Foreigners and their overseas income: what next?

[webfact]

Many non-working expats are currently concerned about having to deal with more Thai bureaucracies.

More than three months after “assessable” foreign income became taxable, many of Thailand’s expats are still swimming in a sea of uncertainty. Lots of advice online, but few definite answers. Senior officers from the Revenue have said little of late, although there has been a half-promise to the Swiss ambassador in a televised interview to print the tax identification forms in English as well as in Thai.

 

There is a view amongst some Thai lawyers that we must wait until July for clarification on nitty-gritty issues such as double taxation treaties and the tax status of pensions. By that time, some expats will have passed 180 days of minimum residence necessary for tax liability in this category.

 

However, other specialists argue that the Revenue needs not to clarify anything. After all, formal tax law did not change on January 1 2024. There was simply the closing of a tax loophole which had enabled Thais or foreigners to delay transferring income here until a subsequent year.

Will all foreigners who spend half a year or more in Thailand be required to register with the Revenue by obtaining a tin (tax identification number) and submitting the required forms?

 

The submission deadline for the calendar year 2024 will be in the January-March quarter of 2025. Revenue spokespersons have hinted at the all-inclusive scenario, but there has not been a formal declaration. Could the tax offices cope with the rush?

There are some categories of foreign tax residents who will not be liable at all this year, for example those who do not transfer ANY foreign income to Thailand in 2024 as well as holders of the 10 year Longterm Residence Visa who are exempt from declaring any foreign income in any case.

 

The fact that you may be required to submit forms does not mean that you are, in fact, liable to pay any Thai tax. But expats won’t welcome the envisaged bureaucracy and likely registration with two tax authorities: the home country and Thailand.

 

There is also ambiguity about the precise status double taxation treaties. A retiree, for example, might argue – and indeed prove – he or she has paid taxes on pensions in the home country. But the Revenue could argue that the retiree could use those payments as a tax credit in Thailand rather than conceding a total immunity.

 

Everyone agrees that the revised rules about foreign income are designed to catch Thais (and foreigners) making profits from untaxed overseas businesses and foreign exchange and crypto currency trading. The problem, needless to say, could be small fish being caught in the net alongside big ones.

 

The optimistic view about the future is that tin registration will remain voluntary as, in fact, it always has been for Thai citizens. If you think you are liable for tax, then by all means register. If you try to cheat, the newish Common Reporting System – an automatic and international exchange of the financial information of individuals to combat tax evasion and ensure compliance – will expose your dealings.

 

But if all expats living here for half a year or so are thrown into the same pit willy-nilly, then Thai authorities can expect non-working longstay expats to become an endangered species. Imagine the note on official publicity for one year extensions or for Elite visas: “You are reminded that you are required to register with the Thai Revenue’s tax identification system if staying in Thailand more than 180 days in a calendar year.” Not exactly marketing.

 

By Barry Kenyon

TOP: File photo for reference only.

 

-- Barry Kenyon 2024-04-04

 

 

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[ChaiyaTH]

What is next: minimal foreigners investing and spending here if staying here 180+ days and a very good exchange rate for us in the coming years.

[mokwit]

The danger is when it becomes fully automated. Right now the RD is not set up to deal with foreigners and are reluctant to do so.

[Badrabbit]

2 hours ago, webfact said:

Many non-working expats are currently concerned about having to deal with more Thai bureaucracies.

More than three months after “assessable” foreign income became taxable, many of Thailand’s expats are still swimming in a sea of uncertainty. Lots of advice online, but few definite answers. Senior officers from the Revenue have said little of late, although there has been a half-promise to the Swiss ambassador in a televised interview to print the tax identification forms in English as well as in Thai.

 

There is a view amongst some Thai lawyers that we must wait until July for clarification on nitty-gritty issues such as double taxation treaties and the tax status of pensions. By that time, some expats will have passed 180 days of minimum residence necessary for tax liability in this category.

 

However, other specialists argue that the Revenue needs not to clarify anything. After all, formal tax law did not change on January 1 2024. There was simply the closing of a tax loophole which had enabled Thais or foreigners to delay transferring income here until a subsequent year.

Will all foreigners who spend half a year or more in Thailand be required to register with the Revenue by obtaining a tin (tax identification number) and submitting the required forms?

 

The submission deadline for the calendar year 2024 will be in the January-March quarter of 2025. Revenue spokespersons have hinted at the all-inclusive scenario, but there has not been a formal declaration. Could the tax offices cope with the rush?

There are some categories of foreign tax residents who will not be liable at all this year, for example those who do not transfer ANY foreign income to Thailand in 2024 as well as holders of the 10 year Longterm Residence Visa who are exempt from declaring any foreign income in any case.

 

The fact that you may be required to submit forms does not mean that you are, in fact, liable to pay any Thai tax. But expats won’t welcome the envisaged bureaucracy and likely registration with two tax authorities: the home country and Thailand.

 

There is also ambiguity about the precise status double taxation treaties. A retiree, for example, might argue – and indeed prove – he or she has paid taxes on pensions in the home country. But the Revenue could argue that the retiree could use those payments as a tax credit in Thailand rather than conceding a total immunity.

 

Everyone agrees that the revised rules about foreign income are designed to catch Thais (and foreigners) making profits from untaxed overseas businesses and foreign exchange and crypto currency trading. The problem, needless to say, could be small fish being caught in the net alongside big ones.

 

The optimistic view about the future is that tin registration will remain voluntary as, in fact, it always has been for Thai citizens. If you think you are liable for tax, then by all means register. If you try to cheat, the newish Common Reporting System – an automatic and international exchange of the financial information of individuals to combat tax evasion and ensure compliance – will expose your dealings.

 

But if all expats living here for half a year or so are thrown into the same pit willy-nilly, then Thai authorities can expect non-working longstay expats to become an endangered species. Imagine the note on official publicity for one year extensions or for Elite visas: “You are reminded that you are required to register with the Thai Revenue’s tax identification system if staying in Thailand more than 180 days in a calendar year.” Not exactly marketing.

 

By Barry Kenyon

TOP: File photo for reference only.

 

-- Barry Kenyon 2024-04-04

 

 

Get our Daily Newsletter - Click HERE to subscribe
 

I pay tax on my 3 pensions in the UK do I now pay tax here too?

[Jonathan Swift]

In the US strict privacy laws will prevent any entity from accessing bank or financial information without the accountholder’s express permission. 

[Jonathan Swift]

1 minute ago, Badrabbit said:

I pay tax on my 3 pensions in the UK do I now pay tax here too?

According to what I’ve read thus far, no. But you may have to file a rax return here. But what if you don’t? How would they find out and track you down? That’s what I wonder. Are they motivated to become the FBI/IRS of Thailand? Do they have the resources to wage tax war against non complying low income expats? Or will it be a matter of so long as you don’t attract attention you stay under the radar?

[mokwit]

4 minutes ago, Jonathan Swift said:

In the US strict privacy laws will prevent any entity from accessing bank or financial information without the accountholder’s express permission. 

Common Reporting Standard.

 

The Common Reporting Standard (CRS), developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis.

 

https://www.google.com/search?client=firefox-b-d&q=Common+Reporting+standard

[Guderian]

Somebody should translate the story about the goose that laid the golden eggs into Thai and send it to the muppets who came up with this bureaucratic mess.

[Bangkok Barry]

If we pay Thai tax like Thais can we also benefit from the 30 baht health scheme? No, I thought not. It only works one-way.

[Jonathan Swift]

4 minutes ago, Card said:

The answer is a clear YES. Any money brought into Thailand from abroad, no matter how it is brought in, is assessable. That doesn't mean it will be taxed but has to be added to the mix and is declarable.

Social Security payments from the US are non assessable, according to Thai government rules that I read. I have my  Social Security incone verification letter in case I need it.

[mokwit]

Just now, Jonathan Swift said:

Social Security payments from the US are non assessable, according to Thai government rules that I read. I have my  Social Security incone verification letter in case I need it.

You will.

[Bangkok Barry]

 

It seems to me that Thailand might be shooting itself in the foot. I for one am considering not making my usual transfers to Thailand but using my UK ATM and visa cards to make purchases. Contactless makes that so easy now. I'll use the money I already have saved here to make minor purchases where a card isn't possible, but even many market stalls have QR codes now.

[Mugi]

14 minutes ago, Card said:

The answer is a clear YES. Any money brought into Thailand from abroad, no matter how it is brought in, is assessable. That doesn't mean it will be taxed but has to be added to the mix and is declarable.

Well, then noone will buy a condo anymore because you must pay 35% in addition:).

Further on DTA counts.

[nickmondo]

6 minutes ago, Bangkok Barry said:

 

It seems to me that Thailand might be shooting itself in the foot. I for one am considering not making my usual transfers to Thailand but using my UK ATM and visa cards to make purchases. Contactless makes that so easy now. I'll use the money I already have saved here to make minor purchases where a card isn't possible, but even many market stalls have QR codes now.

get the Green Wise card for the ATM here.  Its very good

[nowhereman]

In the  first three month I've  managed to cut down my spending for 50% and I will continue to do so until I am sure I won't be paying double taxes. The results of spending less are visible on my body weight and good health 😉  Thank you Thailand 😉

 

[Colabamumbai]

Be smart wait until immigration tells you what you need if anything. 

[AhFarangJa]

Something I do not see written about, yet to my mind is a serious issue, and that is the retired people on annual extensions to stay using the monthly income method. Surely, with a sum of about 65,000 per month coming in regularly to meet visa requirements, the taxman will want to get his grubby paws on some of it.   

[Jumbo1968]

13 minutes ago, Jonathan Swift said:

According to what I’ve read thus far, no. But you may have to file a rax return here. But what if you don’t? How would they find out and track you down? That’s what I wonder. Are they motivated to become the FBI/IRS of Thailand? Do they have the resources to wage tax war against non complying low income expats? Or will it be a matter of so long as you don’t attract attention you stay under the radar?

Will the banks be required to notify the tax authorities if you receive money in your account from overseas ?

if you use the monthly income for your extension will you have to increase this to allow for tax deductions ?

[gravity101]

3 minutes ago, Bangkok Barry said:

 

It seems to me that Thailand might be shooting itself in the foot. I for one am considering not making my usual transfers to Thailand but using my UK ATM and visa cards to make purchases. Contactless makes that so easy now. I'll use the money I already have saved here to make minor purchases where a card isn't possible, but even many market stalls have QR codes now.

This is the best way until we get clarity. International ATM withdrawals can't be tracked back. Larger purchases is where they are shooting themselves in the foot. Who on earth is going to buy a condo/house/car knowing they might have to pay a 30% tax premium on top of the purchase price come the end of the year? Who is going to put their kids in a high end school if the cost is now 30% more? Who will open a business, if to fund it you'll be liable for income tax? It'll all have to come from offshore without touching the local bank...

[AhFarangJa]

2 minutes ago, Colabamumbai said:

Be smart wait until immigration tells you what you need if anything. 

My thoughts too, maybe a completed tax return, and receipt every year when renewing the visa.

[nowhereman]

Don't give them ideas 😉

 

[wensiensheng]

20 minutes ago, Card said:

The answer is a clear YES. Any money brought into Thailand from abroad, no matter how it is brought in, is assessable. That doesn't mean it will be taxed but has to be added to the mix and is declarable.

I’m not sure you are correct. Only INCOME brought in is assessable to tax. Possibly capital gains also. I see no mention of assessing capital monies that are brought in to Thailand.

 

there is also the issue of whether the person withdrawing cash from an atm is, in fact, resident in Thailand for tax purposes. No details were provided by the op on that.

[Satcommlee]

Quote

But the Revenue could argue that the retiree could use those payments as a tax credit in Thailand rather than conceding a total immunity.

This is the bit people should be worried about, people seem to think Dual Tax treaties exist so an individual can CHOOSE which rules to follow.

Take a person living on an income just below the income tax threshold in Europe (perhaps a state pension) but this person is not in Europe!  This person for tax purposes is resident in Thailand and his income is above the tax threshold in Thailand perhaps making him liable to pay tax in Thailand.

 

Having paid no tax in Europe,  he does not have anything to credit against his Thai Tax liability.

 

Not intended to be a qualified response, but thought provocing all the same

 

[scorecard]

32 minutes ago, Badrabbit said:

I pay tax on my 3 pensions in the UK do I now pay tax here too?

Tax on state pensions transferred to Thailand, and the only income of the foreigner seems to be the area where there's very few / zero answers.

 

It surprises me that none of the new 'gurus' have addressed this specific scenario.

 

But I'm guessing these new 'gurus' can't see any potential fees / commissions etc., for themselves in this scenario (Tax on state pensions transferred to Thailand, and the only income of the foreigner) so seems to be the area where there's very few / zero answers.

 

No fees available for the gurus, so it gets ignored. 

[borderhopper2005]

So-called democratically elected (populist) premier.

Turned out to be dumber than previous military dictator.

Always boasting   more than they really can do(mostly for his short-lived approval rate on SNS).

It can get Thai public services into big mess.

Foreign income already taxed in the country of its origin, cannot be taxed(by tax treaty).

Increased application for foreigners' Tax ID number will stress up Thai tax department(undoubtfully). 

Creating so much of the needless new workload for Nothing.

 

It reminds me of one thing.

During the period of previous (army backed) administration, they  once declared that foreigners must report even their domestic travel in TM30.  

But it was eventually dropped; simply unenforceable.

Passport stamps shows aliens' travel records(to and from Thailand).

But nothing showed up when they move around inside Thailand.

They noticed they simply have no manpower or usable system to implement such a regulation.

 

[aussienam]

13 minutes ago, Bangkok Barry said:

 

It seems to me that Thailand might be shooting itself in the foot. I for one am considering not making my usual transfers to Thailand but using my UK ATM and visa cards to make purchases. Contactless makes that so easy now. I'll use the money I already have saved here to make minor purchases where a card isn't possible, but even many market stalls have QR codes now.

Common reporting standards (CRS) though, implemented last year for Thailand means access to transaction details. A recipient bank in Thailand from a UK bank - whether the funds are transferred to your Thai account, to a cash withdrawal facility (ATM) in Thailand, or paying a Thai merchant into their account via VISA, etc, are all traceable and reveal remittances into Thailand.  

I watched an expat forum last year and a rep from a financial attended to talk about all of this and said ATM transactions and using cards for purchases wouldn't necessarily be a way to hide your incoming remittances/spending here.  Especially if there were large amounts solely being used on cards.  

Will TRS bother with all of this?  Who knows.  But if they really wanted to (technology and transaction data is now all available) they easily could.  

[CFCol]

22 minutes ago, Jonathan Swift said:

According to what I’ve read thus far, no. But you may have to file a rax return here. But what if you don’t? How would they find out and track you down? That’s what I wonder. Are they motivated to become the FBI/IRS of Thailand? Do they have the resources to wage tax war against non complying low income expats? Or will it be a matter of so long as you don’t attract attention you stay under the radar?

My understanding from the UK-Thai double taxation agreement is thus.

If you have a government service pension,(ie civil service, armed forces, teacher etc.), they are explicitly non taxable in Thailand.

Old age pensions and private pensions are taxable in Thailand. Any tax paid on these pensions in the UK can be used to offset any Thai tax liabilities. You are also entitled to Thai tax deductions for,among others, health insurance premiums, children's education costs etc.. The qualifying days spent in Thailand under UK - Thai double taxation agreements are 183 days.

If you bring in an exempt pension you would have to prove that it is indeed an exempt pension. ( wise transfers may be a problem in this regard)

[matta01]

Quote

This is the bit people should be worried about, people seem to think Dual Tax treaties exist so an individual can CHOOSE which rules to follow.

This is not true for example a Belgian ( European country ) citizen can not choose. You have to pay taxes in the country where you have your income

[jojothai]

35 minutes ago, mokwit said:

Common Reporting Standard.

 

The Common Reporting Standard (CRS), developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calls on jurisdictions 

The usa is not participating in the CRS.

US citizens may not technically be a part of CRS, but because they must report all of their foreign assets to the IRS, they cannot technically avoid it.

However, if there is no exchange of data to thailand under the CRS, then thailand will not know the other income outside. Surely Only the IRS will know.

[gravity101]

2 minutes ago, borderhopper2005 said:

So-called democratically elected (populist) premier.

Turned out to be dumber than previous military dictator.

Always boasting   more than they really can do(mostly for short-lived approval on SNS.

It can get Thai public service into big mess.

Foreign income already taxed in the country of its origin, cannot be taxed(by tax treaty).

Increased application for foreigners' Tax ID number will stress up Thai tax department(undoubtfully). 

Creating so much of the needless new workload for Nothing.

It reminds me of one thing.

During the period of previous (army backed) administration, they  once declared that foreigners must report even their domestic travel in TM30.  

But it was eventually dropped; simply unenforceable.

Passport stamps shows aliens' travel records(to and from Thailand).

But their movement within Thailand cannot be seen.

They noticed they simply have no manpower to implement such a regulation.

 

TM30 is dropped? Good luck getting anything done at immigration if your current address is still 'some hotel in Thailand'.