Thailand to tax residents’ foreign income irrespective of remittance

[black tabby12345]

20 hours ago, AreYouGerman said:

 

If you didn't pay tax anywhere for it - yes.

If your income outside Thailand is already taxed, seemingly no needs to worry about.

Many of the first world countries have tax agreement(not to tax on one same income more than once).

 

The only and major concern is, Thailand might try to tax already-taxed money again by mistake/on purpose.

[MeePeeMai]

17 hours ago, vangrop said:

As I stated before, I won't declare anything and they won't find anything because I will do all my transactions in cash. When I run out of cash, I will go to neighbouring countries for refueling. I will lose on the exchange but this will be peanuts compared to what is ongoing. The only issue would be if they start a taxing system on your cash at the border, but good luck with that one

 

Yeah, good luck with that one when you go to renew your Visa extension and the I.O. asks to see your bank passbooks and asks how you are supporting yourself here in Thailand.  "I just do border runs and bring in cash" probably won't be an acceptable answer.  They want to see proof that you are not working here etc... 

[Thingamabob]

Your headline is misleading, again. Nothing has yet been agreed, let alone legally approved, regarding tax changes.

 

[AlexRich]

5 hours ago, Neeranam said:

Wrong, they can't tax me on my income from  British company going to my Scottish bank. It is entirely up to me if I want to take it into Thailand, and entirely up to me if I want to pay tax on it. 

I believe that Thailand is part of OECD agreements involving bank information. If you have a Scottish address for the account the information will not go to Thailand. If you have a Thai address on your account it will. 
 

Either way, if you are in Thailand for more than 180 days you are a tax resident, and your Scottish bank interest is taxable under these new rules. Not including that detail in your return is tax evasion. 
 

The problem is that even if they don’t know now they might find out on the future. Countries are being more and more open about information swaps. So it makes sense to organise your life to have residency in the country that has the least tax impact, and only be in Thailand below 180 days. 

[pentagara]

20 minutes ago, jonclark said:

So I guess that means all of the foreigners who are currently classed as 'guests' can now claim residency. I am surprised that the ultra-nationalists have not put the brakes on the whole idea of using the words foreigner and resident in the same sentence...

Tax residence status and immigration residence status are not linked. You don't get immigration residency priviliges in a country just because you are obliged to pay tax in a specific country.  If at all, it works the way round: You apply for a visa, the immigration department checks if you have paid tax or forwards the information to the revenue department that you have stayed in the country more than 180 days --> handled this way by some countries.

The latter will become easier in the future: Once the passport stamping is replaced by the machines entering your border crossing in a database (like in the US, EU soon, Singapore, etc.), all the tax department needs is an extract of that database to check whether you are liable to report your global income. Since the machines work based on biometric data, the passport number is irrelevant by the way. Technology makes our lifes (and the lifes of governments) so much easier.

[Antti]

6 minutes ago, BigBruv said:

 

'A whole lot of money' maybe by your standards.

 

They are aspire to be another Singapore, not the giant asian benidorm that it currently is.

 

Thanksin will have done his homework while away so the changes will keep coming until many chuck the towel in.

 

 

But don’t they achieve exactly the opposite if this comes to pass? Those with substantial wealth will be the first to leave. They have the most to lose and also the resources to relocate. Perhaps to Singapore, which by the way doesn’t tax foreign income.

[black tabby12345]

1 minute ago, Thingamabob said:

Your headline is misleading, again. Nothing has yet been agreed, let alone legally approved, regarding tax changes.

 

 

Yesterday, I got a email from the accounting firm I contacted several days ago(out of curiosity). 

They sent me the link of the original BKK Post article of this same issue.

And that sender(tax specialist) also stressed that the article is purely tax chief's private speech. Not a official statement by the tax department of Thailand.

 

[gearbox]

9 minutes ago, pentagara said:

 

No need. The agency that ensures that Thailand gets the required information already exists and is called OECD. Thailand is just leverages that one, it joined the CRS scheme in 2023 with the first reporting conducted on financial information covering 2022. If they hadn't joined, they actually would have been bullied by the rich countries ('grey tax jurisdictions'), since the point is that the rich countries get information on all the global bank accounts and incomes of their tax residents. The associated hacking skill is called CRS, where banks / financial intermediaries automatically are legally required to report to the foreign tax authorities based on TIN. Thailand is simply leveraging this infrastructure created by other rich tax desperate countries. The concept was initiated by Obama (FATCA) to ensure US citizens can't escape paying tax on their foreign inome. The concept was then picked up in principle by all countries that are OECD members (CRS/AEOI).

AFAIK the Australian banks will provide the CRS data only if the customer declares another tax residency in the KYC forms. I never declared any foreign country tax residency....and how would I know if I'm a tax resident if it is still 6th of June? I may decide tomorrow that I'm going somewhere else until the end of the year.

[Thingamabob]

1 minute ago, MeePeeMai said:

 

Yeah, good luck with that one when you go to renew your Visa extension and the I.O. asks to see your bank passbooks and asks how you are supporting yourself here in Thailand.  "I just do border runs and bring in cash" probably won't be an acceptable answer.  They want to see proof that you are not working here etc... 

In over 40 years I have never been asked how I am supporting myself (financially, that is). Are you saying that will now become a standard question ?

[freeworld]

Deleted

[AlexRich]

3 minutes ago, black tabby12345 said:

If your income outside Thailand is already taxed, seemingly no needs to worry about.

Many of the first world countries have tax agreement(not to tax on one same income more than once).

There is some truth in that, with double tax agreements between countries. The problem is that if the tax paid is below the tax that would have been paid in Thailand, the Thai tax authorities will seek to recover the difference, 

 

If Thai tax would be 50,000, but you paid UK tax of 25,000, the Thai authorities will tax you 25,000 instead of 50,000. There will be some exemptions of course, but the whole system is going to get messy in the future. Big winners will be tax accountants. 

[black tabby12345]

2 minutes ago, Antti said:

But don’t they achieve exactly the opposite if this comes to pass? Those with substancial wealth will be the first to leave. They have the most to lose and also the resources to relocate. Perhaps to Singapore, which by the way doesn’t tax foreign income.

 

The biggest impacted will be global corporation including Thailand's(dodging tax payment skillfully using tax heaven and other legal loopholes).

Earlier this year(in Feb when this was first addressed in public), I saw the article that says this proposed change will be strongly challenged by the wealthy Thais and big companies.

[ujayujay]

No country in the world will share the income of its citizens in their own country with the Thai government.....baaaaah   

[BigBruv]

1 minute ago, Antti said:

But don’t they achieve exactly the opposite if this comes to pass? Those with substancial wealth will be the first to leave. They have the most to lose and also the resources to relocate. Perhaps to Singapore, which by the way doesn’t tax foreign income.

 

 

I think that's the issue: people with "substantial wealth" only visit Thailand for short holidays in private type resorts unless they have certain predelictions. 

NOT taxing foreigners attracts low class people.  Low class people repel middle class and high class people.

 

IMHO the problem is the atmosphere that the low class thousand yard stare pensioners waiting for death bring with them.  If those sorts can be pushed to Cambodia or Phils then job done.

Clean slate to work from

 

Apparently Singapore was a s&^$hole a few years ago so it's possible to turn the situation around

 

 

[orchidfan]

Good luck to those here who have stated that they (presumably wife,kids etc) "will simply up and move 'elsewhere ".

 

My Thai wife of 20+ years will most CERTAINLY NOT "up and move" to Burma, Cambodia or Vietnam as she cannot communicate in their language(s).

 

So that leaves very few options....back to Countries where English is spoken.

 

In our case (birth country ) Oz or Hong Kong*, *where we have permanent Residence status.

But both can be very expensive to live in, and accommodation is tiny (compared to our current 4br,3bath ,house on a large plot of land) and/ or extremely difficult to get.

 

So will tackle this "possible " tax change, IF it even applies to me (70yrs young), by possibly making my Wise transfers (modest pre-taxed pension) to one of my wife's Thai banks (a couple of which I have the atm cards for) so it wont show as me earning overseas "income" and see how that works out.

 

But "up and moving elsewhere" is NOT really an option.

 

Same applies to many other AN forum members here I am sure.

[pentagara]

1 minute ago, gearbox said:

AFAIK the Australian banks will provide the CRS data only if the customer declares another tax residency in the KYC forms. I never declared any foreign country tax residency....and how would I know if I'm a tax resident if it is still 6th of June? I may decide tomorrow that I'm going somewhere else until the end of the year.

Correct. The KYC forms also state that you have to declare any other foreign residencies to the bank if they exist and also inform the bank as soon as your tax residency status changes. If you stay in Thailand more than 180 days in a tax year nevertheless, i.e. become a tax resident, then you would simply be liable of tax evasion in Thailand (in case the rule discussed here actually goes into effect one day, it's not ineffect yet after all). If the tax authority then for some reason finds out, then you'd be on the hook to proof to them that you don't stay 180 days in the country and if you can't then you'd be fined on top of the tax. How could they find out? E.g. by someone telling them, or if they one day get the border crossing data once they introduce the electronic gates for non-Thai passport holders at the border as well. That's how it works in other counries, so Thailand likely would handle it the same way.

 

Furthermore, banks are legally obliged to run checks based on indicators. This seems to be a bit more restrictive for US citizens/tax persons covered by FATCA than for the OECD CRS. Checks include bank account/card transaction data, phone numbers, and such.

 

 

[BritScot]

20 hours ago, Foxx said:

 

That is incorrect.  The USA and Eritrea tax worldwide income based upon nationality - not upon residence.  Plenty of other countries tax the worldwide income for their resident nationals, including the UK.

I think you are wrong about the UK! I have friends who work in the middle East who do not pay tax uk or otherwise, tax free income. Unless you mean living in the uk and earning money from outwith the uk, no one is checking Unless your prominent and do your own tax returns. 

[BE88]

6 minutes ago, freeworld said:

Nope, depends on the intent, circumstances and the govt resorts to fines and penalties before they get to that stage and it has to be a serious amount of money.

 

April 2023

1. Please define provide details of criminal tax fraud offence in your jurisdiction

In general, a criminal tax fraud offence requires an intention to evade tax. Examples of criminal tax fraud offences are as follows:

According to section 37 of the Revenue Code, any person who performs the following acts shall be subject to an imprisonment from three months to seven years and a fine from THB 2,000 to THB 200,000:

i. intentionally notifies false statement or gives false information or answers with a false statement or shows false evidence to evade taxes or request for a tax refund, or

ii. by fault, fraud, scheme, or any other method of similar nature, evades or attempts to evade tax or request for a tax refund.

According to section 37 bis of the Revenue Code, any person intentionally fails to file tax return forms to evade tax shall be subject to an imprisonment of up to one year, or a fine of up to BHT 200,000, or both.

2. What are the typical trigger points that could lead to criminal investigations? Can the application of certain tax penalties trigger criminal proceedings?

An adjustment of tax payable would not automatically trigger criminal proceedings for tax fraud. In order to constitute a tax fraud offence, other elements must also exist, for example, an intention to evade tax.

 

Thank you for providing more information on the law in Thailand, but in my country this does not happen and therefore in a country like Thailand where this is possible perhaps with false accusations that you have made an untruthful statement it raises all the danger bells for me which is to laugh about in Thailand.

 

I didn't survive three months in Thai prisons, so the consequences of these new tax rules are becoming very dangerous for us expats.

 

 

[pentagara]

They do. Because they also get data from Thai banks in return. If you open a bank account in Thailand as a foreigner, banks now have to ask for your foreign tax number (TIN). Based on this they transfer your bank account information to your home country's tax authority (year end balance, interests, dividents, etc.).

 

8 minutes ago, ujayujay said:

No country in the world will share the income of its citizens in their own country with the Thai government.....baaaaah   

 

[Thaindrew]

5 hours ago, alphason said:

 

This is the issue for many.

 

If income in the UK in under the UK threshold of 12,570GBP you pay no UK tax, on 12,570GBP (around 565K baht) as an example tax is around 15% in Thailand (less some allowances).

 

Will Thailand look at your income, or your assessable income stated by HMRC (income less deductions, used to calculate your tax).

 

UK CGT on property is 18%/24%, Here there is no CGT so I think you pay tax on that at normal income tax rates (not 100% sure ??). So for example a UK property with a gain of around 100,000GBP would pay 24% tax in UK, but 35% in Thailand. (possibly??)

Capital Gains is taxed as income, just paid income tax on the sale of an apartment, they will let you offset any renovation costs and they also let me offset apartment management fees - this means it could go up to 35% on a tiered basis depending on the profit

[black tabby12345]

A massive stimulation in their local economys.

----------------------------

 

Do you really believe the money from the 'new tax' will be spent for the welfare of the poor in Thailand?

Too naive to believe that innocently.

Nothing more than another scheme to enrich the already superrich 0.1% of the ruling class.

If I am here long enough, can see it naturally.

[pentagara]

2 minutes ago, BritScot said:

I think you are wrong about the UK! I have friends who work in the middle East who do not pay tax uk or otherwise, tax free income. Unless you mean living in the uk and earning money from outwith the uk, no one is checking Unless your prominent and do your own tax returns. 

UK taxes worldwide income if you're a tax resident of the UK. If they work in the middle east, they likely don't live in the UK more than 183 days per year, so they likely are not a UK tax resident. People who are not tax residents of the UK are not taxed in the UK on their global income. It doesn't matter if they are UK nationals. Nationality only matters in the US and Eritrea, because these two nations tax their nationals wherever they reside.

[Phuket Pete]

They better hurry up and clarify matters, otherwise Thai Developers and Real Estate Agents will never sell another condo again and likely go bust. I would guess that agreed sales are already being cancelled. 

 

[MeePeeMai]

11 minutes ago, Thingamabob said:

In over 40 years I have never been asked how I am supporting myself (financially, that is). Are you saying that will now become a standard question ?

 

If you use the money in the bank required for your 12 month extension (800k / 400k), or you show the required monthly income to qualify for the extension then no, you will probably not be asked how you support yourself (unless you catch the I.O. on a bad day or rub him/her the wrong way).

 

If however, you use an agent or there is no activity (money in or out) in your passbook for the 800k/400k you may be questioned... especially if future 12 mo. extensions might be tied to or depend on filing tax documents here in Thailand (for tax residents).

 

The noose seems to be tightening and it's getting uncomfortable now.

[black tabby12345]

20 minutes ago, Thingamabob said:

In over 40 years I have never been asked how I am supporting myself (financially, that is). Are you saying that will now become a standard question ?

 

Question: How you are supporting yourself?

 

It is often asked by an ordinary Thais(other than bureaucrats).

But I have never been asked by anyone in uniform in Thailand.

I have been here nearly 2 decades by now though.

[redwood1]

19 minutes ago, Antti said:

But don’t they achieve exactly the opposite if this comes to pass? Those with substantial wealth will be the first to leave. They have the most to lose and also the resources to relocate. Perhaps to Singapore, which by the way doesn’t tax foreign income.

 

 

This was why the LTR visa was created...

 

The LTR visa was created to make sure the very well-off and rich never have to pay any taxes...

 

The way they look at things its just wrong to make the very wealthy pay any taxes.....Taxes are only for the middle class and the poor....

[Thaindrew]

3 hours ago, Sheryl said:

 

No tax on transfers per se. Tax is on income. If the source of the funds transferred is savings of funds earned/acquired before 2023 then no tax implication.

thats the 2024 rule yep, who know what rules they will apply in 2025 - and thats the problem

[JimGant]

2 hours ago, lordgrinz said:

Is there anything in the laws, as they are now, that would make 401K's and IRA's open game for taxes if they aren't cashed out? They are the moment tax deferred until they are withdrawn, not sure if that applies in Thailand.

No, neither if cashed out in Thailand or US.

 

Currently, under the remitted taxation system, if you cashed out a chunk of your IRA and sent it to Thailand this year, it would NOT be assessable income -- because the Thai rules say all income earned before Jan 2024 is not subject to Thai taxation. And this chunk of your IRA (assuming no contributions in 2024) would definitely be pre-2024 income. That it is 'tax deferred' income, makes never no mind in this remittance scenario. There would, of course, be US taxation on this chunk of IRA -- but with no offsetting Thai credits, since you paid no Thai tax on it.

 

Now, under the new worldwide income scenario, if you cashed out a chunk of IRA in 2024, it would now be a taxable event, both in Thailand and the US (because of the US savings clause). And the amount of taxable IRA would be the same, both on your US and Thai tax returns. And, per DTA, Thailand has primary taxation rights on this IRA, thus gets to keep all the taxes it collects, and the US has to absorb a tax credit for same. But total tax bill between the two countries would thus be the same as if I only paid taxes to the US. Example:

 

I cash out $15000 of my IRA (which, in real life, approximates my last year's RMD). This all falls into my 12% tax bracket, so my US taxes on this IRA is $1800

 

In Thailand, I have their equivalent of 'standard deduction' (also called TEDA, in some quarters) being 500,000 baht (age over 65, no wife deduction). When I plug in the $15,000 IRA as assessable income, this (using 36 FX) translates into 540,000 baht. So when I subtract TEDA, I end up with 40,000 baht of taxable income. All of this falls in the first Thai tax bracket, where the rate is 5%. So, tax bill is 2000 baht, or $56.

 

Now, on my US tax return I could take this Thai tax bill of $56 dollars as a tax credit, lowering my US tax bill from $1800 to $1744. And, I wouldn't even need to file the tax credit Form 1116, since I'm below $600 (filing joint). Just a one line item entry on Schedule 3, and that's it. No extra effort at all.

 

Now, look at both scenarios: Remitted and worldwide.  My total tax bill is the same -- $1800 or $1744+$56. So, at least for Yanks and private pensions and IRAs -- this new worldwide income scheme is a real yawner. And, it's even tempting (tho' I've been warned about giving tax advice on this forum) to say: Is my time worth filing a Thai tax return for $56? I guess it could be, if I could do it all online, although I don't have (or want) a TIN. Will need to ponder that one.

 

Worldwide income taxation by the Thais doesn't alter much for Yanks.

 

 

[Everyman]

50 minutes ago, CharlesHolzhauer said:

Via CRS - a global financial reporting system where countries share financial data about each other’s residents.

 

Ain’t going to happen. Countries like the US aren’t going to hand over massive amounts of intelligence on their own citizens to any tin pot foreign regime that asks for it.

 

Imagine China searching such a database for patterns consistent with foreign spying, or using it to dig up dirt on presidential candidates and leaking it to the press.

 

Even in the U.S the government couldn’t get Trump’s financial records without a subpoena. 

 

This had gone far enough into paranoia land. You all need to take some Xanax, have a Chang in your favorite lady bar and forget about this for a couple years so you can see that nothing will happen. If it makes you feel better, pick a lady bar in Angeles city so you don’t spend more than 180 days in a year in Thailand. 

[Thaindrew]

2 hours ago, NoDisplayName said:

 

I manage my investments and income to pay $0 tax in the US.  There would be no offsetting credit.

 

Capital gains is not taxed in Thailand............Thai stocks only.  Foreign stocks capital gains paid at ordinary income rate.

 

Many ifs and unknowns.

Wait and see.

Update Plan B.

 

 

capital gains are now taxed in Thailand as income, make a profit on a property sale and it taxed at income tax rates. the land office is sending sales paperwork to the tax office, who contact you to pay the tax