Introduction to Personal Income Tax in Thailand

[Unamerican]

On 3/16/2025 at 6:10 PM, Liquorice said:

Any tax paid in the UK under the DTA can be applied as a 'tax credit' against any tax due in Thailand, but as mentioned previously there is nowhere on the forms to enter such paid tax as a credit.

No, it is not that simple: proportions etc. need to be calculated!  Please read the DTA in detail for the necessary calculations. 

[Unamerican]

On 1/25/2025 at 6:14 AM, essexman said:

She added my pension payments together and then worked out my allowances. 

Do please can you tell,us the details of your allowances? Thank you! 

[gamb00ler]

On 3/16/2025 at 7:21 PM, anrcaccount said:

What about the thousands ( tens of thousands) of foreigners who remitted THB millions in 2024 to buy property....or even expensive vehicles? None of them are paying tax, right?

You didn't mention that tax would only be due on the "remitted THB millions in 2024" if it was earned in 2024.  It is very likely that by far the bulk of any funds remitted for purchase of property would have been earnings from prior years and as such would be non-assessable.

 

No need for hysterics.

[anrcaccount]

5 minutes ago, gamb00ler said:

You didn't mention that tax would only be due on the "remitted THB millions in 2024" if it was earned in 2024.  It is very likely that by far the bulk of any funds remitted for purchase of property would have been earnings from prior years and as such would be non-assessable.

 

No need for hysterics.

Not necessarily at all. No hysteria present. 

 

Many people sell a property or stocks in their home country, and then purchase real estate in Thailand.

 

Many of the sales and subsequent purchases, would have happened in 2024, therefore any capital gain on the sale, theoretically assessable upon remittance to Thailand. 

 

But I suspect few to none would be declaring this,  despite this situation likely occurring many thousands of times in 2024. 

[JimGant]

8 hours ago, anrcaccount said:

Many people sell a property or stocks in their home country, and then purchase real estate in Thailand.

 

Many of the sales and subsequent purchases, would have happened in 2024, therefore any capital gain on the sale, theoretically assessable upon remittance to Thailand. 

Right -- but the value of that property or stocks on 12/31/2023 would be non assessable, per Por 162. However, some (or maybe it's just one) tax advisory outfits are saying, "Por 162 is limited to pre 2024 savings in a bank account." And a shill on this forum keeps echoing that.

 

Quote

Order No. Por.162/2566, issued on November 20, 2023, provides further clarification. It states that the new interpretation should not apply to foreign-sourced income earned before January 1, 2024

 

I think you'd be well within your reasoning powers to interpret Por 162 as NOT being restricted to bank savings accounts.

[Jingthing]

1 hour ago, JimGant said:

Right -- but the value of that property or stocks on 12/31/2023 would be non assessable, per Por 162. However, some (or maybe it's just one) tax advisory outfits are saying, "Por 162 is limited to pre 2024 savings in a bank account." And a shill on this forum keeps echoing that.

 

 

I think you'd be well within your reasoning powers to interpret Por 162 as NOT being restricted to bank savings accounts.

"Shill" here.

Pray tell kind sir what Thai tax advisory firm has come out to support your creative view that it isn't only about banked savings?

Crickets?

[Etaoin Shrdlu]

5 hours ago, JimGant said:

Right -- but the value of that property or stocks on 12/31/2023 would be non assessable, per Por 162. However, some (or maybe it's just one) tax advisory outfits are saying, "Por 162 is limited to pre 2024 savings in a bank account." And a shill on this forum keeps echoing that.

 

 

I think you'd be well within your reasoning powers to interpret Por 162 as NOT being restricted to bank savings accounts.

 

It is not clear, at least in my opinion, whether the basis used for determining the amount of capital gains for Thai tax purposes is the original cost of the asset when purchased, as would be the case under US tax regulations, or the value of the asset on 31 December 2023. In other words, are unrealized capital gains at 31 December 2023 added to the actual cost of the asset in order to determine the basis for calculating capital gains?

 

I think it is a bit of a stretch to consider unrealized capital gains as income earned in years prior to 2024. My gut tells me that the capital gains are earned in the year the asset is sold and the basis is the cost of the asset when purchased.

 

It would certainly be nice if the TRD would clearly state that the basis for capital gains is the value of the asset at 31 December 2023, but I'm not going to hold my breath.

 

 

 

 

[gamb00ler]

1 hour ago, Etaoin Shrdlu said:

I think it is a bit of a stretch to consider unrealized capital gains as income earned in years prior to 2024. My gut tells me that the capital gains are earned in the year the asset is sold and the basis is the cost of the asset when purchased.

You're correct that the capital gains are not known until the asset is sold or exchanged for a different asset.  However, any government can develop regulations that determine what portion of any gain is taxable.

 

It is very reasonable in situations where the asset is not actually sold/exchanged that some life or financial event triggers a deemed disposition at Fair Market Value (FMV).  For instance when I moved to a different country my home was treated as being sold and immediately reacquired at the same price.  I was then taxed on the deemed capital gain.

 

TRD should treat their new regulations as such a financial event.  The most reasonable implementation of TRD's change in assessibility of remitted income would use the FMV as of Dec. 31, 2023.  By doing so TRD would eliminate most of the disparity in taxation between long term and short term holdings that would otherwise be created by their arbitrary choice of effective date.

[Etaoin Shrdlu]

1 hour ago, gamb00ler said:

You're correct that the capital gains are not known until the asset is sold or exchanged for a different asset.  However, any government can develop regulations that determine what portion of any gain is taxable.

 

It is very reasonable in situations where the asset is not actually sold/exchanged that some life or financial event triggers a deemed disposition at Fair Market Value (FMV).  For instance when I moved to a different country my home was treated as being sold and immediately reacquired at the same price.  I was then taxed on the deemed capital gain.

 

TRD should treat their new regulations as such a financial event.  The most reasonable implementation of TRD's change in assessibility of remitted income would use the FMV as of Dec. 31, 2023.  By doing so TRD would eliminate most of the disparity in taxation between long term and short term holdings that would otherwise be created by their arbitrary choice of effective date.

 

Good point. Let's hope that the TRD does indeed use this approach.

[anrcaccount]

8 hours ago, JimGant said:

Right -- but the value of that property or stocks on 12/31/2023 would be non assessable, per Por 162. However, some (or maybe it's just one) tax advisory outfits are saying, "Por 162 is limited to pre 2024 savings in a bank account." And a shill on this forum keeps echoing that.

 

 

I think you'd be well within your reasoning powers to interpret Por 162 as NOT being restricted to bank savings accounts.

 

I agree with your logic and reasoning, but it is still unclear how the TRD views this.

 

Consider someone who simply worked a salaried job for 20 years in their home country, and over this 20 years paid all their spare income into the mortgage on the property. They then sold this property (for a significant capital gain as it was owned for 20 years!)  and transferred the proceeds to Thailand as a tax resident. 

 

How can Thailand even consider taxing this income, earnt prior to 31-12-2023, just because it is parked in a mortgage offset account , but funds in normal bank accounts are exempt? Absolutely ludicrous. Same goes for income invested into stocks / funds instead of parked in a bank.

 

As I've pointed out before, if they actually tried to implement this, it could be worked around by simply rebuying any stable asset with the proceeds of the original asset sale > Selling that asset at cost > and remitting the proceeds to  Thailand > no capital gain, no tax. 

 

Anyway, in full agreement with your view. 

 

If the TRD are in any way serious about taxing remitted foreign gains, they will 100% need to provide detailed clarity on the point of what constitutes 'income earned pre 2024'.

[JimGant]

8 hours ago, Jingthing said:

Pray tell kind sir what Thai tax advisory firm has come out to support your creative view that it isn't only about banked savings?

As far as I know, only Thaitax has come out to say bank savings are the only allowed monies for Por 162; no others, that I recall, have said that. Probably because TRD hasn't clarified the situation, at least officially. And these more professional tax advisories would rather say nothing than make a statement as stupid as "bank savings only."

 

Say my bank savings account had a $100k balance on 25 Dec 2023. But, as interest rates for CDs finally had climbed to where they looked attractive -- I bought $90k worth of CDs on 26 Dec 2023. What's my Por 162 'value' on 31 Dec2023 -- $10k or $100k? If you say $10k, you're implying that Por 162 exempt income -- must be in the form of liquid assets, not near liquid assets. Do you (and Thaitax) really believe that's what TRD meant when they said "INCOME existing before 2024?"

 

Give it your best shot.

[motdaeng]

as expected, the entire tax situation for tax residents in thailand is more or less a mess. different interpretations of laws, regulations, and the TDA by taxpayers, tax advisors, and tax office employees only add to the confusion ... to make thing clear is not something thai's are good in ...

 

turning this into a functional, fair, and consistent tax system for foreign tax residents is hardly achievable for thailand ... even in the long run.

 

with the LTV, taxes are waived, so why not offer a modest flat tax rate for those who prefer to skip all the bureaucracy and avoid filing a tax return?

 

don’t get me wrong, i don’t want to pay taxes either, but i believe that in the future, we won’t be able to avoid contributing to the (corrupt) government’ even we do not get anything in return from the goverment ...

[Yumthai]

6 hours ago, motdaeng said:

with the LTVR, taxes are waived, so why not offer a modest flat tax rate for those who prefer to skip all the bureaucracy and avoid filing a tax return?

 

don’t get me wrong, i don’t want to pay taxes either, but i believe that in the future, we won’t be able to avoid contributing to the (corrupt) government’ even we do not get anything in return from the goverment ...

 

So you acknowledge that, with LTR visa, Thailand is blatantly and openly laughing at us telling: "Hey foreigner, if you are wealthy enough you can reside in our beautiful country tax-free on your foreign remittances, otherwise -if you're too poor- you'll have to file and pay taxes (potentially up to 35%) as any other resident."

 

You say you don't want to pay taxes either but, as you apparently can't meet LTR financial requirements, you're suggesting that all the other less privileged slaves resign to accept their fate by paying a modest flat tax in all fairness.

 

Am I getting it right?

 

[motdaeng]

2 hours ago, Yumthai said:

 

So you acknowledge that, with LTR visa, Thailand is blatantly and openly laughing at us telling: "Hey foreigner, if you are wealthy enough you can reside in our beautiful country tax-free on your foreign remittances, otherwise -if you're too poor- you'll have to file and pay taxes (potentially up to 35%) as any other resident."

 

You say you don't want to pay taxes either but, as you apparently can't meet LTR financial requirements, you're suggesting that all the other less privileged slaves resign to accept their fate by paying a modest flat tax in all fairness.

 

Am I getting it right?

 

 

no, luckily, you got almost everything wrong ... 

 

by the way, i haven’t paid any taxes (all fully legal) for over 20 years living fulltime in thailand  ... not in thailand and not in my home country.

i don’t work, i’m too young for a pension ... but i’ve been filing tax returns in thailand for more than 10 years without any issues ... 

 

right now, i don't need an LTR because it doesn't give me any tax advantages ...

as we all know, everyone's situation is different, and mine is no exception ...

[Yumthai]

2 minutes ago, motdaeng said:

no, luckily, you got almost everything wrong ... 

 

by the way, i haven’t paid any taxes for over 20 years living fulltime in thailand  ... not in thailand and not in my home country.

i don’t work, i’m too young for a pension ... but i’ve been filing tax returns in thailand for more than 10 years without any issues ... 

 

right now, i don't need an LTR because it doesn't give me any tax advantages ...

as we all know, everyone's situation is different, and mine is no exception ...

So why on earth are you suggesting a modest flat tax rate for all those who can't afford an LTR or avoid the taxes? Does it sound fair to you? 

[motdaeng]

1 minute ago, Yumthai said:

So why on earth are you suggesting a modest flat tax rate for all those who can't afford an LTR or avoid the taxes? Does it sound fair to you? 

 

i agree with you, it's not fair ... i know a first-world country where rich foreigners make flat tax rate deals with the tax authorities, completely legal. that's not fair either...

 

in a corrupt country like thailand, there will never be a truly fair solution for anything what ever ... anyone living in thailand has to be able to look past these things ...

[JimGant]

43 minutes ago, motdaeng said:

but i’ve been filing tax returns in thailand for more than 10 years without any issues ... by the way, i haven’t paid any taxes (all fully legal) for over 20 years living fulltime in thailand  ... not in thailand

Why did you even file?

[motdaeng]

38 minutes ago, JimGant said:

Why did you even file?

 

because of the withholding tax refund!

depending on the year, my withholding tax refunds does add up to a nice five-figure amount ...

why should i give that up? it's money i can legally claim back ... 

 

[Yumthai]

1 hour ago, motdaeng said:

because of the withholding tax refund!

depending on the year, my withholding tax refunds does add up to a nice five-figure amount ...

why should i give that up? it's money i can legally claim back ... 

Then, since you have several millions THB saved in Thai banks tax should be the least of your concerns for a (long) while.

[Klonko]

Observations from filing taxes in Thailand for the first time:

• Preparing and filing taxes is easier than for my home country Switzerland, which already has a comparably tax payer friendly system. Total time spent was 1-2 hours using the online filing.
• Admittedly, having my stepdaughter doing the entries was helpful.
• Though entitled, I do not use transfers with DTA credits as long as I would have to rely on refunds.
• Living from savings and THB 760k transfers from pension, my net Thai tax bill is less than THB 2k. Paying taxes in Thailand, I can partially recover withholding tax on my foreign investment income.

I love Thailand.

 

P.s. Thank you Mike.

[redwood1]

40 minutes ago, Klonko said:

Observations from filing taxes in Thailand for the first time:

• Preparing and filing taxes is easier than for my home country Switzerland, which already has a comparably tax payer friendly system. Total time spent was 1-2 hours using the online filing.
• Admittedly, having my stepdaughter doing the entries was helpful.
• Though entitled, I do not use transfers with DTA credits as long as I would have to rely on refunds.
• Living from savings and THB 760k transfers from pension, my net Thai tax bill is less than THB 2k. Paying taxes in Thailand, I can partially recover withholding tax on my foreign investment income.

I love Thailand.

 

P.s. Thank you Mike.

 

Why are you thanking Mike?....The guy who bailed on all his tax postings when the water got to hot , with too many uncomfortable questions....And has not re-logged in since.....Not someone I would be following.....

[motdaeng]

2 hours ago, Klonko said:

Observations from filing taxes in Thailand for the first time:

• Preparing and filing taxes is easier than for my home country Switzerland, which already has a comparably tax payer friendly system. Total time spent was 1-2 hours using the online filing.
• Admittedly, having my stepdaughter doing the entries was helpful.
• Though entitled, I do not use transfers with DTA credits as long as I would have to rely on refunds.
• Living from savings and THB 760k transfers from pension, my net Thai tax bill is less than THB 2k. Paying taxes in Thailand, I can partially recover withholding tax on my foreign investment income.

I love Thailand.

 

P.s. Thank you Mike.

 

thanks for your report ... 🙏 

 

may i ask how you ended up with 2k in taxes from transferring 760k? thanks.

[Klonko]

3 hours ago, motdaeng said:

 

thanks for your report ... 🙏 

 

may i ask how you ended up with 2k in taxes from transferring 760k? thanks.

Maximum allowances for age 65+, pension deductible,, health insurance, spouse and  support for wife's parents. Withholding tax on Thai bank interest. 

[Liquorice]

13 minutes ago, Klonko said:

Maximum allowances for age 65+, pension deductible,, health insurance, spouse and  support for wife's parents. Withholding tax on Thai bank interest. 

Still shouldn't have been eligible for any tax unless you don't pay any taxes in your home Country, or you didn't enter that as a tax credit because there is nowhere on the form to do so.

[Klonko]

5 hours ago, redwood1 said:

 

Why are you thanking Mike?....The guy who bailed on all his tax postings when the water got to hot , with too many uncomfortable questions....And has not re-logged in since.....Not someone I would be following.....

I have some disagreements with Mike e.g, on gift tax, but he set up a comprehensive information source as basis for my tax planning. Moreover, I sympathise with him leaving this thread looking at the often repetitive and less constructive posts.