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

[Mike Lister]

57 minutes ago, JimGant said:

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.

Of course it's an unrealised capital gain, he tells us that. Your assumption about FIFO that follows is an assumption based on what you think, not what is fact. That may be fine but you have to tell people it's an opinion/assumption, not a fact.

[connda]

1 hour ago, Mike Lister said:

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.

Folks - read this and chill.  Wait until 2025, see what happens, then plan and act accordingly. 

 

 

[CharlieH]

Notice to Members:

 

Posts made by individuals reflect their own opinions and should not be taken as fact.

Please draw your own conclusions and consult a qualified professional before acting on any such advice or content.

 

Thank you.

[khunPer]

23 hours ago, Mike Lister said:

To be clear......your stock value per 31st December 2023 is still stock and is not savings. The CG is measured from the date the asset was first acquired and is not re-baselined once again at 31 December 2023. eg. you spend $1,000 and buy stock in 2015 and sell it in February 2024. Your CG is measured from 2015, not 1 January 2024.

I don't agree – stock value is savings, savings are not only cash without interest or other gains – your capital gain before 1st January 2024 is savings by Thai rules, as it's earned the year before. It's capital gain after 1st January that is taxed. However, in a country with capital gain tax at selling time – where the rule has been due the whole period the stocks have been owned – it would be your whole capital gain that shall be taxed. In some countries you will be taxed after "inventory" – i.e., value at year-end – which means that you pay tax of unrealized capital gain of your savings, and you therefore might be forced to sell out of you savings to pay tax of money that you have not yet capitalized.

[Mike Lister]

21 minutes ago, khunPer said:

I don't agree – stock value is savings, savings are not only cash without interest or other gains – your capital gain before 1st January 2024 is savings by Thai rules, as it's earned the year before. It's capital gain after 1st January that is taxed. However, in a country with capital gain tax at selling time – where the rule has been due the whole period the stocks have been owned – it would be your whole capital gain that shall be taxed. In some countries you will be taxed after "inventory" – i.e., value at year-end – which means that you pay tax of unrealized capital gain of your savings, and you therefore might be forced to sell out of you savings to pay tax of money that you have not yet capitalized.

Stocks are capital gains, capital gains are only realised when the stock is sold, until that time there is no gain and nothing was earned.

[Lacessit]

2 minutes ago, Mike Lister said:

Stocks are capital gains, capital gains are only realised when the stock is sold, until that time there is no gain.

Let's say I have 300 shares of a stock I bought prior to 2024. In December 2023 , those shares are worth $50 = $15,000.

 

I sell the shares in 2024 for $60. I now have $18,000.

 

If I only remit $15,000 of that money to Thailand, and leave the capital gain in Australia, please explain why that is not savings prior to 2024.

[Mike Lister]

3 minutes ago, Lacessit said:

Let's say I have 300 shares of a stock I bought prior to 2024. In December 2023 , those shares are worth $50 = $15,000.

 

I sell the shares in 2024 for $60. I now have $18,000.

 

If I only remit $15,000 of that money to Thailand, and leave the capital gain in Australia, please explain why that is not savings prior to 2024.

The moment you use your savings to buy stock, you no longer have savings you have an investment. You don't earn income from that investment until you sell the stock, until the point of sale, you don't have savings,  you only have an investment and you only have a paper profit and no taxable event. The taxable event occurs when you sell the stock and realise the gain which takes place after 1 January 2024, outside the terms of Por 162.

[Lacessit]

5 minutes ago, Mike Lister said:

The moment you use your savings to buy stock, you no longer have savings you have an investment. You don't earn income from that investment until you sell the stock, until the point of sale, you don't have savings,  you only have an investment and you only have a paper profit and no taxable event. The taxable event occurs when you sell the stock and realise the gain which takes place after 1 January 2024, outside the terms of Por 162.

The stock is bought with savings which were taxed as part of income prior to 2024. In the example I gave, the $3000 gain is taxable if remitted to Thailand.

 

If the $15,000 is also taxed when remitted to Thailand, it becomes double taxation. Which IMO DTA's are designed to prevent.

[khunPer]

28 minutes ago, Mike Lister said:

Stocks are capital gains, capital gains are only realised when the stock is sold, until that time there is no gain and nothing was earned.

No, depending on local tax rules. In my home country for example, you can pay tax of unrealized capital gain on stocks, but also deduct any present loss in future gains for taxation. So, your saving's gain are taxed after the inventory method; i.e. you inventory of savings at year end minus previous year end-value, if any gain in value, you pay tax, even you haven't sold anything or seen any cash.

[Mike Lister]

4 minutes ago, Lacessit said:

The stock is bought with savings which were taxed as part of income prior to 2024. In the example I gave, the $3000 gain is taxable if remitted to Thailand.

 

If the $15,000 is also taxed when remitted to Thailand, it becomes double taxation. Which IMO DTA's are designed to prevent.

It was said earlier that principle and gain cannot be separated and that any partial remittance contains a mixture of both, until the entire amount has been remitted.

 

Savings change their form once they are invested, they are no longer savings, they are an investment, not just a part of the money, everything that is invested. The gain, if there is one, is on the total investment, not just on a part of it.

[Mike Lister]

4 minutes ago, khunPer said:

No, depending on local tax rules. In my home country for example, you can pay tax of unrealized capital gain on stocks, but also deduct any present loss in future gains for taxation. So, your saving's gain are taxed after the inventory method; i.e. you inventory of savings at year end minus previous year end-value, if any gain in value, you pay tax, even you haven't sold anything or seen any cash.

Great to know those things happen in your home country. Thailand Revenue however doesn't too much care about those things I imagine, all they see and care about is the remittance of a capital gain from the sale of an investment. That said, I imagine any tax paid as a part of the home country settlement process can almost certainly be offset against any PIT liability that results in Thailand.

 

I don't have a horse in this race, I'm only repeating what has been said previously on these issues. 

[khunPer]

1 minute ago, Mike Lister said:

Great to know those things happen in your home country. Thailand Revenue however doesn't too much care about those things I imagine, all they see and care about is the remittance of a capital gain from the sale of an investment. That said, I imagine any tax paid as a part of the home country settlement process can almost certainly be offset against any PIT liability that results in Thailand.

 

I don't have a horse in this race, I'm only repeating what has been said previously on these issues. 

Thanks for your reply, and it's not only in my country the system is like that, it was just an example.

 

The main problem with Thai income tax of foreigners right now is that we lack clear rules about how, it will be imposed. Prime minister Srettha Thavisin mentioned taxation as "interest", which is a flat rate of 15 percent. However, it's not anything final. The only final thing we to my knowledge know right now is that the Thai government will tax foreign income from this year, and everything before this year – i.e., value per 31st December 2023 – is considered as tax free savings.

 

For us with smaller income transferred to Thailand, which are not covered by a DTA, it might not be a major problem, while for those with larger funds transferred it can be a huge problem; or make them make a move to another more income tax-friendly place.

 

The worst case scenarios is however, the suggestion of income tax on all foreign income or gain, no matter if it's transferred into Thailand or not. Unfortunately, this is how several country's income tax-system works, so not unlikely, if Thailand for example use the Scandinavian countries as role model, which has been mentioned...

[Mike Lister]

6 minutes ago, khunPer said:

Thanks for your reply, and it's not only in my country the system is like that, it was just an example.

 

The main problem with Thai income tax of foreigners right now is that we lack clear rules about how, it will be imposed. Prime minister Srettha Thavisin mentioned taxation as "interest", which is a flat rate of 15 percent. However, it's not anything final. The only final thing we to my knowledge know right now is that the Thai government will tax foreign income from this year, and everything before this year – i.e., value per 31st December 2023 – is considered as tax free savings.

 

For us with smaller income transferred to Thailand, which are not covered by a DTA, it might not be a major problem, while for those with larger funds transferred it can be a huge problem; or make them make a move to another more income tax-friendly place.

 

The worst case scenarios is however, the suggestion of income tax on all foreign income or gain, no matter if it's transferred into Thailand or not. Unfortunately, this is how several country's income tax-system works, so not unlikely, if Thailand for example use the Scandinavian countries as role model, which has been mentioned...

The things we do know are recorded below but many aspects remain unclear, whether that is intentional on the part of the TRD or whether policy has not yet been been decided regarding foreigners overseas income, is also unclear. But it is clear that taxing worldwide income will not be implemented quickly because it requires a change in the law and parliamentary approval.

 

 

[Eudaimonia]

The Help section of Jitta Wealth, a Thai wealth management company, contains a very interesting tax calculation example. The company suggests that when repatriating funds, principal comes first and profit last.

 

I hope someone with a better command of the Thai language can read this and try to find supporting evidence. This is for Thai investors transferring money out and back in, but the principle may be the same.

 

Here's a Google translation of section 2.3:

 

Quote

 

2.3 Principal and profit According to the Revenue Department Profit is the excess from the principal transferred to invest. Therefore, if the customer transfers money to invest 1 million baht, the money transferred back to Thailand that exceeds the cost of 1 million baht will be counted as a profit that must be submitted as income.

 

For example, if we have transferred money to invest abroad 1,000,000 baht after January 1, 2024 and the investment has grown to 1,200,000 baht. When we transfer all money back into Thailand, the first 1,000,000 baht will be considered the principal. Not considered as money Therefore, it is not necessary to pay taxes. The 200,000 baht will be considered as anassessment income that must be taxed.

 

[Tax calculation examples follow]

 

 

Original: https://help.jittawealth.com/hc/th/articles/16856829739801-ภาษีสำหรับการลงทุนต-างประเทศมีอะไรบ-าง

[Mike Lister]

Just now, Eudaimonia said:

The Help section of Jitta Wealth, a Thai wealth management company, contains a very interesting tax calculation example. The company suggests that when repatriating funds, principal comes first and profit last.

 

I hope someone with a better command of the Thai language can read this and try to find supporting evidence. This is for Thai investors transferring money out and back in, but the principle may be the same.

 

Here's a Google translation of section 2.3:

 

 

 

Original: https://help.jittawealth.com/hc/th/articles/16856829739801-ภาษีสำหรับการลงทุนต-างประเทศมีอะไรบ-าง

No, we've been round that loop before, that is not the correct depiction of how the transfer takes place. Every remittance of capital gains comprises capital and gain, until the total amount is exhausted. You cannot cherry pick whether capital or gain comes first or last, they both come at the same time..

[khunPer]

20 minutes ago, Mike Lister said:

Savings change their form once they are invested, they are no longer savings, they are an investment, not just a part of the money, everything that is invested. The gain, if there is one, is on the total investment, not just on a part of it.

Depending of local tax rules – in my country "investment" is savings. If I buy stock for my savings of cash money in my home's hidden safe, it's still my savings, but I might have gain or loss on my savings – it's advised to invest one's savings for better gain than just bank interest. Even "invested" retirement savings are taxed, and it's after the "inventory method", no matter if the gain originates from interest or capital gain.

For private savings we can choose an inventory taxed savings account with a maximum deposit limit – savings shall be placed in stock exchange traded stocks – and inventory gains will be taxed at a slight lower rate than normal income tax, which is as low as 17%. Or we can "invest" and pay dividend tax from 27% to 42% and capital gain tax of the profit when sold, but at normal income tax rate, which can be as high as 52%.

Thailand might look at the Scandinavian method for efficient income tax of savings.

[Mike Lister]

1 minute ago, khunPer said:

Depending of local tax rules – in my country "investment" is savings. If I buy stock for my savings of cash money in my home's hidden safe, it's still my savings, but I might have gain or loss on my savings – it's advised to invest one's savings for better gain than just bank interest. Even "invested" retirement savings are taxed, and it's after the "inventory method", no matter if the gain originates from interest or capital gain.

For private savings we can choose an inventory taxed savings account with a maximum deposit limit – savings shall be placed in stock exchange traded stocks – and inventory gains will be taxed at a slight lower rate than normal income tax, which is as low as 17%. Or we can "invest" and pay dividend tax from 27% to 42% and capital gain tax of the profit when sold, but at normal income tax rate, which can be as high as 52%.

Thailand might look at the Scandinavian method for efficient income tax of savings.

Once again, those are home country tax rules, not Thailand Revenue rules.

[khunPer]

5 minutes ago, Mike Lister said:

The things we do know are recorded below but many aspects remain unclear, whether that is intentional on the part of the TRD or whether policy has not yet been been decided regarding foreigners overseas income, is also unclear. But it is clear that taxing worldwide income will not be implemented quickly because it requires a change in the law and parliamentary approval.

 

 

This is the present Thai income tax, we don't know details about how foreign income will be taxed.

 

And "pension" might be covered by a DTA and therefore not double taxed, if the tax paid at source is higher than Thai income tax. You need to carefully read the DTA for home country in question, they are different.

[khunPer]

2 minutes ago, Mike Lister said:

Once again, those are home country tax rules, not Thailand Revenue rules.

Kind explanation to your statement about savings and investment, investment is not different from savings. Thai foreign income tax might well be based with Scandinavia as role model.

[Lacessit]

3 minutes ago, khunPer said:

Kind explanation to your statement about savings and investment, investment is not different from savings. Thai foreign income tax might well be based with Scandinavia as role model.

My point exactly. It should not matter whether I have savings in shares, peer-to-peer lending, or term deposits, because I have already paid tax on those funds, and they exist prior to 2024.

 

The proposition that savings are only cash in an at-call bank account is IMO completely ridiculous.

[Mike Lister]

5 minutes ago, Lacessit said:

My point exactly. It should not matter whether I have savings in shares, peer-to-peer lending, or term deposits, because I have already paid tax on those funds, and they exist prior to 2024.

 

The proposition that savings are only cash in an at-call bank account is IMO completely ridiculous.

So where do you draw the line? If stocks and shares are really only savings and not capital investments, what about property, is that also savings too, it is after also only a capital investment as well. You have savings and you buy something, it's therefore no longer savings. Savings are where you don't exchange the money for anything else.

[Lacessit]

1 minute ago, Mike Lister said:

So where do you draw the line? If stocks and shares are really only savings and not capital investments, what about property, is that also savings too, it is after also only a capital investment as well. You have savings and you buy something, it's therefore no longer savings. Savings are where you don't exchange the money for anything else.

If I have property bought prior to 2024 with money I have already paid tax on, that might be included as savings after I sell it. As you say, maybe there is a line somewhere.

 

Going back to my $15,000 share portfolio, what happens if I sell them at a loss? Taxing me twice on what I remit hardly seems fair.

 

Perhaps you could post the relevant TRD regulations which define what constitutes savings, because it seems to me there is more opinion than fact.

[NoDisplayName]

1 hour ago, Mike Lister said:

 

 

From Thai income tax form, page 3, item 7, we should also have a 25,000 baht deduction for "health insurance premium paid."

 

Unclear if you can also take an additional 25,000 for spouse's health insurance.

[ballpoint]

7 hours 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.

 

That 1% chance happened to me, and I was called in for an audit at the Bangkok Area 3 Revenue Office.  This was under the old rules, which, luckily I was following by transferring money to an overseas account at the end of one year and remitting it to Thailand in the first half of the next.  Their explanation as to what is assessable and what is taxable was:

 

Funds I have in that account at the beginning of the year (which, under the new rules is now always Jan 1st 2024) are not assessable.

 

Any increase in those funds, from whatever source, between Jan 1st and the time of the last remit for that year are assessable, unless I could show that they had been taxed by a nation having a tax treaty with Thailand.  I was careful not to transfer anything to this account until after I'd made my final remittance for that year, but monthly interest payments were made to it.  After pointing out that taxes were withheld on these - included in the statement, they were exempted.

 

Had I transferred money to that account prior to my final Thailand remit for that year, I would be taxed on whatever portion of that money I remitted. (Unless I could show it had already been taxed by a nation having a tax treaty with Thailand).  Even if my non-assessable fund balance in that account on Jan 1st was higher.  For example, if I had $100k on Jan 1st, deposited $50k on Mar 1st and then remitted $50,000 on May 1st, I would be liable for taxes on the full $50k.  The reasoning being, I had $100k at the start of the year, I remitted $50k and I still had $100k afterwards.  Therefore the $50k was earned during that year - LIFO.

 

The result of the audit was favourable to me, because I had been following the rules.  Since then, I visit my small upcountry district tax office every March, taking statements from my Thai accounts and the overseas one I use as the source of the remits.  I cross reference every deposit in my Thai accounts with a withdrawal from the overseas one, and highlight the interest and tax withheld in the latter.  (I also need to account for every other deposit in my Thai accounts, which over the years have included a large Lazada refund and medical insurance reimbursements. - Take note, those who claim one can use Wise or similar to make it appear that the deposit was a local one.  You will still need to prove where it came from).  Result so far, no tax to pay, no need to file a return.  I will be doing the same next March and see what they say, though this will effectively still be under the old rules. It is March 2026 that things get interesting.

 

The above is fact, I have not added any speculation to it, but will do so now.  My take is that the same reasoning will apply to any savings one had on Jan 1st this year.  That is, if they are in an account that is otherwise not touched, you can remit the full amount tax free at anytime.  Once comingling of other funds occurs however, you will be required to account for that "new" money, and will have to pay tax on it when you remit it here on a LIFO basis (unless you can prove it had already been taxed by a nation having a tax treaty with Thailand).  I'm also of the opinion that if you hold mutual funds, or some other non bank account investment, overseas and keep an official statement of their value on Jan 1st this year, capital gains will be treated the same as for savings.  If I have $1M in funds on Jan 1st this year and sell, and remit, the whole lot for $1.5M in a later year, my assessable income is $500k.  Any increase in fund value prior to Jan 1st this year was not remitted to Thailand and, under the rules of the time, is non-assessable Thai income. 

[Mike Lister]

1 hour ago, Lacessit said:

If I have property bought prior to 2024 with money I have already paid tax on, that might be included as savings after I sell it. As you say, maybe there is a line somewhere.

 

Going back to my $15,000 share portfolio, what happens if I sell them at a loss? Taxing me twice on what I remit hardly seems fair.

 

Perhaps you could post the relevant TRD regulations which define what constitutes savings, because it seems to me there is more opinion than fact.

It's all opinion, what else did you think it is! If it were  provable fact, the relevant documentation would have been posted months ago. I thought you understood that those people with tax and accountancy experience in these debates have been trying to assess information from a variety of sources in an attempt to decipher what the TRD Code actually says and what operational practice is. But since foreign assessable income is not well documented and not in practise taxed heavily todate, this is all new ground for everyone.

[Mike Lister]

43 minutes ago, NoDisplayName said:

 

From Thai income tax form, page 3, item 7, we should also have a 25,000 baht deduction for "health insurance premium paid."

 

Unclear if you can also take an additional 25,000 for spouse's health insurance.

Yes you can, if you file jointly.

[Mike Lister]

1 hour ago, Lacessit said:

If I have property bought prior to 2024 with money I have already paid tax on, that might be included as savings after I sell it. As you say, maybe there is a line somewhere.

 

Going back to my $15,000 share portfolio, what happens if I sell them at a loss? Taxing me twice on what I remit hardly seems fair.

 

Perhaps you could post the relevant TRD regulations which define what constitutes savings, because it seems to me there is more opinion than fact.

There is no provision in Thai tax law for capital losses under DTA rules.

[Lacessit]

2 minutes ago, Mike Lister said:

There is no provision in Thai tax law for capital losses under DTA rules.

I was not saying there is. In Australia, I can offset any capital gains against capital losses in previous years.

 

From Ballpoint's post:

 

"I'm also of the opinion that if you hold mutual funds, or some other non bank account investment, overseas and keep an official statement of their value on Jan 1st this year, capital gains will be treated the same as for savings.  If I have $1M in funds on Jan 1st this year and sell, and remit, the whole lot for $1.5M in a later year, my assessable income is $500k.  Any increase in fund value prior to Jan 1st this year was not remitted to Thailand and, under the rules of the time, is non-assessable Thai income"

 

While it is still an opinion, it would appear he has actual experience with the TRD.

 

 

 

 

[Mike Lister]

11 minutes ago, Lacessit said:

I was not saying there is. In Australia, I can offset any capital gains against capital losses in previous years.

 

From Ballpoint's post:

 

"I'm also of the opinion that if you hold mutual funds, or some other non bank account investment, overseas and keep an official statement of their value on Jan 1st this year, capital gains will be treated the same as for savings.  If I have $1M in funds on Jan 1st this year and sell, and remit, the whole lot for $1.5M in a later year, my assessable income is $500k.  Any increase in fund value prior to Jan 1st this year was not remitted to Thailand and, under the rules of the time, is non-assessable Thai income"

 

While it is still an opinion, it would appear he has actual experience with the TRD.

 

 

 

 

Perhaps read through the Q&A's in the link below, there are others in the series that will help fill in knowledge gaps. Note also Q13:

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

 

More Q&A's here:

 

https://www.expattaxthailand.com/your-questions-answered/

[Lacessit]

32 minutes ago, Mike Lister said:

Perhaps read through the Q&A's in the link below, there are others in the series that will help fill in knowledge gaps. Note also Q13:

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

 

More Q&A's here:

 

https://www.expattaxthailand.com/your-questions-answered/

Reading through both links, foreign-based income is taxable when remitted to Thailand. Income earned prior to 2024 is not.

 

Savings prior to 2024 are not taxable when remitted to Thailand. It seems no reporting of such remittances is necessary.

 

Where it gets fuzzy is the definition of savings. I could not find a question which specifically asked the status of shares, peer-to-peer lending accounts, or term deposits in terms of whether they are regarded as savings, or not.