Foreigners and their overseas income: what next?

[lordgrinz]

9 minutes ago, NJHOUSE said:

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.

 

Lets hope they don't operate like the Immigration Office, because some piece of paper you just printed off online won't cut it.

[JackGats]

1 hour 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.

Remittance free but with punitive ATM fees.

[sqwakvfr]

15 minutes ago, TallGuyJohninBKK said:

 

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.

 

 

 

Would it be a blanket or all encompassing exemption regardless of the income?  I only used 50K but some have pension that are much higher. Some have pension that are not taxed by the US Governemnt because some have been declared disabled up to 100% and are not subject to US Income Taxes.  Per Thai SOP: Do first and think later.  This could be a pandara's box for the Thai Government that is looking to raise money to cut it's budget deficit. 

[MeePeeMai]

7 minutes ago, TallGuyJohninBKK said:

 

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.

 

 

 

 

Well my Government pension from the USA is a "State Government" pension from being a retired civil service employee... so as I understand it, Thailand has sole taxing rights to MY pension under the DTA (as long as I am a "tax resident" of Thailand).

 

I still don't have a clear answer about my annual ROTH conversions (already taxed by the IRS) and any qualified ROTH distributions I make (not taxed by the IRS because the taxes have already been paid on everything except the capital gains portion of the ROTH IRA).

 

Then there's my rental income from the USA and both long term and short term capital gains in my brokerage accounts.

 

I got audited last year by the IRS (which was a pain in the arse) and I had to fly back to the USA just to deal with it.

 

It just gets so damn complicated an uncertainty abounds.  How is anyone ever supposed to relax and not worry about things in this kind of environment?  "Just hire an accountant and get a tax attorney" you might say, well where am I supposed to find those (well qualified and knowledgeable) here in Thailand?  Can they be trusted and might I regret hiring them for lack of experience or simply fumbling my returns??

 

It just looks like a nightmare and there are so many things that could go wrong if you ask me.  Dealing with my Federal and State tax returns in the USA every year is already extremely complicated and expensive.  The thought of doing an annual return in Thailand and dealing with accountants/attorneys/DTA and the Thai RD scared me right out of Thailand. 

 

I was happy to leave behind the headaches and nightmare of adding this into my already stressful toxic tax cake mix.

 

 

[jerrymahoney]

39 minutes ago, JackGats said:

Remittance free but with punitive ATM fees.

Punitive as opposed to paying taxes? And some banks refund the 220 fee(s) each month. 

[Mike Lister]

59 minutes ago, NJHOUSE said:

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

I'm not sure which is the more damaging part, the lack of clear information from the TRD or the anxious willies who constantly imagine the worse.

[TroubleandGrumpy]

2 hours ago, topt said:

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

I read it in an early story in a magazine/online new organisation that is not allowed to be posted here.

Search for quotes attributed to the new TRD GM Kulaya Tantitemit. 

[TallGuyJohninBKK]

1 hour ago, MeePeeMai said:

Well my Government pension from the USA is a "State Government" pension from being a retired civil service employee... so as I understand it, Thailand has sole taxing rights to MY pension under the DTA (as long as I am a "tax resident" of Thailand).

 

My understanding is that the exemption on government pensions referenced in the U.S.-Thai tax treaty would apply equally to federal and state U.S. government pensions....  But, I also don't work for the Thai Revenue Dept....  🙂

 

If anyone has gotten clearer advice on the status of U.S. state government pensions, please do chime in...

[TroubleandGrumpy]

5 hours ago, TallGuyJohninBKK said:

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:

 

 

Exactly the problems predicted by the US tax expert, are what most Expats anticipate will be the biggest problems - Thai bureaucracy in the TRD.  9 months to approve a $900 credit under a DTA - that is how TRD will affect Expat's lives when they are lodging a tax return in Thailand and expecting DTAs to be able to be used.  Of course the lunatic Thai apologists think and say, that it will all be unicorns and milk and honey - but the reality will be very different. The Thai TRD staff do not know the rules, do not comply with the rules, and do not care about the rules - and unlike the Immigration Police they are not trained or staffed to deal with Expats - and a lot less speak English. IMO the best strategy is to avoid dealing with them if at all possible. Some say you must get a TIN and lodge a tax return, some say you only need to apply for a TIN if you have to pay income taxes. Either way, Thailand is no longer a recommended destination for Expats to retire (or marry), and as the Aussie bloke on the Overboard in Asia site states, there are much more Expat tax friendly countries to retire to, and The Philippines and Malaysia are just 2 of them. 

[TallGuyJohninBKK]

1 hour ago, sqwakvfr said:

Would it be a blanket or all encompassing exemption regardless of the income?  I only used 50K but some have pension that are much higher. Some have pension that are not taxed by the US Governemnt because some have been declared disabled up to 100% and are not subject to US Income Taxes.  Per Thai SOP: Do first and think later.  This could be a pandara's box for the Thai Government that is looking to raise money to cut it's budget deficit. 

 

As I understand it, under the U.S-Thai tax treaty, U.S. government pensions and things like Social Security, and I'd assume that would include disability payments as part of Social Security, are simply NOT taxable by Thailand, period. Doesn't matter their amount, and whatever else may be going on with a person's finances, large or small.

 

On the other hand, private pension remittances absolutely ARE/can be taxable by Thailand under the terms of the taxation treaty.

 

 

[TallGuyJohninBKK]

6 minutes ago, TroubleandGrumpy said:

Exactly the problems predicted by the US tax expert, are what most Expats anticipate will be the biggest problems - dealing with the idiotic incompetent Thai bureaucracy in the TRD.  9 months to approve a $900 credit under a DTA - that is how TRD will affect Expat's lives when they are lodging a tax return in Thailand and expecting DTAs to be able to be used. 

 

I too was more than a bit alarmed / dismayed when I heard Carden's account of that....

 

The issue of home country-based tax credits, and their application against Thai taxation due, would seem to have the potential to be a large and significant issue for future expat Thai taxation under the current foreign remittances policy.

 

[TroubleandGrumpy]

3 hours 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.

Ditto regarding having all the records and documents ready and prepared, just in case the TRD comes knocking.  But as we both know, the problem will be if Somchai in the local TRD Office accepts those records/documents, and agrees that the money is/was not taxable in Thailand. If he/she does not, then they can hit you with a tax bill that you have 7 days to pay, and then (and only then) you can lodge an appeal against that decision, and good luck winning that.  The thing is that the TRD does not have to prove that the money brought over was income, it is up to the Expat to prove that it was not income - firstly to the satisfaction of the TRD Officer, and then to the Appeals Tribunal - and in Thai too. 

 

My Plan B includes the option of me leaving on the next fight/ship out of here, if the TRD sends a letter asking me to attend a compulsory meeting about 'unpaid taxes' over the years since 2024 - followed sometime later by the Thai wife (I hope). I know some have already left, and some are now living in Thailand less than 180 days each year, and some are planning to leave if/when things do get implemented, and some if/when some Expats are nailed. I want to stay as long as possible and I am hoping to stay forever - we have a house and life here. But we will leave rather than pay a load of income tax on the 1 million+ baht that I bring into Thailand every year (much more when buying things like cars or property). Even those guys on just the Pension could get a decent tax bill - and if TRD does not accept that all the listed exclusions and allowances apply equally to all foreigners, their calculated tax bill could be much higher.  That is the problem, unlike the Tax Office in Aust (and everywhere else in the 1st world) where the rules are fully published and detailed, in Thailand the tax rules are vague and subject to the interpretation of each Officer. 

 

There is a Youtuber that was living in China with a wife for many years, and then it all went pear shaped, and he had to flee. He now publishes a lot of stories about the negatives on China - and some of it is really bad.  I reckon the same thing w/could happen if one of those Youtube channel Expat gets caught out and is screwed over by the TRD, and forced to pay a big tax bill.  Not that TRD gives a rat's rear - but this move is just the wrong thing to do IMO. The Philippines and Malaysia and Indonesia have both excluded retired Expats incomes from overseas, why is Thailand not doing the same. Surely they know that Expats overall pay more in VAT alone, than the vast majority of Thais pay in VAT and Income Taxes combined.  

[TroubleandGrumpy]

2 hours ago, lordgrinz said:

 

Lets hope they don't operate like the Immigration Office, because some piece of paper you just printed off online won't cut it.

Sorry - but from what I have seen and heard from tax experts (direct and online), TRD requires 'documented proof' of any evidence provided when investigating tax compliance - an online printout is not enough. 

[TroubleandGrumpy]

2 hours ago, sqwakvfr said:

Would it be a blanket or all encompassing exemption regardless of the income?  I only used 50K but some have pension that are much higher. Some have pension that are not taxed by the US Governemnt because some have been declared disabled up to 100% and are not subject to US Income Taxes.  Per Thai SOP: Do first and think later.  This could be a pandara's box for the Thai Government that is looking to raise money to cut it's budget deficit. 

Unfortunately you are correct - it is unclear and uncertain how it would all be employed by TRD.  The official international tax rules are that all USA Citizens are only taxable in USA - they use a Citizenship based approach to all worldwide income.  Most countries use a Residency based tax approach, and anyone who lives in their country for more than X number of days (around 180) is a tax resident.  But most Residence based countries do not tax overseas incomes unless remitted into their country - it is assumed the income earned overseas is taxed there - and that is why DTAs exist.  However, USA is extremely strong and powerful about them only getting taxes on money earned in USA, and although they will 'allow' their Citizens to be taxed in another country, they only allow that to be applicable for income earned in that other country.      

[TroubleandGrumpy]

2 hours ago, MeePeeMai said:

 

Well my Government pension from the USA is a "State Government" pension from being a retired civil service employee... so as I understand it, Thailand has sole taxing rights to MY pension under the DTA (as long as I am a "tax resident" of Thailand).

 

I still don't have a clear answer about my annual ROTH conversions (already taxed by the IRS) and any qualified ROTH distributions I make (not taxed by the IRS because the taxes have already been paid on everything except the capital gains portion of the ROTH IRA).

 

Then there's my rental income from the USA and both long term and short term capital gains in my brokerage accounts.

 

I got audited last year by the IRS (which was a pain in the arse) and I had to fly back to the USA just to deal with it.

 

It just gets so damn complicated an uncertainty abounds.  How is anyone ever supposed to relax and not worry about things in this kind of environment?  "Just hire an accountant and get a tax attorney" you might say, well where am I supposed to find those (well qualified and knowledgeable) here in Thailand?  Can they be trusted and might I regret hiring them for lack of experience or simply fumbling my returns??

 

It just looks like a nightmare and there are so many things that could go wrong if you ask me.  Dealing with my Federal and State tax returns in the USA every year is already extremely complicated and expensive.  The thought of doing an annual return in Thailand and dealing with accountants/attorneys/DTA and the Thai RD scared me right out of Thailand. 

 

I was happy to leave behind the headaches and nightmare of adding this into my already stressful toxic tax cake mix.

 

 

Some will say you are being negative, but in my experience, you are rightly concerned and there is ample evidence to have those concerns. And the other thing is how much will one of those experienced Thai tax and DTA experts cost for a PIT.  If I was not married to a Thai and living in 'our' house, we would have left already - the 180 days from January 1 was up yesterday (29th June).  

[Mike Lister]

3 minutes ago, TroubleandGrumpy said:

Unfortunately you are correct - it is unclear and uncertain how it would all be employed by TRD.  The official international tax rules are that all USA Citizens are only taxable in USA - they use a Citizenship based approach to all worldwide income.  Most countries use a Residency based tax approach, and anyone who lives in their country for more than X number of days (around 180) is a tax resident.  But most Residence based countries do not tax overseas incomes unless remitted into their country - it is assumed the income earned overseas is taxed there - and that is why DTAs exist.  However, USA is extremely strong and powerful about them only getting taxes on money earned in USA, and although they will 'allow' their Citizens to be taxed in another country, they only allow that to be applicable for income earned in that other country.      

There are no official international tax rules, what are you talking about? There is a DTA between Thailand and the USA, is that what you're trying to say?

 

If that is the case, it does not say that the US citizens are only taxable in the US, it depends on the class and type of income.

 

Your second statement in bold above is also nonsense. The USA does not prevent other countries from taxing income that arises in the US.

[JimGant]

3 hours ago, NJHOUSE said:

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?

Right on!

[JimGant]

2 hours ago, lordgrinz said:

Lets hope they don't operate like the Immigration Office, because some piece of paper you just printed off online won't cut it.

We still get all our bank statements hard copy, snail mail -- since the wife isn't computer literate for such retrievals.

[NoDisplayName]

24 minutes ago, TroubleandGrumpy said:

The official international tax rules are that all USA Citizens are only taxable in USA

 

25 minutes ago, TroubleandGrumpy said:

However, USA is extremely strong and powerful about them only getting taxes on money earned in USA, and although they will 'allow' their Citizens to be taxed in another country, they only allow that to be applicable for income earned in that other country. 

 

Citation, please!!!!!

 

If you can do that, you win the intertubes today, and I'll put you in for poster of the millenium!

[JimGant]

5 hours ago, Mike Lister said:

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

Actually, I think you nailed it in an earlier post, where you said ATM transactions could not be tracked, thus no data for TRD to make any tax evasion case -- unlike for transfers into your bank account, which, of course, would have data for TRD to ask about, "why no tax return?" Thus, just nonsensical to pursue ATM transactions.

[Mike Lister]

1 minute ago, JimGant said:

Actually, I think you nailed it in an earlier post, where you said ATM transactions could not be tracked, thus no data for TRD to make any tax evasion case -- unlike for transfers into your bank account, which, of course, would have data for TRD to ask about, "why no tax return?" Thus, just nonsensical to pursue ATM transactions.

I didn't say they couldn't be tracked, of course they can! What I said was:

 

"What they might be saying is that such transactions are too difficult to track and enforce so we'll give them a pass, or, it might just be a WAG on his part....dunno".

[Klonko]

3 hours ago, lordgrinz said:

 

Lets hope they don't operate like the Immigration Office, because some piece of paper you just printed off online won't cut it.

They will ask for all documents to be stamped and signed off by a very senior person of the document issuing entity (cf. insurance certificates) and translated into Thai certified by the ministry of foreign affairs.

 

Sorry, could not resist to add to fearmongering.

[DrJoy]

On 4/5/2024 at 9:35 AM, JimGant said:

Certainly it wouldn't be cost effective for RD to man up to check all tax situations of foreigners

I have visited several RD Offices throughout the length and breath of Thailand, never once encountered a person who could even speak kindergarten level English.

 

Their HQ on Paholyothin road has over 200 staff, none could speak English.

 

So how will they communicate with the farang that his/her tax is due ?

[Mike Lister]

9 minutes ago, DrJoy said:

I have visited several RD Offices throughout the length and breath of Thailand, never once encountered a person who could even speak kindergarten level English.

 

Their HQ on Paholyothin road has over 200 staff, none could speak English.

 

So how will they communicate with the farang that his/her tax is due ?

Better come to Chiang Mai in that case, most staff at District 1 & 2 offices speak English well.

[JimGant]

3 hours ago, sqwakvfr said:

Would it be a blanket or all encompassing exemption regardless of the income?  I only used 50K but some have pension that are much higher. Some have pension that are not taxed by the US Governemnt because some have been declared disabled up to 100% and are not subject to US Income Taxes.

All pensions paid for prior govt service are EXCLUSIVELY taxable only by the US. Period. Makes no difference the amount of the pension, or whether or not it is exempt from US taxation. Social Security also exclusively taxable by the US.

[sqwakvfr]

6 minutes ago, JimGant said:

All pensions paid for prior govt service are EXCLUSIVELY taxable only by the US. Period. Makes no difference the amount of the pension, or whether or not it is exempt from US taxation. Social Security also exclusively taxable by the US.

Thanks. Is the Thai Government aware of this? 

[TroubleandGrumpy]

1 hour ago, Mike Lister said:

There are no official international tax rules, what are you talking about? There is a DTA between Thailand and the USA, is that what you're trying to say?

 

If that is the case, it does not say that the US citizens are only taxable in the US, it depends on the class and type of income.

 

Your second statement in bold above is also nonsense. The USA does not prevent other countries from taxing income that arises in the US.

You should have stayed away - but it is great that I can now disagree with you, prove you wrong (maybe) and not get suspended/banned.

I meant Internationally accepted 'rules' as outlined here:-

International Tax Rules | TaxEDU Glossary (taxfoundation.org)

And as under the OECD that Thailand is trying to join.

Taxation - OECD

 

No - USA taxes all its Citizens irrespective of where the income is earned. It is not about type or class.  Read it up.

 

Yes it does - the IRS does not easily support other countries taxing its Citizens on the money they make in the USA. Yes there are exceptions made by the IRS, usually for employment based arrangements overseas, but a blanket attack on USA Citizen's money earned in USA by other countries is generally rebuked by the IRS.  USA is one of the few countries that imposes taxation based on Citizenship and not on Tax Residency - it does not matter where you live as a USA Citizen and things like their DTAs reflect that.

U.S. citizens and resident aliens abroad | Internal Revenue Service (irs.gov)

[TroubleandGrumpy]

16 minutes ago, sqwakvfr said:

Thanks. Is the Thai Government aware of this? 

Somchai in the local TRD Office is probably not aware. And as someone pointed out already, many TRD Offices do not have training or knowledge on the applicability of DTAs.  Business returns are often centralised in Bangkok where the vast majority of DTAs are applied in taxation. As PITs are done in the Provinces usually, then this will be a problem probably.  

[TroubleandGrumpy]

1 hour ago, NoDisplayName said:

Citation, please!!!!!

If you can do that, you win the intertubes today, and I'll put you in for poster of the millenium!

Thanks - much appreciated.

See my post above. 

 

[TroubleandGrumpy]

33 minutes ago, Mike Lister said:

Better come to Chiang Mai in that case, most staff at District 1 & 2 offices speak English well.

What sort of answer is that ?? Come On !!