What will you do if global taxes would be approved?

[NoDisplayName]

35 minutes ago, Gottfrid said:

All to their own. I have no problem with it, and I actually will be pissing away around 2 million baht every year. But, that is if you want to live in Thailand? Complaining doesn´t work.

 

You could buy an elite visa for 100-150K baht per year and not pay income tax. 
 

Quote

 

Do I have to pay income taxes in Thailand as a Thai Elite visa holder?

The Thai Elite Visa is a privilege visa which falls under the special tourist visa or privilege entry category. The Thai Elite Visa holder does not need to pay income taxes especially when the income was derived abroad. There are instances where a Thai Elite Visa holder may voluntarily pay income tax in Thailand to obtain a tax ID.

 

 

 

[NoDisplayName]

2 hours ago, Felton Jarvis said:

Cambodia is the obvious choice. It gets better every year. Easy visa terms, no 90-day reports and just a good retirement experience.

 

I believe Cambodia is also moving this year to tax global income for tax residents.  So far, all I've found is pending legislation to tax global salary.  Nothing about passive income.

 

I could see having "retirement" visas in both countries.  Spend five months each in Thailand and Cambodia.  A month each in China and Vietnam as tourist.

 

I'm already taxed by the US on interstellar, and probably multidimensional income, and don't consent to paying an extra $10,000+ per year to pay for luxury watches and aircraft carriers.  I've already got ten supercarrier fleets (and more under construction!) to support!

[BE88]

12 minutes ago, NoDisplayName said:

 

You could buy an elite visa for 100-150K baht per year and not pay income tax. 
 

 

 

Elite visas are just scams and are not exempt from paying taxes

[Mike Teavee]

22 minutes ago, NoDisplayName said:

 

You could buy an elite visa for 100-150K baht per year and not pay income tax. 
 

 

 

 

I honestly don't believe they're giving you the full story here & a quick search will show reputable companies like Siam Legal saying that TE holders are subject to the same 180 day Tax Residency rules as everybody else (Except LTR holders)... 

Visa Status as a Special Tourist

Although the Thailand Elite visa is a privileged tourist visa, you are subject to pay income tax if you have a foreign-source income at the amount required for taxation. For example, a deposit of 1,000,000 THB into a bank account in Thailand may be considered as a foreign-source income required for taxation. The bank will submit a report to the Revenue Department at its request in monitoring any unusual financial activity.

 

https://www.siam-legal.com/thai-elite-visa/legal-applications-on-the-new-thai-tax-law-and-thailand-elite-visa-holders/

 

 

I would want it in writing from Elite themselves that I'm exempt from tax on all remittances before I forked out 900K+ to buy one. 

 

[Gottfrid]

16 minutes ago, NoDisplayName said:

 

You could buy an elite visa for 100-150K baht per year and not pay income tax. 
 

 

 

That will not work anymore. It´s old information, from the time the law was not enforced.

[Mike Teavee]

2 minutes ago, Gottfrid said:

That will not work anymore. It´s old information, from the time the law was not enforced.

 

I agree, the one site that I found with that information on was an agent (not the official Elite) site https://www.elitevisa.com/thailand-elite-visa-overview & a quick check of the source for that page shows a Published Date of 20/06/2023 which is before the recent change was announced. 

 

[worgeordie]

When I came to live here ,at the time you had to have a tax check

before they would give you the OK to depart ,it was nonsense really ,

the lady checking what tax you had to pay was more into what things

you could bring back for her from say Singapore ..

 

Bras,knickers & perfume were what she wanted ,I never bought any

for her ,but I expect many did , then she would tell what tax you needed

to pay, it was 200 Baht to 500 Baht , never did find out what kind of tax

it was , just an inconvenience really , then a new Government came in

and abolished it , 

 

regards worgeordie

 

[NoDisplayName]

16 minutes ago, BE88 said:

Elite visas are just scams and are not exempt from paying taxes

 

A googles got me to the www.thaiembassy.com with

 

Quote

 

Do I have to pay income tax in Thailand if I earn income from overseas?

If you earn income from overseas you are not required to pay income tax in Thailand. However, members of Thai Elite can voluntarily pay for income tax in Thailand and obtain a TIN.

 

 

OOPS!  NOT a Thai embassy FAQ page. 

Disregard!

 

This website is managed by Siam Legal
International - a law firm in Thailand

 

[JimGant]

18 hours ago, TallGuyJohninBKK said:

That said, if they really go thru with the current plan, it might well hasten us to both relocate back to my home country.  Too many unknowns right now, as usual....

John, what's the worst that could happen? You already pay taxes on your worldwide income. If Thailand will now exercise their right under the DTA to collect their share -- with a subsequent tax credit to be absorbed by the US -- your overall tax bill will be the same.

[JimGant]

18 hours ago, Mike Teavee said:

IIRC (It's been a few months since I looked at this), Thailand has primary taxing rights on UK Rental Income

Negative:

Quote

 Income from immovable property may be taxed in the Contracting State in which
such property is situated. [from uk thai treaty]

This language is similar to other DTAs -- the situs country has primary taxation rights, but the resident country has secondary taxation rights. ['may be taxed' is treaty language for there being a primary taxation authority, but also a secondary one. If it said 'may only be taxed, ' then there's only an exclusionary taxation authority, no secondary.]

 

So, submit tax returns to both countries -- with UK collecting all the taxes, and issuing a credit toward Thai taxes. If Thai taxes, after absorbing the UK tax credit, are positive -- well, you'll owe this delta, plus full fare to the UK.

[biervoormij]

1 hour ago, JimGant said:

John, what's the worst that could happen? You already pay taxes on your worldwide income. If Thailand will now exercise their right under the DTA to collect their share -- with a subsequent tax credit to be absorbed by the US -- your overall tax bill will be the same.

Jim this would not be true in my case. The US and Thailand have very different tax rates and exemption. I get about $14,000 standard deduction in the US.  It is my understanding I would only get 150K at a 0 rate in Thailand and 90K standard deduction or about $7,000.

 

I also can earn $40,000 in capital gains in the US with a tax rate of 0%.  That would put me in the 25% tax bracket in Thailand.

 

I don't have the US taxes to absorb the credit from Thai taxes.  I think this change would cost me close to $7,000 a year. 

 

Unless I missed something or misunderstood something, I think If this happens I will leave Thailand. 

[Hummin]

1 hour ago, BE88 said:

Elite visas are just scams and are not exempt from paying taxes

what did you think elite visa was? 

 

 

[Mike Teavee]

1 hour ago, JimGant said:

Negative:

This language is similar to other DTAs -- the situs country has primary taxation rights, but the resident country has secondary taxation rights. ['may be taxed' is treaty language for there being a primary taxation authority, but also a secondary one. If it said 'may only be taxed, ' then there's only an exclusionary taxation authority, no secondary.]

 

So, submit tax returns to both countries -- with UK collecting all the taxes, and issuing a credit toward Thai taxes. If Thai taxes, after absorbing the UK tax credit, are positive -- well, you'll owe this delta, plus full fare to the UK.

Agreed, "Primary" was a bad choice of word when what I meant to say was that Thailand may have a right to tax it.

 

Interestingly in another thread @alphasonshared his findings from Sherrings who clarify the use of the word "May" as to mean they would be the only ones who would apply Tax...

 

The wording around Rental Income is the same as around Property Capital Gains so looking hopeful that only the UK would tax Rental Income, but there's still the question about whether you need to report the income as assessable income even if Thailand doesn't tax it as Section 40, Paragraph 5, Point 2 lists Rental Income as assessable income but is it if it's covered by a DTA & if so, how do you show that it's already been taxed (especially if like me any income from it falls within my Personal Taxation Allowance so I've paid tax on it at nil rate)... 

 

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

(5) Money or any other gain derived from:

(a) rent of property,

 

https://www.rd.go.th/english/37749.html

 

 

[TallGuyJohninBKK]

2 hours ago, JimGant said:

John, what's the worst that could happen? You already pay taxes on your worldwide income. If Thailand will now exercise their right under the DTA to collect their share -- with a subsequent tax credit to be absorbed by the US -- your overall tax bill will be the same.

 

I'm looking at issues pertaining to existing U.S. IRAs and Roth IRAs....  In the U.S., earnings and distributions from Roth IRAs are not taxable in perpetuity, period. Earnings from regular IRAs can grow tax deferred in perpetuity at present, but a person once they're in their early 70s would have to start taking modest annual taxable distributions.

 

So when Thailand says they want to tax all income worldwide for Thailand residents, do they mean all undistributed earnings or only distributions from IRA accounts?

 

And if they want to start Thailand taxing earnings and/or distributions from my various IRA accounts, it's not clear to me whether those would be protected by the U.S.-Thai tax treaty and-or whether I'd be entitled to a dollar for dollar offset on my U.S. taxes for Thai taxes imposed on my IRAs, considering there are differing tax rates involved.

 

 

 

[Mike Teavee]

1 hour ago, JimGant said:

John, what's the worst that could happen? You already pay taxes on your worldwide income. If Thailand will now exercise their right under the DTA to collect their share -- with a subsequent tax credit to be absorbed by the US -- your overall tax bill will be the same.

I don't know how it is in the US, but in the UK I could be liable for extra taxes on:-

1. Capital Gains from Share Sales (As an Expat, not taxed in the UK)
2. Higher Rate Tax on Dividends (As an Expat can use the disregarded Income Rules)
3. Tax on Interest, Dividends, Capital Gains in my ISA (ISAs are Tax Free Savings accounts so no Tax on anything you have in there). 

Then there's the question of Personal Allowances, in the UK it's currently £12,570 (Approx. 585,000 THB), in Thailand it could be as low as 60K, the tax on the difference of 525,000 THB would be 30,750

• First 150K at 0% = 0
• Next 150K at 5% = 7,500
• Next 200K at 10% = 20,000
• Remaining 5K at 15% = 750

 

[NoDisplayName]

1 hour ago, biervoormij said:

Jim this would not be true in my case. The US and Thailand have very different tax rates and exemption. I get about $14,000 standard deduction in the US.  It is my understanding I would only get 150K at a 0 rate in Thailand and 90K standard deduction or about $7,000.

 

I also can earn $40,000 in capital gains in the US with a tax rate of 0%.  That would put me in the 25% tax bracket in Thailand.

 

I don't have the US taxes to absorb the credit from Thai taxes.  I think this change would cost me close to $7,000 a year. 

 

Unless I missed something or misunderstood something, I think If this happens I will leave Thailand. 

 

Don't forget your calculation of capital gains/losses won't apply to Thai taxes as it does to your US taxes.

 

You can't offset $10K in gains with $10K in losses.  You pay tax on the gains, the losses are simply lost.

 

I ran the numbers and my $0 tax bill in the US will incur a tax due of approximately $10K in Thailand.  That's before considering capital losses applied to gains in the US.

[AreYouGerman]

4 hours ago, Mike Teavee said:

Although the Thailand Elite visa is a privileged tourist visa, you are subject to pay income tax if you have a foreign-source income at the amount required for taxation. For example, a deposit of 1,000,000 THB into a bank account in Thailand may be considered as a foreign-source income required for taxation. The bank will submit a report to the Revenue Department at its request in monitoring any unusual financial activity.

 

A 1,000,000 THB deposit into a bank account is 'unusual financial activity'? Who wrote that. Lol.

[JimGant]

2 hours ago, Mike Teavee said:

shared his findings from Sherrings who clarify the use of the word "May" as to mean they would be the only ones who would apply Tax..

Nope. "May" by itself means there's a primary and a secondary tax authority. "May only" means there's only an exclusive taxation authority. In US treaties, because of the savings clause, where there's an exclusive ("may only") taxation clause, like for private pensions, this evaporates into a "may" situation. Thus, IRAs and private pensions, in this situation, have Thailand as primary taxation authority, but with the US having secondary taxation rights.

[KhunHeineken]

On 6/7/2024 at 11:15 AM, ChaiyaTH said:

Otherwise most seem to plan on leaving for at least 180 days per year.

There goes the property market in the tourist areas, for both sales and rents. 

 

It's not just about those already here, but also the next generation of retiree / expat coming through.  Why would they buy a property they will only live in for 179 days of the year? 

[KhunHeineken]

On 6/7/2024 at 7:16 AM, Guderian said:

 

Take it slowly, I have around 12 million Baht invested in Thailand, far too much to just walk away from or hold a fire sale so I can exit quickly. Go the 180-day route, as you suggest, and try the other places in SEA that you've either been to or fancy living. At least you'll see some new things, and you may find somewhere you like better than Thailand. Then you can sell up here and move there full-time. Of course, at the moment to avoid CRS it's only Cambodia and the Philippines that didn't sign up for it, and there's no guarantee that they won't at some point in the future, so the nomadic lifestyle may be the way to go long-term. I kept my place in the UK and go back there every year for 6-8 weeks, so it's not an impossible hardship to buy another property somewhere in SEA, spend 4 or 5 months a year there, and make sure I'm not tax-resident anywhere.

I just mentioned in another post, if your 12 million baht "invested in Thailand" is mainly in property, in a tourist area, then who is going to be the market you are selling to, and how much competition will there be for the those prepared to stay, or move to Thailand, at any cost as to their tax liability, and also throw in a decent offer for your property?  

 

There's already an oversupply in property here.  This will kill the market.   You may not need to sell during a fire sale, but fire sale offers may be all you, and many others, will ever get. 

[DrJack54]

Some off topic nonsense removed

[Mike Teavee]

41 minutes ago, JimGant said:

Nope. "May" by itself means there's a primary and a secondary tax authority. "May only" means there's only an exclusive taxation authority. In US treaties, because of the savings clause, where there's an exclusive ("may only") taxation clause, like for private pensions, this evaporates into a "may" situation. Thus, IRAs and private pensions, in this situation, have Thailand as primary taxation authority, but with the US having secondary taxation rights.

That's been my interpretation thus far hence I'm waiting for things to fully confirmed before bringing over Capital/Rental income but Sherrings have clearly stated that's the case on their site & in personal correspondence with @alphasonso it's looking "Hopeful" that their application of that article will be more positive for us. 

 

 

[JimGant]

2 hours ago, TallGuyJohninBKK said:

So when Thailand says they want to tax all income worldwide for Thailand residents, do they mean all undistributed earnings or only distributions from IRA accounts?

Only the distributions from your conventional IRA -- like your annual RMD. This is clearly labelled in the DTA, particularly in the Technical Explanation. They'll just be concerned with mirroring what's in your US 1040, as to what income they're interested in. And, yes, you'll get a one for one tax credit against your US taxes for the Thai taxes paid on this IRA distribution. Undistributed earnings are of no interest to Thailand, or the US, for taxation purposes.

 

Roth IRAs are an interesting scenario. The Thai US treaty doesn't mention them, because the treaty was signed before Roth came about. But look at the following from the latest OECD Model tax treaty (2017):

Quote

Notwithstanding subparagraph (a) of this paragraph, the amount of any such
pension or remuneration arising in a Contracting State that, when received, would be
exempt from taxation in that Contracting State if the beneficial owner were a resident
thereof shall be exempt from taxation in the Contracting State of which the beneficial
owner is a resident

 And this, from the US-UK DTA:

Quote

 The Technical Explanation states, “Thus, for example, a distribution from a U.S. ‘Roth IRA’ to a UK resident would be exempt from tax in the United Kingdom to the same extent the distribution would be exempt from tax in the United States if it were distributed to a U.S. resident.”

 

So, this is the current OECD feeling on Roth IRAs -- and should the Thai-US treaty be reaccomplished, this would certainly be in there. Sadly, we're stuck with the current treaty's ancient language.

 

What to do? This is what, in the CPA world, is called a grey area. But -- to not declare any Roth distribution as assessable income to Thailand -- seems ethical under the new criteria, and in accordance with more modern standards than when the existing treaty was written. Now, I've been warned to not give tax advice on this forum -- so, just say what I just mentioned was an observation.

 

That TRD would even be aware of the term "Roth" (which they wouldn't be if you didn't have to declare non assessable income somewhere). Even if they explored your 1040 tax return, Roth would not show up. So, forget anything about any Roth distributions, should you have taken any (no RMD here), as somehow being reportable assessable for Thai tax purposes.

[TallGuyJohninBKK]

2 minutes ago, JimGant said:

what I just mentioned was an observation.

 

Jim, your observations above are both very helpful and instructive, and much appreciated!  🙂

 

[KhunHeineken]

On 6/7/2024 at 8:06 AM, connda said:

The last option should have been, "I'm going to kick back, wait, and see what shakes in 2025."

'If you fail to plan, you are planning to fail."

 

I had a Plan B even before I moved here permanently.  

 

This may cause many to start considering a Plan B.  Probably something they should have already had. 

[KhunHeineken]

Around 30% say they will leave for 6 months in order not to be a tax resident of Thailand.

 

I have a couple of questions for around the other 30% who believe they will be able to reside here in the same fashion, yet still not pay any tax. 

 

How do you propose to avoid paying the tax, on a long term basis, and how will you deal with any possible punitive measures to force you to pay something?  (when I say "something" it may not be the correct amount, but "something" over zero baht)   

[Yumthai]

3 minutes ago, KhunHeineken said:

and how will you deal with any possible punitive measures to force you to pay something? 

This has yet to be seen. If it happens solutions will come along, as always in Thailand.

[KhunHeineken]

7 minutes ago, Yumthai said:

This has yet to be seen. If it happens solutions will come along, as always in Thailand.

Sure.  I get that.  The whole thing has basically "yet to be seen."  If it eventuates, in the way/s that have been discussed, what possible "solutions" do you see arising. legitimate, or otherwise? 

[Klonko]

To date, only large businesses seem to be in scope of the contemplated global income tax. In the long run, I expect Thailand to formally adopt the global norm of taxing all residents not only on remittances but global income. 
 

However, given examples such as Portugal, this does not necessarily result in the 35% marginal Thai tax rate for retirees. Applying the existing Thai tax rates and rules to global income could make Thailand for some residents a higher taxing country than their home country, in particular for capital gains.  I doubt that Thailand will ultimately kill the goose that lays the golden eggs respectively drive away retirees spending annually a couple of millions bath in Thailand.

 

If I will be ever - I bet this will not happen in 2025 - taxed on global income in Thailand, the resulting tax rate is not more than 20% as a fair contribution to my country of residence, foreign (withholding) taxes are fully recognized, and the tax filing and documentation is not too cumbersome, I will likely remain tax resident in Thailand. Filing taxes for global income could be a nightmare, especially if documentation needs to be translated and if the nomenclature does not correspond with Thailand.

 

Else I would search for a third domicile to comply with the 179 days rule. However, similar to the global income tax becoming a worldwide norm, the days of not being tax resident in any country will  be counted, too, and possibly I will have to reluctantly move back to my home country as main domicile at a higher age.

 

For the time being, I am relaxed and do not worry.

[Mike Teavee]

11 hours ago, KhunHeineken said:

Around 30% say they will leave for 6 months in order not to be a tax resident of Thailand.

 

I have a couple of questions for around the other 30% who believe they will be able to reside here in the same fashion, yet still not pay any tax. 

 

How do you propose to avoid paying the tax, on a long term basis, and how will you deal with any possible punitive measures to force you to pay something?  (when I say "something" it may not be the correct amount, but "something" over zero baht)   

I plan on applying for the LTR in 2026 (when my pensions start) on the assumption that it would get a similar waiver for the Global Tax change as they did for the changes to the Remittance rules. 

 

If the LTR holders don't get this then I'll effectively revert to < 180 days in Thailand but will stagger it so that some years I can spend longer than 180 consecutive days here... E.g. if this were to come in next year I might spend...  

• Jan 2025 -June 2025 In Thailand 
• July 2025- June 2026 out of Thailand
• July 2026 - June 2027 in Thailand (last 179 days of 2026 + first 179 days of 2027)
• July 2027- June 2028 out of Thailand
• July 2028 - June 2029 in Thailand (last 179 days of 2028 + first 179 days of 2029)

This is an extreme example, I would probably do more like 8/9 & 3/4 month tranches but the point is I'd time it to take advantage of the fact that I can stay in Thailand longer than 180 days as long as I stagger it across calendar years