Must Read A SIMPLE GUIDE TO PERSONAL INCOME TAX IN THAILAND

[cdemundo]

43 minutes ago, 747man said:

Do you even bother reading posts ?....Only Sometimes, But THANK YOU For Your HELP......

"Do you even bother reading posts ?" 

reminds me of the kid in school "Weren't you listening?".

Never liked that kid.

[DaRoadrunner]

What happens if you need to bring in a large sum, such as 20 million Baht to buy a house in Thailand?

 

And just how will they enforce this new tax?

[Dogmatix]

1 hour ago, Lacessit said:

Are the concessions only available to married couples? What happens with single foreigners supporting a GF? What forms of marriage are recognized by the Thai authorities?

 

The way I read it, if one is married, over 65. with a pension income of 600,000 baht, they get exemptions of 560,000 baht. Guys in defacto relationships get nothing.

 

To get the spouse allowance you have to do a joint tax filing and the first time you claim you will be asked to submit a marriage certificate. So no. Common law marriages are not recognized for this purpose.  

 

No sure how you get to allowances and deductions over the following without having deductions for things like investment in RMF/SSF or insurance and stuff.

Basic allowance  60,000

Senior allowance 190.000

Totals                   270,000.

 

Adding the tax free threshold of 150,000, tax would start 420,000.

 

[Mike Lister]

Everyone:

 

There is an increasing number of questions being raised on the subject of tax both in this new thread (which I had hoped might be locked) and other parallel threads on the same subject. Off the top of my head, from what I've seen today, 50% of the questions can be answered by reading the document I wrote. another 40% can be answered by digging into the links provided and a further 10% are new issues that I hadn't covered previously, such as Gift Tax.

 

The purpose of the document is to give everyone a starting point and to address the concerns of the average retiree on pension income. I'm not willing or able to answer an endless stream of questions of increasingly complex questions about tax when you can do the research just as easily as me. There are lots of different nationalities on AN, each one has a different DTA, I am unwilling to study them all, you will have to find your own and do some work. You are going to have to help yourselves, now that you have a foundation.

 

Lastly, the reason I wrote the document was to try and bring to an end a 200+ page thread about tax that was an endless talking shop involving half a dozen of the same people, most of which was ego boosting nonsense. It would be a shame to see this thread go in the same direction.

 

The last point that needs to be made very clear is that the new rules came into force 1 January this year for income that YOU will need to report NEXT YEAR between 1 January and 31 March 2025. That doesn't absolve you of the need to file a tax return this year, before 31 March 2024, if you meet the criteria and threshold for filing a return, based on last years financial activity.

 

 

 

Edited January 8 by Mike Lister

[koolkarl]

It is incredible that so many are willing to be subservient to being taxed, hiring accountants, etc. and not granted immigrant status, no free healthcare, etc. and breathe polluted air most of the year. There are other countries you can move to who won't tax you to death and give you nothing in return.

[LarryLEB]

8 minutes ago, LarryLEB said:

  1 hour ago, Iamloki said:

Just curious, what exemptions do guys in your home country get for "defacto relationships"?

In the US they get zero...

Mike Lister, please note that lamloki asked the above question about what exemptions we get in our HOME country.  Please read my complete post, which includes lamloki's post above!

Edited January 8 by LarryLEB

[Dogmatix]

In your section 8 I don't believe there is any requirement to file a tax return if you have Thai bank interest in excess of 60,000.  PWC says this:

 

" in the case of having income from other sources (with or without employment income) of THB 60,000 or less (for single persons) or THB 120,000 or less (for married persons)."

 

I believe it refers to income from non-employment sources, e.g. rental income. Banks deduct 15% withholding tax on interest and it is an option to declare this income, if you believe you would pay less than 15% and get a refund. Otherwise you can just accept the 15% deduction and not declare it. Same applies to Thai dividends from which 10% withholding tax is deducted at source. You can have as much Thai dividend income as you want and it will not push up your tax rate. If you opt to declare Thai dividends, you can claim tax credits for the corporate income tax paid by the companies to avoid double taxation. This can be all calculated automatically for you by the RD's website, if you file online in Thai.  Otherwise it would be very laborious and would take many hours of work (don't ask me how I know this).  To qualify for the tax credit on dividends, you must own foreign registered shares as a foreigner, not NVDRs. 

 

Now for the bad news.  This 60,000 threshold for declaring non-employment income probably applies to foreign pensions.

 

Regarding the tax allowance of 100,000 cited for pensions, this seems misleading.  The 100,000 tax allowance is for Section 40.1 income from employment which includes pensions but only pensions derived from employment.  So state pensions are out but Thailand doesn't have any. So no need for them to mention this in the RC.  I suspect company occupational pensions from overseas are also excluded, even though they appear to qualify on the face of it.  That is because I suspect that to qualify the corporate pension has to be notified by a Thai employer, e.g. Thai Civil Service.  Most Western government employment pensions will be protected from Thai taxation by DTAs, but not so state pensions (except US Social Security) and company pensions.

[Rimmer]

Off topic posts about US and Canada have been removed, please do not hijack the topic which is about:

 

A SIMPLE GUIDE TO PERSONAL INCOME TAX IN THAILAND.

 

 

[KannikaP]

1 hour ago, Lacessit said:

Are the concessions only available to married couples? What happens with single foreigners supporting a GF? What forms of marriage are recognized by the Thai authorities?

 

The way I read it, if one is married, over 65. with a pension income of 600,000 baht, they get exemptions of 560,000 baht. Guys in defacto relationships get nothing.

 

 

The way I read it, someone over 65 gets a 190k allowance, plus 60k for himself, plus 60k if married, plus the first 150k @ 0%.

[Mike Lister]

2 minutes ago, Dogmatix said:

In your section 8 I don't believe there is any requirement to file a tax return if you have Thai bank interest in excess of 60,000.  PWC says this:

 

" in the case of having income from other sources (with or without employment income) of THB 60,000 or less (for single persons) or THB 120,000 or less (for married persons)."

 

I believe it refers to income from non-employment sources, e.g. rental income. Banks deduct 15% withholding tax on interest and it is an option to declare this income, if you believe you would pay less than 15% and get a refund. Otherwise you can just accept the 15% deduction and not declare it. Same applies to Thai dividends from which 10% withholding tax is deducted at source. You can have as much Thai dividend income as you want and it will not push up your tax rate. If you opt to declare Thai dividends, you can claim tax credits for the corporate income tax paid by the companies to avoid double taxation. This can be all calculated automatically for you by the RD's website, if you file online in Thai.  Otherwise it would be very laborious and would take many hours of work (don't ask me how I know this).  To qualify for the tax credit on dividends, you must own foreign registered shares as a foreigner, not NVDRs. 

 

Now for the bad news.  This 60,000 threshold for declaring non-employment income probably applies to foreign pensions.

 

Regarding the tax allowance of 100,000 cited for pensions, this seems misleading.  The 100,000 tax allowance is for Section 40.1 income from employment which includes pensions but only pensions derived from employment.  So state pensions are out but Thailand doesn't have any. So no need for them to mention this in the RC.  I suspect company occupational pensions from overseas are also excluded, even though they appear to qualify on the face of it.  That is because I suspect that to qualify the corporate pension has to be notified by a Thai employer, e.g. Thai Civil Service.  Most Western government employment pensions will be protected from Thai taxation by DTAs, but not so state pensions (except US Social Security) and company pensions.

A number of posters from overseas who have filed Thai tax returns have claimed the 50% of pension income, max of 100k. It was the subject of much debate in the long thread and despite a series of challenges by me, I was presented with enough  evidence and weight of opinion from different people to be convinced it does apply.

 

Regarding bank interest etc. There are two tax filing forms, PND 90 and PND 91. PND 90 if for people with bank interest only but in excess of 60k, PND 91 if those with bank interest and other income, AS THE LINK STATES.

[tlcwaterfall]

16 minutes ago, koolkarl said:

It is incredible that so many are willing to be subservient to being taxed, hiring accountants, etc. and not granted immigrant status, no free healthcare, etc. and breathe polluted air most of the year. There are other countries you can move to who won't tax you to death and give you nothing in return.

Edited January 8 by tlcwaterfall

[Mike Lister]

1 minute ago, KannikaP said:

The way I read it, someone over 65 gets a 190k allowance, plus 60k for himself, plus 60k if married, plus the first 150k @ 0%.

That's what it says.

[digital]

1 minute ago, KannikaP said:

The way I read it, someone over 65 gets a 190k allowance, plus 60k for himself, plus 60k if married, plus the first 150k @ 0%.

Yes looks like you possibly can add the exempt amounts and allowances together to reach the tax free amounts.

 

<65 60K personal + 60K wife + 150K exempt = 270K

>65 60k +60k +150k + 190K over 65 allowance = 460K

Plus deductions for health insurance etc 

 

(Can wife allowance be claimed if wife is already using her allowance?)

 

[jaideedave]

1 hour ago, Bobthegimp said:

Here's a relevant section for Canadian pensioners from our country's dual taxation agreement with Thailand.  I urge people from other countries to check their agreements before caving in to despair. 

Bob, I receive a company pension from Canada. So I understand that can only be taxed in Canada? What about my OAS,CPP pensions? Same?

[digital]

6 hours ago, Tony M said:

Thank you for this. It looks extremely useful.

 

 Did I see, or did I imagine, that there is an annual allowance for giving or "gifting" money to spouse ?

 

Sounds too easy? ... but I've read it in many sources, sunbeltasia, sherrings, mazars, acclime etc

 

Can gift 20M each year to spouse/child etc (10M if not a relative), over this taxed at 5%

 

 

[J Branche]

This is a Tax Bracket based on Thai Earned Income.  This will need to be changed Foreign Earned Income by Non Thais is 2x, 2.5x, 3x, this amount for paying the same tax percentages.

 

First Thing the Government needs to understand is the Wealthy can afford to pay the smartest Accountants, Lawyers, and Strategist to pay only the minimum that is required.

 

Taxable Income per year(Baht) Tax rate

0 – 150,000 Exempt

150,000 – 300,000 5%

300,000 – 500,000 10%

500,000 – 750,000 15%

750,000 – 1,000,000 20%

1,000,000 – 2,000,000 25%

2,000,000 – 4,000,000 30%

Over 4,000,000 35%

[KannikaP]

3 minutes ago, digital said:

Yes looks like you possibly can add the exempt amounts and allowances together to reach the tax free amounts.

 

<65 60K personal + 60K wife + 150K exempt = 270K

>65 60k +60k +150k + 190K over 65 allowance = 460K

Plus deductions for health insurance etc 

 

(Can wife allowance be claimed if wife is already using her allowance?)

 

Of course the exempt amounts can be added together, what other way is there?

 

And no, you cannot be cheeky and try to claim your wife's allowance if she has already claimed it. 

[10baht]

I don't understand how the Thai government can know what interest a US bank pays you? Or the amount of  dividends you may receive from a brokerage account, or the profit you make on the sale of stock? Of the sale of anything? Like a house. If you receive rent ?? how will they know about that?

[Madgee]

Regarding the DTA between the UK & Thailand:

AFAIK: Article 19 confirms that people who receive a UK Gov. services pension are exempt from income tax on the amount received.

As regards the UK state pension which is regarded as income.

Does this imply that the UK personal allowance for tax purposes (£12,570.00 approx. ฿550,000) is not liable for Thai tax but any amount over this is subject to tax, even though it will be taxed at source in the UK? 
 

[10baht]

8 hours ago, CharlieH said:

As a general rule, most private or company pensions from most countries appear to be assessable here but YOU will need to confirm that yours is or is not. If that is true, private and company pension income IS assessable income in Thailand.

 

And unless you tell them how will they even know you have a pension?

[RichardColeman]

I am still totally confused by this nonsense - I send money from my UK account that is savings. I cannot see how Thailand is going to see what is genuine savings as opposed to income. I would totally support tax on foreign income paid direct to Thailand by either a pension or a work company as you need to pay tax somewhere.

[Ralf001]

1 hour ago, digital said:

Thanks for the guide, still not that clear how its going to work out.

 

Are the allowances taken off before getting to the assessable income figure?

So tax free amount is at least 60,000 personal allowance + 150,000 exempt rate = 210,000 tax free (+ any other allowances)?

 

If you are a married couple can both claim personal allowance 60,000 + wife allowance (60,000). If my wife is working and uses her allowance can I still claim 60,000 for her and vice versa?

 

If you have savings overseas prior to Jan 24, and then have some earnings from income or CGT or whatever in later years how will they know from which income pot the money is coming, can you just say the money I transferred over is from savings before Jan 24.

 

Another observation, if your income overseas is below the thresholds in that country and you pay ZERO tax, but here that same income is above the exempt threshold would you pay tax on it if brought into Thailand? Or put another way, the Overseas income in below the exempt threshold overseas, but it is declared overseas on a tax return with taxable income calculated as ZERO. With a dual tax agreement can the declared income in Thailand in Thailand be ZERO as that is what is calculated overseas.

 

From an "employed in Thailand" perspective.

Allowances (for me) are deducted from my gross income.

Edited January 8 by Ralf001

[Will B Good]

Suffering from a good mix of stupidity, early onset dementia and laziness my friend asks......is anyone clever enough or even willing to interpret all of this tax malarkey purely from a UK expat perspective.......??? 

[Kalasin Jo]

8 hours ago, CharlieH said:

For example, a retiree aged 65 years of age, married and living here full  time, supporting a Thai wife who has no income and doesn’t file tax return, is allowed the following:

 

a. Personal Allowance for self - 60,000

b. Personal Allowance for wife - 60,000

c. Over age 65 years exemption - 190,000

d. 50% of pension income received, up to 100k - 100,000

e. In addition, the first 150,000 of assessable income is zero rated and free of tax

Thank you. Very helpful. And as I understood from my own research you confirm the Thailand/UK DTA does not cover the British State Pension so to the extent remitted to Thailand is assessable and should be declared here and in the UK. But these allowances seem to take much of the sting away. Does one simply claim all that are applicable in this example and add up the total, that total figure being where the tax bands with a positive % charge apply?

 

 

 

[Dogmatix]

24 minutes ago, Mike Lister said:

A number of posters from overseas who have filed Thai tax returns have claimed the 50% of pension income, max of 100k. It was the subject of much debate in the long thread and despite a series of challenges by me, I was presented with enough  evidence and weight of opinion from different people to be convinced it does apply.

 

Regarding bank interest etc. There are two tax filing forms, PND 90 and PND 91. PND 90 if for people with bank interest only but in excess of 60k, PND 91 if those with bank interest and other income, AS THE LINK STATES.

 

Interesting, if they have given the 50% allowance up to max 100,000 to foreign pension. Indeed this should be the case according to the letter of the RC but I assumed they might discriminate against foreign pensions. Technically it should only apply employment pensions but perhaps they will be generous enough to extend it to state pensions.  However, for most foreigners tax credits should be claimable for pension income and US social security is protected anyway.

 

Here's what the RD says about declaring Thai interest income and dividend income. 

 "Interest

The following forms of interest income may, at the taxpayer’s selection, be excluded from the computation of PIT provided that a tax of 15 per cent is withheld at source:

 

1. interest on bonds or debentures issued by a government organization;
2. interest on saving deposits in commercial banks if the aggregate amount of interest received is not more than 20,000 baht during a taxable year;
3. interest on loans paid by a finance company;
4. interest received from any financial institution organized by a specific law of Thailand for the purpose of lending money to promote agriculture, commerce or industry.

Dividends

Taxpayer who resides in Thailand and receives dividends or shares of profits from a registered company or a mutual fund which tax has been withheld at source at the rate of 10 per cent, may opt to exclude such dividend from the assessable income when calculating PIT. However, in doing so, taxpayer will be unable to claim any refund or credit as mentioned in 2.4."

 

So Thai bank interest is taxable if over 20,000, even if 15% tax already withheld but, if non-employment income is the only assessable income you have, I guess, no need to declare it, unless total non-employment income is over 120,000.  If your interest income is over 20,000, it seems you can avoid declaring it, if you keep your money in a finance company or in government bonds.  Potentially you could pay more than the 15% withholding tax, if you were in a higher tax bracket.  Even with such low interest rates in Thailand, it is not difficult to get more than 20,000 in bank interest.

 

But what I said about Thai dividends stands.  No limit to how much you can receive without declaring, if you are happy with the 10% withholding tax.  There is a sweet spot for filing tax credits on Thai dividends which is around 2-4 million dividend income a year. As long as you don't have any other income, you can get a tax rebate of over 4000,000 on dividend income of 3 million, if you do RMF and have other deductions too.  That means that you actually get more tax back than was deducted.  I guess these dividend tax credits will be abolished sooner or later though.  

 

 

[Ben Zioner]

56 minutes ago, koolkarl said:

It is incredible that so many are willing to be subservient to being taxed, hiring accountants, etc. and not granted immigrant status, no free healthcare, etc. and breathe polluted air most of the year. There are other countries you can move to who won't tax you to death and give you nothing in return.

Not sure anyone is subservient. Most are just waiting to find out how painful it will be be, and start thinking about alternatives if it is just too much. The real idiots would be those planning to move to Thailand during the next 2 or 3 years. While they could just enjoy two or three 25 weeks tax free holidays. 

[nglodnig]

1 hour ago, Dogmatix said:

Basic allowance  60,000

Senior allowance 190.000

Totals                   270,000.

No it doesn't

[Lopburikid]

2 hours ago, Trippy said:

I'm in the same boat. If all my income is from US social security, do I need to still file a Thai tax return? Or get a Thai tax ID number?

My pensions both state and military are taxed in the UK. Plus, I have a fixed exchange rate The UK has a tax treaty with Thailand.

[10baht]

What are the penalties if anything is mistakenly reported or forgotten to report by mistake. Also if toy make $40,000.00 - jointly - and it is all Social Security income and only bring $39,000.00 to Thailand to live on, what do you report??? ZERO?

[peterrabbit]

48 minutes ago, 10baht said:

I don't understand how the Thai government can know what interest a US bank pays you? Or the amount of  dividends you may receive from a brokerage account, or the profit you make on the sale of stock? Of the sale of anything? Like a house. If you receive rent ?? how will they know about that?

If you think, that then you had better read this:-

https://www.thaiexaminer.com/thai-news-foreigners/2024/01/06/new-tax-era-as-revenue-now-shares-data-with-138-countries/