thailand can attest that an active avoidance of anything official is the best policy.

 

I appreciate for many retirees, the impact is next to nothing. But for others who are at a more enterprising point in their life from a business sense, Hong Kong or Singapore are starting to look a lot more attractive from a tax perspective. 

 

 

[Mike Lister]

1 minute ago, NorthernRyland said:

thanks got it now.

 

That's not a lot of money. At 400k annual then you're liable on taxes for anything over 33k/month. I still don't see how this will affect most people because you've already been taxed on the total sum which is in excess of 33k/month anyways and the rate is gong to be great than 5% I think.

 

Correct me if I wrong but the problems come if you're earning something like 2+ mil year and your tax rate in your home country is less than the Thai maximum so now I sounds like you're liable for the difference on all money imported in to the country. 

It depends on the country involved, the source of the income and the specifics of the DTA, much of US based income cannot be taxed by Thailand under treaty laws. But to be clear, there is very little clarity regarding what will happen, things just haven't been decided and agreed plus everything could easily change in a flash. Perhaps best to chill and wait and see.

[Bobthegimp]

Just now, lordgrinz said:

I think the bottom line here is that I am not willing to fill out any tax papers or share any sensitive financial information from foreign accounts with any Thai government agency, would rather just leave first. I would bet many others would agree, if that's what they want, so be it.

 

I don't blame you. 

 

The Thais most seriously impacted are also the wealthiest and most influential citizens.  The type who can run over cops and crash van loads of professors with impunity. This should be an interesting battle. 

[kingstonkid]

3 hours ago, Skipalongcassidy said:

This situation begs the question as to why Thailand insists on inventing the wheel all over again... is it pride or ignorance that blinds them to other tried and true systems that are up and running with all the bugs already dealt with. Asking for a friend.

 

That is easy.  The reason for this change is because of 10K per person and all the other promises and toys that the governments keep buying and giving.

 

Consider that Thailand subsidizes or pays

 

Oil and gas sold 

regulates the prices of many items sold

10K per person

money to people coming back from israel

Submarines that never seem to be around

bts/mrt fares 

SRT at a loss

All the government employees

BMA

Thai Airways

AOT

China Belt Road Plan

 

and there is probably more.

 

Most of the rich Thais have outside investments and are buying/stashing money outside of the country.

 

Why do you think Thais buy British football teams?

 

 

 

 

 

 

[Mike Lister]

4 minutes ago, khunpa said:

Well no matter what any transfers into the country, could involve a risk of you having to prove where the money comes from.

 

So in theory you could face a nightmare in having to prove your transfer was already taxed.

 

Of course in practical terms the RD-Officer will properly just as for an envelope for your new problem to “go away”.

In theory you could get hit by a truck before lunch, in which case the whole subject is moot.

[NorthernRyland]

Just now, Mike Lister said:

It depends on the country involved, the source of the income and the specifics of the DTA, much of US based income cannot be taxed by Thailand under treaty laws.

I heard it was the difference so if the max rate in Thailand is 35% that will be easily reached by a person making a modest 60k USD/year in America, who will be paying something like 20% income tax, thus if that's true you get a 15% rate of tax on all income imported into Thailand.

 

This would really apply to married or Thai elite people earning money aboard (my personal situation)

[JimboB4]

They’re talking about permanent residence. They are talking about foreign investment income. This doesn’t affect any foreigner living here which they of course don’t specify. 

[Bobthegimp]

4 minutes ago, kingstonkid said:

 

That is easy.  The reason for this change is because of 10K per person and all the other promises and toys that the governments keep buying and giving.

 

Consider that Thailand subsidizes or pays

 

Oil and gas sold 

regulates the prices of many items sold

10K per person

money to people coming back from israel

Submarines that never seem to be around

bts/mrt fares 

SRT at a loss

All the government employees

BMA

Thai Airways

AOT

China Belt Road Plan

 

and there is probably more.

 

Most of the rich Thais have outside investments and are buying/stashing money outside of the country.

 

Why do you think Thais buy British football teams?

 

 

 

 

 

 

 

TL;DR   someone has to pay for the graft.

[crazykopite]

Thailand has tax agreement with many countries including my country the U.K. and as my tax is taken out at source every month by HMRC I won’t be obliged to pay tax on my U.K. pensions in Thailand if they try then I will up sticks and move to the Philippines spending 6 months there and six months in Thailand 

[JimboB4]

1 minute ago, crazykopite said:

Thailand has tax agreement with many countries including my country the U.K. and as my tax is taken out at source every month by HMRC I won’t be obliged to pay tax on my U.K. pensions in Thailand if they try then I will up sticks and move to the Philippines spending 6 months there and six months in Thailand 

Of course you won’t 

[Mike Lister]

2 minutes ago, NorthernRyland said:

I heard it was the difference so if the max rate in Thailand is 35% that will be easily reached by a person making a modest 60k USD/year in America, who will be paying something like 20% income tax, thus if that's true you get a 15% rate of tax on all income imported into Thailand.

 

This would really apply to married or Thai elite people earning money aboard (my personal situation)

The tax rate in Thailand is NOT 35%, the highest tax band is but there are lots of other bands below that. The first 150k is tax free, the next 150k is taxed at 5%, the next 200k is taxed at 10%....and so on. The full tax tables are here: https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income

[Mike Lister]

4 minutes ago, JimboB4 said:

They’re talking about permanent residence. They are talking about foreign investment income. This doesn’t affect any foreigner living here which they of course don’t specify. 

No, they are talking about ANYONE who is resident in Thailand for tax purpose, that means anyone who stay here for more than 180 days in every tax year.

[Rampant Rabbit]

guess  this  is  going to be another 200pages oif what ifs.........I dont see much comment on this  rule for the DTA's   https://www.rd.go.th/english/23520.html

5.   What happens if the rate of tax stipulated in the Revenue Code is different from that of an agreement?  

- Apply the rate which is more beneficial to the taxpayer.  

[NorthernRyland]

Just now, Mike Lister said:

The tax rate in Thailand is NOT 35%, the highest tax band is but there are lots of other bands below that. The first 150k is tax free, the next 150k is taxed at 5%, the next 200k is taxed at 10%....and so on. The full tax tables are here: https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income

OK I'm just gonna stop asking question until the policy is introduced. 🙂 I need to start doing real research if I want to understand this correctly. Thanks though.

[jerrymahoney]

1 hour ago, Jeffrey346 said:

My wife. She is a lawyer and works for the RD. She applied for this new position.

So one lawyer for each of 70 provinces: One lawyer for Bangkok and one for Sing Buri?

[retarius]

My plan is to become non resident. I have other homes in other countries, and will spend time there. I'l ditch the retirement visa and come here as a tourist. I'll be damned if I am paying more taxes on money that has already been taxes. I can spend time in the US, time in Europe and less than 180 days here. I hate it here in rainy season and March, April, May so it's pretty easy to arrange a schedule that works with better weather. March and April in Miami' September, October in Europe; and a couple of months cruising. 

I'll sell some land my missus owns here and use the money to spend in other countries.

I self insure for medical here, so no changes or need for insurance; and I have insurance for Europe. The only medical insurance problem is the US and I am insured for Part A anyway (the hospital stays)

[Misty]

3 hours ago, Skipalongcassidy said:

This situation begs the question as to why Thailand insists on inventing the wheel all over again... is it pride or ignorance that blinds them to other tried and true systems that are up and running with all the bugs already dealt with. Asking for a friend.

 

It looks like the original Thai tax code in fact may have been based on an existing system.  For example, the UK taxes inward remittances for non-domiciled tax residents ("non-doms").  https://www.gov.uk/tax-foreign-income/non-domiciled-residents

 

The difference is that UK non-doms I know avoid this tax by living on their income and remitting as little foreign income as possible. To make this work, they have to scrupulously keep their foreign accounts separate : those that remit income, and those that never do.  High level executive non-doms usually get very expensive tax advice before they accept positions in the UK. They prepare for this tax in advance by opening and maintaining "clean" (nonmixed) accounts.

 

So Thailand may not be trying to invent the wheel.  Thailand (and arguably Malaysia) are potentially using similar tax code, but the situation in country is very different. Unlike highly paid UK non-doms, many foreign tax residents in Thailand remit foreign income regularly and have not segregated their accounts. Thailand switching horses mid-stream could be messy.

 

 

 

[dick turpin]

1 hour ago, Jeffrey346 said:

My wife. She is a lawyer and works for the RD. She applied for this new position.

Out of interest, what did it actually say in the job

description.......chasing down miscreant farangs..  

[JimboB4]

6 minutes ago, Mike Lister said:

No, they are talking about ANYONE who is resident in Thailand for tax purpose, that means anyone who stay here for more than 180 days in every tax year.

A “resident” for tax purposes definitely doesn’t affect anyone here more than 180 days. If you’re on a marriage visa, retirement visa or whatever that is not for tax purposes and is definitely not a resident. 

Edited November 6, 2023 by JimboB4

[salavan]

So it seems like it's definite then!! So how about some details then. 

Am I taxed on the money I recive in my own country by Thailand or am I only taxed on the money I bring into Thailand? I have an FCD account is it taxed before I change it up into baht? or only after I change it up into baht? 

Let's have some details Mr tax man or are you going to keep it a secret until the last minute. 

[Jeffrey346]

5 minutes ago, jerrymahoney said:

So one lawyer for each of 70 provinces: One lawyer for Bangkok and one for Sing Buri?

I didn't say that..  BKK may have 50+. Smaller provinces less

[Jeffrey346]

5 minutes ago, dick turpin said:

Out of interest, what did it actually say in the job

description.......chasing down miscreant farangs..  

Sorry, don't know

[Mike Lister]

10 minutes ago, JimboB4 said:

A “resident” for tax purposes definitely doesn’t affect anyone here more than 180 days. If you’re on a marriage visa, retirement visa or whatever that is not for tax purposes and is definitely not a resident. 

It's pretty much universal tax law that anyone who lives in a country for more than 180 days in a single tax year, is considered to be "tax resident" or "resident for tax purposes", in that country, end of story.

[Jeffrey346]

5 minutes ago, salavan said:

So it seems like it's definite then!! So how about some details then. 

Am I taxed on the money I recive in my own country by Thailand or am I only taxed on the money I bring into Thailand? I have an FCD account is it taxed before I change it up into baht? or only after I change it up into baht? 

Let's have some details Mr tax man or are you going to keep it a secret until the last minute. 

Thereare no details yet. Plus all tax laws will have exceptions. Everyone here is just speculating. Keep in mind, if your country has a tax agreement with Thailand, nothing will change.

[Sydebolle]

It will create a black market to the enjoyment of the Indian money changers who are in permanent need of foreign currency cash for all those crooks evading taxes. 

I remember 30+ years ago a survey in either Bangkok Post or The Nation which stated, that among the top 100 income tax payers there are exactly six Thais while the other 94 were alien ........

Do you honestly think that this ratio has substantially changed ever since? 

[Mike Lister]

Just now, Jeffrey346 said:

Thereare no details yet. Plus all tax laws will have exceptions. Everyone here is just speculating. Keep in mind, if your country has a tax agreement with Thailand, nothing will change.

I think it's too early to confirm that nothing will change, indeed some things almost certainly will. For example, income earned overseas from renting out immovable property, will be taxable in Thailand, when it is imported, subject to DTA rules which will vary from country to country.

[Jeffrey346]

1 minute ago, Sydebolle said:

It will create a black market to the enjoyment of the Indian money changers who are in permanent need of foreign currency cash for all those crooks evading taxes. 

I remember 30+ years ago a survey in either Bangkok Post or The Nation which stated, that among the top 100 income tax payers there are exactly six Thais while the other 94 were alien ........

Do you honestly think that this ratio has substantially changed ever since? 

Yes, I do think that number is bogus. There are 100's of Thai millionaires. 

[mikebell]

5 hours ago, Gknrd said:

My guess is they will have authorized tax officials that you will have to get signed off on before you go to immigration for an extension of your visa.

 

AKA Police.