Must Read Introduction to Personal Income Tax in Thailand

[dinga]

For a while now it has seemed to me folks are tying themselves up in knots, and causing themselves - and others -  unnecessary angst by triple guessing/pontificating upon what the TRD may do in applying the new & suggested personal tax changes.  While civil discussions about possible implications and differing views are very healthy, dogmatic insistence is not - especially when based on how Revenue Authorities in other countries act (this of course may be useful when considering risk management steps).

 

Some time ago, I related the story of the advice given by a very senior and hugely experienced Thai to "read the words - that's what the law means" - don't apply the typical farang approach of trying to interprete the meaning.

 

For what it's worth, here's a real example of how Thai tax authorities actually apply the Land & Building Tax [LBT] Law - which I reckon is diametrically opposed to how the Tax Department would proceed in my home country.

 

LBT is payable on 4 categories - including:

*  For Agricultural purposes:  Rate 0.15% - but exempt if the tax doesn't exceed 50 mill baht

*  Left empty or unused:  Rate 1.2% with additional amounts of 0.3% if empty/unused for each period of more than 3 years, to a maximum 3%

 

Everyday I drive past what had previously been vacant beachfront land - very, very valuable beachfront land.  Some time ago, these blocks were sparcely planted with a variety of plants  -  cassave; coconuts; gum trees; mangos etc.  Those plants being given minimal attention post planting - with the obvious purpose being for the owners to eliminate the LBT liability on land that is really being held for capital appreciation. 

 

While acceptable in Thailand ("read the words") it's hard/impossible to imagine a tax authority in any other country agreeing with the agricultural purposes claim.

 

Hope this example helps folks to balance consideration of worst case scenarios

[Mike Lister]

18 minutes ago, dinga said:

For a while now it has seemed to me folks are tying themselves up in knots, and causing themselves - and others -  unnecessary angst by triple guessing/pontificating upon what the TRD may do in applying the new & suggested personal tax changes.  While civil discussions about possible implications and differing views are very healthy, dogmatic insistence is not - especially when based on how Revenue Authorities in other countries act (this of course may be useful when considering risk management steps).

 

Some time ago, I related the story of the advice given by a very senior and hugely experienced Thai to "read the words - that's what the law means" - don't apply the typical farang approach of trying to interprete the meaning.

 

For what it's worth, here's a real example of how Thai tax authorities actually apply the Land & Building Tax [LBT] Law - which I reckon is diametrically opposed to how the Tax Department would proceed in my home country.

 

LBT is payable on 4 categories - including:

*  For Agricultural purposes:  Rate 0.15% - but exempt if the tax doesn't exceed 50 mill baht

*  Left empty or unused:  Rate 1.2% with additional amounts of 0.3% if empty/unused for each period of more than 3 years, to a maximum 3%

 

Everyday I drive past what had previously been vacant beachfront land - very, very valuable beachfront land.  Some time ago, these blocks were sparcely planted with a variety of plants  -  cassave; coconuts; gum trees; mangos etc.  Those plants being given minimal attention post planting - with the obvious purpose being for the owners to eliminate the LBT liability on land that is really being held for capital appreciation. 

 

While acceptable in Thailand ("read the words") it's hard/impossible to imagine a tax authority in any other country agreeing with the agricultural purposes claim.

 

Hope this example helps folks to balance consideration of worst case scenarios

I agree completely.

 

But I do think that what gets lost on readers some times is that there are implicit assumptions in all these threads that don't need to be repeated with every post. Many members have forgotten what they were or never understood them in the first place. e.g. posters are not experts in Thai tax law; much is not known or understood about what the TRD intends in practise.

Edited Wednesday at 01:26 AM by Mike Lister

[Mike Lister]

On 6/24/2024 at 3:51 PM, JohnnyBD said:

Just to be clear.

It's a 5-year Certificate of Deposit with a US bank. The monthly interest is paid directly to my US brokerage account, and then it's transferred to my US checking account the same day it posts each month. I spend the interest in the US and do not remit it to Thailand. So, when the CD matures in 2028, I will get back the original money I invested in 2023. Is the original money I get back considered pre-2024 money?

I think it is, because the interest on the CD was paid away into a second account and kept clearly separate from the principle. ergo, the value of the CD on the maturity date is the same as the value on the date it was invested.

[BusNo8]

New BKK post article today 27 June. Seems like nothing new but solidifying what is known.

 

Pure speculation, but not only do I expect that that immigration will do cursory check of those on long extension - I could also see them not issuing annual extension of stay for those not in country 180 days.

 

I fully expect immigration to have some part of not enforcement but gatekeeper.

[Raindancer]

17 minutes ago, BusNo8 said:

New BKK post article today 27 June. Seems like nothing new but solidifying what is known.

 

Pure speculation, but not only do I expect that that immigration will do cursory check of those on long extension - I could also see them not issuing annual extension of stay for those not in country 180 days.

 

I fully expect immigration to have some part of not enforcement but gatekeeper.

Your second paragraph is somewhat confusing.  Perhaps you could clarify it please, especially " not issuing annual extension etc based on 180 days not in country.

 

Thank you

[BusNo8]

19 minutes ago, Raindancer said:

Your second paragraph is somewhat confusing.  Perhaps you could clarify it please, especially " not issuing annual extension etc based on 180 days not in country.

 

Thank you

 

First, this is pure speculation. I can easily see reasoning Immigration developing the following mindset.

 

We have a one year extension for you. It is based upon you living in Thailand. As you are in country less than half the year - de facto, you are not living in Thailand. If you are not domiciled / resident you are undeserving of a non immigrant resident visa. Nevertheless, we are a big hearted lot. We will grant your request if you file tax form in Thailand 😂

 

Again, conjecture, but seems an easy way to force compliance.

Edited yesterday at 01:59 AM by BusNo8

[Raindancer]

8 minutes ago, BusNo8 said:

 

First, this is pure speculation. I can easily see reasoning Immigration developing the following mindset.

 

We have a one year extension for you. It is based upon you living in Thailand. As you are in country less than half the year - de facto, you are not living in Thailand. If you are not domiciled / resident you are undeserving of a non immigrant resident visa.

 

Again, conjecture, but seems an easy way to force compliance.

Thank you for your rationale.

 

However let us politely agree to disagree.

A one year extension for example, based upon marriage or retirement, is de facto a one year extension, based upon the current requirements to fulfill such applications.

 

Should a holder of this annual extension decide to leave for x months, they merely apply for a rentry stamp.

 

This doesn't necessarily fit the viewpoint, that if you don't live here full time, that we  (immigration) can arbitrarily decide, that you are undeserving of an annual extension. 

 

Indeed there's no such caveat in current regulations, and I personally cannot see them imposing this " speculative" change.

 

But it's good to have a courteous disagreement. 🙏🏻

 

 

Edited yesterday at 02:07 AM by Raindancer
Punctuation

[Mike Lister]

8 minutes ago, BusNo8 said:

 

First, this is pure speculation. I can easily see reasoning Immigration developing the following mindset.

 

We have a one year extension for you. It is based upon you living in Thailand. As you are in country less than half the year - de facto, you are not living in Thailand. If you are not domiciled / resident you are undeserving of a non immigrant resident visa. Nevertheless, we are a big hearted lot. We will grant your request if you file tax form in Thailand 😂

 

Again, conjecture, but seems an easy way to force compliance.

I can't see that accomplishing anything useful for anyone. Visa's and tax residency are two different things, the one doesn't and shouldn't enforce the other.

[Raindancer]

10 minutes ago, BusNo8 said:

 

First, this is pure speculation. I can easily see reasoning Immigration developing the following mindset.

 

We have a one year extension for you. It is based upon you living in Thailand. As you are in country less than half the year - de facto, you are not living in Thailand. If you are not domiciled / resident you are undeserving of a non immigrant resident visa. Nevertheless, we are a big hearted lot. We will grant your request if you file tax form in Thailand 😂

 

Again, conjecture, but seems an easy way to force compliance.

Again, there is no evidence on any government website to support your speculation that a TIN would be required by immigration, at the point of extension renewal.

 

This has been discussed and refuted many times on this forum.

[swimnos]

I am 64 years old, my wife is 65 years old. From june 2023 I get a pension and my wife have a small shop. My wife and I filing separately TAX.

For 2023 my income was low so I had to pay zero income tax. My wife had to pay 800 THB. As I understand my wife will get this year an extra exemption of THB 190,000 because she is 65.

My pension is been payed on a foreign bankaccount. Is it wise that every month send half of my pension to my own Thai bankaccount and the other half to my wife her bankaccount.
So I have exemption for THB 160,000 and my wife has exemption for THB 250,000. 
Is this possible to get extra tax deduction and is it legal.

[Raindancer]

19 minutes ago, swimnos said:

I am 64 years old, my wife is 65 years old. From june 2023 I get a pension and my wife have a small shop. My wife and I filing separately TAX.

For 2023 my income was low so I had to pay zero income tax. My wife had to pay 800 THB. As I understand my wife will get this year an extra exemption of THB 190,000 because she is 65.

My pension is been payed on a foreign bankaccount. Is it wise that every month send half of my pension to my own Thai bankaccount and the other half to my wife her bankaccount.
So I have exemption for THB 160,000 and my wife has exemption for THB 250,000. 
Is this possible to get extra tax deduction and is it legal.

At 65 years old and filing a separate income tax returm, your allowances would be:

1.   Old age ( 65) allowance>190000 baht

2.  Personal Allowance> 60000 baht

3.  Pension relief max 100000 baht.

4.  The first 150000 baht is not assessable as taxable.

 

Total: 450000 baht before you pay tax.

 

All income under current TRD rules,  which has not always been implemented, is that any income over 220000 per annum, will require a TIN and income tax return.

 

I'm not sure you can circumvent the regulations by sending some money to yourself and some to your wife on a monthly basis unless there's some loophole in TRD regulations.

 

You could also look at the figures I have listed and apply those, where applicable to your wife for assessable income.

 

There is a download guide on expattaxthailand site that explains all deductible allowances etc.

 

https://www.expattaxthailand.com/

 

Good luck.

Edited yesterday at 02:59 AM by Raindancer
Additional info

[Raindancer]

3 hours ago, Raindancer said:

At 65 years old and filing a separate income tax returm, your allowances would be:

1.   Old age ( 65) allowance>190000 baht

2.  Personal Allowance> 60000 baht

3.  Pension relief max 100000 baht.

4.  The first 150000 baht is not assessable as taxable.

 

Total: 450000 baht before you pay tax.

 

All income under current TRD rules,  which has not always been implemented, is that any income over 220000 per annum, will require a TIN and income tax return.

 

I'm not sure you can circumvent the regulations by sending some money to yourself and some to your wife on a monthly basis unless there's some loophole in TRD regulations.

 

You could also look at the figures I have listed and apply those, where applicable to your wife for assessable income.

 

There is a download guide on expattaxthailand site that explains all deductible allowances etc.

 

https://www.expattaxthailand.com/

 

Good luck.

Edit to my poor maths.

500000 baht and not 450000 as quoted.