Thailand to tax residents’ foreign income irrespective of remittance

[Dogmatix]

On 7/4/2024 at 2:58 PM, Presnock said:

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.

 

No need for Immigration to cooperate with the RD to do this.  The RD already has a system for taxpayers to get a certified copy of their latest tax return.  Just show up at your local tax office with a copy of your tax return and they will give you a stamped a signed copy for a small fee of about 100 baht.  The police just need to add at certified copy of the latest tax return to the list of documents required for visa renewal.  I think this is already done for NON-B visas.  Also no need for the Immigration to report anything to the RD.  You don't have a certified tax return, you don't get your visa renewed and have to leave the country. They could pass the information to the RD who could send you a notice reminding you to do a tax return but government departments hate cooperating with each other or providing access to each other's databases. 

 

Requiring certified tax returns is so easy that its a no brainer for Immigration. If you have enough income or savings to live on for another year, it is not unreasonable for them to assume you remitted at least 120k in the previous tax year. If that is all non-assessable, you can file a turn return with zero income, just like my company has to file a monthly VAT return showing zero VATable income. 

[Presnock]

10 minutes ago, Dogmatix said:

 

No need for Immigration to cooperate with the RD to do this.  The RD already has a system for taxpayers to get a certified copy of their latest tax return.  Just show up at your local tax office with a copy of your tax return and they will give you a stamped a signed copy for a small fee of about 100 baht.  The police just need to add at certified copy of the latest tax return to the list of documents required for visa renewal.  I think this is already done for NON-B visas.  Also no need for the Immigration to report anything to the RD.  You don't have a certified tax return, you don't get your visa renewed and have to leave the country. They could pass the information to the RD who could send you a notice reminding you to do a tax return but government departments hate cooperating with each other or providing access to each other's databases. 

 

Requiring certified tax returns is so easy that its a no brainer for Immigration. If you have enough income or savings to live on for another year, it is not unreasonable for them to assume you remitted at least 120k in the previous tax year. If that is all non-assessable, you can file a turn return with zero income, just like my company has to file a monthly VAT return showing zero VATable income. 

well from what folks have written that have done the tax filling, there is no input for non-assessable income such as dta protected pensions. so guess in any case they might have to re-do the forms and then notify us that they want these new forms too.  I will not get a tax ID number unless the TRD says anyone who remits any funds (even if non-assessable) must file so must get an id number so they would need to change the criteria for that too as it is rule #1 - obtaining a TRD tax nr within 60 days of remitting assessable funds - change to even non-assessable remittances.  We're waiting...probably until 2025 and then the hassles begin as they haven't thought of all the things the expats will come up with.

[Dogmatix]

15 hours ago, Paris333 said:

The article is very clear:

Expatriates with Taxed Income For expatriates receiving income already taxed in another country, such as pensions, these amounts will not be subject to additional Thai taxes. This is particularly relevant for retirees living in Thailand who receive pensions from their home countries.

Source:

https://www.pattayamail.com/latestnews/news/new-tax-rules-for-foreign-sourced-income-464735

So if you have Saving Account in Europe and you are retired in permanent residency in Thailand it doesnt have to do or you are not  obliged to transfer your Savings in Thai Banks to receive almost zero interest rates.

You can tranfer them periodically for your needs with.....low Bank fees with Revolut as I do not only in Thais but also to U.A.E where I bought two small 55 sq/m apartments just for renting €1.500 + €1.500 = €3.000 per month income.

Are you searching for idiots to liquidate my small assets and to tranfer them in Thais receiving almost zero interest rates or to tax "me" in order Seven party Thai Government to give "benefits" to Thais?

You are not serious!!!

Source:

https://www.revolut.com/en-LU/money-transfer/send-money-to-thailand/

There is a general misunderstanding about of those who have been or periodically visit Thailand that they are illegals in something or in worst case they are "seniors" searching for prostitutes or childs dull bubble sh.....ts stories.

Of course its not true at least to the extent mentioned in portals......

We are legal citizens nothing to hide and above of Thais tax law since we are legal foreigners from European or American States.

 

I note that the tax advisor quoted cites no reference for his assertion that overseas pensions will not be taxable in Thailand.  The RD has been silent on the application of the remittance tax but in its interview with the Swiss embassy the RD official made clear that they had every intention of taxing pension income remitted to Thailand.  A DTA may allow you a tax credit but they have said that, if the Thai tax rate is higher they will come after you for the difference.  They have not said what they would accept as evidence of a tax credit which is anyway made extremely difficult by the lack of synchronisation of tax years.  For example, if you are a Brit, when you file your tax return in March 2025, how do you show your UK tax return for the period 6 April to 31 Dec 2024 when the UK tax year only ends on 5 April 2025?  Potentially you will have to pay full Thai tax on pension (and rental) income for that part of the year and try to claim a tax credit from HMRC which will not be forthcoming because HMRC has made very clear that it exercises its "may tax" option on any income arising in the UK - a not unreasonable position.  There the UK expects Thailand to exercise its "may tax" right to collect only the difference, if Thai rates ae higher.  

 

The big problem here is that DTAs are very vague and countries have to come to mutual understandings on how to operate them.  Within EU and including the UK  they have developed these unwritten understandings.  Generally speaking they accept the principle that income is taxed in the European country it arises and the European country where the taxpayer resides will not attempt to collect teh difference on income that has been subject to tax in another European country. 

 

Thailand has no such understanding on how to operate DTAs with any other country and has not produced any domestic regulations on how RD staff should apply DTAs. If you ask them, they will admit they don't have a clue.  But RD officials have indicated that intend to apply the letter of the DTAs in order to collect as much tax as they can. 

 

Hopefully they will one day come up with understandings with the 61 countries with which they have DTAs not to try to collect more tax on income already subjected to tax in another country but it is premature and highly misleading for a tax advisor to claim this has already happened without zero supporting evidence. 

[tomkenet]

On 7/5/2024 at 7:16 AM, motdaeng said:

 

that's new to me. how reliable is this source? 

 

https://www.pattayamail.com/latestnews/news/new-tax-rules-for-foreign-sourced-income-464735

I have asked the author of this article about this and got following answer.

Key takeaway is that there is no time limit as many of us believed.

 

"

 

Thank you for your clarification, and I appreciate your attention to detail in interpreting the regulation.

You are indeed correct regarding the policy outlined in P.O. 162, as it specifies that offshore-sourced income received before January 1, 2024, can be remitted to Thailand on or after this date without being subject to Thai personal income tax, with no specific deadline stated for the end of 2024 for these remittances.

As per the Revenue Department's order P.O. 162/2566, income generated from foreign sources before the year 2567 (2024) is exempt from tax if it is brought into Thailand starting from the year 2567 (2024) onwards, regardless of the year it is brought in. This policy aims to allow income to be realized this year, before January 1, 2567 (2024), ensuring that if you bring this income into Thailand in a different tax year—specifically from 2567 onwards—you will not be subject to personal income tax as per Revenue Department order P.O. 161/2566.

 

The Revenue Department issued Revenue Department Order No. P. 162/2023 to exempt income generated from overseas sources before 2024. It will be exempt from paying taxes if it is brought back into Thailand from 2024 onwards.

As a result of Order P. 162/2023, investors who have transferred money to invest abroad will not be liable for personal income tax in Thailand if assessable income arising from foreign sources that occurred before 2024 is brought back into the country from 2024 onwards, regardless of the year it was brought in.
This is in order for the said income to be realized this year before January 1, 2024. Therefore, if you bring income from sales into Thailand in different tax years, that is, imported into Thailand from 2024 onwards, you will not have to pay personal income tax according to the Revenue Department's order No. P. 161/2566.

To clarify, the policy outlined in Revenue Department Order No. P.O. 162/2566 indeed specifies that offshore-sourced income received before January 1, 2024, can be brought into Thailand on or after January 1, 2024, without being subject to Thai personal income tax. There is no explicit deadline mentioned for when this remittance must occur, meaning that there is no requirement for the income to be transferred to Thailand before the end of 2024. This allows for more flexibility in managing your financial arrangements without immediate tax implications under Thai law.

Further, as outlined in Revenue Department Order No. P. 162/2023, this exemption applies to any assessable income arising from foreign sources before 2024, which is brought back into Thailand from 2024 onwards, regardless of when it is brought in. The intent is to facilitate the realization of income in a way that complies with Thai tax law while recognizing the timelines that may affect international financial planning.

It appears there was a misunderstanding or miscommunication regarding the need to remit income by the end of 2024. I apologize for any confusion this may have caused. The key takeaway is that the income received before 2024 is exempt if brought into Thailand starting from 2024 onwards, without a specified cut-off year for these remittances.

If you have further questions or need more detailed guidance on how this may affect your financial planning, please feel free to reach out.

[bugger bognor]

That may be the case my point is the Thai authorities will have to do a national campaign to inform All expats of the exact legal position! nobody has any idea of what will really come to pass or be enforced. Most likely nothing will be clarified before next year knowing how Thai authorities operate . There would be enormous pressure on immigration and the tax department in January next year if we all had to file and get the necessary paperwork there would need to be thousands of extra staff trained in all languages and international tax treaties and code's, would be very difficult for the Thai revenue department to be upto speed for years 

 

[redwood1]

9 minutes ago, bugger bognor said:

That may be the case my point is the Thai authorities will have to do a national campaign to inform All expats of the exact legal position! nobody has any idea of what will really come to pass or be enforced. Most likely nothing will be clarified before next year knowing how Thai authorities operate . There would be enormous pressure on immigration and the tax department in January next year if we all had to file and get the necessary paperwork there would need to be thousands of extra staff trained in all languages and international tax treaties and code's, would be very difficult for the Thai revenue department to be upto speed for years 

 

 

Hey it took them 6-7 years to get the online 90 day reporting to work more often than not.....And that was just one simple non complex thing... 

 

[bugger bognor]

Agreed 👍 

[Dogmatix]

59 minutes ago, Presnock said:

well from what folks have written that have done the tax filling, there is no input for non-assessable income such as dta protected pensions. so guess in any case they might have to re-do the forms and then notify us that they want these new forms too.  I will not get a tax ID number unless the TRD says anyone who remits any funds (even if non-assessable) must file so must get an id number so they would need to change the criteria for that too as it is rule #1 - obtaining a TRD tax nr within 60 days of remitting assessable funds - change to even non-assessable remittances.  We're waiting...probably until 2025 and then the hassles begin as they haven't thought of all the things the expats will come up with.

 

Bear in mind that the only DTA protected pensions are pensions of former government officers and US social security plus maybe some other countries' state pensions.  These are in the "shall tax" category.  The vast majority of state pensions and all private pensions are in the "may tax" category which means that Thailand can exercise its option to tax them, even though they are already subject to tax.  In these cases the DTAs only protect you from double taxation but not from dual taxation.

 

I don't think they are going to redo the PND 90/91 forms, even to provide a space for claiming of tax credits.  We are half way through the tax year now and nothing has been said. They are very lazy and can easily argue that DTAs have been in place for 50 years and (a very small number of) people have been claiming tax credits without this.

 

Think about it like the requirement for a company to register for VAT in order to apply for a WP.  Companies with revenue under 1.8 million a year or 300k in a single month and companies who have no domestic sales do not have to register for VAT.  My company had no domestic sales but I had to register for VAT and file monthly zero returns which I still have to to today more than 10 years after cancelling my WP with that company. There is no way to get out of the VAT net once you are in it, other than dissolving the company.  If Immigration decides that everyone on a non-tourist visa presumably has some income and must present a certified tax return to renew their visa, they are not going to care about subtleties.  If you have to get a certified tax return and have no assessable income, they will think that is tough luck, as they will probably not believe you anyway.  However, it is not too difficult to file a tax return declaring 120-180k in income and get the piece of paper Immigration is asking for without having to pay any tax and it would only cost 100 or 200 baht.  

 

I think they would have to give plenty of lead time to allow people to get TINs and tax certificates.  For example they could announce around now that anyone on a non-tourist visa from before 1 July  2025 will need to show a certified tax return for renewals after April 2026.  All of them will be tax residents and none would have any excuse not to comply with that.

[Dogmatix]

39 minutes ago, bugger bognor said:

That may be the case my point is the Thai authorities will have to do a national campaign to inform All expats of the exact legal position! nobody has any idea of what will really come to pass or be enforced. Most likely nothing will be clarified before next year knowing how Thai authorities operate . There would be enormous pressure on immigration and the tax department in January next year if we all had to file and get the necessary paperwork there would need to be thousands of extra staff trained in all languages and international tax treaties and code's, would be very difficult for the Thai revenue department to be upto speed for years 

 

 

Come on. You are forgetting where you are and forgetting that Thai bureaucrats are very lazy and want to be noticed by the politicians for coming up with stuff that can be made to sound as if a huge amount of incremental tax will be collected with no backlash from Thai voters.  They don't think through the ramifications and don't care if a chaotic situation is created for others to clean up, as long as it is not going to get Thai protestors out on the streets to make them look bad.  The guy who signed the order had already been promoted from the RD to be finance permanent secretary and left the RD 10 days later with his quick win on his record and he might be in the running for a juicy post-retirement job, even finance minister, if noticed by politicians.  If the implementation is messy, he can blame it on his successor.  He is also the guy behind the abolition of the waiver on tax on small imported packages below 1,500 baht declared value, claiming fancifully that will raise 700 million in incremental tax before the end of this year.  No mention of the cost of collecting tiny amounts of VAT, potential chaos in post offices or the likelihood that Thais will avoid buying many of these imported products that are not available in Thailand at all to avoid huge queues in post offices.  They simply don't care. 

[Danderman123]

As time goes by, and the Revenue Department does little or nothing to prepare for the mass numbers of Farang tax returns supposedly required in 2025, I am beginning to think this is a nothingburger.

[Porthos]

2 hours ago, Dogmatix said:

They have not said what they would accept as evidence of a tax credit

For the evidence to claim foreign tax credit, Tax Payment Certificate issued by foreign tax authority is recommended.

 

https://www.rd.go.th/fileadmin/user_upload/lorkhor/newspr/2024/FOREIGNERS_PAY_TAX2024.pdf (24 April 2024)

[Mike Lister]

1 hour ago, Dogmatix said:

 

Come on. You are forgetting where you are and forgetting that Thai bureaucrats are very lazy and want to be noticed by the politicians for coming up with stuff that can be made to sound as if a huge amount of incremental tax will be collected with no backlash from Thai voters.  They don't think through the ramifications and don't care if a chaotic situation is created for others to clean up, as long as it is not going to get Thai protestors out on the streets to make them look bad.  The guy who signed the order had already been promoted from the RD to be finance permanent secretary and left the RD 10 days later with his quick win on his record and he might be in the running for a juicy post-retirement job, even finance minister, if noticed by politicians.  If the implementation is messy, he can blame it on his successor.  He is also the guy behind the abolition of the waiver on tax on small imported packages below 1,500 baht declared value, claiming fancifully that will raise 700 million in incremental tax before the end of this year.  No mention of the cost of collecting tiny amounts of VAT, potential chaos in post offices or the likelihood that Thais will avoid buying many of these imported products that are not available in Thailand at all to avoid huge queues in post offices.  They simply don't care. 

Exactly, that's the entire issue.

[Celsius]

19 minutes ago, Danderman123 said:

As time goes by, and the Revenue Department does little or nothing to prepare for the mass numbers of Farang tax returns supposedly required in 2025, I am beginning to think this is a nothingburger.

 

While others will try to convince you otherwise. Gotta wonder why.

[Mike Lister]

38 minutes ago, Celsius said:

 

While others will try to convince you otherwise. Gotta wonder why.

Gee, that's a tough one, let me think for a mo. Hmm, try to explain to others that the tax laws have changed and there's a new emphasis on foreigners filing returns and declaring income. Why ever would anyone want to do that, in a country where official communications are often poor and visa surprises are often announced at short notice ......I give up, it's got me stumped. What's the answer? Will there be a big reveal?

[yozah]

You are not helping anyone. You are just normalizing the situation aka working for the tax department.

[Mike Lister]

Just now, yozah said:

You are not helping anyone. You are just normalizing the situation aka working for the tax department.

Damn, my disguise has been rumbled. 

[Celsius]

2 minutes ago, Mike Lister said:

Gee, that's a tough one, let me think for a mo. Hmm, try to explain to others that the tax laws have changed and there's a new emphasis on foreigners filing returns and declaring income. Why ever would anyone want to do that, in a country where official communications are often poor and visa surprises are often announced at short notice ......I give up, it's got me stumped. What's the answer? Will there be a big reveal?

 

I will stick with poor communication instead of filing a tax return like an idiot.

[Mike Lister]

19 minutes ago, yozah said:

You are not helping anyone. You are just normalizing the situation aka working for the tax department.

Here ya go, some light reading, come back to us with any questions:

 

 

[yozah]

3 minutes ago, Mike Lister said:

Here ya go, some light reading, come back to us with any questions:

 

 

Your point? Confession?

[Mike Lister]

1 minute ago, yozah said:

Your point? Confession?

TRD employee number 2546A, guilty as charged me lud.

[In the jungle]

25 minutes ago, yozah said:

You are not helping anyone. You are just normalizing the situation aka working for the tax department.

 

Normally you would pay good money for the quality of advice we have received from Mike Lister.  He has helped me understand these tax issues considerably.

[yozah]

Way to miss the point

[Mike Lister]

3 minutes ago, yozah said:

Way to miss the point

Some people, the vast majority I guess, want to live their lives according to the rules, that's especially true of retirees living in a foreign country where they are dependent on a visa to spend their remaining years. That's especially true when it comes to income tax, because most mature reasoned people understand the power pf the Revenue departments. In order to do that, they need to be informed, so they can make reasoned decisions. That others don't like the laws of the land is a different issue, that's their prerogative of course but shouldn't interfere with those who are happy to play by the rules as they understand them. 

 

Now, you can troll me if you wish, I really don't mind but I do think you're going to find yourself in a minority on this point so I'll check back in a few hours and see how it all worked out for you..

[redwood1]

33 minutes ago, yozah said:

You are not helping anyone. You are just normalizing the situation aka working for the tax department.

 

Exactly......The word "Normalizing" Is what a few posters here repeatedly try and encourage endlessly here regarding taxes....

 

Folks there is nothing to "Normalize"

 

All this tax nonsense is rotten to the core...The only place for it is in the trash can....

 

If they cant get it together to get Thais to pay taxes dont bloody ask anyone else to pay, especially when you offer zero in return..

 

And no way in a million years does Thailand have the organizational level to deal with expats taxes from every country on earth anyways.........Anyone that supports this madness is part of the problem.....

[Ben Zioner]

22 hours ago, Mike Lister said:

Ignorance of the law is not usually a good defense in any country, least of all here, I imagine. The average person may not be a member of AN but they might be expected to read newspapers, read online forums/periodicals, have a visa agent and/or they might be expected to have a bank account, all of which would inform them of what changes have been implemented. Waiting for an official notice to appear in the mail box, seems to me to be bloody minded rather than practical or sensible but each to their own.

I have an LTR visa, as long as I am not instructed by BOI to file a tax return I will nor do so. I believe that those waiting instructions from TI would have a point.

[tomacht8]

47 minutes ago, Ben Zioner said:

I have an LTR visa, as long as I am not instructed by BOI to file a tax return I will nor do so. I believe that those waiting instructions from TI would have a point.

No reason to panic or even be afraid, even if some people here are painting the devil on the wall. What big thing is supposed to happen? I'm also waiting for an official invitation. Be it a letter from the tax office or maybe at some point in the future that immigration tells me they still need a tax document. Then you have to take action and perhaps pay a late fee, just as it has developed over many years with the TM30.

In my case, my Thai tax advisor advises me to wait.

 

On the other hand, anyone who has trouble sleeping because of this new, internal tax instruction (e.g. this is not a new tax law, but just an internal procedural instruction that reinterprets current law; and the whole thing is currently very controversial) thinks that they should get a tax number in advance to have to, should do it.

Ultimately, everyone has to decide for themselves and their specific situation.

[tomacht8]

3 hours ago, Porthos said:

For the evidence to claim foreign tax credit, Tax Payment Certificate issued by foreign tax authority is recommended.

 

https://www.rd.go.th/fileadmin/user_upload/lorkhor/newspr/2024/FOREIGNERS_PAY_TAX2024.pdf (24 April 2024)

Thanks. This is helpfull. In my country you no get such a Certificate. The tax authority give your the yearly taxreport (around 10 Pages) with the amount you must pay. After you pay with banktransfer your tax bill. That's it.

If a Thai tax officer will accept this two papers (Report + Bankslip), who knows?

I will ask my european tax advisor if there is a possibility to get such a "Certificate".

 

Even if it's just a precautionary preparation, the f@&"&ing bureaucracy and paperwork starts now. Running costs, translator costs, certification fees, loss of time. 

[JimGant]

1 hour ago, Mike Lister said:

there's a new emphasis on foreigners filing returns and declaring income.

Says who? There's probably a new desire for foreigners -- with TAXABLE income -- to file a tax return, and pay the appropriate taxes. But a desire to have someone with 120k in assessable income -- but who is 380k short of taxable income (after deductions/allowances/150k freebie) -- to have to file a nil tax return -- is NUTS! Why would TRD want to deal with all that worthless paper, and the cost of processing it....?

 

But, yes, if now you realize that the new remittance rules mean you owe taxes -- by golly, go get a TIN, and then file a tax return, and pay the taxes owed (and then, per DTA, deduct those taxes from your home country tax return).

 

But if you don't owe Thai taxes -- then don't get a TIN, don't file a nil tax return, and then relax. The worst that can happen is -- in the miniscule chance they'll call you in -- and you did, indeed, have assessable income exceeding 120k -- you'll owe a 2000 baht fine -- which is cheaper than all that effort to get a TIN and to file a tax return -- assuming your time is worth something.

 

So, use your common sense with this. Yes, if you owe taxes, file and pay. But if you don't -- not to worry about certain suggestions, including the big house, without vaseline.

 

 

[Mike Lister]

21 minutes ago, JimGant said:

Says who? There's probably a new desire for foreigners -- with TAXABLE income -- to file a tax return, and pay the appropriate taxes. But a desire to have someone with 120k in assessable income -- but who is 380k short of taxable income (after deductions/allowances/150k freebie) -- to have to file a nil tax return -- is NUTS! Why would TRD want to deal with all that worthless paper, and the cost of processing it....?

 

But, yes, if now you realize that the new remittance rules mean you owe taxes -- by golly, go get a TIN, and then file a tax return, and pay the taxes owed (and then, per DTA, deduct those taxes from your home country tax return).

 

But if you don't owe Thai taxes -- then don't get a TIN, don't file a nil tax return, and then relax. The worst that can happen is -- in the miniscule chance they'll call you in -- and you did, indeed, have assessable income exceeding 120k -- you'll owe a 2000 baht fine -- which is cheaper than all that effort to get a TIN and to file a tax return -- assuming your time is worth something.

 

So, use your common sense with this. Yes, if you owe taxes, file and pay. But if you don't -- not to worry about certain suggestions, including the big house, without vaseline.

 

 

With your selective recall, you like to forget, conveniently, that not filing when supposed to, also exposes you to 10 years worth of back audits, rather than the statutory 3......a minor point of course, probably not worth mentioning, eh!

[Yumthai]

1 hour ago, Mike Lister said:

Some people, the vast majority I guess, want to live their lives according to the rules, that's especially true of retirees living in a foreign country where they are dependent on a visa to spend their remaining years.

 

This is certainly the right approach while living in countries where rules are strictly enforced and corruption contained.

 

Adopting the same "law abiding citizen" approach while living in countries similar to Thailand with inconsistent legislation and rules being bypassed daily at all population levels is in my opinion a big mistake. In such environment the "Do as the Romans do" approach is much more productive.