New Tax Rules for Expats in Thailand Spark Concern

[Danderman123]

2 minutes ago, CallumWK said:

 

366 - 180 = 186

 

Anyway I'm sure you are a troll, because why would the time of flight out of Thailand on the 157th day of the year be a concern.

 

You have to get better at trolling mate

You are correct, it's 186 days out of Thailand.

 

I have spent about 4 months out of Thailand this year, but every day not in Thailand counts. Since I have a condo in Thailand, every day I travel costs me. If I can save a day tonight, all the better for me.

[ChaiyaTH]

I wonder if most people realize that even they might be too stupid this year, to really know what they need to know, it doesn't mean legally they could still come back to bite our asses for this year, in 7 years from now.

[JackGats]

On 5/30/2024 at 12:53 AM, Excogitator said:

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

Except I read that Norway had been collecting taxes from its citizens living in Thailand for years now. The rationale was that if Norwegians residing in Thailand were not ACTUALLY paying taxes to Thailand, they needed to pay them to Norway. I can do without tax treaties of this kind thank you very much.

[kaufmanski]

If you bring in 800,000 for your retirement visa or let's say to purchase (gifting the funds to your wife) a home are these taxable income? That's to say any money you bring to Thailand is taxable income??

 

Edited June 5 by kaufmanski

[Expat68]

7 hours ago, Danderman123 said:

They could, if they want to. Like for an audit.

I will just fill in the same details for my wife's and I's self assessment income in the UK. If they want to ?? that, then it is them who have the problem, not me

[saintdomingo]

4 hours ago, kaufmanski said:

If you bring in 800,000 for your retirement visa or let's say to purchase (gifting the funds to your wife) a home are these taxable income? That's to say any money you bring to Thailand is taxable income??

 

Does it make a difference if the 800,000 is from previous savings, current year earned income or pensions.?

Edited June 5 by saintdomingo

[Mike Teavee]

12 hours ago, kaufmanski said:

If you bring in 800,000 for your retirement visa or let's say to purchase (gifting the funds to your wife) a home are these taxable income? That's to say any money you bring to Thailand is taxable income??

 

If the 800K is for your retirement extension then it needs to be in your name so cannot be a "Gift" to the wife & would be assessable income (taxable) if it wasn't from pre-2024 savings or covered by a DTA.

 

[I'm obviously assuming you're going to have spent >179 days in Thailand and so are Tax Resident]

Edited June 5 by Mike Teavee

[Mike Teavee]

7 hours ago, saintdomingo said:

Does it make a difference if the 800,000 is from previous savings, current year earned income or pensions.?

Yes...

• Previous Savings (Pre-2024) - No Tax
• Savings from Income earned after 1/1/2024 - Taxable unless covered by DTA
• Current Year Earned Income - Taxable unless covered by DTA
• Pensions - Taxable unless covered by DTA

Edited June 5 by Mike Teavee

[kaufmanski]

USA has a DTA with Thailand. So does that mean if I file in USA, I am exempt from paying taxes in Thailand from foreign earned income? I work in countries other than Thailand and USA. But I am an American citizen.

[kaufmanski]

The more I ponder different scenarios under DTA, for example sending money to your wife or girlfriend, or withdrawing foreign funds by ATM, etc etc. This will be impossible to monitor. I am guessing, that we will have to go to a registered accountant and claim some minimum amount of earnings. And then pay a set tax of a few thousand 

[Mike Teavee]

35 minutes ago, kaufmanski said:

USA has a DTA with Thailand. So does that mean if I file in USA, I am exempt from paying taxes in Thailand from foreign earned income? I work in countries other than Thailand and USA. But I am an American citizen.

Not necessarily, it all depends on what's been agreed as part of the DTA, it is possible that you'll need to pay Tax in Thailand if:-

1. The income is not covered in the DTA 
2. The income is not taxed in your home country (Could be a Tax Free investment product or something like Capital Gains which aren't always taxed for Non-Residents) 
3. Thailand has primary rights to tax the income (unlikely with the US DTA but with other country's DTAs it's very possible) - In this case you would pay the tax in Thailand & should be able to claim a tax credit for the other country to offset any tax you've paid there. 
4. Thailand has higher rates of tax than you've already been taxed, in which case you should be able to offset what you've already paid & pay the difference to Thailand.

 

NB Even though you might not have any tax to pay, you are still supposed to file a return if your assessable income is > 120K (Single).

Edited June 6 by Mike Teavee

[Excogitator]

19 hours ago, JackGats said:

Except I read that Norway had been collecting taxes from its citizens living in Thailand for years now. The rationale was that if Norwegians residing in Thailand were not ACTUALLY paying taxes to Thailand, they needed to pay them to Norway. I can do without tax treaties of this kind thank you very much.

If the Norwegians (residing in Thailand) get their income from Norway, then it should be taxed, one time, in Norway, but not in Thailand.

 

If the Norwegians (residing in Thailand) get their income from Thailand then it should be taxed, one time, in Thailand, but not in Norway.

 

That is the whole point of a tax treaty, to avoid double taxation.

[kaufmanski]

3 hours ago, Mike Teavee said:

Not necessarily, it all depends on what's been agreed as part of the DTA, it is possible that you'll need to pay Tax in Thailand if:-

1. The income is not covered in the DTA 
2. The income is not taxed in your home country (Could be a Tax Free investment product or something like Capital Gains which aren't always taxed for Non-Residents) 
3. Thailand has primary rights to tax the income (unlikely with the US DTA but with other country's DTAs it's very possible) - In this case you would pay the tax in Thailand & should be able to claim a tax credit for the other country to offset any tax you've paid there. 
4. Thailand has higher rates of tax than you've already been taxed, in which case you should be able to offset what you've already paid & pay the difference to Thailand.

 

NB Even though you might not have any tax to pay, you are still supposed to file a return if your assessable income is > 120K (Single).

Do you mean over 120,000 foreign earned income as per USA? I file income exclusion in USA. Are you a tax guy? Send me an <personal email removed per forum rules, please use PM system>

[Mike Teavee]

9 minutes ago, kaufmanski said:

Do you mean over 120,000 foreign earned income as per USA? I file income exclusion in USA. Are you a tax guy? Send me an <personal email removed per forum rules, please use PM system>

Sorry, I meant 120,000 THB which is the limit at which you are supposed to file a Thai Tax Return. 

 

I'm not a Tax guy, but spent 30 years working in IT for a couple of Global banks, part of which included coding a lot of Tax related rules so have some experience of how Tax works in the UK & have been doing a lot of reading up on how it works in Thailand, other guys on here are much more familiar with the US tax system. 

 

[JimGant]

20 hours ago, JackGats said:

Except I read that Norway had been collecting taxes from its citizens living in Thailand for years now. The rationale was that if Norwegians residing in Thailand were not ACTUALLY paying taxes to Thailand, they needed to pay them to Norway. I can do without tax treaties of this kind thank you very much.

Welcome to the OECD's new world of, not just 'no double taxation' but also 'no no taxation.' The new model tax treaties are being written to accomodate this. Some countries, like the US, aleady prevent 'no no taxation' with its savings clause, that gives the US at least secondary taxation rights, even in situations where the DTA gives the other country exclusionary rights.

 

Norway's system is interesting. If you can show the Norwegian tax authorities that 100% of you Norwegian income (to include govt pensions) was subject to taxation by Thailand, then you get a complete pass from Norwegian taxes (even if the Thai taxes were considerably less than what the Norwegian taxes would have been). And apparently that's how it works out, and why Norwegians in Thailand welcome being taxed by Thailand.

[Expat68]

1 hour ago, Excogitator said:

If the Norwegians (residing in Thailand) get their income from Norway, then it should be taxed, one time, in Norway, but not in Thailand.

 

If the Norwegians (residing in Thailand) get their income from Thailand then it should be taxed, one time, in Thailand, but not in Norway.

 

That is the whole point of a tax treaty, to avoid double taxation.

I pay my UK taxes every year

[maake55555]

I have another question, recently I was informed by my bank that I could no longer use a ATM card with my Thailand account, I must go  through the bank teller at the bank to withdraw money. Does anyone else know about this new policy and what does it mean. From US.

[petedk]

On 6/3/2024 at 4:22 PM, motdaeng said:

 

my wife does my tax return since 10+ years for me. she is using always my pink id card, never had any problems ... 

 

 

Exactly the same here. I have never had any problems

 

All I am saying is that this year they asked for a copy of every page of mu y passport.  I didn't have problems this time either. The money was refunded immediately.

[JackGats]

4 hours ago, Excogitator said:

If the Norwegians (residing in Thailand) get their income from Norway, then it should be taxed, one time, in Norway, but not in Thailand.

 

If the Norwegians (residing in Thailand) get their income from Thailand then it should be taxed, one time, in Thailand, but not in Norway.

 

That is the whole point of a tax treaty, to avoid double taxation.

Obviously, but life is not that simple. There are Norwegians who reside in Thailand and get their income neither from Thailand nor Norway, or they do get their income from Norway but free of withholding tax. In theory, it should not be Norway's business if Thailand relinquishes its right to tax, as it has been doing up to 2024 and will go on doing for LTR holders. But apparently Norway sees it as its business to nullify tax privileges awarded by a foreign country.

 

So avoiding double taxation is, alas, not the "whole point" of a tax treaty. Another point is increasingly making sure taxes are paid somewhere. A tax treaty is not always our friend.

[JackGats]

4 hours ago, JimGant said:

Welcome to the OECD's new world of, not just 'no double taxation' but also 'no no taxation.' The new model tax treaties are being written to accomodate this. Some countries, like the US, aleady prevent 'no no taxation' with its savings clause, that gives the US at least secondary taxation rights, even in situations where the DTA gives the other country exclusionary rights.

 

Norway's system is interesting. If you can show the Norwegian tax authorities that 100% of you Norwegian income (to include govt pensions) was subject to taxation by Thailand, then you get a complete pass from Norwegian taxes (even if the Thai taxes were considerably less than what the Norwegian taxes would have been). And apparently that's how it works out, and why Norwegians in Thailand welcome being taxed by Thailand.

Interesting.

 

This means that for Norwegians an LTR pensioner visa is not that interesting. If you are Norwegians you should instead contrive to get taxed in Thailand at some lowish Thailand rate.

[kaufmanski]

1 hour ago, maake55555 said:

I have another question, recently I was informed by my bank that I could no longer use a ATM card with my Thailand account, I must go  through the bank teller at the bank to withdraw money. Does anyone else know about this new policy and what does it mean. From US.

This doesn't make sense. If you have an ATM card (with known networks) of any kind you should be able to use an ATM machine. Ask the bank manager to explain.

 

[maake55555]

maake55555:  They showed me a letter with little info about this situation, I had to sign up for a new account and restrictive ATM use with the new account, thus I have to take out my money from a teller.  Also, I can no longer transfer money between accounts.  Total US control over my account. ?

[DrPhibes]

5 hours ago, maake55555 said:

maake55555:  They showed me a letter with little info about this situation, I had to sign up for a new account and restrictive ATM use with the new account, thus I have to take out my money from a teller.  Also, I can no longer transfer money between accounts.  Total US control over my account. ?

If you mean your US banks account ATM card being used overseas, I can see that. Citibank just changed their rules for check deposit.  The check must match exactly the name on the account.  So if my name is Joe Bob Briggs and I get a check written to J. Bob Briggs, they will not deposit the check.  Also, to have Zelle deposits to my business account  I actually have to reduce the security of my online access.  Just nuts!

[DrJoy]

On 5/30/2024 at 5:49 AM, new2here said:

how your PD 90/91 to Labour before they’ll authorize a renewal (assuming you worked in Thailand in the previous calendar year)

This requirement has been in place for years.

Expats on NON B work visa and WP, have to present PND 91 to renew their work permit/visas

 

The fear and cry is by the expats on retirement extensions/visas !

Edited June 6 by DrJoy

[Excogitator]

8 hours ago, JackGats said:

Obviously, but life is not that simple. There are Norwegians who reside in Thailand and get their income neither from Thailand nor Norway, or they do get their income from Norway but free of withholding tax. In theory, it should not be Norway's business if Thailand relinquishes its right to tax, as it has been doing up to 2024 and will go on doing for LTR holders. But apparently Norway sees it as its business to nullify tax privileges awarded by a foreign country.

 

So avoiding double taxation is, alas, not the "whole point" of a tax treaty. Another point is increasingly making sure taxes are paid somewhere. A tax treaty is not always our friend.

I don't totally disagree with you, but in my view, a tax treaty is better than double taxation for the vast majority. If you want a magic pill that caters to every man and his dog, then you just won't find it...

[Danderman123]

17 hours ago, maake55555 said:

I have another question, recently I was informed by my bank that I could no longer use a ATM card with my Thailand account, I must go  through the bank teller at the bank to withdraw money. Does anyone else know about this new policy and what does it mean. From US.

Because your bank account receives government money from abroad.

[placnx]

On 6/1/2024 at 11:37 AM, JimGant said:

Why they left re-sourcing out of the Thai-US DTA is a question researched by others. See page 19 of the below reference for a rationale that re-sourcing was a given, and not necessary to be specifically addressed:

https://nysba.org/NYSBA/Sections/Tax/Tax Section Reports/Tax Reports 2014/1313 Report.pdf

 

I'd cite Article 25(1) on my Form 8833:

This, along with an explanation in that two miles of space they give you -- should suffice, by addressing the forest, and not all those piddling re-sourcing trees.

 

The forest, of course, is the treaty to eliminate double taxation. And a treaty that gives Thailand primary taxation rights on certain US Income, namely private pensions and IRAs. But without a Form 8833 permission to trump the Internal Tax Code that says:

..... how can you eliminate double taxation if you can't take a tax credit on your US tax return -- for those taxes you paid Thailand for their taxation of your US private pension or IRA?

 

Obviously you can't, otherwise the treaty is worthless. Thus, the lack of a re-sourcing paragraph in the treaty, that you can cite on your Form 8833 -- is a non starter. The forest -- and common sense -- rule.

 

Note the last para in Article 25 of the Technical Explanation:

 

Written 26 years ago -- with no subsequent protocol to incorporate re-sourcing language. May be they figured the treaty wasn't broken -- and no protocol needed. Or, maybe they were just plain lazy. Anyway, I can't see a problem with any Form 8833 filings (other than they have to be mailed in, and can't be included with your electronic TurboTax filing. Oh well.

The problem is that as both the treaty and the technical explanation make clear, the credit is allowed but limited by US law to foreign tax paid on foreign-source income. I have yet to discover how someone without foreign-source income can override US law when the treaty states after article 25(3): "Notwithstanding the preceding sentence, the determination of the source of income for purposes of this Article shall be subject to such source rules in the domestic laws of the Contracting States as apply for
the purpose of limiting the foreign tax credit."

 

These are links for the 1996 US Model Tax Treaty and its Technical Explanation:

https://home.treasury.gov/system/files/131/Treaty-US-Model-1996.pdf

https://home.treasury.gov/system/files/131/Treaty-US-Model-TE-1996.pdf

These can be compared to the specific versions for Thailand. I have not done this comparison yet.

 

Anyway, you should read page 31 of the NY Bar report 1313 which addresses the specifics of the Thai and Indian treaties with the US regarding allowable credit.

 

[placnx]

On 6/1/2024 at 11:37 AM, JimGant said:

Why they left re-sourcing out of the Thai-US DTA is a question researched by others. See page 19 of the below reference for a rationale that re-sourcing was a given, and not necessary to be specifically addressed:

https://nysba.org/NYSBA/Sections/Tax/Tax Section Reports/Tax Reports 2014/1313 Report.pdf

 

I'd cite Article 25(1) on my Form 8833:

This, along with an explanation in that two miles of space they give you -- should suffice, by addressing the forest, and not all those piddling re-sourcing trees.

 

The forest, of course, is the treaty to eliminate double taxation. And a treaty that gives Thailand primary taxation rights on certain US Income, namely private pensions and IRAs. But without a Form 8833 permission to trump the Internal Tax Code that says:

..... how can you eliminate double taxation if you can't take a tax credit on your US tax return -- for those taxes you paid Thailand for their taxation of your US private pension or IRA?

 

Obviously you can't, otherwise the treaty is worthless. Thus, the lack of a re-sourcing paragraph in the treaty, that you can cite on your Form 8833 -- is a non starter. The forest -- and common sense -- rule.

 

Note the last para in Article 25 of the Technical Explanation:

 

Written 26 years ago -- with no subsequent protocol to incorporate re-sourcing language. May be they figured the treaty wasn't broken -- and no protocol needed. Or, maybe they were just plain lazy. Anyway, I can't see a problem with any Form 8833 filings (other than they have to be mailed in, and can't be included with your electronic TurboTax filing. Oh well.

The problem is that as both the treaty and the technical explanation make clear, the credit is allowed but limited by US law to foreign tax paid on foreign-source income. I have yet to discover how someone without foreign-source income can override US law when the treaty states after article 25(3): "Notwithstanding the preceding sentence, the determination of the source of income for purposes of this Article shall be subject to such source rules in the domestic laws of the Contracting States as apply for
the purpose of limiting the foreign tax credit."

 

These are links for the 1996 US Model Tax Treaty and its Technical Explanation:

https://home.treasury.gov/system/files/131/Treaty-US-Model-1996.pdf

https://home.treasury.gov/system/files/131/Treaty-US-Model-TE-1996.pdf

These can be compared to the specific versions for Thailand. I have not done this comparison yet.

 

Anyway, you should read page 31 of the NY Bar report 1313 which addresses the specifics of the Thai and Indian treaties with the US regarding allowable credit.

 

[JimGant]

 I really don't think they wrote a tax treaty, that gave Thailand primary taxation rights on US income, but allowed avoidance of double taxation -- by allowing a credit of this taxation against US taxes -- but forgot to add a clause about "treating US income as foreign income" (re-sourcing) -- that resulted in negating the treaty's protection against double taxation.

 

Anyway, I'll take the tax credit. And if ever asked about it (1% chance, based on auditing data rates) -- I'm obviously equipped with enough narrative to put any auditor into: "Enough, OK."

 

Nice, intellectual discussion. That's about it.

 

 

[maake55555]

On 6/6/2024 at 5:30 PM, Danderman123 said:

Because your bank account receives government money from abroad.

True, my retirement pay is sent to my Thai account, I understand that, but why did they stop ATM use??