Thailand to tax residents’ foreign income irrespective of remittance

[Celsius]

4 minutes ago, Mike Lister said:

My wife earns 1 million as self employed and pays virtually no tax because of a standard 60% deductions for the cost of sales (whereas the true cost is closer to 25%).

 

I don't understand. She claims 60% expenses while true cost is 25%?

 

Is that not tax fraud?

 

Also she obviously doesn't make 1 million, that is her gross income.

[lordgrinz]

2 minutes ago, Mike Lister said:

My wife earns 1 million as self employed and pays virtually no tax because of a standard 60% deductions for the cost of sales (whereas the true cost is closer to 25%). I earn about a million but leave half of it outside Thailand whilst half of what is remitted is exempt, again, no tax. Some of it is luck of the draw, some of it is planned, but does perhaps go some way to explain why so few Thai's pay tax. 

 

Yeah, everyone's situation is different, but I don't relish the idea of giving 24.5% of what little i have to Thailand......like you said, very few Thai's even pay tax, why is it then that I would have to pay way more than they do, and for what conveniences? TM30's, 90 Days, Yearly extensions, Re-entry permits, no ability to own land, Farang pricing, etc ...etc...etc......more headaches than it's worth. I don't like being treated like an ATM machine.

[Mike Lister]

4 minutes ago, Celsius said:

 

I don't understand. She claims 60% expenses while true cost is 25%?

 

Is that not tax fraud?

 

Also she obviously doesn't make 1 million, that is her gross income.

In the world of taxation, taxpayers are often given a choice whether to take a standard deduction or to itemise actual costs and provide receipts. My wife takes the standard deduction which allows her to deduct 60% of the cost of sales, as input costs. That leaves her 400k to apply against the tax tables, before deducting TEDA. She nets between 675k and 750k, depending on contributions to LTF's etc and TEDA.

[Celsius]

Just now, Mike Lister said:

In the world of taxation, taxpayers are often given a choice whether to take a standard deduction or to itemise actual costs and provide receipts. My wife takes the standard deduction which allows her to deduct 60% of the cost of sales, as input costs. That leaves her 400k to apply against the tax tables, before deducting TEDA. She nets between 675k and 750k, depending on contributions to LTF's etc and TEDA.

 

I have never seen this world of taxation rules where business owners are given a choice not to provide receipts and claim the almost unbelievable 60% deduction. 

 

Can you provide me with a link to this tax law in Thailand?

 

 

[Mike Lister]

12 minutes ago, Celsius said:

 

I have never seen this world of taxation rules where business owners are given a choice not to provide receipts and claim the almost unbelievable 60% deduction. 

 

Can you provide me with a link to this tax law in Thailand?

 

 

I can but I'm not going to because I have other more important things to do, it's easy enough to find. 

 

Oh what the heck, here's an artcile on it: https://kpmg.com/th/en/home/insights/2018/02/thailand-tax-updates-15february2018.html

 

NOTE: it used to be an 85% deduction.....can you imagine? Make something for 10 baht, sell it for 100 baht and claim 85 baht as your costs and the rest as TEDA, wheeee.

Edited June 26 by Mike Lister

[Celsius]

19 minutes ago, Mike Lister said:

I can but I'm not going to because I have other more important things to do, it's easy enough to find. 

 

Oh what the heck, here's an artcile on it: https://kpmg.com/th/en/home/insights/2018/02/thailand-tax-updates-15february2018.html

 

NOTE: it used to be an 85% deduction.....can you imagine? Make something for 10 baht, sell it for 100 baht and claim 85 baht as your costs and the rest as TEDA, wheeee.

 

What a strange tax law and it seems to change a lot. It used to be 80% standard deduction, 60% standard deduction and according to PWC is will be 50% standard deduction this year with a max limit of 100,000 baht.

 

It seems like the party is over and it will just get worse for small business owners paying tax getting little in return.

[Mike Lister]

8 minutes ago, Celsius said:

 

What a strange tax law and it seems to change a lot. It used to be 80% standard deduction, 60% standard deduction and according to PWC is will be 50% standard deduction this year with a max limit of 100,000 baht.

 

It seems like the party is over and it will just get worse for small business owners paying tax getting little in return.

That's not correct, the 60 PC deduction remains but is for self employed, you're confusing two groups. Later,,  no time now

[Celsius]

4 minutes ago, Mike Lister said:

That's not correct, the 60 PC deduction remains but is for self employed, you're confusing two groups. Later,,  no time now

 

Never mind. I found it on Sherrings 

[Lorry]

1 hour ago, lordgrinz said:

TM30's, 90 Days, Yearly extensions, Re-entry permits

All this paper is expensive,  somebody has to pay for it

[Lorry]

1 hour ago, lordgrinz said:

I don't like being treated like an ATM machine.

What are you doing in Thailand, then? 

The RD is not the first one to treat you as an ATM.

This starts with the first taxi ride from the airport,  continues with the girls who love you so much,  and ends with the government hospital charging 250,000 for the last 24 hours before you died. 

The RD has been an exception so far.

[Mike Lister]

33 minutes ago, Lorry said:

What are you doing in Thailand, then? 

The RD is not the first one to treat you as an ATM.

This starts with the first taxi ride from the airport,  continues with the girls who love you so much,  and ends with the government hospital charging 250,000 for the last 24 hours before you died. 

The RD has been an exception so far.

Harsh, but true.

[Presnock]

4 hours ago, Mike Lister said:

I have no reason to believe the TRD will ever do that, there's especially no reason to believe there will someday be an epiphany moment, the clouds will part and this all seeing all knowing announcement will be made that will magically make everything clearer.

 

The Thai tax code has existed for decades, the TRD made only one small rule change to it, their position is very likely to be, what's so difficult to understand! Enough is known at present for people to understand the basics of the tax system but that's probably not enough for the average expat with above overseas earning's, other than basic things like savings or pensions. There will likely be some trial and error in all of this with many people erring on the side of caution, rather than trying to file a complete fully tested return the in the first year. We've already seen ample evidence that people are withholding remittances', until they see first hand experiences reported. That is likely to be the way this proceeds, if it proceeds at all.

I agree and the less info provided by the TRD will be a welcome sight for the TAX agents because like we have been saying all along, too many different expats from different tax countries for just about any one person so will need a tax agent .  Glad I am not in that boat.  Good luck to all.

[Presnock]

5 hours ago, Henryford said:

What's more confusing, the changes to the Thai tax laws or reading the 47 pages of comments?

Yes! agree - but the 47 pages of comments are more repeats than anything new.

[Incorrigible1]

9 hours ago, Gknrd said:

Texas, I have a nice home on the I-35 corridor. It's booming like crazy. But, compared to other places it is still very affordable and the money flowing in here has made it so nice for us retiree's.  The city's are setting up centers and reducing the home taxes.. I completely lucked out. I bought when prices were very cheap. And when I turned 65 taxes froze. I could not ask for anything better. It has made it so I can travel abroad 6 months a year and relax at home for 6 months. And I have some wonderful neighbors. 

 

[Incorrigible1]

Just now, Incorrigible1 said:

Texas

Thank you.  Have some friends in the Fort Worth area who really like it

[tomkenet]

An off topic question.

A company I am invested in gives quarterly dividends. They have now changed to capital distributions instead. I know dividends are accessible income if remitted, what about capital distributions?

[hrrecruiter]

On 6/25/2024 at 12:44 AM, 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.

 

I'm in an almost identical situation. 

- Elite Visa 20y

- Property in TH

- Aiming at Bali (much easier VISAS than TH, multiple entries)

 

I went to Bali to do some recce and it should work fine actually, planning on maintaining 2 houses (BKK & CANGGU)

 

Just waiting until the RD pull the trigger and reinforce the global taxes, I may pay the 1st year with fines and I will put the plan to work. The extra costs of housing + flights, gets offset by the taxes, and you dont need to deal with the accounting & filling

 

 

 

[Presnock]

49 minutes ago, Incorrigible1 said:

 

Spent some time in central and west Texas a long time ago - a huge state to say the least.  Great for retirees in no state taxes either so save that way.  I have read too a lot of those tax swamped folks from Calf have been moving to Texas too.  Now if we could rope those tornadoes and gulf storms a tad it would open up more of the state for living.  Lots of good food there too as I became acquainted with the Tex-mex restaurants with a bowl of jalapenas on every table!  In the year or so that I was there, I really enjoyed it immensely.

[Thaindrew]

On 6/25/2024 at 9:38 AM, NJHOUSE said:

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!

one big issue though is that Thailand is using the income tax system to tax "tax residents" on money that is not truly income, ie capital gains, you wouldn't pay income tax rates (up to 35%) on capital gains in your home country.

[Thaindrew]

1 hour ago, hrrecruiter said:

 

I'm in an almost identical situation. 

- Elite Visa 20y

- Property in TH

- Aiming at Bali (much easier VISAS than TH, multiple entries)

 

I went to Bali to do some recce and it should work fine actually, planning on maintaining 2 houses (BKK & CANGGU)

 

Just waiting until the RD pull the trigger and reinforce the global taxes, I may pay the 1st year with fines and I will put the plan to work. The extra costs of housing + flights, gets offset by the taxes, and you dont need to deal with the accounting & filling

 

 

 

this seems the last loop hole for governments to close, living in 3 countries (179 + 179 + 7 days), so as to not be tax resident anywhere - it does have complications with banking when the bank ask for residency address and tax codes - but it is my short term plan to do the same - I also have 20 year Thai Elite Visa - other option is LTR visa but some of the requirements are high to achieve. 

[anrcaccount]

1 hour ago, hrrecruiter said:

 

I'm in an almost identical situation. 

- Elite Visa 20y

- Property in TH

- Aiming at Bali (much easier VISAS than TH, multiple entries)

 

I went to Bali to do some recce and it should work fine actually, planning on maintaining 2 houses (BKK & CANGGU)

 

Just waiting until the RD pull the trigger and reinforce the global taxes, I may pay the 1st year with fines and I will put the plan to work. The extra costs of housing + flights, gets offset by the taxes, and you dont need to deal with the accounting & filling

 

 

 

Cool your jets son, a big life change based on this policy discussion is an overreaction!

You probably were liable to pay tax in TH for the last few years anyway (according to policy) , and you didn't, and nothing happened.

Remember, the at times very wide gap between policy and enforcement in TH. 

Right now, apart from a lot of hot air on this forum, there's little to indicate next year will be any different!


 

[scorecard]

4 minutes ago, anrcaccount said:

Cool your jets son, a big life change based on this policy discussion is an overreaction!

You probably were liable to pay tax in TH for the last few years anyway (according to policy) , and you didn't, and nothing happened.

Remember, the at times very wide gap between policy and enforcement in TH. 

Right now, apart from a lot of hot air on this forum, there's little to indicate next year will be any different!


 

I did a calculation based on being in Thailand 365 days a year. Turned out I owed 650Baht personal Thai income tax. 

 

My acct. took a look, and said:

- In your case I can't see any way the Thai RD could find any relevant details on you.

- The revenue which is from an old age pension. I'm sure the RD would NOT want to touch these funds. And they are protected by a double tax agreement.

- She added, even so I'm sure we can find a factor to reduce your taxable income to under the threshold. 

 

[Yellowtail]

I think I am just going to start using a US credit card for most everything I can. If I do that, I can go years without having to bring any money into Thailand. 

 

I used to do this when I was working in Thailand and getting paid into my US account. 

[jaideedave]

3 hours ago, Lorry said:

What are you doing in Thailand, then? 

The RD is not the first one to treat you as an ATM.

This starts with the first taxi ride from the airport,  continues with the girls who love you so much,  and ends with the government hospital charging 250,000 for the last 24 hours before you died. 

The RD has been an exception so far.

"the government hospital charging 250,000 for the last 24 hours before you died'

I'm trying to avoid that happening.I gave my Dr the signed DNR forms to place in my file.

I'm a 73 yo C survivor with a 14 yo quad bypass. I'd just hate to see my wife's inheritance stolen by some greedy hospital and my last day/s.   

[Thaindrew]

4 minutes ago, Yellowtail said:

I think I am just going to start using a US credit card for most everything I can. If I do that, I can go years without having to bring any money into Thailand. 

 

I used to do this when I was working in Thailand and getting paid into my US account. 

 

with the taxation system proposed for 2025 it doesn't matter how you spend it, only how you earn it 

[Yellowtail]

25 minutes ago, Thaindrew said:

 

with the taxation system proposed for 2025 it doesn't matter how you spend it, only how you earn it 

Does it not only apply to funds you bring into Thailand? 

[Thaindrew]

1 minute ago, Yellowtail said:

Does it not only apply to funds you bring into Thailand? 

yep for 2024, but the proposals for 2025 go much further.

[Yellowtail]

3 minutes ago, Thaindrew said:

yep for 2024, but the proposals for 2025 go much further.

Are they planning to cancel the double taxation treaties they have in place? 

[Thaindrew]

3 minutes ago, Yellowtail said:

Are they planning to cancel the double taxation treaties they have in place? 

I'd say thats unlikely, but its going to be complicated, the DTA state who has first rights to the tax and in some cases that will be Thailand, in some instances it may be both given the differing tax free allowances, and many countries also run different tax years (ie ending April or ending December) which is going to add to the complications

[Yellowtail]

1 minute ago, Thaindrew said:

I'd say thats unlikely, but its going to be complicated, the DTA state who has first rights to the tax and in some cases that will be Thailand, in some instances it may be both given the differing tax free allowances, and many countries also run different tax years (ie ending April or ending December) which is going to add to the complications

What countries mandate the tax year not be the calendar year?