Thailand to tax residents’ foreign income irrespective of remittance

[MeePeeMai]

4 minutes ago, Dogmatix said:

Also a big problem that individuals as landlords have to submit a half year PMD 94 tax return with estimate FY income as well as PND 90 and pay tax twice yearly.

 

Right, I just read about this.  Unacceptable to me.

[atpeace]

1 minute ago, Celsius said:

 

That's right. They should not because they treat me as a tourist, not as a resident.

 

Some tax cheerleaders don't seem to understand this fact.

I'm not trying to be a dkhead.  I just want some answers. I don't want to pay additional taxes on top of what I have already paid in the USA but as of yet don't sense I will and hence the lack of concern.

 

The USA and many other countries require "retired" tax residents that aren't citizens to file.  Most these individuals get little in return other than being able to use the infrastructure in such country.  There are many globe trotters not paying taxes and being funded by those that do.  Interesting times and a global tax is interesting but IMO not going to be a reality for many years.

 

Do you think individuals living in Thailand that have income and don't include this income on tax returns submitted in their home country should be taxed here?

[MeePeeMai]

Landlords (at least in the USA) get to deduct or write off many things on their taxes i.e. their property tax, utilities paid, depreciation of the rental, interest on the mortgage, fire insurance, flood insurance, hurricane insurance, repairs, maintenance costs, landscaping or yard maintenance, management fees etc.

 

If the Thai RD only sees and taxes your rental "income" and disallows your expenses (mentioned above) either by law or by way of making the burden of proof too onerous then this will be a big deal for some of us.

[Dogmatix]

33 minutes ago, CharlesHolzhauer said:

The change in remittances did not require legislation. However, the latest 'bombshell' will need to be legislated and may take considerable time to implement.

They could bypass parliament with a Royal Decree but that is risky, as parliament could overturn it later with consequences for whoever approved it.Major changes like the inheritance tax have been acts of parliament, while minor things like tax exemption for LTR visas have been Royal Decrees. 
 

They said they are confident of getting the Top Up Tax bill for multi nationals enacted through Parliament in time to go into effect by 2025 which has just been approved by cabinet. But the BOI is arguing it needs more time. This one still needs to drafted and be approved by cabinet, then pass Council of State scrutiny before going through 3 readings inparliament and then go to the Senate. The readings are sonetimed made close together, if uncontroversial and Urgent with few  amendments called for but that is unusual and there is often competing legislation. So being in effect for 2025, though technically possible, would be a tall order needing all stops pulled out and no opposition in parliament. 2026 is more feasible, if the government lasts. Since this is pushed by the RD not a political party, it probably won’t go away unfortunately.

[beammeup]

27 minutes ago, atpeace said:

I think the world is grappling with a means of taxing individuals that aren't paying taxes and residing in countries where it is easier not to pay taxes. I seriously doubt countries are will impose a tax on money that has already been taxed "wherever".  There will be exceptions but basing fears on big what ifs seems pointless and stressful. 

 

I'm just looking for some facts behind this fear and don't want to be blindsided. 

 

 

We are all here for the facts, but they are few and far between currently. In the mean time it may be useful for some to hear other peoples take on the situation

[MeePeeMai]

6 minutes ago, atpeace said:

The USA and many other countries require "retired" tax residents that aren't citizens to file.  Most these individuals get little in return other than being able to use the infrastructure in such country. 

 

Well those non citizens retirees in the USA can buy and own property to name but one example.

[Misty]

This potential change s*cks. That said, remember Thailand has a progressive personal income tax system. The top marginal rate is 35%, but you’d need to earn a lot of income in the lower brackets before your top-level income (last baht earned) starts getting taxed at that rate.

For example, if you earn Bt3,000,000 in global income, your Thai effective tax rate would be 20.6% as per the table below. If you’re currently paying 25% in your home country, depending on DTAs and using  Thai tax credits you might pay 20.6% in tax to Thailand, and then 4.4% in your home country.

Someone with especially high earnings could consider contributing to a Thai tax advantage plan such as an RMF to cut Thai taxes further - at least what they might pay in their home country.

 

And if the Thais are serious about moving forward with this, as part of the change hopefully they'll also consider cutting the progressive rates to be more inline with nearby jurisdictions such as Singapore or HK. 

 

 

[Misty]

This potential change s*cks. That said, remember Thailand has a progressive personal income tax system. The top marginal rate is 35%, but you’d need to earn a lot of income in the lower brackets before your top-level income (last baht earned) starts getting taxed at that rate.

For example, if you earn Bt3,000,000 in global income, your Thai effective tax rate would be 20.6% as per the table below. If you’re currently paying 25% in your home country, depending on DTAs and using  Thai tax credits you might pay 20.6% in tax to Thailand, and then 4.4% in your home country.

Someone with especially high earnings could consider contributing to a Thai tax advantage plan such as an RMF to cut Thai taxes further - at least to what they might pay in their home country.

 

And if the Thais are serious about moving forward with this, as part of the change hopefully they'll also consider cutting the progressive rates to be more inline with nearby jurisdictions such as Singapore or HK. 

 

 

[CharlesHolzhauer]

1 minute ago, MeePeeMai said:

 

Well those non citizens retirees in the USA can buy and own property to name but one example.

Based on your own situation in Thailand, would a property in your name make difference?

[atpeace]

9 minutes ago, MeePeeMai said:

 

I know they are focusing on taxing individuals who don't currently pay taxes but to think that the Thai authorities will let you slide or give you a pass just because you pay taxes in another country (US for example), or leave those of us on a Non-O or Non O-A is probably foolish.

 

I think if they bother to see this through then they will go after every baht they can get.

 

Even if they were to adhere (strictly) to the double tax treaty, in my own case (the USA) then I will get screwed.

 

I too don't want to be blindsided.  Depending on which country one has his citizenship, it might be wise to start reading and understanding your countries tax treaty with Thailand (if there is one in place).

This is why leaders in the past were wise enough to form tax agreements.  They aren't perfect put the intention is to eliminate double taxation.  I'm not saying double taxation isn't a possibility but the odds IMO are miniscule.  Just my opinion and looking for facts.  My stance is not popular on this thread but I can't change my frame of mind just because other dislike it.  I get it, some are really fearful and I'm not insulting them and name calling.

[atpeace]

5 minutes ago, Misty said:

This potential change s*cks. That said, remember Thailand has a progressive personal income tax system. The top marginal rate is 35%, but you’d need to earn a lot of income in the lower brackets before your top-level income (last baht earned) starts getting taxed at that rate.

For example, if you earn Bt3,000,000 in global income, your Thai effective tax rate would be 20.6% as per the table below. If you’re currently paying 25% in your home country, depending on DTAs and using  Thai tax credits you might pay 20.6% in tax to Thailand, and then 4.4% in your home country.

Someone with especially high earnings could consider contributing to a Thai tax advantage plan such as an RMF to cut Thai taxes further - at least to what they might pay in their home country.

 

And if the Thais are serious about moving forward with this, as part of the change hopefully they'll also consider cutting the progressive rates to be more inline with nearby jurisdictions such as Singapore or HK. 

 

 

Where is your global income?  Does your country have a tax agreement?  Have you paid taxes on the income?  

[Celsius]

22 minutes ago, MeePeeMai said:

the Thai RD only sees and taxes your rental "income" and disallows your expenses (mentioned above) either by law or by way of making the burden of proof too onerous then this will be a big deal for some of us.

 

Of course they won't allow it. When my wife used to rent out her condo none of that was deductible. When she finally sold it at 20% loss, ahe still had to pay "income tax" on that condo.

 

This is why buying a property for "investment" in Thailand is such a bad deal if you are an individual (not a corp). 

 

 

[beammeup]

2 minutes ago, atpeace said:

This is why leaders in the past were wise enough to form tax agreements.  They aren't perfect put the intention is to eliminate double taxation.  I'm not saying double taxation isn't a possibility but the odds IMO are miniscule.  Just my opinion and looking for facts.  My stance is not popular on this thread but I can't change my frame of mind just because other dislike it.  I get it, some are really fearful and I'm not insulting them and name calling.

Your stance is not popular because they are your opinions. Like you said yourself you are looking for facts.

[MeePeeMai]

3 minutes ago, CharlesHolzhauer said:

Based on your own situation in Thailand, would a property in your name make difference?

 

If I could buy and own land and build my own place as a single retiree living here then it would certainly be more appealing.  I'm not fond of navigating obstacles and jumping through hoops just to get a work around.  

[atpeace]

11 minutes ago, beammeup said:

We are all here for the facts, but they are few and far between currently. In the mean time it may be useful for some to hear other peoples take on the situation

Fare enough but it seems many are assuming the worst case scenario as a fact.  For example the USA could raise income taxes by 50% to cover shortfalls but the probability is slim to none. I don't get the fear for something that has just been mentioned or thought about. I have more insane ideas than the next person but they are just passing thoughts and thankfully rarely implemented.  

[CharlesHolzhauer]

4 minutes ago, MeePeeMai said:

If I could buy and own land and build my own place as a single retiree living here then it would certainly be more appealing.

But you still may have to explain the double tax treaty to the RD staff here etc...

[atpeace]

5 minutes ago, beammeup said:

Your stance is not popular because they are your opinions. Like you said yourself you are looking for facts.

OK, that is circular but makes sense somewhat.  It doesn't change my perspective though.  I just want to know if anyone has any facts.

 

  I doesn't have to be an argument and I might have been an instigator- sorry. Is this thread based on fear or are there facts that I'm missing?  I feel as this is more of a competition and an opportunity to label individuals.  I probably should just move on and touch base on these tax threads every now and then to see if more facts are available. Peace🙂

[CharlesHolzhauer]

I wonder about the absence of Mike Lister. Not only will he need to update The Simple Tax Guide, but I also miss his balanced and no-nonsense perspective on Thai tax issues.

[Thailand J]

16 minutes ago, Misty said:

if you earn Bt3,000,000 in global income

If a US person earned that income in US from capital gain or dividend, the personal exemption is $14600, next $47025 is taxed at 0%, above that the tax rate is 15%.

assuming US1=36B.

Bt3,000,000 is about $83333.

The tax would be ($83333-$14600-$47025)x.15 =$3256, about Bt117,000

 

Bt117000 US tax compared to Bt617,000 thai tax in your example. That is additional Bt500,000 for the tax payer even with tax credit.

[atpeace]

4 minutes ago, Thailand J said:

If a US person earned that income in US from capital gain or dividend, the personal exemption is $14600, next $47025 is taxed at 0%, above that the tax rate is 15%.

assuming US1=36B.

Bt3,000,000 is about $83333.

The tax would be ($83333-$14600-$47025)x.15 =$3256, about Bt117,000

 

Bt117000 US tax compared to Bt617,000 thai tax in your example. That is additional Bt500,000 for the tax payer even with tax credit.

Is there a document that states that Thailand is planning on additionally taxing the Individuals that pay less income taxes in there home country than they would here?

[Lorry]

17 minutes ago, atpeace said:

Do you think individuals living in Thailand that have income and don't include this income on tax returns submitted in their home country should be taxed here?

Russian IT professionals live here, work from home for Russian companies,  get very good salaries and pay zero tax in Thailand. 

 

German pensioners live here,  get their pensions tax free from Germany (according to DTA only Thailand can tax them) and pay zero tax in Thailand. They are completely untaxed.

 

Absentee landlords live here,  pay taxes for rentals not here (where they live) but abroad because of a more favorable tax regime there (e.g. can deduct renovation cost).  

 

Many Westerners fall under the threshold where they have to pay taxes in their home countries, often pretending they are still living there. These thresholds are quite high in the West because the minimum income needed  to exist there is high.  But they live in Thailand,  enjoying the low minimum needed to exist. They don't see that accordingly the minimum threshold to pay taxes is low.

I know people living on 20-30,000 baht.  Told to be careful about Thai taxes the answer is "I fall under the threshold in my home country" (which they haven't seen for decades).

 

In my home country,  dividends and interest are tax-free for non-residents.

In theory,  one should include them in a Thai tax return. 

 

 

These are just some examples that come to mind immediately. 

I am all for taxing these people.

But not me, please!

 

 

[JohnnyBD]

I agree, some may pay less taxes in Thailand than in their home country, but some will pay much more. For example; in the US if filing married & joint, you can have up to $124,800 in total income before you pay any taxes depending on the types of income. You will get $29,200 married deduction, $1,550 age 65 deduction, and can have long-term qualified dividends up to $94,050 for total income of $124,800 with zero tax liability. In my case, for 2024, I will have $29,200 & $1,550 of ordinary income & $38,386 in LT dividends which will be exempt in the US, but would be assessable income in Thailand. I will pay tax on the rest of my US income. If this worldwide income tax becomes law, I will just stay less than 180 days in Thailand and spend more time back home with my children & grandchildren.

[MeePeeMai]

2 minutes ago, atpeace said:

Is there a document that states that Thailand is planning on additionally taxing the Individuals that pay less income taxes in there home country than they would here?

 

Check if your country has a Double Tax Agreement or Double Tax Treaty with Thailand.  That will basically spell out which country gets to tax you on certain things (either partially or exclusively) and if you get to claim a "credit" for taxes already paid in one country or another.

 

If your country does not currently have a tax treaty with Thailand then that is a good question.  What happens in that case?   I don't know. 

[Lorry]

36 minutes ago, CharlesHolzhauer said:

I wonder about the absence of Mike Lister. Not only will he need to update The Simple Tax Guide, but I also miss his balanced and no-nonsense perspective on Thai tax issues.

Didn't he write he leaves the forum?

[beammeup]

24 minutes ago, atpeace said:

OK, that is circular but makes sense somewhat.  It doesn't change my perspective though.  I just want to know if anyone has any facts.

 

  I doesn't have to be an argument and I might have been an instigator- sorry. Is this thread based on fear or are there facts that I'm missing?  I feel as this is more of a competition and an opportunity to label individuals.  I probably should just move on and touch base on these tax threads every now and then to see if more facts are available. Peace🙂

I agree you do have to wade through a lot of B.S. fear and panic to glean what few facts there are. I imagine if there are any new facts it will be headline news.

[redwood1]

51 minutes ago, CharlesHolzhauer said:

The damage is being caused by very nervous people. I am not belittling the impact that the new law, if legislated and implemented, will have. It could indeed create an uproar. However, feeling threatened and unwelcome in Thailand seems a bit over the top, in my opinion.

 

Have you been living it a cave fore the past 20 years or what?

 

Maybe many years ago expats were welcomed in Thailand but for at least the last 20 years they have just been tolerated at best...

 

I cant recall a single policy or program that was designed to make expats life better ever...

 

Checking in with immigration every 90 days like criminals....Being called dirty farang.....Double pricing seems just fine with the government....God forbid if you wanted a marriage visa and the hell you had to go through to get that...Ever tightening and more complicated visa rules......bla bla bla  need I go on?

 

It been a looong time since expats felt welcomed...

[beammeup]

11 minutes ago, Lorry said:

Didn't he write here leaves the forum?

He probably moved to Cambodia to avoid this tax situation.

[Lorry]

4 minutes ago, MeePeeMai said:

If your country does not currently have a tax treaty with Thailand then that is a good question.  What happens in that case?

In that case,  both countries will tax you according to their laws. This may lead to double taxation: the same income may be taxed twice.

 

Some countries I couldn't find on the RDs list of DTAs:

Croatia, Serbia, Macedonia, Greece, Portugal, Mexico,  Brazil,  Argentina,  Saudi Arabia, Iran

 

https://www.rd.go.th/english/766.html

[MeePeeMai]

1 hour ago, Celsius said:

 

Of course they won't allow it. When my wife used to rent out her condo none of that was deductible. When she finally sold it at 20% loss, ahe still had to pay "income tax" on that condo.

 

This is why buying a property for "investment" in Thailand is such a bad deal if you are an individual (not a corp). 

 

 

 

Here's a thought

 

If I sell my house in the USA, as a single home owner I am allowed up to $250,000 in capital gains TAX FREE ($500,000 for married couples).  That means no taxes will be due on the first $250,000 of profit on the sale.  Any gains over and above the 250k/500k would be taxed at the 15% long term capital gains rate.

 

Under the new proposed tax rules, how much tax would I have to pay here in Thailand on that sale of my home if I made a profit of 250k (or more). 

 

Something to think about.  

[CharlesHolzhauer]

21 minutes ago, Lorry said:

Didn't he write he leaves the forum?

I am not aware of this. Can you provide the link please.