Thailand to tax residents’ foreign income irrespective of remittance

[Thingamabob]

4 minutes ago, Neeranam said:

They are not worried about foreigners leaving as they will get huge dividends from rich Thais, more than making up for any monies foreigners spend.

Who is 'They' ? The Thai government is more than one unit, obviously.

[jaywalker2]

 

17 hours ago, Foxx said:

 

That is incorrect.  The USA and Eritrea tax worldwide income based upon nationality - not upon residence.  Plenty of other countries tax the worldwide income for their resident nationals, including the UK.

True, but tax is only charged on income in the year that it is earned and I've never heard of remittances being taxed.

 

[lordgrinz]

8 minutes ago, Sheryl said:

 

You are not required to file taxes if you have no assessable income/owe no tax, or are not tax resident in Thailand (exception being if you earned income in Thailand).

 

 

Yes and yes. (I do the same as you re #3).

 

 

IF the proposed change to the law goes through, and IF it applies to non-Thai citizens, then yes you could be taxed here on income paid out of a 401K or similar instrument. Possible exception being if you can establish the funds are from earnings prior to becoming a Thai tax resident but that is beyond my pay grade.

 

Regarding your last point, the Common Reportiung System (CRS), which Thailand recently joined, is designed to share such inofrmation.  While there may be soem gaps now, can expect the system to be tightened in the near future. I would not count on income abroad being unknown to Thai tax authorities.

 

 

Is there anything in the laws, as they are now, that would make 401K's and IRA's open game for taxes if they aren't cashed out? They are the moment tax deferred until they are withdrawn, not sure if that applies in Thailand.

[retarius]

2 minutes ago, Sheryl said:

 

You are not required to file taxes if you have no assessable income/owe no tax, or are not tax resident in Thailand (exception being if you earned income in Thailand).

 

 

Yes and yes. (I do the same as you re #3).

 

 

IF the proposed change to the law goes through, and IF it applies to non-Thai citizens, then yes you could be taxed here on income paid out of a 401K or similar instrument. Possible exception being if you can establish the funds are from earnings prior to becoming a Thai tax resident but that is beyond my pay grade.

 

Regarding your last point, the Common Reportiung System (CRS), which Thailand recently joined, is designed to share such inofrmation.  While there may be soem gaps now, can expect the system to be tightened in the near future. I would not count on income abroad being unknown to Thai tax authorities.

 

Thanks Sheryl. I was not aware of the CRS.

The catch for me is that until I do my taxes in the US for 2024 which I will do in October 2025, I won't know if I will owe taxes in Thailand, or how much....and it would depend on the taxation at marginal rates. Thailand seems to be higher in the middle brackets where it would be 28% in the US but up to 35% in Thailand the same (36 vs 35%) at the higher end.

It seems the easiest and safest for me, given that I earn nothing in Thailand is to stay out of the country for 185-6 days per year. 

[Neeranam]

2 minutes ago, Thingamabob said:

Who is 'They' ? The Thai government is more than one unit, obviously.

I mean the Thai RD -  they are looking for large monies from rich individuals and corporations earning monies abroad. 

I  could be wrong but believe they don't care about foreigners unless they are bringing in 1 million +.

[lordgrinz]

7 minutes ago, Neeranam said:

They are not worried about foreigners leaving as they will get huge dividends from rich Thais, more than making up for any monies foreigners spend.

 

Not on your life, rich Thai's will just move themselves offshore too, thus negating any dividends from them.

[NoDisplayName]

1 minute ago, Sheryl said:

By definition, if earned this year it is not savings.

 

I referred to savings accumulated from pre-2023 earnings (and in many cases prior to becoming a Thai tax resident).  This is not taxable to Thailand, and indeed was likely taxed at source back when earned.

 

I understand the way the system previously worked.  Under the new system , there appears to be no point in declaring money brought in as savings or taxed, as worldwide assessable current year income is already being taxed. 

 

In the brave new tax code, current year income is taxed, brought in or not.  Savings from any year is not taxed, brought in or not.

[Dmaxdan]

1 hour ago, bronzedude said:

Imagine the paperwork mountain.

And boy do they like paperwork here!

[Presnock]

18 minutes ago, NoDisplayName said:

 

This could be handled as with DLT.  English language licenses can be directly converted, other languages require a translation.

 

But what documentation would be required?  USA doesn't send a receipt or an official copy of a tax return.  All I normally have is a downloaded copy of the return I file electronically.  Immigration won't accept my downloaded/printed bank statements, so I doubt the tax office will accept potentially photoshopped tax returns.

 

And while the kind and gentle taxfolk are perusing my "official" US tax return, what numbers are they considering as assessable?  Total income, adjustments and deductions, US taxable income?

 

Will Thailand recognize exclusions on income available to US taxpayers, IRA/Roth, Foreign earned income, capital gains for certain tax brackets - income that may be claimed on US tax returns, but not taxed?

 

Does this mean the amount brought in to Thailand will no longer be a concern, as worldwide income will be assessable and taxed, whether brought in or not.  This would suggest that the allowance for bringing in savings would no longer apply. 

 

And would this eventually be linked to the immigration process, whereby an official, stamped Thai tax return.....not a photocopy....will be added to the checklist for extensions?

 

I'm so excited to learn about potential new places to reside.

Fortunately for me, I only have pension income for my 1040's, I only provide the first page without my bank info which they can get anyway and the Thai officials have accepted that with no problem for qualitifications.  I am not sure what the RD will require as proof  but I do have other documentation that I can provide too without any real problems for me.  But the only worry I have is that the banking info provided under the CRS to the Thais will be in Thai controlled hands and that might be risky.  Who knows, not me for sure with the new banking procedures.  Good luck to us all

[lordgrinz]

5 minutes ago, jaywalker2 said:

 

True, but tax is only charged on income in the year that it is earned and I've never heard of remittances being taxed.

 

 

That's what has bugged me about the whole thing, the remittance part seems so odd, and highly unmanageable....which is why this new news from the RD makes more sense, taxing Worldwide income would be at least, normal.

[John Drake]

How is the Thai government going to get information from my US bank or the IRS? They don't have my social security number and my bank and the IRS don't have my passport number. And all my banking, tax returns, and 401K and other retirement are tied to my social security number. Is social security even allowed to give out my number to a foreign government?

[Presnock]

42 minutes ago, retarius said:

A few simple questions:

 

1) I have read that the tax liability in Thailand is only on folk who 'stay over 180 days'. Does anyone know what the Thai tax department means when it says this ie does it mean that if you stay 181 days you have to file taxes with them and if you stay 180 days you do not have to? I have decided to avoid tax residency and to spend 180 or more days outside of Thailand each year. 

2) I have taxes deducted at source from bank accounts etc that pay interest. I currently deduct any taxes on interest earned from my US taxes and don't bother claiming the tax back here in Thailand. Will I still be able to do this? 

3) If I pay tax here on my worldwide income, will I be able to deduct the taxes I pay in Thailand from my US taxes under US/Thailand DTA rules? 

4) Some US retirement savings plans eg 401Ks allow you to put cash into a plan untaxed and pay taxes on the funds when you withdraw them after retirement. Would such income be taxed in Thailand? 

5) Much of Thailand's plan depends on them being able to coerce 'platforms' in other nations (and that they currently might not do any exchange business with) into telling them each year how much certain clients are earning. This sounds a bit like FACTA. I'm not sure that all US banks and financial companies are going to contact all of their customers to check whether they are Thai tax residents, and then 'informing' on their customers to Thai tax authorities. I have an idea that not many Thai banks comply with FACTA since the only bank that will accept SS payments in Bangkok Bank, kinda implying that other banks don't have enough US business to turn their business upside down to fill in annual reports for another government. Anyone in the know about this?

 

If anyone has any info please let me know.

like the rest of us for definite answers to your questions, you must wait for the final word on the tax programs of Thailand

[Neeranam]

I think a fairer way to tax foreigners here would be to have some kind of Poll Tax, similar to the one Margaret Thatcher introduced in Scotland in 1989.

Why should foreigners be able to utilize Thailand's public services in the same way as Thai taxpayers?

I mean services like roads, public transport, education, etc. 

I think it unfair that my Norwegian neighbor pays no tax here yet uses the same road, his daughter is at the same school and they use the same songtaew etc. 

 

[Everyman]

Random banks in the US, Europe and the UK aren’t going to hand over account and transaction en masse to whatever tin pot country asks for them.

 

Why? National security. This information could be used for spying purposes. And don’t tell me about “CRS.” There is a ton of paranoid hysteria about every comment coming out of revenue department these days, but what has actually happened so far is NOTHING. 

[MarkBR]

4 hours ago, Bangkok Barry said:

 

Would they tax me on money I spend using my UK credit card?

This I need to know as well.

[lordgrinz]

3 minutes ago, Neeranam said:

I think a fairer way to tax foreigners here would be to have some kind of Poll Tax, similar to the one Margaret Thatcher introduced in Scotland in 1989.

Why should foreigners be able to utilize Thailand's public services in the same way as Thai taxpayers?

I mean services like roads, public transport, education, etc. 

I think it unfair that my Norwegian neighbor pays no tax here yet uses the same road, his daughter is at the same school and they use the same songtaew etc. 

 

 

Since most Thai's pay no income tax, that argument falls flat.

[freeworld]

Here is another reason tax is being scrutinised. Thai authorities are wondering how all this money entered the country from around the globe and how it was taxed.

 

Source article Bloomberg June 2024

https://www.bloomberg.com/news/articles/2024-06-02/thailand-probes-cybercrime-ring-s-assets-of-over-27-million

 

"Thailand Probes Cybercrime Ring’s Assets of Over $27 Million"

 

[Sheryl]

29 minutes ago, NoDisplayName said:

 

But what documentation would be required?  USA doesn't send a receipt or an official copy of a tax return.  All I normally have is a downloaded copy of the return I file electronically.  Immigration won't accept my downloaded/printed bank statements, so I doubt the tax office will accept potentially photoshopped tax returns.

 

And while the kind and gentle taxfolk are perusing my "official" US tax return, what numbers are they considering as assessable?  Total income, adjustments and deductions, US taxable income?

 

Will Thailand recognize exclusions on income available to US taxpayers, IRA/Roth, Foreign earned income, capital gains for certain tax brackets - income that may be claimed on US tax returns, but not taxed?

 

Does this mean the amount brought in to Thailand will no longer be a concern, as worldwide income will be assessable and taxed, whether brought in or not.  This would suggest that the allowance for bringing in savings would no longer apply. 

 

And would this eventually be linked to the immigration process, whereby an official, stamped Thai tax return.....not a photocopy....will be added to the checklist for extensions?

 

 

 

I don't think you will be required to submit US tax return unless audited/questioned by RD on your Thai return. In which case, if you claimed a credit for taxes paid in the US, your US tax return (electronic copy) should suffice. Thai tax officials are not going to routinely review your US tax return (and likely would not know how to read it).

 

The only things relevant to your Thai tax return would be:

 

- Assessable income, for which you would usually have other documentation besides your tax return e.g. 1099s etc. The US-Thai DTA outlines what income can be taxed in Thailand. Most notably, US Social Security and any government pensions, are not assessable in Thailand.  US exclusions and deductions etc are irrelevant as Thailand has its own exclusions/ deductions. You would report your gross (assessable) income on a Thai tax return and then apply the exclusions/deductions provided for under the Thai tax code.

 

- US taxes paid, which might then be claimed as a tax credit in Thailand.  The present Thai tax forms have no place to claim tax credits, so can't say for sure if they will require you to attach any supporting documentation. They may not; US tax forms do nto require you to attach copies of foreign tax returns to support tax credit claims (though you would need to produce them if audited).

 

In both US and Thailand, only income (earned or passive) is assessable, not savings. Interest on savings is taxable, though.

 

An interesting question which I do not have an answer to, is the situation for income which was put into a retirement instrument (IRA, 401K etc) and then withdrawn.  My take on this is that, as the capital amount is   income earned prior to becoming a Thai tax resident, it should not be taxable, and neither should interest on it prior to becoming a Thai tax resident, but interest on it accrued after that (or after 2023/2024 depending on how the law is worded) would be. but that is my take, would need to discuss with an accountant. As these type of retirement funds are pretty unknown in Thailand I suspect the tax code  may not directly address it.

 

Nothing has been said much less decided linking tax returns of expats not employed in Thailand to extensions of stay (excluding speculation on this board). This change to the tax law has not yet been enacted.

[John Drake]

1 hour ago, lordgrinz said:

 

How exactly? Without a USA social security number how would they know anything? My accounts are listed to my home address in the USA, not to Thailand.

 

I didn't see this until now and asked the same question below. I thought US privacy prohibited giving out social security numbers. I did read that the IRS does exchange "some" information with foreign governments. But this is opening up things to identity theft if the US government gives out your personal ID data.

[Rockhopper]

The tax department better think this through. It could bite them in the ass when ex-pats leave because they can't afford to stay in Thailand and they take their money elsewhere.  

[oslooskar]

I'm not terribly worried. If the Thai authorities make life difficult for me here, I will simply pack up and move elsewhere. That being said, I think every expat, no matter where they live, should have a backup plan.

[Sheryl]

18 minutes ago, John Drake said:

How is the Thai government going to get information from my US bank or the IRS? They don't have my social security number and my bank and the IRS don't have my passport number. And all my banking, tax returns, and 401K and other retirement are tied to my social security number. Is social security even allowed to give out my number to a foreign government?

Nowadays, under FATCA rules, foreign banks are supposed to obtain your US SSN or TIN if you have an account with them. Expect this to be enforced more strictly.

 

My bank in Thailand certainly did this, and has my SSN on file.

 

A bank in Cambodia that I have an account with, ask me for my SSN every single year.

 

 

[CFCol]

18 hours ago, 0ffshore360 said:

To do as the headline suggests would nullify dual tax agreements.

Maybe, just maybe, this is another undetailed  amendment to original declarations that would be enough to drive Thai Tax Office employees crazy with the volume of work entailed . This new declaration involving a change in the existing legislation will probably take years to pass objections anyway but does publicly focus attention on "big Money".

Why do you think it would nullify double taxation agreements? Double taxation agreements would still legally operate. IE NO CHANGE THERE. Stop scaremongering and put your brain in gear.

[bradiston]

13 minutes ago, Neeranam said:

I think a fairer way to tax foreigners here would be to have some kind of Poll Tax, similar to the one Margaret Thatcher introduced in Scotland in 1989.

Why should foreigners be able to utilize Thailand's public services in the same way as Thai taxpayers?

I mean services like roads, public transport, education, etc. 

I think it unfair that my Norwegian neighbor pays no tax here yet uses the same road, his daughter is at the same school and they use the same songtaew etc. 

 

Most of us foreigners are classed as tourists. You got yourself Thai citizenship, so now you have to pay Thai taxes. Everything comes at a price. Expats with 1 year extensions aren't Thai citizens, so how can they possibly be taxed as such? Only a fraction of Thais pay income tax, and an even smaller fraction of foreigners. The rest, vat, excise etc, everybody pays. So we contribute same as most Thais.

[lordgrinz]

1 minute ago, bradiston said:

Most of us foreigners are classed as tourists. You got yourself Thai citizenship, so now you have to pay Thai taxes. Everything comes at a price. Expats with 1 year extensions aren't Thai citizens, so how can they possibly be taxed as such? Only a fraction of Thais pay income tax, and an even smaller fraction of foreigners. The rest, vat, excise etc, everybody pays. So we contribute same as most Thais.

 

Arguably more actually, I am sure I have paid more in taxes already then 90 percent of Thai's have ever paid in their whole lives.

[Sheryl]

33 minutes ago, lordgrinz said:

 

Is there anything in the laws, as they are now, that would make 401K's and IRA's open game for taxes if they aren't cashed out? They are the moment tax deferred until they are withdrawn, not sure if that applies in Thailand.

If not cashed out/no withdrawals then no. They are just savings. It is income that is assessable not savings from earnings prior to 2023 (and in many cases  prior types to becoming a Thai tax resident)

 

Where it gets complicated is the situation for withdrawals from these instruments. I would  argue that since what is being withdrawn are earnings from employment prior to being a Thai tax resident, should not be assessable in Thailand except for any more recent interest received, but I am not sure where this would fit under Thai lax laws. The code addresses pensions but nto these types of instruments.

[bradiston]

2 minutes ago, Sheryl said:

Nowadays, under FATCA rules, foreign banks are supposed to obtain your US SSN or TIN if you have an account with them. Expect this to be enforced more strictly.

 

My bank in Thailand certainly did this, and has my SSN on file.

 

A bank in Cambodia that I have an account with, ask me for my SSN every single year.

 

 

Things have changed a lot. It won't be long before governments will be able to track your movements via the chip in your passport read at immigration. Probably already can.

[NoDisplayName]

11 minutes ago, Sheryl said:

...US exclusions and deductions etc are irrelevant as Thailand has its own exclusions/ deductions. You would report your gross (assessable) income on a Thai tax return and then apply the exclusions/deductions provided for under the Thai tax code.

 

- US taxes paid, which might then be claimed as a tax credit in Thailand. 

 

This could get scary.

 

Thailand won't recognize the US standard deduction, personal exclusions, various credits, so these amounts are all assessable and taxable by Thailand?

 

Thailand won't recognize the US 0% capital gains rate on long term capital gains...........currently up to $47,150?

 

So...............I'll be on the hook for tax on at least US$75,000 to Thailand?

 

And obviously any income earned outside Thailand or the US which falls under the US foreign earned income exclusion will be assessable by Thailand?

[John Drake]

6 minutes ago, Sheryl said:

Nowadays, under FATCA rules, foreign banks are supposed to obtain your US SSN or TIN if you have an account with them. Expect this to be enforced more strictly.

 

My bank in Thailand certainly did this, and has my SSN on file.

 

A bank in Cambodia that I have an account with, ask me for my SSN every single year.

 

 

 

I've never given mine for two accounts I have with Bangkok Bank or the single one I have with SCB. SCB opened 14 years ago and Bangkok Bank opened 12 years ago. And how do they confirm the social security number? Unless it is required to show the social security card, someone could easily make a mistake with a single digit?

[Hanuman2547]

I'll just be a snowbird that doesn't stay in Thailand more than 180 days a year.