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Introduction to Personal Income Tax in Thailand


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  • 2 weeks later...

I will update the guide in a couple of places to reflect that we now understand that penalties can be levied for not filing a tax return, when the threshold has been exceeded but there is no tax to pay. Previously we had been told repeatedly that there was no penalty, we now know that there is a THB 2,000 fine but it is unclear whether it is actually levied. 

 

"the consequences of an individual tax resident not filing a PND90/91 tax return, if he/she has income over 120k but not enough to pay tax is that there is a fine of up to 2,000 baht for this under Section 35 of the RC.  Section 17 is the relevant section in the context of Section 35". 

 

In practise, I don't believe this change in our understanding will impact anyone this year but it is something that should be considered in January next year.

 

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Because we now know that a fine is possible for not filing a tax return, this information changes what we said about acquiring a TIN. Previously we wrote that it wasn't necessary to obtain a TIN, if no tax was due. The new information about the fine above, now changes what we have to say regarding TIN's which may now be needed, as long as the assessable income threshold has been exceeded.

 

 

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1 hour ago, Mike Lister said:

Because we now know that a fine is possible for not filing a tax return, this information changes what we said about acquiring a TIN. Previously we wrote that it wasn't necessary to obtain a TIN, if no tax was due. The new information about the fine above, now changes what we have to say regarding TIN's which may now be needed, as long as the assessable income threshold has been exceeded.

 

 

If I'm in Thailand all year, but all my income is from US social security thus not accessible income. Do I need to get a TIN, and do I need to file a Thai tax return?

Thanks 

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As things currently stand ,  can those of us just living on our pensions depart Thailand as per normal or will we get hassled at the airport for any documents relating to our tax situation in Thailand.

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9 minutes ago, Denim said:

As things currently stand ,  can those of us just living on our pensions depart Thailand as per normal or will we get hassled at the airport for any documents relating to our tax situation in Thailand.

No documents required, it's very early days on this, maybe downstream things will change 

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Mike, could you please complete your information on the taxes we will be required to pay if we stay more than 180 days in Thailand with a table of taxes and related deductions to have a clearer vision for all us of the taxes we will have to pay next year.

 

Thank you.

Edited by BE88
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20 minutes ago, Mike Lister said:

No documents required, it's very early days on this, maybe downstream things will change 

 

Yes, I would not be sùrprised.

Back in the early 1980's , any foreigner living in the country for more than 180 days per year had to obtain a tax clearance certificate from the revenue department.  This had to be produced upon departure at Don Muang. The amount of tax calculated was a couple of thousand baht. However, if you could get a civil servant to act as your guarantor,  any taxes were waived. There used to be several of these moonlighting civil servants hanging around outside the revenue department and for 500 baht they would act as your guarantor. 

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49 minutes ago, BE88 said:

Mike, could you please complete your information on the taxes we will be required to pay if we stay more than 180 days in Thailand with a table of taxes and related deductions to have a clearer vision for all us of the taxes we will have to pay next year.

 

Thank you.

The answer to your question is person specific and may well change from person to person. The deductions,  allowances (TEDA) and tax tables are set out in para's 65 to 68 of the Simple Tax Guide. A further level of variation is a persons nationality and the terms of their DTA which may provide additional relief. If you need help with specifics regarding your own personal situation you are welcome to PM me with details and I will try to assist. A word of caution: I am extremely busy at present and have a substantial backlog to deal with that may take days, I also have large scale updates to make to the guide so my response will not come quickly.

 

 

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20 minutes ago, G Rex said:

Hi Mike.   Thanks for all of your work here. Now things just look murky, not like mud!

I am an Australian, and have received no 'income' for 4 years. I have savings in several Australian banks, which I transfer when the need arises, though have sent nothing (and will not need to) this Financial Year.

I have a decent amount in an Australian Industry Superannuation Fund, that I will probably start drawing on in 2 or 3 years. I will receive no state pension - I am fully self funded. I know things can (and probably will) change, but do you think my personal super drawdown would be subject to tax here in Thailand?  At the moment any earnings on my super are taxed at 15 percent, but will become tax free when I change to a 'retirement draw down account'. This account will require me to draw a minimum of about 5% of my balance each year.

Cheers, and once again thanks for helping to clarify these emerging tax changes.

I have always understood Australian Tax requirements - but accountancy!  Swahili to me! 

I cannot comment on the contents of country specific DTA's because I have not read them all, I certainly haven't read the terms of the Australian/Thai DTA which has been much discussed in various threads. My suggestion to you is to start reading your DTA to try and find the answer to your questions, failing that. you may wish to look at some of the Australian specific tax threads where your fellow countrymen will no doubt have answers for you. Sorry I can't be more helpful.

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I have "de-cluttered" the thread by removing lengthy, or not directly relevant or technical posts. I've done this  in order to keep the concept of question and answer easy to read for members. If you post was hidden, please don't be offended or alarmed and if you would like it reinstated, please let me know. I'm grateful for your contribution, especially the technical material and if it becomes useful for others, I will reinstate it.

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So - crypto sold on an exchange outside of Thailand is only taxable when you bring the money into Thailand?

In previous years it was said that "the blockchain is everywhere" therefor crypto sold overseas is fully taxable- even if the fiat money is not brought into Thailand (actually I think this was an idea put forward by some big-wig and not necessarily legal advice)

https://sherrings.com/cryptocurrency-income-personal-tax-thailand.html

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27 minutes ago, CrossBones said:

So - crypto sold on an exchange outside of Thailand is only taxable when you bring the money into Thailand?

In previous years it was said that "the blockchain is everywhere" therefor crypto sold overseas is fully taxable- even if the fiat money is not brought into Thailand (actually I think this was an idea put forward by some big-wig and not necessarily legal advice)

https://sherrings.com/cryptocurrency-income-personal-tax-thailand.html

That is what have in the Guide as the latest position from those who are involved with crypto, I confess to knowing very little about it myself.

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There has been some debate over several months about who must file a tax return in Thailand, which I think  the TRD makes explicitly clear and is reflected in the Simple Tax Guide. I thought it might be useful however to also provide a quote from PWC on this subject which says:

 

"The following individuals are required to file income tax returns for income earned in the preceding tax year irrespective of whether there is any tax due:

 

A person who has no spouse and earns income of more than Baht 60,000

• A person who has no spouse and earns income under category (1) (salaries and wages) of more than Baht 120,000

A person who has a spouse and earns income of more than Baht 120,000

• A person who has a spouse and earns income under category (1) (salaries and wages) of more than Baht 220,000".

 

https://www.pwc.com/th/en/tax/assets/thai-tax/thai-tax-booklet-2023-24.pdf

 

 

It's not possible, of course, to file a Thai tax return without first obtaining a Tax Identification Number or TIN. The TRD English language translation on this point is clear but the information is set out perhaps more  succinctly in the link below which states:

 

"Eligibility Criteria (to obtain a TIN):


Expatriates need a TIN if they are Thai tax residents (residing in Thailand for 180 days or more) and have assessable income in Thailand. (see above quote)


Application Process (for a TIN):
To apply for a TIN, expatriates must complete Form L.P. 10.1 and provide a valid passport, visa, and proof of address at their local tax office".

 

https://www.expattaxthailand.com/thailand-expats-guide-to-applying-for-a-tax-identification-number-tin/#:~:text=Expatriates need a TIN if,at their local tax office.

 

 

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An important update to the Tax Document above, which is now referred to as an Introduction to Personal Income Tax in Thailand, rather than a guide.

 

The important message is that there is now substantial evidence to confirm who must obtain a TIN and file a Thai tax return and under what circumstances. That information was posted yesterday in the post above and has now been incorporated into the document in the OP.

 

EVERYONE needs to be aware of the rules on this aspect. 

 

 

 

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How does this 20 million a year git to other people with no tax work? Is this just not a loophole, just say a million to your wife was a gift when really living expenses?

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1 minute ago, proton said:

How does this 20 million a year git to other people with no tax work? Is this just not a loophole, just say a million to your wife was a gift when really living expenses?

 

A quick cut and paste below on what the document says below.

 

If you try to say that million was a Gift to your wife and then you end up using it as living expenses and somebody checks, it might be that there will be a problem. But there again, conjugal property and all that might mean there isn't.

 

Gift Tax is something that is used by wealthier people hence we only know what's written in the Revenue Code rather than what the practical application is. Yes, Gift Tax is often used as a loophole, which is why many other countries wrap additional rules and conditions around it to limit the abuse.....thus far we can't see that Thailand has done the same.

 

It seems clear that Gift Tax can be used legally to genuinely gift funds to somebody, it's also clear the Gift Tax rules can easily be bent and the Gift will be less genuine. What you describe is a Gift to your wife that's really for living expenses. You'll forgive me for thinking that's not really a genuine gift and the risk is the TRD may see things the same way. So the  answer is, I think....if it's a genuine gift and all the rules are strictly followed, it's a good facility to use. But if it's something else, well, there's a risk.

 

 

 

GIFT TAX 

 

59) "PIT is levied on gifts given by persons who are still alive. The tax is collected on the assets or the amount given to parents, ascendants, descendants, spouse, or others based on the value of the gift that exceeds a prescribed threshold, which depends on the type of gift and donor. Assets or amounts given that do not exceed the threshold are exempt from tax.

 

60) The following gifts are exempt from PIT:

 

a) Income derived by a parent from the transfer of ownership or possessory right in an immovable property without any consideration to a legitimate child, excluding an adopted child, in the amount not exceeding THB 20 million throughout a tax year in respect of each child.

 

b) Maintenance income or gifts from ascendants, descendants, or spouse, in the amount not exceeding THB 20 million throughout a tax year.

 

c) Maintenance income derived under a moral obligation or gifts made in a ceremony or on occasions in accordance with established custom from persons who are not ascendants, descendants, or spouse, in the amount not exceeding THB 10 million throughout a tax year.

 

d) Income from gifts in the case where the person who receives the gifts will use them for religious, educational, or public benefit purposes according to the intention of the donors under the criteria and conditions referred to in the Ministerial Regulations.

 

61) Gifts in excess of the above thresholds will be subject to PIT at the rate of 5% and will not need to be included together with other income when computing the annual PIT liability.

 

62) For ascendants/dependants the threshold is THB 20 mill, nor non-ascendants and dependants, it's THB 10 mill".

 

https://taxsummaries.pwc.com/thailand/individual/income-determination

 

63) Note: Because Gift Tax is predominantly a domain of the wealthy and depends to a large extent on local practise, there is a shortage of confirmed information on this subject. One field of thought is that Gift Tax cannot be used to escape Thai tax by Gifting untaxed money from overseas. On the other hand, many Western countries, including the UK, do not tax gifts from overseas. Members wishing to exercise this option should seek qualified advice before using this option to Gift untaxed funds.

 

64) Two additional points on this subject are: 1) Funds that are gifted, must be for the use of the person to whom they are gifted. 2) Gifts can be revoked later and reclaimed, under specific circumstances, such as if the receiver of the gift defames the Gifter or fails to take care of their serious medical needs. Issues arise here when the receiver is the spouse of the gifter and under marital law, the gift is regarded as conjugal property. Until this becomes more clear, it is critical that anyone wishing to use Gift Tax, seeks professional advice.

 

 

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20 hours ago, Mike Lister said:

There is a section in here which SEEMS to cover superannuation/retirement funds, suggesting they are tax exempt????

 

Exemptions…….

Certain types of income are exempt from personal income tax. In respect of income from employment, money derived in the form of per diem, travelling expenses and certain fringe benefits, such as medical treatment, is tax exempt. The exemptions also include maintenance income derived under a moral obligation (subject to a threshold - see gift tax above), corpus of a legacy or inheritance (see the section on inheritance tax below) and certain capital gains as noted above. Provided that certain conditions are met, gains or benefits from registered provident funds, retirement mutual funds, long term equity funds, super savings funds, national saving funds including amounts derived from insurance or social security funds, interest on a deposit received from a bank in Thailand, a savings co-operative and a return from a deposit in Thailand according to Islamic principles are also tax exempt. Profit sharing distributed by a fixed income mutual fund to individual investors is exempt from tax.

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1 minute ago, xylophone said:

There is a section in here which SEEMS to cover superannuation/retirement funds, suggesting they are tax exempt????

 

Exemptions…….

Certain types of income are exempt from personal income tax. In respect of income from employment, money derived in the form of per diem, travelling expenses and certain fringe benefits, such as medical treatment, is tax exempt. The exemptions also include maintenance income derived under a moral obligation (subject to a threshold - see gift tax above), corpus of a legacy or inheritance (see the section on inheritance tax below) and certain capital gains as noted above. Provided that certain conditions are met, gains or benefits from registered provident funds, retirement mutual funds, long term equity funds, super savings funds, national saving funds including amounts derived from insurance or social security funds, interest on a deposit received from a bank in Thailand, a savings co-operative and a return from a deposit in Thailand according to Islamic principles are also tax exempt. Profit sharing distributed by a fixed income mutual fund to individual investors is exempt from tax.

Yes, some Thai investment and pension funds are but they must be Thai funds and also held for a minimum period, in the case of an LTF (long term funds) for example, 7 years. The rules governing RMF's or retirement mutual funds are similar. Here's a link to UOBAM which has a range of such funds, it will give you an idea of what's involved.

 

https://www.uobam.co.th/en/fund-type/6/retirement

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Of course, another reason for needing to obtain a Thailand TIN is that many foreign banks in other jurisdictions (eg UK offshore banks) require this from Thailand tax residents when opening an account or continuing to operate an account from within Thailand. Similarly required by UK HMRC when filing a tax return there as a not-ordinarily resident with UK tax obligations. 

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3 hours ago, CMMCB said:

Similarly required by UK HMRC when filing a tax return there as a not-ordinarily resident with UK tax obligations. 

Well I filled in one for years without ever adding Tha tax residency to it and it was never queried even though they have my address here.......

More recently adding in Thailand I still did not give a TIN and again not asked for so not sure you can say it is "required".

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I only have income in the UK (paid into an offshore bank and transferred from there) plus Thai bank interest, which is subject to Thai tax withholding.

They consists of State Pension, Private Pension and an annuity from an old Company pension.

I do not intend to take over any monies that could make me liable for significant Thai tax annually, leaving the remainer to be handled under inheritance rules, but will still need to submit details.

Can you please advise which declaration form I should use PN90 or PN91, I'm confused on this matter.

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1 hour ago, OJAS said:

What address should paper returns be sent to, and would this be worth stating in the Guide, please?

 

I thought you had to take them down and personally file at a revenue office..........?

Even if not I personally would not trust in posting such a document but that is just me. 

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