Tourists Having to File a Thai Tax Return

[khunPer]

On 11/28/2023 at 2:16 AM, koolkarl said:

In this country, you are either an immigrant, a citizen or a tourist.  As most of you are aware, anyone staying here more than 180 days a year is considered a tax resident and must file a tax return reporting any incoming remittances to Thailand.  Most retirees are not immigrants or citizens.  What is the legality of a tourist having to file a tax return here?

Your forgot "tax resident", which in principle is all staying for 180 days or longer in the Thailand during a calendar year. Until now nobody really cared about tourists as tax residents – as long as you didn't work in Thailand – or retirees with retirement pension coming in from abroad. From January 1st this might change, but we still lack details about how taxation of foreign money transfers shall be done.

[Mike Lister]

59 minutes ago, chilly07 said:

Except HMRC definition places me as tax resident in the UK as I had tax relief on my pension contributions which I must pay back as I receive my pension payments. Can't be tax resident in more than one country!

You can be taxed on income in several countries at the same time, I am. You cannot however be tax resident in multiple countries but that doesn't avoid you having to pay tax in all of them. I am taxed in the UK on rental income and pension but I am not UK resident for tax purposes. I am tax resident in Thailand for income that arises here or income that is shipped here that is untaxed. I am also taxed in the US on my US Social Security but I am not tax resident there. In total, I file tax returns in three countries each year but I am only tax resident in Thailand because this is where I spend more than 180 days each tax year.

[Surasak]

6 hours ago, TroubleandGrumpy said:

That is fine and it is up to you - and anyone else can do the same if they wish.

But since you made that public announcement, let me say to you and everyone reading this, why that is very 'dangerous'.

 

Failure to lodge a tax return when lodging one is required, is a serious fine for each and every year, plus you must pay all backdated taxes they calculate, plus it involves backdated interest charged on any amounts deemed that should have been paid. It will involve your Passport being blocked to stop you leaving the country, can result in immediate detention, can result in criminal charges and Court appearances and jail time, and it can result in deportation for Expats.

Unlike most other things, were being 'caught' means a punishment of that occurence (like not wearing a helmet), not lodging tax returns and not paying income taxes, is an extremely harsh punishemnt - and they will go back over every year since 2024.

TRhis is not like staying illegally in the country (no Visa extensions etc.) and the information is available on the net.

 

If that is your plan over the next 3-5-10 years, then that is up to you - but now you know what the downsides are.

That is all I am doing mate - pointing out things that I am aware of - learning things I am not aware of - contributing.

I get the impression you like black paint? However, each to their own.

[Mike Lister]

2 hours ago, chilly07 said:

Except HMRC definition places me as tax resident in the UK as I had tax relief on my pension contributions which I must pay back as I receive my pension payments. Can't be tax resident in more than one country!

One more thing on your post: if you are technically tax resident in Thailand and you are making pension contributions in the UK, you are not entitled to tax relief beyond (I think) five years after you left the UK, nor are you allowed to continue making those pension payments. You may however continue to operate your pension and in the case of a SIPP, to manage it from Thailand but you will lose some of the deposit protection offered by the UK.

 

In my case, I was not UK resident for many years, then I returned and became tax resident for a single year. During that time I opened a SIPP and transferred funds into it. The following year I was not UK resident and opened a second SIPP from Thailand and made the maximum contribution into it, this was supplemented by an HMRC tax refund. The rules said I could do that for no more than X years, based on my one year UK residency previously. Today, I operate those two SIPPs from Thailand and can receive payments from them but I cannot deposit funds into them, by law.

[TroubleandGrumpy]

32 minutes ago, Surasak said:

I get the impression you like black paint? However, each to their own.

Nah - hate it - gets too hot - clothes, cars, driveways, etc.

Much prefer white.

[TroubleandGrumpy]

1 hour ago, Mike Lister said:

You can be taxed on income in several countries at the same time, I am. You cannot however be tax resident in multiple countries but that doesn't avoid you having to pay tax in all of them. I am taxed in the UK on rental income and pension but I am not UK resident for tax purposes. I am tax resident in Thailand for income that arises here or income that is shipped here that is untaxed. I am also taxed in the US on my US Social Security but I am not tax resident there. In total, I file tax returns in three countries each year but I am only tax resident in Thailand because this is where I spend more than 180 days each tax year.

Very interesting - no wonder you know a bit about tax laws.  Tax returns in 3 countries - how is that done.  What I mean by that is - how easy or hgard is it to do them.  I lodge tax returns in Australia - but the ATO (Tax Office) has all my financial details and each year they send me out a pre-filled tax return with all the income that I have earned from various soiurces. All I have to do is advise of any others and claim deductions or alloowances - which I never bother to do because the total income is under the tax-free threshold or is not taxable income (like Pension).

 

[Mike Lister]

1 minute ago, TroubleandGrumpy said:

Very interesting - no wonder you know a bit about tax laws.  Tax returns in 3 countries - how is that done.  What I mean by that is - how easy or hgard is it to do them.  I lodge tax returns in Australia - but the ATO (Tax Office) has all my financial details and each year they send me out a pre-filled tax return with all the income that I have earned from various soiurces. All I have to do is advise of any others and claim deductions or alloowances - which I never bother to do because the total income is under the tax-free threshold or is not taxable income (like Pension).

 

I have a UK tax accountant that I use for the form filling and filing process but I use a spreadsheet here in Thailand to decide what tax I want to pay in the UK and how much I want to take out of my UK based pension/investment account. This return costs me about 7k baht per year in accountancy fees and because I'm not UK resident, I don't pay the 20% VAT. I get 12,570 Pounds in the UK that is a tax free allowance to use as I wish.

 

The US is short 1040NR (non resident), it's simple and easy and costs me nothing. My US earnings are usual under the tax threshold so this is a form filling exercise.

 

The Thai return is also simple, a spreadsheet lets me add up the amounts and balance out the amounts across all three countries. I have over 400k Baht in tax free money to play with. I do all the calculations and let the RD lady (who I know well) enter the data which must balance to my spreadsheet. It's a simple process which I start tracking at the beginning of each tax year so I can what the direction is adjust as needed.

[TroubleandGrumpy]

19 minutes ago, Mike Lister said:

I have a UK tax accountant that I use for the form filling and filing process but I use a spreadsheet here in Thailand to decide what tax I want to pay in the UK and how much I want to take out of my UK based pension/investment account. This return costs me about 7k baht per year in accountancy fees and because I'm not UK resident, I don't pay the 20% VAT. I get 12,570 Pounds in the UK that is a tax free allowance to use as I wish.

 

The US is short 1040NR (non resident), it's simple and easy and costs me nothing. My US earnings are usual under the tax threshold so this is a form filling exercise.

 

The Thai return is also simple, a spreadsheet lets me add up the amounts and balance out the amounts across all three countries. I have over 400k Baht in tax free money to play with. I do all the calculations and let the RD lady (who I know well) enter the data which must balance to my spreadsheet. It's a simple process which I start tracking at the beginning of each tax year so I can what the direction is adjust as needed.

Thanks Mike much appreciated.

Being organised and planning ahead pays off in the long run - well doine mate.

I hope that if things go OK and we dont have to leave - but I am thinking and planning if it is not OK, and hopefully I can get to the position you are in and the annual process is sorted. 

[Paris333]

I am sorry but I will displease you because as a tourist who has gone to Thailand (I have already worked in a multinational in Thailand) but I repeat as a tourist all the items I bought I gave the receipts at Suvarnabhumi airport and they returned the VAT to me. Of course I put the money in a postal envelope and sent it back in my Bangkogians friends from Athens.

Who say Thailand is unfair in taxes?

[jerrymahoney]

17 hours ago, Mike Lister said:

Yesterday, a long standing poster who is articulate and has lived in Thailand for many years, stated that he would not become tax resident here. That poster is very intelligent yet he thought that to become tax resident he had to take specific action which he intended to avoid. It was necessary to explain that in order to become tax resident, no action had to be taken other than to not leave the country for 180 days.

This same long-standing poster may use his long-standing modus operandi on the Revenue folks:

 

I suppose with any service anywhere, it comes down to the approach one uses, negotiating skill and fortitude. I do not let these things go. You can lay down and die, like a submissive sheep in this life, or you can defend your dignity and put up a fight. 

 

[Mike Lister]

1 minute ago, jerrymahoney said:

This same long-standing poster may use his long-standing modus operandi on the Revenue folks:

 

I suppose with any service anywhere, it comes down to the approach one uses, negotiating skill and fortitude. I do not let these things go. You can lay down and die, like a submissive sheep in this life, or you can defend your dignity and put up a fight. 

 

I'm not sure that trying to challenge the Thai RD on the 180 day rule is worth more than a nanosecond of consideration, it's just not a starter for me but hey, each to their own. Trying to challenge the RD on their sovereign right to enact and modify tax law seems equally pointless. In fact, I can't see any element of the new act that a foreigner can sensibly challenge, unless they have extremely deep pockets and the best possible connections.  Any challenge based on the constitution would probably need to be launched by a Thai national so it's unclear what basis said long standing foreign may use t stand and fight......remember the Alamo!

[jerrymahoney]

20 minutes ago, Mike Lister said:

remember the Alamo!

I just did my one-year retirement extension wherein I had to show 65K+ baht per month FTT transfer to my Thai bank account.

 

I can imagine that Immigration may at some point inquire as to your tax reporting status on said account.

[Mike Lister]

3 minutes ago, jerrymahoney said:

I just did my one-year retirement extension wherein I had to show 65K+ baht per month FTT transfer to my Thai bank account.

 

I can imagine that Immigration may at some point inquire as to your tax reporting status on said account.

That's very possible, I think there's an extremely good chance that tax clearance certificates will be required at some stage, either to leave the country or as you imply, to extend a visa, or perhaps even both. Those certificates were popular in the US when I lived there in the 1970's and 1980's, if you didn't have one, you couldn't fly!

[Puccini]

On 11/29/2023 at 2:48 AM, proton said:

why do you have to do it every year? I did it once then the bank never stopped tax after that. The RD sent me a tax return one year, threw it away and never got another one.

 

The difference probably is that Expat68 never gave his bank his Thai TIN (Tax Identification Number) and therefore his bank continues to withhold 15% tax on the interest paymenyts and every year he goes to the tax office to file a tax return and claim a refund of the withholding tax on the bank interest.

 

Nothing wrong with that, particularly if you live in a remote place and maybe welcome this annual opportunity of social interaction.

[TroubleandGrumpy]

On 11/30/2023 at 2:04 AM, Paris333 said:

I am sorry but I will displease you because as a tourist who has gone to Thailand (I have already worked in a multinational in Thailand) but I repeat as a tourist all the items I bought I gave the receipts at Suvarnabhumi airport and they returned the VAT to me. Of course I put the money in a postal envelope and sent it back in my Bangkogians friends from Athens.

Who say Thailand is unfair in taxes?

So what did you buy that was approved to give you back the VAT at the airport as you were leaving?

[JimGant]

On 11/29/2023 at 10:18 AM, Mike Lister said:

Just remember though that when you do that next year, you will also need to report all your income into Thailand and account for it, not just reclaim the tax on interest. If you don't you will have filed an incomplete return which will be fraudulent.

 

I keep hearing this phrase from you, and wonder where you got it from? The last thing Thailand's RD wants are thousands of pages with numbers that don't generate any tax revenue. If I don't have any taxable income to report, because: It wasn't remitted; or it was remitted but was exempt from Thai taxes due to exclusivity in the DTA (e.g,. my US Air Force pension and Social Security); or it was remitted, but was tax exempt income in my home country (Roth payouts, interest from tax exempt bonds, etc). See here on this last point:

 

Quote

a) Pensions and other similar remuneration beneficially owned by a resident of a
Contracting State shall be taxable only in that State.
b) Notwithstanding subparagraph a), the amount of any such pension or
remuneration arising in a Contracting State that, when received, would be exempt from taxation in that State if the beneficial owner were a resident thereof shall be exempt from taxation in the Contracting State of which the beneficial owner is a resident.

OECD Model Agreement

Then, no need to file a Thai tax return. What, pray tell, is the fraud that might be involved.....?

 

So, like in the US, if you have no taxable income, no tax return is required to be filed (a few exceptions, like, if you're independently employed). Thus, Thailand is not prepared to deal with all this paperwork from tax residents filing tax returns, but who don't owe any taxes. Logic dictates they'll just have to go on the self-assessment wagon, with some random audits, particularly of large sum remitters, to see what's what.

 

I'm not worried, and wouldn't be, even if I didn't have an LTR visa. Thailand's not going to shoot themselves in the foot by examining all foreign remittance into Thailand -- thus killing Foreign Direct Investment -- a big necessity for the economy to go forward. No, I think what we'll see is taxation on worldwide income (subject to DTA dictates) and not taxation of remitted cash flow, where maybe income can be parsed from capital (not likely). Thailand's not stupid -- the remitted gimmick was to allow Thai fat cats a tax avoidance scheme. Hopefully, such fat cats won't queer the situation that now requires taxation on worldwide income, and not just on remitted income. Stay tuned.

 

Edited December 2, 2023 by JimGant

[Puccini]

On 11/29/2023 at 4:18 AM, Mike Lister said:

Excellent. Just remember though that when you do that next year, you will also need to report all your income into Thailand and account for it, not just reclaim the tax on interest. If you don't you will have filed an incomplete return which will be fraudulent.

 

The Thai Revenue Department does not ask persons who claim a tax refund to report all their "income into Thailand"

[Puccini]

On 11/29/2023 at 5:36 AM, Mike Lister said:

...It was necessary to explain that in order to become tax resident, no action had to be taken other than to not leave the country for 180 days...

 

This description of what makes a foreigner in Thailand is not correct. It does not have to be an uninterrupted stay of 180 or more days. It is the total number of days within a tax year, which in Thailand currently is a calendar year, that counts.

Source: Thailand's Revenue Code

[Puccini]

On 11/29/2023 at 9:06 AM, chilly07 said:

Except HMRC definition places me as tax resident in the UK as I had tax relief on my pension contributions which I must pay back as I receive my pension payments. Can't be tax resident in more than one country!

 

You can be a tax resident, ie a resident for tax purposes, simultaneously in more than one country. This is the reason why agreements for the avoidance of double taxation exist between some countries.

[Puccini]

On 11/29/2023 at 10:09 AM, Mike Lister said:

...You cannot however be tax resident in multiple countries...

 

You can, in fact, be tax resident in more than one country.

[Mike Lister]

1 hour ago, Puccini said:

 

You can, in fact, be tax resident in more than one country.

No, you can only be tax resident in one country but you can of course be obliged to pay taxes in multiple countries. Tax residency is based on the number of days per tax tear. The requirement to pay taxes is not based on  tax residency but on tax rules. I for example am tax resident in Thailand because I live here year round. But I also pay UK tax  under HMRC rules which I would have to do even though I spend zero days there each year., 

[Mike Lister]

1 hour ago, Puccini said:

 

The Thai Revenue Department does not ask persons who claim a tax refund to report all their "income into Thailand"

There is no option to complete only the parts of a  Thai tax return that you want to complete, you either file a tax return or you don't and if you do, that means the entire return or the parts of it that pertain to your circumstances. Therefore, you cannot just complete the part of the tax return that relates to interest income and not complete the part about other income, if indeed you have any.

[Mike Lister]

1 hour ago, Puccini said:

 

This description of what makes a foreigner in Thailand is not correct. It does not have to be an uninterrupted stay of 180 or more days. It is the total number of days within a tax year, which in Thailand currently is a calendar year, that counts.

Source: Thailand's Revenue Code

I don't believe I have ever said it must be an  uninterrupted period of 180 days, if I have ever implied that I did not intend to.

[Mike Lister]

On 12/2/2023 at 2:14 PM, JimGant said:

 

I keep hearing this phrase from you, and wonder where you got it from? The last thing Thailand's RD wants are thousands of pages with numbers that don't generate any tax revenue. If I don't have any taxable income to report, because: It wasn't remitted; or it was remitted but was exempt from Thai taxes due to exclusivity in the DTA (e.g,. my US Air Force pension and Social Security); or it was remitted, but was tax exempt income in my home country (Roth payouts, interest from tax exempt bonds, etc). See here on this last point:

 

Then, no need to file a Thai tax return. What, pray tell, is the fraud that might be involved.....?

 

So, like in the US, if you have no taxable income, no tax return is required to be filed (a few exceptions, like, if you're independently employed). Thus, Thailand is not prepared to deal with all this paperwork from tax residents filing tax returns, but who don't owe any taxes. Logic dictates they'll just have to go on the self-assessment wagon, with some random audits, particularly of large sum remitters, to see what's what.

 

I'm not worried, and wouldn't be, even if I didn't have an LTR visa. Thailand's not going to shoot themselves in the foot by examining all foreign remittance into Thailand -- thus killing Foreign Direct Investment -- a big necessity for the economy to go forward. No, I think what we'll see is taxation on worldwide income (subject to DTA dictates) and not taxation of remitted cash flow, where maybe income can be parsed from capital (not likely). Thailand's not stupid -- the remitted gimmick was to allow Thai fat cats a tax avoidance scheme. Hopefully, such fat cats won't queer the situation that now requires taxation on worldwide income, and not just on remitted income. Stay tuned.

 

 

The point I was making in that previous exchange was that you cannot file a Thai tax return to reclaim tax paid on Thai bank interest income alone and ignore other income received from overseas. You either report all your income or you don't report any for the reasons you have set. To only  partially report income is fraudulent.

 

The RD rules state:

 

WHO HAS TO FILE ภ.ง.ด.91?

 

1. Residents of Thailand If you stay in Thailand for the total of at least 180 days in the tax year, you are considered a “resident of Thailand” for tax purposes. You have to file a return on the income that you received if you meet one of the following conditions:

 

(1) Your total income exceeded 120,000 baht in the tax year.

 

 

 

 

[Puccini]

1 hour ago, Mike Lister said:

I don't believe I have ever said it must be an  uninterrupted period of 180 days, if I have ever implied that I did not intend to.

 

Yes, did not say an uninterrupted period of 180 days. you said 

Quote

... not leave the country for 180 days...

Source: https://aseannow.com/topic/1312798-tourists-having-to-file-a-thai-tax-return/?do=findComment&comment=18527328

 

In my book, not leaving the country for 180 days means an uninterrupted stay of 180 days.

[Puccini]

1 hour ago, Mike Lister said:

There is no option to complete only the parts of a  Thai tax return that you want to complete, you either file a tax return or you don't and if you do, that means the entire return or the parts of it that pertain to your circumstances. Therefore, you cannot just complete the part of the tax return that relates to interest income and not complete the part about other income, if indeed you have any.

 

The Thai tax return forms ภ.ง.ด.90 and ภ.ง.ด.91 ask for the declaration of all assessable income, not of all income. Not all income is assessable income, and not all "income into Thailand" is assessable income.

[Mike Lister]

30 minutes ago, Puccini said:

 

The Thai tax return forms ภ.ง.ด.90 and ภ.ง.ด.91 ask for the declaration of all assessable income, not of all income. Not all income is assessable income, and not all "income into Thailand" is assessable income.

Yes I agree. But that doesn't change any part of what I wrote, you still have to declare that income, not just the part to reclaim the tax on bank interest.

[Mike Lister]

1 hour ago, Puccini said:

 

Yes, did not say an uninterrupted period of 180 days. you said 

Source: https://aseannow.com/topic/1312798-tourists-having-to-file-a-thai-tax-return/?do=findComment&comment=18527328

 

In my book, not leaving the country for 180 days means an uninterrupted stay of 180 days.

Once again, that was not what was intended which I think you well know. In that quote above I was trying to reference a separate conversation with a third party rather than provide an answer, which I also think you well understand. Are we done yet!

[CartagenaWarlock]

On 11/28/2023 at 9:34 PM, TheAppletons said:

We should all be beating the drum loudly that tourists will have to file Thai income taxes.

Tourists who live here for less than 180 days do not have to file anything. Now the question is: what is the definition of money brought to Thailand for people who don't have any incomes from Thailand but have lived there for more than 180 days? Are credit card expenses considered money brought to Thailand? Are credit card or debit card withdrawals from ATMs considered money brought to Thailand? The regulation must clarify it. My plan is now to spend as much as charging credit cards and withdrawing money from ATMs using debit cards. 

[Mike Lister]

5 minutes ago, CartagenaWarlock said:

Tourists who live here for less than 180 days do not have to file anything. Now the question is: what is the definition of money brought to Thailand for people who don't have any incomes from Thailand but have lived there for more than 180 days? Are credit card expenses considered money brought to Thailand? Are credit card or debit card withdrawals from ATMs considered money brought to Thailand? The regulation must clarify it. My plan is now to spend as much as charging credit cards and withdrawing money from ATMs using debit cards. 

I don't know the answer but I do know that in the case of the UK, where the credit card bill is paid determines whether or not the spending is potentially taxable. Somebody posted a link to this subject in a different thread on tax.

Edited December 3, 2023 by Mike Lister