Thailand to tax residents’ foreign income irrespective of remittance

[Mike Lister]

2 minutes ago, Celsius said:

 

I compared it and then you compared it.

 

And I will continue comparing it because even my wife who has the best insurance in Thailand money can buy (Life insurance, company insurance, health insurance and social security that she paid in for the past 20 years) knows first hand that healthcare in Thailand sucks and more than 50% of the time her insurance does not even pay.

 

Forgot to add accident insurance that she pays monthly. So that is 5 insurance policies.

 

 

Please go find somebody else to bicker and argue with, I have no interest.

[Ben Zioner]

5 minutes ago, redwood1 said:

So whats the master plan here?

 

To make retired expats spend the last years of their life bogged down in a confusing murky tax hell until they are dead?

 

And to add salt to the wound give them absolutely zero benefits....While at the same time letting the vast majority of the Thais continue to not pay any taxes especially the very very rich who have their money protected  in offshore accounts.. 

All very true.. 

[NJHOUSE]

At first I thought that taxing residents' worldwide income was rare among countries but it appears, after some basic research, that this is a fairly common tax policy. Not sure of actual enforcement around the world, but this type of taxation is not out of the ordinary.

 

Granted, some of the countries only tax foreign income if it is remitted but most places can tax it even if NOT remitted.  At least this is what I see based on the following Wikipedia article:

 

https://en.wikipedia.org/wiki/International_taxation

 

There you can see pretty much all of Thailand's neighbors have laws on taxing of foreign income although I doubt Cambodia, Laos, Myanmar, Vietnam are able to enforce and collect!

[MeePeeMai]

If nothing else, it's just another complicated hoop to jump through just to live in Thailand (which might be ripe for corruption or at least personal interpretation and selective enforcement by whichever RD person / office you will be assigned to).

 

For me it was simple, that was the last straw.  I'm not jumping through any more hoops just to be allowed to spend my time and money there (nor am I going to cough up 35% tax because I am well into the 35% Thai tax bracket).  I don't want to worry about the double tax treaty and how that is implemented or what that nightmare process that will end up being either. 

 

The list goes on and on for me, but in escaping the tax trap and the possible nightmare that comes with it, I'll surely be one of the 1st to leave Thailand (I was only in Thailand for 169 days in 2024).

 

Best of luck to all and I hope it all blows over, but I'm not willing to just sit and wait to find out what happens.  I'm sure there will be many more leaving next year.

 

 

[NJHOUSE]

FYI: If you've been in Thailand since Jan 1st, this Thursday is your last day to exit before becoming a resident for tax purposes. For many, this Friday things get real.

[MarkBR]

15 hours ago, Mike Lister said:

I can easily imagine a scenario where not much happens, except the new rule is enacted, but the TRD does not proactively enforce it, except on a very selective basis, that would make lots of sense to me. There's no traction in chasing smaller fish, it's too labor intensive with almost no reward yet it remains useful to net the bigger fish and the evaders. The downside to that scenario is that everyone will still need to play by the new rules, in case one day a bigger net is cast.

Chasing small fish also costs a lot of money, more than they money they will get back.

[ChaiyaTH]

11 hours ago, Metapod said:

I have 20 year Thai Elite, own multiple properties here and have lived here for over a decade. 

 

This change just means I will have to be a temporary resident in Thailand and spend less than 180 days a year here. I'll also be investing abroad instead as I no longer feel comfortable investing more into Thailand with the direction they want to go with tax. Thailand is going from one of the most favourable tax systems to one of the worst in the world. It's nuts.

 

I might also need to consider moving somewhere else for my main "home" as I don't want to be limited in my main home base if I have kids in future that need schooling.

 

Probably make a move to Bali for a while as the offer a 5 year visa that doesn't tax offshore earnings.

That's the only thing that bothers me right now, and I have to enroll him end of this year too. We could live 6 months on and off but then how to do that with school. Only option reasonable so far seems to be doing homeschooling, but that will take even more time from me for sure, as I am pretty sure she will not do it properly.

 

I think for myself and most people it eventually leads to just coming here for holidays if at all. One part in me says they will never do it anyway but at the same time they have done so many things nobody expected, this would not be that surprising anymore. 

I mean, they even stop giving people non-o single entry visa's if not having 400K in a Thai bank, which defeats the entire purpose of that visa for those who live abroad and visit 1-2 times a year for 2-3 months. They clearly been motivating us to leave since nearly a decade. 

[Raindancer]

7 minutes ago, MarkBR said:

Chasing small fish also costs a lot of money, more than they money they will get back.

Agreed...but I always use the caveat " this is Thailand".

 

No, I am not Thai bashing.  I am merely stating that there is absolutely no logic in some of the things they do or propose. They sometimes on a variety of issues,  seem to knee jerk a response, as yet  another good idea. 

[ChaiyaTH]

Small or big fish is not relevant, they do not have to chase us, we will come to them for our visa's and when we arrive or depart regardless. And then it's a criminal thing to not have filed and paid the taxes too, resulting in still paying + a fine + potential jailtime + blacklist. It's very naive to think that way.

[ChaiyaTH]

1 hour ago, NJHOUSE said:

FYI: If you've been in Thailand since Jan 1st, this Thursday is your last day to exit before becoming a resident for tax purposes. For many, this Friday things get real.

One wonders when they finally update anything about this, I mean people would suddenly all need accountants or tax numbers etc etc etc. Let alone the global taxes potentially, to keep us in the dark now since june 5th? 

[Raindancer]

7 minutes ago, ChaiyaTH said:

Small or big fish is not relevant, they do not have to chase us, we will come to them for our visa's and when we arrive or depart regardless. And then it's a criminal thing to not have filed and paid the taxes too, resulting in still paying + a fine + potential jailtime + blacklist. It's very naive to think that way.

I think this subject is quite emotive.  But as of yet,  there is nothing on any government website that suggests you will need to provide a TIN  etc at renewal of extension at immigration.

 

This is only speculation at this point.

 

Let's just see what plays out and if necessary adapt and apply whatever they want, if indeed it comes to pass.

[jaideedave]

4 hours ago, Presnock said:

what does the Canadian DTA with Thailand say about your pension (is it a Canadian government pension?)?

Interesting. I always struggle with legal jargon, whats your take?

Two of my pensions are gov't and one is private (work related)

I'd appreciate your opinion...

 

[Celsius]

2 hours ago, NJHOUSE said:

FYI: If you've been in Thailand since Jan 1st, this Thursday is your last day to exit before becoming a resident for tax purposes. For many, this Friday things get real.

 

Maybe for you. I don't plan on paying taxes.

[Metapod]

5 hours ago, motdaeng said:

 

sorry, off topic: why would someone earning 20 million per year live in a country like thailand?

could it be that you exaggerated a little bit? 

 

 

We obviously swim in different ponds. Not everyone here is an aging pensioner trying to squeak by in retirement.

[Mike Teavee]

2 hours ago, NJHOUSE said:

FYI: If you've been in Thailand since Jan 1st, this Thursday is your last day to exit before becoming a resident for tax purposes. For many, this Friday things get real.

Not for me, I did 20 days (& it was bloody freezing every day) in the UK 16 April - 6 May so have until 15th August 🙂

 

[Presnock]

21 minutes ago, jaideedave said:

Interesting. I always struggle with legal jargon, whats your take?

Two of my pensions are gov't and one is private (work related)

I'd appreciate your opinion...

 

I agree with you on the interpretation of that phrasology - In the US DTA it specifically says that a govt pension can only be taxed by the US govt, same as social security, whereas a private one or a state pension could be taxed by Thailand- BUT I believe that one phrase "arising in a Contracting State and paid to a resident of the other contracting state shall be taxable only in the first-mentioned state makes me think that all three pensions are exempt from Thai Taxation but one might have to read the Thai part of the DTA in order to see what it says.  Hopefully we will get a reading by later this week as we will pass into the 180th day of this calendar year and those who have been here the whole 6 months to date will be THAI TAX Residents.  Feel sorry for anyone negatively affected by this or the next program.

Finally, I am unsure as to the EXACT meaning of "Contracting State" and looks like Pension (arising in) earned under one country and paid to a (tax) resident of the other country shall be taxable only (BY) in  the first-mentioned country.  The in at the very last part makes me wonder if one would interpret that to mean you would have to be IN the country paying the pension.  Again, not seeing the Thai, or not really understanding what the Thai Revenue Dept might think it means could be different.  Once they print out the final program then I/we might be better qualified to answer.  The more I see of some of the DTA's, the more concerned I might be.  I am glad the US one was so expicit.  Sorry, I might have confused you but hopefully, they will just let all the pensions come in tax free as other ASEAN countries have done.

That would definitely make life easier.  Take care and good luck.

[JimGant]

1 hour ago, jaideedave said:

Interesting. I always struggle with legal jargon, whats your take?

Two of my pensions are gov't and one is private (work related)

I'd appreciate your opinion...

The Canada-Thai tax treaty does not have separate Articles for private and govt pensions -- unlike most treaties, including that of your cousins to the south. Thus, all your Canadian pensions, private and govt, are taxable ONLY by Canada. The "ONLY" word, per OECD definitions, gives exclusionary taxation rights to the referenced country. If "ONLY" was omitted from the language, then, in this example, Thailand would have secondary taxation rights. And if their taxation of these pensions was higher than Canada's -- then you pay full fare to Canada, plus the Thai taxes that exceed the Canada tax credit that Thailand has to absorb. But, this is not the case , as Thailand does not, per treaty language, have secondary taxation rights.

 

I don't know if I can say congrats on this treaty language -- 'cause if the treaty gave exclusionary taxation rights of all Canada pensions (private and govt) to Thailand -- and Thailand tax rates were below Canada's, well, then, you'd be in a better position in this situation. I don't know -- you'd have to run the comparative numbers.

 

But, for Canadians, nothing has changed when it comes to this new Thai taxation language -- you still file your Canadian taxes, with your pension data, per normal -- with no need to consider or file a Thai tax return. Eh?

[Lorry]

5 hours ago, redwood1 said:

So whats the master plan here?

 

To make retired expats spend the last years of their life bogged down in a confusing murky tax hell until they are dead?

 

And to add salt to the wound give them absolutely zero benefits....While at the same time letting the vast majority of the Thais continue to not pay any taxes especially the very very rich who have their money protected  in offshore accounts.. 

Sounds like my home-country 

[Lorry]

2 hours ago, ChaiyaTH said:

I think for myself and most people it eventually leads to just coming here for holidays

Many Thais in the government and in the bureaucracy are very happy to read this

[jaideedave]

37 minutes ago, Presnock said:

I agree with you on the interpretation of that phrasology - In the US DTA it specifically says that a govt pension can only be taxed by the US govt, same as social security, whereas a private one or a state pension could be taxed by Thailand- BUT I believe that one phrase "arising in a Contracting State and paid to a resident of the other contracting state shall be taxable only in the first-mentioned state makes me think that all three pensions are exempt from Thai Taxation but one might have to read the Thai part of the DTA in order to see what it says.  Hopefully we will get a reading by later this week as we will pass into the 180th day of this calendar year and those who have been here the whole 6 months to date will be THAI TAX Residents.  Feel sorry for anyone negatively affected by this or the next program.

Finally, I am unsure as to the EXACT meaning of "Contracting State" and looks like Pension (arising in) earned under one country and paid to a (tax) resident of the other country shall be taxable only (BY) in  the first-mentioned country.  The in at the very last part makes me wonder if one would interpret that to mean you would have to be IN the country paying the pension.  Again, not seeing the Thai, or not really understanding what the Thai Revenue Dept might think it means could be different.  Once they print out the final program then I/we might be better qualified to answer.  The more I see of some of the DTA's, the more concerned I might be.  I am glad the US one was so expicit.  Sorry, I might have confused you but hopefully, they will just let all the pensions come in tax free as other ASEAN countries have done.

That would definitely make life easier.  Take care and good luck.

Thanks very much for taking the time to reply. I'm beginning to feel a little better about this whole debacle. Cheers

[Andrew Dwyer]

6 hours ago, Celsius said:

 

What kind of a silly comment is this?

 

Most places "back home" people have security, healthcare, no visa hassles, no 90 day reporting, full rights as citizens.

 

If I am to go "back home" I would get free healthcare, free dental, various refund checks (carbon tax, GST). Then, of course, I could get a job or even better open my own company and work legally without any hassles or reporting or stress unlike in Thailand where they expect me to pay tax.

 

 

Why don’t you give that a try then ……… oh wait a minute 🤔

[jaideedave]

16 minutes ago, JimGant said:

The Canada-Thai tax treaty does not have separate Articles for private and govt pensions -- unlike most treaties, including that of your cousins to the south. Thus, all your Canadian pensions, private and govt, are taxable ONLY by Canada. The "ONLY" word, per OECD definitions, gives exclusionary taxation rights to the referenced country. If "ONLY" was omitted from the language, then, in this example, Thailand would have secondary taxation rights. And if their taxation of these pensions was higher than Canada's -- then you pay full fare to Canada, plus the Thai taxes that exceed the Canada tax credit that Thailand has to absorb. But, this is not the case , as Thailand does not, per treaty language, have secondary taxation rights.

 

I don't know if I can say congrats on this treaty language -- 'cause if the treaty gave exclusionary taxation rights of all Canada pensions (private and govt) to Thailand -- and Thailand tax rates were below Canada's, well, then, you'd be in a better position in this situation. I don't know -- you'd have to run the comparative numbers.

 

But, for Canadians, nothing has changed when it comes to this new Thai taxation language -- you still file your Canadian taxes, with your pension data, per normal -- with no need to consider or file a Thai tax return. Eh?

JG,Eh? 555, anyway thanks so much, I like your interpretation of this word salad they love to produce (gov't) 

Like everyone else I'm just hoping it mostly affects the 'other guy" 

 

[Presnock]

9 minutes ago, jaideedave said:

Thanks very much for taking the time to reply. I'm beginning to feel a little better about this whole debacle. Cheers

Thats exactly what it is...I can only imagine what the Revenue Department will finally do if anything at all...might just have to wait an additional year or forever.

[Presnock]

22 minutes ago, Lorry said:

Many Thais in the government and in the bureaucracy are very happy to read this

Well, if they get what they want with Chinese and Russian tourists galore and moving here, they will get what they deserve and I truly believe that they will not succeed at first but if they do force the western expats out the citizens here will in my opinion regret it very much so.  That also goes for the money that the western retirees and digital nomads, etc provide yearly.

[Enzian]

I've already been out of the country a full 93 days so far this year, so I have some flexibility for the remainder, and the fact that my Non-O rolls over Dec. 20 seems convenient. So is there a written rule that being in country any parts of 180 days makes one a tax resident, or is 180 safe and it's 181?

Also, saying they go global, how does Thailand calculate taxable income on residential rental property? Is it based on gross receipts, or gross receipts after the usual (USA) deductions for property tax, debt service, insurance, maintenance and repairs, etc.? Or something in between? Would they want to look at a US Schedule E? Or would rental income abroad be exempt? 

Finally now, I'm concerned about them establishing something statutory but not enforcing it, or only selectively in a few kinds of cases. Because then if we move with the herd we could always be technically in violation, they would always have a gotcha to apply, or suddenly institute on everyone. Just like it's impossible to file a US Schedule E without there being something there that the IRS could second guess: like why did you put the cost of this piece of work in current expenses and not on a depreciation schedule? Thanks.

[Mike Lister]

2 minutes ago, Enzian said:

I've already been out of the country a full 93 days so far this year, so I have some flexibility for the remainder, and the fact that my Non-O rolls over Dec. 20 seems convenient. So is there a written rule that being in country any parts of 180 days makes one a tax resident, or is 180 safe and it's 181?

Also, saying they go global, how does Thailand calculate taxable income on residential rental property? Is it based on gross receipts, or gross receipts after the usual (USA) deductions for property tax, debt service, insurance, maintenance and repairs, etc.? Or something in between? Would they want to look at a US Schedule E? Or would rental income abroad be exempt? 

Finally now, I'm concerned about them establishing something statutory but not enforcing it, or only selectively in a few kinds of cases. Because then if we move with the herd we could always be technically in violation, they would always have a gotcha to apply, or suddenly institute on everyone. Just like it's impossible to file a US Schedule E without there being something there that the IRS could second guess: like why did you put the cost of this piece of work in current expenses and not on a depreciation schedule? Thanks.

179 is safe, 180 is not.

[motdaeng]

2 hours ago, Metapod said:

 

We obviously swim in different ponds. Not everyone here is an aging pensioner trying to squeak by in retirement.

 

just for the record, i swim in a pool, not a pond!

by the way, it wasn't a personal attack, just a simple question. 

 

here an other question:

if someone has so much income (+ 20 m/year) , why not go for the long-term-residents (LTR)?

https://ltr.boi.go.th/

 

 

[Eudaimonia]

Here's what I fear might happen:

• Honest people with lots of income and assets move out.
• Dishonest people with lots of income and assets remain but use fake addresses abroad, illegal nominees, other people's bank accounts and ATM cards, agents, bribes, and so on to avoid detection and taxation.
• Low-income pensioners will not be initially targeted or questioned, as taxing them would often be unprofitable and unreasonable. Still, they will live their golden years technically in violation of unclear laws and fear impending visa changes and crackdowns, which affects their mental health.

Good guys out, bad guys in; everyone stay stressed.

[Mike Lister]

7 minutes ago, Eudaimonia said:

Here's what I fear might happen:

• Honest people with lots of income and assets move out.
• Dishonest people with lots of income and assets remain but use fake addresses abroad, illegal nominees, other people's bank accounts and ATM cards, agents, bribes, and so on to avoid detection and taxation.
• Low-income pensioners will not be initially targeted or questioned, as taxing them would often be unprofitable and unreasonable. Still, they will live their golden years technically in violation of unclear laws and fear impending visa changes and crackdowns, which affects their mental health.

Good guys out, bad guys in; everyone stay stressed.

There is no basis on which to think the first two points would occur. 

 

Honest people with lots of income have an easy out with the tax exempt LT visa.

 

Dishonest people are unlikely to be more to move in to a country where tax laws have been strengthened.

 

[Eudaimonia]

15 minutes ago, Mike Lister said:

Honest people with lots of income have an easy out with the tax exempt LT visa.

 

The LTR visa does not seem to be an option for people under 50 who are already living in Thailand and have income only from abroad.

 

They need an "official personal income tax return as filed to state authorities such as P.N.D. 90/91, BIR60, Form 1040, Form W-2, SA100, T1 General etc. showing income of no less than 80,000 USD per year in the past 2 years."

 

A Thai tax resident is unlikely to have declared 80,000 USD foreign source income in their Thai tax return before all these changes.

 

15 minutes ago, Mike Lister said:

Dishonest people are unlikely to be more to move in to a country where tax laws have been strengthened.

 

Yes, well I wrote "remain", not "move in".