Foreigners and their overseas income: what next?

[JimTripper]

3 hours ago, AreYouGerman said:

 

How's that a downgrade?

 

Also you were just giving your requirements and the answer for that would be the Phillipines. Now you have more requirements? Well, next time you should be more specific about what you are looking for.
😊

The country is dirty and the food sucks.

[AreYouGerman]

37 minutes ago, JimTripper said:

The country is dirty and the food sucks.

 

Thailand is dirty is as well. Imagine living in Chiang Mai or going into the water in Pattaya. Lol.

 

About food: People constantly bring this up but I just don't get it. Is somebody forcing you to eat food you don't like? Huh? Why don't you eat Thai food in the Phillipines three times a day.

[Lorry]

13 minutes ago, AreYouGerman said:

 

Thailand is dirty is as well. Imagine living in Chiang Mai or going into the water in Pattaya. Lol.

 

About food: People constantly bring this up but I just don't get it. Is somebody forcing you to eat food you don't like? Huh? Why don't you eat Thai food in the Phillipines three times a day.

Because filipino food is so much more delicious.

And so varied:

They have fish and rice (with beans), or rice and fish (with or without beans). You also get rice and beans and fish. Or just rice and fish.

And no hot spices.

 

I like rice and fish.  I could eat filipino food every day.

[AreYouGerman]

3 minutes ago, Lorry said:

Because filipino food is so much more delicious.

And so varied:

They have fish and rice (with beans), or rice and fish (with or without beans). You also get rice and beans and fish. Or just rice and fish.

And no hot spices.

 

I like rice and fish.  I could eat filipino food every day.

 

And I could eat German dinner every day!

 

Bread + Wurst or Bread + Cheese or Bread + Wurst + Cheese.

 

Love it! And it was even possible to get a German dinner EVERYWHERE in the WORLD! Imagine that! It's magic! I am even traveling with my own bread baking machine! ☺️

[ukrules]

3 hours ago, AreYouGerman said:

Love it! And it was even possible to get a German dinner EVERYWHERE in the WORLD! Imagine that! It's magic! I am even traveling with my own bread baking machine!

 

I must admit I'm partial to a schnitzel once or twice a week but I mostly eat what would be considered 'international' food and I hardly ever eat anything Thai, except for the occasional curry.

 

I've also been here for 15 years and not changed one bit during that time.

 

[lordgrinz]

On 5/10/2024 at 1:29 PM, Mike Lister said:

Fair enough, it's your decison.

 

This is what scares me, unless the RD makes some changes.

 

 

[Mike Lister]

1 minute ago, lordgrinz said:

 

This is what scares me, unless the RD makes some changes.

 

 

I'm not going to watch a one hour video in order to understand your question or concern! If you want me to comment on your concerns, tell me what they are.

[Danderman123]

So far this year:

 

I have stayed out of Thailand for 3 and a half months, and

 

I have only transferred into Thailand my monthly Social Security pension, plus a couple of small ATM withdrawals. So my Bangkok bank account is growing - if I stay in Thailand in 2025 for the entire year, I should have enough in the bank that I don't have to transfer in any money except my pension.

 

I am preparing for the worst case scenario that the RD prosecutes tax evaders in 2025, and Farangs in the village are sent to the monkey house for not filing tax returns.

 

Last note: I just remembered that the Non-O retirement visa renewal requires sending in a bank book as part of the package, so the 800,000 baht requirement is checked. This allows Immigration to review incoming bank transfers, so it would be trivial to check against RD records to check if a tax return has been filed.

 

No idea how this will work for those who use an agent to obviate the 800,000 baht in the bank requirement.

[Gknrd]

Big question is what is next. Every year they are adding additional hoops. Just not worth it anymore.

Thankfully there are many other countries that are not near the hassle.

[lordgrinz]

I am trying to find a way to handle part of the problem, just ordered a Wise debit card, might make use of that, as I highly doubt they will be tracking debit card purchases using a non Thai bank for payment. Hopefully I can make purchases using that, and avoid any scrutiny over sending actual cash to my SCB account, which would definitely be a very visible remittance.

[Lorry]

16 hours ago, lordgrinz said:

I am trying to find a way to handle part of the problem, just ordered a Wise debit card, might make use of that, as I highly doubt they will be tracking debit card purchases using a non Thai bank for payment. Hopefully I can make purchases using that, and avoid any scrutiny over sending actual cash to my SCB account, which would definitely be a very visible remittance.

Use this card to withdraw only savings from 2024.

That's 2 layers of protection. 

[Presnock]

On 4/26/2024 at 3:41 AM, MartinBangkok said:

LivinLOS, are you in a state of denial or have you been asleep the last 10 months.

 

This is exactly what has happened already!

I agree.  Part of the OECD  CRS and FACTA are all programs aimed at various targets i.e. tax evasion, money laundering, corruption, and probably a lot more as control over the masses gets more and more difficult in my opinion.  I do read about the US from which I hail and I realize that people are not financially robust as many people think.  Housing is totally out of control and people are even resorting to living in a foreign country and driving across the border to come to work in border states as they can't afford the state housing (which would also include property and other taxes).  I have lived overseas more than the US since I got out of HS in 1964 and have filed taxes on my earnings every single year except VN war resident and tax exempt.  I haven't had a lot of the freebie stuff that taxpayers reportedly get like during the COVID fiasco but my tax bill is paid regularly.  I divested myself of any holdings in the states or some state/city/district there would be after me to pay their taxes too.  While I was working overseas, I was a govt employee so me state of residence took their share of my paycheck and my house there required me to pay property taxes too.  Now I have to file my Foreign Bank and Financial Report (FBAR) every year as well as inform the tax folks that I do have a foreign bank account.  But still, I guess a sizeable number of US citizens working overseas do not or have not been paying their "fair share" so the govt resorts to different schemes to find ways to hunt those people down.  Now, the Thais and other foreign countries are going to aid the US Justice and Tax offices in tracking down those people.  I am pretty sure that the Thais when checking remittances into Thailand which are supposedly going to be reported by tax ID and tax forms and claims of exemption are going to be asked to verify large remittances.  It will be interesting to note how far that can and will go to track down expats financials.  I read today another article about the "dire" condition of the Thai national finances while they seek more tax monies to fund populist promises but which weigh heavily on the empty coffers.  So, I guess maybe after June the RD will put out the final on the new interpretation of the Thai tax law.  Sorry for this boring tale of my opinion and why I see it the way I do.  As said by Benjamin Franklin, "nothing is certain except taxes and death".  Good Luck to all...I noted on the news that the Thai weather department says that we will enter into the rainy season on the 20th of this month.

[lordgrinz]

6 hours ago, Lorry said:

Use this card to withdraw only savings from 2024.

That's 2 layers of protection. 

 

Yes, that's where the funds will be coming from anyway.

[lordgrinz]

On 5/13/2024 at 3:27 PM, Mike Lister said:

I'm not going to watch a one hour video in order to understand your question or concern! If you want me to comment on your concerns, tell me what they are.

 

Specifically the savings, which is explained in an example from 17:26 to 21:50......it appears remitted money from savings, WOULD be subject to taxes, no matter when it was earned.

[Mike Lister]

1 minute ago, lordgrinz said:

 

Specifically the savings, which is explained in an example from 17:26 to 21:50......it appears remitted money from savings, WOULD be subject to taxes, no matter when it was earned.

You should watch the video again, it doesn't say that his savings are taxable. What it says is that the person has savings AND pension income and the pension income is taxable. Even if the pension income was banked in the UK and remitted to Thailand later, that money would be taxable, IF it was earned after 1 January 2024. Any pension income earned and banked before that date, along with any savings already in the bank, is not taxable.

[lordgrinz]

30 minutes ago, Mike Lister said:

You should watch the video again, it doesn't say that his savings are taxable. What it says is that the person has savings AND pension income and the pension income is taxable. Even if the pension income was banked in the UK and remitted to Thailand later, that money would be taxable, IF it was earned after 1 January 2024. Any pension income earned and banked before that date, along with any savings already in the bank, is not taxable.

 

From 21:30 to 22:30 is based on remittance from a lump sum savings from years of savings from salary, listen to it again.

[Mike Lister]

20 minutes ago, lordgrinz said:

 

From 21:30 to 22:30 is based on remittance from a lump sum savings from years of savings from salary, listen to it again.

The rules as we understand them currently are these:

 

All income earned before 1 January 2024 is free of Thai tax, when remitted to Thailand, including savings from salary earned before that date.

 

I don't know the date on that video but I suspect it was made after the new rule (Por 161) was announced on 15 September 2023 but before the 1 January 2024 concession (por 162) was granted on November 20 2023.

 

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

 

 

[lordgrinz]

7 minutes ago, Mike Lister said:

The rules as we understand them currently are these:

 

All income earned before 1 January 2024 is free of Thai tax, when remitted to Thailand, including savings from salary earned before that date.

 

I don't know the date on that video but I suspect it was made after the new rule (Por 161) was announced on 15 September 2023 but before the 1 January 2024 concession (por 162) was granted on November 20 2023.

 

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

 

 

 

It's all these interpretations that are confusing, what exactly the law states would be my big worry. I mean is the RD going to publish some type of amendment based on these Q&A's, or are we hoping the person who answered these questions is allowed to make these interpretations? 

[Mike Lister]

4 minutes ago, lordgrinz said:

 

It's all these interpretations that are confusing, what exactly the law states would be my big worry. I mean is the RD going to publish some type of amendment based on these Q&A's, or are we hoping the person who answered these questions is allowed to make these interpretations? 

You have several choices:

 

Avoid becoming Thai tax resident in the current year and wait and see how all of this plays out early next year.

 

Use a Thai CPA tax professional to guide you.

 

Follow the lead of the large tax consultancies such as PWC, combined with answers from the TRD Q&A sessions, along with your own interpretation of the rules.

 

In the first year of implementation, the last option is not an unreasonable one since it allows you to see how things play out when tax returns are filed in 1Q25 and foreigners report their experiences.

[lordgrinz]

8 minutes ago, Mike Lister said:

You have several choices:

 

Avoid becoming Thai tax resident in the current year and wait and see how all of this plays out early next year.

 

Use a Thai CPA tax professional to guide you.

 

Follow the lead of the large tax consultancies such as PWC, combined with answers from the TRD Q&A sessions, along with your own interpretation of the rules.

 

In the first year of implementation, the last option is not an unreasonable one since it allows you to see how things play out when tax returns are filed in 1Q25 and foreigners report their experiences.

 

As you know, I went with the wait and see approach. I still wish I could move money here this year, but I'm too scared to do it. If it works the way they are saying, then I should be golden, except when I runout of lump sum savings (many years from now) and try to send money from my IRA's, at least US Social Security is safe from the RD.

[TroubleandGrumpy]

11 hours ago, lordgrinz said:

 

As you know, I went with the wait and see approach. I still wish I could move money here this year, but I'm too scared to do it. If it works the way they are saying, then I should be golden, except when I runout of lump sum savings (many years from now) and try to send money from my IRA's, at least US Social Security is safe from the RD.

The wait and see approach is definitely what I recommend - and am doing.  As with all things in Thailand involving the bureacracy - there are the rules and then there are what the 'Officer' in any Office decides the rules are. I have absolutely no confidence that a TRD Officer in an Isaan Province will accept any reasonable interpretation of the tax code, or the applicable DTA for my home country.  TRD are not (yet) training their local TRD Officers regarding the impacts this rule change will have on their jobs - particularly for Expats. I know this because my Thai wife's sister's friend works (as a Clerk) at the local TRD District Office. She asked her about it because she has an Expat husband who is/was looking to move to Thailand full-time this year. She has given us other information too - and all that leaves me in no doubt that the TRD is not prepared for an onslaught of Expats lodging tax returns, and absolutely not prepared for those who will be trying to claim exmptions due to DTAs.  If my experience is any guide, the Officers in Bangkok will be far more aware of things than the boondock Offices, who will wait until they are told what to do - and so far they have not been told much at all - and nothing about Expats being caught up in the net. 

[JimGant]

11 hours ago, lordgrinz said:

when I runout of lump sum savings (many years from now) and try to send money from my IRA's

Don't forget, money contributed to a conventional IRA prior to 2024 is exempt income for Thai tax purposes. Just because it's tax deferred, thus you pay Uncle Sam taxes on it on year withdrawn -- doesn't change the fact that it was income earned pre 2024. So, if you've stopped contributing to your IRA, all the money you eventually withdraw will be non assessable income, for Thai tax purposes. And even if you have some new post 2023 contributions -- if RD doesn't stipulate LIFO, feel free to declare you IRA withdrawals as first from the oldest contributions.

[lordgrinz]

45 minutes ago, JimGant said:

Don't forget, money contributed to a conventional IRA prior to 2024 is exempt income for Thai tax purposes. Just because it's tax deferred, thus you pay Uncle Sam taxes on it on year withdrawn -- doesn't change the fact that it was income earned pre 2024. So, if you've stopped contributing to your IRA, all the money you eventually withdraw will be non assessable income, for Thai tax purposes. And even if you have some new post 2023 contributions -- if RD doesn't stipulate LIFO, feel free to declare you IRA withdrawals as first from the oldest contributions.

 

But wouldn't the growth of what is in the IRA after 2024 be taxable when withdrawn and then remitted to Thailand? I would assume Thailand would look it as either interest income (which is how cash is handled in my IRA) , or capital gains?

[JimGant]

6 minutes ago, lordgrinz said:

But wouldn't the growth of what is in the IRA after 2024 be taxable when withdrawn and then remitted to Thailand?

Yes, that is why let's hope RD doesn't designate LIFO as the withdrawing rule. Otherwise, you should be free to choose the oldest contributions as what's being withdrawn.

[lordgrinz]

8 minutes ago, JimGant said:

Yes, that is why let's hope RD doesn't designate LIFO as the withdrawing rule. Otherwise, you should be free to choose the oldest contributions as what's being withdrawn.

 

At this rate, I am just glad they aren't taxing us on World-Wide income, just remittance. God forbid if that changes!

[Danderman123]

1 hour ago, JimGant said:

Don't forget, money contributed to a conventional IRA prior to 2024 is exempt income for Thai tax purposes. Just because it's tax deferred, thus you pay Uncle Sam taxes on it on year withdrawn -- doesn't change the fact that it was income earned pre 2024. So, if you've stopped contributing to your IRA, all the money you eventually withdraw will be non assessable income, for Thai tax purposes. And even if you have some new post 2023 contributions -- if RD doesn't stipulate LIFO, feel free to declare you IRA withdrawals as first from the oldest contributions.

This is great advice for how to correctly fill out a Thai tax return.

 

The question is how many foreigners are going to prepare a Thai tax return, and what will happen to those who don't.

 

I have met only one person who does their taxes here, and that was a hotel manager whose firm did their taxes. The Farangs in the village seem unaware of the new rules, or the old rules, for that matter.

[TroubleandGrumpy]

2 hours ago, lordgrinz said:

 

At this rate, I am just glad they aren't taxing us on World-Wide income, just remittance. God forbid if that changes!

If it does, then there will be a lot (more) of Expats leaving Thailand. I remember when listening to the Thai TRD person being interviewed by the Swedish Embassy person, that he said that Thailand was thinking about as a next step to introduce global income personal income taxes.  

 

Edited May 17 by TroubleandGrumpy

[TroubleandGrumpy]

1 hour ago, Danderman123 said:

This is great advice for how to correctly fill out a Thai tax return.

 

The question is how many foreigners are going to prepare a Thai tax return, and what will happen to those who don't.

 

I have met only one person who does their taxes here, and that was a hotel manager whose firm did their taxes. The Farangs in the village seem unaware of the new rules, or the old rules, for that matter.

In the past, prior to the change, the TRD just decided/accepted that retired/married Expats (those not working) did not have to lodge a tax return.  I make that conclusion based on the fact that foreign Expats who are not working have been here for many decades, and I am not aware of anyone being charged or fined etc for not lodging a tax return. I do hope they continue with that approach and 'look the other way' - and they are certainly not prepared for an influx of Expat tax returns and all their associated issues/questions.

[JimGant]

7 hours ago, lordgrinz said:

At this rate, I am just glad they aren't taxing us on World-Wide income, just remittance. God forbid if that changes!

Well, if RD has anyone home with brains and ethics, who can push back against fat cats who established the remittance system decades ago, with the 'bring it in next year' hiccup that allowed tax avoidance -- we just might see Thailand join the rest of the world in taxing income, not income remittances. And, hey, the new system doesn't really afford the fat cats tax relieve with the remittance system -- so maybe no real push back to get rid of this system.

 

If so, what do we see? Well, let's look at a Yank. Since remittances are no longer a factor, we just look at income for tax year 2024. In my situation, Air Force pension and Social Security are exempt from Thai tax, per DTA. Now, my IRA Required Minimum Distribution (RMD) of $14000 -- taxable in tax year 2024, both in the US and Thailand, would put me about 10000 baht of taxable income on the Thai tax return. So, I guess, I now have to file a Thai tax return, and pay some Thai taxes. And, per DTA, Thailand has primary taxation right on that RMD, meaning they get to keep all the taxes, but the US has to absorb a tax credit for these Thai taxes. As it turns out, at least in this scenario, my US taxes are a lot higher than the Thai taxes, so that after the Thai credit, I'm exactly where I would be if I hadn't had to pay Thai taxes -- pay a bit to Thailand, and have that bit reduce one for one on my US tax return.

 

So what would doing away with the remittance scenario mean? First, now no more screams of horror about all remittances to Thailand being taxed -- no one will even care about remittances anymore, in terms of income. Two, CRS and FATCA reporting, which never ever reported on remittances, can now become effective in identifying foreign income. Three, schemes like sending money to your US buddy to wire to Thailand in your behalf -- will, of course, no longer be an effective tax avoidance scheme in the days of no more remittance taxation. And, four, all your pre-2024 income being exempt from Thai taxation....is, of course, still in effect --'cause killing the remittance stupidity now means the calendar now dictates what income is subject to taxation -- and that doesn't include pre-2024 income.

 

So, what's the downside? None that I can see for Yanks. For Thailand? A much more streamlined approach to international taxation, especially as they petition for entry into the OECD community.

 

 

[Lorry]

12 hours ago, TroubleandGrumpy said:

If it does, then there will be a lot (more) of Expats leaving Thailand. I remember when listening to the Thai TRD person being interviewed by the Swedish Embassy person, that he said that Thailand was thinking about as a next step to introduce global income personal income taxes.  

 

I was almost going to click onto the video,  thinking, oh, another video,  this time with the Swedish ambassador...

 

Never mind, you are from Australia,  you are excused. 

(Most Europeans I know think that New Zealand is near Australia, whereas the distance between Australia and New Zealand is much bigger than the distance between Switzerland and Sweden)