Foreigners and their overseas income: what next?

[freeworld]

3 hours 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. 

Can suggest to read the Thai tax code, DTA, consult a tax accountant or discuss your tax situation with RD staff.

[JimGant]

56 minutes ago, lordgrinz said:

I would like to avoid filing any taxes here in Thailand though, or have to explain where my money comes from,

 

I'm just curious -- what are the sources of your remitted income to Thailand? If largely current year private pensions, then, yes, assessable income. But not assessable are govt pensions and social security, from current or past years; any and all monies from a financial account established pre 2024, where the balance on 31 Dec 2023 exceeds any and all monies remitted; and IRA Required Minimum Distributions, and other distributions, since, if you're taking RMDs, your IRA contributions were well before 31 Dec 2023.

 

So, not sure where your worries are coming from -- unless most of your remittances are current year private pensions. Otherwise, doubtful you have any Thai taxable income.

 

Worried about bad guys (or bad wives) getting sensitive data? Your information is never on review, unless you get a tax compliance audit (unlikely, unless you're remitting tons of money, and not filing a tax return). And even here, you can redact all your information on the supporting 1099s, except payer, payee, and amounts. Relax.

[freeworld]

3 hours ago, lordgrinz said:

 

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

https://library.siam-legal.com/thai-law/revenue-code-assessable-income-and-income-tax-sections-40-64/

[nowhereman]

4 hours ago, pattaya1234was said:

I am sure it If , for exais good but if you live in Thailand you cannot get one. if, for example, you have a home in the Uk then you can obtain a card there.

Not true. I just received my Wise card on my Thai address. Before concluding application for new card I was asked to which address I wanted to be send.

[ThaiPauly]

29 minutes ago, jayboy said:

 

You will.

What sort of answer is that?

 

It's a bullsh*t answer as you have not addressed the question.

 

Means I think you made it up unless you can give me any details I will assume its not factual

[freeworld]

4 hours ago, lordgrinz said:

 

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

The US embassy shows a list of tax preparers for the US, need to check if there is an updated list.

 

https://th.usembassy.gov/wp-content/uploads/sites/90/tax_consultants_2017.pdf

[jayboy]

53 minutes ago, ThaiPauly said:

What sort of answer is that?

 

It's a bullsh*t answer as you have not addressed the question.

 

Means I think you made it up unless you can give me any details I will assume its not factual

 

It's a succinct but pertinent answer.If you have not heard from your CI bank, you will in the future.

 

Assuming you are a Thai tax resident, the UK and the Channel Islands have an active CRS relationship with Thailand. Banks are obliged to report  accounts to the Thai tax authorities. To make that report, they need your TIN. That's why they will ask for it.

 

 

[JohnnyBD]

4 hours ago, lordgrinz said:

 

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

Mr. lordgrinz,

I understand your anxiety. I also had anxiety at first, but after reading the Tax Guide that was created by Mr. Lister (a big thanks to him), it clearly states, it's up to you & me to self-assess our own remittances and it's up to us to determine whether those remittances are assessable income or not. Just to be safe, I set up a separate US bank account for my US Social Security monies to go into so it won't get comingled with my other income streams. I will then transfer that exact amount each month to Thailand. Those remittances are non-assessable income as per the DTA, so I won't need to file a Thai tax return. In the very unlikely event, that the Thai tax man comes knocking at my door, I will be able to easily show that all my remittances were non-assessable income. I guess everyone needs to figure out how best to manage their financial affairs to eleminate the need to file a Thai tax return or at least lessen the tax burden. Good luck to you sir.

[spambot]

1 hour ago, JimGant said:

.... from current or past years; any and all monies from a financial account established pre 2024, where the balance on 31 Dec 2023 exceeds any and all monies remitted

Mnnn - Good info.

 

So for example with £175,000 inside a savings account on 31 Dec 2023 - Then remitting 65k Thb / month (Approx. £17,500 / yr) to a Thai Bank for Visa ext. This essentially provides 10yrs of remittance that is free from taxation - Am I understanding you correctly?

[LivinLOS]

20 hours ago, JohnnyBD said:

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?

Yeah pretty much.. 

Before they did not ask because a simple 'its last years savings' was the solution.. 

New they can ask and you need a better reason.. Theres still plenty of potential reasons, and a total lack of clarity about whch ones they may accept, how they view taxes paid elsewhere and tax credits, etc etc. But the possibility of needing to justify them is on the table, and if there is undeclared income in thier eyes, its 200% with the penalty. 

Guys who use the income method for extensions are signing a possible liability and handing it over, I cannot imagine that in a few years time a future government doesnt decide it just doesnt want that free tax revenue. 

[Presnock]

6 hours ago, lordgrinz said:

 

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

my income is covered by the dta between the US and Thailand and I am good for 10 years as of last month as covered by Royal Decree also.

[LivinLOS]

19 hours ago, Badrabbit said:

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" 

That will depend on if you 'should' pay tax in your homne country.. 

If you filed a P85 when you became non resident of the uk, you shouldnt be paying taxes there. 

[LivinLOS]

19 hours 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?

Yes.. The issue revolves around what can be proven to be non-asseable and also how Thailand treats taxes paid where they should not have been. 

If nothing else this recent tweak of the rules has shown how few expats have a clue what they should do when they stop being resident of thier home countries and many have been paying taxes for years even decades for no reason at all. 

[Mike Lister]

2 minutes ago, LivinLOS said:

Yes.. The issue revolves around what can be proven to be non-asseable and also how Thailand treats taxes paid where they should not have been. 

If nothing else this recent tweak of the rules has shown how few expats have a clue what they should do when they stop being resident of thier home countries and many have been paying taxes for years even decades for no reason at all. 

Amen to that!

[Presnock]

6 hours ago, lordgrinz said:

 

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

DTA Between Thailand and US and Royal Decree re LTR visa.

[spambot]

8 minutes ago, LivinLOS said:

That will depend on if you 'should' pay tax in your homne country.. 

If you filed a P85 when you became non resident of the uk, you shouldnt be paying taxes there. 

With the proviso - UK government state pension remain liable to tax in the UK no matter where you are resident. 

[LivinLOS]

18 hours ago, NorthernRyland said:

I've never heard of anyone being taxed who isn't working here.  In theory you're correct though, we've all had tax liabilities since the beginning but then why didn't they even tell us? It would be easy at immigration for them to say, btw, you have a tax liability and need to talk with an accountant, get a TIN etc...

 

If they start making noise about this at immigration then I'll pay attention but until then I appear to be in the same position as always, just like the rest of us.

 

 

Because up to Jan 1st if they said thay all you had to reply was 'no this is savings from last tax year' as they cant look into your overseas bank t prove your liability, you had none. 

Now that changes, this year is pretty easy to argue the same, but as year by year goes by, the credibility of that argument becomes weaker.. In 2030 if you want to say you have lived off only savings, not investment returns for the last 6 years, proving that gets harder and harder.. 

Of course all this likely falls into the 'too hard' category.. But everyone now needs to be concious of it.. 

People using income, pension or otherwise for extensions are much more at early risk. They are the low hanging fruit on this. 

[LivinLOS]

16 hours ago, Neeranam said:

Why do long term visa holders get special treatment over Thais? 

Are you sure about this? 

Yes LTR visas are 0 rated for overseas income tax.. Exactly why I am transitioning to an LTR visa. 

[LivinLOS]

7 hours ago, jayboy said:

 

All employed foreigners in Thailand pay tax and always have done so and that is not up for debate.I speak as someone formerly in that category.The more pertinent question for this forum is how many retired expats without Thai generated income and resident more than 180 days have filed returns and paid tax - that is up to now.The answer is almost none though a tiny minority may have filed returns for reasons best known to themselves, and sometimes quite unnecessarily.The Thai Revenue Department in practice had no issues with that.The situation has changed now and though the practical aspects are still not fully clear we have a reasonable understanding of how matters will play out.

For 4 years I filed zero returns, to the absolute bafflement of the revenue dept.. 

My reasons where I had bsuiness activity in UK and europe and was having to file in UK, Netherlands, and Ireland, I still do in 2 of those.. I needed be sure my home country filing was fully up to spec so that if demaned I could show it there, I had good earnings in each of those countries and claimed non residence there for tax remissions. To claim tax relief on large sums there but not have a home country tax return I could show was a much bigger risk than just forcing them to take the zero return. 

I admit it was odd, they appeared to never having seen anyone file 0 without Thai employment, work permit, and domestic source income.  

[Presnock]

11 minutes ago, LivinLOS said:

Yes LTR visas are 0 rated for overseas income tax.. Exactly why I am transitioning to an LTR visa. 

 

11 minutes ago, LivinLOS said:

Yes LTR visas are 0 rated for overseas income tax.. Exactly why I am transitioning to an LTR visa. 

plus no 90-day reports either.

 

[LivinLOS]

3 hours ago, JimGant said:

I'm just curious -- what are the sources of your remitted income to Thailand? If largely current year private pensions, then, yes, assessable income. But not assessable are govt pensions and social security, from current or past years

That may be the case for USA expats, thier DTA states it and I think from memory canada also.

This is not the case for UK expats, and most EU countries whose DTAs I looked at, actually many scandivanian expats choose to pay taxes here at a lower rate than in thier home countries. 

In the case of the UK pensions only remain UK domestic source income for non residents on armed forces pensions and some civil servant pensions. The rest, both state and private pensions stop being UK taxable after a P85 filing. Paying taxes 'back home' is user error, not the correct use of the system, of course th UK doesnt exactly remind folks fo that and even incenivises not doing so (index linking, healthcare access etc). 

[LivinLOS]

5 minutes ago, Presnock said:

 

plus no 90-day reports either.

 

 Still needed but it becomes a 365 day report 😉 it becomes once per year if you dont travel. 

[LivinLOS]

1 hour ago, spambot said:

Mnnn - Good info.

 

So for example with £175,000 inside a savings account on 31 Dec 2023 - Then remitting 65k Thb / month (Approx. £17,500 / yr) to a Thai Bank for Visa ext. This essentially provides 10yrs of remittance that is free from taxation - Am I understanding you correctly?

Yes that should remain cear under the jan 1 2024 prior savings rules.. 

[LivinLOS]

20 minutes ago, spambot said:

With the proviso - UK government state pension remain liable to tax in the UK no matter where you are resident. 

No it is not.. I am unsure why people repeat and believe this, the information is easy to check online. 

https://www.gov.uk/state-pension-if-you-retire-abroad/tax-on-your-state-pension

https://www.gov.uk/tax-uk-income-live-abroad

When tax is not due or is already deducted

Non-residents do not usually pay UK tax on:

• the State Pension
• interest from UK government securities (‘gilts’)

If you live abroad and are employed in the UK, your tax is calculated automatically on the days you work in the UK.

Income Tax is no longer automatically taken from interest on savings and investments.

 

[Presnock]

6 minutes ago, LivinLOS said:

 Still needed but it becomes a 365 day report 😉 it becomes once per year if you dont travel. 

yes, so not every 90-days, exactly what I said...

[JohnnyBD]

1 hour ago, LivinLOS said:

Yes LTR visas are 0 rated for overseas income tax.. Exactly why I am transitioning to an LTR visa. 

Good luck. I will be looking into this option too.

[spambot]

1 hour ago, LivinLOS said:

No it is not.. I am unsure why people repeat and believe this, the information is easy to check online. 

https://www.gov.uk/state-pension-if-you-retire-abroad/tax-on-your-state-pension

https://www.gov.uk/tax-uk-income-live-abroad

When tax is not due or is already deducted

Non-residents do not usually pay UK tax on:

• the State Pension
• interest from UK government securities (‘gilts’)

If you live abroad and are employed in the UK, your tax is calculated automatically on the days you work in the UK.

Income Tax is no longer automatically taken from interest on savings and investments.

 

Yup - I read the info on the website for your included text "When tax is not due.... Non residents do not usually pay UK tax on state pensions" - I got a different interpretation of what it was saying and the way I read this Is: if normally a non resident does not pay tax on state pensions (because it is below the personal allowance) then no tax is payable. However your interpretation is - If you are non resident then you do not need to pay tax on the state pension.

 

I can see that it might be interpreted in two ways and I am now not totally convinced which might be the absolute correct interpretation. However the same HMRC website you provided the link for also says.

You usually have to pay tax on your UK income even if you’re not a UK resident. Income includes things like:

• pension

Also what would be more decisive is what is in the Thailand DTA. While it is a little bit inconclusive, this seems to identify taxation by the UK of Gov pensions, but it is not totally clear if this is referring to state pensions or government employment pensions or possibly both - ARTICLE 19.—(1) (a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to any individual in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State

[Mike Lister]

For UK citizens, income that arises in the UK is taxable in the UK. If that income falls within the Personal Allowance then it will be zero rated. But if the State Pension should exceed the PA, (a political bombshell for whoever decided to make that happen), it will be taxable in the UK, under existing rules. 

[JimGant]

3 hours ago, spambot said:

So for example with £175,000 inside a savings account on 31 Dec 2023 - Then remitting 65k Thb / month (Approx. £17,500 / yr) to a Thai Bank for Visa ext. This essentially provides 10yrs of remittance that is free from taxation - Am I understanding you correctly?

Yes. The only snag, should you be called in to explain the sources of your remittances, is if you opened a new bank account post Jan 1 2024, and in this account all your post Jan 1 2024 monies were deposited, and these are the monies being remitted to Thailand. For appearance sake, you need to have transferred enough money from your pre 2024 account to your post 2023 account -- up to the 175k GBP grandfathered amount -- to cover remittances to Thailand. Yes, with the fungibility of money, you shouldn't need to play this game. But, should you get a bean counting nerd in RD on your case, this would give cover. But if you don't go this route, I certainly wouldn't lose any sleep over it.

[spambot]

34 minutes ago, JimGant said:

Yes. The only snag, should you be called in to explain the sources of your remittances, is if you opened a new bank account post Jan 1 2024, and in this account all your post Jan 1 2024 monies were deposited, and these are the monies being remitted to Thailand. For appearance sake, you need to have transferred enough money from your pre 2024 account to your post 2023 account -- up to the 175k GBP grandfathered amount -- to cover remittances to Thailand. Yes, with the fungibility of money, you shouldn't need to play this game. But, should you get a bean counting nerd in RD on your case, this would give cover. But if you don't go this route, I certainly wouldn't lose any sleep over it.

Good Response. it would also require good management of UK account(s) since any spent funds out of an account(s) and not remitted to Thailand or addition into the account(s) would no longer be available as tax free and after many years of similar transaction contaminations could become a complex argument to sustain with RD.