New Thai Tax On Remittances??

[Mike Lister]

3 minutes ago, Negita43 said:

A slight variation I use a debit card (UK) to pay for medical bills:

1. If I can prove the money was in the bank account before 01/24 will that be taxable?

2. Are medical bills tax deductible?

1. Theoretically those would be savings so no.

 

2. Not medical bills but health insurance premiums are, with a Thai insurer, up to 25k per year can be deducted from assessable income

[Negita43]

On 1/22/2024 at 4:02 AM, Robin said:

Will money from sale of UK property owned before 2023 be considered income?  Like most property in UK, there could be a sizeable capital gain on the sale.  Saving?  Income?  How will this be decided?

I would like to see an answer to this one too

[Mike Lister]

On 1/22/2024 at 11:02 AM, Robin said:

I am a retiree from UK, lived in Thailand with wife  for some years on Retirement visa, all very happy with life until this came along.  I do not like uncertainty.

As a precaution, before 1/1//2024, I transferred US$50,000to my Thil bank account, with no problems, so with wife's income from rice fields and beauty shop, we can go on living in Thailand.  

My questions are for the future;  I have property in UK, now rented out, and income kept in UK (taxes paid)  My intention ha always been to sell this property and live out my life on the capital, perhaps transferred to Thailand.

Will money from sale of UK property owned before 2023 be considered income?  Like most property in UK, there could be a sizeable capital gain on the sale.  Saving?  Income?  How will this be decided?

If all the proceeds of the sales are kept in a Asset management Account, does it become savings or income?

Say the money was kept in UK bank offering me a credit card, and I spend in Thailand mainly on this card. is that expenditure taxable income or not?

Do I need a reliable  Thai Tax Consultant to give me these answers?  Can someone on AN suggest such a person?

I have never had any contact with Thai RD or been given a Tax umber and I was hoping to keep it that way.  Wife has income from growing Rice but has never files a tax return.

This whole idea of Sreettha's appears to be a good way of getting Retirees out of Thailand, and possibly counterproductive, 

 

17 hours ago, persimmon said:

Would money brought in from the sale of a house be taxed ? In the UK , the sale of a domestic property attracts no CGT , so is a very good way of accumulating wealth over the long term . Not so good though if it`s taxed when transferred to Thailand .

I don't think anyone outside of a few people in the Thai RD can answer this question with 100% certainty, not at this point in time. I also have UK property that I will sell before too long so this issue applies to me also.

 

My view is that any gain earned, prior to 1 January 2024, is tax free, in Thailand, that is clear because the RD has stated as much. The question then becomes, how will apportioned gain be calculated for tax purposes, from 1 January 2024 and the answer is, I do not know. My best guess is that Thailand does not want to prevent foreigners' from bringing money into the country to spend on real estate in Thailand so there will almost certainly not be a tax to pay on those house sale proceeds, as long as the property was a primary residence. If it was not and CG was paid on the sale, that will be adequate proof that tax was paid and again, not taxable in Thailand. For a crystal clear bullet proof answer, you will have to wait I'm afraid, until the RD speaks.

[Jonpail]

On 1/20/2024 at 3:55 PM, giogio said:

I will read your mentioned guide

 

what new rules need to be announced? (Or, did u mean to say: we hope changes of current new rules?)

 

i visited a provincial inland revenue last week, spoke in depth with chief director. First he told me was: “foreigners seem to misinterpret the rule”. Provincial Inland revenues have already been instructed by govnmt that remittances will be taxed according to certain criterias. He gave me copy of govnmt instructions, the forms to apply for TIN and told me to come back by march 2025 to file tax return.

 

that s why i posted on forum

“foreigners seem to misinterpret the rule”. is this because they haven't announced the exact details yet?

[Jonpail]

Just now, Jonpail said:

“foreigners seem to misinterpret the rule”. is this because they haven't announced the exact details yet?

Do you have a government # for the government form instructions?

 

[Mike Lister]

1 hour ago, Jonpail said:

“foreigners seem to misinterpret the rule”. is this because they haven't announced the exact details yet?

No, not at all, the Revenue made their announcement last year and it was very clear:

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html#:~:text=The Foreign Source Income Law&text=A resident of Thailand* who,bringing the income into Thailand.

 

 

[JimGant]

On 1/22/2024 at 10:32 AM, Mike Lister said:

So, people who earned money last year and remitted it last year, are taxable on that income. It's a basic premise of all of these discussions on tax, in every thread.

 

Indeed (unless the applicable DTA says the home country has exclusive taxation rights on that income).

[JimGant]

9 hours ago, JimHuaHin said:

But, if the funds used to pay the credit card debt were acquired after 1 January 2024, then the purchase is classed as a taxable remittance.

 

We're forgetting that the new rule applies to remitted INCOME, not remitted cash flow. A credit card cash flow to the Thai merchant I buy from is just a loan from the bank that issued me the credit card. It's not remitted income. This is in the same category as, I borrow $100,000 from my mother, which I then remit to Thailand. Whether I gave my mom a note, or she considered it a gift, is neither here nor there. It is definitely NOT income, and therefore would not show up on my US tax return, nor would it be considered income for Thai purposes. How I pay the bank back, or how I pay Mom back, does not redefine this loan as income.

 

Do you really think the Thais are going to view all remittances into Thailand as income? Of course not. And they're not going to be able to differentiate remittances between income and capital. As said too many times on these threads, common sense dictates that what you report as assessable income on your Thai tax return will be determined only by you. Random compliance audits, like we do in the US, may be in the future. But even if hit by one of them, if you filter all your monies through an offshore or home country bank, the fungibility of such money, and some good record keeping, should shoo away the revenuers.

[Jonpail]

1 hour ago, Mike Lister said:

No, not at all, the Revenue made their announcement last year and it was very clear:

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html#:~:text=The Foreign Source Income Law&text=A resident of Thailand* who,bringing the income into Thailand.

 

 

Is there any mention of taxing Social Security or pensions? That's what a lot of people are concerned about, but I don't see any clear mention of it. Also, it says that any income earned before 2024 is protected. Does it specify how that needs to be proven? It looks like they think/say they can tax pensions, but it doesn't specify social security is that clear somewhere?

Edited January 24 by Jonpail

[Mike Lister]

4 minutes ago, Jonpail said:

Is there any mention of taxing Social Security or pensions? That's what a lot of people are concerned about, but I don't see any clear mention of it. Also, it says that any income earned before 2024 is protected. Does it specify how that needs to be proven? It looks like they think/say they can tax pensions, but it doesn't specify social security is that clear somewhere?

Please read the folloiwng and revert to us with any outstanding questions afterwards. Thanks

 

 

[topt]

5 hours ago, Mike Lister said:

as long as the property was a primary residence.

My understanding is that if you are non-resident for tax and sell property in the UK whilst being non resident you still have to pay CGT - even if it was your PPP although there are various calculations that help to reduce the overall figure.

[Robin]

It seems to me that the crucial thing is what is considered to be income and what is savings.

 

 

 Until this is resolve, we are all just speculating.

In my own case:

I ownsome property in UK, now rented out, but all bought from earnings (mortgage repayments,) or capital, ( bequests.)

My retirement plan has always been to sell this property and live in LOS on the income from investing this capital.  

Selling this property will incur CGT in UK and I will calculate and pay this on selling.

If I bring the proceeds of the sales to Thailand. will it be regarded as savings, capital, or income?

 

[alphason]

21 hours ago, Robin said:

In my own case:

I ownsome property in UK, now rented out, but all bought from earnings (mortgage repayments,) or capital, ( bequests.)

My retirement plan has always been to sell this property and live in LOS on the income from investing this capital.  

Selling this property will incur CGT in UK and I will calculate and pay this on selling.

If I bring the proceeds of the sales to Thailand. will it be regarded as savings, capital, or income?

 

 

I'm in a very similar position, spent a lot of time trying to find answers, read a lot and even HMRC can't really tell me, 

 

The most credible thing I have found is from Sherrings https://sherrings.com/capital-gains-personal-income-tax-thailand.html  I contacted them to confirm and they told me this was correct under the UK / Thailand double tax agreement immovable property in the UK is subject to the Capital Gains Tax legislation in the UK, and not subject to Thailand's tax.

 

For a resident of Thailand deriving capital gains income from a source outside of Thailand and bringing it into Thailand**.
Personal income tax on the amount of capital gains income (the amount of the proceeds exceeding the costs of the investment).

**not including capital gains from immovable property which most double tax agreements prescribe the tax rights for the country in which the immovable property is situated.

 

This is discussed in a few of my earlier posts before if you look. I am hoping this is correct from Sherrings they should be well qualified to answer this, trouble is no one would want to be the first to try

I think the other option as rules stand is to be non Thai tax resident for the year the gain is remitted to Thailand. Or IF the rules change to worldwide in the year the property is sold in the UK.

[jayceenik]

On 1/24/2024 at 2:53 PM, Mike Lister said:

1. Theoretically those would be savings so no.

 

 

"Theoretically" applies to me...

I have since a long time a FCD Euro in SIN. Non interest producing since many years. I have whittled it down over the years to buy car, house, living expenses, etc for my Thai wife. Now I think I'll have to close it down and bring the rest of it into in my savings account in Thailand to be THB because I fear that inbound remittances from that SIN account after 1JAN25 could be hammered by the TRD. "Theoretically" is not a certainty even though I think like you that it's most likely to be a "no".

It's now over five months that the new tax law should have been announced and spelled out clearly but even knowledgeable guys like you are still not sure 100% of WTF is going on about what applies to us tax residents farangs.

Anyway, thanks for all your valuable inputs.

[Mike Lister]

2 minutes ago, alphason said:

 

I'm in a very similar position, spent a lot of time trying to find answers, read a lot and even HMRC can't really tell me, 

 

The most credible thing I have found is from Sherrings https://sherrings.com/capital-gains-personal-income-tax-thailand.html  I contacted them to confirm and they told me this was correct under the UK / Thailand double tax agreement immovable property in the UK is subject to the Capital Gains Tax legislation in the UK, and not subject to Thailand's tax.

 

For a resident of Thailand deriving capital gains income from a source outside of Thailand and bringing it into Thailand**.
Personal income tax on the amount of capital gains income (the amount of the proceeds exceeding the costs of the investment).

**not including capital gains from immovable property which most double tax agreements prescribe the tax rights for the country in which the immovable property is situated.

 

This is discussed in a few of my earlier posts before if you look. I am hoping this is correct from Sherrings they should be well qualified to answer this, trouble is no one would want to be the first to try

I think the other option as rules stand is to be non Thai tax resident for the year the gain is remitted to Thailand. Or IF the rules change to worldwide in the year the property is sold in the UK.

I think the Sherrings statement on Capital Gains is correct but I am less certain about whether or not the TRD would tax the proceeds as income at PIT rates.

[Mike Lister]

1 minute ago, jayceenik said:

"Theoretically" applies to me...

I have since a long time a FCD Euro in SIN. Non interest producing since many years. I have whittled it down over the years to buy car, house, living expenses, etc for my Thai wife. Now I think I'll have to close it down and bring the rest of it into in my savings account in Thailand to be THB because I fear that inbound remittances from that SIN account after 1JAN25 could be hammered by the TRD. "Theoretically" is not a certainty even though I think like you that it's most likely to be a "no".

It's now over five months that the new tax law should have been announced and spelled out clearly but even knowledgeable guys like you are still not sure 100% of WTF is going on about what applies to us tax residents farangs.

Anyway, thanks for all your valuable inputs.

To be clear.....1 Jan 2025 is not a key date other than it is the start of the tax reporting for income remitted THIS calendar year.

[KhunHeineken]

On 6/20/2024 at 2:03 AM, Mike Lister said:

To be clear.....1 Jan 2025 is not a key date other than it is the start of the tax reporting for income remitted THIS calendar year.

Correct.

 

I think it was you, Mike, who said the date to be deemed a resident of Thailand for tax purposes for the 2024 calendar year is the 27th June 2024, which is the 180 days. 

 

After that date, you are caught up in the net, and along for the ride, whatever that ride may be, which will not be known until the 1st January 2025. 

 

Interesting times ahead.