Thailand to tax residents’ foreign income irrespective of remittance

[Klonko]

1 hour ago, matta01 said:

You are not obliged to bring money into Thailand in 2024.  How you are going to file a tax return? 

Proclaim something is one thing. Converting it into a "workable" system in practice is something else.

Not thinking before they start is a common mistake here

I only stated that taxing global income will be even more not "workable" than the current system which indeed is in limbo as regards practical implementation.

[Dogmatix]

20 hours ago, ukrules said:

I doubt they will go back to that old antiquated system but you never know.

 

If they do then I suspect it might only apply to those who are actually tax resident and stay in Thailand for the full 180 days or more per year.

 

It would be quite a nonsense to have people get tax clearance certificates in the first 180 days of any year unless of course they were resident in the previous year - now that would take a lot of checking and form filling.

 

 

Yes, they would only use the old tax clearance system, if they were too lazy to draft a new police regulation. If would be quite easy to draft a new regulation though.  Just add a tax clearance certificate to the list of documents required to renew a visa other than a tourist visa.  If no tax due yet, get a certificate from the RD office that no tax was due. 

[Dogmatix]

After a few weeks of requesting it I finally received a hard copy of my statements for December 2023 from a bank in Hong Kong with a tiny little bank stamp 12 millimetres across without any signatures or initials.  I suppose I could add the signatures myself.  It's not exactly a certified copy but better than a downloaded statement from the internet, I guess, and probably better than most people will be able to provide to proof that income was earned before 2024.

[Dogmatix]

21 hours ago, brian2322 said:

Regarding global taxation, I'm guessing it's as big a deal to the Thai billionaires as it is to us.  More so, maybe...  Do they get to play by the 179 day rule as well?  

 

The Thai billionaires will find it inconvenient but they can use corporate structures to avoid a lot of the effect.  They have family office wealth management companies set up in various tax efficient 0jurisdictions.  These companies can retain earnings from dividends and capital gains without creating taxable events for beneficiaries in Thailand.  Thai beneficiaries can will only have to pay income tax, if they receive dividends from these companies in their own names. Even this can be avoided by using loans.  Offshore Co A lends US$10 million to Thai beneficiary for 10 years.  10 years later he takes another loan out from Offshore Co B to repay the original loan to Offshore Co A and so on.  To prevent this there would need to be legislation allowing the RD to lift the corporate veil on offshore companies and trusts.  Legislation would have to make the company taxable as a Thai company, if beneficiaries and/or controlling shareholders were found to be Thai tax residents.  I doubt if that would come in the first round, if at all.  if Tony is in power at the time, he will definitely prevent that.  Other corrupt Thai politicians and bureaucrats use offshore structures to hide wealth offshore too.  Some were outed in the Panama papers but not investigated by Thai authorities.  So Thai billionaires and their families will probably be safe for a long time to come.

[tomacht8]

The Thai tax authority's entire project is so complex and complicated that it cannot be implemented quickly in practice. All the different DTAs, the evaluation of the different types of income, the ability to read all the different tax returns from all countries, to record and assign the different tax dates, all the transfers, cash exchanges, credit card transactions, ...

 

this requires enormous IT power, menpower and well-trained tax specialists. At present, Thailand does not have the administrative capacity necessary to carry out such a gigantic tax fishing expedition.

 

Anyone staying in Thailand for more than 180 days should first read the small print of their country-specific DTA. It should also be borne in mind that Thailand certainly does not want to drive away its well-off pensioners or potential condo investors. However, their unclear announcement has caused a lot of uncertainty and, already now, economic damage.

 

How will it go on? I suspect that in the first phase of implementation the tax authorities will, or will have to, limit themselves to the low-hanging fruits.

 

The easiest group are those foreigners who run to their regional tax offices, ask perhaps not-so-smart questions, and come out with a new tax number and 2024 tax forms.

 

The second group will be those foreigners who have high single transaction amounts from abroad to Thailand. The first sample is larger than 10 million THB, then larger than 5 million THB, etc. Whether this data can be so easily passed on to the tax authorities by the commercial banks is currently generally questionable and controversial.

 

The third group could be pensioners who have their pension automatically paid out to a Thai bank account every month. A 2 account model might be advisable here. Have the current pension payments 2024, 2025, ... paid out to a domestic account. And transfers to Thailand should only be made from a second account that contains savings, interest, rental income, etc. that were received before December 31, 2023.

 

The burden of proof is reversed in tax law. The tax authority claims that there is taxable income, the citizen then has to prove that this is not the case. Everyone who is affected should prepare for the eventuality. It's good if you can prove that the money you transferred to Thailand in 2025 are, for example, savings from 2022.

 

I wish everyone the best of luck with this annoying topic.

 

 

[matta01]

Unfortunately, I do not belong to the group of elite pensioners, but the proclamation of tax measures in this case has meant that several Thai people such as the elderly or orphans and others no longer receive money or support from some of these pensioners as they now react completely differently and they say we do not know also what awaits us. That is the result , it is very unfortunate but it is the  reality. 

[tomacht8]

39 minutes ago, matta01 said:

Unfortunately, I do not belong to the group of elite pensioners, but the proclamation of tax measures in this case has meant that several Thai people such as the elderly or orphans and others no longer receive money or support from some of these pensioners as they now react completely differently and they say we do not know also what awaits us. That is the result , it is very unfortunate but it is the  reality. 

The problem also extends to all Thais who receive money from abroad. Direct Thai family members may be able to avoid tax liability using the gift allowances. However, very few normal Thais are familiar with Thai tax law and may be unfairly asked to pay.

 

It will perhaps be worse for all the bar girls, Mia nois and Thai girlfriends who have no official family connections but have a sponsor abroad. A tax liability can quickly arise if the exemption limits are exceeded. This will definitely delay or avoid some gold chain-, car-, house-, house repair-, Iphone- or water buffalo - purchases. I think these bad implications for the thai economy, were completely overlooked by the initiating tax officials.

[redwood1]

46 minutes ago, tomacht8 said:

The problem also extends to all Thais who receive money from abroad. Direct Thai family members may be able to avoid tax liability using the gift allowances. However, very few normal Thais are familiar with Thai tax law and may be unfairly asked to pay.

 

It will perhaps be worse for all the bar girls, Mia nois and Thai girlfriends who have no official family connections but have a sponsor  abroad. A tax liability can quickly arise if the exemption limits are exceeded. This will definitely delay or avoid some gold chain-, car-, house-, house repair-, Iphone- or water buffalo - purchases. I think these bad implications for the thai economy, were completely overlooked by the initiating tax officials.

 

Yea sure Bar girls will all be running to the tax office to report sponsor money?  Yea right......When pigs fly in the year 2424 maybe...lol

 

And overseas Thai workers will also be all reporting their overseas income?.....Another.....Yea right when Pigs fly....

 

Zero chance of most Thais ever paying taxes on income for the foreseeable future......

[Bvor]

1 hour ago, tomacht8 said:

Direct Thai family members may be able to avoid tax liability using the gift allowances.

Are gifting allowances only applicable to direct Thai family members thereby excluding all other Thai persons eg long-term girlfriend?

[Metapod]

14 minutes ago, Bvor said:

Are gifting allowances only applicable to direct Thai family members thereby excluding all other Thai persons eg long-term girlfriend?

 

I think it has to be family or spouse but I could be wrong on that.

[tomacht8]

41 minutes ago, redwood1 said:

 

Yea sure Bar girls will all be running to the tax office to report sponsor money?  Yea right......When pigs fly in the year 2424 maybe...lol

 

And overseas Thai workers will also be all reporting their overseas income?.....Another.....Yea right when Pigs fly....

 

Zero chance of most Thais ever paying taxes on income for the foreseeable future......

555. Clearly the majority of Thais will not report this voluntarily. However, the international money transfer stands in the banking system. Who knows, when the Thai girlfriend builds a fancy new house for  some million THB on the countryside, whether a regional tax officer won't come snooping around.

[tomacht8]

45 minutes ago, Bvor said:

Are gifting allowances only applicable to direct Thai family members thereby excluding all other Thai persons eg long-term girlfriend?

Ask yourself. How credible is a gift without anything in return between strangers?

 

Thai law provides tax exemptions, for example, for gifts to relatives in the ascending or descending line or for maintenance payments to spouses and children. In these cases, you will receive up to 20 million THB for free periods.

[Bvor]

10 minutes ago, tomacht8 said:

Ask yourself. How credible is a gift without anything in return between strangers?

I don't think I need to as not relevant to my query in context of long-time girlfriend. Just found on another thread re Gifting and Tax an interesting reference to this issue - see attached 44(c) which maybe can be applied to long-term girlfriend not registered as spouse.

[tomacht8]

15 minutes ago, Bvor said:

I don't think I need to as not relevant to my query in context of long-time girlfriend. Just found on another thread re Gifting and Tax an interesting reference to this issue - see attached 44(c) which maybe can be applied to long-term girlfriend not registered as spouse.

Could be entirely possible. The only question is what, for example, is a moral obligation towards the girlfriend in this context. I can understand when someone causes harm to another (e.g. traffic accident, the accident victim has a lifelong disability = moral obigation to support with money). Or at a ceremony (more like a one-off payment), e.g. for an engagement. There may already be Thai tax law rulings on this from the past. It is best to ask a Thai tax law specialist about this.

[Enzian]

28 minutes ago, tomacht8 said:

The only question is what, for example, is a moral obligation towards the girlfriend in this context

If you had promised her, in effect, that she would have a roof over her head, and had money sent to her to cover your shared apartment during a period that you were gone, if that's not "moral obligation" then I don't know what is. But to be a bit more serious, this expression must have some history and context in Thai law and tradition, and I wish someone who really knows would tell us.

[tomacht8]

41 minutes ago, Enzian said:

If you had promised her, in effect, that she would have a roof over her head, and had money sent to her to cover your shared apartment during a period that you were gone, if that's not "moral obligation" then I don't know what is. But to be a bit more serious, this expression must have some history and context in Thai law and tradition, and I wish someone who really knows would tell us.

I completely agree. These are very specific cases. There is also the question of what amount of money constitutes such a moral obligation. The allowance for 44c is 10 million per year. It's very unlikely that the Thai Girlfriend needs an average of 800K a month for papaya salad and apartment rent (taxfree). I think that maintenance sums between 10-30K per month are irrelevant for the tax authorities. These small amounts usually result in only very small tax burdens, if any at all. It's mainly about the larger millions of amounts that are supposed to be exempt from tax. If you look at it from the tax officers perspective, 10 million tax-free = around 3 million tax loss. It is obvious that in such cases the tax officer looks very closely. The moral obligation must be very clear in order to transfer millions tax-free. The only example that comes to mind: The foreign boyfriend was playing with matches in the house of the Thai girlfriend and the house burned down without insurance. Yes, there would be a moral obligation to transfer a few million for reconstruction.

[stat]

6 hours ago, tomacht8 said:

The Thai tax authority's entire project is so complex and complicated that it cannot be implemented quickly in practice. All the different DTAs, the evaluation of the different types of income, the ability to read all the different tax returns from all countries, to record and assign the different tax dates, all the transfers, cash exchanges, credit card transactions, ...

 

this requires enormous IT power, menpower and well-trained tax specialists. At present, Thailand does not have the administrative capacity necessary to carry out such a gigantic tax fishing expedition.

 

Anyone staying in Thailand for more than 180 days should first read the small print of their country-specific DTA. It should also be borne in mind that Thailand certainly does not want to drive away its well-off pensioners or potential condo investors. However, their unclear announcement has caused a lot of uncertainty and, already now, economic damage.

 

How will it go on? I suspect that in the first phase of implementation the tax authorities will, or will have to, limit themselves to the low-hanging fruits.

 

The easiest group are those foreigners who run to their regional tax offices, ask perhaps not-so-smart questions, and come out with a new tax number and 2024 tax forms.

 

The second group will be those foreigners who have high single transaction amounts from abroad to Thailand. The first sample is larger than 10 million THB, then larger than 5 million THB, etc. Whether this data can be so easily passed on to the tax authorities by the commercial banks is currently generally questionable and controversial.

 

The third group could be pensioners who have their pension automatically paid out to a Thai bank account every month. A 2 account model might be advisable here. Have the current pension payments 2024, 2025, ... paid out to a domestic account. And transfers to Thailand should only be made from a second account that contains savings, interest, rental income, etc. that were received before December 31, 2023.

 

The burden of proof is reversed in tax law. The tax authority claims that there is taxable income, the citizen then has to prove that this is not the case. Everyone who is affected should prepare for the eventuality. It's good if you can prove that the money you transferred to Thailand in 2025 are, for example, savings from 2022.

 

I wish everyone the best of luck with this annoying topic.

 

 

I agree to most of your statements but maybe TRD says screw em and tries to tax all income unless you provide a bank book statement in the format of Thai cabinet decision xyz signed by 3 bank board members notarized by the pope. Remember the rules about thai bank books for immigraton that have a shelf life of some days only before they are no longer acceptable? If I understand correctly they can go back several years for audits as well...

 

Godspeed everyone!

[NoDisplayName]

3 minutes ago, stat said:

I agree to most of your statements but maybe TRD says screw em and tries to tax all income unless you provide a bank book statement in the format of Thai cabinet decision xyz signed by 3 bank board members notarized by the pope. Remember the rules about thai bank books for immigraton that have a shelf life of some days only before they are no longer acceptable? If I understand correctly they can go back several years for audits as well...

 

Godspeed everyone!

 

We have real world examples of unobtainium.

 

The certificate to be signed by director(s) of a foreign insurance company to be acceptable western insurance.

 

The "bank letter" sent by SWIFT needed to open a savings account.

[tomacht8]

25 minutes ago, stat said:

I agree to most of your statements but maybe TRD says screw em and tries to tax all income unless you provide a bank book statement in the format of Thai cabinet decision xyz signed by 3 bank board members notarized by the pope. Remember the rules about thai bank books for immigraton that have a shelf life of some days only before they are no longer acceptable? If I understand correctly they can go back several years for audits as well...

 

Godspeed everyone!

You describe perfectly, one of the missing master pieces in this looming Thai tax puzzle. It is precisely these clear and unambiguous implementation directives that are missing. Not even the Pope knows which documents and evidence will be accepted, how, when and where. Unfortunately, in Thailand it is often the case that flip flop announcements and laws are made. What extra papers, translations, certifications and evidence will be required by Somchai in his regional tax office is anyone's guess. One thing is for sure, it will not be uniform across Thailand.

[stat]

On 7/1/2024 at 2:12 PM, Mike Lister said:

A remittance is considered to be whatever the taxpayer says it is, there is no default position or automatic assumption that a remittance is one thing or the other.

Dead wrong there is no gurantee of the above.

[Confuscious]

Where can I find a link to the tax scales for civilians?

[tomacht8]

28 minutes ago, Confuscious said:

Where can I find a link to the tax scales for civilians?

https://www.forvismazars.com/th/en/insights/doing-business-in-thailand/payroll/personal-income-tax

[Mike Lister]

3 hours ago, stat said:

Dead wrong there is no gurantee of the above.

Unnecessarily argumentative, again, there's nothing even remotely incorrect about what I wrote!

 

My comment doesn't suggest anything is guaranteed, only that the taxpayer must state /decide what the nature is of the funds being remitted. 

 

"there is no default position or automatic assumption that a remittance is one thing or the other", but the first step in the process is the taxpayer must decide what it is and so say.

[Mike Lister]

2 hours ago, Confuscious said:

Where can I find a link to the tax scales for civilians?

 

[Dogmatix]

17 hours ago, Bvor said:

Are gifting allowances only applicable to direct Thai family members thereby excluding all other Thai persons eg long-term girlfriend?

 

There is an annual exemption of 10 million for gifts to non-family members but there is a case study on the RD website where the RD ruled that transfers from overseas by a foreign man to his Thai girlfriend for maintenance purposes didn't qualify for the gift exemption because they were not legally married.  The catch is that gifts to people who are not a spouse or a descendant or ascendant direct relation have to pass a more stringent test of being gifts for a traditional occasion, such as wedding gifts.  There is more case law on this.  So it is unlikely that gifts to a girlfriend will pass muster, if investigated.  On the other hand there seems to be a lot of latitude over gifts to a legal spouse or direct family member.

[Presnock]

14 hours ago, stat said:

Dead wrong there is no gurantee of the above.

That is one of the things being asked regularly - WE STILL have not been advised by the Revenue Department of alll that goes with this new interpretation.  We are being told by "experts" that once we are tax residents, in 2025 if we have assessable remittances into Thailand then we need to have a Thai ID tax number and then need to file tax forms...however, if one with a US govt pension only like I do, then I will never be remitting assessable monies into Thailand so should not have to obtain a Thai tax ID number nor should I ever file Thai tax forms.  Now, if they amend the law to state that once one becomes a Thai tax resident, they must obtain a tax ID number - then they need to amend their law on that and advise the expat community that this is a "new" requirement.  Or, they could look at the amount I send and if that amount is higher than what they consider "of interest", they also might advise me that I need to visit the RD in my area and explain WHY I haven't obtained a tax id nor why I did not file a tax form here.  Whatever they are planning (if at all) then it would sure let a lot of people just relax and get on with life either here or elsewhere if they would publish the new amendments to the tax law and what all it entails as of 2024/2025 timeframe.  Good luck to all of us.

[Presnock]

22 hours ago, Dogmatix said:

 

Yes, they would only use the old tax clearance system, if they were too lazy to draft a new police regulation. If would be quite easy to draft a new regulation though.  Just add a tax clearance certificate to the list of documents required to renew a visa other than a tourist visa.  If no tax due yet, get a certificate from the RD office that no tax was due. 

That may be the problem...as they sit around discussing the how they will implement his new procedure, each then starts to work out how many more bodies they will need and how much more work they are going to have to put into their very positions.  Then they start re-thinking that procedure and go on to another... like getting immigration involved in their business - yeah I am sure immigration would just love to start doing work for the revenue dept without getting something out of it - no pluses for immigration that is for sure, just more work and more pissed off expats.  Seems like the cart before the horse story again with this program and even before starting it they begin talking about the NEXT world wide program and How Much Money can we get from the foreigners?  OOPS the amounts have dropped! story next year or whenever they keep count.  Good luck to all, happy rainy season - glad the weather dept said that this year the rainy season would be light for the first couple of months and then in Late July early August the rains would begin in earnest and maybe two storms during the final part of this season.  Seems to be a lot of rains so far for this area of BKK.

[JackGats]

Up to now I have stressed to put in at least 6 months and a few days in Thailand each year. I have done so in order to be able to show the taxman and my banks back home, should they wax investigative, that I am an de facto resident of Thailand. Now I am being told I have been overcautious with this. In actuality 5 months and a few days or less in TH would suit me immensely better than 6 months and a few days. Taking a one-month break to Jakarta in January when TH gets overcrowded would suit me to a T. I'll make this my plan if worldwide taxation gets enforced by TH with no exemption for LTR holders.

[Mike Lister]

24 minutes ago, Presnock said:

That is one of the things being asked regularly - WE STILL have not been advised by the Revenue Department of alll that goes with this new interpretation.  We are being told by "experts" that once we are tax residents, in 2025 if we have assessable remittances into Thailand then we need to have a Thai ID tax number and then need to file tax forms...however, if one with a US govt pension only like I do, then I will never be remitting assessable monies into Thailand so should not have to obtain a Thai tax ID number nor should I ever file Thai tax forms.  Now, if they amend the law to state that once one becomes a Thai tax resident, they must obtain a tax ID number - then they need to amend their law on that and advise the expat community that this is a "new" requirement.  Or, they could look at the amount I send and if that amount is higher than what they consider "of interest", they also might advise me that I need to visit the RD in my area and explain WHY I haven't obtained a tax id nor why I did not file a tax form here.  Whatever they are planning (if at all) then it would sure let a lot of people just relax and get on with life either here or elsewhere if they would publish the new amendments to the tax law and what all it entails as of 2024/2025 timeframe.  Good luck to all of us.

 

It isn't that "experts" are saying anything, it's what the TRD Code says.

 

https://www.rd.go.th/english/21987.html

[Bvor]

22 minutes ago, Dogmatix said:

the RD ruled that transfers from overseas by a foreign man to his Thai girlfriend for maintenance purposes didn't qualify for the gift exemption because they were not legally married.

hmm, hope more case law can be more considerate where appropriate.

EG. I'm "gifting" to help a poor family for kids education and 24/7 homecare for bedridden vegetative "gf" father - not for any tax avoidance reasons.

I dare not register marriage/defacto cos Centrelink will reduce my OAP.

Best I not do 180> days in LOS -  "gf" can always accompany me back to Oz for 1 or 2 of my swings per year.