Poll - New Tax Rule, What Will YOU Do?

[Mike Lister]

Let's find out who is planning to do what:

[Crossy]

I voted "wait and see".

 

I'm already a Thai taxpayer by virtue of being employed (actually I'm "resting" right now) but I really want to avoid paying more tax than I absolutely have to.

 

[Mike Lister]

FWIW I'm not going to make any changes in my life as a result of the new rule. I've filed tax returns in previous years and can usually control the income I remit here to avoid tax.

[brianthainess]

I don't get enough to pay Thai tax, or enough to pay tax in any country, so I won't be doing anything different.

[Chri]

Are you sure that the announced intention of the Thai Revenue to revise the tax exemption status of Foreign Income imported for use here, more than 1 year after it was earned, actually came into being on 1/01/24. 

I have been told that the proposal has been parked, at least, for this year What's more, Revenue are a collection agency, not a legislative body, so they cannot  determine taxation, only implement the law as passed and amended by Parliament. 

[Mike Lister]

4 minutes ago, Chri said:

Are you sure that the announced intention of the Thai Revenue to revise the tax exemption status of Foreign Income imported for use here, more than 1 year after it was earned, actually came into being on 1/01/24. 

I have been told that the proposal has been parked, at least, for this year What's more, Revenue are a collection agency, not a legislative body, so they cannot  determine taxation, only implement the law as passed and amended by Parliament. 

No new tax law was created. only a reinterpretation of an existing law which became effective on September last year. A concession was granted in November last year to make the new interpretation effective as of 1 January this year. No, it hasn't been parked, it's live and the Revenue is actively recruiting additional legal staff nationally to manage the new international rules agenda.

[Mike Lister]

I am told the person responsible for the new interpretation of the tax law, is the new incoming Minister of Finance, that should give you a clue as to whether it will be cancelled or not.

[connda]

My sources of income are Social Security, a US-based pension, and I'll  eventually have some income from my IRA when I'm forces to begin cashing it out due to age. 

All of these income sources are filed with the IRS via an annual 1099 and are declared as taxable income in the United States. 

I'm not doing anything as under the US-Thai DTA all of my income is already "taxed" in the US.  I will keep copies of my annual tax filings. I have copies of my US 1099 filing going all the way back to 2007, and If Thailand suddenly says that they have a right to tax my US income that has already been filed with the IRS (i.e., "taxed" in the US) - then I'll begin a letter writing campaign to my State Senators and Congress-person.  I'm sure there are other bureaucratic entities in the US who deal in enforcing the Dual-Tax Agreements between the US and foreign countries.  We collectively need to figure out who those entities are before hand and add them to the list of those to notify.

I have no problem paying Thai taxes that are their due, which are Thai VAT and the taxes they automatically take out of my Thai bank accounts. So they get 7% of all money from my US sources, and then 15% of any money I "invest" in an interest bearing bank account in Thailand. 
They want more?  **** them.  It's greed and it's in violation of the DTA tax treaty as they really are looking to dual tax income that is already taxed in the US (speaking as a US citizen).  Which is wrong and amoral.
 

So, coming after US citizen's income that is filed annually with the US IRS and taxed in the Untied States?  That's going to be a problem that needs to be addressed by those in the US government who are responsible for enforcement of the US Dual-Tax Agreements.  Otherwise those agreements aren't worth the paper they are written on. The same for those who annually file their taxes in their home countries.

 

So let's put our heads together here guys and gals.  What we are really worried about is Thailand taxing US income that is already filed with the US IRS and taxed in the US - and - if that happens then it is in violation of the US-Thai Dual-Tax Agreement - and - it is morally wrong.  What we should be thinking - collectively - is: if that happens, who in the Untied States do we collectively contact. Because the noise the Thai government is making is: "We don't care about Dual-Tax Agreements and we are coming after your income that has been taxed in your homeland."

Untied we stand, divided we fall - so we need to act as a collective in unison if this nonsense goes sideways next year.  Plan now - together.
@Mike Lister 

Edited May 3 by connda

[Mike Lister]

2 minutes ago, connda said:

My sources of income are Social Security, a US-based pension, and I'll  eventually have some income from my IRA when I'm forces to begin cashing it out due to age. 

All of these income sources are filed with the IRS via an annual 1099 and are declared as taxable income in the United States. 

I'm not doing anything as under the US-Thai DTA all of my income is already "taxed" in the US.  I will keep copies of my annual tax filings.  If Thailand suddenly says that they have a right to tax my US income that has been already been filed with the IRS (i.e., "taxed" in the US) - then I'll begin a letter writing campaign to my State Senators and Congress-person.  I'm sure there are other bureaucratic entities in the US who deal in enforcing the Dual-Tax Agreements between the US and foreign countries.  We collectively need to figure out who those entities are before hand and add them to the list of those to notify.

From what you've written, it sounds like your income is exempt anyway so why the letter writing campaign? Either your income is excluded by treaty of the tax already paid in the US will offset any Thai tax liability.

[Chri]

The application of a law by an entity, charged with that function, cannot be open to cavalier interpretation by them, at will, by the executive who are creatures of the law. and subservient to it.

If Revenue have decided to re-interpret their understanding or application of a law, then their previous position was ultra vires and the current is intra vires.

In law, only one scheme can be correct. Only a Court, in a judicial review process, can establish an interpretation by precedent. It cannot be A or B.  

What's more, the exemption applies to all Thai tax residents and not just foreigners tax resident here, in relation to foreign earned or worldwide income. I would imagine that the really big losers would be those Thais who have major investments abroad and if faced with the exemption loss, would not repatriate income, resulting in the tax change, possibly, having a negative effect on revenues. 

I cannot contradict Mike's information, other than to say that is not what I have been told and  by a (Thai) body, which was involved in the direct lobbying of Revenue on the issue. There is  a letter in the BP today from a contributor, who also failed to get any clarification from Revenue on the issue. 

I think clarity is needed and the only way to get it is in a written comment from Revenue.

[Ben Zioner]

None of the above, but a combination plus a few a other things.

[Stocky]

1 hour ago, Crossy said:

I voted "wait and see".

Likewise, but I've also started to be a more thoughtful with how much money I remit to my Thai accounts.

[Mike Lister]

8 minutes ago, Chri said:

The application of a law by an entity, charged with that function, cannot be open to cavalier interpretation by them, at will, by the executive who are creatures of the law. and subservient to it.

If Revenue have decided to re-interpret their understanding or application of a law, then their previous position was ultra vires and the current is intra vires.

In law, only one scheme can be correct. Only a Court, in a judicial review process, can establish an interpretation by precedent. It cannot be A or B.  

What's more, the exemption applies to all Thai tax residents and not just foreigners tax resident here, in relation to foreign earned or worldwide income. I would imagine that the really big losers would be those Thais who have major investments abroad and if faced with the exemption loss, would not repatriate income, resulting in the tax change, possibly, having a negative effect on revenues. 

I cannot contradict Mike's information, other than to say that is not what I have been told and  by a (Thai) body, which was involved in the direct lobbying of Revenue on the issue. There is  a letter in the BP today from a contributor, who also failed to get any clarification from Revenue on the issue. 

I think clarity is needed and the only way to get it is in a written comment from Revenue.

I'm not trained in law, especially not in Thai law so I can't comment on much of what you've written. But let's look for a moment at the anecdotal evidence thus far:

 

1) several entities said at the outset that the new interpretation would be challenged in the courts but thus far there has been no evidence of that. In fact, the author of the new interpretation has just become Finance Minister.

 

2) All the major tax consultancies such as PWC, KPMG, Sherrings, Mazars and others, have all met with TRD executives and undergone many many Q&A sessions that have been published. Most of the details are understood and have been published ergo the TRD statements have been made. 

 

3) The TRD is actively recruiting some 40 plus Thai lawyers to act as the DTA specialist in each of the areas.

 

4) All the major consultancies have produced their annual tax guides and have written the new rule into stone, for their clients.

 

 

[Mike Lister]

2 minutes ago, Stocky said:

Likewise, but I've also started to be a more thoughtful with how much money I remit to my Thai accounts.

Sensible.

[Rimmer]

An off topic video has been removed. Please don't do this it is trolling!! 

[scubascuba3]

Too many pensioners panicking, I'll wait and see and if i need to will spend less than 6 months here a year

[Mike Lister]

Just now, scubascuba3 said:

Too many pensioners panicking, I'll wait and see and if i need to will spend less than 6 months here a year

The panicking pensioners have already panicked, educated themselves about what their position will be and have now had their minds put at rest. We're now into the second tier, those who didn't bother to find out about the impact previously and who now see the rule change as a reality. Those waves will continue for quite some time.

[connda]

48 minutes ago, Mike Lister said:

From what you've written, it sounds like your income is exempt anyway so why the letter writing campaign? Either your income is excluded by treaty of the tax already paid in the US will offset any Thai tax liability.

Because of how it may be interpreted.  I can see it now.
"Did you pay taxes.  Let's see the taxes you paid."

 

In the US, everyone receives deductions and exemptions, including the Standard Deduction.
If your taxable income is above the deductions then you paid the IRS.
If your taxable income is below the deductions then you get a refund of those taxes which have already been withheld.

Either way - you have declared your "taxable income" on a 1099 filed with the IRS in the United States making all of that income "taxed."  It's not about whether your income is greater or less than your deductions - it's the fact that you filed your taxable income in the United States.

I don't feel like being stuck between Thailand playing word-games in order to tax income they have no right to tax.  In other words, if they chose not to recognize the deductions and exemptions all US taxpayers are afforded by their own country.  At the simplest level this entire fiasco should boil down to:  If you declare earned income in the US, file a 1099 with the IRS which is accepted - none of that income is taxable in Thailand under the US-Thai DTA.

So regarding "letter writing?"  Yeah - if Thailand says they are going to tax income that has been declared and filed and accepted by the IRS, and do so in violation of the DTA - it's time to write letters.

If Thailand refuses to recognized the tax deductions and exemptions of the tax codes of other countries that it has DTAs with, then why should those countries recognize the deductions and exemptions of the Thai tax code either. 
It's not the bottom-line of your tax return that determines your tax liability,  its that fact that you declared your taxable income with the tax institution (the IRS in the US) in your own country. How that tax liability is assessed is the jurisdiction of the home-country tax agency or institution.

 

So basically Mike - I don't trust Thailand or the intentions of their Finance Ministry.  Everything I see here points to their  intention to side-step their DTAs with other countries in order to increase their tax base by taxing foreign income they have no right to tax.

Edited May 3 by connda

[Hummin]

Transfer money to my wife bank account as a gift, I got embassy letter for my visa.

 

Still Im not staying more than 179 days this year, or in the future. 4-5 months a year is more than enough. I do not think I ever again will live permanent in Thailand. 7 years was enough. 

Edited May 3 by Hummin

[Mike Lister]

8 minutes ago, connda said:

Because of how it may be interpreted.  I can see it now.
"Did you pay taxes.  Let's see the taxes you paid."

 

In the US, everyone receives deductions and exemptions, including the Standard Deduction.
If your taxable income is above the deductions then you paid the IRS.
If your taxable income is below the deductions then you get a refund of those taxes which have already been withheld.

Either way - you have declared your "taxable income" on a 1099 filed with the IRS in the United States making all of that income "taxed."  It's not about whether your income is greater or less than your deductions - it's the fact that you filed your taxable income in the United States.

I don't feel like being stuck between Thailand playing word-games in order to tax income they have not right to tax.  In other words, if they chose not to recognize the deductions and exemptions all US taxpayers are afforded by their own country.  At the simpiest level this entire fiasco should boil down to:  If you declare earned income in the US, file a 1099 with the IRS which is accepted - none of that income is taxable in Thailand under the US-Thai DTA.

So regarding "letter writing?"  Yeah - if Thailand says they are going to tax income that has been declared and filed and accepted by the IRS, and do so in violation of the DTA - it's time to write letters.

I can't help but feel, from what you've written, that you don't fully understand the mechanics of DTA's, nor of a foreign governments sovereign right to levy taxes on residents and/or invoke internationally accepted tax policies. But we'll save that discussion for another time and place.

[Dcheech]

Everybody love to shop talk about this. Still waiting for the Thai government confirmation on what the heck they want.

 

For all those who say the laws are already on the books. OK, If that is the case, and I have looked at them. I would be submitting a tax based on the capital gains for this year, which would be an extremely SMALL percentage of the non pension, money I bring in after exemptions. I can prove all that BTW, but the Thai tax system as it now stands would not be able to deal with or process my information.

Which leaves it up to the Thai government to clarify what they want or are doing. I am not expecting any answers to those questions any time soon. 

As for the shop talkers ... eight more months of shop talk to go. Best to pace yourself. 

 

[Mike Lister]

2 minutes ago, Dcheech said:

Everybody love to shop talk about this. Still waiting for the Thai government confirmation on what the heck they want.

 

For all those who say the laws are already on the books. OK, If that is the case, and I have looked at them. I would be submitting a tax based on the capital gains for this year, which would be an extremely SMALL percentage of the non pension, money I bring in after exemptions. I can prove all that BTW, but the Thai tax system as it now stands would not be able to deal with or process my information.

Which leaves it up to the Thai government to clarify what they want or are doing. I am not expecting any answers to those questions any time soon. 

As for the shop talkers ... eight more months of shop talk to go. Best to pace yourself. 

 

Do you really think you are the only person in the history of Thai taxation to ever report an overseas capital gain! 

[Dcheech]

3 minutes ago, Mike Lister said:

Do you really think you are the only person in the history of Thai taxation to ever report an overseas capital gain! 

 

Mike you are a great shop talker & bravo but really, they need to get that new tax form out which you have stated they are doing ... until then ... I need more ice & lime juice, and need to get that before noon.

Aloha 

[gamb00ler]

36 minutes ago, connda said:

Either way - you have declared your "taxable income" on a 1099 filed with the IRS in the United States making all of that income "taxed."  It's not about whether your income is greater or less than your deductions - it's the fact that you filed your taxable income in the United States.

Of course I haven't examined every type of income in the USA, but there is at least one income source that is not taxed in the US but may be assessable income for Thai tax residents.  Income earned in a US Roth account is never taxed by the IRS if taken as a qualified distribution.  It is probably assessable in the eyes of the TRD.  I don't think you can state that such income is "taxed" in the USA and thus shouldn't be taxed in Thailand.

Edited May 3 by gamb00ler
add "qualified distribution"

[connda]

13 minutes ago, Mike Lister said:

I can't help but feel, from what you've written, that you don't fully understand the mechanics of DTA's, nor of a foreign governments sovereign right to levy taxes on residents and/or invoke internationally accepted tax policies. 

But we'll save that discussion for another time and place.

That's probably because it takes a international tax lawyer to understand them.

I've read the US-Thai DTA.  I don't see anywhere within that agreement where Thailand can double tax income that has been declared as taxable income with the IRS, just because I'm a Thai tax resident. 

This entire fiasco boils down to an interpretation of term "taxed income."

I'll be honest with you Mike - the DTA makes my Social Security payment untouchable.

That leaves my pension which I receive in the US and transfer to Thailand.  If push comes to shove, I'll limit the amount I remit to Thailand to keep it under the personal exemption ceiling of the Thai tax code, I'll take every exemption and deduction I can find, and I'll start to claw-back the 15% that my banks take out of my account for taxes on "earned interest."  I still won't pay anything - well - other than the PITA time that it takes to have to file.  Actually - Thailand will pay me.  I'll rake back all the taxes I've paid on earned interest that I've let slide up to this point. 

I started out here on a business visa and I filed taxes the first three years I was here.  I don't want to do it - but I can - and I'll remain unaffected by this "money-grab."

It's not the money Mike.  It's the principle.  I don't like greed or amorality.  And I see the potential that both are driving this fiasco in the first place.

Again - it's a PITA, not the end-of-the-world, well, at least for me personally.  Now for all these expat members who claim they are independently wealthy.  Well, this might affect them.  But if they are that rich then they can afford tax lawyers and brown-envelops (the latter unfortunately being a reality in Thailand that truly sucks).

[Dan O]

2 hours ago, Mike Lister said:

Let's find out who is planning to do what:

I voted I'll do what Im suppose to do based on what the laws actually require. Im tracking the laws both here and what exemption the DTA from USA outlines. I have been very careful to track pension money movements from origin issue to my US bank and then onward to Thailand. Thay way I have the appropriate info to act once the dust settles. 

[connda]

15 minutes ago, gamb00ler said:

Income earned in a US Roth account is never taxed by the IRS if taken as a qualified distribution.

Ahhh, but it is.  The money that goes into a Roth is "earned income" and subject to taxation - BEFORE - you put it in the Roth.  Any income that Roth generates after that point is "tax exempt."

This is why I'm going to keep pounding on this point.  Is this entire fiasco about side-stepping the deductions and exemptions of your home-country's tax code in order to lay claim to funds that are tax exempt in your own country, therefore effectively taxing that income both in the US and Thailand. 

If that's the game they are going to play, then I'm going to ask cognizant officials in US government to do the same to Thai citizens in the US who are tax residents in the US who remit Thai income to the US.
Now - that will only affect the rich and wealthy Thais, which in turn will get the attention of both the US and the Thai government when the Hi-So Thais are dual-taxed as well and begin to squawk to their own elite leaders. 

[Moonlover]

According to the figures that you posted earlier in the year @Mike Lister I will not be liable for tax here anyway, due to the fact that the bulk of my income is in the form of an UK armed forces pension, which they cannot tax anyway.

 

But I'd rather do without the irksome administration of having to prove that to them, so I opted for 'not planning to do anything differently'.

Edited May 3 by Moonlover

[Mike Lister]

1 minute ago, connda said:

Ahhh, but it is.  The money that goes into a Roth is "earned income" and subject to taxation - BEFORE - you put it in the Roth.  Any income that Roth generates after that point is "tax exempt."

This is why I'm going to keep pounding on this point.  Is this entire fiasco about side-stepping the deductions and exemptions of your home-country's tax code in order to lay claim to funds that are tax exempt in your own country, therefore effectively taxing that income both in the US and Thailand. 

If that's the game they are going to play, then I'm going to ask cognizant officials in US government to do the same to Thai citizens in the US who are tax residents in the US who remit Thai income to the US.
Now - that will only affect the rich and wealthy Thais, which in turn will get the attention of both the US and the Thai government when the Hi-So Thais are dual-taxed as well and begin to squawk to their own elite leaders. 

I don't see how a tax exemption granted by one country should automatically be grandfathered to another country. The taxation risk of losing that exemption was surely one of the factors in the plan to move here in the knowledge that it would be lost.

[connda]

1 hour ago, Chri said:

I think clarity is needed and the only way to get it is in a written comment from Revenue.

And then the question becomes: "Why isn't that clarification forthcoming?"

You are correct.  The Thais with foreign investments will be the most affected.  As such, perhaps it will be wealthy Thais who force the issue either administratively or judicially to obtain the clarification (which one has to question - Is this deliberate obfuscation?).  Well - TIT, right?