A Visit to the Tax Office

[NoDisplayName]

***UPDATE v4***

 

Received a text message from "e-revenue" yesterday.

 

"Refund check was mailed to [pink ID number] 13/07"

[Lorry]

4 hours ago, Mike Lister said:

The new forms and the revised online system will be available by November/December.

Thx

And than foreigners have 3 months to learn how to file. 

I know Thais are quick learners...

[JimGant]

Not sure what tax thread to throw this into. But, this seems as good as any.

 

Anyway, we know that "savings" remitted to Thailand is not assessable income -- and thus not taxable. In fact, by definition, it's not even income, but savings. So, it would seem that, prior to being remitted to Thailand, income, if possible, needs to be converted to savings, if we want to avoid Thai taxes.

 

But how? Certainly all those monies in my savings account were, at one time "income." When did they magically become savings? Best guess is when taxes were paid on them. And in, my case, all my income has taxes 'withheld at source." And, I've upped this withholding rate to more than cover what the final taxes would be, when I file my US tax return the following calendar year. Thus, my income is free of all taxes -- and I would guess -- it's now considered "savings."

 

And all this "after tax" income -- now savings -- plops into my savings account, from which I suck out my Wise transfers. So, I would treat this as a non assessable income remittance to Thailand. As such, it's not reported on a Thai tax return. And for me, at least, I wouldn't be anywhere near having any taxable income -- and would not bother getting a TIN, or filing a tax return.

 

In the remote situation where I'd be called in to TRD for a chat -- I certainly could explain that what I remitted were savings, not income.

 

If you think about it -- the old rules, where income remitted to Thailand the year after it was earned -- was exempt for taxes -- could be, because in the "year after," it had morphed into non taxable savings. Hmmm.

[gamb00ler]

45 minutes ago, JimGant said:

Not sure what tax thread to throw this into. But, this seems as good as any.

 

Anyway, we know that "savings" remitted to Thailand is not assessable income -- and thus not taxable. In fact, by definition, it's not even income, but savings. So, it would seem that, prior to being remitted to Thailand, income, if possible, needs to be converted to savings, if we want to avoid Thai taxes.

 

But how? Certainly all those monies in my savings account were, at one time "income." When did they magically become savings? Best guess is when taxes were paid on them. And in, my case, all my income has taxes 'withheld at source." And, I've upped this withholding rate to more than cover what the final taxes would be, when I file my US tax return the following calendar year. Thus, my income is free of all taxes -- and I would guess -- it's now considered "savings."

....SNIP....

 

Here's how I analyze the issue of converting your US based income into savings.

 

If there was no DTA with USA, I don't think TRD would be influenced by or take into consideration what happens between you and the IRS regarding taxation or exemption from taxation.  They would just simply apply their definitions of income and savings and then calculate the tax.  That TRD process would convert your US income into savings as far as Thailand is concerned.

 

But... there is a DTA and that is why TRD now acknowledges that you may have been taxed on your income by the USA and that TRD's position in the taxation pecking order is defined by the treaty.  If TRD only gets second dibs on those funds it is forced to accept that USA's taxation has in part or in whole converted your income to savings.  If TRD gets first dibs then they simply apply their rules and definitions as they would with no treaty in place.

 

So.... I would simplify the above and say that the DTA is what determines when and how your income is converted to savings.

 

 

[topt]

12 hours ago, Mike Lister said:

The new forms and the revised online system will be available by November/December.

I keep seeing this mentioned by certain people.

Who actually said that this would happen and where was it communicated - presumably someone from the Thai RD?

[Mike Lister]

5 hours ago, topt said:

I keep seeing this mentioned by certain people.

Who actually said that this would happen and where was it communicated - presumably someone from the Thai RD?

Member @sometimewoodworker I believe, who has arranged a meeting with Big 4 tax accountants.

[JimGant]

10 hours ago, gamb00ler said:

So.... I would simplify the above and say that the DTA is what determines when and how your income is converted to savings.

Probably so.  I doubt Thailand would, if it had primary taxation rights, allow a Yank to say: 'Sorry, buddy, but this money has already been taxed by the US, so it is no longer income.'

[topt]

4 hours ago, Mike Lister said:

Member @sometimewoodworker I believe, who has arranged a meeting with Big 4 tax accountants.

I don't believe his meeting has actually happened yet - based on something he wrote last week?

 

I had presumed it was based on a Thai RD comment from one of the various "live" meetings but if not then it would appear to be completely unsubstantiated at this point. 

[Mike Lister]

17 minutes ago, topt said:

I don't believe his meeting has actually happened yet - based on something he wrote last week?

 

I had presumed it was based on a Thai RD comment from one of the various "live" meetings but if not then it would appear to be completely unsubstantiated at this point. 

Agreed, but it's the latest semi-tangible remark we have.

[sometimewoodworker]

5 hours ago, Mike Lister said:

Member @sometimewoodworker I believe, who has arranged a meeting with Big 4 tax accountants.

@Mike Lister you are correct. The information regarding the 2024 forms availability was given by the Tax Director of one of the Big 4 tax accountants when asking about the costs of filing a return using their services.
 

I have, as yet, got and given no exact information regarding the timing of revisions to the online system or allowances, however it is safe to assume that the allowances will be published at the same time as the forms as if they weren’t the forms couldn’t be used. It would also be reasonably safe to assume that any revisions to the online systems would be rolled out at the same time.

 

 

BUT TIT YMMY

@topt you are correct my meeting is scheduled for early next month 

[sometimewoodworker]

13 hours ago, JimGant said:

Not sure what tax thread to throw this into. But, this seems as good as any.

 

Anyway, we know that "savings" remitted to Thailand is not assessable income -- and thus not taxable. In fact, by definition, it's not even income, but savings. So, it would seem that, prior to being remitted to Thailand, income, if possible, needs to be converted to savings, if we want to avoid Thai taxes.

 

But how? Certainly all those monies in my savings account were, at one time "income." When did they magically become savings? Best guess is when taxes were paid on them. And in, my case, all my income has taxes 'withheld at source." And, I've upped this withholding rate to more than cover what the final taxes would be, when I file my US tax return the following calendar year. Thus, my income is free of all taxes -- and I would guess -- it's now considered "savings."

 

And all this "after tax" income -- now savings -- plops into my savings account, from which I suck out my Wise transfers. So, I would treat this as a non assessable income remittance to Thailand. As such, it's not reported on a Thai tax return. And for me, at least, I wouldn't be anywhere near having any taxable income -- and would not bother getting a TIN, or filing a tax return.

 

In the remote situation where I'd be called in to TRD for a chat -- I certainly could explain that what I remitted were savings, not income.

 

If you think about it -- the old rules, where income remitted to Thailand the year after it was earned -- was exempt for taxes -- could be, because in the "year after," it had morphed into non taxable savings. Hmmm.

Your semantics and logic are totally flawed.

1) all income earned prior to 1/1/2024 can have any name you like as it is not assessable 

2) all income earned post 1/1/2024 is assessable

3) income earned post 1/1/2024 is always assessable and never magical transforms into savings 

4) just because you save the income outside Thailand and remit it in 10 years doesn’t magically change it into savings and make it non assessable income 

5) just because you transfer the money into as many different accounts with as many names as you like doesn’t change assessable income into savings 

6) Thailand has no interest in designations of what is and isn’t income by other countries. It has its own rules.

13 hours ago, JimGant said:

And all this "after tax" income -- now savings -- plops into my savings account, from which I suck out my Wise transfers. So, I would treat this as a non assessable income remittance to Thailand.

You are wrong

 

13 hours ago, JimGant said:

And for me, at least, I wouldn't be anywhere near having any taxable income

You must be living on an extremely small amount as anything over about 400k (much less if you are under 65 and unmarried ) should be reported and taxed

[Mike Lister]

I predict a waning interest in tax threads is imminent.

[Lorry]

2 hours ago, sometimewoodworker said:

Your semantics and logic are totally flawed.

1) all income earned prior to 1/1/2024 can have any name you like as it is not assessable 

2) all income earned post 1/1/2024 is assessable

3) income earned post 1/1/2024 is always assessable and never magical transforms into savings 

4) just because you save the income outside Thailand and remit it in 10 years doesn’t magically change it into savings and make it non assessable income 

5) just because you transfer the money into as many different accounts with as many names as you like doesn’t change assessable income into savings 

6) Thailand has no interest in designations of what is and isn’t income by other countries. It has its own rules.

 

You are wrong

 

Agreed 100%

 

2 hours ago, sometimewoodworker said:

You must be living on an extremely small amount as anything over about 400k (much less if you are under 65 and unmarried ) should be reported and taxed

Not "anything over about 400k" - assessable income over 400k.

Many people remit savings from savings accounts or CDs from before 1/1/2024.

(Many people have old savings in Thailand, just don't remit anything and still live very well).

[JimGant]

2 hours ago, sometimewoodworker said:

You must be living on an extremely small amount as anything over about 400k (much less if you are under 65 and unmarried ) should be reported and taxed

Darn. And here I thought my $80,000 Air Force retirement and Social Security were non assessable per the DTA. Nice that a smart, young fella like yourself put me straight. Many thanks. (Now, let me run this thru my semantics checker before I push the button.)

[sometimewoodworker]

18 hours ago, gamb00ler said:

Here's how I analyze the issue of converting your US based income into savings.

You can not convert income of any kind into savings , you can save income, it is then saved income 

18 hours ago, gamb00ler said:

That TRD process would convert your US income into savings as far as Thailand is concerned.

it is always income it never becomes savings, 

it has always been income it never becomes savings,

it will always have been income it never becomes savings 

 

income is either assessable income (the vast majority) or non-assessable income 

Transfers into Thailand from overseas are often, but certainly not always, from income 

• if the transfer is from funds accrued pre 1/1/2024 there is no reporting requirement 
• if the transfer is not from income there is no reporting requirement 
• if the transfer is from non-assessable income (a few countries have agreements that make some income non-assessable) there is no reporting requirement 
• if the transfer into Thailand is from all other types of income there IS a reporting requirement 

Despite the fact that there is a de facto requirement to file a tax return if you have income or transfers of income 

• many tax department offices do not require (or want) a tax return filed if there is no tax due or no refund due

that the revenue department doesn’t want you to file a zero tax due does not stop you from filing one.
It is an exercise in futility but complies with the strict wording of the rules and makes some people feel warm and fuzzy.

 

Thailand has a pragmatic approach to rules and laws it does not follow the Teutonic principles that all rules and laws must always be followed to the letter.

[gamb00ler]

@sometimewoodworker  in the context of the Jim's message the distinction between income and savings is very clear.  I continued using the same point of reference in my post.

 

Savings is just after tax income.  I think most posters in these tax threads understand that.

[Mike Lister]

8 minutes ago, gamb00ler said:

@sometimewoodworker  in the context of the Jim's message the distinction between income and savings is very clear.  I continued using the same point of reference in my post.

 

Savings is just after tax income.  I think most posters in these tax threads understand that.

I agree, this is just a new commer trying to redefine the nomenclature.

[topt]

3 hours ago, Mike Lister said:

I agree, this is just a new commer trying to redefine the nomenclature.

Quite amusing when you consider yesterday , or day before, he was unaware what TEDA referred to.........

 

On a separate note I see Barry Kenyon continues to either stoke or smother, depending on your point of view  .......

https://www.pattayamail.com/latestnews/news/dont-panic-because-thai-revenue-has-written-to-100000-tax-residents-urging-registration-465598

[sometimewoodworker]

4 hours ago, gamb00ler said:

@sometimewoodworker  in the context of the Jim's message the distinction between income and savings is very clear.  I continued using the same point of reference in my post.

 

Savings is just after tax income.  I think most posters in these tax threads understand that.

If you are staying in your home country and your income is staying in your home country where you are taxed or not depending on your tax allowances from your home country your point of view is reasonable.

 

However if you remit funds to Thailand you are fundamentally wrong and my statement on income never transitioning from income into savings is the way the wayThai revenue department regards the situation is totally correct, to reiterate 

 

it is always income it never becomes savings, 

it has always been income it never becomes savings,

it will always have been income it never becomes savings 

 

if that were not the case then anyone who remitted funds to Thailand that had already been declared to their home country would never have any Thai tax liability, this is clearly wrong and anyone who has income (you are calling it savings, the TRD does not)remitted to Thailand in excess of all allowances is due to file a Thai tax return and many will have some tax due after deduction of the credit for the home countries tax that has been paid. 

 

any one who thinks that after taxation your income magically changes state from income to savings is very sadly wrong and probably has no way of understanding the situation 

 

NB this is only important from any and all earnings post 1/1/2024 as prior to that your money could have been earned by performing services to a unicorn and it would be un-assessable 

 

[sometimewoodworker]

4 hours ago, gamb00ler said:

@sometimewoodworker  in the context of the Jim's message the distinction between income and savings is very clear.  I continued using the same point of reference in my post.

 

Savings is just after tax income.  I think most posters in these tax threads understand that.

That you define after tax remittances as savings suggests that they should not be assessed for a Thai tax liability. The TRD doesn’t and expects you to assess the majority of them as income. 
 

You are welcome to continue to believe that is the case, however if the TRD decides to audit you, you will quickly find that that assessment is wrong and you are likely to have some interesting and expensive conversations 

[gamb00ler]

@sometimewoodworker Your understanding of the issues discussed in these tax threads has somehow become distorted.

 

Savings (as used in these threads) are the portion of income left after you and the government come to an understanding of what you owe them.  By paying the tax, you completely remove the government's shadow from those funds and you can spend, invest or save them however you wish.  Those funds become the taxpayer's savings.  In the taxpayer's view those remaining funds are net income.  But, in these threads we use the word income from the viewpoint of the taxing authority... not the taxpayer.  From the TRD's point of view, the taxpayer's net income is savings and thus beyond their reach.

 

In my post I said: 

If TRD only gets second dibs on those funds it is forced to accept that USA's taxation has in part or in whole converted your income to savings.

 

In the situation my comments describe, TRD will not be getting any tax revenue on some part (or perhaps any) of the funds where the US has primary (first dibs) taxing authority.  TRD can try to tax those funds but the US taxpayer can use a tax credit to reduce or eliminate TRD's claimed tax (as per the DTA).  Thus in effect those already taxed funds are now the taxpayer's savings as far as TRD is concerned.

 

If TRD's claimed tax is greater than the US tax already paid, they will of course be entitled to collect that amount.

 

 

[gamb00ler]

@sometimewoodworker It seems you have an issue with the use of the word savings to describe the funds remaining after taxation has been applied.  That's unfortunate because that is the terminology that has been used throughout these taxation threads.  I don't talk to any tax accountants so I don't know if it is the appropriate terminology but it seems most posters agree with it's use and meaning.

 

It's crucial to remember that there are two (or more) taxing authorities that will have different views of how the same funds are allocated between income and savings.  The relevant DTA's play a significant role in determining how a taxing authority applies the terms income and savings.

[Lorry]

1 hour ago, gamb00ler said:

Savings (as used in these threads) are the portion of income left after you and the government come to an understanding of what you owe them

Sorry, this is hilarious.

You are very,  very wrong.

@sometimewoodworker is right about this. 

Income doesn't "become savings". I don't know  where you and others get this absurd idea from, that income isn't income anymore,  once you have paid some local taxes. It has become "net income" or "income after taxes", but it's still income. 

 

If some government agency of your home country asks " what was your income in the year 20xx?", at least in my home country I cannot say,  "oh, in 20xx I had no income,  because I paid my taxes already"

And if said government agency tells me to give them 20% of my income of 20xx, I am not happy,  but I have to give it to them. 

 

There is a very strong tendency in all tax threads to wishful thinking. 

Dangerous and can be expensive.

 

[Mike Lister]

4 hours ago, Lorry said:

Sorry, this is hilarious.

You are very,  very wrong.

@sometimewoodworker is right about this. 

Income doesn't "become savings". I don't know  where you and others get this absurd idea from, that income isn't income anymore,  once you have paid some local taxes. It has become "net income" or "income after taxes", but it's still income. 

 

If some government agency of your home country asks " what was your income in the year 20xx?", at least in my home country I cannot say,  "oh, in 20xx I had no income,  because I paid my taxes already"

And if said government agency tells me to give them 20% of my income of 20xx, I am not happy,  but I have to give it to them. 

 

There is a very strong tendency in all tax threads to wishful thinking. 

Dangerous and can be expensive.

 

Under Worldwide Taxation rules, any income that was taxed in the previous year becomes savings in subsequent years hence @gamb00ler does have a point. I think if we take his interpretation and add to it a wait of one tax year, it's hard to deny that is not the correct interpretation.

[Mike Lister]

4 hours ago, Lorry said:

Sorry, this is hilarious.

You are very,  very wrong.

@sometimewoodworker is right about this. 

Income doesn't "become savings". I don't know  where you and others get this absurd idea from, that income isn't income anymore,  once you have paid some local taxes. It has become "net income" or "income after taxes", but it's still income. 

 

If some government agency of your home country asks " what was your income in the year 20xx?", at least in my home country I cannot say,  "oh, in 20xx I had no income,  because I paid my taxes already"

And if said government agency tells me to give them 20% of my income of 20xx, I am not happy,  but I have to give it to them. 

 

There is a very strong tendency in all tax threads to wishful thinking. 

Dangerous and can be expensive.

 

Sorry, I forgot to address the second part:

 

Income can become savings, that is clear, as long as tax and all expenses are paid, the only real question is how much time must pass before that happens.....I suggest that one tax year makes things certain.

 

Just because the income become savings, doesn't mean the person no longer had income, that conversion from income to savings isn't retrospective that changes history. If a person earns all year long, pays all their taxes and expenses, at the end of the year, any saved funds represent savings. But that doesn't mean they didn't have income, of course they did, it's just that x percentage of that income was saved. And whilst that formula of income to savings may be satisfactory for one country's Revenue department, it may not be the same for another country's such as TRD who may have a different formulae which changes the income to savings ratio.....that is the impact of DTA rules and the different taxation rates of different classes of income, between the two Revenue Depts.

[sometimewoodworker]

3 hours ago, Mike Lister said:

Under Worldwide Taxation rules, any income that was taxed in the previous year becomes savings in subsequent years hence @gamb00ler does have a point. I think if we take his interpretation and add to it a wait of one tax year, it's hard to deny that is not the correct interpretation.

Heads up We are not living under Worldwide Taxation rules we are living under (discussing) Thailand’s taxation rules 

 

You could possibly argue that Thailand treated income (they did not but you could argue the point) in that way prior to 1/1/2024. In fact they just regarded non current years income as non assessable income

 

your instance of using the word savings to refer to what was taxed income is a disingenuous way of referring to it and leads to a misunderstanding and incorrect belief that you can bring in any amount of ”savings” (your term) and have zero tax liability.
 

This is because Thailand does not consider remittances of savings as taxable.

However Thailand does (now) tax remittances of income (DTAs allowing )(irrespective of when earned post 1/1/2024) as taxable

 

you could equally call one of these an ideal household pet

 

but if you do and you and others believe you, then don’t be surprised when you and your friends become live “pet food” 

 

I trust you can now see exactly why any redefinition of income as savings is foolish and promotes misunderstanding.

You could call it ‘saved income’ but by the definition that is important Thailand’s taxation rules it is always and forever income when remitted to Thailand. 
 

After it’s remitted and assessed for taxation it can become anything you like. Beer seems quite popular 🙂 

 

[Lorry]

3 hours ago, Mike Lister said:

Under Worldwide Taxation rules, any income that was taxed in the previous year becomes savings in subsequent years hence @gamb00ler does have a point. I think if we take his interpretation and add to it a wait of one tax year, it's hard to deny that is not the correct interpretation.

What "worldwide taxation rules" are these?

Are they written in any law?

These are not the rules in my home country.

I hope TRD knows and follows these rules. 

But aren't they almost exactly the rules they had until 2023? "You can remit your income just in the next calendar year,  and it's tax free?" And didn't they abolish exactly this? Just to re-introduce it through mysterious "worldwide rules"?

 

You are saying: I get income in, let's say, 2024, pay home country taxes on it in 2025 and can than remit it as savings tax-free to Thailand?

DTA not necessary?

Sorry, this is absurd.

Or do I misunderstand something?

[Lorry]

3 hours ago, Mike Lister said:

Just because the income become savings, doesn't mean the person no longer had income, that conversion from income to savings isn't retrospective that changes history. If a person earns all year long, pays all their taxes and expenses, at the end of the year, any saved funds represent savings. But that doesn't mean they didn't have income, of course they did, it's just that x percentage of that income was saved. And whilst that formula of income to savings may be satisfactory for one country's Revenue department, it may not be the same for another country's such as TRD who may have a different formulae which changes the income to savings ratio.....that is the impact of DTA rules and the different taxation rates of different classes of income, between the two Revenue Depts.

Aaaaah, now, this I can agree to.

But now we are talking semantics, aren't we?

It makes sense, the way you say it here.

[Mike Lister]

3 minutes ago, sometimewoodworker said:

Heads up We are not living under Worldwide Taxation rules we are living under (discussing) Thailand’s taxation rules 

 

You could possibly argue that Thailand treated income (they did not but you could argue the point) in that way prior to 1/1/2024. In fact they just regarded non current years income as non assessable income

 

your instance of using the word savings to refer to what was taxed income is a disingenuous way of referring to it and leads to a misunderstanding and incorrect belief that you can bring in any amount of ”savings” (your term) and have zero tax liability.
 

This is because Thailand does not consider remittances of savings as taxable.

However Thailand does (now) tax remittances of income (irrespective of when earned post 1/1/2024) as taxable

 

you could equally call one of these an ideal household pet

 

but if you do and you and others believe you, then don’t be surprised when you and your friends become live “pet food” 

 

I trust you can now see exactly why any redefinition of income as savings is foolish and promotes misunderstanding.

You could call it ‘saved income’ but by the definition that is important Thailand’s taxation rules it is always and forever income 

 

I did not suggest Thailand is living under worldwide taxation rules hence none of us needs a heads up! Since the Director of the TRD has said publicly that Worldwide Taxation is something being considered, it is worthwhile mentioning that aspect for readers to consider future impact. 

 

FWIW STWW, these discussions historically have been held on a different level, rather than pictures of animals and quoting dictionary definitions of simple words.

[Mike Lister]

17 minutes ago, sometimewoodworker said:

Heads up We are not living under Worldwide Taxation rules we are living under (discussing) Thailand’s taxation rules 

 

You could possibly argue that Thailand treated income (they did not but you could argue the point) in that way prior to 1/1/2024. In fact they just regarded non current years income as non assessable income

 

your instance of using the word savings to refer to what was taxed income is a disingenuous way of referring to it and leads to a misunderstanding and incorrect belief that you can bring in any amount of ”savings” (your term) and have zero tax liability.
 

This is because Thailand does not consider remittances of savings as taxable.

However Thailand does (now) tax remittances of income (DTAs allowing )(irrespective of when earned post 1/1/2024) as taxable

 

 

 

I trust you can now see exactly why any redefinition of income as savings is foolish and promotes misunderstanding.

You could call it ‘saved income’ but by the definition that is important Thailand’s taxation rules it is always and forever income when remitted to Thailand. 
 

After it’s remitted and assessed for taxation it can become anything you like. Beer seems quite popular 🙂 

 

 

We disagree completely on your definition that income can never become savings but I suspect it's unproductive to debate the point with you here, plus I have no interest in doing so..