Personal Income Tax Guide (for foreigners) Thailand

[Mike Lister]

23 hours ago, Crossy said:

Mike. I have an offshore (Isle of Man) private pension fund that's due to start paying in April 2024.

 

It was funded solely by my (very taxed) income in Thailand, will I have to pay tax on the funds again when it is re-imported (i.e. spent)??

 

Let me come back to this, now that I've settled down a bit. :)

 

The way in which your offshore pension in IOM was funded initially doesn't appear relevant, even if you used taxed USD from your work in Thailand. The money that was earned in Thailand was exported to the IOM so at that point the connection ends, unless the contract for the funding of your offshore pension was established using a Thai company which seems improbable.

 

I believe that leaves you in a situation that is very similar to many others here. You are retired in Thailand married and you derive income from an overseas pension. You will be entitled to at least 560,000 in tax deductions. allowances and exemptions each year (see below), possibly more, so the question is, how much more than that will you need to import each year because that will determine how much tax you have to pay. 

 

TEDA = Tax Allowance, Deductions & Exemptions

PA1 = 60,000 (personal Allowance for the tax filer)

PA2 = 60,000 (deductions for spouse)

OAE - 190,000 (over age 65 years exemptions)

PD - 50% of pension received, max 100,000 (deductions for pension income received)

ZR - zero rated for tax - 150,000 (the zero rated tax band in the tax tables)

(Note: there are additional TEDA’s depending on your personal circumstances but these are the major ones most commonly used)

 

[jonesthepost]

Am i right in that as a UK retired pension any money I transfer in to Thialand will not be taxable if  it has been taxed in UK.If so as my  UK  state pension and my company pension come to less than 12,575 pounds  P.A. so it is not taxed it there my transfered funds will be taxed I believe that there other  UK pensioners in the same boat 

[brewsterbudgen]

1 minute ago, jonesthepost said:

Am i right in that as a UK retired pension any money I transfer in to Thialand will not be taxable if  it has been taxed in UK.If so as my  UK  state pension and my company pension come to less than 12,575 pounds  P.A. so it is not taxed it there my transfered funds will be taxed I believe that there other  UK pensioners in the same boat 

 

Isn't there a similar provision for low amounts like this to be tax free in Thailand?

 

[UKresonant]

Just now, jonesthepost said:

Am i right in that as a UK retired pension any money I transfer in to Thialand will not be taxable if  it has been taxed in UK.If so as my  UK  state pension and my company pension come to less than 12,575 pounds  P.A. so it is not taxed it there my transfered funds will be taxed I believe that there other  UK pensioners in the same boat 

See item 26 of the guide on the 1st page, probably very little tax to pay, if over 65

 

(I'm just wondering as well if there is some exemption for the UK state pension, relative to the Thai state pension if that is also not taxed, implied by  by Article 24 of the UK-TH DTA, but will read more later)

[Mike Lister]

Below are sample copies of the tax form showing the structure of the form and examples of the TEDA (tax Exemptions, Deductions and Allowances). The TEDA codes used in the earlier examples have been updated to remain consistent with the RD terminology. The purpose of posting these forms is to familiarize you with them and to show where certain information can be found. I can't help very much with further information about them because I file online and the RD staff do this for me. When I prepare my tax return I do so using a basic spreadsheet and make the computation in advance so that I know what the bottom line is. I leave the form filling to the RD staff who are most helpful.

 

 

Structure of Information in PND 91:  Assessable income, exemptions, deductions, allowances

 

(Revised) Abbreviations and Acronyms 

TEDA = Tax Exemptions, Deductions, & Allowances

OAE = 190,000 (over age 65 years exemption)

PD = 50% of pension received, max 100,000 (deduction for pension income received)

PA1 = 60,000 (personal allowance for the tax filer)

PA2 = 60,000 (personal allowance for spouse)

ZR - zero rated for tax - 150,000 (the zero rated tax band in the tax tables)

(Note: there are additional TEDAs depending on your personal circumstances but these are the major ones most commonly used)

 

[Mike Lister]

31 minutes ago, jonesthepost said:

Am i right in that as a UK retired pension any money I transfer in to Thialand will not be taxable if  it has been taxed in UK.If so as my  UK  state pension and my company pension come to less than 12,575 pounds  P.A. so it is not taxed it there my transfered funds will be taxed I believe that there other  UK pensioners in the same boat 

The number you quoted, 12,575, is the UK Personal Allowance which only applies to the UK side of taxation. Thailand has its own system which comprises Tax Exemptions, Deductions and Allowances (TEDA).

 

People of different ages and circumstances will have different TEDA's. As an over age 65 year old you are entitled to the following:

60,000 Personal Allowance

190,000 Over age 65years

100,000 (max) or 50% of pension income remitted

In addition, the first 150,000 is zero rated for tax. That gives you a total tax free income of 500,000 baht, which in UK pounds terms is 11,300 approx so it's nearly the same as the UK Personal Allowance. If you are married you can claim a further 60,000 for your wife. Other TEDA exist for additional items such as life and health insurance premiums paid in Thailand. 

 

As long as your remitted income is below the figures shown above, you should be free and clear of tax in Thailand.

 

 

[billd766]

2 hours ago, Mike Lister said:

Below are sample copies of the tax form showing the structure of the form and examples of the TEDA (tax Exemptions, Deductions and Allowances). The TEDA codes used in the earlier examples have been updated to remain consistent with the RD terminology. The purpose of posting these forms is to familiarize you with them and to show where certain information can be found. I can't help very much with further information about them because I file online and the RD staff do this for me. When I prepare my tax return I do so using a basic spreadsheet and make the computation in advance so that I know what the bottom line is. I leave the form filling to the RD staff who are most helpful.

 

 

Structure of Information in PND 91:  Assessable income, exemptions, deductions, allowances

 

(Revised) Abbreviations and Acronyms 

TEDA = Tax Exemptions, Deductions, & Allowances

OAE = 190,000 (over age 65 years exemption)

PD = 50% of pension received, max 100,000 (deduction for pension income received)

PA1 = 60,000 (personal allowance for the tax filer)

PA2 = 60,000 (personal allowance for spouse)

ZR - zero rated for tax - 150,000 (the zero rated tax band in the tax tables)

(Note: there are additional TEDAs depending on your personal circumstances but these are the major ones most commonly used)

 

Thank you for that information.

[Moonlover]

3 hours ago, Mike Lister said:

3 hours ago, jonesthepost said:

Am i right in that as a UK retired pension any money I transfer in to Thialand will not be taxable if  it has been taxed in UK.If so as my  UK  state pension and my company pension come to less than 12,575 pounds  P.A. so it is not taxed it there my transfered funds will be taxed I believe that there other  UK pensioners in the same boat 

 

3 hours ago, Mike Lister said:

The number you quoted, 12,575, is the UK Personal Allowance which only applies to the UK side of taxation. Thailand has its own system which comprises Tax Exemptions, Deductions and Allowances (TEDA).

 

People of different ages and circumstances will have different TEDA's. As an over age 65 year old you are entitled to the following:

60,000 Personal Allowance

190,000 Over age 65years

100,000 (max) or 50% of pension income remitted

In addition, the first 150,000 is zero rated for tax. That gives you a total tax free income of 500,000 baht, which in UK pounds terms is 11,300 approx so it's nearly the same as the UK Personal Allowance. If you are married you can claim a further 60,000 for your wife. Other TEDA exist for additional items such as life and health insurance premiums paid in Thailand. 

 

As long as your remitted income is below the figures shown above, you should be free and clear of tax in Thailand.

 

 

Sorry @Mike Lister, but I don't get this at all. I'm in a similar position to many UK pensioners here in having multiple pensions, all of which are subject to UK taxes. My pensions having been harvested by HMRC are then sent to me here in Thailand.

 

Why should Thailand's Revenue dept have any further claim on that income whatsoever? Isn't that what DTAs are all about? Protecting tax payers from being taxed twice on the same income source(s). If it doesn't, then it isn't worthy of the title 'Double Taxation Agreement' is it!

 

And why, in the original notification, published in Thai Enquirer (and other publications) does it say: 'Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand'. There is a bit of an anomaly here between this, at what you have said above.

 

https://www.thaienquirer.com/50744/thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

 

Edited January 12 by Moonlover

[Negita43]

16 hours ago, Mike Lister said:

The old rule was that income remitted in the year it was earned is taxable. Any income you earned in 2023 and remitted in the same year, should be reported in a tax return before 31 March this year, assuming you were Thai tax resident. You say you were out of the country for 180 days, does that mean you were in Thailand for the rest of the year which is 185 days. You need to count those day very carefully to be certain because if it is 185 days, yes, you were tax resident in Thailand.

 

Thank you Mike for trying to explain the often unexplainable (inexsplicable?)!

1. I never transfer from income - only from assets. Although proving that might be difficut since money realised  from assets get transferred to bank accounts before transfer to Thailand. (but the implication of what you say above is; if the transfer was from assets it's not declarable as "income" for tax purpses.

2. I do think was grossly unfair to announce this would be implimented (even if it was already extant but not applied) threequarters of the way through a tax year.

3. Being 80 years old I was just about to sell my flat in the UK and transfer all my finacial assets to Thailand to make it easier for my gf (12+ year relationship) to deal with everything when the inevitable happens - Maybe I will have to re-think this especially with regard to my UK state pension which currently goes to my UK bank account and is taxed (lightly) over there..

4. I agree with what many have said that the revenue people in Thailand are usually very helpful as I worked here for 5 years and  they were always helpful when I filed my returns so I think I may well go and speak with them.

[TheAppletons]

1 hour ago, Moonlover said:

 

Sorry @Mike Lister, but I don't get this at all. I'm in a similar position to many UK pensioners here in having multiple pensions, all of which are subject to UK taxes. My pensions having been harvested by HMRC are then sent to me here in Thailand.

 

Why should Thailand's Revenue dept have any further claim on that income whatsoever? Isn't that what DTAs are all about? Protecting tax payers from being taxed twice on the same income source(s). If it doesn't, then it isn't worthy of the title 'Double Taxation Agreement' is it!

 

And why, in the original notification, published in Thai Enquirer (and other publications) does it say: 'Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand'. There is a bit of an anomaly here between this, at what you have said above.

 

https://www.thaienquirer.com/50744/thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

 

 

  His response was to an individual who noted that his pension(s) totaled less than the UK taxation level of 12,575 UK pounds....thus, was not taxed in the UK.  Ergo, it would be potentially liable for taxation in Thailand.

 

  That person said:  ".......as my  UK  state pension and my company pension come to less than 12,575 pounds  P.A. so it is not taxed it there my transfered funds will be taxed I believe that there other  UK pensioners in the same boat ."

 

 

 

  

[JimGant]

17 hours ago, Mike Lister said:

18 hours ago, retarius said:

What are the penalties for non compliance? Askin' for a friend. 

It depends on the nature of the non-compliance, anywhere from a fine for late filing when payment is due, up to 10 years and 200k fine for evasion.

 

If you owe no taxes (because you have a negative taxable income of 380k baht, after you subtract 500k of allowances et al from the 120k required minimum filing threshhold of assessable income), then the penalty for no filing is a fine equal to (in some cases, twice) the taxes owed. But, you don't owe any taxes -- thus, no fine, or any other kind of penalty. So why file?

 

My gardener is paid 500bt per day. Thus, six days a week times 52 = 156k. So, by law, she's expected to file, although she'll owe no taxes after subtracting allowances et al. So, you think she, and all the other minimum wage earners will file? Of course not -- fortunately, since only trees and man hours, not collectible taxes, are involved. And, as usual, the people often know better than their government, and react accordingly.

 

Point being: No taxable income, no reason to file. And no penalties. So, don't file in this situation.

[Mike Lister]

1 hour ago, Moonlover said:

 

Sorry @Mike Lister, but I don't get this at all. I'm in a similar position to many UK pensioners here in having multiple pensions, all of which are subject to UK taxes. My pensions having been harvested by HMRC are then sent to me here in Thailand.

 

Why should Thailand's Revenue dept have any further claim on that income whatsoever? Isn't that what DTAs are all about? Protecting tax payers from being taxed twice on the same income source(s). If it doesn't, then it isn't worthy of the title 'Double Taxation Agreement' is it!

 

And why, in the original notification, published in Thai Enquirer (and other publications) does it say: 'Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand'. There is a bit of an anomaly here between this, at what you have said above.

 

https://www.thaienquirer.com/50744/thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

 

The previous poster said that his pensions were within the UK Personal Allowance hence there was no need to pay UK tax. If his pensions had been higher than the PA and UK tax was due, we would have then explored what types of pensions were involved and whether the DTA offered any respite from tax when they were remitted to Thailand but this wasn't necessary. I explained that the Thai equivalent of the UK PA is TEDA which in his case, comes to a similar amount hence no tax is due. If his UK pensions were higher than the UK PA and he had been taxed, that could be used to offset any tax due in Thailand, under the terms of a DTA. Is that more clear or does it need more explanation?

 

As a caveat to the above: we do not know at this stage, how the Thai RD will manage this whole rule change e business which is why the imperative currently is to wait and see what happens and what news emerges. There is a range of possibilities ranging from the really good news, eg, we changed our minds, sorry for the upset, to, we're going to tax quite a few things.....and anywhere in between.

[Mike Lister]

2 minutes ago, JimGant said:

 

If you owe no taxes (because you have a negative taxable income of 380k baht, after you subtract 500k of allowances et al from the 120k required minimum filing threshhold of assessable income), then the penalty for no filing is a fine equal to (in some cases, twice) the taxes owed. But, you don't owe any taxes -- thus, no fine, or any other kind of penalty. So why file?

 

My gardener is paid 500bt per day. Thus, six days a week times 52 = 156k. So, by law, she's expected to file, although she'll owe no taxes after subtracting allowances et al. So, you think she, and all the other minimum wage earners will file? Of course not -- fortunately, since only trees and man hours, not collectible taxes, are involved. And, as usual, the people often know better than their government, and react accordingly.

 

Point being: No taxable income, no reason to file. And no penalties. So, don't file in this situation.

I said at the start of the thread that we would not try to bottom out issues that remain unknowns, instead we would flag these at the end of the document and refer back to them when new information emerges. I wrote, "B. The conflicting need to file a tax return where zero tax is due (a nil return)".

 

As things stand presently, Para 24 in the document reads as follows, based on the latest set of RD rules:

 

 

24. Who must file a tax return? The English language translation of the RD rule says that, "You have to file a return on the income that you received if you meet one of the following conditions:

(1) Your total income exceeded 120,000 baht in the tax year.

(2) You were married and your income combined with that of your spouse exceeded 220,000 baht in the tax year."

 

This is understood to mean assessable income.

 

Until the RD provides further guidance, the above is the recommendation that we have to give. As and when the RD clarifies matters, we will change the above . Let's please not debate matters here for which poster opinion is different from the RD instruction.

[Negita43]

19 minutes ago, Negita43 said:

The old rule was that income remitted in the year it was earned is taxable

Maybe my old mind is going wonky but is the implication of that - if you keep say pension income earned in the UK, in 2023 and don't remit it till one or more years later then it is not declarable/taxable?

[MistyBlue]

14 minutes ago, Mike Lister said:

"B. The conflicting need to file a tax return where zero tax is due (a nil return)".

 

The 22/23 PWC booklet explicitly states a tax return is required irrespective of whether any tax is due (pages 13 and 14).

 

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

 

[JimGant]

13 minutes ago, Mike Lister said:

Until the RD provides further guidance, the above is the recommendation that we have to give

 

Well, you could include alternative recommendations, like from retired CPAs, particularly if that alternative recommendation saved a lot of time and effort -- and was completely safe from punitive actions, like fines or imprisonment. Certainly, including a sidebar of other opinions, is the professional way, particularly in fluid and confusing situations, like this subject. Just my thoughts.

[Mike Lister]

2 minutes ago, JimGant said:

 

Well, you could include alternative recommendations, like from retired CPAs, particularly if that alternative recommendation saved a lot of time and effort -- and was completely safe from punitive actions, like fines or imprisonment. Certainly, including a sidebar of other opinions, is the professional way, particularly in fluid and confusing situations, like this subject. Just my thoughts.

Yes sure, that's not unreasonable, but, we can't offer up alternatives that contradict the present rules thus I'm not quite sure how best to couch those alternatives. 

[Mike Lister]

5 minutes ago, MistyBlue said:

 

The 22/23 PWC booklet explicitly states a tax return is required irrespective of whether any tax is due (pages 13 and 14).

 

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

 

Yes I saw that and thank you for posting that link earlier.

 

The need to post a zero or null return was always my interpretation of the rules and is indeed what I have filed previously. But there was a substantial weight of posters who argued against that in the long thread and said that was crazy. Even now, that view still exists in some quarters.

 

I believe we should leave the recommendation the way it is and that the RD criteria set out above is what the document will recommend. In the meantime,  To be clear for everyone else, Thai tax returns should be filed, as long as the assessible income level is reached, regardless of whether tax is due or not. As and when the landscape changes, we'll let everyone know.

[JimGant]

4 minutes ago, MistyBlue said:

The 22/23 PWC booklet explicitly states a tax return is required irrespective of whether any tax is due (pages 13 and 14).

 

Yeah, and PWC is a good company, but I guess they're just passing on what the translation comes out to be. But since Thailand can't fine me or imprison me for not filing when no taxes owed, just what can they do? Well, this is certainly an area where I'd take my chances -- going back to my CPA days, where I'd always recommend the grey area that is in your favor, at least when I added up the probabilities. Here, however, there are some unknowns, like, can they mess around with your visa for not filing.....

 

So, do what you're comfortable with, at least with the current information. But I'd bet they'll modify the 120k rule, just to prevent a flood of tax returns with no check attached.

 

 

[Mike Lister]

Can I bring everybody's attention back to the purpose of the thread, the need to complete the document in the OP. We're still looking for gaps, errors, lack of clarity etc, if anyone can contribute, that will be really appreciated.  Answering individual tax questions is OK but very wearing and a completed document will mean posters can answer their own questions.

[UWEB]

22 hours ago, Mike Lister said:

IMPORTANT - The authors of this document are neither lawyers nor tax advisors, anyone who takes action based on its contents are solely responsible.

 

 

A SIMPLE GUIDE TO PERSONAL INCOME TAX IN THAILAND

11 January, 2024

Version 5, Rev F

Draft work in Progress

 

1. The purpose of this guide is to provide foreigners living in Thailand with the simplest possible overview of Personal Income Tax (PIT) in Thailand. The scope of this document is limited to PIT.

 

2. You may have heard that new tax laws came into effect on 1 January this year. In fact, that is not true! The old tax rules still exist and remain valid, albeit just one minor change to them was made in November last year. Previously, anyone who earned money overseas and remitted it to Thailand in a different tax year, received that money free of Thai tax. That loop hole in the Revenue Department (RD) tax code has been exploited by wealthy Thai’s and is now closed.  Money earned overseas after 1 January 2024 and remitted to Thailand in any year, is now potentially liable to Thai tax and must be assessed via tax return, subject to a minimum income threshold . The purpose of the new rule is to reduce tax avoidance and to help detect tax evasion. Unfortunately, it now means that overseas funds transfers by foreigners living in Thailand, also have an increased risk of being taxed.

 

3. This guide is an overview of the core parts of the PIT system. It is not designed to be exhaustive and it doesn’t cover all aspects of PIT, nor is it intended to  override anything produced by the i RD, or specialist tax companies such as Sherrings or Mazzars. This guide also does not address all types of income or the rules relevant to people from every country. What this guide will provide is a starting point for readers to manage their own tax affairs and it will also provide most of the answers for those with simple tax affairs, especially the average pensioner.

 

4. There are also certain types of visa that fall outside of the RD tax code. The LTR visa for example is one of them, it  received its tax exempt status by royal decree hence visa holders will not to be assessed for Thai tax and they are specifically excluded from this explanation.

 

5. Terminology: this document uses the word “assessable” often. Assessable in the context of this document and the RD, means income that is liable to tax which must be included on a Thai tax return. Not all income is assessable, some is excluded from assessment by its very nature, an example might be income that is not remitted to Thailand or because of the terms of a specific tax agreement. There is assessable income that is taxable and assessable income that is exempt from tax, but the expression, "non-assessable income”, does not really exist as an entity within the Thai Revenue Code. Consequently, readers should not think that some of their income is not assessable under the Thai Tax code. Taxable income = Assessable income minus exemptions, deductions, allowances.

 

6. Dual Tax Agreement/Double Tax Agreement (DTA): is an agreement between two countries that sets out which of the two countries has the right to tax specific types of income and all the associated rules. It’s purpose, in part, is to ensure that the same funds are not taxed twice by two different countries  and provides a means by which tax that is paid twice, can be recovered, how and from where. Note: If the taxpayer income arises in one country but the tax  payer is resident in a second country, use of a DTA can result in increased tax being paid, if the second country has a higher rate of tax on the type of income in question, than the other.

 

7. This document is being drafted in January 2024. Tax returns are due between now and 31 March 2024, which cover the period, 1 January 2023 until 31 December 2023. The tax changes affecting foreigners in Thailand came into effect 1 January 2024 which means this years income activity is not reportable until at least 181 days from the start of the year. For year round residents, a tax return will be due 1 January next year, 2025.

 

8. If you stay in Thailand for more than a cumulative 179 days, between 1 January and 31 December each year, you will be and always were considered to be Tax Resident in Thailand during that year, almost entirely  regardless of the type of visa you have (special tax exempt classes of visa excluded). It doesn’t matter that you may be Tax Resident in your home country or elsewhere or that you pay tax in those countries, Thailand will still regard you as Tax Resident. Tax Residency and Immigration status (and the visa you hold) are different things. Tax residency is based solely on the number of days you spend in Thailand and where you are at midnight on each day.

 

9. It should be noted that there always was an obligation on the part of foreigners who were tax resident in Thailand, to report assessable income every year, provided they met the minimum income threshold. This law was not actively enforced in the past and many remained unaware of their obligation. Very little has changed today, that obligation remains unchanged albeit the scope of income that must be reported has now increased and tax collection has taken on a higher profile.

 

10. Because you are Tax Resident, YOU must review your income each year to determine if it is regarded as assessable to tax in Thailand, nobody else will do this for you. If your income does not exceed 120,000 baht per year, you do not need to file a tax return (60,000 baht if your only income is bank interest paid to you by a bank in Thailand). If your income is over 120,000 baht per year, you must file a Thai tax return between 1 January and 31 March.

 

11. Your income in Thailand is defined as any money paid to you inside Thailand, as well as, any money you receive from overseas, both types are potentially assessable income for Tax Residents. There are many types of income that can be as assessable, the Thai RD lists some of them and is linked below, however, the list is not exhaustive and does not consider the many different types of overseas income that forigners may have:

https://sherrings.com/personal-income-tax-in-thailand.html#:~:text=Section%2040%20of%20Thailand's%20Revenue,Pensions%3B%20and

 

12. There are also classes or types of Thai income that the RD regards as exempt from assessment and these are also linked below. Note: it is assumed that if the income is not listed as exempt, that it is regarded as assessable:

THIS IS A PLACE HOLDER FOR THE CORRECT LINK

 

13. The definition of income that is derived from  within Thailand is fairly clear, if you work and have a job and you are a Tax Resident, the payment you receive is assessable for tax.  Interest that is paid to you on Thai bank accounts is regarded as assessable income, as is income from investments such as stocks and bonds within Thailand. As a general principle, any payment you receive for work that arises within Thailand is regarded as assessable income. You should note that if you are generating income by working while staying in Thailand, it is (and has always been) irrelevant where that money is paid and whether you bring the money into the country or keep it offshore. That money arises in Thailand hence it is taxable here.

 

14. It is not possible to give the same blanket rule to everyone to determine whether their income is assessable or not because of the variable factors involved. Overseas income has to pass several tests to determine if it is assessable to Thai tax or not. It is still early days and all the rules are not yet clear. It has been said that foreign tax residents who import funds from countries that have a DTA with Thailand, will not be effected. Exactly how that will work leaves many questions unanswered hence this document attempts to look at only the most popular types of income based on what is known at present. This document does not speculate as to what may happen in the future, other than in the segment at the end concerning likely future Immigration rules.

 

15. First and foremost, only income that is remitted to Thailand is assessable in Thailand, funds that remain outside Thailand are not. If we take the simplest type of income and say that you transfer personal savings from overseas to Thailand and those savings  were earned before 1 January 2024, those funds are not assessable. But savings earned after that date are, hence the date when the income is earned is extremely important. A word of caution, you may be asked to provide proof that savings were earned before 1 January 2024 hence it will help if you store statements of each of your accounts showing valuations that are effective as of 31 December 2023.  

 

16. The way in which the income is received in Thailand does not change its definition. Bank transfers, cheques, cash, overseas ATM and credit card transactions can also be income, the last two because overseas funds were imported to pay for goods or services in Thailand.

 

17. Another common type of income is pensions, which can be complicated, depending on the type of pension and the country that it comes from. The country of origin is important because there are over 60 different types of Dual Tax Agreements, sometimes called Double Taxation Agreements (DTA’s), between Thailand and those 60+ countries and each one is different. As a general rule, most private or company pensions from most countries appear to be assessable here but YOU will need to confirm that yours is or is not. If that is true, private and company pension income IS assessable income in Thailand.

 

18. US Social Security payments, a form of pension paid to some older people, can only be taxed by the US under DTA rules and Thailand is forbidden from taxing them, this means those payments are NOT assessable income. UK State pension on the other hand is not covered by a DTA so it is assessable income in Thailand whilst UK Government or Civil Service, Armed Forces and some NHS pensions are not. YOU must research your own country’s DTA to determine if your pension is exempt or not.

 

19. The proceeds from the sale of a capital item such as overseas property, where funds are remitted to Thailand, is one popular source of expat funds, the sale of some investment products such as stocks, shares and bonds is another. Those proceeds typically comprise two parts, capital and profit. If the capital and/or was acquired before 1 January 2024, it is free of Thai tax. One way to separate capital and profit may be to have an official valuation or statement that is dated 1 January 2024 since anything earned before that date, is not assessable. Also, if the profit has been the subject of a Capital Gains return in the home country, that also may be free of Thai tax but this cannot be guaranteed at this time, until things are made more clear and are once again subject to the terms of any DTA. YOU will need to review the DTA between Thailand and your home  country to fully understand what particular clauses affect you.

 

20. It appears as though most property rental income that is remitted to Thailand is considered to be assessable income and is taxable here, unless of course it has been taxed in the home country and/or the DTA prohibits its taxation (which seems unlikely).

 

21. YOU are responsible for determining if your assessable income in Thailand exceeds the threshold and means you must file a tax return. That assessable income might comprise, pension payments, investment income, rental income or any of the other types of income listed in the link above. If you have assessable income of over 120,000 baht per year, you must file a tax return (60,000 baht if your sole source of assessable income is bank interest paid in Thailand).

 

22. Before you can file a tax return in Thailand, you need to acquire a Tax Identification Number or TIN from the RD offices in your area. You will need your passport, a valid and current visa or extension and in many areas, a Certificate of Residency from the Immigration Department.

 

23. Who must file a tax return? The English language translation of the RD rule says that, "You have to file a return on the income that you received if you meet one of the following conditions:

(1) Your total income exceeded 120,000 baht in the tax year.

(2) You were married and your income combined with that of your spouse exceeded 220,000 baht in the tax year."

 

This is understood to mean assessable income.

 

https://www.rd.go.th/fileadmin/download/english_form/030265guide91.pdf

 

24. Completing a tax return is a simple affair for most people, if you have difficulty, the Revenue Department staff are extremely helpful. Tax returns must be filed between 1 January and 30 March each year, if you file later than that, penalties will apply.

 

25. Thai tax is layered in bands and is payable based on the amount of assessable income that  falls within each band and are shown and linked below:

 

Taxable Income per year(Baht) Tax rate

0 – 150,000 Exempt

150,000 – 300,000 5%

300,000 – 500,000 10%

500,000 – 750,000 15%

750,000 – 1,000,000 20%

1,000,000 – 2,000,000 25%

2,000,000 – 4,000,000 30%

Over 4,000,000 35%

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Payroll/Personal-Income-Tax

 

26. The Thai tax system contains a series of Allowances, Deductions and Exemptions that will help you reduce your tax bill and they are very generous. It is easily possible for the average expat foreign retiree to reduce their taxable income by 500,000 baht or more each year. For example, a retiree aged 65 years of age, married and living here full  time, supporting a Thai wife who has no income and doesn’t file tax return, is allowed the following:

 

a. Personal Allowance for self - 60,000

b. Personal Allowance for wife - 60,000

c. Over age 65 years exemption - 190,000

d. 50% of pension income received, up to 100k - 100,000

e. In addition, the first 150,000 of assessable income is zero rated and free of tax

 

27. Additional deductions and allowances exist for health or life insurance premiums paid in Thailand. A complete list of deductions, allowances and exemptions can be found here

https://www.rd.go.th/english/6045.html  or from Sherrings below.

https://sherrings.com/personal-tax-deductions-allowances-thailand.html

 

28. The Thai Revenue  tax filing system is on-line but only available in Thai language at present. The tax forms are however available in English and they can be downloaded from the link below.

https://www.rd.go.th/english/63902.html

 

29. A simple sample completed tax form for a person aged over 65 years is shown below as a guide.

https://aseannow.com/topic/1312534-taxation-of-ex-pats-pensions-etc/page/6/#elControls_18532562_menu

 

30. Tax filing in Thailand is based on the honour system, it relies on you declaring all the right information every year and there are severe penalties for evading Thai tax. It would be foolish and a gross under estimation of RD capabilities to think  that doing nothing and keeping a low profile means you should ignore Thai taxation. Very few sane people in the US and UK ignore the tax authorities who tend to have a long reach. It cannot be ruled out that at some point, a link may be established between tax filings and visa extensions. A law already exists that requires foreigners to apply for Tax Clearance Certificates before being allowed to depart the country but it is not being enforced currently. These things are possible because similar things have been adopted in several countries in the past, including the US.

 

31. The RD tax return requires taxpayers to report assessable income, the tax rules even list some types of income In Thailand that are not assessable to help in this. In addition, some types of income, from some locations, for some nationalities, are also known to be exempt.

 

32. If a taxpayer is certain that some of their income is not assessable, they may not want to declare it on their Thai tax return.  Alternatively they may wish to ask the RD or employ specialist tax advisor's. It should go without saying that some taxpayers may try to suggest that some of their income is not assessable when really they don’t know for sure, or, they know that it is and say it that it isn’t, a sort of, chancing your arm and hoping you wont get found out. In that situation, the RD will not look favourably on such people and penalties are likely.

 

33. There are several sources of detailed tax information and these web sites are linked below:

https://www.rd.go.th/english/6045.html

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

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Payroll/Personal-Income-Tax

 

UNRESOLVED, CONFLICTING or UNCLEAR  ISSUES

 

A. The exact nature of the imported income taxation rules between the Thai RD and countries with whom it has DTAs

 

B. The conflicting need to file a tax return where zero tax is due (a nil return).

 

C. 

 

 *** END ***

Mike, thanks a lot for this excellent Guideline and the additional added clarifications. I will adjust it with some additional Information's I have found after reading the Thai-German DTA for my personal use.

[MistyBlue]

28 minutes ago, Mike Lister said:

Can I bring everybody's attention back to the purpose of the thread, the need to complete the document in the OP. We're still looking for gaps, errors, lack of clarity etc, if anyone can contribute, that will be really appreciated.  Answering individual tax questions is OK but very wearing and a completed document will mean posters can answer their own questions.

 

I have three items of feedback:

 

1.  Thanks for putting the disclaimer at the top, that puts my mind at rest - thank you.

 

2.  I believe the statement on credit card transactions in item 16 is misleading.  Credit card transactions are not income remittances, they are credit or loan remittances and the new interpretation only deals with income remittances.  We may yet hear further clarification in this area which is why I believe this should be removed from item 16 and added to the end of the document in the unresolved issues section.

 

3. The old thread is still pinned to the top of this section of the forum. I suggest that is unpinned and this new thread is pinned instead.

[jaideedave]

21 hours ago, Mike Lister said:

Here's a few examples that may help some people. Keener eyes than mine will tell me if I made any mistakes

!

(Revised/updated) Abbreviations and Acronyms used below

TEDA = Tax Exemptions, Deductions, & Allowances

OAE = 190,000 (over age 65 years exemption)

PD = 50% of pension received, max 100,000 (deduction for pension income received)

PA1 = 60,000 (personal allowance for the tax filer)

PA2 = 60,000 (personal allowance for spouse)

ZR - zero rated for tax - 150,000 (the zero rated tax band in the tax tables)

(Note: there are additional TEDAs depending on your personal circumstances but these are the major ones most commonly used)

 

PERSON A - Single, over 65, from UK, pension income THB 50k month.

Has assessable income of 50 x 12 or 600,000 per year. Their TEDE totals (PA1, OAE, PD and ZR) or 500,000. Taxable income = 100,000 baht at 5%. Note: if married to a Thai, their TEDE increases by  or 60,000 and their taxable income is 40,000 which is taxed at 5%.

 

PERSON B  - Same as above but from USA on Social Security old age pension

This person pays no tax, married or single, because all of their income is exempt under the Double Tax Agreement between the USA and Thailand.

 

PERSON C - Either A or B above but also has some savings

If the savings were earned before 1 January 2024, there is no change to their taxable income above. IF the savings had been earned after that date, their total assessable income would increase by the same amount. AND/OR, if, they also had savings interest in Thailand during the same period, the interest earned would be added to their taxable income but this would be offset by tax withheld at source by the banks.

 

PERSON D - Under age 50, income from savings and investments.

This person has limited TADE because of their age plus there is no tax exemption on their sources of income. This person must look at whether their income was taxed at source in their home country, and on the terms and conditions (T&C) of their country's DTA, either of which may make some or all of their income tax exempt.

 

PERSON E  - Property or other capital item such as stocks or bonds

This person has owned their investment for some times but decides to sell it and transfer the funds to Thailand. The sale of the item comprises two parts, the capital that was used to buy the investment and the profit earned since.  

 

The capital used to buy the investment is free of Thai tax but the amount may need to be proven via statements etc.

 

The profit on the investment that was earned prior to 1 January 2024 is tax free but the amount should be capable of being proven hence a statement or valuation dated 1 January 2024 will be helpful.

 

The remaining profit is potentially taxable in Thailand, subject to the terms of any DTA and is added to existing Taxable Income.

 PERSON B  - Same as above but from USA on Social Security old age pension

I believe I'm dude B. Change the USA to Canada and the DTA reads about the same. Only taxable in Canada. Therefore I deem my pensions non assessable so no point in even filing. I don't have any assessable income. period.

This person pays no tax, married or single, because all of their income is exempt under the Double Tax Agreement between the Canada and Thailand.

 

 

 

 

[Mike Lister]

7 minutes ago, MistyBlue said:

 

I have three items of feedback:

 

1.  Thanks for putting the disclaimer at the top, that puts my mind at rest - thank you.

 

2.  I believe the statement on credit card transactions in item 16 is misleading.  Credit card transactions are not income remittances, they are credit or loan remittances and the new interpretation only deals with income remittances.  We may yet hear further clarification in this area which is why I believe this should be removed from item 16 and added to the end of the document in the unresolved issues section.

 

3. The old thread is still pinned to the top of this section of the forum. I suggest that is unpinned and this new thread is pinned instead.

Thank you, I appreciate your efforts and comments, I will action them this afternoon.

[Negita43]

I just want to make one point:

This is a forum a place for discussion it is not a consultancy - a place for advice - information posted here is just that provided in good faith but not 100% guaranteed for accuracy.

I for one would like to say a huge thanks to Mike and others for hours of effort that must have gone into this thread trying to help others understand a complex issue.

We read the information here act on it or not BUT in the end whatever we do with it is our own responsibility.

[Mike Lister]

Can I just say that now, at the end of my first 24 hours in my new role, how much I miss the dozens of confused and sad emojis I used to receive each day. If anyone wants to give me a couple, just for the sake of nostalgia, that will be great.  :))

 

Seriously, a great job everyone, it feels like we're making progress and that more people are becoming aware. 

[Des1]

5 minutes ago, Mike Lister said:

Can I just say that now, at the end of my first 24 hours in my new role, how much I miss the dozens of confused and sad emojis I used to receive each day. If anyone wants to give me a couple, just for the sake of nostalgia, that will be great.  :))

 

Seriously, a great job everyone, it feels like we're making progress and that more people are becoming aware. 

Your posts are a great help, can't say enough how much I appreciate your efforts

[Presnock]

3 hours ago, Moonlover said:

 

Sorry @Mike Lister, but I don't get this at all. I'm in a similar position to many UK pensioners here in having multiple pensions, all of which are subject to UK taxes. My pensions having been harvested by HMRC are then sent to me here in Thailand.

 

Why should Thailand's Revenue dept have any further claim on that income whatsoever? Isn't that what DTAs are all about? Protecting tax payers from being taxed twice on the same income source(s). If it doesn't, then it isn't worthy of the title 'Double Taxation Agreement' is it!

 

And why, in the original notification, published in Thai Enquirer (and other publications) does it say: 'Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand'. There is a bit of an anomaly here between this, at what you have said above.

 

https://www.thaienquirer.com/50744/thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

 

I have not read the DTA between UK and Thailand but in the US DTA ( I realize this is different but I learned from reading the DTA that deals with my funds and suggest you do the same.  In mine it says what pensions are exempt from foreign residences but for not-govt pensions, they in turn can be taxed by the "resident" (in our case Thailand).  As an American, I have to pay US taxes but if Thailand were to begin taxing my funds, then I could in turn have the US IRS stop deducting taxes from those funds that the Thais are taking out tax.  These non-govt funds can be protected by the IRS giving credit for any taxes removed by the Thais.  Like I said, it is clear in the US DTA and I would think that by reading your own DTA it might answer any questions you might have.  Again as I said many times, and what you will see here before the final version is royally blessed, these are opinions of non-professionals for the most part, but even the professional tax agents are only guessing right now.  Good luck on yours, hope all works out for you and everyone else having questions.

[Presnock]

2 hours ago, Mike Lister said:

I said at the start of the thread that we would not try to bottom out issues that remain unknowns, instead we would flag these at the end of the document and refer back to them when new information emerges. I wrote, "B. The conflicting need to file a tax return where zero tax is due (a nil return)".

 

As things stand presently, Para 24 in the document reads as follows, based on the latest set of RD rules:

 

 

24. Who must file a tax return? The English language translation of the RD rule says that, "You have to file a return on the income that you received if you meet one of the following conditions:

(1) Your total income exceeded 120,000 baht in the tax year.

(2) You were married and your income combined with that of your spouse exceeded 220,000 baht in the tax year."

 

This is understood to mean assessable income.

 

Until the RD provides further guidance, the above is the recommendation that we have to give. As and when the RD clarifies matters, we will change the above . Let's please not debate matters here for which poster opinion is different from the RD instruction.

As has been noted before, there is no penalty for not filing if you do NOT have assessible income...why get a Tax Number and file a "zero" form if there is no penalty.  However IF the govt decides that WE must have a TN if we have certain incomes in order to move through immigration, then year WE will have to get a TN and do what paperwork they want unless we decide to a friendlier tax countr.  Funny, I just received an article talking about the 10 most desired countries 2024 in the world.  Thailand was number 6 and it said that while there are a few immigration complaints, taxation was avoidable by getting an LTR visa but of course they didn't say if that was easy, cheap or whatever.  But as a last resort, if you meet the necessary requirements for that visa, by royal decree you won't need to pay taxes while in Thailand to the Thais.

[Presnock]

21 hours ago, Aforek said:

My embassy ( France ) tells that because of the "Convention " ( DTA for English people ), we just have to do an income statement in the amphoe ( if we live outside Bangkok ) , but we don't have to pay anything 

who to believe ? 

seems to me YOU should read that DTA so YOU will know what it says.  Or, maybe see a tax expert who can give you his/her opinion of what the RD final will look like.  Or wait until next year when it becomes necessary to file or not