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

[Mike Lister]

2 minutes ago, Ben Zioner said:

Innocent question: have you worked out the that tax that could be levied now from those funds?

Yes. I have to pay capital gains because I bought the property whilst overseas and have rented it out ever since, I have never lived in it for more than six months. I calculate I will pay UK tax of under one thousand pounds and that I will pay no Thai tax on the sale. Still, I have a fair market value price in mind which I will hold out for.

[Phulublub]

4 hours ago, BE88 said:

Condo sales are in sharp decline in Thailand currently and I wonder how much influence this indecision of the government in not clarifying the various points for importing money into Thailand for foreign residents in Thailand.

 

Therefore, all this lack of clear directives on the new taxation for foreign residents results in considerable economic damage.

 

How much longer can the government wait in the face of this economic damage?

 

I have no problem waiting and seeing what happens

Since it is highly unlikely that anyone sending enough money here to buy condos would have earned that money this year, your conclusion is incorrect as such money would not be laible to any tax.  I very much doubt anyone who earned enough in Januray to be able to transfer it to Thailand to buy a condo would do that; even if they did, would care about any possible additional tax over that they had already paid, unless they are money laundering, in which case they would happily pay the tax to "clean" those funds.

 

PH

[QuantumQuandry]

4 hours ago, Mike Lister said:

Nobody in these threads about Thai tax have suggested that anyone should file a Thai tax return unnecessarily.

 

That last word ("unnecessarily") is key.  You have stated "If your assessable income is over 120,000 baht per year, you must file a Thai tax return between 1 January and 31 March.".

So you are clearly saying that a lot of foreigners must (necessarily) file tax returns.  But, for others who think that the necessity of that is ambiguous, filing tax returns (for expats not earning money in Thailand) are, at this time, at least potentially "unnecessary".

[Phulublub]

2 hours ago, Mike Lister said:

I am one such person, I have property in the UK I want to sell but can't because of market conditions. I will wait until Spring and then maybe try again, when I do sell I will import those funds to Thailand will buy a rental property here.

Slightly off topic, but have you considered that in a global property market downturn, you will get less for your UK property, pay less tax on the profit, but your Thai property(ies) will also cost you less.  If you wait until the UK market picks up, you may fuind that Thai prices have risen the same, or more...and there is also the currency risk to consider.  The overall difference may be very small and if your long term intention is to sell in UK and buy here, then the best time to do it is "now" subject, of course, to selling your UK property at a reasonable price.

 

PH

[Phulublub]

1 hour ago, BE88 said:

I would just like to know what reasons you have to indirectly approve the game of the Thai government towards expatriates and more particularly towards retired you think with your superiority who are among the poor incapable of understanding the most basic cases.

The new regulations are not aimed at retirees.  So many think we are vital to the health of Thailand's economy.   We are not.  The regualtions are aimed at Thais.  That some of us may get caught up in it is immaterial in the overall scheme of things; even those who do will, because of the numerouse DTAs, have little or no additional taxes to pay. 

 

PH

[Mike Lister]

2 minutes ago, Phulublub said:

Slightly off topic, but have you considered that in a global property market downturn, you will get less for your UK property, pay less tax on the profit, but your Thai property(ies) will also cost you less.  If you wait until the UK market picks up, you may fuind that Thai prices have risen the same, or more...and there is also the currency risk to consider.  The overall difference may be very small and if your long term intention is to sell in UK and buy here, then the best time to do it is "now" subject, of course, to selling your UK property at a reasonable price.

 

PH

You caught me out, I accept that I am making excuses, to a certain degree. If I wanted shot of the place I would sell but the fact is that doing so will sever my final link with the UK so there's a loss of my plan B element, as well as an emotional link. Mind you, if somebody comes along and offers me loadsamoney for the place, I'll sell in a flash. 🙂  

 

We humans can be complicated at times, no. 

[potless]

2 hours ago, Mike Lister said:

2 hours ago, Ben Zioner said:

Innocent question: have you worked out the that tax that could be levied now from those funds?

Yes. I have to pay capital gains because I bought the property whilst overseas and have rented it out ever since, I have never lived in it for more than six months. I calculate I will pay UK tax of under one thousand pounds and that I will pay no Thai tax on the sale. Still, I have a fair market value price in mind which I will hold out for.

Perhaps I am wrong, but I think that Ben Zioner was referring to tax that you may have to pay when you import the proceeds of the sale into Thailand. Assessable income?

[BE88]

40 minutes ago, Phulublub said:

Since it is highly unlikely that anyone sending enough money here to buy condos would have earned that money this year, your conclusion is incorrect as such money would not be laible to any tax.  I very much doubt anyone who earned enough in Januray to be able to transfer it to Thailand to buy a condo would do that; even if they did, would care about any possible additional tax over that they had already paid, unless they are money laundering, in which case they would happily pay the tax to "clean" those funds.

 

PH

 

I agree with you PH, let's wait and see the economic damages are important; I want to see now how many Chinese rush to buy condos in BKK or Phuket

[Mike Lister]

1 minute ago, potless said:

Perhaps I am wrong, but I think that Ben Zioner was referring to tax that you may have to pay when you import the proceeds of the sale into Thailand. Assessable income?

Indeed he was, which is why I wrote that "I will pay no Thai tax on the sale", meaning that when the funds are imported they will be free of tax. My apologies, I could have been clearer in what I wrote.

[Ben Zioner]

13 minutes ago, potless said:

Perhaps I am wrong, but I think that Ben Zioner was referring to tax that you may have to pay when you import the proceeds of the sale into Thailand. Assessable income?

With the current [known] state of play, if I was planning to transfer a one off large chunk of money, such as the proceeds of a house sale, I'd allocate THB 500k of that money for a 185 days holiday outside of Thailand. All perfectly conform to current rules.

 

This is why I didn't react to Mike's answer.

 

[Phulublub]

7 minutes ago, Ben Zioner said:

With the current [known] state of play, if I was planning to transfer a one off large chunk of money, such as the proceeds of a house sale, I'd allocate THB 500k of that money for a 185 days holiday outside of Thailand. All perfectly conform to current rules.

 

This is why I didn't react to Mike's answer.

 

Why?  Once again, any money earned before the start of this year is NOT liable for any Thai tax.  How often does this need repeating?

 

PH

[Ben Zioner]

13 minutes ago, Phulublub said:

Why?  Once again, any money earned before the start of this year is NOT liable for any Thai tax.  How often does this need repeating?

 

PH

We are talking about a forthcoming house sale. And since we don't know how this will be assessed by the Thai RD I'd rather go and enjoy myself eslewhere for half a year. Now Mike might have another more elaborate way to take care of his own affairs..

[potless]

34 minutes ago, Phulublub said:

Why?  Once again, any money earned before the start of this year is NOT liable for any Thai tax.  How often does this need repeating?

Mike Listers post on page 3 (6th post down) suggests that this may not be the case any longer.

[Phulublub]

14 minutes ago, potless said:

Mike Listers post on page 3 (6th post down) suggests that this may not be the case any longer.

An update has clarified that the new regulation only applies to Assessable Income from 1 Jan 24; this is why you may see several posts advising that statements showing assets and values at 31 Dec 24 should be kept to help prove (if needed) any future transfers of these funds is from exempt assets and is not Assessable Income.

 

PH

[potless]

52 minutes ago, Ben Zioner said:

We are talking about a forthcoming house sale. And since we don't know how this will be assessed by the Thai RD I'd rather go and enjoy myself eslewhere for half a year. Now Mike might have another more elaborate way to take care of his own affairs..

I havent read all the posts on various threads but the way I currently understand it is that a large amount of money remitted to Thailand will be assessable.  Let us assume a person is tax resident here and has claimed all personal allowances regarding his income. He then wishes  to import 4 million baht to purchase a property (not an unreasonable sum I think). I calculate roughly a tax liability of around 972,000 baht on the 4 million baht. In order to pay that tax, he would have to import another large sum( 1 million baht plus), because that extra money would also have a tax liability. Tax on tax? Or am I wrong? 

[Ben Zioner]

17 minutes ago, potless said:

I havent read all the posts on various threads but the way I currently understand it is that a large amount of money remitted to Thailand will be assessable.  Let us assume a person is tax resident here and has claimed all personal allowances regarding his income. He then wishes  to import 4 million baht to purchase a property (not an unreasonable sum I think). I calculate roughly a tax liability of around 972,000 baht on the 4 million baht. In order to pay that tax, he would have to import another large sum( 1 million baht plus), because that extra money would also have a tax liability. Tax on tax? Or am I wrong? 

Yes, but this is a worst case scenario. If the money comes from the sale of a property we can suppose that capital gains may be considered a income and what's let as savings. Some people will pay the capital gains tax in their country of origin, but the amount paid may be higher or lower than than what they would pay here. The DTA will come into the picture and last would Thai RD isolate pre-2024 gains? The mind boggles...So, IMHO, if you want to transfer large amounts in the next couple of years make sure are not resident for the purpose of  taxation.

[potless]

3 minutes ago, Ben Zioner said:

Yes, but this is a worst case scenario. If the money comes from the sale of a property we can suppose that capital gains may be considered a income and what's let as savings. Some people will pay the capital gains tax in their country of origin, but the amount paid may be higher or lower than than what they would pay here. The DTA will come into the picture and last would Thai RD isolate pre-2024 gains? The mind boggles...So, IMHO, if you want to transfer large amounts in the next couple of years make sure are not resident for the purpose of  taxation.

The country of origin is, as you say, important. In the UK, you would not normally pay capital tax gains on the proceeds of the sale of a property if it is your main residence. Anyone in the UK planning to sell up and retire to Thailand may wish to reconsider.

[Mike Lister]

1 hour ago, potless said:

Mike Listers post on page 3 (6th post down) suggests that this may not be the case any longer.

What I wrote in that post is as follows:

 

"There is one change that sparked all this discussion, and that is that income that is remitted to Thailand, is taxable here, regardless of the year it was earned. Previously the law was that it was only taxable if remitted in the same year it was earned".

 

Are you clear now on what is and what is not taxable under the new and old rules?

[Ben Zioner]

24 minutes ago, potless said:

The country of origin is, as you say, important. In the UK, you would not normally pay capital tax gains on the proceeds of the sale of a property if it is your main residence. Anyone in the UK planning to sell up and retire to Thailand may wish to reconsider.

No need to reconsider, just time it right, transfer the money in a year where you stayed in Thailand for less than 180 days.

[potless]

43 minutes ago, Mike Lister said:

income that is remitted to Thailand, is taxable here, regardless of the year it was earned.

 

3 hours ago, Phulublub said:

Why?  Once again, any money earned before the start of this year is NOT liable for any Thai tax.

I feel that these two posts contradict each other so I would have to say I am not clear about this.

[Mike Lister]

1 minute ago, potless said:

 

I feel that these two posts contradict each other so I would have to say I am not clear about this.

Prior to 31 December 2023, any funds that were remitted to Thailand, in the year they were earned, were potentially taxable here. This meant that a person could earn income, save it in a bank account for one year and then remit it the following year, free of Thai tax.

 

The change to the tax law that took place last last year did away with the above and said that anything earned and remitted AFTER 1 January 2024, regardless of when it was earned or remitted, was potentially taxable in Thailand.

 

Better?

[UKresonant]

Just now, Mike Lister said:

Prior to 31 December 2023, any funds that were remitted to Thailand, in the year they were earned, were potentially taxable here. This meant that a person could earn income, save it in a bank account for one year and then remit it the following year, free of Thai tax.

 

The change to the tax law that took place last last year did away with the above and said that anything earned and remitted AFTER 1 January 2024, regardless of when it was earned or remitted, was potentially taxable in Thailand.

 

Better?

 

With the assumption of being Thai Tax Resident at both events....

[Phulublub]

4 hours ago, Mike Lister said:

Prior to 31 December 2023, any funds that were remitted to Thailand, in the year they were earned, were potentially taxable here. This meant that a person could earn income, save it in a bank account for one year and then remit it the following year, free of Thai tax.

 

The change to the tax law that took place last last year did away with the above and said that anything earned and remitted AFTER 1 January 2024, regardless of when it was earned or remitted, was potentially taxable in Thailand.

 

Better?

Yes. 

 

To be pedantic, it is anything earned and remitted after 31 Dec 23.

 

PH

[Phulublub]

8 minutes ago, UKresonant said:

 

With the assumption of being Thai Tax Resident at both events....

Anyone thinking of dodging a bullet by having one year when they are not Thai tax resident needs to be careful.  I have read (but cannot now find the source) that if you were tax resident, spend a year not tax resident and remit funds dirign that year, but then subsequently become tax resident again, the money transferred during your non-tax resident year will be Assessable Income in the year you return. 

 

I suspect this is to stop people doing exactly as is being suggested to try and circumvent the law..

 

PH

[UKresonant]

7 hours ago, Phulublub said:

Anyone thinking of dodging a bullet by having one year when they are not Thai tax resident needs to be careful.  I have read (but cannot now find the source) that if you were tax resident, spend a year not tax resident and remit funds dirign that year, but then subsequently become tax resident again, the money transferred during your non-tax resident year will be Assessable Income in the year you return. 

 

I suspect this is to stop people doing exactly as is being suggested to try and circumvent the law..

 

PH

Thanks for that info.

 

I guess the English translation of POR 162/2566 lost a bit somewhere.

From 2024 on 

A. Earned / derived whilst Thai Tax resident.

B.  Assessable in the future if that at "A" is remitted to Thailand.

 

If they think that when you spend one year ever, tax resident, and then they will tax anything that is sent to Thailand for eternity, then yes I will try and circumvent that, or think what that very special year may be.

 

I wonder if they will bring out a 90per 179 day ME Visa? I suppose two single entry 90 day ones would do. 

 

Would be interesting if you find where you read /;seen that. 

 

Sounds like more mines in the minefield, or it could be easy the ain't really fully unfurled their new colours yet perhaps. Smiley face or Smiley with sharp teeth 

[Mike Lister]

8 hours ago, Phulublub said:

Anyone thinking of dodging a bullet by having one year when they are not Thai tax resident needs to be careful.  I have read (but cannot now find the source) that if you were tax resident, spend a year not tax resident and remit funds dirign that year, but then subsequently become tax resident again, the money transferred during your non-tax resident year will be Assessable Income in the year you return. 

 

I suspect this is to stop people doing exactly as is being suggested to try and circumvent the law..

 

PH

This has been one of the important open issues at the end of the document, for some time. So thank you for spotting and posting about it, if you are able to find a link that will be most helpful, if not, at least we have a good indication of the way the world will be.......not surprising really.

[smedly]

the problem I see here is the economic scales are so different between 3rd world Thailand and the west - from minimum wage - tax thresholds - salaries etc, they are not equal not even close.

 

If I start to pay tax in Thailand what do I get in return ?

 

They can't even tax their own citizens as pointed out earlier in this thread, only about 5% of the working population pay income tax, that's a huge number not paying income tax.

 

 

[Mike Lister]

32 minutes ago, smedly said:

the problem I see here is the economic scales are so different between 3rd world Thailand and the west - from minimum wage - tax thresholds - salaries etc, they are not equal not even close.

 

If I start to pay tax in Thailand what do I get in return ?

 

They can't even tax their own citizens as pointed out earlier in this thread, only about 5% of the working population pay income tax, that's a huge number not paying income tax.

 

 

What frequently gets overlooked or forgotten in all of this is that the new tax rule is aimed at making native Thais pay their fair share of tax, foreigners are merely collateral damage who happened to get caught up in it all. That said, Thailand did have a poor reputation when it comes to enforcement of financial rules so many foreigners have taken advantage of that to evade tax in their home country and elsewhere. 

 

The average foreigner is very unlikely to be negatively impacted by any of these changes, there's even a good chance some will benefit financially by having their income taxed here rather than in their home country. The free seminar will hopeful stress that point and make people do their sums to find out what their own position is, many will be surprised.

 

But you asked, what do you get in return. The answer is, nothing.

 

 

[JimGant]

2 hours ago, smedly said:

If I start to pay tax in Thailand what do I get in return ?

 

For those of us who will break even, because any increase in Thai taxes will be an equal decrease (through credits) in our home country taxes (the US, for example) -- then I certainly have no problem with my taxes now transferring to Thailand. Less money for infrastructure improvements in the US, that I'll never see -- and more money for Block 70 F-16's, to ward off the hoards of Burmese Mig-29's and SU-30's (well, ok, maybe mo' betta going to increased welfare benefits).

[Phulublub]

4 hours ago, Mike Lister said:

But you asked, what do you get in return. The answer is, nothing.

To deliberately misquote...

 

"What have the Thai Government ever done for us?"

 

Apart from the sanitation, the medicine, education, wine, public order, irrigation, roads, the fresh water system, and public health ... 

 

Oh peace?  SHUT UP!!!!!

 

©️Monty Python  1979