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

[freeworld]

1 hour 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. 

Wrong.

 

Immigration resident and tax resident are two different kinds of residence, same the world over.

[The Cyclist]

6 minutes ago, JimboB4 said:

That’s not true they can’t tax income from overseas being deposited into a bank account I’ve already verified this 

 

Only Doom & Gloom moonhowlers on the other thread were getting their knickers in a twist claiming that overseas remmitances would be taxed by the receiving bank.

 

The Thai RD can certainly tax income from overseas that lands in a bank account in Thailand.

[Purdey]

I wonder if, by luck, the Shinawatra family will avoid this tax somehow?

[salavan]

2 hours 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”.

I wish I could share your optimism. 

Everyone said covid will be used to reset the economy seem they were right. 

[Andrew65]

7 hours ago, Captain Monday said:

What is the definition of ”Living In”　？

Being physically present in a country. In the UK I think it's for more than 90 days per annum (for tax purposes).

[Thaindrew]

they can if it hasn't already been taxed, or if its been taxed at a lower rate than would be applicable in Thailand, indeed if you live here over 180 days they have first dibs on your tax and its up to you to reclaim / offset from your home country if you have also paid there

 

20 minutes ago, JimboB4 said:

That’s not true they can’t tax income from overseas being deposited into a bank account I’ve already verified this 

[perconrad]

4 hours ago, Plus Esse Quam Simultatur said:

They started already more than 2 years ago this project.

Ather living here for more than 15 years and on government pension from Denmark I was suddenly called in for a meeting at the Tax office in Jomtien which covers all Banglamung area. I was ordered to bring different papers like the yearly tax payment and pension income from Denmark and bank account papers. They ran through it all and then fined me for not having reporting the last 2 years. Has been hear anything before so it was a big surprise they did this move. Denmark has a double taxation agreement with Thailand. At the same time I got a tax number so I could report the following year which I actually denied to do because the online reporting wasn't set up. I have never had an income from other places than my pension.

I was fined 400 Baht which I had to pay in the Ampur and not at the tax office.

Oh Yes they mean business with this tax for foreingers no doubt about that. Thinking differently will be a big mistake.

The concequens will be that I leave Thailand for good if they want to act silly which they always do. I live here permanently for you information 

 

I am Danish too and receive pensions in Denmark which are taxed with 38 %.

I have lived in Thailand more than 17 years.

 

Last year I was invited to a meeting with the local tax office in Kantharalak, Sisaket, I should not bring anything and at the meeting the officers showed me that they had received my yearly tax return from the Danish tax bureau.

Since I had paid so much in tax, the officers said I was free to go and I should not report or pay tax to Thailand, it looked that they were sorry for me that I had already paid so much in tax.

 

They showed me that I had a tax ID and that was my ID number on my pink ID card

[MartinL]

2 hours 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 

Make it 7 months Philippines, 5 months Thailand and you should get your UK State Pension unfrozen, if you're getting one.

[Guderian]

One big problem with this is that, regardless of legal challenges, it's probably going to take several years to understand what the implications really are on a personal level. I think a lot of people have been hoping that, as of 1/1/2024, suddenly everything would become clear, but if it's going to mean filing an annual tax return in order to be able to continue living here then the first one won't be due until 2025, after the 2024 tax year has ended. Then, as with all things in Thai bureaucracy, different offices will apply the rules as they see fit, so just like with Immigration, the whole thing will end up being a pig's ear. It will probably be 2026 before the dust settles and we understand how, broadly, they are going to implement any changes, plus what local idiosyncrasies apply to us. So we will be faced with 2 or 3 years of complete uncertainty over our tax situation, nobody will want to bring in large sums of money to buy a new car or boat or condo or house, in case in a year or two the TRD decides that you owe 30% or more tax on the amount. Expat life will, to a certain extent, grind to a halt.

[Choochai]

5 hours ago, Skeptic7 said:

The shallow ineptitude, greed, lack of foresight, innovation and responsibility of this country is astounding. Always dreaming up another stupid new scheme to pick the pockets of others not responsible and bite the hands that feed it.

Hear, hear

[Srikcir]

Will this proposed income tax apply to foreign embassy personnel being paid by their governments? I'd like to hear from the ambassadors agreeing to the tax, especially from wealthy nations such as China, USA, Saudi Arabia, Qatar, Russia.

 

I also find there is persistent lack of Thai pubished income tax revenue data expected from taxing foreign residents, especially how it compares to Thai citizen foreign income tax. Is taxing foreign residents material, especially compared to tax Thai citizens foreign income ND the mount of government oversight required for compliance? Is there really a monetary issue with foreign citizen income? 

 

What about NOT refunding VAT paid by the tens of MILLIONS of foreign tourists? No government oversight necessary, minimal change in laws, probably save government spending required to run the program. 

 

Furthermore, Thai citizens receive benefits through taxation, ie., access to government health services, right to vote, access to The Office of the Ombudsman and Office of the PM, Thai resident pricing to various venues, own land, etc. What do foreign residents get other than a privilege to reside In Thailand for 180 days annually in Thailand?

[lapamita]

the world getting harder.....

 

what is with a person ,  living for example on entrystamp or visa 4 month in thai, and another country on temporary residence 6 month and 2 month in diffrent countrys , without beeing a us citizen.  meaning no tax residency

and at foreign banks tell the thai adress , as proof of adress 

last 20 year was the status quo

any implication?? 

[Mike Teavee]

3 hours ago, Mike Lister said:

I am not non-resident for tax purpose in Thailand but I am non-resident for tax in the UK. I live in Thailand year round, did I say something that made you think otherwise?

No, I was asking the other 2 guys who said they never spend enough times in a country to become Tax Resident whether this meant they were by default Tax Resident in their home country (I.e. Do you have to be Tax Resident somewhere). 

 

Can I ask how you're not Tax Resident in Thailand if you live here year round/> 180 days? 

 

[Ben Zioner]

5 hours ago, MangoKorat said:

As I understand it, and I may well be wrong - double tax agreements don't prevent you from being taxed in Thailand.  My understanding is that if the amount of tax you paid in your home country is less than you would have paid in Thailand - you will have to pay the difference.  That might not be the case in many situations but one group that may well be affected is those on a pension.  For example, if your UK pension is less than the UK tax threshold - which many are, you don't pay tax on it in the UK.  However, even the basic UK pension is over the Thai tax threshold and therefore, according to my understanding and what I've read, it will be taxable if you bring it into Thailand.

You are correct, I  don't know how low  UK state pensions are, but I have calculated that people transferring the IO required minimum of 65000 a month would end up paying something like 3000 a month. That's about one beer less a day, quite healthy isn't? And considering that the price of a beer is mostly tax, the government won't get any richer  either.

[MrPancake]

Thailand will become a retiree trap.

The country has no other choice.

It's facing an ageing population problem and its economy is crippled by huge inequalities and bad education.

Milking western retirees as much as possible will be part of the country's strategy for the years / decades to come.

[RPCVguy]

1 hour ago, scorecard said:

 

At least 3 items that are missing from these discussions / comments:

 

- Are basic offshore state pensions subject to Thai personal tax?
- What's the threshold income amount which requires annual reporting and possibly payment of Thai personal tax on offshore state pensions received into Thailand?

- Does a double tax agreement with the country of origin of the pension have any affect (realizing of course that the laws of the sending country cannot be imposed by or on the Thai legal system/processes)?

Agreed! These are the basic questions for many retirees, especially retirees who have married Thai.
As reported so far, this is the kind of murky, ill-defined announcement that will cause a flood of comments, and tons of anguish. (As did the forced medical insurance rule change of a few years ago.) I have no investments and conduct no business. Currently I am well below the amounts that are taxable in the USA. As it is for me, ALL of it goes to my family, helping the local town economy.

This part looks encouraging, but is slippery when viewed midst the overall message of the article.
"The section provides for a 15% tax rate on interest on bonds, deposits or debentures, and capital gains derived from selling shares, debentures, bonds or other financial instruments linked to companies or other juristic partnerships. The legal experts suggested that many investors, including foreigners and Thai people alike, may not be able to easily differentiate for tax purposes between the principal and income of sums moving in and out of the country, which could lead them to be taxed at a rate of 35% and in this way would become an incentive for investors to keep their money out of Thailand to avoid complications with the Revenue Department."

[samtam]

4 hours ago, Mike Teavee said:

 

 

Can I ask which country you guys are from & whether not being Tax Resident elsewhere means by default you are Tax Resident in your home country. 

 

The reason I ask is that I plan on doing every 3rd year as a Non-Tax resident in Thailand during which I'll bring in enough money to support me for the next 3 years, BUT I don't want this to mean that I default to becoming tax resident in my home country (UK).

 

As an aside, the Tax Residency threshold in the UK operates on a sliding scale depending on how long you've been Non-UK Tax Resident & how many "Economic Ties" you have there. I can spend up to 89 days in the UK as I have 2 "Economic Ties" there, but if I had the full (4) "Economic Ties" it would be 45 days as I've been Non-UK Tax Resident for > 3 years & 16 days if I hadn't.

 

 

 

Can you expand on "economic ties" please?

[TroubleandGrumpy]

Seems those people like myself and @Dogmatix and @stat and @Mike Lister and many others who have been 'discussing' this matter (not always in agreement), and the possible implications, and the possible counter measures - and who were called 'phrophets of doom' by the 'bar-boys' and 'emus' on this forum, have been doing the right thing when raising the issues and debating the negatives.

 

 

Well, who would have guessed - several Thai tax law exdperts have come out and said it too.  Maybe now the 'bar-boys' and 'emus' will realise that this is not an issue to be treated with disdain (and those discussing it), and that the  'She'll be right mate - have another beer'  is not going to be the right strategy in the long run. It might not become such a big issue - but it certainly can if things are not clarified and detailed explanations are not provided by the Thai RD.  As the post above says - we will have to 'report' remittances into Thailand and dfeclare them either taxabale or non-taxable income (as it stands), and good luck convincing Somchai in the Thai RD that your pension/savings are not 'income' that can be taxed in Thailand - and even more good luck when arguing with Pronchai that a DTA means you pay no taxes 🙂   

 

In this modern world of social media and its massive influence on all Govts (especially Thailand). It is only because of Expats like us 'complaining' on this forum, and other websites, and our Thai partners, that this issue is being 'responded to' by people that do have an influence in Thailand.  There are no guarantees either way, but these days it is very much that the 'squeky wheel' gets the oil - and the 'noisier' we are the better. So get active boys and put forward your thoughts and opinions - right or wrtong it does not matter.

 

And 'Good Luck Everybody'.  Forcing me to pay income taxes will mean my Thai wife and I will be leaving Thailand - period.  My reasons for all that are in my previous posts in thge other thread (many times). 

[retiree]

4 hours ago, Plus Esse Quam Simultatur said:

They ran through it all and then fined me for not having reporting the last 2 years. ... I was fined 400 Baht

 

Do I understand you correctly?  Do you mean no tax, but a 200 baht fine for each year you failed to file?

 

Underrated post, imho.

[nottin]

I think it is safe to say in order to be a tax resident you must have a tax ID. You can be a resident in Thailand because you spend most of the year in Thailand, but that alone doesn't make you a tax resident. How to get a tax ID here, first off you should earn income here. The stipulations of Non-imm OA retirement visa and Thailand Elite, both clearly state you cannot work. So unless they start handing out tax IDs, I am not worried. And then even if they did, sure they might know of one overseas account where you send your money from to support yourself in Thailand, but good luck learning about any other accounts. They will have a hard enough time finding the accounts of the smart Thais who have already taken their Baht out Thailand.

[freeworld]

2 hours ago, Jeffrey346 said:

What does that have to do with the new Tax Laws

He can claim it back on his tax submission as a govt donation.

[StayinThailand2much]

2 hours ago, jerrymahoney said:

You said: They will enforce it. In fact, the Revenue Department is in the process of hiring 70 Lawyers.. One in each province to assure tax collection.

 

The ones in Bangkok, Chonburi, Phuket, and other major tourist places will be very busy...

Edited November 6, 2023 by StayinThailand2much

[Mike Teavee]

16 minutes ago, samtam said:

 

Can you expand on "economic ties" please?

Sorry, the correct term is "Family Ties"... 

https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm11530

 

I think the Statutory Residency Test explains it better...  

https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm11500

[Hardcastle P]

5 hours ago, MangoKorat said:

As I understand it, and I may well be wrong - double tax agreements don't prevent you from being taxed in Thailand.  My understanding is that if the amount of tax you paid in your home country is less than you would have paid in Thailand - you will have to pay the difference.  That might not be the case in many situations but one group that may well be affected is those on a pension.  For example, if your UK pension is less than the UK tax threshold - which many are, you don't pay tax on it in the UK.  However, even the basic UK pension is over the Thai tax threshold and therefore, according to my understanding and what I've read, it will be taxable if you bring it into Thailand.

Are pension incomes taxed in Thailand 

[Mike Teavee]

Possibly more geared towards US guys (though from the bits I've seen they do touch on UK a little bit). but it is very long (2:32:48)...  

 

... & So far I've only watched the 5 minute edited highlights from

 

 

[4MyEgo]

1 hour ago, JimboB4 said:

That’s not true they can’t tax income from overseas being deposited into a bank account I’ve already verified this 

 

Are you saying that they don't have the powers to freeze your bank accounts until such a time that you pay your tax ?

[LivinLOS]

9 hours ago, Shop mak said:

It seems unlikely that this will take effect from 1 Jan 2024. 

 

Said this from day 1.. This is a huge fundamental change to how taxable sources are calculated.. Thailand cannot manage to collect speeding tickets for a decade and they believe they are going to have a fully revised tax code in (checks calendar) 56 days ?? 

Not a chance. 

[LivinLOS]

7 hours ago, HappyExpat57 said:

I believe most people here are safe - for now.

 

This presumes you are paying tax in other countries.. The vast majority of truly long term expats I know do not.. They have signed out of home countries and no longer file or declare there. 

[Lucky Bones]

5 hours ago, daveAustin said:

A mass exodus of expats is what many in this pathetic excuse of a shyster government would want. 

Yup. Bureaucrats & Army Generals terrified of falangs.

Quick men - hide in the barracks & lock the gate.🙃🙃

[samtam]

4 hours ago, Bobthegimp said:

 

Leave, but to where? 

 

Didn't we have some big global event around 3 years ago when the governments of the world, despite all of the language and cultural barriers, reached the same conclusions and took the exact same measures in almost perfect lockstep?  Looks like we're getting another taste of it. 

 

Colombia and Thailand are very disparate cultures on opposite sides of the world, yet are adopting the same tax measures as Western nations.  Let me know if you find a bolt hole to escape this globalist madness and the first drinking binge is on me. 

 

Colombia and Thailand are very disparate countries to each other, as indeed they are to Hong Kong SAR and Singapore (in terms of tax), and yet the latter 2 have very favourable tax regimes, (as noted by the lawyer in the OP).

 

 

3 hours ago, Karma80 said:

 

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. 

 

 

 

Unfortunately living in either Hong Kong or Singapore would cost you infinitely more in housing and cost of living, than any new tax in Thailand.