Personal Income Tax Guide (for foreigners) Thailand

[Mike Lister]

1 minute ago, JimGant said:

 

This whole subject matter has become boring and inconclusive. Think I'll dust off my LTR visa and try and figure out how to report my one-year stay period.

Yes, but most people understood that months ago. The game today is to raise awareness and inform, rather than to try and solve individual tax issues.

[Bluetongue]

I'm wondering how these arbitrary 180 day of residence rulings will be affected by time spent in other third countries for instance on holidays. Possibly silly I know. If one was not a tax resident of Thailand or the home country what happens? I have done this, departed from Australia for an extended vacation through Europe and then returned to Thailand. Presumably the whole idea of it is that you have to be resident and file somewhere. In my case I prefer to use the the tax free threshold in Australia only available to residents (for tax purposes)

[retarius]

19 minutes ago, JimGant said:

 

Essentially, yes. The formula for integrating foreign tax credits into your US tax return is interesting, if you like math riddles. Check out the instructions for Form 1116. But, if your Thai taxes on this IRA are less than the US taxes on same amount, your total tax bill between what you pay Thailand and what you pay the US will be the same as if you never filed with Thailand. And, as I think you alluded to, I have no problems paying Thailand and not the US my tax dollars/baht, as I'd rather pay to fix pot holes here than in Iowa. Timing is where it could be tricky, as you need to have your Thai tax return results (for credit purposes) prior to filing your US tax return. But an extension with the IRS is no big deal, as neither are amended returns. 

Yes, timing might be an issue. As I said (I think) I'll file US taxes for 2024 on Oct15th 2025 (having paid the taxes in the first quarter of 2024). I'm thinking if I pay Thai taxes on money remitted here during 2024 at the end of 2024, then I will have the data of how much I paid to Thailand (my deduction) by the time I file US taxes for 2024. But I'm not really sure of the tax calendar in Thailand as I have never filed taxes here. 

[NoDisplayName]

3 hours ago, JimGant said:

 

Sorry. All that money in your 401k or IRA is tax deferred income (unless you padded it with some after tax income, in which case Form 8606 would apply). Thus, when you take your annual Required Minimum Distribution or any other distributions, that now becomes taxable income in the year it is taken. So, nope, can't say it was income prior to Jan 1, 2024.

 

And, the DTA says Thailand has exclusive taxation rights on this income (if remitted). And the saving clause says you also have to declare this income on your US tax return. However, the Thai taxes would be a credit against US taxes owed.

 

The guy who agreed to this on the DTA was an idiot, as here you have years and years of tax deferred income, whereby the US collected no taxes. And now when paid out, and you're a resident of Thailand, Thailand gets  first collection rights on this money, and the US maybe no money, if the Thai credits cover the US tax. Wonderful planning, US.

 

401(K)'s, like IRA's, come in two flavors.  Traditional using pre-tax income, and Roth, using after tax income for contributions.

 

It's hard enough for 'merkan tax professionals to understand the US tax code.  Can't imagine the Thai bureaucrats will be able to wrap their minds around a gorillion pages of tax code.

 

https://www.politifact.com/factchecks/2017/oct/17/roy-blunt/tax-code-so-long-nobodys-really-sure-its-length/

 

Guess we'll have to wait and see. 

 

In the meantime, we can research the procedures for converting 401(K)'s and traditional IRA's to Roth IRA's.

 

 

Edited January 25 by NoDisplayName

[parallelman]

18 hours ago, retarius said:

Yes, timing might be an issue. As I said (I think) I'll file US taxes for 2024 on Oct15th 2025 (having paid the taxes in the first quarter of 2024). I'm thinking if I pay Thai taxes on money remitted here during 2024 at the end of 2024, then I will have the data of how much I paid to Thailand (my deduction) by the time I file US taxes for 2024. But I'm not really sure of the tax calendar in Thailand as I have never filed taxes here. 

You might find it is January. Like many here I did not have a tax number. I do have one now. I visited the local area revenue building with what I thought would the necessary info and quoted the P.161/2566 amendment. The experience was a good one and all the personnel were very polite. After they showed me the deductions I was allowed (single, retied etc.) I paid the required tax due for January 2022 to this month, which was less than what I thought it would be when considering the guide Mike Lister has supplied (and what is on the Thai Revenue website) So there are probably personal details which have to be considered during the interview. Hope this helps

[Mike Lister]

23 hours ago, BE88 said:

 

So I suppose that even those who have a pink identification card and already have a tax code?

It appears not, those people that have both Pink ID cards and TIN's tell us the numbers are different plus I can find nothing to suggest that the one is a substitute for the other.

[Mike Lister]

19 hours ago, JimGant said:

 

Me neither.

 

19 hours ago, retarius said:

Yes, timing might be an issue. As I said (I think) I'll file US taxes for 2024 on Oct15th 2025 (having paid the taxes in the first quarter of 2024). I'm thinking if I pay Thai taxes on money remitted here during 2024 at the end of 2024, then I will have the data of how much I paid to Thailand (my deduction) by the time I file US taxes for 2024. But I'm not really sure of the tax calendar in Thailand as I have never filed taxes here. 

The Thai tax calendar for 2024 is linked below:

 

https://kpmg.com/th/en/home/insights/2024/01/2024-thailand-tax-calendar-english.html

 

 

[Robin]

Thanks very much,  such valuable information.  At las I can see a way clear to continue my life in LOS.

I wonder how many potential retirees have been put off by this nonsense.

Taksin had his faults, but at least he understood some economics and gave us the Retirement visas and other benefits.

[OJAS]

1 hour ago, Mike Lister said:

It appears not, those people that have both Pink ID cards and TIN's tell us the numbers are different plus I can find nothing to suggest that the one is a substitute for the other.

 

And those of us who have received COVID jabs in Thailand will probably have had yet another 13-digit ID number stated in our certificates!

 

[OJAS]

On 1/20/2024 at 12:46 AM, UKresonant said:

Would it be the Transfer rate on the date of filing I wonder.  

 

My understanding is that it will be the relevant BOT Transfer rate on the date when your pension payment hits your Thai bank account - either as a result of a direct transfer initiated by your pension provider; or, if the payment is made to a home country bank account, when it is credited to your Thai bank account as a result of (e.g.) a subsequent SWIFT or Wise transfer. 

[TPDH]

If you're a Thai tax resident by staying here 180+ days a year and you earn foreign income (such as capital gains on crypto) that you never transfer to Thailand, do you still need to pay income tax on that income in Thailand?  

For example: If you generate income (capital gains) from crypto investments from a foreign crypto exchange and you transfer those profits to a foreign bank account. You then never transfer or use that money in Thailand, would you have any tax liability for such foreign income in Thailand? 

 

I assume no. But that would mean you can legally pay 0 in taxes on capital gains because my home country in Europe wouldn't tax it either as I'm a tax resident of Thailand. This would still make Thailand a really beneficial country from a tax perspective. 

[CapraIbex]

3 hours ago, Robin said:

gave us the Retirement visas

To which country are you referring to?

[Mike Lister]

24 minutes ago, TPDH said:

If you're a Thai tax resident by staying here 180+ days a year and you earn foreign income (such as capital gains on crypto) that you never transfer to Thailand, do you still need to pay income tax on that income in Thailand?  

For example: If you generate income (capital gains) from crypto investments from a foreign crypto exchange and you transfer those profits to a foreign bank account. You then never transfer or use that money in Thailand, would you have any tax liability for such foreign income in Thailand? 

 

I assume no. But that would mean you can legally pay 0 in taxes on capital gains because my home country in Europe wouldn't tax it either as I'm a tax resident of Thailand. This would still make Thailand a really beneficial country from a tax perspective. 

Please read the guide linked below, only funds remitted to Thailand are potentially taxable.

 

 

 

[Mike Lister]

I have updated the guide in the OP with the following information:

 

When to Apply for  TIN (Tax Identification Number)

 

"Within 60 days from the date he derives assessable income".

 

https://www.rd.go.th/english/21987.html

[Mike Lister]

Below is the link for anyone to report details of their visit to a Revenue Office, anywhere in the country. The objective is to record details of any information that was obtained as a  result of the visit, new rules, requirements etc.

 

 

[Mike Lister]

We're only two weeks into the thread and the Simple Tax Guide but the feedback has been overwhelmingly positive. I do want to acknowledge the significant contributions made by three "behind the scenes" posters, who wish to remain anonymous but who have done an outstanding job of research and suggesting ideas for how to move the topic forward. Thank you, I am extremely grateful for your efforts.

 

If anyone else has comments they wish to contribute but don't want to do so publicly, please feel free to PM me.

 

 

[Mike Lister]

A link below to the KPMG Tax News Flash page listing the latest news from the RD. It's a useful link because it's easy to read and everything is in one place. As new announcements are made, they should appear in the link:

 

https://kpmg.com/th/en/home/insights/2019/01/th-tax-and-legal-news-flash.html

 

Also linked is the Siam-Legal web page which provides useful legal commentary on tax related issues:

 

https://www.siam-legal.com/thailand-law/thailand-new-tax-on-foreign-income-an-overview/

[billd766]

6 hours ago, Mike Lister said:

A link below to the KPMG Tax News Flash page listing the latest news from the RD. It's a useful link because it's easy to read and everything is in one place. As new announcements are made, they should appear in the link:

 

https://kpmg.com/th/en/home/insights/2019/01/th-tax-and-legal-news-flash.html

 

Also linked is the Siam-Legal web page which provides useful legal commentary on tax related issues:

 

https://www.siam-legal.com/thailand-law/thailand-new-tax-on-foreign-income-an-overview/

Thank you for those 2 links.

 

For me the Siam-legal link gives a little more (but not enough) information about a person who is retired in Thailand and whose home country (UK) has a DTA with Thailand.

 

I will send them an email on Monday to see if they can clarify whether I have to pay tax on my 3 pensions.

 

I am 79, married for 24 years, and should be entitled to a higher tax allowance here in Thailand, plus I am supporting my 19 year old son, who is in his first year at university.

 

My state pension I pay no UK tax on as it is within my tax free allowance.

My military pension I pay some tax on, as combined with my state pension it exceeds the UK tax free allowance.

My company pension is taxed at 20%.

 

I read in earlier pages that my UK military is tax exempt in Thailand. Whether that is correct I don't know as it is down to the Thai RD.

 

[The Cyclist]

47 minutes ago, billd766 said:

I read in earlier pages that my UK military is tax exempt in Thailand. Whether that is correct I don't know as it is down to the Thai RD.

 

Armed Forces Pensions ( Army, Navy, RAF ) are the first pensions listed on the Uk Governments list of Government pensions.

 

As such, it is covered by a DTA and non taxable in Thailand.

 

The link to the actual Government webpage was posted in the 200 page long thread.

[billd766]

4 minutes ago, The Cyclist said:

 

Armed Forces Pensions ( Army, Navy, RAF ) are the first pensions listed on the Uk Governments list of Government pensions.

 

As such, it is covered by a DTA and non taxable in Thailand.

 

The link to the actual Government webpage was posted in the 200 page long thread.

 

Thank yo for that information.

 

If it is covered by the DTA, would I have to declare it?

[Mike Lister]

1 hour ago, The Cyclist said:

 

As yet, I have no idea, awaiting further details from the RD.

 

 

I think there are two parts to that. The first is, is it covered by a DTA, this is something that can be reviewed without waiting for anything from the RD. The second part is, if it is taxable under the DTA, how does it get declared and that may need to wait until new forms are issued. Although that second part begets the question, how do foreigners declare it currently, for those that have to.

[TroubleandGrumpy]

On 1/26/2024 at 2:44 PM, TPDH said:

If you're a Thai tax resident by staying here 180+ days a year and you earn foreign income (such as capital gains on crypto) that you never transfer to Thailand, do you still need to pay income tax on that income in Thailand?  

For example: If you generate income (capital gains) from crypto investments from a foreign crypto exchange and you transfer those profits to a foreign bank account. You then never transfer or use that money in Thailand, would you have any tax liability for such foreign income in Thailand? 

 

I assume no. But that would mean you can legally pay 0 in taxes on capital gains because my home country in Europe wouldn't tax it either as I'm a tax resident of Thailand. This would still make Thailand a really beneficial country from a tax perspective. 

NO.

[Mike Lister]

I have updated Para 6 of the document in the OP  to include the following:

 

Copies of all the Dual Tax Agreements between Thailand and other countries are available to download from the following link: https://www.rd.go.th/english/766.html

[Mike Lister]

The Revenue Guide 2023 linked below confirms the top rate of tax starts at 5 million, the document in the OP has been updated accordingly.

 

https://www.rd.go.th/fileadmin/download/english_form/080966Ins94.pdf

[Mike Lister]

With a  focus on retirees, try this to see if it makes things more understandable:

 

 

Where those things have been taxed in the home country, at a rate that is the same as or higher than Thailand, they are unlikely to be taxed here.

 

 

[Mike Lister]

There's lots of uninformed noise about not be willing to be taxed in Thailand, the question is, how many of us should be and actually want to be, but don't realise it!

 

If, as in the case of the UK, your home country, basic rate of tax is 20% and you were able to have your income taxed in Thailand, rather than in the UK, the following example may help you understand the benefit. As you can see, the advantage to being taxed in Thailand means you would save over one thousand Pounds in tax per year.

 

 

Unfortunately, the terms of the DTA's means that some foreign countries retains tax rights over certain types of income. But that doesn't stop you from exploring which parts of your income you can have taxed in Thailand and still save money.

 

 

[Negita43]

On 1/17/2024 at 7:52 AM, Neeranam said:

I have to pay tax as I work for a German company - I believe I can avoid paying tax by gifting my salary to my Thai relatives, including unworking wife/ mother-in-law, children.

If we can gift 20 million a year, then it is Hunky Dory.

I would have thought that would only be true if the "gift" came directly from the source of the money - if the "gift" came from you (if only for a brief period) then you would be subject to tax before  the act of "gifting". Equally if the "gift" came from your employer I suspect it would be treated as income and the "giftee" woulld be taxed on it.

Edited January 28 by Negita43

[Neeranam]

10 minutes ago, Negita43 said:

I would have thought that would only be true if the "gift" came directly from the source of the money - if the "gift" came from you (if only for a brief period) then you would be subject to tax before  the act of "gifting". Equally if the "gift" came from your employer I suspect it would be treated as income and the "giftee" woulld be taxed on it.

One thing I've started doing is sending one of kids in Bangkok money directly for her condo and uni expenses from my UK account. 

 

[Negita43]

15 hours ago, Mike Lister said:

With a  focus on retirees, try this to see if it makes things more understandable:

A small clarication if possible - is income retained in the UK for more tha 1 year taxable or not taxable?

Keep up the good work Mike

[Mike Lister]

9 hours ago, Negita43 said:

A small clarication if possible - is income retained in the UK for more tha 1 year taxable or not taxable?

Keep up the good work Mike

Income that is earned after 1 January 2024, is taxable, regardless of when it is remitted.