Foreigners and their overseas income: what next?

[NorthernRyland]

4 hours ago, LivinLOS said:

Because up to Jan 1st if they said thay all you had to reply was 'no this is savings from last tax year' as they cant look into your overseas bank t prove your liability, you had none. 

Yes that's true but my point is that there was never a "if they said", in fact never once was the issue even brought to our attention. Once they come to us with their hands out and ask for their cut we should act, but not before then.

[Neeranam]

16 hours ago, Mike Teavee said:

The fact that some LTR Holders do not pay Tax on the Overseas Income has been published by many sources, but Sheerings seems to be the most quoted when it comes to Thailand's Tax rules so here's their take...

 

https://sherrings.com/long-term-resident-visa-tax-concessions-thailand.html

 

 

 

Thanks, interesting, 

 

Surely there will by an outcry by Thais, including myself,  if rich foreigners don't have to pay tax on their foreign income and we do. 

This would be unconstitutional. 

[Kalasin Jo]

On 4/4/2024 at 12:00 PM, Bangkok Barry said:

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.

Exactly. My gripe too.

And about half the population of working age here are unregistered casual workers paid cash in hand. They know nothing about income tax and never will. Happy to turn up in their thousands at the government hospitals for the (nominal 30 baht payment) free healthcare. All my immediate Thai family, none of whom knows a thing about income tax  ( or their country's immigration laws) frequently use it, yours truly acting as chauffeur. After about 4 hours they come out with carrier bags of prescribed meds. I noticed the actual cost for one such bagful was 3,500 baht. Not even the UK NHS which still offers free at point of delivery healthcare gives out free prescription drugs except to pensioners. If we are to be taxpayers here we should be entitled to this too. 

The problem is that we may be regarded as tax resident here but their immigration laws do not in general give residency, only long stay (1 year at a time ) visitor status. European countries  in general do give residential status which then triggers the right to work, entitlement to the state's health-care and the requirement to make tax declarations. 

 

Even a genuine and lasting marriage to a Thai confers no rights here whatsoever on the foreign spouse, is in fact an even greater annual administrative burden on the foreigner ( and the Thai spouse) seeking permission to stay by virtue of marriage to a Thai.

[Mike Teavee]

7 hours ago, Neeranam said:

Thanks, interesting, 

 

Surely there will by an outcry by Thais, including myself,  if rich foreigners don't have to pay tax on their foreign income and we do. 

This would be unconstitutional. 

A lot of (if not most) countries offer incentives so "Wealthy" people will live there. E.g. UK (currently being discussed/reviewed after Sunak's wife was shamed into paying tax on her Indian income even though she didn't need to) & Singapore. 

 

[ThaiPauly]

15 hours ago, jayboy said:

 

It's a succinct but pertinent answer.If you have not heard from your CI bank, you will in the future.

 

Assuming you are a Thai tax resident, the UK and the Channel Islands have an active CRS relationship with Thailand. Banks are obliged to report  accounts to the Thai tax authorities. To make that report, they need your TIN. That's why they will ask for it.

 

 

My CI Bank hounded me for my TIN  about 5 years ago.

I actually have one from when I had a company here 20 years ago

 

Would this be what you may be referring to Jayboy?

[Bangkok Barry]

8 hours ago, Kalasin Jo said:

European countries  in general do give residential status which then triggers the right to work, entitlement to the state's health-care and the requirement to make tax declarations.

 

A Thai sister-in-law went to live in Hungary with her Dutch husband, Five year permission to stay, no fuss, no home visit, no 90-day report. And she contributed to the economy and local people by selling garden produce. All non-existent here in La-La Land.

[jayboy]

1 hour ago, ThaiPauly said:

My CI Bank hounded me for my TIN  about 5 years ago.

I actually have one from when I had a company here 20 years ago

 

Would this be what you may be referring to Jayboy?

 

I have a feeling the system changed so that old TIN numbers may not be applicable now. I was in the same position as you and had to get a new number.

 

As to CI banks chasing I resisted for a long time.The risk is that they are not averse to debanking customers who don't meet their criteria - and they are being pressured by their governments on the CRS issue.I decided not to take the risk - though I don't really know how material it is.

[Mike Lister]

8 minutes ago, jayboy said:

 

I have a feeling the system changed so that old TIN numbers may not be applicable now. I was in the same position as you and had to get a new number.

 

As to CI banks chasing I resisted for a long time.The risk is that they are not averse to debanking customers who don't meet their criteria - and they are being pressured by their governments on the CRS issue.I decided not to take the risk - though I don't really know how material it is.

The transition from 10-digit to 13-digit tax ID numbers for foreigners in Thailand occurred in September 2017. 

 

[pattaya1234was]

19 hours ago, nowhereman said:

Not true. I just received my Wise card on my Thai address. Before concluding application for new card I was asked to which address I wanted to be send.

OK, but you say a new card. By that I assume you already had a card with a previous address whis was not in Thailand. A first card Wise tell me   card cannot be for someone with a Thai address and no fixed address somewhere else in the world.

[Neeranam]

10 hours ago, Kalasin Jo said:

Exactly. My gripe too.

And about half the population of working age here are unregistered casual workers paid cash in hand. They know nothing about income tax and never will. Happy to turn up in their thousands at the government hospitals for the (nominal 30 baht payment) free healthcare. All my immediate Thai family, none of whom knows a thing about income tax  ( or their country's immigration laws) frequently use it, yours truly acting as chauffeur. After about 4 hours they come out with carrier bags of prescribed meds. I noticed the actual cost for one such bagful was 3,500 baht. Not even the UK NHS which still offers free at point of delivery healthcare gives out free prescription drugs except to pensioners. If we are to be taxpayers here we should be entitled to this too. 

The problem is that we may be regarded as tax resident here but their immigration laws do not in general give residency, only long stay (1 year at a time ) visitor status. European countries  in general do give residential status which then triggers the right to work, entitlement to the state's health-care and the requirement to make tax declarations. 

 

Even a genuine and lasting marriage to a Thai confers no rights here whatsoever on the foreign spouse, is in fact an even greater annual administrative burden on the foreigner ( and the Thai spouse) seeking permission to stay by virtue of marriage to a Thai.

The 30 baht health payment scheme no longer exists. It is the universal health system which costs nothing. 

Foreigners working here can get on the social security scheme. 

Does a Thai retiree in the UK get on the NHS? Very few Thai retirees could retire in the UK due to the strict immigration requirements. Conversely, UK retirees can retire here very easily and if they got universal health care it would be a huge burden on the Thai economy. 

 

 

 

[Badrabbit]

On 4/4/2024 at 11:58 AM, 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?

I've never tried to stay under the radar, paid tax on my pensions for the last 16 years in the UK. Immigration the bank never gave me any paperwork regarding paying tax here, it's not ignorance I just never thought about it.

 

[Mike Lister]

2 minutes ago, Badrabbit said:

I've never tried to stay under the radar, paid tax on my pensions for the last 16 years in the UK. Immigration the bank never gave me any paperwork regarding paying tax here, it's not ignorance I just never thought about it.

 

You are in fine shape Ken, you have nothing to be concerned about. Your income is all mostly exempt, as we have discussed. In the extremely unlikely event you are asked to verify it is exempt, HMRC can easily verify those things quickly. Stop worrying, please!

[nowhereman]

12 hours ago, pattaya1234was said:

OK, but you say a new card. By that I assume you already had a card with a previous address whis was not in Thailand. A first card Wise tell me   card cannot be for someone with a Thai address and no fixed address somewhere else in the world.

You might be right. I hope you manage to get it done.

[nofarang]

On 4/4/2024 at 2:57 PM, Startmeup said:

Just transfer a lump of money into a Thai friends bank account and get them to give you the cash. Or are we saying all the cam girls, penpals and family donations/gifts from abroad will be declaring this money and be subject to tax too?

Give me fcukin break. This tax thing will be thrown in the bin. 

Exactly!!!

"the cam girls, penpals and family donations/gifts from abroad will be declaring"???

not in a million years

[Bday Prang]

On 4/4/2024 at 12:05 PM, 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.

what about the charges? I think some cards are cheaper than others but if you have one of the pricier ones you could end up paying more in fees than in tax

[topt]

On 4/5/2024 at 4:11 PM, LivinLOS said:

The rest, both state and private pensions stop being UK taxable after a P85 filing. Paying taxes 'back home' is user error,

 

On 4/5/2024 at 3:44 PM, LivinLOS said:

That will depend on if you 'should' pay tax in your homne country.. 

If you filed a P85 when you became non resident of the uk, you shouldnt be paying taxes there. 

 

I am surprised no one else has pulled you up on this as, unless I am misunderstanding what you are saying, potentially you are completely wrong......

 

Private pensions are taxable in the UK for a non resident irrespective of filing a P85. The only way you avoid tax on a private pension paid in the UK is if you take it offshore or the combined amount is less than the personal allowance. The state pension may be zero rated but is added to the total of income so effectively counts for your total tax base.

 

Any property rental amounts are also taxable and again a P85 has nothing to do with it.

 

You could start here - https://www.gov.uk/tax-uk-income-live-abroad

 

P85 detail - https://www.gov.uk/guidance/get-your-income-tax-right-if-youre-leaving-the-uk-p85

 

Please show me I am wrong........

 

[ding]

American pensioners, see the US-Thai Double Taxation Agreement;

 

ARTICLE 20 Pensions and Social Security Payments 1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State. 2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State. 3. Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State. The term “annuities” as used in this paragraph means a stated sum paid periodically at stated times during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). For government pensions, see;

 

Americans with government pensions/annuities, see:

 

ARTICLE 21 Government Service a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who: i) is a national of that State; or ii) did not become a resident of that State solely for the purpose of rendering the services. a) Any pension paid by, or out of funds created by, a Contracting State or political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other State.

 

American expats with rental property income, see:

 

ARTICLE 6 Income from Immovable (Real) Property 1. Income derived by a resident of a Contracting State from immovable (real) property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

 

**So... I (living in the contracting state of Thailand) have a US rental house (in the _other_ contracting state, the US) may be taxed in the _other_ contracting state (the US). Correct?

 

US Treasury Dept. clarification titled,

"DEPARTMENT OF THE TREASURY TECHNICAL EXPLANATION OF THE CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE KINGDOM OF THAILAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME SIGNED AT BANGKOK ON NOVEMBER 26, 1996"

American expats with rental income, see Dept. of Treasury clarification; Article 6 (Income from Immovable (Real) Property) This Article deals with the taxation of income from immovable, or real, property. The two terms should be understood to have the same meaning. Paragraph 1 The first paragraph of Article 6 states the general rule that income of a resident of a Contracting State derived from real property situated in the other Contracting State may be taxed in the Contracting State in which the property is situated.

 

**So... my rental house in the US is taxed only in the US, not Thailand.

This is from Dept. of Treasury, please copy/paste the title above in a search engine. No link, sorry.

[JimGant]

1 hour ago, ding said:

**So... my rental house in the US is taxed only in the US, not Thailand.

 

You forgot to copy this part of the technical explanation for rental receipts:

https://www.irs.gov/pub/irs-trty/thaitech.pdf

Quote

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

 

Thus, Thailand has secondary taxation rights on rental income from your US (situs) rental property, i.e., the situs country does not have exclusionary taxation rights. For practical purposes, this means the US gets to keep all taxation on that rental income, while Thailand only keeps any taxation left after subtracting out a tax credit for the US taxes. Thus, in many (most) cases there won't be any taxes left for Thailand to collect.

 

Today's Thai tax forms don't allow for you to show a rental taxation net of a US tax credit. So, do the math on a matchbook, and if zero or negative, just don't report it. If there is some taxation due, after subtracting out the tax credit on a worksheet, fiddle with the numbers to arrive at that number, to insert on your tax return.

 

This concept, seen in many DTAs, of primary and secondary taxation countries, is fortuitous for the secondary country, should the primary country not tax the income in question. But, if country A is designated as having "exclusive" taxation rights, well then, country B has no rights, even if country A chooses not to exercise its taxation rights. Exclusive taxation rights are also contained in the DTA phrase: "May be taxed ONLY in country A", while "may be taxed" is code language in OECD Model tax treaty language as having primary taxation rights. Got that?

 

Now you know why the Treasury Dept has seen fit to write technical explanations for certain tax treaties.

[Badrabbit]

12 hours ago, Mike Lister said:

You are in fine shape Ken, you have nothing to be concerned about. Your income is all mostly exempt, as we have discussed. In the extremely unlikely event you are asked to verify it is exempt, HMRC can easily verify those things quickly. Stop worrying, please!

Thanks Mike.

[Darksidedude]

On 4/5/2024 at 6:35 AM, JimGant said:

 

Of course they have the right to tax foreign income, if the tax treaty allows. And these same treaties prevent double taxation, through exclusivity or by tax credits. But, yeah, they don't have the right to tax savings -- and there's no plan to do so. The rumor that all remittances into Thailand will be subject to taxation is pure baloney. Unless it's a direct deposit of a taxable foreign income, like a private pension, then it's up to you to parse what's income and what's savings, in that cash flow of fungible money into Thailand. The banks certainly can't determine what is and what isn't income. Nor can RD.

 

So it's up to you to determine whether or not you have a Thai tax obligation. For many of us, already paying our home country taxes on worldwide income, our total tax bill between home country and Thailand probably won't change -- with, now, Thailand finally getting some tax revenue, and the home country losing same tax revenue, by having to grant a credit. Ho hum.

 

Certainly it wouldn't be cost effective for RD to man up to check all tax situations of foreigners. In fact, it may make sense to go with what we've already heard, namely: "Pay tax in your home country, no need to file Thai tax return." But, just to make it scary for tax cheats, set up random tax compliance audits. And, of course, if you're not paying tax to your home country, now you have the opportunity to pay someone something. Sounds good to me.

if you're not paying tax to your home country, now you have the opportunity to pay someone something. Sounds good to me.

 

Have you got a screw loose or something agreeing to to this

 

For  10 years i was working abroad 4 weeks on 4 weeks off 2009 to 2019, my tax status in Australia is non resident for tax purposes, i have been working in middle east country's which do not impose taxes so the money i get is 100 percent my money in the bank and is 100 % legal by law.

 

How is it that Thailand could tax my income when I'm am not working in Thailand and living there on a spouse visa.

 

So now and for the last 5 years i have been living with my family (thai) in Oman working a 9 to 5 office job tax free, was planning to retire in Thailand but if they start to impose tax on money i bring into Thailand when i retire no way will in be moving back there which many other falangs will choose the same, Thailand as always will shoot themselves in the foot and loose out, they dont think of the big picture that is investing in real estate the falang supporting the in laws etc etc

[EVENKEEL]

Mai pen rai comes to mind regarding this.

[Mike Lister]

15 minutes ago, Darksidedude said:

if you're not paying tax to your home country, now you have the opportunity to pay someone something. Sounds good to me.

 

Have you got a screw loose or something agreeing to to this

 

For  10 years i was working abroad 4 weeks on 4 weeks off 2009 to 2019, my tax status in Australia is non resident for tax purposes, i have been working in middle east country's which do not impose taxes so the money i get is 100 percent my money in the bank and is 100 % legal by law.

 

How is it that Thailand could tax my income when I'm am not working in Thailand and living there on a spouse visa.

 

So now and for the last 5 years i have been living with my family (thai) in Oman working a 9 to 5 office job tax free, was planning to retire in Thailand but if they start to impose tax on money i bring into Thailand when i retire no way will in be moving back there which many other falangs will choose the same, Thailand as always will shoot themselves in the foot and loose out, they dont think of the big picture that is investing in real estate the falang supporting the in laws etc etc

Anything earned before 1 January 2024 is free of Thai tax, you only have to be concerned about income earned and imported to Thailand after that date.

[ding]

5 hours ago, JimGant said:

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

Thanks for the reply Jim! I saw that and did not forget it. I saw that the US has in situ prime position to collect that rental income from its citizen and did not expressly hand that off to Thailand. The US IRS has not sent me a notice saying they no longer want that portion of my tax payment. The US IRS has not said they want Thailand to be in prime position. The IRS did not state anywhere that I can find that the US surrenders their existing and established prime position to continue collecting that rental income tax.

 

5 hours ago, JimGant said:

ARTICLE 6 Income from Immovable Real Property 1. Income derived by a resident of a Contracting State (me, an American) from immovable  property (my US rental house) situated in the other Contracting State (referring to me, residing in Thailand) may be taxed in that other State.

The IRS has not sent me a notice that they give up their right to collect that portion of my tax so it remains the in situ Contracting State collecting the tax from its citizen living in Thailand (the Other Contracting State). There is no tax to "credit" in Thailand because it is exempt due to being paid to the US IRS and subject to the DTA. It is expressly exempt until the US tells somebody it doesn't want that part of my tax responsibility anymore.

 

I didn't forget it, just saw that the word "may" had no force - yet!

 

* Edit to Article 6 quote mine, sorry to put it in that quote box...

[JimGant]

1 hour ago, ding said:

The IRS has not sent me a notice that they give up their right to collect that portion of my tax so it remains the in situ Contracting State collecting the tax from its citizen living in Thailand (the Other Contracting State). There is no tax to "credit" in Thailand because it is exempt due to being paid to the US IRS and subject to the DTA.

 

It's not an either/or situation -- both countries get to tax your rental income, per the DTA. In this case, the US is the primary taxation authority, and Thailand the secondary. Thus, the US taxes you with no regard to Thailand, and keeps all the tax collection, since, as primary, they don't have to absorb a credit. Thailand, on the other hand, can consider your rental income as assessable income, but, per the DTA, has to use the US taxation as a credit against its taxation. So, if in a low tax bracket, your US taxation credit may completely wipe out any Thai taxation. In higher tax brackets, Thailand could net some taxes from your rental income.

 

Anyway, if you figure out on a worksheet that you'd owe Thailand no taxes, after it absorbs the US tax credit, don't even bother to include this rental saga on your Thai tax return, should you have to file for other reasons. Obviously, keep that worksheet should RD come knocking down the road.

[ding]

4 hours ago, JimGant said:

It's not an either/or situation -- both countries get to tax your rental income, per the DTA.

Hmm well the DTA exists to expressly stipulate that it is not an "and" taxation situation. The DTA is clear that the US will collect taxes on Articles 6, 20 and 21 etc. That means Thailand does _not_ get to tax that. It's expressly exempt from taxation claims from Thailand.

 

 

Can I ask, Where do you get your information on how all the worksheet stuff this is handled? I'm not familiar at all. How would you do a "worksheet" regarding tax "credits" on income that is expressly exempt per the DTA?

4 hours ago, JimGant said:

Thailand, on the other hand, can consider your rental income as assessable income

I don't see how, unless the US declares that they no longer want that part of my taxes paid to them. I don't see that happening. So the US is prime because the real property is in situ in the US... where I pay all my income tax... per the DTA.

4 hours ago, JimGant said:

both countries get to tax your rental income, per the DTA

I just can't read the DTA that way. How do you get there?

For Thailand to unilaterally imply secondary taxation claims after IRS tax returns are provided as evidence that tax was already paid to the US would involve the Dept. of State and Treasury. Where are the governments representing citizens subject protected from double taxation via DTA's?

 

Anyway, We will leave Thailand Dec 2024 because proving to a RD Official, beyond just showing that I paid tax on my pensions and rental income using my IRS tax return, will make immigration look like a well-oiled machine. Except that the RD has serious penalties and immigration is cheap.

[JimGant]

25 minutes ago, ding said:

Hmm well the DTA exists to expressly stipulate that it is not an "and" taxation situation. The DTA is clear that the US will collect taxes on Articles 6 ....That means Thailand does _not_ get to tax that. It's expressly exempt from taxation claims from Thailand.

There are many examples of both countries having taxation rights on the same income -- otherwise, why would you need a credit system, if only one country could tax..... The rental example is the purest, because others involve the "saving clause," whereby the US has secondary taxation rights on all income taxed by Thailand, even tho' the DTA gives Thailand certain "exclusive" taxation rights. [Private pensions, IRAs, etc.] Thus, because of the "saving clause," even tho' Thailand has "exclusive" taxation rights on my private or IRA pension, it practically results in Thailand only having "primary" taxation rights, with the US having "secondary" rights. In this case, Thailand keeps all the collected taxes, and the US gets to keep only the taxes collected after absorbing the Thai tax credit. So, double taxation is avoided, but the country getting "first dibs" per the DTA, gets to keep all the taxes, by not having to absorb a tax credit.

 

But back to Article 6, and rentals. Here, the US is "primary" taxation authority -- per the DTA language of "may" collect taxes -- if the DTA said "may ONLY" collect taxes, then the US would be the exclusive taxation authority, and Thailand would not have secondary taxation authority:

 

Quote

The first paragraph of Article 6 states the general rule that income of a resident of a
Contracting State derived from real property situated in the other Contracting State may be taxed in the Contracting State in which the property is situated. ......This Article does not grant an exclusive taxing right to the situs State; the situs State is merely given the primary right to tax

 

Thus, Thailand also has the right to tax your rental income, but must absorb a tax credit equal to the taxes paid the US. A fat cat Thai, with rental property in the US, and in the Thai 35% tax bracket -- would probably find he owes quite a bit of tax to Thailand, as the US tax credit for this rental income would probably be small. But, this is why Thailand would like to have this option of secondary taxation rights, even tho' for paupers like you and me, the US tax credit would probably cancel out any Thai taxes owed.

[1sickpuppy]

On 4/4/2024 at 12:15 PM, gravity101 said:

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...

Why is it 30% when Thais only pay 7% and most dont TIT

[KhunLA]

2 minutes ago, 1sickpuppy said:

Why is it 30% when Thais only pay 7% and most dont TIT

the 30% would be on fund transferred into the country as income, with income tax due.   As far as the purchase, it would be the same as the locals pay.

 

Will put a crimp on large purchases, if money not already in country, and taxable if brought in. 

 

I transferred in ฿6M one time.   Glad it was way before they started paying attention, and now enforcing the tax code.  Imagine paying 35% on that, although I wouldn't have bothered if I thought that was going to happen.

 

Will put a stop to many large purchases, though with the few expats here, don't think it will even be noticed in grand scheme of things.

 

Anyone thinking of, need to transfer over now, before having a long term visa, and meeting the 180 day staying window.

[lordgrinz]

7 hours ago, JimGant said:

There are many examples of both countries having taxation rights on the same income -- otherwise, why would you need a credit system, if only one country could tax..... The rental example is the purest, because others involve the "saving clause," whereby the US has secondary taxation rights on all income taxed by Thailand, even tho' the DTA gives Thailand certain "exclusive" taxation rights. [Private pensions, IRAs, etc.] Thus, because of the "saving clause," even tho' Thailand has "exclusive" taxation rights on my private or IRA pension, it practically results in Thailand only having "primary" taxation rights, with the US having "secondary" rights. In this case, Thailand keeps all the collected taxes, and the US gets to keep only the taxes collected after absorbing the Thai tax credit. So, double taxation is avoided, but the country getting "first dibs" per the DTA, gets to keep all the taxes, by not having to absorb a tax credit.

 

But back to Article 6, and rentals. Here, the US is "primary" taxation authority -- per the DTA language of "may" collect taxes -- if the DTA said "may ONLY" collect taxes, then the US would be the exclusive taxation authority, and Thailand would not have secondary taxation authority:

 

 

Thus, Thailand also has the right to tax your rental income, but must absorb a tax credit equal to the taxes paid the US. A fat cat Thai, with rental property in the US, and in the Thai 35% tax bracket -- would probably find he owes quite a bit of tax to Thailand, as the US tax credit for this rental income would probably be small. But, this is why Thailand would like to have this option of secondary taxation rights, even tho' for paupers like you and me, the US tax credit would probably cancel out any Thai taxes owed.

 

Wouldn't it be easier to just let us pay our taxes in our home countries, which we also state we are out of the country for whatever amount of days anyway, then maybe add an area for which country we reside in, and then let Thailand and the Home country tax authority decide who gets what behind the scenes? Since I am just a guest in this miserable hellhole anyway, why treat us like permanent residents?! My main objective is to not file taxes in Thailand, ever.

[topt]

2 hours ago, KhunLA said:

and now enforcing the tax code. 

Got any examples of that.............other then where some expats have gone and volunteered.........