Thailand to tax residents’ foreign income irrespective of remittance

[Trip Hop]

46 minutes ago, Foxx said:

 

I wrote "Plenty of other countries tax the worldwide income for their resident nationals, including the UK."  Note the word "resident".  So (as usual) I'm not wrong.  Your workers in the Middle East are spending sufficient time outside the UK to be classed as non-resident, and so their non-UK income is not taxed in the UK.

 

Not always the case.  As you say if they are out of the country for a full tax year (April 6th to April 5th the following year) excluding allowable days for visits, you are entitled to file non-dom status and will pay no tax on outside UK income providing you can prove that you are registered for tax in the country that you are based.  However, a lot of countries/contracts in the Middle east etc will pay tax free and use this as bait regardless of whether the contract is long enough for you to qualify.  This can lead to a rather unpleasant surprise if the UK tax man catches up with you at a later date.  I know people that have been caught out this way and I have also turned down contracts myself when the attractive so called tax-free turns out not to be the case. 

[MeePeeMai]

This new tax mess has a fowl stench to it for me and it reminds me of a situation I was put in here several years ago when I was living here under O-A visa extensions (I suspect an equally unpleasant outcome with this new tax residence fiasco).  

 

Remember this?  A mandatory health insurance clause was added to the O-A visa category which mandated Health Insurance for O-A extensions.  I have health insurance in the USA which covers me here in Thailand (under Blue Cross/Blue Shield and is accepted at most or all private hospitals in Thailand).

 

Simple solution, select and purchase a plan from one of the "approved" Thai insurance companies or if you already have insurnance, simply have the "board members" of your insurance company fill out this form and then submit it.  Sounds pretty easy right? ... except that it was IMPOSSIBLE and NOBODY was able to complete the form to their satisfaction, so we were forced to either buy a Thai health insurance policy or leave Thailand and come back on a visa exempt and then start the process over to get an "O" visa (which is what I ended up doing).

 

What is my point here and how is this related to this thread?

 

My itemized taxes in the USA are very complicated with rental income, a pension, Traditional IRA and ROTH IRA distributions, both long and short term capital gains in my brokerage accounts, various tax write offs, depreciations (and state taxes as well) etc.  My funds are currently co-mingled in my bank accounts in the USA.

 

Exactly which and what amount of relevant documents am I going to have to show to the Thai R.D. and just how are they possibly going to figure out this mess in a fair and equitable manner with regards to the tax amount due under the USA/Thai double taxation treaty?

 

I live in Udon Thani, so if they say that I may only deal with accountants and Thai R.D officials here in Udon Thani to sort out this mess every year then I might as well shoot myself.  It could possibly be handled properly in Bangkok but I'm certain that we will be required to deal with the R.D. in our place of residence (same as we cannot go to a different Immigration Office to do our extensions of stay).

 

This just seems like a frustrating nightmare on the horizon to me (to say the least).

 

 

[burner2014]

If this gets enforced (not only a law that no one cares about) then this is the max exodus Thailand wants to see. They can't have their mind right 😄 first they close the 1 year loophole (which is something I can live with) but now they wanna play world police 😄 

 

It's so funny on the other hand they want everyone coming (Visa's for everyone lol) and on the other hand they make rules that will not favor any foreigner living here anymore.

[Thaindrew]

27 minutes ago, alphason said:

 

I've been struggling to find out about this, but from found this on Sherrings Thai tax pages...

 

Taxation of Capital Gains Income.

 

Specific types of assessable (taxable) income, for a resident of Thailand* is taxed as follows: 

* A resident is a person in Thailand for 180 days or more in a year

 

For a resident of Thailand deriving capital gains income from a source outside of Thailand and bringing it into Thailand**.
Personal income tax on the amount of capital gains income (the amount of the proceeds exceeding the costs of the investment).

 

**not including capital gains from immovable property which most double tax agreements prescribe the tax rights for the country in which the immovable property is situated.

 

Is this saying the UK Thai DTA prevents Thailand charging CGT/PIT on the sale of a property in the UK ??

the property I sold was in Thailand so the DTA wasn't relevant.

 

I also recently sold a property in the UK and paid capital gains tax there but It only worked out as a low percentage (much less than Thai income tax rates) - I sold it last year just in case Thailand conspired to find a way to tax it ! 

[kaufmanski]

22 hours ago, AreYouGerman said:

Hahahahaha. The Phillippines look better every day.

 

And the best part is, even if you are covered by a Double Taxation Agreement (meaning you got fleeced already in your passport country or wherever your money is taxed already) you have to file for taxes every year which will cost 10,000 - 20,000 THB done by an accountant.

 

I concur. And I think it will be a standard fee of 5,000 baht to issue a semi fraudulent document that you will need to submit to renew your visa. And once a year all the local tax firms will get fined. But the revenue will be worth it.

[Tonyfarang]

I see many UFO's in the sky, coming to get the Aliens.... E.T. Go Home! 😛 🤣 🤣 🤣  🤣 🤣 🤣

[burner2014]

23 minutes ago, proton said:

They need everything they can get to help pay for their enormous 10k baht for every Thai over 16 election bribe bill, I will not be contributing. 

*who has less than 500k THB in their bank account 😄 

[Neeranam]

2 hours ago, freeworld said:

Do you mean a Thai citizen residing in the UK?

 

The basics are here

https://www.gov.uk/tax-foreign-income/residence

 

UK residence and tax

Your UK residence status affects whether you need to pay tax in the UK on your foreign income.

Non-residents only pay tax on their UK income - they do not pay UK tax on their foreign income.

Residents normally pay UK tax on all their income, whether it’s from the UK or abroad. But there are special rules for UK residents whose permanent home (‘domicile’) is abroad.

Yes, thanks. 

So Thais in the UK, US, Australia pay tax on their foreign income but those countries' citizens residing in Thailand think they don't need to do the same. Interesting. 

[topt]

11 minutes ago, Trip Hop said:

Not always the case.  As you say if they are out of the country for a full tax year (April 6th to April 5th the following year) excluding allowable days for visits, you are entitled to file non-dom status and will pay no tax on outside UK income providing you can prove that you are registered for tax in the country that you are based. 

Perhaps we are talking Apples and Oranges.

Registering as non-resident for tax in the UK is vastly different to registering as a non-dom. Non-doms are (as far as I am aware) are tax resident in the UK but not domiciled. As a lowly Brit but registered as non-resident for tax with HMRC I pay no tax on any offshore income or any capital gains excluding property. I have not had to show that I am registered elsewhere.

[Neeranam]

1 hour ago, bradiston said:

It's what the call for skilled technicians is all about. I'm looking to invest in hacking. Seems like a sure thing. Any ETFs? Groups listed on SET?

Thailand approved its first spot in Bitcoin ETF, with One Asset Management joining the growing list of jurisdictions approving regulated Bitcoin funds.

https://bitcoinmagazine.com/business/thailand-approves-the-first-spot-bitcoin-etf

[topt]

Just now, Neeranam said:

Yes, thanks. 

So Thais in the UK, US, Australia pay tax on their foreign income but those countries' citizens residing in Thailand think they don't need to do the same. Interesting. 

It's not necessarily that they think they do not have to do the same. That is how the tax rules have been set up for decades. 

Just so happens that Thailand not only moved the goal posts with the change announced last year but now are talking about moving the whole stadium..........(if it goes ahead)

[Neeranam]

3 minutes ago, topt said:

It's not necessarily that they think they do not have to do the same. That is how the tax rules have been set up for decades. 

Just so happens that Thailand not only moved the goal posts with the change announced last year but now are talking about moving the whole stadium..........(if it goes ahead)

As the Buddhists say, 

“Change is never painful, only resistance to change is painful.”

 

According to Buddhism, everything in human life, all objects, as well as all beings whether in heavenly or hellish or earthly realms in Buddhist cosmology, is always changing, inconstant, undergoes rebirth and redeath (Samsara). This impermanence is a source of dukkha.

[AlexRich]

1 hour ago, MeePeeMai said:

 

And that's not the only problem,

 

I'm a US citizen and my tax documents aren't available usually until mid to late March which gives me time to file my US tax return (usually due on April 15th but expats get an automatic 6 month extension to the filing deadline in the USA).

 

So how is it even possible for me to file taxes in Thailand in early March (under the double tax treaty with Thailand) when I haven't even done my taxes in the USA yet and won't be anywhere near ready yet to file here in Thailand.

 

My guess is that the Thai R.D. will require me to file here in March and pay all taxes due... then I may be allowed to later file paperwork requesting a refund for my overpaid taxes at some point in the future when I have all the required documents together to show proof of my taxes paid in the USA.

 

This is something that I am not willing to put myself through just to live here and I have absolutely zero faith in getting the refund due on my overpaid taxes (if it came to that), nor do I have any faith in the person in charge at the R.D. understanding or enforcing the double tax treaty properly (not to mention I moved here to escape govt. bureaucracy, paperwork headaches and the like).

 

Plus all the supporting documents they will request which must be official documents and must stamped and signed in blue ink by the appropriate official in the USA (no photo copies) etc. etc. etc.

 

Is it really worth the hassle?  Hell no, not for me.

 

Yes, I agree with that. My suspicion is that they will tax you and only give a refund if you can present the correct paperwork. And what is deemed "correct" will change depending on who you are dealing with. It looks like a gargantuan mess. I will spend a few months in Thailand each year, but that's it. 

 

 

[alphason]

5 minutes ago, Thaindrew said:

the property I sold was in Thailand so the DTA wasn't relevant.

 

I also recently sold a property in the UK and paid capital gains tax there but It only worked out as a low percentage (much less than Thai income tax rates) - I sold it last year just in case Thailand conspired to find a way to tax it ! 

 

Thanks, maybe should have sold earlier also.

 

UK CGT on property is 18%or24%, Thailand PIT could be as high as 35%. (£45k 30%, £110k 35%). How do they calculate gain, from when.

 

Also if you owned the property before April 2015, as a UK non resident you can rebase the valuation to April 2015, so taxed only on gain from April 2015.

 

 

[Thaindrew]

8 minutes ago, topt said:

Perhaps we are talking Apples and Oranges.

Registering as non-resident for tax in the UK is vastly different to registering as a non-dom. Non-doms are (as far as I am aware) are tax resident in the UK but not domiciled. As a lowly Brit but registered as non-resident for tax with HMRC I pay no tax on any offshore income or any capital gains excluding property. I have not had to show that I am registered elsewhere.

 

becoming UK non-tax resident is fairly easy yes, you are out of the country for a period of time and have no earnings in the UK. Non-Dom is harder to achieve - proposed legislation seems to say that you can claim Non Dom if you lived in another country for 10 years straight and proactively choose that country as your place of domicile (not a mix of countries) - given the upcoming election we will have to see if that legislation goes through. 

 

As a non-tax resident you are correct that we don't pay any tax in the UK on foreign earnings but we are still liable for capital gains achieved in the UK (say from a sale of a property) and still liable for inheritance tax unless we can claim non-dom status.

[Letseng]

On 6/5/2024 at 11:11 AM, sqwakvfr said:

Hypothetical conversation between a Thai Revenue Employee and a foreign resident:  "What was your income from the US last year?"  "None of your businessa and if want to know contact the IRS".  "What is the IRS?". "Information Release Service".  

But not everybody comes from US. What if you are required to submit US income tax return when doing your Thai self assessment?

[spidermike007]

If this is indeed true, it seems like a major over reach, and rather draconian. I cannot see it being enforced. And if these govt. goons ever figured out a way to enforce it, the expat population would likely drop to 10,000. 

 

Over taxation is a device used by lazy minds who do not seem capable of running an economy. 

 

Or, perhaps they see it as a way of "purifying" the nation? 

[Trip Hop]

13 minutes ago, topt said:

Perhaps we are talking Apples and Oranges.

Registering as non-resident for tax in the UK is vastly different to registering as a non-dom. Non-doms are (as far as I am aware) are tax resident in the UK but not domiciled. As a lowly Brit but registered as non-resident for tax with HMRC I pay no tax on any offshore income or any capital gains excluding property. I have not had to show that I am registered elsewhere.

 

I don't want to get in a debate about this as I don't know the finer technicalities with regards to terminology/status.  However, a quick search of the internet reveals the following:

 

"Non-dom" describes a UK resident whose permanent home - or domicile - for tax purposes is outside the UK. It refers to a person's tax status, and has nothing to do with their nationality, citizenship or resident status - although it can be affected by these factors.

[Thaindrew]

2 minutes ago, alphason said:

 

Thanks, maybe should have sold earlier also.

 

UK CGT on property is 18%or24%, Thailand PIT could be as high as 35%. (£45k 30%, £110k 35%). How do they calculate gain, from when.

 

Also if you owned the property before April 2015, as a UK non resident you can rebase the valuation to April 2015, so taxed only on gain from April 2015.

 

 

 

Yes I used the rebasing method and paid an effective tax rate on the profit of only 3-4%.

 

in Thailand they calculate based on land office docs, purchase price v selling price less any allowances for renovation, furniture etc (that in effect are passed on in the sale), but you need proper receipts. 

[MeePeeMai]

Along with the recent tax debacle, I'm also anxious to see what kind of cluster schmuck they can come up with when all the long term non-Immigrant visa rules are changed on Sept 1st of this year.

 

It has been reported that the 17 long term visas (available now) will be reduced to just 7 and that there will be requirement changes for all long term visa holders who wish to stay in Thailand long term.  Also mentioned that that there will be more scrutiny attached to the visas and extensions in order to weed out the undesirables and criminals.

 

This could be the opportunity to they have been waiting for to raise the bar on income and bank deposit requirements for retirees and spouses of Thai citizens (on long term stay visa extensions).  Nothing of this has been mentioned yet but they have been throwing subtle hints for a few years now (Big Joke has been pushing for this for some time).

 

When it rains it pours!

 

 

[aldriglikvid]

I wonder if the latest THB weakness isn't explained, to a small degree at least, to the tax changes and all the news about taxing remittance & income. 

I rather large part of my expat friends are deliberately making fewer international transfers into Thailand - and they are probably not alone. 

[freeworld]

1 hour ago, Everyman said:

 

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. 

You mean like this.

 

https://th.usembassy.gov/united-states-and-thailand-sign-agreement-to-share-tax-information/

 

I know in my home country the US has very close cooperation with our tax authorities to catch tax offenders from both countries.

[Neeranam]

2 hours 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).

Interesting, thanks. 

Why do you think the Thai Rd would investigate one of its citizens? 

Could it be if they have regular bank deposits from abroad? 

[Presnock]

2 hours ago, CharlesHolzhauer said:

That is moderately interesting but of little value to those residing in Thailand. The fact remains that Thailand is an independent and sovereign country with its own laws, rules and regulations. But you already knew that and acted accordingly.

This waS IN RESPONS TO those that asked if the US tax folks provided foreign-language assistance.  Just because Thailand doesn't, they do allow English as well as Thai and there are numerous official translation agents available.  Probably some tax agents will advertise foreign language assistance too.

[MeePeeMai]

5 minutes ago, Letseng said:

What if you are required to submit US income tax return when doing your Thai self assessment?

 My money is on this ^^^^^

[Thaindrew]

2 minutes ago, Trip Hop said:

 

I don't want to get in a debate about this as I don't know the finer technicalities with regards to terminology/status.  However, a quick search of the internet reveals the following:

 

"Non-dom" describes a UK resident whose permanent home - or domicile - for tax purposes is outside the UK. It refers to a person's tax status, and has nothing to do with their nationality, citizenship or resident status - although it can be affected by these factors.

 

Losing your UK domicile

1. Long-term residence abroad: You need to be able to demonstrate that you have a clear intention to live permanently or indefinitely in another country.
2. Severing all UK ties: You need to be able to demonstrate your intention that you will never reside in the UK again.

Servering all UK ties is not easy, property, bank accounts etc .... this is where they catch people back into the inheritance tax net. There are many legal cases, but this is one of the harshest - a UK guy lived in Germany for 20 years and actively claimed domicile. However when he died (in Germany) his will asked for his ashes to be spread at a specific place in the UK. The Inland Revenue won a court case to say that he was UK domicile because he hadn't severed all links. 

[EVENKEEL]

5 hours ago, bob smith said:

I have a few beach residences dotted about Thailand.

 

I love them but they are a fast track to alcoholism. 

 

Not much else to do except get hammered or go for a walk.

 

bob.

Yes Bob.

[Tonyfarang]

28 minutes ago, Neeranam said:

Yes, thanks. 

So Thais in the UK, US, Australia pay tax on their foreign income but those countries' citizens residing in Thailand think they don't need to do the same. Interesting. 

Yes but they can buy land in their name, they have NHS - great insurance / health benefits / hospitals for free, free and great education for their kids, they are entitled to retirement / pension, they pay the same prices on everything that UK citizens pay everywhere, they are most on permanent visas, they don't have 90 day reportings, and in 5 years they can get passport! Happy?

[Neeranam]

2 minutes ago, freeworld said:

You mean like this.

 

https://th.usembassy.gov/united-states-and-thailand-sign-agreement-to-share-tax-information/

 

I know in my home country the US works very close with our tax authorities to catch tax offenders from both countries.

I can see the US handing over information about large corporations but not Hank, retired butcher from Brooklyn. 

[ChasingTheSun]

Taxing worldwide income regardless of when/if remitted to Thailand would probably be a total game changer for most wealthy retired expats in Thailand.

 

If they are going to get taxed in Thailand as much as in a place like Europe, you may as well live somewhere on the Med in Europe(Spain, Portugal, Italy, France) with all the benefits of Europe.

 

This is an example of the calculus:

 

Pay 50k in taxes in Thailand and get NOTHING for it.

VS.

 

Pay 50k in taxes in Europe and get “free” quality healthcare, good schools, police and fire, good roads etc.