Tax Session for American citizens from the Embassy and American Chamber of Commerce

[TallGuyJohninBKK]

1 hour ago, Wayne9732 said:

Had anything been mentioned about compensation (VA Disability) 

 

It's not taxed in the USA and as far as I'm aware (I hope I'm not wrong) it can't be taxed anywhere else...

 

 

No mention, and no question asked during the session, of anything about disability compensation.

[TallGuyJohninBKK]

By the way, since some folks here have mentioned it in other related threads, the panelists also opined that foreigners in the future, from Jan. 1 2024 onward, carrying cash with them coming into Thailand also would be considered a form of bringing foreign income into the country. Just the same as the more traditional routes they also mentioned, such as wire transfers and online currency platforms like Wise.

 

[gargamon]

5 hours ago, TallGuyJohninBKK said:

One of the things the panelists specifically said was they BELIEVED, for now, that foreign debit and credit card transactions (purchases and cash withdrawals) done here in Thailand likely WOULD be considered tax assessable income,

In a country so disorganized, it's hard to see how they would do this. Every credit card/ATM withdrawal will need to be correlated to a unique individual. Do they expect visa/Mastercard to track it for them? Good luck with that. 

[TallGuyJohninBKK]

17 minutes ago, gargamon said:

In a country so disorganized, it's hard to see how they would do this. Every credit card/ATM withdrawal will need to be correlated to a unique individual. Do they expect visa/Mastercard to track it for them? Good luck with that. 

 

Understand the issue you're raising... I'm just repeating what they opined during the session. Wherein they also said the onus will be on expats to self declare and file a Thai tax return if they have a tax liability here.

 

There was also some discussion about an international financial info sharing network called the Common Reporting Standard (CRS), which they likened to an international version of FATCA.  And basically said, the Thai Rev. Department could obtain bank account info on people here from their banks in their home countries.

 

But saying they could, of course, is a different matter from the notion that the Thai Rev Department would actually go out and try to start tracking down foreign bank account and transaction details on many tens of thousands of expat foreigners residing in Thailand, and not just on their bank accounts, but then also delving a layer deeper in linking those bank accounts to specific bank card numbers and transactions.

 

https://en.wikipedia.org/wiki/Common_Reporting_Standard

 

Nothing here that seems to reach down to the level of bank card numbers:

 

Information exchanged

"The information and its exchange format are governed by a detailed standard, whose details are listed in a 44-page long document.^[15]

Each participating country will annually automatically exchange with the other country the below information in the case of Jurisdiction A with respect to each Jurisdiction B reportable account, and in the case of Jurisdiction B with respect to each Jurisdiction A reportable account:^[16]

1. Name, address, Taxpayer Identification Number (TIN) and date and place of birth of each Reportable Person.
2. Account number
3. Name and identifying number of the reporting financial institution;
4. Account balance or value as of the end of the relevant calendar year (or other appropriate reporting period) or at its closure, if the account was closed.
5. Distributions made to the account (dividends, interest, gross proceeds/redemptions, other)"

 

 

 

Edited December 15, 2023 by TallGuyJohninBKK

[samtam]

2 minutes ago, TallGuyJohninBKK said:

 

Understand the issue you're raising... I'm just repeating what they opined during the session. Wherein they also said the onus will be on expats to self declare and file a Thai tax return if they have a tax liability here.

 

There was also some discussion about an international financial info sharing network called the Common Reporting Standard (CRS), which they likened to an international version of FATCA.  And basically said, the Thai Rev. Department could obtain bank account info on people here from their banks in their home countries.

 

But saying they could, of course, is a different matter from the notion that the Thai Rev Department would actually go out and try to start tracking down foreign bank account and transaction details on many tens of thousands of expat foreigners residing in Thailand, and not just on their bank accounts, but then also delving a layer deeper in linking those bank accounts to specific bank card numbers and transactions.

 

 

 

...and then presumably translating it. Whatever "narrative" (the technical term used by a bank when it annotates a transaction on a statement) would not be clear to RD. Hell, when I try and check the "narrative" list in the back of my bank passbook savings, even that is not comprehensive, and even the bank's own staff do not know what some of their "narratives" mean. If banks here employ people of that level/standard and they have the equivalent in RD, this will never amount to a hill of beans, (aka "HOB" in a bank narrative...)

[TallGuyJohninBKK]

3 hours ago, Sheryl said:

Not mentioned in the webinar and also not addressed (unfortunately) in the US-Thai tax treaty as far as I can see.

 

Addendum: while no mention of VA Disability Compensation the Tx treaty does say as follows:

 

"a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State."  And there is a similar clause regarding government pensions.  (i.e. US government rumunertion  overall, and poensions, are   taxable only in US). Section 21 of the Treaty.

 

It could be inferred from the4se clauses that the VA compensation should not be taxable in Thailand but would need to confirm that.

 

 

 

I went back and re-read the US-Thai tax treaty document this afternoon.

 

It does appear to indicate that U.S. government pensions and Social Security paid to U.S. nationals should only be taxed by the U.S.  And the same notion likewise appears extended to pensions from subdivisions of the federal government, like states and such.

 

But I'm not a tax attorney.... And it would be nice to hear one of them come out and confirm that.

 

[Jingthing]

15 minutes ago, TallGuyJohninBKK said:

 

I went back and re-read the US-Thai tax treaty document this afternoon.

 

It does appear to indicate that U.S. government pensions and Social Security paid to U.S. nationals should only be taxed by the U.S.  And the same notion likewise appears extended to pensions from subdivisions of the federal government, like states and such.

 

But I'm not a tax attorney.... And it would be nice to hear one of them come out and confirm that.

 

Interesting.

I'm wondering about a very common source of retirement income for Americans -- withdrawals from traditional IRA accounts. Treated exactly as income by the IRS but arguably in a similar class as social security retirement income as far as that treaty. 

[TallGuyJohninBKK]

33 minutes ago, Jingthing said:

Interesting.

I'm wondering about a very common source of retirement income for Americans -- withdrawals from traditional IRA accounts. Treated exactly as income by the IRS but arguably in a similar class as social security retirement income as far as that treaty. 

 

One of the Revenue Department clarifications passed along this morning during the Chamber online panel was they've now added a grandfathering provision, whereby only non-exempt foreign income earned AND remitted into Thailand from Jan. 1, 2024 onward will be subject to taxation. And not funds/income earned prior to that date.

 

A slide from the morning's presentation:

 

 

Separately, apart from the above provision, I'm not aware of any tax treaty or other provision that would exempt IRA fund remittances into Thailand -- except the grandfathering provision cited above.

 

[UWEB]

25 minutes ago, TallGuyJohninBKK said:

 

One of the Revenue Department clarifications passed along this morning during the Chamber online panel was they've now added a grandfathering provision, whereby only non-exempt foreign income earned AND remitted into Thailand from Jan. 1, 2024 onward will be subject to taxation. And not funds/income earned prior to that date.

 

A slide from the morning's presentation:

 

 

Separately, apart from the above provision, I'm not aware of any tax treaty or other provision that would exempt IRA fund remittances into Thailand -- except the grandfathering provision cited above.

 

If I understand above correct, all savings in your Bank Account(s) as per 31.12.23 can be remitted to Thailand without paying Tax for?

[TallGuyJohninBKK]

28 minutes ago, UWEB said:

If I understand above correct, all savings in your Bank Account(s) as per 31.12.23 can be remitted to Thailand without paying Tax for?

 

I believe that's correct, as per another of the presentation slides from this morning's American Chamber of Commerce webinar:

 

[Jingthing]

1 hour ago, TallGuyJohninBKK said:

 

One of the Revenue Department clarifications passed along this morning during the Chamber online panel was they've now added a grandfathering provision, whereby only non-exempt foreign income earned AND remitted into Thailand from Jan. 1, 2024 onward will be subject to taxation. And not funds/income earned prior to that date.

 

A slide from the morning's presentation:

 

 

Separately, apart from the above provision, I'm not aware of any tax treaty or other provision that would exempt IRA fund remittances into Thailand -- except the grandfathering provision cited above.

 

Well that's clear as mud.

Funds from a decades old IRA were obviously earned long ago.

[Sheryl]

12 minutes ago, Jingthing said:

Well that's clear as mud.

Funds from a decades old IRA were obviously earned long ago.

Obviously, except for interest that may still be accruing.

 

To my reading only interest newly earned on an IRA after 1 Jsnusry would be taxable in Thailand and that, only if remitted here.

 

the Tax treaty specifically states that oncome from annuities (a common vehicle ofr IRAs when people are ready to start tapping into them) is taxable only in US.

[Jingthing]

3 minutes ago, Sheryl said:

Obviously, except for interest that may still be accruing.

 

To my reading only interest newly earned on an IRA after 1 Jsnusry would be taxable in Thailand and that, only if remitted here.

 

the Tax treaty specifically states that oncome from annuities (a common vehicle ofr IRAs when people are ready to start tapping into them) is taxable only in US.

Thanks but still clear as mud.

Let's say I sell 10k of a mutual fund and remit to Thailand next year.

I have no idea what portion of that if any was increased after Jan 1. 

If not fully sold the basis is probably all older but how are such complexities communicated to Thai revenue.

[TallGuyJohninBKK]

27 minutes ago, Sheryl said:

Obviously, except for interest that may still be accruing.

 

To my reading only interest newly earned on an IRA after 1 Jsnusry would be taxable in Thailand and that, only if remitted here.

 

the Tax treaty specifically states that oncome from annuities (a common vehicle ofr IRAs when people are ready to start tapping into them) is taxable only in US.

 

I asked about that IRA issue on a slightly different kind of income, inheritance income, which is flatly exempt from Thai taxation.

 

One of the panel members this morning confirmed that the inheritance amount itself would be tax exempt, but that the subsequent EARNINGS from the original sum would still be subject to Thai tax, assuming the recipient was a Thai tax resident, etc etc.

 

[Jingthing]

On the IRA issue it seems to me Thailand Revenue wouldn't care if the withdrawal was from traditional or Roth.

With traditional that is taxable in the US so you might have a credit to use with that against Thai tax.
With Roth it's not income in the US but if you remit it to Thailand, depending on the enforcement of this mess, you may have EXPLAINING to try to avoid Thai tax just the same as traditional!

[frantick]

So if your savings is more than your SS, both in the US, let's say, how could you not just pull from savings and replenish savings with SS. Or, just claim SS as savings since you have more than that in a savings account. How would anyone verify that? 

[TallGuyJohninBKK]

On 12/15/2023 at 10:40 AM, ChicagoExpat said:

Thanks for posting.  Knowing they ran out of time to address all the questions, they said they'd schedule a follow up in a few weeks, after they met with the Revenue people to get clarification on some issues.

 

If I can get it, I'll post the new info here when it is scheduled.

 

For folks who want to be sure to be alerted of any future sessions, the American chamber does have an email notifications list for NON-members... And they indicated people can email them and ask to be added to their NON-members notification list.

 

[Guavaman]

On 12/15/2023 at 7:23 PM, Sheryl said:

To my reading only interest newly earned on an IRA after 1 Jsnusry would be taxable in Thailand and that, only if remitted here.

 

the Tax treaty specifically states that oncome from annuities (a common vehicle ofr IRAs when people are ready to start tapping into them) is taxable only in US.

Deductible contributions to a traditional (not Roth) IRA are pre-tax income, as well as any capital gains, dividends, and interest derived from those contributions that accrue with the IRA. So all funds in an IRA are untaxed in the US until they are withdrawn, at which point all of it becomes taxable income, taxed at the ordinary income rate.

 

Regarding remittance of traditional IRA withdrawals under the DTA, the Department of the Treasury Technical Explanation clarifies that remuneration (withdrawals) from traditional IRAs are are "generally taxable only in the residence State of the recipient." 

 

DEPARTMENT OF THE TREASURY TECHNICAL EXPLANATION OF THE CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE KINGDOM OF THAILAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

https://www.irs.gov/pub/irs-trty/thaitech.pdf

 

Article 20 (Pensions and Social Security Payments)

Article 20 deals with the taxation of private (i.e., non-government) pensions, annuities, social security, and similar benefits.

 

Paragraph 1

Paragraph 1 provides that private pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence State of the recipient.

 

The phrase “pensions and other similar remuneration” is intended to encompass payments made by private retirement plans and arrangements in consideration of past employment.  In the United States, the plans encompassed by Paragraph 1 include:  qualified plans under section 401(a), individual retirement plans (including individual retirement plans that are part of a simplified employee pension plan that satisfies section 408(k), individual retirement accounts and section 408(p) accounts), non-discriminatory section 457 plans, section 403(a) qualified annuity plans, and section 403(b) plans.

 

The payer must submit a 1099-R with the IRS, so the taxpayer must report this income in a tax filing with the IRS. Theoretically, a tax credit will be available from the RD in Thailand for taxes paid on IRA withdrawals in the US. 

[Sheryl]

On 12/16/2023 at 4:49 PM, frantick said:

So if your savings is more than your SS, both in the US, let's say, how could you not just pull from savings and replenish savings with SS. Or, just claim SS as savings since you have more than that in a savings account. How would anyone verify that? 

In the case of SS there is no need for concern. The DTA is very explicit on this, SS is taxable only in the US.

 

"ARTICLE 20
Pensions and Social Security Payments
1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.
2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State."

 

SS and government pensions (but nto private pensions) are not taxable in Thailand, full stop.

 

Savings remitted to Thailand that are from income earned before becoming a Thai tax resident are also, per the Revenue Dept, not taxable but establishing that could be more complicated.

 

The simplest thing for US citizens to do, and what I have done, is to limit remittances to SS and (if you have one) government pensions/benefits. And get a "credit advice" after each remittance to show source of funds (some banks will provide these automatically be email if requested).

[neilrob]

Very useful discussion. Particular thanks to TallGuy and Sheryl for their most helpful information

[Thailand J]

U S government pension and SS are exempted by DTA , that's clear.

IRA's are not necessarily  private pension plans. Both traditional and Roth IRA's are saving plans. Per RD DI 162/2566, the balance in any IRA prior to Jan 1 2024 is tax exempted if you tranfer into Thiland in the future years. This is my understanding.

https://kpmg.com/th/en/home/insights/2023/11/th-tax-news-flash-issue-146.html

 

[mooping20Baht]

so dumb question who/what is "Thai Tax Resident" ?  if one keeps the required Bank Sum in the Thai Banks for extensions. Is that automagically making one a TTR?

 

 

b) in the US, if we have foreign income, we must use the foreign earned income credit , to avoid double taxation, which is (above a limit) is a nightmare, so much so that I forego it and keep the foreign funds in a tax-deferred IRA plan. And just take the loss.

 

ofc Thailand would need the information from the US on taxable US investments to implement something similar.

 

[Jingthing]

2 hours ago, mooping20Baht said:

so dumb question who/what is "Thai Tax Resident" ?  if one keeps the required Bank Sum in the Thai Banks for extensions. Is that automagically making one a TTR?

 

 

b) in the US, if we have foreign income, we must use the foreign earned income credit , to avoid double taxation, which is (above a limit) is a nightmare, so much so that I forego it and keep the foreign funds in a tax-deferred IRA plan. And just take the loss.

 

ofc Thailand would need the information from the US on taxable US investments to implement something similar.

 

No, it's not about your bank accounts in Thailand, it's about your physical presence in Thailand.

The rule is simple. If you're living in Thailand for 180 days in a calender year you're considered a tax resident of Thailand by Thailand Revenue.

[mooping20Baht]

so, if one is in Thailand > 350 days/year its considered their "tax-home" for all future earning on investments ? Is the new rules?

 

 

but, doesn't exclude them from US investment earnings, as if their tax-home was the US ? for federal purposes?

 

 

[Guavaman]

18 hours ago, Thailand J said:

U S government pension and SS are exempted by DTA , that's clear.

IRA's are not necessarily  private pension plans. Both traditional and Roth IRA's are saving plans. Per RD DI 162/2566, the balance in any IRA prior to Jan 1 2024 is tax exempted if you tranfer into Thiland in the future years. This is my understanding.

Department of the Treasury Technical Explanation of the Convention between the United States and Thailand which was signed on November 26, 1996. https://www.irs.gov/pub/irs-trty/thaitech.pdf

 

 Article 20 (Pensions and Social Security Payments)

Article 20 deals with the taxation of private (i.e., non-government) pensions, annuities, social security, and similar benefits.

 

 Paragraph 1

Paragraph 1 provides that private pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence State of the recipient.

 

The phrase “pensions and other similar remuneration” is intended to encompass payments made by private retirement plans and arrangements in consideration of past employment.  In the United States, the plans encompassed by Paragraph 1 include:  qualified plans under section 401(a), individual retirement plans (including individual retirement plans that are part of a simplified employee pension plan that satisfies section 408(k), individual retirement accounts and section 408(p) accounts), non-discriminatory section 457 plans, section 403(a) qualified annuity plans, and section 403(b) plans.

[Everyman]

I’m really looking forward to a big ol’ fat *nothing* happening regarding this issue so we can all go back to arguing crypto versus gold and trying to get a 0.02% better exchange rate. 

[Thailand J]

14 hours ago, Guavaman said:

Paragraph 1

Paragraph 1 provides that private pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence State of the recipient.

 

The phrase “pensions and other similar remuneration” is intended to encompass payments made by private retirement plans and arrangements in consideration of past employment.  In the United States, the plans encompassed by Paragraph 1 include:  qualified plans under section 401(a), individual retirement plans (including individual retirement plans that are part of a simplified employee pension plan that satisfies section 408(k), individual retirement accounts and section 408(p) accounts), non-discriminatory section 457 plans, section 403(a) qualified annuity plans, and section 403(b) plans.

 

Paragragh 1 emcompass private retirement plans.

 

Self administered IRA accounts are not part of any private retirement plan, it's just an account defined as savings account by the IRS.Per RD DI 162/2566 the remittance of the withdrawals into Thailand should be tax exempted.

This has nothing to do with double tax treaty.

Edited December 25, 2023 by Thailand J

[Guavaman]

On 12/25/2023 at 6:00 PM, Thailand J said:

Self administered IRA accounts are not part of any private retirement plan, it's just an account defined as savings account by the IRS.Per RD DI 162/2566 the remittance of the withdrawals into Thailand should be tax exempted.

This has nothing to do with double tax treaty.

3 issues:

Q1:  Are IRA accounts deemed to be private retirement plans by the Department of the Treasury and the IRS?

A1:  Yes, IRA accounts are private retirement plans according to the DoT and IRS.

 

Q2:  Is taxation of IRA accounts encompassed by "the Convention"?  (The Convention Between the Government of the United States of America and the Government of the Kingdom of Thailand for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed at Bangkok on November 26, 1996)

A2:  Yes

 

Q3:  Should remittances of distributions from IRA accounts be tax-exempt per RD DI 162/2566?

A3: For distribution of contributions prior to Jan. 1, 2024 = yes; for distributions of gains after Jan. 1, 2024 = no.

 

Rationale:

Q1:  Are IRA accounts deemed to be private retirement plans by the Department of the Treasury and the IRS?  (it's just an account defined as savings account by the IRS.)

A1:  Yes, IRA accounts are private retirement plans according to the DoT and IRS.

https://www.irs.gov/retirement-plans/plan-sponsor/types-of-retirement-plans

 

Types of Retirement Plans

Individual Retirement Arrangements (IRAs), Roth IRAs, 401(k) Plans, SIMPLE 401(k) Plans, 403(b) Plans, SIMPLE IRA Plans (Savings Incentive Match Plans for Employees), SEP Plans (Simplified Employee Pension), SARSEP Plans (Salary Reduction Simplified Employee Pension), Payroll Deduction IRAs, Profit-Sharing Plans, Defined Benefit Plans, Money Purchase Plans, Employee Stock Ownership Plans (ESOPs), Governmental Plans, 457 Plans, Multiple Employer Plans

https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras

 

Individual Retirement Arrangements (IRAs)

Types of IRAs

A traditional IRA is a tax-advantaged personal savings plan where contributions may be tax deductible.

A Roth IRA is a tax-advantaged personal savings plan where contributions are not deductible but qualified distributions may be tax free.

A Payroll Deduction IRA plan is set up by an employer. Employees make contributions by payroll deduction to an IRA (Traditional or a Roth IRA) they establish with a financial institution.

A SEP is a Simplified Employee Pension plan set up by an employer. Contributions are made by the employer directly to an IRA set up for each employee.

A SIMPLE IRA plan is a Savings Incentive Match Plan for Employees set up by an employer. Under a SIMPLE IRA plan, employees may choose to make salary reduction contributions, and the employer makes matching or nonelective contributions.

A SARSEP - the Salary Reduction Simplified Employee Pension Plan - is a type of SEP set up by an employer before 1997 that includes a salary reduction arrangement.

 

So a traditional IRA is an Individual Retirement Arrangement , that is a type of (private) Retirement Plan.  

 

IRA accounts are private retirement plans according to the DoT and IRS.

Note: private means not government.

 

Q2:  Is taxation of IRA accounts covered by "the Convention"?  (The Convention Between the Government of the United States of America and the Government of the Kingdom of Thailand for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed at Bangkok on November 26, 1996)

A2:  Yes

 

The Technical Explanation is an official guide to the Convention.  It reflects the policies behind particular Convention provisions, as well as understandings reached with respect to the application and interpretation of the Convention.

 

Paragraph 1

Paragraph 1 provides that private pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence State of the recipient.

 The phrase “pensions and other similar remuneration” is intended to encompass payments made by private retirement plans and arrangements in consideration of past employment.  In the United States, the plans encompassed by Paragraph 1 include:  qualified plans under section 401(a), individual retirement plans (including individual retirement plans that are part of a simplified employee pension plan that satisfies section 408(k), individual retirement accounts and section 408(p) accounts), non-discriminatory section 457 plans, section 403(a) qualified annuity plans, and section 403(b) plans.

 

Q3:  Should remittances of distributions from IRA accounts be tax-exempt per RD DI 162/2566?

A3: For distribution of contributions prior to Jan. 1, 2024 = yes; for distributions of gains after Jan. 1, 2024 = no.  Just an opinion waiting to be confirmed by the RD.

 

This is an important issue that you have raised. It highlights the challenges that will arise due to the RD DI 162/2566 exempting remittances of income realized pre-2024. This special grandfathering order will likely be the source of endless conflict between the RD and Thai tax residents forever.

 

Thus, although IRA accounts are encompassed by “the Convention”, all deductible contributions to IRA accounts that can be proven to have been deposited in an IRA prior to Jan. 1, 2024, are deemed to be exempt from taxation upon subsequent remittance to Thailand  forever according to Order 162.

 

This is a special opportunity that remains open to access during the remaining days of 2023.

According to advice of Baker MacKenzie, Thai tax residents are advised to convert offshore income to capital prior to Jan. 1, 2024.

 

https://insightplus.bakermckenzie.com/bm/tax/thailand-offshore-sourced-income-received-before-1-january-2024-can-be-brought-into-thailand-in-2024-or-later-without-being-subject-to-thai-personal-income-tax/

 

What to do before 1 January 2024

For greater flexibility in bringing offshore-sourced income back to Thailand, Thai tax resident individuals may consider recognizing and receiving such income by 31 December 2023. For example, if the shareholders receive dividends paid from offshore investments or gains from the sale of offshore investments outside Thailand by 31 December 2023, they can bring these offshore dividends and gains to Thailand in or after 2024 without being subject to Thai personal income tax.

 

Alternatively, they may consider using that offshore-sourced income to reinvest offshore. In this case, the nature of offshore-sourced income should be changed to capital or costs of investment, and only the gains recognized from the reinvestment will be subject to Thai personal income tax upon remittance to Thailand.

 

Example:

If funds in an IRA account are invested in stocks: sell all the stonks this week to realise all gains/profits and losses. Once the IRA account value is all cash, the amount of the principal/capital in the account is established in the final statement for 2023.  This amount is thus documented as the starting capital for reinvestment in 2024. Thus, all contributions and gains realized in December 2023 become deemed as pre-2024 income that can be remitted to Thailand tax-exempt forever.

 

Regarding the gains on the funds reinvested in the IRA account, they are subject to Thai income tax upon remittance.

 

What documentation is required as evidence of remittance of capital vs gains and if FIFO will be accepted, are issues that remain to be clarified in the uncertain future.

 

The important point is that one can take action this week to potentially shelter future remittances from Thai income tax by acting NOW to take profits and reclassify all IRA funds as pre-2024 income NOW.

[mooping20Baht]

2 hours ago, Guavaman said:

 

seems rather extreme suggestion IMHO.

after age 59.5 , all IRA distributions except Roth are taxed per one's bracket as ordinary income.

only time one must *track and then maybe separate contributions is for w/d before age 59.5 for Roths, which is messy to say the least , most people probably *don't track TIRA contributions, and dubious is the Institution will have all the records.

Imagine a 401k that was contributed to, via years of paycheck deduction, then rolled over to a Rollover TIRA.

personally, since I've already been taxed on my taxable investments, I don't think that .th /DOT should have any business taxing them again.

[Guavaman]

1 hour ago, mooping20Baht said:

personally, since I've already been taxed on my taxable investments, I don't think that .th /DOT should have any business taxing them again.

According to the DTA, Thailand has priority in collecting tax from your IRA distributions. 

 

Since the Thai tax return must be filed by March 31st, the only way that one could have "already been taxed" is if one files early with the IRS prior to the April 15th deadline and prior to March 31st Thai tax filing deadline. 

 

Thai tax return due March 31st, US tax return due April 15th.