Introduction to Personal Income Tax in Thailand

with the simplest possible overview of Personal Income Tax (PIT) in Thailand. The scope of this document is limited to PIT, it is relevant to all income, of any type and from any source or location. The contents of this document are for information purposes only and does not represent professional tax advice.

INTRODUCTION

2) This guide is an overview of several core parts of the PIT system, as we understand them today. It is not designed to be exhaustive and it doesn’t cover all aspects of PIT, nor is it intended to override or contradict anything produced by the Thai Revenue Department (TRD), or specialist tax companies such as PWC, Sherrings or Mazars, for example. This guide also does not address all sources of income or the rules relevant to people from every country.

3) This guide is only A STARTING POINT for readers to begin managing their own tax affairs. It provides links to many sources of information containing answers for those with simple tax affairs, especially the average pensioner. If after reading this guide, the reader remains uncertain or unclear, they are strongly advised to seek out professional tax advice from a Thai tax expert, preferably a Thai Certified Public Accountant (TCPA). Note: this guide uses reference links to half a dozen tax consultancies, law firms, as well as the TRD and these are shown at the end of the guide. The links have been chosen for no other reason they have proven to be reliable sources of information and are typically current on the latest tax news.

4) This document looks at the tax laws and related tax rules that exist but does not attempt to understand the degree to which they are always uniformly followed or enforced. Often in Thailand, laws are enacted, utilised, but then become dormant for long periods before being brought back into service again, Immigration’s TM30 law is a good example. It is virtually impossible for us to understand the degree to which any particular rule is enforced uniformly, nationwide, or when a particular law might next be activated once again. For example, we are aware that penalties exist for not filing a tax return where the income threshold has been exceeded but no tax is due. We think it is unlikely that this rule is enforced and that many people, if any, are fined, but we cannot be certain. Readers must therefore assess their own willingness to accept the risk of not following a particular seemingly dormant rule that might suddenly one day be fully utilised once again, without notice.

IMPORTANT TO UNDERSTAND

5) This document contains a blend of fact, consensus and opinion, obtained, typically, from reliable and well known professional sources such as Big 4 accounting firms and the TRD themselves. Much effort has gone into trying to determine the correct answer to each aspect that is described herein. Nevertheless, there are areas that remain uncertain and where this is the case, we tell you what our confidence level is. Readers should remember that many official source documents have been translated into English and some meaning may have been lost as a result. Readers should also note that in Thailand, what is said to be true in one location by an authoritative source, may differ from that of another source in another location. Since this document is only an introduction to Thai tax and not an instruction manual, readers should independently confirm any aspect of the document that pertains to them personally.

OVERVIEW OF THE TAX LAW

6) Thai tax laws require Foreigners who reside in Thailand, for one or more periods, with at least 180 days in one tax calendar year, AND who receive income from inside or outside Thailand via:

a) Income from employment (wages, salaries, remuneration, etc.) assessable under Section 40 of the Revenue Code;

b) Income from business operations is assessable under Section 40.

c) Passive or property income (interest, dividends, rental income, goodwill, pension, capital gains etc.) based on Article 41 paragraph 2 of the Revenue Code.

d) to assess their income for Thai tax and file a tax return, providing the assessable income threshold has been exceeded. Thai-sourced income is always taxable in Thailand, wherever it is received and regardless of tax residence status. Foreign sourced income is subject to remittance, tax residency and other factors such as terms of a DTA.

7) According to TRD rule, the following individuals are required to file income tax returns for income earned in the preceding tax year, irrespective of whether there is any tax due:

a) A person who has no spouse and earns income of more than Baht 60,000

b) A person who has no spouse and earns income under category (1) (salaries and wages) of more than Baht 20,000

c) A person who has a spouse and earns income of more than Baht 120,000

d) A person who has a spouse and earns income under category (1) (salaries and wages) of more than Baht 220,000".

https://www.pwc.com/th/en/tax/assets/thai-tax/thai-tax-booklet-2023-24.pdf

SUMMARY OF KEY POINTS

a) The threshold for filing a tax return is very low, tax residency and income of 60k Baht for a single person, 120k for a married person, in a single tax year. A fine is capable of being levied for not filing, even if no tax is due.

b) The TRD Tax Code appears more domestic centric than international. Many aspects of Thai tax law that affect foreigners in Thailand are not well documented for public consumption. Consequently, knowledge gaps exist that are slowly being filled.

c) The tax year is the calendar year which ends on 31 December, tax returns must be filed the following year, before 31 March.

d) Only income remitted to Thailand is potentially taxable in Thailand, income that remains overseas is not taxable for foreigners.

e) You must be present in Thailand for 180 days or more per calendar year before you are considered tax resident (a day can be as a little as a few minutes). The 180 days can be spread over multiple visits.

f) There is no double taxation but some types of income may be taxed at a different rate, some lower, some higher or some not at all.

g) Dual Tax Agreements (DTA’s) exist between Thailand and over 60 countries, each is different, you must read and understand yours.

h) The tax treatment of a person from one country, using a certain type of income, may not be the same as that of another person from a different country, using the same or even different type of income. DTA rules are country, person and income type dependent.

i) Tax returns are filed using the honour system. You must declare your income, without any supporting paperwork and this will either be accepted or not, just as in the US and UK. If supporting evidence is required, it will be requested later.

j) As long as the rules of the relevant DTA are followed, there should be no double taxation and income that is taxed overseas should not be taxed twice. It is possible however that the right to tax income may shift from one country to another, depending on the terms of the DTA. Any tax paid on income in one country can be used to offset a tax liability on that income in the other country. This may result in a refund/credit of tax already paid, payment of additional tax, or nothing at all.

k) assessable income in Thailand may take many forms, bank transfers, cash, cheques, overseas debit card, ATM transactions etc. and potentially, credit card transactions.

l) Generous Tax Exemptions, Deductions and Allowances (TEDA) exist, along with a zero rated tax band, combine to create a significant tax free buffer for many tax payers.

m) How you intend to use your imported funds in Thailand is of no concern to the RD and does not change the taxation of those funds.

n) Not all aspects of Gift Tax are fully understood, similarly, the way that the TRD will treat partial remittance of overseas Capital Gains is not known.

o) For the most part, the various tax treaties do not limit the extent to which pension, dividend, rental and interest income can be taxed by Thailand.

BACKGROUND

😎 The rules that govern income tax in Thailand are contained in the TRD Tax Code, they have been in place for decades. In September 2023, a single change was made to the tax rule governing overseas funds, transferred into Thailand. That rule change took effect on 1 January this year (2024). Previously, anyone who remitted funds to Thailand in a different year from when they were earned, was able to import those funds free of Thai tax.

9) In November 2023, a concession was made which allowed the new rule to become effective 1 January 2024 and any income earned before that date to be managed under the previous interpretation of that rule. It’s important to understand this change was a reinterpretation of an existing tax rule, no new law was created hence, it does not need to be published in the Gazette, in order to be adopted.

10) The previous interpretation of the tax rule was a loop hole in the TRD tax code that had been exploited by wealthy Thai’s and is now closed. Now, any money earned overseas after 1 January 2024 and remitted to Thailand in any year, is potentially liable to Thai tax and must be assessed via a tax return, subject to a minimum income threshold and tax residency status. The purpose of the new rule is to reduce tax avoidance and to help prevent tax evasion. This also now means that overseas funds transferred into Thailand, by foreigners who are tax resident here, potentially have an increased risk of being taxed.

11) It should be understood that there always was an obligation on the part of foreigners who were tax resident in Thailand, to report Assessable Income every year, provided they met the minimum income reporting threshold. This law has not always been actively enforced in the past and many foreigners have been unaware previously of their obligation to file a tax return. Very little has changed today, that obligation remains unchanged albeit the scope of income that must be reported has now increased and tax collection has taken on a higher profile

12) At the time of writing, there are still unanswered questions about exactly how the TRD will operationalise some aspects of the tax process and how some types of income will be managed for tax, relative to foreigners tax returns and their overseas income in Thailand. As new information is made available, we will try to update this document and keep you appraised of new developments. If after reading it, anyone remains unclear about the points that have been explained in this document, they are welcome to raise questions to see if anyone can provide clarity. Alternatively, the cost of using a qualified TCPA to complete your tax return and answer all your questions, is unlikely to be expensive. I regret that we are unable to recommend specific people or companies.

13) Lastly, there are certain types of visa that fall outside of the TRD rules, the LTR visa for example is one of them. It received its tax exempt status by royal decree hence visa holders will not to be assessed for Thai tax, in accordance with the rules issued along with that visa and they are specifically excluded from this explanation.

ACTIVE DEVLOPMENTS WE ARE AWARE OF

14) We are aware of several activities that are under-way currently that may affect what is written in this document but they have not yet concluded. Readers should remain alert for changes in the following areas:

a) We understand that several DTA’s are being renegotiated at present, you should check to see if the agreement between Thailand and your home country is updated because this may affect you.

b) It has been rumoured that the new interpretation of the tax rule might be challenged in court and potentially overturned, to date we have seen no evidence that it has been challenged.

c) We are told that the tax return forms are being redesigned, the new forms may yield some clues as to what additional information will be required of taxpayers.

TERMINOLOGY & PROCESS

15) Income that is not remitted to Thailand is Excluded Income. Overseas

Funds Transfers that are remitted to Thailand, must be reviewed by YOU, the tax payer, to determine their nature, the source of funds and the date they were acquired. Some Funds Transfers may be Exempt under the terms of a DTA (see below) or because of TRD rules. What remains after Excluded and Exempt Income has been removed, is regarded as Assessable Income, which may be subject to a Thai tax return, as long as it exceeds the income threshold.

16) Tax Exclusions, Deductions and Allowances are known as TEDA.

THE FOUR CATEGORIES OF INCOME

a) Exempt Income - is money that is not considered for Thai tax, because it is not remitted to Thailand or it is excluded by virtue of a DTA or TRD rules.

b) Remitted or Transferred Income - these are any funds sent to Thailand from overseas, for any purpose.

c) Assessable Income - this is income that must be declared on a tax return, as long as the total amount of all income exceeds the threshold. It excludes income that the TRD says is not assessable and it excludes any income specifically excluded under the terms of your country’s DTA with Thailand.

d) Taxable Income - this is assessable income from above, but minus TEDA.

17) Income can be Remitted but Exempt, (e.g. Government Pensions) or, not Taxable.

18) Remitted Income can be Assessable but not Taxable, any income that has already been fully taxed in your home country is an example, as is Assessable income below the level of the TEDA would be another.

19) Income can be Remitted, Assessable and Taxable but no Thai tax due, this is because it falls below the level of the Thai TEDA (or Personal Allowances equivalent) and/or is within the zero tax rated band.

20) For example: the TRD has confirmed that all income earned before 1 January 2024 is to be managed under the old tax rule. Savings earned before 1 January 2024 are considered free of Thai tax. Similarly, for example, the DTA between the US and Thailand confirms that US Social Security (SSc) income is Excluded from tax in Thailand. What remains after every type of Exempt income is deducted, is income that is regarded in this document, and in TRD terminology, as Assessable Income that YOU must report on a tax return, subject to a minimum reporting threshold amount. Assessable Income is entered on the tax return and assessed for tax and the appropriate TEDA amounts applied. If a positive amount remains, that is considered to be Taxable Income that is subject to tax, in accordance with the Thai Tax Tables.

21) The following link provides a legal definition of assessable income in Thailand.

https://www.tilleke.com/wp-content/uploads/2011/05/Thailand-Tax-Guide.pdf

THE TAX IMPLICATIONS OF REMITTANCES

22) If you receive funds in Thailand, you must determine whether they represent assessable income or not. If they are assessable, you must report them on a tax return, subject to minimum threshold amounts. You are the only person who can do this because you are the only person who knows.

23) Similarly, if you remit funds to Thailand from overseas, to someone other than yourself, you must also determine if those funds are assessable and if they are, declare them on your tax return, subject to threshold amounts. Just because you remit funds to another person in Thailand and the money does not enter your bank account, does not mean those funds escape your tax assessment.

24) For example, a remittance from your overseas account, to a Thai property developer, in order to buy property in Thailand, must still be assessed for Thai tax. If that remittance comprises exempt income, it does not need to be declared, but if it comprises taxable income, the money must be declared.

25) In a second example, funds that you remit to another person, from overseas, might be intended as a Gift. If those funds are not assessable income eg savings, you do not need to declare them on your Thai tax return. It is unclear presently whether gifted funds that are assessable to Thai tax, must be reported on the gifters tax return (see Gift Tax)

26) The recipient of the Gift, may also need to report the Gift and pay Gift Tax on the amount. Gift tax for customary gifts from close relatives is only due if the gift is more than 10m THB (20m for legally married wife, parents or descendants)

27) Along the same lines as the above, if somebody sends you money in Thailand, it may be deemed to be a Gift, which under Gift Tax rules is not assessable here, subject to the amounts involved. The Thai Revenue may require further details of that Gift to ensure it is genuine and not income disguised as a Gift.

28) As an over arching principle, the TRD does not care what the purpose is of the remitted funds, or their intended use. The Revenue is only interested in the amounts that you declare and what you say the source of those funds was, which you may need to prove, to the satisfaction of the TRD.

DUAL (or Double) TAX AGREEMENTS (DTA’s)

29) A DTA is an agreement between two countries that sets out which of the two countries has the right to tax specific types of income and all the associated rules. Its purpose, in part, is to ensure that the same funds are not taxed twice by two different countries and provides a means by which tax that is paid twice, can be recovered, how and from where.

30) Note: If taxpayer income arises in one country but the tax payer is resident in a second country, use of a DTA can result in increased tax being paid, if the second country has a higher rate of tax on the type of income in question, than the other. Obversely, allowing income to be taxed in Thailand, may result in paying a lower rate of tax than in your home country. It should also be noted that the rules contained in a DTA, take precedent over national tax rules. Copies of all the DTA between Thailand and other countries are available to download from the following link although, as said at the outset, we understand that some are being renegotiated at present. A links to all DTA’s can be found below:

https://www.rd.go.th/english/766.html

TAX CALENDAR

31) Thai tax returns must be filed between 1 January and 31 March. This document is being revised in April 2024. The new tax law changes affecting foreigners in Thailand came into effect 1 January 2024 which means this years income activity is not reportable until at least 180 days from the start of the year. For year round residents, a tax return will be due between 1 January next year, 2025 and 31 March 2025, this will cover the tax year 2024 which runs from 1 January to 31 December.

TAX RESIDENCY

32) If you remain in Thailand for more than a cumulative 179 days, between 1 January and 31 December each year, you will be and always were considered to be Tax Resident in Thailand during that year, almost entirely regardless of the type of visa you have (special tax exempt classes of visa excluded). It doesn’t matter that you may be Tax Resident in your home country or elsewhere or that you pay tax in those countries, Thailand will still regard you as Tax Resident. Tax Residency and Immigration status (and the visa you hold) are different things. Tax residency is based solely on the number of days you spend in Thailand.

33) A Thai taxable day is counted using the entry and exit stamps in your passport, unlike many other countries where it is determined by where you are at midnight. The number of Thai taxable days counter reverts to zero, on 1 January each year. Other countries use different criteria for counting taxable days, it is therefore possible to be tax resident in two countries in the same year and for some days to be counted twice or even not at all, when crossing the international date line for example. It’s important to remember that 179 days plus 5 seconds equals 180 days.

TAX FILING THRESHOLD

34) Because you are Tax Resident, YOU must review your inbound overseas Funds Transfers each year to determine if they represent income assessable to tax in Thailand, nobody else will do this for you. You must count the days and you must assess your income to determine if a tax return should be filed or not, nobody else will tell you to do so although you could be asked later, why you did not!

35) YOU are responsible for determining if your assessable income in Thailand exceeds the threshold, which means you must file a tax return. That assessable income might comprise a combination of pension payments, investment income, rental income or any of the other types of income. If you have assessable income of over 60,000 baht per year (120,000 baht if married), you are required to file a tax return (60,000 baht if your sole source of assessable income is bank interest paid in Thailand). You are still required to file a return, as long as your assessable income exceeds the threshold, even though there is no tax to pay.

36) Failure to file a tax return where the income threshold has been exceeded but no tax is due, can technically result in a fine of THB 2,000. Failure to file a tax return when tax is due, can result in harsh penalties.

TYPES OF INCOME

37) First and foremost, only income that is remitted to Thailand is assessable in Thailand, funds that remain outside Thailand is not. If we take the simplest type of income and say that you transfer personal savings from overseas to Thailand and those savings were earned before 1 January 2024, those funds are subject to tax under the old rules. But savings earned after that date potentially fall under the new rule, thus, the date when the income was earned is extremely important, as is whether or not you were Thailand Tax Resident when the funds were remitted. A word of caution, if your tax return is audited or appears suspicious, you could be asked to provide proof that savings were earned before 1 January 2024 hence it will help if you retain statements of each of your accounts showing valuations that are effective as of 31 December 2023 or earlier.

38) Your income in Thailand is defined as any money paid to you inside Thailand, as well as, potentially, any money you receive from another country. Both types are potentially assessable income for Thai Tax Residents. There are many types of income that can be classed as assessable. The TRD lists some of them in Section 40, 1-8, excluding that income that is excluded by a DTA or other TRD rules, and is linked below. However, the list is not exhaustive and does not consider all of the many different types of overseas income that foreigners may have. As a general rule, all income is potentially assessable unless it is excluded by your country’s DTA.

https://www.rd.go.th/english/37749.html#section40

39) In Thai tax law, virtually all income is assessable, unless it is subsequently excluded by date, DTA rules or under Thai TRD rules - there is no concept of non-assessable income. Income is understood to mean money that is received from any source. The definition of income that is derived from within Thailand is fairly clear, if you work and have a job and you are a Tax Resident, the payment you receive is assessable for tax. Interest that is paid to you on Thai bank accounts is regarded as assessable income, as is income from investments such as stocks and bonds within Thailand. As a general principle, any payment you receive for work that arises within Thailand is regarded as assessable income. You should note that if you are generating income by working while staying in Thailand, it is (and has always been) irrelevant where that money is paid and whether you bring the money into the country or keep it offshore. That money arises in Thailand hence it is taxable here.

40) The rules governing income from overseas are similar to those governing domestic income. Inbound overseas Funds Transfers are either assessable or exempt, based on their country/origin, source of funds and date earned. Income that is imported where tax has been paid, in the home country, will not be taxed a second time in Thailand and no double taxation will exist. It is however possible that additional tax could be due in Thailand on that income, if the tax rates here are higher than in the home country. It is also possible that tax credits may be due, if the Thai tax rate is lower.

METHOD OF FUNDS TRANSFER

41) The way in which overseas Funds are received in Thailand does not change their definition. Bank transfers, cheques, cash or overseas ATM withdrawals can also be income, the latter because overseas funds were imported to pay for goods or services in Thailand.

CREDIT CARD SPENDING USING FOREIGN CARDS

42) A series of interesting and useful debates have tried to determine if overseas credit card spending in Thailand by Thai tax residents, constitutes assessable income but they have been unable to decisively conclude. It is far from certain that such spending is not assessable and several factors lead us to believe it may be. The salient points in the debate include:

43) It is irrelevant that the spending is done on credit, the taxable event occurs in Thailand when the buyer receives the goods or services they purchased and the seller is remunerated.

44) The TRD is very unlikely to be interested in minor or small scale purchases made using foreign credit cards but is likely to be attracted by large expenses that are repeated every month.

45) The core issue is likely to be the source of the funds used in the home country to settle the credit card bill and whether those funds are exempt or assessable.

46) The TRD doesn’t care about credit agreements or debt in the card holders home country, only about the events that took place in Thailand and the funds used to facilitate them.

47) Debt forgiveness may well be construed as receiving assessable income.

48) Revenue authorities in several countries, including the UK, regard Credit Card spending as assessable income.

49) As more becomes clear on this point, we will update the guide accordingly.

50) Most recent news - In a recent interview with one of the Embassies, the TRD representatives confirmed that credit card transactions in Thailand, using overseas cards, is tax assessable income in Thailand, for Thai tax residents. This is the only TRD statement we have on this subject.

INCOME FOR REAL ESTATE PURCHASE

51) As a general rule, the TRD Tax Code does not consider the purpose of the funds that are imported, only whether the funds are assessable or not. For example, funds imported to buy real estate will be viewed in the same way that imported funds for any other purpose will be, there's nothing special about the fact those funds are buying property versus anything else. Note: it seems improbable that the TRD would wish to constrain or damage the Thai property market by appearing to tax remitted funds that are intended to purchase real estate here but we don’t know currently how this aspect will be addressed. One potential solution might require property buyers to leave their funds invested in real estate, for a minimum period, after which the funds will be considered free of PIT.

PENSIONS

52) Another common type of income is pensions, which may not always be straight forward, depending on the type of pension and the country that it comes from. The country of origin is important because there are over 60 different DTA’s, sometimes called Double Taxation Agreements (DTA’s), between Thailand and those 60+ countries and each DTA is different.

53) As a general rule, many government pensions appear to be tax free in Thailand. However, most private sector and company pension, from most countries, appear to be assessable here but YOU will need to confirm that yours is, or is not. As said previously, any tax that has been paid on those pensions in the home country, can be used to offset any tax that is due under Thai RD rules, if the Thai rates of tax are higher and if any tax is due.

UK PENSIONS

54) UK Pensions fall into two categories:

a) Public Sector (Government): includes Civil Service, Armed Forces and some NHS

b) Private Sector: includes UK State Pension, Company Pensions and private pensions

55) The UK/Thai DTA specifically mentions Government Pensions, which can only be taxed in the UK. Private Sector pensions are not mentioned in the DTA and are capable of being taxed in Thailand, unless they have been taxed in the UK, in which case a credit is issued against tax payable in Thailand.

US SOCIAL SECURITY

56) As said at the outset, US Social Security (SSc) payments, a form of pension paid to some older people, can only be taxed by the US. Under DTA rules, Thailand is forbidden from taxing resident foreigners on them. This means those payments are NOT assessable income.

CAPITAL GAINS

57) The proceeds from the sale of a capital item such as overseas property, where funds are remitted to Thailand, is one popular source of expat funds, the sale of some investment products such as stocks, shares and bonds is another. Those proceeds typically comprise two parts, capital and profit (or gain). If the capital gain was realised before 1 January 2024, it is free of Thai tax. If they were acquired after that date, they are potentially subject to Thai tax at PIT rates.

58) One way to distinguish between capital and gain from investments dated after 1 January 2024, may be to have an official valuation or statement that is dated 1 January 2024 (or earlier). 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.

59) We understand currently that the TRD views any remittance of assessable capital gains to Thailand as comprising both capital and gain. It cannot be claimed that the remittance contains just one or the other, it always contains both and this continues until the total amount is exhausted.

60) 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.

a) Most types of capital gains are taxable at PIT rates, however, the following capital gains are exempt from tax:

b) Capital gains on the sale of shares in a company listed on the Stock Exchange of Thailand, provided that the sale is made on the Stock Exchange of Thailand, and on the sale of investment units in a mutual fund.

c) Gains on the sale of non-interest bearing debentures, bills, or debt instruments issued by a corporate entity, except in the case where the bonds or debt instruments were sold for the first time at a price lower than their redemption price to an individual.

d) Gains on the sale of securities listed on stock exchanges in the Association of Southeast Asian Nations (ASEAN) member countries and traded through the ASEAN Link, excluding securities in the form of treasury bills, bonds, bills, or debentures.

e) Capital losses may not be offset against capital gains.

https://taxsummaries.pwc.com/thailand/individual/income-determination

DIVIDEND INCOME

61) Dividends received from a company incorporated in Thailand are subject to withholding tax (WHT) at a flat rate of 10%. A resident of Thailand receiving dividends from companies incorporated in Thailand may elect to exclude this income from the computation of income tax and waive the tax credit referred to in the other tax credits and incentives section.

62) Dividend income from sources outside Thailand is taxed here at PIT rates using the stepped tax tables. Any overseas tax already paid will be credited and used as an offset against any Thai tax that is due. Any dividends received before 1 January 2024, are exempt. Once again, you will need to review the DTA between Thailand and your home country to fully understand what particular clauses affect you. Conformation of these things exist in the following links:

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

https://taxsummaries.pwc.com/thailand/individual/income-determination

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

PROPERTY RENTAL INCOME

63) Property rental income that is remitted to Thailand is considered to be assessable income and is taxable here, unless of course it has been fully taxed in the home country and/or a DTA prohibits or limits its taxation.

64) All rental properties in Thailand are subject to a tax on the rental income. Thai income taxes are calculated using a progressive scale ranging from 0-35%".

65) Rental income from overseas property owned by foreigners who are tax resident in Thailand is not liable to Thai tax on that income, as long as that income is not remitted to Thailand. If however that rental income is remitted, an interim tax return PND 94, must be filed if the total remitted within the first six months of the year, exceeds 60,000 baht. “A half-year personal income tax return or PND. 94 is the income tax filing of an individual whose income from January to June exceeds 60,000 baht”.

66) The House and Land Tax Act assigns a tax rate to different categories of land and property based on a number of variables. Details of that act are described in the following link:

https://www.hlbthai.com/new-property-tax-law-in-thailand/

GIFT TAX

67) First and foremost, our confidence levels that we understand all the Gift Tax rules is not high.

What the Rules Say

68) The TRD does not consider what the purpose is of remitted funds, only whether they are assessable or not. If a foreigner remits non-assessable funds and then gifts them in Thailand, that is the end of the matter for the gifter.

69) If however the foreigner remits assessable funds to Thailand and then gifts them inside Thailand, those funds must be reported as assessable income on the foreigners tax return, no matter that they are later gifted.

70) The third scenario is not agreed by everyone and is contingent upon further input from the TRD. It suggests that if the foreigner gifts offshore assessable income, direct to a Thai resident, the foreigner must report that income as if they themselves had received it directly.

71) "PIT is levied on gifts given by persons who are still alive. The tax is collected on the assets or the amount given to parents, ascendants, descendants, spouse, or others based on the value of the gift that exceeds a prescribed threshold, which depends on the type of gift and donor. Assets or amounts given that do not exceed the threshold are exempt from tax.

72) The following gifts are exempt from PIT:

a) Income derived by a parent from the transfer of ownership or possessory right in an immovable property without any consideration to a legitimate child, excluding an adopted child, in the amount not exceeding THB 20 million throughout a tax year in respect of each child.

b) Maintenance income or gifts from ascendants, descendants, or spouse, in the amount not exceeding THB 20 million throughout a tax year.

c) Maintenance income derived under a moral obligation or gifts made in a ceremony or on occasions in accordance with established custom from persons who are not ascendants, descendants, or spouse, in the amount not exceeding THB 10 million throughout a tax year.

d) Income from gifts in the case where the person who receives the gifts will use them for religious, educational, or public benefit purposes according to the intention of the donors under the criteria and conditions referred to in the Ministerial Regulations.

73) Gifts in excess of the above thresholds will be subject to PIT at the rate of 5% and will not need to be included together with other income when computing the annual PIT liability.

74) For ascendants/descendants the threshold is THB 20 mill, nor non-ascendants and descendants, it's THB 10 mill".

What Some Members Think:

75) The following summary points compiled by a member may help guide readers in the use of Gift Tax:

a) Gifts must be traditional gifts based around a fixed date or occasion.

b) Traditional gifts include supporting the spouse or other persons, mainly family, based on a moral obligation.

c) Gifts to non-family members are more likely not to meet the moral obligation criterion.

d) A ceremonial act may be required, in particular for non-spouses.

e) Gifts must not be returned to the donor and used as a way to avoid income taxes, except under very specific Gift Tax rules which are likely to void the earlier tax advantage.

f) Moral obligation is subject to interpretation, there is no single definition.

g) TRD may apply additional criteria.

h) TRD assessment may differ from self-assessment which risk must be evaluated in each case individually.

76) Additional points on this subject are:

a) Funds that are gifted, must be for the use of the person to whom they are gifted.

b) Gifts can be revoked later and reclaimed, under specific circumstances, such as if the receiver of the gift defames the Gifter or fails to take care of their serious medical needs.

c) Gifts to a spouse become Sin Suan Tua or the sole property of the spouse, under marital law the gift is not regarded as conjugal property.

d) Gifts made outside Thailand appear to be safe.

e) The Gift must be formally documented and recorded, the more documentation the better.

f) No more than THB 20 mill should be remitted to Thailand per year, unless 5% Gift Tax is paid on the balance.

77) Until the circumstances surrounding Gift Tax and all it entails, becomes more clear,, it is critical that anyone wishing to use Gift Tax, seeks professional advice.Note: Because Gift Tax is predominantly a domain of the wealthy and depends to a large extent on local practice, there is a shortage of confirmed information on this subject. One field of thought is that Gift Tax cannot be used to escape Thai tax by Gifting untaxed money from overseas. On the other hand, many Western countries, including the UK, do not tax gifts from overseas. Members wishing to exercise this option should seek qualified advice before using this option to Gift untaxed funds.

INHERITANCE TAX

78) "Heirs are subject to the inheritance tax only on the value of a legacy that exceeds THB 100 million obtained from each testator together either once or on several occasions. The inheritance tax rate is 10%, except in the case of heirs who are ascendants or descendants of the testator, where the rate is 5%. Legacies received by the spouse of a testator are exempt from the tax".

https://taxsummaries.pwc.com/thailand/individual/other-taxes

CRYPTO

79) Crypto transactions inside Thailand are subject to PIT on the gain amount, crypto transactions outside Thailand are charged on the amount brought into Thailand, when it is imported.

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

NON-RESIDENT INCOME

80) Income that was earned and remitted in a year when a person was Thai tax resident is assessable under Thai tax rules. There is now a growing body of opinion from TRD sources to suggest that overseas income earned whilst Thai tax resident but remitted to Thailand whilst not, is free of Thai tax but this remains uncertain. Some care should be exercised before considering this option, readers may wish to obtain professional tax advice to confirm this point, before using this approach.

COMINGLED FUNDS

81) Funds from various sources that are all contained in the same bank account are referred to as commingled funds. Trying to account for them separately can be difficult, unless you keep complete records that show the individual sources of those funds. Much of this comes down to individual discipline and the ability to retain and file receipts and statements.

82) Many tax authorities have policies regarding commingled funds, policies such as LIFO, (last in, first out) which is primarily an inventory management technique but could be used with commingled fund accounts. The UK says that capital and gain entering a mixed or commingled account, loses its identity and that any remittance from the fund, is income first, capital second. Yet another option might be that any remittance is viewed as comprising interest/gain or income first and capital second. We are not aware of the TRD policy regarding commingled funds or even if one exists. If you hold funds in this way, until such time as the TRD policy on this is made clear, you only have two options open to you. The first is to keep detailed records that describe all the feeds into the commingled account and hope that will be sufficient, or separate the sources into their own accounts.

MOST RECENT Q&A WITH THE REVENUE

83) The latest Q&A with the Revenue is linked below, in it they attempt to clarify outstanding areas of concern:

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

TAX IDENTIFICATION NUMBER (TIN)

84) Before you can file a tax return in Thailand, you must obtain a Tax Identification Number or TIN from the RD offices in your area. You are required by law to obtain a TIN, within 60 days from when you first derive the minimum assessable income, which is 120,000 baht of income received from overseas, after becoming tax resident. For long stay residents that will be a minimum of 180 days plus 60 days in country, in the same tax year. The Thai ID card number serves as the TIN for the local population. It is not necessary for people who are not Thai tax resident to obtain a TIN, neither is it necessary to obtain one if you do not exceed the assessable income level threshold.

85) Regardless of whichever method you use to file, you must obtain a TIN first. After you obtain your TIN you should ask the TRD office to set up your on-line account and show you how to use the system. If you are not fluent in Thai, it may help to take somebody with you who is. There have been several reports from members who have been refused a TIN. In order to obtain a TIN, You will need to bring the following documentation:

a) Completed LP 10.1 form, available at the tax office

b) Valid passport and visa (วีซ่า)

c) Proof of address (e.g., a rental agreement, yellow tabien baan (ทะเบียนบ้าน), or residency certificate from the immigration office)

d) Employment contract (สัญญาจ้างงาน) or proof that you have tax liability in Thailand (e.g., proof of financial transactions)

https://franklegaltax.com/2023-tax-return-filing-in-thailand/

86) There is no valid reason why a TRD office should refuse to issue you with a TIN, as long as as you have all the required documents and they are all in order. If you are met with refusal, the head office in Bangkok will be most interested. If you continue to have problems obtaining a TIN, the Revenue Department Help Line number is 02 272 8000 and they will be able to assist you.

https://www.expatica.com/th/civil/administration/tax-id-thailand-2172861/#apply

TAX FILING ELLEGIBILITY

87) “All persons earning income are required to file a tax return no later than 31 March of the following year for hard-copy filing and 8 April for on-line filing, except for individuals whose income from employment is THB 120,000 or less (for single persons) or THB 220,000 or less (for married persons) and in the case of having income from other sources (with or without employment income) of THB 60,000 or less (for single persons) or THB 120,000 or less (for married persons)”.

https://taxsummaries.pwc.com/thailand/individual/tax-administration

TAX BANDS

88) Thai tax is stepped in bands and is payable based on the amount of taxable income that falls within each band and are shown and linked below:

Taxable Income per year(Baht)/Tax rate

0 – 150,000 Exempt

150,000 – 300,000 5%

300,000 – 500,000 10%

500,000 – 750,000 15%

750,000 – 1,000,000 20%

1,000,000 – 2,000,000 25%

2,000,000 – 5,000,000 30%

Over 5,000,000 35%

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Payroll/Personal-Income-Tax

TAX EXEMPTIONS DEDUCTIONS & ALLOWANCES (TEDA)

89) The Thai tax system contains a series of Tax Exemptions, Deductions and Allowances (TEDA) that will help you reduce your tax bill and they are very generous. It is easily possible for the average expat foreign retiree to reduce their taxable income by 500,000 baht or more each year. For example, a retiree aged 65 years of age, married and living here full time, supporting a Thai wife and receiving only pension income, is allowed the following TEDA, identified by the corresponding RD code:

a) Personal Allowance for self (PA1) - 60,000

b) Personal Allowance for wife (PA2) - 60,000

c) Over age 65 years exemption (OAE) - 190,000

d) 50% of pension income received, up to 100k (PD) - 100,000

e) In addition, the first 150,000 of assessable income is zero rated and free of tax (ZR)

90) Additional deductions and allowances exist for health or life insurance premiums paid in Thailand, along with a range of other things. A complete list of deductions, allowances and exemptions can be found in the links below:

https://www.rd.go.th/english/6045.html or from Sherrings below.

https://sherrings.com/personal-tax-deductions-allowances-thailand.html

TAX FORMS AND FILING

91) The TRD tax filing system is on-line but only available in Thai language at present. The tax forms are however available in English and they can be downloaded from the link below.

https://www.rd.go.th/english/65308.html

92) Tax returns must be filed between 1 January and 31 March each year, if you file later than that, penalties will apply. Tax filing is electronic or paper based. The TRD e-filing link below lists TRD agents around the country who are authorised to file returns for customers, if required.

93) Completing a tax return is not complicated for most people, if you have difficulty, the Revenue Department staff are extremely helpful. If you want to file electronically, you should ask the TRD office to set up your on-line account and show you how to use the system. If you are not fluent in Thai it may help to take somebody with you who is. If you want to try doing this yourself at home, the TRD e-filing site is where you can apply for an e-filing account, submit forms and also practise using the system.

https://efiling.rd.go.th/rd-cms/

SAMPLE COMPLETED TAX RETURN

94) In order to become familiar with the forms.the following link shows a sample completed tax return form.

https://aseannow.com/topic/1324294-introduction-to-personal-income-tax-in-thailand/?

do=findComment&comment=18875136

THE HONOUR SYSTEM AND PENALTIES

95) Tax filing in Thailand is based on the honour system, it relies on you declaring all the correct information every year and there are severe penalties for evading Thai tax. It is not necessary to provide proof or supportive documentation of the things you claim on your tax return, when you file the return. If however your return is audited, supportive documentation may be requested at that time. It would be foolish and a gross under estimation of TRD capabilities to think that doing nothing and keeping a low profile means you should ignore Thai taxation. Very few rational people in Western countries ignore the tax authorities who tend to have a long reach and have extensive powers.

96) “Whoever intentionally avoids a payment of tax or claims a refund of tax by filing false tax returns, or providing false statements or false answers to questions or providing false evidence, can be punished by: Imprisonment for a term of 3 months to 7 years, and. A fine of 2,000 Baht to 200,000 Baht.”

97) As stated earlier, there is also a fine that is capable of being levied, for not filing a return, even when no tax is due, as long as the assessable income level is exceeded. Perhaps more importantly, TRD is empowered to audit the preceding 10 years tax returns in the event a tax resident fails to file a return after exceeding the threshold. Where returns have been made, TRD is only empowered to audit the preceding two years. It should be understood that there is no evidence presently that the TRD does undertake decade long back audits on people who don’t file, neither are we aware that the fine is levied for not filing, when no tax is due. But it should also be noted that those facilities do exist and were only created in the last decade.

https://sherrings.com/

98) If a taxpayer is certain that some of their income is Tax Exempt, they may not want to declare it on their Thai tax return, unless the newly designed tax form requires it. If in doubt, you may wish to ask the TRD or employ specialist tax advisor's. It should go without saying that some taxpayers may try to suggest that some of their income is not assessable when really they don’t know for sure, or, they know that it is and say it that it isn’t and hoping they wont get found out. In that situation, the TRD will probably not look favourably upon such people and penalties are likely.

TAX CLEARANCE CERTIFICATES

99) It cannot be entirely ruled out that at some point, a link may be established between tax filings and visa extensions. A law already exists that requires foreigners to apply for Tax Clearance Certificates before being allowed to depart the country but it is not being enforced currently for a majority of visa types but it is in operation for some. These things are possible because similar things have been adopted in several countries in the past, including the US.

CERTIFICATE OF TAX RESIDENCY or TAX PAID

100) A certificate of Residency form, confirms that the taxpayer was resident in Thailand during a particular year and that they filed a tax return. A second document, RO21 confirms the amount of tax paid, both documents can be found in the following links:

RO21.pdf and https://www.rd.go.th/english/21978.html

REVENUE DEPARTMENT OFFICES STRUCTURE

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

SOURCES OF TAX INFORMATION

103) There are several sources of detailed tax information available and some of these web sites are linked below. The first link is to The Thai Revenue Department Tax Rules which is the most important one which everyone should use as their initial point of reference. The link is to an English language translation of the Revenue Department Law and contains the Revenue Code. We strongly caution against using ad-hoc web sites for tax information, regardless of how authentic they may seem. Similarly, several videos exist where tax advice is offered but many of these are teasers that lead to paid for services and the act as a lead in to the sale of financial services products.:

https://www.rd.go.th/english/6045.html

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

https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Payroll/Personal-Income-Tax

https://www.pwc.com/th/en/tax/thai-tax-booklet-2022.html

UNRESOLVED, CONFLICTING or UNCLEAR ISSUES

Points A - J resolved and removed.

k) - how does the TRD distinguish between principal (funds from legacy investments, inheritance, original investment principal) versus earnings (interest, dividends, remuneration) from commingled funds, determination of applicable foreign currency exchange rates for tax assessment, etc.

P) - Returned to the list: The issue of whether income earned in a year when tax resident but remitted to Thailand in a year when not tax resident………….is it taxable? Many contradictory reports on this, even from within TRD and tax consultants themselves.

Q) - Does the TRD regard credit card spending in Thailand, using a foreign credit card, assessable income. The early indication on this point is yes, it does.

R) - Is foreign loan monies remitted to Thailand, considered assessable income, eg for the purchase of a vehicles, condos, property, etc.

S) - If a foreigner gifts offshore assessable income, direct to a Thai resident, is the foreigner required to report that income, as if they themselves had received it directly?

*** END ***

Mike Lister · April 6

The “Simple Tax Guide” has been substantially updated and is contained in the post above. When a newer version becomes available, I will replace the version in the OP and members will be notified. Readers of the guide should note the following para, from the guide:

9) We are aware of several activities that are under way currently that may affect what is written in this guide but they have not yet concluded decisively. Readers should remain vigilant for changes in the following areas:

a) We understand that several Dual Tax Treaty Agreements (DTA’s) are being renegotiated at present, you should check to see if the agreement between Thailand and your home country is updated because this may affect you.

b) It has been rumoured that the new interpretation of the tax rule might be challenged in court and potentially overturned, to date we have not seen news about any challenge.

c) We are told that the tax return forms are being redesigned, the new forms may yield some clues as to what additional information will be required of taxpayers. Readers should remain alert for news about the new forms, when they are issued.

Anyone who has questions about the guide or how the contents affect them, can raise them here in this thread or in the long tax thread (linked below) where several people should be able to help. If anyone has tax guide or related issues they can’t get answers to, they should feel free to PM me and I will see if I am able to help further.

The Simple Tax Guide is a community project that has been viewed over 80,000 times. It has helped several hundred AN members with their taxes and alleviated a lot of unnecessary worry, particularly from older members. If you would like to participate in the construction of the guide by suggesting ways to improve it, or by drafting new sections for the guide, you are most welcome to do so and should contact me via PM.

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

Mike Lister · April 20

This is the Simple Tax Guide thread, members are welcome to post the following:

1) Suggestions for change or the addition of new sections with the Tax Guide

2) Queries about their own tax related issues where they need answers or assistance

3) Moderators to post new updated sections to the Simple Tax Guide and to provide additional information and links in support of the Guide.

This thread is NOT for:

1) Debating

2) Questions about DTA's and foreign tax issues

3) Anything unrelated to the Simple Tax Guide

4) Discussions about CRS and OECD

Any off topic, aggressive or overly long posts will be deleted without warning.

Mike Lister · April 20

I have amended para 59 above to reflect latest emerging information between members and TRD personel.

NON-RESIDENT INCOME

59) Income that was earned and remitted in a year when a person was Thai tax resident is assessable under Thai tax rules. There is now a growing body of opinion from TRD sources to suggest that overseas income earned whilst Thai tax resident but remitted to Thailand whilst not, is free of Thai tax. Some care should be exercised before considering this option, readers may wish to obtain professional tax advice to confirm this point, before using this approach.

Mike Lister · April 20

I will update the guide in a couple of places to reflect that we now understand that penalties can be levied for not filing a tax return, when the threshold has been exceeded but there is no tax to pay. Previously we had been told repeatedly that there was no penalty, we now know that there is a THB 2,000 fine but it is unclear whether it is actually levied.

"the consequences of an individual tax resident not filing a PND90/91 tax return, if he/she has income over 120k but not enough to pay tax is that there is a fine of up to 2,000 baht for this under Section 35 of the RC. Section 17 is the relevant section in the context of Section 35".

In practise, I don't believe this change in our understanding will impact anyone this year but it is something that should be considered in January next year.

Mike Lister · April 20

Because we now know that a fine is possible for not filing a tax return, this information changes what we said about acquiring a TIN. Previously we wrote that it wasn't necessary to obtain a TIN, if no tax was due. The new information about the fine above, now changes what we have to say regarding TIN's which may now be needed, as long as the assessable income threshold has been exceeded.

Trippy · April 21

1 hour ago, Mike Lister said:

Because we now know that a fine is possible for not filing a tax return, this information changes what we said about acquiring a TIN. Previously we wrote that it wasn't necessary to obtain a TIN, if no tax was due. The new information about the fine above, now changes what we have to say regarding TIN's which may now be needed, as long as the assessable income threshold has been exceeded.

If I'm in Thailand all year, but all my income is from US social security thus not accessible income. Do I need to get a TIN, and do I need to file a Thai tax return?

Thanks

Mike Lister · April 21

15 minutes ago, Trippy said:

If I'm in Thailand all year, but all my income is from US social security thus not accessible income. Do I need to get a TIN, and do I need to file a Thai tax return?

Thanks

My interpretation is that you do not, because all your income is exempt hence you not exceed the threshold.

Denim · April 21

As things currently stand , can those of us just living on our pensions depart Thailand as per normal or will we get hassled at the airport for any documents relating to our tax situation in Thailand.

Mike Lister · April 21

9 minutes ago, Denim said:

As things currently stand , can those of us just living on our pensions depart Thailand as per normal or will we get hassled at the airport for any documents relating to our tax situation in Thailand.

No documents required, it's very early days on this, maybe downstream things will change

BE88 · April 21

Mike, could you please complete your information on the taxes we will be required to pay if we stay more than 180 days in Thailand with a table of taxes and related deductions to have a clearer vision for all us of the taxes we will have to pay next year.

Thank you.

Edited April 21 by BE88

Denim · April 21

20 minutes ago, Mike Lister said:

No documents required, it's very early days on this, maybe downstream things will change

Yes, I would not be sùrprised.

Back in the early 1980's , any foreigner living in the country for more than 180 days per year had to obtain a tax clearance certificate from the revenue department. This had to be produced upon departure at Don Muang. The amount of tax calculated was a couple of thousand baht. However, if you could get a civil servant to act as your guarantor, any taxes were waived. There used to be several of these moonlighting civil servants hanging around outside the revenue department and for 500 baht they would act as your guarantor.

Mike Lister · April 21

49 minutes ago, BE88 said:

Mike, could you please complete your information on the taxes we will be required to pay if we stay more than 180 days in Thailand with a table of taxes and related deductions to have a clearer vision for all us of the taxes we will have to pay next year.

Thank you.

The answer to your question is person specific and may well change from person to person. The deductions, allowances (TEDA) and tax tables are set out in para's 65 to 68 of the Simple Tax Guide. A further level of variation is a persons nationality and the terms of their DTA which may provide additional relief. If you need help with specifics regarding your own personal situation you are welcome to PM me with details and I will try to assist. A word of caution: I am extremely busy at present and have a substantial backlog to deal with that may take days, I also have large scale updates to make to the guide so my response will not come quickly.

Mike Lister · April 21

20 minutes ago, G Rex said:

Hi Mike. Thanks for all of your work here. Now things just look murky, not like mud!

I am an Australian, and have received no 'income' for 4 years. I have savings in several Australian banks, which I transfer when the need arises, though have sent nothing (and will not need to) this Financial Year.

I have a decent amount in an Australian Industry Superannuation Fund, that I will probably start drawing on in 2 or 3 years. I will receive no state pension - I am fully self funded. I know things can (and probably will) change, but do you think my personal super drawdown would be subject to tax here in Thailand? At the moment any earnings on my super are taxed at 15 percent, but will become tax free when I change to a 'retirement draw down account'. This account will require me to draw a minimum of about 5% of my balance each year.

Cheers, and once again thanks for helping to clarify these emerging tax changes.

I have always understood Australian Tax requirements - but accountancy! Swahili to me!

I cannot comment on the contents of country specific DTA's because I have not read them all, I certainly haven't read the terms of the Australian/Thai DTA which has been much discussed in various threads. My suggestion to you is to start reading your DTA to try and find the answer to your questions, failing that. you may wish to look at some of the Australian specific tax threads where your fellow countrymen will no doubt have answers for you. Sorry I can't be more helpful.

Mike Lister · April 21

I have "de-cluttered" the thread by removing lengthy, or not directly relevant or technical posts. I've done this in order to keep the concept of question and answer easy to read for members. If you post was hidden, please don't be offended or alarmed and if you would like it reinstated, please let me know. I'm grateful for your contribution, especially the technical material and if it becomes useful for others, I will reinstate it.

CrossBones · April 21

So - crypto sold on an exchange outside of Thailand is only taxable when you bring the money into Thailand?

In previous years it was said that "the blockchain is everywhere" therefor crypto sold overseas is fully taxable- even if the fiat money is not brought into Thailand (actually I think this was an idea put forward by some big-wig and not necessarily legal advice)

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

Mike Lister · April 22

27 minutes ago, CrossBones said:

So - crypto sold on an exchange outside of Thailand is only taxable when you bring the money into Thailand?

In previous years it was said that "the blockchain is everywhere" therefor crypto sold overseas is fully taxable- even if the fiat money is not brought into Thailand (actually I think this was an idea put forward by some big-wig and not necessarily legal advice)

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

That is what have in the Guide as the latest position from those who are involved with crypto, I confess to knowing very little about it myself.

Mike Lister · April 22

There has been some debate over several months about who must file a tax return in Thailand, which I think the TRD makes explicitly clear and is reflected in the Simple Tax Guide. I thought it might be useful however to also provide a quote from PWC on this subject which says:

"The following individuals are required to file income tax returns for income earned in the preceding tax year irrespective of whether there is any tax due:

• A person who has no spouse and earns income of more than Baht 60,000

• A person who has no spouse and earns income under category (1) (salaries and wages) of more than Baht 120,000

• A person who has a spouse and earns income of more than Baht 120,000

• A person who has a spouse and earns income under category (1) (salaries and wages) of more than Baht 220,000".

https://www.pwc.com/th/en/tax/assets/thai-tax/thai-tax-booklet-2023-24.pdf

It's not possible, of course, to file a Thai tax return without first obtaining a Tax Identification Number or TIN. The TRD English language translation on this point is clear but the information is set out perhaps more succinctly in the link below which states:

"Eligibility Criteria (to obtain a TIN):

Expatriates need a TIN if they are Thai tax residents (residing in Thailand for 180 days or more) and have assessable income in Thailand. (see above quote)

Application Process (for a TIN):
To apply for a TIN, expatriates must complete Form L.P. 10.1 and provide a valid passport, visa, and proof of address at their local tax office".

https://www.expattaxthailand.com/thailand-expats-guide-to-applying-for-a-tax-identification-number-tin/#:~:text=Expatriates need a TIN if,at their local tax office.

Mike Lister · April 23

An important update to the Tax Document above, which is now referred to as an Introduction to Personal Income Tax in Thailand, rather than a guide.

The important message is that there is now substantial evidence to confirm who must obtain a TIN and file a Thai tax return and under what circumstances. That information was posted yesterday in the post above and has now been incorporated into the document in the OP.

EVERYONE needs to be aware of the rules on this aspect.

proton · April 23

How does this 20 million a year git to other people with no tax work? Is this just not a loophole, just say a million to your wife was a gift when really living expenses?

Mike Lister · April 23

1 minute ago, proton said:

How does this 20 million a year git to other people with no tax work? Is this just not a loophole, just say a million to your wife was a gift when really living expenses?

A quick cut and paste below on what the document says below.

If you try to say that million was a Gift to your wife and then you end up using it as living expenses and somebody checks, it might be that there will be a problem. But there again, conjugal property and all that might mean there isn't.

Gift Tax is something that is used by wealthier people hence we only know what's written in the Revenue Code rather than what the practical application is. Yes, Gift Tax is often used as a loophole, which is why many other countries wrap additional rules and conditions around it to limit the abuse.....thus far we can't see that Thailand has done the same.

It seems clear that Gift Tax can be used legally to genuinely gift funds to somebody, it's also clear the Gift Tax rules can easily be bent and the Gift will be less genuine. What you describe is a Gift to your wife that's really for living expenses. You'll forgive me for thinking that's not really a genuine gift and the risk is the TRD may see things the same way. So the answer is, I think....if it's a genuine gift and all the rules are strictly followed, it's a good facility to use. But if it's something else, well, there's a risk.

GIFT TAX

59) "PIT is levied on gifts given by persons who are still alive. The tax is collected on the assets or the amount given to parents, ascendants, descendants, spouse, or others based on the value of the gift that exceeds a prescribed threshold, which depends on the type of gift and donor. Assets or amounts given that do not exceed the threshold are exempt from tax.

60) The following gifts are exempt from PIT:

a) Income derived by a parent from the transfer of ownership or possessory right in an immovable property without any consideration to a legitimate child, excluding an adopted child, in the amount not exceeding THB 20 million throughout a tax year in respect of each child.

b) Maintenance income or gifts from ascendants, descendants, or spouse, in the amount not exceeding THB 20 million throughout a tax year.

c) Maintenance income derived under a moral obligation or gifts made in a ceremony or on occasions in accordance with established custom from persons who are not ascendants, descendants, or spouse, in the amount not exceeding THB 10 million throughout a tax year.

d) Income from gifts in the case where the person who receives the gifts will use them for religious, educational, or public benefit purposes according to the intention of the donors under the criteria and conditions referred to in the Ministerial Regulations.

61) Gifts in excess of the above thresholds will be subject to PIT at the rate of 5% and will not need to be included together with other income when computing the annual PIT liability.

62) For ascendants/dependants the threshold is THB 20 mill, nor non-ascendants and dependants, it's THB 10 mill".

https://taxsummaries.pwc.com/thailand/individual/income-determination

63) Note: Because Gift Tax is predominantly a domain of the wealthy and depends to a large extent on local practise, there is a shortage of confirmed information on this subject. One field of thought is that Gift Tax cannot be used to escape Thai tax by Gifting untaxed money from overseas. On the other hand, many Western countries, including the UK, do not tax gifts from overseas. Members wishing to exercise this option should seek qualified advice before using this option to Gift untaxed funds.

64) Two additional points on this subject are: 1) Funds that are gifted, must be for the use of the person to whom they are gifted. 2) Gifts can be revoked later and reclaimed, under specific circumstances, such as if the receiver of the gift defames the Gifter or fails to take care of their serious medical needs. Issues arise here when the receiver is the spouse of the gifter and under marital law, the gift is regarded as conjugal property. Until this becomes more clear, it is critical that anyone wishing to use Gift Tax, seeks professional advice.

xylophone · April 23

20 hours ago, Mike Lister said:

https://www.pwc.com/th/en/tax/assets/thai-tax/thai-tax-booklet-2023-24.pdf

There is a section in here which SEEMS to cover superannuation/retirement funds, suggesting they are tax exempt????

Exemptions…….

Certain types of income are exempt from personal income tax. In respect of income from employment, money derived in the form of per diem, travelling expenses and certain fringe benefits, such as medical treatment, is tax exempt. The exemptions also include maintenance income derived under a moral obligation (subject to a threshold - see gift tax above), corpus of a legacy or inheritance (see the section on inheritance tax below) and certain capital gains as noted above. Provided that certain conditions are met, gains or benefits from registered provident funds, retirement mutual funds, long term equity funds, super savings funds, national saving funds including amounts derived from insurance or social security funds, interest on a deposit received from a bank in Thailand, a savings co-operative and a return from a deposit in Thailand according to Islamic principles are also tax exempt. Profit sharing distributed by a fixed income mutual fund to individual investors is exempt from tax.

Mike Lister · April 23

1 minute ago, xylophone said:

There is a section in here which SEEMS to cover superannuation/retirement funds, suggesting they are tax exempt????

Exemptions…….

Certain types of income are exempt from personal income tax. In respect of income from employment, money derived in the form of per diem, travelling expenses and certain fringe benefits, such as medical treatment, is tax exempt. The exemptions also include maintenance income derived under a moral obligation (subject to a threshold - see gift tax above), corpus of a legacy or inheritance (see the section on inheritance tax below) and certain capital gains as noted above. Provided that certain conditions are met, gains or benefits from registered provident funds, retirement mutual funds, long term equity funds, super savings funds, national saving funds including amounts derived from insurance or social security funds, interest on a deposit received from a bank in Thailand, a savings co-operative and a return from a deposit in Thailand according to Islamic principles are also tax exempt. Profit sharing distributed by a fixed income mutual fund to individual investors is exempt from tax.

Yes, some Thai investment and pension funds are but they must be Thai funds and also held for a minimum period, in the case of an LTF (long term funds) for example, 7 years. The rules governing RMF's or retirement mutual funds are similar. Here's a link to UOBAM which has a range of such funds, it will give you an idea of what's involved.

https://www.uobam.co.th/en/fund-type/6/retirement

CMMCB · April 23

Of course, another reason for needing to obtain a Thailand TIN is that many foreign banks in other jurisdictions (eg UK offshore banks) require this from Thailand tax residents when opening an account or continuing to operate an account from within Thailand. Similarly required by UK HMRC when filing a tax return there as a not-ordinarily resident with UK tax obligations.

topt · April 23

3 hours ago, CMMCB said:

Similarly required by UK HMRC when filing a tax return there as a not-ordinarily resident with UK tax obligations.

Well I filled in one for years without ever adding Tha tax residency to it and it was never queried even though they have my address here.......

More recently adding in Thailand I still did not give a TIN and again not asked for so not sure you can say it is "required".

CMMCB · April 23

Ok, topt, poor wording on my part. The non-residence form asks for other tax residences, and a TIN, rather than requires it.

Mike Lister · April 23

An interesting and not by any means unique or rare example of how providing information in the Tax Guide is helpful to many.

A member contacted me because they were concerned about the impact of the new tax rules and wanted to understand their liability, they had been fretting about it for some time. This person is retired and like me, has income from multiple countries and also significant savings overseas that are used to supplement their living expenses here. Their living expenses are in the region of 100k baht per month so they were concerned that the tax impact could be significant.

After we went through the details, we found that the pension income from country A is exempt by virtue of a DTA but the pension income from country B is taxable. The savings resulted from the sale of real estate in their home country and earned before 1 January 2024. The combination of those things, along with TEDA of 500k, means that person is nowhere near to paying tax on any income in Thailand, their assessible income is less than 250k baht per year, this means they can import a further 250k if they wish and still be free of tax.

So here we have a member who was concerned and had been worried because of a 1.2 mill. p.a. lifestyle and the associated tax implications but it turns out there aren't any. This kind of story is very common, people are afraid because they don't know and when they find out the facts, that fear goes away.

What can I say, read the guide and if you don't understand your situation, PM me and we'll try to figure it out together. But please note, this thread is not intended or able to assess overly complex or high income tax positions, those people can afford paid for tax guidance.

foreverlomsak · April 24

I only have income in the UK (paid into an offshore bank and transferred from there) plus Thai bank interest, which is subject to Thai tax withholding.

They consists of State Pension, Private Pension and an annuity from an old Company pension.

I do not intend to take over any monies that could make me liable for significant Thai tax annually, leaving the remainer to be handled under inheritance rules, but will still need to submit details.

Can you please advise which declaration form I should use PN90 or PN91, I'm confused on this matter.

OJAS · April 24

What address should paper returns be sent to, and would this be worth stating in the Guide, please?

topt · April 24

1 hour ago, OJAS said:

What address should paper returns be sent to, and would this be worth stating in the Guide, please?

I thought you had to take them down and personally file at a revenue office..........?

Even if not I personally would not trust in posting such a document but that is just me.

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Introduction to Personal Income Tax in Thailand

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