Personal Income Tax Guide (for foreigners) Thailand

[CharlesHolzhauer]

21 hours ago, Mike Lister said:

There is a separate discussion on tax for Australians, it may help you to join that debate.

Where is the separate discussion on tax for Australians located?

[Mike Lister]

9 minutes ago, CharlesHolzhauer said:

Where is the separate discussion on tax for Australians located?

There are several spread across the forum, mostly in the Home Country forum for Australia, here's one:

 

 

[CharlesHolzhauer]

27 minutes ago, Mike Lister said:

There are several spread across the forum, mostly in the Home Country forum for Australia, here's one:

Sadly, none of the discussions therein are useful with regards to the subject matter.
 

[topt]

24 minutes ago, CharlesHolzhauer said:

Sadly, none of the discussions therein are useful with regards to the subject matter.
 

Create a new thread perhaps?

[KhunLA]

8 hours ago, CharlesHolzhauer said:

Where is the separate discussion on tax for Australians located?

The TH/AU tax agreement will tell you what's taxable or exempt, if anything,  And this thread has links to what you can expect to pay if necessary in TH.  Kind of easy actually.

 

What else would you need ?   Suggest an Aussie/Thai tax/finance advisor to do your taxes if you can't figure it out.

[CharlesHolzhauer]

16 hours ago, topt said:

Create a new thread perhaps?

Before making assumptions and potentially embarrassing you further, may I suggest that you take the time to read the context and understand how I arrived at this comment.

[CharlesHolzhauer]

9 hours ago, KhunLA said:

The TH/AU tax agreement will tell you what's taxable or exempt, if anything,  And this thread has links to what you can expect to pay if necessary in TH.  Kind of easy actually.

 

What else would you need ?   Suggest an Aussie/Thai tax/finance advisor to do your taxes if you can't figure it out.

Before making assumptions and potentially embarrassing you further, may I suggest that you take the time to read the context and understand how I arrived at this question.

[KhunLA]

3 hours ago, CharlesHolzhauer said:

Before making assumptions and potentially embarrassing you further, may I suggest that you take the time to read the context and understand how I arrived at this question.

Why would they care or even know about what you receive in AU, as Thai RD only cares about what you bring in.   Thought that was fairly obvious through  out the thread.  There easy ways to avoid the Thai tax, but that would fall under 'tax avoidance', and not to be discussed.

Edited March 27 by KhunLA

[Mike Lister]

Guys,

 

I will appreciate it very much if we can keep this thread as "clean" as possible so that newcomers can find the answers they need quickly, without having to wade through pages of distractions. There are other tax threads, especially the long thread where matters can be debated and related topics discussed.

 

TIA.

 

 

[Mike Lister]

On a tax related matter:

 

I am aware of some on and offshore financial advisors who are using the new tax rules as a means to promote their sales activities. Typically these involve videos and education in the new tax rules, accompanied by offers to assist with tax return preparation, at a fee. Some of these services are quite expensive compared to average costs for similar services of a tax CPA/company. The ultimate goal however of some of these businesses is to sell financial services such as insurance, life, health, investments etc.

 

A simple tax return should not require much assistance at all and can almost certainly be done without assistance or with the help of advice from members in these threads and from the local Revenue office. More complicated or involved tax returns may require assistance from a tax CPA, as far as I can see, the cost of this should be well under 10k Baht but will of course depend on the size of the firm and its location since charges vary dramatically nationwide. 

 

I would strongly recommend that, if you intend to use a tax consultant/CPA, for tax advice, that you employ one that has offices you can visit and discuss matters face to face and that you ask for recommendations and also shop around, just as you might for anything else you buy.

 

 

 

[CharlieH]

Off topic inflammatory post removed.

 

 

[BebFr]

I have income from the US and Europe. The European income is taxed, but the private pension received in the US is not taxed.

How will the income introduced in Thailand be taxed as Thai resident?

Thailand calculates a global income tax rate and applies this rate to the income brought into Thailand. 

Is this correct?

[Mike Lister]

4 minutes ago, BebFr said:

I have income from the US and Europe. The European income is taxed, but the private pension received in the US is not taxed.

How will the income introduced in Thailand be taxed as Thai resident?

Thailand calculates a global income tax rate and applies this rate to the income brought into Thailand. 

Is this correct?

That is not correct.

 

I am pretty certain the income will be assessed according to its source and taxed and credited accordingly.I for example, receive income from several countries and each one is taxed or not, in accordance with that country's DTA. Some of it is exempt under DTA rules whilst income from another country is taxed in that country and credited here.

[Negita43]

On 3/25/2024 at 10:43 AM, Lacessit said:

am waiting to hear from any poster who has gone to Immigration for a retirement extension, and has been told they must have a Thai tax number for the extension to be approved.

Went early March Korat was not asked for tax number

[kevtheblue]

At the moment I live in the UK. December 2023 I cashed in my 25% tax free cash from my pension.

I sent it to my Thai bank account

Shortly I am going to put my home up for sale. I will be sending some of proceeds to my Thai bank account,

hopefully before the end of 2024.

I will then be looking to move to Thailand. Will I  have to pay tax on the money I have sent as a non resident.

Would i be better off waiting until July 2025 to make the move

 

                                                       thanks kevtheblue

[UKresonant]

4 hours ago, kevtheblue said:

At the moment I live in the UK. December 2023 I cashed in my 25% tax free cash from my pension.

I sent it to my Thai bank account

Shortly I am going to put my home up for sale. I will be sending some of proceeds to my Thai bank account,

hopefully before the end of 2024.

I will then be looking to move to Thailand. Will I  have to pay tax on the money I have sent as a non resident.

Would i be better off waiting until July 2025 to make the move

 

                                                       thanks kevtheblue

If all the remittance is in 2024 whilst UK  tax resident and not Thai tax resident, I think arrival in Thailand anytime after 6th April 2025 would work well.

 

( there is some criteria that in some circumstance HMRC would rewind your status to their last full UK tax year. But honestly can't recall the detail.....)

 

July 7th 2025 would be for sure, should anything run past 31st Dec 2024.

 

No you should not have to pay tax on that created whilst not Yhai tax resident. But timing is  the difference between having to prove status Vs no doubt.

[OJAS]

16 hours ago, kevtheblue said:

At the moment I live in the UK. December 2023 I cashed in my 25% tax free cash from my pension.

I sent it to my Thai bank account

Shortly I am going to put my home up for sale. I will be sending some of proceeds to my Thai bank account,

hopefully before the end of 2024.

I will then be looking to move to Thailand. Will I  have to pay tax on the money I have sent as a non resident.

Would i be better off waiting until July 2025 to make the move

 

                                                       thanks kevtheblue

 

You will already have paid capital gains tax to HMRC on the sale of your UK property, and, since this is covered by Article 14(1) of the double taxation agreement between the UK and Thailand, there is IMHO no need for you to declare the sale proceeds once remitted to Thailand as assessable income for the purposes of any tax return you might be required to file with the Thai RD:

 

https://assets.publishing.service.gov.uk/media/5a80bddc40f0b623026953eb/uk-thailand-dtc180281_-_in_force.pdf

 

That said, it is possible that the RD might eventually be alerted to any sizeable remittances arising from your property sale and require you to provide evidence that these do not, in fact, relate to income which should be classed as assessable. FYI I am still in the process of remitting to Thailand the proceeds from the sale of my UK property a couple of years ago in (sizeable) dribs and drabs, and have decided to hang on to all papers relating to this sale, together with all subsequent UK bank statements, in case I do get challenged by the RD at some point. I would strongly advise you to do the same.

 

Personally speaking, I would not have thought that any of this should be a material consideration to the timing of your move to Thailand.

 

Edited March 29 by OJAS

[MangoKorat]

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

"All rental properties are subject to a House and Land Tax, which is 12.5% of the annual rental income. On top of that, the rental income is taxable, and owners will have to pay Thai income taxes on the money. Thai income taxes are calculated using a progressive scale ranging from 0-37%".

Is anyone able to clarify that please?

 

Whereas I understand that rental income is liable to income tax, would I be correct in saying that the 12.5% House and Land Tax does not apply to property outside Thailand owned by a foreigner living in Thailand?

[Mike Lister]

2 hours ago, MangoKorat said:

Is anyone able to clarify that please?

 

Whereas I understand that rental income is liable to income tax, would I be correct in saying that the 12.5% House and Land Tax does not apply to property outside Thailand owned by a foreigner living in Thailand?

Correct. The rental income derived from overseas property is not taxable in Thailand, as long as it remains overseas. But, if that income is remitted to Thailand, it is assessable to Thai tax.

[JimGant]

3 hours ago, Mike Lister said:

The rental income derived from overseas property is not taxable in Thailand, as long as it remains overseas. But, if that income is remitted to Thailand, it is assessable to Thai tax.

Yes, but Thai tax receipts would be net (via credit) of any tax paid to the country where the property is located. The following from the US technical explanation; but it's pretty much standard language in all the treaties that follow the OECD Model: 

Quote

This Article does not grant an exclusive taxing right to the situs State; the situs State is
merely given the primary right to tax. The Article does not impose any limitation in terms of rate
or form of tax on the situs State

 

So, Thailand has secondary taxation rights. Just how you'd treat this on a Thai tax return is an interesting question, since there currently are no lines for tax credits... Of course if your situs country doesn't tax you, Thailand gets to keep the whole enchilada, since there are no tax credits to net out. That's why having secondary taxation rights might pay off in some situations.

[JimTripper]

 

On 1/11/2024 at 7:24 PM, NoDisplayName said:

So, let's say Person X has a baseline statement from Dec 31, 2023 with a balance of $1 million.

 

Does this mean Person X can transfer into Thailand any of this amount free of tax?  And for how long?  Can X bring in $100K each year for the next ten years tax free, by showing the 2023 base balance along with a sum total of all monies transferred in until exhausted?

Why risk it? Singapore banks are much more stable.

[Bobsuruncle]

I have tried doing a search here to find out if USA monthly V A disability compensation payments are considered assessable taxable income in Thailand, or if they are exempt. I haven't had much luck yet. I have obtained and read the DTA for USA/Thailand and found it spells out that social security payments are exempt from taxation but I haven't been able to figure out if all the legal jargen also applys to the monthly VA compensation. Has anyone on this forum been able to get a clear answer to this? Thanks ahead of time for any help. And thank you, Mike Lister for putting this discussion together.

 

[Mike Lister]

2 minutes ago, Bobsuruncle said:

I have tried doing a search here to find out if USA monthly V A disability compensation payments are considered assessable taxable income in Thailand, or if they are exempt. I haven't had much luck yet. I have obtained and read the DTA for USA/Thailand and found it spells out that social security payments are exempt from taxation but I haven't been able to figure out if all the legal jargen also applys to the monthly VA compensation. Has anyone on this forum been able to get a clear answer to this? Thanks ahead of time for any help. And thank you, Mike Lister for putting this discussion together.

 

I don't know the answer to your question but this man may.... @JimGant

 

I'm sure he'll be along soon.

[JimGant]

5 hours ago, Bobsuruncle said:

I have tried doing a search here to find out if USA monthly V A disability compensation payments are considered assessable taxable income in Thailand, or if they are exempt

Just like govt pensions, VA disability payments are exclusively taxable by the US. Meaning, even tho' the US chooses not to tax such payments, Thailand doesn't have secondary taxation rights on such payments. Thus, not assessable income for Thai tax purposes, per the DTA.

 

Quote

Subparagraphs (a) and (b) of paragraph 1 deal with the taxation of government
compensation other than a pension. Subparagraph a) provides the general rule that wages,
salaries, and other remuneration paid by one of the Contracting States or by its political
subdivisions or local authorities to any individual are generally exempt from tax by the other
State, if the compensation is in respect of governmental services rendered to that State,
subdivision or authority.

From technical explanation of DTA, Article 21

 

[Mike Lister]

Thanks Jim 

[MangoKorat]

15 hours ago, Mike Lister said:

Correct. The rental income derived from overseas property is not taxable in Thailand, as long as it remains overseas. But, if that income is remitted to Thailand, it is assessable to Thai tax.

Thanks Mike but I understood that much.  Its the 12.5% House and Land Tax I'm concerned about.  I presume (hope) that actually only applies to those who own rental properties in Thailand. I don't see how Thailand could have the jurisdiction to be able to levy a tax on foreign property.

[Mike Lister]

12 minutes ago, MangoKorat said:

Thanks Mike but I understood that much.  Its the 12.5% House and Land Tax I'm concerned about.  I presume (hope) that actually only applies to those who own rental properties in Thailand. I don't see how Thailand could have the jurisdiction to be able to levy a tax on foreign property.

They dont

[Patjqm]

On 1/11/2024 at 2:03 PM, Mike Lister said:

How old are you and are you married to a Thai? Assuming you are, it seems to me that if you are over 65 years of age and married, your allowances/deductions/exemptions will be 500,000 so there wouldn't be any tax to pay here.

yes but if a DTA says that pension can only be taxed in the other country, and that country did not take tax( for ex. because to low amount) can Thailand tax?( thzt would be against the DTA...?

[Bobsuruncle]

9 hours ago, JimGant said:

Just like govt pensions, VA disability payments are exclusively taxable by the US. Meaning, even tho' the US chooses not to tax such payments, Thailand doesn't have secondary taxation rights on such payments. Thus, not assessable income for Thai tax purposes, per the DTA.

Thank you JimGant, your answer is very helpful and appreciated.

[aussienam]

On 3/26/2024 at 12:03 PM, TroubleandGrumpy said:

I can say this - your Super is taxed at 15% of the nett earnings if it is in 'accumulation phase' - the Super Fund pays the ATO direct on its total amount of earnings in all accounts in the accumulation phase . But there is no detail on taxes paid by each account holder - so proving that tax has been paid to TRD would be extremely difficult, if not impossible.  If or when you transition to 'retirement phase' and receive regular scheduled payments, your account earnings is tax free (but that money becomes taxable income for ATO and DHS purposes - not taxed but counted).  

MY POST CONCERNS THOSE WHO ARE AUSTRALIAN EXPATS - WHO ARE SELF FUNDED RETIREES AND/OR HAVE OR INTEND TO HAVE A PRIVATE (NON-GVT) PENSION FUNDED THROUGH AN EXISTING PRIVATE SUPERANNUATION FUND.  

 

Thanks mate.  I am in a unique situation transitioning funds into Super both Concessional contributions (which I pay additional 15% tax using a 'Notice of Intent to Claim a Deduction' on my tax return - seems separate to nett earnings tax?) and non-concessional contributions from external investments.  (To date - concessional contribution cap limits are $27,500 per financial year and non-concessional contributions are capped at $110,000 per financial year, with $330,000 allowed as an alternative as a 3-year bring forward contribution cap limit).  

You state that in the accumulation phase Super nett earnings gets taxed 15%.  Okay.  On both concessional and non-concessional contributions?

 

Maybe there is some sort of letter that is verified by the ATO that can be produced for international tax compliance purposes?  Sounds like it may be the case since there are other countries that already impose a non-resident tax too on foreigners incoming remittances and those expats require proof of tax? 

 

Here is where to me it gets extremely complex and uncertain: 

 

1) I was planning to liquidate an investment early next financial year (Oz) and make a large non-concessional contribution into my Superannuation fund, just after 1 July this year, using the '3-year bring forward rule.  It allows you to make three years worth of non-concessional contributions at the yearly maximum contribution cap limit.  This is in lieu of the usual yearly non-concessional contribution cap limit.  

 

I was then planning to almost immediately (same financial year) convert that contribution into a newly created 2nd pension account.  I have spoken to the Superannuation fund and they said this is fine - no waiting period, and will be provided the option to merge that new pension account with my existing Super fund pension account (save on doubling up on monthly admin fees). 

 

2) The issue I am now unsure of therefore, is that that newly deposited non-concessional contributions (x3 year's worth) will not have had time to be in an accumulation phase (?) as it will almost immediately be transferred into a new pension account before the next financial year.

 

The Super fund may impose a 15% tax on any possible small earnings made before transfer, but may not be in the fund long enough to have accumulated any nett earnings (wouldn't have happened to my other funds i moved from my Superannuation account into a current small Super pension, as I had that money invested in the Superannuation fund account for a few years beforehand, so would have been taxed over 2-3 financial years first).  Maybe I need to hold off converting a new contribution into a pension account for a year until it has been taxed over a financial year? But not sure the point:

 

3) Issue as well is that the Super fund already has funds I have added, that would have been taxed assessed (and will be taxed assessed this financial year) and therefore had 15% taken out-of nett earnings. 

My non-concessional contributions after 1 July will be added to that same account and merged with the same funds already taxed. 

 

4) Finally, in the pension fund, it is still accumulating (albeit at a lower % as I am drawing a pension from it), albeit what I believe is all untaxed.  So I am concerned that money in a pension fund that is accumulating from untaxed profits (since it moved to the pension fund), could be taxable by Thai revenue. 

 

5) Seems to me from my basic understanding, that you may be able to somehow argue that the money in the pension fund had been in a Super fund where it was taxed yearly on net income earnings at 15%.  But any nett earnings made on that amount since it was transferred over to a pension account is untaxed (currently averaging out over 10 years at around 8% p/a). 

Also issue is the deposit amounts put into Super as concessional and non-concessional contributions - they are not nett earnings from Super, and probably deemed savings and/or income derived from other taxed investments. 

 

So those contribution amounts transferred to the pension account haven't been taxed within Super accumulation phase.  Only the nett earnings have.  And we cannot backtrack all contribution amounts into Super over years (decades for most) to see where they all derived from and whether they were untaxed or taxed before being contributed into Super.  

 

How to 'un-muddy' those waters?  

 

To summarize: Basically, in Oz, private pensions, when remitting money to LOS, we are moving money into Thailand from an untaxed pension fund, that previously was taxed only on nett earnings during accumulation phase in the Superannuation fund beforehand.  The contributions into the Super fund that generated those earnings may have been untaxed (savings/base amount before interest earned on any investment, inheritance, compensation, etc) or taxed (income derived from external investments, taxed salaries, etc) prior to them being contributed into to the Super fund. 

 

I don't know if Thai Revenue cares about the sources of the Super fund contributions and if taxed over the decades before being put into a Super fund accumulation phase, only if the pensions accounts are or are not being taxed.  Seems they just may look at the pension itself and if it is/isn't taxed and not the history of the accumulation of funds beforehand? 

 

Something I obviously need clarification with from my accountant and the Super fund.  They may be able to clarify some tax info on the Australian end at best, but you'd need international tax expert advice who thoroughly understand Thai tax laws, as well as a lot of clarification from Thai revenue department. 

 

I have watched a public expat forum in Pattaya on YouTube where a tax expert guest attended and mentioned he did not believe Australian pensions would be taxed - according to his and his firm's interpretation of the legislation and DTAs.  But we get alternative interpretations since.  

 

I am still not feeling any more confident about this.  Keeping frugle and minimizing transfers still. And definitely holding off making any investments into Thailand. 

 

Thanks.