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

[discrete]

3 hours ago, Puccini said:

 

The problem is you will only find out what, if anything, happens after bringing the money into Thailand. It's an awkward situation.

Maybe I will transfer a small chunk first . then get my accountant to get a ruing from RD about its status as an inbound capital transfer ... by providing transfer details including evidence of the source of the funds as an existing overseas asset rather than income. 

 

If they are unfriendly and deem it 'income' ... it is only a small tax problem and I will not bring the rest into the country.

If they rule (correctly) that it is an asset transfer and not taxable income, I can use that ruling to support the tax treatment of the rest of the inbound funds.

Edited November 12, 2023 by discrete

[samtam]

6 hours ago, Mike Lister said:

Yes I agree. One of the problems is that 48% of the Thai economy is grey, unreported untaxed income, I don't know how the government can accurately estimate anything when only 50% of the economy is being reported.

 

They attend a course in the Tourist Authority of Thailand Magic School of Statistics and Wishful Thinking, (TATTMSSWT for short). 

[retiree]

8 hours ago, Mike Lister said:

Yes I agree. One of the problems is that 48% of the Thai economy is grey, unreported untaxed income, I don't know how the government can accurately estimate anything when only 50% of the economy is being reported.

 

As noted in this post, the figure that is most often cited in this thread -- 46.2% -- is based on admittedly "poor" evidence that is one step below "use with caution."

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

 

Prof. Friedrich Schneider is another key reference; he estimates 40.9% in 2014¹.  For what it's worth, he also repeatedly quoted 70% -- and was himself very widely cited -- for 1998-1999, so this seems like a remarkable recovery^2,3.  

 

The problem with all of these numbers is made plain in a typical newspaper analysis:  

    Visible informal business in the country is widespread and consists of street vendors, food stalls, souvenir sellers, repair shops, makeshift entertainment venues and so forth, ... "if this revenue was just taxed by the general 7% value-added tax, the Thai government could have brought in ..."  (quoting an anonymous Thai economist)⁴

 

Recall that a) income distribution in Thailand is extremely unbalanced, b) 20% of the population receives 50% of the income, c) the average wage in Thailand is 15,400 baht/month, and d) low-income workers and low-revenue businesses are not subject to personal income tax or VAT (all references provided in the link above).

 

It is intentionally illusory to imagine the income that could be garnered from these folks if only they were "just taxed by the general 7% value-added tax" -- they have intentionally been excluded from such taxation.    And it is equally misguided to assume that the government has not carefully considered the effect that applying such a tax would have on a large population that is barely getting by as it is -- more than a third of Thailand's population is either below the poverty line (6.3%)⁵, or faces food insecurity (28.6%)⁶.

 

Thailand is not Italy, where so many large and profitable businesses have historically evaded reporting that years ago, tourists were advised to hold onto their restaurant receipts -- the police were known to demand them to ensure that restaurants were charging VAT.   Thailand does have a shadow economy (which many posters on this list seem to be eager to participate in).  And in cases of corruption, as well as the problems every country faces in taxing drugs, prostitution, and the like, large sums may be involved.   

 

But these cost far less than I think is commonly imagined in terms of GDP.  Corruption is estimated at $1.5-3 billion of $500 billion of GDP in recent years -- a painful bite of the budget, but only a small fraction of the economy.   Similarly, prostitution is not taxed, and is also likely to involve billions of dollars, concentrated in a manner that could reasonably yield tax revenue.  But (perhaps unlike corruption) that money is spent in ordinary activities (raising families, building houses, etc.) that boost GDP and are taxed. 

 

Overall, I find it hard to see how all of these add up to anything close to the unsupported 40-50% of GDP figures commonly cited.  This is a quite interesting topic, though, and I would be grateful for links to any more detailed and accurate assessment of the role the shadow economy plays in Thailand. 

 

1 https://link.springer.com/chapter/10.1007/978-3-319-59846-8_3  New Estimates for the Shadow Economies of 11 Asian Countries from 2000 to 2014  Friedrich Schneider 2017

2 https://www.elibrary.imf.org/display/book/9781589060968/ch01.xml  Shadow Economies  Friedrich Schneider and Dominik Enste  2002 IMF

3 https://www.imf.org/external/pubs/ft/issues/issues30/ Hiding in the Shadows  Friedrich Schneider and Dominik Enste  2002 IMF 

4 https://www.gulf-times.com/story/448401/Thailand-s-shadow-economy-among-biggest-worldwide   Arno Maierbrugger Gulf Times Correspondent, Bangkok. 2015

5 https://www.adb.org/where-we-work/thailand/poverty  Poverty Data: Thailand  2021

6 https://www.frontiersin.org/articles/10.3389/fpubh.2022.1071814/full   Socio-demographic and geographic disparities of population-level food insecurity during the COVID-19 pandemic in Thailand  Sirinya et al 2023

 

Edited November 12, 2023 by retiree

[Mike Lister]

2 minutes ago, retiree said:

 

As noted in this post, the figure that is most often cited in this thread -- 46.2% -- is based on admittedly "poor" evidence that is one step below "use with caution."

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

 

A Prof. Friedrich Schneider is also frequently mentioned; he estimates 40.9% in 2014¹.  For what it's worth, he also repeatedly quoted 70% -- and was himself very widely cited -- for 1998-1999, so this seems like a remarkable recovery^2,3.  

 

The problem with all of these numbers is made plain in a typical newspaper analysis⁴:  

    Visible informal business in the country is widespread and consists of street vendors, food stalls, souvenir sellers, repair shops, makeshift entertainment venues and so forth, ... "if this revenue was just taxed by the general 7% value-added tax, the Thai government could have brought in ..."  (quoting an anonymous Thai economist)

 

Recall that a) income distribution in Thailand is extremely unbalanced, b) 20% of the population receives 50% of the income, c) the average wage in Thailand is 15,400 baht/month, and d) low-income workers and low-revenue businesses are not subject to personal income tax or VAT. 

 

It is intentionally illusory to imagine the income that could be garnered from these folks if only they were "just taxed by the general 7% value-added tax" -- they have intentionally been excluded from such taxation.    And it is equally misguided to assume that the government has not carefully considered the effect that applying such a tax would have on a large population that is barely getting by as it is -- more than a third of Thailand's population is either below the poverty line (6.3%)⁵, or faces food insecurity (28.6%)⁶.

 

Thailand is not Italy, where so many large and profitable businesses have historically evaded reporting that years ago, tourists were advised to hold onto their restaurant receipts --the police were known to demand them to ensure that restaurants were charging VAT.   Thailand does have a shadow economy (which many posters on this list seem to be eager to participate in).  And in cases of corruption, as well as the problems every country faces in taxing drugs, prostitution, and the like, large sums may be involved.   

 

But these cost far less than I think is commonly imagined in terms of GDP.  Corruption is estimated at $1.5-3 billion of $500 billion of GDP in recent years -- a large hunk of the budget, but only a small fraction of the economy.   Similarly, prostitution is not taxed, and is also likely to involve billions of dollars, concentrated in a manner that could reasonably yield tax revenue.  But (perhaps unlike corruption) that money is spent in ordinary activities (raising families, building houses, etc.) that boost GDP and are taxed. 

 

Overall, I find it hard to see how all of these add up to anything close to the unsupported 40-50% of GDP figures commonly cited.  I would be delighted to read of any more detailed and accurate assessment of the role the shadow economy plays in Thailand. 

 

1 https://link.springer.com/chapter/10.1007/978-3-319-59846-8_3  New Estimates for the Shadow Economies of 11 Asian Countries from 2000 to 2014  Friedrich Schneider 2017

2 https://www.elibrary.imf.org/display/book/9781589060968/ch01.xml  Shadow Economies  Friedrich Schneider and Dominik Enste  2002 IMF

3 https://www.imf.org/external/pubs/ft/issues/issues30/ Hiding in the Shadows  Friedrich Schneider and Dominik Enste  2002 IMF 

4 https://www.gulf-times.com/story/448401/Thailand-s-shadow-economy-among-biggest-worldwide   Arno Maierbrugger Gulf Times Correspondent, Bangkok. 2015

 

5 https://www.adb.org/where-we-work/thailand/poverty  Poverty Data: Thailand  2021

6 https://www.frontiersin.org/articles/10.3389/fpubh.2022.1071814/full   Socio-demographic and geographic disparities of population-level food insecurity during the COVID-19 pandemic in Thailand  Sirinya et al 2023

 

I think there is a difference between suggesting that "48% of the Thai economy is grey, unreported untaxed income", and implying that might equate to "40-50% of GDP figures commonly cited". Perhaps in part this is imprecise terminology.

 

I had intended to imply that 48% of all earnings are unreported and untaxed, assuming the various estimates are broadly accurate. Judging from the small number of people in the tax net, that figure doesn't seem far fetched. On the surface it appears that currently, say 20% of the workforce produces 100% of the current GDP and that the 48% who do not contribute to GDP, are only capable of producing a much smaller percentage. Capturing the earnings of that 48% would not therefore double GDP but instead would increase it by a lesser amount.

 

GDP measurement on the other hand is a different issue. GDP can be measured by the sum of all purchases, the sum of all sales, or, the sum of everything produced. Thailand uses the combination method which means all three methods are used hence the product of that calculation doesn't overlay even closely to the previous one about the earnings of the workforce and unreported and untaxed income. 

[retiree]

17 minutes ago, Mike Lister said:

I think there is a difference between suggesting that "48% of the Thai economy is grey, unreported untaxed income", and implying that might equate to "40-50% of GDP figures commonly cited". Perhaps in part this is imprecise terminology.  I had intended to imply that 48% of all earnings are unreported and untaxed, . ... GDP measurement on the other hand is a different issue.

 

You are absolutely right.  I jumped to the conclusion that you were referring to GDP, and not income (unlike Schneider and my other citations, who are referring to GDP) -- I guess I'm just used to seeing words like "gray" and "shadow" so frequently used in that context.  My apologies for getting this wrong.  

 

Your explanation of 48% makes good sense.  I just don't see where the figure comes from, or how close it might be to this X or Y ?

   X% of Thai earnings are below or barely above the limit for reporting and taxation. 

   Y% of unreported Thai earnings would yield significant taxes if discovered.

I'm open to a side bet on the fraction of Y that should be, but are not, showing up on tax returns that are currently filed, and which (I think) the RD has its sights on ;) 

[Mike Lister]

11 minutes ago, retiree said:

 

You are absolutely right.  I jumped to the conclusion that you were referring to GDP, and not income (unlike Schneider and my other citations, who are referring to GDP) -- I guess I'm just used to seeing words like "gray" and "shadow" so frequently used in that context.  My apologies for getting this wrong.  

 

Your explanation of 48% makes good sense.  I just don't see where the figure comes from, or how close it might be to this X or Y ?

   X% of Thai earnings are below or barely above the limit for reporting and taxation. 

   Y% of unreported Thai earnings would yield significant taxes if discovered.

I'm open to a side bet on the fraction of Y that should be, but are not, showing up on tax returns that are currently filed, and which (I think) the RD has its sights on ;) 

The Social Security Fund may yield a clue. The Bangkok Post has an article that I'm not allowed to post entitled "Make Social Security Sustainable". The article states that the SSF fund is supported by over 10 million subscribers comprising salaried employees and the self employed, that's about 30% of the workforce. If 11% of the workforce pays tax and 30% are registered for SSc, and, the unemployment rate is under 4%, that means in excess of 60% don't pay tax and don't contribute to the SSF, perhaps that's the "48%" (or whatever it is) that represents the grey unreported untaxed income.

[Mike Lister]

1 hour ago, retiree said:

 

You are absolutely right.  I jumped to the conclusion that you were referring to GDP, and not income (unlike Schneider and my other citations, who are referring to GDP) -- I guess I'm just used to seeing words like "gray" and "shadow" so frequently used in that context.  My apologies for getting this wrong.  

 

Your explanation of 48% makes good sense.  I just don't see where the figure comes from, or how close it might be to this X or Y ?

   X% of Thai earnings are below or barely above the limit for reporting and taxation. 

   Y% of unreported Thai earnings would yield significant taxes if discovered.

I'm open to a side bet on the fraction of Y that should be, but are not, showing up on tax returns that are currently filed, and which (I think) the RD has its sights on ;) 

Another way to look at this is to take the 2022 government budget which comprised personal income tax revenue of THB 368 bill. (below, Page 45) Divide that by the average annual wage (15,400 x 12) of THB 184,800 which equates to 2 million workers or 6% of the workforce. An estimate from Asia Foundation below suggests 5.5% of the population pays tax which means those numbers broadly balance.

 

So, the Personal Income Tax component of GDP, THB 368 bill., is supplied by 6% of the workforce.

 

https://asiafoundation.org/2015/04/15/thailand-and-taxes/#:~:text=Many Thais%2C both rich and,million regularly pay income taxes.

 

https://www.worldbank.org/en/country/thailand/publication/aging-and-the-labor-market-in-thailand#:~:text=At around 38 million%2C the,Southeast Asian Nations (ASEAN).

 

https://dmcrth.dmcr.go.th/attachment/dw/download.php?WP=rUqjMT04qmqZG22DM7y04TyerPMjBT01qmIZAJ1CM5O0hJatrTDo7o3Q

 

https://tradingeconomics.com/thailand/wages
 

Edited November 12, 2023 by Mike Lister
Edit to add link to average wages

[Puccini]

9 hours ago, discrete said:

Maybe I will transfer a small chunk first . then get my accountant to get a ruing from RD about its status as an inbound capital transfer ... by providing transfer details including evidence of the source of the funds as an existing overseas asset rather than income. 

 

If they are unfriendly and deem it 'income' ... it is only a small tax problem and I will not bring the rest into the country.

If they rule (correctly) that it is an asset transfer and not taxable income, I can use that ruling to support the tax treatment of the rest of the inbound funds.

 

It may get complicated if the DTA of your country has a "may be taxed" clause regarding capital gains, eg like this clause in the UK DTA:

Quote

 

Article 14. Capital gains from the alienation of immovable property, as defined in paragraph (2) of Article 7, may be taxed in the Contracting State in which such property is situated.

 

 

 

 

In this post in another topic, Jim Gant gave an insight into the technicalities of "may be taxed" from the viewpoint of the US DTA.

 

The Thai tax return form ภ.ง.ด. 90 asks for the declaration of "Income from...sales of immovable property acquired in a commercial or profitable manner", which leaves open the question of what they mean by "commercial or profitable manner"

 

Edited November 12, 2023 by Puccini
added the last paragraph

[Mike Lister]

I'm perfectly happy to be corrected on this but it seems after reading the 2022 budget breakdown (linked below) that Personal Income Tax  revenue was THB 368, 300 bill (Page 45) whilst GDP was THB 16,997,600 bill (page 62). That means Personal Income Tax represents just over 2% of GDP and that it is paid for by about 6% of the workforce.  Those things being true, it's easy to understand why the RD wants to increase the tax net and to tax overseas income from residents. My only question is why they haven't done this sooner.

 

The tax burden to GDP ratio in Thailand is 16.4%, in the UK for example it is 34%.

 

https://dmcrth.dmcr.go.th/attachment/dw/download.php?WP=rUqjMT04qmqZG22DM7y04TyerPMjBT01qmIZAJ1CM5O0hJatrTDo7o3Q

 

https://www.oecd.org/tax/tax-policy/revenue-statistics-asia-and-pacific-thailand.pdf

 

https://www.ceicdata.com/en/indicator/united-kingdom/tax-revenue--of-gdp#:~:text=United Kingdom Tax revenue%3A % of GDP was reported at 27.0,Jun 2023%2C with 274 observations.

[Guavaman]

7 hours ago, Puccini said:

The Thai tax return form ภ.ง.ด. 90 asks for the declaration of "Income from...sales of immovable property acquired in a commercial or profitable manner", which leaves open the question of what they mean by "commercial or profitable manner"

 

The real estate (land & property) business in Thailand is subject to a specific business tax.

 

Google translate:

Royal Decree Issued in accordance with the Revenue Code

Concerning the sale of immovable property for commerce or profit (No. 342) 1998

 

Section 4 specifies that the sale of immovable property specifically requires registration of rights and legal acts as follows:  It is the sale of immovable property in a commercial or profitable manner that is subject to specific businesses tax according to Section 91/2 (6) of the Revenue Code.

 

https://www.rd.go.th/english/37753.html#section912

 

Section 91 Specific business tax is an assessment tax.

 

Section 91/2 Subject to section 91/4, the following businesses carried on in Thailand shall be subject to specific business tax under the provisions of this Chapter:

 

(6) sale of an immovable property in a commercial or profitable manner, irrespective of the manner in which such property is acquired, only in accordance with the rules, procedures and conditions prescribed by a royal decree; 

 

[Mike Lister]

11 hours ago, retiree said:

 

You are absolutely right.  I jumped to the conclusion that you were referring to GDP, and not income (unlike Schneider and my other citations, who are referring to GDP) -- I guess I'm just used to seeing words like "gray" and "shadow" so frequently used in that context.  My apologies for getting this wrong.  

 

Your explanation of 48% makes good sense.  I just don't see where the figure comes from, or how close it might be to this X or Y ?

   X% of Thai earnings are below or barely above the limit for reporting and taxation. 

   Y% of unreported Thai earnings would yield significant taxes if discovered.

I'm open to a side bet on the fraction of Y that should be, but are not, showing up on tax returns that are currently filed, and which (I think) the RD has its sights on ;) 

My apologies for the detour but I thought it was worth trying to understand the extent to which Personal Income tax plays a role in GDP and the answer seems to be that it is very small, only about 2.1% of GDP. PIT is a small direct tax, Corporate tax is much larger plus indirect taxes such as sales tax and VAT are the largest. Plus the 6% of the workforce that contributes that 2.1% seems to imply that the grey market, which is what we started to discuss initially, is probably even larger than the 48% that I suggested at the outset. I recall the RD reporting that about 11% of the workforce submits a tax return yet only 6% pay tax. That leaves 89% of the workforce (38 million) who do not file a return and 94% who don't pay tax, those figures are astronomical. The question now is, of the 89% of the workforce who don't file returns, how many earn under the minimum required to file a return and how many constitute the grey economy? I have difficulty believing that 89% of the workforce earn less than THB 120k (10k month) or THB 220K (18.3K month) for a married couple, per year although I accept that might be true.  Increasingly, grey market income is proving to be a huge amount that could change the entire government revenue budget profile, if it was harnessed, hence the tax on inflows.

[Dogmatix]

22 hours ago, Puccini said:

 

The Thai tax return form ภ.ง.ด. 90 asks for the declaration of "Income from...sales of immovable property acquired in a commercial or profitable manner", which leaves open the question of what they mean by "commercial or profitable manner"

 

 

Like many aspects of Thai tax this is fairly opaque. I believe "commercial or profitable manner" wording is to distinguish from property acquired through inheritance or not for profit which is exempt.  I have no idea how property qualifies as acquired not for profit in addition to inherited property.  I would suggest that this category is probably redundant. 

 

Property sales are taxed at source at the Land Office and, similarly to tax withheld from dividends, there is no need to declare sales on the tax return form, if tax withheld was correct.  I think the reason to declare property sales is in the case of the land sale involving Sansiri that was flagged by Chuvit.  In that case the sellers owned the land jointly and broke up the sale into a number of transactions of several days with the Land Department charging the regular withholding tax applicable to individuals. However, corporations have to pay normal corporate income tax and partnerships have to pay tax at the normal income tax progressive rates after deduction of allowable expenses for which there is a space on the form. In the Sansiri case, Chuvit argued that the Revenue Code regarded joint sellers as a partnership and therefore they should have have paid at the top progressive rate of 35% on the gains instead of getting away with the withholding tax which would have been less than 5% of the sales value. 

 

So if you are filing a PND 90 as a partnership, you should declare gains on property sales and claim expenses there.  Income tax paid withheld at the Land Dept should be entered under the tax paid section. Thus, if you have a substantial gain like the sellers in the Sansiri case, you will have to pay more tax and vice versa, if you had a small gain or a loss.  Normal individuals don't have to fill in this section in respect of sales of Thai property because the withholding tax at the Land Office is final for them. 

[discrete]

On 11/12/2023 at 3:58 PM, Puccini said:

 

It may get complicated if the DTA of your country has a "may be taxed" clause regarding capital gains, eg like this clause in the UK DTA:

 

In this post in another topic, Jim Gant gave an insight into the technicalities of "may be taxed" from the viewpoint of the US DTA.

 

The Thai tax return form ภ.ง.ด. 90 asks for the declaration of "Income from...sales of immovable property acquired in a commercial or profitable manner", which leaves open the question of what they mean by "commercial or profitable manner"

 

Hopefully they will accept that the property in question is my UK home ....purchased for that purpose originally by my partner some 40 years ago. Jointly owned for 5 years and now solely owned after her death. It is my legal residential address in the UK.

[Barnet1900]

On 11/7/2023 at 12:35 AM, stat said:

I am a big fan of low tax taxes! However thai taxes are still way lower then in the rest of the world especially as they "only" tax your remitance.

Agreed. But what do you get for higher taxes? I'll happily pay more for better health care and emergency services but the added funds won't go to them, it will line the elite pockets.

[UKresonant]

I'm trying to compare the Thai taxes  and the UK Taxes, I'm not really seeing that Thai Taxes are lower, just not much  more. I'm only considering pension income taxed at source in the UK [for my own purposes]  I would think the remittance basis is efficient if I kept the income below £12.5k~540k Baht to use up the UK nil band, and isolate in a separate UK account, pensions (since I have a few pre-taxed sources) that would be over the 540K THB, which would generate a full tax credit somewhere! (UK or TH) I only have one DTA applicable pension in the stack .

 

Would seem to be pretty thin until the state pension turns in for duty! 

I need to generate some isolated, non-resident savings mini pots for potential future use perhaps. 

 

If they did move it towards a global income as rumoured, that's when it would become a lot more than a admin nightmare, Not having been, and not anticipating being 100% there in the future. It would make for a full under 179 day deterrent as default. 

 

Did this back of the packet spreadsheet, which is only a generalisation, It assumes t/t rate of 1GBP =43THB .

Edited November 14, 2023 by UKresonant

[Mike Lister]

8 minutes ago, UKresonant said:

I'm trying to compare the Thai taxes  and the UK Taxes, I'm not really seeing that Thai Taxes are lower, just not much  more. I'm only considering pension income taxed at source in the UK [for my own purposes]  I would think the remittance basis is efficient if I kept the income below £12.5k~540k Baht to use up the UK nil band, and isolate in a separate UK account, pensions (since I have a few pre-taxed sources) that would be over the 540K THB, which would generate a full tax credit somewhere! (UK or TH) I only have one DTA applicable pension in the stack .

 

Would seem to be pretty thin until the state pension turns in for duty! 

I need to generate some isolated, non-resident savings mini pots for potential future use perhaps. 

 

If they did move it towards a global income as rumoured, that's when it would become a lot more than a admin nightmare, Not having been, and not anticipating being 100% there in the future. It would make for a full under 179 day deterrent as default. 

 

Did this back of the packet spreadsheet, which is only a generalisation, It assumes t/t rate of 1GBP =43THB .

I see that you have the 60k personal allowance but I don't see the 190K deduction for being over age 65....or have I missed something?

[UKresonant]

Just now, Mike Lister said:

I see that you have the 60k personal allowance but I don't see the 190K deduction for being over age 65....or have I missed something?

Yes that would certainly help, but not applicable  for a few years yet and I have to wait till 67 on the State pension kicking in. I maybe need to do a "in 4 and bit years" and "in 6 and a bit years time" version 

[Mike Lister]

1 minute ago, UKresonant said:

Yes that would certainly help, but not applicable  for a few years yet and I have to wait till 67 on the State pension kicking in. I maybe need to do a "in 4 and bit years" and "in 6 and a bit years time" version 

Also keep in mind the other things that can reduce your taxable income, things such as life and medical insurance premiums and investments such as LTF funds.   

[UKresonant]

Just now, Mike Lister said:

Also keep in mind the other things that can reduce your taxable income, things such as life and medical insurance premiums and investments such as LTF funds.   

Medical insurance possibly, but since I was operating on and based my (at the time temporary) early retirement on the 1 year non-O multi along with the best 92day per trip travel insurance I could find, and did enquire of a Thai policy as well. The broker said he could not honestly sell me one, as I may not meet the over 180days(6month) in 12 month T&C condition. Could look at it again.. Curious coincidental time period to the subject at hand.

A lot of visa requirement detail has changed in the 5 years since then, if not the headline requirements.

I suppose the LTF fund could be like a little insurance policy if it were to save tax, but tend leave Thai based assets to the Thai ID card carrying members of the family! (using their own resources )

Edited November 14, 2023 by UKresonant

[Mike Lister]

2 minutes ago, UKresonant said:

Medical insurance possibly, but since I was operating on and based my (at the time temporary) early retirement on the 1 year non-O multi along with the best 92day per trip travel insurance I could find, and did enquire of a Thai policy as well. The broker said he could not honestly sell me one, as I may not meet the over 180days(6month) in 12 month T&C condition. Could look at it again.. Curious coincidental time period to the subject at hand.

I suppose the LTF fund could be like a little insurance policy if it were to save tax, but tend leave Thai based assets to the Thai ID card carrying members of the family! (using their own resources )

The Thai based health insurance policies are not the best because of the way they are governed and the rules here in Thailand, increases in premiums, cancellation, additional exclusions etc. An international policy via Dubai or similar is a much better deal but the premiums are not tax deductible. Another consideration is a life insurance policy with say AiA that includes a health insurance rider, that would be good value, safe and also allow the tax deduction. 

[Rampant Rabbit]

1 hour ago, UKresonant said:

I'm trying to compare the Thai taxes  and the UK Taxes, I'm not really seeing that Thai Taxes are lower, just not much  more. I'm only considering pension income taxed at source in the UK [for my own purposes]  I would think the remittance basis is efficient if I kept the income below £12.5k~540k Baht to use up the UK nil band, and isolate in a separate UK account, pensions (since I have a few pre-taxed sources) that would be over the 540K THB, which would generate a full tax credit somewhere! (UK or TH) I only have one DTA applicable pension in the stack .

 

Would seem to be pretty thin until the state pension turns in for duty! 

I need to generate some isolated, non-resident savings mini pots for potential future use perhaps. 

 

If they did move it towards a global income as rumoured, that's when it would become a lot more than a admin nightmare, Not having been, and not anticipating being 100% there in the future. It would make for a full under 179 day deterrent as default. 

 

Did this back of the packet spreadsheet, which is only a generalisation, It assumes t/t rate of 1GBP =43THB .

In DTA's  it says the Thai revenue dept  must give the better ie  lower  rate on this  money when taxing it, I dont see anybody mentioning this  much? rule 5 here  https://www.rd.go.th/english/23520.html

Edited November 15, 2023 by Rampant Rabbit

[Rampant Rabbit]

55 minutes ago, UKresonant said:

Yes that would certainly help, but not applicable  for a few years yet and I have to wait till 67 on the State pension kicking in. I maybe need to do a "in 4 and bit years" and "in 6 and a bit years time" version 

is  that the 60k+the 150k? under 65years  old total 210k per  person ? how  about if  married and each half wanst to be taxed personally  not as a joint couple can they both get 150k +60kpa?

Edited November 15, 2023 by Rampant Rabbit

[Mike Lister]

2 minutes ago, Rampant Rabbit said:

is  that the 60k+the 150k? under 65years  old total 210k per  person ? how  about if  married and each half wanst to be taxed personally  not as a joint couple can they both get 150k +60kpa?

The 150k is not an allowance, it's a zero rated tax free band that everyone gets. The 60k is the personal allowance that everyone gets also and if they are married, the spouse gets it too. So, that's 120k in allowances for the tax payer and the non working spouse. After all the allowances are deducted from the assessible income, that gives you taxable income which is applied against the tax tables, of which the first 150k is zero rated or free of tax.

[Rampant Rabbit]

1 minute ago, Mike Lister said:

The 150k is not an allowance, it's a zero rated tax free band that everyone gets. The 60k is the personal allowance that everyone gets also and if they are married, the spouse gets it too. So, that's 120k in allowances for the tax payer and the non working spouse. After all the allowances are deducted from the assessible income, that gives you taxable income which is applied against the tax tables, of which the first 150k is zero rated or free of tax.

Thanks so I can expect 150k no tax then 60k extra  allowance  also no tax  total 210k no tax to pay and the same for my Wife if  filing seperately

[Mike Lister]

5 minutes ago, Rampant Rabbit said:

Thanks so I can expect 150k no tax then 60k extra  allowance  also no tax  total 210k no tax to pay and the same for my Wife if  filing seperately

Yes, pretty much.

[JimGant]

33 minutes ago, Rampant Rabbit said:

In DTA's  it says the Thai revenue dept  must give the better ie  lower  rate on this  money when taxing it, I dont see anybody mentioning this  much?

The only tax rates mentioned in the DTAs are those 10 and 15% figures applicable to interest and dividends. For other income, like pensions, you pay full fare taxation to the country doing the taxing.

[retiree]

9 hours ago, Rampant Rabbit said:

In DTA's  it says the Thai revenue dept  must give the better ie  lower  rate on this  money when taxing it, I dont see anybody mentioning this  much? rule 5 here  https://www.rd.go.th/english/23520.html

 

If that were the case, a DTA would not need to include details about different taxation rules for different types of income.  It could just say "we have a DTA, so use the lowest rates."

 

Rule 5 ('favor the taxpayer when "the rate of tax stipulated in the Revenue Code is different from that of an agreement" ') would seem to apply only when there is genuine ambiguity.  I think this is a general RD principle.  Otherwise, as that same FAQ says: 

• 9.    What is the method for elimination of double taxation provided in the agreement?  
  - In a double taxation agreement, there are credit and exemption methods.  

[Rampant Rabbit]

1 hour ago, retiree said:

 

If that were the case, a DTA would not need to include details about different taxation rules for different types of income.  It could just say "we have a DTA, so use the lowest rates."

 

Rule 5 ('favor the taxpayer when "the rate of tax stipulated in the Revenue Code is different from that of an agreement" ') would seem to apply only when there is genuine ambiguity.  I think this is a general RD principle.  Otherwise, as that same FAQ says: 

• 9.    What is the method for elimination of double taxation provided in the agreement?  
  - In a double taxation agreement, there are credit and exemption methods.  

and how the hell they expect the average joe to understand it I have no idea.

[Guavaman]

4 hours ago, retiree said:

Rule 5 ('favor the taxpayer when "the rate of tax stipulated in the Revenue Code is different from that of an agreement" ') would seem to apply only when there is genuine ambiguity.  I think this is a general RD principle.  Otherwise, as that same FAQ says: 

• 9.    What is the method for elimination of double taxation provided in the agreement?  
  - In a double taxation agreement, there are credit and exemption methods.  

 

That file - https://www.rd.go.th/english/23520.html - was last updated: 01.09.2014.

 

The most recent set of Q&A issued to clarify the Order by the RD includes mention of only the credit method , not the exemption method. 

 

10. Question: If assessable income imported into Thailand is income that was already taxed abroad, if the money is brought back in, the income must be taxed in Thailand again?  Is it a double tax collection or not?
 

Answer: There is no double taxation. In the case of being a tax resident in Thailand (remained in Thailand for more than 180 days) can take tax paid abroad as a credit against required tax in Thailand in the tax year in which the assessable income is brought into Thailand according to the provisions of the Double Tax Convention that Thailand is a contracting party with that country.
 

[JimTripper]

On 11/12/2023 at 11:50 AM, The Cyclist said:

 

 

Yet on this thread alone we are on page 23 and nearly 700 posts, filled with posters claiming all sorts of nonsense and making plans to flee Thailand.

 

And then head over to the other thread, which is even bigger, and has even more nonsense of what will happen come on 01 Jan 2024.

 

The only fact I can tell you about the 01 Jan 2024 is that I will have a hangover from hell.

live your life as a drunk then and see where it gets you. 🥃