Foreigners and their overseas income: what next?

[Mike Lister]

2 minutes ago, LivinLOS said:

You seem to be purposefully not understanding the issue.  

In the past inbound funds could always have been claimed to be prior years savings, and as Thailand had no ability to determine that or not it was all ignored. 

Since Jan 1 inbound funds no longer can be written off as simply offshore savings from past years, and hence all inbound funds are potentially taxable here unless we can show them to be one of the multiple reasons why not eg correctly taxed under a DTA, prior savings, etc etc etc etc 

Without the loophole they fall into default taxable unless justifed not taxable, with the loophole as anyone could claim anything was prior savings and untaxable they simply didnt ask. 

If they choose to implement this is anyones guess, my gut is it is far too hard a task for regional tax officrs to be skilled in understanding 67 DTAs, sources of income, what is domestic sourced income etc.. But tax clearanes for extensions of stay renewals ?? Things that add friction and cost money ?? maybe.. 

 

No, I understand the issue very well but we don't agree on whether the risk has increased or not. You think it has, I don't think it has, I think little has changed from a risk/responsibility standpoint. It's OK to have a different opinion, I don't mind that, in truth I doubt we could measure accurately who is right.

[Card]

6 hours ago, wensiensheng said:

I’m not sure you are correct. Only INCOME brought in is assessable to tax. Possibly capital gains also. I see no mention of assessing capital monies that are brought in to Thailand.

 

there is also the issue of whether the person withdrawing cash from an atm is, in fact, resident in Thailand for tax purposes. No details were provided by the op on that.

Apologies, yes I meant income brought in, not capital, but it will ve difficult to prove the difference between the two

[Mike Lister]

Just now, Card said:

Apologies, yes I meant income brought in, not capital, but it will ve difficult to prove the difference between the two

Not really. If I'm the Thai Revenue and you tell me that you've imported capital and I think it's income, you'll find a way to prove to me that it's what you say. 🙂

[JohnnyBD]

26 minutes ago, LivinLOS said:

Since Jan 1 inbound funds no longer can be written off as simply offshore savings from past years, and hence all inbound funds are potentially taxable here unless we can show them to be one of the multiple reasons why not eg correctly taxed under a DTA, prior savings, etc etc etc etc 

Just a question, do we really have to show anyone anything, unless we're audited? First, we are not tax residents if we don't meet the 180 day in-country threshold. Then, we are suppose to self-assess our remittances to determine if any of them meet the assessable income criteria. If we fall under the 120k threshold or the remittances are not assessable income because of the DTA or they were from prior savings, or prior assets, then we do not need a TIN and do not need to file a tax return. I guess if the 1 in 100,000 chance the TRD tax man comes knocking at our door, then we will need to show him that our remittances were not assessable income. Isn't that pretty much correct?

[gearbox]

6 hours ago, aussienam said:

Common reporting standards (CRS) though, implemented last year for Thailand means access to transaction details. A recipient bank in Thailand from a UK bank - whether the funds are transferred to your Thai account, to a cash withdrawal facility (ATM) in Thailand, or paying a Thai merchant into their account via VISA, etc, are all traceable and reveal remittances into Thailand.  

I watched an expat forum last year and a rep from a financial attended to talk about all of this and said ATM transactions and using cards for purchases wouldn't necessarily be a way to hide your incoming remittances/spending here.  Especially if there were large amounts solely being used on cards.  

Will TRS bother with all of this?  Who knows.  But if they really wanted to (technology and transaction data is now all available) they easily could.  

Where did you find info that banks would provide transaction info under the CRS? There is no such thing. Only summaries are provided.

 

Also it looks like the banks are semi-voluntarily providing that information. Recently a couple of Aussie banks were asking me in forms if I'm a tax resident of another country, probably for CRS reporting. No need to guess how I answered.

[ukrules]

5 hours ago, Thaindrew said:

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

Nonsense, complete and utter fantasy.

[Phulublub]

2 hours ago, Presnock said:

What I fine really disgusting, is that people from a multitude of countries don't even bother to read the tax agreements between Thailand and their country.  In addition everyone's income may come from totally alien to at least some of us who do read our DTA and the local RD regs, yet those folks continue to pour out their situation and expect us to clarify things for them.  Yeah a couple of really nice people do that very thing but again no matter what we advise, until the final written law or amendment to same are published we are just guessing.  Some incomes are exempt the royal decree even under Royal Decree No. 743 dated 23 May 2022. 

Agree entirely.

 

PH

[Surasak]

7 hours ago, Badrabbit said:

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

Depends on how much you bring in.

[Surasak]

7 hours ago, Bangkok Barry said:

If we pay Thai tax like Thais can we also benefit from the 30 baht health scheme? No, I thought not. It only works one-way.

Having spent a little time in a Thai General hospital, I'll stick with what I have in place at the present, thanks.

[Phulublub]

55 minutes ago, LivinLOS said:

You seem to be purposefully not understanding the issue.  

In the past inbound funds could always have been claimed to be prior years savings, and as Thailand had no ability to determine that or not it was all ignored. 

Since Jan 1 inbound funds no longer can be written off as simply offshore savings from past years, and hence all inbound funds are potentially taxable here unless we can show them to be one of the multiple reasons why not eg correctly taxed under a DTA, prior savings, etc etc etc etc 

Without the loophole they fall into default taxable unless justifed not taxable, with the loophole as anyone could claim anything was prior savings and untaxable they simply didnt ask. 

If they choose to implement this is anyones guess, my gut is it is far too hard a task for regional tax officrs to be skilled in understanding 67 DTAs, sources of income, what is domestic sourced income etc.. But tax clearanes for extensions of stay renewals ?? Things that add friction and cost money ?? maybe.. 

 

Nope.  The was (and is) no loophole.

 

In the past, you could "decide" if asked, that inbound funds were from prior years' and therefore not assessable.

 

Now, you could "decide" that inbound funds are from savings held at 1 Jan and therefore not assessable.

 

It is a question of fact (a legal term) where and when the funds originated.  In both cases you are either telling the truth or you are not, depending on the real origination of the funds.  Nothing has changed in that regard.  At all.

 

Please show where any official announcment makes any reference anywhere to linking a tax clearance certificate to extension renewal. Stop scaremongering.  Please.

 

PH

[gearbox]

5 hours ago, Phulublub said:

ATM and CC purchases can be tracked and traced in exactly the same way as direct transfers.  If money transferred to Thailadn (by whatever means, inlcuding bringing in cash) is assessable incoem then there MAY be a Thai tax liability.

 

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

 

A lot of expats are getting worked up about a change that will have minimal or no impact on them.  It is aimed at gathering tax from wealthy Thais; that it is broad in scope so we are caught as well is perhaps unfortunate.

 

As yet, Thai tax forms do not have the required fields for any of us to file, even if we want to.  That may change by next January when we are supposed to file.  We should also obtain a TIN (Tax Identification Number).  But if we do not, and continue to bring is funds but have none that are assessable, the fine for non reporting and non payment is equal to the amount owed - so nothing.  

 

Even for those who may have some income that is assessable, then if tax has already been paid, then under all DTAs, this is credited either here or at home so is paid only once.  With Thai rates low, and allowances decent, there will usually still be no extra tax to pay.

 

But if you want to panic, run to another country, store cash under mattress, or other silly extremes, feel free to do so.

 

PH

This is not correct. Only the bank issuing credit and debit cards have full information of your ATM withdrawals and credit card transactions. Even the tax office in your country doesn't have normally access to this, they can get it only if you are under investigation.

 

The AML govt agencies around the world use the concept of "entity resolution", this is decisive info to attribute a transaction to an entity. It could be something like this - full name + DOB + passport number + address. In Australia something similar is 100 points identity identification. The ATM withdrawals or CC purchases do not provide complete information to third parties and the transaction can't be attributed to an entity except by the issuing bank.

[n00dle]

wow, a news story that says nothing,

[Surasak]

7 hours ago, Bangkok Barry said:

 

It seems to me that Thailand might be shooting itself in the foot. I for one am considering not making my usual transfers to Thailand but using my UK ATM and visa cards to make purchases. Contactless makes that so easy now. I'll use the money I already have saved here to make minor purchases where a card isn't possible, but even many market stalls have QR codes now.

That sound like it might be expensive. Principals can be a fine thing until they shatter.

[JimGant]

14 minutes ago, Phulublub said:

Nope.  The was (and is) no loophole.

 

In the past, you could "decide" if asked, that inbound funds were from prior years' and therefore not assessable.

 

Now, you could "decide" that inbound funds are from savings held at 1 Jan and therefore not assessable.

 

It is a question of fact (a legal term) where and when the funds originated.  In both cases you are either telling the truth or you are not, depending on the real origination of the funds.  Nothing has changed in that regard.  At all.

 

Bingo! And right in bed with Mike Lister.

[Startmeup]

Just transfer a lump of money into a Thai friends bank account and get them to give you the cash. Or are we saying all the cam girls, penpals and family donations/gifts from abroad will be declaring this money and be subject to tax too?

Give me fcukin break. This tax thing will be thrown in the bin. 

[Badrabbit]

47 minutes ago, Surasak said:

Depends on how much you bring in.

Less than 1 million per year.

[Badrabbit]

5 hours ago, lucky2103 said:

It depends.

If the UK and Thailand have a double taxation treaty, chances are you won't pay taxes in TH....IF the tax rate in TH is equal or below compared to the UK.

 

However, if TH taxes are higher than in the UK, you may have to pay the difference to the thai RD.

 

These infos are from my German accounting company.

I did go to my local Revenue office, they told me "if you pay tax in your home country you won't pay tax here" 

[Mike Lister]

33 minutes ago, JimGant said:

 

Bingo! And right in bed with Mike Lister.

I wish to deny this ugly rumour. 🙂

[Bangkok Barry]

54 minutes ago, Surasak said:

Having spent a little time in a Thai General hospital, I'll stick with what I have in place at the present, thanks.

 

My local hospital is first class. Pot luck I guess.

[anrcaccount]

1 hour ago, Mike Lister said:

No, I understand the issue very well but we don't agree on whether the risk has increased or not. You think it has, I don't think it has, I think little has changed from a risk/responsibility standpoint. It's OK to have a different opinion, I don't mind that, in truth I doubt we could measure accurately who is right.

Really? Doesn't seem logical given your actions. 

 

Why did you go to all the effort of trying to create a "simple" tax guide only after the foreign income guidance tweak then?

 

Why not do it a few years ago?

 

If you don't think the risk has changed ( I happen to agree with you on that), why all the effort now?

 

 

 

 

 

 

 

 

 

 

 

[JohnnyBD]

14 minutes ago, Mike Lister said:

I wish to deny this ugly rumour. 🙂

Funny reply...

Mike, just a question regarding someone posting that we need to show the RD that our remittances are non-assessable. First, we should not need to show anyone anything, unless we're audited right? And, we are tax residents only if we meet the 180 day in-country threshold, right? If we are tax residents, then we are supposed to self-assess our remittances to determine if any of them are assessable income. If the remittances are non-assessable because of the DTA, or becuase they were from prior savings or prior assets, or they fall under the 120k threshold, then we do not need a TIN and we do not need to file a tax return. I guess there's always a slight chance the TRD tax man comes knocking at our door, if so, then and only then would we need to show him our remittances were non-assessable. Seems pretty straight forward to me. Isn't that pretty much correct?

[anrcaccount]

1 hour ago, Phulublub said:

Nope.  The was (and is) no loophole.

 

In the past, you could "decide" if asked, that inbound funds were from prior years' and therefore not assessable.

 

Now, you could "decide" that inbound funds are from savings held at 1 Jan and therefore not assessable.

 

It is a question of fact (a legal term) where and when the funds originated.  In both cases you are either telling the truth or you are not, depending on the real origination of the funds.  Nothing has changed in that regard.  At all.

 

Please show where any official announcment makes any reference anywhere to linking a tax clearance certificate to extension renewal. Stop scaremongering.  Please.

 

PH

I think you and the poster you comment on are actually both saying the same thing.

 

It is the same as it ever was, until it isn't. 

 

All these posters talking about how they used to "rely" on the prior years inbound fund rule, in reality never had to rely on anything,..as they were never asked the question.

 

The new "ruling" doesn't change that.

 

Time will tell. 

 

 

 

 

[Mike Lister]

1 minute ago, anrcaccount said:

Really? Doesn't seem logical given your actions. 

 

Why did you go to all the effort of trying to create a "simple" tax guide only after the foreign income guidance tweak then?

 

Why not do it a few years ago?

 

If you don't think the risk has changed ( I happen to agree with you on that), why all the effort now?

 

 

 

 

 

 

 

 

 

 

 

A good question! I think it was because of the obvious panic that gripped so many people who appeared to have no knowledge whatsoever of tax and probably never had to understand it previously. That lack of awareness was never apparent to me previously, so when posters began sending me PM's asking for help whilst I was engaged in the long thread during October/November/December, it became obvious that somebody needed to do something. From memory I had over thirty tax discussions with mostly lower income pensioners, some of whom had been here a long time and many of whom were very scared, one poster appeared ready to self harm and sent some of us into panic mode. And whilst these long complex debates about CRS and capital gains etc are great, there's a large section of the expat population that needs just the basics and they were being overlooked.

[Mike Lister]

5 minutes ago, JohnnyBD said:

Funny reply...

Mike, just a question regarding someone posting that we need to show the RD that our remittances are non-assessable. First, we should not need to show anyone anything, unless we're audited right? And, we are tax residents only if we meet the 180 day in-country threshold, right? If we are tax residents, then we are supposed to self-assess our remittances to determine if any of them are assessable income. If the remittances are non-assessable because of the DTA, or becuase they were from prior savings or prior assets, or they fall under the 120k threshold, then we do not need a TIN and we do not need to file a tax return. I guess there's always a slight chance the TRD tax man comes knocking at our door, if so, then and only then would we need to show him our remittances were non-assessable. Seems pretty straight forward to me. Isn't that pretty much correct?

Right, right, right and right.

[bbi1]

Why y'all sheeting your pants worrying about the Thai gov taxing your foreign earned income? The hookers here in Thailand sure aren't sheeting their pants worrying about their locally earned income they pay zero tax on and don't declare any of it. They've never done it before and they never will in the future. If the Thai gov was going to crack down, they could get a ton of tax money from these hookers who don't declare their big income.

[tandor]

2 hours ago, LivinLOS said:

And this may now need to be proven.. That what has changed, the shift from not needing to prove anything, now becomes needing to establish it is NOT taxable by showing that it was prior savings, DTA covered, etc... 

There are plenty of reasons why an inbound transfer isnt taxable income, but now they may demand that it is proven that it is not taxable income, a task we have not in the past had to do. 
 

correct, that is why I have started requesting written proof of a breakdown of my Aged Pension.

[Mike Lister]

2 minutes ago, bbi1 said:

Why y'all sheeting your pants worrying about the Thai gov taxing your foreign earned income? The hookers here in Thailand sure aren't sheeting their pants worrying about their locally earned income they pay zero tax on and don't declare any of it. They've never done it before and they never will in the future. If the Thai gov was going to crack down, they could get a ton of tax money from these hookers who don't declare their big income.

It's a lot harder to tax a cash business than it is to track electronic bank transfers! That's why the unofficial economy or grey workforce here is so large at 48% of the total workforce.

[anrcaccount]

5 minutes ago, Mike Lister said:

A good question! I think it was because of the obvious panic that gripped so many people who appeared to have no knowledge whatsoever of tax and probably never had to understand it previously. That lack of awareness was never apparent to me previously, so when posters began sending me PM's asking for help whilst I was engaged in the long thread during October/November/December, it became obvious that somebody needed to do something. From memory I had over thirty tax discussions with mostly lower income pensioners, some of whom had been here a long time and many of whom were very scared, one poster appeared ready to self harm and sent some of us into panic mode. And whilst these long complex debates about CRS and capital gains etc are great, there's a large section of the expat population that needs just the basics and they were being overlooked.

Fair enough.

 

"Ignorance is bliss" is an old truism , and trying to help may have in fact not done so.

 

I do respect your efforts, but do wonder if Alison Krauss/ Ronan Keating may have had a better strategy....

 

"You say it best, when you say nothing at all".

 

[Dogmatix]

8 hours ago, Badrabbit said:

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

 

Yes. Most likely you will need to pay the difference, if the Thai tax is more than the UK tax.  But they haven't clarified that yet and maybe never will, nor have they clarified what documentation will be acceptable to claim tax credits for tax already paid, assuming tax credits can be deducted and they don't force you to pay full Thai tax and try and reclaim what has been paid elsewhere. Thai bureaucrats would like tax receipts certified by a government but you will never get that from HMRC.  They won't ever respond to a request for that.  Also, bear in mind the tax years are out of synch with the UK being 6 April to 5 April and Thailand being 1 Jan to 31 Dec.  So you, if you remit your pensions to Thailand monthly, you will not have anything to show you paid tax on remittances from May to December when you file your Thai tax. 

 

To date there is nowhere on the Thai tax return form to claim a tax credit and the forms are only in Thai.  There are translations for guidance only but they are usually inaccurate. I have found the translation to omit new item, e.g. the new tax return may have added an item 17 in Thai but the English translation finishes at item 16 because they just cut and paste the previous year's one without adding the update.  You can go along to RD offices with you information and ask the ladies there to fill in your tax return for you but God help you, if you live in the sticks and they are only used to doing tax returns for rice merchants and the like. 

[Mike Lister]

3 minutes ago, anrcaccount said:

Fair enough.

 

"Ignorance is bliss" is an old truism , and trying to help may have in fact not done so.

 

I do respect your efforts, but do wonder if Alison Krauss/ Ronan Keating may have had a better strategy....

 

"You say it best, when you say nothing at all".

 

Doing nothing and staying quiet, wouldn't have helped those pensioners feel any better or address their concerns. Just think about it, guys who have been here for twenty plus years, doing OK on their pensions but not a lot of spare cash, suddenly think they are going to get hit for Thai tax that they can't afford. They have no living relatives back "home" and no where else to go, that was exactly what many of them were thinking.