New tax laws

[Liquorice]

4 minutes ago, Mike Lister said:

We know that only 11% of the workforce is registered for tax and that only 6% of the WF pays tax, 4% via a PAYE equivalent. That is one of the smallest tax nets in Asia and the Revenue is working to increase it, case in point, the new tax ruling. We all know the capture rate is low, the Revenue knows it also, that's why more people will be forced into that net, mostly by using electronic bank information I imagine. 

And a lot of those that currently don't pay taxes, have businesses that work on cash, striving to cover day to day living expenses, so it never sees the light of day in a bank account.

 

I appreciate the hard work and effort you put into informing everyone and posting about Thailand's personal tax guide, but I don't agree with the speculation and scaremongering it's caused that all foreigners incomes to Thailand will be taxable. I have it on good authority from my local Tax office that the new laws were never aimed at foreign retirees or those with Thai spouse/families. They are fully aware which Countries have reciprocal double taxation treaties and that only 'net' pension incomes are being transferred.

 

[Liquorice]

14 minutes ago, Mike Lister said:

Great! I don't understand what your wife's business is., how it is structured for tax or income etc and I don't need to know, bottom line sound like she pays some tax on her income. My wife operates her business as described and that's cost effective for her. Is there a point anywhere here? 

No, it's not income based.
The business tax is based on the floor area size of the premises.
The signage tax is based on how many and what area any advertising signage is displayed.

[worrab]

1 hour ago, xeniv23 said:

I don't think that anyone will come knocking on your door.  It's possible that you will just be doing the routine paperwork for an extension and suddenly the IO will ask "Where are your Thai Tax Documents.....?  No Documents No Extension?"  Just a guess.  It could be official policy or an IO just jerking your chain.  The way things work around here you just never know.  

That would be an interesting scenario for me. I stopped remitting money to Thailand in Dec 2023. I am due a sizeable inheritance which is not liable for taxation here and we can live off that easily. Therefore no TIN or any other tax documents! Only papers from my solicitors to state this is inheritance money, which are submitted to my bank here.

There may be many other people who are in similar situations who do not need to remit money here for whatever reason.
This is why I really do not reckon tax documents etc will ever be part of obtaining an extension of stay. To much hassle for them to sort this all out.

[Lacessit]

3 minutes ago, Liquorice said:

And a lot of those that currently don't pay taxes, have businesses that work on cash, striving to cover day to day living expenses, so it never sees the light of day in a bank account.

 

I appreciate the hard work and effort you put into informing everyone and posting about Thailand's personal tax guide, but I don't agree with the speculation and scaremongering it's caused that all foreigners incomes to Thailand will be taxable. I have it on good authority from my local Tax office that the new laws were never aimed at foreign retirees or those with Thai spouse/families. They are fully aware which Countries have reciprocal double taxation treaties and that only 'net' pension incomes are being transferred.

 

As Mike has said, either the banks will start demanding TIN's from foreigners to operate a Thai account, and/or Immigration will want a TIN before granting a visa extension.

If either actually happens to someone on this forum, it's a fairly safe bet they will be posting about it.

 

[Mike Lister]

3 minutes ago, Liquorice said:

And a lot of those that currently don't pay taxes, have businesses that work on cash, striving to cover day to day living expenses, so it never sees the light of day in a bank account.

 

I appreciate the hard work and effort you put into informing everyone and posting about Thailand's personal tax guide, but I don't agree with the speculation and scaremongering it's caused that all foreigners incomes to Thailand will be taxable. I have it on good authority from my local Tax office that the new laws were never aimed at foreign retirees or those with Thai spouse/families. They are fully aware which Countries have reciprocal double taxation treaties and that only 'net' pension incomes are being transferred.

 

It's about ignorance, if people would stop and bother to understand what's involved they'd realise that for most people there are no issues. Instead what we see, all to often, is the cavalier types so swear..... they'll never pay tax in Thailand.....it will never happen........how will they know.......etc etc. We've seen repeatedly how relieved people have been once they understand the issues and do the basic math, there are tens if not hundreds of people in that category. It's not us that is the problem we're trying to educate and help. The problem is those cavalier types who confuse others and give them false hope, those are the ones you should be disagreeing with.

 

About DTA's: my best guess is that most tax offices don't understand DTA's because it's impossible to make sweeping statements that include everyone. The US DTA excludes Social Security Payments, the UK one doesn't exclude their equivalent.....one excludes some pensions, the other excludes other pensions but not some! Saying that only net pension are being transferred, is wholly wrong and misleading.

[Mike Lister]

8 minutes ago, Liquorice said:

No, it's not income based.
The business tax is based on the floor area size of the premises.
The signage tax is based on how many and what area any advertising signage is displayed.

Great, so she pays tax, how she pays it is of no interest or concern to me, juist that she pays tax. If she pays business tax, brilliant, it's one of the main input taxes for government. 

[NorthernRyland]

1 hour ago, 0ffshore360 said:

I can understand that the Thai Government would like to tax "earnings" of people resident in Thailand but for those who are here longer than 183 days therefore deemed tax residents but who are drawing on pensions or savings that presumably are already taxed at source then as an inflow of foreign exchange  every dollar, Euro, shekel of whatever is already a net gain to Thailand and it's economy. Tax or no tax that money is already injected.

 

that's what I think but governments are greedy and shameless. If you think they can take your money they will because they view it as their right. I pay taxes in the US on my income and I won't be paying Thailand anything until immigration gets involved and presents a clear procedure and states penalties for not complying. I'm waiting because this may never happen, like so many other things.

[worrab]

55 minutes ago, Mike Lister said:

Or, the Immigration people will require you to prove taxes were paid and any Revenue needs were satisfied, before you can extend your visa

I find this scenario highly unlikely. You have 2 totally different departments for a start. Immigration have enough paperwork to sift through and to impose this onto them would make extensions extremely hard work. Especially when quite a few, like myself I suspect, do not need to register for tax. And no, I have not got an LTR or anything. Just have enough money over here for us to live comfortably.

[Mike Lister]

5 minutes ago, NorthernRyland said:

that's what I think but governments are greedy and shameless. If you think they can take your money they will because they view it as their right. I pay taxes in the US on my income and I won't be paying Thailand anything until immigration gets involved and presents a clear procedure and states penalties for not complying. I'm waiting because this may never happen, like so many other things.

How many times have I seen you say that, I've lost track. And you still haven't bothered to read the tax guide and understand your DTA, otherwise you'd realise that you almost certainly wont be taxed any more than you already are. You'll forgive me for saying but you are your own worst enemy.

[Mike Lister]

Just now, worrab said:

I find this scenario highly unlikely. You have 2 totally different departments for a start. Immigration have enough paperwork to sift through and to impose this onto them would make extensions extremely hard work. Especially when quite a few, like myself I suspect, do not need to register for tax. And no, I have not got an LTR or anything. Just have enough money over here for us to live comfortably.

Just to play devils advocate on this.......tax clearance certificate laws have been on the books for many years, Immi already requires them from certain classes of visa holders and before those classes can leave the country. Extending that system to a wider audience would be trivial, it's just a nother piece of paper, you the visa applicant must collect and supply.

[Chivas]

You can bet your Bottom Dollar that before 2024 is out there will have been a complete reversal and all will be forgotten as in a bad dream

 

 

[NorthernRyland]

28 minutes ago, Mike Lister said:

How many times have I seen you say that, I've lost track. And you still haven't bothered to read the tax guide and understand your DTA, otherwise you'd realise that you almost certainly wont be taxed any more than you already are. You'll forgive me for saying but you are your own worst enemy.

fair enough but I'm not jumping through more hoops for these people that constantly disregard their own laws and make ridiculous proposals that fall apart when they try to actually implement them. If I need to file forms I'll do that but not until the forms are presented to me personally.

[Moonlover]

33 minutes ago, Mike Lister said:

About DTA's: my best guess is that most tax offices don't understand DTA's because it's impossible to make sweeping statements that include everyone. The US DTA excludes Social Security Payments, the UK one doesn't exclude their equivalent.....one excludes some pensions, the other excludes other pensions but not some! Saying that only net pension are being transferred, is wholly wrong and misleading.

And therein lies the weakest link in all this. How on Earth can all these offices get to deal with foreigners when I doubt if our local office up here in rural Issan for instance have ever met a farang before other than the occasional working one?

 

The more I consider this, the more unworkable it appears to be.

[Bangkok Barry]

1 hour ago, Mike Lister said:

That isn't what a Dual Tax Agreement means and it doesn't work that way.

 

I thought if you satisfied the tax conditions in one country (ie have paid tax in your own country) then it was satisfied in the reciprocal country too and you didn't have to pay on that income again. Or in my case satisfying the conditions that I do not have to pay there. According to you, that is not the case and even if I am not liable there that same income is liable to be taxed in Thailand. So what is a reciprocal agreement?

[Lacessit]

1 hour ago, NorthernRyland said:

that's what I think but governments are greedy and shameless. If you think they can take your money they will because they view it as their right. I pay taxes in the US on my income and I won't be paying Thailand anything until immigration gets involved and presents a clear procedure and states penalties for not complying. I'm waiting because this may never happen, like so many other things.

The USA has a DTA with Thailand. Whatever happens, you cannot be taxed in two jurisdictions, only one.

If you stay in Thailand for more than 180 days, you are deemed a Thai tax resident. In that case, you would stop paying tax in the USA.

[Mike Lister]

 

1 hour ago, Bangkok Barry said:

 

I thought if you satisfied the tax conditions in one country (ie have paid tax in your own country) then it was satisfied in the reciprocal country too and you didn't have to pay on that income again. Or in my case satisfying the conditions that I do not have to pay there. According to you, that is not the case and even if I am not liable there that same income is liable to be taxed in Thailand. So what is a reciprocal agreement?

Have you read the Simple Tax Guide? No, I thought not!

 

DUAL TAX AGREEMENTS (DTA’s)

 

18) A 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. Its 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. Obversely, allowing income to be taxed in  Thailand, may result in paying a lower rate of tax than in your home country.  It should also be noted that the rules contained in a DTA, take precedent over national tax rules. Copies of all the Dual Tax Agreements between Thailand and other countries are available to download from the following link although we understand that some are being renegotiated at present.     

[JimGant]

26 minutes ago, Lacessit said:

If you stay in Thailand for more than 180 days, you are deemed a Thai tax resident. In that case, you would stop paying tax in the USA.

 You'll always pay tax to the US, or at least have to file a tax return -- because of the so-called "saving clause" in the DTA, which allows the US to tax all your worldwide income irrespective of what the DTA says. This is not as onerous as it sounds, because the DTA does prevent double taxation. But it does mean, if Thailand can't tax it because of the DTA, or won't tax it, because it is not remitted -- then the US taxes it -- and keeps the whole kit and caboodle, since there's no Thai offsetting tax credit. Conversely, if per DTA, Thailand has exclusive, or at least primary taxation rights -- and they implement their taxation authority -- then they keep the whole kit and caboodle -- and your US taxes are reduced by the Thai tax credit on that remitted income.

 

Thus, for Yanks, your total tax bill between both countries probably won't change a bit -- unless Thai effective tax rates on subject income exceed that of the US. In that case, you pay full fare to the US Treasury, and pay Thailand whatever net taxes remain after subtracting out the US tax credit. I can't see that happening to me, because even if I cashed out a huge chunk of my IRA, all that money was pre-2024 income -- and thus not assessable for Thai tax purposes. All my other income is govt pensions, and thus exempt.

 

But, I've got an LTR visa, so I'm protected from this goat rope. However, my wife isn't -- so need to keep an eye open on her situation, when I kick.

[Mike Lister]

1 hour ago, Moonlover said:

And therein lies the weakest link in all this. How on Earth can all these offices get to deal with foreigners when I doubt if our local office up here in rural Issan for instance have ever met a farang before other than the occasional working one?

 

The more I consider this, the more unworkable it appears to be.

We're aware that the District Tax Offices are each hiring one Tax Attorney each to handle DTA related matters. Local tax offices are not great to work with but District and Regional Offices are much better equipped and usually very capable.

[scorecard]

6 hours ago, Surasak said:

If you are over 65 years old and do not transfer more than 500K into Thailand (Given all the allowances), then you are not required to pay tax in Thailand. In fact you do not have to register at the tax office, as they are not interested in the extra work that would generate given the number of foreigners in the country.

 

guess you mean 500,000Baht per annum, meaning money coming in less allowances that can be claimed. 

 

- Is that the situation regardless of age?

- Or is there an age point where this all changes?  (e.g. 80 years old)?

- And, if the funds coming in are all from a government old age pension and the recipient  has no other income, what's the situation?

 

[jvs]

3 hours ago, Mike Lister said:

At the risk of sounding like Mr Doom and Gloom, let me tell you how I think this will play out for people like you.

 

Firstly, there will be no letter from the Revenue, inviting you to file a tax return and giving you lots of easy instructions in English, goodness me, where do you think you are!

 

One of two things will happen. EIther, your bank will require you to log a TIN against your account and if you don't you wont be able to operate your account. Or, the Immigration people will require you to prove taxes were paid and any Revenue needs were satisfied, before you can extend your visa.

 

Do not expect much notice of either and don't expect to be notified personally. 

 

What do you mean by people like me?

I was just posting my thoughts and you know nothing about me.

I realize you are the go to man about taxes but i will just wait and see what will happen.

I already pay tax in my home country and if i have to submit some kind of form here i will of course.

My visa does not expire in the beginning of the year so i will have time to read the stories that i am sure will be reported on this forum.

I have been thinking about this for a bit and i wonder what will happen to the people who use an agent to make their visa.

Some of them are not able to prove they have income or  where it comes from.

How are they able to obtain their next visa?Will the agents also be able to fix that?

Any ideas on this?

[Mike Lister]

2 minutes ago, scorecard said:

guess you mean 500,000Baht per annum, meaning money coming in less allowances that can be claimed. 

 

- Is that the situation regardless of age?

- Or is there an age point where this all changes?  (e.g. 80 years old)?

- And, if the funds coming in are all from a government old age pension and the recipient  has no other income, what's the situation?

 

TAX EXEMPTIONS DEDUCTIONS & ALLOWANCES (TEDA)

 

58) The Thai tax system contains a series of Tax Exemptions, Deductions and Allowances (TEDA) 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 (PA1) - 60,000

b) Personal Allowance for wife (PA2) - 60,000

c) Over age 65 years exemption (OAE) - 190,000

d) 50% of pension income received, up to 100k (PD) - 100,000

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

 

From the Simple Tax Guide:

 

59) 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 in the links below:

 

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

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

 

 

 

[Mike Lister]

1 minute ago, jvs said:

What do you mean by people like me?

I was just posting my thoughts and you know nothing about me.

I realize you are the go to man about taxes but i will just wait and see what will happen.

I already pay tax in my home country and if i have to submit some kind of form here i will of course.

My visa does not expire in the beginning of the year so i will have time to read the stories that i am sure will be reported on this forum.

I have been thinking about this for a bit and i wonder what will happen to the people who use an agent to make their visa.

Some of them are not able to prove they have income or  where it comes from.

How are they able to obtain their next visa?Will the agents also be able to fix that?

Any ideas on this?

By people like you I mean, the wait and see what happens brigade.

 

The options for using agents in the future, assuming tac clearance certificates are required at some point, involves too much conjecture and whatiffery for me to be able to comment sensibly. Needless to say, it would make life more difficult and certainly more expensive, rather than the obverse.

[Surasak]

6 hours ago, Mike Lister said:

That is incorrect guidance and is highly inappropriate!

 

The basic deductions for an over 65 year old are 190k for over age 65 years plus 60k personal allowance. There is also a zero tax rated band of 150k. If the difference between those two allowances and the 500k you mention is derived from ANY source that is not covered by a DTA and/or is taxed at a lower rate in the home country than it is in Thailand, the income is assessable to Thai tax. Not registering for a TIN and not filing taxes to declare that income, assuming the person was Thai tax resident, means that person is guilty of tax evasion for which there are harsh penalties.

 

 

I have no intention of causing an argument. But, instead of quoting from handouts and info gained from other sources, try visiting a TRD office and asking for their take on this highly contentious subject. When I visited earlier this month I was greeted with complete surprise and asked why I wanted a TIN number. This from the head lady of the office. She said I was the first person in the province to request this, and having looked at the papers of my income I offered, insisted there was no need. Was I about to argue? It was a case of khorp Khun Khap, a quick wai and I hightailed it out of there.

[Surasak]

6 hours ago, Ben Zioner said:

Don't get it, with 500K you are unlikely to stay longer than the 179 days, that would make you tax resident. And, you'd need to show more that that to get a non-O extension for retirement.

I forgot to insert 500K 'per year'. Sorry about that.

[Mike Lister]

4 minutes ago, Surasak said:

I have no intention of causing an argument. But, instead of quoting from handouts and info gained from other sources, try visiting a TRD office and asking for their take on this highly contentious subject. When I visited earlier this month I was greeted with complete surprise and asked why I wanted a TIN number. This from the head lady of the office. She said I was the first person in the province to request this, and having looked at the papers of my income I offered, insisted there was no need. Was I about to argue? It was a case of khorp Khun Khap, a quick wai and I hightailed it out of there.

I have, I have sat with Revenue staff as well as with specialist tax consultancy staff to discuss these things. What you posted previously was incorrect and remains so.

[Surasak]

42 minutes ago, scorecard said:

guess you mean 500,000Baht per annum, meaning money coming in less allowances that can be claimed. 

 

- Is that the situation regardless of age?

- Or is there an age point where this all changes?  (e.g. 80 years old)?

- And, if the funds coming in are all from a government old age pension and the recipient  has no other income, what's the situation?

 

1..Yes

2.. over 65

3.. Not to my knowledge, I am over 80

4.. As stated, it depends on the amount you remit to Thailand per year.

[superal]

5 hours ago, Mike Lister said:

And of course if you don't register for a TIN, the persons bank account wouldn't yield any clues whatsoever to the persons identity.! :))

How about this . The Thai government will have access to all foreigners residence who are on retirement  / marriage etc visas . so it would not be hard to trace them or their finances , using the D.T.A.  No one will come knocking on your door this year but your tax accounts tax have to be submitted by March next year, if indeed this nightmare comes to being . 

If this tax happens , I have no doubts that there will be expats leaving Thailand for other Asia countries . What I do not understand is how it has been kept so quiet because I have not heard it discussed before in  my circle of social life .

 

Just wish that there was some member of the Thai government Tax department  who could give a formal statement .

[Mike Lister]

4 minutes ago, superal said:

How about this . The Thai government will have access to all foreigners residence who are on retirement  / marriage etc visas . so it would not be hard to trace them or their finances , using the D.T.A.  No one will come knocking on your door this year but your tax accounts tax have to be submitted by March next year, if indeed this nightmare comes to being . 

If this tax happens , I have no doubts that there will be expats leaving Thailand for other Asia countries . What I do not understand is how it has been kept so quiet because I have not heard it discussed before in  my circle of social life .

 

Just wish that there was some member of the Thai government Tax department  who could give a formal statement .

From a Revenue perspective, this rule change is quite minor. Traditionally, the Revenue do not make formal public announcements about such things, instead, the change is announced through formal channels and the news picked up by interested parties such as the major tax consultancies like PW, Sherrings and Mazars. Those consultancies have attended briefing sessions held by the Revenue and have fielded questions and received answers, all of which have been published. Here is one such Q&A:

 

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

 

You have to remember that only a small percentage of the population is interested in this, it isn't like in the West where a change of this nature impacts almost everyone.

[proton]

Endlessly confusing 😄

[orchidfan]

2 hours ago, Mike Lister said:

By people like you I mean, the wait and see what happens brigade.

 

The options for using agents in the future, assuming tac clearance certificates are required at some point, involves too much conjecture and whatiffery for me to be able to comment sensibly. Needless to say, it would make life more difficult and certainly more expensive, rather than the obverse.

To quote Napoleon when asked what his "strategy" was before going into battle.

He replied...

"I just turn up and see what happens "

 

(Mind you, it didn't work out well for him at a couple of battles 🤔)