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Its Happening - Law to Tax Overseas Income Now in Progress


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So they told ASEAN that the tax would apply to Thais and "permanent" residents.

Makes you wonder if something has been lost in translation perhaps ? Maybe they meant "long term residents" ?

Or maybe others think "permanent" residents and "long term Visa holders" are the same thing ?

Is there an actual draft of the actual regulation somewhere or is it still a "work in progress" somewhere ?

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20 minutes ago, Kerryd said:

So they told ASEAN that the tax would apply to Thais and "permanent" residents.

Makes you wonder if something has been lost in translation perhaps ? Maybe they meant "long term residents" ?

Or maybe others think "permanent" residents and "long term Visa holders" are the same thing ?

Is there an actual draft of the actual regulation somewhere or is it still a "work in progress" somewhere ?

 

 

Something lost in translation. They meant tax residents, i.e. those spending at least 180 days or partial days in the Kingdom in a calendar/tax year.  The Revenue Code is nationality neutral. Nothing in it distinguishes Thai citizens or PRs from anyone else.

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1 hour ago, Gottfrid said:

The biggest problem here is not the taxation itself. The horrible thing is that they will just take the money, and we will not be included in neither health system nor any pension system.

 

That is true.  Foreign residents, including temporary residents,  in Western countries usually get those benefits, except in the US which has no universal healthcare for its own citizens (spends the money on export of war, death and destruction instead).  In the UK the only thing  most foreigners living there, whether on settlement visas or not, don't get if the vote which, considering the quality of politicians doesn't matter much.  Some even do get the vote, including the Irish and citizens of Commonwealth countries and the latter don't reciprocate.  Labour likes this because most of the foreigners vote for them.

Edited by Dogmatix
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1 minute ago, Taboo2 said:

This plan would not apply to Social Security or 401K or other pensions that are taxed in the US already.

 

 

 

That's right in the case of US SS pensions and pensions from US government, state or local government employment because the US has the sole right to tax this income in the DTA.  I am know about 401K.  If no specifically exempted in the DTA, it would be taxable in Thailand.

 

Unfortunately very few other farang countries negotiated to exempt state pensions in their DTAs like the US did.  You will find that nearly all exempt only pensions from government employment.  However, it is arguable whether foreign state pensions are taxable because the wording in Section 40 covering pensions specifies only pensions from employment. It doesn't specify pensions that are not from employment.  Perhaps they will argue that the UK state pension is indirectly from employment because yhou don't get it, if you haven't worked.  But other pensions like the Australian Superannuation cannot be regarded as pension from employment because it is now payable to slackers who have never worked a day in their lives.  I wonder, if they will amend the wording to cover all foreign pensions but I doubt it as they are very lazy thinkers and probably haven't got round to this year.

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1 hour ago, Gottfrid said:

I can read that you are still in playschool. Take your time now, and carefully calculate how much it´s worth for you, and then leave the tax changes to the grown ups.

A person would have to be clueless to not realize many people move here to meet younger women.  

The value to me is worth me staying here and paying some tax to enjoy what this country offers.

But, I guess Gottfrid if one does not like women they would not understand the value.  So glad that is not me.

Edited by bkk6060
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1 hour ago, Kerryd said:

The way it works is, you are expected to report ALL income you make outside (and/or inside) of Thailand.

Pension income that is already taxed in your home country still counts towards your total income even if there is a Tax Treaty between your country and Thailand.
However, Thailand wouldn't (legally) be allowed to tax that portion of your total income.

They would then total all your income, subtract the "personal deduction" and tax you on the balance (at whatever rate).

It's unlikely you will get any deductions for charity donations or medical expenses or anything else you would normally be able to deduct from your taxes back home.

However, if you also have to do taxes back home on the same income and Thailand has charged you more than your home country, you can (in some countries at least) claim the difference as a credit on your home country's taxes.

This is a link to the Government of Canada's list of Tax Treaties:
https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties.html

Most of the treaties are virtually identical and include clauses for things like pensions taxed in one country can't be taxed in the other.
For the Phillipines:

Pensions and Annuities

1. Pensions and annuities arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in the Contracting State in which they arise. (Then some gibberish about "periodic pension payments".)

For Thailand:

Pensions

1. Pensions and other similar remuneration, whether they consist of periodic or non-periodic payments, for past employment, arising in a Contracting State and paid to a resident or the other Contracting State shall be taxable only in the first-mentioned State.

(Canada does not have, nor is negotiating a tax treaty with Cambodia so technically you could be fully taxed on all your income in your home country and in Cambodia.)

Also note: Tax treaties do NOT confer ANY "rights" to the person being taxed.

"No Taxation without Representation" is an "ideal" and "principle" - not a law.

 

 

So where would those allowances come in, is that just on the amount transfered into the country?

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39 minutes ago, Dogmatix said:

 

That's right in the case of US SS pensions and pensions from US government, state or local government employment because the US has the sole right to tax this income in the DTA.  I am know about 401K.  If no specifically exempted in the DTA, it would be taxable in Thailand.

 

Unfortunately very few other farang countries negotiated to exempt state pensions in their DTAs like the US did.  You will find that nearly all exempt only pensions from government employment.  However, it is arguable whether foreign state pensions are taxable because the wording in Section 40 covering pensions specifies only pensions from employment. It doesn't specify pensions that are not from employment.  Perhaps they will argue that the UK state pension is indirectly from employment because yhou don't get it, if you haven't worked.  But other pensions like the Australian Superannuation cannot be regarded as pension from employment because it is now payable to slackers who have never worked a day in their lives.  I wonder, if they will amend the wording to cover all foreign pensions but I doubt it as they are very lazy thinkers and probably haven't got round to this year.

If your 401 is taxed, which most are, it is exempt.

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2 hours ago, SiamAndy said:

If they want to tax Resident expats, then they should also let us in on the 30 Baht health scheme as well.

And provide an path for "tax residents" to become Permanent Residents based on their tax status, and to eventually be able to have a path to Citizenship as we are taxed like Thai citizens. 

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