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

[Mike Lister]

4 hours ago, UKresonant said:

a. If the funds were created (and subject to tax scrutiny overseas) when not Thai Tax Resident or the are excluded, probably will work splendidly. 

b. If from (overseas) funds created whilst Thai Tax resident and have not been considered against Thai tax, I don't see how it can work either (going forward).

 

11 hours 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 recommend we park the Gift Tax questions and place it back on the list of unknows at the end of the document. The issue wont be forgotten or overlooked but it's in the same camp as the UK Personal Allowance issue in that we don't have enough information available to understand it and it requires clarification by the RD.

[UKresonant]

1 hour ago, Scouse123 said:

I won't be signing up for any LTR or any other poor value for money scheme, nor offers from the Thai government, including their poor return bonds.

 

The income tax, I will just do the wait and see approach, I am in no rush as it appears nor is the Thai government, as they have failed to expand on anything since the announcement.

 

Whatever, It's the beginning of 2024, so anything possibly due, won't be until 2025, and I see no reason for a stampede to accountants, who will try to scare us to death to use their services, nor will I join the chorus of ' I'm leaving, that is the final straw ' brigade, who are, like me, are not in possession of the facts nor implications at this stage.

 

A question for the ' experts ' though, if these rules come to pass, what about all those importing large amounts of funds to purchase condominiums and businesses?

 

Surely, one would think that the government will be shooting themselves in the foot?

 

A friend of mine, who is a long term resident and former UK tax inspector, seems to be of the opinion that this was initially aimed at people who are wealthy, such as Thais, avoiding tax and also aimed at those in the cryptocurrency industries, those working remotely in the Far East with online businesses and those involved in large stocks and share transfers.

 

 It's possible retirees are at the moment, until clarification, getting swept up with the sandstorm.

 

I moved monies a long time ago, but I still do such things as new cars and trucks etc, however, I will closely monitor expenditure in this country until I know the full implications.

That's about it, the primary target is the ones not paying tax any where, and the indigenous Thai supposed to be taxpayers compounding untaxed money's tax free., Then bringing it in Totally untaxed.

 

Everyone else secondary and coincidental targets perhaps.  Thai and expat. 

 

On money's remitted / brought in for condo and major purposes (your question to others), if the money was generated whilst the recipient was not tax resident it is remains not an issue?

 

If you made the money over a number of years whilst being a Thai resident, then you are being treated equally as per Thai resident nationals, now under the Tax changes when remitting overseas funds.  (Surely folks are not expecting superior treatment to Thai nationals in identical scenarios.) Quacks like a duck looks like a duck and the like.

 

I think there is a perhaps a sympathy argument that there should be a  period, for folks transitioning to stay full time in Thailand. Selling a personal residential property overseas (tax free in UK) moving the money over and though doing due diligence thought it was 183days rather than 180 for the tax residence, and similar, its an injustice! scenarios. 

 

The tax changes impact to me are principally  the potential time and complexity, compared with bringing in last year's already taxed money, ensuring no admin or tax errors arose (under the old rule)

 

 

[Mike Lister]

I will add the property purchase issue and the unclear way in which inbound funds might be taxed, to the list of unclear/unknowns at the end of the document.

[UKresonant]

18 minutes ago, Mike Lister said:

have said repeatedly that I don't believe the government would deliberately harm the Thai property sector, there will not be a financial penalty for importing funds to buy property here. I don't know at this stage how it will work in  practise but there will not be additional tax to pay on those funds

It will be an interesting option to avoid those now working out their additional tax bill, if it surfaces....

[Dan SG]

13 hours ago, Kalasin Jo said:

Yes it is. But it is not income if it is a credit card. It is borrowed money. That's what credit is and it needs repaying along with interest. Different with a debit card.

I would add that using foreign cards, debit or credit,  can be a very expensive way of financing life here on a cash basis, especially drawing cash at Thai ATMs no matter which bank owns the machine. A fixed charge of 220 baht each time, possible loss on the exchange rate plus commission and I don't know about you but my UK bank charges me a processing fee too dependant on the amount converted to GBP that equals or exceeds 220 baht. So all in all a total cost of at least 500 baht or more each withdrawal. Using a Wise UK debit card to make cash withdrawals even if you have previously converted to baht with them is still very expensive too.

Debatable.  I think this is only one clarification in a future circular away from being seen as remitted to Thailand.  Yes, this is a very expensive way of funding day life here too.  

 

While I appreciate not everyone has the means but this is a definite advantage of the long term resident visa.  You can put your money into offshore bonds / accounts, receive gross and bring into thailand without any tax in Thailand (or anywhere else assuming you remain Thai resident).   

[Mike Lister]

19 hours ago, maddermax said:

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

 

17 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. 

 

16 hours ago, garygooner said:

The trouble is all the repetition now. 

Time to relax & just post new info from tax experts & Thai RD.  

 

I have some sympathies with these posts but the reality is quite different from what you think. If anything, I am the one who should be fed up with the repetition because I'm the one who has to moderate all the issues and answer the questions.

 

The fact is that repeat threads such as this introduce new questions and issues that haven't been identified thus far and that require further research and an answer. This morning alone, I added four new unknows/unclear points to the end of the simple tax guide, issues that need answers. That is excellent, it means we are finding gaps and plugging them. 

 

We've also seen in this thread that several people have asked questions for the first time and have started to think about their own personal circumstances, that was the objective in all of this at the outset. There are still lots of people out there who haven't even looked at the tax issue or who haven't made a decision about what they need to do.

 

So whilst you, and I, may be tired of the repetition, please understand that you are not typical of everyone out there, you know and understand, many don't. Threads like this are really useful in helping those people to become aware and understand what's involved. If you think these threads only increase stress levels, you must have a very short line of sight, perhaps what you really mean is, they increase your stress levels because you're trying to ignore the subject!

 

 

 

[spambot]

5 hours ago, UKresonant said:

 

Some thinking out loud...

 

I expect no DTA effect at all. I would prioritise your tax residency status, of when the funds were placed into the ISA.

 

I think I would try not to remit ISA proceeds to Thailand. and have now associated an ISA to a totally different bank, to which my pre-taxed pensions are paid to in the UK. I would expect the state pension to go where my ISA goes to if / when I eventually get it as not taxed at source.

 

I think the only way to be reasonably safe, is to avoid any input to that ISA after 31st December of the year before you to become / became tax resident in Thailand, if an event does not decided your timing in lieu of any plan. Then at least that valuation point the capital value is excluded from Thai Tax, as created when not Thai Tax Resident.

 

You still have an opportunity you start another ISA the April  before the year you move to Thailand and can still deposit to that one in the UK tax year of the move. There may be multiple resident non- resident swings!

 

(If it is a Stocks and  Shares ISA it could be a churning of the funds whilst still UK Tax resident to give more recent base value points could be a goer, if you think you may later have to withdraw and remit to Thailand)

 

A corporate action could initiate a disposal scenario within the tax free wrapper, and an associated gain.

 

I would ignore events within the tax Free Wrapper in the UK, but dividends being paid out perhaps can't excepting they will be all trailed to UK expenditure, so not a remit to Thailand issue, unless a force Majeure arises.

 

Unfortunately I understand the ISA wrapper will have zero recognition in Thailand.

 

All phrased from my Non-Thai Tax resident current status view point! The UK is my centre of vital interest (DTA speak), having only one very special interest present in Thailand currently.

 

Will wait and see for further info......

 

 

 

 

You make some very good points here and on the whole I agree with your logic. Obviously much is current speculation, but speculation that is well thought out like this educates - understanding all the issues that might happen, allows the reader to better comprehend the actual situation when it does happen - Context in complexity is what drives better decisions.

[spambot]

11 minutes ago, Mike Lister said:

 

 

 

I have some sympathies with these posts but the reality is quite different from what you think. If anything, I am the one who should be fed up with the repetition because I'm the one who has to moderate all the issues and answer the questions.

 

The fact is that repeat threads such as this introduce new questions and issues that haven't been identified thus far and that require further research and an answer. This morning alone, I added four new unknows/unclear points to the end of the simple tax guide, issues that need answers. That is excellent, it means we are finding gaps and plugging them.

 

We've also seen in this thread that several people have asked questions for the first time and have started to think about their own personal circumstances, that was the objective in all of this at the outset. There are still lots of people out there who haven't even looked at the tax issue or who haven't made a decision about what they need to do.

 

So whilst you, and I, may be tired of the repetition, please understand that you are not typical of everyone out there, you know and understand, many don't. Threads like this are really useful in helping those people to become aware and understand what's involved.

 

 

 

Excellent balanced positional response.

[Ben Zioner]

I shouldn't post so early.

[retarius]

9 hours ago, gamb00ler said:

As a US taxpayer the way I think about the changed Thai tax interpretation is like this:

• all the funds in my possession at 11:59:59 of Dec. 31,2023 are defined to be non assessable savings in the eyes of the Thai RD.
• as of 01/01/2024 all interest/dividends/capital gains arising from those savings would now be assessable if subsequently brought into Thailand in my name 
• non of the special accounts such as 401k, IRA, Roth, etc will have any special status in the eyes of the Thai RD so all post 2023 income from the funds in these accounts is assessable if subsequently brought into Thailand in my name 

My accounting strategy will be to move all income after 01/01/2024 from non tax-advantaged accounts to new separate accounts that will contain only funds that the Thai RD may consider assessable.  The balances in my original accounts will remain 100% non assessable.

 

Things are more complicated for the special tax-advantaged accounts because transfers are much more cumbersome than for regular accounts.  I may just keep all my subsequent year end statements from these accounts and keep track of the balance that is assessable.  Any amounts withdrawn from these accounts will be designated as first-in first-out so that the assessable funds will be the last withdrawn.

 

If I die suddenly without sufficiently educating my heirs about what is and what isn't assessable..... at least those left behind can just spend it all and claim plausible deniability.  In reality I would assume upon my death all my potentially assessable (but foreign held) funds would become non-assessable.

 

I was thinking that for 2024 and later, potentially assessable funds held outside Thailand behave much like a pre-tax retirement account.  I will defer subjecting those funds to Thai tax by not remitting them until after I have spent as much of the non assessable funds as is practical.  That way I can continue to invest the portion that may ultimately end up in the Thai government coffers.

Thank you for this. The record keeping for the 401K might be horrendous and I would only be able to deduct any Thai taxes paid to the extent that they were below the amount that would have been paid in the US. I intend to forget the idea of paying taxes in Thailand as there seems to be no advantage to me.

 

Sadly, the 1/2/2024 date has passed for opening new accounts for existing non-IRA savings. I am going to the US soon (March) to open a new account and fill it with exactly the amount of money I plan to withdraw when I close my existing savings accounts. I plan to say, if questioned, that money if fungible and I have merely transferred the savings to an account where I can have them transferred remotely. Furthermore I was planning to gift the money, in aliquots less than 10 million to my partner here in Thailand. So I have two arguments to present. On reading the gifting rules, kindly provided by Mike Lister, any gifts from me, might not qualify as gifts and so I must take advice locally how to add this extra layer of security, as my partner and I are not married, despite having been together for 18 years. 

[Mike Lister]

9 hours ago, gamb00ler said:

As a US taxpayer the way I think about the changed Thai tax interpretation is like this:

• all the funds in my possession at 11:59:59 of Dec. 31,2023 are defined to be non assessable savings in the eyes of the Thai RD.
• as of 01/01/2024 all interest/dividends/capital gains arising from those savings would now be assessable if subsequently brought into Thailand in my name 
• non of the special accounts such as 401k, IRA, Roth, etc will have any special status in the eyes of the Thai RD so all post 2023 income from the funds in these accounts is assessable if subsequently brought into Thailand in my name 

My accounting strategy will be to move all income after 01/01/2024 from non tax-advantaged accounts to new separate accounts that will contain only funds that the Thai RD may consider assessable.  The balances in my original accounts will remain 100% non assessable.

 

Things are more complicated for the special tax-advantaged accounts because transfers are much more cumbersome than for regular accounts.  I may just keep all my subsequent year end statements from these accounts and keep track of the balance that is assessable.  Any amounts withdrawn from these accounts will be designated as first-in first-out so that the assessable funds will be the last withdrawn.

 

If I die suddenly without sufficiently educating my heirs about what is and what isn't assessable..... at least those left behind can just spend it all and claim plausible deniability.  In reality I would assume upon my death all my potentially assessable (but foreign held) funds would become non-assessable.

 

I was thinking that for 2024 and later, potentially assessable funds held outside Thailand behave much like a pre-tax retirement account.  I will defer subjecting those funds to Thai tax by not remitting them until after I have spent as much of the non assessable funds as is practical.  That way I can continue to invest the portion that may ultimately end up in the Thai government coffers.

One slight change:

 

"as of 01/01/2024 all interest/dividends/capital gains arising from those savings would now be assessable if subsequently brought into Thailand in my name".

 

 If tax is paid in the home country, on that income, it can be used to offset any tax that arises in the Thai assessment.  If that income is taxed at source (as it is in the UK), that means there may be no Thai tax to pay. 

[JimGant]

5 hours ago, Scouse123 said:

I won't be signing up for any LTR or any other poor value for money scheme

 

Lemme see..... Yeah, I had to pay 50,000 baht for my LTR visa -- but I saved 10 trips to the Imm office for annual extensions, thus saving 57,000 in fees (1900+3800) x 10, for a profit of 7000 baht, plus savings in time, effort, and gasoline. And saved myself 10 trips to the bank for those required statements. Plus, no more opportunity cost for that mandatory 800k parked in a low interest bank account. Saved 35,000 per year by no longer needing a worthless health insurance policy required for O-A extensions (BoI gladly accepted my Tricare policy, which the O-A folks wouldn't). No more 90 day reports (no big deal, except when the online system crashes). And no investment required -- just needed to flash last year's 1099s to show I earned the required amount of income. And, of course, no worries about Thai taxation, courtesy of a Royal Decree. Thus, I can sit back, have a beer, and chuckle at all the hand wringing on these tax threads. So, I don't believe the LTR visa I got was a "poor value for money scheme."

[Presnock]

18 hours ago, Presnock said:

 

 

some of those complaints could be eliminated by the Long-Term-Resident visa versus retirement O or OA, if you qualify for the wealthy pensioner (number two on the LTR list) not the super wealthy folks.

[Presnock]

16 hours 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.

Thus the need to be able to provide some official documentation that the funds have been scrubbed by the person's home country prior to applying for an exemption in Thailand.  I am fairly sure that the Thai RD won't accept a farang's verbal/signed deposition.  My opinion only.  I am in the process of getting an LTR so I can just avoid any problems no matter what they decide on this issue if they ever do in my lifetime.

[Mike Lister]

1 minute ago, Presnock said:

Thus the need to be able to provide some official documentation that the funds have been scrubbed by the person's home country prior to applying for an exemption in Thailand.  I am fairly sure that the Thai RD won't accept a farang's verbal/signed deposition.  My opinion only.  I am in the process of getting an LTR so I can just avoid any problems no matter what they decide on this issue if they ever do in my lifetime.

The Thai tax filing system is no different to that of the UK or US. Taxpayers fill out the forms, sign them and submit them, if there are no issues or you're not selected for audit, refunds are issued or tax is paid. There are no verbal depositions or needing to file supporting documentation, it's a simple tax return form.

[JuanMatus]

I see responses from Europe region.  What about US pensioners who pay taxes to US govt on every nickel they earn!  I was told by a friend that US has a treaty to not tax their citizens in other countries as they pay taxes in their homeland!  Is that true?  

[Presnock]

12 minutes ago, Mike Lister said:

The Thai tax filing system is no different to that of the UK or US. Taxpayers fill out the forms, sign them and submit them, if there are no issues or you're not selected for audit, refunds are issued or tax is paid. There are no verbal depositions or needing to file supporting documentation, it's a simple tax return form.

that is correct as I know as I file my US taxes yearly so I have documentation that my funds have been taxed but if one has not nor does not file then they don't have the documentation to prove that the funds have been taxed in their home country.

[Mike Lister]

5 minutes ago, Presnock said:

that is correct as I know as I file my US taxes yearly so I have documentation that my funds have been taxed but if one has not nor does not file then they don't have the documentation to prove that the funds have been taxed in their home country.

OK so there's an issue for those who don't file a home country return but that is noted and being researched, for anyone else it's straight forward and simple.

[atpeace]

12 hours ago, Neeranam said:

The Thai government are after very rich Thais NOT foreign pensioners taking in already taxed pensions.

I'm very confident this is the case and retirees  might have substantial tax due that wasn't the intention.  My bet is it will have little to no impact once it is implemented and the government excludes or provides loop holes for expats.  On paper the new regs are a definite concern especially for younger and unmarried retirees that have fewer means to reduce their tax bill vs the 65 up crowd.

 

I seriously doubt the intention of the new regs is to squeeze xpats for little gain in the end.  Governments throughout the world are trying to implement tax schemes that are more fair for everybody considering the current ease of working abroad or investing abroad.  Seems like a good idea and everybody should contribute but not be double taxed.

[Mike Lister]

8 minutes ago, JuanMatus said:

I see responses from Europe region.  What about US pensioners who pay taxes to US govt on every nickel they earn!  I was told by a friend that US has a treaty to not tax their citizens in other countries as they pay taxes in their homeland!  Is that true?  

I suggest you start by reading the following:

 

 

 

[atpeace]

23 minutes ago, JuanMatus said:

I see responses from Europe region.  What about US pensioners who pay taxes to US govt on every nickel they earn!  I was told by a friend that US has a treaty to not tax their citizens in other countries as they pay taxes in their homeland!  Is that true?  

The concern is that almost 50% Americans,  myself included, pay little to no tax on their federal tax.  Most to many Americans through legal tax deductions/credits pay little to nothing for the first 50K dollars each year.  In Thailand that number is reduced to around $4kand theoretically retirees would have to pay taxes on the amount above 4k that was never taxed if brought into Thailand.  All this is a guessing came but interesting nonetheless. 

 

Very little concern on my end and doing things to reduce the risk.  For example, drawing down my 800k retire visa amount so I don't bring much money into the country this year seems wise?  We will have a better idea in the coming year but why take risks that can be avoided with little effort.  This is why this thread is interesting  - easy to plan for something with more info.

[Scouse123]

2 hours ago, JimGant said:

 

Lemme see..... Yeah, I had to pay 50,000 baht for my LTR visa -- but I saved 10 trips to the Imm office for annual extensions, thus saving 57,000 in fees (1900+3800) x 10, for a profit of 7000 baht, plus savings in time, effort, and gasoline. And saved myself 10 trips to the bank for those required statements. Plus, no more opportunity cost for that mandatory 800k parked in a low interest bank account. Saved 35,000 per year by no longer needing a worthless health insurance policy required for O-A extensions (BoI gladly accepted my Tricare policy, which the O-A folks wouldn't). No more 90 day reports (no big deal, except when the online system crashes). And no investment required -- just needed to flash last year's 1099s to show I earned the required amount of income. And, of course, no worries about Thai taxation, courtesy of a Royal Decree. Thus, I can sit back, have a beer, and chuckle at all the hand wringing on these tax threads. So, I don't believe the LTR visa I got was a "poor value for money scheme."

 

 

We are all in different positions.

 

If the situation suits you, good for you.

 

Without getting into it, I am still developing and reinvesting cash and capital in properties as well as building them with my sons in the UK, I am only just back here to Thailand, February 6th.

 

These LTR arrangements don't suit me, and definitely not anything that involves investing in Thai bonds and securities.

 

The 800K method suits me, and once a year for a new extension to an immigration office 1 hour away is fine.

 

Private health insurance, I have as a matter of common sense.

[FritsSikkink]

On 2/10/2024 at 10:53 AM, Mike Lister said:

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

I understand that the person getting the gift could be taxed. 

What i can't find (on the Tax website) if the gift to your wife is a deductible from the PIT.

Same with educational fees paid for university.

[Mike Lister]

5 minutes ago, FritsSikkink said:

I understand that the person getting the gift could be taxed. 

What i can't find (on the Tax website) if the gift to your wife is a deductible from the PIT.

Same with educational fees paid for university.

Educational fees are, I don't believe Gifts are or even should be.

[offset]

4 minutes ago, Mike Lister said:

Educational fees are, I don't believe Gifts are or even should be.

Are you saying school fees are a deductible in full or is there a limit

[Mike Lister]

1 minute ago, offset said:

Are you saying school fees are a deductible in full or is there a limit

https://www.rd.go.th/fileadmin/download/english_form/220364guide-allow.pdf

 

 

[Ben Zioner]

15 minutes ago, Scouse123 said:

 

These LTR arrangements don't suit me, and definitely not anything that involves investing in Thai bonds and securities.

No need for that, just show them you pension statement and health insurance, pay the 50k and off you go. 

[Mike Lister]

6 minutes ago, offset said:

Are you saying school fees are a deductible in full or is there a limit

 

17 minutes ago, FritsSikkink said:

I understand that the person getting the gift could be taxed. 

What i can't find (on the Tax website) if the gift to your wife is a deductible from the PIT.

Same with educational fees paid for university.

Sorry guys, I need to come back to you on the university fees issue. There is an allowance to support a child in further education, to the age of 26 years I believe but uni. fees I am now unsure.

[Scouse123]

7 minutes ago, Ben Zioner said:

No need for that, just show them you pension statement and health insurance, pay the 50k and off you go. 

 

I don't get a state pension fore another six years. I've always been self-employed, even when I had property and businesses in Thailand.

 

Other cash and monies, except for a decent sized lump in a Cambodia bank, are wrapped up in building projects in the UK at the moment.

 

I can show the properties and projects in my sole name, but they are in the UK.

 

So, I don't think that would satisfy them, would it?

 

 

[Ben Zioner]

10 minutes ago, Scouse123 said:

 

I don't get a state pension fore another six years. I've always been self-employed, even when I had property and businesses in Thailand.

 

Other cash and monies, except for a decent sized lump in a Cambodia bank, are wrapped up in building projects in the UK at the moment.

 

I can show the properties and projects in my sole name, but they are in the UK.

 

So, I don't think that would satisfy them, would it?

 

 

So you don't qualify for this visa. No need to denigrate it. Ok, let's get back to tax.