Thailand to tax residents’ foreign income irrespective of remittance

[sandyf]

15 hours ago, BE88 said:

 

You should know Thailand here everything happens wrongly you would not have paid the tax yet because it is complicated to change the rules but not complicated to continue as before🙃

Tell that to the poster that said it was in effect "now"

Too many premature interpretations.

[Robaht]

2 hours ago, lordgrinz said:

 

Which is why I am waiting on the sidelines, I have over $30,000 sitting in a Wise account waiting to be sent over as baht, will grow it to about $100,000 soon, but at least its earning 4.85%, so I'll let it sit for now.....also waiting on my Wise debit card to arrive, thought that might be a way to buy things without worrying about remittance, but that sounds like it won't work the way I planned, so I'm kind of stuck on the sidelines waiting for answers.

Yeah, last year I used Wise to bring money in small increments like 10k baht into my Kasikorn bank and just withdraw from ATMs - worked great! Finally I thought, here is a way to avoid the 220b charge at ATMs and get a great exchange rate. LOL now that would count as funding/revenue/assessable income whatever you want to call it. So I've stopped that and don't even use my Thai bank account.  Now I pay with credit cards wherever I can, use my credit card to withdraw money at ATM - I use the yellow bank and keep the receipts which are labeled "visa credit" so that should be fine, and also bring cash to exchange here in Thailand. I'm not sure what else I could do, maybe get Thai baht out of country say on a "money run" to Malaysia or something!

[BE88]

14 minutes ago, sandyf said:

Tell that to the poster that said it was in effect "now"

Too many premature interpretations.

16 hours ago, sandyf said:

Wrong. I have just had a package delivered from India by Thai Post without any additional charges. Value was around $45 USD.

 

My replay was to your India statement not the PO
🙃

[Thaindrew]

54 minutes ago, Robaht said:

Yeah, last year I used Wise to bring money in small increments like 10k baht into my Kasikorn bank and just withdraw from ATMs - worked great! Finally I thought, here is a way to avoid the 220b charge at ATMs and get a great exchange rate. LOL now that would count as funding/revenue/assessable income whatever you want to call it. So I've stopped that and don't even use my Thai bank account.  Now I pay with credit cards wherever I can, use my credit card to withdraw money at ATM - I use the yellow bank and keep the receipts which are labeled "visa credit" so that should be fine, and also bring cash to exchange here in Thailand. I'm not sure what else I could do, maybe get Thai baht out of country say on a "money run" to Malaysia or something!

 

credit card and ATM transactions all are part of CRS reporting unfortunately

[Tonyfarang]

3 hours ago, Porthos said:

Here is the original Thai source of this news. It was a meeting of the Deputy Finance Minister and the RD on 31 May.

 

https://www.thansettakij.com/business/economy/597533

 

Food for thought: The recent developments in Norway, as highlighted by The Guardian, offer a valuable lesson in economic strategy and policy implications.

 

https://www.theguardian.com/world/2023/apr/10/super-rich-abandoning-norway-at-record-rate-as-wealth-tax-rises-slightly  

 

Increased wealth taxes have prompted an exodus of the super-rich from Norway. This trend is not only telling but also serves as a cautionary tale for other nations considering similar measures. It's crucial to learn from these examples to avoid repeating the same mistakes.

 

Several countries, such as Malaysia and the Philippines, are actively positioning themselves as attractive destinations for affluent individuals by offering favorable tax regimes. This competition for wealthy residents is becoming increasingly fierce, and it presents a significant opportunity for countries like Thailand.

 

Thailand has the potential to transform itself into a premier destination for high-net-worth individuals, much like Monaco in Europe. By fostering an environment that attracts and retains wealthy, high-quality residents with tax incentives, Thailand can stimulate its economy and drive substantial growth.

 

In contrast, the current approach seems to attract low-budget, mostly short-term tourists and individuals who spend small amounts to live here or use cryptocurrencies for transactions, leading to economic losses as these funds don't fully enter the Thai economy. This influx of non-tax residents fails to stimulate the broader economy in the way that affluent, long-term residents do. Wealthy individuals contribute significantly by purchasing homes, condos, cars, and other high-value goods, and their potential departure would halt these vital economic activities.

 

Furthermore, this strategy extends in foreigners taking jobs that should be reserved for Thai citizens, negatively impacting local job opportunities and economic stability. The loss of wealthy residents would result in a significant economic downturn, as Thailand would miss out on their substantial contributions. It is crucial to understand that the impact is far-reaching and extends beyond the immediate financial losses, affecting the overall economic health and future prosperity of the country.

 

It is imperative for the government to shift its focus towards attracting serious, wealthy citizens who can contribute significantly to the economy, rather than catering to short-term, budget-conscious visitors. By doing so, Thailand can fully realize its potential as a leading economic hub in Asia.

 

Food for thought, esteemed Policymakers. Let's work together to shape a prosperous future for Thailand.

[tomkenet]

30 minutes ago, Thaindrew said:

 

credit card and ATM transactions all are part of CRS reporting unfortunately

Irrelevant, They are not income

[jonclark]

4 hours ago, Sheryl said:

A breeze only if you pay no taxes in your home country and all your income (or, for current tax year,  income  earned in, or remitted to, Thailand) is assessable.

 

The current forms will have to be revised to include way to claim credit for foreign taxes paid.

 

And then there is the very much unresolved question of whether and how to show foreign sourced income that is non-assessable under terms of a DTA. 

 

I would not at all count on RD staff, especially upcountry, to be familiar with these issues. 

 

 

Obviously i can only comment on the current situation and not speculate what may or may not happen in the future, as i have no crystal ball unfortunatly.

 

 

[Dogmatix]

4 hours ago, ChaiyaTH said:

Why they don't address the elephant in the room anyway. There is only like 20 families who get 80% of all the money in the first place, they clearly are not paying enough, so go get it from them and the issue would be resolved while leaving us alone.

 

Last year they said that the reinterpretation was aimed at Thais investing overseas, not expats.  That means small and medium sized Thai investors who use international accounts at Thai brokers to invest overseas and are low hanging fruit.  Of course they cannot get the super wealthy Thais because they keep their offshore wealth in tax efficient family office corporate structures in countries that don't tax things like capital gains from offshore.  That means that under Thai global taxation they will only have to pay tax on capital gains on stocks, if they want to pay out dividends to themselves.  Otherwise they can trade freely generating untaxable capital gains and let their wealth accumulate further.  Smaller Thai investors overseas will have to pay Thai tax on capital gains in the year the arise whether they remit or not. 

 

Recognising that they will not get much from wealthy Thais, I think this has now morphed into a plan to get tax from anywhere they can, including collecting another 7,000 baht from Joe Bloggs' already taxed pension in Nakhorn Nowhere.  Given their keenness to collect 7 baht VAT on 100 baht packages sent from China, it doesn't seem that there is any concern about collecting revenue costing more than the revenue raised.  They are only going to judge themselves on top line revenues, not net revenues after costs which is pathetic.

[KannikaP]

1 hour ago, tomkenet said:

Irrelevant, They are not income

Is it not classed as foreign money coming into Thailand?

[Dogmatix]

2 hours ago, sandyf said:

Well aware of the process. Poster I respondedd to said it was in effect "now".

 

This refers to the imposition of VAT on small postal packages.  The Thai press was reporting on 4 June that the cabinet had just approved the wording for the announcement and it would be announced in the Royal Gazette and become effective 15 days later.  So far it doesn't appear to have been announced in the Royal Gazette yet.   

[Dogmatix]

6 hours ago, Sheryl said:

A breeze only if you pay no taxes in your home country and all your income (or, for current tax year,  income  earned in, or remitted to, Thailand) is assessable.

 

The current forms will have to be revised to include way to claim credit for foreign taxes paid.

 

And then there is the very much unresolved question of whether and how to show foreign sourced income that is non-assessable under terms of a DTA. 

 

I would not at all count on RD staff, especially upcountry, to be familiar with these issues. 

 

 

 

But will they revise the forms? There have been DTAs with Thailand for 50 years and a small number of individual taxpayers have been claiming tax credits for decades without any space on the forms, presumably by having to draft a letter to the RD or have a tax lawyer do that.  We half way through the year and no sign of these new forms and any official comment confirming they are working on them.  It is quite possible they will just say, "If it ain't broke, why fix it?"

[Jinxed1]

Wait... multiple sources say "from 2024"

 

So, If this year I already remitted money that I earned before 2024 (not taxable before the change), before knowing about this new rule, I still have to pay tax on it in 2025 because it's retroactive?

 

Please tell me I'm wrong or that's completely fked up

[Dogmatix]

7 hours ago, Presnock said:

Multimillionaires?  I think there are a lot fewer than you and the rest of the AN think.  I only have a US govt pension so the taxes that could be avoided via the LTR are a moot point anyway because of the DTA with the US.  If the Thais decided to wipe out all the treaties that have been

worked out between Thailand and those 60 or 61 other countries, they by international law have to advise those countries in advance that they

wish to do this.  Then if they followed through they would have a difficult time getting any treaty signed with a foreign country for anything unless of course they follow this route and join BRICS in the fall.  The LTR on last count hardly has enough expats to help the revenue dept meet their goals anyway.  Any mulitmillionaires on an LTR would just cease to be a tax resident here or elsewherever they wanted.  In the long run, any changes that are made to the tax laws against expats will IMHO cause a decrease in the funds collected by the Revenue Department as it will probably already show a drop from 2024.

 

I am with you but the problem seems to be that the people in power seem to have an extremely arrogant attitude to expats.  They only care about the super wealthy and even then they are preparing to blow up the LTR tax exemption because it only applies to remitted income which will be irrelevant under global taxation. For other expats, including those with Thai families,  they couldn't care less is they drive them out or not.  It is obvious that a lot of inflows to Thailand will be choked off, particularly due to the idiotic approach of introducing a remittance tax as a short term measure before going for the jugular with global tax.  A lot of damage will be done by the remittance tax because it strikes directly at capital inflows - duh.  And huge confusion and uncertainty is created by having two confliction foreign income tax systems introduced one after the other with no preparation in terms of regulations, training for staff or appropriate forms. 

 

It's all about generating more top line to please Tony and get promoted to positions with greater opportunities for corruption. To hell with the cost of generating the incremental revenue or the overall loss to the fixed capital formation caused by choking off capital inflows. You see this power group talking about "quick wins".  This is what they win.  Stuff that can be spun to make it look like a win but it's actually a loss.  So sad for Thai people to get stuck with this type of government that they didn't elect.    

[Sheryl]

15 minutes ago, Dogmatix said:

 

 

But will they revise the forms? There have been DTAs with Thailand for 50 years and a small number of individual taxpayers have been claiming tax credits for decades without any space on the forms, presumably by having to draft a letter to the RD or have a tax lawyer do that.  We half way through the year and no sign of these new forms and any official comment confirming they are working on them.  It is quite possible they will just say, "If it ain't broke, why fix it?"

There have been reports that they are revising the forms and with specific mention of adding fields for tax credits.

 

 

[Dogmatix]

8 hours ago, lordgrinz said:

 

Well, until they state what is acceptable proof of savings, it would be better not to send anything. I don't believe in the, just ignore it until they come looking approach.

 I am also very concerned about proof on anything they might ask for from overseas.   The kind of documents that RD staff are used to in Thailand, such as certified bank statements, certified tax receipts proper contract notes are often simply not available from overseas.  The RD official in the Swiss embassy video make clear that they would requesting exactly that sort of stuff.  

 

The way it works when you file a tax return is different from in developed countries where it is a genuine honours system and you can file for a lifetime without ever being asked for a document or audited.  The Thai RD request documentation for every item you declare some weeks or months after you file, unless they have it already in the form of e-receipt for example.  Claiming tax credits for Thai dividends involves sending them an original hard copy of every single dividend certificate, even though you can give permission for the data to be fed directly to the RD from the TSD registry which is the registrar for 90% of Thai listed companies.  For income from employment you have to send an original copy of your 50 bis document, even though that is filed directly with the RD by your employer. 

 

You don't need a good imagination to see how this mentality could be applied to things like capital gains from overseas (certified original copies of buying and selling contract notes) or foreign tax credits (an original tax receipt certified and stamped by the tax authority).

[Dogmatix]

10 minutes ago, Sheryl said:

There have been reports that they are revising the forms and with specific mention of adding fields for tax credits.

 

I have seen people saying that but I haven't seen a direct quotation from a Revenue Department official confirming that.  Actually they should have done that decades ago when the first DTAs were signed.  Now there is only just over 6 months to go before the 2024 tax returns will be issued and people start filing with them.  So let's hope they get them out in time.

[Sheryl]

9 hours ago, jonclark said:

 

Filing income tax is a breeze - No accountant needed - although they will have to start printing .91 forms in English as they are all in Thai at the moment and most staff at tax offices have a very basic understanding of English. But it is a breeze. Getting tax rebates is also a doddle - my tax office fills in all the necessary bits for me if I give them the correct supporting documents, and a couple of months later my cheque turns up for 40 - 50k.  Remember if you pay tax you can now claim all the rebates the government offers - including hotel rooms and household appliances as these are frequently made tax deductibles depending on how the government wants to boost the economy by increasing consumption. Even healthcare has been a tax deductible which should help pensioners.

 

@jonclark  do you (or anyone else with experience filing Thai tax returns) happen to know if by filing online one bypasses the  local (provincial) RD ofgice? 

 

Having previously spent 2 days arguing with mine about whether such a thing as a retirement visa/extension existed I would very much like to avoid any future dealings. 

[tomkenet]

1 hour ago, KannikaP said:

Is it not classed as foreign money coming into Thailand?

This thread is about taxation on worldwide accessible income. The remittance is therefore irrelevant. 

 

 

[Sydebolle]

"by requiring platforms with an income of 1 billion baht or more to report their sources of income."

Mind boggling ideas all over the place ....... again. 

Luckily I earn not quite 1 billion Baht, so that saves me - thank you! 

[Middle Aged Grouch]

Seriously am considering to quit Thailand and to look around in other countries in Asia or even in one of the many spanish islands like the Canary Islands where cost of living is low, great health care and cheaper premiums and 10 times far less hassles with tax or immigration.

[Sigmund]

What about those who ony come to Thailand for 3 months on the "O" non immigrant visa ?

 

Will they also be taxed on their bank accounts for example in Thailand ?

[TheAppletons]

27 minutes ago, Sydebolle said:

"by requiring platforms with an income of 1 billion baht or more to report their sources of income."

Mind boggling ideas all over the place ....... again. 

Luckily I earn not quite 1 billion Baht, so that saves me - thank you! 

 

  Like several others on this thread, you're confusing two different proposals.

 

  One is to tax multi-national corporations a minimum tax - that's where the one billion THB comes into play.

 

  Two is to tax individuals on world-wide income - there is not one billion THB requirement for that to take effect.

[TheAppletons]

20 minutes ago, Sigmund said:

What about those who ony come to Thailand for 3 months on the "O" non immigrant visa ?

 

Will they also be taxed on their bank accounts for example in Thailand ?

 

  To be classified as a Thai tax resident, one must spend 180 days or more in Thailand.  If you don't, then no worries.  

 

  Pretty clearly evident if one bothers to read the thread.  

[Robaht]

23 minutes ago, Sydebolle said:

"by requiring platforms with an income of 1 billion baht or more to report their sources of income."

Mind boggling ideas all over the place ....... again. 

Luckily I earn not quite 1 billion Baht, so that saves me - thank you! 

I don’t know but I thought the sentence that refers to the 1 billion baht was poorly worded and open to interpretation, but I thought it as more “platforms” like banking or money sending institutions (like Wise or Western Union) with 1 billion baht in transfers would be required to provide a list of who recieved funds, something like that. Probably wrong but …

[NoDisplayName]

How about an example for a US citizen classed as tax resident in Thailand?

 

US citizen, aged 50-65, retired not working, NO salary, no IRA contributions, not collecting social security, married to Thai filing separately on IRS 1040.

 

Income:

 

Ordinary dividends: $15,000 (bonds and stock ETF’s)

Interest: $200

Capital gains: $43,250 (mainly stocks/etf’s held > 1 year)

 

Total income: $58,450 < ------- assessable by Thailand

 

IRS standard deduction $13,850

Taxable income: $$44,600

 

US Tax due: $0 (calculated using IRS capital gains worksheet, 0% LTCG tax for first two tax brackets)

 

Thai assessable income at $1=฿36.6 ---- > ฿ 2,139,270

 

Allowances:

 

Personal allowance: ฿ 60,000

Spouse allowance ฿ 60,000

Health Ins allowance ฿ 25,000

 

Taxable income: ฿ 1,994,270

 

Taxable Income (baht)	Tax Rate (%)	Tax (฿)
0-150,000	Exempt	0
more than 150,000 but less than 300,000	5	7,500
more than 300,000 but less than 500,000	10	20,000
more than 500,000 but less than 750,000	15	37,500
more than 750,000 but less than 1,000,000	20	50,000
more than 1,000,000 but less than 2,000,000	25	250,000

 

Total Thai tax due: ฿365,000 US$9,973

 

 

Thai tax rates are 10% for dividends and 15% for bonds, likely only for thai stocks/bonds.  foreign stocks/bonds would be taxed as regular income.

 

US capital gains can be offset by capital losses.  Unknown if this applies to thai taxes.  If not, anyone tax loss harvesting will be in for a big surprise.

 

Thai tax can be taken as a credit on US taxes.  Don't owe $10,000 to the IRS?  Can carryover the credit for next year.  wow.

 

 

 

[Middle Aged Grouch]

10 minutes ago, TheAppletons said:

 

  To be classified as a Thai tax resident, one must spend 180 days or more in Thailand.  If you don't, then no worries.  

 

  Pretty clearly evident if one bothers to read the thread.  

On the other hand if a bank wants to take the tax at source from an account, how will they know the account holder is not staying more then the 180 days. Assuming that tax will also be take out from any bank account in the name of a foreigner ?

[NoDisplayName]

3 minutes ago, Middle Aged Grouch said:

On the other hand if a bank wants to take the tax at source from an account, how will they know the account holder is not staying more then the 180 days. Assuming that tax will also be take out from any bank account in the name of a foreigner ?

 

Then the foreign account holder must file a tax return to claim a refund the following year.

[Sheryl]

Just now, NoDisplayName said:

 

Then the foreign account holder must file a tax return to claim a refund the following year.

Above is correct if what you meant was tax on interest. Banks will take it out, unless you go through paperwork to prevent this. They do this neither knowing nor caring if you are tax resident. Even non-tax residents are subject to tax on income sourced within Thailand. Always have been.

 

If what @Middle Aged Grouch meant was banks taking out taxes from remittances from abroad, not likely to happen.  Not their job and too many factors go into w what if any tax might be owed on it (tax residence status/overall income/source of the funds etc etc.)

 

Banks are not the Revenue Dept.  However banks could, and well might,inform RD of remittances received from abroad.

 

[redwood1]

10 minutes ago, NoDisplayName said:

How about an example for a US citizen classed as tax resident in Thailand?

 

US citizen, aged 50-65, retired not working, NO salary, no IRA contributions, not collecting social security, married to Thai filing separately on IRS 1040.

 

Income:

 

Ordinary dividends: $15,000 (bonds and stock ETF’s)

Interest: $200

Capital gains: $43,250 (mainly stocks/etf’s held > 1 year)

 

Total income: $58,450 < ------- assessable by Thailand

 

IRS standard deduction $13,850

Taxable income: $$44,600

 

US Tax due: $0 (calculated using IRS capital gains worksheet)

                              (0% LTCG tax for first two tax brackets)

 

Thai assessable income at $1=฿36.6 ----------- > ฿ 2,139,270

 

Allowances:

 

Personal allowance: ฿ 60,000

Spouse allowance ฿ 60,000

Health Ins allowance ฿ 25,000

 

Taxable income: ฿ 1,994,270

 

Taxable Income (baht)	Tax Rate (%)	Tax (฿)
0-150,000	Exempt	0
more than 150,000 but less than 300,000	5	7,500
more than 300,000 but less than 500,000	10	20,000
more than 500,000 but less than 750,000	15	37,500
more than 750,000 but less than 1,000,000	20	50,000
more than 1,000,000 but less than 2,000,000	25	250,000

 

Total Thai tax due: ฿365,000 US$9,973

 

 

Thai tax rates are 10% for dividends and 15% for bonds, likely only for thai stocks/bonds.  foreign stocks/bonds would be taxed as regular income.

 

US capital gains can be offset by capital losses.  Unknown if this applies to thai taxes.  If not, anyone tax loss harvesting will be in for a big surprise.

 

Thai tax can be taken as a credit on US taxes.  Don't owe $10,000 to the IRS?  Can carryover the credit for next year.  wow.

 

And what benefits will you be getting from the government?

Let me think......How about zero benefits.... except you will be free to carry on with 90 day reporting as usual....

[NoDisplayName]

25 minutes ago, NoDisplayName said:

US capital gains can be offset by capital losses.  Unknown if this applies to thai taxes.  If not, anyone tax loss harvesting will be in for a big surprise.

 

There's good news and bad news.  No, wait......it's all bad.

 

Quote

 

Capital gains and investment income earned by a resident from sources outside Thailand are not taxable unless remitted to Thailand in the year of receipt.

Capital losses may not be offset against capital gains.

https://taxsummaries.pwc.com/thailand/individual/income-determination

 

 

Assume the first sentence is now incorrect, as the remittance system goes away.

 

The second sentence is a killer.  If you sell stocks or mutual funds for a $50K gain, and you offset this with a $50K loss to lower your US tax bill, you'll still be liable for tax on $50K assessable income in Thailand.

 

This will add another couple thousand dollars to my annual Thai tax bill!

 

Amazing!