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

[Yme]

If over 55 go to Cambodia. 
Arrive on a normal visa. 
Rent a serviced apartment or similar for two months
Get a 12 month retirement extension on your origina 30-day visa through an agency. 
Get a certificate of residency from the Sangkat.
Open a bank account in and download the appropriate app. 
Send a shed load of money to Cambodia and get 8.4% pa, paid monthly on a 12 mth TD. Pay 6% residence tax on the interest. Have the interest paid into your savings account linked to the app. Have your O/S pension paid into the same savings account. 
Use Wise to transfer money to yourself in Thailand (for free if on the last day of the month). Use the bank's virtual Visa, Mastercard, or UnionPay card to pay for things in Thailand. 
 

Edited February 10 by Yme

[UKresonant]

8 hours ago, CygnusX1 said:

I believe less than 180 days - vital to be accurate here! I now have a spreadsheet for days in Thailand, had intended to spend around 7 months here in 2024, now planning no more than 177 days (a delayed or cancelled flight could put me over 180 days if I don’t allow a safety margin). I think if I’m in Thailand at midnight that counts as being here for the next day?

That's what Dad does, just has to watch for variance on the Dec/Jan Trip. Belt and braces as always from previous years money so far, and pre Jan 2024 funds ongoing, so absolutely no chance of liability to tax over there.

Edited February 10 by UKresonant

[Mike Lister]

32 minutes ago, Derek B said:

Hmmmmm thinking ............. If I end up paying Thai tax on what I bring into Thailand it just means there will be that much less spent in the local community & surrounding areas. Thailand as a whole will not be any better off. At the personal & local level of "family & friends" and all kinds of estabishments all will be worse off. Effectively the tax on me will be passed on to the locals as I will have less funds to spend with them.

 

If I pay Thai income tax I expect something in return. If being taxed as a local citizen I would expect the same state benefits (whatever they are), the right to vote and relief from any Dual Pricing as a Gov quoted policy eg., National Parks & Health Care.

Expect away, those things wont happen!

 

To get health care you would need to have paid into the social security fund because that's the driver. And you want the vote...really!

[UKresonant]

4 hours ago, Andrew65 said:

A possible solution: Use the debit/credit cards from your overseas accounts to pay living expenses? Don't transfer funds into a Thai account from overseas?

If you have not declared your tax residency already to your debit card provider (bank), a non-tourist pattern of spending, in a particular country, may prompt them to ask for you to clarify. (Depending what jurisdiction your bank is located).

[spambot]

While some tax might be saved through Dual Taxation relief, in the case of a UK pensioner this might not be as clear cut as identified in the article, which says…

 

"John’s pension, while now subject to tax in Thailand, might find some relief through a double taxation agreement between the UK and Thailand."

 

The double taxation treaty means that any pension income, should it be private pensions or state pension, is taxed locally in the UK, but can not be double taxed by Thailand.

 

https://assets.publishing.service.gov.uk/media/5a80bddc40f0b623026953eb/uk-thailand-dtc180281_-_in_force.pdf

 

In the agreement between Thailand and UK, within the section that relates to UK personal allowances, how they will be treated in Thailand in set out below.

 

4) Nothing contained in this Article shall be construed as obliging either Contracting State to grant to individuals not resident in that State any of the personal allowances, reliefs and reductions for tax purposes which are granted to individuals so resident. 

 

Rewriting this in more straightforward simple words, Thailand is not required to give tax benefits, like personal allowances, to British passport holders who are living in Thailand and receiving income from the UK.

 

The UK tax free Personal Allowance for the tax year 2024-2025 is set at £12,570. If the personal allowance is not made available in Thailand then the basic state pension, which would be normally below this personal allowance when paid in UK would not be subject to UK Tax, but when when paid in Thailand (if personal allowance is not given consideration) Tax could be payable on all income not taxed by HMRC, which could be the total pension amount.

 

Quickly looking at the Thailand Tax rates  - Personal income tax (PIT) 

150,001 to 300,000 = 5%  (£3,300 - £6,700)

300,001 to 500,000 = 10%  (£6,700 - £11,100) 

Then pay 15% (PIT) rate  (between £11,100 -  £16,700)

 

A rough and dirty calculation - If all of  Pension coming in from UK was say a total value of 500,000 Baht (about same as New state Pension) and if no personal tax allowance is given consideration, while including the statutory 60,000 exemptions, but not including child or spouse or health exemptions, Taxed on 440,000 Income -  The Tax payable would be 21,500 (£475).

 

Obviously this is 'Only' if the personal allowance (Single person) is not made available for UK pension payments sent to Thailand.

 

This is not Tax advice since I have no idea better than the next, what the Thai Revenue will decide - This is only meant to identify what might be possible and is not meant to be anything other than a personal contribution to understand some of the potential issues for many UK pensioners living in Thailand. 

[pauku1]

10 minutes ago, spambot said:

.... While some tax might be saved through Dual Taxation relief, in the case of a UK pensioner this might not be as clear cut as identified in the article, which says…

 

"John’s pension, while now subject to tax in Thailand, might find some relief through a double taxation agreement between the UK and Thailand."

 

The double taxation treaty means that any pension income, should it be private pensions or state pension, is taxed locally in the UK, but can not be double taxed by Thailand.

 

 

 

A rough and dirty calculation - If all of  Pension coming in from UK was say a total value of 500,000 Baht (about same as New state Pension) and if no personal tax allowance is given consideration, while including the statutory 60,000 exemptions, but not including child or spouse or health exemptions, Taxed on 440,000 Income -  The Tax payable would be 21,500 (£475).

 

Obviously this is 'Only' if the personal allowance (Single person) is not made available for UK pension payments sent to Thailand.

 

This is not Tax advice since I have no idea better than the next, what the Thai Revenue will decide - This is only meant to identify what might be possible and is not meant to be anything other than a personal contribution to understand some of the potential issues for many UK pensioners living in Thailand. 

 

Here a small excell to play with the numbers.....

 

 

taxel.xls

[UKresonant]

8 hours ago, AjarnMartin said:

Perhaps poetic licence regarding ‘just before’ to mean when he was 58…? 🙏

Retiring at 55 he was going to have his pension benefits actuarial reduced at a flat rate of 5% per anum for every year prior to his normal retirement age of 60. I.e. 25%. So he did not retire for a further 2 years at age 57, where his reduction of retirement pension benefits would be 15%. On his occupational Defined Benefit Pension. (Not relevant to DC money purchase pensions, SIPPS etc)

But they are getting the pension paid for three more years relative to the NRA.

 

Edited February 10 by UKresonant

[Blumpie]

11 hours ago, Mike Lister said:

 

 

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

This bears repeating:  for 90 percent of retirees Thailand is NOT your home.  You are there only because of your yearly visa that is renewed every year.  Fail to meet those requirements for any reason and you're out on your ear.  

Understandably some circumnavigate the rules and that's fine and good but they do shut those loopholes down and things change.  

I would never consider Thailand my home no matter how long I am there.  Sad but reality hurts.

[ericthai]

10 hours ago, 1happykamper said:

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

cheap girls???

you also get some bonuses ..corrupt cops, pot holes in roads, expensive booze, free roaming dogs, Ganja (legal or not TBD)

hell, what more could you ask for?

[UKresonant]

7 hours ago, Robin said:

My retirement plan is t sell my property in UK and liv here on the proceeds.  Will the money from property sale be classified as 'income'?  The property is owned outright and been paid for years ago.  Not subject to UK CGT. 

All seems a very grey area.  How will RD know what is going on? 

Say I visit UK once a year and bring back £5k  in cash.  the change to ThB at one of the money changers, not a bank.  Who will know what is going on?

From 2024 on, if your over 179days in the calendar year and become Thai Tax resident, then the starting position is your under the Thai tax.

when ever you then bring gain into Thailand, which will be on Thai PIT rates. ( then of course all other considerations, DTA', it has been subject to tax etc)

 

(I made sure when doing sizable transactions in 2018, that I was not Thai tax resident that year, to eliminate the doubt.)

 

If you bring cash in and change it at the exchange booth, what do they do with the photcopy of your passport they take under a requirement of Bank of Thailand regulations?

[sherwood]

Tax, think I will just ignore the whole concept until I'm actually forced to make payment.

Sure I have to pay vat and service charges but that is ok, the rest is all a pipe dream.

In other words, <deleted> em.

Thanks

[spambot]

2 hours ago, pauku1 said:

 

Here a small excell to play with the numbers.....

 

 

taxel.xls 10.5 kB · 25 downloads

Nice Work - Thanks for doing the upload - All sensible and considered information while working as a group benefits everyone when something new like this needs better understanding.

[spambot]

49 minutes ago, UKresonant said:

From 2024 on, if your over 179days in the calendar year and become Thai Tax resident, then the starting position is your under the Thai tax.

when ever you then bring gain into Thailand, which will be on Thai PIT rates. ( then of course all other considerations, DTA', it has been subject to tax etc)

 

(I made sure when doing sizable transactions in 2018, that I was not Thai tax resident that year, to eliminate the doubt.)

 

If you bring cash in and change it at the exchange booth, what do they do with the photcopy of your passport they take under a requirement of Bank of Thailand regulations?

It might be a good plan if you have the lifestyle option to move funds into Thailand in the tax year that you are not resident just to stay under the radar. but if its just about the odd time visiting and being over the 180 days by a few days or even a few weeks these type of infrequent occurrences is probably not going to be worth the effort for the Tax to capture. The more likely first targets will probably be low hanging fruit, such as long term recurring tax paying expats on NON-IMMIGRANT VISA "O" who must provide full details where they live and a financial statement annually.

[Marco100]

Only income brought to Thailand is Taxable . ( No worldwide taxation as far as this is an amendment of an old law ) .

Patrimony exsisten before End of December 2023 are considered Savings and when imported are exempted of taxes .

This is what I got to understand till today . Any one has a Worldwide Tazation information ?

If you need to pay certain sums better do it direct from overseas .

Use Overseas Credit card to pay expenses in Thailand .

This should limit the transfer of cash to Thailand to minimum and related taxes to a reasonable ammount .

Please correct me if wrong ?

[UKresonant]

2 hours ago, spambot said:

It might be a good plan if you have the lifestyle option to move funds into Thailand in the tax year that you are not resident just to stay under the radar. but if its just about the odd time visiting and being over the 180 days by a few days or even a few weeks these type of infrequent occurrences is probably not going to be worth the effort for the Tax to capture. The more likely first targets will probably be low hanging fruit, such as long term recurring tax paying expats on NON-IMMIGRANT VISA "O" who must provide full details where they live and a financial statement annually.

For a slight overrun most likely, but with some doubt, unless they implement the Tax Clearance Certificate for individuals again, like they had in the early 90's(?) But probably very unlikely. could you imagine someone on an METV thats had one extension getting blocked at exit, unlikely hopefully.

[Mike Lister]

5 hours ago, spambot said:

While some tax might be saved through Dual Taxation relief, in the case of a UK pensioner this might not be as clear cut as identified in the article, which says…

 

"John’s pension, while now subject to tax in Thailand, might find some relief through a double taxation agreement between the UK and Thailand."

 

The double taxation treaty means that any pension income, should it be private pensions or state pension, is taxed locally in the UK, but can not be double taxed by Thailand.

 

https://assets.publishing.service.gov.uk/media/5a80bddc40f0b623026953eb/uk-thailand-dtc180281_-_in_force.pdf

 

In the agreement between Thailand and UK, within the section that relates to UK personal allowances, how they will be treated in Thailand in set out below.

 

4) Nothing contained in this Article shall be construed as obliging either Contracting State to grant to individuals not resident in that State any of the personal allowances, reliefs and reductions for tax purposes which are granted to individuals so resident. 

 

Rewriting this in more straightforward simple words, Thailand is not required to give tax benefits, like personal allowances, to British passport holders who are living in Thailand and receiving income from the UK.

 

The UK tax free Personal Allowance for the tax year 2024-2025 is set at £12,570. If the personal allowance is not made available in Thailand then the basic state pension, which would be normally below this personal allowance when paid in UK would not be subject to UK Tax, but when when paid in Thailand (if personal allowance is not given consideration) Tax could be payable on all income not taxed by HMRC, which could be the total pension amount.

 

Quickly looking at the Thailand Tax rates  - Personal income tax (PIT) 

150,001 to 300,000 = 5%  (£3,300 - £6,700)

300,001 to 500,000 = 10%  (£6,700 - £11,100) 

Then pay 15% (PIT) rate  (between £11,100 -  £16,700)

 

A rough and dirty calculation - If all of  Pension coming in from UK was say a total value of 500,000 Baht (about same as New state Pension) and if no personal tax allowance is given consideration, while including the statutory 60,000 exemptions, but not including child or spouse or health exemptions, Taxed on 440,000 Income -  The Tax payable would be 21,500 (£475).

 

Obviously this is 'Only' if the personal allowance (Single person) is not made available for UK pension payments sent to Thailand.

 

This is not Tax advice since I have no idea better than the next, what the Thai Revenue will decide - This is only meant to identify what might be possible and is not meant to be anything other than a personal contribution to understand some of the potential issues for many UK pensioners living in Thailand. 

Well spotted, you're one of those rare posters who have actually done their homework and read something, I like that. 🙂

 

One thing you may have not spotted is that there is an equivalent of the Personal Allowance on the Thai side. TEDA (Tax Exemptions Deductions and Allowances) for an over age 65 year old is roughly equivalent to the Personal Allowance. In a worst case scenario, the Thai RD disallows the UK PA, in which case the Thai TEDA compensates. In a best case scenario, the Thai RD allows the UK PA AND you  get the Thai TEDA also. 

[UKresonant]

9 minutes ago, Marco100 said:

Only income brought to Thailand is Taxable . ( No worldwide taxation as far as this is an amendment of an old law ) .

Patrimony exsisten before End of December 2023 are considered Savings and when imported are exempted of taxes .

This is what I got to understand till today . Any one has a Worldwide Tazation information ?

If you need to pay certain sums better do it direct from overseas .

Use Overseas Credit card to pay expenses in Thailand .

This should limit the transfer of cash to Thailand to minimum and related taxes to a reasonable ammount .

Please correct me if wrong ?

IMHO

Only* income brought to Thailand is Taxable.  Generally Yes if it is Earned whilst you are a Thai tax Resident, and you bring it in to Thailand, 'in year' or at any time in the future. *(could be Gains taxed as income, dividends etc). 

 

Patrimony exsisten before End of December 2023 are considered Savings and when imported are exempted of taxes . Various suggest correct

 

This is what I got to understand till today . Any one has a Worldwide Tazation information ? It is still remittance basis in most cases. a global declaration may arise in Dual taxation or when you need a Certificate of Residence from Thai RD, to present to an oversees tax authority but is still tax on remittance at the Thai end, on the examples I've seen. 

 

On the next bit, direct payments & cards I'll just comment...

Please correct me if wrong ? You have some potential to discover you may not be correct. 

Except perhaps if  what you pay for is purely out with Thailand.

[Dan SG]

13 hours ago, Robin said:

My retirement plan is t sell my property in UK and liv here on the proceeds.  Will the money from property sale be classified as 'income'?  The property is owned outright and been paid for years ago.  Not subject to UK CGT. 

All seems a very grey area.  How will RD know what is going on? 

Say I visit UK once a year and bring back £5k  in cash.  the change to ThB at one of the money changers, not a bank.  Who will know what is going on?

Yes that will be considered a gain in the year in which it is earned unless there is something under thai domestic tax which exempts the gain from the sale of a main residence (I don't know if there is or isn't).  You're right that practically this rule is difficult to enforce / monitor but tax is always on a self-assessment basis, i.e. you need to determine and declare the right income and put it in a tax return; if you don't you always run the risk it could be discovered and you're liable for back taxes, interest and penalties.  Like anything in life it's a risk / reward trade off.

[Dan SG]

9 hours ago, CartagenaWarlock said:

I try not to stay more than 6 months in Thailand, but now I have to count days. I've completely stopped sending money to my Thai account, instead using my credit cards for most purchases wherever possible and using my US debit cards to withdraw cash from ATMs.

Don't mean to be bearer of bad news but that is bringing money into Thailand! 

[DUNROAMIN]

I think I will wait until the tax office comes knocking at my door, then make a decision which path to go down.

[RichardColeman]

On 2/10/2024 at 5:21 AM, webfact said:

The new law dictates that all foreign earned income remitted to Thailand by tax residents is subject to personal income tax.

 

Again - totally unclear - Foreign EARENED income. I'm sending savings, so far as I am concerned I am giving them nothing

[Mike Lister]

1 minute ago, RichardColeman said:

 

Again - totally unclear - Foreign EARENED income. I'm sending savings, so far as I am concerned I am giving them nothing

That's imprecise wording in the article, that is not the Revenue definition.

 

If you are remitting savings that were earned prior to 1 January 2024, those savings are not taxable in Thailand. If you are remitting savings that were earned in part after that date but were taxed in the UK, they are still not Thai taxable.

[RichardColeman]

2 hours ago, Dan SG said:

Yes that will be considered a gain in the year in which it is earned unless there is something under thai domestic tax which exempts the gain from the sale of a main residence (I don't know if there is or isn't).  You're right that practically this rule is difficult to enforce / monitor but tax is always on a self-assessment basis, i.e. you need to determine and declare the right income and put it in a tax return; if you don't you always run the risk it could be discovered and you're liable for back taxes, interest and penalties.  Like anything in life it's a risk / reward trade off.

I totally disagree - the sale of an asset is the transference of an asset into cash - it is not an income. If the Thai declare ALL income to Thailand is taxable, along with the transfering of your savings(of which tax has already been paid on in your home country potentially) the entire foreign housing market will collapse.

 

Personally I think the only people that they will be going after are people that live in thailand but have money paid direct into a thai bank account by a company that cannot be shown to have paid tax on the income. Otherwise it is just a 10% tax raid on everybody's savings and transfers.

 

I am in the position of having a house in the UK that I can go back to, this effects me, my plan has always been to sell my house and bring the family to the UK ,I will just do it sooner rather than later.

 

As for those on low UK state pensions, you may as well move into that prison cell size room now if the thai government want some of your already low pension

[Mike Lister]

1 minute ago, koolkarl said:

I wrote only incoming remittances to Thailand in 2024,  have to be shown on a 2024 Thai tax return, nothing else.

We're aware that the Thai tax return form is being redesigned but nothing has been announced about what the new form may require, the changes could be minor or substantial because it is changed every year. If you have authoritative information from the Thai Revenue that confirms all incoming remittances to Thailand in 2024, must be included on the new form, it would be excellent if we could all understand that. If you have a link confirming that information, please post it.

[jacko45k]

17 hours ago, stix40 said:

Gifting Wife

So I gift my wife 1 million baht per year ..

Then we live off her money for the year 

Is that possible? 

 

How you gift 2 million baht to wife and the following year she gifts back 1 million baht back .

Is that possible??

 

 

 

Sounds like a simple attempt to avoid paying taxes.. and not in the spirit of the law.... 

[Mike Lister]

7 minutes ago, RichardColeman said:

I totally disagree - the sale of an asset is the transference of an asset into cash - it is not an income. If the Thai declare ALL income to Thailand is taxable, along with the transfering of your savings(of which tax has already been paid on in your home country potentially) the entire foreign housing market will collapse.

 

Personally I think the only people that they will be going after are people that live in thailand but have money paid direct into a thai bank account by a company that cannot be shown to have paid tax on the income. Otherwise it is just a 10% tax raid on everybody's savings and transfers.

 

I am in the position of having a house in the UK that I can go back to, this effects me, my plan has always been to sell my house and bring the family to the UK ,I will just do it sooner rather than later.

 

As for those on low UK state pensions, you may as well move into that prison cell size room now if the thai government want some of your already low pension

You can disagree all you want but Capital Gains are taxable in Thailand, albeit at the PIT rates, just as they are in any country.

 

EDIT TO ADD: There are capital gains exclusion rules that exist in one country and which may or may not be accepted in another, that is one of the key issues at the heart of this property sale question that many have asked. We don't know enough yet about the rules that the Thai RD will apply to overseas CG transactions so it needs more research.

[RichardColeman]

4 minutes ago, Mike Lister said:

You can disagree all you want but Capital Gains are taxable in Thailand, albeit at the PIT rates, just as they are in any country.

Yes, but only if the UK does not tax it when sold and the money paid direct to Thailand bank account. If it hits a UK bank account first and CGT paid in the UK, it becomes savings and not taxable for CGT a second time. Any 'income' paid direct to thailand from a business transaction od work I think is the aim of this new law. It hits savings it will effect too much of previously taxed money and destroy the housing market. 

[Mike Lister]

2 minutes ago, RichardColeman said:

Yes, but only if the UK does not tax it when sold and the money paid direct to Thailand bank account. If it hits a UK bank account first and CGT paid in the UK, it becomes savings and not taxable for CGT a second time. Any 'income' paid direct to thailand from a business transaction od work I think is the aim of this new law. It hits savings it will effect too much of previously taxed money and destroy the housing market. 

I edited my post before you posted your reply so you may not have seen that I acknowledge there are CG exclusions in some countries. The key issue is whether Thailand is obliged to accept those exclusions and regard that income as free of tax, the answer to which I do not know.

[Mike Lister]

The Capital Gains issue has appeared a number of times but we still don't have a conclusive answer. One potential answer is that the gain is pro-rata with any part of it being tax free if earned prior to 1 January 2024 and the remainder, taxable. That approach would require an accurate  valuation at 1 January 2024 which may be problematic if you try to get one retrospectively.

[maddermax]

I wish you would stop with this article as it is only causing panic.

These laws have been in place for a long time but never enforced as I believe the Government realises that this would 'kill the goose that laid the golden egg'.

Even though they do not get any income from taxing us expats they benefit in many other ways.