New Tax Rules for Expats in Thailand Spark Concern

[PETERTHEEATER]

7 hours 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 

Please reconsider. Your action could threaten the plan to pay Thai nationals 10,000 each due to lack of funds...🤣

[Expat68]

2 hours ago, Dmaxdan said:

I've never really been that worried about filing a tax return and potentially paying tax in Thailand. In real terms I only transfer small amounts into Thailand each month.

 

But what does concern me big time is the actual logistics of doing a tax return properly.

I live in Chiang Mai province with, apparently 30,000 other long term expats.

How the hell are the RD in Chiang Mai going to process that many ignorant foreigner's tax returns within the first three months of the year???

We will all have to all camp out the night before just in the vain hope of getting a slot!!!

This is a side of this that the government hasn't thought through...

 

Okay, so maybe a percentage of the long term expats may work here and therefore pay tax on their salaries. But even so...

 

People will say "get an accountant or a financial advisor" but there can't possibly be enough English speaking advisors to go around. And none of them can start working for you until this year is over. 

Personally speaking, if the forms are in English I can't see them too difficult to fill in. I fill a UK tax form in every year

[TallGuyJohninBKK]

40 minutes ago, JimboB4 said:

Don’t worry read. 
 

https://www.expattaxthailand.com/your-questions-answered/#:~:text=US specific%3A Are Social Security,accounts potentially liable for tax%3F&text=In the US DTA%2C it,are not taxable in Thailand.

 

When I go to that website, all I see are the various posted questions, but clicking them doesn't appear to show any of the actual answers???

 

[new2here]

6 hours ago, Danderman123 said:

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.

that’s true.. working foreigners are pretty straight forward .. I agree.. my larger point is that the same general idea could be used to address those who have “income” but derived form outside thailand and imported into the kingdom 

[Presnock]

6 hours ago, Danderman123 said:

Taxation of US social security benefits would require that Thai marginal tax rates would have to be higher than US rates.

 

Even so, you wouldn't be liable for the entire amount, US tax payments would be deducted from Thai taxable amounts.

Actually, everywhere there has been a web interview including with RD person too, we have been told that DTA's will over ride the Thai tax law, if so, US social security is taxable ONLY by the US govt as is the US govt pension.  Of course, I also realize that Thailand could drop all the DTA agreements and start from scratch but I believe that would happen at the same time as every expat in Thailand would disappear.

my opinion only as I am still in the deep woods with everyone else concerning what the Thai govt will publish on this new interpretation IF ANYTHING and just go with what has been published and see what drops out of the woods come next January-March.

[drow24]

1. Have a friend with both a home county bank and a Thai bank account that lives outside Thailand over the 180 day limit so as to not trigger the tax event.
2. Send your Home Country currency to your friends bank account.

3. Your friend sends Thai baht equivalent to your Thai baht account bank.

(The friend can also send home currency to Thailand without tax worries at some point between this)

This means you did a peer to peer currency exchange with your peer. It’s 100% legal if documented and reported correctly (banks will document and report big transfers)

Keep the receipts of transfer and the currency rate at time of transfer to PROVE there’s no weird stuff going on.
At tax time, you will need to show and prove money was sent and money was received at the same value as a currency exchange, with no profit involved for either party.

 

I could see this being a business venture for someone. Charge a flat Fee in your home country currency for the service. It’ll be less than paying tax for those who didn’t need to pay tax before.

Also, I could see a peer to peer money transfer system where these above transactions occur through a phone app. 
I know a few expats that want to transfer baht into home currency and I know a few retirees that want to transfer home currency into baht. Just need to start working together. 

[Presnock]

2 hours ago, Mike Lister said:

You could get your TIN now and have the TRD set up your online account, that way you'd never need to go near the Revenue office to file.

Even we folks that know (or believe) that we will have no assessable income might save some future time by visiting the local RD office, provide sufficient proof that we will not have assessable income in the future and have them note that for the foreseeable future.  Just and idea.

[LudwigK]

Retirement Visa...you should know! 

More than 180 days??  Best proof is your passport.

[Mike Lister]

25 minutes ago, TallGuyJohninBKK said:

 

Your comment above regarding the speculation about Thai tax compliance potentially being linked at some point to the visa/extension process...

 

The above speculation also doesn't reflect the fact, as previously noted here, that not ALL resident expats will in fact have a legal obligation to file a Thai tax return...or even register for a Thai tax ID.

 

Because their foreign incomes sources may be exempt / non-assessible under the various tax rules (such as exempt by double taxation treaty provisions and/or being pre-Jan.1 savings accrued abroad, etc.)

 

We agree completely, i have said exactly the same thing in this thread. Somebody asked me if I thought it was likely, my response is that it may happen at some point in the future 

[Presnock]

2 hours ago, Srikcir said:

Not if a foreigner has a LTR visa Pensioner category.

at the 5 year renewal time, the LTR holder will have to requalify showing the tax forms from his/her country in order to stay another 5 years...at the yearly visit (or agent) only informing the BOI of residence but there are other considerations to if one is a regular international traveler.  Besides that, some LTR holders will be working in Thailand too and will in fact have to pay taxes on that salary.

[TallGuyJohninBKK]

4 hours ago, JimGant said:

[There's a question on whether or not a gift might be tax exempt; the jury is still out on this question.]

 

Jim, from all the early stuff saw on the newish Thai tax provisions, I thought those pretty clearly spelled out an exemption for imported funds given as a gift/gifts to Thai spouses, up to a pretty large limit.

 

Did something change on that somewhere along the way?

 

 

BTW, correct me if I'm wrong... but from the U.S. end of things, if I have accrued savings in a U.S. account and decide to gift a portion of that to my Thai spouse, I've already paid U.S. income tax on that income when it was earned.

 

And, the U.S., in its own taxation scheme, has a pretty high threshold before it gets to taxing gifts,  including a gift tax exemption for gifts to spouses?

 

Are there types of gifts that are not taxable?

Yes. There are a few categories that, in general, are not subject to gift taxes, including:

 

• Tuition paid directly to a college
• Medical bills paid directly to a care provider
• Gifts to your spouse
• Gifts to political organizations

 

https://www.britannica.com/money/gift-tax-rules

 

https://www.investopedia.com/terms/u/unlimited-marital-deduction.asp

 

 

[Presnock]

2 hours ago, redwood1 said:

 

Yea I would say a LTR visa is a tax free ....Free lunch......For the most wealthy...

Suggest before making comments on a particular visa, one should actually read the benefits of that visa.  sounds a bit like jealousy to me...and also the qualifications - not always the most wealthy.

[JohnAllan]

'This development has spurred considerable concern, particularly among retirees who have enjoyed years of tax-free income.'

 

There's a CONSIDERABLE difference, between tax-free - and THAI-TAX-FREE!

 

So ... do the Thai authorities 'plan' to agree double-taxation agreements, with the requisite countries?

 

Or do they 'hope' - in TYPICAL Thai fashion - that the expats won't notice?

[Dont confuse me]

I could be wrong but I believe all government pensions are taxed at source as are private pensions (they are not earned in LoS) 

So unless they are throwing work permits around where's the panic?

Ohh that will be from those working unlawfully worrying about not paying tax !

[DrPhibes]

21 minutes ago, Presnock said:

Actually, everywhere there has been a web interview including with RD person too, we have been told that DTA's will over ride the Thai tax law, if so, US social security is taxable ONLY by the US govt as is the US govt pension.  Of course, I also realize that Thailand could drop all the DTA agreements and start from scratch but I believe that would happen at the same time as every expat in Thailand would disappear.

my opinion only as I am still in the deep woods with everyone else concerning what the Thai govt will publish on this new interpretation IF ANYTHING and just go with what has been published and see what drops out of the woods come next January-March.

People keep calling these laws between Thailand and other countries DTA's.  These are tax Treaties, not just some agreements.  If a country suddenly stopped adhering to treaties, who is going to want to deal with them?

[Presnock]

1 hour ago, Srikcir said:

What if you determine you have no Thai taxable income through either a Double Tax Treaty or LTR visa?

Must you still file a Thai tax return showing zero tax due?

according to the Thai law, one must have a Tax ID number to file an income tax form, but that law says one must get a tax id number once that person remits ASSESSABLE funds into Thailand.  In theory if one does not remit assessable funds at all then they should not have to worry.  However, if the banks or some other office is providing them with the amount remitted, the RD may require the expat to provide proof that the remitted funds are not assessable.  We might see something on this prior to next calendar year, but then again we might not...just saying

[Ebumbu]

33 minutes ago, JimGant said:

Well, you'll continue to pay Thai taxes -- on those remitted incomes the DTA says are primarily taxable by Thailand. But, yes, those Thai taxes, in the form of a tax credit, can be deducted from the US tax bill on the same income. Assuming US taxes on this income are higher than you paid in Thailand, your total tax bill, between the two countries, would be the same as if you didn't have to pay taxes to Thailand. But, now, Thailand gets to keep all the taxes -- and the US takes a hit equal to the credit. Fair is fair.

 

Here's what I understand so far: I am only taxed on money I bring into Thailand each year. What stays in the States is not taxable by Thailand. Is that right? 

Let's say if I bring 1M baht into Thailand next year to support myself. I pay taxes on it to Thailand. But, if I want to deduct that 1M baht from my US taxes, it has to be earned income (from work) and not money from interest, dividends, or capital gains. Am I on the right track? 

If most of my income is from investments (I'm retired), and I bring that over to support myself in Thailand, would I be unable to deduct those Thai tax payments from my US tax return? I think so. But, not sure. 

Is there a link to an easy primer on this stuff? Thanks.

 

[brianthainess]

10 hours ago, webfact said:

particularly among retirees who have enjoyed years of tax-free income.

The headline on all these stories should make it clear, if you're income is below your country's

tax free income then it will not apply, all my 'Income' is below any tax, and any interest I earn in my Thai bank is taxed at source.

Do most expats not pay tax at source when working in Thailand ? 

[CharlesHolzhauer]

9 minutes ago, JohnAllan said:

do the Thai authorities 'plan' to agree double-taxation agreements

It may be helpful to read the 'Introduction to Personal Income Tax in Thailand' <https://aseannow.com/topic/1324294-introduction-to-personal-income-tax-in-thailand/#comment-18857397> in particular DUAL TAX AGREEMENTS (DTA’s).

[wensiensheng]

2 hours ago, mania said:

Actually way back when this taxing was first mentioned I pretty much thought it was all about Thai's & closing a loophole many of them use to work abroad & hold their savings there a year then sending it all home tax free. When you consider all the farm workers abroad & other lines of work it made sense.

I do t think a farm workers abroad are the target. Super rich Thais who have overseas business subsidiaries/business who delayed send money into Thailand in order to use the loophole, yes.

 

or how about super rich Thai family with a few hundred million USD, who keep the money in overseas bank accounts and remit the interest only after one year has passed.

 

Those are the guys the change is targeted at. The farming crowd would be below the tax threshold anyway.

[brianthainess]

3 hours ago, 4MyEgo said:

 

It's not that bad, e.g. if I brought in a million baht per year as income, which it's not, it's savings from the sale of a dwelling a few years back, it would work out like this.

 

Deductions for self over 65 =  190,000 baht

Wife                                             60,000 baht

1 child                                          60,000 baht

2nd child                                     60,000 baht

3rd child                                      60,000 baht

4th child                                      60,000 baht

Goods and services purchased 50,000 baht

                                                = 540,000 baht

 

So 1,000,000 -

        540,000

     = 460,000 over the tax scale 

     =   39,500 baht payable in tax, i.e. if my money was deemed income, which it isn't, it's proceeds from a sale of my principal place of residence some years ago, so zero tax would be payable IMO.

 

Almost got my knickers in a knot over nothing.

 

Agree I find this fear mongering when most won't have to pay any Thai tax.

[StayinThailand2much]

1 hour ago, flexomike said:

How would you deal with the tax treaties with foreign countries?

 

Really hope, they have enough taxation bureaucrats who are fluent in Swedish, Greek, and Korean to check all the double taxation agreements... 

[Presnock]

24 minutes ago, DrPhibes said:

People keep calling these laws between Thailand and other countries DTA's.  These are tax Treaties, not just some agreements.  If a country suddenly stopped adhering to treaties, who is going to want to deal with them?

EXACTLY!!!!!!!!

[Almer]

2 hours ago, redwood1 said:

 

A tax form filed and paying taxes are 2 very different things......I bet only 70% of those  11.9 million tax returns payed any taxes and bet a whole lot less than that paid any substantial taxes....

 

Point being Very  few Thais Rich or Poor pay any income tax in Thailand....And thats not going to change...

If they want tax revenue put it on VAT

[Old Croc]

1 hour ago, CharlesHolzhauer said:

My comment wasn't intended to be insulting; instead, it was meant to convey a sense of ignorance and perhaps a touch of arrogance.

You certainly demonstrated you have that.

 

[Mike Lister]

36 minutes ago, TallGuyJohninBKK said:

 

Jim, from all the early stuff saw on the newish Thai tax provisions, I thought those pretty clearly spelled out an exemption for imported funds given as a gift/gifts to Thai spouses, up to a pretty large limit.

 

Did something change on that somewhere along the way?

 

 

BTW, correct me if I'm wrong... but from the U.S. end of things, if I have accrued savings in a U.S. account and decide to gift a portion of that to my Thai spouse, I've already paid U.S. income tax on that income when it was earned.

 

And, the U.S., in its own taxation scheme, has a pretty high threshold before it gets to taxing gifts,  including a gift tax exemption for gifts to spouses?

 

Are there types of gifts that are not taxable?

Yes. There are a few categories that, in general, are not subject to gift taxes, including:

 

• Tuition paid directly to a college
• Medical bills paid directly to a care provider
• Gifts to your spouse
• Gifts to political organizations

 

https://www.britannica.com/money/gift-tax-rules

 

https://www.investopedia.com/terms/u/unlimited-marital-deduction.asp

 

 

There is an ongoing debate about Gift Tax that has not decisively concluded, in the thread below, at this time it remains on our list of unknowns/unclear issues.

 

 

[jayboy]

1 hour ago, JimboB4 said:

his is what I thought but so misleading articles on this site about so many different subjects (typically cannabis these days) in this case misleading information trying to imply that this applies to everyone and all income even though it actually does not under the law. 

 

On the subject of misleading articles, the site that you reference is in my view deeply suspect and I don't think any astute person would touch it with a barge pole.It's a trap for gullible farang, a bottom feeder.If you need proper advice talk to a qualified Thai tax expert and if that's too challenging talk to one of the well known companies (Mazar, Peat Marwick etc).To be clear I don't think this site, amateurish though it is, is necessarily a scam. But a careful reading of the background provided on this forum provides as much as you need at this stage.

[flexomike]

1 hour ago, Expat68 said:

Personally speaking, if the forms are in English I can't see them too difficult to fill in. I fill a UK tax form in every year

a previoius post can't remember what page around 8 I think had link for an English form but there wasn't anything on the form about tax treaty deductions

 

[JimGant]

1 hour ago, placnx said:

Credit on US taxes is complicated because the Thai-US tax treaty does not contain a provision for what is called re-sourcing, unlike other US treaties negotiated in the same time frame. Strange, since over the years there were model treaties containing these rules. It seems like it is time for overhaul of the Thai-US treaty.

Good catch. And, yes, the US-Thai DTA does not have a re-sourcing clause. But, that omission is not critical to allowing a tax credit for Thai taxes on US income. This is all accomplished by attaching a Form 8833, along with your Form 1116 (tax credit form), to your tax return. 

 

What the Form 8833 explains away is that, per tax treaty, the Internal Revenue Code that says tax credits are only allowed on foreign income, not US income -- is overridden by the tax treaty -- specifically, that tax credits are a major part of the treaty, precluding double taxation. And, yes, this means a credit for Thai tax on US income taxable by Thailand. Here from the Form 8833 instructions:

 

Quote

A taxpayer takes a treaty-based return position by maintaining that a treaty of
the United States overrules or modifies a provision of the Internal Revenue Code
and thereby causes (or potentially causes ) a reduction of tax on the taxpayer’s tax return. For these purposes, a treaty includes, but is not imited to, an income tax treaty; .....

 That the Thai-US DTA doesn't have a re-sourcing clause is a minor oversight -- and not one that would preclude the Form 8833 from allowing a tax credit for Thai taxes on US income specifically allowed to be taxed primarily by Thailand.

[TallGuyJohninBKK]

29 minutes ago, Mike Lister said:

There is an ongoing debate about Gift Tax that has not decisively concluded, in the thread below, at this time it remains on our list of unknowns/unclear issues.

 

 

 

 

So you are referring to this post of yours in that thread?

 

AND

 

 

And I'm assuming the language and document cites you're referring to there is to one of the "guide" documents you've been keeping on the Thai taxation topic?