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

[Mike Lister]

29 minutes ago, Phulublub said:

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

 

 

 

I was going to write, "nothing more than you have now", and probably should have.

[Mike Lister]

Word reaches me from a friend who attended a Mazzars tax briefing at an embassy in Bangkok this week that Thailand is currently renegotiating DTA's with several countries, much more than that I don't know. 

[Mike Lister]

A baiting post has been removed

[Bluetongue]

On 1/31/2024 at 12:43 PM, TigerandDog said:

I had a lengthy telephone conversation last week with a tax accountant in Australia who specialises in the Australian tax treaties.

 

There was some good news for some and also bad news for some.

 

#1.  The first thing he pointed out was that expat Australians permanently living in Thailand (viz. more than 180 days in Thailand, therefore making them tax residents of Thailand not Australia) who have been filing annual non-resident tax returns in Australia and being slugged 32% tax are being taxed illegally by the ATO under the terms of  the Tax Treaty and are eligible to claim a full refund of all the tax paid for those tax returns. He also advised that they should have an Australian tax accountant submit a $0.00 tax return and declare it as a FINAL tax return so they no longer need to submit any future tax returns in Australia, until such time as they become an Australian tax resident again. He cited as an example the case of a client that had been submitting non resident returns in Oz for many years. He made representations on behalf of the client and was able to have $900k refunded to the client by the ATO.

 

#2. Under the tax treaty if we are deemed to be a tax resident of Thailand, then the ATO cannot legally tax you.

 

#3. As a tax resident of Thailand, especially now with Thailand banks bringing their systems into the 21st century and exchanging data with all the countries that are part of the global reporting system, we will be required under Thai tax law to not only submit a tax return in Thailand declaring the funds we transfer into Thailand but also all income, if any, earned elsewhere in the world.

 

#4. Despite this not being a great piece of news, the up side of it is that the tax rates here in Thailand are significantly lower than those in Australia.

 

Based on the information I was given I did a quick gestimate of what tax, if any, I might have to pay here in Thailand. So after estimating my annual pension payments received and interest paid to my bank account, and deducting the tax that is automatically deducted from the interest and claiming the over 65 increase in the tax free threshold and teh personal deduction of 60k THB I estimate that I will only have to pay 7k THB in tax (approx AUD $300.00). So all in all not so bad compared to around AUD $9k if I was lodging non resident tax returns in Oz.

I have no doubt that the accountant is an expert and probably most of what he says would be correct for most Australian taxpayers. However here is a cohort of over 60 government and military pension receivers whose pension is mostly taxable (due to some long ago Treasurer deeming unfunded superannuation benefits as having come from an untaxed source.) Some years ago it was 400000 people, it would be less now due to attrition. The point being that such people have to lodge with the payer, usually Comsuper, a declaration which asks if you are or are not a resident of Australia. If you are not you lose access to the tax free threshold and will be taxed 32% on the portion considered to be from an untaxed source (most of it). This money is deducted prior to payment. Thailand has no right to tax this money under the DTA . The only way to get a refund of some or all of this money would be to lodge a tax return in Australia, as was quoted in this example where an accountant lodged amended returns, which the poster referred to as representations. However I don't believe the example covers this income.

 

I don't know whether I'm in the knee jerk or coin drop phase but at this stage I have no intention of going to the ATO with such a question

[Mike Lister]

An important update from Sherrings regarding the remittance of funds during a year when the tax payer not tax resident and their subsequent taxation.

 

On 23 January 2024, the RD was asked and answered as follows, parahrased:

 

Q: If I'm not resident in Thailand for a year and I earned foreign sourced income in that year, is it taxed when I bring it into Thailand?

A: It is not taxed because you were not resident in Thailand in the year it was earned.

 

Q: What types of foriegn source income is assessoble income and subject to PIT under Section 41, Para 2 law?

A: ....those prescribed in Section 40 (1 to 8 ) but not including income that is exempt or on which tax does not have to be paid under the Revenue code.

 

Q; a lengthy question about tax paid on income overseas.

A; There is no double taxation in Thailand, tax paid overseas can be credited against tax payable.

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

 

[smedly]

1 hour ago, Mike Lister said:

Q: What types of foriegn source income is assessoble income and subject to PIT under Section 41, Para 2 law?

A: ....those prescribed in Section 40 (1 to 8 ) but not including income that is exempt or on which tax does not have to be paid under the Revenue code.

vague as usual

 

 

[Mike Lister]

5 minutes ago, smedly said:

vague as usual

 

 

I suggest you read the link, I didn't retype everything that was said. I think what has been said is good news, read it and you'll see,

[smedly]

1 hour ago, Mike Lister said:

I suggest you read the link, I didn't retype everything that was said. I think what has been said is good news, read it and you'll see,

needs some clarity but overall looks positive, private or state pensions would be money accumulated while working seems to be exempt as does money deposited in foreign bank accounts (excluding interest earned), that would be my interpretation 

[Mike Lister]

1 minute ago, smedly said:

needs some clarity but overall looks positive, private or state pensions would be money accumulated while working seems to be exempt as does money deposited in foreign bank accounts (excluding interest earned), that would be my interpretation 

Most private or state pensions arise in the UK and would be subject to the UK tax process hence excluded from tax here.

 

Agreed on foreign savings accounts.

[Phulublub]

6 minutes ago, Mike Lister said:

Most private or state pensions arise in the UK and would be subject to the UK tax process hence excluded from tax here.

 

Agreed on foreign savings accounts.

Is it that simple though?

 

UK ex Military in receipt of Military pension (exempt by DTA) and state pension (assessable Income).    Tax is paid...but on which one?  Pro rata?   Likely under threshhold, but...what if post miltary life, he worked and obtained a further private pension (Assesable Income?)....then it gets muddy.

 

State Pensions are most definitely not "money accumulated while working".  Paying NI gives an entitlement to the Pension.  There is no pot of money.  Not sure the status of private pensions, either defined contribution or defined benefit.

 

PH

[Mike Lister]

5 minutes ago, Phulublub said:

Is it that simple though?

 

UK ex Military in receipt of Military pension (exempt by DTA) and state pension (assessable Income).    Tax is paid...but on which one?  Pro rata?   Likely under threshhold, but...what if post miltary life, he worked and obtained a further private pension (Assesable Income?)....then it gets muddy.

 

State Pensions are most definitely not "money accumulated while working".  Paying NI gives an entitlement to the Pension.  There is no pot of money.  Not sure the status of private pensions, either defined contribution or defined benefit.

 

PH

If you have three UK pensions (or more) in the same UK pot and the sum total has been subject to a UK tax return, UK tax will have been paid on the sum total, assuming the total is in excess of the Personal Allowance.  Regardless of whether UK tax has been paid or not, they have all been subject top the UK tax return process, that is what counts. Once that is done, the total of those funds is free of Thai tax, when remitted to Thailand. And since all of those pensions are UK tax paid, you don't even need to declare them in Thailand.

[Phulublub]

47 minutes ago, Mike Lister said:

If you have three UK pensions (or more) in the same UK pot and the sum total has been subject to a UK tax return, UK tax will have been paid on the sum total, assuming the total is in excess of the Personal Allowance.  Regardless of whether UK tax has been paid or not, they have all been subject top the UK tax return process, that is what counts. Once that is done, the total of those funds is free of Thai tax, when remitted to Thailand. And since all of those pensions are UK tax paid, you don't even need to declare them in Thailand.

I read that as you saying that any income (or is it just pension income?) that has been declared in the UK does not need to be declared.  If so, since we all submit self assesment returns, then all UK taxpayers (even if they dont have sufficient income to actually pay any tax) are all outside the scope of these regulations and we can all safely ignore them.

 

That's not how I read the rule though...even if declared and taxed then if we remit here more than the 120K (or 190K for 65+) non-exempt income, we should file a return and may be liable to tax if the Thai total is more than that already paid.

 

PH

[Mike Lister]

1 minute ago, Phulublub said:

I read that as you saying that any income (or is it just pension income?) that has been declared in the UK does not need to be declared.  If so, since we all submit self assesment returns, then all UK taxpayers (even if they dont have sufficient income to actually pay any tax) are all outside the scope of these regulations and we can all safely ignore them.

 

That's not how I read the rule though...even if declared and taxed then if we remit here more than the 120K (or 190K for 65+) non-exempt income, we should file a return and may be liable to tax if the Thai total is more than that already paid.

 

PH

My reading at present is that as long as the income was earned prior to 1 January 2024, or has been taxed in the UK, it is free of Thai tax. That being the case, it is excluded income that doesn't need to be declared on the Thai tax return. 

 

I will read all this again in the morning, today has been another long day, I'm drained and probably couldn't spot an elephant in a hay stack right now. 🙂

[smedly]

10 hours ago, Mike Lister said:

Most private or state pensions arise in the UK and would be subject to the UK tax process hence excluded from tax here.

 

Agreed on foreign savings accounts.

private pensions are in effect long term savings with rules as to how the money is released, I chose  to take it spread since aged 50, i am not old enough for state pension in the uk but i would interpret that as long term savings also, paying into a fund over time - granted not all countries are the same ,, i have no clue how it works anywhere  

[smedly]

11 hours ago, Phulublub said:

State Pensions are most definitely not "money accumulated while working".

yes they are

 

you contributed to a fund your whole working life which becomes payable when certain conditions are met

 

I think we can all bin this discussion 

[Mike Lister]

34 minutes ago, smedly said:

private pensions are in effect long term savings with rules as to how the money is released, I chose  to take it spread since aged 50, i am not old enough for state pension in the uk but i would interpret that as long term savings also, paying into a fund over time - granted not all countries are the same ,, i have no clue how it works anywhere  

Unfortunately, governments and the finance industry don't see things the same way. The fact is there's a tax advantage to what you call long term savings, which means contributions are tax free. Savings on the other hand, apart from some ISA's, are not in the same class and are structured differently.  The good news Smedly is that your pension wont attract tax in Thailand when it is remitted here. As we've said from the outset, the purpose of the new tax rules has always been to tax evaders and ensure everyone pays tax somewhere. The fact that your pensions are subject to the UK tax process, means your are free and clear.

[TigerandDog]

17 hours ago, Bluetongue said:

I have no doubt that the accountant is an expert and probably most of what he says would be correct for most Australian taxpayers. However here is a cohort of over 60 government and military pension receivers whose pension is mostly taxable (due to some long ago Treasurer deeming unfunded superannuation benefits as having come from an untaxed source.) Some years ago it was 400000 people, it would be less now due to attrition. The point being that such people have to lodge with the payer, usually Comsuper, a declaration which asks if you are or are not a resident of Australia. If you are not you lose access to the tax free threshold and will be taxed 32% on the portion considered to be from an untaxed source (most of it). This money is deducted prior to payment. Thailand has no right to tax this money under the DTA . The only way to get a refund of some or all of this money would be to lodge a tax return in Australia, as was quoted in this example where an accountant lodged amended returns, which the poster referred to as representations. However I don't believe the example covers this income.

 

I don't know whether I'm in the knee jerk or coin drop phase but at this stage I have no intention of going to the ATO with such a question

There is 1 question you need to ask yourself:

 

#1. are you a tax resident of Australia OR Thailand. Based on your comment it appears that you are a tax resident of Thailand.  Therefore under section 4 of the DTA ComsuperAustralia CANNOT legally tax you. With regards to Comsuper, have you ever made aware that as a tax resident of Thailand under the terms of the Oz/Thai DTA they cannot legally deduct the 32% tax from your pension and that Thailand is the ONLY state where you are liable to pay income tax, and that they need to be making representations to the ATO on your behalf to recover the tax that has been improperly deducted.

 

My guess is that Comsuper are either not aware of the DTA and it's provisions or that when you have advised them that you are a non tax resident of Australia you have not made them aware that you are a tax resident under Thai tax law and that the terms of the DTA prevent them from deducting any tax from your pension. 

 

I'd be contacting Comsuper and asking them why they aren't complying with the Thai/Oz DTA. It would be interesting to hear their response to that enquiry.

[UWEB]

On 2/1/2024 at 8:27 AM, 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

I guess you are right, but the real impact for House/Condo sales will start in the second quarter of the year. Who had the plans to buy a House or Condo in the first three month of 2024 probably has transferred the needed Money before end of 2023.

[Mike Lister]

An unnecessarily argumentative post has been removed.

 

10. You will not post troll messages. Trolling is the act of purposefully antagonizing forum members by posting controversial, inflammatory, irrelevant or off-topic messages with the primary intent of provoking other members into an emotional response or to generally disrupt normal on-topic discussion.

[roo860]

37 minutes ago, UWEB said:

I guess you are right, but the real impact for House/Condo sales will start in the second quarter of the year. Who had the plans to buy a House or Condo in the first three month of 2024 probably has transferred the needed Money before end of 2023.

Me

[Ems3]

Not sure if this is addressed elsewhere. What could happen if I were to be gifted UK property in 2024 while tax resident (>180 days) in Thailand? The property would be rented in the UK, not sold, and I assume I'd have to pay rent on any income I bought over to Thailand relating to this next year but presumably not if it remains in the UK. 

 

Most importantly, is there any risk of Thailand going after global income with these new tax rules? Could the property itself be looked on as income received in a year when I was a Thai tax resident? Earlier in the thread comments seem fairly clear that it will only be income remitted to the country, has this been spelt out clearly anywhere? 

[Ems3]

41 minutes ago, couchpotato said:

You are thinking too deeply...nobody really knows what's going to be the final regulations (if they did we wouldn't need these hundreds of needless posts), plus your questions are way out in left field, so wait a while until the Thai IRD make final regs (or not).

 

Agree it's a bit left field and unlikely to happen. But the worldwide income question is certainly a concern - both Cambodia and Vietnam apply tax this way.

 

Is there any clear statement that's been released regarding excluding income not remitted to Thailand (similar to the Revenue Department clarification that pre 2024 income would not be assessible)? 

[Phulublub]

17 hours ago, smedly said:

yes they are

 

you contributed to a fund your whole working life which becomes payable when certain conditions are met

 

I think we can all bin this discussion 

There is no "fund" that you contribute to. 

 

You pay for current expenditure while working and that includes the pensions being paid at that time.  When you come to draw a state pension then, if you have paid sufficeint contributions, you are entitled to a benefit paid for by the then cirrent taxpayers.

 

PH

 

[Mike Lister]

5 hours ago, Ems3 said:

Not sure if this is addressed elsewhere. What could happen if I were to be gifted UK property in 2024 while tax resident (>180 days) in Thailand? The property would be rented in the UK, not sold, and I assume I'd have to pay rent on any income I bought over to Thailand relating to this next year but presumably not if it remains in the UK. 

 

Most importantly, is there any risk of Thailand going after global income with these new tax rules? Could the property itself be looked on as income received in a year when I was a Thai tax resident? Earlier in the thread comments seem fairly clear that it will only be income remitted to the country, has this been spelt out clearly anywhere? 

You would still have to pay tax on the rental income in the UK, even if the property was gifted.

 

No, there is almost no chance that non Thai's will be taxed on worldwide income.

 

And no again. the gift you receive in the UK will not be viewed as income here, it is a gift and Thailand also has gift tax laws.

[Mike Lister]

4 hours ago, couchpotato said:

You are thinking too deeply...nobody really knows what's going to be the final regulations (if they did we wouldn't need these hundreds of needless posts), plus your questions are way out in left field, so wait a while until the Thai IRD make final regs (or not).

I'm not too sure about that.   I think we have pretty good picture of the final set will look like now.

[Mike Lister]

3 hours ago, Ems3 said:

 

Agree it's a bit left field and unlikely to happen. But the worldwide income question is certainly a concern - both Cambodia and Vietnam apply tax this way.

 

Is there any clear statement that's been released regarding excluding income not remitted to Thailand (similar to the Revenue Department clarification that pre 2024 income would not be assessible)? 

YES! Only income remitted to Thailand is taxable in Thailand.

[Mike Lister]

I've removed a post that was exactly opposite of what the true situation is, income that is not remitted to Thailand remains not taxable. If you don't know the correct answer for certain, please do not post.

[CharlesHolzhauer]

20 hours ago, TigerandDog said:

at this stage I have no intention of going to the ATO with such a question

You could join https://community.ato.gov.au/s/

[Ben Zioner]

On 2/2/2024 at 7:09 PM, smedly said:

needs some clarity but overall looks positive, private or state pensions would be money accumulated while working seems to be exempt as does money deposited in foreign bank accounts (excluding interest earned), that would be my interpretation 

I admire your optimism.

[Expat68]

6 hours ago, Mike Lister said:

I'm not too sure about that.   I think we have pretty good picture of the final set will look like now.

Not sure. I am doing nothing until there are clear rules and instructions. My philosophy is and always has been and this goes for UK Tax laws as well, do not mention anything which they do not ask for