Personal Income Tax Guide (for foreigners) Thailand

[Mike Lister]

An extract below, from a post directed at someone in a different thread, who suggested that I might have ulterior motives for compiling the Simple Tax Guide and in helping others with their tax. I thought it was worth repeating here in part, just to head off any similar concerns that other may be harbouring:

 

"I have no connection with any tax consultancy inside or outside Thailand, nor am I connected in any way to any organisation globally that may benefit in any way from anything I write here, on any subject, nor do I benefit in any way, directly or indirectly from writing those things. That said, I worked for Deloittes in the City of London for four years during the 1980's and they are of course one of the Big 4, or Big 6 as they were then. But I have not maintained contact with any member of the firm, beyond the year 2000. After leaving Deloitte I started my own business which was based around international management consultancy and large scale program management, mostly in the telecommunications sector and  Finance sectors, a majority of which has been in the US, Asia Pacific and China".

[OJAS]

The following statement in the now-locked Swiss-related thread on the Thai Visas, Residency, and Work Permits forum has caught my eye, since it could be of interest to us Brits who are in receipt of the UK State Pension:

 

"Finally, any income that is taxed in the home country, can use that tax to OFFSET any potential Tax in Thailand. IF the level of tax in the home country is the same or higher than in Thailand, no further tax will be due here, if it lower, Thai tax MAY be due."

 

So, despite the fact that the State Pension is not covered by the UK/Thailand DTA, does this mean that those of us already paying tax on it to HMRC at a rate of 20% (as, indeed, I am doing) would not, in fact, need to declare subsequent Wise, SWIFT, etc transfers of DWP payments into our Thai bank accounts as "assessable income" as part of any tax return we might be required to file with the RD?

 

In this connection I am, of course, aware that State Pension payment transfers are, in any event, extremely unlikely to be taxed by the RD in practice as a result of various allowances/exemptions totalling up to 500k THB (my perpetually frozen State Pension works out at around 300k THB per annum based on current exchange rates).

 

Edited March 3 by OJAS

[Mike Lister]

35 minutes ago, OJAS said:

The following statement in the now-locked Swiss-related thread on the Thai Visas, Residency, and Work Permits forum has caught my eye, since it could be of interest to us Brits who are in receipt of the UK State Pension:

 

"Finally, any income that is taxed in the home country, can use that tax to OFFSET any potential Tax in Thailand. IF the level of tax in the home country is the same or higher than in Thailand, no further tax will be due here, if it lower, Thai tax MAY be due."

 

So, despite the fact that the State Pension is not covered by the UK/Thailand DTA, does this mean that those of us already paying tax on it to HMRC at a rate of 20% (as, indeed, I am doing) would not, in fact, need to declare subsequent Wise, SWIFT, etc transfers of DWP payments into our Thai bank accounts as "assessable income" as part of any tax return we might be required to file with the RD?

 

In this connection I am, of course, aware that State Pension payment transfers are, in any event, extremely unlikely to be taxed by the RD in practice as a result of various allowances/exemptions totalling up to 500k THB (my perpetually frozen State Pension works out at around 300k THB per annum based on current exchange rates).

 

No, it doesn't mean that you don't need to declare the income. It just means that if it is declared on a Thai tax return and it ends up being taxed here, you can use the tax already paid in the UK , to offset any Thai tax liability. 

 

The basis of a Double Tax Agreement between two countries is that tax payable in one country can be applied towards tax that is due in another. If the UK taxes the money at 20% and you import the funds to Thailand and their corresponding tax rate on that particular type of income is say 15%, there is no Thai tax to pay. But, if the corresponding Thai tax rate was (for example) 25%, you could use the 20% tax you paid in the UK  to offset the Thai tax liability, leaving you with 5% tax to pay here.

 

 

[Mike Lister]

I was scouring the media this morning for anything new about the tax situation in Thailand, when I re-read an article from Tilleke & Gibbins, the highly regarded law firm in Bangkok. They wrote a piece for the Danish/Thai Chamber of commerce and one sentence must have been overlooked earlier, which now seems to confirm an earlier issue. The extract from the article reads:

 

 "Also, individuals who reside in Thailand for less than 180 days in a calendar year are not subject to PIT on their offshore-sourced income, even if it is brought into Thailand".

 

https://www.tilleke.com/insights/thailand-new-order-closes-tax-loophole-for-offshore-sourced-income/

 

The earlier debate was about whether income remitted to Thailand was taxable, in a year when the taxpayer was not tax resident. Clearly, current year income is not taxable in the scenario, but this does not also include prior year income.

 

In summary and in simple terms: If you are not tax resident in Thailand during a particular year, any income that you earn during that year and which is remitted to Thailand at any time, is not taxable here.

[Hummin]

1. All my income is taxed in my home country, we have a tax deal, I do not pay tax in Thailand?

 

2. I Send money to my Thai wife account from my offshore account, I do not pay tax in Thailand? 

 

3. I live 179 days in Thailand, I do not pay tax in Thailand

 

How will this turn out when renew visa? Do we need tax proof or ay verification before renewal?

Edited March 4 by Hummin

[Mike Lister]

9 minutes ago, Hummin said:

1. All my income is taxed in my home country, we have a tax deal, I do not pay tax in Thailand?

 

2. I Send money to my Thai wife account from my offshore account, I do not pay tax in Thailand? 

 

3. I live 179 days in Thailand, I do not pay tax in Thailand

 

How will this turn out when renew visa? Do we need tax proof or ay verification before renewal?

If you live here for less than 180 days per calendar year, you are not Thai tax resident so none of this affects you.

 

There has not been any comment from Immigration regarding taxes and visa extensions, as of this moment in time, nothing has changed..

[billd766]

Out of curiosity will I have to pay more or less Thai income tax on my Government pension, my military pension and my company pension as I bring in my pensions every month that they get paid?

 

I am asking for me and not for a friend,

 

Any information will be gratefully received with thanks.

[UKresonant]

1 hour ago, billd766 said:

Out of curiosity will I have to pay more or less Thai income tax on my Government pension, my military pension and my company pension as I bring in my pensions every month that they get paid?

 

I am asking for me and not for a friend,

 

Any information will be gratefully received with thanks.

 

If UK pensions?

 

Government / Military pensions only taxable in the UK under the UK Thai DTA (unless you have Thai Nationality)

check they are on the list

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343000

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

 

State NI and Private pensions are not in the DTA, but if the private pension is taxed already in the UK  under PAYE probably not much of an issue.

 

Edited March 4 by UKresonant

[Mike Lister]

2 hours ago, billd766 said:

Out of curiosity will I have to pay more or less Thai income tax on my Government pension, my military pension and my company pension as I bring in my pensions every month that they get paid?

 

I am asking for me and not for a friend,

 

Any information will be gratefully received with thanks.

Should be less, depending on the amounts, you may get away almost free of Thai tax because two out of three sound like they may be exempt.

[Phulublub]

6 hours ago, Mike Lister said:

Should be less, depending on the amounts, you may get away almost free of Thai tax because two out of three sound like they may be exempt.

 

Frankly, "sound like they may" is not helpful, especially as UKResonant has provided a more comprehensive answer already (though you may have been posting at the same time). 

 

As main contributor to this thread you, of all posters, should be posting only full and factual answers. 

 

PH

[Mike Lister]

4 minutes ago, Phulublub said:

 

Frankly, "sound like they may" is not helpful, especially as UKResonant has provided a more comprehensive answer already (though you may have been posting at the same time). 

 

As main contributor to this thread you, of all posters, should be posting only full and factual answers. 

 

PH

The poster does not provide sufficient information for me or anyone else to give a full or exact answer. As poster UKResonant asks....are they UK pensions? Are they on the lists he provided and as  such exempt? Plus in order to give a full and exact answer, we would need to know the precise amounts involved since this can vary the answer. 

 

As main contributor to this thread, I have an obligation not to mislead and to provide only factual answers, rather than guess or assume anything, and those things I have done.

 

Lastly, let me be perfectly clear once again that this thread, the simple tax guide and our involvement in trying to help readers and answer their questions, where possible, is voluntary and does not represent professional tax advice. We are perfectly happy to try and help where ever we can but but we are less happy about being chastised because somebody thinks we should have done more research, watched a particular video or given a better answer! 

[billd766]

9 hours ago, UKresonant said:

 

If UK pensions?

 

Government / Military pensions only taxable in the UK under the UK Thai DTA (unless you have Thai Nationality)

check they are on the list

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343000

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

 

State NI and Private pensions are not in the DTA, but if the private pension is taxed already in the UK  under PAYE probably not much of an issue.

 

Thank you.

 

2 hours ago, Mike Lister said:

The poster does not provide sufficient information for me or anyone else to give a full or exact answer. As poster UKResonant asks....are they UK pensions? Are they on the lists he provided and as  such exempt? Plus in order to give a full and exact answer, we would need to know the precise amounts involved since this can vary the answer. 

 

As main contributor to this thread, I have an obligation not to mislead and to provide only factual answers, rather than guess or assume anything, and those things I have done.

 

Lastly, let me be perfectly clear once again that this thread, the simple tax guide and our involvement in trying to help readers and answer their questions, where possible, is voluntary and does not represent professional tax advice. We are perfectly happy to try and help where ever we can but but we are less happy about being chastised because somebody thinks we should have done more research, watched a particular video or given a better answer! 

The question that I asked was, though I probably didn't put it that well, was basically does it or should it, make any difference if the money I am transferring to Thailand is last years money, or in my case this years money as it arrives in my Wise bank account.

 

I do understand that my military pension is non taxable (non assessible)  in Thailand, so would I need to the Thai RD?

 

I have a print that I made showing the breakdown of the dates and amounts of my 3 pensions transferred to my BBK branch in Kamphaeng Phet for last year and I can probably do another 5 years back if required.

 

Mike, if you need those figures for last year, I can PM them to you.

[Mike Lister]

4 minutes ago, billd766 said:

Thank you.

 

The question that I asked was, though I probably didn't put it that well, was basically does it or should it, make any difference if the money I am transferring to Thailand is last years money, or in my case this years money as it arrives in my Wise bank account.

 

I do understand that my military pension is non taxable (non assessible)  in Thailand, so would I need to the Thai RD?

 

I have a print that I made showing the breakdown of the dates and amounts of my 3 pensions transferred to my BBK branch in Kamphaeng Phet for last year and I can probably do another 5 years back if required.

 

Mike, if you need those figures for last year, I can PM them to you.

If you transfer last years money, there is nothing to think about, it is regarded as savings and is free of all tax. It is only income earned from 1 January 2024 onwards that requires some thought.

 

Your military is exempt to Thai tax by virtue of the DTA, regardless of which year it is earned. There is no space on the current Thai tax form to report exempt income. What I do is to not report my exempt income, you may wish to do the same with your military pension.

 

That leaves your company pension and what you call, Government Pension, it's not clear to me if you mean State Pension or some other form of government pension, perhaps you can clarify?

 

Feel free to PM me with the transfer amounts from last year but only your Government and Company Pensions and I'll do some sums and PM you back, later in the day. 

 

.

 

 

[Mike Lister]

35 minutes ago, billd766 said:

Sorry for the delay. I was outside this morning servicing and trying to get my weed whacker to start, before it got too hot.

 

When I came back in I split up my pensions into an XLSX document which hopefully I managed to attach to a PM to you.

 

Thank you.

 

Bill

PM received and reply sent, get back to whacking weeds, you don't have any tax issues to worry about.

[Mike Lister]

41 minutes ago, JohnnyBD said:

Mike & Jim,

Thanks for your comments and staying on top of this issue. If you have time, could you please give me your opinions on whether you think my US Social Security being deposited in my US bank account (with other funds), can then be wired (same exact amount) to my Thai bank and qualify as non-assessable? Do you think I need to open a separate US bank account just for my SS so it's not comingled with other funds? I'm really struggling with how to set this up so I don't have any issues with Thai RD. I hope they are not expecting everyone to have their SS deposited directly in a Thai bank from the US gov't. I prefer sending mine on an as-need basis from my own bank account. Your thoughts on this issue would be greatly appreciated. Thank you...

I receive US SSc directly into my Thai bank every month and that is non-assessable for Thai tax purposes, 

[JimGant]

1 hour ago, JohnnyBD said:

my US Social Security being deposited in my US bank account (with other funds), can then be wired (same exact amount) to my Thai bank and qualify as non-assessable?

 

The question of co-mingled funds being parsed between savings and assessable income is a reoccurring question here. But, I really don't think you'll be grilled by RD on this. And with adequate records, like sending your social security to Thailand in the exact amount received in your US bank, would be nice, but probably overkill. That you can keep adequate records that remitted amounts fall into the non assessable category, either by virtue of DTA or being from a pre 2024 bank account, should cover your six. But, again, just be comfortable with your self-assessment; the chance of being audited by RD, for either not filing, or for filing a questionable return, is virtually nil, as they don't have, and will not have, the manpower to conduct audits where the cost/benefit analysis is a joke.

[Mike Lister]

8 hours ago, JohnnyBD said:

Thanks. I guess I will ask some of the Tax firms here for their opinions or guidance on that issue. I prefer not to have the US gov't transfer my SSc directly to my Thai bank if I don't need to. I prefer to transfer it on an as-need basis if I can do it that way.

I can see no reason why you cannot keep the SSc money in the US and transfer as needed. Ultimately, it's an accounting tracking issue, just make sure you keep some reasonable records and understand what is what. That said, the chances of the average person being asked to prove the source of the funds is very low, I think.

[Mike Lister]

Removed 7 none essential posts but have left copies of the question asked and the answer given, in an attempt to declutter and keep the thread readable.

[CharlesHolzhauer]

On 2/27/2024 at 4:55 PM, Mike Lister said:

And point six finally has some clarity, the long awaited  gifts from. abroad statement.

In the context of transferring or gifting an amount, say THB 3 million, from overseas to a spouse's bank account, should the transferee/giftee complete a tax return for amounts below the THB 20 million threshold, or wait for the RD to take action and provide documented proof that the gift is indeed a gift?

[Mike Lister]

10 minutes ago, CharlesHolzhauer said:

In the context of transferring or gifting an amount, say THB 3 million, from overseas to a spouse's bank account, should the transferee/giftee complete a tax return for amounts below the THB 20 million threshold, or wait for the RD to take action and provide documented proof that the gift is indeed a gift?

I will try to find out.

[Negita43]

Apologies if this has been asked before:

I have a tax number because several years ago I legally worked here. Since I stopped working I have not filed any tax return.

Does the fact that I have a tax number require me (under the new regime)

1.  To file a tax return if I an here more than 180 days but do not transfer any money from overseas ( asset or income) ie live of the money already transferred before 31 Dec 2023

2.  To file a tax return even if I am not here for 180 days?

[Mike Lister]

3 minutes ago, Negita43 said:

Apologies if this has been asked before:

I have a tax number because several years ago I legally worked here. Since I stopped working I have not filed any tax return.

Does the fact that I have a tax number require me (under the new regime)

1.  To file a tax return if I an here more than 180 days but do not transfer any money from overseas ( asset or income) ie live of the money already transferred before 31 Dec 2023

2.  To file a tax return even if I am not here for 180 days?

1. - No

2. - No

[Negita43]

On 3/4/2024 at 1:57 PM, Mike Lister said:

There has not been any comment from Immigration regarding taxes and visa extensions, as of this moment in time, nothing has changed

Renewed my Visa extension Tuesday (Korat) - no mention of tax situation or tax documents required

Edited March 7 by Negita43
added IO

[Negita43]

On 1/11/2024 at 9:54 AM, Mike Lister said:

Maintenance income derived under a moral obligation or gifts made in a ceremony or on occasions in accordance with established custom from persons who are not ascendants, descendants, or spouse, in the amount not exceeding THB 10 million throughout a tax year.

The above is from your version 8 rev A document (which must have been many hours of hard work - thanks).

I have a partner of 12 years (we were apart for nearly 2 years because of Covid). She has a husband who refuses to divorce her she is finacially secure for day to day living but I contribute mostly to the cost of us living together. I would argue I have a moral obligation to support her so would the above apply to any "gift" I would make to her or is that a stretch to far?

[Mike Lister]

2 minutes ago, Negita43 said:

The above is from your version 8 rev A document (which must have been many hours of hard work - thanks).

I have a partner of 12 years (we were apart for nearly 2 years because of Covid). She has a husband who refuses to divorce her she is finacially secure for day to day living but I contribute mostly to the cost of us living together. I would argue I have a moral obligation to support her so would the above apply to any "gift" I would make to her or is that a stretch to far?

Assuming you mean Thai partner? Setting aside your Gift Tax question for a moment, your bigger concern is supporting another mans wife in Thailand which has serious legal consequences that could lead to financial consequences, if it is proven. I suggest you would not want to try to use Gift Tax in that situation.

[Mike Lister]

Bank interest income is probably one of the main areas that retirees will want to understand, the links below describes all aspects:

 

https://sherrings.com/interest-income-personal-tax-thailand.html

https://www.pwc.com/th/en/tax/assets/thai-tax/thai-tax-2022-23-booklet.pdf

 

Key Points:

 

1) If you don't file a Thai tax return, the amount of tax with held by the bank will be regarded as your final tax bill and there is no need to file a tax return, as long as you have no other assessible income.

 

2) As long as regular savings interest does not exceed 20,000 baht per year, you will not pay tax on that income.

 

3) Interest paid on savings at Government Housing Bank is free of tax.

 

4) Savings interest income that is earned and taxed overseas and then imported into Thailand, earn Thai tax credits, which can then be applied to offset Thai PIT on those funds.

 

 

 

[jayboy]

If a UK company pension has been agreed by HMRC to be paid free of UK tax (ie has been given an NT coding) does that mean it will be free of tax in Thailand if remitted here? I'm pretty sure that it would be taxable in Thailand but thought the question was just about worth asking.

[Mike Lister]

22 minutes ago, jayboy said:

If a UK company pension has been agreed by HMRC to be paid free of UK tax (ie has been given an NT coding) does that mean it will be free of tax in Thailand if remitted here? I'm pretty sure that it would be taxable in Thailand but thought the question was just about worth asking.

My guess is that it will be assessable in Thailand since the UK NT coding has nothing to do with TRD.

[hcvc]

The time I spent teaching Special Education to students with disabilities was intrinsically rewarding - filled with feel good perks. I view my teachers’ pension as extrinsic recognition - a symbolic “gold watch” - awarded upon my retirement for decades of dedicated service.

The thought that the Revenue Department of Thailand might covet my “gold watch” disturbs me.

 

As a layperson a Double Tax Agreement (DTA) reads like a twisted treatise on ambiguous rules of taxation and brims with legal doublespeak. Whilst mulling over perplexing verbiage such as “Contracting State” - my mind devolves into a fugue state.

 

I wish I knew a tax guru. A sage capable of deciphering the inane jargon embedded in the Thai-USA Double Tax Agreement (DTA).

 

My basic query (worry) is whether my 401(a) Defined Benefit Plan provided by the Arizona State Retirement System is exempt from taxation by the Revenue Department of Thailand?

 

losnsol?

[JimGant]

 

Here's the problem. This is a quote from you, from the Swiss post that was taken down.

 

Quote

"Finally, any income that is taxed in the home country, can use that tax to OFFSET any potential Tax in Thailand. IF the level of tax in the home country is the same or higher than in Thailand, no further tax will be due here, if it lower, Thai tax MAY be due."

 

In the beginning, we heard, "If you have a DTA, and you pay home country taxes, you won't owe taxes in Thailand." This seemed to be the RD way of not having to deal with the specifics of individual DTAs, but just avoid double taxation by acknowledging that you paid taxes to your home country. End of discussion. No need to file a Thai tax return.

 

And this may be the way it will be going forward -- wave a home country tax return (regardless of how much paid, if any, in home country taxes) in the faces of Thai RD, and thus have no Thai tax obligation.

 

But this is absurd, if Thailand really wants to utilize all their DTAs to collect taxes that they have primary taxation authority over.

 

Using my 401a as an example. Thailand, per DTA, has primary taxation authority on my remitted 401a. Thus, they get to keep every baht of taxes collected from this income -- it is NOT offset by any tax credit from my US taxes -- but the US does have to accept a tax credit from Thailand.  So, even if the Thai taxes owed on this income is, say, $100 -- and the taxes on the same income paid to the US is $500 -- Thailand at least gets to keep $100 in taxes -- and the US only nets $400 in taxes, after subtracting out the Thai tax credit of $100. For me, the US taxpayer, my total tax bill between the two countries is still $500. So, no big deal that Thailand is finally utilizing the provisions of the DTA. But a big deal for them, if they don't......

 

Bottom line: I don't understand why Thailand would just say, always use your home country's taxes as a tax credit against Thai taxes -- and, in most cases, don't owe anything to Thailand. Why not use their primary taxation authority to issue, not accept, tax credits -- and at least collect the taxes they're owed? And, for Yanks, this would have little, if any affect, on the total tax bill between countries.

 

Anyway, I'm sure we'll hear more about the affects of DTAs on future Thai tax matters. If not, the Thais will be losing out on tax revenues -- when it wouldn't take much to just clarify how self-assessment vis-a-via one's DTA with Thailand should apply.