Thailand to tax residents’ foreign income irrespective of remittance

[KannikaP]

13 hours ago, tomkenet said:

This thread is about taxation on worldwide accessible income. The remittance is therefore irrelevant. 

 

 

Is ANY money brought into, or spent on a card in Thailand not classed as income?

[sandrew33]

19 hours ago, Sheryl said:

A breeze only if you pay no taxes in your home country and all your income (or, for current tax year,  income  earned in, or remitted to, Thailand) is assessable.

 

The current forms will have to be revised to include way to claim credit for foreign taxes paid.

 

And then there is the very much unresolved question of whether and how to show foreign sourced income that is non-assessable under terms of a DTA. 

 

I would not at all count on RD staff, especially upcountry, to be familiar with these issues. 

 

 

Correct. I mean these are issues that cause delays in processing (and reviews/audits) even in countries that have had worldwide tax and foreign tax credit arrangements in operation for decades. 
 

There tends to be a relatively small group of revenue authority staff in most jurisdictions that deal with any complex or “grey” area issues. So in a country that has limited/no prior exposure it’ll take a long time to get up to speed. 
 

In reality this will feed the confusion too because limited resources will cause them to focus in certain areas first - bigger end of town - and so those at the lower end of the tax scale who ignore all this might be fine for years (or not) even if they are doing it wrong. 
 

 

 

[tomkenet]

18 minutes ago, KannikaP said:

Is ANY money brought into, or spent on a card in Thailand not classed as income?

It might be income, that depends on the source of the funds.

[AhFarangJa]

2 hours ago, OJAS said:

 

Far from dual pricing being scrapped, much more likely that we would be clobbered for tax at special foreigner rates which were at least double those paid by the locals, I would have thought!

 

For sure, My Wife owns a small shop, She pays 350 Baht tax, twice a year. I somehow think my tax is going to be a little bit more.

[freeworld]

3 hours ago, OJAS said:

 

Far from dual pricing being scrapped, much more likely that we would be clobbered for tax at special foreigner rates which were at least double those paid by the locals, I would have thought!

 

No the tax rates are for everyone. It depends on the level of income of the tax payer.

Edited June 8 by freeworld

[HuaHinNew]

On 6/5/2024 at 3:52 PM, John Drake said:

It was slowly at first, but now more and more people are coming to understand that:

 

Prayuth was better.

Prayuth...........do you miss me now..........555

 

These rich young liberal politicians are going to tax the crap out of the country and everyone in it, they can get their hands on! 

[Dogmatix]

2 hours ago, freeworld said:

No the tax rates are for everyone. It depends on the level of income of the tax payer.

 

Not completely true, if you compare income from investment.  Capital gains tax on Thai stocks is zero, on dividends it's 10% flat rate and on property sales it is a transactional tax that is generally fairly low and doesn't get lumped in with your income. Tax on investment gains and income on all foreign assets is up to 35% and lumped into your overall income.

[HuaHinNew]

LOS - Land of Stupidity

 

I have always been of the opinion that there is a lot of dead brain matter in Thailand. 

 

The process of implementing new legislation by a government typically involves the following steps:

 

1. Determining What the New Law Should Do: The first step is to identify the purpose and objectives of the new law
2. Demonstrating Necessity and Appropriateness: It’s important to justify why the new law is necessary and how it fits within the existing legal framework
3. Building Consensus: This involves gathering support for the new law among stakeholders, including lawmakers, interest groups, and the public
4. Ensuring Soundness and Viability: The final version of the new law and the mechanisms for its implementation must be practical and capable of achieving the intended outcomes
5. Following the Rulemaking Process: In many jurisdictions, the process of implementing new legislation is governed by certain laws and procedures

These procedures include the Administrative Procedure Act (APA), Parliamentary Review Act, Paperwork Reduction Act, Regulatory Flexibility Act3, and others

[Lorry]

4 hours ago, CharlesHolzhauer said:

we are considered 'collateral damage.'

I have never believed that. 

We are the target,  as I have written before. 

We are sitting ducks,  as dogmatix explained. 

4 hours ago, CharlesHolzhauer said:

pensioners residing here for a considerable amount of time and (may or may not) supporting families and maintaining residences

That's why they are sitting ducks. 

How many times have people written on this forum: never bring more to

Thailand than you can afford to lose.

4 hours ago, CharlesHolzhauer said:

do not have the financial means for this additional tax burden

They do. And they will pay. Every bar girl knows how to squeeze a foreigner dry. The point where he really is not able to pay any more is usually far away. 

 

[Lorry]

As for sitting ducks: the Russians (and Ukrainians) here are an even easier target than a poor British pensioner.  They have money and nowhere to run (Bali is not so keen on them anymore).

And if Thailand is lucky they may be joined soon by Taiwanese, Lithuanians .... etc

Edited June 8 by Lorry

[Tony M]

I, probably like many others, am completely lost with all of this.  At the moment, it looks like income remitted into Thailand will be taxed as assessable or non-assessable ?  A tax return will, probably, need to be completed. Or not (this is still unclear).  My question, and I apologise if it has already been asked and answered in one of the many threads, is what exchange rate does one need to use when converting transferred "income" to Thai baht on the tax return form ?  Is it the rate on the date of submitting the form or a "median" of the possibly many different rates throughout the tax year ?

 

I apologise if the question makes no sense.

[Yumthai]

28 minutes ago, Dogmatix said:

Capital gains tax on Thai stocks is zero, on dividends it's 10% flat rate

Even with such tax incentives Thai stock market is so under-performing that it's still more profitable to invest in US stocks and pay up to 35% marginal tax. Besides, you can claim a US dividends tax credit (15% WHT) in Thailand.

[CharlesHolzhauer]

21 minutes ago, Lorry said:

I have never believed that. 

We are the target,  as I have written before. 

We are sitting ducks,  as dogmatix explained. 

That's why they are sitting ducks. 

How many times have people written on this forum: never bring more to

Thailand than you can afford to lose.

They do. And they will pay. Every bar girl knows how to squeeze a foreigner dry. The point where he really is not able to pay any more is usually far away. 

 

Cherry picking does work, doesn't it. And from a contextual point of view your response is irrelevant.

[freeworld]

38 minutes ago, Dogmatix said:

 

Not completely true, if you compare income from investment.  Capital gains tax on Thai stocks is zero, on dividends it's 10% flat rate and on property sales it is a transactional tax that is generally fairly low and doesn't get lumped in with your income. Tax on investment gains and income on all foreign assets is up to 35% and lumped into your overall income.

Agree with all that.

 

"Far from dual pricing being scrapped, much more likely that we would be clobbered for tax at special foreigner rates which were at least double those paid by the locals"

 

If Thais had investment gains and income on foreign assets they would be subject to tax at the same rates as foreigners.

[freeworld]

31 minutes ago, Tony M said:

I, probably like many others, am completely lost with all of this.  At the moment, it looks like income remitted into Thailand will be taxed as assessable or non-assessable ?  A tax return will, probably, need to be completed. Or not (this is still unclear).  My question, and I apologise if it has already been asked and answered in one of the many threads, is what exchange rate does one need to use when converting transferred "income" to Thai baht on the tax return form ?  Is it the rate on the date of submitting the form or a "median" of the possibly many different rates throughout the tax year ?

 

I apologise if the question makes no sense.

This is how business does it:

Any currency, asset or liability which has been received or paid
during the accounting period must be converted into the functional
currency at the market rate on the date of receipt or payment.
• Outstanding currencies, assets and liabilities as of the closing
date of the accounting period must be converted into the
functional currency at one of the following rates:
- Mid-rate, or
- Average buying or selling rate of commercial banks as
calculated by the Bank of Thailand

 

So the payment or receipt is on the day that the transaction took place at the market rate. You would have a record of that.

 

Edited June 8 by freeworld

[JimGant]

16 hours ago, Sheryl said:

That means unless there is some revision to forms enabling me to state my non-assessable income, I am sure to be called in, and it will be a huge headache to say the least. 

I'm still lost on why you think it's superior to list your non-assessable income. This just gives RD a list of items to draw their curiosity to -- what's this Ross thingy you didn't include as assessable? Just file and pay any taxes due on your assessable income. If somehow RD knows your lifestyle indicates you should be reporting more assessable income than you are, well, show up to their summons with a list of all that non-assessable income, per DTA -- and dazzle them.

 

But giving them a list of foreign income you're not reporting as assessable -- would just wet their curiosity more than if you left out this information. IMO.

[sabaijai]

On 6/6/2024 at 2:35 PM, black tabby12345 said:

 

Those commercial entities/billionaires  already making a huge amount of profit (openly dodging tax payment) will be the primary targets.

Otherwise, they just end up as wasting huge amount of time and labor by the end of any tax years.

What is the point of chasing around not-so-affluent foreigners for little or no gain.

 

Exactly.

[jonclark]

17 hours ago, AreYouGerman said:

 

A breeze, like everything else right now.

Life is only as difficult as you make it.  No point getting your knickers in a twist. 

[Tony M]

1 hour ago, freeworld said:

This is how business does it:

Any currency, asset or liability which has been received or paid
during the accounting period must be converted into the functional
currency at the market rate on the date of receipt or payment.
• Outstanding currencies, assets and liabilities as of the closing
date of the accounting period must be converted into the
functional currency at one of the following rates:
- Mid-rate, or
- Average buying or selling rate of commercial banks as
calculated by the Bank of Thailand

 

So the payment or receipt is on the day that the transaction took place at the market rate. You would have a record of that.

 

 

Many thanks.

[rattlesnake]

Unfeasible in so many ways…

 

I'm going to forget about it and let it disappear under the carpet. Last time I said that was over a year ago, about the "crackdown on those who use agents". How's that going?

[daveAustin]

On 6/6/2024 at 8:35 AM, black tabby12345 said:

What is the point of chasing around not-so-affluent foreigners for little or no gain.

To scare them and hopefully get rid of them. As you know, a certain faction of the Thai populace does not really care for us wrinkly foreigners. 

[Eudaimonia]

The more I research this, the more I believe it will be an unmitigated disaster. Foreigners will be fighting for the last helicopter out when Bangkok falls.

 

I fund my retirement with investments I manage myself: I get dividends and do some trading. I'm happy to pay income tax for the funds remitted to Thailand if I can deduct withholding taxes already paid. However:

 

As always, some trades are profitable, while some are not.

 

In a normal country, one might invest $100,000 in five stocks each, four of which fail miserably (-75%) while one is a big hit (+400%). The calculation is simple: $400,000 minus 4 x $75,000 equals a net profit of $100,000. One then pays a capital gains tax of around 25% ($25,000).

 

In Thailand, an individual taxpayer cannot offset capital losses against capital gains. That's incredible. So, all the losses will be ignored, and tax will be payable on the $400,000 profit. At a nearly 35% progressive rate, it comes to around $140,000.

 

So, $140,000 in tax is payable for a net income of $100,000. That's a 140% tax rate. Have I understood this wrong? It's a pretty steep price for the public services around here.

 

Add to this the archaic documentation requirements. In Western countries, the taxman normally accepts a simple list of trades and looks at the bottom line. In Thailand, they will probably require documents signed and stamped by Jerome Powell and the board of Deutsche Bank, notarized, translated, certified, apostilled, and what have you.

 

[Ben Zioner]

5 minutes ago, Eudaimonia said:

So, $140,000 in tax is payable for a net income of $100,000. That's a 140% tax rate. Have I understood this wrong? It's a pretty steep price for the public services around here.

Thanks for giving me schadenfreude, if the worst happens to me I'll be hit only with 23%. And no bureaucratic hassle as I have only pensions..

[rocketboy2]

14 minutes ago, daveAustin said:

To scare them and hopefully get rid of them. As you know, a certain faction of the Thai populace does not really care for us wrinkly foreigners. 

 

Hit the nail on the head. 

[topt]

21 hours ago, Jinxed1 said:

Wait... multiple sources say "from 2024"

 

So, If this year I already remitted money that I earned before 2024 (not taxable before the change), before knowing about this new rule, I still have to pay tax on it in 2025 because it's retroactive?

 

Please tell me I'm wrong or that's completely fked up

Not seen anybody answer you  so you are currently wrong but who knows........

Change to regulation started from 1/01/2024 removing loophole of remitting year after earnt. However any savings prior to that date can be remitted without incurring tax. This is in play and effectively will only be seen when people file (those who do...) Jan-March 2025.

 

Thread is about a new RD proposal to tax tax residents on world wide income - no-one knows exactly when or even if this will be put in play and therefore what dates will apply.

[CharlesHolzhauer]

20 minutes ago, daveAustin said:

a certain faction of the Thai populace does not really care for us wrinkly foreigners. 

Nor does a certain faction of people in your country really care for Asians...

[CharlesHolzhauer]

On 6/6/2024 at 2:35 PM, black tabby12345 said:

What is the point of chasing around not-so-affluent foreigners for little or no gain.

Because the not-so-affluent foreigners are swimming in the same river - it's called collateral damage. But there is hope and time for the government finding a creek dedicated to the less fortunate pensioners or old-age individuals.

[Sheryl]

2 hours ago, JimGant said:

I'm still lost on why you think it's superior to list your non-assessable income. This just gives RD a list of items to draw their curiosity to -- what's this Ross thingy you didn't include as assessable? Just file and pay any taxes due on your assessable income. If somehow RD knows your lifestyle indicates you should be reporting more assessable income than you are, well, show up to their summons with a list of all that non-assessable income, per DTA -- and dazzle them.

 

But giving them a list of foreign income you're not reporting as assessable -- would just wet their curiosity more than if you left out this information. IMO.

1. There is a clear record of foreign  remittances to my Thai Bank that will be many fold the declared income.

 

2. The declared income would be so low as to be unbelievable, without needing to know anything about my lifestyle.

 

Of course, if there is no way to show (and then deduct) non-assessable income then I will have to do as you suggest but I think it eill be an immediate red flag. 

[Sheryl]

3 hours ago, Tony M said:

I, probably like many others, am completely lost with all of this.  At the moment, it looks like income remitted into Thailand will be taxed as assessable or non-assessable ?  A tax return will, probably, need to be completed. Or not (this is still unclear).  My question, and I apologise if it has already been asked and answered in one of the many threads, is what exchange rate does one need to use when converting transferred "income" to Thai baht on the tax return form ?  Is it the rate on the date of submitting the form or a "median" of the possibly many different rates throughout the tax year ?

 

I apologise if the question makes no sense.

I leave it to others to answer the currency exchange question.

 

At the present time, some remittances are assessable and some are not, depending on the source of the funds and terms of the relevant Dual Tax Agreement between your country and Thailand. Entirely possible for part of a remittance to be assessable and part not.

 

There have been/are several other threads running on this matter. Some including handy guides on estimating whether you owe tax.  Please read these. 

 

If you have assessable income, you are required to file a tax return though in practice it seems no repercussions for not filing if you owed no tax, i.e.   your assessable income, after deductions/ exemptions  was below the threshold for tax. 

 

This thread is about a proposed future change that would tax foreign income regardless of whether remitted to Thailand. 

[Tony M]

6 minutes ago, Sheryl said:

I leave it to others to answer the currency exchange question.

 

At the present time, some remittances are assessable and some are not, depending on the source of the funds and terms of the relevant Dual Tax Agreement between your country and Thailand. Entirely possible for part of a remittance to be assessable and part not.

 

There have been/are several other threads running on this matter. Some including handy guides on estimating whether you owe tax.  Please read these. 

 

If you have assessable income, you are required to file a tax return though in practice it seems no repercussions for not filing if you owed no tax, i.e.   your assessable income, after deductions/ exemptions  was below the threshold for tax. 

 

This thread is about a proposed future change that would tax foreign income regardless of whether remitted to Thailand. 

Well, excuse me for asking a question.  It seemed to me that it could be relevant to both "remitted income" and to any future possible changes in declaring foreign/global income.  I have read the "handy guides" on estimating, declaring, identifying assessable and non-assessable income(s), but the handy guides, although incredibly useful, don't answer all of the questions that I and others might have. So, apologies for intruding in a thread which isn't even yours.