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

[Mike Lister]

A trolling meme has been removed, it will be the last one!

[Mike Lister]

2 minutes ago, CharlieKo said:

I am registered as non resident, I get the state pension and was getting an income up to a couple years ago from assets. Sold those assets a couple of years ago. But I gain interest on what is now savings in the bank. I get that as a gross amount not ta deducted. My accountant told me that HMRC have said I do not need to make a UK tax return in the future. Or they will contact me if they think I need to submit a return. 

 

I suggest that what my post said is essentially the same as what you mentioned " you must still pay UK tax on any income that arises there". 

 

As a side note. I am not sure if HMRC expect me to declare the interest earned on savings to the Thai RD. When Thai RD would only be taxing income brought into the country! But and this is something I need to find out. With the Pension and interest earned, it takes me over the tax free threshold. So I am aware I may have to pay tax on that in the UK. But that would then negate paying taxes here in Thailand as my state pension would also have been taxed. 

 

Having been to my local RD when applying for a TIN, they said as long as I pay tax in the UK, they weren't interested in collecting taxes from me.

 

That is my experience.

 

   

That's all correct. Your interest earned in the UK is already subject to tax at source, ditto the Thai interest in banks here. You have the option to declare the Thai interest here or via the UK, I suggest here is easier because it is not taxable in the UK.

[CharlieKo]

5 minutes ago, Gilligan In Drag said:

How long will it take them to actually enforce these rules

I know a Thai guy who works for an American company here in Thailand his wages are sent from the US. His local RD contacted him about him not paying any tax. He was able to show he was taxed in the US. So actually if the RD think you should be paying tax. They know where to find you!

[ChasingTheSun]

Is this the bottom line for those who already had significant capital/assets overseas already at December 31 2023?….
 

This new tax grab only applies to expats residing in Thailand who live off of their overseas pension/biz/investment income and cap gains which is generated after December 31 2023 and brought into Thailand?

If you simply bring in capital that was existing pre-2024 into Thailand you will be tax exempt on that pre-2024 capital.

Income/cap gains generated after December 31 2023 is never taxed in Thailand unless it is brought into Thailand at a future date.

[Mike Lister]

9 minutes ago, ChasingTheSun said:

Is this the bottom line for those who already had significant capital/assets overseas already at December 31 2023?….
 

This new tax grab only applies to expats residing in Thailand who live off of their overseas pension/biz/investment income and cap gains which is generated after December 31 2023 and brought into Thailand?

If you simply bring in capital that was existing pre-2024 into Thailand you will be tax exempt on that pre-2024 capital.

Income/cap gains generated after December 31 2023 is never taxed in Thailand unless it is brought into Thailand at a future date.

Yes

[ukrules]

4 hours ago, CygnusX1 said:

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)

A wise decision, always allow room for the unexpected.

[Andrew65]

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?

[Mike Lister]

I've removed a post that was incorrect and incomplete, the poster meant well but the picture he painted was the  wrong one.

 

The first 150,000 baht of taxable income is rated taxable at 0%, it is a zero rated tax band and not free income.

 

Also, there are TEDA (Tax Exemptions Deductions and Allowances) that range from 60,000 to over 400,000, based on your age and circumstances, in addition to the zero rated band..  

 

[NorthernRyland]

3 hours ago, ChaiyaTH said:

The difference is that people earning this much in Thailand, have proper set-ups and not pay the classic tax percentages and schemes.

 

If you're employed by a US company then they notify the IRS every year of your earnings regardless of where you are living. If you're evading taxes that's another matter of course. Many so-called digital nomads fall in to this category and will be paying taxes like anyone else in the US.

[JimGant]

4 hours ago, LikeItHot said:

For retirement extensions if they want to tax transfers that's fine but to have a mandatory monthly transfer and then taxing it is a scam.

There's never going to be a "withholding at entry point" for any remittances. First and foremost, because remitted cash flows can never parse what is, and what isn't, income. Most probably are after tax capital for investment, living expenses, whatever. And "withholding at source" of income earned in the US, and remitted to Thailand -- is only for non resident aliens. Automatically at 30%, but reduced to treaty rates -- normally 15% -- if the alien files a W-8BEN. So, as a US citizen, any Thai taxation will be up to your self-assessment as to what is subject to Thai taxation via the DTA. Gov't pensions and Social Security are the obvious exemptions from Thai taxes. Sucking it from a pre 2024 bank account would also make it exempt. Just keep good records, in the unlikely event that you are subject to a random compliance audit.

[JimGant]

2 hours ago, koolkarl said:

Removed by moderator

That's the biggest load of malarkey ever presented on these threads. Sadly, it will be gobbled up by the non critical thinkers -- kinda a MAGA moment in a foreign country. Jeez.

[JimGant]

Quote

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

 No!!!!

[JimGant]

1 hour 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'? 

 

Cost of property, plus subsequent capital improvements, certainly aren't income. Profit on the sale (cap gains) would be subject to taxation -- but not double taxation.

[Mike Lister]

I removed a post that was just too much bizarre speculation about the prospects downstream, not healthy, not for us or you!

[xtrnuno41]

Translated to English, a man in Thailand: 

 

"Since I'm only 52 and I don't have a pension or something like that yet. receive, I live in Thailand from my savings. Now I noticed that 15% tax was withheld from the interest I received and I started looking further.

I came across some information on this site https://www.rd.go.th/english/6045.html I thought it was strange that I had 15% withholding, but that according to the tax brackets nothing had to be paid. It now appears that you can reclaim/deduct this money from your tax return.

I am not an expert and went to the municipality (with my wife of course). I received very good help there, the lady behind the counter created a tax number and sent me to my bank for a statement of the interest and tax paid by me.

Today she completed the tax return for me and if all goes well, I will soon receive the tax withheld by the bank back, so let's keep our fingers crossed...

Perhaps interesting for those who have virtually no tax income in Thailand or have to pay less than 15% in tax."

 

He had to find out that he was taxed. No one really telling him , you have to find out on bank info.

Bank is holding tax, even he didnt had a TIN. He went for it later.

So above 20000 baht interest. The story doesnt tell explicit if it was on whole year 2023, as that would be weird, as Thailand says no tax before 2024.

Or he had then a very good bank account with lots of money? Just in 1 month over 20000 baht of interest? Ok maybe so. Fact is your bank is holding tax, even you dont have TIN.

If you want to benefit the deductions, YOU MUST get that TIN. They force you to act, or not then you loose, but hold tax anyway. Sadly the man isnt responding further, so I dont know more details.

 

[Mike Lister]

3 minutes ago, xtrnuno41 said:

Translated to English, a man in Thailand: 

 

"Since I'm only 52 and I don't have a pension or something like that yet. receive, I live in Thailand from my savings. Now I noticed that 15% tax was withheld from the interest I received and I started looking further.

I came across some information on this site https://www.rd.go.th/english/6045.html I thought it was strange that I had 15% withholding, but that according to the tax brackets nothing had to be paid. It now appears that you can reclaim/deduct this money from your tax return.

I am not an expert and went to the municipality (with my wife of course). I received very good help there, the lady behind the counter created a tax number and sent me to my bank for a statement of the interest and tax paid by me.

Today she completed the tax return for me and if all goes well, I will soon receive the tax withheld by the bank back, so let's keep our fingers crossed...

Perhaps interesting for those who have virtually no tax income in Thailand or have to pay less than 15% in tax."

 

He had to find out that he was taxed. No one really telling him , you have to find out on bank info.

Bank is holding tax, even he didnt had a TIN. He went for it later.

So above 20000 baht interest. The story doesnt tell explicit if it was on whole year 2023, as that would be weird, as Thailand says no tax before 2024.

Or he had then a very good bank account with lots of money? Just in 1 month over 20000 baht of interest? Ok maybe so. Fact is your bank is holding tax, even you dont have TIN.

If you want to benefit the deductions, YOU MUST get that TIN. They force you to act, or not then you loose, but hold tax anyway. Sadly the man isnt responding further, so I dont know more details.

 

This is normal. All bank interest is deducted 15% tax at source, some banks will not do this if you show them a TIN but not all. Tax paid on interest on Fixed Deposits cannot be stopped, you must reclaim this via a tax return.

[JimGant]

7 hours ago, retarius said:

Thank you for this. I have a 401K account in the US into which untaxed funds went during my working life. It is really deferred income, and so the US taxes any distributions you take. Up to age 70 you can opt not too take any distributions. As I understand it (and I may be wrong), under the US DTA, you can opt to pay the tax in either jurisdiction, Thailand or US.

 

Actually, Required Minimum Distributions (RMD) now begin at age 73. And, the money in your 401k account is not "deferred income," -- it's earned income in the year paid, with deferred taxation. Thus, all that money paid into your 401k account pre 2024 is exempt from Thai taxation. But, of course, like all worldwide income, it is taxable by the US.

 

If you take an RMD in 2024, and then remit it to Thailand -- per the DTA, Thailand has exclusive taxation rights on that RMD. But the US also gets to tax it, due to the treaty's saving clause that trumps all DTA language. But here, as Thailand has primary/exclusionary taxation rights -- they get to keep all the taxation, and the US only keeps what's left after applying the Thai taxation credits. Sounds fair to me -- country where I live gets to use my taxes to their and my benefit.

[geisha]

7 hours ago, retarius said:

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

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

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

The position on gifts might end up murky.

I think you’ll need to see a solicitor specializing in such area to make sure your partner is comfortable after your death. But be careful of protecting yourself too.

[buriram39]

A pension in Australia is 'exempt' income. Therefore under a dual tax agreement has been fully taxed in Australia. I am interested to hear any response on this and I am sure we are not yet completely informed.

[Gknrd]

Capital gains are a big part of my income. I personally would not consider living there . Just me I guess. Another cog in the wheel for retirement IMHO. Don't want to do the yearly extension, Don't want to do the 90 day reports, Do not want to deal with the Thai tax man. Not to mention all the rules that go along with retirement there for US expats. Pass big time.

Like the old saying goes "Nice to visit, but would not want to live there"

 

[JimGant]

17 minutes ago, Mike Lister said:

This is normal. All bank interest is deducted 15% tax at source, some banks will not do this if you show them a TIN but not all. Tax paid on interest on Fixed Deposits cannot be stopped, you must reclaim this via a tax return.

 

My wife's bank accounts don't have any withholding, since they're well short of the 20000 baht in interest that the Code then requires withholding of everyone -- plus her accounts are only registered with her Thai ID -- no US dual citizen connection. Now mine, of course, are registered with a US connection, thus a 15% withholding. Here's what the US-Thai DTA says about non-discrimination:

 

Quote

Article 26: Non-Discrimination

Paragraph 1 provides that a national of one Contracting State may not be subject to
taxation or connected requirements in the other Contracting State that are other or more
burdensome than the taxes and connected requirements imposed upon a national of that other
State in the same circumstance.

 

Hmmmm. Already a foot in the door in thwarting treaty language.

[dlclark97]

13 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

 

Not sure how this short write up succeeded in any of the following.  "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."

[CartagenaWarlock]

1 hour 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?

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.

[xtrnuno41]

47 minutes ago, Mike Lister said:

This is normal. All bank interest is deducted 15% tax at source, some banks will not do this if you show them a TIN but not all. Tax paid on interest on Fixed Deposits cannot be stopped, you must reclaim this via a tax return.

Mmmm, ok. From his story, I red he was surprised.

On the other hand the story is missing a time line to be sure.

But as he was surprised, I assumed he is longer in Thailand and didnt  had before or he didnt notice or his money grew to have past the limit in interest. Or even this was the first time ever, I excluded, maybe wrong, that option?

Could be possible, as you say it is taxed all time.

As long as you stay under limit, you are not taxed then according to https://www.rd.go.th/english/6045.html . section interest ?! Right?

[Flink]

So if I'm reading this right, my UK pension now has to be declared when I submit my tax return. However, in the UK my pension falls below the minimum figure for tax so it is not taxed in the UK but could now be taxed in Thailand? How is that even legal?

[UKresonant]

7 hours ago, creative1000 said:

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

So it would probably be covered by the pre-2024 dis-regard, if you still have the paper work. (The interest on such savings has to be considered, if Thai Tax resident after Jan 2024, and later remitted to Thailand)

 

Assuming the tax situation is probably as understood time now, if you asked the same question in 2034 it would depend on whether you were Thai tax resident when youn earned the income, if you were, it would be potentially taxable, if you brought it in to Thailand, at any time in the future. (read the English translations of RD 162/2566, see if it explains ) 

 

So from now on the interest on the savings will likely become Thai taxable as soon as you exceed the 179days in Thailand that year, whenever you bring it into Thailand from now on...

[1happykamper]

7 hours ago, Drumbuie said:

All the things the government contributes towards. You may mock Thai policing ( and I'm sure you do) but try living in a country with no effective policing or judicial system *at all* for a while... and then you might see it differently.

Ditto provision and distribution of electricity, public transport systems etc. A country with a completely uneducated population and no public health services is also not much fun to live in. 

I'll be happy to pay some tax here, as I was in my own countr, even though a lot is mis-spent, because the alternative is a lot worse. 

You presume a lot cup cake. I pay plenty of taxes here in LOS... 

[Mike Lister]

27 minutes ago, Flink said:

So if I'm reading this right, my UK pension now has to be declared when I submit my tax return. However, in the UK my pension falls below the minimum figure for tax so it is not taxed in the UK but could now be taxed in Thailand? How is that even legal?

Please read the link below and come back to me with anything that is unclear.

 

[Derek B]

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.

[UKresonant]

8 hours ago, trevoromgh said:

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

If you spend less than 180 days cumulatively in the calendar year your not tax resident in Thailand.

 

Then years in to the future it would only be if your bringing in assessable income generated from a year you were over the 179 days in Thailand. (After 2023)