Thailand to tax residents’ foreign income irrespective of remittance

[Mike Lister]

1 minute ago, Yumthai said:

 

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.

Inconsistent enforcement is, in my world, one of the very best reasons for wanting to follow the rules, as they are laid out in law.....but each to their own.

[Jingthing]

The acid test of enforcement on this is going to be whether immigration gets involved during extensions or not.

IF all expats not earning money in the Thailand economy just totally ignores this and waits to see what happens, then what? Maybe nothing.

Do they have the bandwidth or motivation to 10 year audit, kick us all out, etc.?

For a group that for most part will owe absolutely nothing?

 

[Mike Lister]

1 minute ago, Jingthing said:

The acid test of enforcement on this is going to be whether immigration gets involved during extensions of not.

Personally I hope that all expats not earning money in the Thailand economy totally ignores this and just wait and see what happens.

Do they have the bandwidth to 10 year audit, kick us all out, etc.?

For a group that for most part will owe absolutely nothing?

The threat of back audits is a power tool, something to wield if anyone gets too stroppy or uncooperative, I don't see it being used widely. But you have to ask yourself, would you want to be in that situation where, just because you didn't file a simple return, you opened yourself up to that much scrutiny. Personally, I think it's a serious deterrent.

[Yumthai]

5 minutes ago, Mike Lister said:

would you want to be in that situation where, just because you didn't file a simple return, you opened yourself up to that much scrutiny

I think quite the opposite. In Thailand you open yourself to much more scrutiny by voluntary filing in their tax database.

[Jingthing]

4 minutes ago, Yumthai said:

I think quite the opposite. In Thailand you open yourself to much more scrutiny by voluntary filing in their tax database.

Well I would assume once you file they will be expecting you to file for life as long as you're here.

[Fat Bob]

This potential taxation change may not be as bad as we think it is, for those who are residents in both Thailand and another country and have most assets in the other country in which that country has a DTA with Thailand. It is bad for those who are only a resident in Thailand or whose other residency doesn’t have a DTA with Thailand. Or the DTA specifies that the income can be taxed by Thailand.

 

I’ve given a brief read on the Canada-Thailand DTA, and my gosh it is hard to read, I’ll have to read it a few more times or hopefully someone here has also taken a read and understand this DTA. It sounds like for a Canadian resident (as determined by the DTA, and you can only be resident of one contracting state in the DTA, which as long as you have a permanent home available, such as a family home not even owned by you and where the majority of your assets are, so doesn’t matter if you stay in Thailand 365 days a year and haven’t been in Canada for even years), interests and capitals gains from Canadian sources are only taxable in Canada, not in Thailand. Assuming your main source of income is from the stock market or savings accounts, Thailand will not be taxing any of those. Now, for actual income, which I guess is what taking money out of a registered retirement savings account is, this I don’t know yet.

 

This seems to be not too big of a change for those who intend to be paying taxes where they’re from. For those who rely on being solely a Thai resident and store their monies in perhaps Singapore and remit their estimated yearly expenses into Thailand first day of year, to not pay any taxes anywhere, then this tax change may have a large impact.

[Mike Lister]

4 minutes ago, Yumthai said:

I think quite the opposite. In Thailand you open yourself to much more scrutiny by voluntary filing in their tax database.

Perhaps. The problem with that logic is it assumes they don't know who you are or where you live, until you tell them. I don't know about anyone else but both my banks and the Immi Dept know very well where I live because they write to me at my home address plus I give them copies of loads of documents each year that confirm that. And since my banks send electronic details of tax with held on my savings interest, I'm pretty sure they already have records on most people.

[Mike Lister]

4 minutes ago, Jingthing said:

Well I would assume once you file they will be expecting you to file for life as long as you're here.

I don't think so. They used to send me blank paper copies which I would often ignore. Some years I file, some years I don't, nobody says anything when I don't.

[Yumthai]

2 minutes ago, Jingthing said:

Well I would assume once you file they will be expecting you to file for life as long as you're here.

I used to file when I was working here then stopped once my contract was over. Never heard from TRD since then. But it was 20 years ago. 

[Jingthing]

1 minute ago, Yumthai said:

I used to file when I was working here then stopped once my contract was over. Never heard from TRD since then. But it was 20 years ago. 

Thanks.

Sounds like I was wrong about that.

[Felton Jarvis]

On 6/5/2024 at 7:33 PM, Dmaxdan said:

It might also "clear out" a lot of good people. Spouses, fathers and mothers etc. Real people (not sexpats) who are prepared to make sacrifices and devot their lives for the greater good of their families. And because of this many may no longer be able to do so, not at the same level anyway.

 

The riff raff you speak of are, in real terms a very small minority.

 

And let's not forget that Thailand is almost completely incapable of taxing it's own citizens.

The usual definition of "farang riff-raff" on this forum is anyone with a retirement income of less than 500 thousand USD.

[topt]

1 minute ago, Felton Jarvis said:

The usual definition of "farang riff-raff" on this forum is anyone with a retirement income of less than 500 thousand USD.

Who's "usual definition" is that - or just a nice round number you came up with.........?

[topt]

38 minutes ago, Fat Bob said:

This potential taxation change may not be as bad as we think it is

Are you talking the potential change to ww taxation as per the thread title or the change which has happened - because that is what everybody else seems to be now discussing for the last knows how many pages......

If you are referring to the suggested change to ww taxation then give the man a cigar for being the only poster to stay on song.........

 

64 pages of mainly recycled verbiage from the other tax threads for a thread that's supposed to be about a potential change which has only been "suggested" and on which no-one has any new information because there isn't any..........

[Fat Bob]

The thread title.

 

For the change that’s already happened … I actually don’t know what to think of that, or how to prove the money I’m bringing in has been taxed. There’s no trace to guarantee those exact funds have been taxed. All I can say if they come to audit is hey, I’m taxed every single year in Canada for all my income and as you can see in my chequing / savings account there are way more monies than those i brought in.

 

 

[tomacht8]

1 hour ago, Yumthai said:

I think quite the opposite. In Thailand you open yourself to much more scrutiny by voluntary filing in their tax database.

Fully agree. I bet that the tax office currently, as of today, does not know which foreigner has been in Thailand for more than 180 days or not. Both retroactively and for this year. And whether and when the tax office will be able to determine this fact (more than 180 days) for all foreigners nationwide for the calendar year 2024? Since 15 years I have a thai tax ID, received automatically via the Pink ID. I have never received any mail from the tax office and I want it to stay that way for as long as possible.

[Lorry]

6 minutes ago, tomacht8 said:

 I bet that the tax office currently, as of today, does not know which foreigner has been in Thailand for more than 180 days or not. Both retroactively and for this year. And whether and when the tax office will be able to determine this fact (more than 180 days) for all foreigners nationwide for the calendar year 2024?

They don't know this. 

Even in far more digitalized countries.

But they have other ways to get you. 

Auditing 10 years back is one of them. 

Requiring a tax certificate to leave the country or to extend a visa would be another one. 

 

 

[Enzian]

I also have a tax ID or TIN or whatever because I have a pink card and I remember the day I got it, I was inadvertently wearing a pink dress shirt. This gave a big chuckle to all the office people about when my picture was taken and printed on my new card; a pink card with a pink shirt! That's about the level all this is happening on.

[lordgrinz]

6 minutes ago, Enzian said:

I also have a tax ID or TIN or whatever because I have a pink card and I remember the day I got it, I was inadvertently wearing a pink dress shirt. This gave a big chuckle to all the office people about when my picture was taken and printed on my new card; a pink card with a pink shirt! That's about the level all this is happening on.

 

I had to go look at old tax filings of my wife, she has been using me on her taxes since 2021, so my TIN (Pink ID#) is there, just no foreign income or remittance of mine declared. We are half way through this year, so I'm pretty sure I will make it through this year without any remittances, not sure about all of 2025, but I will try.

[tomacht8]

34 minutes ago, Lorry said:

They don't know this. 

Even in far more digitalized countries.

But they have other ways to get you. 

Auditing 10 years back is one of them. 

Requiring a tax certificate to leave the country or to extend a visa would be another one. 

 

 

This 10 year audit is pure fear mongering. In order to deploy such a heavy artillery, there must be serious reasons and suspicions that are at least in the 2-digit million range. And not for foreigners who didn't know that they had to submit a tax return for their breadcrumb transfers. In addition, as a private individual you are not obliged to keep your receipts for decades.

 

As far as I know, the law has been in place for a very long time that requires a tax clearing paper to be presented when leaving the country for stays longer than 180 days. But it has never been done. The effects would be fatal in the large number of cases to be expected and in the world press.

 

The third possibility is the most likely. that you could be forced to join the club of Thai tax returners by extending your visa.

[Lorry]

1 hour ago, tomacht8 said:

there must be serious reasons and suspicions that are at least in the 2-digit million range.

Is that just what youth think or is their a rule somewhere?

[Mike Lister]

1 hour ago, tomacht8 said:

This 10 year audit is pure fear mongering. In order to deploy such a heavy artillery, there must be serious reasons and suspicions that are at least in the 2-digit million range. And not for foreigners who didn't know that they had to submit a tax return for their breadcrumb transfers. In addition, as a private individual you are not obliged to keep your receipts for decades.

 

As far as I know, the law has been in place for a very long time that requires a tax clearing paper to be presented when leaving the country for stays longer than 180 days. But it has never been done. The effects would be fatal in the large number of cases to be expected and in the world press.

 

The third possibility is the most likely. that you could be forced to join the club of Thai tax returners by extending your visa.

Tax clearance certificates have been in active use for several categories of visa, including work permits and temporary stay workers.

[Mike Lister]

5 hours 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....?

 

 

The issue you constantly seem to get hung up on is, the difference between what is required in law and whether what is actually required is sensible, in your opinion. I don't think you can make these subjective assessments of what is sensible, on behalf of others. All you can do is to set out the facts and let them make their own decision how to proceed.

[Klonko]

2 hours ago, tomacht8 said:

This 10 year audit is pure fear mongering. In order to deploy such a heavy artillery, there must be serious reasons and suspicions that are at least in the 2-digit million range. And not for foreigners who didn't know that they had to submit a tax return for their breadcrumb transfers. In addition, as a private individual you are not obliged to keep your receipts for decades. ...

Nobody knows what the threshold for tax audits will be in five years time. You will have to prove that remittances were not tax assessable income. If you do not have the documents ready, it is your problem. Following a risk based approach, I would file taxes if non tax assessable remittances exceed THB 2m and generate tax assessable income resulting in a 4-5 digit tax. TRD can tick a box, may - looking at my CRS data - realise that I can reduce my tax payable to zero, and may leave me in peace. Main advantage is to limit possible tax audits to 3 years.

[tomacht8]

53 minutes ago, Mike Lister said:

Tax clearance certificates have been in active use for several categories of visa, including work permits and temporary stay workers.

But now it's completely messed up. Those who have business, time-work permits, or special visas (for example well-known musicians) know about their tax case from an official body. These are very few cases compared to the masses who stay in Thailand for more than 180 days.

 

I mean full-scale enforcement. Foreigners who have been in Thailand for more than 180 days in 2024 want to leave in 2025. In terms of time, they cannot be prevented from leaving the country until March 2025. After March 2025, immigration can only ask: Did you submit your tax return on time? How long it takes to get from the tax office rje tax clearing paper varies between the declaration and the tax assessment issued. What would happen if, for example, you want to leave the country in May 2025 and you have not submitted a tax return for 2024? Will you then be barred from leaving the country? How the immigration will get this info? And this perhaps in thousands or tens of thousands of cases? And what about those who didn't transfer any money to Thailand in 2024, didn't work and lived only on the savings from their Thai savings account? That would be pure chaos. And something like that would definitely get in the international press. This is an interesting example from an existing law and how it is enforced in practice.

[tomacht8]

2 hours ago, Lorry said:

Is that just what youth think or is their a rule somewhere?

This is what my Thai tax expert explained to me. The Thai tax office is more behind the big fish. The problem is that all the small fish swim in the pond too. There have to be clear signs in advance to see, for example, from a simple inquiry to a commercial bank, that there is much more to be gained. At the moment, for example, a lot of Russians are buying villas on the islands and many Chinese are buying condos in Bangkok that are in the 20-50 million THB range. Apparently no one asks where the money comes from.

 

And as a little cherry on the cake. My Thai wife runs two businesses. She must report her income every 6 months. She then goes out for chicken lunch with her regional tax officer. They then roll the dice somehow, to determine the tax burden.

[Mike Lister]

1 hour ago, tomacht8 said:

But now it's completely messed up. Those who have business, time-work permits, or special visas (for example well-known musicians) know about their tax case from an official body. These are very few cases compared to the masses who stay in Thailand for more than 180 days.

 

I mean full-scale enforcement. Foreigners who have been in Thailand for more than 180 days in 2024 want to leave in 2025. In terms of time, they cannot be prevented from leaving the country until March 2025. After March 2025, immigration can only ask: Did you submit your tax return on time? How long it takes to get from the tax office rje tax clearing paper varies between the declaration and the tax assessment issued. What would happen if, for example, you want to leave the country in May 2025 and you have not submitted a tax return for 2024? Will you then be barred from leaving the country? How the immigration will get this info? And this perhaps in thousands or tens of thousands of cases? And what about those who didn't transfer any money to Thailand in 2024, didn't work and lived only on the savings from their Thai savings account? That would be pure chaos. And something like that would definitely get in the international press. This is an interesting example from an existing law and how it is enforced in practice.

I think you're being concerned about this aspect, unnecessarily. It used to be that, as a Green Card holder in the US, I had to apply in advance for a tax clearance certificate, every time I wanted to travel outside the country, it was a pain in the rear at times. The odd part was that, living on the border with Canada, no such certificate was required if I wanted to go to Toronto (or similar) for a holiday, from there I could have flown overseas unrestricted. In the US case, showing that I had an employer and a bank account, was enough to obtain the certificate,regardless of whether taxes had been filed that year or not. Typically, a tax clearance cert would only be with held, if something was amiss, rather than having not yet filed..

[Presnock]

10 hours 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. 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..

Obviously, see CRS, FACTA, FBAR, OECD - the last being the latest in July 2023 with 138 different countries signing on to this agreement.  All  of these are designed for several reasons, the first being that countries want to get what they consider their fair share of taxes on income.  Yeah organized criminal activity will also suffer some from these agreements too.  But the bottom line is that countries can respond to these agreements through manipulating taxes not only of their own people but foreigners that have decided to work maybe and live in foreign countries.  Yesterdays news had article about Portugal resciinding some of these taxes on expats as they probably lost some folks too who moved to "greener"  pastures.  Thailand's kneejerk reactions to the OECD agreement came about because the new government moved into empty coffers with promises to give their supporters freebies which cost big bucks.  Expats are an easy target here so we can either follow the new rules or leave.  Several of the followers on this forum not only understand the new rules, know where others can find them or they have graciously wrote the basics - each expat of course depending on where they are from could have a wide variety of financial situations that will be affected (maybe) by some of the Thai Revenue  Department change in their regulations.  I for one had no idea about this program in relations to my finances but through the diligent and accurate information provided by a few folks on this forum, I now understand about my situation totally.  Any changes or adjustments by the TRD, I think I can adjust my thoughts too or I can go to sources these forum members have provided for all and check to see if I am affected or not to any changes.  I thank Mike and those others who have borned a lot of nasty thoughts and comments from some of the forum members but I just fail to understand these people.   Many folks probably have a UNIQUE financial situation and to expect anyone on the forum to be a total expert in everything is just unfair to begin with and these forum members that have taken their time to educate people somewhat in general terms with FACTS and so generous in their own time to publish all that they can find on this subject is to me very commendable.  I hope everyone can appreciate just how much time it cost these people to let us know how to approach this new tax plan.  Again I thank everyone providing any actual information on this plan and possible plans but caution all that agents aren't always correct nor should anyone on the forum believe everything they read on the forum.  I do wish everyone a happy day and that we all come through this better educated on this subject.  Relax and enjoy the great things available in Thailand.

[TigerCat]

6 hours ago, Mike Lister said:

Tax clearance certificates have been in active use for several categories of visa, including work permits and temporary stay workers.

How many tax years back did / does a person have to go to get a Tax clearance certificate?

 

[jayboy]

9 hours ago, Enzian said:

I also have a tax ID or TIN or whatever because I have a pink card and I remember the day I got it, I was inadvertently wearing a pink dress shirt. This gave a big chuckle to all the office people about when my picture was taken and printed on my new card; a pink card with a pink shirt! That's about the level all this is happening on.

 

At the risk of stating the obvious, knowing your tax ID/TIN number is not the same thing as having that number registered with the RD.

 

Whether non registration would represent more than a minor administrative blip when filing a return, I have no idea.

[Mike Lister]

38 minutes ago, TigerCat said:

How many tax years back did / does a person have to go to get a Tax clearance certificate?

 

Current year only