Must Read Introduction to Personal Income Tax in Thailand

[black tabby12345]

9 hours ago, Mike Lister said:

A DTA can be utilised in an accommodating way or by using a strict interpretation, the latter involving greater effort but also a higher level of tax collection. We do not know which path the TRD will go down at present. I don't see that either way represents a greater risk of double taxation, the likelihood of which remains extremely low. 

 

A sensible approach is to minimise remittances, until all the rules become more clear and this could take many months.

 

Please read the document in the following link, which will answer all your questions.

 

Thank you for the additional info.

Current ceiling to me:60000+150000.

At 65, 210000+190000=400000.

Thank you for your time today.

Your posts make great help.

 

Edited May 27 by black tabby12345

[aldriglikvid]

Great post, bookmarked it! 

Let's say I transfer 2 million baht to my Thai account. Furthermore, let's assume its taxed capital gains from my home country which - to my best understanding - have the right to tax such gains. Let's also note that capital gains tax in that home country is higher than in Thailand - i.e. if anything, would create tax credits here, so to speak. 

 

Do I under these circumstances file zero (0) as assessable income, or 2 million? None of these seem "right".

 

All the best, 

[Mike Lister]

1 hour ago, aldriglikvid said:

Great post, bookmarked it! 

Let's say I transfer 2 million baht to my Thai account. Furthermore, let's assume its taxed capital gains from my home country which - to my best understanding - have the right to tax such gains. Let's also note that capital gains tax in that home country is higher than in Thailand - i.e. if anything, would create tax credits here, so to speak. 

 

Do I under these circumstances file zero (0) as assessable income, or 2 million? None of these seem "right".

 

All the best, 

I think you declare 2 mill. in assessable income and invoke the DTA which will give you a tax credit in Thailand.

[shdmn]

As someone just reading that document for the first time, right away I was confused by the use of TRD and DTA all throughout the document.  I know it is obvious to the author and most people reading it,  but it wasn't to me at first and probably a lot of other people visiting this thread for the first time.  Yes, I eventually found the spots in the document where it defines them.  Even though TRD is explained in the first couple paragraphs it was kind of buried so I didn't see it at first.  Took me a little while to find it since I tend to read documents like this out of order, looking for the most relevant parts and various key words at first.

 

I would suggest running a FIND/REPLACE and change all those three letter acronyms to their full meaning or use both throughout instead of starting with three letter acronyms from the very beginning.  Don't just assume someone is going to read top to bottom, start to finish, word for word, rather than quickly try scan sections for key words or read it out of order.  Another point is that I am not sure if DTA is the universal description.  I have always understood it as just a tax treaty, or double tax treaty, or reciprocal tax treaty (RTT).  Yet another reason three-letter acronyms are not always a good idea.

Edited May 31 by shdmn

[Mike Lister]

3 hours ago, shdmn said:

As someone just reading that document for the first time, right away I was confused by the use of TRD and DTA all throughout the document.  I know it is obvious to the author and most people reading it,  but it wasn't to me at first and probably a lot of other people visiting this thread for the first time.  Yes, I eventually found the spots in the document where it defines them.  Even though TRD is explained in the first couple paragraphs it was kind of buried so I didn't see it at first.  Took me a little while to find it since I tend to read documents like this out of order, looking for the most relevant parts and various key words at first.

 

I would suggest running a FIND/REPLACE and change all those three letter acronyms to their full meaning or use both throughout instead of starting with three letter acronyms from the very beginning.  Don't just assume someone is going to read top to bottom, start to finish, word for word, rather than quickly try scan sections for key words or read it out of order.  Another point is that I am not sure if DTA is the universal description.  I have always understood it as just a tax treaty, or double tax treaty, or reciprocal tax treaty (RTT).  Yet another reason three-letter acronyms are not always a good idea.

Both those terms, DTA and TRD are defined on the first page, in accordance with standard writing conventions globally, which states that all acronyms are defined, the first time they are used. You say you "eventually" found out where the terms were defined. I don't understand how anyone could fail to understand what they are, as long as they started reading from the beginning and didn't skip read.

[mania]

Thank you Mike for posting this!

I found it so useful I put it in a PDF 

Thanks again

 

 

Edited May 31 by mania

[Mike Lister]

52 minutes ago, mania said:

Thank you Mike for posting this!

I found it so useful I put it in a PDF 

Thanks again

 

 

It gets updated frequently so watch the version/rev numbers, it's been updated over 46 times since we started in January. After my holiday I'm going to rewrite the entire document which by now has grown piecemeal and can be made easier to understand.

[OJAS]

On 5/31/2024 at 3:18 AM, aldriglikvid said:

Let's say I transfer 2 million baht to my Thai account. Furthermore, let's assume its taxed capital gains from my home country which - to my best understanding - have the right to tax such gains. Let's also note that capital gains tax in that home country is higher than in Thailand - i.e. if anything, would create tax credits here, so to speak. 

 

A further assumption which I presume that you are also making here is that the capital gains in question were all earned post-1/1/24? I am taking the view that the taxed capital gain on the UK property I sold in 2021 (and which I'm still transferring in dribs and drabs to Thailand) constitutes non-assessable income on the grounds that it was earned before 1/1/24.

Edited June 1 by OJAS

[aldriglikvid]

8 minutes ago, OJAS said:

 

A further assumption which I presume that you are also making here is that the capital gains in question were all earned post-1/1/24? I am taking the view that the taxed capital gain on the UK property I sold in 2021 (and which I'm still transferring in dribs and drabs to Thailand) constitutes non-assessable income on the grounds that it was earned before 1/1/24.

Well - both, actually. I do have +2 million in capital gains that already have been taxed pre 2024; but my question was more akin to going forward (as I would still pay same, and higher, taxes back home - while considered a tax resident here as well). 

 

This is the conundrum in my point of view: how do I proof to Thai RD that my capital gains from 2022, comingled to my personal accounts in 2022 and 2023, are the "same" money I'm sending this year. I can produce my tax fillings from 2022, but it will be difficult to "draw a connection" to money sent in 2024. Even though it's the same money. 

 

Oh well, money has already been transferred so I'll make the best of it coming spring 2025. 

[Mike Lister]

Inserted a Table of Contents into the document.

[Presnock]

On 5/26/2024 at 9:30 AM, Presnock said:

that is why we must wait until the Thai revenue department comes out with the final paper explaining how THEY are going to interpret our incomes if at all.  They might realize at some point that with all the different incomes reported from around the world and the 61 DTA's that it is too complicated and they take the easy way out...possibly why they are saying "voluntary" filing of tax forms to see what drops out.

it depends on the source of the funds you remit into Thailand.  It also will depend on when you earned those funds. Check out this forum - you can find the minimum single/married assessable income that means that you would need to get a Thai Tax id Number from the Thai revenue department in your area.  Then, you can also find where to get the tax forms online (this forum gives you the address), and next year, Jan-March you will need to filll out and file the tax forms for your situation.  There are deductions also found here but since none of us yet knows exactly what the Thai revenue dept will publish nor when they will publish the final paper on this issue, anything we tell you might just be a guess at this point.  Many think that a tax agent may be necessary to figure things out for them but if you have done tax filing in your own country, you might be able to do your filing by yourself...good luck

 

[jvs]

I just read in the Bangkok post this morning that all money coming in from abroad is going to be taxed.

I was thinking that savings you had before 2024 was not taxable,

now they are saying also you savings will be taxable.

I see so much information on different You Tube channels that it is hard to figure out what is what.

Maybe just have to wait and see what happens,no one really seems to know and of course different countries will have different agreements with Thailand.

 

 

[whatsupdoc]

A really scary article in the BKK Post.

It states in the first line; "The Revenue Department is preparing to amend the law to collect taxes from individuals who have income from abroad, even if that income is not brought into the country."

 

If Thailand starts to tax worldwide income I'll have to seriously reconsider if I want to stay for more than 180 days a year in Thailand....

[aldriglikvid]

@Mike Lister

Here's a tough one for you to take a stab at. 

My main and only form of income the last couple of years have been Capital - and more specific capital gains and dividends inside of a tax wrapper called "ISK". 
 

Taxation of ISK Accounts

1. Annual Taxation on Account Value:

   • ISK accounts are subject to a standardized annual tax based on the value of the account, rather than on the individual gains or withdrawals. This tax is calculated on the average account balance throughout the year.
   • The tax rate is determined by the government and is typically a small percentage of the account value. This means that you pay tax regardless of whether you make withdrawals or realize gains.

2. No Capital Gains Tax:

   • One of the main advantages of an ISK account is that you do not pay capital gains tax on the profits from the sale of securities held within the account.
   • Dividends and other returns are also not taxed individually but are instead included in the annual tax calculation.

Withdrawals from ISK Accounts

• Tax Treatment of Withdrawals:
  • Withdrawals from an ISK account are not taxed separately at the time of withdrawal. The taxation is already accounted for through the annual tax based on the account's value.
  • This means that you can withdraw money from your ISK account without incurring additional tax liabilities.

Implications for You

Any withdrawals you make from this account should be seen as already taxed under the ISK's annual taxation regime. This means you do not need to pay additional taxes on the withdrawals themselves.


For all the obvious reasons, this wrapper is really comfortable. There's no doubt, domestically at least, that all withdrawals done now in 2024 have already been taxed for previous year(s). I have substantial amounts of accumulated gains that have been taxed for pre 2024 - but without making actual withdrawals. This begs the question, do you think Thai RD will have objections to the actual withdrawal date or do you think they have the professionalism and understanding to interpret said tax wrapper correctly? 

I did transfer five million earlier this spring, somewhat confident I could show previous tax records of it being taxed. Confidence has been eroded a bit of late, thus my Q. 

Thanks again for all your help, 

Bless 

[JohnnyBD]

46 minutes ago, whatsupdoc said:

If Thailand starts to tax worldwide income I'll have to seriously reconsider if I want to stay for more than 180 days a year in Thailand....

I will just spend less than 180 days in Thailand if that's what it takes. I'm hoping the LTR-WP visa holders will still be exempt, but if not, I wanted to spend more time with my children & grandchildren anyway.

[chang50]

My question is about 'allowable expenses' as a deduction.. on the 90 tax form it states 50% but not exceeding 100,000 baht.What exactly are 'allowable expenses'?Can everyone who is filing a return claim this or does it have to be an actual expense incurred and what would be an example of said expense?Thanks.

[abrise]

On 6/7/2024 at 5:59 AM, chang50 said:

My question is about 'allowable expenses' as a deduction.. on the 90 tax form it states 50% but not exceeding 100,000 baht.What exactly are 'allowable expenses'?Can everyone who is filing a return claim this or does it have to be an actual expense incurred and what would be an example of said expense?Thanks.

It's a deduction limited to 100 000B you dont have to prove it.

[toums]

On 6/5/2024 at 5:28 PM, JohnnyBD said:

I will just spend less than 180 days in Thailand if that's what it takes. I'm hoping the LTR-WP visa holders will still be exempt, but if not, I wanted to spend more time with my children & grandchildren anyway.

 

Are you LTR WP ? If yes can I asked you few questions? thanks

[MangoKorat]

I've had a read through the excellent guide provided by @Mike Lister - as excellent as it might be, to those of us with a 'less than financial' mind, it all seems mind boggling.

 

I fully understand that any and all income remitted to Thailand by a tax resident may well attract taxation but how about someone who is not tax resident?

 

Say for example that whilst you are NOT tax resident in Thailand, you remit funds to your Thai bank account, funds that would not normally be taxable in the country where you reside for tax purposes, is that money taxable or does it even need to be declared.

 

For example:

 

If say I sent 5 million baht from the proceeds of a house sale in the UK to my Thai bank account whilst still living and being tax resident in the UK, is that taxable in Thailand? Would I even need to declare it? For the purpose of clarity, let's say that the source of the money was the sale of a sole residence - not normally assessed for capital gains tax in the UK.

 

Does anything change if I then move to Thailand during the next tax year?

[topt]

11 hours ago, MangoKorat said:

I've had a read through the excellent guide provided by @Mike Lister - as excellent as it might be, to those of us with a 'less than financial' mind, it all seems mind boggling.

 

I fully understand that any and all income remitted to Thailand by a tax resident may well attract taxation but how about someone who is not tax resident?

 

Say for example that whilst you are NOT tax resident in Thailand, you remit funds to your Thai bank account, funds that would not normally be taxable in the country where you reside for tax purposes, is that money taxable or does it even need to be declared.

 

For example:

 

If say I sent 5 million baht from the proceeds of a house sale in the UK to my Thai bank account whilst still living and being tax resident in the UK, is that taxable in Thailand? Would I even need to declare it? For the purpose of clarity, let's say that the source of the money was the sale of a sole residence - not normally assessed for capital gains tax in the UK.

 

Does anything change if I then move to Thailand during the next tax year?

If you are in Thailand less than 180 days in a calendar year you are not tax resident so no Thai tax to pay on any remittances in that year - currently........

if you move the following year than still no tax to pay on what you have already remitted. Anything remitted in that year then depends on all the other factors mentioned in the guide.

 

If/when they move to global tax then that changes.

[JohnnyBD]

14 hours ago, MangoKorat said:

I fully understand that any and all income remitted to Thailand by a tax resident may well attract taxation but how about someone who is not tax resident?

 

Say for example that whilst you are NOT tax resident in Thailand, you remit funds to your Thai bank account, funds that would not normally be taxable in the country where you reside for tax purposes, is that money taxable or does it even need to be declared.

No, you do not need to declare monies remitted into Thailand if you are NOT a tax resident. If you stay less than 180 days in Thailand, you are NOT a tax resident, and you do NOT need to file a tax return. No one really knows what the rules are going to be next year, so it's better to remit any big monies while you are NOT a tax resident, like I'm doing.

[shortstop2]

On 4/27/2024 at 7:20 PM, Mike Lister said:

 

Attached is an example of how to complete a PD91.

 

500k-230366PIT91.pdf 895.17 kB · 46 downloads

First off Mike, a big thank you for all the effort you put into your clearly well researched and time consuming posts!

 

Before I saw this sample return, I downloaded a PD90 as interest, pensions, Roth conversions because at first glance it would appear that the" not only from employment" would apply. 

 

Buy your sample tax return is the PD91 which specifically mentions Pensions on Line 1.

 

My question is who should use PD90 and who should use PD91?

 

 

[Mike Lister]

Cross posted here for completeness:

 

If you have overseas rental income to declare next year, there's a standard deduction of 30% of gross rent to cover all rental related expenses. Alternatively, you can deduct actual expenses, if they are greater, but you will need to provide incontrovertible proof those expenses are genuine and essential.

 

If you import any rental income before 30 June, you will need to file an interim report hence two tax returns per year. If at all possible, wait until after 30 June before remitting rental income to Thailand.

[alphason]

On 5/5/2024 at 4:20 AM, Mike Lister said:

An update to Capital Gains:

 

49) One way to separate capital and gain may be to have an official valuation or statement that is dated 1 January 2024 (or earlier) since anything earned before that date, is not assessable. That is easier to do with investments but may not be possible with real estate. One usually reliable source has said that any gain begins the date the asset was first acquired and that it is not possible to reset the start date to January 2024. We can add with great certainty however that the date of your move to Thailand has no bearing on the valuation date of a capital asset. Also, if the profit has been the subject of a Capital Gains (CG) return in the home country, that also may be free of Thai tax because the gain would have been converted to savings, at that point.  

 

50) We do not know at this time, exactly  how the Thai Revenue will chose to distinguish between  capital and  gain, what is described above is only one approach. Another approach is apportionment, which is where every transfer from the combined capital and gain, contains a mix of capital and gain and this continues until the total amount is exhausted. Yet a third possibility is that the income is remitted first and that capital always follows. We are told by one of our sources of information that any remittance of a capital gain will contain both parts and that it is not possible to declare the remittance solely as one or the other. We will need to remain vigilant for news on this issue.

 

51) Lastly, It is clear from the Sherings Q&A link below that CG resulting from the sale of foreign assets, whilst not resident in Thailand, are free of Thai tax. As a stop gap measure and for planning purposes, selling the assets before moving to Thailand would appear tax efficient, as would remitting the proceeds whilst not Thai tax resident. 

 

Thanks, Where is this Sherrings Q&A thats referred to?

 

According to Sherrings Thailand Capital Gains Income Personal Tax - SHERRINGS

 

For a resident of Thailand deriving capital gains income from a source outside of Thailand and bringing it into Thailand**.
Personal income tax on the amount of capital gains income (the amount of the proceeds exceeding the costs of the investment).

**not including capital gains from immovable property which most double tax agreements prescribe the tax rights for the country in which the immovable property is situated.

 

and also List of assessable (taxable) income   Thailand Personal Tax Assessable Income - SHERRINGS

 

(5) Income derived from rental of 1. Land, buildings, house

(8) Other income includes income derived from 1. Transfers of immovable property in Thailand.

Of the 30ish types of income listed this was only one that says 'In Thailand'.

 

I have mentioned this another topic, but here seems busier. Sherrings also confirmed this was correct under the UK / Thailand double tax agreement immovable property in the UK is subject to the Capital Gains Tax legislation in the UK, and not subject to Thailand's tax.

 

 

Edited June 16 by alphason

[Mike Lister]

38 minutes ago, alphason said:

 

Thanks, Where is this Sherrings Q&A thats referred to?

 

According to Sherrings Thailand Capital Gains Income Personal Tax - SHERRINGS

 

For a resident of Thailand deriving capital gains income from a source outside of Thailand and bringing it into Thailand**.
Personal income tax on the amount of capital gains income (the amount of the proceeds exceeding the costs of the investment).

**not including capital gains from immovable property which most double tax agreements prescribe the tax rights for the country in which the immovable property is situated.

 

and also List of assessable (taxable) income   Thailand Personal Tax Assessable Income - SHERRINGS

 

(5) Income derived from rental of 1. Land, buildings, house

(8) Other income includes income derived from 1. Transfers of immovable property in Thailand.

Of the 30ish types of income listed this was only one that says 'In Thailand'.

 

I have mentioned this another topic, but here seems busier. Sherrings also confirmed this was correct under the UK / Thailand double tax agreement immovable property in the UK is subject to the Capital Gains Tax legislation in the UK, and not subject to Thailand's tax.

 

 

See Q5

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

[alphason]

1 hour ago, Mike Lister said:

See Q5

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

 

Thanks, I shouldn't have used that original quote, Q5 is about foreign source assessable income in general and rightly says it's not taxed in Thailand when not a tax resident.

 

I'm referring to, the gain from sale of immovable property situated outside Thailand for a Thai tax resident is only assessable in the country where the immovable property is located, as per Sherrings website  https://sherrings.com/capital-gains-personal-income-tax-thailand.html

(This has been confirmed to me as correct by Sherrings in the case of UK property not subject to Thai tax)

[OJAS]

On 4/24/2024 at 5:08 PM, Mike Lister said:

Another point to add is that when I fits obtained my TIN years ago, they were only issued at the Regional Offices, not the District offices, I don't know what the situation is today. 

 

According to the following official RD link (which dates back 10 years!), TIN applications should be submitted at your local area revenue branch ofiice (the lowest tier in the hierarchical revenue office structure), or, alternatively if you live in Bangkok, your area revenue office:

 

https://www.rd.go.th/english/21987.html

 

I can now vouch for this on the basis of personal experience, having today obtained a TIN from my local area revenue branch office at Klaeng. One particularly important point to note is that the L.P.10.1 form for individuals is only available in the Thai language, so it is IMHO essential that you are accompanied by someone who is fluent in Thai when submitting your TIN application in order to assist you with its completion. Fortunately for me, my wife was on hand to ensure that all Thai script equivalents of t's were crossed and i's dotted!😊

[Mike Lister]

4 minutes ago, OJAS said:

 

According to the following official RD link (which dates back 10 years!), TIN applications should be submitted at your local area revenue branch ofiice (the lowest tier in the hierarchical revenue office structure), or, alternatively if you live in Bangkok, your area revenue office:

 

https://www.rd.go.th/english/21987.html

 

I can now vouch for this on the basis of personal experience, having today obtained a TIN from my local area revenue branch office at Klaeng. One particularly important point to note is that the L.P.10.1 form for individuals is only available in the Thai language, so it is IMHO essential that you are accompanied by someone who is fluent in Thai when submitting your TIN application in order to assist you with its completion. Fortunately for me, my wife was on hand to ensure that all Thai script equivalents of t's were crossed and i's dotted!😊

Area and District are pretty much interchangeable terms, the District Offices in Chiang Mai having only recently been bedged from Districts to Area.

:

 

101) The main office of the TRD is in Bangkok. The country is divided into tax regions and each region is sub divided into districts. Small TRD offices are located in many tessabahns which serve the local community. When dealing with the TRD, it is advisable to deal with at least District Level offices. The address of the TRD Office in Bangkok is: 

 

The Revenue Department 

90 Soi Phaholyothin 

7 Phaholyothin Road 

Phayathai 

Bangkok 10400 

 

102) The following link shows how the country is divided into tax regions with their different districts.

 

https://www.rd.go.th/337.html