Free event aims to shed light on the new tax rules for foreign income brought into Thailand

[UWEB]

3 hours ago, ukrules said:

 

Interesting.

 

The new 'memo' became effective on Jan 1.

 

Is everyone expected to go out and get tax id numbers before March which is the end of the tax year here?

 

Tax year is 1st of January till 31st of December, then you have 3 month time to file your Tax Return.

[UWEB]

4 hours ago, Watchit said:

Because initially it was not aimed at the average Joe foreigner. It was meant for rich Thais bringing in income from abroad.

 

 

 

You still believe this fairy tale? Rich Thai know how to avoid taxes for sure.

[puck2]

Not a single word about DTA = Double Tax Agreement is mentioned. What a joke.

[TallGuyJohninBKK]

5 hours ago, BenStark said:

Below is what my Embassy sent me today.

 

If you live in Thailand for more than 180 days a year, you will be considered a Thai tax resident. In that case you must indicate all foreign income that you bring in to Thailand. If the taxes that have already been paid in Belgium are not sufficient according to Thai tax legislation, you may have to pay an extra tax in Thailand.

 

While correct in the most general sense, that above is still a pretty gross oversimplification of what's likely to be the case, because:

 

1. the RD hasn't really clarified yet how this new tax regime is going to work in all its details, and

 

2. the advice above doesn't reflect the recent clarification by the RD that income saved prior to Jan. 1 2024 is not going to be subject to Thai taxation under this new regime, no matter when it's brought into Thailand, and

 

3. the above advice fails to recognize that many western countries have double taxation treaties with Thailand that, in many cases, limit or entirely exclude from Thai taxation certain kinds of income/revenues earned by those nationalities, and

 

4. Holders of the Thai LTR visas are exempt from this entire tax scheme, etc etc.

 

Lots of details that come into play here.

 

 

 

[Dante99]

3 hours ago, BenStark said:

Where in the world do you pay tax on your income in the year you earn it?

 

Everywhere there is withholding tax or a requirement to pay estimated taxes.  

The USA for sure.

[BenStark]

2 hours ago, ikke1959 said:

If that is true, the tax department will refund the paid tax in Belgium if it is more than you had to pay in Thailand??

 

Yep, and on 25 December Santa Claus flies through the sky on his sleigh.😄

[BenStark]

31 minutes ago, Dante99 said:

Everywhere there is withholding tax or a requirement to pay estimated taxes.  

The USA for sure.

 

We aren't talking about withholding taxes here.

[CartagenaWarlock]

4 hours ago, BenStark said:

Me for example haven't filed a tax return in my home country for the past 14 years, because I'm registered here, and had no official income in my country

If you don't pay taxes in your home country, then you must pay here in Thailand. There is no confusion about it. Confusion is for people who do pay taxes in their home country and bring post-taxed funds to Thailand. 

[BenStark]

38 minutes ago, TallGuyJohninBKK said:

While correct in the most general sense, that above is still a pretty gross oversimplification of what's likely to be the case, because:

 

1. the RD hasn't really clarified yet how this new tax regime is going to work in all its details, and

 

I may be wrong, but my impression of a double tax agreement (or however they call it) between 2 countries has always been that you can not be taxed in 2 countries, but that the highest tax regime applies.

 

So if you earn money in a country A, then you will be taxed on those earnings in that country, but as soon as you import the money into country B where you are a resident for tax purposes, and the tax scale on that amount of earnings is higher in country B than in the country you have paid already, then you will still have to pay the difference

[BenStark]

3 minutes ago, CartagenaWarlock said:

If you don't pay taxes in your home country, then you must pay here in Thailand. There is no confusion about it. Confusion is for people who do pay taxes in their home country and bring post-taxed funds to Thailand. 

 

The money in my accounts in my home country is there for decades already, so obviously I have paid tax on it when I still lived there and earned it.

 

So according to you I have to pay tax again if I want to use the money I earned more than 14 years ago?

[CartagenaWarlock]

4 hours ago, BritScot said:

The Thai government is not your friend.

Why the Thai government will be friends with people who have fled 10,000 miles to find a decent living in a foreign country, including women for a family. 

[CartagenaWarlock]

Just now, BenStark said:

The money in my accounts in my home country is there for decades already, so obviously I have paid tax on it when I still lived there and earned it.

If you could prove it. 

[BenStark]

2 hours ago, steve187 said:

if you do not pay tax or have any UK income, what do you want to show, that you paid no tax and have no income?

 

in the UK, its called PAYE if you only have pension income, that how you pay ( through a tax coding) any income tax due

 

Well, I wasn't born yesterday, in fact I was born 65 years ago, and had a working life in my home country, and must have paid tax on my earnings.

 

I officially moved here 14 years ago (registered at the embassy at that time) so I had no duty anymore to file tax returns since, as I didn't live or work anymore in my home country or in Thailand.

 

 

[BenStark]

1 minute ago, CartagenaWarlock said:

If you could prove it. 

 

And how you prove that?

 

My money was in an account which I held for probably 35 years. Last year that bank send me a letter that they closed all account for customers that permanently live abroad. I'm not the only one, and neither is my bank the only one that has this policy.

 

So I had to open a new account online (not an easy task) and move all my money to that new account

[BenStark]

3 hours ago, Phulublub said:

Wrong. 

 

You only need to bring in 800000 ONCE.  If already done, then all you ned is annual living expenses, and many will have exempt pensions, already be paying tax in income in home country and will thus be liable for little or no Thai additioanl taxes.

 

PH

 

Wrong

 

Well unless you manage to live on less than 800K a year, then you have to bring it in EVERY year

[AlexRich]

I would not stay in Thailand greater than 180 days this year until the rules are clear. The new rules exhibit all the hallmarks of “unintended consequences” … and by the time everything is clear you might find that you are on the hook for a tax liability.

[TallGuyJohninBKK]

20 minutes ago, BenStark said:

I may be wrong, but my impression of a double tax agreement (or however they call it) between 2 countries has always been that you can not be taxed in 2 countries, but that the highest tax regime applies.

 

Not necessarily... In the Thai treaty with the U.S., for example, certain kinds of U.S. source income are flatly excluded from Thai taxation in their entirety, including government pensions and Social Security.

 

In those instances, doesn't matter at all what the relative tax rates might be between Thailand and the U.S. for those sources.

 

 

[kinyara]

3 minutes ago, AlexRich said:

I would not stay in Thailand greater than 180 days this year until the rules are clear. The new rules exhibit all the hallmarks of “unintended consequences” … and by the time everything is clear you might find that you are on the hook for a tax liability.

 

That's one option, for me it was more practical to transfer in enough pre 31st December 2023 so that no further transfers were required in 2024. I figure that buys me 1 and 1/2 years for the specifics to be clarified. I've already got a TIN from working here several years ago. 

[TallGuyJohninBKK]

27 minutes ago, BenStark said:

The money in my accounts in my home country is there for decades already, so obviously I have paid tax on it when I still lived there and earned it.

 

So according to you I have to pay tax again if I want to use the money I earned more than 14 years ago?

 

 

As I previously posted in response to the Belgium advice:

 

2. the advice above doesn't reflect the recent clarification by the RD that income saved prior to Jan. 1 2024 is not going to be subject to Thai taxation under this new regime, no matter when it's brought into Thailand.

 

"On 20 November 2023, the Revenue Department issued Departmental Instruction no. Paw.162 ("DI Paw. 162"), which provides further guidance that the interpretation under the Departmental Instruction Paw.161/2566 ("DI Paw.161") shall not apply to any foreign-sourced income earned by Thai tax residents before 1 January 2024.

 

By virtue of this DI Paw. 162, Thai tax residents will not be required to include their foreign-sourced income earned before 1 January 2024 in their personal income tax returns, even if such income will be brought into Thailand from 1 January 2024 onwards."

 

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Further-guidance-on-Foreign-Sourced-Income

 

[BenStark]

5 minutes ago, TallGuyJohninBKK said:

As I previously posted in response to the Belgium advice:

 

2. the advice above doesn't reflect the recent clarification by the RD that income saved prior to Jan. 1 2024 is not going to be subject to Thai taxation under this new regime, no matter when it's brought into Thailand.

 

And here it gets complicated.

 

Since 01/01/2024 I'm entitled to a pension, which goes in the same account, because as I said, banks are not interested any more in opening bank accounts when you don't live there.

 

So if I transfer money, is that the money I earned since 01/01/2024, or the money I earned decades ago?

[TallGuyJohninBKK]

9 minutes ago, BenStark said:

 

And here it gets complicated.

 

Since 01/01/2024 I'm entitled to a pension, which goes in the same account, because as I said, banks are not interested any more in opening bank accounts when you don't live there.

 

So if I transfer money, is that the money I earned since 01/01/2024, or the money I earned decades ago?

 

You're hardly alone in facing that kind of quandary... and no clear guidance at present that I'm aware of on how to handle those kinds of situations.

 

All I can say is, one thing I'm doing now is keeping a documents snapshot of all my home country financial account balances as of 12-31-23... so I'll have clear future evidence of just how much accrued savings I had on hand prior to the start of the new Thai taxation rules.

 

 

 

[Liverpool Lou]

5 hours ago, ukrules said:

The new 'memo' became effective on Jan 1.

Is everyone expected to go out and get tax id numbers before March which is the end of the tax year here?

Effective from January 1st 2024 so any tax, after all allowances, will be due 2025.

[Liverpool Lou]

6 hours ago, BritScot said:

If your embassy is correct then every expat is going to get a massive tax bill and its very simple because minimum 400,000baht ~ 800,000baht has to be brought in to Thailand for a retierment visa every year.

Those figures do not have to be brought into Thailand every year, it just has to be in the bank for each renewal.

[TallGuyJohninBKK]

1 hour ago, BenStark said:

 

Wrong

 

Well unless you manage to live on less than 800K a year, then you have to bring it in EVERY year

 

I think the prior poster's comments were correct in terms of what is possible.

 

For example, in my case, I've had a standing 800K retirement extension account in a Thai bank for many years, long prior to the current debacle. Never withdraw any funds from it, have never added any funds to it. It's a static, pre-existing account balance that's not going to be subject to the new rules.

 

And then, for my living expense, I draw funds monthly from abroad that all are my government pension, which is exempt from Thai taxation under the US-Thai double taxation treaty.

 

Thus, as long as I continue in that framework, I should not have any Thai tax obligation from the new regime...

 

And that's without even getting into the ability to draw down on pre 2024 accrued savings that also would be exempt from the new tax rules.

 

[Liverpool Lou]

Judging from so many comments here, it appears that the tax-briefing event is not needed, all the answers are here...just pick the one that you like!

[foreverlomsak]

5 hours ago, BritScot said:

then every expat is going to get a massive tax bill and its very simple because minimum 400,000baht ~ 800,000baht has to be brought in to Thailand for a retierment visa every year.

I'm on the 800k in the bank and have been for years, I only bring in what I want to spend, the 800k stays in the bank year in year out, for example if I bring in nothing for the next few years I will still get my annual extensions, so saying every expat must bring 400k/800k into Thailand every year for a retirement extension and massive tax bills borders on scare mongering.

Those on Monthly Income do not have to show that any money is actually brought into Thailand only that they receive that level of income (UK, US and AUS are different as they need to show the money arriving in their account as they cannot get embassy income statements). Note Thailand can only tax what arrives in Thailand not what stays outside.

Just as matter of interest I expect that my tax bill for bringing in my all my 2024 income not would result in a massive tax bill, my calculations show it to be in the order of 1,200 Baht maximum for the year, only because the UK exchange rate is so high at the moment. As the rules are written just now (may be changed in the future who knows) you have a 100k deduction plus a 60k personal allowance, if married a further 60k spouse allowance, if over 65 or disabled a further 190k allowance (there are other allowances) and the first 150k of taxable income is rated at 0%, then the next 150k is taxed at 5%, the next 200k at 10% and so on. IMHO nothing looks massive unless you are bringing in over 3 million per year, even then???. And don't forget the Double Taxation or other rules/agreements that are applicable to the source country(s) of your income.

[BenStark]

18 minutes ago, TallGuyJohninBKK said:

 

I think the prior poster's comments were correct in terms of what is possible.

 

For example, in my case, I've had a standing 800K retirement extension account in a Thai bank for many years, long prior to the current debacle. Never withdraw any funds from it, have never added any funds to it. It's a static, pre-existing account balance that's not going to be subject to the new rules.

 

And then, for my living expense, I draw funds monthly from abroad that all are my government pension, which is exempt from Thai taxation under the US-Thai double taxation treaty.

 

Thus, as long as I continue in that framework, I should not have any Thai tax obligation from the new regime...

 

And that's without even getting into the ability to draw down on pre 2024 accrued savings that also would be exempt from the new tax rules.

 

 

Maybe something was lost in translation,.

 

Yes the 800K for immigration purpose has to be brought in only once...................... if you don't touch it.

 

But you have to live, and then 800k even will provide a meagre living.

 

Not everyone, I would actually assume very few, are in the same positions as you where their pension is exempt of any taxes anywhere.

[AlexRich]

1 hour ago, kinyara said:

 

That's one option, for me it was more practical to transfer in enough pre 31st December 2023 so that no further transfers were required in 2024. I figure that buys me 1 and 1/2 years for the specifics to be clarified. I've already got a TIN from working here several years ago. 

Yes, good option. Until the situation is clear moving money into Thailand is best kept on hold.

[TallGuyJohninBKK]

31 minutes ago, BenStark said:

Not everyone, I would actually assume very few, are in the same positions as you where their pension is exempt of any taxes anywhere.

 

Lots of Americans in Thailand who are on government and/or military pensions and/or receiving U.S. Social Security payments.

 

Can't speak to the terms of other countries' DTAs with Thailand.

 

[BenStark]

2 minutes ago, TallGuyJohninBKK said:

 

Lots of Americans in Thailand who are on government and/or military pensions and/or receiving U.S. Social Security payments.

 

Can't speak to the terms of other countries' DTAs with Thailand.

 

 

Sorry mate, I thought we had a sensible conversation, but it seems I was wrong.

 

How many % of the expats in Thailand is American, and how many % of those are entitled to those pensions, compared to the whole expat community?