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

[Somrak]

42 minutes ago, Mike Lister said:

I strongly suspect from what you have written that you do not understand the new ruling. Very very few people will find themselves paying 35% tax here, unless they are extremely wealthy, have no TEDA and import substantial amount of money each year. Even then!!! 

Earning more than 1 million baht isn't rich.  In addition, I have had 800k in the bank for 20 years and have therefore lost a lot of money. 

I am sadly Not rich. 😞

[Presnock]

3 hours ago, Moonlover said:

Yes, I completely agree with you. One only has to read through a few of the postings on these threads to see that all they achieve is an INCREASED level of misunderstanding, worry and stress. And inevitably they provide ample opportunity for malcontents, of which there are many on this forum nowadays, to indulge themselves with their their anti Thai sentiments.

 

I have no intention of reacting to ANY information posted here unless it comes from an official government source.

What has been told since the very first article appeared - we go thru the same thing and we are all told again "nothing is final YET!  Until they do the final and we see that this is posted in the Royal Gazette, it could say something good or bad for no one or for everyone.  Let's wait until the final is approved and then we can act based on our own situations.

 

[Somrak]

44 minutes ago, Mike Lister said:

I strongly suspect from what you have written that you do not understand the new ruling. Very very few people will find themselves paying 35% tax here, unless they are extremely wealthy, have no TEDA and import substantial amount of money each year. Even then!!! 

 

42 minutes ago, Presnock said:

well, if your investments are over the 120K or 150K  baht then you might have to pay on that but definitely nothing on the SS due to article 21 of the DTA between Thailand and the US.  Check out the charts for needing a Thai Tax ID number.

 

I am from Switzerland.

[Presnock]

3 minutes ago, Somrak said:

 

I am from Switzerland.

my bad!  sorry

 

[Celsius]

my Thai wife has a job offer waiting for her in Thailand. She would earn enough to support both of us therefore I would probably not need to bring any money into Thailand. It would not be a great lifestyle but we are both at the point where we don't need much luxuries.

 

I was just thinking she could add me on her tax return as kee nok Farang and I wouldn't have to worry about any tax nonsense. 

[Mike Lister]

Another unnecessarily argumentative and off topic post has been removed. 

 

The source of news articles has been explained in an earlier post, as has the role played by moderation  in those articles. I have removed argumentative posts relating to this subject, any further posts along the same lines will result in formal warnings being issued.

 

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[CharlieKo]

39 minutes ago, Presnock said:

you might want to wait as pensions might not be considered "earned income".

 

I made that distinction already in my posts. But The DTA with the UK doesn't include pensions. So it could be taxed in Thailand. Though I think it doubtful. The other problem is that in the UK the tax year ends April the 5th and returns must be made by the end of July the latest. So if HMRC think I should be paying tax they will let me know. Point being, that by the time I would have to make a tax return here in Thailand, HMRC would be breathing down my neck. 

 

As I already mentioned if I have to pay tax to HMRC then Thai RD would not be interested to process any return I make. Also HMRC would be very interested if I was earning an Income here in Thailand. As I think I'm right in saying that HMRC would be very interested in collecting any shortfall between the percentage paid in Tax here and the tax paid to HMRC. 

 

Like the US, the UK think they are entitled to collect tax on global earnings!

[offset]

I think there is a double tax agreement between the UK and Thailand am I correct if so does it mean only non taxed earnings in the UK are taxable in Thailand 

[kaneko86]

Moral of the story:

Bring 3-4 times a year 9999 $ in cash

[Ben Zioner]

On 2/10/2024 at 12:02 PM, 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. 

And even then I don't see how it can work. The money I'd gift my wife would have to be remitted first and therefore get taxes as my income. In fact, I don't see who is exempt the gifter, the giftee, both? Maybe worth developing a bit here, with care.

[Mike Lister]

5 minutes ago, Ben Zioner said:

And even then I don't see how it can work. The money I'd gift my wife would have to be remitted first and therefore get taxes as my income. In fact, I don't see who is exempt the gifter, the giftee, both? Maybe worth developing a bit here, with care.

Surely you can import the funds and Gift them in the same tax year, that way they represent non-assessable income on your part and don't need to be reported.

[Ben Zioner]

9 minutes ago, Mike Lister said:

Surely you can import the funds and Gift them in the same tax year, that way they represent non-assessable income on your part and don't need to be reported.

But then it becomes assessable income of the giftee, no?

 

So if that was the case it would help mitigating the higher tax brackets, a bit.

[Mike Lister]

10 minutes ago, Ben Zioner said:

But then it becomes assessable income of the giftee, no?

 

So if that was the case it would help mitigating the higher tax brackets, a bit.

I don't think so. The transfer between gifter and receiver has to be made at some point, that transfer either takes place from a Thailand account to another Thailand account or from a UK account (say) to a Thailand account. The way in which the transfer is made and where it is made, doesn't change the nature of the transaction which is a gift.

[spambot]

13 hours ago, Mike Lister said:

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. 

Thanks for that - I appreciate the feedback.

I have factored this into the Tax calculation (But just for TEDA - Single personal allowance) arriving at £475 Tax to pay.

Also thanks to pauku1  the numbers in the spreadsheet look reasonable and are very useful in order to start some outline Tax planning. 

As you rightly point out there are other allowances (Credit Mike Lister) - Taken from one of your previous posts

TEDA = Tax Allowance, Deductions & Exemptions

PA1 = 60,000 (personal Allowance for the tax filer)

PA2 = 60,000 (deductions for spouse)

OAE - 190,000 (over age 65 years exemptions)

PD - 50% of pension received, max 100,000 (deductions for pension income received)

ZR - zero rated for tax - 150,000 (the zero rated tax band in the tax tables)

 

The big surprise is possibly for anyone new to Thailand and who requires 800,000 Baht (Retirement) to satisfy the Visa requirement and gets charged (estimated using only single person 60K personal allowance) £800 in tax just to satisfying this requirement.

 

There is going to be a lot of armchair accountants that will try and figure out ways to eliminate this tax - One way would be to ensure the transferring of any funds are in the Tax year prior to arriving. Possibly also for anyone who is already long stay, leave the country for greater than 180 days (in the same Tax year) and buffer their account with a large lump sum for the non tax year. Obviously a lot of effort and a lot of funding.

 

 

 

[Ben Zioner]

2 minutes ago, Mike Lister said:

I don't think so. The transfer between gifter and receiver has to be made at some point, that transfer either takes place from a Thailand account to another Thailand account or from a UK account (say) to a Thailand account. The way in which the transfer is made and where it is made, doesn't change the nature of the transaction which is a gift.

So what you are saying is:

- If I give 10 million to my Wife, these 10 million are non assessable for me, as they are a gift.

- and for my wife they are equally non assessable, because they are a gift.

Can't be, as no one would pay tax in Thailand... 

[Mike Lister]

3 minutes ago, spambot said:

Thanks for that - I appreciate the feedback.

I have factored this into the Tax calculation (But just for TEDA - Single personal allowance) arriving at £475 Tax to pay.

Also thanks to pauku1  the numbers in the spreadsheet look reasonable and are very useful in order to start some outline Tax planning. 

As you rightly point out there are other allowances (Credit Mike Lister) - Taken from one of your previous posts

TEDA = Tax Allowance, Deductions & Exemptions

PA1 = 60,000 (personal Allowance for the tax filer)

PA2 = 60,000 (deductions for spouse)

OAE - 190,000 (over age 65 years exemptions)

PD - 50% of pension received, max 100,000 (deductions for pension income received)

ZR - zero rated for tax - 150,000 (the zero rated tax band in the tax tables)

 

The big surprise is possibly for anyone new to Thailand and who requires 800,000 Baht (Retirement) to satisfy the Visa requirement and gets charged (estimated using only single person 60K personal allowance) £800 in tax just to satisfying this requirement.

 

There is going to be a lot of armchair accountants that will try and figure out ways to eliminate this tax - One way would be to ensure the transferring of any funds are in the Tax year prior to arriving. Possibly also for anyone who is already long stay, leave the country for greater than 180 days (in the same Tax year) and buffer their account with a large lump sum for the non tax year. Obviously a lot of effort and a lot of funding.

 

 

 

If you are over age 65 for example, your TEDA is circa 350k baht which can effectively be added to the 150k zero rated tax band giving you around 500k baht tax free in Thailand every year. Add to that the fact that any income that is remitted where tax has already been paid in the home country, will not be taxed again and that tax will be credited against any Thai tax that is due. ASSUMING, that the Thai RD allows the UK PA, for example, to remain, and that pensions are taxed in the UK, that means that almost no Thai tax will be due on a pension of an average size and where tax is due, the TEDA relieves most of the tax stress.

 

If the example is a single person under age 65, the picture changes but still the fact that the money coming from the UK is taxed there, should mean virtually no tax is payable in Thailand because UK tax tables are higher than the Thai tax tables.

[faxx]

As I understand it foreign income will not be taxable if I keep it in a Hong Kong bank account and use it to pay for a luxury vacation on Hawaii.

[Mike Lister]

12 minutes ago, Ben Zioner said:

So what you are saying is:

- If I give 10 million to my Wife, these 10 million are non assessable for me, as they are a gift.

- and for my wife they are equally non assessable, because they are a gift.

Can't be, as no one would pay tax in Thailand... 

As for the first point, hardly anyone does pay tax here, that's the big problem! But it's almost certainly not because of Gift Tax.

 

If you look at the link below and read the para, "Assessible (Taxable) Gift Income" and scroll down to part that reads, "for a  gift received by...a spouse", the rules state that up to 20 mill. is tax free. If not a spouse etc, it's 10 mill.

 

One of us appears to be missing something here on this point, I hope it isn't me. So if you can tell me where you think what I have said above is incorrect, please do.

 

https://sherrings.com/gift-tax-law-in-thailand.html#:~:text=tradition or custom-,Subject to tax on the amount of the gift received,baht in a tax year.&text=Exemption from tax as per the rules specified by Ministerial Regulation.&text=an adopted child)-,On the amount of the gift received in excess of,transfer of the immovable property. 

[Mike Lister]

5 minutes ago, faxx said:

As I understand it foreign income will not be taxable if I keep it in a Hong Kong bank account and use it to pay for a luxury vacation on Hawaii.

True

[offset]

6 minutes ago, Mike Lister said:

If you are over age 65 for example, your TEDA is circa 350k baht which can effectively be added to the 150k zero rated tax band giving you around 500k baht tax free in Thailand every year. Add to that the fact that any income that is remitted where tax has already been paid in the home country, will not be taxed again and that tax will be credited against any Thai tax that is due. ASSUMING, that the Thai RD allows the UK PA, for example, to remain, and that pensions are taxed in the UK, that means that almost no Thai tax will be due on a pension of an average size and where tax is due, the TEDA relieves most of the tax stress.

 

If the example is a single person under age 65, the picture changes but still the fact that the money coming from the UK is taxed there, should mean virtually no tax is payable in Thailand because UK tax tables are higher than the Thai tax tables.

Is the tax free allowance classed as taxed or could that be classed as taxable in Thailand

[Mike Lister]

Just now, offset said:

Is the tax free allowance classed as taxed or could that be classed as taxable in Thailand

That is the big question currently. I believe it is a case of the overseas funds having been subject to the overseas tax process rather than actual tax having been paid on every pound or baht that is remitted. But the RD need to confirm this is the case and that they will allow the UK PA.

[spambot]

14 hours ago, UKresonant said:

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.

Good information about the Tax clearance certificate - Also I think you are right METV tourists would be a big issue and rather confusing expecting Tax to be considered on Exit. There are around 2.6 million foreigners long term resident in Thailand and if eliminating the people from Lao, Myanmar and Cambodia (1.8 million), then about 800k other long term foreigners is a healthy number to start new Tax investigation activities. However probably initially the more important priority will be actual Thailand nationals, sufficiently wealthy who have been repatriating overseas funds at zero tax.

[offset]

1 minute ago, Mike Lister said:

That is the big question currently. I believe it is a case of the overseas funds having been subject to the overseas tax process rather than actual tax having been paid on every pound or baht that is remitted. But the RD need to confirm this is the case and that they will allow the UK PA.

So it is a wait and see

[Mike Lister]

5 minutes ago, offset said:

So it is a wait and see

I'm pretty sure they will allow the UK PA and other countries personal allowances and exemptions, otherwise it becomes too complex given the various tax bodies, forms and rules involved. The Thai RD wants to be sure the money you import isn't illegally sourced and that it has been declared somewhere, drilling down to exemptions and allowance is unlikely to be part of their agenda.

[offset]

9 minutes ago, Mike Lister said:

I'm pretty sure they will allow the UK PA and other countries personal allowances and exemptions, otherwise it becomes too complex given the various tax bodies, forms and rules involved. The Thai RD wants to be sure the money you import isn't illegally sourced and that it has been declared somewhere, drilling down to exemptions and allowance is unlikely to be part of their agenda.

So that means you should always bring your taxed money over during the tax year,if not it becomes saving which will be taxable 

[atpeace]

On 2/10/2024 at 12:04 PM, Mike Lister said:

Income earned before 1 January 2024 is not taxable here.

If this ends up being how taxes on pre 2024 income is treated then I would think many retirees have nothing to worry about at least for the next 5-10 years.  For example if you have 400k US dollars in savings prior to 2024 and transfer 25k each year, disregarding inflation, you are cool for 16 years.

 

I'm a US citizen and FACTA is a mutual agreement that requires foreign banks to provide account balances as well as other info.  Here is KrungThai's FACTA link - https://krungthai.com/en/content/about-ktb/corporate-governance/fatca#:~:text=FATCA requires foreign financial institutions,and US-Owned Foreign Entity. .   

 

I've read many of your posts on this subject and appreciate all the personal effort you have put into providing factual info.  I'm still uncomfortable a little with what will be implemented because I sense even you are only guessing on the outcome.  If pre 2024 earned income can be brought to Thailand without having to mess with current investment earning, I'm as happy as a clam.

[spambot]

7 hours ago, Mike Lister said:

Articles such as these help raise awareness and help educate many, we've seen ample evidence of that, that's why they are posted. If people panic it's probably because they are not informed, reading these threads helps change that.

Mike Lister is correct having Knowledge is strength. Rather than, 'War is peace. Freedom is slavery. Ignorance is strength.' George Orwell 1984.

[Mike Lister]

3 minutes ago, atpeace said:

If this ends up being how taxes on pre 2024 income is treated then I would think many retirees have nothing to worry about at least for the next 5-10 years.  For example if you have 400k US dollars in savings prior to 2024 and transfer 25k each year, disregarding inflation, you are cool for 16 years.

 

I'm a US citizen and FACTA is a mutual agreement that requires foreign banks to provide account balances as well as other info.  Here is KrungThai's FACTA link - https://krungthai.com/en/content/about-ktb/corporate-governance/fatca#:~:text=FATCA requires foreign financial institutions,and US-Owned Foreign Entity. .   

 

I've read many of your posts on this subject and appreciate all the personal effort you have put into providing factual info.  I'm still uncomfortable a little with what will be implemented because I sense even you are only guessing on the outcome.  If pre 2024 earned income can be brought to Thailand without having to mess with current investment earning, I'm as happy as a clam.

Sure, we've had to make some assumptions along the way which I think is only reasonable but there's also a large helping of fact that underpins that and it is growing every week. Reading the following link, may help, if you haven't already done so, That Q&A made life a lot easier. https://sherrings.com/foreign-source-income-personal-tax-thailand.html

[Cabradelmar]

1 hour ago, Ben Zioner said:

And even then I don't see how it can work. The money I'd gift my wife would have to be remitted first and therefore get taxes as my income. In fact, I don't see who is exempt the gifter, the giftee, both? Maybe worth developing a bit here, with care.

 

The tax liability falls on the recipient of the gift, which in this case would be your wife. However, of the amount is under the threshold and it's a gift between spouses, she isn't liable for personal income tax either. Send the money to her bank account directly from your foreign bank account. 

 

[Mike Lister]

22 minutes ago, offset said:

So that means you should always bring your taxed money over during the tax year,if not it becomes saving which will be taxable 

Even savings earned post 1 January 2024 will be OK, if overseas tax was paid on them.