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

[MangoKorat]

2 minutes ago, Homburg said:

The way that I would expect this to work is that you compute total Thai taxes due on your gross income, you are then allowed to deduct from that total any taxes already suffered, leaving a net amount payable in Thailand.  Please note that if the taxes paid elsewhere exceed the Thai taxes then no refund is due!

Isn't that the same as what I posted?

[khunpa]

The practical problem with an unclear law like this, is that RD officials will interpret it to their likings.

Even many licensed lawyers here do not actually know the law and interpret it their own way. Also just look at how immigration works. It’s a hit or miss.
 

Once a RD official see money coming in and target you, they will simply determine some made up amount you must pay (either over or under the table) for your problem to go away.
 

All that is needed is a few public cases of foreigners being wrongly targeted to create uncertainty amongst others. Meaning that Thailand will lose a lot of new investment money.

 

Laws are fine as long as you enforce them in a fair, clear and none-corrupt way. That’s not the case in Thailand.

 

I could easily imagine that those going in to the local RD-department to declare their tax for the first time, could easily find themselves in more trouble than they imagined. That’s Thailand’s biggest problem. Better bring a lawyer when go there. 😄

 

We will probably see a booming new  industry of “Tax-Agents”. Just like “Visa-Agents” who can “fix” any issues for a certain amount of payment.😉

Edited November 5, 2023 by khunpa

[MangoKorat]

11 minutes ago, HappyExpat57 said:

 

I placed the laugh emoticon - I have trouble imagining how they will ever figure that out!

I presume that you would be firstly required to declare your income under the new laws. You would then not be able to show any tax paid in the UK.  They may possibly accept a letter from the UK Revenue stating that you are not required to pay tax on it. However, an article I read by a 'Tax Accountant' in Thailand suggested that the Double Taxation Agreement between the UK and Thailand did not include such matters and that tax would be payable on pension income that was over the Thai tax threshold.

[Captain Monday]

27 minutes ago, Autonuaq said:

 

 

With all respect to your view on things, you can make it very hard for yourself. Hard because the revenue office just can file and claim your world income falls in Thailand. Then it is up to you to proof otherwise.

 

Especially with your claim as you made here you make is very easy for them or any other country. The 183 days makes it easy for a person to proof his residence and with this where his world income had to be defined.

When you stay 4 months in one country that also can make it easier to point to a certain country that is where your world income falls.

 

The way you present all, based on my firsthand experiences, when asked me, is that you make it hard for yourself.

The world is global, and in the infomration age the information is floating between governments.

 

 

 

I tend to agree with what you suggest and believe this is an intentional further ramming of the the wedge that began well well prior to covid intended to gradually drive certain foreign demographic cohorts out of Thailand. Time will tell but I think next year they will be going beyond the spirit of tax equilization treaties and as such like as you posted「the revenue office just can file and claim your world income falls in Thailand. Then it is up to you to proof otherwise」.

 

My income is mainly wages from a US employer automatically taxed at the source in fact each year I usually get a large refund after I file my US tax return because they take to much do to standard deduction。This year I got almost $8000 dollars back, an interest free loan to Uncle sam. Next year will be worse do to large bonus. 

 

No objection to fullfilling my income taxation obligations but I will not be double-taxed or rorted by this mob. 

After the experience of being locked out of Thailand for months during covid and what that necessitated for me personally plan B has become plan A, and is already activated.  No need to panic just yet but I have noproblem selling my condo and just visiting a few times a year, or just walking away.

 

I never invested more than I could afford to lose.

 

 

[Can samui]

Ok, here are my concerns.

I will say, it will be nearly impossible for a foreigner to file his own taxes so there goes 20,000 to pay an accountant to file for you.

Embassies no longer issue statements of income for visa extension purposes so cannot see them issuing proof of taxation.

Who will be responsible for confirming the paperwork at immigration for visa renewal. Dont think there are many tax lawyers at the local office.

This is going to be…interesting. 

[Mike Lister]

3 minutes ago, Can samui said:

Ok, here are my concerns.

I will say, it will be nearly impossible for a foreigner to file his own taxes so there goes 20,000 to pay an accountant to file for you.

Embassies no longer issue statements of income for visa extension purposes so cannot see them issuing proof of taxation.

Who will be responsible for confirming the paperwork at immigration for visa renewal. Dont think there are many tax lawyers at the local office.

This is going to be…interesting. 

If you have non complex financial affairs and have only regular payments that you import from overseas each month, pension or similar, along with savings interest in Thai banks, the tax return is simple. But it is in Thai so you may need help. I take my numbers to the local RD offices every January and the people there are happy to complete the return, free of charge, it takes 5 minutes. As long as you know what the net position or bottom line is regarding paying additional tax or getting a refund, you can easily trust RD to do that job for you. The Thai RD code is simple, it is not all complex for simple tax accounts. If you have a business here the story is different, you need an accountant.

[mokwit]

Right now with overseas banks and brokerages you can tick the box "Thailand issues TIN's but i am not legally required to obtain one"

 

Not sure that will be an option going forward - may have to get a Thai TIN to continue with an overseas account if resident in Thailand

[BE88]

33 minutes ago, MangoKorat said:

As I understand it, and I may well be wrong - double tax agreements don't prevent you from being taxed in Thailand.  My understanding is that if the amount of tax you paid in your home country is less than you would have paid in Thailand - you will have to pay the difference.  That might not be the case in many situations but one group that may well be affected is those on a pension.  For example, if your UK pension is less than the UK tax threshold - which many are, you don't pay tax on it in the UK.  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.

 

It's a good summary of what they want to do with pensioners who don't pay taxes in their country.

 

[Pouatchee]

3 hours ago, Gknrd said:

It will go into effect , it won't matter if it is challenged in court or not. 

Nightmare to be  enforced or not, it does not matter. 

My guess is they will have authorized tax officials that you will have to get signed off on before you go to immigration for an extension of your visa.

 

 

my tax slips come in in january and my extension is due in november. it will be a hell of an impossible juggling act

[Homburg]

9 minutes ago, Can samui said:

Ok, here are my concerns.

I will say, it will be nearly impossible for a foreigner to file his own taxes so there goes 20,000 to pay an accountant to file for you.

Embassies no longer issue statements of income for visa extension purposes so cannot see them issuing proof of taxation.

Who will be responsible for confirming the paperwork at immigration for visa renewal. Dont think there are many tax lawyers at the local office.

This is going to be…interesting. 

Absolutely, plus the Thai tax office will no doubt use an "official" exchange rate that bears no relation to the actual exchange rate and maximises the tax take. 

[tandor]

38 minutes ago, HappyExpat57 said:

 

I placed the laugh emoticon - I have trouble imagining how they will ever figure that out!

by the Statutory Declaration you will be made sign and have Notarised.

[goatfarmer]

1 hour ago, HappyExpat57 said:

I believe most people here are safe - for now.

 

"At the time of writing, Thailand has concluded 61 double tax agreements with countries worldwide.

Armenia	Hungary	Poland
Australia	India	Romania
Austria	Indonesia	Russia
Bahrain	Israel	Seychelles
Bangladesh	Italy	Singapore
Belarus	Japan	Slovenia
Belgium	Korea	South Africa
Bulgaria	Kuwait	Spain
Cambodia	Laos	Sri Lanka
Canada	Luxembourg	Sweden
Chile	Malaysia	Switzerland
China	Mauritius	Taipei
Cyprus	Myanmar	Tajikistan
Czech Republic	Nepal	Turkey
Denmark	Netherlands	Ukraine
Estonia	New Zealand	United Arab Emirates
Finland	Norway	United States of America
Germany	Oman	Uzbekistan
Great Britain and Northern Ireland	Pakistan	Vietnam
Hong Kong	Philippines"

 

https://www.belaws.com/thailand/double-tax-agreements/

Right. Most people seem to be disregarding this proviso. The only major omission I can see is France.

[ikke1959]

Maybe the tax department should first set up a good system for their own people, as almost nobody in Thailand pays taxes.. They have n clue what people are doing, earning and possess.... And the ones who pay taxes are not reliable too as we have seen recently in the news.... And when hey have that done, maybe they cold focus on foreigners

[Plus Esse Quam Simultatur]

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 

 

[daveAustin]

3 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.

A mass exodus of expats is what many in this pathetic excuse of a shyster government would want. 

[Jeffrey346]

To date, RD employees have not been given any details on this new tax law. No use getting bent out of shape at this time..

 

[Lucky Bones]

3 hours ago, Gknrd said:

It will go into effect , it won't matter if it is challenged in court or not. 

Nightmare to be  enforced or not, it does not matter. 

My guess is they will have authorized tax officials that you will have to get signed off on before you go to immigration for an extension of your visa.

 

Likely correct. Just like Anootin's Woopy Weed. Introduce without legislation, policy or structure.

It will be interpreted however the beaurocratic individual considers they can bleed a bribe.

Total Balls-Up as usual.🙃🙃

[HappyExpat57]

6 minutes ago, 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 

 

That is truly discouraging. 😔

[spidermike007]

1 hour ago, HappyExpat57 said:

I believe most people here are safe - for now.

 

"At the time of writing, Thailand has concluded 61 double tax agreements with countries worldwide.

Armenia	Hungary	Poland
Australia	India	Romania
Austria	Indonesia	Russia
Bahrain	Israel	Seychelles
Bangladesh	Italy	Singapore
Belarus	Japan	Slovenia
Belgium	Korea	South Africa
Bulgaria	Kuwait	Spain
Cambodia	Laos	Sri Lanka
Canada	Luxembourg	Sweden
Chile	Malaysia	Switzerland
China	Mauritius	Taipei
Cyprus	Myanmar	Tajikistan
Czech Republic	Nepal	Turkey
Denmark	Netherlands	Ukraine
Estonia	New Zealand	United Arab Emirates
Finland	Norway	United States of America
Germany	Oman	Uzbekistan
Great Britain and Northern Ireland	Pakistan	Vietnam
Hong Kong	Philippines"

 

https://www.belaws.com/thailand/double-tax-agreements/

Exactly. And it is likely that many of us who are not currently taxpayers in Thailand will not be affected one iota. 

[HappyExpat57]

I am seriously considering using an agent now for my annual extension if they can bypass all this bullpucky.

[Tom Parkinson]

I can only imagine a lot of expats will opt for the BOI-supported Long-Term Resident visas, which specifically exclude from taxes all income from outside Thailand. 

[khunpa]

Personally I live off my savings. What I will do is just bring in a certain small amount every month and report that.

 

No more large transfers and luxury purchases within Thailand.

 

Can’t see how spending way less within Thailand, will benefit the country? But it’s their choice.

 

If things go too crazy I will just move elsewhere for 6 months every year.

 

 

 

Edited November 6, 2023 by khunpa

[SGD]

You are all missing the point.

Currently, Thailand considers income earned over 12 months ago as capital and capital is not taxed.

Thus, if you can earn income tax free at source and then spend income earned 13 months ago, you legally have no tax to pay.

However, if Thailand changes their interpretation of capital or requires income earned anywhere to be taxed in the year it is earned, you would technically have to declare your income and suffer Thai taxation.

In reality, if you are paid into Hong Kong and transfer capital, no-one is ever going to ask you where the money came from because it is none of their business.

[Lucky Bones]

1 hour ago, Skipalongcassidy said:

This situation begs the question as to why Thailand insists on inventing the wheel all over again... is it pride or ignorance that blinds them to other tried and true systems that are up and running with all the bugs already dealt with. Asking for a friend.

Thailand is frighteningly inclusive, especially at beaurocracy level. The world is subservient to Thai thinking.🙃🙃

[Jeffrey346]

5 minutes ago, SGD said:

You are all missing the point.

Currently, Thailand considers income earned over 12 months ago as capital and capital is not taxed.

Thus, if you can earn income tax free at source and then spend income earned 13 months ago, you legally have no tax to pay.

However, if Thailand changes their interpretation of capital or requires income earned anywhere to be taxed in the year it is earned, you would technically have to declare your income and suffer Thai taxation.

In reality, if you are paid into Hong Kong and transfer capital, no-one is ever going to ask you where the money came from because it is none of their business.

The new law closes the loop on income earned in 1 year and brought into Thailand the next year.

[BE88]

 

Finally it is good news because it pushes me to change my way of life, after having lived 10 years in Thailand the time has come to live in Thailand as a tourist for the winter months and the rest in another country making my life more active and interesting out of the current boredom.

 

 

[Dan O]

1 hour ago, hotchilli said:

Hope so... My government pension starts in 2025 so I have a year to go for this to settle.

If during 2024 this is set in stone I will be moving out of Thailand after 15 years here.

If you come from a country with a DTA then you most likely will have no impact as most countries with a DTA exclude govt pensions from being taxed in other jurisdictions. You should read up on your country's DTA to make yourself knowledgeable. All these articles are slanted in there headlines and  presentation to attract readers. Most of this article is on the impact on legality to change the interpretation of tax code, thailand investments overseas and economic impact to Investments and little to do with targeting expats although they will be caught in the potential net in some instances. 

[Peterw42]

10 minutes ago, SGD said:

You are all missing the point.

Currently, Thailand considers income earned over 12 months ago as capital and capital is not taxed.

Thus, if you can earn income tax free at source and then spend income earned 13 months ago, you legally have no tax to pay.

However, if Thailand changes their interpretation of capital or requires income earned anywhere to be taxed in the year it is earned, you would technically have to declare your income and suffer Thai taxation.

In reality, if you are paid into Hong Kong and transfer capital, no-one is ever going to ask you where the money came from because it is none of their business.

 

The new laws changes the definition of capital, savings etc. Any money in any year, in to Thailand, is taxable no matter how or when it was earned. Its the whole reason we are discussing it

[Countryman]

When I first moved here 30 odd years ago ,you had to get a tax clearance before you

were allowed to leave the country , it was a farce ,only ever had to pay more than 500

Baht , the lady doing the assessment was more interested in asking me to bring her

some knickers and bras from my overseas trip. 

[khunpa]

24 minutes ago, Jeffrey346 said:

To date, RD employees have not been given any details on this new tax law. No use getting bent out of shape at this time..

 

Even when they do get the details, it’s pretty certain that it will be interpreted differently by each individual and district. So total confusion.