Introduction to Personal Income Tax in Thailand

[Yumthai]

2 hours ago, Chonnikarn said:

Still, even if you believe you owe no tax, it’s a good idea to file. If you don’t file and you were supposed to, the Thai Revenue Department (TRD) can audit you going back 10 years. But if you do file, they can only go back 2 years. So filing, even with zero tax due, gives you protection.

And yes, there are real penalties. Fines can go up to 200,000 THB and even jail time (up to 7 years) in serious fraud cases. Declaring all income properly is important. For example, claiming that foreign pension income is tax-free when it’s not, or forgetting to report transfers, can get you into trouble.

Scaremongering season open again!

[motdaeng]

12 hours ago, Yumthai said:

Scaremongering season open again!

 

no scaremongering at all, that are facts, written in the tax regulations / tax law ...

if you prefer to follow it or not, that's your own decision because you seems be a grown up already ... 

[Ricohoc]

15 hours ago, Yumthai said:

Scaremongering season open again!

 

Apparently so.

[topt]

5 hours ago, motdaeng said:

 

no scaremongering at all, that are facts, written in the tax regulations / tax law ...

if you prefer to follow it or not, that's your own decision because you seems be a grown up already ... 

So why post the "facts" after the tax filing season has ended - especially as said "facts" have been posted and discussed thousands of times (ok maybe hyperbole but certainly 10's of times) in the past...........

Reads like an AI piece to me especially as a supposedly new poster........

[Yumthai]

1 hour ago, topt said:

Reads like an AI piece to me especially as a supposedly new poster........

I think AI promotes neutral approach rather than biased advice such as "it’s a good idea to file", "So filing, ..., gives you protection", "Declaring ... is important".

[TroubleandGrumpy]

I read an article on Pattaya Mail recently - they interviewed a lot of Expats and asked them what they were doing about 'the income tax issue'.  The responses they got were - Never heard of it - Not on your life - Doesn’t apply to me -  The Tax office said “Go Away”.  Some Expats admitted using a tax consultant because they felt threatened, and some said they already have a work permit and pay taxes now.

 

The vast majority are not getting a TIN and are not lodging anything, because they view that they are getting non-taxable money (Pensions) - and/or the money they bring in has already been taxed and is largely savings made from years of working - and/or with all the allowances and deductions available they do not have to pay any income taxes.  

 

I recently saw a youtube interview that included a senior tax official, and she said that she believes that Thailand will follow the lead of all their neighbours and exempt Govt Pensions from being taxable (which she thinks are exempt anyway).  She also indicated that as with Malaysia. Indonesia and The Philippines, they will probably also exempt any money already subjected to the taxation system of the Expat's home/source country.

 

I very much liked her opinions and views, not only because she was saying 'good' things, but also because she knew what a DTA was and knew the details.  She said to the interviewer in response to a question about taxing Pensions (paraphrase) - 'No that will probably not be taxed - because under all DTAs all foreign tax residents in Thailand are entitled to the same rights and privileges under Thai tax laws as afforded to Thais, and Thai citizens do not pay income taxes on any Govt Pension or payment. Therefore under International Tax Laws and DTAs, Thailand cannot tax Govt Pensions or any Govt payment'. 

 

In summary it was agreed that if any Expat (tax resident) is earning income that is taxable in Thailand, then they should get a TIN and lodge a tax return.  But it was clear to me that if an Expat reasonably believes they are not bringing any taxable income into Thailand, then they do not have to lodge a tax return. That situation will change if they are earning income overseas but do not bring it into Thailand, if/when Thailand goes to a global taxation model (as do most other countries do). 

 

The suggestion by the interviewer that it might be safer to lodge a return just in case, was agreed to by the Expat tax consultant (of course), but it was not actually agreed to by the Official - she said nothing. Instead she gave a commitment that over time TRD will provide a lot more clarity about what is taxable and what is not taxable.  Plus she noted that there was not a place in the 2025 tax return to advise the amount of any Govt Pension received, because Thais dont pay income taxes on Pensions. The Expat tax consultant (IMO to drum up fear/business) said that it could be done in a separate letter attached to the tax return - the Thai official said nothing and just looked away (and we know what that means).

 

As for a long time now - I am waiting and watching before doing anything. I know Government enough to know that if you file a document once, they will wonder why you have not done it again the next time around. If as the Thai Tax Official indicated (both verbally and non-verbally), I am not required to file a tax return in the future, then it would be wise not to file one now. Plus I have written advice from a tax company that I do not have to file a tax return because I do not have to pay income taxes based on the money I remitted and my allowances, deductions and exemptions - their caveat being 'under the current tax filing directives from TRD'.  Given somewhere about 20-30 million Thais dont lodge a tax return on the same basis - I accept that advice.

[Jingthing]

35 minutes ago, TroubleandGrumpy said:

I read an article on Pattaya Mail recently - they interviewed a lot of Expats and asked them what they were doing about 'the income tax issue'.  The responses they got were - Never heard of it - Not on your life - Doesn’t apply to me -  The Tax office said “Go Away”.  Some Expats admitted using a tax consultant because they felt threatened, and some said they already have a work permit and pay taxes now.

 

The vast majority are not getting a TIN and are not lodging anything, because they view that they are getting non-taxable money (Pensions) - and/or the money they bring in has already been taxed and is largely savings made from years of working - and/or with all the allowances and deductions available they do not have to pay any income taxes.  

 

I recently saw a youtube interview that included a senior tax official, and she said that she believes that Thailand will follow the lead of all their neighbours and exempt Govt Pensions from being taxable (which she thinks are exempt anyway).  She also indicated that as with Malaysia. Indonesia and The Philippines, they will probably also exempt any money already subjected to the taxation system of the Expat's home/source country.

 

I very much liked her opinions and views, not only because she was saying 'good' things, but also because she knew what a DTA was and knew the details.  She said to the interviewer in response to a question about taxing Pensions (paraphrase) - 'No that will probably not be taxed - because under all DTAs all foreign tax residents in Thailand are entitled to the same rights and privileges under Thai tax laws as afforded to Thais, and Thai citizens do not pay income taxes on any Govt Pension or payment. Therefore under International Tax Laws and DTAs, Thailand cannot tax Govt Pensions or any Govt payment'. 

 

In summary it was agreed that if any Expat (tax resident) is earning income that is taxable in Thailand, then they should get a TIN and lodge a tax return.  But it was clear to me that if an Expat reasonably believes they are not bringing any taxable income into Thailand, then they do not have to lodge a tax return. That situation will change if they are earning income overseas but do not bring it into Thailand, if/when Thailand goes to a global taxation model (as do most other countries do). 

 

The suggestion by the interviewer that it might be safer to lodge a return just in case, was agreed to by the Expat tax consultant (of course), but it was not actually agreed to by the Official - she said nothing. Instead she gave a commitment that over time TRD will provide a lot more clarity about what is taxable and what is not taxable.  Plus she noted that there was not a place in the 2025 tax return to advise the amount of any Govt Pension received, because Thais dont pay income taxes on Pensions. The Expat tax consultant (IMO to drum up fear/business) said that it could be done in a separate letter attached to the tax return - the Thai official said nothing and just looked away (and we know what that means).

 

As for a long time now - I am waiting and watching before doing anything. I know Government enough to know that if you file a document once, they will wonder why you have not done it again the next time around. If as the Thai Tax Official indicated (both verbally and non-verbally), I am not required to file a tax return in the future, then it would be wise not to file one now. Plus I have written advice from a tax company that I do not have to file a tax return because I do not have to pay income taxes based on the money I remitted and my allowances and exemptions - their caveat being 'under the current tax filing directives from TRD'.  Given somewhere about 20-30 million Thais dont lodge a tax return on the same basis - I accept that advice.

US exception.

IRAs and 401ks are not government pensions.

They are classed  as private pensions and excluded by DTA.

[motdaeng]

18 hours ago, TroubleandGrumpy said:

I.... and Thai citizens do not pay income taxes on any Govt Pension or payment ....

that's an interesting point, thanks for the input.

 

a few years ago, i spoke with a retired bank manager from a government bank (gsb). she told me that she has to pay tax on her pension because she was a government employee, unlike pensions from private companies. whether this is accurate and what the tax regulations actually say would be interesting to find out.

 

many people refer to the DTA and claim that no tax needs to be paid on their pension. the fact that even among tax advisors there's no consensus on how to interpret some of the 61 DTA's, this is one other unresolved issue ...

 

from my point of view, the thai tax department has handled the entire situation very unprofessionally. instead of providing clarity on at least some key questions, there is widespread confusion about how the tax regulations are being (differently) interpreted  ...

 

 

[Ricohoc]

3 hours ago, motdaeng said:

from my point of view, the thai tax department has handled the entire situation very unprofessionally. instead of providing clarity on at least some key questions, there is widespread confusion about how the tax regulations are being (differently) interpreted  ...

 

 

 

Absolutely correct. 

 

Little to no guidance at all; and every local office has a different answer.