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

[CartagenaWarlock]

On 11/5/2023 at 4:14 PM, john11k said:

Chances are they will now leave and spend it else where. 

Nope. The lure of easy access to everything, including entertainment, is going to keep them here. Also, those who have families will be forced to live here. Yes, a small fraction will leave, and that is always expected. 

[JimGant]

5 hours ago, Sato said:

A US citizen living in Europe is 100% taxable in this country for EVERY income he has. How on earth do you come to the idea he is exampted to pay tax in there ? This is in the sole tax sovereignity of this country where the US citizen is living in and the US Governement has absolutley no rights in the sovereignity of this country.

 

Oh, BS. That's what DTAs are all about, defining which contracting state has exclusive taxing authority; no taxing authority; or partial authority (and credits involved, if both countries should tax). My govt pension, due to DTAs, is not taxable by any European country in which I might reside -- so what's this "sole tax sovereignty" of European countries all about? Do your homework.

[Ben Zioner]

3 hours ago, Misty said:

 

Yes, the US does tax any tax resident on their world wide income - citizens, green card holders (permanent residents) and holders of other types of visas.  Green card holders outside of the US are also taxed on world wide income.

Amazing.

[Ben Zioner]

3 hours ago, The Cyclist said:

 

Yes

 

It is amazing the different sources of information that are available, yet another day dawns and another round of the same absolute crap begins.

 

Quite bizarre, how the same Doomers & Gloomers manage to miss all the information posted.

 

See the headline and go into total meltdown, inventing scenarios that will make them flee Thailand 

 

Not only is it quite bizarre, it is hilarious.

You keep repeating...And are just as boring as a flat stage of the tour de France.

[rabas]

2 hours ago, stat said:

So pls let us know what part and what supporting documents of an DTA exemption you claimed and why you needed it? Beforehand it was difficult to pay income tax at all, even if you wanted to (as long as you were not working in TH.)

 

First, what's being discussed? I mentioned the RD's change to a loophole allowing overseas earned income (earned while tax resident here) to enter Thailand tax free by waiting to the year after it was earned. After Jan 1, 2024, it will be taxable in any future year.

 

I did post the RD's official comments about the change as many seem unaware of them, but those were the RD's words, not mine.

 

I can't discuss how this may affect different individuals and surely can't discuss individuals' and their countries' complex tax paperwork, which seems to be your concern.

 

Re: my comment. I understand the RD rule because in 2018 I auctioned a large collection in China over several months. Concerned about tax, I called the RD and spoke with an officer (in Thai, which I speak well). She explained it all and suggested I keep the money in China until the next year, and thus no tax, DTA, etc. Next year I can't do that.

 

Though I can sympathize with your pain, each person's story will differ.

 

Edited November 10, 2023 by rabas

[ukrules]

13 minutes ago, rabas said:

Next year I can't do that.

 

Not without leaving the country for about 186 days, which is always an option if it's going to be a large amount.

 

A couple of 80 to 90 day stays in some other country plus a 2 or 3 week holiday somewhere separate should ensure there's no residence country if you play it right. I could tolerate that for one year if I were to bring in a large amount of untaxed money.

 

It's not so easy to lose tax residency in plenty of other places so I guess we should be grateful for that, they could take the average number of days over 3 years in the country like some other places do and that would take a lot more than 1 year to 'avoid' for someone who's already been here for a long time.

[Felt 35]

2 hours ago, stat said:

You failed to read my two examples. Do you understand that there is no need to change any DTA in the given examples in order to have a substantial negative impact on your tax bill?

 

 

Failed was a very harsh word to use IMO. I'm no financial tax advisor and it wasn't a advice to anyone just the fact that a DTA between two countries can not automatically just be changed over the night to fit new ideas in one state.

Anyway, I don't have any prerequisites to know the rules in Germany vs a tax agreement with Thailand, but it reminds me a bit of how it was at home until about 2008-9. i.e., to pay tax for individual people with, for example, a pension was a bit of a goodwill issue here in Thailand.
When you mention tax on capital income, bank interest, and fund placement, I mean previously to have seen it mentioned in this thread that it was only in case of a possible transfer to Thailand, but I now see that it is a question of capital income regardless of whether it is transferred or not and then I myself will be affected, even if the interest I earn in a year is a pittance in the grand scheme of things.

Felt

Edited November 10, 2023 by Felt 35

[Gknrd]

8 hours ago, Dogmatix said:

An article in yesterday's Prachachart Thurakit suggests the RD is starting to walk this back a bit but not giving up on it https://www.prachachat.net/finance/news-1432180?fbclid=IwAR0FtCbDVifNc-atDT8uHGklrCLP5PNOva3VrsaHFX9W_kjEm-bKQBnqEKc .  It sounds like they are planning to exempt all foreign source income earned before 1 January 2024.  It also sounds like they are thinking of moving to a global taxation model involving taxation of foreign source income in the year it arises, regardless of whether it is remitted to Thailand or not.  They seem to have realised that that they need to amend the Revenue Code, which could take a couple of years, and not just let the RD issue a directive to staff that is not binding on taxpayers. However, they could still go for a stop gap solution to try to raise some more tax from income earned in 2024.   

 

The whole thing smacks of stupidity and incompetence from politicians and civil servants alike.  If you want to make major changes to the tax regime, it needs careful study beforehand and then proper legislation in parliament, not just let a bureaucrat blurt out a nonsensical unlawful order and threaten everyone.  Huge damage has already been done by that.  At least they are likely to give expats more time to make arrangements to sell up and get out of the country.

 

Here is a rough google translate.

 

Stocks-Finance

The Revenue Department delays "taxing" foreign income before 2024, adhering to the same criteria.

November 9, 2023 - 6:32 a.m.

 

levy taxes

The Revenue Department has called in the capital market department to understand the tax collection methods from people who earn money abroad. which when imported must be subject to tax inspection No matter what year it was imported. Previously, imports over a year would not be taxed. After the announcement was made Many parties are still concerned about the lack of clarity.

 

Permanent Secretary of the Treasury insists that loopholes must be closed.

Mr. Lawan Saengsanit, Permanent Secretary of the Ministry of Finance, said that the Ministry of Finance has confirmed that there will definitely be taxation of income from foreign countries. The law will be amended to allow collection as soon as the money is received. Only, amending the law must pass through Parliament, so it probably won't be done quickly. But insist that you have to do it. Because it meets international criteria

 

“People who have already paid taxes from abroad need not worry. Because you don't have to pay twice. But you must understand that In the past, there have been large companies that have used this channel to manage taxes. We have to close this gap.”

 

              

Investors complain about riding elephants to catch grasshoppers.

Mr. Anurak Bunsawaeng (Jo Luk Isaan), a major investor and former president of the Value Investors Association (Thailand), said that major investors Should be taxed at the personal income tax rate. The highest rate is 35%.

 

Therefore, I believe that no one will definitely accept being taxed. Therefore, you may see large investors 1. Stop investing abroad. 2. Do not take money back to the country and 3. Use gray methods to find various loopholes, which will make the opportunity for the government to collect a lot of revenue from this tax probably not be possible.

 

“It will definitely create a lot of problems. Because it will cause difficulties for investors. Including in practice through brokers Must collect documents for incoming and outgoing money. To separate profits to prove tax payments each year. which creates a lot of difficulties

 

So it is like riding an elephant to catch grasshoppers. This means that taxes cannot be collected. Because the chance that there will be very few people willing to pay But it creates many negative effects. It's not just big investors. but also private funds or a group of magnates who invest money abroad.”

 

Mr. Anurak said I want the government to change its perspective. Because it's not that investors don't want to pay taxes. But if taxes are collected at a reasonable rate or at the level of 10-15%, it is still acceptable.

 

“Tax collection should require people to act honestly. But if you keep it that high I believe that there will definitely be a lot of corruption. Right now, I mostly invest in China, Vietnam, and the United States, and have prepared several defensive plans.”

 

Begin to charge money from 2024.

However, recently there was a report from the Revenue Department that It has been concluded that In the first phase, there will be relief in the case of income generated abroad before 2024, if it is not imported within the same tax year as the year in which the income was generated. It will not have to be checked. Because finding document evidence will be difficult. It is considered to be releasing the ghost.

 

“Income generated before 2024 will use the old rules. That is, if it is not imported in the same tax year. The department will not collect it. As for imports across the year, they are no longer collected according to the original criteria. But income generated abroad from January 1, 2024 onwards, imported at any time will be subject to tax.

 

In the future, Section 41 of the Revenue Code will be amended to immediately calculate tax in the year in which income is earned abroad. Regardless of whether money is brought into the country or not, however, it may take 1-2 years to amend the law.”

 

Set "Pichai" to see private offers

Special Professor Kitipong Urapeepattanaphong, director of the Stock Exchange of Thailand (SET) and former chairman of the board of Baker & McKenzie Company Limited, told "Prachachat Turakij" that the collection of such taxes is being developed. Let's discuss in order for the government to postpone enforcement for now

 

Because I believe it's not worth it. It will affect the overall tax picture of Thailand as a whole. It is understood that now Mr. Settha Thavisin, Prime Minister and Minister of Finance, has assigned Mr. Pichai Chunhavajira, Advisor to the Prime Minister. is in charge of this matter

 

“And according to the Revenue Department Order No. 161/2023 that was issued, it is a practice. It cannot be interpreted outside of the law. Therefore, if such taxes are to be collected The tax structure must be restructured. which is a big deal The law must be amended, repealed Section 41, paragraph two, and issued a new law in its place. In the future, taxes will be collected similar to the United States. That is, all income in this world must be taxed. But in general, taxes should not exceed 15%.”

 

The Revenue Department announces income from abroad over the year must be taxed starting 1 Jan. 2024.

Revenue Department discusses new order “Income earned from abroad over the year” is subject to tax.

Is collecting foreign investment tax worth it? Question from "Kitipong Urapeepattanapong" tax law guru

 

 

 

All this is going to do is hurt small investors like me.. Nothing more. 

It will pull in billions from small investors, the wealthy will not be affected much.

 

Edited November 10, 2023 by Gknrd

[Gknrd]

2 hours ago, CartagenaWarlock said:

Nope. The lure of easy access to everything, including entertainment, is going to keep them here. Also, those who have families will be forced to live here. Yes, a small fraction will leave, and that is always expected. 

Same thing with the forced 800K in the bank. That went so well they decided to notch it up a bit. 

I did the math behind that. It was insane amounts of money. And the guys here just said , ahhh it is just 800K!  IMHO just setting themselves up for the next scheme..

 

Go back and read the old threads on forced 800K and money in the bank.  

 

Now their thinking is, these westerners are idiots and will pay anything to sleep here. 

Edited November 10, 2023 by Gknrd

[Lucky Bones]

23 minutes ago, Gknrd said:

Same thing with the forced 800K in the bank. That went so well they decided to notch it up a bit. 

I did the math behind that. It was insane amounts of money. And the guys here just said , ahhh it is just 800K!  IMHO just setting themselves up for the next scheme..

 

Go back and read the old threads on forced 800K and money in the bank.  

 

Now their thinking is, these westerners are idiots and will pay anything to sleep here. 

Hey. Relax, you did the math, all is OK. The B800,000 was forced and notched up? How much now?

You are sounding very xenophobic.🙃🙃

[Gknrd]

7 minutes ago, Lucky Bones said:

Hey. Relax, you did the math, all is OK. The B800,000 was forced and notched up? How much now?

You are sounding very xenophobic.🙃🙃

This is exactly how the 800K threads went.   No need to revisit the old threads.  

[Lucky Bones]

11 minutes ago, Gknrd said:

This is exactly how the 800K threads went.   No need to revisit the old threads.  

Oh Dear. Tin hat time. Sleep well.

[Gknrd]

1 minute ago, Lucky Bones said:

Oh Dear. Tin hat time. Sleep well.

Just the facts!

[pedro01]

So, has anyone found an accountant that can sort this out? I am transferring a year's worth of expenses to a new bank account and I won't add any money to it after Dec 31. I am hoping to show this is savings that I am living off (which it is) - and avoid the local taxation.

 

What I don't want to do is argue the toss over this with someone in RD. I want an accountant that knows the laws to do it. 

[Lorry]

22 hours ago, Gknrd said:

Where?

EU

[Lorry]

22 hours ago, Captain Monday said:

Paying cash” for  home is an Americanism simply meaning not taking out a home loan or mortgage

I didn't know 

[Maestro]

Removed an abusive post.

[Lorry]

11 hours ago, Dogmatix said:

In the future, Section 41 of the Revenue Code will be amended to immediately calculate tax in the year in which income is earned abroad. Regardless of whether money is brought into the country or not, however, it may take 1-2 years to amend the law.”

This plan makes me plan to stay only 179 days a year.

I can live with remittances taxed, it's not that much in my case (I am not going the DTA route, stat has explained why - too complicated,  too much work for me, not worth it).

But I am not going to - additionally to immigration and and and... - have another Thai bureaucracy to deal with. No more certified translations, trips to embassy, MFA, district office,  whatever...no, thank you.

 

 

Edited November 10, 2023 by Lorry

[Lorry]

It took me 2 years to get the new property tax sorted out.

That was about a grand total of 1000 B.

100-200 hours work (includes reading up on it and includes getting the necessary house registration, which unexpectedly turned out to be useful for other things,  too).

Even Thais don't work for 5-10B/hr but I felt ignoring taxes wouldn't be a good idea.

 

Income tax will be much worse,  as the amounts are much higher. 

 

Edited November 10, 2023 by Lorry

[stat]

8 hours ago, CartagenaWarlock said:

Nope. The lure of easy access to everything, including entertainment, is going to keep them here. Also, those who have families will be forced to live here. Yes, a small fraction will leave, and that is always expected. 

I think 30% of the "wealthy" expats will leave but as they are probably only 10% of all expats just 3% overall. Of course just my wild guess.

[stat]

25 minutes ago, Lorry said:

It took me 2 years to get the new property tax sorted out.

That was about a grand total of 1000 B.

100-200 hours work (includes reading up on it and includes getting the necessary house registration, which unexpectedly turned out to be useful for other things,  too).

Even Thais don't work for 5-10B/hr but I felt ignoring taxes wouldn't be a good idea.

 

Income tax will be much worse,  as the amounts are much higher. 

 

Thanks for your post! This is really bad stuff timewise I agree.

[Straight8]

On 11/6/2023 at 2:37 PM, lordgrinz said:

I've done 7 years of marriage extensions, and never given them foreign financial information.

 

but that will all change most likely from 01 Jan 2024, if this gets implemented

[Mike Lister]

Some of you guys have whipped yourself into such a frenzy and confirmed in your minds that only the very worst will happen, despite there being no new facts and despite constant reminders that the RD is developing new processes. Are you paranoid, are you glass half empty people? It's certain you're not logical or rational, however will you get through the rest of your lives baffles me.

[beammeup]

1 hour ago, Mike Lister said:

Some of you guys have whipped yourself into such a frenzy and confirmed in your minds that only the very worst will happen, despite there being no new facts and despite constant reminders that the RD is developing new processes. Are you paranoid, are you glass half empty people? It's certain you're not logical or rational, however will you get through the rest of your lives baffles me.

This post is illogical.

[Mike Lister]

2 minutes ago, beammeup said:

This post is illogical.

I can't begin to count the number of times that certain posters have told us they are leaving the country yet they're still in the discussion, confirming their decision.....that's the illogical part. 

[hondoelsinore]

 

[Mike Lister]

6 minutes ago, hondoelsinore said:

 

I stopped watching after 2 minutes because of two incorrect statements in that time, I've decided the rest of it is not going to be any better.

 

1.55 is wrong, the law does not say within twelve months of being earned, it says remitted within the same tax year.

 

2:15 NO, you were not supposed to go to the tax department and pay tax as soon as the money was wired, you were required to file a tax return at the end of the tax year and settle the accounting then.

[TheAppletons]

15 minutes ago, Mike Lister said:

I stopped watching after 2 minutes because of two incorrect statements in that time, I've decided the rest of it is not going to be any better.

 

1.55 is wrong, the law does not say within twelve months of being earned, it says remitted within the same tax year.

 

2:15 NO, you were not supposed to go to the tax department and pay tax as soon as the money was wired, you were required to file a tax return at the end of the tax year and settle the accounting then.

  

  But....but...it was on YouTube.  It must right.  

[rabas]

16 minutes ago, Mike Lister said:

I stopped watching after 2 minutes because of two incorrect statements in that time, I've decided the rest of it is not going to be any better.

 

1.55 is wrong, the law does not say within twelve months of being earned, it says remitted within the same tax year.

 

2:15 NO, you were not supposed to go to the tax department and pay tax as soon as the money was wired, you were required to file a tax return at the end of the tax year and settle the accounting then.

 

I stopped watching at 8 minutes after so many mistakes. He also suggested that money earned decades ago would get counted, but the rules clearly say you must be a tax resident when the money is earned.

 

Edited November 11, 2023 by rabas

[Mike Lister]

Great, so now we have goodness only knows how many expats in Pattaya, spreading incorrect information about this, they should join in here, they'll fit right in.