Foreigners and their overseas income: what next?

[lordgrinz]

3 minutes ago, Presnock said:

Once the embassy stopped issuing income verification letters, I began monthly payments and my income was strictly from a US government pension so I have never FAILED to pay taxes where none are due.  I don't have a Thai TIN and don't plan to get one at least until they change the tax law to require that all ex-pats must get one.  The law now says we only need to get on within 60 days of remitting assessable income - I don't have any.

 

 

The problem is, who is deciding what "assessable income" is, and how would anyone verify that is, or is not?

[Mike Lister]

1 minute ago, lordgrinz said:

 

The problem is, who is deciding what "assessable income" is, and how would anyone verify that is, or is not?

Seriously?

[lordgrinz]

1 minute ago, Mike Lister said:

Seriously?

Yes, seriosuly.

[Mike Lister]

1 minute ago, lordgrinz said:

Yes, seriosuly.

Have you tried reading the tax guide?

[Mike Lister]

4 minutes ago, lordgrinz said:

Yes, seriosuly.

I say seriously because you've already asked these questions and recieved sound advice from Jim Gant who is expert on US taxes, in the thread linked below:

 

 

[lordgrinz]

Just now, Mike Lister said:

Have you tried reading the tax guide?

 

You mean the one everyone has been fighting about in other threads, and interpreting whatever way they wish? Skimmed....but basically I gave up. I'll wait until we hear official word from the Thai government on how this whole mess is going to be handled for foreigners, at least before I send any more money over here. I'm also waiting to hear back on those first few foreigners (Guinea pigs) that file their taxes next year. 

[lordgrinz]

1 minute ago, Mike Lister said:

I say seriously because you've already asked these questions and recieved sound advice from Jim Gant who is expert on US taxes, in the thread linked below:

 

 

 

I take his advice with a grain of salt, I still don't want to be one of the first Guinea pigs in this mess, I hope he is right......but I'm not betting on it.

[Mike Lister]

1 minute ago, lordgrinz said:

 

You mean the one everyone has been fighting about in other threads, and interpreting whatever way they wish? Skimmed....but basically I gave up. I'll wait until we hear official word from the Thai government on how this whole mess is going to be handled for foreigners, at least before I send any more money over here. I'm also waiting to hear back on those first few foreigners (Guinea pigs) that file their taxes next year. 

Closed threads, never to be reopened or updated again threads.

 

OK so it sounds like between what Jim told you and what you've said above that you're sorted, waiting is a good plan.

[Mike Lister]

1 minute ago, lordgrinz said:

 

I take his advice with a grain of salt, I still don't want to be one of the first Guinea pigs in this mess, I hope he is right......but I'm not betting on it.

If you're not going to take a US CPA tax experts advice, there's no point looking for anyone better or asking the question here! Out.

[lordgrinz]

Just now, Mike Lister said:

If you're not going to take a US CPA tax experts advice, there's no point looking for anyone better or asking the question here! Out.

 

A US CPA is not a Thai CPA....Out.

[JimGant]

1 hour ago, Darksidedude said:

how can they have the right to tax someone on their foreign income or savings its absolutely absurd.

 

Of course they have the right to tax foreign income, if the tax treaty allows. And these same treaties prevent double taxation, through exclusivity or by tax credits. But, yeah, they don't have the right to tax savings -- and there's no plan to do so. The rumor that all remittances into Thailand will be subject to taxation is pure baloney. Unless it's a direct deposit of a taxable foreign income, like a private pension, then it's up to you to parse what's income and what's savings, in that cash flow of fungible money into Thailand. The banks certainly can't determine what is and what isn't income. Nor can RD.

 

So it's up to you to determine whether or not you have a Thai tax obligation. For many of us, already paying our home country taxes on worldwide income, our total tax bill between home country and Thailand probably won't change -- with, now, Thailand finally getting some tax revenue, and the home country losing same tax revenue, by having to grant a credit. Ho hum.

 

Certainly it wouldn't be cost effective for RD to man up to check all tax situations of foreigners. In fact, it may make sense to go with what we've already heard, namely: "Pay tax in your home country, no need to file Thai tax return." But, just to make it scary for tax cheats, set up random tax compliance audits. And, of course, if you're not paying tax to your home country, now you have the opportunity to pay someone something. Sounds good to me.

[Sheist]

On 4/4/2024 at 4:21 PM, garzhe said:

The US is not a party to the CRS

 

What does this mean?  Assume everyone reading is a US citizen. 

RE:  "While the United States revolutionized the way that countries share financial account information by enacting the Foreign Account Tax Compliance Act (FATCA),[1] it has refused to adopt the global version of FATCA—the Common Reporting Standard (CRS)—that has been adopted by over 100 jurisdictions.

[Mike Lister]

On 4/5/2024 at 9:37 AM, Sheist said:

 

What does this mean?  Assume everyone reading is a US citizen. 

RE:  "While the United States revolutionized the way that countries share financial account information by enacting the Foreign Account Tax Compliance Act (FATCA),[1] it has refused to adopt the global version of FATCA—the Common Reporting Standard (CRS)—that has been adopted by over 100 jurisdictions.

Source? Link?

[mrmicbkktxl]

1 hour ago, Sheist said:

 

So if we have a Thai savings account and we do NOT want an automatic 15% tax deduction taken on all inflows of cash, what exactly is this advice that WE have to give our bank?  Tell them to ALLOW or to NOT ALLOW the TRD to have access to our account data?  It sounds like we need to ALLOW (is this correct?) so they will NOT take out 15% each time, but this video only causes me stress and confusion.  If they take out 15%, then we HAVE to get a TIN and file to get it back!  (assume this account is 100% unaccessable and is not required to file)  The point is to avoid filing when the money is non-assessable (and thus non-taxable) and not be FORCED to file just to get our 15% withholding back!  This lawyer says "may" and "will see what happens" WAY too much in this discussion.

I think at one point everyone what stays more than 180 days will need a TIN,probaly checked or asked for at extension of stay starting from 2025,just a thought

[jayboy]

30 minutes ago, Mike Lister said:

I have assessible income in Thailand that must be reported under Thai tax law and I chose to do so. What is unnecessary about that!

 

You mean interest on bank deposits as you have previously reported ? Fair enough, but most expats not already in the Thai tax system would regard these as de minimis in view of the paltry amounts usually involved.

35 minutes ago, Mike Lister said:

Any informal statistics you may have developed over however many years, from whatever casual sources, regarding how many expat foreigners do or do not pay tax on overseas income in Thailand is purely anecdotal, that is definitely not up for debate.

 

Your use of language is rather imprecise.Of course expat foreigners pay Thai tax on overseas income - when employed here I did so myself since my salary was paid in the UK but related to my work in Thailand.But we are talking about retired expats and it is not really plausible to suggest other than a tiny minority filed returns in the past.If you regard the senior managers in top Thailand accounting firms as "casual sources'. so be it.Of course much of the evidence is anecdotal but its value or otherwise depend on the experience and integrity of the source.People will make up their own minds.

 

 

[ThaiPauly]

18 hours 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.

What pressure?

 

I bank in the CI and have received no pressure from them to do anything

 

Please clarify your statement

[lordgrinz]

Anyone know if the money we bring back when we come in on an airplane is considered assessable income? If I understand correctly, we don't even need to declare anything over 450,000 baht (or USD 15,000), correct? So no paper trail of where it came from, or would the issue arrive after I try to deposit it in my Thai bank account?

 

https://aip.caat.or.th/2023-12-28-AIRAC/html/eAIP/VT-GEN-1.3-en-GB.html#:~:text=1 Any person leaving or,when carrying over 450%2C000 THB.

[ThaiPauly]

13 hours 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.

If the working girls have to pay tax they would just increase the fee you pay them to compensate. 

 

It's not rocket science

 

 

[James105]

On 4/4/2024 at 9:38 AM, webfact said:

There are some categories of foreign tax residents who will not be liable at all this year, for example those who do not transfer ANY foreign income to Thailand in 2024

 

Ok, well thats good as I remitted enough cash for about 2 years into my Thai bank account over here in December.   If I was to (hypothetically) spend 6 months or so out of Thailand and make myself a non tax resident in Thailand next year or the year after and take the opportunity to replenish my Thai bank account whilst a non tax resident would that be legal tax avoidance or illegal tax evasion?

[ThaiPauly]

15 minutes ago, lordgrinz said:

Anyone know if the money we bring back when we come in on an airplane is considered assessable income? If I understand correctly, we don't even need to declare anything over 450,000 baht (or USD 15,000), correct? So no paper trail of where it came from, or would the issue arrive after I try to deposit it in my Thai bank account?

 

https://aip.caat.or.th/2023-12-28-AIRAC/html/eAIP/VT-GEN-1.3-en-GB.html#:~:text=1 Any person leaving or,when carrying over 450%2C000 THB.

Get a home safe and a security system

[Sheist]

1 hour ago, Mike Lister said:

Source? Link?

https://www.google.com/search?q=The+US+is+not+a+party+to+the+CRS&rlz=1C1CHBD_enTH1041TH1041&sourceid=chrome&ie=UTF-8 which takes from https://michiganlawreview.org/should-the-us-adopt-crs-2/#:~:text=While the United States revolutionized,adopted by over 100 jurisdictions., from July 2019. 

 

To date, the US has still not adopted CRS.  Anyone who has reported a foreign account with value larger than 10k USD in any year is aware of the FATCA/FBAR filing requirement.

[JimGant]

21 minutes ago, lordgrinz said:

So no paper trail of where it came from, or would the issue arrive after I try to deposit it in my Thai bank account?

But of course. The bank clerk will sit down with you and divide the $15000 into four piles. The first is from your latest private pension check, say $2500, so it's assessable income. The second, say $5000, is from your govt pension, thus it is not assessable, per DTA. The third, say $5000, is from a savings account that was closed on 31 Dec 2023 -- thus this is money grandfathered, and thus not assessable. And the last $2500 is from rental receipts from a house in your home country. Now, home country gets primary taxation rights on this, but Thailand has secondary rights, per most DTAs, so it is assessable income ('tho Thailand will have to apply a credit of home country tax against its Thai tax). So, you have a total of $5000 (180000 baht) of assessable income. Now the law says you must file a Thai tax return for assessable income  over 120000 (single, 220000 married). Stupid law, since if you're over 65, you won't have any taxable income until assessable income exceeds 500000. So you won't owe any tax. And there's no fine or foul if you don't owe tax. So ask yourself -- why file?

 

Anyway, back to the bank. Obviously, this scenario is absurd. As it would be for all cash flows -- SWIFT, Wise, etc. So, it's "up to you" (famous phrase of Alfred E. Somchai) to self-assess your remitted cash flows as to whether or not they're savings or income. And if the latter, is that income assessable, or not. Just keep good records, including rationale for judgement calls (like using FIFO), in case you're amongst the 1% called in for a compliance audit.

 

Way too much over-thinking on this matter.

[fulhamster]

23 hours ago, Jonathan Swift said:

 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?

Well not by using any information they pile up from 90 day reports.

They have no idea how to contact you if they needed to

[fulhamster]

22 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.   

About 35% of it.

So will Immigration accept the monthly transfer amount as before or after the tax deduction ?

If after, then the 65K would need to be more like 100K

[Sheist]

1 hour ago, mrmicbkktxl said:

I think at one point everyone what stays more than 180 days will need a TIN,probaly checked or asked for at extension of stay starting from 2025,just a thought

 

So what is the answer to avoid the 15% withholding at our bank for inbound transfers of foreign cash by SWIFT, etc?  I could not understand the lawyer's answer, or if it was speculation or based on something clear.  

 

 

[Mike Lister]

1 hour ago, jayboy said:

 

You mean interest on bank deposits as you have previously reported ? Fair enough, but most expats not already in the Thai tax system would regard these as de minimis in view of the paltry amounts usually involved.

 

Your use of language is rather imprecise.Of course expat foreigners pay Thai tax on overseas income - when employed here I did so myself since my salary was paid in the UK but related to my work in Thailand.But we are talking about retired expats and it is not really plausible to suggest other than a tiny minority filed returns in the past.If you regard the senior managers in top Thailand accounting firms as "casual sources'. so be it.Of course much of the evidence is anecdotal but its value or otherwise depend on the experience and integrity of the source.People will make up their own minds.

 

 

Not only that but other income also, I don't know why that concept is so hard to grasp.

[lordgrinz]

44 minutes ago, JimGant said:

But of course. The bank clerk will sit down with you and divide the $15000 into four piles. The first is from your latest private pension check, say $2500, so it's assessable income. The second, say $5000, is from your govt pension, thus it is not assessable, per DTA. The third, say $5000, is from a savings account that was closed on 31 Dec 2023 -- thus this is money grandfathered, and thus not assessable. And the last $2500 is from rental receipts from a house in your home country. Now, home country gets primary taxation rights on this, but Thailand has secondary rights, per most DTAs, so it is assessable income ('tho Thailand will have to apply a credit of home country tax against its Thai tax). So, you have a total of $5000 (180000 baht) of assessable income. Now the law says you must file a Thai tax return for assessable income  over 120000 (single, 220000 married). Stupid law, since if you're over 65, you won't have any taxable income until assessable income exceeds 500000. So you won't owe any tax. And there's no fine or foul if you don't owe tax. So ask yourself -- why file?

 

Anyway, back to the bank. Obviously, this scenario is absurd. As it would be for all cash flows -- SWIFT, Wise, etc. So, it's "up to you" (famous phrase of Alfred E. Somchai) to self-assess your remitted cash flows as to whether or not they're savings or income. And if the latter, is that income assessable, or not. Just keep good records, including rationale for judgement calls (like using FIFO), in case you're amongst the 1% called in for a compliance audit.

 

Way too much over-thinking on this matter.

 

I'm still going with the wait and see attitude, I was just thinking of padding my account a little more to accommodate all of 2025 just in case things are still not set in stone. The whole Remitted part is the absurd part of this, either tax us on worldwide income, or not. I would like to avoid filing any taxes here in Thailand though, or have to explain where my money comes from, it comes from Wise.....no other explanation needed. I files taxes in the US where the money is sourced, I don't feel like handing them any information about any accounts held there, because I don't trust anyone in Thailand to have that info, even my wife 🤪

[Sheist]

50 minutes ago, Sheist said:

 

So what is the answer to avoid the 15% withholding at our bank for inbound transfers of foreign cash by SWIFT, etc?  I could not understand the lawyer's answer, or if it was speculation or based on something clear.  

 

EDIT:  Since it has never been done in years past, I suspect I already agreed to that when the account was opened, but I need to verify with my bank.  My only concern is if January 1, 2024 lit some "let's start it now anyway" fuse.  

 

[Sheist]

21 minutes ago, lordgrinz said:

 

I'm still going with the wait and see attitude, I was just thinking of padding my account a little more to accommodate all of 2025 just in case things are still not set in stone. The whole Remitted part is the absurd part of this, either tax us on worldwide income, or not. I would like to avoid filing any taxes here in Thailand though, or have to explain where my money comes from, it comes from Wise.....no other explanation needed. I files taxes in the US where the money is sourced, I don't feel like handing them any information about any accounts held there, because I don't trust anyone in Thailand to have that info, even my wife 🤪

 

In theory, this might be why the US has not joined the CRS.  It might open up security concerns to the US accounts based on data handling compliance methods.  It also might explain recent reports of local banks refusing to open local accounts for US citizens, if true.  If you already have one (or some) open, consider yourself lucky!  

 

RE:  "While the United States revolutionized the way that countries share financial account information by enacting the Foreign Account Tax Compliance Act (FATCA), it has refused to adopt the global version of FATCA—the Common Reporting Standard (CRS)—that has been adopted by over 100 jurisdictions. This means that while the Internal Revenue Service (IRS) receives information about U.S. persons’ financial accounts in foreign financial institutions (FFIs), U.S. financial institutions (U.S. FIs) report little or no information about foreigners holding financial accounts in the United States. Several commentators have argued that the United States is becoming the “world’s new tax haven,” as foreigners can evade the taxes they owe in other countries by holding unreported funds in U.S. FIs. Another consequence is that FFIs around the world need to comply with both FATCA and CRS, resulting in higher compliance costs."

https://michiganlawreview.org/should-the-us-adopt-crs-2/#_ftn5

[jayboy]

3 hours ago, ThaiPauly said:

I bank in the CI and have received no pressure from them to do anything

 

You will.