Its Happening - Law to Tax Overseas Income Now in Progress

[Metapod]

40 minutes ago, LOG54 said:

Hello

I don't know how to post a link..

Interesting article by Thai examiner on 8th in which they say "very quickly" long term visas will be linked to tax declarations..

Have a good day

 

I have 20 year Thai Elite visa. I will just spend less than 180 days a year in Thailand and simplify my life.

[sandyf]

50 minutes ago, VBF said:

At present, the PA IS more than the Full Pension  but not by much. The Pension will catch up very soon meaning that ALL pensioners will be caught in the tax net.

Just like the poster I replied to, you are wrong.

For some reason people seem to have forgotton that between 1978 and 2016 the UK state pension was a 2 tier arrangement and continually talk about the state pension in the singular.

There are quite a percentage of people getting well over the PA from their state pension.

[gamb00ler]

2 hours ago, Thaindrew said:

I live in Thailand and currently don't need to remit funds as I sent sufficient last year - so no remittances this year, so not tax in Thailand this year.

You may want to consider remitting enough current year income to use up all your tax exemptions for this year to reduce the potential of exceeding your exemptions in later tax years.

[gamb00ler]

7 hours ago, Derek B said:

"No tax without representation". Anyone up for a Thai Tea party?

I'll be there, but I'll bring my own tea.  I don't like Thai tea.

[Will B Good]

1 minute ago, gamb00ler said:

I'll be there, but I'll bring my own tea.  I don't like Thai tea.

 

Earl Grey and I'm there.

[gamb00ler]

6 hours ago, Cabradelmar said:

Every countries DTA is uniquely crafted. You can't possibly know what they all say (other than Canada's, apparently). With the advent of 401k RMDs (replacing pensions), many DTA are already outdated. 

I have read 3 DTA's and beyond that many of the DTA's use the OECD model.  And that model is as I described.... the tax treaty has NO dependancy on the tax code of the signatories.

 

It seems you have looked at even fewer DTA's than I.

 

Please show all of us what part of the US-Thai DTA needs amending.

 

https://www.irs.gov/pub/irs-trty/thaitech.pdf

 

Edited September 10 by gamb00ler

[Danderman123]

6 hours ago, Qld4000 said:

What a mess , I’ve read so many interpretations of this Tax issue on forums , seen so many YouTube carnival barkers spruiking different angles  and still in the dark other than disappearing for six months & avoiding the problem. 
IF…your total foreign income needs to be declared & submitted to Thai Tax  authorities , do you really want them trawling through your financial affairs & questioning you every step of the way since they like that approach when the option of rinsing you for money is in their hands. 
 

Another thing, will those financials require translating & notarising by a consulate or relevant authority.   Otherwise you could submit anything. 
Will they need to liase with the Tax accountant that prepared your  financials.   ??   Will they require bank statements, details of transactions etc etc ……I can imagine this b@ll<deleted> could drag on indefinitely AND …it’s likely you’ll be interviewed by a tax office “underling “ with no idea either .

 

Even if it’s finally set in stone what is required……do you really want to go through the above process every year with likely follow ups.  
 

At the moment….my affairs are easily done 5 minutes on a Govt website who have ALL my financial info via a TFN tax file no.   That site simply sends me its figures from its data base on me…..I amend if necessary & hit ENTER.     Done & dusted.  
 

Compare that to dealing with Thai tax authorities.    Not a hope in hell. 
 

A change of scenery for 6 months of the year will be a pleasure. A rolling stone gathers no moss & a few blokes here could be better off as a moving target & ATM service as well.  

You don't need bank statements or any proof to file a Thai tax return. 

 

Supporting documents are only required if you are audited.

[Presnock]

2 hours ago, redwood1 said:

 

So are you saying Thailand pulled a scam with the LTR visa like they did with the Elite visa?............

 

Like the Elite had perfect timing for dramatically raising the price....But you got the old price if you renewed in the few months before the soon to be announced income  tax plan.......lol............( they had the Elite visa renewal timed  almost to the day of the income tax announcement)

 

 I am sure they already knew about the world wide income tax when they were punishing the LTR visa too.......Sooooooooooo scam or not?

 

 

Well I would be pissed if that comes to pass - but under the DTA I still won't have to pay on my US govt pension.  But at least that visa is good for 10 years, no 90 day reports etc so I am still glad I got it.

[jesimps]

On 9/8/2024 at 8:50 AM, Thailand J said:

Some may think cheating is unlikely to get caught here..plus the magic of brown envelope will keep you from harm.

but I know I can't sleep well if my tax is not in good order...I may walk into a tax revenue office to confess  🙂

I did just that in Jomtien Tax Office fairly recently, but they refused to let me register for tax assessment. Told me to go away and pay tax to my home country. Didn't even need a brown envelope.

[ballpoint]

One thing to come out of this is that it gives some hope for those deriving income from mutual funds. 

 

From the official English translation of the Thai Tax Code:

 

"Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation:

...

(23) Income from sale of investment units in a mutual fund.

(24) Income of a mutual fund."

 

I brought this up in one of the other tax threads, and the consensus was that it refers only to Thailand based mutual funds.  However, in the full article in the Bangkok Post that the OP refers to, it states:

 

"(TRD director-general) Ms Kulaya said the proposed amendment would specifically target personal income tax and would not include corporate income tax or income from mutual funds investing abroad, except for private funds."

 

A private fund is defined as one where your portion of the shares held by the fund are in your name, rather than a regular one, where you hold units in the fund.  Therefore it does appear that overseas based mutual funds are also tax exempt.  

 

Bangkok Post - Law to tax income from overseas in the works

© Bangkok Post PCL. All rights reserved.

[jesimps]

On 9/8/2024 at 11:02 AM, HappyExpat57 said:

I suspect renewing your extension will be tied in with proof of filing taxes. Nothing good will come of this to retirees.

Like the visa based on marriage to a Thai, it'll be a paper chase, only on an international scale. If it means phone calls to HMRC UK, I think I'll top myself. I had to phone them several months back. Nearly an hour sat listening to music waiting to speak with someone, then trying to decypher the West Indian and the  Jock on the other end of the line. It was a nightmare.

[kimamey]

On 9/7/2024 at 9:52 PM, save the frogs said:

so that means she will have 6 other boyfriends.

that's not a relationship

Well it could be a financial one.

Having said that when I first met my now wife I was only coming here for a few weeks a year.

[Thailand J]

51 minutes ago, ballpoint said:

(TRD director-general) Ms Kulaya said the proposed amendment would specifically target personal income tax and would not include corporate income tax or income from mutual funds investing abroad, except for private funds."

Someone suggested to me  she was referring to Thai Mutual Funds investing abroad.

[ballpoint]

39 minutes ago, Thailand J said:

Someone suggested to me  she was referring to Thai Mutual Funds investing abroad.

 

That may be the case.  My first reaction would then be to argue that they have no right to tax overseas fund gains that aren't remitted to Thailand when their own ones are tax free, and when that likely fails, go back to plan "A":  Only realise and remit a gain during non-resident years.

[VBF]

2 hours ago, sandyf said:

3 hours ago, VBF said:

At present, the PA IS more than the Full Pension  but not by much. The Pension will catch up very soon meaning that ALL pensioners will be caught in the tax net.

Just like the poster I replied to, you are wrong.

For some reason people seem to have forgotton that between 1978 and 2016 the UK state pension was a 2 tier arrangement and continually talk about the state pension in the singular.

There are quite a percentage of people getting well over the PA from their state pension.

@sandyf- We're both right, but you are PARTIALLY right and PARTIALLY wrong.

 

At PRESENT, The full rate of new State Pension is £221.20 a week - that is the higher of the 2 tiers and = £11,502.40 per annum - here's the official proof

The new State Pension: What you'll get - GOV.UK (www.gov.uk) 

 

At PRESENT (Tax Year 6 April 2024 to 5 April 2025) The standard Personal Allowance is £12,570 - again official proof here

 Income Tax rates and Personal Allowances : Current rates and allowances - GOV.UK (www.gov.uk)

 

So, as i said At PRESENT, the PA IS more than the Full Pension by £1067.60 - as I also said, not by much.

 

However you also said  "There are quite a percentage of people getting well over the PA from their state pension." - Yes - i'm one of them but because of "protected payments" which put the weekly State Pension amount over the £221.20 and thus over the PA.

 

So in that respect you are correct.

Edited September 10 by VBF

[keysersoze276]

On 9/7/2024 at 9:16 PM, Pouatchee said:

happy days... not

so now the nightmare begins

 

 

so now they will have access to our home records... big brother... reallyyyy. 

 

double taxation? these matters really need to be cleared up and imho double taxation is just plain wrong... hope tere will be provisions blocking this.

 

NO TAXATION WITHOUT REPRESENTATION!!!

Fu@@ing right, bro!

[JimGant]

8 hours ago, NoDisplayName said:

If you as a single filer earn about $15K in dividends, plus $45K in capital gains, your US tax bill is $0.

 

But your Thai tax bill will be $10,000.

You have no US tax to claim foreign tax credit.

Agreed. Most Yanks I know don't live off substantial annual LT cap gains and dividends. But, yes, there are some.

[lavezzi]

this new law reminds me the crackdown on chinese tour company where they lost millions of turists for a while and then stepped back.

Im exited to see what will happend to real estate market 

[JimGant]

10 hours ago, CharlesHolzhauer said:

Remit money annually from your overseas account as a gift to your wife's account, with the intention of making this a tax-compliant gift.

This thread is about what happens if Thailand switches to worldwide taxation. If they do,the remittance aspect of taxation avoidance disappears. So using remitted gifts for tax avoidance will no longer be a player.

[Enzian]

On 9/9/2024 at 3:07 PM, JimGant said:

 

Second scenario, much rarer is: Rental income on property in US. US has primary taxation rights on this income, thus gets to keep all taxation, without any regard to a credit. DTA, however, gives Thailand secondary taxation rights on this rental income -- but Thailand has to absorb a credit for the taxes paid to the US. Thus, credit could completely wipe out any Thai taxation - if US taxation were higher than Thai taxation. But, if Thai taxation higher, they get to keep what's left after the credit.

The problem, as I understand it, is that Thailand has a completely different way of calculating "taxable income" starting from gross receipts on rental property than does the US. The US IRS has one fill out a Schedule E which can (depending on how busy you've been) reduce one's taxable income to a small fraction of the gross receipts for the year. Thailand, I've been told, is not interested in your US Schedule E; they give a standard deduction of 30% of your gross and then tax you on the resulting figure. So one could have a gross of $500,000 but still plausibly have a US "taxable income" of $50,000 depending on various circumstances, and your tax would be in the low 5 figures. But Thailand would see your taxable income as $350,000 ($500,000 minus 30%), to be taxed at 35%, resulting in a tax liability of maybe $100,000 or so after the US credit. If I'm getting this all wrong, please inform.

Edited September 10 by Enzian
clarity

[chiang mai]

36 minutes ago, Enzian said:

The problem, as I understand it, is that Thailand has a completely different way of calculating "taxable income" starting from gross receipts on rental property than does the US. The US IRS has one fill out a Schedule E which can (depending on how busy you've been) reduce one's taxable income to a small fraction of the gross receipts for the year. Thailand, I've been told, is not interested in your US Schedule E; they give a standard deduction of 30% of your gross and then tax you on the resulting figure. So one could have a gross of $500,000 but still plausibly have a US "taxable income" of $50,000 depending on various circumstances, and your tax would be in the low 5 figures. But Thailand would see your taxable income as $350,000 ($500,000 minus 30%), to be taxed at 35%, resulting in a tax liability of maybe $100,000 or so after the US credit. If I'm getting this all wrong, please inform.

You are mostly correct, however, you do not have to take the standard deduction, you can itemise with receipts instead, if you wish.

[Enzian]

19 minutes ago, chiang mai said:

You are mostly correct, however, you do not have to take the standard deduction, you can itemise with receipts instead, if you wish.

Thanks. Itemizing with receipts is exactly what a Schedule E is, so could I just show them a copy of my Schedule E? It will include property taxes in Alameda Co. CA, depreciation schedules going back years, cost basis calculations perhaps, insurance and utilities records, paperwork receipts from contractors and subcontractors, materials receipts from lumberyards and plumbing supply companies 8,000 miles away, and so on. If they will accept that, and more, then I'm clear. 

Edit: Assuming no big problem with differences in bracket rates I guess.

Edited September 10 by Enzian

[chiang mai]

6 minutes ago, Enzian said:

Thanks. Itemizing with receipts is exactly what a Schedule E is, so could I just show them a copy of my Schedule E? It will include property taxes in Alameda Co. CA, depreciation schedules going back years, cost basis calculations perhaps, insurance and utilities records, paperwork receipts from contractors and subcontractors, materials receipts from lumberyards and plumbing supply companies 8,000 miles away, and so on. If they will accept that, and more, then I'm clear. 

Be aware also that if you remit rental income to Thailand in the first six months of the year, you must file an interim return in June, as well as filing at year end.

[mania]

Seems like in this thread of 28 pages most seem concerned about what "Might Come To Pass" if laws are passed.

 

But very few seem worried that a law that was already passed as of Jan 1st 2024 has been in effect & will be tallied Dec 31st 2024. As it stands some may actually already owe Thailand taxes due by March 2025 on income brought INTO Thailand during 2024

"What is the new tax rule in Thailand 2024?New conditions, effective from 2024, were amended to state regardless of the year the income is brought into Thailand, it is subject to personal income tax. The tax rate is progressive, ranging from 5% to 35%. However, the department provided exceptions to mitigate the impact on taxpayers."

 

 

Edited September 10 by mania

[sandrew33]

On 9/10/2024 at 3:03 AM, MartinBangkok said:

"The notion that you should pay tax in Thailand if you live in Thailand isn’t a terrible one but it will certainly cause some chaos over the next few years"

 

Are you crazy? Not a terrible notion???!! Paying tax to my home country gives me absolutely free education, including university (standards of education in a different universe compared to Thailand), 100% free health care (standard millions of miles above Thailand), several hundred welfare benefits never heard of in Thailand (how about 1 full year maternity benefit with full salary covered by the state), 1 full year on 100% salary in case of sickness (and very descent welfare support in case of not returning to workforce). Mininimum state pension of circa 80.000 Baht a month (your work pension comes in addition). Median state pension cirka 135.000 Baht per month). I could go on. Shall I? Ok, I will, freedom of speach, the right to vote, can buy land and property (and anything else), no 90 day reporting, no hell bureacracy, no price discrimination, a very good justice system (low income earners get lawyers free). Shall I still go on? How about a police force that enforces laws, first responders professionally trained and educated with world class equipment? Descent politicians and leaders which gives my country a military force that would run over Thailand in days, even though my country only has 1/7th of Thai population. Shall I give you more? Ok, no discimination of foreigners. No scams (compared to Thailand). A very low level of corruption. More??

 

PS: I am out of Thailand already after 15 years in "The land of fake smiles". Found another nation not far from Thailand, more beautiful (mountains, jungles, beaches, golf courses, girls!, and airquality and water quality (beaches) on a different level compared to Thailand. And last but not least, a people so much more expat friendly than Thais, it's hard to phatom, and they all speak English! More? Ok, I forgot to mention my soon to be new V8 muscle car (American), is less than half the price of Thailand!! (red wine too).

 

Cheers

Nice rant. Do you feel better? 
 

By the way,  odd choice of name given you hate the place and have been out of here for 15 years. 

[sandrew33]

On 9/9/2024 at 8:23 AM, ukrules said:

 

It's not illegal while there's 180 day rules in place.

 

It's not a loophole either.

 

Potentially true but many countries will have a law that determines tax residency and once a tax resident you remain resident until you establish tax residency elsewhere.  
 

So jumping from country to country avoids you establishing residency in those new countries but you remain tied to country 1 as tax resident. 

[sandrew33]

On 9/9/2024 at 9:11 AM, RandolphGB said:

I'm yet to see how the Thai revenue office will know about income from UK assets paid to a UK bank account. 

CRS 

[chiang mai]

1 hour ago, mania said:

Seems like in this thread of 28 pages most seem concerned about what "Might Come To Pass" if laws are passed.

 

But very few seem worried that a law that was already passed as of Jan 1st 2024 has been in effect & will be tallied Dec 31st 2024. As it stands some may actually already owe Thailand taxes due by March 2025 on income brought INTO Thailand during 2024

"What is the new tax rule in Thailand 2024?New conditions, effective from 2024, were amended to state regardless of the year the income is brought into Thailand, it is subject to personal income tax. The tax rate is progressive, ranging from 5% to 35%. However, the department provided exceptions to mitigate the impact on taxpayers."

 

 

I believe members are mostly aware of the previous rule change but are divided into various camps as follows:

 

30% - OK/Fine

35% - Wait and See for more details in November

20% - Will stay here less than 180 days per year

35% - Will remit less assessable income

3 members - You're scaremongering and talking borrocks

 

(Note percentages don't total 100 because some members selected multiple options)

 

[sandrew33]

On 9/9/2024 at 9:51 AM, gearbox said:

In theory you are right, Thailand can request this info, and they do have a proof that you were a tax resident.

 

In practice unlikely to happen as it is not an automated exchange, at the home country side all your banks need to be contacted to generate CRS reports manually.

 

As I said before the only way to foolproof this is to stay less than 180 days in Thailand, fortunately easy for me without any extra effort required.

CRS is actually an obligation on your bank. The bank has to form a view on your place of residency which is why they ask those questions. 
 

if you have a Thai bank account and you’ve notified them you are an Aussie they will report CRS info to Thai revenue who will report to Australian Tax Office. 
 

If you have an Aussie bank account and they’ve determined you are living in Thailand then the same in reverse. 
 

Of course you can obfuscate or not tell the truth and maybe get away with it. This will get harder as computer systems & data matching improves over time. 
 

Or you can dance the Thai residency 180 day test as you mention. This is not an option for most retired expats. 

[Mike Teavee]

9 minutes ago, sandrew33 said:

Potentially true but many countries will have a law that determines tax residency and once a tax resident you remain resident until you establish tax residency elsewhere.  
 

So jumping from country to country avoids you establishing residency in those new countries but you remain tied to country 1 as tax resident. 

That's not correct as you can be a Tax Resident in 1 country, multiple countries or no countries at all. 

 

E.g. I am Tax Resident in Thailand, if I spend <180 days in Thailand & bounce around different countries for the remainder of the year never establishing Tax Residency in any of them I won't be a Tax Resident anywhere. 

 

If you are claiming that I would revert to being Tax Resident in my home country then that's not true either as you need to spend a minimum of 15 days in the UK & given I've been Non-UK Tax Resident for >3 years (18 years) & have a maximum of 1 "Tie" (even that is debatable) in the UK I would need to spend > 182 days there in 1 Tax Year to re-establish my UK Tax Residency.