Important video clarifications on the new taxes for foreign residents in the Swiss embassy

[mokwit]

It might be so that if there is a tax treaty you will not be taxed but you may still have to prove that no tax is due, alternatively if they wanted to, the authorities could de facto exempt foreigners by saying their income was covered by tax treaties and therefore no need for needless scrutiny.

[topt]

1 hour ago, CartagenaWarlock said:

It'll be interesting to see how the agents do it.

As I have already said there is currently no link between the 2 and none has been mooted but anything is possible in time.

[BE88]

35 minutes ago, mokwit said:

It might be so that if there is a tax treaty you will not be taxed but you may still have to prove that no tax is due, alternatively if they wanted to, the authorities could de facto exempt foreigners by saying their income was covered by tax treaties and therefore no need for needless scrutiny.

 

But it is certain that you should prove it with a document showing that you have paid the tax in your country and if it is not in English with an official translation paid for by you as was said in the video.

 

[Ben Zioner]

38 minutes ago, mokwit said:

It might be so that if there is a tax treaty you will not be taxed but you may still have to prove that no tax is due, alternatively if they wanted to, the authorities could de facto exempt foreigners by saying their income was covered by tax treaties and therefore no need for needless scrutiny.

Reckon it is the former, from the talk about the proof documents and their translation/certification about 20 minutes from start.

[norbra]

36 minutes ago, scorecard said:

But:  For Australian Old age Pensioners the payments are not subject to tax (but if the person has other income then the situation changes).

 

So for Aussie OAP recipients with no other income residing permanently in Thailand does the 'not subject to tax' mean that tax has been considered by the Aussie system and not taxable, therefore the 'not subject to tax' flows through to the Thai tax scenario? 

No . Your Aged pension funds remitted to Thailand will be taxed here if you are a Thai tax resident.

The first 150,000 thb (190,000 if you aged 65+) is tax exempt.

Then 150,000 (+65 year 110,000)@ 5%

Then 200,000@ 10%

Then 200,000@15%

Then @20%.

There could well be challenges to this arrangement,because a lot of Hiso will be out of pocket big time,as well as activists and academics pointing to individuals financial plans having been shredded,etc.

 

[digger70]

1 hour ago, scorecard said:

But:  For Australian Old age Pensioners the payments are not subject to tax (but if the person has other income then the situation changes).

 

So for Aussie OAP recipients with no other income residing permanently in Thailand does the 'not subject to tax' mean that tax has been considered by the Aussie system and not taxable, therefore the 'not subject to tax' flows through to the Thai tax scenario? 

 

Yes this  seems to be right I just found a little more info for Our Aussies.   

Are Australian pensions taxed?

Tax on the Age Pension

There is no tax payable on withdrawals you make from super, whether it is regular retirement income payments or lump sums, provided you are aged 60 or over. However, what about Age Pension payments? Age Pension payments are generally tax free, provided they are your only source of income.

[norbra]

26 minutes ago, digger70 said:

 

Yes this  seems to be right I just found a little more info for Our Aussies.   

Are Australian pensions taxed?

Tax on the Age Pension

There is no tax payable on withdrawals you make from super, whether it is regular retirement income payments or lump sums, provided you are aged 60 or over. However, what about Age Pension payments? Age Pension payments are generally tax free, provided they are your only source of income.

Sorry wishful thinking.

As an aged pensioner your payments are not taxed in AUSTRALIA,but when you REMIT them to a Thai bank account then as a Thai tax resident they are tax assessable income.

[SunsetT]

3 hours ago, Wrwest said:

The extra paperwork for which Thailand if famous will be enough to cause some to keep their time in Thailand below the 180 days thus depriving Thailand of the spending … perhaps to be spent in another lower cost country.

Yes I agree. Im a Snowbird and Im already calculating when I can return to Thailand in October to keep under 180 days for 2024. It will be more than a week later than when I would normally return.  My 1st week or so I normally spend in hotels at the beach so Thailand will now lose that income as I will travel straight to my NE residence.

[Guderian]

I remember my time working in Switzerland as a consultant fondly. A very generous day rate, 40% of which was declared to the local tax authorities, while the other 60% went tax-free into my offshore bank account. Good old Swiss, they've always known how to do things efficiently, lol.

[JimGant]

On 2/28/2024 at 11:45 AM, CartagenaWarlock said:

Nothing new, really. If the pension is specifically mentioned, in the double-taxation strategy, it is not taxed.

 

Not true for the US-Thai tax treaty. Yes, gov't pensions and social security are specifically restricted to taxation only by the paying country. However, private pensions, annuities, and IRAs *are* mentioned as being exclusively taxable by country of residence, i.e., Thailand. (But the US still maintains taxation rights on these payments, per the "saving clause.")

 

But, yes, other DTAs are less specific. The UK one makes no mention of private pensions

[jayboy]

7 hours ago, Sydebolle said:

The ambassador's 15 minutes of fame; something to show back to his ministerial boss on how proactive and busy he is. 

 

What a pointless comment.In my opinion the ambassador did an excellent job.I

[Khyron]

4 hours ago, BE88 said:

 

But it is certain that you should prove it with a document showing that you have paid the tax in your country and if it is not in English with an official translation paid for by you as was said in the video.

 

Good luck with the Thai revenue department deciphering a US 1040 long form, It won't be a simple document saying I paid taxes or not. Hopefully when I retire, we will only have to file a 1040EZ, a single page document.

 

My big question is how they are going to determine prior savings that have been taxed throughout the years vs actual income after I retire when monies are sent to Thai banks. The money I will have when I sell my house is considered tax free in California and the US. I figure If I receive that money at the end of one year, then stay in LOS beginning in another year, I won't have to declare it, does that sound correct?

 

Do other countries have similar tax preparation? Or is the US alone in overly complicated yearly tax declaration?

 

Thanks for any and all replies.

[Lite Beer]

5 hours ago, norbra said:

No . Your Aged pension funds remitted to Thailand will be taxed here if you are a Thai tax resident.

The first 150,000 thb (190,000 if you aged 65+) is tax exempt.

Then 150,000 (+65 year 110,000)@ 5%

Then 200,000@ 10%

Then 200,000@15%

Then @20%.

There could well be challenges to this arrangement,because a lot of Hiso will be out of pocket big time,as well as activists and academics pointing to individuals financial plans having been shredded,etc.

 

Not quite correct.  Thailand Personal Tax Deductions and Allowances - SHERRINGS

 

[roobaa01]

8 hours ago, jojothai said:

People need to know that if they are over 65 they have the 160,000 and an extra 190,000 allowance for over 65. 

People need also to know that another THB 60.000 is granted if I are married to a Thai national. Thereto I think there is also a THB 100000 threshold for pension . Hence in total then 450000 plus the first THB 150000 income are tax exempt . So to my believe the 600 k.

 

Wbr

Roobaa01

[BE88]

53 minutes ago, Khyron said:

Good luck with the Thai revenue department deciphering a US 1040 long form, It won't be a simple document saying I paid taxes or not. Hopefully when I retire, we will only have to file a 1040EZ, a single page document.

 

My big question is how they are going to determine prior savings that have been taxed throughout the years vs actual income after I retire when monies are sent to Thai banks. The money I will have when I sell my house is considered tax free in California and the US. I figure If I receive that money at the end of one year, then stay in LOS beginning in another year, I won't have to declare it, does that sound correct?

 

Do other countries have similar tax preparation? Or is the US alone in overly complicated yearly tax declaration?

 

Thanks for any and all replies.

 

It is a question that many ask themselves, buying a house in Thailand this year and the following is a puzzle, like simply transferring savings to Thailand. No official statement has been made on this matter, it would appear that Thais consider any amount coming into Thailand to be taxable according to this video if you don't have pay tax before, which is complete idiocy. but if it amounts to $1 million then it is not taxable on investor visas.

 

[Mike Lister]

2 minutes ago, BE88 said:

 

It is a question that many ask themselves, buying a house in Thailand this year and the following is a puzzle, like simply transferring savings to Thailand. No official statement has been made on this matter, it would appear that Thais consider any amount coming into Thailand to be taxable according to this video if you don't have pay tax before, which is complete idiocy. but if it amounts to $1 million then it is not taxable on investor visas.

 

That is completely untrue, readers should be very careful what they read on this subject because there's a lot of misinformation around, including this video. There will not be any official statement, the statement last September and November is all you get. One small change has been made to a single tax rule, the rest of the Thai Revenue Code remains as it has in the past. You could try starting by reading the following, that will at least give you a reliable starting point.

 

 

 

[Mike Lister]

8 hours ago, BE88 said:

This means that every citizen in Thailand who resides more than 180 days is entitled to a tax deduction of 190,000 + 60,000 THB if he is legally married yet another deduction of 60,000 THB and so on if he has other minor children dependent on each 60,000 THB.

NO, that is not correct. The TEDA (Tax exemptions deductions and allowances) depend on several factors including age, marital status, number of children, deductible expenses for insurance, investments etc and a whole host of other factors.

[Sigmund]

2 solutions apply here.

 

a) stay only for 178 days

 

b) consider relocating to other countries like Vietnam or anyplace else in the region that with less immigration or tax hassles for retirees. Even India is better and more simple in delivering long stay multiple entry visas for foreigners.

[Mike Lister]

7 hours ago, mokwit said:

It might be so that if there is a tax treaty you will not be taxed but you may still have to prove that no tax is due, alternatively if they wanted to, the authorities could de facto exempt foreigners by saying their income was covered by tax treaties and therefore no need for needless scrutiny.

No you do not have to prove anything! All you have to do is to file a return and understand the terms of your country's DTA.

[Mike Lister]

48 minutes ago, BE88 said:

 

So Mike, do you think that the person invited by the Swiss embassy was not a representative of the Thai government????
😂

 

And what you affirm is the absolute truth?

 

We make it very difficult to understand you and I not trust you affirmations.

 

 

 

I've no idea who the person in the video is and I've no idea where they came from. Based on recent events I've witnessed that are similar, would be tax advisors are holding these seminars everywhere, some are worthwhile, many are not, many are simply attempts to get new business.

 

If you don't trust what I have to say, I wont bother repeating anything here that is already in the simple tax guide, which is there for anyone who wishes to read it. Anyone who is waiting for some huge announcement from the Thai Revenue Department regarding the one small change they made to their tax rules last year, will be disappointed. Many people appear to be using this as a wait and see tactic in the absence of any firm understanding on their part. But please, be my guest, feel free to wait away, to your hearts content. 

 

[jayboy]

13 minutes ago, Mike Lister said:

I've no idea who the person in the video is

 

The video makes it very clear that the person is a senior legal expert from the Thai Revenue Department.

[MikePBrown]

The Lawyer mentioned that a Gift (up to Bt20m/year) to support your Spouse would be tax exempt for her/him. To me this appears to be saying that if you transfer from abroad to your Spouse's bank account up to 20 million baht a year, she/he will not need to pay income tax on this. For anyone who will have income tax liabilities in Thailand and has a wife who they support here, then there appears to be a method to reduce your tax liability in Thailand.

 

20 million Baht also seems to be a high gift allowance - one can only think as to why this large allowance was included????

[Mike Lister]

10 hours ago, jayboy said:

 

The video makes it very clear that the person is a senior legal expert from the Thai Revenue Department.

Excellent, then he should know what he's talking about. But it seems clear that either somebody on the video doesn't know, or, what was reported from the video, is incorrect or incomplete. I haven't watched the video and don't intend to, I'm merely responding to what posters have written here.

 

The OP has said,  "No official statement has been made on this matter, it would appear that Thais consider any amount coming into Thailand to be taxable according to this video if you don't have pay tax before".

 

With regard to the first part: as said earlier, no official statement is expected, instead, the international tax consultancies appear to be holding Q&A sessions with RD officials and publishing them, not dissimilar to this video. The Sherrings Q&A is here: 

 

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

 

Regarding the remainder pf the statement, specifically the following, "any amount coming into Thailand to be taxable if you don't pay tax before":

 

The above is only one part of a much larger picture and is highly misleading in isolation. Any income earned prior to 1 January 2024 is not taxable; income that is exempt under the terms of the DTA is not assessable to tax; income that is gifted to ascendants and descendants is also not assessible; savings are not assessible and so on and so on. So, the stand alone statement that "Thais consider any amount coming into Thailand to be taxable according to this video if you don't have pay tax before", is very wrong and highly misleading.

 

 

 

 

 

 

[Mike Lister]

17 minutes ago, MikePBrown said:

The Lawyer mentioned that a Gift (up to Bt20m/year) to support your Spouse would be tax exempt for her/him. To me this appears to be saying that if you transfer from abroad to your Spouse's bank account up to 20 million baht a year, she/he will not need to pay income tax on this. For anyone who will have income tax liabilities in Thailand and has a wife who they support here, then there appears to be a method to reduce your tax liability in Thailand.

 

20 million Baht also seems to be a high gift allowance - one can only think as to why this large allowance was included????

The Simple Tax Guide has this to say about Gift Tax, please read carefully the last para entitled "Note":

 

GIFT TAX 

 

43) "PIT is levied on gifts given by persons who are still alive. The tax is collected on the assets or the amount given to parents, ascendants, descendants, spouse, or others based on the value of the gift that exceeds a prescribed threshold, which depends on the type of gift and donor. Assets or amounts given that do not exceed the threshold are exempt from tax.

 

44) The following gifts are exempt from PIT:

a) Income derived by a parent from the transfer of ownership or possessory right in an immovable property without any consideration to a legitimate child, excluding an adopted child, in the amount not exceeding THB 20 million throughout a tax year in respect of each child.

b) Maintenance income or gifts from ascendants, descendants, or spouse, in the amount not exceeding THB 20 million throughout a tax year.

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

d) Income from gifts in the case where the person who receives the gifts will use them for religious, educational, or public benefit purposes according to the intention of the donors under the criteria and conditions referred to in the Ministerial Regulations.

 

45) Gifts in excess of the above thresholds will be subject to PIT at the rate of 5% and will not need to be included together with other income when computing the annual PIT liability.

 

46) For ascendants/dependants the threshold is THB 20 mill, nor non-ascendants/dependants it's THB 10 mill".

 

47) https://taxsummaries.pwc.com/thailand/individual/income-determination

 

Note: Only funds that are exempt from Thai tax or funds on which Thai tax has already been paid, can be Gifted. It is not possible to Gift funds that are assessable income, in order to avoid Thai tax.

 

The above is our current understanding of the Thai RD rules, which may or may not change as we go forward. We think the rules are unusual and rely on custom and tradition rather than on the RD Code itself and appear to have been included to satisfy the needs of the wealthy classes. Whether or not foreigners in Thailand will be able to use those same rules, in the same way, is uncertain. Also, it is highly likely that Thailand will adopt additional safeguards to prevent abuse of Gift Tax rules, as other countries have done, these will limit the extent to which Gifting can reduce tax.

 

[MikePBrown]

19 minutes ago, Mike Lister said:

The Simple Tax Guide has this to say about Gift Tax, please read carefully the last para entitled "Note":

 

GIFT TAX 

 

43) "PIT is levied on gifts given by persons who are still alive. The tax is collected on the assets or the amount given to parents, ascendants, descendants, spouse, or others based on the value of the gift that exceeds a prescribed threshold, which depends on the type of gift and donor. Assets or amounts given that do not exceed the threshold are exempt from tax.

 

44) The following gifts are exempt from PIT:

a) Income derived by a parent from the transfer of ownership or possessory right in an immovable property without any consideration to a legitimate child, excluding an adopted child, in the amount not exceeding THB 20 million throughout a tax year in respect of each child.

b) Maintenance income or gifts from ascendants, descendants, or spouse, in the amount not exceeding THB 20 million throughout a tax year.

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

d) Income from gifts in the case where the person who receives the gifts will use them for religious, educational, or public benefit purposes according to the intention of the donors under the criteria and conditions referred to in the Ministerial Regulations.

 

45) Gifts in excess of the above thresholds will be subject to PIT at the rate of 5% and will not need to be included together with other income when computing the annual PIT liability.

 

46) For ascendants/dependants the threshold is THB 20 mill, nor non-ascendants/dependants it's THB 10 mill".

 

47) https://taxsummaries.pwc.com/thailand/individual/income-determination

 

Note: Only funds that are exempt from Thai tax or funds on which Thai tax has already been paid, can be Gifted. It is not possible to Gift funds that are assessable income, in order to avoid Thai tax.

 

The above is our current understanding of the Thai RD rules, which may or may not change as we go forward. We think the rules are unusual and rely on custom and tradition rather than on the RD Code itself and appear to have been included to satisfy the needs of the wealthy classes. Whether or not foreigners in Thailand will be able to use those same rules, in the same way, is uncertain. Also, it is highly likely that Thailand will adopt additional safeguards to prevent abuse of Gift Tax rules, as other countries have done, these will limit the extent to which Gifting can reduce tax.

 

Thanks Mike - It looks like I need to be dead for this option to work!! I'll get my rose tinted glasses prescription checked tomorrow. BTW is the note from the regulation as I see PWC do not mention it in their summary.

[Mike Lister]

4 minutes ago, MikePBrown said:

Thanks Mike - It looks like I need to be dead for this option to work!! I'll get my rose tinted glasses prescription checked tomorrow. BTW is the note from the regulation as I see PWC do not mention it in their summary.

No, the note is something we added after much scrutiny. Gift Tax was the subject of intense review and debate amongst a number of people in the other threads, including CPA's and tax experts. The conclusion we arrived at is an interpretation rather than a precise extract from the Revenue Code which remains silent or vague in many areas. It was clear to us that Gift Tax could not be used as a means of evading tax by using assessible income for the Gift although the question has never been put to a RD official and tested. Part of the reason for this is that Gift Tax is not extensively used and is the domain of the wealthy hence most RD offices would not be able to answer the question! We do know that going forward, District RD offices are recruiting lawyers at each office, to address issues and questions such as this because the spouse of one of our members has applied for the role.

[CartagenaWarlock]

11 hours ago, scorecard said:

But:  For Australian Old age Pensioners the payments are not subject to tax (but if the person has other income then the situation changes).

 

So for Aussie OAP recipients with no other income residing permanently in Thailand does the 'not subject to tax' mean that tax has been considered by the Aussie system and not taxable, therefore the 'not subject to tax' flows through to the Thai tax scenario? 

I don't see the confusion. If it is mentioned not to be taxed by Thailand, it won't be taxed. What needs to flow through it? Does Australian old age pensions are barred from taxation in Thailand by the tax treaty like US social security or Swiss pension? if so, it won't be taxed. If not, you pay the tax. 

[CartagenaWarlock]

9 hours ago, JimGant said:

mentioned as being exclusively taxable by country of residence, i.e., Thailand. (But the US still maintains taxation rights on these payments, per the "saving clause.")

Yes, the US maintains taxation rights for all its citizens for world-wide incomes. However, the US also exempts you from paying taxes on your income if you have already paid or accrued it in another country. While doing your taxes, you can get credits by attaching Form 1116 to your 1040. Now, if you don't pay any taxes in the US on some income, e.g., ROTH withdrawal, you don't get any credit. This whole thing about taxing money brought to Thailand is really ridiculous. No country does that. I am not sure how they are going to implement it for foreigners. 

[motdaeng]

7 hours ago, CartagenaWarlock said:

.... Does Australian old age pensions are barred from taxation in Thailand by the tax treaty like US social security or Swiss pension? if so, it won't be taxed. If not, you pay the tax. 

 

why do you think the swiss pension is barred from taxation in thailand?

as far as I know, that is incorrect!

 

there are a lot of incorrect information and rumours about the new tax law ... luckily i do get my pension in few years time, therefore i don't have to worry too much yet ...

 

[mokwit]

11 hours ago, Mike Lister said:

No you do not have to prove anything! All you have to do is to file a return and understand the terms of your country's DTA.

Is this based on your actual experience of filing in Thailand whilst receiving funds from a DTA country?