New tax era in Thailand begins as Revenue now shares data with 138 countries within the OECD

[Shoeless Joe]

To satisfy my own curiosity I visited my local immigration and my local RD offices today in Nan and asked the following questions.

1) I asked immigration if they required any evidence of my compliance with the RD's newly 'tweaked' income tax legislation when renewing my retirement visa. They confirmed that they did not.

2) I asked the RD if I needed to pay income tax on the pension money I transferred to Thailand from the UK. It was explained thus: The RD is only interested in taxing income from money earnt in Thailand OR  money brought into Thailand on which tax has not already been paid. My pensions which are taxed at source in the UK, are (according to the RD) NOT eligible to be taxed in Thailand principally because of the existing DTA agreement. Apparently I have 'non-assessable income'. The RD officers were incredibly helpful (apparently I was the first person to ask about the income tax changes).

In summary - Immigration aren't interested and I have no income tax liabilities. I know I am only confirming wise words from Mike Lister and others kind enough to reply to my previous angst-ridden enquiries. I hope this provides some reassurance to those in a similar situation

Regards.

Joe.

[JGon]

  On 1/8/2024 at 6:45 AM, QuantumQuandry said:

Not a rhetorical question.  Genuinely curious how many people will just lump it and stay.

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If my non assessable income turn out to be assessable... I would be in a tax rate of 30% (after being tax by my home country as well). That is something I'm not willing to accept and would bounce at 178 days.

[BE88]

  On 1/8/2024 at 6:58 AM, Sato said:

In certain tax divison in Thailand you cannot file a tax return if your taxable income is below 120'000 Bath even if you want.

 

In some tax division you need a residence certificate to file a tax return which at some immigration offices you want get anymore.

 

Everything so confusing in Thailand 😀

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It is clear that it will not be easy to make the tax declaration as well as obtaining the tax number alone with no clear directive, it will be a month of a fighter

 

[steve187]

  On 1/8/2024 at 1:55 AM, Mike Lister said:

The UK Personal Allowance is roughly GBP 12,570 per year.

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don't forget you can get 10% from the wife's/husbands allowance if they are not using the full amount, but they have to be registered and have the tax free allowance in the UK

[ikke1959]

In a few days we will read that Thailand is the country for retirement.... But when people consider to come and know that they probably have to pay double tax or unnecessary tax, the retirement paradise will be over soon, and with that another blow for the tourism

[ikke1959]

It will not work.. How are they going to check all the information they get?? Even a new application as Mor Prom can't go smoothly and that is only for Thailand.. Now they have to deal with 138 countries and thousands of companies ....

[StayinThailand2much]

  On 1/8/2024 at 11:21 AM, Shoeless Joe said:

2) I asked the RD if I needed to pay income tax on the pension money I transferred to Thailand from the UK. It was explained thus: The RD is only interested in taxing income from money earnt in Thailand OR  money brought into Thailand on which tax has not already been paid. My pensions which are taxed at source in the UK, are (according to the RD) NOT eligible to be taxed in Thailand principally because of the existing DTA agreement.

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Great report, Joe. Did you, by any chance, ask the RD whether they expect you to lodge a tax return after the end of this year?

[Shoeless Joe]

  On 1/8/2024 at 1:52 PM, StayinThailand2much said:

 

Great report, Joe. Did you, by any chance, ask the RD whether they expect you to lodge a tax return after the end of this year?

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Thanks. Regretfully I didn't ask. As soon as they confirmed I had no liability I was out of there!

Joe

 

[Mike Lister]

  On 1/8/2024 at 1:52 PM, StayinThailand2much said:

 

Great report, Joe. Did you, by any chance, ask the RD whether they expect you to lodge a tax return after the end of this year?

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All foreigners have always been regarded exactly the same as Thais in that they are obliged/required to file a tax return every first quarter, of every year, provided they meet the criteria of being tax resident and having assessible income in excess of 60k Baht. That rule has existed since the the 1990's. The only thing that has changed now is that one specific aspect of funds transfer has now become changed, nothing else has. This years tax return, due to be filed before 31 March, looks at income earned or transferred in during the year it was earned, last year. That is exactly the same as all previous years. So when you ask, did the RD say they are expecting a tax return to be filed this year, the answer is that the RD has been expecting everyone to file a return, every year for the past XX number of years but of course, many have ignored the rule.

 

This is the point in the proceedings where some posters will jump in and call me bad names, because I have filed a Thai tax return in previous years. I am a Brit, retired and my pensions are remitted to Thailand and paid directly into my Thai bank. I also have banks savings interest and other income that arise in Thailand hence my total assessible income is in excess of the threshold plus I am Thai tax resident. I also file a UK return and a US return, because I derive income from the US also. The net effect is that I pay no tax in Thailand because the deductions and allowances are what they are but I am still required to declare it and file the return.

[Dan O]

  On 1/8/2024 at 10:09 AM, VBF said:

I wouldn't be too sure of that! 

SCB pays me interest twice a year and deducts tax from the Gross amount, leaving me with the Net amount of interest.

 

They are, of course assuming that the account holder (me) is / was liable for income tax. I imagine that up to now, as I'm not  liable,  I could claim it back at the end of the tax year in some way. I choose not to bother as the amount is so small, it's not worth the effort of doing whatever is required - I am, after all just a tourist.

 

My point is that the mechanism for the banks to withhold estimated tax already exists. Whether they will or not I have no idea.

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Withholding tax on interest they pay you is completely different than withhold tax on money passing thru accounts. The mechanism you refer to is easy only because they issued the interest payment and they are the source, they have no mechanism to know where the money passing thru the account came from originally, if its taxable or even if taxes have already been paid. I stand by my statement earlier 

[Mike Lister]

  On 1/8/2024 at 10:09 AM, VBF said:

I wouldn't be too sure of that! 

SCB pays me interest twice a year and deducts tax from the Gross amount, leaving me with the Net amount of interest.

 

They are, of course assuming that the account holder (me) is / was liable for income tax. I imagine that up to now, as I'm not  liable,  I could claim it back at the end of the tax year in some way. I choose not to bother as the amount is so small, it's not worth the effort of doing whatever is required - I am, after all just a tourist.

 

My point is that the mechanism for the banks to withhold estimated tax already exists. Whether they will or not I have no idea.

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Neither banks nor the RD have the means to know whether transfer is taxable assessible income or not or whether the recipient is tax resident or not, it can't happen.

[VBF]

  On 1/8/2024 at 2:31 PM, Mike Lister said:

Neither banks nor the RD have the means to know whether transfer is taxable assessible income or not or whether the recipient is tax resident or not, it can't happen.

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Also to @Dan O

Fair enough comments - I actually didn't consider your points.

 

So rather than "can't happen",  IF (repeat IF) the Government instructed the banks to withhold x% from every foreign deposit,  the banks could, technically, do it.

 

Having said that, the following uproar would be a total s**tstorm, but when did people's objections and / or common sense stop the authorities from imposing a ridiculous rule without first thinking it through? 

And, then, usually,  backtracking on it! 🙄

 

I do agree with you both, it's unlikely though. 

[salavan]

I'm already making plans to return to my original country of birth should this go through. 

[RandiRona]

  On 1/8/2024 at 5:13 AM, Presnock said:

The Chinese signed the same OECD document as did Russia and India.

 

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The way Chinese work is no money transferred to Thailand, all transactions takes place in China and here businesses can show expense and claim tax breaks. This is called Hawala Trade and Chinese do it all the time along with Indians and Russians.

 

What Is Hawala? Money Transfer Without Money Movement (investopedia.com)

[vangrop]

  On 1/8/2024 at 12:43 AM, KannikaP said:

I bring in Bht 40k per month totalling Bht 400k per year. With various allowances and the tax threshold, I shall have to pay around Bht 4000  at the end of the year even though there is an agreement with UK.. Confirmed by my local taxman

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i don't believe you because you are obviously not good in maths. 40k a month is 480 a year

[Marco100]

With the AEOI ( OECD CRS ) if you declared your residence in Thailand to your Overseas Banks than from now on Overseas Bank are obligated to exchange information to Thailand .

At End of the year Banks will send your account balances to Thailand RD . ( Person or Beneficiary of a Companies , et et ) . 

Rest is up to each single individual to clarify ....

 

[DudleySquat]

  On 1/7/2024 at 8:54 PM, webfact said:

The country will play its part in ending worldwide tax avoidance and evasion by international firms and foreign residents.

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Tax avoidance is not illegal anywhere.

[ukrules]

  On 1/8/2024 at 5:20 AM, NZAMBOY said:

the way i see it, the banks will hold back 15% of our offshore deposit and we'll have to file in order to have it returned

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Nonsense

[ukrules]

  On 1/8/2024 at 6:16 AM, ballpoint said:

Now, when it comes to the new law / directive, like everyone else's comments on this, and the numerous other threads on this topic, this is my informed opinion only.

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Interesting that they seem to take a 'last in, first out' approach to the foreign account.

 

I can't see them returning to the old style system but even if they do I guess simply paying whatever they deem due will get rid of any restrcition.

 

I read elsewhere that there's something like a 3 year backlog of audits - are people supposed to wait 3 years and travel nowhere?

 

For me it's going to be a very simple calculation, zero tax paid anywhere else so all remittances are taxable if I stay for more than 180 days and get a tax id.

I will then pay whatever is due but I'm going to send a massively reduced amount of money in order to control how much I pay.

 

 

[quake]

  On 1/8/2024 at 11:21 AM, Shoeless Joe said:

To satisfy my own curiosity I visited my local immigration and my local RD offices today in Nan and asked the following questions.

1) I asked immigration if they required any evidence of my compliance with the RD's newly 'tweaked' income tax legislation when renewing my retirement visa. They confirmed that they did not.

2) I asked the RD if I needed to pay income tax on the pension money I transferred to Thailand from the UK. It was explained thus: The RD is only interested in taxing income from money earnt in Thailand OR  money brought into Thailand on which tax has not already been paid. My pensions which are taxed at source in the UK, are (according to the RD) NOT eligible to be taxed in Thailand principally because of the existing DTA agreement. Apparently I have 'non-assessable income'. The RD officers were incredibly helpful (apparently I was the first person to ask about the income tax changes).

In summary - Immigration aren't interested and I have no income tax liabilities. I know I am only confirming wise words from Mike Lister and others kind enough to reply to my previous angst-ridden enquiries. I hope this provides some reassurance to those in a similar situation

Regards.

Joe.

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Got a couple of questions for you.

I'm not doubting anything you have said in your post.

But can you tell me, in what language your conversation with the RD was in ?

and who was fluent in what language, or was someone else acting as an interpreter

if so who. ?

Just asking , as many things can get lost  or flipped around in translation.

I'm sure the RD offices around Thailand are all professionals, but not sure all staff will be fluent in a English Maybe they are, I don't know.

 

Also, what proof of tax paid in the uk, did the RD want to see, in regards to this.

Thanks Quake.

 

Ps well done for going in and asking. 

 

 

[Presnock]

  On 1/8/2024 at 1:38 AM, Srikcir said:

With regard to US and associated worldwide income, a US taxpayer must pay income tax as earned or received on income during the year by either withholding or making estimated tax payments (ie., monthly/quarterly). Otherwise, there is a penalty for underpayment of estimated tax. See Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts.

https://www.irs.gov/taxtopics/tc306

So it might not be surprising that many of US funds transferred to Thailand by American resident expats from the US might have already been taxed beyond such common income sources as government pensions and social security. 

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so, according to what has been written so far, if taxed already there shouldn't be any new tax added in my opinion but I sure have no idea what the new government plans for us.

[Presnock]

  On 1/8/2024 at 7:33 AM, samtam said:

 

Until they want it officially translated.

 

 

 

Tax exempt LTR under Royal Decree, until it's not.

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Well the government cannot change the royal decree but of course royally it could be changed but probably will not happen in my opinion

[Spilornis]

  On 1/8/2024 at 12:00 PM, ikke1959 said:

It will not work.. How are they going to check all the information they get?? Even a new application as Mor Prom can't go smoothly and that is only for Thailand.. Now they have to deal with 138 countries and thousands of companies ....

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Computer matching is rather easy and cheap these days. It's massive and within countries the Tax authorities have been doing it for the last 50 years. The problem will be matching names and identifying numbers across jurisdictions. The good news is that it won't be all done at once and I think that running a match on activity in Thailand will be a relatively low priority for the main Western tax authorities

[Presnock]

  On 1/8/2024 at 6:45 AM, QuantumQuandry said:

If this whole deal involves any reasonable amount of extra money coming out of my pocket, I will move back to Philippines and try some other local countries, like Malaysia/Indonesia.

 

I wonder how many people are in the same boat?  Take a guess at what percentage of expats (that weren't already paying taxes for foreign income)...would be willing to pay more to Thailand, if the rules change and are enforced?

 

Not a rhetorical question.  Genuinely curious how many people will just lump it and stay.

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from other expat forums, same discussions by local govt of new tax base possibly for ex-pats until they see how many they might lose

[quake]

  On 1/8/2024 at 10:23 PM, Presnock said:

from other expat forums, same discussions by local govt of new tax base possibly for ex-pats until they see how many they might lose

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 Your putting to much stock in the value of a Falang to the government and there departments here.

They want you out, not in. even if they lose money over it.

Your not welcome anymore here. just barley tolerated, at best.

 

 

[jacko45k]

  On 1/8/2024 at 2:38 AM, Shoeless Joe said:

So you're saying you're just too lazy. 

That being the case you deserve to be taxed to the limit.

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Absolutely, I am retired.

If I ask someone how are the wife and kids, I want the short answer, not a tome of several chapters. 

[jacko45k]

  On 1/8/2024 at 4:10 AM, Dan O said:

I'm not realky trying to be correct as everyone's situation is different so correct is adjustable. My advice has been the same all along. Read your country's DTA to see where you fall in this and then compare it when the final regs are issued here. No one knows for sure and it's different by person and country so no need to panic over what you dont know will happen yet?

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That is the reality, nobody really knows much as it has not been detailed yet.. and we have a thread of 210 pages of people offering opinion and in depth knowledge. 

[jacko45k]

  On 1/8/2024 at 5:19 AM, NanLaew said:

 

Since the UK state pension varies widely from person to person, there's no way you can claim they will qualify for Thai tax. Most pensioners are way underfunded and won't get anywhere near their full benefits. I would wager that most pensioners pitching their tent here will barely make the lowest tax tier. The balloon chase will endure.

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I thought it was the same for all (mostly) in the UK. Only us Expats have frozen ones that may vary a little as they are fixed to what it was first time paid out. As far as I know all UK  State pensions are less than the UK tax threshold  (personal allowance) and I also dispute that they 'vary widely'.

[jacko45k]

  On 1/8/2024 at 5:24 AM, Bday Prang said:

That is the nature of all the rules, regulations, and procedures  regarding tax and indeed all legal matters,

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But I did not ask for that.... simply a number relating to Thai tax allowances. Had I wanted the full regulations and procedures, I would have asked for that, or bought the book. I would hope the forum could help with that!

[Mike Lister]

  On 1/8/2024 at 11:01 PM, jacko45k said:

That is the reality, nobody really knows much as it has not been detailed yet.. and we have a thread of 210 pages of people offering opinion and in depth knowledge. 

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The base tax system here has not changed in years, the rules today are almost exactly the same as they have been for years. The only one thing that has changed is a single rule. The problem is that today, foreigners in Thailand are just waking up to the fact that many of them should have been filing tax returns for the past X years but haven't. Now that one single rule has changed, those foreigners are having to learn the entire tax system from scratch, not just the one rule that changed.