Personal Income Tax Guide (for foreigners) Thailand

[OJAS]

3 hours ago, Mike Lister said:

After 1 January 2024, it's all taxable no matter when it's remitted. 

 

That presumably means that all of the income in question was actually earned after this date, as per 1 of your tables above.

[Mike Lister]

5 minutes ago, OJAS said:

 

That presumably means that all of the income in question was actually earned after this date, as per 1 of your tables above.

Yes, thanks, mine wasn't a very clear answer was it, I'll go back and edit it! :((

[OJAS]

23 hours ago, Mike Lister said:

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.

 

It does, however, appear to me unlikely that we Brits in receipt of the UK State Pension will get very far in persuading HMRC to exempt us from being taxed on that particular pension - especially given that, as you have already explained elsewhere, various allowances will mean that we shall, in practice, almost certainly not have to pay any tax on declared assessable income relating to it here in Thailand!

 

The State Pension will likely be my sole source of assessable income for RD taxation purposes since I am in receipt of a Civil Service occupational pension which is covered by the UK/Thailand DTA, and income on the sale of my UK property in late 2021, which I am still remitting to Thailand in dribs and drabs, was all earned before 1/1/24.

[Mutt Daeng]

On 1/27/2024 at 4:04 PM, Mike Lister said:

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.

I'm giving this a bump as I think it would be very useful to know sooner rather than later, how current expat taxpayers declare monies which are exempt of Thai tax because they are covered by their country's DTA (eg Gov pension). 

[JimGant]

18 minutes ago, Mutt Daeng said:

I'm giving this a bump as I think it would be very useful to know sooner rather than later, how current expat taxpayers declare monies which are exempt of Thai tax because they are covered by their country's DTA (eg Gov pension). 

 You don't declare monies that are exempt from Thai tax. Tax forms only have lines for assessable income, which is logical: Why would Thai tax collectors want their forms cluttered with figures that have no tax value?

[Mike Lister]

1 hour ago, OJAS said:

 

It does, however, appear to me unlikely that we Brits in receipt of the UK State Pension will get very far in persuading HMRC to exempt us from being taxed on that particular pension - especially given that, as you have already explained elsewhere, various allowances will mean that we shall, in practice, almost certainly not have to pay any tax on declared assessable income relating to it here in Thailand!

 

The State Pension will likely be my sole source of assessable income for RD taxation purposes since I am in receipt of a Civil Service occupational pension which is covered by the UK/Thailand DTA, and income on the sale of my UK property in late 2021, which I am still remitting to Thailand in dribs and drabs, was all earned before 1/1/24.

I agree it seems unlikely but I can't imagine how this might play out in the longer term. I keep seeing reports of people being asked where they want to be taxed, here or back home but I don't know how that stacks up against where the income arises in the first place.....work in progress perhaps.. 

[Mike Lister]

26 minutes ago, JimGant said:

 You don't declare monies that are exempt from Thai tax. Tax forms only have lines for assessable income, which is logical: Why would Thai tax collectors want their forms cluttered with figures that have no tax value?

 

47 minutes ago, Mutt Daeng said:

I'm giving this a bump as I think it would be very useful to know sooner rather than later, how current expat taxpayers declare monies which are exempt of Thai tax because they are covered by their country's DTA (eg Gov pension). 

Jim is absolutely correct, at present there is nowhere on the tax return to put non-assessable income but that doesn't mean there wont be in the future. It seems odd that taxpayers will be able to receive funds from overseas and make the determination they are not assessable, without there being some accounting for those funds. Bank transfer coding will go some way towards helping with this but that alone is not the entire solution.

[Mutt Daeng]

30 minutes ago, JimGant said:

 You don't declare monies that are exempt from Thai tax. Tax forms only have lines for assessable income, which is logical: Why would Thai tax collectors want their forms cluttered with figures that have no tax value?

Thanks for your reply.

[Mutt Daeng]

2 minutes ago, Mike Lister said:

 

Jim is absolutely correct, at present there is nowhere on the tax return to put non-assessable income but that doesn't mean there wont be in the future. It seems odd that taxpayers will be able to receive funds from overseas and make the determination they are not assessable, without there being some accounting for those funds. Bank transfer coding will go some way towards helping with this but that alone is not the entire solution.

I get 3 pensions (1 x State, 1 x Govt & 1 x Private pension) paid into my UK bank account. I make 1 wise transfer per month to each of my 2 Thai bank accounts. One transfer is most of my Govt pension and the other most of my State pension. So unless the Thai RD announce differently, do I just need to declare the State pension transfer on a tax return since its over 120000 baht, which will result in a NIL return and forget about he Govt  pension transfer? When I transfer funds to Thailand I specify the reason in wise as General Living Expenses, so no obvious bank code difference between the two.

[Mike Lister]

3 minutes ago, Mutt Daeng said:

I get 3 pensions (1 x State, 1 x Govt & 1 x Private pension) paid into my UK bank account. I make 1 wise transfer per month to each of my 2 Thai bank accounts. One transfer is most of my Govt pension and the other most of my State pension. So unless the Thai RD announce differently, do I just need to declare the State pension transfer on a tax return since its over 120000 baht, which will result in a NIL return and forget about he Govt  pension transfer? When I transfer funds to Thailand I specify the reason in wise as General Living Expenses, so no obvious bank code difference between the two.

There seems to be conflicting rules in play, one is the need to report all assessable income over the 120k threshold, versus, the need to file a nill return, for which there is no penalty if it is not filed.  I'm hoping one poster who has already encountered this at the RD will help clarify. 

 

But essentially what you wrote is correct, the Gov. pension is exempt by virtue of the DTA so doesn't need to be reported, unless the forms are changed in the future. The State pension is taxable but if the amount is under your minimum taxable threshold, that will result in no tax being due. 

[Mutt Daeng]

5 minutes ago, Mike Lister said:

There seems to be conflicting rules in play, one is the need to report all assessable income over the 120k threshold, versus, the need to file a nill return, for which there is no penalty if it is not filed.  I'm hoping one poster who has already encountered this at the RD will help clarify. 

 

But essentially what you wrote is correct, the Gov. pension is exempt by virtue of the DTA so doesn't need to be reported, unless the forms are changed in the future. The State pension is taxable but if the amount is under your minimum taxable threshold, that will result in no tax being due. 

Thanks for your comments Mike. 

[Negita43]

6 hours ago, Mike Lister said:

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

Like I said once before this is like creeping Ivy.

So if income in say 2024 in say the UK is invested in stocks and then at a later date stocks are sold and remitted what is the situation then? I can see all sorts of complications here - what if I held a stock in the UK pre 2024 is sold and the proceeds re-invested in another stock in 2024 is that then taxable? Also stocks held in an "ISA Wrapper" in the UK are free of all UK taxes (Capital gains and dividend) but if they are remitted to Thailand (even if held before 2024) do they become taxable in Thailand - It's a minefield.

[Mike Lister]

2 minutes ago, Negita43 said:

Like I said once before this is like creeping Ivy.

So if income in say 2024 in say the UK is invested in stocks and then at a later date stocks are sold and remitted what is the situation then? I can see all sorts of complications here - what if I held a stock in the UK pre 2024 is sold and the proceeds re-invested in another stock in 2024 is that then taxable? Also stocks held in an "ISA Wrapper" in the UK are free of all UK taxes (Capital gains and dividend) but if they are remitted to Thailand (even if held before 2024) do they become taxable in Thailand - It's a minefield.

Most likely this is a wait and see issue but in principle:

 

The baseline amount of capital at 1 Jan 2024 is free of tax but interest income earned thereafter is not, unless taxed at a similar or higher rate than in Thailand. 

[Negita43]

2 hours ago, Mike Lister said:

The baseline amount of capital at 1 Jan 2024 is free of tax but interest income earned thereafter is not, unless taxed at a similar or higher rate than in Thailand. 

Thanks Mike that's as maybe but UK stock market is somewhat depressed at the moment and most of my stocks are showing loses from when purchased.

[JimHuaHin]

Firstly Mike L., thank you for your fantastic effort in preparing this document.

 

Secondly, and finally, I find it annoying and frustrating (even as a former educator) when some posters do not read the document, and then pose questions which are clearly and concisely answered in the document.

 

I congratulate you on your patience.

[JimGant]

8 hours ago, Mike Lister said:

It seems odd that taxpayers will be able to receive funds from overseas and make the determination they are not assessable, without there being some accounting for those funds. Bank transfer coding will go some way towards helping with this but that alone is not the entire solution.

 

There's no way they'll be able to parse cash flows into Thailand to determine capital inflows vs income inflows. And if the latter, whether those income inflows are exempt via a DTA -- what are they gonna do -- hire thousands to peruse DTAs of 61 nations (contemplate a cost/benefit conclusion of that) ? And say they did -- for my and wife's remittances to Thailand, yes, they could easily discern Air Force pensions and Social Security as non assessable via DTA (although I filter these through my US savings account before being forwarded by Wise -- another roadblock to parsing). And my wife's Pan Am pension is issued by a Federal agency - the Pension Benefit Guarantee Corporation (PBGC) -- because Pan Am went bankrupt and their pensions were taken over by the PBGC. So, it looks like her pension, issued by the Feds, would be exempt under the DTA, at least in the eyes of a Thai RD DTA analyst. Nope. The fine print says, "a pension for service to the government." Not a pension issued by a gov't organization. You think that nuance would be caught by an analyst?

 

Anyway, a lot of other reasons why parsing remittances won't work, even with bank codes, which, as I understand, may have some Wise transfers coded as domestic, not international -- how's that square with coding of foreign remittances? And, of course, the bank account established and funded pre Jan 2024 -- all my Wise transfers come from such an account -- and I would declare that such transfers come from the oldest tranche, not the newest, post Jan 1, 2024 tranche. As there are no international accounting dictates on Fifo and Lifo for remittances, and unless Thailand dictated otherwise (doubtful), I'd be in my right to self-assess that my Wise transfers came from the oldest part of my bank account (and thus I've got many years of pre 2024 funds to work through before worrying about remittance taxation).

 

And, yes, there's that term "self-assess" again, which is becoming tiresome repeating that it will be the only logical way Thailand can implement its new ruling. Unless you have direct deposits on pensions taxable by Thailand, according to DTA -- you've got flexibility in your self-assessment, particularly if you had a nice stash of pre 2024 savings.

 

 

[Negita43]

As I am quite old and I want it easy for my Thai partner to access my money when I die .so my plan for 2024 was to transfer all my assets to Thailand this year. so I was somewhat miffed about this new process/implementation of an existing rule  (unknown to me). To me there are too many unknowns about what will happen with interpretation/implemetation of this "rule"  and  I am somewhat unsure about being able to provide a sufficient paper trail to prove what was an asset and what was income Ok so here is my strategy for getting all my assets over here which was my original plan for this year.

 

It's fairly simple but can anyone see a problem with this strategy or am I being naive?

 

1. Leave the country for over the requisite number of days say March 2024

2. Return to Thailand after that number of days say October 2024 so I will not be a tax resident for 2024

3. Between October 2024 and December 31 December 2024 transfer all income and assets up to that date to my Thai Bank account.

That will just leave me with my state pension to declare as income in 2025

[Neeranam]

This might be helpful for those in the area. 

https://members.bccthai.com/bcct/asp/eventdetail.asp?EventID=4331&SponsorID=-1

[Mike Lister]

1 hour ago, Negita43 said:

As I am quite old and I want it easy for my Thai partner to access my money when I die .so my plan for 2024 was to transfer all my assets to Thailand this year. so I was somewhat miffed about this new process/implementation of an existing rule  (unknown to me). To me there are too many unknowns about what will happen with interpretation/implemetation of this "rule"  and  I am somewhat unsure about being able to provide a sufficient paper trail to prove what was an asset and what was income Ok so here is my strategy for getting all my assets over here which was my original plan for this year.

 

It's fairly simple but can anyone see a problem with this strategy or am I being naive?

 

1. Leave the country for over the requisite number of days say March 2024

2. Return to Thailand after that number of days say October 2024 so I will not be a tax resident for 2024

3. Between October 2024 and December 31 December 2024 transfer all income and assets up to that date to my Thai Bank account.

That will just leave me with my state pension to declare as income in 2025

This seems like overkill and reactive, let's chat offline.

[Mike Lister]

29 minutes ago, Neeranam said:

This might be helpful for those in the area. 

https://members.bccthai.com/bcct/asp/eventdetail.asp?EventID=4331&SponsorID=-1

Tax Briefing - Hua Hin

 

BCCT Pre-Connecting Western Seaboard (Hua Hin) Tax Briefing

This Event closes for Online Bookings in 3 days 19 hours 11 minutes.  Add to Google Calendar
Date & Time:	Fri 02-Feb-2024 17:00
Location:	Holiday Inn Vana Nava Hua Hin, Meeting Room on Mezzanine Level
Duration:	1 hour
Member Cost:	THB 0.00

[Mike Lister]

2 hours ago, JimGant said:

 

There's no way they'll be able to parse cash flows into Thailand to determine capital inflows vs income inflows. And if the latter, whether those income inflows are exempt via a DTA -- what are they gonna do -- hire thousands to peruse DTAs of 61 nations (contemplate a cost/benefit conclusion of that) ? And say they did -- for my and wife's remittances to Thailand, yes, they could easily discern Air Force pensions and Social Security as non assessable via DTA (although I filter these through my US savings account before being forwarded by Wise -- another roadblock to parsing). And my wife's Pan Am pension is issued by a Federal agency - the Pension Benefit Guarantee Corporation (PBGC) -- because Pan Am went bankrupt and their pensions were taken over by the PBGC. So, it looks like her pension, issued by the Feds, would be exempt under the DTA, at least in the eyes of a Thai RD DTA analyst. Nope. The fine print says, "a pension for service to the government." Not a pension issued by a gov't organization. You think that nuance would be caught by an analyst?

 

Anyway, a lot of other reasons why parsing remittances won't work, even with bank codes, which, as I understand, may have some Wise transfers coded as domestic, not international -- how's that square with coding of foreign remittances? And, of course, the bank account established and funded pre Jan 2024 -- all my Wise transfers come from such an account -- and I would declare that such transfers come from the oldest tranche, not the newest, post Jan 1, 2024 tranche. As there are no international accounting dictates on Fifo and Lifo for remittances, and unless Thailand dictated otherwise (doubtful), I'd be in my right to self-assess that my Wise transfers came from the oldest part of my bank account (and thus I've got many years of pre 2024 funds to work through before worrying about remittance taxation).

 

And, yes, there's that term "self-assess" again, which is becoming tiresome repeating that it will be the only logical way Thailand can implement its new ruling. Unless you have direct deposits on pensions taxable by Thailand, according to DTA -- you've got flexibility in your self-assessment, particularly if you had a nice stash of pre 2024 savings.

 

 

I don't think it would be that difficult to to do that Jim, some of the RD forms already have sections for exempt income so a slightly different form that is an extension of that will work. Dear Taxpayer - please list all overseas transfer sources of funds received, annual amount of transfers recieved and  stating whether assessable or not....job done.

[Negita43]

1 hour ago, Mike Lister said:

There's no way they'll be able to parse cash flows into Thailand to determine capital inflows vs income inflows. And if the latter, whether those income inflows are exempt via a DTA -- what are they gonna do

My feeling is, as with all tax departments, it's up to you to prove what you say not for them to disprove what you say

[UKresonant]

18 hours ago, Negita43 said:

Also stocks held in an "ISA Wrapper" in the UK are free of all UK taxes (Capital gains and dividend) but if they are remitted to Thailand (even if held before 2024) do they become taxable in Thailand - It's a minefield

I have to agree about the ISA I can see dividends paid out of the tax free ISA wrapper could be taxed as normal dividends, but no idea on calculating capital gains from any disposal out of the ISA if tax resident in Thailand. 

[Mike Lister]

These issues about capital gains losses and how to manage gains (or losses) from investments and property etc, aren't new ones that have suddenly changed because of the new ruling. Yes, those proceeds would have been free of Thai tax under the new rule, if imported in a different year from when earned. But CG in Thailand is charged at PIT rates which means it is likely to be much lower than in the West. As long as the sale of the investment has been through the home country tax process, I can't see there being a tax issue here in Thailand because the transaction will already have been taxed.

[Yumthai]

46 minutes ago, Mike Lister said:

But CG in Thailand is charged at PIT rates which means it is likely to be much lower than in the West. As long as the sale of the investment has been through the home country tax process, I can't see there being a tax issue here in Thailand because the transaction will already have been taxed.

 

Plenty of countries (HK, SG, UK, US to name a few) do not tax or apply low tax rates on capital gains according to different rules, asset type, and taxpayer residence. Same for dividends.

DTA rules will apply (if any) but will not exempt to pay tax in Thailand on remitted income if higher TH tax rates.

 

https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

 

[OJAS]

11 hours ago, Mike Lister said:

Tax Briefing - Hua Hin

 

BCCT Pre-Connecting Western Seaboard (Hua Hin) Tax Briefing

This Event closes for Online Bookings in 3 days 19 hours 11 minutes.  Add to Google Calendar
Date & Time:	Fri 02-Feb-2024 17:00
Location:	Holiday Inn Vana Nava Hua Hin, Meeting Room on Mezzanine Level
Duration:	1 hour
Member Cost:	THB 0.00

 

Are the BCCT planning to organise similar briefings in other parts of the country since Hua Hin is, I'm sure, not a particularly convenient place to get to for many?

 

Nevertheless many thanks are, I think, due to the BCCT for seemingly stepping forward, once again, in support of expats on a topical issue of particular concern to us, just as they did a couple of years ago in the case of COVID vaccinations.

 

[Mike Lister]

21 minutes ago, Yumthai said:

 

Plenty of countries (HK, SG, UK, US to name a few) do not tax or apply low tax rates on capital gains according to different rules, asset type, and taxpayer residence. Same for dividends.

DTA rules will apply (if any) but will not exempt to pay tax in Thailand on remitted income if higher TH tax rates.

 

https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

 

I'm not sure what you said here. What I said is that if the CG has been taxed in the home country, it is unlikely to attract CG (PIT) in Thailand, unless the Thai rate of PIT is higher than the CG rate in the home country.

[Mike Lister]

13 minutes ago, OJAS said:

 

Are the BCCT planning to organise similar briefings in other parts of the country since Hua Hin is, I'm sure, not a particularly convenient place to get to for many?

 

Nevertheless many congratulations and thanks are, I think, due to the BCCT for seemingly stepping forward, once again, in support of expats on a topical issue of particular concern to us, just as they did a couple of years ago in the case of COVID vaccinations.

 

I'm sorry I don't know, poster @Neeranam posted the link, I just gave it wider coverage.

[Neeranam]

28 minutes ago, OJAS said:

 

Are the BCCT planning to organise similar briefings in other parts of the country since Hua Hin is, I'm sure, not a particularly convenient place to get to for many?

 

Nevertheless many thanks are, I think, due to the BCCT for seemingly stepping forward, once again, in support of expats on a topical issue of particular concern to us, just as they did a couple of years ago in the case of COVID vaccinations.

 

5 minute walk from my house, however I can't go.

I'm not sure if there are other ones planned, I expect so.

[OJAS]

On 1/29/2024 at 9:05 AM, Mike Lister said:

I agree it seems unlikely but I can't imagine how this might play out in the longer term. I keep seeing reports of people being asked where they want to be taxed, here or back home but I don't know how that stacks up against where the income arises in the first place.....work in progress perhaps.. 

 

This does, however, strike me as an issue of potential interest to those in receipt of UK company pensions in particular, the more so if these pensions are significant in financial terms and/or they are also in receipt of the UK State Pension*. As I understand the present position, HMRC would only allow taxation relief equal to the amount of tax paid (at lower rates in most cases) to the RD here.

 

I strongly suspect that this could, in practice, mean UK company pensioners having to file tax returns with HMRC for the first time ever in most cases, as well as with the RD here. Which would mean them having to enlist the services of a commercial software supplier if filing to HMRC online since they are UK tax non-residents. What with the differing tax years (6/4/Y1 to 5/4/Y2 in the case of HMRC and 1/1/Y1 to 31/12/Y1 in the case of the RD), this could all turn out to be a bureaucratic nightmare in their case!

 

* @billd766 - looks like you might come under this heading.