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

[UKresonant]

Just now, Sheryl said:

The  new regulation (regulation, not law - the tax law has nto been amended) does not "target" foreigners. It applies equally to everyone  resident in Thailand 180 days in a year or more and from releases by the Revenue department is primarily aimed ("targeted to" if you will) wealthy Thais.

 

Foreigners are not exempt purely by being foreigners, but that is hardly the same as being targeted.

 

The new rule does not alter reporting requirements in the least. There are no new reporting requirements.

 

The only thing the new regulation does, is remove a prior clause that made otherwise taxable income brought into Thailand from abroad non-taxable if not brought in during the year it was earned.

 

It is worth noting that foreigners who were having old age pensions directly remitted to Thailand have in some cases (depending on type of pension and terms of the relevant Tax Treaty with Thailand) always owed tax on it, though most have not been filing tax returns or paying.  Their situation remains unchanged.

 

 

 

 

 

 

 

 

 

 

 

 

That's what confused me on various posts over the years, why people getting their pensions direct credited did not mention tax complications.

 

In 2018 I took an early retirement (at the time thought temporary), making sure I was under 180 days in Thailand. that gave me a savings amount potential for sending to Thailand under the current saving from previous years rules, and not direct crediting anything to Thailand. With that few years savings buffer and the savings accounts being ring fence, I could avoid tax complications indefinitely, That is what is now no longer available.

 

I've only been Thai Tax resident in 2019, but only savings remitted.

 

Being a UK resident only my small Government pension is covered by the DTA.

 

Everything of my income is taxed at source in the UK, or is zero tax rated via Government authorised savings Schemes. As HMRC said back in 2018 they can see everything I have on their screen, it is purposely structured that way. I reckon I will always be considered tax resident in the UK, but now have the prospect of the complication of a tug of war on some of the tax. As well as wondering what a Thai revenue person would accept, as only pension payslips would be available etc the tax years between the two countries are 13 weeks out of sync etc. 

 

All I can do for now is try and ringfence the elements that I have payslips showing Tax deduction, and keep an ongoing record, and try an only send to Thailand from that group.

 

This change is nothing to look forward to! 

 

Should I be there more than 179days in the future, that would only give perhaps 60k allowance, 150k zero Tax band 100k from a pension from a DTA covered pension, before complications...

 

.

[Ben Zioner]

24 minutes ago, Metapod said:

holding out hope that Thai Elite will be excluded and given preferential treatment like the LTR visas

holding out hope that they won't repeal Royal Decree 743.

Edited November 7, 2023 by Ben Zioner

[Antifreeze]

On 11/6/2023 at 9:02 AM, Mike Lister said:

One more time ryan, just for you!

 

Income tax in every country is assessed annually, that's when you do the summing up and make the tax calculation.

 

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!

Would you know where to get an English version of taxable income vs income doc. I get pension but I need to supplement from my savings. 

 

I can imagine the paperwork that all this will generate... not that I am not used to it. 

[nottin]

23 hours ago, JackGats said:

You are a tax resident if you stay in TH at least 180 (or 183) days in a single tax year. If you stay in TH 180 days but have no tax ID you are a tax resident avoiding (evading?) taxes. Not being registered as a tax-payer and not  filing taxes doesn't protect you from legally being considered a tax resident.

I am not saying I am not a tax resident anywhere. I am a tax resident in another country and cannot get around that. Ok, I do earn some income in Thailand, and pay taxes on it, all 3,500 Baht interest from my bank account. I have never seen or been told that I am a tax resident in Thailand even though I spend 90% of the year here. Just went through this with broker accounts I set up earlier this year in Europe, US & Asia, and their compliance departments were satisfied with my explanation of where my tax jurisdiction is and that I have no tax liability in Thailand even though I consider myself a resident here, which at this time, I believe to be completely true.  

I did try searching for guidelines of what makes a tax resident, a resident of a country, and as long as I do what I need for my legal tax jurisdiction in another country I am good.

If Thailand tries coming after all income earned abroad by a retiree residing in Thailand, yet who is not allowed to work in Thailand, well they cannot even accomplish this with their own citizens. 

[Mike Lister]

14 minutes ago, nottin said:

I am not saying I am not a tax resident anywhere. I am a tax resident in another country and cannot get around that. Ok, I do earn some income in Thailand, and pay taxes on it, all 3,500 Baht interest from my bank account. I have never seen or been told that I am a tax resident in Thailand even though I spend 90% of the year here. Just went through this with broker accounts I set up earlier this year in Europe, US & Asia, and their compliance departments were satisfied with my explanation of where my tax jurisdiction is and that I have no tax liability in Thailand even though I consider myself a resident here, which at this time, I believe to be completely true.  

I did try searching for guidelines of what makes a tax resident, a resident of a country, and as long as I do what I need for my legal tax jurisdiction in another country I am good.

If Thailand tries coming after all income earned abroad by a retiree residing in Thailand, yet who is not allowed to work in Thailand, well they cannot even accomplish this with their own citizens. 

If you spend 90pc of your time in Thailand you are tax resident here, regardless of where else you think you may be tax resident also. I pay tax in three countries but I'm only tax resident because it's where I spend 90pc ofy time. My UK pension and rental income is taxed in the UK but I am not resident for tax there, that means they can't tax me on income I receive from the USA or Thailand. 

Edited November 7, 2023 by Mike Lister

[Ralf001]

4 hours ago, Srikcir said:

Topic is related to proposed taxation of foreign resident's foreign income. And my comment is related to what Thai privileges comes with that proposed taxation. 

Seems you're getting free government medical coverage under a different premise. Maybe you can explain further.

I pay tax

 

[stat]

Abother update from the LTR thread:

 

@Misty

..OK another update from the visa guy who talked with the BOI today the Pension visa is only exempt for overseas income taht does not come into Thailand..

 

For now - who knows what will happen next year...!

[SpaceKadet]

So basically, we are not sure of anything, and how they might think the government will control it. As usual, the information coming out is just as clear as mud, and until we see how it's gonna be implemented, we just speculate.

 

Additional reporting requirements for the expats? How will that work? If I would go to the tax authorities in my home country and ask for for some fancy document that is not in their vocabulary, they will just tell me to go <deleted> myself and don't bother them. Thailand, and its requirements is not exactly on the world priority list.

[Ben Zioner]

45 minutes ago, stat said:

Abother update from the LTR thread:

 

@Misty

..OK another update from the visa guy who talked with the BOI today the Pension visa is only exempt for overseas income taht does not come into Thailand..

 

For now - who knows what will happen next year...!

Where did you see this? There hasn't been an update on the LTR thread for days..

 

Edited November 7, 2023 by Ben Zioner

[stat]

1 minute ago, Ben Zioner said:

Where did you see this? There hasn't been an update on the LTR thread for days..

 

 

[Ben Zioner]

3 minutes ago, stat said:

 

Yes I know this thread quite well, but which post says that?

 

So far the understanding is that Income earned and remitted while under LTR isn't taxable. To change that they would have to repeal Royal decree 743. Or ignore it, but that could be construed as a crime.

[MangoKorat]

3 hours ago, Jaggg88 said:

All UK pension providers will use your personal tax code and submit a P60 at the end of the tax year so all your pension income will have been assessed and tax deducted or not as required.

You don't submit a P60, you are given a P60.

[stat]

37 minutes ago, Ben Zioner said:

Yes I know this thread quite well, but which post says that?

 

So far the understanding is that Income earned and remitted while under LTR isn't taxable. To change that they would have to repeal Royal decree 743. Or ignore it, but that could be construed as a crime.

Just click the link and you land right on it :-)

[Felt 35]

After reading trough this report there is no wonder Thailand are considered a flawed democracy and that as best. 

Felt

[trainman34014]

On 11/6/2023 at 3:47 PM, Brickleberry said:

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....

The only 'Standards' they have are either double or extremely low !

[Chris Daley]

3 photos and pay the fine.

[Misty]

2 hours ago, stat said:

Abother update from the LTR thread:

 

@Misty

..OK another update from the visa guy who talked with the BOI today the Pension visa is only exempt for overseas income taht does not come into Thailand..

 

For now - who knows what will happen next year...!

I did not write this, you are mistaken

[Danderman123]

On 11/6/2023 at 8:16 AM, Jeffrey346 said:

I don't think it works that way. If you pay tax in the US you don't pay tax in Thailand

Nope.

 

Under the Thai-US tax treaty, your paid US taxes are subtracted from the Thai tax bill.

[UKresonant]

Just now, Jaggg88 said:

All UK pension providers will use your personal tax code and submit a P60 at the end of the tax year so all your pension income will have been assessed and tax deducted or not as required.

I think the problem with UK P60s will be they will be issued probably late April / May well past the deadline for submitting a Thai return by the end of March. Also they do not relate to the Thai Tax year. The figures on them will have the first 13 weeks of Thai Tax year missing and include 13 weeks of the next Thai Tax year. I think they may only be useful to demonstrate cumulative historical taxed income, that would related to funds remitted to Thailand later. (I'm not normally Thai tax resident in the past or now). The recent Q&A update, seemed to suggest it may still be accepted as savings, as it was earned when not tax resident in Thailand.

 

Should I ever have to submit a return would the Thai RD accept the pension Gross and Tax deducted as they come off the pension payslips, at least one is a PDF download only. If they don't this will be completely unworkable IMHO, as I don't see any other way of presenting the UK taxable income relative to a Thai Tax year.

 

The other worry would be Thai RD potentially putting there paw out for tax, already deducted in the UK and asking that I should claim it back in the UK.

 

It's all potentially one big headache, due to perceived uncertainty, it may be easy (but have doubts)

 

I've absolutely no idea what Thai RD are like to deal with, and maybe no one has, for their attitude and custom and practice going forward after these recent amendments to their rules / standing orders.

 

Would be nice if some UK folks would post their experience in this respect, when transacting with Thai RD, when it happens

 

 

 

[Sheryl]

6 hours ago, samtam said:

 

When you state "their position remains unchanged", I'm not sure I follow you: their position surely changes, because now they will still owe taxes, and file a tax return?

They always owed taxes and thus should have filed returns. Nothing new on either front. 

[Sheryl]

14 hours ago, UKresonant said:

.... The recent Q&A update, seemed to suggest it may still be accepted as savings, as it was earned when not tax resident in Thailand.

 

 

Can you provide link to this? Thanks

[Sheryl]

3 hours ago, SpaceKadet said:

So basically, we are not sure of anything, and how they might think the government will control it. As usual, the information coming out is just as clear as mud, and until we see how it's gonna be implemented, we just speculate.

 

Additional reporting requirements for the expats? How will that work? 

 

There has been no change to tax reporting requirenents.

 

No reason at all to expect additional  reporting requirements  for anyone let alone expats. 

[Guavaman]

 

As usual, the devil is in the details. Some types of income are not exempted for LTR visa holders.

 

Royal Decree Issued under the Revenue Code Governing Reduction of Tax Rates and Exemption of Taxes (No. 743) B.E. 2565 (2022)

Section 5 Income tax under Part 2 of Chapter 3 in Title 2 of the Revenue Code shall be exempted for a foreigner categorised as Wealthy Global Citizen, Wealthy Pensioner, or Work from-Thailand Professional who is granted a Long-Term Resident Visa under immigration law for assessable income under section 40 of the Revenue Code derived in the previous tax year from an employment, or from business carried on abroad, or from a property situated abroad, and brought into Thailand.

--------------------------------

EXEMPTED UNDER ROYAL DECREE 743

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.⁴

(5) Money or any other gain derived from:

(a) rent of property,

(8) Income from business, commerce, agriculture, industry, transport or any other activity not specified in (1) - (7).

 

NOT EXEMPTED UNDER ROYAL DECREE 743

(4) Income that is:

(a) Interest on a bond, deposit, debenture, bill, loan whether with or without security, the part of interest on loan after deduction of withholding tax under the law governing petroleum income tax, or the difference between the redemption value and the selling price of a bill or a debt instrument issued by a company or juristic partnership or by any other juristic person and sold for the first time at a price below its redemption value. Such income also includes income assimilated to interest, benefit or other consideration derived from the provision of a loan or from a debt-claim of every kind whether with or without security.

(b) Dividend, share of profits or any other gain derived from a company or juristic partnership, a mutual fund or a financial institution established under a specific law in Thailand for the purpose of providing a loan in order to promote agriculture, commerce or industry; the part of dividend or share of profits after deduction of withholding tax under the law governing petroleum income tax.

(g) Gains derived from transfer of partnership holdings or shares, debentures, bonds, or bills or debt instruments issued by a company or juristic partnership or by any other juristic person.

[Morch]

The more I'm reading about this, the less clear it becomes.

Given that I was never one to pay attention to such stuff, I guess I'll stick with ignoring it until someone asks me to do something about it.

Of course, it could mean a mess, or some financial hit. But as I'm not really sure what I could/should be doing, plus they may very well move the goal posts anyway, maybe no use worrying about it now. Can always get stressed later.

 

Far as I recall, almost all of the previous 'doomsday' changes in the last 20 years ended up being a disappointment as 'end of days'.

Sure, some hassles, some extra hoops to jump through, some restrictions, more paperwork - but bottom line no big deal.

 

Signed,

Grasshopper me. 

[Captain Monday]

8 hours ago, Artisi said:

Is yours? 

Of course

[Sydebolle]

On 11/6/2023 at 9:53 AM, Jeffrey346 said:

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

You're wrong, there are thousands of Thai millionaires. But they have excellent "tax planning" ....... 

[Lorry]

8 hours ago, Thailand said:

Correct.

went to get a new bank debit card and she had to fill out a new form effective from yesterday with multiple questions about income where from , previous employment etc very invasive and will apply to all new accounts and most actions you might need to do at your bank. This applies to all persons, Thai's and foreigners. The staff were told this relates to the new funds remitted to Thailand law but had no idea how it may be applied.

I changed to a new bank book but was not required to fill out the form!

Which bank?

Form in English or in Thai? 

[Lorry]

2 hours ago, Sheryl said:

 

There has been no change to tax reporting requirenents.

 

No reason at all to expect additional  reporting requirements  for anyone let alone expats. 

Contrary to what you write,  the new regulation is a huge change - and is correctly viewed as such by lawyers and tax advisers. 

 

Yes, in theory a pensioner who had his pension credited to his Thai bank account,  has always owed tax.

Yes, in theory he should have filed a tax return. 

 

De facto, nobody ever cared. 

The RD didn't expect foreign pensioners to file a tax return (some pensioners who tried, report being told to forget about it).

The RD didn't expect them to pay taxes , either. 

 

The law didn't change - but, as the poster "Thailand" had written - the practice seems to change. Today was the first time in over 20 years that I heard bank staff utter the word "RD".

 

BTW don't forget,  the rich Thais that some people write are targeted,  they are Srettha's (and his master's) own flesh and blood. Why should he hurt them? And rich Thais will find other loopholes.

Moderately well-off (according to Thai standards) foreigners are the softest target there is. They cannot defend themselves. 

[Straight8]

On 11/6/2023 at 8:14 AM, Captain Monday said:

Then to nothing to concern myself with as  I do not spend 180 days/year in any country.

 

regards,

 

Captain Monday 

 

 

Constant international travel

 

I will slightly adjust so Im not here for 180 days.

 

They can go and GS

[Ben Zioner]

6 hours ago, Morch said:

The more I'm reading about this, the less clear it becomes.

Given that I was never one to pay attention to such stuff, I guess I'll stick with ignoring it until someone asks me to do something about it.

Of course, it could mean a mess, or some financial hit. But as I'm not really sure what I could/should be doing, plus they may very well move the goal posts anyway, maybe no use worrying about it now. Can always get stressed later.

 

Far as I recall, almost all of the previous 'doomsday' changes in the last 20 years ended up being a disappointment as 'end of days'.

Sure, some hassles, some extra hoops to jump through, some restrictions, more paperwork - but bottom line no big deal.

 

Signed,

Grasshopper me. 

That's  a dangerous position to keep, to  do that you must make sure that you have been 100% consistent with the old rule in all the  years you have been tax resident here. Having an agent at hand in case they start an investigation will also be a must.