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 June 26 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 June 27 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 June 27 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 June 27 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.

[khlongtoey]

so say one has $500k sitting in a US stock market fund at the end of 2023. In 2024 the fund earns 5% so at the end of 2024 the account is then $525k, if in 2025 one sells and remits $50k  from the fund into .th.

 

is all $50k taxable (yes, if one stays >180 days, calendar year) ?

 

or is it only the capital gains after the end of 12/2023  that are taxable?

what if I remits $25k and indicate it is on the original capital and NOT the gains ?

 

if one transfer the $25k capital gains to a checking account and then uses wise to transfer it to BBL "savings account" ; is one going to have to show proof that there were realized capital gains traced to that particular remittance/transfer to the US checking account?

 

can one then safely remit whatever ST or LT capital gains were realized from the previous US tax year?

 

 

 

[treetops]

2 hours ago, khlongtoey said:

is all $50k taxable (yes, if one stays >180 days, calendar year) ?

 

or is it only the capital gains after the end of 12/2023  that are taxable?

what if I remits $25k and indicate it is on the original capital and NOT the gains ?

Nobody knows yet what rules wiil be applied, or if you apply your preferred rules whether these will be accepted by the Thai tax authorities should it come to an audit.

[OJAS]

On 6/27/2024 at 8:57 AM, 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.

 

"We will grant your request if you file tax form in Thailand"

 

Just one little flaw with this argument, I think, in addition to the points made by @Raindancer and @Mike Lister in their replies. What if your remitted (at the present time) income is earned solely from non-assessable sources such as US social security payments - or, if assessable, totals less per annum than the minimum 120k threshold required for tax returns? Are you really suggesting that annual extensions might be denied to everyone who is not required to file a tax return? Pure and utter bunkum IMHO if you are!

 

Edited July 6 by OJAS

[norbra]

On 6/27/2024 at 1:34 PM, Raindancer said:

Edit to my poor maths.

500000 baht and not 450000 as quoted.

Your original math is correct.

3,claim 50% of pension (for pensions payments up to 100,000thb maximum)

So 50,000thb is max claimable.

[Mike Lister]

A post showing links to the TRD online tax filing system. Note: it is possible to file late for the past three years.

 

 

[Mike Lister]

A quick word of warning:

 

A number of video's and media newspaper articles about tax lately, all containing incorrect or highly suspect information, despite coming from seemingly authoritative sources.

 

One stated that pre 1January 2024 savings must be brought into Thailand before the end of this year, otherwise it becomes taxable....this is not true and the statement has subsequently be retracted but not many will have seen it.

 

Another states that ATM and credit card transactions using foreign banks, is not assessible income in Thailand whilst the TRD has stated the exact opposite in their Hua Hin presentation.

 

Be careful what you read, if you want fact, go to the Revenue site or the Big 4 or similar.

 

Edited July 9 by Mike Lister

[jayceenik]

3 hours ago, Mike Lister said:

A quick word of warning:

 

A number of video's and media newspaper articles about tax lately, all containing incorrect or highly suspect information, despite coming from seemingly authoritative sources.

 

One stated that pre 1January 2024 savings must be brought into Thailand before the end of this year, otherwise it becomes taxable....this is not true and the statement has subsequently be retracted but not many will have seen it.

 

Another states that ATM and credit card transactions using foreign banks, is not assessible income in Thailand whilst the TRD has stated the exact opposite in their Hua Hin presentation.

 

Be careful what you read, if you want fact, go to the Revenue site or the Big 4 or similar.

 

Thanks for that info. Very important for me

I was getting worried that I'd have to close down an old pre-31DEC23 FCD non-interest bearing savings account in SIN and transfer it to Thailand before 31DEC24. 

So, it seems like I can wait until convenient.

I'll sleep better 😊

 

Edited July 10 by jayceenik

[Raindancer]

On 7/6/2024 at 1:38 PM, norbra said:

Your original math is correct.

3,claim 50% of pension (for pensions payments up to 100,000thb maximum)

So 50,000thb is max claimable.

Nope.  My maths are correct.

 

50% of pension is allowed.  But....up to a maximum of 100000 baht is allowed towards the allowances to offset any tax liability. 

 

Therefore e.g   a person on an annual pension of say 400000 baht per year, can claim 50% of that,  but is limited to a maximum of 100000 baht claimed towards his annual allowances, pre tax.

[norbra]

1 hour ago, Raindancer said:

Nope.  My maths are correct.

 

50% of pension is allowed.  But....up to a maximum of 100000 baht is allowed towards the allowances to offset any tax liability. 

 

Therefore e.g   a person on an annual pension of say 400000 baht per year, can claim 50% of that,  but is limited to a maximum of 100000 baht claimed towards his annual allowances, pre tax.

Thanks for advice on interpretation of max allowance,I can now add 50k to my calculations 

[CharlesHolzhauer]

19 minutes ago, norbra said:

Thanks for advice on interpretation of max allowance,I can now add 50k to my calculations 

go to <https://aseannow.com/topic/1318120-revenue-department-contact-reports/#comment-18647010>
and locate the post from 'pauku1' in which he provided a [taxel.xls] spreadsheet for calculating taxes.

[xylophone]

1 hour ago, CharlesHolzhauer said:

go to <https://aseannow.com/topic/1318120-revenue-department-contact-reports/#comment-18647010>
and locate the post from 'pauku1' in which he provided a [taxel.xls] spreadsheet for calculating taxes.

Wonderful......thank you for the links and many thanks to @pauku1 for the spreadsheet and info.

[Raindancer]

On 7/11/2024 at 10:49 AM, norbra said:

Thanks for advice on interpretation of max allowance,I can now add 50k to my calculations 

No problem.  Glad to help.

[RPCVguy]

On 5/21/2024 at 8:02 PM, Mike Lister said:

There is no place on the current form to put that information because it means invoking the DTA. We're waiting to see what the new tax form looks like in the hope it will yield some clues about what is required.

Mike, along with many others here, a huge THANK YOU  for your post and many responses.
Like a few others here, my situation should be simple, BUT there is no way to both list non-assessible and then deduct it from further consideration. 75% of my annual income is from US Social Security. 25% is split evenly between a federal pension and an annuity from a corporate pension plan. (Oh, and a few hundred Baht is withheld annually by the Thai Bank for my mandated deposit as someone married to a Thai.) Under the DTA, only the corporate pension and Thai bank interest is assessible, and it is well below the 120,000 baht level - even this year with exchange rates high for the US Dollar.
Retired here 17 years, except for a few hundred (mostly Life insurance) ALL COMES INTO THAILAND and shows up in my bank accounts.
TRD wants it all listed.
I (and many others) need a way to account on tax form for DTA funds brought into Thailand.

A Thai friend in Bangkok got nowhere further than being pointed to the current forms 90 and 91. She was told not to expect any changes to the forms for 2024.
On Tuesday July 9th I also contacted the US Embassy asking about any potential changes to the DTA with Thailand. The reply:

Quote

     Yes, we understand that there is a great deal of anxiety among U.S. retirees here concerning possible changes.   
     Thailand has made no approach, up until now, to the U.S. Government to renegotiate its tax treaty. 
     At this point, while we have asked the Thai Government for clarification, we have not received any specific information as to how this might affect U.S. citizens, if at all.

 

 

[Mike Lister]

59 minutes ago, RPCVguy said:

Mike, along with many others here, a huge THANK YOU  for your post and many responses.
Like a few others here, my situation should be simple, BUT there is no way to both list non-assessible and then deduct it from further consideration. 75% of my annual income is from US Social Security. 25% is split evenly between a federal pension and an annuity from a corporate pension plan. (Oh, and a few hundred Baht is withheld annually by the Thai Bank for my mandated deposit as someone married to a Thai.) Under the DTA, only the corporate pension and Thai bank interest is assessible, and it is well below the 120,000 baht level - even this year with exchange rates high for the US Dollar.
Retired here 17 years, except for a few hundred (mostly Life insurance) ALL COMES INTO THAILAND and shows up in my bank accounts.
TRD wants it all listed.
I (and many others) need a way to account on tax form for DTA funds brought into Thailand.

A Thai friend in Bangkok got nowhere further than being pointed to the current forms 90 and 91. She was told not to expect any changes to the forms for 2024.
On Tuesday July 9th I also contacted the US Embassy asking about any potential changes to the DTA with Thailand. The reply:

 

 

There is currently no need to declare non assessable income, although that may change towards the end of this year as the new tax forms are redesigned and released for use (we understand they will be available in November). Typically in the past, Social Security income for example, was simply left off the the tax form and not declared at all (I didn't declare mine and the TRD has been happy with that).

[Mike Lister]

***Please be aware that no updates are being made to the document in the op and haven't been so since I stopped being a moderator several weeks ago. I will try to post things of relevance here in this thread but as times moves forward, parts of the document will be superseded. 

[RPCVguy]

43 minutes ago, Mike Lister said:

There is currently no need to declare non assessable income, although that may change towards the end of this year as the new tax forms are redesigned and released for use (we understand they will be available in November). Typically in the past, Social Security income for example, was simply left off the the tax form and not declared at all (I didn't declare mine and the TRD has been happy with that).

So simply ignore the non-assessible amounts, unless there are new forms for 2024 that allow for the declaration and then elimination of those amounts.
Meanwhile, I used Google Translate and generated these two portions of the USA/Thai DTA as images to print and show to TRD if they ask for details.

__________________________________________________________________________________

Edited July 12 by RPCVguy

[retarius]

On 7/11/2024 at 11:27 AM, Raindancer said:

Nope.  My maths are correct.

 

50% of pension is allowed.  But....up to a maximum of 100000 baht is allowed towards the allowances to offset any tax liability. 

 

Therefore e.g   a person on an annual pension of say 400000 baht per year, can claim 50% of that,  but is limited to a maximum of 100000 baht claimed towards his annual allowances, pre tax.

I have a US SS pension of about 120,000 baht per month (depending on exchange rate) paid into Bangkok Bank here in Thailand. I file a US tax return each year and this is included as part of my income. 

I have become confused about what is going to happen in future and what is fake news and have decided this year (for the first time) to spend less than 180 days in Thailand in 2024 and future years and become non resident for tax purposes. 

Are you telling me here that the maximum deduction for pension is 100,000 per year? That's of no use to me at all. 

I have been informed on ASEAN and by Bangkok based tax consultants that Thailand have no right to tax my US SS pension under the DTA? If Thailand is able and does tax my SS payment, I will have to take a deduction against my US taxes. I cannot imagine what a recording and accounting head he this will present, not to say, raising likelihood of a US tax audit. My priority is simplicity and avoiding tax accounting nightmares. I have no desire to negotiate my annual tax bill with someone resembling an immigration officer. Being out of Thailand for 186 or so days a year is inconvenient, but an inconvenience I am willing to endure to legally arrange my affairs to avoid paying taxes in Thailand.

[Mike Lister]

38 minutes ago, RPCVguy said:

So simply ignore the non-assessible amounts, unless there are new forms for 2024 that allow for the declaration and then elimination of those amounts.
Meanwhile, I used Google Translate and generated these two portions of the USA/Thai DTA as images to print and show to TRD if they ask for details.

__________________________________________________________________________________

There is a link in the document in the OP that will let you download your DTA in English.

 

Also, US SSc is exempt, under DTA rules.

Edited July 12 by Mike Lister