Expat Tax Twists in Thailand: Navigating the New Landscape in 2024

[webfact]

A new reality is dawning for expats in Thailand.

 

A significant overhaul of the Thai tax system, effective January 1st, 2024, has thrown a curveball at the expat community, raising concerns and prompting a scramble for solutions.

 

This article delves into the intricacies of this new tax tango, offering a roadmap for expats to navigate the complexities and unlock potential strategies to secure their financial future in the Land of Smiles.

 

Previously a haven for foreign income, Thailand’s tax code offered a sweet deal to expats:

 

Foreign earnings stashed abroad remained blissfully untaxed. However, the new year has ushered in a paradigm shift. Now, all foreign earned income brought into Thailand by tax residents, including expats, is subject to personal income tax. This marks a significant departure from the past, leaving many expats wondering how to navigate this uncharted territory.

 

Understanding the Old and the New:

 

To grasp the full impact of the changes, let’s rewind to the pre 2024 era. Expats enjoyed the freedom of keeping their foreign income untaxed as long as it remained outside Thailand. Income earned and brought into the country within the same year was subject to tax, but passive income like pensions and investments from abroad existed in a grey area, with no clear guidelines.

 

Fast forward to 2024, and the landscape has transformed. The new law dictates that all foreign earned income remitted to Thailand by tax residents is subject to personal income tax.

 

By Online Reporter

Top File photo. For illustrative purposes only.

 

Full story: HUA HIN TODAY 2024-02-10

 

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[Bobthegimp]

The article is worth a read.

 

Their take is that this is a "tax the poor" scheme, whereby people can give gifts up to 20 million baht to their spouse or be here on a Long Term Resident's Visa and pay zero tax.  They claim that dual tax agreements might provide "some" relief for pensioners, where most tax treaties strictly forbid dual taxation of pensions.  

 

We'll see. 

[MartinL]

From the linked article:-

 

"John, a retired teacher, received his UK pension .... John could potentially qualify for the “Wealthy Pensioner” category once he reaches 50 years old in a few years".

 

So 'John' appears to be retired from teaching in his mid-40s or earlier. I can't imagine that any UK teachers' pension fund would allow a member to draw a pension at such a young age. I thought the minimum age for pension eligibility was 55 with, I seem to recall, moves being proposed to increase this minimum age. Something not right about this example but I doubt it's 'real people'.

 

[dick turpin]

Now, where did I leave that 20 million baht.

[Mike Lister]

1 hour ago, Bobthegimp said:

The article is worth a read.

 

Their take is that this is a "tax the poor" scheme, whereby people can give gifts up to 20 million baht to their spouse or be here on a Long Term Resident's Visa and pay zero tax.  They claim that dual tax agreements might provide "some" relief for pensioners, where most tax treaties strictly forbid dual taxation of pensions.  

 

We'll see. 

DTA's provide a lot of relief for many people, including the fact that any tax paid on income in the home country can be used to offset any tax liability in Thailand. Because Thailand's tax rates are generally lower than most in the West, this means that few people will pay additional tax on income that has already be en taxed overseas. You might want to read this:

 

 

 

 

 

[mikebell]

14 minutes ago, MartinL said:

From the linked article:-

 

"John, a retired teacher, received his UK pension .... John could potentially qualify for the “Wealthy Pensioner” category once he reaches 50 years old in a few years".

 

So 'John' appears to be retired from teaching in his mid-40s or earlier. I can't imagine that any UK teachers' pension fund would allow a member to draw a pension at such a young age. I thought the minimum age for pension eligibility was 55 with, I seem to recall, moves being proposed to increase this minimum age. Something not right about this example but I doubt it's 'real people'.

 

I am a retired teacher of 39 years experience. Just before I turned 60 I tried to retire & draw my pension.  I was told I would lose 5% per year on every year before my 60th birthday.  I clung on for another 2 years.

[jacko45k]

2 minutes ago, mikebell said:

I am a retired teacher of 39 years experience. Just before I turned 60 I tried to retire & draw my pension.  I was told I would lose 5% per year on every year before my 60th birthday.  I clung on for another 2 years.

Perhaps a typo there? Clinging on from just before turning 60, to becoming 60 should not be 2 years time.

[Red Phoenix]

17 minutes ago, Mike Lister said:

DTA's provide a lot of relief for many people, including the fact that any tax paid on income in the home country can be used to offset any tax liability in Thailand. Because Thailand's tax rates are generally lower than most in the West, this means that few people will pay additional tax on income that has already be en taxed overseas. You might want to read this:

 

 

 

 

 

~

Yes, and the two main takeaways from this are that:

#1 - You have to get insight into the content of the DTA between your home-country (or the country where you earned the income) and Thailand, to determine whether the types of income you earned are ASSESSABLE income or whether they are exempt according to the terms of the DTA.

#2 - Irrespective whether as a result of the above research, you fall under the tresshold that you will effectively be taxed by the Thai IRS, you would have to submit an income declaration when your assessable income is above 120K (or 220K when combined with the income of your Thai wife). 

[Mike Lister]

4 minutes ago, Red Phoenix said:

~

Yes, and the two main takeaways from this are that:

#1 - You have to get insight into the content of the DTA between your home-country (or the country where you earned the income) and Thailand, to determine whether the types of income you earned are ASSESSABLE income or whether they are exempt according to the terms of the DTA.

#2 - Irrespective whether as a result of the above research, you fall under the tresshold that you will effectively be taxed by the Thai IRS, you would have to submit an income declaration when your assessable income is above 120K (or 220K when combined with the income of your Thai wife). 

There is an even more important one that comes before those two and that is if your income has already been taxed in your home country, that tax can be used to offset any tax liability here. Please read this:

 

 

[ikke1959]

Thailand want to country to be for retirees... but with all visa requirements as 65k a month per person or 800.000 per person on a bank account and now extra tax payment, combined with all kind of other general laws as alcohol sales ban, double pricing also in hospitals, scam by taxis. Thailand will never be a country to be the country to retire as they want. And worst of all is that most Thais don't even have to fill in a tax form, while some as we have seen last months ear a lot of money without any taxpaying, again double standards for the foreigners

Edited February 10 by ikke1959

[Mike Lister]

12 minutes ago, ikke1959 said:

Thailand want to country to be for retirees... but with all visa requirements as 65k a month per person or 800.000 per person on a bank account and now extra tax payment, combined with all kind of other general laws as alcohol sales ban, double pricing also in hospitals, scam by taxis. Thailand will never be a country to be the country to retire as they want. And worst of all is that most Thais don't even have to fill in a tax form, while some as we have seen last months ear a lot of money without any taxpaying, again double standards for the foreigners

There are no double standards as far as taxation is concerned, the Thai Revenue Rules don't distinguish between Thais and foreigners. 

 

Do you have a plan for where you will retire, will you be going home?

[retarius]

3 hours ago, Bobthegimp said:

The article is worth a read.

 

Their take is that this is a "tax the poor" scheme, whereby people can give gifts up to 20 million baht to their spouse or be here on a Long Term Resident's Visa and pay zero tax.  They claim that dual tax agreements might provide "some" relief for pensioners, where most tax treaties strictly forbid dual taxation of pensions.  

 

We'll see. 

I have wondered about 'gifts' to my partner here, and to whom I am not married. My situation is specific in that I wish to gift my partner as I have life shortening disease and cognitive impairment. I would like to gift her now so as to avoid her possibly having to fight for a share of my US assets when I am gone.

My ex-wife and kids are nice people but I don't really think I can trust them to look after my current partner (of 18 years) when I am not around physically or mentally to police things. 

Note there are valid, logical and legal reasons, which I will not go into here, as to why my partner and I are not married.

The position on gifts might end up murky.

[retarius]

1 hour ago, Red Phoenix said:

~

Yes, and the two main takeaways from this are that:

#1 - You have to get insight into the content of the DTA between your home-country (or the country where you earned the income) and Thailand, to determine whether the types of income you earned are ASSESSABLE income or whether they are exempt according to the terms of the DTA.

#2 - Irrespective whether as a result of the above research, you fall under the tresshold that you will effectively be taxed by the Thai IRS, you would have to submit an income declaration when your assessable income is above 120K (or 220K when combined with the income of your Thai wife). 

Thank you for this. I have a 401K account in the US into which untaxed funds went during my working life. It is really deferred income, and so the US taxes any distributions you take. Up to age 70 you can opt not too take any distributions. As I understand it (and I may be wrong), under the US DTA, you can opt to pay the tax in either jurisdiction, Thailand or US. So I suppose the challenge is then, where do you want your tax dollars to go? Here to build roads and schools (and supply all those whose noses are trough) or in the US where I get zero benefit, and where they spend too much money, imho, warmongering. My choice boils down to supporting endless war or endless corruption.

[Mike Lister]

6 minutes ago, retarius said:

Thank you for this. I have a 401K account in the US into which untaxed funds went during my working life. It is really deferred income, and so the US taxes any distributions you take. Up to age 70 you can opt not too take any distributions. As I understand it (and I may be wrong), under the US DTA, you can opt to pay the tax in either jurisdiction, Thailand or US. So I suppose the challenge is then, where do you want your tax dollars to go? Here to build roads and schools (and supply all those whose noses are trough) or in the US where I get zero benefit, and where they spend too much money, imho, warmongering. My choice boils down to supporting endless war or endless corruption.

Poster @JimGant will be best placed to advise on this.

[Mike Lister]

15 minutes ago, retarius said:

I have wondered about 'gifts' to my partner here, and to whom I am not married. My situation is specific in that I wish to gift my partner as I have life shortening disease and cognitive impairment. I would like to gift her now so as to avoid her possibly having to fight for a share of my US assets when I am gone.

My ex-wife and kids are nice people but I don't really think I can trust them to look after my current partner (of 18 years) when I am not around physically or mentally to police things. 

Note there are valid, logical and legal reasons, which I will not go into here, as to why my partner and I are not married.

The position on gifts might end up murky.

Whether or not the gift is taxable and the rate, depends on the relationship between the parties involved. 

 

https://sherrings.com/gift-tax-law-in-thailand.html

[Liverpool Lou]

1 hour ago, ikke1959 said:

most Thais don't even have to fill in a tax form, while some as we have seen last months ear a lot of money without any taxpaying, again double standards for the foreigners

All Thais with income are obliged to declare it and pay tax if applicable - many are within the exempt bracket.  Income-earning Thais do not have any exemption from filing a tax return.   Who are "the Thais earning a lot of money" who are exempted from tax to whom you refer?

[1happykamper]

.. and if I do pay taxes in Thailand.. what will I get in return ? 555

[SS1]

4 hours ago, Bobthegimp said:

The article is worth a read.

 

Their take is that this is a "tax the poor" scheme, whereby people can give gifts up to 20 million baht to their spouse or be here on a Long Term Resident's Visa and pay zero tax.  They claim that dual tax agreements might provide "some" relief for pensioners, where most tax treaties strictly forbid dual taxation of pensions.  

 

We'll see. 

 

That may be true for the LTR visa types, but I see that as the opposite for the tax-free gifts. This is a considerable loophole, that would easily allow both lower- to upper-income class expats to keep transferring enough funds to Thailand to live comfortably tax-free.  Note: gifts under 10m THB per tax year to a non-relative friend seem to be also tax-free. 

[Mike Lister]

2 minutes ago, 1happykamper said:

.. and if I do pay taxes in Thailand.. what will I get in return ? 555

The right to live here year round.

[creative1000]

Is moving money (earned 10 years ago) from a usa bank account to Thailand bank now taxable this year? I’ve heard so many answers

[Liverpool Lou]

A good article extolling the virtues of the LTR visa supplemented by anecdotal "case studies" and the usual "I don't actually know, we'll have to wait and see speculation", ending with the disclaimer that it should not be considered professional financial or tax advice and that readers are strongly encouraged to consult with a qualified financial advisor. 

The authors interesting SEC licencing/approval details can be seen here...

https://market.sec.or.th/public/orap/PersonProfile01.aspx?lang=en&personrunid=0000092919

Edited February 10 by Liverpool Lou

[charliebadenhop]

Let's say my rich aunt wants to give me B2 million to buy a house for me and my spouse....

 

Will that be taxed?

 

And if it won't be taxed, how will the Thai govt. know what is "a gift" compared to what is income?

[Cabradelmar]

Nothing new... Anyone who did their research already knows about the gifting tax laws in Thailand (which areof little help useless you are married to Thai or supporting your child with a Thai)... This poor old horse is beat and dead. 

[Mike Lister]

An inflammatory post has been removed.

[trevoromgh]

Can someone advise me if these new tax rules apply if you live in Thailand for less than 6 months of the year please?

[soalbundy]

Now that we pay tax do we have representation in parliament.....thought not. The deductions you can make on your taxable income are quite generous, my tax would work out to be around 1200 Baht per month so it's not debilitating.

[Mike Lister]

6 minutes ago, creative1000 said:

Is moving money (earned 10 years ago) from a usa bank account to Thailand bank now taxable this year? I’ve heard so many answers

Income earned before 1 January 2024 is not taxable here.

[Mike Lister]

1 minute ago, trevoromgh said:

Can someone advise me if these new tax rules apply if you live in Thailand for less than 6 months of the year please?

No, they do not

[Mike Lister]

4 minutes ago, Cabradelmar said:

Nothing new... Anyone who did their research already knows about the gifting tax laws in Thailand (which areof little help useless you are married to Thai or supporting your child with a Thai)... This poor old horse is beat and dead. 

You may wish to look more closely.

 

https://sherrings.com/gift-tax-law-in-thailand.html

[Cabradelmar]

3 minutes ago, Liverpool Lou said:

An good article extolling the virtues of the LTR visa supplemented by anecdotal "case studies" and the usual "we'll have to wait and see speculation, ending with the disclaimer that it is for informational purposes only and should not be considered professional financial or tax advice and that readers are strongly encouraged to consult with a qualified financial advisor. 

The authors interesting SEC licencing/approval details can be seen here...

https://market.sec.or.th/public/orap/PersonProfile01.aspx?lang=en&personrunid=0000092919

 

Of course... they want to raise anxiety to sell more LTRs. That entire program has been a resounding failure since its launch. Less then 7000 sold and most to NonOs getting off of retirement extensions (under the weather pensioner category). Very few net new takers for any of the other 3 categories.