New Tax Rules for Expats in Thailand Spark Concern

[CanadaSam]

There are BENEFITS from this new regulation:

 

1-  Windfall for neighboring countries who will see a sharp increase in foreigners spending their 180 days each year not in Thailand,

 

2-  Many "tax lawyers" and accountants getting increased business from worried foreigners.

 

Benefits to the Thai Government? 

 

I don't see much, rather I see a sharp decrease in local spending by those who decide to go outside Thailand for 180 days, or for those who decide that enough is enough, and change their retirement location to another country.

[Mike Lister]

3 minutes ago, tandor said:

you will find Immigration Dept. may refuse your Annual Extension unless you provide your Taxation Identification Number. (This was mentioned to a couple of us who registered recently at the TRD). 

                                                             PS. Don't shoot the Messenger.

The messenger is a not to blame but the story line is unproven and unsubstantiated scaremongering.

[Gknrd]

1 hour ago, Mike Lister said:

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

It's a bet.  If you can afford it... which I doubt... 

[Mike Lister]

5 minutes ago, ExpatOilWorker said:

Are you saying, that you don't think the yearly tax eventually will be linked or part of the process for the yearly extension?

IMO, eventually it may be, but definitely not in the short and improbable in the medium term. 

[jollyhangmon]

29 minutes ago, hotchilli said:

How  does taxing expats on their pensions or other income help Thailands income inequality?

 

... and where exactly is the 'representation' going in line with that new income taxation? As that's how it works - except if it's nothing but another moneygrab.

[nakhonandy]

As a farang in the village. I have excellent Internet and access to all news channels including Asean Now.

Why would I or the other farang in their villages not know about this?

Unless they have chosen to go totally without Internet. 

[Mike Lister]

13 minutes ago, Mike Lister said:

Correct. The US SSc income is exempt by treaty and the pre 2024 savings are exempt by Por162.

A couple of members seem confused by the above, feel free to ask questions if you don't understand. One of them should do so before his ban takes effect!

[worrab]

2 hours 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 have to do a yearly extension which is actually in December. But here is a hypothetical scenario for you regarding a tax return being tied to an extension. Have a very large inheritance which started paying out beginning of year and final payment in November. Not subject to tax in Thailand. Can easily live on that without worrying about any other finances coming into Thailand and can just accept any tax on interest payments from the bank. Do not need to invest in markets etc so in essence, do not need to ever make a tax return.

Other expats could be in similar situations one way or another with shrewd investing before Jan 2024 ensuring there was enough funds here, so how could you tie the return and Immigration together?   

[Mike Lister]

1 minute ago, worrab said:

I have to do a yearly extension which is actually in December. But here is a hypothetical scenario for you regarding a tax return being tied to an extension. Have a very large inheritance which started paying out beginning of year and final payment in November. Not subject to tax in Thailand. Can easily live on that without worrying about any other finances coming into Thailand and can just accept any tax on interest payments from the bank. Do not need to invest in markets etc so in essence, do not need to ever make a tax return.

Other expats could be in similar situations one way or another with shrewd investing before Jan 2024 ensuring there was enough funds here, so how could you tie the return and Immigration together?   

It's easy to think it might be linked but those who are certain it will be, haven't thought it through. The other aspect in addition to the scenario you point out is tax residency, not all long term visa holders are tax resident.

[bob smith]

6 minutes ago, worrab said:

so how could you tie the return and Immigration together?   

they wont.

 

and even if they did, it would cause so much anger and frustration at the IO desk that they would stop it within a week.

 

plus farangs like me hate going to immigration every year, I do it only because mrs. smith wants it that way!

 

If I had it my way I would go to an embassy abroad every 12 months and leave the country every 3 for a bit of galavanting.

but mrs. smith knows all about my exploits abroad and wants me to curtail such activities as she gets a bit jealous..

 

bob.

[gaucan]

1 hour ago, Mike Lister said:

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

im ALL IN  ( with my thapthimgrob )

[Drumbuie]

50 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. 

Like many, I have two Thai bank accounts. One for my retirement extension 800k, the other for daily spending. Tasking Immigration with assessing total Thai income is not going to work, they'd all have to be retrained. 

 

But what *might* happen is that supplying a copy of a filed Thai tax return becomes part of the conditions for granting a retirement visa extension. 

 

But nobody knows yet. So this article appears only to be a crude way of drumming up trade for accountants in Thailand. 

 

[Jonathan Swift]

From what I've read, US social security is not taxable. So I imagine I will file a tax return and provide Social Security documentation that my income matches the amount transferred here every month. That should require minimal math skills on the part of their tax dept. 

[gaucan]

good, need to keep these pesky dirty smelly high-ego  falangz in check 😍

[Danderman123]

6 minutes ago, worrab said:

 

Other expats could be in similar situations one way or another with shrewd investing before Jan 2024 ensuring there was enough funds here, so how could you tie the return and Immigration together?   

Immigration knows whether you have remained in Thailand long enough to be a tax resident.

 

Therefore, if you are a known resident, Immigration *could* ask you for a copy of your tax return, when you request your annual extension.

[Danderman123]

3 minutes ago, Jonathan Swift said:

From what I've read, US social security is not taxable. So I imagine I will file a tax return and provide Social Security documentation that my income matches the amount transferred here every month. That should require minimal math skills on the part of their tax dept. 

Easy peasy, assuming the Thai tax forms support deductions due to a tax treaty.

 

Except filing a Thai tax return is no fun.

 

Do you have a Thai tax id?

[Bangkok Barry]

2 hours 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?

 

 

Many people DO spend 180+ days in Thailand - retirees, those with a Thai wife - and in answer to your question, it's not a one-off and they'd get you in December 2025.

[worrab]

Just now, Danderman123 said:

Immigration knows whether you have remained in Thailand long enough to be a tax resident.

 

Therefore, if you are a known resident, Immigration *could* ask you for a copy of your tax return, when you request your annual extension.

You are missing the point. If you do not need to make a tax return for whatever reason, the scenario I painted with inheritance or shrewd investing not needing to submit funds after Dec 2023, how can you be asked for it at renewal time? 

[EVENKEEL]

1 hour ago, 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.

Totally correct. Pretty much shameful the extent this forum will go to for member participation.

[Presnock]

3 hours ago, webfact said:

 

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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While I agree that some ex-pats may be affected in some ways, this article seems to have been prepared by the tax agents.  I also agree that expats must be aware of their own tax situation in regards to the DTA with Thailand and their home country if there is one.  But this article seems to me that this new interpretation is aimed at the expats when in effect, it is most likely too, to affect Thais that have avoided paying taxes on current year earnings as previously they were following tax law that they could hold those funds until the following year without having to pay taxes.  I also think that if one does

have convoluted income(s) that a tax agent may well be needed.  Fortunately we have had several dedicated forum members that have done a tremendous amount of searches on this issue and have shared their findings, theories, and recommended that expats not worry until the final information from the Thai government is published.  Good luck to all and hopefully we can all still relax and enjoy the great things we love about this country.

income taxes on monies earned outside of Thailand.  

[Danderman123]

3 minutes ago, Gknrd said:

Everyone is going to be different. But, for the majority of expats It is going to hit their capital gains. Or earned income from abroad from multiple fronts. I have heard allot of different stories. Don't think just because the US has a tax treaty with Thailand that SS won't be taxed.  The threshold in Thailand is much lower than in the US. 

But ask Mike Lister, he is the expert... hahaha

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.

[Expat68]

Doesn't frighten me. I have filled a UK tax return in for the last 20 years

[Danderman123]

2 minutes ago, worrab said:

You are missing the point. If you do not need to make a tax return for whatever reason, the scenario I painted with inheritance or shrewd investing not needing to submit funds after Dec 2023, how can you be asked for it at renewal time? 

You are absolutely correct.

 

If you transmitted big money into Thailand prior to January 1, 2024, you don't have to worry about filling out a Thai tax return.

 

I personally wouldn't trust a Thai bank with that much money.

[Expat68]

Doesn't frighten me. I have filled a UK tax return in for the last 20 years

[Presnock]

1 hour ago, Excogitator said:

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

I have never read any of the DTA's with any of the countries except that of the USA since that is the one affecting me but I clearly understand where my government stands of govt pensions, social security as it is clearly spelled out in the the DTA.  From listening to others on this forum, I don't think that their country's DTA has been as specifically spelled out as that of the US.  Hopefully we will all learn in the near future just how few of us will be affected (if at all) with the new interfpretation.  Good luck to all!

[Robbkk]

2 hours ago, motdaeng said:

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

 

Open question? I need to show tax returns every year to renew my work visa.

 

The enforcement you're looking for will be a visa denied. 

[rick44]

If you have lived in Thailand more than one year, you are probably not in a total panic.

 

Have you ever witnessed a change in regulations that cannot be worked around?

[CharlieH]

Reported posts removed.

[EVENKEEL]

I expect there will be plenty of farang tax experts lying in wait to pounce on gullible expats with their savvy expert tax advice. 

[Presnock]

1 hour ago, Danderman123 said:

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.

Not so sure as Thai tax law says one doesn't have to apply for a Thai tax ID until 60 days from having ASSESSIBLE monies remitted into Thailand.  If one has no Thai Tax ID (unless that rule too is going to change) then one doesn't have to file without a tax id number.  But, since we don't know where the Thai govt will be getting info on any monies we do remit, then if they have banks do it, immigration do it, or some other form, and they know we remitted funds over the minimum amounts necessary for reporting, then we may be tasked with proving why the funds are not assessible in Thailand.  Make sure one can back up what ever is needed for proof.