Payment of income tax under Section 41, paragraph two of the Revenue Code

[TroubleandGrumpy]

Quote from article written 2 days ago - Most Thai legal experts say that the Revenue is primarily interested in Thais or expats with offshore banks accounts, a history of currency speculation or profit-making business enterprises overseas. However, the only way of distinguishing them from typically retired “tax residents” would be for all to register with the Revenue for a tax identification number. That procedure, if required in future, does not necessarily mean that tax would be due.

Thai Revenue offers glimmer of clarification on tax changes - Pattaya Mail

 

As the article says, as soon as the Thai RD clarifies what the new rules are, and how they are going to apply them, and what is now deemed to be 'taxable income', then and only then will Expats be able to determine if I have any income tax liability, and if they are required to lodge a tax return in 2025, and every year going forward.  

 

IMO it is unlikely they will provide that clarity/certainty before January 1 2024, so my plan is to bring forward money transfers into Thailand before December 31, and then I will only bring in the minimum in the year 2024. But if I am wrong and they announce their decisions soon, and I am never going to pay income taxes in Thailand - happy days.

[Mike Lister]

4 minutes ago, JackGats said:

Our home countries (UK, DE, FR, you name them) are perfectly able, if they so want, to collect every last tax penny on money we hold in any country in the World, so why would Thailand be per se unable to do so? To bank on the Thai bungling because they've been known to bungle in other fields is of little help. Would you feel comfortable using hard drugs in Thailand just because Thai police is much less efficient than US or UK police at catching the occasional hard drug user?

Thailand's tax code does not allow it to assess tax on the overseas earnings of tax residents who are not citizens, nor will it ever do so. It's not that Thailand is not capable of doing that, it's simply that it isn't allowed to by statute. Why will it never come about? Because Thailand wants foreigners to live here, it wants the foreign currency they bring and they want local economy support that foreigners bring. Despite living here for more than 20 years and having a house, wife, family and friends here, if Thailand said it was going to tax my UK investment account each year, I would be forced to leave and I'm pretty sure others would do the same. I file a Thai tax return each year and have for the past three years, I don't mind paying some Thai tax, But if you try and make a grab for my overseas earnings, I will be gone. Only the US does that and Thailand in no way brings with it the benefits that living in the US does.

[Mike Lister]

4 minutes ago, TroubleandGrumpy said:

Quote from article written 2 days ago - Most Thai legal experts say that the Revenue is primarily interested in Thais or expats with offshore banks accounts, a history of currency speculation or profit-making business enterprises overseas. However, the only way of distinguishing them from typically retired “tax residents” would be for all to register with the Revenue for a tax identification number. That procedure, if required in future, does not necessarily mean that tax would be due.

Thai Revenue offers glimmer of clarification on tax changes - Pattaya Mail

 

As the article says, as soon as the Thai RD clarifies what the new rules are, and how they are going to apply them, and what is now deemed to be 'taxable income', then and only then will Expats be able to determine if I have any income tax liability, and if they are required to lodge a tax return in 2025, and every year going forward.  

 

IMO it is unlikely they will provide that clarity/certainty before January 1 2024, so my plan is to bring forward money transfers into Thailand before December 31, and then I will only bring in the minimum in the year 2024. But if I am wrong and they announce their decisions soon, and I am never going to pay income taxes in Thailand - happy days.

The article is clarification of nothing by nobody who knows anything, it's just another unqualified opinion.

[TroubleandGrumpy]

5 minutes ago, Mike Lister said:

The article is clarification of nothing by nobody who knows anything, it's just another unqualified opinion.

Yes. Wow. 

[TroubleandGrumpy]

22 minutes ago, The Cyclist said:

 

Do you think that the above could possibly pertain to the loopholes that they are currently trying to close. And is nothing whatsoever to do with income remitted to Thailand from 01 Jan 2024 that has already been taxed in the source Country ?
This is not an exercise in trying to catch people who have already paid tax. It is an exercise to catch people who are not paying tax.

Unintended consequences  Unintended consequences - Wikipedia

 

[herfiehandbag]

On 11/23/2023 at 9:55 PM, MrMuddle said:

Can someone put this into layman's terms please. Is Thailand expecting foreign retirees  who live here, pay tax on their pensions from their home countries?

The cynic in me suspects that your request will go unanswered.

Because 1): no one knows, including very probably the tax authorities whose minds it has likely it has never crossed.

2): attempting to answer such a question would perhaps reveal that the answerer lives off a simple pension (eugh!), and is therefore not anything like as rich as those making the most noise!

3): the amounts are so small that no self respecting "agent" or "tax consultant" will be interested in them.

 

I also wonder, if you are a pensioner assessed as tax resident, and paying income tax on your pension ( relatively easy to assess I suppose as my pension is paid into my Thai bank account), will you then be eligible, for example, for the benefits enjoyed by Thai tax payers - particularly in the field of healthcare?

Edited November 26, 2023 by herfiehandbag

[jacob29]

48 minutes ago, Mike Lister said:

But if you try and make a grab for my overseas earnings, I will be gone. Only the US does that and Thailand in no way brings with it the benefits that living in the US does.

Do some more research into the topic - almost every country in the world has a tax on worldwide income, the exceptions are few and far between.

 

The unique aspect of US tax, is that they will collect US tax even if you've severed all ties (except citizenship) and don't live there anymore. That's not what Thailand is doing.

 

As for a statute preventing it, there was a statute preventing recreational Cannabis use as well. There are a few reasons this change might not go through, but it's not because it's impossible for Thailand to implement (when nearly every other country can and does).

Edited November 26, 2023 by jacob29

[TravelerEastWest]

51 minutes ago, herfiehandbag said:

The cynic in me suspects that your request will go unanswered.

Because 1): no one knows, including very probably the tax authorities whose minds it has likely it has never crossed.

2): attempting to answer such a question would perhaps reveal that the answerer lives off a simple pension (eugh!), and is therefore not anything like as rich as those making the most noise!

3): the amounts are so small that no self respecting "agent" or "tax consultant" will be interested in them.

 

I also wonder, if you are a pensioner assessed as tax resident, and paying income tax on your pension ( relatively easy to assess I suppose as my pension is paid into my Thai bank account), will you then be eligible, for example, for the benefits enjoyed by Thai tax payers - particularly in the field of healthcare?

If your country has a tax treaty with Thailand you will probably be fine.

 

If your country has no tax treaty with Thailand depending on your pension size and family situation etc you will pay perhaps nothing and maybe a small amount.

 

Laws change so stay up to date...

[Mike Lister]

41 minutes ago, jacob29 said:

Do some more research into the topic - almost every country in the world has a tax on worldwide income, the exceptions are few and far between.

 

The unique aspect of US tax, is that they will collect US tax even if you've severed all ties (except citizenship) and don't live there anymore. That's not what Thailand is doing.

 

As for a statute preventing it, there was a statute preventing recreational Cannabis use as well. There are a few reasons this change might not go through, but it's not because it's impossible for Thailand to implement (when nearly every other country can and does).

I came to Thailand to live over 20 years ago on the understanding my world wide earnings were not taxable here, I did my research beforehand, it's not as if I didn't and simply didn't know. If the rules of the game now change and Thailand decides my worldwide earnings are theirs to tax, that breaks the deal we made and I shall make different arrangements. For much of the 1990's I was not tax resident anywhere, I lived in three different places and on planes, I can easily revert to living in two places each year for 180 days each and a two week holiday in a third country somewhere else, those homes are already there, all I need to do is go live in them. 

[TravelerEastWest]

5 minutes ago, Mike Lister said:

"... If the rules of the game now change and Thailand decides my worldwide earnings are theirs to tax, that breaks the deal we made and I shall make different arrangements...."

 

I understand your feelings and have been in Thailand for close to 20 years but you never had a deal with Thailand.

 

Every country has laws and all countries reserve the right to change them as they feel it is best.

 

So the 'deal" you had with Thailand was that you liked the old situation - which was liable to change at any time...

[Mike Lister]

1 minute ago, TravelerEastWest said:

 

I understand your feelings and have been in Thailand for close to 20 years but you never had a deal with Thailand.

 

Every country has laws and all countries reserve the right to change them as they feel it is best.

 

So the 'deal" you had with Thailand was that you liked the old situation - which was liable to change at any time...

And I reserve the right to react accordingly and change my living arrangements to suit, which will cost them the tax I would have paid here and also the daily living and travel expenditure I would have spent. This will not be a negative from my perspective.

[TravelerEastWest]

9 minutes ago, Mike Lister said:

And I reserve the right to react accordingly and change my living arrangements to suit, which will cost them the tax I would have paid here and also the daily living and travel expenditure I would have spent. This will not be a negative from my perspective.

 

You don't have to reserve your rights You're a free man you can leave Thailand for good reasons or no reason at all...

 

The government has decided that overall it is to their benefit to create new laws. So I think the official position is to wish you well but you are a guest in this country and unless you have the right to vote you have no say in Thai laws.

 

As a side note, Thailand has the BOI and they try actively to recruit foreign investment and certain individuals.

 

The new LTR 10-year visas are very useful and easy to get if you meet the requirements. With one the current tax situation is a moot point. Except for the worker version which has a max 17% Thai tax

Edited November 26, 2023 by TravelerEastWest

[Mike Lister]

1 minute ago, TravelerEastWest said:

 

You don't have to reserve your rights You're a free man you can leave Thailand for good reasons or no reason at all...

 

The government has decided that overall it is to their benefit to create new laws. So I think the official position is to wish you well but you are a guest in this country and unless you have the right to vote you have no say in Thai laws.

 

As a side note, Thailand has the BOI and they try actively to recruit foreign investment and certain individuals.

 

The new LTR 10-year visas are very useful and easy to get if you meet the requirements. With one the current tax situation is a moot point. Except for the worker version which has a max 17% Thai tax

Oh please, spare me! I never suggested I had a say in Thai affairs, nor that I even wanted one. I simply pointed out that as they move the goal posts, I change my approach, it's quite simple really.

 

As for the 10 year visa: at age 74 years that would not make sense to me, nor would I see it as a sensible use of my assets.

[TravelerEastWest]

1 hour ago, Mike Lister said:

 

 

"...As for the 10 year visa: at age 74 years that would not make sense to me, nor would I see it as a sensible use of my assets."

 

 

"breaks the deal we made"

Apologies I misread your statement I thought that you were of the opinion that you had a deal with the Thai government...

 

Not sure what you mean by the use of assets? You can easily do the paperwork yourself the BOI staff are very friendly and helpful.

 

The cost is 50,000 baht for ten years for the Pension version so 5,000 a year. and no need for 800,000 or any other amount in the bank here. So no use of assets that I see.

 

But best of all no problems with taxes on foreign source income. So you would save your time and energy and costs to travel unless you want to do that anyway then all is well...

 

No charge for a reentry visa and no wasted time for annual visits to immigration so overall for me it works very well and I save lots of money - I am still working so it is not easy for me to be out of the office to go to immigration.

 

But I understand everyones situation is different. I was just trying to help you - feel free to disregard my thoughts.

[mran66]

On 11/23/2023 at 2:59 PM, RupertIII said:

This is even more worrying - https://www.prachachat.net/finance/news-1443480

Google translation of the last paragraph, immediately above the copy of the official order:- In the future, the Revenue Department will amend Section 41 of the Revenue Code by immediately calculating 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 earlier announcement about taxing funds brought to thailand is not a big issue

 

However if they indeed would go for global income taxable in Thailand if tax resident (like many developed countries do) , that would be more serious issue. Luckily that would require law change so that can react in time. 

Edited November 26, 2023 by mran66

[andux]

On 11/23/2023 at 9:28 PM, OzzBlizz said:

 

 

I lost 50 brain cells just by seeing the video thumbnail.

 

[OzzBlizz]

3 hours ago, andux said:

 

I lost 50 brain cells just by seeing the video thumbnail.

 

I don't think you could put 50 brain cells together on any given day, but what I really don't understand is why you would think I care? Reading some of what you have posted, I only see an emotionally immature know it all, which seems par for the course in here.

[OzzBlizz]

5 hours ago, TravelerEastWest said:

 

 

"breaks the deal we made"

Apologies I misread your statement I thought that you were of the opinion that you had a deal with the Thai government...

 

Not sure what you mean by the use of assets? You can easily do the paperwork yourself the BOI staff are very friendly and helpful.

 

The cost is 50,000 baht for ten years for the Pension version so 5,000 a year. and no need for 800,000 or any other amount in the bank here. So no use of assets that I see.

 

But best of all no problems with taxes on foreign source income. So you would save your time and energy and costs to travel unless you want to do that anyway then all is well...

 

No charge for a reentry visa and no wasted time for annual visits to immigration so overall for me it works very well and I save lots of money - I am still working so it is not easy for me to be out of the office to go to immigration.

 

But I understand everyones situation is different. I was just trying to help you - feel free to disregard my thoughts.

Which company is 50,000 for 10 years? 

[Gknrd]

Read today this will affect all condo purchaches, house purchaches, bringing in large sums to buy land in wife's name. That will be easy to tax. Banks will turn that in.  Also read that with this tax they could start nabbing sponsors and illegal land ownership thru companys.

Edited November 26, 2023 by Gknrd

[Mike Lister]

4 minutes ago, Gknrd said:

Read today this will affect all condo purchaches, house purchaches, bringing in large sums to buy land in wife's name. That will be easy to tax. Banks will turn that in.  Also read that with this tax they could start nabbing sponsors and illegal land ownership thru companys.

There is already a way to nab foreign ownership via companies, through the Land Office and they do actively investigate such arrangements. .I have two farang friends in CM who have run afoul of this in the last decade when the LO came knocking and asked for details of their company ownership. Both were given six months to rearrange their affairs.

 

But as far as general property ownership by foreigners is concerned, any taxation changes will not alter things. The property market is too reliant on foreigners for that to happen. 

[Gknrd]

1 hour ago, Mike Lister said:

But as far as general property ownership by foreigners is concerned, any taxation changes will not alter things. The property market is too reliant on foreigners for that to happen. 

 

Guess we will see soon enough. 

[TravelerEastWest]

2 hours ago, OzzBlizz said:

Which company is 50,000 for 10 years? 

 

No company is involved with the LTR Wealthy Pension visa.

 

You can easily do the paperwork yourself and the BOI staff helps you (not the same people as immigration).

 

50,000 baht is the fee to the Thai government for the ten-year visa. You can apply online

https://www.thaievisa.go.th/ltr-visa

 

If you have a good income or wealth or a job with a large company these visas take away the tax problem being talked about.

 

If you have a very low retirement income and or your country has a tax treaty with Thailand there is little to no tax issues

 

Only some people in the middle need to be concerned. They can bring in large amounts before January 1st (if possible) 

[Mike Teavee]

3 hours ago, Gknrd said:

Read today this will affect all condo purchaches, house purchaches, bringing in large sums to buy land in wife's name. That will be easy to tax. Banks will turn that in.  Also read that with this tax they could start nabbing sponsors and illegal land ownership thru companys.

If you're bringing in up to 20 Million to give to the wife to buy land then just transfer it directly to her from your overseas account & declare it as a "Gift"... No Tax to pay. 

 

Even if you weren't married & wanted to give 20 Million to your partner to buy land in their name it might be worth sending it as a "Gift" as the Tax will be a flat rate 5% instead of the sliding scale up to 35%. 

 

If it's up to 10Million you might even get away with no tax to pay if you can show it was for a "Special Occasion" (I wonder if Birthdays count).

 

https://www.expat.hsbc.com/expat-explorer/expat-guides/thailand/tax-in-thailand/#:~:text=Inheritance and gift taxes&text=However%2C gifts received from a,year) are exempt from tax.

 

In general, gifts are taxed at a flat rate of 5%. However, gifts received from a legitimate parent, child or spouse (up to THB 20 million per year) or in a ceremony or on occasions in accordance with custom and tradition (up to THB 10 million per year) are exempt from tax.

 

 

Edited November 26, 2023 by Mike Teavee

[TravelerEastWest]

9 minutes ago, Mike Teavee said:

If you're bringing in up to 20 Million to give to the wife to buy land then just transfer it directly to her from your overseas account & declare it as a "Gift"... No Tax to pay. 

 

Even if you weren't married & wanted to give 20 Million to your partner to buy land in their name it might be worth sending it as a "Gift" as the Tax will be a flat rate 5% instead of the sliding scale up to 35%. 

 

If it's up to 10Million you might even get away with no tax to pay if you can show it was for a "Special Occasion" (I wonder if Birthdays count).

 

https://www.expat.hsbc.com/expat-explorer/expat-guides/thailand/tax-in-thailand/#:~:text=Inheritance and gift taxes&text=However%2C gifts received from a,year) are exempt from tax.

 

In general, gifts are taxed at a flat rate of 5%. However, gifts received from a legitimate parent, child or spouse (up to THB 20 million per year) or in a ceremony or on occasions in accordance with custom and tradition (up to THB 10 million per year) are exempt from tax.

 

 

Gifting is a possibility, I wonder if you gifted money for a house that also is in your wife's name and you divorced in the future would you have any rights to the house? I don't know but it seems like probably not...

 

Also if lots of people start doing this to get around the law - the Thai government might start to presume your intent was tax fraud. Quite possible - something to think about.

 

Governments assuming intent - that you have to prove otherwise happens often the US included.

[beammeup]

This gifting thing needs clarification, my understanding is that when you send the money you will be taxed but she is not liable for tax. You will be remitting the money so you pay tax.??

[Mike Lister]

12 minutes ago, beammeup said:

This gifting thing needs clarification, my understanding is that when you send the money you will be taxed but she is not liable for tax. You will be remitting the money so you pay tax.??

Typically there's a timeframe involved, in the case of IHT the giver must survive the gift by seven years, or similar.

[nong38]

Many counties have a tax agreement with Thailand where you will not be double taxed. home country and then again when you transfer money here, they all seem to be different and in my view open to interpretation. Your home country treats you as a non-resident citizen but resident for tax purposes, they want the money. Whilst if you spend more than 180 days out of your home country you would be classed as non-domicile unless you have a residence in that country you can use, I suspect that many here have given up any residence in the home country. Thailand then says that if your main residence is in Thailand and you are here for more than 180 days you could be liable for tax, which I can see because they want the money. At the moment our taxes are taxed at source where they have originated and now Thailand is looking at the 180 days and the place of residence, how this will end up is uncertain, I would suggest anyone takes a look at the tax agreement your home country has with Thailand and see what you make of it which may not be the way the Revenue service here sees it but if you are going to be asked to pay tax here then you should be able to re claim what you have paid back home although it might be slow and painful to get it.

When I first arrived here there was talk of a 0.5 % land tax per annum and nothing happened so we will have to wait and see what comes out of the mist.

Plan for the worst and hope for the best.

[Morch]

3 hours ago, Mike Teavee said:

If you're bringing in up to 20 Million to give to the wife to buy land then just transfer it directly to her from your overseas account & declare it as a "Gift"... No Tax to pay. 

 

Even if you weren't married & wanted to give 20 Million to your partner to buy land in their name it might be worth sending it as a "Gift" as the Tax will be a flat rate 5% instead of the sliding scale up to 35%. 

 

If it's up to 10Million you might even get away with no tax to pay if you can show it was for a "Special Occasion" (I wonder if Birthdays count).

 

https://www.expat.hsbc.com/expat-explorer/expat-guides/thailand/tax-in-thailand/#:~:text=Inheritance and gift taxes&text=However%2C gifts received from a,year) are exempt from tax.

 

In general, gifts are taxed at a flat rate of 5%. However, gifts received from a legitimate parent, child or spouse (up to THB 20 million per year) or in a ceremony or on occasions in accordance with custom and tradition (up to THB 10 million per year) are exempt from tax.

 

 

 

Other than my own savings, and meager government allocation (not exactly pension, more like disability compensation) I am able to withdraw from our mutual family account back home, as needed. We set this up years ago, for various reasons, and it works well enough given everyone is sensible, and relationships solid. I put a few large lump sum into that years ago, nowadays more of a beneficiary when needed. Since some years back, I'm not officially an owner of the account (too much hassle back home whenever some action needed and my signature/approval demanded).

 

If I understand correctly, future transfers from this source could easily be construed as 'gifts' from family members, therefore either inuring a low tax rate, or none at all (depending on sums involved)? And if I was to use an associated credit card, that too would be unlikely to pop on the RD's radar (again, not for large  sums)? And both these paths applicable either to my own bank account here or Mrs. Morch's?

 

My set of mind is that I'm willing to pay up (up to a point, anyway) if it saves me bureaucracy and hassles. So if the tax thing isn't too bad, I may be inclined to just pay instead of getting all the paperwork form back home regarding how my money is managed/sourced. Could be wrong, but if one is lazy (guilty) and not wealthy (me, again) then maybe not much of a difference between paying up and hiring an accountant. What I don't want is to be too bothered, or face some serious legal issues down the road.

 

Seeing as the land and house are paid for, and our needs aren't extravagant, there aren't any expected huge expenditures or investments on the horizon - so seems like a good chance nothing much would change.Sometimes I'm happy that the few business initiatives offered/planned here didn't come about, makes life simpler.

 

Edit: Money back home is (heavily) taxes already, and there's a tax agreement with Thailand in place.

Edited November 27, 2023 by Morch

[Morch]

2 hours ago, Mike Lister said:

Typically there's a timeframe involved, in the case of IHT the giver must survive the gift by seven years, or similar.

 

Yes, this was actually pointed out to us by the helpful Bangkok Bank official before moving funds for land and house. The land was bought pretty quickly, the house maybe 5-6 years later on (the Mrs. being the Mrs. was stressed about this, I naturally forgot all about it).

[jacob29]

14 hours ago, Mike Lister said:

If the rules of the game now change and Thailand decides my worldwide earnings are theirs to tax, that breaks the deal we made and I shall make different arrangements. For much of the 1990's I was not tax resident anywhere, I lived in three different places and on planes, I can easily revert to living in two places each year for 180 days each and a two week holiday in a third country somewhere else, those homes are already there, all I need to do is go live in them. 

 

There was no deal stipulating these conditions would never change, and it's a little bit absurd that you seem to think that's how things should work. In fact it's insanity to think the expat population should block domestic policies targeted to Thais - as they certainly can't introduce this legislation for Thai nationals while exempting foreigners.

 

If your plan is to stay under 180 days in all countries - that's fine, and you can still do that in Thailand. You wouldn't actually be leaving Thailand, just spending less time here. You were implying you were headed to some other country you could become a tax resident in, and not pay tax on worldwide income. There are still some places you can do that, but by and large you wouldn't want to live there.