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

[ChaiyaTH]

6 minutes ago, NorthernRyland said:

 

for reference here are the current US federal income brackets. State income tax varies from 0 to 13%. A median US family earns 75,000/year and individual 30,000. The individual is earning 1 million THB per year. Not sure which rate they would pay in Thailand. My wife earns ~50k THB/month and pays 14% she says.

 

 

The difference is that people earning this much in Thailand, have proper set-ups and not pay the classic tax percentages and schemes. Also the taxes in usa on this scheme, explain very well why the countries social healthcare system etc is so <deleted> up lol.

 

In most western european countries you would be at 30-40% where it is 12-22% on this example. The tax in thailand would be about the same but the issue here is that you get a EU + USA mix: maximum taxes for minimal returns.

[Lacessit]

4 minutes ago, heiri007 said:

How... will it all be enforced?

A very good question. It depends on whether the tax people can link up with Immigration to ensure visas and extensions are made dependent on tax compliance. Without that, IMO it's a toothless tiger.

 

The difficulty there will be that the tax people will be p!ssing in the soup of corrupt IO's, and making extra work in determining the residency status of each and every foreigner.

[Mike Lister]

1 minute ago, matta01 said:

You do not pay for the visa, you pay for the extension. (there is a little difference)

In almost all of the postings you read here, it states that Thailand asks for tax on your income but that is not the case. It is that they ask for tax on the money you bring into Thailand. The procedure therefore is for the moment unknown. What we do know is that there is a difference between a pensioner who has his monthly pension in a Thai bank account and a pensioner who brings money periodically into Thailand. Everything else is speculation for the moment.

I disagree, I think the process is well understood and always has been. The recent change is just to one part of a single rule, everything else remains as it has been for years. May I suggest you read the tax guide that was posted earlier, it will help clarify several points.

[ChaiyaTH]

5 minutes ago, NorthernRyland said:

They're probably going to have to get immigration involved but if they can't achieve that then they'll have to keep track of foreigners and audit them. I assume they'll at least make us file an affidavit at immigration stating we paid taxes. 

Even if they would be doing that, and started actual enforcing it, people would just pay minimal nonsense tax or leave Thailand. In both cases Thailand + economy loses. We should be happy anyway, less tourism + less of money from long stayers + more printing money & minimal foreign money inflow, maybe a cheaper baht for us many years to come.

[AjarnMartin]

4 hours ago, jacko45k said:

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

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

[Mike Lister]

1 minute ago, ChaiyaTH said:

Even if they would be doing that, and started actual enforcing it, people would just pay minimal nonsense tax or leave Thailand. In both cases Thailand + economy loses. We should be happy anyway, less tourism + less of money from long stayers = minimal foreign money inflow, maybe a cheaper baht for us.

Expat inflows do nothing for the value of THB, all the movement comes from exports which are in excess of USD22 bill month and which are mostly settled in USD.

[Thingamabob]

This article is misleading. There is nothing new about what the author calls tax changes. What may, or may not, be relevant is the extent to which existing laws wiil be more rigorously enforced than currently. 

[Mike Lister]

A post critical of the news article was removed, in accordance with forum rules. The news team works hard to find relevant articles to post, their efforts are appreciated.

[Lacessit]

2 minutes ago, Mike Lister said:

I disagree, I think the process is well understood and always has been. The recent change is just to one part of a single rule, everything else remains as it has been for years. May I suggest you read the tax guide that was posted earlier, it will help clarify several points.

I bring funds into Thailand periodically. They may be provable savings prior to January 2024, or subsequent savings arising from a pension.

How is the RD supposed to tell the difference? If it's transferred into an account held jointly with a Thai, what then? Is the RD able to mandate the reporting of all overseas transfers of foreigners? How does it determine the residency status of each foreigner?

 

 

[Mike Lister]

Just now, Lacessit said:

I bring funds into Thailand periodically. They may be provable savings prior to January 2024, or subsequent savings arising from a pension.

How is the RD supposed to tell the difference? If it's transferred into an account held jointly with a Thai, what then? Is the RD able to mandate the reporting of all overseas transfers of foreigners? How does it determine the residency status of each foreigner?

 

 

It's not the RD job to determine anything about those funds, it's yours! You need to do that and to tell them what they are when you file your tax return.

 

Tax residency is determined by spending a cumulative 180 days or more per calendar year in Thailand.

[happydreamer]

Ive actually found the tax rates here to be much higher than what they are at home.

[Mike Lister]

1 minute ago, happydreamer said:

Ive actually found the tax rates here to be much higher than what they are at home.

Where are you from?

 

The lower end and top end rates for over aged 65 year olds are lower than the UK but the middle band is slightly higher. For a younger persona without TEDA, the difference could be significant.

[The Cyclist]

17 minutes ago, oldestswinger said:

For what it's worth, about a week ago I went to my local tax office in Bangkok and told them that I wanted to apply for a tax identification number (TIN).

They asked if I had any income arising in Thailand. I replied that I did not and lived on my pension from the UK.

They said that I therefore did not need a TIN and would not issue one.

 

That takes us to RD Offices in Bangkok / Pak Chong / Ubon and Nan all saying the same thing.

 

Another erroneous article, probably good for 50 pages of nonsense.

 

Any article that states " All income to be taxed " give it a good, stiff ignoring.

[4MyEgo]

I would suggest when the article is talking about pensions below, inverted commas, they are not talking about Age Pensions, however, they can tax Age Pensions if they decide to under Article 18 of the DTA for Aussies, but can't see this happening personally as they could have done this from 1989 when the DTA was agreed upon, so why bother now ?

 

I believe this is more so aimed at the "Wealthy Pensioners" drawing down from sourced funds like superannuation schemes and other investment vehicle's that will be taxed in Thailand, and those individuals being taxed here in Thailand can apply for credits back in their country, where the funds came from.

 

Makes sense to me as Age Pensions do not get taxed in Australia if they are a resident of Thailand, therefore there would be no credits applicable for Age Pensioners.

 

Copy and pasted from the article below.

 

"Pensions, while taxed in Thailand, may find some relief through double taxation agreements with the home country".

 

"Wealthy Pensioners":

• Minimum age: 50 years old.
• Minimum annual pension or passive income: US$80,000.
• Alternative option: If your income falls between US$40,000 and US$80,000, you can compensate with a minimum investment of US$250,000 in Thai government bonds, foreign direct investment, or Thai property.

 

[wensiensheng]

I haven’t seen much said about the process of segregating overseas income from capital and then only remitting capital into Thailand.
 

The same process that non UK domicile people use for UK tax purposes. Rishi Sunaks wife being a prime example until it was highlighted when he became PM.

 

Presumably that works for Thai tax purposes if the overseas accounts show clear segregation of capital and income? Although presuming things may be a tad risky

[Lacessit]

3 minutes ago, Mike Lister said:

It's not the RD job to determine anything about those funds, it's yours! You need to do that and to tell them what they are when you file your tax return.

 

Tax residency is determined by spending a cumulative 180 days or more per calendar year in Thailand.

Effectively, I can transfer all my savings to Thailand over the next 5 - 10 years, not pay a cent in tax, and allow the pension I collect every fortnight to accumulate in an Australian bank account for the same period, correct?

Bad luck for pensioners who have Centrelink transferring their pension directly into a Thai bank, though.

[Mike Lister]

1 minute ago, Lacessit said:

Effectively, I can transfer all my savings to Thailand over the next 5 - 10 years, not pay a cent in tax, and allow the pension I collect every fortnight to accumulate in an Australian bank account for the same period, correct?

Bad luck for pensioners who have Centrelink transferring their pension directly into a Thai bank, though.

Sure, you could do that. 

[JimTripper]

Fortunately, I actually "bring in" very little to Thailand. As long as worldwide income is not taxed I'm Ok.

 

Btw, all the thai based health insurance policies I have seen have a 180 residency requirement to be valid so that puts you in the tax window if you want to be covered.

[Mike Lister]

2 minutes ago, wensiensheng said:

I haven’t seen much said about the process of segregating overseas income from capital and then only remitting capital into Thailand.
 

The same process that non UK domicile people use for UK tax purposes. Rishi Sunaks wife being a prime example until it was highlighted when he became PM.

 

Presumably that works for Thai tax purposes if the overseas accounts show clear segregation of capital and income? Although presuming things may be a tad risky

Yes you can parse that money and remit only capital, it depends on your to provide the necessary records to confirm what you say, if asked.

[matta01]

“Starting January 1st, 2024, a Thai tax resident who brings foreign-earned income into Thailand must pay Thailand income tax.”

 

For me, it is very clear that they're asking for tax on the money you bring into Thailand. That means if you have 500.000 income and you bring only 250.000 into Thailand then they count from 250.000 and not from 500.000

 

If you have tax in your home country on your income and there is an agreement you can look at what the possibilities are, normally you pay only a one-time tax on your income. I have read your text however, the individual interpretation of certain segments might differ from person to person. Such as bringing in money periodically into Thailand as income (pension)or on the total amount of pension money.

Sorry for my Englisch but I try to my best

 

[Mike Lister]

1 minute ago, matta01 said:

“Starting January 1st, 2024, a Thai tax resident who brings foreign-earned income into Thailand must pay Thailand income tax.”

 

For me, it is very clear that they're asking for tax on the money you bring into Thailand. That means if you have 500.000 income and you bring only 250.000 into Thailand then they count from 250.000 and not from 500.000

 

If you have tax in your home country on your income and there is an agreement you can look at what the possibilities are, normally you pay only a one-time tax on your income. I have read your text however, the individual interpretation of certain segments might differ from person to person. Such as bringing in money periodically into Thailand as income (pension)or on the total amount of pension money.

Sorry for my Englisch but I try to my best

 

I recommend you read the tax guide, linked earlier, it will answer most of your questions. But basically yes, only funds remitted to Thailand are potentially taxable, funds that remain outside are not.

[Lacessit]

11 minutes ago, The Cyclist said:

 

That takes us to RD Offices in Bangkok / Pak Chong / Ubon and Nan all saying the same thing.

 

 

I will be asking the RD office in Chiang Rai if I need a TIN.

[The Cyclist]

1 minute ago, Lacessit said:

I will be asking the RD office in Chiang Rai if I need a TIN.

 

I hope you don't have far to travel 

 

I was in and out in about 5 minutes, without a TIN and no need to file anything 

[Cabradelmar]

59 minutes ago, Mike Lister said:

"For a gift received by a person who is NOT an ascendant, decedent or spouse, tax is payable on the amount of the gift, in excess of THB 10 mill."

 

Only "on occasions that correspond to custom or tradition"... It's a rather limited exemption...  Essentially, songkran, chinese new year, and birthday (or funeral) - I can't think of any other openings. But sure, it's an option if you trust your Thai GF. Just be careful if you start taking this up to start giving 100s of thousand THB to a Thai GF on only 2-3 qualifying events each year.

[riclag]

42 minutes ago, oldestswinger said:

For what it's worth, about a week ago I went to my local tax office in Bangkok and told them that I wanted to apply for a tax identification number (TIN).

They asked if I had any income arising in Thailand. I replied that I did not and lived on my pension from the UK.

They said that I therefore did not need a TIN and would not issue one.

I said that I understood that from 1st Jan foreigners would be liable for tax on money brought in from abroad. They said that they had no information on this and wished me a good day.

Exactly!

when everything is all sorted , in a year or two or I get notified from the Tax agency  .Then I can make a informed assessment.

[Wrwest]

OK, we have been faced with this since late last year and the water is still over.y murky. I am being told conflicting information from tax accounting firms here in Thailand with the bottom line that no one can definitively say what will be true. Time to start leaning on our respective diplomatic/national taxing communities to press the Kingdom of Thailand to publicly state there will be no effect on long term Thai residents form foreign countries until and unless the Kingdom of Thailand gives definitive absolute rules and at least a one year notice of these rules before implementation. This will give long term foreign residents the opportunity to leave Thailand. The various diplomatic missions have the responsibility to clearly tell its nationals if the existing tax agreements/tax treaties will protect their nationals from double taxation or a complicated Thai tax reporting burden. 

[Cabradelmar]

1 hour 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?

 

Correct, less than 180 days. Accuracy is indeed vital. The day you arrive counts, and everyday you are in country prior to midnight. And it's not when your flight leaves its when you are stamped out.

[andre47]

47 minutes ago, oldestswinger said:

For what it's worth, about a week ago I went to my local tax office in Bangkok and told them that I wanted to apply for a tax identification number (TIN).

They asked if I had any income arising in Thailand. I replied that I did not and lived on my pension from the UK.

They said that I therefore did not need a TIN and would not issue one.

I said that I understood that from 1st Jan foreigners would be liable for tax on money brought in from abroad. They said that they had no information on this and wished me a good day.

you should look for a new tax office.

I went to my local revenue office and got the TIN without any questions. 

If you have a bank account in Europe the bank demands from you a TIN. When I live in Thailand more than 180 days per year I am tax resident in Thailand and I can obtain a Thai TIN.

[buriram39]

8 hours ago, webfact said:

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

 

- Cigna offers a range of visa-compliant plans that meet the minimum requirement of medical treatment, including COVID-19, up to THB 3m. For more information on all expat health insurance plans click here.

 

Get our Daily Newsletter - Click HERE to subscribe

 

Derine the word 'earned' pretty important here.

[JimTripper]

12 minutes ago, riclag said:

Exactly!

when everything is all sorted , in a year or two or I get notified from the Tax agency  .Then I can make a informed assessment.

Maybe with a large arrears tax bill & a lump sum sitting in your retirement account in a Thai bank.