Foreigners and their overseas income: what next?

[Neeranam]

9 minutes ago, TallGuyJohninBKK said:

 

On that above point, the managing partner of what I gather is one of the larger expat oriented legal and tax advisory firms in Thailand, MPG, did a YouTube video interview the other day where he opined that ATM withdrawals and credit card spending would NOT count as foreign remittances under the Thai Revenue Department's scheme.

 

I realize there are different and conflicting views on that topic. But I thought it was interesting to hear this guy flatly saying that only foreign transfers into Thai bank accounts would be counted as foreign remittances for taxation purposes.

 

He made those comments at about the 11:45 time point in the video below.

 

 

 

Sounds like he is just after business from foreigners who are scared of their own shadow or don't know anything about Thailand. Don't believe these sharks just preying on the gullible. 

 

[Neeranam]

10 minutes ago, lordgrinz said:

 

I keep my mailing address in the USA, so that's helped. The last mail I had sent here was the most dangerous one yet, had two ATM cards in it, two checks from escrow/insurance refunds on sale of my house, and my new US drivers license. Glad those documents all made it here.....LOL

Did you order from the US, or using a VPN? They know by my IP address I'm in Thailand so I had to give my Thai address.

[TallGuyJohninBKK]

On a related topic, there was another YT video interview lately with another BKK-based expat tax advisory (Thomas Carden) who spoke about, under the current rules, it taking his firm NINE MONTHS to get the Thai Revenue Dept to acknowledge/recognize a $900 tax credit from the U.S.

 

His broader point was basically saying that under the PROPOSED new Thai law that would impose taxation on worldwide income, that it would be basically impossible for expats here to successfully file their own Thai taxes in the future (under the proposed law) because of all the issues about claiming credits for taxes paid in people's home countries.

 

His comments on the nine months deal came at the 6:50 time point in the video below:

 

 

[TallGuyJohninBKK]

11 minutes ago, Neeranam said:

Sounds like he is just after business from foreigners who are scared of their own shadow or don't know anything about Thailand. Don't believe these sharks just preying on the gullible.

 

 

Your comment above makes no sense.

 

With this particular tax advisory exec claiming that ATM and credit card transactions would NOT be considered foreign remittances for Thai taxation purposes, his view is EXCLUDING/REDUCING the share of expats who would likely need his firm's services -- not increasing that potential client group.

 

 

[lordgrinz]

12 minutes ago, Neeranam said:

Did you order from the US, or using a VPN? They know by my IP address I'm in Thailand so I had to give my Thai address.

 

Not sure if I did, but I do have ExpressVPN, so maybe. Pretty sure I did it here though.

[Mike Lister]

35 minutes ago, TallGuyJohninBKK said:

 

On that above point, the managing partner of what I gather is one of the larger expat oriented legal and tax advisory firms in Thailand, MPG, did a YouTube video interview the other day where he opined that ATM withdrawals and credit card spending would NOT count as foreign remittances under the Thai Revenue Department's scheme.

 

I realize there are different and conflicting views on that topic. But I thought it was interesting to hear this guy flatly saying that only foreign transfers into Thai bank accounts would be counted as foreign remittances for taxation purposes.

 

He made those comments at about the 11:45 time point in the video below.

 

 

 

Ask yourself, does the way in which the funds are delivered make any difference, TT or cash via ATM.

[Neeranam]

20 minutes ago, TallGuyJohninBKK said:

 

Your comment above makes no sense.

 

With this particular tax advisory exec claiming that ATM and credit card transactions would NOT be considered foreign remittances for Thai taxation purposes, his view is EXCLUDING/REDUCING the share of expats who would likely need his firm's services -- not increasing that potential client group.

 

 

Perhaps, but the rest of what he said will get him more clients, especially those who are well off. 

This is a loophole, possibly, people will go to him, thinking they can't go to the RD by themselves, they need a lawyer

[TallGuyJohninBKK]

7 minutes ago, Mike Lister said:

Ask yourself, does the way in which the funds are delivered make any difference, TT or cash via ATM.

 

MPG and their managing partner, Luca Bernardinetti, are significant players in the expat tax advisory world here from everything I can gather.

 

I have no basis for knowing whether his opinion is correct or not. But it was interesting to hear an individual like him espouse that view flatly and without any equivocation.

 

I just wish his interviewer had followed up and asked him HOW he came to hold that opinion and/or what his basis was/is for having that interpretation.

 

https://connect.amchamthailand.com/list/member/mahanakorn-partners-group-co-ltd-4348

 

 

 

[Mike Lister]

15 minutes ago, TallGuyJohninBKK said:

 

MPG and their managing partner, Luca Bernardinetti, are significant players in the expat tax advisory world here from everything I can gather.

 

I have no basis for knowing whether his opinion is correct or not. But it was interesting to hear an individual like him espouse that view flatly and without any equivocation.

 

I just wish his interviewer had followed up and asked him HOW he came to hold that opinion and/or what his basis was/is for having that interpretation.

 

https://connect.amchamthailand.com/list/member/mahanakorn-partners-group-co-ltd-4348

 

 

 

I also wish that. But having worked previously for the Big 4, I have heard many outrageously untrue words uttered by supposedly knowledgeable people. Often, the aura that surrounds the company negates any element of doubt about what is said. We will find out in due course.

[jerrymahoney]

1 hour ago, TallGuyJohninBKK said:

On that above point, the managing partner of what I gather is one of the larger expat oriented legal and tax advisory firms in Thailand, MPG, did a YouTube video interview the other day where he opined that ATM withdrawals and credit card spending would NOT count as foreign remittances under the Thai Revenue Department's scheme.

Most ATM's I have used say there is a 20,000 baht per day withdrawal limit.

 

So by that reasoning one could, by using the ATM route, bring in upwards of 500,000 baht per month remittance tax free.

[JimGant]

1 hour ago, lordgrinz said:

Yes, because B6 million will go unnoticed by RD? I'm waiting to see how people fair when they try that theory.

I've already sent 5M baht this year to Thailand, in four installments via Wise. Wise taps my savings account, which on Dec 31, 2023, was well north of 5M baht. And, for future wires, I'll have my IRA RMDs (or more, if needed) sent to my savings account -- up to the amount my IRA was valued at on Dec 31, 2023. I guess I could even have my Air Force pension (non assessable via DTA) direct deposited to my savings account. Thus, I'll have a savings account that could never run out of tax exempt remittances, at least in my lifetime.

 

I guess if I sent many years' worth of large remittances -- and hadn't filed any tax returns 'cause remittances were non assessable income -- TRD might call me in for a chat. But, so what. I'll show them my bank statements and Wise transfer statements. Completely covered.

 

That I keep good records is just my nature, and not for any deep worry about TRD inquests -- since plan A is my LTR visa. Good records, tho', would be there if plan B is needed.

[TallGuyJohninBKK]

9 minutes ago, jerrymahoney said:

Most ATM's I have used say there is a 20,000 baht per day withdrawal limit.

 

So by that reasoning one could, by using the ATM route, bring in upwards of 500,000 baht per month remittance tax free.

 

Several Thai banking companies, Krungsri chief among them, have 30K baht maximum per withdrawal limits on ATM transactions. BKK Bank has a 25K per withdrawal transaction limit.

 

The per day limits are usually set by the account holder, and can be much much larger. The per transaction limits are based on bank company policy as to the maximum their ATMs will allow per transaction.

 

[jerrymahoney]

2 minutes ago, TallGuyJohninBKK said:

 

Several Thai banking companies, Krungsri chief among them, have 30K maximum per withdrawal limits on ATM transactions. BKK Bank has a 25K per withdrawal transaction limit.

 

The per day limits are usually set by the account holder, and can be much much larger. The per transaction limits are based on bank company policy as to the maximum their ATMs will allow per transaction.

 

My error -- so one could bring in closer to a million baht per month not subject to remittance.

[lordgrinz]

9 minutes ago, JimGant said:

I've already sent 5M baht this year to Thailand, in four installments via Wise. Wise taps my savings account, which on Dec 31, 2023, was well north of 5M baht. And, for future wires, I'll have my IRA RMDs (or more, if needed) sent to my savings account -- up to the amount my IRA was valued at on Dec 31, 2023. I guess I could even have my Air Force pension (non assessable via DTA) direct deposited to my savings account. Thus, I'll have a savings account that could never run out of tax exempt remittances, at least in my lifetime.

 

I guess if I sent many years' worth of large remittances -- and hadn't filed any tax returns 'cause remittances were non assessable income -- TRD might call me in for a chat. But, so what. I'll show them my bank statements and Wise transfer statements. Completely covered.

 

That I keep good records is just my nature, and not for any deep worry about TRD inquests -- since plan A is my LTR visa. Good records, tho', would be there if plan B is needed.

 

Well, that puts you and NJHOUSE on my list of guinea pigs to watch over the next year or two 😉 "If" either one of you gets audited, then I will be all ears on how it panned out.

[TallGuyJohninBKK]

4 minutes ago, jerrymahoney said:

My error -- so one could bring in closer to a million baht per month not subject to remittance.

 

Just keep in mind, most folks using their home country debit cards in that way would be paying an added 220 baht Thai bank fee for each and every foreign card ATM withdrawal here -- except for those with relatively rare accounts that reimburse foreign ATM fees....

 

But frankly, if someone was doing 30 foreign card ATM withdrawals per month and seeking reimbursement, I suspect their home country bank would be having a chat with them about their residency status and potentially other issues as well.

 

 

[JimGant]

1 hour ago, Neeranam said:

I don't know if I have to declare this to the tax man, anyone?

Not according to a tax professional from MTG associates, whose video was referenced here. Hey, when interpretations of all this new tax stuff is in such a state of flux -- pick the answer that best suits you, and your bottom line (and hope the matter is not later redefined, to your disadvantage). And, of course, record this source's bonafides, for possible use at a later chat with TRD.

[JimGant]

7 minutes ago, lordgrinz said:

 "If" either one of you gets audited, then I will be all ears on how it panned out.

I think the ruling that pre 2024 income is tax exempt from any remittance -- is on pretty solid ground.

[jerrymahoney]

9 minutes ago, TallGuyJohninBKK said:

 

Just keep in mind, most folks using their home country debit cards in that way would be paying an added 220 baht Thai bank fee for each and every foreign card ATM withdrawal here -- except for those with relatively rare accounts that reimburse foreign ATM fees....

 

But frankly, if someone was doing 30 foreign card ATM withdrawals per month and seeking reimbursement, I suspect their home country bank would be having a chat with them about their residency status and potentially other issues as well.

 

 

Well frankly I can't see the Thai RD going through all this brouhaha and then telling people ATM withdrawals of any size are not subject to remittance reporting.

 

And what if you had 5 or so banks to spread out the withdrawals each month?

[lordgrinz]

5 minutes ago, JimGant said:

I think the ruling that pre 2024 income is tax exempt from any remittance -- is on pretty solid ground.

 

I hope so too, I'm just worried about what they definitively accept as proof, that would have to come up in an audit to be proven one way or the other. Unless of course the RD comes out and clarifies this for all of us, not just RD's off-the-cuff comments to Sherrings.  

[TallGuyJohninBKK]

12 minutes ago, JimGant said:

I think the ruling that pre 2024 income is tax exempt from any remittance -- is on pretty solid ground.

 

Jim, I think I had an earlier misunderstanding about how the latest proposal calling for a new LAW for the Thais to tax worldwide income of those with Thai tax residency status operated vis-a-vis their prior enacted Revenue Code changes about taxing incoming foreign remittances.

 

Originally, I thought the latest LAW proposal was simply REPLACING the earlier Revenue Code measures that were being abandoned. But now lately, it's sounding like the earlier Revenue Code measures regarding taxation of incoming foreign income remittances are remaining in effect, and then beyond that, we'll have to see if they do or don't end up actually enacting a new LAW on taxing worldwide income.

 

Is that the way you're reading things, or you've got a different interpretation?

 

[TheAppletons]

6 minutes ago, TallGuyJohninBKK said:

 

Jim, I think I had a misunderstanding about how the latest proposal calling for a new LAW for the Thais to tax worldwide income of those with Thai tax residency status operated vis-a-vis their prior enacted Revenue Code changes about taxing incoming foreign remittances.

 

Originally, I thought the latest LAW proposal was simply REPLACING the earlier Revenue Code measures that were being abandoned. But now lately, it's sounding like the earlier Revenue Code measures regarding taxation of incoming foreign income remittances are remaining in effect, and then beyond that, we'll have to see if they do or don't end up actually enacting a new LAW on taxing worldwide income.

 

Is that the way you're reading things, or you've got a different interpretation?

 

 

  Not Jim but.....the remittance taxation is in effect now, the worldwide income tax scheme is under consideration for future implementation.  So - in effect - both of your scenarios are true.  The taxation on worldwide income would replace the remittance tax, which remains in effect until superceded.

[topt]

2 hours ago, TroubleandGrumpy said:

Exactly the point - they are targeting Expats - the new Boss of TRD has specifically stated that Expats have to start contributing.  

Do you have a citation for that as I don't remember seeing it? (not saying it wasn't said)

[TallGuyJohninBKK]

41 minutes ago, TheAppletons said:

 

  Not Jim but.....the remittance taxation is in effect now, the worldwide income tax scheme is under consideration for future implementation.  So - in effect - both of your scenarios are true.  The taxation on worldwide income would replace the remittance tax, which remains in effect until superceded.

 

But one overlap between the two different measures, presumably, would be the recently updated changes to the Revenue Code that savings (income) accrued prior to Jan. 1 2024 would NOT be subject to Thai taxation, no matter when in the future those funds might be remitted into Thailand.

 

And as a corollary to that, there's no indication that the recent PROPOSAL to tax worldwide income would be retroactive to prior years. So if and when such a law is actually enacted, assuming it actually is, that income taxation presumably would also only apply to income from future years, and not touch income accrued from prior years.

 

And, of course, that the applicable provisions of various countries' double taxation treaties with Thailand would continue to provide various exemptions/exclusions on what Thailand can and cannot tax in the way of foreign-sourced income... Such as the exclusion in the U.S.-Thai tax treaty saying that Social Security and govt pensions are only taxable by the U.S.

 

 

[TheAppletons]

6 minutes ago, TallGuyJohninBKK said:

 

But one overlap between the two different measures, presumably, would be the recently updated changes to the Revenue Code that savings accrued prior to Jan. 1 2024 would not be subject to Thai taxation, no matter when in the future those might be remitted into Thailand.

 

And as a corrollary to that, there's no indication that the recent PROPOSAL to tax worldwide income would be retroactive to prior years. So if and when such a law is actually enacted, assuming it actually it, that income taxation presumably would also only apply to income from future years, and not touch income accrued from prior years.

 

 

 

    Concur, based upon what we know now.  It would be highly unusual for a government to attempt to retroactively apply a new income tax law to previous tax years.  

 

   Now, if someone were to whisper the words "wealth tax" to the TRD.....different ballgame.  (Colombia, France, Norway, Spain, and Switzerland all have some form of a wealth tax, I think.)

[NJHOUSE]

52 minutes ago, lordgrinz said:

 

I hope so too, I'm just worried about what they definitively accept as proof, that would have to come up in an audit to be proven one way or the other. Unless of course the RD comes out and clarifies this for all of us, not just RD's off-the-cuff comments to Sherrings.  

Not off-the-cuff comments. It was put out as official guidance with full clarity. Look up Por No. 162/2566 AKA Departmental Instruction number 162/2566

[lordgrinz]

3 minutes ago, NJHOUSE said:

Not off-the-cuff comments. It was put out as official guidance with full clarity. Look up Por No. 162/2566 AKA Departmental Instruction number 162/2566

 

Does it state how to prove those savings? Nope...so it's a remark without clarification.

[NJHOUSE]

8 minutes ago, lordgrinz said:

 

Does it state how to prove those savings? Nope...so it's a remark without clarification.

I have all my year-end statements with the available balance. They can watch me log into my account and retrieve these statements in real time if they want. What else do you think they expect? Are you that paranoid? Do you keep your money under your mattress because tomorrow your bank can say you have a zero balance in your account and there's nothing you could do.

[sqwakvfr]

I hope this scenario does not come true about foreing pension incomes from countries that have double taxation agreements with Thailand: 

 

1. American living in Thailand with a government pension and let's say the annual income is $50,000.

2. American pays US federal income tax at 12% of AGI (Adjusted Gross Income).  Do not know what the Thai Government uses as taxable income(maybe someone knows)

3. Thai Government tells the American because his pension income is high his Thai Tax amount is 30%.

4.  The American then owes the Thai Government 18% tax on his income inspite of the double taxation agreement because he has already paid 12% to the US Government. 

 

If this actually happens then I have just one thing to say "Houston I am out of here".  

[TallGuyJohninBKK]

6 minutes ago, sqwakvfr said:

If this actually happens then I have just one thing to say "Houston I am out of here".  

 

The U.S. government pension  of an American living in Thailand would specifically be exempt from Thai taxation under the terms of the longstanding double taxation treaty between the two countries. It would NOT be Thai tax assessible income.

 

When it comes to U.S. government pensions, there's no balancing act under the treaty of which country has the higher or lower tax rate. It's simply a blanket declaration that only the U.S. (not Thailand) has the right to tax U.S. government pensions.

 

 

 

[NJHOUSE]

5 minutes ago, sqwakvfr said:

I hope this scenario does not come true about foreing pension incomes from countries that have double taxation agreements with Thailand: 

 

1. American living in Thailand with a government pension and let's say the annual income is $50,000.

2. American pays US federal income tax at 12% of AGI (Adjusted Gross Income).  Do not know what the Thai Government uses as taxable income(maybe someone knows)

3. Thai Government tells the American because his pension income is high his Thai Tax amount is 30%.

4.  The American then owes the Thai Government 18% tax on his income inspite of the double taxation agreement because he has already paid 12% to the US Government. 

 

If this actually happens then I have just one thing to say "Houston I am out of here".  

I hear ya. Already this kind of talk is negatively affecting Thailand. They better wise up soon.