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

[Kalasin Jo]

As usual with Thai government announcements it's " shoot first ask questions later". This "lets tax foreign income" and "let's start in January 2024" is madness. No consultation before the announcement, no detail in or after it and now only 2 months to go unless postponed to allow consultation, clear and practical detail as to how it works and what we need to do.....in English as well as Thai.

 

I would say this: if it turns out I have to register for tax purposes here and am liable to tax here I expect in return the same entitlement to benefits as Thai  citizens receive.

In particular  access to the 30 baht government health service.

European countries such as France require foreign residents to register for tax, make annual declarations etc and ALSO require them to register in the French healthcare system where they are then treated in exactly the same way as French citizens.

To round off: I am well aware there can be a difference between tax residency and immigration residency. But as long as the best immigration status I can afford here, as it is for most of us, is a 1 year permission to stay which must be reapplied for before that expires and subject to satisfaction of the same terms and conditions as my very first, with refusal always at the discretion of the Immigration officer/office handling it I do not regard myself as resident here however many days in a tax year I may spend here. I am a long stay visitor, 11 years now, who pumps money in to the Thai economy and supports a family here but I receive no recognition in return.

My personal experience in France where I was resident as a foreigner for 19 years is completely different. There, after 5 years of legal residency and a taxpayer there, benefitting from the French healthcare system from the start, I was entitled to apply for and obtained permanent residency status without financial conditions then and for the future. And my Thai wife, subject only to de facto ( though no happy snaps required, no home visit took place ) and de jure proof of ongoing marriage, was granted the same status and entry in to the French healthcare system.

[KannikaP]

1 hour ago, Ben Zioner said:

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.

There is no way that someone on the UK State Pension alone could transfer Bht 65000 per month. or £1481.

[rabas]

3 hours ago, Jeffrey346 said:

You are correct. My wife's opinion is those who are deferring income to the next calander year will pay taxes on those funds brought into Thailand.

Those who are not have nothing to worry about

That sums it up. They only changed a well known loophole allowing Thai and tax residents to avoid tax on remitted overseas earned income by waiting until the year after it was earned. 

 

A few years ago I auctioned some valuables in China. So I called the RD and asked if I was liable for tax. The kind lady (your wife?) said any profit would be taxable and recommended I use the loophole by waiting till next year to avoid tax. Thanks RD.

 

Rich Thai using the loophole will be most affected. This may also force many to repatriate large sums of overseas money before Jan 1, 2024. That could be part of the plan.

 

Foreign retirees like me are not on their radar. They got bigger fish to scale.

[Ben Zioner]

7 minutes ago, KannikaP said:

There is no way that someone on the UK State Pension alone could transfer Bht 65000 per month. or £1481.

So, they won't pay any tax in Thailand anyhow, DTA or not. That's all I was trying to say.

[chilli42]

9 hours ago, Gknrd said:

Same here.

That is not going to work.  

[The Cyclist]

1 hour ago, TroubleandGrumpy said:

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

 

Jeses H Christ

 

I'm still waiting for you to publish the emails your 2 tax experts sent you.

 

What do these tax experts that you speak of, know that the rest of us do not know ?
 

Have they had a separate briefing to clarify the previous clear as mud announcement ?
 

Holy Christ, I'm amazed that you can actually leave the safe space of your bed and comfort blanket long enough to reach a keyboard, never mind get to your local RD Office, should it ultimately be needed.

 

Every tax expert, and other other kind of expert can can express an opinion, which means nothing until the Thai Government / RD issue clarification.

[John Drake]

Everybody just repeating over and over what they already said in the initial topic about this.

[Jaggg88]

6 hours ago, MangoKorat said:

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.

and if I've paid more tax than would be due in Thailand do I get a tax refund? because with your line of thinking that is how it should work. All your income in the UK is taxed but if your income does not reach the tax threshold the payment is nil. That doesn't mean it was tax-free or exempt it means your liability was nil. So it has been assessed for tax and no payment is due. This does not then make an opportunity for Thailand to assess this income again under Thai rules and make you pay tax because, under the double taxation agreement, they agreed not to subject earnings to tax twice.

This recent Thai amendment to an existing tax rule is all about foreign earnings that have not been taxed and not about double taxation income.

However, if you do have Thai or foreign earnings that have not been subject to tax then the Thai authorities will look at your double-taxation earnings and apply the credit to your current Thai tax liability, and in your example that credit would be zero. 

As a footnote, the double-taxation agreement allows tax authorities to exchange information about an individual's income.

[sqwakvfr]

Most long term foreigners are on “Non-Immigrant Visas” (O,OA or marriage) so we are not immigrants to LOS? Therefore, we do not have legalresident status? At least in other countries some foreigners are classified as residents.  Residents should have a tax burden to the host country.  So if a foreigner pays taxes to the Thai Government then does he or she get residency status? I doubt it?  As usual doing before thinking. 

 

As a Non Immigrant OA Visa holder what benefits can.I obtain by paying taxes in LOS? 

Edited November 6, 2023 by sqwakvfr

[freeworld]

1 hour ago, 4MyEgo said:

 

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

Freezing a bank account would probably need a court order or some kind of law to do so.

 

First one would need an interaction with the RD to determine what and if any tax would be owed, then the process would start if the taxpayer was non compliant.

 

You state they will freeze the bank account, how then would you pay any tax due?

[freeworld]

36 minutes ago, sqwakvfr said:

Most long term foreigners are on “Non-Immigrant Visas” (O,OA or marriage) so we are not immigrants to LOS? Therefore, we do not have legalresident status? At least in other countries some foreigners are classified as residents.  Residents should have a tax burden to the host country.  So if a foreigner pays taxes to the Thai Government then does he or she get residency status? I doubt it?  As usual doing before thinking. 

 

As a Non Immigrant OA Visa holder what benefits can.I obtain by paying taxes in LOS? 

No benefits except the gracious use of the Thai public infrastructure and friendly services govt staff provide for Tax Residents.

 

If one wants benefits then apply for Thai citizenship and make contributions.

 

One chooses to live in a country, imports money to live and buy things, over a certain number of days the tax laws/code determines tax residency, that is a choice the tax resident makes.

Edited November 6, 2023 by freeworld

[Mike Lister]

3 hours 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 

Whatever you chose to believe is your choice.

[rickudon]

My main interest in this is how are they going to assess the amount of money you bring in to Thailand. In my case, most of it never sees a Thai bank account.

[freeworld]

11 minutes ago, rickudon said:

My main interest in this is how are they going to assess the amount of money you bring in to Thailand. In my case, most of it never sees a Thai bank account.

Like in most other countries, the onus is on the tax payer to declare it.

 

This is in the tax code/law.

Edited November 6, 2023 by freeworld

[Karma80]

36 minutes ago, sqwakvfr said:

Most long term foreigners are on “Non-Immigrant Visas” (O,OA or marriage) so we are not immigrants to LOS? Therefore, we do not have legalresident status? At least in other countries some foreigners are classified as residents.  Residents should have a tax burden to the host country.  So if a foreigner pays taxes to the Thai Government then does he or she get residency status? I doubt it?  As usual doing before thinking. 

 

As a Non Immigrant OA Visa holder what benefits can.I obtain by paying taxes in LOS? 

 

More to the point, Non-O visas do not come with the ability to work, so in reality are little more than glorified tourist visas. The WP is just another level of ridiculous.

[4MyEgo]

27 minutes ago, freeworld said:

You state they will freeze the bank account, how then would you pay any tax due?

 

When you would call the bank asking why you can't access your money, the bank will have a note on the computer directing you to the RD.

 

RD doesn't need a court order to freeze your account, but if wish to believe so then that is your call.

 

Naturally they would try and notify you by mail that you owe them money, after a certain period and a possible reminder, they will tell the bank to freeze your account, it would then be up to you to pay it, or take it up with the court to unfreeze your account, good luck with that one.

 

Governments have so much power that they by-pass courts to expedite processes, leaving that up to the individual at play.

[freeworld]

15 minutes ago, 4MyEgo said:

 

When you would call the bank asking why you can't access your money, the bank will have a note on the computer directing you to the RD.

 

RD doesn't need a court order to freeze your account, but if wish to believe so then that is your call.

 

Naturally they would try and notify you by mail that you owe them money, after a certain period and a possible reminder, they will tell the bank to freeze your account, it would then be up to you to pay it, or take it up with the court to unfreeze your account, good luck with that one.

 

Governments have so much power that they by-pass courts to expedite processes, leaving that up to the individual at play.

Nonsense.

 

For tax the interaction is between the tax office and the tax payer, if tax is owed pay it or dispute it, mind the penalties and interest start to build up until the tax is paid or solved.

 

Sometimes it needs to go to court to be solved but its the first I hear the tax man will freeze a bank account due to unpaid tax. If there is any money in the account the tax man could help himself (garnish the account) and if there is still outstanding tax to be paid the interest and penalties will accumulate.

 

"Governments have so much power that they by-pass courts to expedite processes, leaving that up to the individual at play. " LOL

Edited November 6, 2023 by freeworld

[Bravoxray]

I didn't notice anyone raising the issue of Central Bank Digital Currencies (CBDCs). If/when that system is implemented, who knows, we may all be paying taxes in every country where we even do just a single financial transaction. If you make a complaint or say a politically incorrect word, even if you think you are a "good person", you might well find yourself with a very low ESG score, or even debanked, your money confiscated, and you transformed from a "good person" to a non-person whom no one is allowed to help. Will the "convenience" be worth it? If not, too bad, because you will not have a vote or any kind of say.  And just wait until the one world government bans cash and crypto - then it will be CBDC or nothing. Does anyone really think that governments will not do these things given the opportunity? Most countries are currently looking into implementing CBDCs. See Reuters article: Study shows 130 countries exploring central bank digital currencies. 

 

[trainman34014]

Am i bovvered ?    Nope; what will be will be but when the Childlike Thai Bureaucrats and Generals do anything at all it normally ends up as a complete Buggers Muddle, so let's see where this lot ends up !

[vangrop]

10 hours ago, PingRoundTheWorld said:

Knowing Thailand, it's very likely to take effect, then be reversed almost immediately when they realize they can't enforce it (not to mention the legal challenges to come). Trying to actually enforce this will result in a mass exodus of expats and huge amounts of money - no one wants to pay extra taxes on money that's already been taxed, nor have to report and prove that it was already taxed. And that's the real question: if and how are they going to enforce it? will all tax residents have to report? As usual big confusion and zero clarity

As stated several times, they are incapable of putting such measures into practice. A failing administration, poorly competent agents and ambient corruption are obstacles to any measure of this magnitude. Already when we consider the problems in managing their online visa system, or remember the chaos during the Covid era. In fact it is yet another anti-foreigner nationalist populist’s wet dream. On the other hand, they face a deluge of lawsuits that they will be incapable of managing. Imagine the complexity of controlling, centralizing, analyzing and cross-referencing the different bases containing the tax data of those concerned. For me it is a stone in the pond, an elephant giving birth to a mouse. No worries.

[vivananahuahin]

180 days and no money here anymore, bye...

[sqwakvfr]

50 minutes ago, Karma80 said:

 

More to the point, Non-O visas do not come with the ability to work, so in reality are little more than glorified tourist visas. The WP is just another level of ridiculous.

That has always  been my understanding:  I am nothing more or less than long term Tourist.  I cannot expect to receive benefits of residency while I am a long term tourist in LOS.  So what other country imposes income tax or other types of residency taxes on tourists?  Just this announcement is putting doubt on some who are contemplating major purchases in LOS.  Once confidence is lot it is difficult to get back.  A precise and timely clarification might be a good idea but TIT.

[Brickleberry]

So let me get this right...You can be a convicted drug dealer in Australia, but this conviction does not apply to Thailand as it happened outside of the country -  Yet you can earn money from outside the country, but this money should be taxed by Thailand? Double standards....

[Sato]

4 hours ago, freeworld said:

Wrong.

 

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

BS.

In most western and civilized countries it is exactly the same.

Staying more then 182 day's in such a country makes you automatically 'a permanent' resident and taxholder.

Or in other words ... you get permition to stay in such a country and are from day one 'permanent resident' and taxholder with exactly the same privileges as a citizen. And when you leave the country to live in another country you deregister with the municipality and are no longer taxholder in this country.

[Enzian]

6 minutes ago, sqwakvfr said:

I am nothing more or less than long term Tourist.

And this might be why a long stay visa involves on renewal checking a box marked Other rather than Retirement (there is no such box). There is no such thing as a Retirement visa in Thailand though that is what we often call it. I often wondered why they did it that way, now I'm getting a clue.

[jaideedave]

1 hour ago, rickudon said:

My main interest in this is how are they going to assess the amount of money you bring in to Thailand. In my case, most of it never sees a Thai bank account.

In my case my pensions total about 70k/ month.My tax free amount is around 400k/year.(400 div by 12) =33k transferred into my bank acct and 37k in cash from an ATM for living expenses.There's my 70k. That just might work.

[Metapod]

19 minutes ago, jaideedave said:

In my case my pensions total about 70k/ month.My tax free amount is around 400k/year.(400 div by 12) =33k transferred into my bank acct and 37k in cash from an ATM for living expenses.There's my 70k. That just might work.

 

withdrawing cash from ATM from an overseas bank while in Thailand is still a remittance and liable for tax.

 

[freeworld]

45 minutes ago, Sato said:

BS.

In most western and civilized countries it is exactly the same.

Staying more then 182 day's in such a country makes you automatically 'a permanent' resident and taxholder.

Or in other words ... you get permition to stay in such a country and are from day one 'permanent resident' and taxholder with exactly the same privileges as a citizen. And when you leave the country to live in another country you deregister with the municipality and are no longer taxholder in this country.

No it does not make one a permanent resident until it is applied for and granted by the immigration laws of a country.

 

Some countries have also reduced the 180 day rule and now consider about 90 days and a total number of days over a period of time then one is deemed tax resident.

 

The tax residence is still related to the description in the tax laws/code ie. the length of time one resides within and the ties and financial obligations etc...)

 

For this Thailand is quite unique with their 1 year visa/extension and probably consider people residing in Thailand all year long to still be residents/tax residents in their home countries and hence the banks will be reporting their bank accounts to the tax office for onward reporting. The DTA (if one exists) clearly outlines how to allocate where the individual will be considered tax resident.

 

Check the OECD tax residency information for different countries.

Edited November 6, 2023 by freeworld

[MangoKorat]

2 hours ago, Jaggg88 said:

and if I've paid more tax than would be due in Thailand do I get a tax refund? because with your line of thinking that is how it should work. All your income in the UK is taxed but if your income does not reach the tax threshold the payment is nil. That doesn't mean it was tax-free or exempt it means your liability was nil. So it has been assessed for tax and no payment is due. This does not then make an opportunity for Thailand to assess this income again under Thai rules and make you pay tax because, under the double taxation agreement, they agreed not to subject earnings to tax twice.

As I say, what I posted is my understanding and an article by a tax accountant said the same. I'm not about to try and find that article as it was weeks ago when these new tax rules were first reported. We will have to wait and see how things turn out but I don't agree that pension income such as I mentioned would be subjected to tax twice. If its your sole income and its under the UK threshold it simply will not be assessed and not taxed. Most people won't have been required to submit a UK tax return so income that is under the tax threshold will automatically not have been assessed.

 

As for getting a tax refund, of course not, for that income to have been taxed in the UK, you would surely need to have been resident in the UK at the time it was received and then UK tax rules would apply with tax being charged accordingly, would it not? If you moved to Thailand during the corresponding tax year, no tax would be due in Thailand - isn't that the very basis of a double taxation agreement?

 

 

 

 

 

my understanding

[MangoKorat]

3 hours ago, Hardcastle P said:

Are pension incomes taxed in Thailand 

No idea, I would guess that it depends on how much they are.  They are certainly taxed in many countries if they are over that country's tax threshold.