Thailand to tax residents’ foreign income irrespective of remittance

[Sheryl]

37 minutes ago, retarius said:

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. 

If you can easily stay out of the country 180 days a year or more, then that is a good idea (IF this change to the law is enacted and IF it applies to non-citizens. Both of these are still IFs).

 

For many of us with permanent homes here etc this is not an option.

 

The change is not going to apply to 2024. IF enacted the earliest it could take effect would be for 2025.

 

For those of us who are tax resident, IF this goes through, the timing of tax returns will indeed be a bit of a juggling act/headache.  I often do not receive all my US tax documents before March. Filing date for Thai returns is March 31.

[lordgrinz]

3 minutes ago, Sheryl said:

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 I would  argue that since what is being withdrawn are earnings from employment prior to being a Thai tax resident, should not be assessable in Thailand except for any more recent interest received, but I am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.

 

I know the current US Administration would like to tax unrealized gains on stocks, etc......which is why I asked about 401K's and IRA's as they fluctuate in value as they grow, not just contributions. So I wasn't sure how this would apply in Thailand, do they consider it income this year if my IRA doubles in value this year? That could be a huge issue.

[Sheryl]

40 minutes ago, NoDisplayName said:

 

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.

Correct, if this goes through it will supersede/render irrelevant the prior rule on  remittances.

 

I was replying to someone who for some reason thought that if they transferred in money to purchase a condo, those funds would be taxable in Thailand. Under neither current rules nor the proposed change to the law would that be the case  assuming the money in question is savings.

[lordgrinz]

4 minutes ago, John Drake said:

 

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?

 

I actually can't remember if I gave mine to SCB in 2016, or not, but I do declare through an FBAR the account here in Thailand.

[jaywalker2]

19 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?

They U.S. has exchange of tax information agreements with some foreign governments. I doubt this currently applies in Thailand. When I worked in Japan, I had to file a U.S. return on the income I earned there. My tax adviser told me that the IRS did not have access to Japanese tax records and so had no way of knowing how much I actually earned. In other words, I could put whatever amount I wanted on the tax return and short of a full-fledged audit (which almost never happens) they would have no way of knowing if it was accurate.

[Sheryl]

3 minutes ago, John Drake said:

 

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?

No confirmation process that I know of but as the information is submitted to US tax authorities perhaps some check on that end.

 

You are required to file FBAR annually if you have more than $10,000 (total) in foreign bank account. This would link  your SSN to your foreign bank accounts.

 

You may in future be asked by BBL and SCB to provide your SSN.

[BarstoolChang]

54 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.

Then i imagine Thailand will have a similar situation to norway.

 

https://www.businessinsider.com/rich-norwegians-worth-billions-relocated-switzerland-escape-higher-wealth-tax-2023-9

[Sheryl]

4 minutes ago, lordgrinz said:

 

I know the current US Administration would like to tax unrealized gains on stocks, etc......which is why I asked about 401K's and IRA's as they fluctuate in value as they grow, not just contributions. So I wasn't sure how this would apply in Thailand, do they consider it income this year if my IRA doubles in value this year? That could be a huge issue.

 

Gains in stocks are probably covered in the Thai tax code but I have not bothered to look into it. But I doubt taxable until realized.

 

I cannot see any difference between an IRA doubling in value and real estate increasing in value. Either way it is unrealized gains (which might well be offset by losses in future before it the property is finally sold or the IRA withdrawn from).

 

 

[Thingamabob]

40 minutes ago, Neeranam said:

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 +.

You may well be right, and I hope you are. My fear is that this is a shabby govt grubbing about for additional revenue sources, but also not wanting to upset influential, well-off Thais. They are therefore trying to hit foreigners first. On the other hand this govt could just be thrown out before too long in which case the revised tax legislation may go on hold, or be dropped entirely.

[Sheryl]

13 minutes ago, NoDisplayName said:

 

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?

The Thai tax code has its own personal deductions,  exclusions, rules on capital gains etc.  These are what will apply. You don't apply Thai tax rules when you do your US tax return, and neither will you apply US tax rules when doing a Thai return, should you need to.

 

Terms of the DTA of course do apply, and you can claim a credit for any taxes paid in US on your Thai return or vice versa.

 

Yes, income that was  excluded from US tax under the foreign income exclusion would  be assessable  in Thailand. ..IF you are tax resident here and IF this proposed revision to the tax law is enacted and IF it applies to non-Thai citizens.

 

 

 

 

[NoDisplayName]

1 minute ago, Sheryl said:

The Thai tax code has its own personal deductions,  exclusions, rules on capital gains etc.  These are what will apply. You don't apply Thai tax rules when you do your US tax return, and neither will you apply US tax rules when doing a Thai return, should you need to.

 

Terms of the DTA of course do apply, and you can claim a credit for any taxes paid in US on your Thai return or vice versa.

 

Yes, income that was  excluded from US tax under the foreign income exclusion would  be assessable  in Thailand. ..IF you are tax resident here and IF this proposed revision to the tax law is enacted and IF it applies to non-Thai citizens.

 

 

 

 

 

I manage my investments and income to pay $0 tax in the US.  There would be no offsetting credit.

 

Capital gains is not taxed in Thailand............Thai stocks only.  Foreign stocks capital gains paid at ordinary income rate.

 

Many ifs and unknowns.

Wait and see.

Update Plan B.

 

 

[Sir Dude]

The usual opaque nonsense from the clowns in charge and their general ineptitude. This whole idea has trouble and difficulty written all over it, with so many negatives that can/will transpire if enforced. It's not just scaring away the very foreigners they want to attract, both workers (teachers/digital nomads/businesses etc.) and wealthy retirees, but what about the Thais working oversea and their remittances for the survival of families etc.? I forecast the locals getting the hump over this one too... might well be the final nail in the coffin for many too, just not worth it.

However, having said all that, it could end up on the books but not enforced once they realize how much damage is done and the resistance to it there is (from multiple quarters), like many other "laws" that are effectively ignored... but they have the optics of it being a "law" that can be selectively enforced if so needed.

[Tonyfarang]

3 hours ago, Neeranam said:

Wrong, they can't tax me on my income from  British company going to my Scottish bank. It is entirely up to me if I want to take it into Thailand, and entirely up to me if I want to pay tax on it. 

YES! They can! IF you stay in a country as tax resident (over 183 days for Thailand), YES they can if they want. That raises the question if YOU want to keep staying in this status or you just find alternative, like a few (and first myself) are already looking for. You have to respect and obay the rules of the country you live in! If you don't like them, you know where is the airport, get a plain and go "where you're treated best" as the amazing Andrew saying...

[freedomseeker]

Damn... A shock change! 

 

I am glad that I made a smart decision to stay in Thailand for less than 180 days this year. I have left Thailand in Feb and I will only be back in Mid August (About 175 days).

 

Most likely I will do the same in 2025

[rumeaug]

Mmm...alright...so the money I have in my bank account in my home country, which has absolutely nothing to do with Thailand (I dont make any transfers from my country to thailand. Its only used  there exclusively) , will be taxed  in Thailand. Great.

[hhaat]

19 hours ago, redwood1 said:

Whats funny is any big company like Google or Microsoft with way over 1 billion baht income in Thailand, You can bet your last dollar their army of lawyers will make sure they dont pay, Jack....

Companies like Google and Amazon etc are already paying local taxes for services consumed locally.  For example, if there is sales tax in your country, you are already seeing this in your invoice.

 

It is currently not a norm to tax retirees for money remitted from overseas.  But a few years later, it may become a norm.

 

But before that, it should be a norm to tax NON-RETIREES for money they remit from outside.  They are getting income.  This income HAS TO BE TAXED.  Who are these non-retirees? 

* Youtubers

* digital "nomads"

* those doing streaming to sell goods (especially Chinese who do streaming in Thai hypermarkets and night markets illegally to sell goods in China)

* those who buy goods from outside and sell in Thailand and vice versa through chat services

 

Retirees generally have no income.  To tax them for their savings should be something done later, if it is ever done.

 

Any taxation decision made by Thailand will not depart from this principle.

Edited June 6 by hhaat

[John Drake]

31 minutes ago, Sheryl said:

No confirmation process that I know of but as the information is submitted to US tax authorities perhaps some check on that end.

 

You are required to file FBAR annually if you have more than $10,000 (total) in foreign bank account. This would link  your SSN to your foreign bank accounts.

 

You may in future be asked by BBL and SCB to provide your SSN.

 

Sorry, I don't want to keep pushing it. But the FBAR, which I do file every year, is for the US. For Thai revenue to get the number, that would mean they would still have to access a US government data base. Is that legal? Do privacy laws in the US prevent it. I remember when the US embassy stopped the income letters for visa extensions a few years ago. Then, I thought part of the reason was the US State Department was prohibited from accessing and thus verifying IRS and Social Security statements. How would Thailand's government be able to access US government databases that other US agencies can't even access?

[Tonyfarang]

3 hours ago, ChaiyaTH said:

This is the end of living in thailand fulltime, if it becomes true. This is the biggest potential scare news in like a decade plus.

Totally Agree! Very dissapointing and makes me regret for all the investments and money I spent here assuming that will be my permanent home. And suddendly, preparing to pack and move because of unexpeted announcements. We all have to respect and obay to what the country we live in requires, but we all have the ability to choose. So for me, wanting to be fully respectful and have no headaches, the only way is just to stay here less than 180 days and that's it. 2024, plenty of countries are working hard to gather people, therefore -> money, by offering tax free - exeptions and many more things (social security, amazing healthcare, retirement etc) to attract people, cleverly attracting wealthy people. If one stays in a country, any country, they spend a lot. Buying a lot of things for the house (condo), cars, motorbikes, etc. moving the economy a lot. One that is staying 180 days in a country, will NOT spend even the 50% that he would spend in 365 days because he feels he is "termporarily" in this place. Plus, consider that one moving to another country can build a new life and never go back to the country even for 180 days..  We all hope that this will never happen because the real money will be away, and no country wants just the shoe-string budget visitors. IT's not the QUANTITY (number of visitors) guys!! IT's the QUALITY!  Praying for the best!

[Bangkok Barry]

17 minutes ago, Sir Dude said:

I forecast the locals getting the hump over this one too.

 

Well, they voted for the government. Oh, wait......

[NoDisplayName]

17 minutes ago, NoDisplayName said:

 

I manage my investments and income to pay $0 tax in the US.  There would be no offsetting credit.

 

Capital gains is not taxed in Thailand............Thai stocks only.  Foreign stocks capital gains paid at ordinary income rate.

 

Many ifs and unknowns.

Wait and see.

Update Plan B.

 

 

 

Okay..............let's say I have $75,000 "disallowed" exemptions and exclusions available in the US.

 

That's currently about ฿2,750,000 assessable income.

 

300,001 to 500,000	10
500,001 to 750,000	15
750,001 to 1,000,000	20
1,000,001 to 2,000,000	25
2,000,001 to 5,000,000	30

 

Sure, I'll get a few deductions according to the Thai tax code, but I'd probably be looking at an ANNUAL tax bill of ฿500,000.  Just an estimate, I'll do more precise calculations later.

 

It would be cheaper to buy a condo in Cambodia, commute every other month between there and the homestead in Issan.  But then I'd have to ask.........why?  We'll just sell the house here and move elsewhere.

 

And............no more O-visa extensions in Thailand.

 

 

[Tonyfarang]

1 hour 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.

In this case they can do it like in other countries - ONLY the Fully Domiciled (Citizen or Permanent Residents over x - big amount of years) pay tax on the worldwide income, income from investments, from anything across the world, dividends etc. The Non-Dom are just paying 0% on worldwide income when tax residents (over 183 days). A few countries are doing this to attract new people, especially wealthy. The "law of attraction" 😃

[daveAustin]

2 hours ago, cardinalblue said:

Thai gov is so incompetent…because they can’t figure out how to get the economy rolling, they pick low hanging fruit like retired expats who are bringing in money to spend repeat spend not to horde…

 

Why in the hell do you want to tax a group who in turn is putting the money into the economy? 
 

ir makes zero sense…it’s like the bar scene when having low volume of customers raise drink prices rather than offer discounts to attract more customers 

 

Mind boggling….

 

Because the dinosaurs in government are stupid, incompetent, unempathetic  and most of all xenophobic. i.e. we tolerate you for your money but if you stay too long we’ll shaft you. All these recent grandiose schemes and this n that visa to attract foreign investment blah blah and they pull this one. Donkeys. 

[oslooskar]

13 minutes ago, John Drake said:

How would Thailand's government be able to access US government databases that other US agencies can't even access?

I seriously doubt that they could, they don't have that kind of influence.

[jvs]

18 hours ago, AreYouGerman said:

But in all fairness, isn't it fair that you give Thailand a fair share of you money for allowing you stay in their country? You should actually ask to have this applied retroactively!

Of course!

I spend roughly 1 million baht here every year for the past 20 odd years.

If i have to pay tax here most of that will go to a few fat cats,corruption is rife here.

So all of my money is already going into the economy directly, a lot of local people also profit from that.

I pay for some one to go to uni and keep people employed.

Sending some of this money to the government will mean less money for the local people because i will have less to spend.

In most countries paying tax also means you get some benefit,what will we get here?

Yes a very good plan,right?

[salavan]

21 hours ago, yang123 said:

Double Taxation Agreements to be nixed?

Sound like it

[markus]

21 hours ago, Djinn91 said:

Laughable and will only affect those companies with 1 billion baht in foreign income. (good luck enforcing it anyways)

 

Not sure why all the Farang get scared. they're not coming for you 200-800K baht...

What nonsense!

Who says that ALL foreigners are afraid? How about you adjust your choice of words!

[Neeranam]

Out of interest, does a Thai resident in the UK or USA have to pay tax on foreign income?

[Tonyfarang]

20 minutes ago, NoDisplayName said:

 

Okay..............let's say I have $75,000 "disallowed" exemptions and exclusions available in the US.

 

That's currently about ฿2,750,000 assessable income.

 

300,001 to 500,000	10
500,001 to 750,000	15
750,001 to 1,000,000	20
1,000,001 to 2,000,000	25
2,000,001 to 5,000,000	30

 

Sure, I'll get a few deductions according to the Thai tax code, but I'd probably be looking at an ANNUAL tax bill of ฿500,000.  Just an estimate, I'll do more precise calculations later.

 

It would be cheaper to buy a condo in Cambodia, commute every other month between there and the homestead in Issan.  But then I'd have to ask.........why?  We'll just sell the house here and move elsewhere.

 

And............no more O-visa extensions in Thailand.

 

 

Cambodia does not tax worldwide income? I read that they do https://taxsummaries.pwc.com/cambodia/individual/taxes-on-personal-income  But I am reading about Phills tax exemption and Malaysia too. I am researching actively and I'd extremely appreciate your feedback too. Thank you!

[Purdey]

Once they find the taxman stepping on the toes of Thais with money overseas this will probably be adjusted. Thaksin lived abroad for 17 years and must have money that was not taxed by Thailand.

[Sheryl]

8 minutes ago, Neeranam said:

Out of interest, does a Thai resident in the UK or USA have to pay tax on foreign income?

For US depends on whether condidered a resident alien or non-resident alien.

 

Resident aliens are subject to same tax rules as US citizens and are taxed on worldwide income.