New tax tax regulation

[solidad90]

Hello everybody,

 

I saw a thread that was very interesting but it was locked due to some language violations.

 

 

This meeting, between the French ambassy and an expert from the Thai revenue department, were discussing about the new law regarding foreign incomes. As you know, any foreign income brought to Thailand is now taxable under the new rule, whenever year you earn this income.

 

What is very concerning was about a comment from the Revenue department about the double tax agreement between France and Thailand, and by extrapolation, every country that signed a tax agreement with Thailand.

 

The revenue department said that the pensions, dividend, profits ect... would (will be) be tax in Thailand, despite beeing already taxed by the first country.

 

It means that the DTA (Double tax agreement) would be not applicable anymore.

 

The Thai revenue expert is talking about this at this sequence, in english language, at 56:17 min of the video (just press play and the sequence will start at the right time, in english language)

 

 

 

This is concerning because when you listen what he says, it seems the DTA will not be taken into consideration anymore. Which mean any income already taxed in the source country, "may be" taxed in Thailand too.

 

Please listen the sequence and share your thoughts 

 

Thanks 

[DrPhibes]

These DTA's are generally treaties between countries.  Can't see the revenue dept. trumping international treaties.

[solidad90]

Did you listen the video ? There were 3 representative from the Thai Revenue department. There was a 10 min debate about semantic wording. The french DTA version says ...income from the source country.. "shall not be taxed" while the Thai DTA version says "may be tax". 

 

The Thai revenue department says that they will read the DTA with the word "may be taxed", which open the door to apply tax to an already taxed income from the source country. 

[retarius]

This is scary. I have been told, by several sources including Asean Now, that the US DTA states specifically that SS can only be taxed by the US government.

 

Obviously I don't know what the Thai translation say, in but my experience with contracts that are translated is that there is often a 'language' that will the governing language and used to guide decisions. I have never seen a US agreement with a company of a foreign country in which the governing language was not English. 

 

Mike Lister do you have anything to add here???? I still have just enough time to avoid being a resident in 2024. 

[JackGats]

At 59 minutes, there's a discussion about a so-called mistranslation in the English version of the tax agreement. Now any tax agreement between France and Thailand will be signed in French and Thai only. Only the French and the Thai will be valid. Any translation in any other language will be for information purposes only.

 

 

 

[solidad90]

8 minutes ago, retarius said:

This is scary. I have been told, by several sources including Asean Now, that the US DTA states specifically that SS can only be taxed by the US government.

 

Obviously I don't know what the Thai translation say, in but my experience with contracts that are translated is that there is often a 'language' that will the governing language and used to guide decisions. I have never seen a US agreement with a company of a foreign country in which the governing language was not English. 

 

Mike Lister do you have anything to add here???? I still have just enough time to avoid being a resident in 2024. 

 

You are touching the sensitive point. The debate between the Thai tax revenue department and the French revenue department were talking about which language will "govern" the DTA.

 

The representative of the French revenue department was saying that they were following the French version (which is official) since 50 years, and he was very surprised by the declarations of the Thai revenue department.

 

They ended the debate by saying that this issue should be resolved "by top level officials". 

 

But what most of the people understood is that the Thai revenue department seems ready to burry the DTA, in order to enforce their new law and collect taxes on foreign incomes.

[solidad90]

This needs to be clarified of course but imagine that you are earning money oversea and live in Thailand. 

 

This money was already taxed in the first country. Thailand wish now to tax it again, at a 30% rate.

 

The video also talked about real estate income. The Thai tax office representative said that despite the income from real estate was taxed in the first (source) country, they reserve the right to tax it if you bring the money into Thailand.

 

This means, if you have income from a condo in any country, and already paid income taxes on it, Thailand can taxe it again. This is totally crazy.

 

[Presnock]

Just like many of us have been saying about this issue, experts of different countries including Thailand continue to say that DTA's trump Thai RD.  If the Thai govt plans to ignore 61 international agreements at once, then since they have now reportedly applied to join the OECD, I would imagine many governments will be opposed to their joining if they fail to abide by international agreements without consultation with those foreign govenments.  But just like we also have said many times - until the final bill is laid out there for all to see, we just continue to hear about possibilities.

[Aforek]

At this conference there was a representative of the French Ministry of Foreign Affairs and he was surprised by what the Thais said : Thais speak of the convention in English which says "may be", but the French convention is very clear; " for pensions, tax will be paid only in the first country (here, France)" : he was very unhappy and all this will undoubtedly be discussed between ministries because the agreement in English is not the agreement signed between France and Thailand

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[topt]

15 minutes ago, solidad90 said:

This means, if you have income from a condo in any country, and already paid income taxes on it, Thailand can taxe it again. This is totally crazy.

AFAIK it's not crazy and can be quite normal.......

I cannot speak for the French/Thai DTA wording but in the UK DTA it states "may be taxed" 

Quote

(1) Income from immovable property may be taxed in the Contracting State in which such property is situated.

In fact it definitely is taxed in the UK but that does not necessarily stop it being taxed in Thailand. You then get into the issue of credits etc.......

How that will play out is a whole different discussion.

[freeworld]

Its all a lot more complicated than just reading the DTA on its surface, but basically certain types of income are only taxable in one state.

 

All DTAs are based on the UN or OECD standard model of format and they all follow that type of wording "may be taxed" with conditions where and when it is applicable in the other state but one needs to read deeper into the DTA to read exactly when and why it can or cannot be taxed in one state or other contracting state.

 

Thailand tax department can't just deviate from the law and treaty, its also a little doubtful by the expertise if one has to refer to another tax official to clarify something.

 

For example here is a comparison between the model OECD convention (in English, French is also available online) and between France and another country, they all follow similar wording and in French article 10 reads maybe taxed.

 

 

French DTA for Dividends

 

OECD model convention

 

 

 

 

[topt]

1 hour ago, solidad90 said:

Please listen the sequence and share your thoughts 

I saw lots of questions after that but no Thai RD response - all seemed in French so I gave up listening 

 

Out of curiosity can anybody tell me what the answers were to questions 18 and 19?

[Aforek]

In my message,  I spoke of "pensions" 

"pensions are taxed only in the first country "; nothing to do with dividends

[Ben Zioner]

No one should panic too much here, the issue with the French DTA is that the text in the French and Thai versions differ. The French version spells clearly that pensions can only be taxed in France while the Thai version, translated into English says that it  "may be" taxed in France. The English version has of course no value according to the French as the treaty has only been ratified in the two original languages.

 

This only shows that anything can happen with these DTAs, but that doesn't mean that every single one will be affected by such glitches.

 

On the bright side, and as in the Swiss presentation of a few months ago, the LTR is mentioned twice a exempting that of foreign income remittance. The nice French speaking lady from RD even says their is currently no plan to change that.

 

Yes their was also some other horror, when one of the RD guys said that income from rental properties would be taxed in Thailand wether taxed at the source or not.

[freeworld]

58 minutes ago, solidad90 said:

This money was already taxed in the first country. Thailand wish now to tax it again, at a 30% rate.

 

The video also talked about real estate income. The Thai tax office representative said that despite the income from real estate was taxed in the first (source) country, they reserve the right to tax it if you bring the money into Thailand.

 

This means, if you have income from a condo in any country, and already paid income taxes on it, Thailand can taxe it again. This is totally crazy.

Tax is complicated everywhere.

 

If money was taxed in another country then they usually ask to prove it for eg a tax certificate obtained from the tax dept where the tax was paid, this could be used to offset against that income being taxed again and if the tax assessed and paid in the other country was less than the national tax laws in the residence country, then additional tax may be assessed.

 

Anyway the DTA on the Thai RD website seems to be a very old one...from 1974/75??? there are newer ones available on the French tax website.

[Aforek]

11 minutes ago, topt said:

I saw lots of questions after that but no Thai RD response - all seemed in French so I gave up listening 

 

Out of curiosity can anybody tell me what the answers were to questions 18 and 19?

questions 18 and 19, the answer is "no " for both questions

banks don't do anything 

 

but Thai banks must communicate informations to Thai authorities if there are more than 3000 transactions a year or if transferts are more than 2 millions bahts a year 

[topt]

23 minutes ago, Aforek said:

but Thai banks must communicate informations to Thai authorities if there are more than 3000 transactions a year or if transferts are more than 2 millions bahts a year 

Thanks - was this from the Thai RD guy?

[freeworld]

6 minutes ago, topt said:

Thanks - was this from the Thai RD guy?

This is a very old issue from 2019.

 

Here is some refs:

Sherrings

https://sherrings.com/bank-deposits-transfers-tax-reporting-thailand.html

 

Mazars

On 20 March 2019, the Government published the Act to Amend the Revenue Code (No. 48), 2562 B.E., in the Government Gazette. This Act became effective on 21 March 2019.

https://www.mazars.co.th/insights/doing-business-in-thailand/tax/deposit-and-transfer-transactions-reporting

[Bangkok Barry]

I am considering using my UK credit card for most purchases and no longer bringing any money at all into Thailand. They can't tax nothing. Of course there will be bank charges, but they would be gradual and I doubt they would come close to the Thai tax I would have to pay.

[Aforek]

19 minutes ago, topt said:

Thanks - was this from the Thai RD guy?

no, the woman, but anyway they work together

 

 

[steve187]

8 minutes ago, Bangkok Barry said:

I am considering using my UK credit card for most purchases and no longer bringing any money at all into Thailand. They can't tax nothing. Of course there will be bank charges, but they would be gradual and I doubt they would come close to the Thai tax I would have to pay.

would still be income

[Mike Lister]

The French language video has already been posted and removed once because only English language material may be posted on the forum. Some members are unhappy with this decision but these are the forum rules.  If anyone fluent in French and English wishes to provide a translation, we can consider that.

 

The video only pertains to the DTA between France and Thailand,  it cannot be extrapolated to be meant to include every other country, because all DTA's can be very different.

 

The issue regarding taxation of pensions appears to result from a questionable translation of the DTA into English where the full meaning was not accurately carried across. The other issue is that the understanding of the French/Thai DTA, by TRD staff, appears less than perfect.

 

I regret that this thread will have to be closed, until such time as we are able to obtain an accurate translation, which I will attempt to do.

[Mike Lister]

9 hours ago, retarius said:

This is scary. I have been told, by several sources including Asean Now, that the US DTA states specifically that SS can only be taxed by the US government.

 

Obviously I don't know what the Thai translation say, in but my experience with contracts that are translated is that there is often a 'language' that will the governing language and used to guide decisions. I have never seen a US agreement with a company of a foreign country in which the governing language was not English. 

 

Mike Lister do you have anything to add here???? I still have just enough time to avoid being a resident in 2024. 

The video is misleading, as Ben Zioner points out, the issue is one of translation which leaves much to be desired. This why the thread was locked, because we only allow English language content to avoid this issue. I do not believe you have anything to be concerned about, US SSc remains not taxable in Thailand, FWIW I also receive US SSc. Lastly, every DTA is different, no one meeting can speak to all DTA's.