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

[Mike Lister]

4 minutes ago, Ben Zioner said:

I agree that most of it has been repeated ad nauseam here. But his intro point is right to the point: cancel or postpone your plans to move to Thailand, at least until things get clearer.

I don't know why anyone would want to do that. If a retiree has made all the plans to move, this announcement doesn't change much at all and is no reason why they should undo all their planning. And since the tax free window between now and 31 December is still open, that's all the more reason why plans shouldn't be cancelled.

[Ben Zioner]

4 minutes ago, Mike Lister said:

I don't know why anyone would want to do that. If a retiree has made all the plans to move, this announcement doesn't change much at all and is no reason why they should undo all their planning. And since the tax free window between now and 31 December is still open, that's all the more reason why plans shouldn't be cancelled.

Sure, if someone is prepared to pay up to 35% of his pension into Thai corruption he is welcome to move to this Tax heaven.

[Mike Lister]

1 minute ago, Ben Zioner said:

Sure, if someone is prepared to pay up to 35% of his pension into Thai corruption he is welcome to move to this Tax heaven.

Stop it! The 35% band doesn't apply until you get over 5 million baht per year and not many retirees have pensions at that level..

 

https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income

 

There is a big difference between the tax table rates and the effective tax rate which considers allowance and deductions and is much lower....as you are VERY AWARE.

[Ben Zioner]

4 minutes ago, Mike Lister said:

Stop it! The 35% band doesn't apply until you get over 5 million baht per year and not many retirees have pensions at that level..

 

https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income

er 

There is a big difference between the tax table rates and the effective tax rate which considers allowance and deductions and is much lower....as you are VERY AWARE.

First, I wrote "up to" as far as I am aware. Second, there are many expats from EU and US who have pensions in that range, I am over 4 Million this year, while I retired only from a "normal" IT mid management job (I wasnt CIO). Third, The "allowances" are peanuts.

[freeworld]

5 minutes ago, Ben Zioner said:

Sure, if someone is prepared to pay up to 35% of his pension into Thai corruption he is welcome to move to this Tax heaven.

Well that is a decision each individual will consider and make before moving to Thailand.

 

Thailand is not a tax haven on any OECD list as you accuse it of being generally corrupt.

 

Seems like CRS is going to work very well and people who reside here avoiding paying tax will now be obliged to do so.

[Mike Lister]

1 minute ago, Ben Zioner said:

First, I wrote "up to" as far as I am aware. Second, there are many expats from EU and US who have pensions in that range, I am over 4 Million this year, while I retired only from a "normal" IT mid management job (I wasnt CIO). Third, The "allowances" are peanuts.

If you're receiving a pension in Thailand of 4 million per year, you are very much the exception rather than the rule, you are almost certainly in the top 0.5% of pension income recipients in Thailand and surely you realise that. It therefore follows that the things that you need to do, is not best advice for what others ought to do.

[Ben Zioner]

12 minutes ago, freeworld said:

Well that is a decision each individual will consider and make before moving to Thailand.

Wasn't  this exactly my point?

Edited November 9, 2023 by Ben Zioner

[lordgrinz]

13 minutes ago, Mike Lister said:

If you're receiving a pension in Thailand of 4 million per year, you are very much the exception rather than the rule, you are almost certainly in the top 0.5% of pension income recipients in Thailand and surely you realise that. It therefore follows that the things that you need to do, is not best advice for what others ought to do.

 

If I had $4 million per year I wouldn't even be in Thailand, this would be the last place on Earth I would want to live.

[Ben Zioner]

Just now, lordgrinz said:

 

If I had $4 million per year I wouldn't even be in Thailand, this would be the last place on Earth I would want to live.

Same  here,  but we talking in THB not USD.

[Mike Lister]

Just now, lordgrinz said:

 

If I had $4 million per year I wouldn't even be in Thailand, this would be the last place on Earth I would want to live.

Baht per year, not USD. But your statement still applies, perhaps he likes temples.

[Ben Zioner]

7 minutes ago, Mike Lister said:

Baht per year, not USD. But your statement still applies, perhaps he likes temples.

Stupid comment, there is no way one could resettle a Thai family to Israel or Europe, with a few savings and 120k a year. Believe me, I would if I could.  And to come back to my early statement: today I would not make the decision to settle here, and anyone faced to such decision should reconsider and or wait a few years.

[freeworld]

On 11/6/2023 at 6:43 AM, CFCol said:

The UK double taxation agreement clearly states 183 days.

I would think that the law in the country overrides what is stated in a DTA agreement but I may be wrong.

Edited November 9, 2023 by freeworld

[lordgrinz]

16 minutes ago, Ben Zioner said:

Stupid comment, there is no way one could resettle a Thai family to Israel or Europe, with a few savings and 120k a year. Believe me, I would if I could.  And to come back to my early statement: today I would not make the decision to settle here, and anyone faced to such decision should reconsider and or wait a few years.

 

Gawd I feel poor, I would be gone and back in the US right now with those numbers, but I agree with the last part of your statement.

[Ben Zioner]

3 minutes ago, lordgrinz said:

Gawd I feel poor

No need for that, it is simple math. If I paid my income tax in Thailand I would, will be liable for about 800k a year, about 2100 Euros. That's barely the rent I would have to pay for very basic accomodation and  I'd still be liable for about 12000 Euros a year of income tax. And then there is the uncertainty of such resettlement. 

[lordgrinz]

3 minutes ago, Ben Zioner said:

No need for that, it is simple math. If I paid my income tax in Thailand I would, will be liable for about 800k a year, about 2100 Euros. That's barely the rent I would have to pay for very basic accomodation and  I'd still be liable for about 12000 Euros a year of income tax. And then there is the uncertainty of such resettlement. 

 

So, you would ONLY have 2,750,000 baht per year left to survive on? But yes, I agree tax sucks.

[Mr Meeseeks]

On 11/6/2023 at 7:18 AM, 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 

 

 

Indeed.

 

I didn't do a tax return last year either, it is due annually in June I believe, so I was a few months overdue. 

 

I paid 25k to my accountant to sort it all out, and had an outstanding tax bill of 60k, which has now turned into a rebate of 120k, so I am OK with that! As you state there was a 400thb fine for filing late, paid to the Amphur. 

 

Those bringing money into the country thinking that they can just keep quiet and that they won't be affected by this may be unpleasantly surprised. 

[freeworld]

9 minutes ago, Mr Meeseeks said:

 

Indeed.

 

I didn't do a tax return last year either, it is due annually in June I believe, so I was a few months overdue. 

 

I paid 25k to my accountant to sort it all out, and had an outstanding tax bill of 60k, which has now turned into a rebate of 120k, so I am OK with that! As you state there was a 400thb fine for filing late, paid to the Amphur. 

 

Those bringing money into the country thinking that they can just keep quiet and that they won't be affected by this may be unpleasantly surprised. 

And also all those waiting for some clarification or some new law to be

implemented, the revenue code and laws already exist and the income streams defined, what more would they be waiting for.

[lordgrinz]

4 minutes ago, freeworld said:

And also all those waiting for some clarification or some new law to be

implemented, the revenue code and laws already exist and the income streams defined, what more would they be waiting for.

 

Ok, so large savings in US banks, if slowly transferred to a Thai bank.....is that taxable? For that matter, is all money being sent to Thailand considered taxable until its not?

[beammeup]

2 minutes ago, lordgrinz said:

 

Ok, so large savings in US banks, if slowly transferred to a Thai bank.....is that taxable? For that matter, is all money being sent to Thailand considered taxable until its not?

I think thats the plan

[freeworld]

5 minutes ago, lordgrinz said:

 

Ok, so large savings in US banks, if slowly transferred to a Thai bank.....is that taxable? For that matter, is all money being sent to Thailand considered taxable until its not?

For the US I would think they are subject to the tax laws of the US

 

Certification of U.S. Residency for Tax Treaty Purposes

 

Many U.S. treaty partners require U.S. citizens and U.S. residents to provide a U.S. Residency Certificate in order to claim income tax treaty benefits, and/or certain other tax benefits, in those foreign countries. The IRS provides this residency certification on Form 6166, a letter of U.S. residency certification

 

https://www.irs.gov/individuals/international-taxpayers/certification-of-us-residency-for-tax-treaty-purposes

Edited November 9, 2023 by freeworld

[beammeup]

OK so you bring in enough to live on say 800K or so. You pay around $2k tax. Not a big deal BUT! if you want to buy a condo, house, car, rolex etc... it will cost you an extra 30%. This is the problem.

[lordgrinz]

1 minute ago, beammeup said:

OK so you bring in enough to live on say 800K or so. You pay around $2k tax. Not a big deal BUT! if you want to buy a condo, house, car, rolex etc... it will cost you an extra 30%. This is the problem.

 

I guess there will be less condos, houses, cars, and Rolex's bought.....that should help the economy! ;-)

 

[beammeup]

or you can buy condos, houses, cars, and Rolex's in Malaysia, Singapore or Hong Kong. and just not bother with Thailand. OK maybe not cars in Singapore.

[tomacht8]

How should the taxation process work then? Someone who lives in Thailand for more than 180 days a year buys a condo for 10 million baht in 2024 and transfers the money from his foreign account to his Thai bank account. Will the tax authorities come in 2025 and want around 30% taxes? Difficult to imagine.

What kind of paperwork will be triggered then? What documents are then necessary to prove that, for example, the money has already been taxed in the home country or where it comes from; from inheritance, property sales, savings, dividends, etc. It's a horror idea to have to fight something like this out in detail with a local tax official who doesn't even know the exact procedural process. As long as the process with all its evidence and certifications is not crystal clear, I will definitely not be transferring any large sums of money to Thailand for the time being.

[Mike Lister]

42 minutes ago, beammeup said:

OK so you bring in enough to live on say 800K or so. You pay around $2k tax. Not a big deal BUT! if you want to buy a condo, house, car, rolex etc... it will cost you an extra 30%. This is the problem.

It will never happen. The housing market here is dependent on foreign buyers, it would crash overnight if everyone knew they had to pay tax on the funds used to purchase the property.

[Sheryl]

3 hours ago, KannikaP said:

My income is UK State Pension, the annual total being below the £12570 threshold, so I am taxed at 0%.

I do not file a tax return as I live here 365 days a year.

If by "here" you mean Thailand you are tax resident in Thailand. Under the UK-Thailand DTA, UK State Pensions are not exempt from taxation in Thailand and since you pay no tax in UK,  no credit to apply. To my understanding If you have been having this pension directly remitted to Thailand you have always owed tax on all the remittances. If you were first banking the funds abroad then brining the funds in in a subsequent year it has previously not been taxable but will be starting next year.

 

There is no applicable DTA exemption or credit in your case as far as I can see. 

 

 

[tomacht8]

8 minutes ago, Mike Lister said:

It will never happen. The housing market here is dependent on foreign buyers, it would crash overnight if everyone knew they had to pay tax on the funds used to purchase the property.

Exactly. Actually unthinkable, but without binding and clearly defined procedures and furthermore taking into account the current legal situation and current statements from the Thai tax authority, I will not make any large money transfers to Thailand from January 1st, 2024.

[lordgrinz]

3 minutes ago, tomacht8 said:

Exactly. Actually unthinkable, but without binding and clearly defined procedures and furthermore taking into account the current legal situation and current statements from the Thai tax authority, I will not make any large money transfers to Thailand from January 1st, 2024.

 

I could use one more bump close to 38 baht to the USD before that point, I may send one more chunk to last me until late 2025, so I can make decisions on the future after the dust settles.

[Mike Lister]

5 minutes ago, lordgrinz said:

 

I could use one more bump close to 38 baht to the USD before that point, I may send one more chunk to last me until late 2025, so I can make decisions on the future after the dust settles.

Seems very unlikely, THB is strengthening because of high season plus USD is down.

[Enzian]

8 minutes ago, Mike Lister said:

The housing market here is dependent on foreign buyers, it would crash overnight if everyone knew they had to pay tax on the funds used to purchase the property.

Since the condo I'm in is for sale (Bangkok, Nana station), I'm on a month-to-month rental agreement, which is fine with me. Last evening talked with the rental agent (owner is out of country) and she said there is almost no one interested in even looking at this unit, though it is priced at what until a few month ago at least seemed like market. Further, she said the big banks have repos they can't sell, and just finished condo buildings, ones coming on line, even older buildings can't find buyers. The market is dead. That's one agent's observation; anyone else hear anything like this? I wanted to ask her if the tax uncertainly entered in, but her English is not great, and I don't know how to describe such a big "IF" to her; I may try later.