What do you think the impact of tax on foreign income will be on Pattaya?

[Mike Lister]

28 minutes ago, jaywalker2 said:

What's being ignored is what was said during the US Embassy seminar, which was that the ultimate intention of the Thai government is to tax all income earned by tax residents of Thailand. In other words, apparently they want to move to a tax on worldwide income and this is the first step.

 

The other major point is that initially it was assumed that this tax was mainly aimed at Thai people with money overseas. That appears not to  be the case and in reality they are deliberately targetting foreigners.

 

So the consequences could be severe if they follow through on these proposals. Even taxing remittances would have a big impact on the condo market, one would think, where foreign buyers play a significant role.

 

Even if the actual impact turns out to be small, the controversy this proposal has stirred up is bound to have negative consequences. Retirees will rethink retiring in Thailand, Diigital Nomads will move on to friendlier areas, and there will be less enthusiasm for investing in condos, parking large amongs of money in the local banks, and making plans to settle down  here if the rules can change so drastically overnight.

 

It's just bad policy.

It is ludicrous to think that foreigners who want to buy real estate in Thailand will be taxed on the purchase, it will kill the property market in Phuket, and elsewhere, stone dead. If that were the case, you would have herd a massive outcry from the industry by now and there hasn't been one.

[peterrabbit]

I can't talk about how this will effect other people but can only say what effect it is having on my circumstances and plans:-

1. Planned to buy a new car next year - CANCELLED

2. Planned to build a new house on land we have - CANCELLED

So that's about 6 million baht I will not be bringing into Thailand next year or ever while the chance of me paying income tax on my savings which have already been taxed on. The exempt from tax burden of proof is being placed on me and the decision in the hands of an official. Once you have brought the money here then your savings are in the hands of the authorities and its too late to send it back. So everything bought here has become extremely expensive and unaffordable (if I have to pay tax) and impossible to plan and budget for.

In England we have the expression "shoot yourself in the foot" which is apt in these circumstances.

If the Thai authorities really do not intend to target the Expats and only the Thais "playing the system" then make the changes only applicable to Thai resident citizens.

[mran66]

50 minutes ago, Mike Lister said:

Income is defined in the RD notes. 

 

https://www.rd.go.th/english/37748.html

 

Definition of income is fairly universal, so I would expect no major issues on that side. Also, in case of pension or salary income only, with no capital or savings existing, this is very straighforward. However, for many people it is not as simple.

 

The interesting question becomes in (fairly common) situation that you have combination of different types of income, in combination some negative income categories (losses) as well as capital in various forms. Again, this is a non-issue if a country applies global tax responsibility like many countries do.

 

However, as Thailand defines taxable income only if the funds are sent to Thailand. When remitting funds to Thailand, how is assessable income defined e.g in following situations:

 

- I sell stock worth 1000k, with realized profit of 100k. I send 900k to Thailand, claiming I re-invest the profit outside and only send the capital, with no taxable income here. How does Thai RD assess my taxable income? Do they accept my claim, or on the contrary they assume that all i send is the profit of 100k + 800k of my realised investment, and the 100k is taxable here?

 

- I make 10 stock sales in a year, each 100k sales. Profit in 9 of them is 10k, i.e total profit is 90k. However one of them is sales with loss of 5k. I send 100k to thailand, claiming that I just send the funds i got from that one sale (at loss), all others stay reinvested outside thailand, and I do not have taxable income in thailand. Thai RD agrees?

 

- I have pension worth 50k a year, tax free in my home country as I not tax resident there. I also have 1000k as savings in my account, which earns 50k interest on tax year. I send 100k to Thailand, claiming i send my savings i.e savings left after that would be 900k + the pension and interest that I re-invested/saved outside Thailand. How does Thai RD assess my taxable income?

 

- I have 50k profit from a 500k stock sale. I borrow 50k from a friend (or a company) who lives and is tax resident outside thailand, and agree to pay back in certain schedule. I send that 50k I borrowed to thailand. How does Thai RD assess my taxable income?

 

- I sell 1000k stock with 100k profit, and create a company 100% owned by myself (outside thailand). I invest the 1000k as capital of that company. Then i take a loan of 100k from that company, and send that to Thailand. What is my assessable income by Thai RD?

 

What many people incl myself is waiting is what the income assesment rules are in such type of situations where only part of total funds I have is sent here (which I think is a case for many expats, esp older ones)

 

 

 

[Mike Lister]

16 minutes ago, mran66 said:

 

Definition of income is fairly universal, so I would expect no major issues on that side. Also, in case of pension or salary income only, with no capital or savings existing, this is very straighforward. However, for many people it is not as simple.

 

The interesting question becomes in (fairly common) situation that you have combination of different types of income, in combination some negative income categories (losses) as well as capital in various forms. Again, this is a non-issue if a country applies global tax responsibility like many countries do.

 

However, as Thailand defines taxable income only if the funds are sent to Thailand. When remitting funds to Thailand, how is assessable income defined e.g in following situations:

 

- I sell stock worth 1000k, with realized profit of 100k. I send 900k to Thailand, claiming I re-invest the profit outside and only send the capital, with no taxable income here. How does Thai RD assess my taxable income? Do they accept my claim, or on the contrary they assume that all i send is the profit of 100k + 800k of my realised investment, and the 100k is taxable here?

 

- I make 10 stock sales in a year, each 100k sales. Profit in 9 of them is 10k, i.e total profit is 90k. However one of them is sales with loss of 5k. I send 100k to thailand, claiming that I just send the funds i got from that one sale (at loss), all others stay reinvested outside thailand, and I do not have taxable income in thailand. Thai RD agrees?

 

- I have pension worth 50k a year, tax free in my home country as I not tax resident there. I also have 1000k as savings in my account, which earns 50k interest on tax year. I send 100k to Thailand, claiming i send my savings i.e savings left after that would be 900k + the pension and interest that I re-invested/saved outside Thailand. How does Thai RD assess my taxable income?

 

- I have 50k profit from a 500k stock sale. I borrow 50k from a friend (or a company) who lives and is tax resident outside thailand, and agree to pay back in certain schedule. I send that 50k I borrowed to thailand. How does Thai RD assess my taxable income?

 

- I sell 1000k stock with 100k profit, and create a company 100% owned by myself (outside thailand). I invest the 1000k as capital of that company. Then i take a loan of 100k from that company, and send that to Thailand. What is my assessable income by Thai RD?

 

What many people incl myself is waiting is what the income assesment rules are in such type of situations where only part of total funds I have is sent here (which I think is a case for many expats, esp older ones)

 

 

 

At those levels of income you need specialist advice, don't expect a social network forum to supply them.

[Mike Lister]

1 hour ago, scottiejohn said:

It might have helped if you had reference which article(s) were applicable!

It might be helpful if you help yourself and read the material on your own, instead of constantly asking me for information and then calling me a liar when I do. You are on my ignore list for a reason , don't expect me to spoon feed you and sing you lullabies.

[mran66]

11 minutes ago, Mike Lister said:

At those levels of income you need specialist advice, don't expect a social network forum to supply them.

 

I'm not expecting advice here, just throwing the main issues out. As far as I have understood, everybody including the best specialist advisors are currently waiting for guidance as there is no reference based on which they could give their advice. It would need to come proactively from RD or alternatively thru a legal process if RD challenges your claim or the other way around. 

 

In near term until official guidance issued) this will have impact to remittances by certain people, though offset to some extent by increased remittances this year. But how far you can anticipate your investment needs -  people considering buying houses or investing elsewhere, certainly want to know how much they would need to pay tax of the remitted funds that could well be zero taxed at the source, accumulated over longer period of time

 

Personally I am kind of lucky as I have my house already, and no plans to invest here directly, thus just need funds for living costs. And as long as tax is only based on funds sent, wont be much no matter how they assess the taxable income

[Jaxxper]

People can guess, but that’s all it will be, a guess. I wouldn’t worry about it until next year, or whenever there are firm guidelines established by the Thai revenue people. Just remember every bodies situation is different.

[PB172111]

On 12/18/2023 at 5:42 PM, Mike Lister said:

Zero impact, don't expect a slump in property prices because it wont happen, guaranteed.

No debating with you then is there 🤣

[Mike Lister]

Just now, PB172111 said:

No debating with you then is there 🤣

Nope, not on this subject.

[CygnusX1]

Minor impact for me as I’ve already bought my condo, but I will be carefully monitoring my total days in Thailand on a spreadsheet from 2024 on, ensuring it’s less than 180 days per calendar year. Spending a bit more time in Europe and Australia as a result.

[KannikaP]

On 12/18/2023 at 6:11 PM, scottiejohn said:

Are you saying that a single  UK retiree >65 on full state pension will NOT pay any tax in Thailand?

 

 

Yes!

[connda]

What do you think the impact of tax on foreign income will be on Pattaya?  Guess we will find out post-Jan-1st-2024.  Until then?  It's just needless worry. 

Wait until there is something to worry about.

[scottiejohn]

8 minutes ago, KannikaP said:

Yes!

Thanks!

Great news if you are correct!

 

Next question!

Does anyone know if they can tax you, apart from withholding tax on interest gained, on the money in your 800,000 Baht fixed deposit retirement bank account already held in Thailand that has been there for 5-6 years?

 

[Ben Zioner]

4 hours ago, JMT42 said:

A silly idea won't happen.

But it has happened. 

[connda]

If it created the conditions for 80% of the expats to pack up and leave Thailand?  I'd be all for it.

I have to admit, the government lockdown of Thailand actually appealed to me.  I liked it.  Nobody around.  Easy to drive.  No pediatricians.  It was great. 

So I think in would be great if Thailand hammers all expats who bring foreign currencies into Thailand.
Honestly - if fun to watch them whack-off there own willies with a sharp instrument of financial terror. 
Yeah - taxes aimed right out foreigners. 

  Cheap-Charlie Expats aren't worth a hill of beans.

Excellent - Let's kick as many out of the country as possible and see how life goes from those whom they support? 

[mran66]

1 hour ago, scottiejohn said:

Thanks!

Great news if you are correct!

 

Next question!

Does anyone know if they can tax you, apart from withholding tax on interest gained, on the money in your 800,000 Baht fixed deposit retirement bank account already held in Thailand that has been there for 5-6 years?

 

 

annual interest is taxable income on the year earned, just like any other local income during that tax year.

if no other local income than that, it is below tax threshold. you could even claim back the withheld tax if no other income - if you dont mind the hassle AND getting taxman attention!

 

[mran66]

1 hour ago, connda said:

I have to admit, the government lockdown of Thailand actually appealed to me.  I liked it.  Nobody around.  Easy to drive.  No pediatricians.  It was great. 

So I think in would be great if Thailand hammers all expats who bring foreign currencies into Thailand.
Honestly - if fun to watch them whack-off there own willies with a sharp instrument of financial terror. 
Yeah - taxes aimed right out foreigners. 

  Cheap-Charlie Expats aren't worth a hill of beans.

Excellent - Let's kick as many out of the country as possible and see how life goes from those whom they support? 

 

...fortunately or unfortunately, most of the expats stayed here, it was the tourists that were missing - even if all expats would be gone, you would not notice it if tourist numbers back up as the tourists are not impacted at all by any income tax laws...

[CygnusX1]

1 hour ago, connda said:

I have to admit, the government lockdown of Thailand actually appealed to me.  I liked it.  Nobody around.  Easy to drive.  No pediatricians.  It was great.

Why do you dislike pediatricians?

[jaywalker2]

5 hours ago, Mike Lister said:

It is ludicrous to think that foreigners who want to buy real estate in Thailand will be taxed on the purchase, it will kill the property market in Phuket, and elsewhere, stone dead. If that were the case, you would have herd a massive outcry from the industry by now and there hasn't been one.

I agree but one thing I've learned over the years is never underestimate the stupidity of the Thai government.  And there has been strong resistence against the change in law but it's under the radar because the negotiations with affected parties are ongoing.

 

Look at the TM30 fiasco. That led to an exodus of foreigners out of Thailand and protests from foreign embassies but the government learned nothing from it. They made a slight modification in the rules but there isn't any consistency among the various immigratioin office.

[jaywalker2]

5 hours ago, topt said:

I take it you meant "not" being taxed?

 

I am also intrigued what @jaywalker2 has heard to make the statement he did..........

The poster Prenock in his summary of what went on at the seminar said this: The seminar speakers also mentioned that they want to tax ALL income one recieves during the tax year, not only that remitted into Thailand and that they were also talking about credit card use and ATM withdrawals. 

[scottiejohn]

1 hour ago, mran66 said:

 

annual interest is taxable income on the year earned, just like any other local income during that tax year.

if no other local income than that, it is below tax threshold. you could even claim back the withheld tax if no other income - if you dont mind the hassle AND getting taxman attention!

 

I understand that but some posters are suggesting that money already put in bank accounts prior to 2024, not interest, could be taxed!

 I know it sounds like scaremongering but is there any basis to their claims?

[dlclark97]

On 12/18/2023 at 5:11 PM, Pattaya57 said:

What tax on foreign income? Never heard of it. 

 

Oh wait, is this like the other hundred new tax threads with no facts so will be soon be sent to the finance forum where the tax nerds can endlessly debate the no facts part? 

Never heard of it?  What planet have you been living on.  Have you had your head buried in the sand?  Major topic for many weeks. Starts i Jan2024.

[mran66]

1 hour ago, scottiejohn said:

I understand that but some posters are suggesting that money already put in bank accounts prior to 2024, not interest, could be taxed!

 I know it sounds like scaremongering but is there any basis to their claims?

 

well, depends on how and where your funds in your bank account have come. If they are non-taxable during current tax policies, they will not be taxed based on this change.

 

but yes if the funds are taxable income sent to thailand during the year they were earned, they are taxable income in the tax year they are sent here. If you have not reported that income as taxable in the past even if you should have, you have violated tax law.

 

but that is kind of outside of the scope of this thread which is about the announced change for 2024

[mran66]

1 hour ago, jaywalker2 said:

I agree but one thing I've learned over the years is never underestimate the stupidity of the Thai government.  

 

that's where the answers to my scenarios become relevant for some people, though probably majority of new condo buying farangs are not tax residents (yet), so the issue not relevant for them

 

but for some people (like me) who have investments for couple of decades without tax on earnings, you could interprete the announcement also so that all earnings on top of the original seed investment 20-some years ago could be considered taxable income.

 

thus the guidelines for definitions and rules is kind of important for some people, though maybe not majority

[Danderman123]

One big thing everyone is overlooking: even if you don't owe anything, you will have to fill out a tax form to prove it. At that point, you are trapped in the tax system.

 

I am taking 2 precautionary measures right now, in the unlikely event that this is implemented in 2024:

 

1) Transferring in money from the US to my Thai bank before January 1.

 

2) I will spend the first 2 months of the year abroad. If this tax thing has crashed and burned by then, no problem. If it is still a threat after February 1, I will plan further trips overseas (out of Thailand).

[JimTripper]

Does it look like I care about money when drinks are on the house?

[BenStark]

3 hours ago, dlclark97 said:

Never heard of it?  What planet have you been living on.  Have you had your head buried in the sand?  Major topic for many weeks. Starts i Jan2024.

 

Really? Oh my god, and we all missed that new law that has been published somewhere.

 

I'm sure, since you seemingly have all the details, you can provide us with a link to the source where it was published, so we all can read up on it.

[jacko45k]

14 hours ago, Mike Lister said:

It is ludicrous to think that foreigners who want to buy real estate in Thailand will be taxed on the purchase, it will kill the property market in Phuket, and elsewhere, stone dead. If that were the case, you would have herd a massive outcry from the industry by now and there hasn't been one.

I saw a recent report that condo sales in Thailand were doing well of late, particularly in Pattaya, but also in Phuket, and Bangkok. With the welcoming and liberal approach to China, Russia and India that is hardly surprising. If that is the case there could be elbow room for a little more taxation... prices would still be well down from London, Beijing and the location more attractive than Moscow. 

I would say not so ludicrous, governments will make money grabs where they can. 

[Andycoops]

There won't be any effect on the Pattaya economy.

[Trippy]

39 minutes ago, Andycoops said:

There won't be any effect on the Pattaya economy.

At the very least, more people will be looking for 6 month rentals instead of 1 year.