Thailand to tax residents’ foreign income irrespective of remittance

[Mike Lister]

5 hours ago, tomacht8 said:

This is what my Thai tax expert explained to me. The Thai tax office is more behind the big fish. The problem is that all the small fish swim in the pond too. There have to be clear signs in advance to see, for example, from a simple inquiry to a commercial bank, that there is much more to be gained. At the moment, for example, a lot of Russians are buying villas on the islands and many Chinese are buying condos in Bangkok that are in the 20-50 million THB range. Apparently no one asks where the money comes from.

 

And as a little cherry on the cake. My Thai wife runs two businesses. She must report her income every 6 months. She then goes out for chicken lunch with her regional tax officer. They then roll the dice somehow, to determine the tax burden.

The first year my wife filed a return for her business (self employed), the lady in the local Tessabhan TRD office fiddled things to where she didn't have to pay tax....the woman lives in the community.

 

When she came home and told me I made her go to the District office and file a corrected return and she paid about 10k in tax. The District Office made all kinds of excuses about the woman in the Tessabahn office not understanding something or other (like her entire job). Just before we left, the officer said we may get a call from the Regional office to ask what we were doing and why, a call that never came. Now, my wife understand the tax system and knows to file correctly.

[redwood1]

.

Edited July 7 by redwood1

[beammeup]

The RD will have their hands full next year going after all of those Russians and Chinese who bought condos and Lambo's . Won't they?

[Dogmatix]

14 hours ago, tomacht8 said:

Thanks. This is helpfull. In my country you no get such a Certificate. The tax authority give your the yearly taxreport (around 10 Pages) with the amount you must pay. After you pay with banktransfer your tax bill. That's it.

If a Thai tax officer will accept this two papers (Report + Bankslip), who knows?

I will ask my european tax advisor if there is a possibility to get such a "Certificate".

 

Even if it's just a precautionary preparation, the f@&"&ing bureaucracy and paperwork starts now. Running costs, translator costs, certification fees, loss of time. 

 

The RD issues certified tax returns which are certificates of tax due or refunds due but I don't think they issue certified tax receipts.  You go along to the RD office with a copy of your tax return and they give you a copy with a stamp, date and a signature on every page. I have some that I had to get years ago when I applied for citizenship and I guess the system is the same. Knowing the Thai bureaucratic mentality they will want something similar from which they can see what type of income it was what you declared for tax.  Perhaps they will accept a certified tax receipt that just shows how much was paid.  But most Western tax authorities don't issue manually signed certificates like they do and taxpayers generally can't just walk into a tax office to request something like that.  They write letters that get a reply months later, if at all, and wait for hours hanging on the line with call centres to be fobbed off when they finally get through.  My family had to resolve an issue with inheritance tax with HMRC in the UK and it took 5 months to get a response despite repeated letters and phone calls.

 

The possibilities for claiming tax credits range from officers who might just close their eyes and say that looks vaguely OK to officers who will stonewall indefinitely, if they don't get the type of documentation they are used to in Thailand. 

 

The way to resolve this would to issue an order saying that income already subjected to tax in a DTA country is not assessable.  That would mean no need to declare it or submit evidence.  But pigs could fly.

[TroubleandGrumpy]

An update to those who are genuinely interested in knowing what is happening - especially if DTAs are required to be used - which it looks like they will be.  It seems many people are thinking like in the West - the rules are this, so that happens - it does not work like that here. I strongly suggest reading @Dogmatix last post - this is a clusterphar.......

 

There is no online TRD process or document that allows an Expat to easily lodge a tax return using their country's DTA to exempt anything already taxed, or to claim any exemption or allowances included in their DTA with Thailand.  I have had it confirmed by 2 tax accountant organisations that if I want to lodge a tax return using any part of a DTA for exclusions or allowances or just plain exemptions, I will need to provide detailed techncial and legal information that will be almost impossible for a layman to do in Thailand - they said I will need to use their services and I believed them.  They both currently use DTAs in the tax returns that they do for overseas companies, and they have absolutely convinced me it will not be an easy thing to do for an 'ordinary' Expat.

 

I gave them the details of the financial situation for myself and my Thai wife, and they advised me that their probable costs to do a tax return using the Australian DTA would be - 70-80K and 80-90K.  I have that in writing if anyone wants to PM for a copy. 

 

It will NOT be a simple matter if Expats are forced to lodge a tax return by TRD/Thai Govt, if they need to use the DTA to either exempt or reduce their taxation liability to Thailand.  IMO TRD will not be creating an online DTA tax lodgment process/document according to both the tax experts. IMO as soon as TRD realised how hard it would be, given that there are 61 separate DTAs and all of them are different in some way, they threw up their hands and shut their mouths.  The tax experts showed me what I did not know - TRD are caught in a very hard place - they are being pushed by the Thai Govt to start making Thais and Expats pay more income taxes. Their new Boss (Ms.Kulaya Tantitemit) is being very compliant to the new Govt,  and like all Thai bosses she has the 'Picard Syndrome' and thinks if she says 'make it so' - it will just happen.

[NoDisplayName]

44 minutes ago, Dogmatix said:

But most Western tax authorities don't issue manually signed certificates like they do and taxpayers generally can't just walk into a tax office to request something like that.

 

An audit by the TRD should be quite the experience.  There is very little "official" an expat could provide to show home country tax returns........at least for the US.

 

I've filed online via an independent IRS recognized free filing service for the past decade with nothing official to show for it.  No physical paper filing, unless I print off a provisional copy myself, nothing from the IRS, only a message from the online service that my return was accepted.

 

As to financial documentation, all the banks and brokerages and credit unions have gone paperless.  The audit victim could go online.....if they still maintain accounts with the same financial entities....and download past statements....if they are maintained online........and print them off themselves.

 

Almost nothing will be official, nothing will be sealed or stamped, and many will be in languages other than English.  Good lucky.

[redwood1]

Folks

A million monkeys with a million crayons will be drawing a exact replica of the Mona Lisa before this tax disaster ever becomes workable....

 

 

 

g

 

[Klonko]

1 hour ago, TroubleandGrumpy said:

An update to those who are genuinely interested in knowing what is happening - especially if DTAs are required to be used - which it looks like they will be.  It seems many people are thinking like in the West - the rules are this, so that happens - it does not work like that here. I strongly suggest reading @Dogmatix last post - this is a clusterphar.......

 

There is no online TRD process or document that allows an Expat to easily lodge a tax return using their country's DTA to exempt anything already taxed, or to claim any exemption or allowances included in their DTA with Thailand.  I have had it confirmed by 2 tax accountant organisations that if I want to lodge a tax return using any part of a DTA for exclusions or allowances or just plain exemptions, I will need to provide detailed techncial and legal information that will be almost impossible for a layman to do in Thailand - they said I will need to use their services and I believed them.  They both currently use DTAs in the tax returns that they do for overseas companies, and they have absolutely convinced me it will not be an easy thing to do for an 'ordinary' Expat.

 

I gave them the details of the financial situation for myself and my Thai wife, and they advised me that their probable costs to do a tax return using the Australian DTA would be - 70-80K and 80-90K.  I have that in writing if anyone wants to PM for a copy. 

 

It will NOT be a simple matter if Expats are forced to lodge a tax return by TRD/Thai Govt, if they need to use the DTA to either exempt or reduce their taxation liability to Thailand.  IMO TRD will not be creating an online DTA tax lodgment process/document according to both the tax experts. IMO as soon as TRD realised how hard it would be, given that there are 61 separate DTAs and all of them are different in some way, they threw up their hands and shut their mouths.  The tax experts showed me what I did not know - TRD are caught in a very hard place - they are being pushed by the Thai Govt to start making Thais and Expats pay more income taxes. Their new Boss (Ms.Kulaya Tantitemit) is being very compliant to the new Govt,  and like all Thai bosses she has the 'Picard Syndrome' and thinks if she says 'make it so' - it will just happen.

Deleted

Edited July 7 by Klonko

[JimGant]

1 hour ago, TroubleandGrumpy said:

 I have had it confirmed by 2 tax accountant organisations that if I want to lodge a tax return using any part of a DTA for exclusions or allowances or just plain exemptions, I will need to provide detailed techncial and legal information that will be almost impossible for a layman to do in Thailand - they said I will need to use their services

I don't believe it. My US DTA gives the US exclusive taxation rights on my Air Force pension and Social Security. Thus, these figures never need to be shown on a Thai tax return, as there's no taxable income value to them (and where would you put them anyway?). Now, per DTA, Thailand has primary taxation rights on my IRA. So, I report this income, in full, on a line on the Thai tax return. Thailand gets to keep all the taxation, which is all they care about. That the DTA allows a tax credit against my US taxes -- is a no never mind for Thailand TRD -- as they're just happy to collect the full bundle -- and also that they need not report anything to the US IRS (my credit reporting on the US tax return is purely self-assessment, with no official Thai tax return data needed). Thus, this taxation proceeds as if there were no DTA, at least in the mechanics of preparing the return.

 

So why would you need to pay an agent 90k to file a tax return that uses DTA language to assess which income is reportable on a Thai tax return -- and which isn't? You can figure this all out yourself, assuming average intelligence, as DTA language is not that hard to decipher.  Just keep a legible record of how you arrived at these figures, in case you're called in for an audit. Which, in my example above, would be 100% kosher. And probably would be for most other DTA situations.

 

Sounds like the tax preparation vultures are beginning to successfully scare the low hanging fruit. Beware.

 

[Mike Lister]

2 hours ago, TroubleandGrumpy said:

An update to those who are genuinely interested in knowing what is happening - especially if DTAs are required to be used - which it looks like they will be.  It seems many people are thinking like in the West - the rules are this, so that happens - it does not work like that here. I strongly suggest reading @Dogmatix last post - this is a clusterphar.......

 

There is no online TRD process or document that allows an Expat to easily lodge a tax return using their country's DTA to exempt anything already taxed, or to claim any exemption or allowances included in their DTA with Thailand.  I have had it confirmed by 2 tax accountant organisations that if I want to lodge a tax return using any part of a DTA for exclusions or allowances or just plain exemptions, I will need to provide detailed techncial and legal information that will be almost impossible for a layman to do in Thailand - they said I will need to use their services and I believed them.  They both currently use DTAs in the tax returns that they do for overseas companies, and they have absolutely convinced me it will not be an easy thing to do for an 'ordinary' Expat.

 

I gave them the details of the financial situation for myself and my Thai wife, and they advised me that their probable costs to do a tax return using the Australian DTA would be - 70-80K and 80-90K.  I have that in writing if anyone wants to PM for a copy. 

 

It will NOT be a simple matter if Expats are forced to lodge a tax return by TRD/Thai Govt, if they need to use the DTA to either exempt or reduce their taxation liability to Thailand.  IMO TRD will not be creating an online DTA tax lodgment process/document according to both the tax experts. IMO as soon as TRD realised how hard it would be, given that there are 61 separate DTAs and all of them are different in some way, they threw up their hands and shut their mouths.  The tax experts showed me what I did not know - TRD are caught in a very hard place - they are being pushed by the Thai Govt to start making Thais and Expats pay more income taxes. Their new Boss (Ms.Kulaya Tantitemit) is being very compliant to the new Govt,  and like all Thai bosses she has the 'Picard Syndrome' and thinks if she says 'make it so' - it will just happen.

I fail to see the basis for this continued fear mongering which is little more than opinion. It has no basis in fact, other than third hand opinion from two anonymous and unidentified tax accountants and subjective opinion that, things will it, "will not be a simple matter". There are no current first hand reports from anyone who tried to utilise a DTA option; there is no report from Big 4 or even small 4 accountancies regarding the complexity involved; there is no new information from the TRD regarding this process. All we have a personal subjective opinion from somebody who was the target of a services selling exercise and who is now concerned at the costs involved.

 

My recommendation is that everyone bide their time, quietly and patiently and ignore the rumours and scaremongering. In the fullness of time, either first hand reports will emerge or pertinent information will be announced.

[JimGant]

1 hour ago, NoDisplayName said:

An audit by the TRD should be quite the experience.  There is very little "official" an expat could provide to show home country tax returns........at least for the US.

Not so.

https://www.irs.gov/individuals/transcript-types-and-ways-to-order-them

[BangkokHank]

On 7/5/2024 at 7:54 PM, Mike Lister said:

The TRD Code states that a Thai tax resident must obtain a Thai TIN, within 60 days of exceeding the minimum threshold (60k, 120k or 220k) regardless of whether tax is payable or not.

Exceeding the minimum threshold of what? Income? Inward remittance? Remitting money from abroad does not automatically make it income.

[Mike Lister]

Just now, BangkokHank said:

Exceeding the minimum threshold of what? Income? Inward remittance? Remitting money from abroad does not automatically make it income.

Assessible income.

[Presnock]

9 minutes ago, JimGant said:

Not so.

https://www.irs.gov/individuals/transcript-types-and-ways-to-order-them

also, as an American I file my taxes every January upon receipt of my 1099R - I have a complete copy of my 1040R for the last 5 years as required by the IRS.  But until the LTR no longer will exemt all funds remitted, I shouldn't have any problem providing proof - my visa which I used the 1040's for financial requirement and if that isn't sufficient, those 1040's also indicate that my pension is paid to me by the US GOVT.  Anyway, prior to worrying about all this, I am awaiting word from the Thai RD hopefully prior to 2025 concerning details about this program.  GOod luck tgo all!

[NoDisplayName]

1 hour ago, JimGant said:

Not so.

https://www.irs.gov/individuals/transcript-types-and-ways-to-order-them

 

Cool beans!

Thanks, I didn't know that was available.

[Danderman123]

7 hours ago, JimGant said:

I don't believe it. My US DTA gives the US exclusive taxation rights on my Air Force pension and Social Security. Thus, these figures never need to be shown on a Thai tax return, as there's no taxable income value to them (and where would you put them anyway?). Now, per DTA, Thailand has primary taxation rights on my IRA. So, I report this income, in full, on a line on the Thai tax return. Thailand gets to keep all the taxation, which is all they care about. That the DTA allows a tax credit against my US taxes -- is a no never mind for Thailand TRD -- as they're just happy to collect the full bundle -- and also that they need not report anything to the US IRS (my credit reporting on the US tax return is purely self-assessment, with no official Thai tax return data needed). Thus, this taxation proceeds as if there were no DTA, at least in the mechanics of preparing the return.

 

So why would you need to pay an agent 90k to file a tax return that uses DTA language to assess which income is reportable on a Thai tax return -- and which isn't? You can figure this all out yourself, assuming average intelligence, as DTA language is not that hard to decipher.  Just keep a legible record of how you arrived at these figures, in case you're called in for an audit. Which, in my example above, would be 100% kosher. And probably would be for most other DTA situations.

 

Sounds like the tax preparation vultures are beginning to successfully scare the low hanging fruit. Beware.

 

To be clear, you are suggesting that tax residents simply "hide" income such as US Social Security from a Thai tax return rather than documenting on the return that a DTA shields that US income from Thai taxation.

 

Unfortunately, in a world where Thailand's Revenue Department seriously pursues foreign tax evaders,  ignoring Social Security income on your Thai return would be a bad strategy.

 

And there is always the possibility that your Thai marginal tax rate is higher than your US rate (or some US tax deductions don't apply in Thailand), so you would be required to pay the difference in Thailand. Hard to do if you don't report the income in the first place.

 

Note that I am writing about a hypothetical situation, there is still no guidance on whether Farangs who don't work in Thailand will have to file tax returns next year.

[Mike Lister]

21 minutes ago, Danderman123 said:

To be clear, you are suggesting that tax residents simply "hide" income such as US Social Security from a Thai tax return rather than documenting on the return that a DTA shields that US income from Thai taxation.

 

Unfortunately, in a world where Thailand's Revenue Department seriously pursues foreign tax evaders,  ignoring Social Security income on your Thai return would be a bad strategy.

 

And there is always the possibility that your Thai marginal tax rate is higher than your US rate (or some US tax deductions don't apply in Thailand), so you would be required to pay the difference in Thailand. Hard to do if you don't report the income in the first place.

 

Note that I am writing about a hypothetical situation, there is still no guidance on whether Farangs who don't work in Thailand will have to file tax returns next year.

That is exactly what I have done, in years gone by and the TRD has been quite happy with the approach and has said nothing.

[JimGant]

44 minutes ago, Danderman123 said:

To be clear, you are suggesting that tax residents simply "hide" income such as US Social Security from a Thai tax return rather than documenting on the return that a DTA shields that US income from Thai taxation.

Exactly where on the return would you put this information? Per the DTA, this income does not exist for any Thai taxation purpose. Are you suggesting the TRD wants footnotes of all non assessable income not being reported?

[Celsius]

11 hours ago, TroubleandGrumpy said:

 

I gave them the details of the financial situation for myself and my Thai wife, and they advised me that their probable costs to do a tax return using the Australian DTA would be - 70-80K and 80-90K

 

Idiots can do it if they want to.

 

That is exactly how much money my wife paid the immigration lawyer to do her Canadian Permanent Residency.

 

Almost as good of a deal as buying real estate in Bangkok. 

[Jack1988]

I am not paying and I will never pay any taxes here

[JohnnyBD]

9 hours ago, Danderman123 said:

To be clear, you are suggesting that tax residents simply "hide" income such as US Social Security from a Thai tax return rather than documenting on the return that a DTA shields that US income from Thai taxation.

 

Unfortunately, in a world where Thailand's Revenue Department seriously pursues foreign tax evaders,  ignoring Social Security income on your Thai return would be a bad strategy.

 

And there is always the possibility that your Thai marginal tax rate is higher than your US rate (or some US tax deductions don't apply in Thailand), so you would be required to pay the difference in Thailand. Hard to do if you don't report the income in the first place.

 

Note that I am writing about a hypothetical situation, there is still no guidance on whether Farangs who don't work in Thailand will have to file tax returns next year.

US Social Security is deemed to be non-assessable income when remitted to Thailand and as such is not required to be reported. It is not about hiding income from the Thai authorities, it is simply not required to be reported.

[Felton Jarvis]

On 7/6/2024 at 9:30 PM, topt said:

Who's "usual definition" is that - or just a nice round number you came up with.........?

Merely indicative of the usual money snob quote from members of this forum. Even though I draw about100 thousand baht a month in retirement income, there are many on this forum who consider me a backpacker. This attitude is what drives the Immigration idea that Thailand needs only wealthy expats.

[Mike Lister]

7 minutes ago, Felton Jarvis said:

Merely indicative of the usual money snob quote from members of this forum. Even though I draw about100 thousand baht a month in retirement income, there are many on this forum who consider me a backpacker. This attitude is what drives the Immigration idea that Thailand needs only wealthy expats.

Exactly that, I couldn't agree more.

[Danderman123]

5 hours ago, JohnnyBD said:

US Social Security is deemed to be non-assessable income when remitted to Thailand and as such is not required to be reported. It is not about hiding income from the Thai authorities, it is simply not required to be reported.

So I can remit funds to Thailand, but not report it, and claim it's a large Social Security pension.

[Guderian]

Has this been raised yet, I can't go back and check out 65 pages? lol.

 

As far as I was aware, everything that's been garnered from this tax mess so far has agreed that any savings overseas that you can prove you had prior to 1/1/2024 can still be remitted into Thailand tax-free when it suits you, say to buy a property. Now this article says something completely different, that the tax-free exemption on remitted savings only lasts until 1/1/2025. And he doesn't just say it once, but twice, so he sounds pretty certain.

 

https://www.pattayamail.com/latestnews/news/new-tax-rules-for-foreign-sourced-income-464735

 

[scorecard]

38 minutes ago, Danderman123 said:

So I can remit funds to Thailand, but not report it, and claim it's a large Social Security pension.

 

Maybe same for old age pensions from other countries?

[Klonko]

1 hour ago, Danderman123 said:

So I can remit funds to Thailand, but not report it, and claim it's a large Social Security pension.

As long as TRD does not ask for proof and you are willing to pay fines.

[Mike Lister]

1 hour ago, Guderian said:

Has this been raised yet, I can't go back and check out 65 pages? lol.

 

As far as I was aware, everything that's been garnered from this tax mess so far has agreed that any savings overseas that you can prove you had prior to 1/1/2024 can still be remitted into Thailand tax-free when it suits you, say to buy a property. Now this article says something completely different, that the tax-free exemption on remitted savings only lasts until 1/1/2025. And he doesn't just say it once, but twice, so he sounds pretty certain.

 

https://www.pattayamail.com/latestnews/news/new-tax-rules-for-foreign-sourced-income-464735

 

He's confused and is guessing, the tax law says he's quite wrong.

[NoDisplayName]

18 minutes ago, Mike Lister said:

He's confused and is guessing, the tax law says he's quite wrong.

 

There was a response in one of these threads where the speaker was asked about that and admitted to being misteaken. 

 

see page 63, "tomkenet"

Edited July 8 by NoDisplayName

[gamb00ler]

2 hours ago, Danderman123 said:

So I can remit funds to Thailand, but not report it, and claim it's a large Social Security pension.

Yes... that's how the self reporting method works.  If you like to gamble for big stakes go for it.  The resulting variance (AKA luck) would look something like:

small win

small win

small win

small win

HUGE LOSS

Edited July 8 by gamb00ler