Personal Income Tax Guide (for foreigners) Thailand

[The Cyclist]

2 minutes ago, Mike Lister said:

Yes, hopefully, sure, but we need to be able to paint a picture of the parts that we do know and also bring readers up to speed on the higher level overview and the process. There will of course be gaps, some quite large, let's continue to record them in the list of unknowns so that we can make progress.

 

The only part that we know is that something has changed from the 01 Jan 2024 with regards to foreign transfers into Thailand.

 

Is there really any point in trying to paint a picture based on speculation for the RD to throw a bucket of black paint over it when they finally extract their finger and issue further instructions ?

 

As I said yesterday, the code attached to my Government Pension remittance probably identifies exactly what it is to both the bank and the RD. 

 

Will the RD require me to file a tax return on income that they cannot touch ? Logic would tell me no, but then I have no idea what the OECD best practice in tax avoidance / evasion is.

 

And unless someone has waded through the forests of OECD paperwork on CRS is, then they will not have a clue how Thailand will move forward until the RD make an announcement.

[Mike Lister]

2 minutes ago, The Cyclist said:

 

The only part that we know is that something has changed from the 01 Jan 2024 with regards to foreign transfers into Thailand.

 

Is there really any point in trying to paint a picture based on speculation for the RD to throw a bucket of black paint over it when they finally extract their finger and issue further instructions ?

 

As I said yesterday, the code attached to my Government Pension remittance probably identifies exactly what it is to both the bank and the RD. 

 

Will the RD require me to file a tax return on income that they cannot touch ? Logic would tell me no, but then I have no idea what the OECD best practice in tax avoidance / evasion is.

 

And unless someone has waded through the forests of OECD paperwork on CRS is, then they will not have a clue how Thailand will move forward until the RD make an announcement.

This aspect is not up for debate, we are not going to cease explaining the things that we know nor answering questions where we can, just because there are some parts we don't. As said repeatedly, as updates are issued and various aspects are made more clear, the document will be updated accordingly.

[digital]

28 minutes ago, digital said:

In the UK property income is calculated from rent received, minus expenses such as insurance, repairs, maintenance, management fees etc. What's left is the "Adjusted profit for the year"

 

If this income was brought into Thailand what figure would they look at, the total rent, or what the UK calculation says is profit?

 

In my case the adjusted profit is under the personal allowance. I have a tax certificate each year SA302 that shows "total income = £0.00" -  this is because the adjusted profit for the rent (rent minus expenses) minus personal allowance is <0.

 

What figure would Thailand want me to declare, the SA302 total income, or the income before deduction of personal allowance? If the former then do Thailand also allow expenses to be deducted, I have only seen "Deductions allowed for the calculation of PIT... c. Income from letting out of property on hire 1) Building and wharves    30%" at Personal Income Tax | The Revenue Department (English Site) (rd.go.th)

 

Thanks

 

 

24 minutes ago, Mike Lister said:

Only funds remitted to Thailand are potentially assessable for Thai tax. Please read the document in the op before raising queries.

 

 

Thanks yes I know that, I'm asking if the income was remitted into Thailand

 

Edited January 16 by digital

[Mike Lister]

58 minutes ago, digital said:

 

 

Thanks yes I know that, I'm asking if the income was remitted into Thailand

 

Assuming you transferred sufficient funds into Thailand to breach the tax filing threshold (120k at present), you would need to determine what is your assessable income and what is not, according to the DTA between the two countries and RD rules. Our understanding at present is that property rental income that is remitted to Thailand is potentially taxable here, only the funds that are transferred would be eligible to be included on your return. If those funds were earned before 1 January 2024, they should be free of tax, according to our understanding of the rules. The precise status of funds that are transferred after that date remain unclear. It has been said that funds remitted from a country with whom Thailand shares a DTA, will not be taxable but that is not confirmed. Much depends on what the RD announces and on the contents of the DTA between the two countries. In what I think is a worst case scenario, the funds that you transfer will be included on a tax return and assessed for tax, subject to any TEDA. Theoretically, there could be additional tax to pay, if the amount remitted was in excess of the TEDA and the Thai rate of tax on those funds was higher than those in the source country....which seems unlikely, unless significant sums are involved.

 

In practice, I remit UK  funds to Thailand that is earned from property rental. I declare on my Thai tax return, the amounts that were transferred but since the total amount of those funds is less than my TEDA, I pay no additional tax.

[digital]

8 minutes ago, Mike Lister said:

 if the amount remitted was in excess of the TEDA and the Thai rate of tax on those funds was higher than those in the source country....which seems unlikely, unless significant sums are involved.

 

Thanks, yes I understand it's a case of wait and see for a lot of people how it will pan out and nobody probably knows the answers yet.

 

Because the UK allows deductions of expenses on the rent income, to arrive at "Adjusted profit for the year" (from UK tax return SA105 UK Property), this figure less UK personal allowance leaves me with a "Total Income of £0.00" showing on SA302 tax Calculation certificate.

 

If that's the figure I can declare in Thailand that's great, but if its the actual rent income before UK expense deductions and personal allowance that Thailand want to tax then it could mean paying Tax in Thailand when I don't in the UK because of the lower Thai personal allowances (it would be below Uk personal allowance, but above Thai personal allowance)

 

Sorry I'm not explaining it well, basically I guess if my UK tax bill is zero due to allowances/deductions, is my income classified as taxed already even though zero tax is paid? Does that make sense?

[Isan Farang]

Today i went to the Tax office in Ubon, to get my tax refund that was deducted from my FD savings last year. The lady told my wife my pension and savings being sent from the UK is not to be taxed. She said if i am a pensioner and have no employment i do not fill out any tax documents.

 

When my wife said there are some supposed new rules starting from Jan 24, the lady smiled and said Thailand has many new rules but none of them are followed. She has worked there for 40 years. 

 

[Mike Lister]

4 minutes ago, digital said:

Thanks, yes I understand it's a case of wait and see for a lot of people how it will pan out and nobody probably knows the answers yet.

 

Because the UK allows deductions of expenses on the rent income, to arrive at "Adjusted profit for the year" (from UK tax return SA105 UK Property), this figure less UK personal allowance leaves me with a "Total Income of £0.00" showing on SA302 tax Calculation certificate.

 

If that's the figure I can declare in Thailand that's great, but if its the actual rent income before UK expense deductions and personal allowance that Thailand want to tax then it could mean paying Tax in Thailand when I don't in the UK because of the lower Thai personal allowances (it would be below Uk personal allowance, but above Thai personal allowance)

 

Sorry I'm not explaining it well, basically I guess if my UK tax bill is zero due to allowances/deductions, is my income classified as taxed already even though zero tax is paid? Does that make sense?

Yes it makes sense. and my guess in your last para is the same as my  guess. 

[The Cyclist]

7 minutes ago, Isan Farang said:

Today i went to the Tax office in Ubon, to get my tax refund that was deducted from my FD savings last year. The lady told my wife my pension and savings being sent from the UK is not to be taxed. She said if i am a pensioner and have no employment i do not fill out any tax documents.

 

When my wife said there are some supposed new rules starting from Jan 24, the lady smiled and said Thailand has many new rules but none of them are followed. She has worked there for 40 years. 

 

 

@Shoeless Joe was also told by his tax office that his income would not be taxed, unfortunately he did not ask if he had to file a tax return.

 

So we might end up in the realms of Immigration, with different Offices having different interpretations of the rules.

[Rimmer]

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[Yumthai]

8 minutes ago, The Cyclist said:

So we might end up in the realms of Immigration, with different Offices having different interpretations of the rules.

It has been the case for years dealing with Immigration offices all over the country. Why would it be different with RD?

 

[Isan Farang]

12 minutes ago, Happy happy said:

Quote deleted by Moderation

 

 

 

 

 

This info was verbal, it may be this year the head office will send a new requirement to follow. So as of now there is no official document with any changes for 2024 returns as far as i am aware. Its a now waiting game 

[jayboy]

5 hours ago, Mike Lister said:

I think you are right, I don't believe those things will be taxed either but of course at this stage we don't have the definitive word from the RD on this, nor the new forms. Savings acquired before 1 Jan 24 are free of tax, we have the official statement on that, a cutoff account statement as of that date, ought be enough to prove the case.

 

That's my understanding also.As it happens, my pre -31.1.24 savings are mostly in Channel Islands cash deposits with a major UK bank.A cut off accounts statement as at 31.12.23 is therefore available, and it seems v.probable that remittances to Thailand from this source will be exempt from tax.so far so good and therefore my main concern is whether future remittances from this source  are assessable for Thai tax, and whether they need to be entered in a Thai tax return.Don't mind either way but obviously would prefer the route with less paperwork.

[Mike Lister]

I have removed some 14 posts from view that were not central to the topic, many of which were moderator notes of caution and casual replies.  I have done this in order to keep the thread relevant and more easily readable to newcomers, without them getting sidetracked or distracted by irrelevance.

[JimGant]

3 hours ago, digital said:

Because the UK allows deductions of expenses on the rent income, to arrive at "Adjusted profit for the year" (from UK tax return SA105 UK Property), this figure less UK personal allowance leaves me with a "Total Income of £0.00" showing on SA302 tax Calculation certificate.

 

It's your gross rent receipts, less expenses, that tax agreements are concerned with as far as income is determined. That your UK personal allowance -- or for Yanks, the standard deduction -- means you pay zero taxes in your home country. That's nice -- but completely divorced of the income figure you declare to Thailand.

Here's something from the US Thai technical explanation. Chew on it for awhile:

 

Quote

The first paragraph of Article 6 states the general rule that income of a resident of a
Contracting State derived from real property situated in the other Contracting State may be taxed
in the Contracting State in which the property is situated.

This Article does not grant an exclusive taxing right to the situs State; the situs State is
merely given the primary right to tax.

Probably most DTAs have something similar, since they're all based on the OECD and UN models. But, what's important about giving taxation rights to both contracting countries -- with one designated as having primary right to tax, like here, with the situs country having the primary right -- is that, if the primary taxing country doesn't tax subject income (due, here, to the UK personal allowance), then the secondary country has the right to tax same income -- and doesn't have to offset it by any tax credits, because there aren't any tax credits coming from the UK, in this example. So, declare your net rental income to Thailand, if remitted -- and if exceeds TEDA and becomes taxable income, well, pay your taxes and have a beer. This, actually, is what OECD current doctrine addresses, namely, model tax agreements don't just address avoidance of double taxation -- they address avoidance of NO taxation.

 

So, if you've got remitted rental net income receipts to Thailand, looks like the rules say, file a Thai tax return (if higher than 120k baht). Home country, as situs state and primary taxing authority, gets to keep all their tax receipts. But has to issue a tax credit to Thailand for these collected taxes. Net result: Pay taxes only to home country; or pay full tax bill to home country, plus some extra tax to Thailand, should the tax credits not subtract out all taxes owed to Thailand. Fun, huh.

 

 

[Mike Lister]

I am busy (trying) to make the document terminology more consistent and uniform, I am also trying to make it more readable and more easily understandable. This has resulted in some portions of the document being rewritten. An early para now defines some terminology and also provides an overview of the process which  is set out below. I'm happy to take sensible and helpful comments that are relevant.

 

 

5.  Terminology and Process: Income that is not remitted to Thailand is Excluded, this has been confirmed by the Thai RD. Overseas Funds Transfers that are remitted to Thailand must be reviewed by YOU the tax payer to determine their nature and the source of funds. Some Transfers may be Exempt under the terms of a Dual Tax Treaty (DTA) (see below) or because of RD rules. For example, the RD has confirmed that income and savings earned before 1 January 2024 are Exempt. Similarly, the DTA between the US and Thailand confirms that US Social Security (SSc) income is Exempt from tax in Thailand. What remains after Exempt funds are deducted, is income that is regarded in this document, and in RD terminology, as Assessable Income that YOU must report on a tax return, subject to a minimum threshold amount. Assessable Income is entered on the tax return and assessed for tax and the appropriate Thai Tax Exclusions, Deductions and Allowances (TEDA) applied. If a positive amount remains, that is considered to be Taxable Income that is subject to tax, in accordance with the Thai Tax Tables.

[Yumthai]

36 minutes ago, Mike Lister said:

5.  Terminology and Process: Income that is not remitted to Thailand is Excluded, this has been confirmed by the Thai RD. Overseas Funds Transfers that are remitted to Thailand must be reviewed by YOU the tax payer to determine their nature and the source of funds. Some Transfers may be Exempt under the terms of a Dual Tax Treaty (DTA) (see below) or because of RD rules. For example, the RD has confirmed that income and savings earned before 1 January 2024 are Exempt. Similarly, the DTA between the US and Thailand confirms that US Social Security (SSc) income is Exempt from tax in Thailand. What remains after Exempt funds are deducted, is income that is regarded in this document, and in RD terminology, as Assessable Income that YOU must report on a tax return, subject to a minimum threshold amount. Assessable Income is entered on the tax return and assessed for tax and the appropriate Thai Tax Exclusions, Deductions and Allowances (TEDA) applied. If a positive amount remains, that is considered to be Taxable Income that is subject to tax, in accordance with the Thai Tax Tables.

Other example of RD exemption: Inheritance and gift remittances are exempt from PIT according to certain conditions/thresholds.

 

 

Edited January 16 by Yumthai

[Mike Lister]

1 minute ago, Yumthai said:

Other examples of RD exemption: Inheritance an gift remittances are exempt from PIT according to certain conditions/thresholds.

 

 

Thanks for the reminder. I wont include that in this early para which is more about defining the terminology and the  process (using a couple of examples) but you've reminded me I need to put in a para later on about this. Thanks.

[sirineou]

On a totally unrelated question. How much cash can you carry in Thailand without having to report it? 

I am asking for a friend.  

[Mike Lister]

6 minutes ago, sirineou said:

On a totally unrelated question. How much cash can you carry in Thailand without having to report it? 

I am asking for a friend.  

I understand the amount has been reduced so I'll have to check, I believe it's $15,000, above which a Customs Declaration is required.

[OJAS]

On 1/12/2024 at 2:42 PM, 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.

 

Apologies if this point has already been raised in the intervening 4 pages, but there appears to be a small - but nevertheless potentially significant in my case - omission in the following sentence included in paragraph 19 relating to capital sales proceeds:

 

"If the capital and/or was acquired before 1 January 2024, it is free of Thai tax."

 

Should this sentence, in fact, include the additional word which I have shown in bold below?

 

"If the capital and/or profit was acquired before 1 January 2024, it is free of Thai tax."

 

Edited January 16 by OJAS

[Mike Lister]

2 minutes ago, OJAS said:

 

Apologies if this point has already been raised in the intervening 4 pages, but there appears to be a small - but nevertheless potentially significant in my case - omission in the following sentence included in paragrph 18 relating to capital sales proceeds:

 

"If the capital and/or was acquired before 1 January 2024, it is free of Thai tax."

 

Should this sentence, in fact, include the additional word which I have shown in bold below?

 

"If the capital and/or profit was acquired before 1 January 2024, it is free of Thai tax."

 

Well spotted, it was a test to see who was reading and paying attention and you are the first to notice! The first prize in this contest is a two week stint as moderator of this thread, congratulations, it's well deserved.

:)

Yes, it should include the word profit.

 

 

[Yumthai]

2 hours ago, sirineou said:

On a totally unrelated question. How much cash can you carry in Thailand without having to report it? 

I am asking for a friend.  

https://www.bot.or.th/en/our-roles/financial-markets/foreign-exchange-regulations/exchange-control-regulation.html#accordion-89d74b5d26-item-394b0956bc

 

"Bringing into or taking out of Thailand baht banknotes in an amount exceeding THB 450,000 or foreign currency banknotes in an amount exceeding USD 15,000 or its equivalent requires a Customs declaration when entering or leaving the country."

[Mike Lister]

I have posted a new version of the document, because of the extent of the changes and the rewording, it has not been sensible to highlight the changes. It remains a draft version that will continue to be updated as things are made more clear and new information is released. I have attempted to make the process and the terminology more clear, consistent and easier to understand but I have done so in isolation so you may see aspects that I haven't.....it's been a long day!

 

Constructive relevant comments are welcome but please read the second post which defines scope and context of the thread. The purpose of the document remains to inform anyone who does not understand the Thai tax system and the intended rule changes. Many aspects of our current understanding may change, as and when the RD makes further announcements. When it does, we will attempt to incorporate any changes, into the document.

[OJAS]

7 minutes ago, Mike Lister said:

I have posted a new version of the document, because of the extent of the changes and the rewording, it has not been sensible to highlight the changes. It remains a draft version that will continue to be updated as things are made more clear and new information is released. I have attempted to make the process and the terminology more clear, consistent and easier to understand but I have done so in isolation so you may see aspects that I haven't.....it's been a long day!

 

Constructive relevant comments are welcome but please read the second post which defines scope and context of the thread. The purpose of the document remains to inform anyone who does not understand the Thai tax system and the intended rule changes. Many aspects of our current understanding may change, as and when the RD makes further announcements. When it does, we will attempt to incorporate any changes, into the document.

 

Mike

 

A couple of further points occur to me (apologies if they have already been covered in your revised draft):

 

1. It might be worth a mention that it is important for us to establish what information the taxation authorities in our home countries might need from us in seeking any tax relief which might be due under the relevant DTT. In the case of us Brits for instance, HMRC require the following form to be completed, including specific input from the RD regarding our tax residency status (this could, in practice, prove a right PITA for those in receipt of UK company pensions in particular):

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1119722/Double_Taxation_Treaty_Relief_Form_DT-Individual.pdf

 

2. I gather that the RD insist on remittances from our home countries being converted into THB for assessment purposes on the basis of the prevailing BOT Transfer rate for the date when a particular remittance was finalised - which, if true, might also be worth mentioning:

 

https://www.bot.or.th/en/statistics/exchange-rate.html

 

 

[JinJock]

13 hours ago, Mike Lister said:

I think you are right, I don't believe those things will be taxed either but of course at this stage we don't have the definitive word from the RD on this, nor the new forms. Savings acquired before 1 Jan 24 are free of tax, we have the official statement on that, a cutoff account statement as of that date, ought be enough to prove the case.

 

Say if foreign account balance before 1 jan 2024 is ~ 1M baht, and then on the same account there was several deposits total of 200000 in 2024, there was one transfer to thai bank from this account amount of 300000. How this should be calculated

a) 300000 come from 1M savings , no tax to pay

b) 100000 come from savings, 200000 taxable

 

If variant b) , then how bank situation should be organized having in mind that i cant change account to where funds is being deposited. What i think i should have done is to transfer all savings before 1 Jan 2024 to other account and then it will be easy to see where savings are and where new deposits, but i did not for reasons. So what to do if variant b ?

Edited January 16 by JinJock

[Mike Lister]

11 minutes ago, JinJock said:

 

Say if foreign account balance before 1 jan 2024 is ~ 1M baht, and then on the same account there was several deposits total of 200000 in 2024, there was one transfer to thai bank from this account amount of 300000. How this should be calculated

a) 300000 come from 1M savings , no tax to pay

b) 100000 come from savings, 200000 taxable

 

If variant b) , then how bank situation should be organized having in mind that i cant change account to where funds is being deposited. What i think i should have done is to transfer all savings before 1 Jan 2024 to other account and then it will be easy to see where savings are and where new deposits, but i did not for reasons. So what to do if variant b ?

Please read the document in the OP, the answers are in there. Feel free to come back with any questions that remain afterwards.

[Mike Lister]

8 hours ago, JinJock said:

 

Say if foreign account balance before 1 jan 2024 is ~ 1M baht, and then on the same account there was several deposits total of 200000 in 2024, there was one transfer to thai bank from this account amount of 300000. How this should be calculated

a) 300000 come from 1M savings , no tax to pay

b) 100000 come from savings, 200000 taxable

 

If variant b) , then how bank situation should be organized having in mind that i cant change account to where funds is being deposited. What i think i should have done is to transfer all savings before 1 Jan 2024 to other account and then it will be easy to see where savings are and where new deposits, but i did not for reasons. So what to do if variant b ?

Now that I've re-read your posts, I don't think the answer is in the document...sorry!

 

If I understand your question correctly, the only part that is transferred to Thailand is the 300k and since that comes from savings earned pre-1 January 2024, there is no tax top pay.

 

[Mike Lister]

10 hours ago, OJAS said:

 

Mike

 

A couple of further points occur to me (apologies if they have already been covered in your revised draft):

 

1. It might be worth a mention that it is important for us to establish what information the taxation authorities in our home countries might need from us in seeking any tax relief which might be due under the relevant DTT. In the case of us Brits for instance, HMRC require the following form to be completed, including specific input from the RD regarding our tax residency status (this could, in practice, prove a right PITA for those in receipt of UK company pensions in particular):

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1119722/Double_Taxation_Treaty_Relief_Form_DT-Individual.pdf

 

2. I gather that the RD insist on remittances from our home countries being converted into THB for assessment purposes on the basis of the prevailing BOT Transfer rate for the date when a particular remittance was finalised - which, if true, might also be worth mentioning:

 

https://www.bot.or.th/en/statistics/exchange-rate.html

 

 

Your tax residency status can be conformed by the entry and exit stamps in your passport, the RD appears to use them as their guide.

 

Yes, the RD deals only in THB so any foreign currency values will need to be converted. I'll look into this and add it to the list.

[OJAS]

6 hours ago, Mike Lister said:

Yes, the RD deals only in THB so any foreign currency values will need to be converted. I'll look into this and add it to the list.

 

An interesting point does, however, arise in the case of pensions not covered  by DTT's which are directly remitted to a Thai bank account by the home country pension provider (as often appears to be the case on here for UK State Pension payments, for instance). Is it the THB amount appearing in bank statements/passbooks which constitutes assessed income, or a conversion of the frozen GBP amount based on the prevailing BOT rate as at the date when the remittance hits the Thai account (notwithstanding that this will almost certainly be different from the actual THB credit)?

 

[Klonko]

DTA: while a DTA may well work in theory, the practical implication is unclear e.g., is certified translation required for foreign account and/or tax statements, and are foreign taxes recognised when paid or only when finally assessed by foreign RD (i.e. reclaim only possible after paying full Thai taxes). 

Unspecified accounting method (FIFO, LIFO, etc.) applied by Thai RD for determining the source of remittances as income or capital.

 

≥  180 days for qualifying as tax resident: There was once a post stating that the Thai RD has calculated fewer days, but I do not remember if this was referring to  a long past event, due to specific practice by a local Thai RD and if the calculation was based on midnight. Is there any source for the applicable calculation method?

 

I expect that many issues will not be officially clarified but subject to local Thai RD practice rendering tax planning rather difficult.