Introduction to Personal Income Tax in Thailand

[RocketDog]

On 12/10/2024 at 5:17 PM, mudcat said:

When I do my FBAR reporting, I report the highest balance in each account during the year. I use the US Treasury exchange rates which are published in January to convert to USD. When I report my Thai bank interest on my tax return, I use the spot exchange rates on the day the interest posts.

 

Report of Foreign Bank and Financial Accounts (FBAR) | Internal Revenue Service

For each account you must report on an FBAR, you must keep records with this information: 

• Name on the account, 
• Account number,
• Name and address of the foreign bank, 
• Type of account, and 
• Maximum value during the year. 

It is easy to get crossways with the different U.S. government reporting of foreign assets.

 

FATCA dates back to 2014 - FBAR is reported on FinCEN 114 which is filed with the Treasury and not with your taxes (blank atta.  As JohnnyBD posted, the threshold is pretty low  aggregate balance >$10,000 at any point during the year, so many if not most of us will need to file at some point during our stay here.  I have filled out templates for my wife and myself that we complete and file at the same time as we file our taxes.  

 

There is a program to 'get right with the IRS' called streamlined filing which requires filing back FinCEN 114 forms and amended f1040s.  I went through that process and it was not fun, but doable on your own if you have good records.

 

The other requirement is to disclose on overseas assets anywhere on f8938 which is filed along with your taxes.  The thresholds are complicated but most of us will not be required to file. 

https://www.irs.gov/businesses/corporations/do-i-need-to-file-form-8938-statement-of-specified-foreign-financial-assets

If your overseas financial assets are getting up into the 100s of thousand USD I suggest that you also take a look at the instructions https://www.irs.gov/pub/irs-pdf/i8938.pdf.  

 

NOTE "If you do not have to file an income tax return for the tax year, you do not need to file Form 8938, even if the value of your specified foreign assets is more than the appropriate reporting threshold." 

We will not need to file a f8938 as most of our assets remain in the U.S., and my U.S. citizen wife will not need to file after I die when she is living on SSA survivor benefits and Thai bank account interest, but the transition year after she inherits will included in the final tax return.

Good info. Thanks

[chiang mai]

On 12/8/2024 at 4:57 PM, MrMuddle said:

Thanks for the reply. When I bring money over I usually transfer it from my UK  savings account to my UK current account, then send it here by SWIFT transfer, leaving the current account balance the same as it was, before I moved the savings into it. I assume that will be OK for the Thai Tax people. I'd already planned to download a 12 month statement from my UK Bank accounts on 31 December, good advice though,
and thanks again for the reply.

'

I came across the following which you may find useful. Some people have said that the TRD has not said anything about the new tax rules but the Bangkok Metropolitan Administration has and they have gone to the trouble of producing a guide, specifically  for foreigners.

 

https://iao.bangkok.go.th/storage/files/Personal Income Tax.pdf

[The Cyclist]

33 minutes ago, chiang mai said:

I came across the following which you may find useful. Some people have said that the TRD has not said anything about the new tax rules but the Bangkok Metropolitan Administration has and they have gone to the trouble of producing a guide, specifically  for foreigners.

 

https://iao.bangkok.go.th/storage/files/Personal Income Tax.pdf

 

Don't understand why you bother 😀😀

 

Clearly it is just the BMA wasting their time, whilst trying to scare foreigners 😀😀

 

Sarcasm may have been used in the making of this comment.

[Yumthai]

43 minutes ago, chiang mai said:

I came across the following which you may find useful. Some people have said that the TRD has not said anything about the new tax rules but the Bangkok Metropolitan Administration has and they have gone to the trouble of producing a guide, specifically  for foreigners.

 

https://iao.bangkok.go.th/storage/files/Personal Income Tax.pdf

This pdf appears to be old as it contains outdated information (deductions, allowances,...). 

 

 

[chiang mai]

4 minutes ago, Yumthai said:

This pdf appears to be old as it contains outdated information (deductions, allowances,...). 

 

 

Specifically which ones

[topt]

4 minutes ago, chiang mai said:

Specifically which ones

Not sure about his comment but single persons allowance says only 30,000 and 60k combined(spouse) unless I am reading it wrong?

[chiang mai]

9 minutes ago, Yumthai said:

This pdf appears to be old as it contains outdated information (deductions, allowances,...). 

 

 

Yes it is out of date, apologies, please disregard 

[scottiejohn]

3 hours ago, chiang mai said:

I came across the following which you may find useful. Some people have said that the TRD has not said anything about the new tax rules but the Bangkok Metropolitan Administration has and they have gone to the trouble of producing a guide, specifically  for foreigners.

 

https://iao.bangkok.go.th/storage/files/Personal Income Tax.pdf

It lists 8 categories' of assessable income but not one of those 8 categories' includes pensions of any kind!

PS; The article appears to be undated!

[The Cyclist]

25 minutes ago, scottiejohn said:

It lists 8 categories' of assessable income but not one of those 8 categories' includes pensions of any kind!

 

Sure

 

Quote

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer. 

(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.

 

Quote

Any person staying in Thailand for a period or periods aggregating 180 days or more in any tax year shall be deemed a resident of Thailand.

 

Black and white in the Thai Revenue Code.

 

https://www.rd.go.th/english/37749.html

 

[chiang mai]

34 minutes ago, scottiejohn said:

It lists 8 categories' of assessable income but not one of those 8 categories' includes pensions of any kind!

PS; The article appears to be undated!

Pensions are Category 1 income, they are deemed to be a part of employment.

[scottiejohn]

5 minutes ago, The Cyclist said:

 

Sure

 

 

 

Black and white in the Thai Revenue Code.

 

https://www.rd.go.th/english/37749.html

 

I am not disputing that!

I was quoting from an earlier post regarding; https://iao.bangkok.go.th/storage/files/Personal Income Tax.pdf

You are not quoting from the same document I was referring to!

 

[scottiejohn]

6 minutes ago, chiang mai said:

Pensions are Category 1 income, they are deemed to be a part of employment.

All category 1 sates is "income from personal services rendered to employers"! (I assume they mean rendered by employers and not to)

How can a state pension be related to employment?

[treetops]

3 hours ago, Yumthai said:

This pdf appears to be old as it contains outdated information (deductions, allowances,...).

 

 

48 minutes ago, scottiejohn said:

PS; The article appears to be undated!

 

First archive copy found dated 1st July 2022.

[chiang mai]

2 minutes ago, scottiejohn said:

All category 1 sates is "income from personal services rendered to employers"! (I assume they mean rendered by employers and not to)

How can a state pension be related to employment?

No, rendered to employers, an employee renders their services to their employer, in return for remuneration.

 

Most people work for employers and pay NI contributions, which entitles them to a state pension when they retire, that was certainly the predominant model when the system was first established. The fact that people today can pay voluntary contributions is a function of the way the system has changed over time but the original model was intended to be based on working in employment. Regardless, that's the way it is regarded today, like it or not.

[norbra]

1 hour ago, scottiejohn said:

All category 1 sates is "income from personal services rendered to employers"! (I assume they mean rendered by employers and not to)

How can a state pension be related to employment?

I read it as " income for personal services provided to employer". Just my take

[scottiejohn]

3 minutes ago, norbra said:

I read it as " income for personal services provided to employer". Just my take

And mine!

I see no connection to a State pension!

[chiang mai]

25 minutes ago, norbra said:

I read it as " income for personal services provided to employer". Just my take

 

20 minutes ago, scottiejohn said:

And mine!

I see no connection to a State pension!

Make up your mind, previously you said, "(I assume they mean rendered by employers and not to)"

 

The State Pension has been explained to you already, what don't you understand?

[topt]

3 hours ago, scottiejohn said:

And mine!

I see no connection to a State pension!

Respectfully under which heading do you think it will apply - whether state or private it is still a pension?

 

I am pretty certain that those souls who have gone and told the revenue about their "pension" transfers and completed a return had those numbers entered under 1 - but I could be wrong.......

Somebody who has done it may actually be able to confirm?

[scottiejohn]

38 minutes ago, topt said:

Respectfully under which heading do you think it will apply - whether state or private it is still a pension?

The word pension is not mentioned!

[chiang mai]

5 hours ago, scottiejohn said:

The word pension is not mentioned!

 

The word pension doesn't need to be mentioned specifically, it is covered by the high level statement.

 

"income from personal services rendered to employers;"

 

....... is the broadest highest level statement which includes everything related to having a job and being paid for doing work. Page 11 of the PWC tax handbook explains it better than the RD code, which is translated from Thai and loses some definition in the translation.

 

https://www.pwc.com/th/en/tax/assets/thai-tax/thai-tax-booklet-2022-23.pdf

[chiang mai]

For those who can't see the word pension included in the Category 1 income description, here's the legal interpretation from Thai legal sources:

 

"Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

1. Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment".

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

 

As you can see, income from employment doesn't specifically state "pensions" are included but it doesn't specifically state bonuses, per diem, or benefits in kind and any related allowances are included either....but they are.

 

[Liquorice]

21 hours ago, scottiejohn said:

The word pension is not mentioned!

Most forms of income are regarded as assessable for tax in Thailand, unless your DTA excludes them.
The UK DTA only excludes 'Civil Service' pensions as exempt taxation, not State, private or company pensions.

 

I wouldn't worry too much, I did my own calculations based on UK state and 2 private pensions, and no tax is due in Thailand.
The PITA is that I still have to complete a PND 60 and submit it, to be informed of what I already know.

 

The best DTA I've come across is Ireland's, which includes all pension types as 'exempt'  from taxation.

[flexomike]

On 12/15/2024 at 10:52 AM, chiang mai said:

I came across the following which you may find useful. Some people have said that the TRD has not said anything about the new tax rules but the Bangkok Metropolitan Administration has and they have gone to the trouble of producing a guide, specifically  for foreigners.

 

https:/T/iao.T.go.th/storage/files/Personal Income Tax.pdf

That link seems out of date, check the personl allowances

[chiang mai]

1 minute ago, flexomike said:

That link seems out of date, check the personl allowances

Yes, we had that discussion yesterday and readers asked to ignore the article. That said, it appears to be dated 2022 so the BMA appears to have been preempting something. 

[scottiejohn]

21 minutes ago, Liquorice said:

Most forms of income are regarded as assessable for tax in Thailand, unless your DTA excludes them.
The UK DTA only excludes 'Civil Service' pensions as exempt taxation, not State, private or company pensions.

 

I wouldn't worry too much, I did my own calculations based on UK state and 2 private pensions, and no tax is due in Thailand.
The PITA is that I still have to complete a PND 60 and submit it, to be informed of what I already know.

 

The best DTA I've come across is Ireland's, which includes all pension types as 'exempt'  from taxation.

My comment was addressed/referencing  to a specific form posted earlier and not about Thai Taxation laws in general!

Please see this pointless document posted earlier on this thread by a so called Thai Tax expert!

https://iao.bangkok.go.th/storage/files/Personal Income Tax.pdf

[scottiejohn]

45 minutes ago, flexomike said:

That link seems out of date, check the personl allowances

it is not just out of date it is totally misleading and the person who posted it should ask the MODS to withdraw it and all our posts making reference to it!

[chiang mai]

27 minutes ago, scottiejohn said:

it is not just out of date it is totally misleading and the person who posted it should ask the MODS to withdraw it and all our posts making reference to it!

The allowances are out of date by one year, otherwise the article is fine. If you don't like it, don't read it.

[scottiejohn]

4 minutes ago, chiang mai said:

The allowances are out of date by one year, otherwise the article is fine. If you don't like it, don't read it.

It is not only out of date as you admit but is also misleading/ambiguous so why did you post it and why don't you get the MODs to remove it and all related responses?

[chiang mai]

2 minutes ago, scottiejohn said:

It is not only out of date as you admit but is also misleading/ambiguous so why did you post it and why don't you get the MODs to remove it and all related responses?

Why don't you get a life! 

[scottiejohn]

2 minutes ago, chiang mai said:

Why don't you get a life! 

Why don't you correct your mistake(s)?