Foreigners and their overseas income: what next?

[TroubleandGrumpy]

1 hour 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 saw a Youtube interview today done 2 days ago with a tax expert - it was a follow up to a previous interview. He stated that Thailand does not receive financial data on ATM withdrawals made from an overseas account (debit or credit cards). They can only get data on transfers made overseas to Thailand banks.  The local Thai banks are not capable of detailing which overseas account made each transaction via their ATMs. 

[NoDisplayName]

7 minutes ago, TroubleandGrumpy said:

Thanks - much appreciated.

See my post above. 

 

 

Nice citiations, but unfortunately they have nothing to do with foreign countries NOT taxing US citizens tax resident there.

 

First two citations are for taxation of multinational companies.

Final citation applies to US citizens filing abroad.

 

Give it another shot, please.  Your award is still pending!

[TroubleandGrumpy]

2 minutes ago, NoDisplayName said:

Nice citiations, but unfortunately they have nothing to do with foreign countries NOT taxing US citizens tax resident there.

First two citations are for taxation of multinational companies.

Final citation applies to US citizens filing abroad.

Give it another shot, please.  Your award is still pending!

You read the wikipedia article about countries that tax globally? 

I will leave it at that - about to have dinner and prefer that to your award 🙂

 

[NoDisplayName]

6 minutes ago, TroubleandGrumpy said:

You read the wikipedia article about countries that tax globally? 

I will leave it at that - about to have dinner and prefer that to your award 🙂

 

 

I promise to read the wikipedia article when you post a link, thanks.

 

[Klonko]

1 hour ago, TroubleandGrumpy said:

I saw a Youtube interview today done 2 days ago with a tax expert - it was a follow up to a previous interview. He stated that Thailand does not receive financial data on ATM withdrawals made from an overseas account (debit or credit cards). They can only get data on transfers made overseas to Thailand banks.  The local Thai banks are not capable of detailing which overseas account made each transaction via their ATMs. 

 

Nobody knows which data TRD can source in the future. Tax audits are possible 10 years in arrears if no taxes have been filed. I assume that all electronic data about me may be retrievable. I compare it to blood samples from anti-doping tests which are stored for many years to be available for further analysis by later developed anti-doping tests. AI will probably make retrieving and evaluating my data very easy.

[Mike Lister]

1 hour ago, TroubleandGrumpy said:

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

A factual answer in English.

[JimGant]

58 minutes ago, TroubleandGrumpy said:

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

Of course it's nonsense. The Thai-US DTA is very clear on which US incomes are taxable by Thailand. As an example, private pensions, IRAs, and 401k distributions are primarily taxable by Thailand. Now, the treaty language actually says Thailand has "exclusive" taxation rights on this income. But the treaty's "saving clause," found in all US tax treaties, gives the US at least secondary taxation rights, "as if the treaty language did not exist." Thus, effectively Thailand has primary taxation rights on my IRA, meaning, they get to keep all the collected taxes; while the US, with secondary taxation rights, gets to tax my IRA -- but has to absorb a tax credit for the Thai taxes paid.

 

And, yes, the US Tax Code does not allow a tax credit for foreign taxes paid on US income -- UNLESS an exception, via international tax treaty, can be shown. This is done by attaching a Form 8833 to your US tax return: "Treaty-Based Return Position Disclosure." Thus, the Internal Revenue Code is trumped by an international treaty. Thailand pockets my taxes in full; and the US pockets the difference, should the Thai tax credit be less than the US taxation.

 

 

[Mike Lister]

2 minutes ago, JimGant said:

Of course it's nonsense. The Thai-US DTA is very clear on which US incomes are taxable by Thailand. As an example, private pensions, IRAs, and 401k distributions are primarily taxable by Thailand. Now, the treaty language actually says Thailand has "exclusive" taxation rights on this income. But the treaty's "saving clause," found in all US tax treaties, gives the US at least secondary taxation rights, "as if the treaty language did not exist." Thus, effectively Thailand has primary taxation rights on my IRA, meaning, they get to keep all the collected taxes; while the US, with secondary taxation rights, gets to tax my IRA -- but has to absorb a tax credit for the Thai taxes paid.

 

And, yes, the US Tax Code does not allow a tax credit for foreign taxes paid on US income -- UNLESS an exception, via international tax treaty, can be shown. This is done by attaching a Form 8833 to your US tax return: "Treaty-Based Return Position Disclosure." Thus, the Internal Revenue Code is trumped by an international treaty. Thailand pockets my taxes in full; and the US pockets the difference, should the Thai tax credit be less than the US taxation.

 

 

For the avoidance of doubt, that's my quote you quoted previously, and not T&G's but I guess the quotes editor is screwed up.

[topt]

1 hour ago, TroubleandGrumpy said:

I saw a Youtube interview today done 2 days ago with a tax expert - it was a follow up to a previous interview. He stated that Thailand does not receive financial data on ATM withdrawals made from an overseas account (debit or credit cards). They can only get data on transfers made overseas to Thailand banks.  The local Thai banks are not capable of detailing which overseas account made each transaction via their ATMs. 

Is this the Chris Parker follow up with Luca from MPG mentioned earlier in this thread?

[puck2]

Very interesting for German Taxpayers, living in  Thailand: -> DTA in English

 

https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Steuern/Internationales_Steuerrecht/Staatenbezogene_Informationen/Laender_A_Z/Thailand/1968-07-26-Thailand-Abkommen-DBA-Gesetz.pdf?__blob=publicationFile&v=1

 

(or google: Doppelbesteuerungsabkommen zwischen Deutschland und Thailand) = DTA  ........

 

This document is written in German language and beside (parallel to) it in English language; and even in Thai language below boths).

 

 General result: German rents  and pensions are free of Thai tax !!!  (artikel 18 ff.) But there are special  exceptions. Try to read and understand the legal language 😊

 

<----->

 

 

[Cult of the Sun]

On 4/4/2024 at 2:47 AM, NorthernRyland said:

It's like you lived in a mafia controlled neighborhood and then when you moved away the old mafia notified another mafia in your new area that you stopped paying dues. 

That is pretty much how the world works. There is a worldwide stalker network that isn't too fond of some of us.  So there are also levels of this that are less obvious to others.  We ALL live in a mafia controlled neighborhood is the bottom line. Even the the stalkers do. They're useful idiots who enforce the prison of the mind for the few at the top. 

[TroubleandGrumpy]

14 hours ago, topt said:

Is this the Chris Parker follow up with Luca from MPG mentioned earlier in this thread?

Yes it is/was.  

[TroubleandGrumpy]

15 hours ago, NoDisplayName said:

 

I promise to read the wikipedia article when you post a link, thanks.

 

Did that already - here it is again.

International taxation - Wikipedia

And as a bonus

List of countries by tax rates - Wikipedia

 

That is it - I did my research to form my opinions going back to October 2023.

Do your own research first - dont just read/watch something that you agree with because that is what you want..

[TroubleandGrumpy]

14 hours ago, Klonko said:

 

Nobody knows which data TRD can source in the future. Tax audits are possible 10 years in arrears if no taxes have been filed. I assume that all electronic data about me may be retrievable. I compare it to blood samples from anti-doping tests which are stored for many years to be available for further analysis by later developed anti-doping tests. AI will probably make retrieving and evaluating my data very easy.

I do believe that TRD can go back 7 years under the tax laws - but it certainly could be 10.

Yes - TRD will be receiving data from the banks automatically - plus they can request more details when investigating someone/thing.

Every bank that is required to report international transactions will be automatically sending a list of details to those approved countries that received international transfers from them (monthly, quarterly, 6 monthly, yearly - not sure). 

And yes - in the future TRD can use AI/Software to search through those lists and collate them according to names/etc. 

Likewise, banks in Thailand are required to provide similar reports to TRD - which can also be collated etc.

 

[Katatonica]

On 4/4/2024 at 1:00 PM, Guderian said:

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

In the land of ‘I don’t have enough customers so I need to put my prices up?'

[TroubleandGrumpy]

16 hours 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 ?

My Thai family members all over Thailand have all said the same thing - the tax officers are not selected for speaking English (unlike Immigration Officers).  I recall going into a Provincial Transport Office when needing to change Province for my Thai driving license (got in Chiang Mai where they did speak some English), and no one spoke English.  When my wife stepped forward and explained it in Thai they understood. When I asked my Wife to ask them if they knew that the writing on both our Thai licenses was in Thai and English - she just laughed. When I asked her to tell them to take out their Thai ID cards and look at the English words - she laughed even louder. When I started to ask about the car license plates,  she told me to 'sut up'. 

[TroubleandGrumpy]

14 hours ago, JimGant said:

Of course it's nonsense. The Thai-US DTA is very clear on which US incomes are taxable by Thailand. As an example, private pensions, IRAs, and 401k distributions are primarily taxable by Thailand. Now, the treaty language actually says Thailand has "exclusive" taxation rights on this income. But the treaty's "saving clause," found in all US tax treaties, gives the US at least secondary taxation rights, "as if the treaty language did not exist." Thus, effectively Thailand has primary taxation rights on my IRA, meaning, they get to keep all the collected taxes; while the US, with secondary taxation rights, gets to tax my IRA -- but has to absorb a tax credit for the Thai taxes paid.

 

And, yes, the US Tax Code does not allow a tax credit for foreign taxes paid on US income -- UNLESS an exception, via international tax treaty, can be shown. This is done by attaching a Form 8833 to your US tax return: "Treaty-Based Return Position Disclosure." Thus, the Internal Revenue Code is trumped by an international treaty. Thailand pockets my taxes in full; and the US pockets the difference, should the Thai tax credit be less than the US taxation.

Not what I said in your quote  - but I hear you and understand. 

 

Answer me this - if a USA citizen living in Thailand is a tax resident and sells their house in USA and makes a capital gain, will they be liable to pay income taxes on that capital gain to Thailand.  Likewise,  if a USA citizen living in Thailand receives a lump sum termination payment in USA, will they be liable to pay income taxes on that amount to Thailand. My understanding is that USA Citizens only pay income taxes to USA on money earned in USA - irrespective of where they are living in the world, and that the USA IRS will ensure they are the ones to receive the income taxes and not the 'other' country.  Tax credits can be utilised for sure - but good luck with doing that here.

 

That is not the case in a country like Australia which is a Residence based tax system - if I am a tax resident in Thailand and I sell a house or get a lump sum payment, I am liable to pay income taxes to Thailand - if I bring that money into Thailand anytime (now or future). But if Thailand does adopt a worldwide tax system, then I will be liable to pay income taxes to Thailand, whether I bring that money into Thailand or not. That is what is coming next, if they go ahead with it.

 

If I knew about all this in 2012 I would not have decided to retire to Thailand. The Philippines, Malaysia and Indonesia do not tax the overseas money of retired foreigners living in their country. I would have gone there and visited Thailand - for under 180 days a year. We might end up doing that anyway. 

[JimGant]

6 minutes ago, TroubleandGrumpy said:

 if a USA citizen living in Thailand receives a lump sum termination payment in USA, will they be liable to pay income taxes on that amount to Thailand. My understanding is that USA Citizens only pay income taxes to USA on money earned in USA

I've already quoted the Thai-US DTA, giving primary taxation rights to Thailand on certain kinds of pensions, to include periodic payment pensions, and lump sum pensions. Believe I answered this question in my previous post.

[TroubleandGrumpy]

5 minutes ago, JimGant said:

I've already quoted the Thai-US DTA, giving primary taxation rights to Thailand on certain kinds of pensions, to include periodic payment pensions, and lump sum pensions. Believe I answered this question in my previous post.

Another one - are you serious mate - sanctimonious statements like that just prove you are wrong IMO.

Or at the least that you will not answer genuine questions - because you dont really know.   

OK - I will ignore your comments from here on out - please do the same. 

[JimGant]

40 minutes ago, TroubleandGrumpy said:

Another one - are you serious mate - sanctimonious statements like that just prove you are wrong IMO.

OK, you're right -- only the USA can tax US income. Whew. No more worries about Thai taxation, as US income is all I have.

[NoDisplayName]

1 hour ago, TroubleandGrumpy said:

Did that already - here it is again.

International taxation - Wikipedia

And as a bonus

List of countries by tax rates - Wikipedia

 

That is it - I did my research to form my opinions going back to October 2023.

Do your own research first - dont just read/watch something that you agree with because that is what you want..

 

I understand you did your research, but the second link is irrelevant, and the first does not support your claim that the United States does not "permit" foreign governments to tax US citizen tax residents.

 

The United States taxes the worldwide income of its nonresident citizens using the same tax rates as for residents. To mitigate double taxation, nonresident citizens may exclude some of their foreign income from work from U.S. taxation and take credit for income tax paid to other countries, and those residing in some countries with tax treaties may also exclude a few types of foreign income from U.S. taxation, but they must still file a U.S. tax return to claim the exclusion or credit even if they result in no tax liability.^[138][139] U.S. citizens abroad, like U.S. residents, are defined as "U.S. persons" and thus are also subject to various reporting requirements regarding foreign finances, such as FBAR, FATCA, and IRS forms 3520, 5471, 8621 and 8938. The penalties for failure to file these forms on time are often much higher than the penalties for not paying the tax itself.

 

This certainly doesn't prevent Thailand from taxing US-based income.  This tells me what/how the US taxes.

 

Do you mean tax treaties?

 

Tax treaties exist between many countries on a bilateral basis to prevent double taxation (taxes levied twice on the same income, profit, capital gain, inheritance or other item). In some countries they are also known as double taxation agreements, double tax treaties, or tax information exchange agreements (TIEA).

 

No details of the US-Thai tax treaty provided.

 

You won't be able to walk into Thai tax court quoting Wikipedia.  That would be about as successful as a sovereign citizen claiming "But officer, I'm not driving, I'm traveling.  This is a not a motor vehicle, it's a vessel.  The US constitution grants the right of free travel under Admiralty Law!!  I don't need a license or insurance or registration.  I did my own research!!"

[burner2014]

21 hours ago, Mike Lister said:

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.

 

The damage is really made. Imagine you want to emigrate to Thailand now.. who with a right mindset is willing to come here now after all these uncertainty and new tax laws. It really feels like they did something without thinking about the consequences.

 

Who really thinks that people will still invest into Thailand now when next year they really bring the law to tax the whole world income. Chinese investors will also not like it. 

 

I think the Thai officials will realize that at some point and give tax incentives as they try already with some new visa types. But we will see how all this ages in the next 24 months.

 

[motdaeng]

7 minutes ago, burner2014 said:

... It really feels like they did something without thinking about the consequences ...

 

welcome to thailand!

don't worry, you'll get used to it!

[burner2014]

19 minutes ago, motdaeng said:

 

welcome to thailand!

don't worry, you'll get used to it!

 

Don't worry long enough here to know this part. I mean the Weed topic is another one 😄 lets legalize weed and now they see the consequences and try to revert it.

 

But I never thought they don't understand why foreigners come here and invest. 

 

It's also weird to do this when the (Thai) economy is struggling. 

[Metapod]

2 hours ago, burner2014 said:

 

The damage is really made. Imagine you want to emigrate to Thailand now.. who with a right mindset is willing to come here now after all these uncertainty and new tax laws. It really feels like they did something without thinking about the consequences.

 

Who really thinks that people will still invest into Thailand now when next year they really bring the law to tax the whole world income. Chinese investors will also not like it. 

 

I think the Thai officials will realize that at some point and give tax incentives as they try already with some new visa types. But we will see how all this ages in the next 24 months.

 

 

imagine the sales for Thai Elite right now. Increased the price to 5million, now they want to tax the <deleted> out of you and by the way, we are now going to give out 5 year visas for almost free (DTV visa).

 

Holding out hope that Thai Elite fight for tax exemption like LTV

[topt]

 

23 hours ago, TroubleandGrumpy said:

I saw a Youtube interview today done 2 days ago with a tax expert - it was a follow up to a previous interview. He stated that Thailand does not receive financial data on ATM withdrawals made from an overseas account (debit or credit cards). They can only get data on transfers made overseas to Thailand banks.  The local Thai banks are not capable of detailing which overseas account made each transaction via their ATMs. 

The reason I asked which video was because I had watched it and I was a little surprised at what you said. Unless I missed something, which is highly possible, I don't recall Luca making any specific statements along the lines of what you said above. I remember him saying categorically that ATM withdrawals did not count as a remittance (he uses the word repatriated) in reply to the interviewers question.

So do I take it this quote is just your extrapolation of the reasons why he said that?

Quote

He stated that Thailand does not receive financial data on ATM withdrawals made from an overseas account (debit or credit cards). They can only get data on transfers made overseas to Thailand banks.  The local Thai banks are not capable of detailing which overseas account made each transaction via their ATMs. 

 

Or can you point me to where he says that - the ATM question was around 11m 50 seconds in.......

Or was it from somewhere else........?

[Dan SG]

On 6/30/2024 at 11:42 AM, RupertIII said:

From an interesting article in the Thai Examiner:-

Capital flight from Thailand is occurring in share sales, bond sales, and among smaller inward investors due to the country’s new foreign taxation drive.

In the meantime, capital has been flowing out of Thailand. This is occurring in both stock and bond markets as well as among smaller investors.

Significantly, there are reports that Thailand’s change in its tax laws, which effectively taxes remittances by both foreigners and Thais, is playing a part in what is looking like a fundamental shift. In effect, both foreigners and Thais are reorganising their affairs.

Unquestionably, this means curtailing remittances to Thailand and using offshore accounts. In addition, because of the new law relating to worldwide taxation, wealthier foreign residents plan to alter their circumstances.

https://www.thaiexaminer.com/thai-news-foreigners/2024/06/28/second-trump-presidency-threatens-further-damage-to-the-baht-the-economy-and-thai-money-markets/

I don't think this is right.  It doesn't tax remittances.  It taxes offshore income.  For example, say you had $100 in an offshore account earning 3% interest.  You then close that account at the end of the year and remit $103 to thailand being your principal and your interest.  You will be taxed on $3 subject to relief for any tax paid on that $3 elsewhere depending on whether there is a DTA or not and the terms of that DTA.  While I think the new rules isn't good I think there is a general misconception that Thailand is going to start taxing whatever you remit to thailand.

[Mike Lister]

1 hour ago, Dan SG said:

I don't think this is right.  It doesn't tax remittances.  It taxes offshore income.  For example, say you had $100 in an offshore account earning 3% interest.  You then close that account at the end of the year and remit $103 to thailand being your principal and your interest.  You will be taxed on $3 subject to relief for any tax paid on that $3 elsewhere depending on whether there is a DTA or not and the terms of that DTA.  While I think the new rules isn't good I think there is a general misconception that Thailand is going to start taxing whatever you remit to thailand.

 

Thailand currently requires all remittances to be assessed for tax, that means any money sent to Thailand from overseas, must be examined by you to determine if they are assessable to tax or not. Some will be exempt, some will be taxable, some will be taxable but a DTA may help offset any tax that is due. But you are correct in that not all money sent to Thailand will be taxable, just because it is a remittance from overseas.

[Dan SG]

1 minute ago, Mike Lister said:

Thailand currently requires all remittances to be assessed for tax, that means any money sent to Thailand from overseas, must be examined by you to determine if they are assessable to tax or not. Some will be exempt, some will be taxable, some will be taxable but a DTA may help offset any tax that is due. But you are correct in that not all money sent to Thailand will be taxable, just because it is a remittance from overseas.

Yes that is just like any self-assessment system that works on a remittance basis e.g. UK taxation of resident non domiciles (at least in the past).  In my example you could simply remit the original principal i.e. the $100 and if this is pre 2024 income or its a gift or it was from the sale of a property post 2024 where you made a loss then its not taxable.  The key is to be efficient with your record keeping and just take a position.  They dont have the technology or manpower to scrutinise all remittances into Thailand.  Once transactions are all on a blockchain that could change but that's why we need to be weary of a digital ID.