Introduction to Personal Income Tax in Thailand

[The Cyclist]

  On 12/29/2024 at 3:05 AM, CallumWK said:

Why omit part of my post to make it fit your AGENDA?

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What are you gibbering about ?
 

Here is your post

 

  On 12/29/2024 at 2:39 AM, CallumWK said:

 

As pointed out in my post, I don't remit any money to Thailand in the foreseeable future, and my pension is my only income.

But my understanding is that 460.000 baht is more than what I can deduct in Thailand to be tax free.

So does the DTA cover me, because it is not taxable in my home country.

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None of the above will have any relevance should Thailand move to taxing world wide income

 

Everything will need to be re-written

[chiang mai]

  On 12/29/2024 at 3:05 AM, The Cyclist said:

 

Sure, play away with hypotheticals to your hearts content, if thats your thing.

 

I don't think it is a good idea to introduce those hypotheticals to a tax thread, where some people appear to be struggling with the here and now, with only a few days left to the end of the 2024 tax year.

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The poor dears, whatever will become of them!

[CallumWK]

  On 12/29/2024 at 3:09 AM, The Cyclist said:

What are you gibbering about ?
 

Here is your post

 

  On 12/29/2024 at 2:39 AM, CallumWK said:

 

As pointed out in my post, I don't remit any money to Thailand in the foreseeable future, and my pension is my only income.

But my understanding is that 460.000 baht is more than what I can deduct in Thailand to be tax free.

So does the DTA cover me, because it is not taxable in my home country.

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Nope that was NOT the post you replied to. Do you see anywhere in that post the line "I'm well aware that it currently isn't taxable as long as I don't remit, "

 

This was the post you replied to and omitted part of it.

 

[Jingthing]

  On 12/28/2024 at 1:56 PM, anrcaccount said:

 

Surely you can see the irony here of:

 

Trying to rely on a decade year old media article as a source...

 

for a remittance rule that's never been applied...

 

where a bunch of people are trying to preempt and voluntarily calculate their own taxation payments.....

 

In a complete absence of any real clarity from the actual revenue authority.....

 

As a Thai would say - JING LOR?? 

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I get your point.

HOWEVER. in the Thai tax system you file without the need to document.

Documentation demands only come IF you're audited.

So having a DEFENSIBLE plan for how you are SELF determining your tax situation is required either from the taxpayer himself or a preparer.

I got the First In First Out guideline from a Thai owned tax specialist company.

Would it be accepted by TR on audit?

I can't predict the future but following that is better than having no logical structure for your self determination.

 

[The Cyclist]

  On 12/29/2024 at 3:15 AM, CallumWK said:

Nope that was NOT the post you replied to. Do you see anywhere in that post the line "I'm well aware that it currently isn't taxable as long as I don't remit, "

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Did I not tell you that Thailand is not currently taxing world wide income and not to worry about ?
 

So asking about DTA's on worldwide taxation is horse manure. They will probably be scrapped / re-written as part of any plan to move to worldwide taxation.

 

All the above is in black and white across multiple posts above.

[Jingthing]

My understanding is that IF the worldwide income thing comes into play it would take multiple years to actually roll it out. But there is something real that we know is real for tax year 2024 about remittances. The old wonderful loophole is now gone. So far, that's all that has changed but it's potentially a very big change.

[The Cyclist]

  On 12/29/2024 at 3:30 AM, Jingthing said:

My understanding is that IF the worldwide income thing comes into play it would take multiple years to actually roll it out.

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Bingo

 

  On 12/29/2024 at 3:30 AM, Jingthing said:

But there is something real that we know is real for tax year 2024 about remittances. The old wonderful loophole is now gone. So far, that's all that has changed but it's potentially a very big change.

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For all those that howl endlessly about changes to the law, there are no new laws etc. None needed, they have simply closed a loophole.

[Jingthing]

  On 12/29/2024 at 3:43 AM, The Cyclist said:

 

Bingo

 

 

For all those that howl endlessly about changes to the law, there are no new laws etc. None needed, they have simply closed a loophole.

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True.

But a loophole so big that TR hadn't ever bothered typical retired expats living on remittances before and I have never heard of even one even filing except if they had a presence in the THAI economy.

[The Cyclist]

  On 12/29/2024 at 3:58 AM, Jingthing said:

But a loophole so big that TR hadn't ever bothered typical retired expats living on remittances before and I have never heard of even one even filing except if they had a presence in the THAI economy.

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I dont really believe that the Thais were interested in closing the loophole. I am still of the opinion that it is only being closed because of the adoption of CRS.

[Jingthing]

  On 12/29/2024 at 4:13 AM, The Cyclist said:

 

I dont really believe that the Thais were interested in closing the loophole. I am still of the opinion that it is only being closed because of the adoption of CRS.

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That's a theory but as it's closed it's understandable that people that previously ignored Thai taxation are feeling that it may be unwise to continue to do so.

As I said before, we can't predict the enforcement going forward but now if you ignore when you actually are liable for tax, the audit letter might actually come, when before this you knew it wasn't coming.

[JimGant]

  On 12/29/2024 at 3:27 AM, The Cyclist said:

So asking about DTA's on worldwide taxation is horse manure. They will probably be scrapped / re-written as part of any plan to move to worldwide taxation.

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The DTAs with Thailand are all based on Model OECD and UN tax treaties, where you'll not find the phrase "remitted income." Check your country's DTA with Thailand, and you'll see the wording fits just fine with worldwide taxation. Remitted is just a footnote by Thailand to the income language in the DTAs, allowing a discount on that worldwide income that doesn't cross the Thai border. Thus, nothing needed to modify DTAs, if and when Thailand switches to worldwide taxation. And, I see no need to modify today's TEDAs either, if the remittance footnote goes away -- those TEDAs fit just fine with worldwide taxation.

 

So, CM -- your spreadsheet drill should be pretty accurate for a worldwide taxation scenario.

[The Cyclist]

  On 12/29/2024 at 4:22 AM, Jingthing said:

That's a theory but as it's closed it's understandable that people that previously ignored Thai taxation are feeling that it may be unwise to continue to do so.

As I said before, we can't predict the enforcement going forward but now if you ignore when you actually are liable for tax, the audit letter might actually come, when before this you knew it wasn't coming.

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Sure, it something that I have also ignored for years, mainly because I was never a tax resident anyway, even though I cannot claim to have known the actual rules back then. It was whatnit was, as they say.

 

It has ended, and it is wise to follow the rules from here on in. Ignorance is no defence, as they say.

[The Cyclist]

  On 12/29/2024 at 4:35 AM, JimGant said:

The DTAs with Thailand are all based on Model OECD and UN tax treaties,

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Yes, I know.

 

That does not mean that the cannot be changed / updated / amended. Especially during a massive jump to worldwide taxation, if Thailand adopted it.

 

 

[The Cyclist]

  On 12/29/2024 at 4:35 AM, JimGant said:

So, CM -- your spreadsheet drill should be pretty accurate for a worldwide taxation scenario.

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And spreadsheets are very rarely accurate. Hence Western Countries being in financial tatters.

[Jingthing]

  On 12/23/2024 at 8:05 AM, JimGant said:

...still waiting to see something official from TRD that says that Por 162 pre 2024 income must manifest itself only as bank account savings, in order to be exempt from Thai taxation. Absent that, I would submit you're free to choose the avenue that provides the best outcome for your remittance of pre 2024 income. Because, absent that, you've got a solid argument in any audit scenario. Worst case, if you lose -- 'cause your solid argument certainly gives you credence against a tax evasion charge -- is pay the taxes owed, with interest. Having said that, if you do decide to not declare these pre 2024 monies on a Thai tax return -- there's nothing there for TRD to peruse as a potential audit -- since there are no line items for non assessable income. Thus, chances of an audit for a nil line item is zip; only if you're caught up in a random compliance audit would -- MAYBE -- they would ask about non declared, non assessable incomes. Hey, weigh your odds of an audit -- and what's the worst that could happen if somehow your pre 2024 income remittances didn't stand scrutiny.

 

Up to you. No brainer, IMO.

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Lots to digest.

If I decide to treat my IRA end of 2023 valuation as exempt, I would simply not file at all as that and Social Security (exempt) are my only remitting income.

But of course they're seeing remittances from the banks, and if audited, unlike you, I would have very little confidence in asserting that 2023 valuation theory.

I wouldn't really expect an audit at my modest levels of remittance. However, at some time in future I may need to remit a very large one time amount, and then I would see an audit as veering towards probable.

I also find it very hard to believe that IRA withdrawals can validly be treated as profit/loss situations as are non retirement account investments.

So I'm afraid my current still held understanding (basically from an online tax info source) is that:

Withdrawals from Traditional IRAs are about the FULL amount (remitted), not capital gains.

The 2023 exemption rule probably does NOT apply to retirement accounts

That the income is viewed by TR as non-exempt PENSION income.

 

My action now is that I won't do an IRA withdrawal until end of next year and before then I have a Thai tax lawyer in mind who I will consult with before remitting any of that .

 

And/or this issue will become more clear over time with some kind of consensus info gleaned from the experience of others. 

[chiang mai]

  On 12/29/2024 at 4:41 AM, The Cyclist said:

 

And spreadsheets are very rarely accurate. Hence Western Countries being in financial tatters.

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Whoa, that's right out there in left field with the flat earth types.

[Jingthing]

  On 12/23/2024 at 8:11 AM, Yumthai said:

If you have been here long enough you should know that each TRD (as Immigration) official has his/her own opinion of the rules too.

If you're looking for certainty there is not in Thailand.

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That is very true but as I'm in Jomtien (Pattaya) there must be thousands of U.S. expats remitting non-exempt retirement account money. So here and at other expat havens details about how the local TR offices are dealing with these very common vehicles have a better chance of being revealed before too long. 

 

Another fun thing which is being emphasized by the Integrity Legal guy. TR is NOT in the business of helping people to pay less tax. So in this example if you file traditonal IRAs in full (ignoring treating them as capital gains situations or subject to 2023 valuable exemption) they're not going to complain especially if it results in you paying tax.

 

Which is a reason to seek expert advice on such matters, but of course, at this point it's wise to consider that "experts" don't really know enough about many details yet to be worth their fees.

[Presnock]

  On 12/29/2024 at 2:39 AM, CallumWK said:

 

As pointed out in my post, I don't remit any money to Thailand in the foreseeable future, and my pension is my only income.

But my understanding is that 460.000 baht is more than what I can deduct in Thailand to be tax free.

So does the DTA cover me, because it is not taxable in my home country.

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AS has been mentioned way too many times to count - who knows what the Thai govt will come out with the new tax scheme and when?  They seem to be including the new worldwide scheme with the 15% corporate tax as the OECD seems to like.  We have also heard from the agents or those with folks seemingly working on the new interpretation/law change that there are a lot of dissension among those in the finance dept so no one outside really has any idea of what will be the final plan nor how it will affect expat retirees and/other farangs as well as Thai folks being affected.  It still remains anybody's guess only - after all it announces at the beginning of this forum - users opinions only!

[Presnock]

  On 12/29/2024 at 3:01 AM, The Cyclist said:

 

Then why ask Questions about a DTA ?
 

If Thialand implements worldwide taxation, DTA's will probably be consigned to history and a whole new set of rules will be written.

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maybe, maybe not as the DTA's were done via treaty between Thailand and other countries.  I recall if one party wanted to change/drop it, they are required to give 6 months notice.  I may be wrong but I do think that since the Thai government wants to join several international groups, they may wish to just keep the DTA's but again only a guess on my part.  Either way, not everyone will be happy but good luck to all if any new scheme surfaces soon.

[The Cyclist]

  On 12/29/2024 at 4:50 AM, chiang mai said:

Whoa, that's right out there in left field with the flat earth types.

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Whilst it might have nothing to do with the topic. It is actually bang on the money.

 

Governments / Government economists make forecasts on a yearly basis, we will raise xx amount via YY taxes and therefore we can spend ZZ amount on various Services.

 

Doesn't appear to be working out too well in the Western World, does it ?
 

Just 1 of the reasons that the UK is on track to borrow £200 billion this year.

 

Or do you have a better explanation that is not out there in left field or flat earth territory ?

[Presnock]

  On 12/29/2024 at 3:09 AM, The Cyclist said:

 

What are you gibbering about ?
 

Here is your post

 

 

None of the above will have any relevance should Thailand move to taxing world wide income

 

Everything will need to be re-written

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I am not an expert but the DTA's usually cover civil pensions in writing but not always so... I think everyone should be checking their DTA carefully.  If your govt ignores civil service pensions then if they are not taxed nor covered in the DTA then you might be taxed or maybe not..Again, only guesses until we see what the Thai's say.  They too may have checckd the PI tax program which basically ignores retirees. And I am sure that the Thai's know full well how much money is "spent" by expats here.

[The Cyclist]

  On 12/29/2024 at 5:46 AM, Presnock said:

I am not an expert but the DTA's usually cover civil pensions

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As the poster does not remit his pension to Thailand, the DTA was a moot point.

 

The poster was trying to wangle his DTA into something that may or may not happen in the future, Thailand introducing world wide taxation.

[Presnock]

  On 12/29/2024 at 5:50 AM, The Cyclist said:

 

As the poster does not remit his pension to Thailand, the DTA was a moot point.

 

The poster was trying to wangle his DTA into something that may or may not happen in the future, Thailand introducing world wide taxation.

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I guess any money you remit this year anyway, will be reported to the local TRD by wherever you send the money to so, probably if over a certain amount determined by the TRD, they may want to audit you or at least ask you to provide proof of the source of those funds forwarded  and they will determine if assessable or not.  BUt like I said, anything I write here is a guess unless I link the reporting source.

[CapraIbex]

  On 12/29/2024 at 4:41 AM, The Cyclist said:

And spreadsheets are very rarely accurate. Hence Western Countries being in financial tatters.

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That’s quite a sweeping generalization! Spreadsheets, like any tool, are only as accurate as the data inputted and the people using them. Blaming them for Western financial troubles is a bit like blaming calculators for bad math. The challenges faced by Western countries are often due to policy decisions and unforeseen global events - not the humble spreadsheet!

Also, let’s not forget that spreadsheets are used worldwide, not just in the West. It’s probably fairer to say that spreadsheets reveal issues rather than cause them.

[CallumWK]

  On 12/29/2024 at 5:50 AM, The Cyclist said:

 

As the poster does not remit his pension to Thailand, the DTA was a moot point.

 

The poster was trying to wangle his DTA into something that may or may not happen in the future, Thailand introducing world wide taxation.

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The poster, ME, asked a question, clearly visible from the question mark at the end, and added IF to his question.

 

The poster, ME, also wasn't the first to bring world wide taxation in to this thread, since the expert ex bank doorman very active in this thread, brought it up

[JimGant]

  On 12/29/2024 at 5:50 AM, The Cyclist said:

The poster was trying to wangle his DTA into something that may or may not happen in the future, Thailand introducing world wide taxation.

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A completely valid wangle, as existing DTAs will definitely govern how world wide taxation will be handled.

[chiang mai]

  On 12/29/2024 at 5:41 AM, The Cyclist said:

 

Whilst it might have nothing to do with the topic. It is actually bang on the money.

 

Governments / Government economists make forecasts on a yearly basis, we will raise xx amount via YY taxes and therefore we can spend ZZ amount on various Services.

 

Doesn't appear to be working out too well in the Western World, does it ?
 

Just 1 of the reasons that the UK is on track to borrow £200 billion this year.

 

Or do you have a better explanation that is not out there in left field or flat earth territory ?

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That some prominent forecast models might have been shown to be wrong, doesn't equate to all spreadsheets rarely being accurate. Financial Forecasting using financial models is both an art and a science, most people remember the headline rather than the entire message and all the caveats that accompanied it.

[The Cyclist]

  On 12/29/2024 at 6:21 AM, JimGant said:

A completely valid wangle, as existing DTAs will definitely govern how world wide taxation will be handled.

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Give your head a wobble. It will become a valid wangle if and when Thailand announces it will move to worldwide taxation.

 

Until that point, it is nothing but garbage.

[The Cyclist]

  On 12/29/2024 at 6:39 AM, chiang mai said:

Financial Forecasting using financial models is both an art and a science,

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Which no-one seems to have mastered.

 

If economists were anywhere near as good as they think they are, they would all be multi-millionaires.

[JimGant]

  On 12/29/2024 at 6:44 AM, The Cyclist said:

It will become a valid wangle if and when Thailand announces it will move to worldwide taxation.

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Geez, the poor guy admitted he knew his current non remittance situation had no tax implications. But, he wanted to know, per DTA, what he might expect IF and WHEN Thailand goes to world wide taxation. And, yes, that DTA will still be valid. What's wrong with preparing for potential occurrences .......? Gosh darn, he might even use a spreadsheet with any and all new found information...