Thailand to tax residents’ foreign income irrespective of remittance

[Mike Lister]

4 minutes ago, Eudaimonia said:

 

The LTR visa does not seem to be an option for people under 50 who are already living in Thailand and have income only from abroad.

 

They need an "official personal income tax return as filed to state authorities such as P.N.D. 90/91, BIR60, Form 1040, Form W-2, SA100, T1 General etc. showing income of no less than 80,000 USD per year in the past 2 years."

 

A Thai tax resident is unlikely to have declared 80,000 USD foreign source income in their Thai tax return before all these changes.

 

 

Yes, well I wrote "remain", not "move in".

People under 50 should have jobs and be working and making money in the West. 🙂

[Eudaimonia]

20 minutes ago, Mike Lister said:

People under 50 should have jobs and be working and making money in the West. 🙂

That's what the Western governments think, but I would not have expected the Thai government to make this moral judgement. Maybe they heard this from the OECD?

 

Actually it looks like LTR pensioners need the same tax documents, so being 50 doesn't change much.

[Klonko]

2 hours ago, Enzian said:

I've already been out of the country a full 93 days so far this year, so I have some flexibility for the remainder, and the fact that my Non-O rolls over Dec. 20 seems convenient. So is there a written rule that being in country any parts of 180 days makes one a tax resident, or is 180 safe and it's 181?

Also, saying they go global, how does Thailand calculate taxable income on residential rental property? Is it based on gross receipts, or gross receipts after the usual (USA) deductions for property tax, debt service, insurance, maintenance and repairs, etc.? Or something in between? Would they want to look at a US Schedule E? Or would rental income abroad be exempt? 

Finally now, I'm concerned about them establishing something statutory but not enforcing it, or only selectively in a few kinds of cases. Because then if we move with the herd we could always be technically in violation, they would always have a gotcha to apply, or suddenly institute on everyone. Just like it's impossible to file a US Schedule E without there being something there that the IRS could second guess: like why did you put the cost of this piece of work in current expenses and not on a depreciation schedule? Thanks.

The most probably unclear or cumbersome requirements for filing taxes for and respective documention of foreign income is an at least as heavy deterrence to stay longer than 179 days in Thailand as the tax itself, even at a lower than 35% marginal tax rate.

[JimGant]

4 hours ago, jaideedave said:

JG,Eh? 555,

"Eh" was said with a wink and a smile. Love Canadians. My finest five year tour in the Air Force was at McChord AFB, in Tacoma, Wash, in a NORAD unit, where 30% of us pilots and controllers were Canadians. Never met a bad egg Canadian. And they all played golf, and carried a jug of Rye in their bags -- meaning, by the time of the triple bet 18th hole, they were easy pickings. Good times, good memories. Hope to see more here in Chiang Mai.

[tomkenet]

2 hours ago, Mike Lister said:

Honest people with lots of income have an easy out with the tax exempt LT visa.

The question is if the tax benefit remains when/if the new proposed worldwide tax regime is put into effect.

[Metapod]

3 hours ago, motdaeng said:

 

just for the record, i swim in a pool, not a pond!

by the way, it wasn't a personal attack, just a simple question. 

 

here an other question:

if someone has so much income (+ 20 m/year) , why not go for the long-term-residents (LTR)?

https://ltr.boi.go.th/

 

 

 

Okay, for a serious answer.

 

1. Tax. Thailand was a very low key tax haven with very favorable territorial taxation setup with overseas remittance and no CFC laws. This made it very advantageous to be based here as a tax resident with the right legal structure for overseas company where you could pay a very low tax rate.

2. Lifestyle. Say what you will, but Thailand is a very fun place to live and visit. There is a reason why Bangkok is the number 1 most visited city in the world. It's a playground country.

3. Networking / History - This might be more specific to my industry and circle of friends, but a lot of us met and networked in Thailand when we started building our businesses. Thailand is one of the world hubs for online marketing / SEO and a lot of us came here when we were starting out a long time ago. We didn't just uproot after we started to make serious money. A lot of us started families and settled down here with roots.

 

As for the LTR visa, I'll probably swap to that visa from Thai Elite. My concern is that the LTR visa will no longer shelter taxes if they push for a non remittance based system.

[Ben Zioner]

8 hours ago, ChaiyaTH said:

One wonders when they finally update anything about this, I mean people would suddenly all need accountants or tax numbers etc etc etc.

There is nothing to update, the remittance tax is in effect since January 1, and it may be superseded at some stage by a global income tax, possibly as early as Jan 1, 2025.

[Gknrd]

I am from the US and I admit from one of the richest and fastest growing places in the US. But, I have never seen the advantage of living in Thailand full time with the new rules. Air is pretty clean where I live , taxes are ridiculously low , petty crime is not the best, but not bad, If I want it free meals, free social centers scattered all over the city, I am out 20% medical. But, not bad.

Only way I would even think about places like Thailand now is if I was renting in the US and didn't have funds. Then It might be a place to consider. But, honestly Mexico , South America , Philippines look more attractive if I was destitute. Only place I have not lived is the Philippines, but I think I will head that way as soon as my 6 months are over in South America. 

 

 

[lordgrinz]

5 minutes ago, Gknrd said:

I am from the US and I admit from one of the richest and fastest growing places in the US. But, I have never seen the advantage of living in Thailand full time with the new rules. Air is pretty clean where I live , taxes are ridiculously low , petty crime is not the best, but not bad, If I want it free meals, free social centers scattered all over the city, I am out 20% medical. But, not bad.

Only way I would even think about places like Thailand now is if I was renting in the US and didn't have funds. Then It might be a place to consider. But, honestly Mexico , South America , Philippines look more attractive if I was destitute. Only place I have not lived is the Philippines, but I think I will head that way as soon as my 6 months are over in South America. 

 

Like you, I don't understand the attraction here, if not for my wife and daughter, I would be out of here forever. This is the biggest cesspool I have ever seen, I mean there are some horrible places (inner cities) in the USA too, but I lived in a rural town in the NE where comfortable/safe living is the norm. Now throw these Thai tax changes in the list of annoyances of living here? This place then becomes what I can only describe as Hell on Earth to someone like me, I hate it here with a passion!

[Eudaimonia]

I am both relieved and perplexed by the headline of an article published by Asian Private Banker today:

 

"The uncertainty has lowered": Global private banks on Thai wealth tax

 

https://asianprivatebanker.com/private-wealth/private-banking/the-uncertainty-has-lowered-global-private-banks-on-thai-wealth-tax/

 

Unfortunately, the article is behind a paywall.

 

First, has there been a proposal for a wealth tax, too? This is a specialist publication for wealth managers, so surely they must know what a wealth tax means. It's not an income tax like what we are discussing here, but a yearly levy on the total value of someone's assets. (The one tax that is still missing...)

 

Second, I am very eager to learn how uncertainty has lowered. To me, it looks like things are just getting increasingly uncertain, but apparently, some people know better. Which is great.

 

Now, does anyone have a private banker to explain? ☺️

[MeePeeMai]

47 minutes ago, Eudaimonia said:

First, has there been a proposal for a wealth tax, too?

 

5555,  Wouldn't that be a real kick in the nuts!!

[Lorry]

2 hours ago, Eudaimonia said:

I am both relieved and perplexed by the headline of an article published by Asian Private Banker today:

 

"The uncertainty has lowered": Global private banks on Thai wealth tax

 

https://asianprivatebanker.com/private-wealth/private-banking/the-uncertainty-has-lowered-global-private-banks-on-thai-wealth-tax/

 

Unfortunately, the article is behind a paywall.

 

First, has there been a proposal for a wealth tax, too? This is a specialist publication for wealth managers, so surely they must know what a wealth tax means. It's not an income tax like what we are discussing here, but a yearly levy on the total value of someone's assets. (The one tax that is still missing...)

 

Second, I am very eager to learn how uncertainty has lowered. To me, it looks like things are just getting increasingly uncertain, but apparently, some people know better. Which is great.

 

Now, does anyone have a private banker to explain? ☺️

They are talking about the taxation of remittances since Jan 2024.

They don't know what a wealth tax is.

Seems like they are not worth their money. 

[JackGats]

8 hours ago, Eudaimonia said:

 

The LTR visa does not seem to be an option for people under 50 who are already living in Thailand and have income only from abroad.

 

They need an "official personal income tax return as filed to state authorities such as P.N.D. 90/91, BIR60, Form 1040, Form W-2, SA100, T1 General etc. showing income of no less than 80,000 USD per year in the past 2 years."

 

A Thai tax resident is unlikely to have declared 80,000 USD foreign source income in their Thai tax return before all these changes.

 

...

The 80k USD are foreign yearly passive income, declared or not. The Thais are not interested in if and where your foreign yearly passive income has been taxed. They only want some official proof your have been earning that money. It just happens that most of the time (though not always) the proof consists in a tax return.

[Incorrigible1]

4 hours ago, Gknrd said:

am from the US and I admit from one of the richest and fastest growing places in the US.

Considering getting a place in the US to spend part of the year.  Could you please tell me what state this is.  

[Tonyfarang]

On 6/11/2024 at 8:54 PM, 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. 

Can't agree more.. I am preparing and looking for alternatives, i'm currently ready for Malaysia, any other options? Just waiting the day that they will announce it. 

[Gknrd]

1 hour ago, Incorrigible1 said:

Considering getting a place in the US to spend part of the year.  Could you please tell me what state this is.  

Texas, I have a nice home on the I-35 corridor. It's booming like crazy. But, compared to other places it is still very affordable and the money flowing in here has made it so nice for us retiree's.  The city's are setting up centers and reducing the home taxes.. I completely lucked out. I bought when prices were very cheap. And when I turned 65 taxes froze. I could not ask for anything better. It has made it so I can travel abroad 6 months a year and relax at home for 6 months. And I have some wonderful neighbors. 

[mtraveler]

The current law states that if money is brought in, it will be taxes as income.  And the amount of tax due will be based on the Thai tax chart (0-150,000 Baht @ 0%, 150,000-300,000 Baht @ 5%, etc....).  The law also says that if there's a tax treaty with another country, the amount already paid can be deducted from the amount of tax due.  I assume that means that if the tax due is 50,000 Baht, and you've already paid 30,000 Baht in taxes in the other country (e.g., USA), then the amount due when the money is brought in is 50,000 - 30,000 = 20,000 Baht.  

 

Now for my question:  how is the tax ALREADY PAID calculated on that money brought in?  Is is based on the last tax return?  Is it based on the average percent tax paid for all income earned during that year?  What if the money was earned in a different year, and the percent tax was higher?  It seems very unclear and arbitrary.  I've already asked an accountant, and have not received an answer.  Maybe someone here can shed some light.  

[Presnock]

13 hours ago, Eudaimonia said:

 

The LTR visa does not seem to be an option for people under 50 who are already living in Thailand and have income only from abroad.

 

They need an "official personal income tax return as filed to state authorities such as P.N.D. 90/91, BIR60, Form 1040, Form W-2, SA100, T1 General etc. showing income of no less than 80,000 USD per year in the past 2 years."

 

A Thai tax resident is unlikely to have declared 80,000 USD foreign source income in their Thai tax return before all these changes.

 

 

Yes, well I wrote "remain", not "move in".

For the LTR only 40K is needed and if one has no investments but has bought a condo, that can be used as the investment needed with the 40K.  Just saying,

[redwood1]

2 hours ago, mtraveler said:

The current law states that if money is brought in, it will be taxes as income.  And the amount of tax due will be based on the Thai tax chart (0-150,000 Baht @ 0%, 150,000-300,000 Baht @ 5%, etc....).  The law also says that if there's a tax treaty with another country, the amount already paid can be deducted from the amount of tax due.  I assume that means that if the tax due is 50,000 Baht, and you've already paid 30,000 Baht in taxes in the other country (e.g., USA), then the amount due when the money is brought in is 50,000 - 30,000 = 20,000 Baht.  

 

Now for my question:  how is the tax ALREADY PAID calculated on that money brought in?  Is is based on the last tax return?  Is it based on the average percent tax paid for all income earned during that year?  What if the money was earned in a different year, and the percent tax was higher?  It seems very unclear and arbitrary.  I've already asked an accountant, and have not received an answer.  Maybe someone here can shed some light.  

 

Dont worry Sir there seem to be plenty of new fly by night tax consultants in Thailand who have sprung up overnight who will help you with your money as they are helping themselves to your money...

[Presnock]

1 minute ago, redwood1 said:

 

Dont worry Sir there seem to be plenty of new fly by night tax consultants in Thailand who have sprung up overnight who will help you with your money as they are helping themselves to your money...

Mtraveler:  exactkt as rewiid1 stated - The only answer that counts right now is this UNTIL THE REVENUE DEPARTMENT PROVIDES COMPLETED PROGRAM FORM,  then the tax agents and the experts on this forum are basically guessing.  A few of those on here have put out the FACTS provided by the Thai tax laws but the final interpretation of any particular situation for the multitude of expats and countries that are ormight be affected or NOT, cannot be guaranteed by anyone here.  Best to just wait...unless you plan to leave the the next couple of days and cease to be a Tax Resident here.  My opinion only of course.

[Henryford]

What's more confusing, the changes to the Thai tax laws or reading the 47 pages of comments?

[Mike Lister]

3 hours ago, mtraveler said:

The current law states that if money is brought in, it will be taxes as income.  And the amount of tax due will be based on the Thai tax chart (0-150,000 Baht @ 0%, 150,000-300,000 Baht @ 5%, etc....).  The law also says that if there's a tax treaty with another country, the amount already paid can be deducted from the amount of tax due.  I assume that means that if the tax due is 50,000 Baht, and you've already paid 30,000 Baht in taxes in the other country (e.g., USA), then the amount due when the money is brought in is 50,000 - 30,000 = 20,000 Baht.  

 

Now for my question:  how is the tax ALREADY PAID calculated on that money brought in?  Is is based on the last tax return?  Is it based on the average percent tax paid for all income earned during that year?  What if the money was earned in a different year, and the percent tax was higher?  It seems very unclear and arbitrary.  I've already asked an accountant, and have not received an answer.  Maybe someone here can shed some light.  

The current law doesn't say that! The current tax law requires the taxpayer to assess their income to determine what is tax assessable income and what is not. Merely remitting funds to Thailand is not the sole  basis for taxation, the remittance must comprise assessible income. 

 

The current law also does not say that tax paid can be deducted against income due. The tax law states that some funds are assessible and some are exempt, the law also says that dual tax agreements (DTA's) will specific which country has the primary taxation rights to certain types of income and is a secondary taxation right exists. 

 

I suggest you read the following and come back to us with questions:

 

 

 

 

[Mike Lister]

46 minutes ago, Presnock said:

Mtraveler:  exactkt as rewiid1 stated - The only answer that counts right now is this UNTIL THE REVENUE DEPARTMENT PROVIDES COMPLETED PROGRAM FORM,  then the tax agents and the experts on this forum are basically guessing.  A few of those on here have put out the FACTS provided by the Thai tax laws but the final interpretation of any particular situation for the multitude of expats and countries that are ormight be affected or NOT, cannot be guaranteed by anyone here.  Best to just wait...unless you plan to leave the the next couple of days and cease to be a Tax Resident here.  My opinion only of course.

I have no reason to believe the TRD will ever do that, there's especially no reason to believe there will someday be an epiphany moment, the clouds will part and this all seeing all knowing announcement will be made that will magically make everything clearer.

 

The Thai tax code has existed for decades, the TRD made only one small rule change to it, their position is very likely to be, what's so difficult to understand! Enough is known at present for people to understand the basics of the tax system but that's probably not enough for the average expat with above overseas earning's, other than basic things like savings or pensions. There will likely be some trial and error in all of this with many people erring on the side of caution, rather than trying to file a complete fully tested return the in the first year. We've already seen ample evidence that people are withholding remittances', until they see first hand experiences reported. That is likely to be the way this proceeds, if it proceeds at all.

[Mike Lister]

39 minutes ago, Mike Lister said:

I have no reason to believe the TRD will ever do that, there's especially no reason to believe there will someday be an epiphany moment, the clouds will part and this all seeing all knowing announcement will be made that will magically make everything clearer.

 

The Thai tax code has existed for decades, the TRD made only one small rule change to it, their position is very likely to be, what's so difficult to understand! Enough is known at present for people to understand the basics of the tax system but that's probably not enough for the average expat with above overseas earning's, other than basic things like savings or pensions. There will likely be some trial and error in all of this with many people erring on the side of caution, rather than trying to file a complete fully tested return the in the first year. We've already seen ample evidence that people are withholding remittances', until they see first hand experiences reported. That is likely to be the way this proceeds, if it proceeds at all.

To add:

 

I think too many people are trying to be perfectionists about what is intended/required and to emulate the level of details provided by home tax departments, they've forgotten where they are. 

[lordgrinz]

37 minutes ago, Mike Lister said:

I have no reason to believe the TRD will ever do that, there's especially no reason to believe there will someday be an epiphany moment, the clouds will part and this all seeing all knowing announcement will be made that will magically make everything clearer.

 

The Thai tax code has existed for decades, the TRD made only one small rule change to it, their position is very likely to be, what's so difficult to understand! Enough is known at present for people to understand the basics of the tax system but that's probably not enough for the average expat with above overseas earning's, other than basic things like savings or pensions. There will likely be some trial and error in all of this with many people erring on the side of caution, rather than trying to file a complete fully tested return the in the first year. We've already seen ample evidence that people are withholding remittances', until they see first hand experiences reported. That is likely to be the way this proceeds, if it proceeds at all.

 

Yup, not sending a single baht into my Thai account until I am in danger of falling below the 400,000 level.......crossing my fingers that I have enough to last me a while, or at least until all the smoke clears.

[lordgrinz]

4 minutes ago, Mike Lister said:

To add:

 

I think too many people are trying to be perfectionists about what is intended/required and to emulate the level of details provided by home tax departments, they've forgotten where they are. 

 

I fully know where I am, Thai Bureaucratic Hell.

[Mike Lister]

Just now, lordgrinz said:

 

I fully know where I am, Thai Bureaucratic Hell.

I'm the exact opposite. I transfer two pensions to Thailand by Direct Deposit, from the pension provider, to my Thai bank account, the bank and the TRD can see the amounts and the source. I also hold a fair amount of legacy cash here in THB so there's no question about my living expenses. They no longer bother sending me tax forms each year, not only because they seem to know I'll file any way but also because they can see there's no tax due. For me, this is an easy process.

[lordgrinz]

1 hour ago, Mike Lister said:

I'm the exact opposite. I transfer two pensions to Thailand by Direct Deposit, from the pension provider, to my Thai bank account, the bank and the TRD can see the amounts and the source. I also hold a fair amount of legacy cash here in THB so there's no question about my living expenses. They no longer bother sending me tax forms each year, not only because they seem to know I'll file any way but also because they can see there's no tax due. For me, this is an easy process.

 

I am in that not rich enough (actually just staying afloat) to make a difference, but enough to where they hit me with taxes that inconvenience me. Lets say my wife makes 1.4 million baht per year, she reduces her taxes to 860,000 with deductions .......where she pays 86000 baht with me on her taxes (all deductions applied), then I add say 1,000,000 to the tax return for the year, I calculate we would pay 245,000 more baht in Thai taxes. That 1,000,000 will probably be tax free in the USA, so I am paying money I don't want to pay to Thailand. Not liking the future here, not that I like it now.

[Celsius]

15 hours ago, Metapod said:

There is a reason why Bangkok is the number 1 most visited city in the world.

 

It isn't 

[Mike Lister]

18 minutes ago, lordgrinz said:

 

I am in that not rich enough (actually just staying afloat) to make a difference, but enough to where they hit me with taxes that inconvenience me. Lets say my wife makes 1.4 million baht per year, she reduces her taxes to 860,000 with deductions .......where she pays 86000 baht with me on her taxes (all deductions applied), then I add say 1,000,000 to the tax return for the year, I calculate we would pay 245,000 more baht in Thai taxes. That 1,000,000 will probably be tax free in the USA, so I am paying money I don't want to pay to Thailand. Not liking the future here, not that I like it now.

My wife earns 1 million as self employed and pays virtually no tax because of a standard 60% deductions for the cost of sales (whereas the true cost is closer to 25%). I earn about a million but leave half of it outside Thailand whilst half of what is remitted is exempt, again, no tax. Some of it is luck of the draw, some of it is planned, but does perhaps go some way to explain why so few Thai's pay tax.