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

[Dogmatix]

2 minutes ago, retiree said:

Thank you Dogmatix for posting this useful article.  https://www.prachachat.net/finance/news-1432180 

 

My interpretation would be slightly different.  As expected, the RD is beginning to issue guidance and "safe harbor" rules on tax law enforcement.  To clarify, a safe harbor rule typically establishes simple documentary evidence needed to establish that one is not subject to a regulation. 

 

If the article is accurate, the first safe harbor rule is that money remitted from an account that was:

• funded in 2023 or earlier, and
• has not had additional funds credited in 2024 or subsequent years,

will be assumed to be non-taxable income, regardless of when it is remitted.  Presumably an account statement that shows

• the pre-existing funds from 2023 or earlier, and
• a remittance to Thailand from that account that matches your Thai income

will be accepted as evidence.  I imagine that it would be advisable for residents to maintain these accounts as-is, and establish new accounts for income and expenditures in 2024 and beyond. 

 

The question of whether Thailand will move to taxing global income of tax residents is non-trivial, and will not be settled by a quick and easy revision of Thai law.  I expect that there may be an attempt to apply this to Thai corporations, and Thai overseas investors, long before there is any consideration of taxing the home-country income of individual tax residents as it is accrued, and regardless of whether it is remitted.

 

Please note that I have no particular expertise in tax or law, besides paying it and obeying them. 

 

The article quotes from varying sources and is suggestive of a work still in progress but also that they have come around to the view that taxing income that arose prior to 1 Jan 2024 may be more trouble than it is worth.   Two things spring to mind. 

 

1. If they really intend to make 1 Jan 2024 a start date for something, they will need a Royal Decree.  Order P. 161/2566 will need to be rescinded and the lawyers will have pointed out to them it wasn't legally binding on taxpayers anyway.  A Royal Decree will need cabinet approval and there may be some differences of opinion in the coalition parties which could change things. Talking about 1 Jan 2024 with any luck will just turn out to be a face saver for the DG of the RD, who seems to have acted like a bit of a nincompoop anyway (albeit no doubt with a nod from finance minister Srettha who was about to hop on the plane to NY at the time) as it would probably be tough to get out a Royal Decree by then and Thailand very rarely makes any law retroactive. 

 

2. Amending the Revenue Code in parliament to introduce global taxation would actually be a more logical step than trying to tax foreign source income on a remittance basis.  My guess is that's where we are ultimately headed, either during the term of this government or an MFP government, if they manage to gain power. But it would be a major undertaking and would easily take two years to draft and go through all 3 readings in parliament.  They might want to reform other aspects of the law as well. . There are many legit arguments against global taxation or a remittance, as raised by Prof Kittipong, former chairman of Baker McKenzie. In addition there are many corrupt politicians and bureaucrats with wealth offshore who might oppose global taxation or remittance tax.  

 

From the macro perspective Thailand has fallen into the middle income trap and has no way to crawl out to become a high income country like Singapore because there is far too much  incompetence and corruption in government. Without those two handmaidens Thailand could strive to be a regional finance centre with a liberal tax regime like Singapore, as suggested by Prof Kittipong.  But that would require enlightened governance and a commitment to improving public education and doing whatever it takes to make Thailand competitive in this post sweated labour phase and thus fulfill it long term sustainable growth potential which is far higher than the 2-3% GDP growth which is now the best it can do. With faster growth the tax take would increase without raising taxes.  As it is, Thais have started to expect a developed country welfare state without first becoming a developed economy. That means raising taxes across the board, including VAT.

 

[TroubleandGrumpy]

7 minutes ago, Sato said:

no arguments and then has to be personally insulted. What pathetic behavior.

You sound like an old spinster berating someone, or a young Karen going off about a random issue. 

Mate - go and do some research on the matter - it is very factual.

I even gave you a suggested google search - which I do again.

You dont have to come back and admit you were wrong or misinformed - but just go research it all.

"Why is US the only country that taxes its non-resident citizens?" 

[The Cyclist]

3 hours ago, TroubleandGrumpy said:

21 hours ago, stat said:

well.

AND anyone lodging a DTA exemption will probably have to do it in Thai and though a Thai certified accountant/lawyer. 

 

On the other thread, Someone very helpfully provided a link to the forms for submitting a tax return, Forms supplied in both English and Thai.

 

That person also ( and I read it elsewhere ) that the RD is currently ammending the forms to include a Section where you declare income covered by a DTA.

 

Therefore, should the need arise ( Awaiting clarification )  it will not be difficult to fill in the English version and have a Thai transcribe to the Thai version and deposit both versions with the RD.

[Mike Teavee]

1 hour ago, samtam said:

 

Itsy bitsy spider...

Thanks @Dogmatix. I hope this is the first nail in this coffin of stupidity. If however, Thailand tries to tax all worldwide income, like the USA, that would be an even more silly idea than the one currently being spouted, and unlike the IRS, I think their ability to enforce this is wildly optimistic. The article you reference also seems to emphasise the main target as (wealthy) Thais who invest overseas, and I suspect like previous attempts to alienate this segment of the electorate will end in tears.

 

Perhaps somebody could explain how US Tax works for non-US Citizens living/Tax Resident in the US i.e. does the US Tax them on all of their world wide income or only Income earned in/remitted to the US? 

 

I can see Thailand introducing a US Style Worldwide Income Tax on Thai Citizens (though they lack the "Clout" of the US when it comes to getting other countries/banks to report information to them) but I can't see them introducing this for Non-Thai Citizens even if they are Tax Resident.

 

Edited November 10, 2023 by Mike Teavee

[TroubleandGrumpy]

10 minutes ago, Dogmatix said:

 

The article quotes from varying sources and is suggestive of a work still in progress but also that they have come around to the view that taxing income that arose prior to 1 Jan 2024 may be more trouble than it is worth.   Two things spring to mind. 

 

1. If they really intend to make 1 Jan 2024 a start date for something, they will need a Royal Decree.  Order P. 161/2566 will need to be rescinded and the lawyers will have pointed out to them it wasn't legally binding on taxpayers anyway.  A Royal Decree will need cabinet approval and there may be some differences of opinion in the coalition parties which could change things. Talking about 1 Jan 2024 with any luck will just turn out to be a face saver for the DG of the RD, who seems to have acted like a bit of a nincompoop anyway (albeit no doubt with a nod from finance minister Srettha who was about to hop on the plane to NY at the time) as it would probably be tough to get out a Royal Decree by then and Thailand very rarely makes any law retroactive. 

 

2. Amending the Revenue Code in parliament to introduce global taxation would actually be a more logical step than trying to tax foreign source income on a remittance basis.  My guess is that's where we are ultimately headed, either during the term of this government or an MFP government, if they manage to gain power. But it would be a major undertaking and would easily take two years to draft and go through all 3 readings in parliament.  They might want to reform other aspects of the law as well. . There are many legit arguments against global taxation or a remittance, as raised by Prof Kittipong, former chairman of Baker McKenzie. In addition there are many corrupt politicians and bureaucrats with wealth offshore who might oppose global taxation or remittance tax.  

 

From the macro perspective Thailand has fallen into the middle income trap and has no way to crawl out to become a high income country like Singapore because there is far too much  incompetence and corruption in government. Without those two handmaidens Thailand could strive to be a regional finance centre with a liberal tax regime like Singapore, as suggested by Prof Kittipong.  But that would require enlightened governance and a commitment to improving public education and doing whatever it takes to make Thailand competitive in this post sweated labour phase and thus fulfill it long term sustainable growth potential which is far higher than the 2-3% GDP growth which is now the best it can do. With faster growth the tax take would increase without raising taxes.  As it is, Thais have started to expect a developed country welfare state without first becoming a developed economy. That means raising taxes across the board, including VAT.

 

IMO Thailand has zero chance of successfully taxing its Tax Residents and Citizens who are making money overseas. Only the USA has been able to get away with that for its Citizens - Thailand has no chance.  There are so many reasons why - just to start all the DTAs they have in place preclude that being accepted.

[Sato]

""Why is US the only country that taxes its non-resident citizens?"" has absolutley nothing to do with the fact that US citizen are taxable in the country they are resident.

Logical thinking doesn't seem to be one of your strengths, on the other hand, insulting others does.

[TroubleandGrumpy]

2 minutes ago, The Cyclist said:

On the other thread, Someone very helpfully provided a link to the forms for submitting a tax return, Forms supplied in both English and Thai.

That person also ( and I read it elsewhere ) that the RD is currently ammending the forms to include a Section where you declare income covered by a DTA.

Therefore, should the need arise ( Awaiting clarification )  it will not be difficult to fill in the English version and have a Thai transcribe to the Thai version and deposit both versions with the RD.

 

Thanks - that will be interesting to see when it is finalised and changed.

I am still concerned over what happens when they 'reject' an assessment and send me a tax bill.

But actually I am more concerned about having to complete a tax return at all - hopefully Expats will be exempted.

[TroubleandGrumpy]

6 minutes ago, Sato said:

""Why is US the only country that taxes its non-resident citizens?"" has absolutley nothing to do with the fact that US citizen are taxable in the country they are resident.

Logical thinking doesn't seem to be one of your strengths, on the other hand, insulting others does.

I will say in response that obtusive arguments and refusing to do any research on an issue - that is my read of yourself.

[The Cyclist]

1 minute ago, TroubleandGrumpy said:

But actually I am more concerned about having to complete a tax return at all

 

Why does filing a tax return concern you, if you are a tax Resident in Thailand ?
 

I've never filed one, but have no issues filing one if it becomes necessary. It's not as if I am busting a gut a work and will struggle to find the time.

[Mike Teavee]

1 minute ago, TroubleandGrumpy said:

I will say in response that obtusive arguments and refusing to do any research on an issue - that is my read of yourself.

I think you guys are coming at it from a different point of view. 

 

To use the UK as an example, an American living in the UK is taxable in/by the UK if they work, get interest from a bank account, make a Capital Gain etc... there so to say that only US can Tax an American's worldwide income is not true.  

 

Now from the flipside, any income you earn in the UK that's been taxed can be offset against the tax that the US applies to your worldwide income (e.g. if you were working abroad I believe up to $120,000 salary income is not taxable in the US) with the result that you'll probably come off net neutral, only time I could see you being worse off is if the tax rates in the foreign country were significantly higher than the equivalent in the US. 

 

BTW, US isn't the only country that taxes it's citizens worldwide, Eritrea does it as well https://www.taxesforexpats.com/expat-tax-advice/Citizenship-Based-Taxation-International-Comparison.html

  

[TroubleandGrumpy]

6 minutes ago, Mike Teavee said:

I think you guys are coming at it from a different point of view. 

 

To use the UK as an example, an American living in the UK is taxable in/by the UK if they work, get interest from a bank account, make a Capital Gain etc... there so to say that only US can Tax an American's worldwide income is not true.  

 

Now from the flipside, any income you earn in the UK that's been taxed can be offset against the tax that the US applies to your worldwide income (e.g. if you were working abroad I believe up to $120,000 salary income is not taxable in the US) with the result that you'll probably come off net neutral, only time I could see you being worse off is if the tax rates in the foreign country were significantly higher than the equivalent in the US. 

 

BTW, US isn't the only country that taxes it's citizens worldwide, Eritrea does it as well https://www.taxesforexpats.com/expat-tax-advice/Citizenship-Based-Taxation-International-Comparison.html

  

Thanks Mike - much appreciated.  Clearly he is thinking about someone working and getting a salary paid and taxed, when I am talking about someone that lives there 180+ days and is retired or married - like most Expats in Thailand that this change affects. 

 

[retiree]

45 minutes ago, Dogmatix said:

... it would be a major undertaking and would easily take two years to draft and go through all 3 readings in parliament.  They might want to reform other aspects of the law as well.  There are many legit arguments against global taxation...  In addition, there are many ... with wealth offshore who might oppose global taxation 

 

I agree.  This is far, far from a done deal.  Nor is global taxation (particularly for non-citizen tax residents) something that can be effected with the stroke of a pen.  The US, UK, etc. tax codes (each thousands of pages) and guidance (each tens of thousands of pages) took a long, long time to get that way as necessary details were filled in over the years. 

 

Note that if this report is accurate, remittance in 2024 will only be taxable for 2024 income.  2023 and prior assessable income will be protected under the safe harbor rule, and the old interpretation of the code.  The earliest remittance that might be affected under the Sept 15 rule won't occur until Jan. 1, 2025, for income earned in 2024. 

 

On the face of it this suggests that the RD would have time to defend a legal challenge.  Hopefully this is something a disinterested Thai legal authority, or an expert in procedural law rather than tax law, will comment on.  

 

Edited November 10, 2023 by retiree

[Mike Lister]

13 minutes ago, retiree said:

 

I agree.  This is far, far from a done deal.  Nor is global taxation (particularly for non-citizen tax residents) something that can be effected with the stroke of a pen.  The US, UK, etc. tax codes (each thousands of pages) and guidance (each tens of thousands of pages) took a long, long time to get that way as necessary details were filled in over the years. 

 

Note that if this report is accurate, remittance in 2024 will only be taxable for 2024 income.  2023 and prior assessable income will be protected under the safe harbor rule, and the old interpretation of the code.  The earliest remittance that might be affected under the Sept 15 rule won't occur until Jan. 1, 2025, for income earned in 2024. 

 

On the face of it this suggests that the RD would have time to defend a legal challenge.  Hopefully this is something a disinterested Thai legal authority, or an expert in procedural law rather than tax law, will comment on.  

 

I've always believed this was the case. I would hope that those people who filed fraudulent tax returns in the past that reclaimed tax paid on bank interest but ignored other income and the rest of the return, will be safe.

[Ben Zioner]

24 minutes ago, retiree said:

Note that if this report is accurate, remittance in 2024 will only be taxable for 2024 income.  2023 and prior assessable income will be protected under the safe harbor rule, and the old interpretation of the code.  The earliest remittance that might be affected under the Sept 15 rule won't occur until Jan. 1, 2025, for income earned in 2024. 

 

Yep, it would make the whole thing a lot more acceptable. I can understand to move to tax foreign income but I would have been gutted if they had changed their rules/practices retroactively.

 

But it seems that my (32) years of not paying income tax (legally) are coming  to an end.

 

But high season tourists will suffer this year, THB will be going through the roof.

Edited November 10, 2023 by Ben Zioner

[The Cyclist]

21 minutes ago, retiree said:

Note that if this report is accurate, remittance in 2024 will only be taxable for 2024 income.  2023 and prior assessable income will be protected under the safe harbor rule, and the old interpretation of the code.  The earliest remittance that might be affected under the Sept 15 rule won't occur until Jan. 1, 2025, for income earned in 2024. 

 

Must be fake noos, some moonhowler has already been shouting about auditing covering the past 10 years 

[jerrymahoney]

1 hour ago, The Cyclist said:

 

On the other thread, Someone very helpfully provided a link to the forms for submitting a tax return, Forms supplied in both English and Thai.

 

That person also ( and I read it elsewhere ) that the RD is currently ammending the forms to include a Section where you declare income covered by a DTA.

 

Therefore, should the need arise ( Awaiting clarification )  it will not be difficult to fill in the English version and have a Thai transcribe to the Thai version and deposit both versions with the RD.

According to the Revenue Department, it will seek opinions from the stakeholders affected by the new rule and issue guidelines to provide more clarity. The plan includes an amendment of the personal income tax return form to facilitate the foreign tax credit claim.

 

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Thailand-Tax-Foreign-Income-Taxable-from-2024

 

e-Form: : Personal Income Tax

 

https://www.rd.go.th/english/62892.html

Edited November 10, 2023 by jerrymahoney

[Misty]

1 hour ago, Mike Teavee said:

 

Perhaps somebody could explain how US Tax works for non-US Citizens living/Tax Resident in the US i.e. does the US Tax them on all of their world wide income or only Income earned in/remitted to the US? 

 

I can see Thailand introducing a US Style Worldwide Income Tax on Thai Citizens (though they lack the "Clout" of the US when it comes to getting other countries/banks to report information to them) but I can't see them introducing this for Non-Thai Citizens even if they are Tax Resident.

 

 

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.

[The Cyclist]

30 minutes ago, jerrymahoney said:

According to the Revenue Department, it will seek opinions from the stakeholders affected by the new rule and issue guidelines to provide more clarity. The plan includes an amendment of the personal income tax return form to facilitate the foreign tax credit claim.

 

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Thailand-Tax-Foreign-Income-Taxable-from-2024

 

e-Form: : Personal Income Tax

 

https://www.rd.go.th/english/62892.html

 

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.

[Mike Teavee]

35 minutes 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.

To align that to Thailand, that would that be like Thailand taxing all Citizens & Permanent Resident Holders on their World wide income.

 

And if I've understood you correctly, somebody who went to work in the US for 1 year on a H1B Visa would be taxed on their world wide income during that year, but presumably once  they left the Job/US & were no longer Tax Resident, the US wouldn't tax any income not arising in the US.

[UKresonant]

3 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

 

 

 

 

I think this bit, should it be amended to Global income will make being there more than 179days a substantial bit more incompatible for me. It would be very strange paying tax in Thailand after paying tax in the UK, and still spending a substantial amount on commitments in the UK. I just seem to perceive incremental negativity since 2018, then there was COVID etc. So though thought of potentially continuously being in Tax flux is a definite negative. 

 

"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.”

 

The remittance rule from Jan 2024, in contrast, is a mild irritation in comparison to that  !

 

 

 

[ukrules]

2 hours ago, The Cyclist said:

The only Doomers & Gloomers that need to be concerned are the Doomers & Gloomers that have been flying below the radar and not paying the appropriate taxes.

 

This is going to be a much larger group of people than you imagine.

[Felt 35]

20 hours ago, stat said:

They do not need to change the DTA. Example: beforehand no tax on capital gains in Thailand, now you have to pay capital gains tax on remittances. There is no DTA involved if you only live in Thailand in cap gains case.

 

Next example German pension: Beforehand TH has taxation right but did not tax it; after 01 Jan 24 you pay income tax on German pension if remitted to Thailand. And again in other cases, if you want to use a dta you must provide tons of translated documents and be willing to go to court. If the disputed tax is 50K USD and above maybe worth it, everything under 50K not worth the time and effort.

 

PS: May I ask you in which capacity you provide financial advise in order to make the above claim about DTAs in general? There are people on this board including me who work in banking and provide tax counsel in international tax matters FYI.

 

Nothing else than experience of following one DTA the last 15 years which stipulate that I shall pay tax on what's actually transferred to Thailand and what not is transferred are taxed in home country where I have to prov with English language Thai tax payment certificate and Thai certificate of residence annually. That DTA will not be changed 1. January 2024 so I will still pay tax on anything transferred to Thailand, either its pension income or savings. My bank home has my TIN and so have naturally home country's tax department. I prov my transfer to Thailand with an annually statement from my bank here and because the info they already have at my home country's tax department it's a "see through" for them if I have transferred anything to a second Thai Bank. I understand that many countries have different DTA`s so I absolutely understand many people's confusion and frustration and I think but can absolutely be wrong that many DTA`s need renegotiations or most likely an additional tax clause for they based in Thailand and that can be negotiated between the relevant country and Thailand quite quickly.

Felt

[mfd101]

I'm still hiding under the bed. I have no (current) plan to emerge.

[The Cyclist]

19 minutes ago, ukrules said:

 

This is going to be a much larger group of people than you imagine.

 

Perhaps it will be, I have no idea of the numbers involved.

 

Neither will I have much sympathy for those involved.

[Misty]

42 minutes ago, Mike Teavee said:

To align that to Thailand, that would that be like Thailand taxing all Citizens & Permanent Resident Holders on their World wide income.

 

And if I've understood you correctly, somebody who went to work in the US for 1 year on a H1B Visa would be taxed on their world wide income during that year, but presumably once  they left the Job/US & were no longer Tax Resident, the US wouldn't tax any income not arising in the US.

The rules on who is a US tax resident are a bit complicated.  But I think that it would be correct to say once someone is no longer a tax resident, the US wouldn't tax income not arising in the US.  It may tax some types of investment income in the US as well as distributions from deferred income accounts such as traditional 401(k)s, IRAs, and Social Security. 

 

Here's a link to definitions for US tax residency: https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates

The Thai definition is so much simpler.

[stat]

10 hours ago, rabas said:

 

Been here 37 years, not too many surprises left.  I understand the new clause because I've used its prior version in the past while consulting with the RD.  I know what it says. This will have some impact on some, not all foreign tax residents and I encourage everyone to better understand the tax laws. I will not opine as that's all this thread has.

 

I will observe that all relevant discussion and news from the RD is on their Thai language site, not a mention on the English site. 

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.)

[Mike Lister]

11 minutes 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.)

I can't imagine why you think that. Every year I file my tax return here and I usually end up paying a small amount of tax, I file the return, pay the tax and get a receipt, it's not difficult.

[stat]

5 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

 

 

 

Thanks for this article and its translation!

 

"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.”

 

 

If this come to pass I and many others will never spend 180+ in TH ever again. Even Germany taxes you lower at 26.375% on cap gains on the personal level (47% if you include corp taxes) vs 35% in TH . But then again this being Thailand I hope the law will be changed at the time the bullet trains zip through Thailand, so the start date will be always the current date +5 years :-)

[stat]

3 hours ago, TroubleandGrumpy said:

You sound like an old spinster berating someone, or a young Karen going off about a random issue. 

Mate - go and do some research on the matter - it is very factual.

I even gave you a suggested google search - which I do again.

You dont have to come back and admit you were wrong or misinformed - but just go research it all.

"Why is US the only country that taxes its non-resident citizens?" 

 

BTW US citizen can claim exemption for their US tax on the part they already paid in the other country. TroubleandGrumpy is correct here.

 

There is however Erithrea that taxes on nationality even if you live somewere else. Germany has also some very special clauses that force you to pay up either when you leave Germany or 5 to 10 years after you have left Germany.

 

https://www.taxesforexpats.com/expat-tax-advice/Citizenship-Based-Taxation-International-Comparison.html

[stat]

1 hour ago, Felt 35 said:

 

Nothing else than experience of following one DTA the last 15 years which stipulate that I shall pay tax on what's actually transferred to Thailand and what not is transferred are taxed in home country where I have to prov with English language Thai tax payment certificate and Thai certificate of residence annually. That DTA will not be changed 1. January 2024 so I will still pay tax on anything transferred to Thailand, either its pension income or savings. My bank home has my TIN and so have naturally home country's tax department. I prov my transfer to Thailand with an annually statement from my bank here and because the info they already have at my home country's tax department it's a "see through" for them if I have transferred anything to a second Thai Bank. I understand that many countries have different DTA`s so I absolutely understand many people's confusion and frustration and I think but can absolutely be wrong that many DTA`s need renegotiations or most likely an additional tax clause for they based in Thailand and that can be negotiated between the relevant country and Thailand quite quickly.

Felt

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?