Selling stocks owned prior to 2024 and remit it to Thailand still tax free?

[NoDisplayName]

26 minutes ago, Mike Lister said:

All of it.

 

I take from your previous posts that only actual cash in a bank savings account is considered "savings."  Your stock portfolio on Dec 31, 2023 is irrelevant to "prior savings" when remitting funds to Thailand in 2024? 

 

How do we determine where the money that is remitted comes from?  Buy/sell stocks a hundred times a year, some with gains and some with losses.  Remit funds to Thailand a dozen times a year at random intervals.  There seems to be no way to link an individual stock sale with a remittance to Thailand.

[aldriglikvid]

If remitted funds are from capital gains, and said capital gains were taxed last year in a country with a DTA at a higher rate than Thailand - one should be "fine" then, I guess? Assuming the DTA's are honored, that is. 

 

[Mike Lister]

3 hours ago, NoDisplayName said:

 

How is this arrived at, that the entire $1000 is assessable?

 

I have $1000 as the cost basis for the stock from 2022. (ignoring the value on Dec 31, 2023), and I have $1000 capital gain on the sale.

 

$1000 stays in the US, $1000 comes into Thailand.

How do we determine which money is brought into Thailand?

 

Do I choose which pot of money I bring over, or does TRD get to decide?

 

Look at it differently.

 

You have a capital gain of 1,000 on an investment of 1,000 and you decide to remit 50% of the total to Thailand. Assuming the gain was realised after 1 January 2024, your entire remittance is assessable income, you don't get to cherry pick and decide whether you're remitting capital or gain. Each remittance comprises capital and gain until the entire investment has been remitted.

[NoDisplayName]

26 minutes ago, Mike Lister said:

Look at it differently.

 

You have a capital gain of 1,000 on an investment of 1,000 and you decide to remit 50% of the total to Thailand. Assuming the gain was realised after 1 January 2024, your entire remittance is assessable income, you don't get to cherry pick and decide whether you're remitting capital or gain. Each remittance comprises capital and gain until the entire investment has been remitted.

 

That is unfortunate, capital gains accumulated while not tax resident will be taxed, and capital losses incurred while tax resident will be disallowed.

 

But how does actual savings come into this?  If I have $1000 in savings on Dec 31, are all remittances apportioned as part savings, part capital gains and part capital?  Am I permitted to cherry pick the actual bank account savings first?

 

Fortunately I caught this before remitting too much this year.  Wise transfers to my bank account for 2024 now total just under $7500, or approximately 270K baht at the current exchange rate, equal to the 2x60K exclusion and 150K 0% bracket.  Anything else goes directly to the wife's account.

 

Glad we didn't transfer funds to buy a new car!

[Mike Lister]

Just now, NoDisplayName said:

 

That is unfortunate, capital gains accumulated while not tax resident will be taxed, and capital losses incurred while tax resident will be disallowed.

 

But how does actual savings come into this?  If I have $1000 in savings on Dec 31, are all remittances apportioned as part savings, part capital gains and part capital?  Am I permitted to cherry pick the actual bank account savings first?

 

Fortunately I caught this before remitting too much this year.  Wise transfers to my bank account for 2024 now total just under $7500, or approximately 270K baht at the current exchange rate, equal to the 2x60K exclusion and 150K 0% bracket.  Anything else goes directly to the wife's account.

 

Glad we didn't transfer funds to buy a new car!

Once again, the funds are either savings or they are not, if they are, they are free of tax. You must state what your remittance comprises, savings or investment income and the tax picture will fall out of that declaration. If all you have is capital gains income, remitting it in a year when you are boit Thai tax resident, means it is not taxable here.

 

 

[koolkarl]

17 hours ago, Mike Lister said:

Very uncool Karl, wrong answer by a mile!

 

Thailand does not not tax on a world wide income basis, only on the remittance basis.

Want to bet $100,000 USD?

 

[Mike Lister]

58 minutes ago, koolkarl said:

Want to bet $100,000 USD?

 

Silly man! The question was asked how Thailand taxes people currently, not what the aspirations of the Revenue Director are for the future.

 

Thailand CURRENTLY taxes income on the remittance basis, there is only a recommendation that they MIGHT change that to the worldwide basis in the FUTURE. IF and WHEN that happens, is completely unclear.

 

Whilst it has been reported that, "The department is now working to amend the law based on the principle of worldwide income", any such change requires a change in the law and parliamentary approval, none of which the Revenue Director can do on her own and all of which will take time, potentially years.

[JimGant]

Wow. Why is so much being made of the interpretation of this:

Quote

The new department order clarifies that only foreign-source income earned from 1 January 2024 will be covered by the new interpretation set out in P161/2023, and does not extend to foreign-source income earned prior to 1 January 2024. This amendment is established with a second paragraph added to Section 1 of P 161/2023 stating:

“The provisions of paragraph one shall not apply to assessable income arising before 1 January 2024.”

Thus, we're talking "FOREIGN-SOURCE INCOME."  Nothing about "savings," which could be construed as income already taxed by the home country (but which taxation plays no part in the Thai tax situation). And it applies to before tax income, like unrealized capital gains (which, again, plays no part in the Thai tax situation). All Thailand is saying is that: The value of your portfolios on 31 Dec 2023, if remitted in part or in whole, will be tax exempt in Thailand. Period.

 

No need to keep in your records which remittances were savings; which were stock principal; which were unrealized stock cap gains, etc. They won't care. They'll only care that the remittances were, indeed, from financial sources existing before 2024. And, as said, they certainly won't care if it has, or hasn't, been taxed by the source country.

 

Right now you're cleared to use whatever accounting rules are to your advantage. Thus, FIFO (first in, first out) would assure your pre-2024 monies are being used first. This would certainly be wise, should your accounts still be active, and are thus accumulating post 2023 income. It is possible they'll mandate LIFO -- there is precedent for this for UK remitted based taxation. And if so, would it be retroactive......?  Hmmm.

[Mike Lister]

46 minutes ago, JimGant said:

Wow. Why is so much being made of the interpretation of this:

Thus, we're talking "FOREIGN-SOURCE INCOME."  Nothing about "savings," which could be construed as income already taxed by the home country (but which taxation plays no part in the Thai tax situation). And it applies to before tax income, like unrealized capital gains (which, again, plays no part in the Thai tax situation). All Thailand is saying is that: The value of your portfolios on 31 Dec 2023, if remitted in part or in whole, will be tax exempt in Thailand. Period.

 

No need to keep in your records which remittances were savings; which were stock principal; which were unrealized stock cap gains, etc. They won't care. They'll only care that the remittances were, indeed, from financial sources existing before 2024. And, as said, they certainly won't care if it has, or hasn't, been taxed by the source country.

 

Right now you're cleared to use whatever accounting rules are to your advantage. Thus, FIFO (first in, first out) would assure your pre-2024 monies are being used first. This would certainly be wise, should your accounts still be active, and are thus accumulating post 2023 income. It is possible they'll mandate LIFO -- there is precedent for this for UK remitted based taxation. And if so, would it be retroactive......?  Hmmm.

Nobody is suggesting that savings will be regarded as income. The discussion is about how to distinguish between what is savings and what is not and how.

 

And unless I missed it, there is no confirmation that the TRD uses FIFO for anything, apart from retirement and redundancies, ergo, no, you are not cleared to decide your own accounting rules and expect that the TRD will bless them all!

 

"The value of your portfolios on 31 Dec 2023, if remitted in part or in whole, will be tax exempt in Thailand". It should be noted, for the avoidance of doubt, that this does not include unrealised capital gains.

Edited June 21 by Mike Lister

[JimGant]

2 minutes ago, Mike Lister said:

no, you are not cleared to decide your own accounting rules and expect that the TRD will bless them all!

In a vacuum of no guidance from TRD, of course you can decide your own accounting rules-- what guidance are you supposed to use? In the 1% chance you're called in for a chat, you've certainly got a prima facie case on why you used FIFO. Again, they may finally issue some guidance on this; but we ain't there yet -- so use whatever accounting rules are in your favor.

[john donson]

the whole joke of not getting anything in return, nothing, zilch

 

I will not file anything

 

if immigration ever after for a tax return, that will be the last drop

[JimGant]

11 minutes ago, Mike Lister said:

The discussion is about how to distinguish between what is savings and what is not and how.

There is no discussion about what is, and what isn't, savings. Savings make no difference in this once-only ruling, that says: All your pre 2024 monies are tax exempt -- if remitted into Thailand post 2023. Period.

[Mike Lister]

3 minutes ago, JimGant said:

In a vacuum of no guidance from TRD, of course you can decide your own accounting rules-- what guidance are you supposed to use? In the 1% chance you're called in for a chat, you've certainly got a prima facie case on why you used FIFO. Again, they may finally issue some guidance on this; but we ain't there yet -- so use whatever accounting rules are in your favor.

Oh, so now you're an expert in Thai law also, I never knew that. Well look, in that case, of course, if you say so,  everyone can make up whatever rules they want and if/when push comes to shove, just tell the TRD people that you created your own rules because you couldn't find theirs....it makes perfect sense.

[Mike Lister]

3 minutes ago, JimGant said:

There is no discussion about what is, and what isn't, savings. Savings make no difference in this once-only ruling, that says: All your pre 2024 monies are tax exempt -- if remitted into Thailand post 2023. Period.

Next time, read the OP before you reply.

 

"Let's say you had $1000 (portfolio value) in foreign stocks on the last day of 2023. And now, in mid 2024 your stock holdings are worth $2000. Does that mean you can still safely sell off $1000 of your stock holdings and remit it into Thailand tax free at any time? As it would be considered savings prior to 2024". 

 

The OP is holding an unrealised capital gain on the last day of 2023 and wants to remit them as savings in 2024, which I imagine in the Jim Gant rule of tax law is probably OK.....duh!

[JimGant]

3 minutes ago, Mike Lister said:

The OP is holding an unrealised capital gain on the last day of 2023 and wants to remit them as savings in 2024, which I imagine in the Jim Gant rule of tax law is probably OK.....duh!

Go back and reread what I wrote. Your total portfolio, as of Dec 31, 2023 -- to include savings and unrealized cap gains -- is exempt from Thai taxes when remitted after Jan 1, 2024. Thailand doesn't care, nor will it investigate, whether those funds remitted are savings, assessable income, non assessable income, a gift, a loan. It makes no difference -- because this is a one-time good deal that exempts ALL remittances, regardless of how they are characterized. The law calls all these funds "foreign -source income."

 

The OP is not remitting a specifically characterized -- like unrealized gains -- chunk of fungible money. Thailand only cares that it is from a pre 2024 source. Period. In fact, when the OP sends off that $1000, it needn't be specifically identified as an unrealized gain -- in fact, using FIFO, that $1000 of fungible money -- is probably the first $1000 he used 20 years ago to open the account.

 

You're confusing normal remittance processing, whereby it's necessary to break down whether such remittance is assessable, or non-assessable, income. And, yes, whether these funds are savings, or income, becomes part of the equation. But in the OP's situation -- and for most of the rest of us -- Thailand is only interested in whether or not the remittance comes from a pre 2024 source -- in which the case, the whole enchilada is automatically, per law, tax exempt/non assessable monies. No need to differentiate between savings and non savings.

[JimGant]

41 minutes ago, Mike Lister said:

just tell the TRD people that you created your own rules because you couldn't find theirs....it makes perfect sense.

No, it's not that I couldn't find their rules -- it's that they don't have any rules. (although it sounds like you're alluding that they DO have such rules....care to share?)

[freeworld]

Just putting this out there.

 

Thailand accounting standards (TFRS) are based on the IFRS standards which are the general accounting rules used in most countries in the world except the US which uses GAAP.

https://www.tfac.or.th/en/Article/Detail/67454

 

The IFRS:

"Several methodological differences exist between the two systems. For instance, GAAP allows a company to use either of two inventory cost methods: First in, First out (FIFO) or Last in, First out (LIFO). LIFO, however, is banned under IFRS."

 

As a note Thailand RD put out a notice for crypto currencies and there it is stated there it is stated they should use the FIFO or Moving Cost Average principle.

 

"The FIFO method is a calculation of the cost of each type of cryptocurrency/digital token, whereby the cryptocurrencies/digital tokens purchased first are treated as sold first, respectively.  As a result, the remaining cryptocurrencies/digital tokens at the end of the day are the latest cryptocurrencies/digital tokens purchased.

The moving average cost method is a calculation of the cost of each type of cryptocurrency/digital token, based on the  average cost of the cryptocurrencies/digital tokens at the beginning of the year and the cost of cryptocurrencies/digital tokens purchased during the year, re-calculated after every purchase."

 

I would assume they would apply the same reasoning to investments.

 

 

RD-manual_crypto.pdf

[Mike Lister]

2 hours ago, JimGant said:

No, it's not that I couldn't find their rules -- it's that they don't have any rules. (although it sounds like you're alluding that they DO have such rules....care to share?)

We've had this discussion before many times and you've been cautioned several times about creating your rules and suggesting to members that it's OK. It might be OK for a CPA to suggest such things in the US and be able to get some traction in a two way debate with an IRS official but there is no suggestion whatsoever the same thing will be allowed here. 

 

Just because some of the rules here are not known to forum members, is no reason to make up your own rules and suggest them as fact or to suggest it will be OK to adopt them. If those are your personal opinions, make it very clear that's what it is, in big bold letters, for the sake of those who look to the likes of you for substance and fact.

[Mike Lister]

2 hours ago, JimGant said:

Go back and reread what I wrote. Your total portfolio, as of Dec 31, 2023 -- to include savings and unrealized cap gains -- is exempt from Thai taxes when remitted after Jan 1, 2024. Thailand doesn't care, nor will it investigate, whether those funds remitted are savings, assessable income, non assessable income, a gift, a loan. It makes no difference -- because this is a one-time good deal that exempts ALL remittances, regardless of how they are characterized. The law calls all these funds "foreign -source income."

 

The OP is not remitting a specifically characterized -- like unrealized gains -- chunk of fungible money. Thailand only cares that it is from a pre 2024 source. Period. In fact, when the OP sends off that $1000, it needn't be specifically identified as an unrealized gain -- in fact, using FIFO, that $1000 of fungible money -- is probably the first $1000 he used 20 years ago to open the account.

 

You're confusing normal remittance processing, whereby it's necessary to break down whether such remittance is assessable, or non-assessable, income. And, yes, whether these funds are savings, or income, becomes part of the equation. But in the OP's situation -- and for most of the rest of us -- Thailand is only interested in whether or not the remittance comes from a pre 2024 source -- in which the case, the whole enchilada is automatically, per law, tax exempt/non assessable monies. No need to differentiate between savings and non savings.

Por 162 states that Por 161 shall not apply to foreign source assessable income earned before 1 January 2024. It does not state that everything you own as of that date may be sold, remitted to Thailand and be tax free. 

 

A share holding held at 31 December 2023 is not assessable income, it is an unrealised capital gain. A n overseas property owned on 31 December 2023 is not assessable income that can later be sold and the proceeds remitted to Thailand free of tax, it also is an unrealised capital gain.

 

Nowhere does it state in Por 161 or Por 162 that unrealised capital gains held as of 31 December 2023 may later be sold and remitted to Thailand, free of tax. If it doe say that anywhere, please quote where.

 

Nowhere does it state in Por 161 or Por 162 that "unrealized cap gains -- is exempt from Thai taxes when remitted after Jan 1, 2024". 

 

 

[patman30]

would it be wise to just take a >6 month holiday lets say every 5 years
and sell all stocks, assets then and then remit funds that year

[JimGant]

41 minutes ago, Mike Lister said:

Just because some of the rules here are not known to forum members, is no reason to make up your own rules and suggest them as fact

Again, there are no published rules that I'm aware of. Are they known to you? If so, do we go FIFO, LIFO, or moving average.? If not existent, or known -- can the reader make his own decision, possibly based on intelligent discussion?

[koolkarl]

5 hours ago, Mike Lister said:

Silly man! The question was asked how Thailand taxes people currently, not what the aspirations of the Revenue Director are for the future.

 

Thailand CURRENTLY taxes income on the remittance basis, there is only a recommendation that they MIGHT change that to the worldwide basis in the FUTURE. IF and WHEN that happens, is completely unclear.

 

Whilst it has been reported that, "The department is now working to amend the law based on the principle of worldwide income", any such change requires a change in the law and parliamentary approval, none of which the Revenue Director can do on her own and all of which will take time, potentially years.

What do you think the CRS agreement is all about?  It is useless for only remittances. So you don't have that 100K  US. 

[JimGant]

54 minutes ago, Mike Lister said:

Nowhere does it state in Por 161 or Por 162 that "unrealized cap gains -- is exempt from Thai taxes when remitted after Jan 1, 2024". 

 

Unless it's unrealized cap gain existing -- per its value in the overall portfolio -- pre 2024. As already stated, this is a no nevermind, as the OP's $1000 remittance from a portfolio that existed pre 2024 doesn't need to be one-for-one from the unrealized gain pile of money. But, under FIFO, would be at the beginning of the pile.

[Mike Lister]

25 minutes ago, JimGant said:

Again, there are no published rules that I'm aware of. Are they known to you? If so, do we go FIFO, LIFO, or moving average.? If not existent, or known -- can the reader make his own decision, possibly based on intelligent discussion?

Most normal people would say, I don't know we'll have to wait and see. You seem to think that's not good enough and just make up your own rules and present them as acceptable fact. I want to out a lot of distance between me and your opinions, I think you're so far out of control on this as to be dangerous.. 

[Mike Lister]

8 minutes ago, koolkarl said:

What do you think the CRS agreement is all about?  It is useless for only remittances. So you don't have that 100K  US. 

Thailand operates a remittance based tax system, end of story. No country can change their tax system mid year and make it retroactive. You are spreading false rumours and distorting fact, both against forum rules.

[topt]

6 minutes ago, koolkarl said:

What do you think the CRS agreement is all about?  It is useless for only remittances. So you don't have that 100K  US. 

CRS Agreement - is about the transfer of information. From wiki -

Quote

The Common Reporting Standard (CRS) is an information standard for the Automatic Exchange Of Information (AEOI) regarding financial accounts on a global level, between tax authorities, which the Organisation for Economic Co-operation and Development (OECD) developed in 2014

Do I get a 100k - baht is ok..........

 

[Mike Lister]

2 hours ago, freeworld said:

Just putting this out there.

 

Thailand accounting standards (TFRS) are based on the IFRS standards which are the general accounting rules used in most countries in the world except the US which uses GAAP.

https://www.tfac.or.th/en/Article/Detail/67454

 

The IFRS:

"Several methodological differences exist between the two systems. For instance, GAAP allows a company to use either of two inventory cost methods: First in, First out (FIFO) or Last in, First out (LIFO). LIFO, however, is banned under IFRS."

 

As a note Thailand RD put out a notice for crypto currencies and there it is stated there it is stated they should use the FIFO or Moving Cost Average principle.

 

"The FIFO method is a calculation of the cost of each type of cryptocurrency/digital token, whereby the cryptocurrencies/digital tokens purchased first are treated as sold first, respectively.  As a result, the remaining cryptocurrencies/digital tokens at the end of the day are the latest cryptocurrencies/digital tokens purchased.

The moving average cost method is a calculation of the cost of each type of cryptocurrency/digital token, based on the  average cost of the cryptocurrencies/digital tokens at the beginning of the year and the cost of cryptocurrencies/digital tokens purchased during the year, re-calculated after every purchase."

 

I would assume they would apply the same reasoning to investments.

 

 

RD-manual_crypto.pdf 1.15 MB · 2 downloads

Maybe they do, wouldn't it be great if we knew rather than just aguessed or assumed.

[freeworld]

24 minutes ago, Mike Lister said:

Maybe they do, wouldn't it be great if we knew rather than just aguessed or assumed.

Strange out of all the accounting and tax experts and you tube videos and meetings with RD producing information and booklets and they do not query or ask to clarify this.

[connda]

I think ya'll are wayyyyy to worried about something that hasn't happened yet.  Wait until 2025 and see what transpires. 
Until then?  Relax and chill out.

[Mike Lister]

13 minutes ago, freeworld said:

Strange out of all the accounting and tax experts and you tube videos and meetings with RD producing information and booklets and they do not query or ask to clarify this.

Yes, I agree, and I wonder why that is.