Thailand to tax residents’ foreign income irrespective of remittance

[BE88]

14 minutes ago, sandyf said:

Wrong. I have just had a package delivered from India by Thai Post without any additional charges. Value was around $45 USD.

 

You should know Thailand here everything happens wrongly you would not have paid the tax yet because it is complicated to change the rules but not complicated to continue as before🙃

[BusyB]

1 hour ago, Dogmatix said:

 

I agree with you that it feels like a serious of electric shocks and you didn't even mention, if you are a medical cannabis user or not.  You are now living under a Thaksin regime. Authoritarianism doing things in a hurry with great confidence, often taking legislative shortcuts, ignoring democratic principals,  without thinking them through or worrying about any unintended consequences that can be mopped later or blamed on someone else. With a dose of xenophobia thrown in.

 

Yeah, such a shame Prayut is gone. None of that with him.

 

Funny but I seem to recall it was a lot worse - except for the tax of course. And the manipulated baht so they could launder their loot in foreign real estate.

 

Actually enforcing a tax code in a near bankrupt state where the fabulously rich do not even pay the police a living wage is not authoritarianism to anyone apart from Ayn Rand freaks.

[Autonuaq]

On 6/5/2024 at 10:46 AM, johng said:

That seems totally unworkable  crazy and unjust !

Wake up!  It is just an implementation of the international laws and the rules and regulations the many countries already have implemented.

[Autonuaq]

On 6/5/2024 at 11:51 AM, bg53 said:

If Thailand taxes on a worldwide basis, there will be a mass exodus of expats.

Why? Around the world this is alreasy common practise. Thailand is just a bit late 

[Derek B]

On 6/5/2024 at 4:07 PM, Dmaxdan said:

Goodness, we've only got 3 and a bit weeks to pack up and get the hell out of here!

Maybe we can car pool.

[Dogmatix]

Those with overseas stock portfolios who are not liable to foreign capital gains tax will be bed and breakfasting just before it comes in, i.e. selling stocks with gains and buying them back to reset Thai taxable gains to zero. 

 

Some may be able to do the same with property by transferring to another name, although gift tax rules may apply.  Thai gift tax rules presumably apply too but they have no way of knowing that a change of ownership of overseas property has taken place. 

[Lorry]

3 hours ago, Dogmatix said:

 

Since gains on funds are tax exempt, this will be a way to hold bitcoin tax free under global taxation.  However, I am confused by the article that says it is an ETF (exchange traded fund) that will be restricted to high net worth investors.  How will they stop low net worth investors from buying it after the initial distribution to HNWs?  Is it really going to be a open ended mutual fund that is only tradable through the fund manager and not an ETF at all?  If anyone can buy it once it is listed, there is no much point restricting the initial distribution.  If only HNW's can buy it on the exchange, liquidity will be a problem and it might trade at large discounts to the bitcoin it holds which would make it fail.  Curious as to what the real plan is which is not apparent from the press release.

In one kind of mutual funds I am familiar with,  HNW  means just 500,000 baht minimum purchase

[ukrules]

2 hours ago, shdmn said:

None of the whiners are going anywhere.  They just like to huff and puff (and whine) about everything. They have nowhere else go because if they did they would have left a long time ago.  I remember many years ago everyone was saying they were going to Cambodia

 

I'm typing this from my apartment in Phnom Penh, Cambodia right now.

 

At the moment I live in both Thailand and Cambodia and I must say, I'm quite liking it down here but the law in Cambodia says they will also tax worldwide income for residents, the key is to keep the days below the threshold for the years in which you make the big bucks.
 

[Dogmatix]

On 6/5/2024 at 3:39 PM, snoop1130 said:

 

The Revenue Department of Thailand will amend a law to tax individuals with foreign income, even if that income is not brought into Thailand.

 

Director-General of the Revenue Department, Kulaya Tantitemit stated that the current tax law mandates individuals residing in Thailand for over 180 days per year to pay taxes on foreign income if it is brought into the country.

 

This income is currently subject to personal income tax payments to the department. The department is now working to amend the law based on the principle of worldwide income.

 

This principle taxes individuals based on their residency within the country, irrespective of whether the income is sourced domestically or internationally.

 

Kulaya mentioned plans to expand the tax base by requiring platforms with an income of 1 billion baht or more to report their sources of income.

 

 

She added that the department will use this information to verify their tax compliance.

 

Previously, the department revised the criteria for tax residency, mandating that individuals residing in Thailand for at least 180 days per year and earning foreign income must pay personal income tax if that income is brought into the country within the same year it was earned.

 

However, this rule will be revised again, effective from 2024, requiring tax payment on foreign income regardless of when it is brought into the country, reported Bangkok Post.

 

By Ryan Turner

Image courtesy of Thailand Elite Visas

 

Source: The Thaiger 2024-06-05

 

Get our Daily Newsletter - Click HERE to subscribe

The Post article didn’t say it would be effective from 2024, as stated here. It didn’t give a start date.

[Paris333]

The annually-renewables are worried about the Thai Revenue’s recent reinterpretation. Section 41 of the tax code, long ignored but now required, means that Thai tax residents (anyone spending more than 180 days in a year here) must obtain a tax identification number and fill in a tax form not later than March 2025 to cover their overseas income transmitted to Thailand in the calendar year 2024.

If that income was pre-taxed in the first country which had a double taxation treaty with Thailand, and can be proved by documentation, it is unlikely the cash will be taxed again in Thailand.😃😃😃

Source:

https://www.pattayamail.com/latestnews/news/does-thailand-really-want-humble-expats-any-more-462482

 

[toums]

4 hours ago, Autonuaq said:

Why? Around the world this is alreasy common practise. Thailand is just a bit late 

 

Not that common in SEA and 'third world countries'.

 

Western countries, another topic..

[Robert Tyrrell]

Good Morning,

 

So because of Thailands failed Fiscal dismay there tactic is to do this !!! ??? I guess your waiting for foriegners to pack it up and pull the plug on Thailand and live eleswhere !!! 

[geisha]

What about foreigners that buy a condo but stay under the 180 days a year ? Will he still pay tax on the property bought , and how much ? Then , if that person wants to sell and take his money elsewhere, what then ? ( ps does not concern me I have nothing in Thailand and under 180 days stay.) Also , if this goes through then the whole  immigration process will be changing.

[AreYouGerman]

3 hours ago, ukrules said:

 

I'm typing this from my apartment in Phnom Penh, Cambodia right now.

 

At the moment I live in both Thailand and Cambodia and I must say, I'm quite liking it down here but the law in Cambodia says they will also tax worldwide income for residents, the key is to keep the days below the threshold for the years in which you make the big bucks.
 

 

Or just go to the Philippines. They still have territorial tax regime for foreigners in place.

[AreYouGerman]

7 minutes ago, Robert Tyrrell said:

Good Morning,

 

So because of Thailands failed Fiscal dismay there tactic is to do this !!! ??? I guess your waiting for foriegners to pack it up and pull the plug on Thailand and live eleswhere !!! 

 

Can you name 3 countries not doing what Thailand does without Google? 🙂

[Presnock]

10 hours ago, AreYouGerman said:

 

Joined already.

 

9 hours ago, Dogmatix said:

I know the Thaksin govt is putting the RD under huge pressure to get more tax from anywhere it can but, having just reinterpreted the law to tax post 2024 remittances, you would think they would be well advised to make that work first.  There is still nowhere to claim tax credits for foreign tax on the tax return forms, nor any reference to them in the Revenue Code.  Application of DTAs is a very complex subject and usually involves hundreds of pages of regulations which they have obviously not intention of doing.  

 

They started off saying this was aimed mainly at Thais investing overseas and for fairness but have dropped all that pretence already.  Wealthy Thais can still easily avoid paying tax on current overseas income under this proposal because then can do their investments through family office companies in tax efficient jurisdictions that don't tax capital gains or dividends like Hong Kong and Singapore.  That way they only have to pay Thai tax, if they decide to pay some of the income out in dividends, and can otherwise continue to accumulate their wealth tax free.  I am sure Thaksin has a whole army of these family offices working for him overseas.  Given that wealthy Thais have an easy way round this, it is extremely questionable that it will generate significant incremental tax revenue. 

 

As with the current remittance tax, the wealthy retirement sector that they seem keen to attract, will take a hit.  It blows up the LTR visa tax exemption on remittances as the LTR visa holders will have to pay tax on their overseas income before they remit it, rendering the Royal Decree exemption redundant.

 

 

9 hours ago, Dogmatix said:

I know the Thaksin govt is putting the RD under huge pressure to get more tax from anywhere it can but, having just reinterpreted the law to tax post 2024 remittances, you would think they would be well advised to make that work first.  There is still nowhere to claim tax credits for foreign tax on the tax return forms, nor any reference to them in the Revenue Code.  Application of DTAs is a very complex subject and usually involves hundreds of pages of regulations which they have obviously not intention of doing.  

 

They started off saying this was aimed mainly at Thais investing overseas and for fairness but have dropped all that pretence already.  Wealthy Thais can still easily avoid paying tax on current overseas income under this proposal because then can do their investments through family office companies in tax efficient jurisdictions that don't tax capital gains or dividends like Hong Kong and Singapore.  That way they only have to pay Thai tax, if they decide to pay some of the income out in dividends, and can otherwise continue to accumulate their wealth tax free.  I am sure Thaksin has a whole army of these family offices working for him overseas.  Given that wealthy Thais have an easy way round this, it is extremely questionable that it will generate significant incremental tax revenue. 

 

As with the current remittance tax, the wealthy retirement sector that they seem keen to attract, will take a hit.  It blows up the LTR visa tax exemption on remittances as the LTR visa holders will have to pay tax on their overseas income before they remit it, rendering the Royal Decree exemption redundant.

 

Applied already in March 2024 - takes 5-7 years before approved or not - google Thailand applies OECD

 

[Dogmatix]

1 hour ago, geisha said:

What about foreigners that buy a condo but stay under the 180 days a year ? Will he still pay tax on the property bought , and how much ? Then , if that person wants to sell and take his money elsewhere, what then ? ( ps does not concern me I have nothing in Thailand and under 180 days stay.) Also , if this goes through then the whole  immigration process will be changing.

There are transactional taxes for buying and selling property, regardless of the buyer or seller’s tax residence. It depends on appraisal value and how long the seller has owned the property. Generally around 3.5-5% of the appraisal price payable at the time of transfer at the land office. An individual seller doesn’t need to include in his tax return but corporate sellers do. Non-tax residents have no tax to pay on remitting the funds in to pay for the condo under current or future rules but a tax resident might have to under the current rule. If you rent it out, a non-tax resident or tax resident both pay Thai tax on the rental income which has to be done twice a year for rental income because that is considered a business done in personal name.

 

Tax liability in this case or not, I guess the condo market is already taking a hit from the current rule, although developers are not complaining yet. Expats already tax resident but currently renting can’t be rushing to remit their savings to buy condos under the threat of a letter from the RD asking them to clarify the tax assessability of the remittance perhaps several years after the event. Retirees looking for a spot to retire may think twice about a place that was a tax haven for expats with no tax on offshore income since taxation started suddenly introducing a remittance tax and then announcing they will do global taxation 5 months after that. That is not to mention the introduction of LTR visas with tax exemption for remitted income with great fanfare. Then folk who have submitted all the detailed personal information to apply and paid the steep fees find that less than a year into their 10 year visas the government will blow up the tax exemption on remittances and tax all their offshore income whether it is remitted or not. That is not to mention the chaos of introducing the first rule precipitously without producing any clarification in the complex applications of 61 different DTAs and with no way to claim tax credits on tax return forms. They give the impression of being angry, xenophobic 5 year olds suddenly put in charge of the country’s tax system pulling this lever and that in quick succession to see if they can make foreign cash tumble out on to the ground like playing a one armed bandit and hoping for a quick jackpot. 

[Dogmatix]

41 minutes ago, Presnock said:

 

 

Applied already in March 2024 - takes 5-7 years before approved or not - google Thailand applies OECD

 

Not sure of the relevance of your comment. Thailand is already in CRS. I believe they are contemplating applying to join OECD at this stage. I guess they are far from meeting the requirements and can’t see what benefits would accrue to an economy stuck in the middle income trap with no obvious route out - GDP growing well below the rate of developed countries and regional neighbors, a hopeless public education system despite massive budgets, years of incompetent economic management, massive corruption at all levels and a flawed democracy with a tendency to military coups that can ignore the result of general elections and appoint convicted felons to the cabinet and allow one to control it from behind the scenes while still on probation.

[MeePeeMai]

8 minutes ago, Dogmatix said:

Tax liability in this case or not, I guess the condo market is already taking a hit from the current rule, although developers are not complaining yet. Expats already tax resident but currently renting can’t be rushing to remit their savings to buy condos under the threat of a letter from the RD asking them to clarify the tax assessability of the remittance perhaps several years after the event. Retirees looking for a spot to retire may think twice about a place that was a tax haven for expats with no tax on offshore income since taxation started suddenly introducing a remittance tax and then announcing they will do global taxation 5 months after that. That is not to mention the introduction of LTR visas with tax exemption for remitted income with great fanfare. Then folk who have submitted all the detailed personal information to apply and paid the steep fees find that less than a year into their 10 year visas the government will blow up the tax exemption on remittances and tax all their offshore income whether it is remitted or not. That is not to mention the chaos of introducing the first rule precipitously without producing any clarification in the complex applications of 61 different DTAs and with no way to claim tax credits on tax return forms. They give the impression of being angry, xenophobic 5 year olds suddenly put in charge of the country’s tax system pulling this lever and that in quick succession to see if they can make foreign cash tumble out on to the ground like playing a one armed bandit and hoping for a quick jackpot. 

 

Yep... talk about a rug pull! 

 

Sort of like seeing the beautiful young woman sitting out front of a massage parlor as you walk by asking you if you want a "massad?" 

 

You say okay!  Then she escorts you back to the room and tells you to undress as she leaves and closes the curtain...  then the fat, ugly old woman comes into your room for your special massage.  Bait and switch tactics are bad for business in the long term but some never learn from their mistakes and just keep on truckin down that road.

[Danderman123]

6 hours ago, Dogmatix said:

The Post article didn’t say it would be effective from 2024, as stated here. It didn’t give a start date.

Because the proposal is aspirational.

 

Like the high speed train from Suvarnabhumi to U-Tapao.

[jonclark]

12 hours ago, AreYouGerman said:

 

We will see about that. You know, you only get 1 year temporary extensions. With the mad brute, the US, on the loose, we can never know for sure when they will start a war in the region. And Thailand for sure won't side with the losers.

Well, as you haven't mentioned who the US will allegedly start a war with, its might be pretty hard for Thailand to decide on sides...It could well side with the US rather than the losers. Lets not forget the US is the worlds strongest military power by some considerable margin. Period! Even the Chinese and Russians know that and that any conflict with the US will involve the US <deleted>ting on them from a great height and the decimation of large parts of their military. 

[jayboy]

10 hours ago, Sheryl said:

There are certainly situations where there would be no assessable income e.g. people whose income source is specified in a DTA as not assessable in Thailand (US citizens with  only Social Security and or government pensions; UK citizens  with only governmenf pebsion etc)

 

People living entirely on savings would have no assessable income unless they received interest on their savings (but of course most do)

 

For the second part of your question correct as of now but  if law is changed as proposed then remitted otlr not, interest income would be assessable. 

 

Thanks.I am coming to the view that the for the current tax year and perhaps the next one, I will not be filing returns because the situation is obviously evolving and best practice (complying with Thai requirements and minimizing the cost to myself) may not be clear for some time.I will be able to live off pre-2024 savings for some years and like many have already remitted enough to last me through 2024.I will remit further funds (pre 2024) to last me through 2025.I appreciate not all will be in a position to do this but many of us will.

 

Thereafter if needs be I will file returns if necessary and pay whatever tax is due.My caution is determined by a feeling that this is very much an emerging story and understandably we on this forum have been trying to impose clarity on a set of issues which are very much work in progress.

[jonclark]

13 hours ago, AreYouGerman said:

 

And you would have to file for income tax in Thailand no matter what, even if you will not have to pay any taxes because of DTA. An accountant will easily charge 20,000 THB because the demand for filing will be high.

 

 

 

Filing income tax is a breeze - No accountant needed - although they will have to start printing .91 forms in English as they are all in Thai at the moment and most staff at tax offices have a very basic understanding of English. But it is a breeze. Getting tax rebates is also a doddle - my tax office fills in all the necessary bits for me if I give them the correct supporting documents, and a couple of months later my cheque turns up for 40 - 50k.  Remember if you pay tax you can now claim all the rebates the government offers - including hotel rooms and household appliances as these are frequently made tax deductibles depending on how the government wants to boost the economy by increasing consumption. Even healthcare has been a tax deductible which should help pensioners.

 

[beammeup]

6 minutes ago, jayboy said:

 

Thanks.I am coming to the view that the for the current tax year and perhaps the next one, I will not be filing returns because the situation is obviously evolving and best practice (complying with Thai requirements and minimizing the cost to myself) may not be clear for some time.I will be able to live off pre-2024 savings for some years and like many have already remitted enough to last me through 2024.I will remit further funds (pre 2024) to last me through 2025.I appreciate not all will be in a position to do this but many of us will.

 

Thereafter if needs be I will file returns if necessary and pay whatever tax is due.My caution is determined by a feeling that this is very much an emerging story and understandably we on this forum have been trying to impose clarity on a set of issues which are very much work in progress.

I am in the same boat but the uncertainty is frustrating. Probably get out for 2026 for the 180. Tour around. Cash out some investment funds (while non-resident) to live on for a few more years. Then take it from there.

[redwood1]

2 hours ago, Dogmatix said:

There are transactional taxes for buying and selling property, regardless of the buyer or seller’s tax residence. It depends on appraisal value and how long the seller has owned the property. Generally around 3.5-5% of the appraisal price payable at the time of transfer at the land office. An individual seller doesn’t need to include in his tax return but corporate sellers do. Non-tax residents have no tax to pay on remitting the funds in to pay for the condo under current or future rules but a tax resident might have to under the current rule. If you rent it out, a non-tax resident or tax resident both pay Thai tax on the rental income which has to be done twice a year for rental income because that is considered a business done in personal name.

 

Tax liability in this case or not, I guess the condo market is already taking a hit from the current rule, although developers are not complaining yet. Expats already tax resident but currently renting can’t be rushing to remit their savings to buy condos under the threat of a letter from the RD asking them to clarify the tax assessability of the remittance perhaps several years after the event. Retirees looking for a spot to retire may think twice about a place that was a tax haven for expats with no tax on offshore income since taxation started suddenly introducing a remittance tax and then announcing they will do global taxation 5 months after that. That is not to mention the introduction of LTR visas with tax exemption for remitted income with great fanfare. Then folk who have submitted all the detailed personal information to apply and paid the steep fees find that less than a year into their 10 year visas the government will blow up the tax exemption on remittances and tax all their offshore income whether it is remitted or not. That is not to mention the chaos of introducing the first rule precipitously without producing any clarification in the complex applications of 61 different DTAs and with no way to claim tax credits on tax return forms. They give the impression of being angry, xenophobic 5 year olds suddenly put in charge of the country’s tax system pulling this lever and that in quick succession to see if they can make foreign cash tumble out on to the ground like playing a one armed bandit and hoping for a quick jackpot. 

 

Dogmatix....Another outstanding post here....

[lordgrinz]

11 hours ago, Sheryl said:

There are certainly situations where there would be no assessable income e.g. people whose income source is specified in a DTA as not assessable in Thailand (US citizens with  only Social Security and or government pensions; UK citizens  with only government pension etc)

 

People living entirely on savings would have no assessable income unless they received interest on their savings (but of course most do)

 

For the second part of your question correct as of now but  if law is changed as proposed then remitted otlr not, interest income would be assessable. 

 

This is the part I want to have concrete verification from the RD on before I remit anything more, that it is indeed non-assessable income, and there is no need to file a return showing it (the remittance). Until that happens, I am living off what I sent before January 1st 2024, and no more money will be sent until I am sure this is settled.

 

[jayboy]

22 minutes ago, lordgrinz said:

This is the part I want to have concrete verification from the RD on before I remit anything more

 

Which part - how interest will be treated or the whole question of remittances from pre-2024 savings? The latter aspect is already settled - to extent it can be in these choppy waters - as we have seen from RD announcement earlier this year.The former remains unsettled and there are arguments on both ides.In most cases interest wont amount to very much, and probably wont attract RD attention.And there is always the golden rule to be applied in Thailand - don't ask questions to which you might not like the answer.

[lordgrinz]

7 minutes ago, jayboy said:

 

Which part - how interest will be treated or the whole question of remittances from pre-2024 savings? The latter aspect is already settled - to extent it can be in these choppy waters - as we have seen from RD announcement earlier this year.The former remains unsettled and there are arguments on both ides.In most cases interest wont amount to very much, and probably wont attract RD attention.And there is always the golden rule to be applied in Thailand - don't ask questions to which you might not like the answer.

 

What do they want to see as acceptable proof of funds being savings only? Do we still need to file a tax return for remittance of these non-assessable funds (savings) we've sent? I would hate to just ignore filing a tax return, then one day have RD question millions of baht being sent into the country, then have them not accept whatever proof I feel is acceptable, but they don't.

[Neeranam]

3 minutes ago, lordgrinz said:

 

What do they want to see as acceptable proof of funds being savings only? Do we still need to file a tax return for remittance of these non-assessable funds (savings) we've sent? I would hate to just ignore filing a tax return, then one day have RD question millions of baht being sent into the country, then have them not accept whatever proof I feel is acceptable, but they don't.

Just stay low, don't file and they will leave you alone. 

[lordgrinz]

1 minute ago, Neeranam said:

Just stay low, don't file and they will leave you alone. 

The only way you avoid taxes is death, and even then they tax you, no such thing as "just lay low" when the taxman cometh.