New tax laws

[Mike Lister]

14 minutes ago, orchidfan said:

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 🤔)

A combination pragmatist and fatalist, urgh, messy.

[Deerculler]

The more I read.

The more confusing it becomes.

[Mike Lister]

1 minute ago, Deerculler said:

The more I read.

The more confusing it becomes.

Feel free to ask questions or read the tax guide, or both

 

 

[Jaggg88]

There is no new tax law but an amendment was made to the existing tax rule. Previously, any untaxed income earned abroad but not brought into Thailand in the tax year it was earned was deemed tax-exempt when brought onshore. The amendment changed this interpretation so now any offshore untaxed earnings are subject to tax no matter what year you bring it onshore. This does not affect taxed income covered by double taxation agreements. Many Thai taxpayers are earning large sums of money via the Internet and were simply delaying bringing the funds onshore and thus avoiding tax liability.

[Mike Lister]

Which Stage Are You At?

 

1) Denial - it’ll never happen

 

2) Anger - bloody incompetents, they don’t tax their own people so they tax us, low hanging fruit

 

3) Bargaining - I could spend 179 days here and then holiday in Cambodia for 7 days and then….blah blah

 

4) Depression - I’m so pissed off, me and the wife we’re leaving and going home

 

5) Acceptance - Well, it’s only going to be about 12k baht per year so not too bad.

[DrJoy]

18 minutes ago, CartagenaWarlock said:

credit cards

A foreign credit card company is under no obligation to reveal their customers data to the Thai RD

[scorecard]

3 hours 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.

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 make an example:

- Receive Oz OAP every 4 weeks by bank transfer, about 460,000Baht.

Less allowances in the Thai tax system:

- Age allowance 190,000Baht because over 65,

- Personal allowance 60,000Baht

- Threshhold of 150,000Baht.

TOTAL 400,000Baht

Deduct 400,000BAht from 460,000Baht = 60,000

I receive no other taxable income.

Therefore no tax payable (my understanding).

 

I've had a Thai personal tax number for over 25 years, now retired. 

 

I live in Thailand permanently (Thai PR for 26 years) so where do I stand re tax resident / non-resident? 

[The Theory]

On 3/28/2024 at 12:51 PM, Cuchulainn said:

Will Immigration start asking for proof of tax payment forms for Non Immigrant O or B visa extensions next year?

If no need to file tax, there will be no need of proof of tax. 

[Rimmer]

Unattributed rumor mill post removed also a reply

[Mike Lister]

16 minutes ago, scorecard said:

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 make an example:

- Receive Oz OAP every 4 weeks by bank transfer, about 460,000Baht.

Less allowances in the Thai tax system:

- Age allowance 190,000Baht because over 65,

- Personal allowance 60,000Baht

- Threshhold of 150,000Baht.

TOTAL 400,000Baht

Deduct 400,000BAht from 460,000Baht = 60,000

I receive no other taxable income.

Therefore no tax payable (my understanding).

 

I've had a Thai personal tax number for over 25 years, now retired. 

 

I live in Thailand permanently (Thai PR for 26 years) so where do I stand re tax resident / non-resident? 

Your annual pension income is 460,000 baht.

 

Your deductions/allowances/exemptions are 190,000 (over age 65 allowance) plus 60,000 (personal allowance) PLUS 100,000 (50% of pension income deduction, to a maximum of 100,000), for a grand total of 350,000.

 

That leaves 460,000 minus 350,000 or 110,000 baht to be applied against the tax tables. The first 150,000 of assessible income is zero rated which means you have no tax to pay.

 

I cannot speak to what the Australia/Thai DTA might say but I don't see that it would impact the calculation above, in any way.

[Mike Lister]

24 minutes ago, The Theory said:

If no need to file tax, there will be no need of proof of tax. 

This aspect is all conjecture and whatifery and can't really be assessed currently. What other countries such as the US do is to require Green Card holders to obtain a tax clearance certificate from the IRS, before they can leave the country. That relies on a discussion between the taxpayer and the IRS to determine whether all tax requirements have been satisfied. Exactly how that might work here is very uncertain, especially since some people have no assessable income and others will have to file a tax return. I suggest this issue be filed under, "worry about it later, if and when it happens".

[Mike Lister]

31 minutes ago, DrJoy said:

A foreign credit card company is under no obligation to reveal their customers data to the Thai RD

Once again this is all conjecture and whatifery at this point. But what can be said is that the UK government, for example, in the case of non-doms and overseas cards, considers credit card payments as assessable income. What also can be said is that in the case of credit card charges in Thailand, using foreign cards, several entities see those charges, before they leave the Thai borders. These include, the merchant, the merchants bank and the Central Bank, the latter because a foreign currency exchange transaction was involved. There is therefore little need for the TRD to require those records from overseas.

[The Theory]

26 minutes ago, Mike Lister said:

What other countries such as the US do is to require Green Card holders to obtain a tax clearance certificate from the IRS, before they can leave the country.

I'm not sure where you got this information, but as far as I know there is no such thing. 
My ex-wife living in LA and she is a green card holder and she never needed to clearly any thing when she leaves the country. 

[Moonlover]

6 hours ago, Mike Lister said:

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.

No surprise there. They're going to need these Tax Attorneys aren't they to deal with the incomes and assets of all the rich Thais that are the real targets of this exercise. I wonder if there are enough to go round.

[Mike Lister]

23 minutes ago, The Theory said:

I'm not sure where you got this information, but as far as I know there is no such thing. 
My ex-wife living in LA and she is a green card holder and she never needed to clearly any thing when she leaves the country. 

I was a US Green Card holder for eighteen years until I surrendered the card in the 1990's. I was required to obtain a certificate before I left for overseas, if that has subsequently changed I'm extremely happy for everyone else. But to be clear, the example is demonstrate how the system works, nothing more.

 

EDIT TO ADD: I was curious about this so I checked the current status and those certificates appear to still be issued but I have not dug into it very deeply.

 

"If you're a resident or a nonresident alien departing the United States, you usually have to show that you have complied with the U.S. income tax laws before you can depart. You do this by obtaining from the IRS a tax clearance document, commonly called a departure permit or sailing permit."

 

https://www.irs.gov/taxtopics/tc858

Edited March 29 by Mike Lister

[ballpoint]

6 hours ago, Mike Lister said:

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.

 

Will this be done at all Amphur (district) offices?  There are 928 of these, if you include the 50 Bangkok Khets - Granted, I don't know if every one of them has a tax office, but I do know that every district in my upcountry province has one.  Hiring a tax attorney for each will be quite a process, and for most, I'd imagine, would cost far more than any extra tax revenue that office will generate.  I can see the Changwat (provincial) offices doing so, but I have been told in no uncertain terms by my provincial office that I must deal with the Amphur in which I live.  in my case, this is a tiny room run by two women who only speak two words of English between them (one says "hello" and the other "goodbye").  I visit them around this time every year, and (under the previous rules at least) have never had to file a return, or been given anything in writing saying that I don't.  Nothing changed on my visit this month, though we are still under the old rules, but I'm very interested to see what happens next year.  Somehow, I can't see an English speaking tax attorney will be squeezed in with them.

[Mike Lister]

1 minute ago, ballpoint said:

 

Will this be done at all Amphur (district) offices?  There are 928 of these, if you include the 50 Bangkok Khets - Granted, I don't know if every one of them has a tax office, but I do know that every district in my upcountry province has one.  Hiring a tax attorney for each will be quite a process, and for most, I'd imagine, would cost far more than any extra tax revenue that office will generate.  I can see the Changwat (provincial) offices doing so, but I have been told in no uncertain terms by my provincial office that I must deal with the Amphur in which I live.  in my case, this is a tiny room run by two women who only speak two words of English between them (one says "hello" and the other "goodbye").  I visit them around this time every year, and (under the previous rules at least) have never had to file a return, or been given anything in writing saying that I don't.  Nothing changed on my visit this month, though we are still under the old rules, but I'm very interested to see what happens next year.  Somehow, I can't see an English speaking tax attorney will be squeezed in with them.

It's been some time since this was first mentioned in the long tax thread, it was so because one posters wife had applied for one of the roles. Much more than that I can't tell you anything further since nobody has raised it since.

 

I personally would never deal with my Amphur or tessaban Revenue office, I only ever go to District which is in the center of Chiang Mai and the levels of English there are good, they are very helpful and knowledgable.

[CartagenaWarlock]

6 hours ago, JimGant said:

You'll always pay tax to the US, or at least have to file a tax return

Not true.  I have worked outside the US, paid taxes to the country of residence, and then claimed the money from my US tax obligation. You have to report to the US IRS your worldwide income. 

[TigerandDog]

9 hours ago, Lacessit said:

There is nothing to stop any pensioner who has provable savings prior to January 1, 2024 transferring said savings progressively into Thailand tax-free, then allowing the pension payments to accumulate in an Australian bank account. At least, that's the way I understand the laws. Money cannot be taxed here, until it surfaces in a Thai bank account.

that's one way to do it provided you still have an aussie account, but once you start transferring those pension funds to Thailand they become taxable. Those aussies that no longer have any connection to Oz and have their pensions paid directly to their Thai account then come under the scenarios I outlined.

[TigerandDog]

2 hours ago, Mike Lister said:

Your annual pension income is 460,000 baht.

 

Your deductions/allowances/exemptions are 190,000 (over age 65 allowance) plus 60,000 (personal allowance) PLUS 100,000 (50% of pension income deduction, to a maximum of 100,000), for a grand total of 350,000.

 

That leaves 460,000 minus 350,000 or 110,000 baht to be applied against the tax tables. The first 150,000 of assessable income is zero rated which means you have no tax to pay.

 

I cannot speak to what the Australia/Thai DTA might say but I don't see that it would impact the calculation above, in any way.

I don't agree with your calculation Mike.

According to my tax accountant the calculation should be as follows:

Pension    -   460,000 baht ( but I believe this figure is grossly understated) as I receive the same pension & the total with the increases every March & Sept will be more in the range of 615k - 620K for 2024)

Personal deduction - 60,000

50% pension deduction - 100,000 (max that can be claimed)

So that makes assessable income of 300,000 baht

 

0-190k (for over 65) = 0

190,000 - 300,000 at 5% = 300k - 190k = 110k x 5% = 5,500 baht tax payable.

 

I also note that scorecard makes no mention of a wife or if he pays health insurance in Thailand. If he has a wife that's another personal deduction of 60k he can claim, and if he pays health insurance in Thailand he can claim up to 25k as a deduction.

 

Should scorecard have a Thai wife and pay health insurance here his calculation would be as follows:

 

Pension    -   460,000 baht ( but I believe this figure is grossly understated) as I receive the same pension & the total with the increases every March & Sept will be more in the range of 615k - 620K for 2024)

Personal deduction - 60,000

50% pension deduction - 100,000 (max that can be claimed)

Personal deduction for wife - 60,000

Health Insurance premium deduction - 25.000

So that makes assessable income of 215,000 baht

 

0-190k (for over 65) = 0

190,000 - 300,000 at 5% = 215k - 190k = 25k x 5% = 1,250.00 baht tax payable.

 

Edited March 29 by TigerandDog

[biervoormij]

2 hours ago, Mike Lister said:

Which Stage Are You At?

 

1) Denial - it’ll never happen

 

2) Anger - bloody incompetents, they don’t tax their own people so they tax us, low hanging fruit

 

3) Bargaining - I could spend 179 days here and then holiday in Cambodia for 7 days and then….blah blah

 

4) Depression - I’m so pissed off, me and the wife we’re leaving and going home

 

5) Acceptance - Well, it’s only going to be about 12k baht per year so not too bad.

Funny I think I am a mix of all of these but number 4.

 

1) Denial - it’ll never happen

I am not sure Thailand will really make all retires file tax returns.

 

2) Anger - bloody incompetents, they don’t tax their own people so they tax us, low hanging fruit

How do you make a change that possibly impacts most expats and not clearly communicate this. I find all the information I have read here helpful but feel like this should be communicated by the Thai government. 

 

3) Bargaining - I could spend 179 days here and then holiday in Cambodia for 7 days and then….blah blah

When I learned about this change I brought more money into Thailand prior to 2024. I will remit under 120K in 2024 so believe I am not required to file a tax return.

 

I want to see the chaos when all the expats try to file their first tax return in Thailand in the start of 2025.  I have seen the lines at immigration when it is spread over 12 months. My understanding is it will be required for everyone to do taxes in the first 3 months of the year. If I feel like I am going to have to get an agent to deal with the taxes I may spend my 800K and move.

 

5) Acceptance - Well, it’s only going to be about 12k baht per year so not too bad.

I think at the amount I bring into the country it will only be about 7K a year. If this is really the case I will increase my retirement withdraw so my home country tax is about equal to this and then claim a foreign tax credit.

 

Sorry for a long answer but I find this tax stuff all rather confusing. I do appreciate all the answers I have received here and have my plan for 2024. I will see what 2025 holds before doing anything crazy.

[Mike Lister]

1 hour ago, TigerandDog said:

I don't agree with your calculation Mike.

According to my tax accountant the calculation should be as follows:

Pension    -   460,000 baht ( but I believe this figure is grossly understated) as I receive the same pension & the total with the increases every March & Sept will be more in the range of 615k - 620K for 2024)

Personal deduction - 60,000

50% pension deduction - 100,000 (max that can be claimed)

So that makes assessable income of 300,000 baht

 

0-190k (for over 65) = 0

190,000 - 300,000 at 5% = 300k - 190k = 110k x 5% = 5,500 baht tax payable.

 

I also note that scorecard makes no mention of a wife or if he pays health insurance in Thailand. If he has a wife that's another personal deduction of 60k he can claim, and if he pays health insurance in Thailand he can claim up to 25k as a deduction.

 

Should scorecard have a Thai wife and pay health insurance here his calculation would be as follows:

 

Pension    -   460,000 baht ( but I believe this figure is grossly understated) as I receive the same pension & the total with the increases every March & Sept will be more in the range of 615k - 620K for 2024)

Personal deduction - 60,000

50% pension deduction - 100,000 (max that can be claimed)

Personal deduction for wife - 60,000

Health Insurance premium deduction - 25.000

So that makes assessable income of 215,000 baht

 

0-190k (for over 65) = 0

190,000 - 300,000 at 5% = 215k - 190k = 25k x 5% = 1,250.00 baht tax payable.

 

Your numbers are not correct, you've used 190k in place of the 150k zero rate band. The numbers I posted originally remain correct.

 

Plus the poster doesn't say that he's married or have health insurance hence I'm not going to make that assumption.

 

We both agree that he is entitled to the 60k personal deduction,

We also both agree he is entitled to the 100k maximum for 50% of his pension payments.

The next deduction is for 190k which is the over age 65 years allowance, this is a separate deduction and not part of the tax tables.

Those things total 350k.

 

The OP says he receives 460k in pension payments, I have to take his word for this so that's the number we'll use here. Deduct 350k from the above and that leaves 110k assessable income.

 

Apply that assessible income against the tax tables, of which the first 150k is zero rated and the op doesn't owe any tax.

 

The tax tables are here:

 

1. 0 to 150,000 THB is exempted from income tax.
2. 150,001 to 300,000 THB is subject to a 5% tax rate.
3. 300,001 to 500,000 THB is subject to a 10% tax rate.
4. 500,001 to 750,000 THB is subject to a 15% tax rate.
5. 750,001 to 1,000,000 THB is subject to a 20% tax rate.
6. 1,000,001 to 2,000,000 THB is subject to a 25% tax rate.
7. 2,000,001 to 5,000,000 THB is subject to a 30% tax rate.
8. 5,000,001 THB or more is subject to a 35% tax rate.

 

 

 

 

Edited March 29 by Mike Lister

[scorecard]

3 hours ago, Mike Lister said:

Your annual pension income is 460,000 baht.

 

Your deductions/allowances/exemptions are 190,000 (over age 65 allowance) plus 60,000 (personal allowance) PLUS 100,000 (50% of pension income deduction, to a maximum of 100,000), for a grand total of 350,000.

 

That leaves 460,000 minus 350,000 or 110,000 baht to be applied against the tax tables. The first 150,000 of assessible income is zero rated which means you have no tax to pay.

 

I cannot speak to what the Australia/Thai DTA might say but I don't see that it would impact the calculation above, in any way.

Thank you, I'll go back to sleep now with an easy mind. 

[The Theory]

3 hours ago, Mike Lister said:

until I surrendered the card

Perhaps this is the answer. 

[soi3eddie]

On 3/28/2024 at 5:51 AM, Cuchulainn said:

Will Immigration start asking for proof of tax payment forms for Non Immigrant O or B visa extensions next year?

 

Quite possibly. Maybe unlikely but who knows. For me, I'm on Non-O retired but never spend more than 180 days in Thailand. Wonder how that might affect me.

 

[Sheryl]

On 3/28/2024 at 3:57 AM, superal said:

Thanks and I hope you are right . However after searching on Google I cannot find any statement to back you up , only info shows similar to mine . Has there been an amendment which eliminates tax on pensions ? Starting January 1st 2024 and counting 180 days residency , after which the new rules kick in 

There is no amendment to that effect and pensions are taxable unless specifically exempted in a Dual Taxation Agreement (DTA) between Thailand and the country in question.

 

DTAs differ markedly in this regard so it is essential to read yours.  Off the top of my head I can tell you this:

 

USA = Social Security can only be taxed in the US.  Ditto government pensions. But private pensions can be taxed by Thailand.

 

UK = government pensions can only be taxed by the UK. Other pensions (including State pensions) can be taxed by Thailand.

 

And, of course, any tax paid in Thailand can be applied as a tax credit on one's home country tax return and vice versa.

[Sheryl]

10 minutes ago, soi3eddie said:

 

Quite possibly. Maybe unlikely but who knows. For me, I'm on Non-O retired but never spend more than 180 days in Thailand. Wonder how that might affect me.

 

If you spend less than 180 days in a year in Thailand you are not resident for tax purposes.

[recom273]

17 hours ago, worrab said:

Simple answer is No! 
Two totally different departments with no links.

Not true. 
 

Our local immigration, for a time, insisted upon seeing a tax receipt before issuing subsequent non-b visa extensions at the same school.

 

They also wish to see a teachers permit / waiver and also a work permit even though the immigration service is not connected with the Labour office or teachers council. They can be an effective way of enforcing the law (they also can be an easy agency to navigate around)
 

In my understanding, immigration had no interest in the amount on the tax receipt but they did want to see one. As this is Thailand, the law wasn’t always enforced, teachers from certain schools didn’t need to include a receipt and if you were applying for an extension for a new school, even though you were known to them previously there was no need to show proof of payment. 

[Lacessit]

5 hours ago, TigerandDog said:

that's one way to do it provided you still have an aussie account, but once you start transferring those pension funds to Thailand they become taxable. Those aussies that no longer have any connection to Oz and have their pensions paid directly to their Thai account then come under the scenarios I outlined.

I agree, and have a friend in Chiang Mai in that position.

I am not getting my knickers in a twist until there is evidence of:

 

1/ Banks deducting tax on international transfers.

or

2/ Immigration refusing visa extension applications that do not have a tax number.

[Mike Lister]

Before we get into a long exchange on this point, let me explain the situation regarding the 190k over 65 years deduction.

 

The TEDA (tax Exemption, deductions and allowances) for over 65 year olds are very generous. Initially I had not believed that a separate deduction of 190k was allowed and that the 190k was merely an extension of the first tier of the tax tables (190k vs 150k). After much debate in the long tax thread, several posters came forward to clarify that the 190k is a separate deduction, and that the first tier of the tax tables isn't adjusted, it remains at 0 - 150k for everyone. Those posters said they have been claiming the 190k deduction for many years. I can understand how some accountants outside Thailand may have some difficulty understanding this point because there aren't that many references that clarify exactly what it is.

 

By the same token, a deduction of 50% of pension income exists (max 100k) in the same way that a deduction of 50% of earned income exists (max 100k), the former being true, even if the pension is from overseas! Strange but true.

 

"In order to support low income earners and the aged, the first THB 150,000 of net income is tax exempt. For a resident who is 65 years of age or older, an exemption is granted on income up to an amount not exceeding THB 190,000".

 

Note: The second sentence does not replace the first one, it is in addition to.

 

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

Edited March 30 by Mike Lister