Thailand to tax residents’ foreign income irrespective of remittance

[CrossBones]

"However, this rule will be revised again, effective from 2024..."

 

It seems very unlikely they can change the tax laws for the current year, half way through the current year.

 

Surely its a typo and means 2025?

[CrossBones]

On 6/5/2024 at 7:39 PM, freeworld said:

Countdown to 180 days and then being considered tax resident arrives about 29th June 2024.

 

Haha yea

How can they change it for current year halfway through the year? 

[CrossBones]

This article says effective 2025

https://www.thaiexaminer.com/thai-news-foreigners/2024/06/05/thai-taxman-now-plans-to-tax-foreigners-on-all-income-whether-it-is-remitted-to-the-kingdom-or-not/

 

The Thaiger article says 2024.

 

It cant be 2024. They cant change fro a territorial based tax system to a worldwide taxation half-way through the year it makes no sense at all.

 

Just the Thaiger spreading fear and clickbait articles as usual!

[John Drake]

53 minutes ago, CrossBones said:

This article says effective 2025

https://www.thaiexaminer.com/thai-news-foreigners/2024/06/05/thai-taxman-now-plans-to-tax-foreigners-on-all-income-whether-it-is-remitted-to-the-kingdom-or-not/

 

The Thaiger article says 2024.

 

It cant be 2024. They cant change fro a territorial based tax system to a worldwide taxation half-way through the year it makes no sense at all.

 

Just the Thaiger spreading fear and clickbait articles as usual!

 

This is Thailand. It will amaze you.

[patman30]

This is likely in preparation for BRICS/CBDCs

[Gknrd]

With the political situation, No Western expat should even remotely consider Thailand as a retirement destination. And, if they do then have an exit strategy in place and ready. 

[lordgrinz]

3 minutes ago, Gknrd said:

With the political situation, No Western expat should even remotely consider Thailand as a retirement destination. And, if they do then have an exit strategy in place and ready. 

 

I'm guessing with these harebrained announcements, that the 2nd half of the year is going to be very unpleasant for the Thai economy, and probably the end of the Pheu Thai party.

[TroubleandGrumpy]

21 hours ago, bg53 said:

 

DTAs do not work this way. Both Contracting States (at residence/domicile and at source) will have a right to tax (save for exemptions, limitations, non-discrimination or other clauses). The resident has no right to select which country he pays tax to. At best he can claim tax credit under the particular DTA to prevent Double Taxation by both Contracting States.

Where a person is a tax resident of two States, they can select which country to apply taxation to their income earned. 

[TroubleandGrumpy]

21 hours ago, TheAppletons said:

 Let's keep the story time rolling.....

  And when they can't pay all of these hypothetical back taxes, interest, fines, and penalties (what, pray tell, is the difference between a fine and a penalty?), they "probably" will go to Thai prison.

  While in hypothetical Thai prison, they will "probably" be forced to have unprotected sex with other men.

  So they'll "probably" catch HIV and then "probably" develop AIDS.

  Go sign up for a Thai TIN immediately or you'll "probably" die of AIDS.

  (Wow!  Thanks for the heads up.  Probably.)

OK I got what you are doing. 

Why is it that people who stick their heads in the sand, always demand others do the same by use of ridicule and abuse.

Read my post - I never said it was 'compulsory' to do what I said - I said it was unwise to make a decision without knowing the downsides.

Think of it this way - you know the downsides of not wearing a helmet - and you can make that decision - up to you - all good - IDGAF.

You read the post and now know the downsides of the taxation issue, which by the way has generated by a extremely large number, the biggest amount of feedback and comment and criticism on social media that has ever happened to Expats in Thailand.

Dont wear a helmet - up to you - but there is no need to ridicule those wearing one. 

[TroubleandGrumpy]

15 hours ago, Gknrd said:

With the political situation, No Western expat should even remotely consider Thailand as a retirement destination. And, if they do then have an exit strategy in place and ready. 

I agree that Thailand is going done a path that clearly indicates that this is not a country that people should retire to in SEAsia. Philippines, Indonesia and Malaysia also all state that anyone living in the country 180-183 days is a tax resident - and they have implemented this new taxing system under OECD etc.. But - they not taxing the retired/married Expats income that they bring into the country (and spend there). 

 

Malaysia introduced the same system a few years ago, but they specifically excluded the Pensions of Expats, plus they also excluded any Expat income that has been subjected to the taxation system of the origin country (whether tax applied or not). Philippines and Indonesia have both implemented the same global tax system, but they have not changed their tax codes regarding foreigners earning money from overseas.  Both tax codes state that an Alien/Foreigner only pays tax on revenue earned/made in their countries, and both state that any income earned overseas by an Alien/Foreigner, whether brought into their country or not, is not taxable.  All three of those other countries have implemented the global taxation system OECD etc. but they have all either made allowances for Aliens/Foreigners, and/or they have kept those rules which exclude them from being taxed for any overseas incomes.  Thailand has done nothing for Expats. 

 

Unlike the other 3 main popular retirement countries in SEAsia (for those without the money needed for Singapore), Thailand has made no allowances for Expats and has not made any changes to 'protect' Expat's overseas earnings under the new global OECD tax system.  In fact, technically, Expat's foreign income remitted into Thailand have always been taxable - but as with so many things here, it was never enforced.

The recent rule change that removed the 12 month exemption has 'exposed' Expat's foreign sourced income, but Thailand has so far done nothing about it.  When Thailand does move to a global taxation system, then Expat's foreign sourced income is extremely exposed and will be taxed - unless Thailand gives us some protection - which they appear to not be interested in doing at all.

 

Thailand is not a recommended country for retirement. If I knew all this over 10 years ago, I would not be retired and living in Thailand.  None of those other 3 countries I mentioned above, treat retired Expats like Parolees and all the other BS that Thailand does. I had a mate who retired to The Philippines - he was right - The Philippines welcomes retired Expats and treats them well.  

[TroubleandGrumpy]

15 hours ago, lordgrinz said:

 

I'm guessing with these harebrained announcements, that the 2nd half of the year is going to be very unpleasant for the Thai economy, and probably the end of the Pheu Thai party.

Today's anticipated Constitutional Court decision about MFP will go a long way to deciding Thailand's future - economically and politically. 

I must say - I knew Thailand had it's 'downsides' - but this is getting ridiculous - I am too old for this sheite. 

[Dogmatix]

On 6/9/2024 at 10:09 AM, 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 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. 

 

 

A complete overhaul of the tax structure for foreign source investment income would be a good idea to bring it into line with tax on Thai investment invome, viz:

 

Capital gains on listed stocks 0% tax or at least allow offset of losses as Thai companies can do.

 

10% flat rate on dividends which don’t impact your top rate of tax.

 

15% on interest without affecting your top rate of tax.

 

A lightweight transactional tax on property sales without affecting your top rate of tax.

 

Taxing foreigners at the top rate of income on these income sources is very unfair, given the easy tax regime on domestic investment income. Many foreigners will right feel discriminated against when they understand this and leave.

 

Foreign rental income which many expats live on, could be a complete nightmare. Thailand allows only a flat deduction of 30% regardless of costs including renovations and repairs which can often wipe out a year’s rental or more. Tax years being out of synch could be a huge problem and to cap it all renting out property is considered a business in Thailand and subject to a PND 94 mid year tax return in September as well as the standard PND 90 year end tax return in March. I think many expat property owners will just throw in the towel and leave when they understand the implications and I can’t blame them.

 

However, it is extremely unlikely they will even consider bringing tax rates on foreign investment income into line with Thai rates. We are dealing with a bureaucracy and politicians who like to go for quick wins without thinking anything through and xenophobia is institutionalized.

Edited June 12 by Dogmatix

[bg53]

4 hours ago, TroubleandGrumpy said:

Where a person is a tax resident of two States, they can select which country to apply taxation to their income earned. 

 

Where did you get this concept? Residence falls on one side or another, and DTAs have clauses to decide residence. 

[SiamAndy]

4 hours ago, TroubleandGrumpy said:

Unlike the other 3 main popular retirement countries in SEAsia (for those without the money needed for Singapore), Thailand has made no allowances for Expats and has not made any changes to 'protect' Expat's overseas earnings under the new global OECD tax system.  In fact, technically, Expat's foreign income remitted into Thailand have always been taxable - but as with so many things here, it was never enforced.

The recent rule change that removed the 12 month exemption has 'exposed' Expat's foreign sourced income, but Thailand has so far done nothing about it.  When Thailand does move to a global taxation system, then Expat's foreign sourced income is extremely exposed and will be taxed - unless Thailand gives us some protection - which they appear to not be interested in doing at all.

 

Thailand is not a recommended country for retirement. If I knew all this over 10 years ago, I would not be retired and living in Thailand.  None of those other 3 countries I mentioned above, treat retired Expats like Parolees and all the other BS that Thailand does. I had a mate who retired to The Philippines - he was right - The Philippines welcomes retired Expats and treats them well.  

Thailand Land of Smiles should actually be called Land of Fake Smiles, I've seen the fake smiles enough times in 12 years of visiting/living in TL.

[Dogmatix]

43 minutes ago, bg53 said:

 

Where did you get this concept? Residence falls on one side or another, and DTAs have clauses to decide residence. 

 

You can easily be tax resident of more than one country.  Many UK expats are still UK tax residents because it is much harder to get out of the UK tax net than the Thai one and conversely much easier to get dragged back into the UK net, eg visit the UK for more than 90 days in a tax year.  US expats are all US tax residents in addition to maybe being a tax resident of other countries.

[bg53]

1 hour ago, Dogmatix said:

You can easily be tax resident of more than one country. 

 

It is possible. However most people would want to get out of tax residency. To intentionally get into double or multiple tax residency status to choose which country to pay tax to is a very novel idea. Perhaps it exists in a handful of combinations.

Edited June 12 by bg53

[bg53]

13 hours ago, TroubleandGrumpy said:

Where a person is a tax resident of two States, they can select which country to apply taxation to their income earned. 

 

Right .....   Good luck to your tax planning.

[AreYouGerman]

On 6/9/2024 at 9:45 PM, bg53 said:

 

It's new for Thailand, and there are options around it in nearby countries.

 

Name 3 without Google.

[bg53]

Just now, AreYouGerman said:

 

Name 3 without Google.

Malaysia, Philippines and as of now Cambodia

[AreYouGerman]

4 minutes ago, bg53 said:

Malaysia, Philippines and as of now Cambodia

 

Where does Cambodia come from? I mean, it seems they just tax salaries, nothing else. 😂

[cdnvic]

Removed some unnecessary bickering. I remind you all that the report button is for reporting serious issues, not for registering disagreement with someone. Multiple misuse of reports can trigger account action. 

[aldriglikvid]

Last year foreigners bought 14 449 condos in Thailand, at the average price of 5 million thb and to the total sum of 73 billion baht. 

As the current rules stand, you need to make an international transfer to THB and show that receipt of currency conversion - to be able to finalize your purchase. 

First quarter of this year this massive transaction volume, by foreigners, is up +5.2% YoY; approx. 75-80 billion thb to be transferred into this country this year alone. 

With this in mind, will the RD chase European €900 euro pensioners? Or even degenerates as myself? 

I still believe, perhaps naively so, that this will be a honor system where actual follow up and scrutiny beyond what you self report, will be very little. 

 

I'm still in the camp that the arbitrary tax on gross remittances will be very, very difficult. In what country is it actually enforced? Are there any examples? 
 

[NanLaew]

On 6/6/2024 at 5:30 AM, 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?

 

Questions about your presumed financial anonymity should be referred to the OECD.

[Eudaimonia]

12 hours ago, aldriglikvid said:

Last year foreigners bought 14 449 condos in Thailand, at the average price of 5 million thb and to the total sum of 73 billion baht. 

As the current rules stand, you need to make an international transfer to THB and show that receipt of currency conversion - to be able to finalize your purchase. 

First quarter of this year this massive transaction volume, by foreigners, is up +5.2% YoY; approx. 75-80 billion thb to be transferred into this country this year alone. 

 

I know this was not the main point of your comment, but the first quarter of 2024 was, in a way, the "last chance" to buy with pre-2024 funds after the enacted tax change.

 

Singapore successfully killed the real estate market for foreign buyers in 2023 with an additional stamp duty. A total of one (1) foreigner purchased luxury homes in Singapore during Q1 2024.

 

The difference is that Singapore wants to intentionally cool down the overheated property market, whereas whatever happens in Thailand now might not be as carefully planned.

[aldriglikvid]

46 minutes ago, Eudaimonia said:

 

I know this was not the main point of your comment, but the first quarter of 2024 was, in a way, the "last chance" to buy with pre-2024 funds after the enacted tax change.

 

Singapore successfully killed the real estate market for foreign buyers in 2023 with an additional stamp duty. A total of one (1) foreigner purchased luxury homes in Singapore during Q1 2024.

 

The difference is that Singapore wants to intentionally cool down the overheated property market, whereas whatever happens in Thailand now might not be as carefully planned.

I appreciate that anecdote, but perhaps the essence of my comment was lost in translation. 

If you're considered a tax resident all remittance into Thailand is to be declared and, absent of a DTA and supporting documents, taxed as income. I continue to argue that taxing remittance will be very difficult, and was using condo purchases as a single example. The 20 000 000 000 THB that foreigners bought condos for in Q1 2024, and the 60 000 000 000 THB that will be bought for in Q2-Q4, might very well be earned pre 2024 and thus not assessable. Nonetheless, 80 000 000 000 of international transfers, from condo purchases alone, will hit Thailand this year and it illustrates how big the space of international transfers really is. 

Whereas a SGP stamp-duty is crystal clear in its presentation and implementation I would argue that very few of the aforementioned buyers of Thai condos are unaware of the current change in Thai tax, and how it will affect them. Not even local RDs can answer if a international transfer in the amount of 5 million should be declared or not taxed. Thailand really needs to clear up things in regards to remittance, as I believe it will hurt the  economy from here and onwards. Just to give you a example: I was about to transfer 1.5m thb to buy a car - but I've now put it on hold. A good friend of mine had decided to buy the condo he was renting, and had received a price that he accepted - but now backed out of it because he's unclear if the remittance will hurt him further on. I/We can't be alone in this. 

 

Anyways, end of rant. I hope Thailand increase the transparency and motives of their actions later this year. 

[Captain Flack]

Some off topic posts have been removed.

[TheAppletons]

On 6/12/2024 at 12:33 PM, TroubleandGrumpy said:

Think of it this way - you know the downsides of not wearing a helmet - and you can make that decision - up to you - all good - IDGAF.

You read the post and now know the downsides of the taxation issue, which by the way has generated by a extremely large number, the biggest amount of feedback and comment and criticism on social media that has ever happened to Expats in Thailand.

Dont wear a helmet - up to you - but there is no need to ridicule those wearing one. 

 

  False equivalence.  

 

  If one wants to use a "wearing a helmet" analogy, the appropriate analogy is "will the Thai authorities enforce the fact that one is not wearing a helmet."  Similarly, if one does not apply for a TIN, will the Thai authorities. enforce any hypothetical penalties for not applying for a TIN.

 

  Always surprises me that when people post foolish statements on public forums they think they shouldn't be treated as a fool.  

 

 

 

 

[Mike Lister]

On 6/12/2024 at 5:23 PM, Dogmatix said:

 

You can easily be tax resident of more than one country.  Many UK expats are still UK tax residents because it is much harder to get out of the UK tax net than the Thai one and conversely much easier to get dragged back into the UK net, eg visit the UK for more than 90 days in a tax year.  US expats are all US tax residents in addition to maybe being a tax resident of other countries.

Er....I am non-resident in the UK for taxes but I still pay UK tax on any income that arises there, rental income and pensions primarily. That doesn't however make me UK tax resident.

[yozah]

17 hours ago, AreYouGerman said:

 

Where does Cambodia come from? I mean, it seems they just tax salaries, nothing else. 😂

Cambodia does tax worldwide income though?

[beautifulthailand99]

Theoretical here.

 

My wife and I live in the UK and have a house here and a condo in Jomtien. The plan is after I die she's sells up and goes to live in Thailand a fairly rich woman in the bosom of her family. Would the strategy for when that happens , sell up in UK transfer the money to Thailnd - live less than 180 days in that tax year and when the money was seasoned, move over permanenly. Currently that would be around 25 million baht.