New Tax Rules for Expats in Thailand Spark Concern

[Presnock]

12 hours ago, garzhe said:

 

Thailand already has dual taxation agreements with 60 countries. These agreements differ in their scope and specifics. How Thai  Tax authorities can deal with this remains to be seen.

 

Australia Austria  Bahrain Bangladesh Belarus  Belgium Bulgaria Canada Chile China Cyprus Czech Republic Denmark Estonia Finland France
Germany Hong Kong Hungary Iceland India Indonesia Ireland Israel Italy Japan Korea Kuwait Lao Luxembourg Malaysia Mauritius Myanmar
Nepal Netherlands New Zealand Norway Oman Pakistan Philippines Poland Portugal Qatar Romania Russia Seychelles Singapore Slovenia
South Africa Spain Sri Lanka Sweden Switzerland Turkey Ukraine United Arab Emirates United Kingdom United States (limited treaty) 

Uzbekistan Vietnam

some forum members have said that they visited their local RD office and were told that they have not held any discussions with BKK on this issue and I can only imagine when they are inundated with foreigners not speaking English or Thai asking if this or that is allowed or what needs to be done.  I have some questions too and believe that they are pretty basic in following this new trend but just have to wait to see if the govt will or will not advise us soon.

[black tabby12345]

2 hours ago, lordgrinz said:

 

Remember, in the new technology age, Immigration still insists on 100's of copies of paper, and an army of workers to sort through it all. It's Thai way of employing useless drones, just create "useless paper works" at the expense of Foreigners.

Foreigners only have to spend some cost of cheap photocopies.

But it is those in tax department to do all these near-zero meaning workloads.

[OccamsRazor]

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

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)

That requirements hasn't been in effect for many years now, at least at Chiang Mai Dept of labor.  I've been renewing for decades and never asked for it.  Similar when you were required to show you paid taxes at the airport before leaving.

[Almer]

This is Srettha baby and he ain't going to be about long, come back PRAYUT

[kennypowers]

So much unnecessary speculation when it's actually quite simple. TTL has done an excellent job of staying on top of this and getting the correct information out. See here: https://www.thethailandlife.com/expat-tax-thailand

[VBF]

14 hours ago, UKresonant said:

Keeping the pre-2024 principle without interest co-mingled might take a bit of attention to detail.

 

Also not being able to create new similar savings, unless from the income stream whilst not Thai tax resident...

In order of your points.....

 

Interest is itemised on any bank account I've ever had - just show the statements - as you say - attention to detail

Open new account(s) now for the future reporting, make no mention of the new accounts to Thai authorities.

 

Bit of a PITA, I grant you, but resolves those two problems.

This all shows the usefulness of keeping all bank statements pretty much forever. Easy these days now it's all online.

 

[kiwikeith]

On 5/30/2024 at 10:37 AM, nickmondo said:

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.

I agree if your pension is taxed in your own country and you have a tax agreement with Thailand, no problems, pensioners won't be touched. 

[superal]

43 minutes ago, kennypowers said:

So much unnecessary speculation when it's actually quite simple. TTL has done an excellent job of staying on top of this and getting the correct information out. See here: https://www.thethailandlife.com/expat-tax-thailand

To any doubters about the forthcoming tax for long term residents , they should click your link . The only thing I am not sure about is the amount of income that can be offset in allowances . It makes a huge difference on the tax bill as was explained to me by the writer of your link but I cannot find the info .

[Mike Lister]

3 minutes ago, superal said:

To any doubters about the forthcoming tax for long term residents , they should click your link . The only thing I am not sure about is the amount of income that can be offset in allowances . It makes a huge difference on the tax bill as was explained to me by the writer of your link but I cannot find the info .

 

It's all there:

 

 

[superal]

4 minutes ago, Mike Lister said:

 

It's all there:

 

 

Thanks Mike

[jwest10]

22 minutes ago, Mike Lister said:

 

It's all there:

Yes indeed Mike I did send a message yesterday and another thank you and looked at he forms but 2024 is not there.
Howeverm I not going to fret at the moment and just one query my wife does not work and does not need to fill in a tax form? but I can claim the 2 lots of 60k Baht
Thanks, Mike for your valued input.

 

 

 

[Mike Lister]

27 minutes ago, jwest10 said:

 

Ah, yes,...things have been hectic for a few days and I'm getting ready to go away on vacation for two weeks.....sorry!

 

 

The 2024 forms don't appear to have been released yet, at least the TRD web sites haven't been updated with them, as far as I can see. I'm down in Bangkok next week, I'll swing by TRD HQ and tell them to get their act together. I'll also mention it to the Director General when we lunch together, assuming I bump into him in Burger King. 🙂

 

 

[jwest10]

5 minutes ago, Mike Lister said:

Ah, yes,...things have been hectic for a few days and I'm getting ready to go away on vacation for two weeks.....sorry!

 

 

The 2024 forms don't appear to have been released yet, at least the TRD web sites haven't been updated with them, as far as I can see. I'm down in Bangkok next week, I'll swing buy TRD HQ and tell them to get their act together. I'll also mention it to the Director General when we lunch together, assuming I bump into him in Burger King. 🙂

 

 

 

6 minutes ago, Mike Lister said:

Ah, yes,...things have been hectic for a few days and I'm getting ready to go away on vacation for two weeks.....sorry!

 

 

The 2024 forms don't appear to have been released yet, at least the TRD web sites haven't been updated with them, as far as I can see. I'm down in Bangkok next week, I'll swing buy TRD HQ and tell them to get their act together. I'll also mention it to the Director General when we lunch together, assuming I bump into him in Burger King. 🙂

 

 

Mikem enjoy your break well deserved and yes tcan claim for my wife an not tax return.

 

[Gilligan In Drag]

Maybe I'm just delusional but it seems a bit thin on the ground stuff to claim. This is something that the Prime Minister said, its not his job is it, to declare taxes and tax schedules and so on.  Where is the revenue department on all of this? If its the Prime Minister's idea, he could be outta here, he's facing problems is he not? It could well be just an idea.  Also, something I ask myself is what was the context of the PMs statement? You don't get any idea of how serious he is about this. And TIT, even if they are serious, the government branches do not communicate or cooperate well, they don't like each other and resent each others authority. My Thai wife who pays attention to the news says it seems they are putting on a lot of airs right now to save face  as the military coup government begins to step back into the shadows, they don't want to look like theye were ineffectual and of little impact. There's also all the Lazada Shoppe taxation brouhaha, my wife commented tha t they don't appear together at all or even serious on that stuff. Its just them trying to appear as though they are in control and in charge. I don't know if thats true or not, but it wouldn't surprise me. It would be a real first if they began actually cooperating  with Immigration or even the foreign embassies well enough to say deny people visas for not paying tax. You go to foreign embassies for visas, they are not the type to want to slog through a bunch stuff from the tax department for each visa that they issue. Embassies are just there to sort of hang out and go to cocktail parties and engage in a little espionage from time to time not grunt work like sorting through everyone's taxes.  They probably depend quite heavily on our visa application money and they know if they start denying people visas it cuts into their cut. It doesnt make sense to me that they would play along with this. Immigration doesn't strike me as the kind of outfit that is going to want to do the bidding of the revenue department or anyone, they are really a don't-tell-me-what-to-do bunch, they are police after all. How do you think the police would like being asked to sort through peoples tax junk  in your home country?  I used to work at a government university and immigration really did not like being told to give foreign profs visas. We were in there all day every year they were on the hone to my univeristy for hours and arms crossed and no, no, no! They are jealous of other government branches authority. Just by myself getting a marriage visa is no problem but if government university asks they were like, "Take a hike Mike! Who do you think you are!" I can imagine it would not be much different with the tax authority trying to tell them, "This guy clear that guy no, don't give him! Thsi one, yes, that one no way, go to his house and arrest him!"

 

It could have been something said to boost support for the PM or his party to get something done that perhaps opposition was saying Thailand couldn't afford like climate change compliance or whatever it is Hans Swab and Greta Toonsermuhgoochie and the globalist gestapo in Geneva want, so why not say you'll have nothing to eat and you'll be happy and that is supposed to mean something.

 

Or otherwise this whole tax thing is not yet  really here or there. The PM said it a long time ago as well. Why hasn't anyone at a more concrete level like say in the actual tax wing of the government said anything or even sketched out a few more details since? I remember looking at so-called translations of what you will have to pay, probably cooked up at some tax law or accounting firm over a case of Sang Som it was quite outrageous as I recall. I'd be paying 30 percent of something that is poverty level income, they seemed to clearly be doing a first run to see the reaction and we've heard nothing concrete since.  Then again I depend on this website alone for news about such stuff, so maybe the real enchilada has not been served up to us, but then again most of you don't like Mexican food, so there ya go.

[placnx]

On 5/30/2024 at 2:13 PM, JimGant said:

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:

 

 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.

Then what article of the tax treaty allows me to allocate US-source income to foreign-source income in form 1116? I looked through the whole treaty and don't see any clause to cite in form 8833. The quote from the 8833 instructions (see original post) means a tax treaty with a provision for overriding IRS rules, and that would be for example re-sourcing. Other treaty provisions might give the country where the US citizen resides the power to tax some kind of income that would normally be taxed in the US under IRS rules. That is the purpose of form 8833, to cite the relevant provision in the particular treaty in question.

 

It could be that IRS being understaffed does not check back to see whether re-sourcing is provided in the Thai-US tax treaty and thus an 8833 claim is not challenged. Most treaties provide re-sourcing.

[MikeN]

Quote

 tax returns due at the end of March 2025, expats will need to get acquainted with the new system quickly

Quickly? Time for at least one change of PM, two committee reconsiderations, and a coup before then.

[shdmn]

I don't know why people keep calling this DTA.  Is that what they call it in the UK? In Canada we just call it a tax treaty or reciprocal tax treaty.  At least that is what the Canada Revenue Agency calls it.  These three letter acronyms some of us are not familiar with, depending on what country you are from, cause confusion at a time when there is already too much confusion.

[Mike Lister]

I've removed a post that gave incomplete and incorrect tax advice that was incorrect and very misleading, along with a valid response that quoted that post.

 

The post stated that, "Pensions (except for government pensions paid to Thai citizens) are not taxable in Thailand", which of course they may be, based on their origin and type. As a general rule, government pensions are not taxable when remitted to Thailand but most other types are, depending on what is said in the relevant DTA. Private pensions, company pensions and even the UK State Pension, are all taxable here. This rule also varies from country to country hence it is not possible to make a single statement on this, that applies to all people.

[Mike Lister]

4 hours ago, shdmn said:

I don't know why people keep calling this DTA.  Is that what they call it in the UK? In Canada we just call it a tax treaty or reciprocal tax treaty.  At least that is what the Canada Revenue Agency calls it.  These three letter acronyms some of us are not familiar with, depending on what country you are from, cause confusion at a time when there is already too much confusion.

This is a Thai forum that has been investigating and debating Thai tax since September last year and has accumulated tens of thousands of posts from thousands of members on the subject ever since. Yours is the first post to ever raise the correct use of acronyms in these discussions. Where ever possible, the discussions have adopted Thai Revenue Department (TRD) terminology on tax and the acronym, DTA, is the TRD's  prefered terminology and has been used from the outset. This forum has adopted the term, Thai Revenue Department to distinguish it from members home country (there are over 90 of these) Revenue Departments which often have similar or the same names. Other commonly used TRD prefered acronyms include PIT and TEDA, both of which are in common use here. The acronym TCPA is intended to distinguish between a Thai tax expert who is a CPA and a CPA from any other country, who may not understand anything about Thai tax matters.

 

https://www.rd.go.th/english/21973.html#:~:text=The focus of a DTA,taxed in the source country.

[Gknrd]

Well I may have opened my mount and inserted foot... ummm

Had a little time to day and did some research.

I did some calculations based on me. So this is what I would expect to pay in Thailand. I think..  haha

 

If SS was totally exempt, which I assume it is now.. sorry about that!

My dividends , where I make up my short fall in SS income would be taxed at a flat 10% rate.

If I sold and had a capital gains on the money it would fall in the graduated tax rate up to 35%.

That is as far as I got because it was all I was interested in for me! Because that would be my tax libality in Thailand.

 

I did look at the two tax forms you file. And the 91 for would be my form I believe.

Not taking in the double taxation agreement with Thailand, Which I know nothing about. Except I assume it means if taxed in the US then I could deduct it from my Thai tax obligations?

It looks like I would be on the hook for a few thousand dollars a year in taxes in Thailand. As long as I didn't have any sales and large capital gains. 

If that were the case my taxes would increase at the rate as defined in the taxable income for Thailand.

 

So, for me and me alone it is not something I would be interested in.  

Also I would be on the hook for a tax attorney in Thailand to make sure things went smothely.

 

Summery and conclusion?  Good ruck... 

 

 

 

 

 

 

[Mike Lister]

12 minutes ago, Gknrd said:

Well I may have opened my mount and inserted foot... ummm

Had a little time to day and did some research.

I did some calculations based on me. So this is what I would expect to pay in Thailand. I think..  haha

 

If SS was totally exempt, which I assume it is now.. sorry about that!

My dividends , where I make up my short fall in SS income would be taxed at a flat 10% rate.

If I sold and had a capital gains on the money it would fall in the graduated tax rate up to 35%.

That is as far as I got because it was all I was interested in for me! Because that would be my tax libality in Thailand.

 

I did look at the two tax forms you file. And the 91 for would be my form I believe.

Not taking in the double taxation agreement with Thailand, Which I know nothing about. 

It looks like I would be on the hook for a few thousand dollars a year in taxes in Thailand. As long as I didn't have any sales and large capital gains. 

If that were the case my taxes would increase at the rate as defined in the taxable income for Thailand.

 

So, for me and me alone it is not something I would be interested in.  

Also I would be on the hook for a tax attorney in Thailand to make sure things went smothely.

 

Summery and conclusion?  Good ruck... 

 

 

 

 

 

 

I believe that the tax paid on your dividend income in the US could be used to offset your tax liabilities in Thailand (assuming the DTA is invoked), which, when you consider your TEDA, should leave you in a good place.

 

I also understand that US Capital gains remitted to Thailand, in a year when you are not tax resident here, will be free of Thai tax. The foregoing is certainly true if the CG is realised in a year when you are not Thai resident.

 

I whole heartedly endorse seeing a Thai tax CPA to confirm your needs, people with anything but simple tax needs should consider doing the same thing.

[JimboB4]

On 5/30/2024 at 1:02 PM, TallGuyJohninBKK said:

 

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???

 

It says US government pensions are non-taxable in Thailand. Those are the rules they have to follow based on the treaty 

[Old Croc]

Would the production of a RD file number or tax assessment allow a foreigner entry to a national park at Thai prices?

[Mike Lister]

57 minutes ago, Old Croc said:

Would the production of a RD file number or tax assessment allow a foreigner entry to a national park at Thai prices?

Nope! But you can use a tax return as proof of your address to open a bank account....I did.

[Presnock]

23 hours ago, Old Croc said:

Questions:  Apologies, likely already been asked and answered in the tsunami of posts in the various threads on the tax subject.

 

Qualified as a tax resident under the 180-day in country rule.

No tax owed because nil remits or under limits after allowances (self-assessed)

 

Do you legally have to obtain a tax number?

Do you legally have to lodge a return? 

 

 

These same questions have been asked of numerous sources including tax experts etc...thai tax law says one who remites ASSESSABLE funds into Thailand should obtain a tax id number within 60 days so that they can file the tax forms.  If not assessable funds remitted, not necessary to file tax forms nor get a tax ID number in my opinion.  Maybe the RD will provide guidance on this sometime in the future

 

[Mike Lister]

1 minute ago, Presnock said:

These same questions have been asked of numerous sources including tax experts etc...thai tax law says one who remites ASSESSABLE funds into Thailand should obtain a tax id number within 60 days so that they can file the tax forms.  If not assessable funds remitted, not necessary to file tax forms nor get a tax ID number in my opinion.  Maybe the RD will provide guidance on this sometime in the future

 

Personally I think the rules are crystal, but day to day execution, adherence and enforcement of them is another subject:

 

TIN required within 60 days of reaching assessable income.

 

Tax return required if assessable income levels reached, regardless if no tax to pay.

[JimGant]

14 hours ago, placnx said:

Then what article of the tax treaty allows me to allocate US-source income to foreign-source income in form 1116? I looked through the whole treaty and don't see any clause to cite in form 8833.

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:

Quote

The United States agrees, in paragraph 1, to allow to its citizens and residents a credit
against U.S. tax for income taxes paid or accrued to Thailand. (from the Technical Explanation)

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:

Quote

Tax credits are only allowed for taxes paid on foreign income,

..... 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:

 

Quote

The diplomatic notes also provide that if the United States alters its policy to authorize tax-sparing credits or grants such a credit in a tax treaty with another country, negotiations will be opened with a view to concluding a protocol that would amend the Convention to incorporate such a credit.

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.

[Gknrd]

I did a quick read over the tax laws. As it is, it is going to affect the middle class foreigners.

 I just did my taxes in the US. The US has some great tax relief. And has a very high tax threshold ..

I went back over my return in the US. I use TurboTax there because I have consolidated my investments in two places. One a bank, and a brokerage firm which I can link both to TurboTax.

The threshold in Thailand is going to rake the small investors like me over the coals. Where in the US I am cut allot os slack.

The thing that interested me were the exact thing that Thailand was targeting.

 

Taxable income for Thailand .. Just under 5K no tax.

10% on dividends flat rate.  WOW

And , Sliding scale on capital gains.  Up to 35% and that is a HUGE rip off for me.. 

 

Summary and conclusion is it is a huge rip off for the average US and European retiree.  

 

Problem I see is the people already there that are middle income expats.

 

[Mike Lister]

2 minutes ago, Gknrd said:

I did a quick read over the tax laws. As it is, it is going to affect the middle class foreigners.

It is a huge rip off. I just did my taxes in the US. The US has some great tax relief. And has a very high tax threshold ..

I went back over my return in the US. I use TurboTax there because I have consolidated my investments in two places. One a bank, and a brokerage firm which I can link both to TurboTax.

The threshold in Thailand is going to rake the small investors like me over the coals. Where in the US I am cut allot os slack.

The thing that interested me were the exact thing that Thailand was targeting.

 

Taxable income for Thailand .. Just under 5K no tax.

10% on dividends flat rate.  WOW

And , Sliding scale on capital gains.  Up to 35% and that is a HUGE rip off for me.. 

 

Summary and conclusion is it is a huge rip off for the average US and European retiree.  

 

Problem I see is the people already there that are middle income expats. You are going to be raked over the coals..

 

Tax residency requires 180 days in country. If you were to take 183 days outside Thailand and remit your dividends and CG to Thailand, in that year, there is no tax to pay. That's hardly being raked over the coals.

 

Tax paid on dividends in the home country can be used to offsets any Thai tax....didn't I just tell you all of that a few hours ago!

[Gknrd]

Bottom line for me is. IF I stayed over 180 days I would be hammered it looks like.

I have read the rules as they stand now. It is a huge rip off for allot of retirees like me. Or a huge tax libility if I were to retire there.

The US has some very high thresholds Thailand is exploiting the area between.