New Tax Rules for Expats in Thailand Spark Concern

[webfact]

 

Thailand's recent tax regulation changes have sent ripples through the expat community. By March 2025, foreign retirees and other expats in Thailand will be required to file income tax returns for the 2024 tax year, marking a significant shift in the nation’s approach to taxing foreign residents.

 

Background on the New Tax Rules

 

Announced by Prime Minister Srettha Thavisin in October 2023, the new tax regime aims to widen the tax base to address the fiscal challenges posed by Thailand’s ageing population. The target is to ensure both economic stability and fair distribution of tax burdens. As a result of this new regime, some retirees could see tax bills exceeding 71,000 Thai Baht.

 

Why the Change?

 

Previously, a legal loophole allowed expats to avoid income tax if they declared that their income was not earned in Thailand within the same year. This loophole, established in 1985, was abolished in September 2023, compelling expats to declare all income earned from January 2024 onwards. The move is part of a broader effort to reduce income inequality and strengthen Thailand’s economic resilience for future challenges.

 

Significant Impact on Expats

 

For many foreign residents, this new requirement will mean navigating unfamiliar tax waters. Tax treaties between Thailand and other countries, including Norway, Sweden, Denmark, and Finland, may offer some relief. However, expats are advised to seek professional financial advice to understand how these treaties may impact their specific circumstances, reported ScandAsia.

 

What to Expect

 

With the first tax returns due at the end of March 2025, expats will need to get acquainted with the new system quickly. This development has spurred considerable concern, particularly among retirees who have enjoyed years of tax-free income.

 

Looking Ahead

 

As the March 2025 deadline approaches, the expat community in Thailand faces significant adjustments. Despite the challenges, proper planning and professional advice will be crucial in navigating this new landscape. The move represents a pivotal shift in Thailand's tax policy, emphasizing fairness and preparation for an ageing population.

 

Picture courtesy: MGR online

 

-- 2024-05-30

 

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[Metapod]

this is going to have large ramifications to thailand. 

[Danderman123]

A lot of Farangs in the village have no clue about this.

[motdaeng]

the big open question is, will the new tax law be enforced by the tax revenue department?

 

 

[Gknrd]

Expats here are in denial plain and simple. In Thailand you have to do a yearly extension. I bet a dollar to donut it will be tired to the yearly extension..

[ukrules]

11 minutes ago, Gknrd said:

Expats here are in denial plain and simple. In Thailand you have to do a yearly extension. I bet a dollar to donut it will be tired to the yearly extension..

Nonsense

 

Many people don't spend 180 days a year in the country and what if your extension is in December just before the end of the tax year - how they gonna get around that?

 

[Hawaiian]

1 hour ago, Metapod said:

this is going to have large ramifications to thailand. 

Not sure how much expats contribute to the economy.  I am no economist, but I think the end result will be less revenue collected because of the multiplier effect of retail spending. 

[Mike Lister]

32 minutes ago, Gknrd said:

Expats here are in denial plain and simple. In Thailand you have to do a yearly extension. I bet a dollar to donut it will be tired to the yearly extension..

I'll take that bet and I'll raise you an eclair.

[Mike Lister]

10 minutes ago, Hawaiian said:

Not sure how much expats contribute to the economy.  I am no economist, but I think the end result will be less revenue collected because of the multiplier effect of retail spending. 

One liberal estimate puts the total value of all westerns in Thailand at around 3% of GDP per year. Recent surveys have shown that less than 10% of them plan to leave as a result of the tax change, some of that will be talk. Impact?  Minimal, is my guess.

[nickmondo]

this article is nothing but scaremongering

there is no new information here.

everyone knows that the truth is...............nobody knows 

disgraceful article, and very annoying.

[tgw]

I was led to this thread by the headline "

BREAKING: Expats in Thailand to face substantial tax bills

"

in my email.

 

can the authors please elaborate on the substantial tax bill we will face, and why that is not an hypothetical ?

[dannyb123]

Laffer curve. Any big fish will spend max 179 days. Great idea incentivising less time spent in your country. The xenophobe thai government wont be getting a penny in income tax from me.

 

 

[Danderman123]

1 hour ago, ukrules said:

Nonsense

 

Many people don't spend 180 days a year in the country and what if your extension is in December just before the end of the tax year - how they gonna get around that?

 

100s of 1000s of Farangs have non-O retirement visas, and many live in the village, not much contact with news sources.

 

Those who have renewals in December will be the last to be impacted by the new tax laws, next year.

 

Immigration doesn't have much to do with the Revenue Department, but they do have the retiree's bank book at visa renewal time.

[Mike Lister]

I read a post today that said many foreigners in the rural villages, still don't know about the tax rule change and I suspect it's true. Unfortunately for those who do know, articles such as these are going to need to be repeated constantly, if the message is to get out to more people.  

[Danderman123]

3 minutes ago, dannyb123 said:

Laffer curve. Any big fish will spend max 179 days. Great idea incentivising them to spend less time in your country. The xenophobe thai government wont get a penny in income tax from me.

That is my goal for 2024. I've already missed 4 months out of Thailand this year.

 

My plan is to monitor visa renewals and also look for signs that the RD is seeking out tax evaders. If that happens in 2025, then I will continue to spend less than 180 days in Thailand.

[Robbie2618]

I would gather that most expats that have incomes outside of Thailand are not working for a company that's going to report the income to the Thai taxing authority and if your earning wages outside of Thailand then you would very likely have a non-Thai bank account. The only income the Thai authorities would know about is what's in your local bank account that you show on visa renewal. 

[new2here]

1 hour ago, motdaeng said:

the big open question is, will the new tax law be enforced by the tax revenue department?

 

 

 Here is my GUESS..

 

For many with Work Permits, one of the various requirements for renewal is that your show your PD 90/91 to Labour before they’ll authorize a renewal (assuming you worked in Thailand in the previous calendar year)

 

So… what I could see is that Immigration adds the mandate that you show a PD 90/91 to them as a part of the overall renewal of stay process… by doing so, they would then be able to see if a foreigner has fulfilled their tax reporting/payment obligations.

 

Again, this is just my guess how Immigration and Revenue might be able to handle the new requirement..  

 

but this only works for those who have Thai-based incomes..  

 

so.. for those who have “assets” that come into thailand from abroad .. I could see Revenue now requiring BANKS to report assets received from out-of-country sources, and paid into accounts held by non-Thais…  

 

at that point the non-thai would have to either claim it as taxable under thai law … or show that it’s not subject to taxation due to things like perhaps an applicable tax treaty, failing to meet the minimum number of days in country etc.

[Coxy]

Looks like I will be spending at least 6 months in Cambodia or Laos.  I will not be donating anything to this government 

[Excogitator]

More tax treaties are needed, like the ones Thailand has with the Scandinavian countries, to avoid double taxation.

[scottdavio]

11 minutes ago, dannyb123 said:

Laffer curve. Any big fish will spend max 179 days. Great idea incentivising less time spent in your country. The xenophobe thai government wont be getting a penny in income tax from me.

 

 

I agree, 2 of my very wealthy friends, have left recently, so they can return in December and keep under the 180 day ruling. 

[Danderman123]

9 minutes ago, Robbie2618 said:

I would gather that most expats that have incomes outside of Thailand are not working for a company that's going to report the income to the Thai taxing authority and if your earning wages outside of Thailand then you would very likely have a non-Thai bank account. The only income the Thai authorities would know about is what's in your local bank account that you show on visa renewal. 

Ummm...

 

The point of the new rules is to make the money you bring into Thailand from your home country taxable, such as bank transfers, ATM withdrawals, and the like.

[Crash999]

It’a great to get the word out because no matter what the details are you’ll need to file a return, and not filing is going to inevitably become a problem. 
 

What would be nice is clarity on the details. If you search for articles you’ll find some saying that it’s only income under certain buckets that qualifies, specifically income from employment, from business, and from property. Other articles say it’s all forms of income, even those from a pension. 
 

Given this is for 2024 income, it would be good for people who need to pay to know now so they can save a bit of money every month rather than be hit with a nasty bill suddenly next year. 

[Danderman123]

6 minutes ago, Excogitator said:

More tax treaties are needed, like the ones Thailand has with the Scandinavian countries, to avoid double taxation.

Tax treaties help, but you need to fill out a tax form to take advantage of the tax treaties. And the tax form may or may not accommodate deductions allowed by tax treaties.

[Danderman123]

11 minutes ago, Coxy said:

Looks like I will be spending at least 6 months in Cambodia or Laos.  I will not be donating anything to this government 

Given that we are almost in June, you need to leave Thailand soon.

[wimpy]

90% of my daily expenses are paid with a foreign credit card. What little cash I use is brought in through atm withdrawals, and goes into my pocket. Good luck taxing that.

[loong]

How is this "Breaking News"?

It is just a rehash of the same reports that we have been seeing for many months with no mew additional information/clarification!

[Danderman123]

13 minutes ago, new2here said:

 Here is my GUESS..

 

For many with Work Permits, one of the various requirements for renewal is that your show your PD 90/91 to Labour before they’ll authorize a renewal (assuming you worked in Thailand in the previous calendar year)

 

So… what I could see is that Immigration adds the mandate that you show a PD 90/91 to them as a part of the overall renewal of stay process… by doing so, they would then be able to see if a foreigner has fulfilled their tax reporting/payment obligations.

 

Again, this is just my guess how Immigration and Revenue might be able to handle the new requirement..  

 

but this only works for those who have Thai-based incomes..  

 

so.. for those who have “assets” that come into thailand from abroad .. I could see Revenue now requiring BANKS to report assets received from out-of-country sources, and paid into accounts held by non-Thais…  

 

at that point the non-thai would have to either claim it as taxable under thai law … or show that it’s not subject to taxation due to things like perhaps an applicable tax treaty, failing to meet the minimum number of days in country etc.

For those with Work Permits, the new rules won't impact them much, they are already paying taxes.

 

The new rules impact Farangs who don't earn income within Thailand.

[Danderman123]

1 minute ago, wimpy said:

90% of my daily expenses are paid with a foreign credit card. What little cash I use is brought in through atm withdrawals, and goes into my pocket. Good luck taxing that.

Credit cards go through a Thai clearinghouse, and transactions can be reported to the Revenue Department.

[Dcheech]

18 minutes ago, nickmondo said:

there is no new information here.

everyone knows that the truth is...............nobody knows 

disgraceful article, and very annoying.

 

Exactly. There is no new information at all. However there is one tag line at the bottom which goes pretty far in explaining the true nature of this article.

 

2 hours ago, webfact said:

Despite the challenges, proper planning and professional advice will be crucial in navigating this new landscape.

No new information, nothing except vague  ... dire warnings & I need to get "professional advice". No Excrement!  I guess I knew the hook was coming. Better get in touch with Somchai & Sons, Tax specialist.  right after I finish my morning coffee. 

Aloha
 

[WingFat]

It occurs to me that there are only two countries that tax worldwide income; the USA and Eritrea of east Africa.

 

Americans get a foreign tax credit on their US taxes for taxes paid in a foreign country, so no change for them. I don't know about how it will work out for Eritreans.

 

For the expats that hail from countries that do not tax their citizens if they are out of the country for a specified time (usually it's 180 days or more) in a calendar year, they have been enjoying tax-free living while expatting in the LOS, in many cases, for decades.

 

While I sympathize with those who will find this a challenge to pay Thai taxes, the saying of "there's no free lunch" comes to mind. And the argument that these people contribute to the Thai economy in other ways, well, so does everyone else.

 

Whatever the case, nobody should have to be double-taxed on the same income. I surely hope that if this issue arises, it gets ironed out such there is no double taxation.