Foreigners and their overseas income: what next?

[gravity101]

1 minute ago, MurakamiX said:

You mean like in developed Western countries? Tax is want technically builds a functional society. Corruption nulls that however. 

I agree. But a blanket assessable income directive without clarity and rules isn't the way to go about it.

I'd wager most on here have had their money already assessed (and deducted if required) for tax, but many won't be able to prove it.

[NorthernRyland]

5 hours ago, webfact said:

However, other specialists argue that the Revenue needs not to clarify anything. After all, formal tax law did not change on January 1 2024. There was simply the closing of a tax loophole which had enabled Thais or foreigners to delay transferring income here until a subsequent year.

 

 

Something just occurred to me. If the ONLY change is this loophole is being closed then does that imply we've all been evading taxes all these years UNLESS we used the loophole? Obviously most of us never even knew about the loophole so what's really changing? Seems like we're in the same position now as we ever were.

[bkk6060]

48 minutes ago, Thingamabob said:

An awful lot of noise being made about this subject. Best to stay calm, and react only when the legislation is clarified.

Yes, it sure seems too much paranoia and foolishness going on.

People rushing to get Tin numbers.

People try to find ways to bring undocumented funds into the country.

People purposely at this point leaving the country for months.

Etc, etc.

 

Seems so stupid.  And it is for money Jan 2024.  I guess so many expats can't show any money or have none in a savings account prior to this year? 

 

Just calm down.  I am doing nothing about any of this and my guess is nothing will change.  But, if many of you want to file a tax return go for it the government would love to have your money.

 

[Mike Teavee]

57 minutes ago, Thaindrew said:

ATM withdrawals are reported as part of CRS to the country where you declare residency

Do you have a link which says this only that would be a very large number of records & matching them to an individual would be a nightmare (e.g. my UK Bank doesn't know about my TIN or even my passport number & matching against Name/Date of Birth isn't accurate enough). 

 

I had a look at the CRS XML Schema (available here https://www.oecd.org/tax/automatic-exchange/common-reporting-standard/schema-and-user-guide/) & it seems to be about reporting "Closing Balances", the period for which isn't clear, but the minimum standard seems to call for reporting at least once per year so it could just be your Bank reports to Thailand what your closing account balance is at the end of the year (Again, this is only of any use if they can match this information to you as an individual). 

 

I believe they have no way of tracking ATM payments but could decide to look at an individual if they bring a lot of money into Thailand or have no visible means of supporting themselves (i.e. they don't bring any money into Thailand). 

 

FWIW until things become clearer, I've decided to:-

1. Bring in 235K THB pa which matches my tax free allowances (60K personal allowance, 25K towards Health Insurance & 150K at 0 Tax rate).
2. Give the GF 360K pa (30K pm) to provide "Support" for her so she can now start paying 1/2 towards rent, utilities, groceries etc... 
3. Use savings I already have in-country for the rest of my expenses. 

I'll also be bringing back £8,000 from my next UK Trip which will be used when I need to purchase foreign currency for trips outside of Thailand (all paid for on my UK Credit card)... I can't say this change has made me plan more international trips as I was going to do more anyway but it's certainly giving me a nudge to do so over domestic travel. 

[jayboy]

36 minutes ago, tomacht8 said:

I recently had a meeting with my Thai tax expert.

Some excellent pointers here, particularly for me 6.7 and 8.

 

It's probably sensible not to apply for a TIN now if you haven't already got one.Having said that, I know several people who have done so not because of the tax position in Thailand but because they are under great pressure from their (mainly) Channel Islands banks.

 

From what you say having a TIN number does not mean one is compelled to file a Thai tax return.

[eisfeld]

5 hours ago, webfact said:

More than three months after “assessable” foreign income became taxable

 

Assessable foreign income was always taxed. What changed is what is considered as assessable.

 

5 hours ago, webfact said:

There is a view amongst some Thai lawyers that we must wait until July for clarification on nitty-gritty issues such as double taxation treaties and the tax status of pensions. By that time, some expats will have passed 180 days of minimum residence necessary for tax liability in this category.

 

Nonsense. After being 180 days in the country doesn't mean that you have to immediately file a tax return.

5 hours ago, webfact said:

Will all foreigners who spend half a year or more in Thailand be required to register with the Revenue by obtaining a tin (tax identification number) and submitting the required forms?

 

No there is no such requirement and nothing changed in that regard. Some have to some don't. Depends on your assessable income, exemptions and so on. No blanket statement can be made.

5 hours ago, webfact said:

The optimistic view about the future is that tin registration will remain voluntary as, in fact, it always has been for Thai citizens.

 

Lol what?

5 hours ago, webfact said:

If you try to cheat, the newish Common Reporting System – an automatic and international exchange of the financial information of individuals to combat tax evasion and ensure compliance – will expose your dealings.

 

Thailand is not party to the CRS. They do have other information exchange programs though. Also what does it have to do with the recent change which affects money transferred into Thailand? They don't need information from other countries because the money went into... Thailand!

 

 

Unfortunately the post did not help at all to clear up the uncertainty that seems to be common amongst expats at this time. The author seems to be or was the British Consul to Thailand in Pattaya.

[gravity101]

2 minutes ago, NorthernRyland said:

 

Something just occurred to me. If the ONLY change is this loophole is being closed then does that imply we've all been evading taxes all these years UNLESS we used the loophole? Obviously most of us never even knew about the loophole so what's really changing? Seems like we're in the same position now as we ever were.

Correct. It's a small change, but huge ramifications. We all used the loophole for bringing money in.

[NorthernRyland]

8 minutes ago, gravity101 said:

Correct. It's a small change, but huge ramifications. We all used the loophole for bringing money in.

I never mindfully used the loophole, I just transferred money when I needed it once a month or so. Same as everyone else right?

[sirineou]

3 hours ago, Jonathan Swift said:

According to what I’ve read thus far, no. But you may have to file a rax return here. But what if you don’t? How would they find out and track you down? That’s what I wonder. Are they motivated to become the FBI/IRS of Thailand? Do they have the resources to wage tax war against non complying low income expats? Or will it be a matter of so long as you don’t attract attention you stay under the radar?

If I understand it correctly , please correct me if I am wrong. You  only have to file a tax return if you have taxable income. and I assume, since your US SSI income is not taxable you don't have to file a tax return. 

[jaideedave]

29 minutes ago, NorthernRyland said:

 

Something just occurred to me. If the ONLY change is this loophole is being closed then does that imply we've all been evading taxes all these years UNLESS we used the loophole? Obviously most of us never even knew about the loophole so what's really changing? Seems like we're in the same position now as we ever were.

555, back in the day I worked in the O&G Industry in the ME and LOS and brought in hundreds of thousands of USD over time with no questions asked.

Am I guilty of tax evasion? Its mostly long gone so good luck to them if they can find it they can have it.

[parallelman]

3 hours ago, 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.

There is a Thai proverb which amounts to the same thing  โลภมากสวภหวย it has a couple of meanings sometimes pictured as a canine has a bone in its mouth but sees a magnified reflection (perhaps in a river) and tries to grab it thus losing the real bone in the process.😀

[ballpoint]

34 minutes ago, jayboy said:

Some excellent pointers here, particularly for me 6.7 and 8.

 

It's probably sensible not to apply for a TIN now if you haven't already got one.Having said that, I know several people who have done so not because of the tax position in Thailand but because they are under great pressure from their (mainly) Channel Islands banks.

 

From what you say having a TIN number does not mean one is compelled to file a Thai tax return.

 

I have a TIN from my years of working here, but since retirement 6 years ago I have not filed a tax return.  I was audited 2 years after I retired, because I went from paying a large amount of income tax annually, to paying none at all, yet remained in Thailand.  Everything was proper and correct.  I had no assessable income - no transfers were made in the same year the money was "earned" (from equity funds), therefore wasn't required to file a return.  Whether that remains the case under the new amendment remains to be seen.  As this year is still under the old rules - funds earned prior to January 2024 are tax exempt, it won't be until early 2026 that I will have to file a return, if necessary.  I'll wait and see what happens between now and then.

 

 

[parallelman]

3 hours ago, 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.

There is a Thai proverb which amounts to the same thing  โลภมากสวภหวย it has a couple of meanings sometimes pictured as a canine that has a bone in its mouth but sees a magnified reflection (perhaps in a river) and tries to grab it thus losing the real bone in the process.😀

[terryofcrete]

3 hours ago, Bangkok Barry said:

but even many market stalls have QR codes now.

My sometimes LLT lady has a QR code on her back ! She says it's a religious tattoo but I know better ! 

[TigerandDog]

3 hours ago, Satcommlee said:

This is the bit people should be worried about, people seem to think Dual Tax treaties exist so an individual can CHOOSE which rules to follow.

Take a person living on an income just below the income tax threshold in Europe (perhaps a state pension) but this person is not in Europe!  This person for tax purposes is resident in Thailand and his income is above the tax threshold in Thailand perhaps making him liable to pay tax in Thailand.

 

Having paid no tax in Europe,  he does not have anything to credit against his Thai Tax liability.

 

Not intended to be a qualified response, but thought provocing all the same

 

For any aussies reading this OP, here's how the Aust/Thai DTA currently works.  Under the Aussie/Thailand DTA if you are a tax resident of Australia, Thailand cannot tax you on money brought into Thailand. However, if you are a tax resident of Thailand, your pension and all other funds, other than proven savings before 31 Dec 2023, brought into Thailand after 1 January 2024 are ONLY subject to Thai income tax. Australia cannot legally tax a Thai tax resident under our DTA. In the majority of cases those aussies who only have their OAP coming into Thailand will be required to submit a tax return, but after taking into account the deductions that have previously been itemised by Mike Lister in other posts on this topic, most should have their assessable income fall into the non-taxable income bracket.

[LivinLOS]

3 hours ago, Badrabbit said:

I pay tax on my 3 pensions in the UK do I now pay tax here too?

 
You should not be paying UK tax once you stop being resident !! 

Once you leave the UK you should have filed a P85 which stops you being tax laible in the UK (where you are no longer resident) on all non 'domestic sourced' income.. Ordinary state and private pensions are then untaxed with only armed forces and some civil servants pensions being considered domestic source. 

Of course the downside of a P85 is that it freezes your UK pension from being index linked and denies you any emergency healthcare on return. However this is the way the system is supposed to work. 

[Mike Lister]

1 hour ago, tomacht8 said:

I recently had a meeting with my Thai tax expert. He also gives lectures on tax law at various universities. Shortly:
1. This is not new tax law, but the whole thing is just a new interpretation of current tax law.
2. This new interpretation is controversial. The legality of this interpretation is currently being questioned by various interest groups, including in tax law court proceedings.
3. The law still applies that if you transfer income from an old year to Thailand in a new year, then it is tax-free. Whether the new interpretation breaks the existing law will be decided in court cases.
4. In my case: I have had a Pink ID card = tax number for decades, but I have never had to personally pay income taxes or receive any mail about it from the tax office. His advice is not to go to the regional tax office and ask stupid questions.
5. It is not the case that banks automatically report all financial transactions from abroad to Thailand to the tax authorities. In addition to the fact that the tax authorities do not have the IT system capacity to carry out such total monitoring, this would also violate the rights of the account holders. The reporting process works exactly the other way around. If the tax authorities have reasonable suspicion, they can request the account holder's bank details.
6. According to my tax advisor, you become noticeable when you do more than 400 foreign transactions per year.
7. If you transfer your savings to Thailand, it is not taxable income. My tax advisor recommended that I include "savings" as a text on my transfers.
8. Large sums should be transferred right at the beginning of the year so that it is clear that they cannot be income for the current year.
9. You can transfer tax-free cash gifts to Thai family members amounting to 20 million baht per year. However, you have to be careful to what extent gift allowances are covered by the tax authorities in your home country.
10. Overall, this new tax interpretation only causes uncertainty for foreign investors and expats. Therefore, all that remains is to wait until the relevant directive rulings emerge from court cases.

Above seems like best advice here and fairly accurate to me.

[whitefarang]

In general, many people would argue that it is not fair for visa holders to pay taxes without receiving any benefits in return. Taxation is typically viewed as a social contract between citizens and the government, where individuals contribute a portion of their income to fund public services and infrastructure that benefit society as a whole. When individuals are taxed without receiving any benefits, it can be perceived as unjust or inequitable . And that is exactly the way I perceive it ! 

[LivinLOS]

3 hours ago, AhFarangJa said:

Something I do not see written about, yet to my mind is a serious issue, and that is the retired people on annual extensions to stay using the monthly income method. Surely, with a sum of about 65,000 per month coming in regularly to meet visa requirements, the taxman will want to get his grubby paws on some of it.   

Absolutely, this group are literally signing a tax liability and providing the proof of the liability with a bow tied around the top !! 

[LivinLOS]

3 hours ago, matta01 said:

This is not true for example a Belgian ( European country ) citizen can not choose. You have to pay taxes in the country where you have your income

are resident. 

I do cross border payolling and income tax for dual nationals as my career, what you just wrote is not not factual.. Once a Belgian leaves Belgium they are only liable for domestic source taxation, income that arises from a fixed assets in Belgium, things like rental returns, forestry income, etc are almst always taxed at source.. Income is broad but only income made from a specific belgian activity would even have a claim and then the claim would depend on residency tests etc. 

[LivinLOS]

2 hours ago, Basso53 said:

My Thai wife will be compulsorily retired without pension from her long time job at a International school this year. I bring in 65000 pm for O extension; hopefully I can then claim her as a dependant?🙏😁🤔

Yes Thailand accepts a marriage dependant and has increased tax bads for married people. 

[LivinLOS]

2 hours ago, gravity101 said:

Correct. My accountant said absolutely do nothing and never voluntarily submit a tax form especially if you never have. Worst case scenario is pleading ignorance and at worst is back payment. Accountants words.

Any assessed undeclared income is subject to a 200% penalty !!

Thats how they do it.. Its your job to file, if you dont file and they determine you should have, its 200%. 

[LivinLOS]

1 hour ago, Phulublub said:

In truth, many will be from countries with a DTA that minimises or eradicates any liability to any tax payments here.

 

It is impossible to accurately comment on the combination of every person, every DTA and every source of income.. 

But in general strokes DTAs most often allow you to either claim back or obtain a tax credit, from the jurisdiction you no longer reside in, so tat you may remit it to the jurisdiction you do reside in.. They do not simply allow you to 'keep paying it back home' or 'pay it where you want to'.. 

Expats that live in developed countries, move around the EU, etc etc know this, because it is enforced to file returns and clearly how to pay taxes and claim credits. Expats here have long lived in a loose developing world model that appers to be coming to an end. Even if the shoe doesnt drop this year or next, how many years do you think it will be until one of the more anti foriegner governments comes up with the bright and no doubt vote winning formula of 'why should these foriegners that live here not pay when Thais have to' (even though only 4m Thais in a 67m population pay income tax). I cannot see how 'make them pay thier fair share, they are rich' wont be an easy sell. 

It might blow over, it might not happen this year, but you better believe over the years it will.. Plan accordingly. 

[LivinLOS]

2 hours ago, Phulublub said:

Depends on the source.  Most US and UK Government pensions, for example, are non-asseable.

 

PH

 US social security yes.. Private pensions and most UK pensions no. UK armed forces pensions and 'some' civil servants also remain uk taxed. 

[LivinLOS]

1 hour ago, Phulublub said:

But he will also have Thai exemptions and allowances...maybe go work out how much will be due on some real life European pensions that are not exempt under that country's DTA. (hint:  In most cases, even when assessable, will be minimial liabilty)

 

PH

But there IS a liability (150k is the first tax free band) I hope your pension pays more than that a year.. 

So now it needs filing, in Thai.. and calculating, and any under declaration has a 200% penalty attached.. 

Its the work this generates as much as the tax. 

[LivinLOS]

1 hour ago, tomacht8 said:

8. Large sums should be transferred right at the beginning of the year so that it is clear that they cannot be income for the current year.
9. You can transfer tax-free cash gifts to Thai family members amounting to 20 million baht per year. However, you have to be careful to what extent gift allowances are covered by the tax authorities in your home country.

8 only worked this year from prior savings.. Next year the savings you bring in on Jan 1 were prior years income you didnt declare... That idea doesnt work year after year. 

9 is 100% the way, you can gift your spouse / wife 20 million baht per year tax free, she can recieve the money and spend it in Thailand and as it was a gift under 20 million doesnt need to be included on a tax return as it isnt a liability.. Easy solution. Of course this doesnt help the 65k a month income for visa people. But it is a huge loophole that can be used for our benefit currently. 

[LivinLOS]

1 hour ago, NorthernRyland said:

 

Something just occurred to me. If the ONLY change is this loophole is being closed then does that imply we've all been evading taxes all these years UNLESS we used the loophole? Obviously most of us never even knew about the loophole so what's really changing? Seems like we're in the same position now as we ever were.

Yes.. Anyone bringin in income the year they made it had a tax laibility in law.. The fact is as Thailand had no way to know what was income and what was prior years savings, they simply ignored what they could not enforce. 

Now the loophole has been removed and all inbounds are considered income unless hown otherwise, they 'may' start enforcing it 

[garzhe]

4 hours ago, mokwit said:

Common Reporting Standard.

 

The Common Reporting Standard (CRS), developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis.

 

https://www.google.com/search?client=firefox-b-d&q=Common+Reporting+standard

The US is not a party to the CRS

[garzhe]

1 hour ago, eisfeld said:

 

Assessable foreign income was always taxed. What changed is what is considered as assessable.

 

 

Nonsense. After being 180 days in the country doesn't mean that you have to immediately file a tax return.

 

No there is no such requirement and nothing changed in that regard. Some have to some don't. Depends on your assessable income, exemptions and so on. No blanket statement can be made.

 

Lol what?

 

Thailand is not party to the CRS. They do have other information exchange programs though. Also what does it have to do with the recent change which affects money transferred into Thailand? They don't need information from other countries because the money went into... Thailand!

 

 

Unfortunately the post did not help at all to clear up the uncertainty that seems to be common amongst expats at this time. The author seems to be or was the British Consul to Thailand in Pattaya.

Thailand is party to the CRS, they made their first report last year

[Presnock]

2 hours ago, CharlesHolzhauer said:

 

Frankly, I am quite dispirited by your assertion. After all and the best to my knowledge, you are engaged in a business endeavor up north. Maybe your comment might have been made humorously or without much thought.

 

Obtaining a tax identification number (TIN) does not automatically mean that the holder is paying taxes. A TIN is simply a unique identifier assigned by a tax authority to individuals or entities for tax purposes.

 

However, whether or not taxes are actually paid depends on various factors such as the individual or entity's income, deductions, exemptions, and compliance with tax laws and regulations. Simply having a TIN does not guarantee that taxes are being paid, as it is possible for someone to have a TIN but not have any taxable income or to be non-compliant with tax obligations.

The RD instructions on "when to obtain a Thai tax id number" says within 60 days of remitting assessable income for 2024 and several people on this forum have indicated that when they went to their local RD, they were refused the issuance of a Thai TIN as they didn't have assessable income.