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

[Ben Zioner]

5 hours ago, Lorry said:

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

But that's  the case all over the  world. Income Tax  always  targets  the "soft" middle class. The rich use the power of their money, the workers class is exempted since they may take the streets.

 

The only fair system would be a flat income tax combined with an effective wealth and inheritance tax.

[Mike Lister]

5 minutes ago, Ben Zioner said:

But that's  the case all over the  world. Income Tax  always  targets  the "soft" middle class. The rich use the power of their money, the workers class is exempted since they may take the streets.

 

The only fair system would be a flat income tax combined with an effective wealth and inheritance tax.

That's true of the West but not here where a majority of the tax burden is borne by business and VAT, only 6% of people pay tax via a PAYE equivalent.

[UKresonant]

Just now, Sheryl said:

 

Can you orovid3 link to this? Thanks

https://thelegal.co.th/2023/10/18/qa-statement-issued-by-revenue-department-clarifying-taxation-applied-on-foreign-sourced-income/

"(2) Non-Resident Income: The Order explains that if a person is not a resident of Thailand during the year in which they earn income, they do not need to include that income in their tax calculations, even if they bring that income into Thailand in a subsequent year when they are a resident. For example, Mr. B earns income from a rental property abroad in a year when he is not considered a resident of Thailand. Then He brings this income into Thailand in a following year when he is a resident, he is not required to calculate such income as assessable income and shall not be subjected to taxation in the year that those money brought into Thailand."

 

Transient statement, or may it work that way I wonder.

[UKresonant]

14 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!

Any proof required or purely a question sheet? (I've just renewed all my debit cards a couple of months ago, so before the sept Announcement)

[Srikcir]

12 hours ago, Ralf001 said:

I pay tax

 

Then that likely supports my comment. Pay Thai tax and get a benefit. Albeit, you pay tax on what - Thai income?

[Ralf001]

8 minutes ago, Srikcir said:

Then that likely supports my comment. Pay Thai tax and get a benefit. Albeit, you pay tax on what - Thai income?

Yeah income.

[Mike Lister]

13 hours ago, Antifreeze said:

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. 

I'm not sure what you mean by taxable income vs income, can you say more?

 

All income received is potentially taxable, until it is assessed and ruled in or out, for whatever reason. For example, I have several income sources. My US Social Security payments are income but they are not taxable in Thailand hence they are ruled out for Thai tax purposes. My UK State pension payments are taxable in Thailand so they must go into the pot labelled, assessable income in Thailand, unless we discover that the mere existence of a DTA between the two countries, means Thailand wont seek to tax that money (at present this is taxable income here). My UK rental income is taxable in Thailand but only if I bring that money into Thailand. If I leave it in the UK it becomes savings. If I then try to import that money to Thailand, potentially it is taxable here.

[UKresonant]

1 hour ago, Ben Zioner said:

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.

Yes the danger is that many could hand the evidence of past taxable events, whilst submitting the next. perhaps first tax return? 

Saying it was RD custom and practice previously, may not cut it.

Studied the subject in 2018 and made sure I was not in Thailand more than 179 days, whilst taking some pension benefits.

Also going forward after 2018 that any remitted money was from past tax years=savings, that's the bit that's been nullified if you are continuously over the 179day p.a. threshold.! (which has the potential to make things  complex in future, Even if I became tax resident one year I may not even be there when the return is due, etc etc.).

Edited November 8, 2023 by UKresonant

[Ben Zioner]

16 minutes ago, UKresonant said:

Yes the danger is that many could hand the evidence of past taxable events, whilst submitting the next. perhaps first tax return? 

Saying it was RD custom and practice previously, may not cut it.

Studied the subject in 2018 and made sure I was not in Thailand more than 179 days, whilst taking some pension benefits.

Also going forward after 2018 that any remitted money was from past tax years=savings, that's the bit that's been nullified if you are continuously over the 179day p.a. threshold.! (which has the potential to make things  complex in future, Even if I became tax resident one year I may not even be there when the return is due, etc etc.).

Yes, and this applies even for those who may benefit from LTR,  i.e  cover your tracks and make sure you are ready, if and when the LTR protection  ends, for whatever reason. Getting a good tax agent would be  recommended in any case. You don't  want  to have to talk to   the Thai RD. 

[UKresonant]

1 hour ago, Ben Zioner said:

But that's  the case all over the  world. Income Tax  always  targets  the "soft" middle class. The rich use the power of their money, the workers class is exempted since they may take the streets.

 

The only fair system would be a flat income tax combined with an effective wealth and inheritance tax.

Disagree.. with the wealth and the inheritance tax bit, as for a flat rate tax....

Why not just add a 0.1% remittance tax on everything for a limited period, save deployment of intelligent individuals and put them to more productive activities, such as auditing unexplained wealth with serious back-up and an official performance percentage of 200 out every 400 extra units of revenue raised .  Politics seems to thrive on causing division, stress and inefficiency... 

Edited November 8, 2023 by UKresonant

[Morch]

2 hours ago, Ben Zioner said:

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.

 

What 'agent'? Do any of these 'agents' know more about this?

I seriously doubt they will attempt to audit all foreigners here 20 years back or anything.

 

Getting an 'agent' might be easier to do in Bangkok, Pattaya, Phuket, Chiang Mai, Hua Hin - other places? Lucky to find someone with good English. Not seeing the point of paying an 'agent' now, for services unspecified.

 

For those of us not stinking rich, and countries having tax agreements, the yearly tax on the income might not be such a big deal, or not worth the hassle of getting an 'agent' etc.

 

if it's not too much money, and no easy way to avoid it, guess I'll just grumble and pay up.

If it's a large sum, a paperwork nightmare, or some sky-is-falling situation, reconsider.

 

Edited November 8, 2023 by Morch

[worrab]

1 hour ago, Mike Lister said:

My UK State pension payments are taxable in Thailand

This is where I get totally confused with all of this. I have a State Pension and a Railway Pension. I pay tax on these in UK even though I live here in Thailand. So are you saying that I could be taxed again on these pensions by the RD or is it covered by DT arrangement?

[The Cyclist]

1 hour ago, Morch said:

What 'agent'? Do any of these 'agents' know more about this?

I seriously doubt they will attempt to audit all foreigners here 20 years back or anything.

 

Considering that this " Change " is effective from the 01 Jan 2024.

 

Any and All references to going back X amount of years to do audits is nothing but scaremongering at its finest.

 

1 hour ago, Morch said:

if it's not too much money, and no easy way to avoid it, guess I'll just grumble and pay up.

If it's a large sum, a paperwork nightmare, or some sky-is-falling situation, reconsider.

 

Exactly.

 

Too many Chicken Littles banging away on related threads screaming doom & gloom, which is quite interesting and amusing,  as no-one has a clue what will happen after the 01 Jan 2024.

[Morch]

2 minutes ago, The Cyclist said:

 

Considering that this " Change " is effective from the 01 Jan 2024.

 

Any and All references to going back X amount of years to do audits is nothing but scaremongering at its finest.

 

 

Exactly.

 

Too many Chicken Littles banging away on related threads screaming doom & gloom, which is quite interesting and amusing,  as no-one has a clue what will happen after the 01 Jan 2024.

 

I'll take it a step further.

If they indeed try this mass historical auditing - there WILL be a mass migration of foreigners, and less replacements.

Never mind that I don't think they are up to it anyway.

 

So even if they got for that, I think they'll have to backtrack - hopefully before too much damage done.

My guess is that like many other clumsily introduced policies, there will be a short chaotic period before they either clarify, reconsider or amend this.

 

Unfortunately, my next extension date falls on December-January. If it wasn't for this, I wouldn't even bother reading these topics.

[The Cyclist]

7 minutes ago, Morch said:

Unfortunately, my next extension date falls on December-January. If it wasn't for this, I wouldn't even bother reading these topics.

 

My next extension is next week, for the sake of Baht 5000 or thereabouts, a 300km roundtrip and a night in a hotel I will renew it.

 

The Chicken Littles would do well to have a look at this 4 point plan.

 

1. Gather the known facts

 

2. Assess the known facts

 

3. Formulate a plan

 

4. Execute plan.

 

Points 2,3 and 4 are moot because point 1 ( as yet ) does not exist.

 

And stop with the unadulterated BS.

Edited November 8, 2023 by The Cyclist
Additional text

[Ben Zioner]

14 minutes ago, The Cyclist said:

Too many Chicken Littles banging away on related threads screaming doom & gloom, which is quite interesting and amusing,  as no-one has a clue what will happen after the 01 Jan 2024.

Said the Ostrich...

[Morch]

3 minutes ago, Ben Zioner said:

Said the Ostrich...

 

Maybe a wise strategy to bury head in sand, if the sky is falling.

 

[The Cyclist]

3 minutes ago, Ben Zioner said:

Said the Ostrich...

 

Really ?
 

What facts  do you know that I ( and others don' know )

 

To help you out here is the facts that I know.

 

Fact - Something is changing on the 01 Jan 2024.

 

How does that fact affect me - No idea ( until clarity is issued by the Gov / RD )

 

So what additional facts are known to you ?

[Ben Zioner]

19 minutes ago, Morch said:

 

Maybe a wise strategy to bury head in sand, if the sky is falling.

 

The  sky isn't falling, but  if they reneged  on the LTR tax exemption, I  can be hit with a yearly tax of 700-800k. So due diligence is the rule here. Remember October 7,  we had forgotten how bloodthirsty Islam is and we weren't prepared.

[Morch]

9 minutes ago, Ben Zioner said:

The  sky isn't falling, but  if they reneged  on the LTR tax exemption, I  can be hit with a yearly tax of 700-800k. So due diligence is the rule here. Remember October 7,  we had forgotten how bloodthirsty Islam is and we weren't prepared.

 

I get your point of view, that's why I said these things might be more worrisome, or worth taking 'action' (but what, exactly?) about - if you are 'rich' (at least by local standards). I think most expats, or those posting here do not hold the fancier visas, or are even candidates for such. So for those here on some regular state pension, those living on lower incomes/savings brackets, things may be different.

[Dogmatix]

4 hours ago, UKresonant said:

https://thelegal.co.th/2023/10/18/qa-statement-issued-by-revenue-department-clarifying-taxation-applied-on-foreign-sourced-income/

"(2) Non-Resident Income: The Order explains that if a person is not a resident of Thailand during the year in which they earn income, they do not need to include that income in their tax calculations, even if they bring that income into Thailand in a subsequent year when they are a resident. For example, Mr. B earns income from a rental property abroad in a year when he is not considered a resident of Thailand. Then He brings this income into Thailand in a following year when he is a resident, he is not required to calculate such income as assessable income and shall not be subjected to taxation in the year that those money brought into Thailand."

 

Transient statement, or may it work that way I wonder.

This comment from "The Legal" fails to properly attribute the source it extracted this information from.  I suspect it is the original Q&A from the RD which said this announcement is not lawful but you should follow it anyway and gave very little clarification beyond that paradoxical statement.

 

You can get a much better idea from a google translation of the complete original than from the selective commentary of "The Legal" whoever that may be.

 

 

RD Order 161 2566 Q&A TH.pdf

[Dogmatix]

12 hours ago, Guavaman said:

 

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.

 Interesting that they decided to exempt some types of investment income but not others. Anyway a Royal Decree is not an Act of Parliament.  All that is needed to amend or cancel a Royal Decree is another Royal Decree.

[NanLaew]

 

https://www.linkedin.com/events/thaiincometaxtechnicalupdateand7117358851707863040/

[Dogmatix]

19 hours ago, Metapod said:

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

I doubt it. The exemption given to LTR visa holders was from the last government and was probably only approved because they didn't think they were giving much away, given that wealthy LTR holders could be assumed to be not living from hand to mouth and could remit only previous year income. So it was probably though of as just a convenience to LTR visa holders, not having to wait to remit their income.

[Dogmatix]

One would think that in the interests of investment in the Thai economy, they might want to give an exempt for remittance of capital that is invested in property, stocks or bonds and held for at least 5 years or something.  But they are probably too bone headed to think of that. 

[Mike Lister]

8 minutes ago, Dogmatix said:

One would think that in the interests of investment in the Thai economy, they might want to give an exempt for remittance of capital that is invested in property, stocks or bonds and held for at least 5 years or something.  But they are probably too bone headed to think of that. 

Anyone who thinks the RD will tax foreign funds destined for the housing or financial markets, probably needs their head examined! The SET and the Bond market depend on capital inflows, the housing market in places such as Phuket depend on foreign buyers, there is just no way those inbound funds will be taxed, period.

[topt]

5 hours ago, Mike Lister said:

My UK rental income is taxable in Thailand but only if I bring that money into Thailand.

I have been wanting to ask about this as you mentioned it in another thread.

According to the DTA between Thailand and the UK first item of Article 7 -

Quote

Article 7 Income From Immovable Property (1) Income from immovable property may be taxed in the Contracting State in which such property is situated.

I note it only uses the word "may" be taxed.

So if you have already been taxed in the UK and then you bring in and is taxed in Thailand what happens with regards to credits etc? Has this happened or do you just not bring in (up to now) in the year you earned it?

[Mike Lister]

4 minutes ago, topt said:

I have been wanting to ask about this as you mentioned it in another thread.

According to the DTA between Thailand and the UK first item of Article 7 -

I note it only uses the word "may" be taxed.

So if you have already been taxed in the UK and then you bring in and is taxed in Thailand what happens with regards to credits etc? Has this happened or do you just not bring in (up to now) in the year you earned it?

I don't know what the new way of handling this will be but in the past the RD didn't appear to actively pursue people who brought money in, regardless of when it was earned. My guess is that if the money was declared in the UK, you/me should be free and clear to import those funds and that will be the end of it. It gets to be too complicated trying to figure out is that 500 Pounds in rent that you just transferred to Thailand was earned when and if it was taxed. There's no mileage in the RD deploying staff to check things at this level, it's not productive. My guess again is that if you filed a UK tax return that showed you declared rental income, that's enough to prevent further questions.

[topt]

12 minutes ago, Mike Lister said:

My guess again is that if you filed a UK tax return that showed you declared rental income, that's enough to prevent further questions.

Thanks - but still as clear as mud then.........

[Sheryl]

12 hours ago, Lorry said:

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".

 

 

 

It is way to soon to assume that the RD "practice" with regard to retirees has changed.

 

The bank staff were responding to an overall requirement not one specific to, or primarily aimed at, foreign retirees.

 

To specifically go after retirees would be a huge amount of work for the RD in exchange for very small returns. Many retiree's remittances are still not taxable (mine certainly are), and figuring out which are and which are nto would in ite=self be a huge hassle. Just does not make sense to make that a priority and the only indication that it would be is coming from  assumptions posted online.