Its Happening - Law to Tax Overseas Income Now in Progress

[jayboy]

5 minutes ago, Ricohoc said:

 

After speaking to a representative at my local TRD office on Friday, as a tax resident, we are expected to file a return whether we have assessable income or not -- whether we owe or not -- if we are here 180 days or more each year.

 

Thanks.There have however been reports with the opposite message.It seems to depend on who one speaks to at which office.Perhaps there will be a clear ruling which will settle the matter once and for all.

 

Don't forget there are millions of Thais with no assessable income who never file tax returns (as well as many Thais who never file but do have assessable income!!) There are no special requirements for foreigners as far as I know.

[Rolo89]

28 minutes ago, ukrules said:

On the subject of tax residency I would like to raise a point about when it is determined that you're non resident or resident.

This is an example which pretty much matches my 2024 travel movements for the year.

Lets say I stay in Thailand from Jan 1 for 177 days and then fly to Cambodia and stay there until late December.

If I return to Thailand on December 29 I will be a tax resident in Thailand for the entire year but if I return on December 30 I won't be a tax resident in Thailand.

 

Nobody is calling their bank on December 29 / 30 to tell them that they're not tax resident for the year and the whole thing resets to zero 3 days later.

 

Come Jan 1, 2025 nobody really knows if they will be alive for the next 180 days let alone present in Thailand. They may have plans and intentions but those can change on a whim.

If I got on a plane and flew to Thailand tomorrow and stayed for a couple of weeks I would become tax resident but I'm probably not going to do that, however it won't be determined 100% until the last few days in December

 

Oh, my point : You  might not know if you're a tax resident in Thailand until the last day or two of the year and then it resets on Jan 1 - so there's not really anything to report to anyone and nobody is going to call asking at that time.

If they were to call you on Jan 1, then you're back in Thailand, nobody knows if they're resident until they've been in Thailand for the full 180 days.

 

I think like most countries tax the onus is on you to count the days and report to them.

 

In theory systems should automatically flag up people they think haven't paid and if anything they want to trip you up to charge fines and high interest.

[chiang mai]

2 minutes ago, jayboy said:

 

Thanks.There have however been reports with the opposite message.It seems to depend on who one speaks to at which office.Perhaps there will be a clear ruling which will settle the matter once and for all.

This is par for the course and should come as no surprise to anyone here..

[norbra]

4 minutes ago, jayboy said:

 

Thanks.There have however been reports with the opposite message.It seems to depend on who one speaks to at which office.Perhaps there will be a clear ruling which will settle the matter once and for all.

Error

[chiang mai]

1 minute ago, Rolo89 said:

I think like most countries tax the onus is on you to count the days and report to them.

 

In theory systems should automatically flag up people they think haven't paid and if anything they want to trip you up to charge fines and interest.

Exactly that. I played the <180 day rule across many countries for almost eight years, my work was such that I was required to be in lots of different places and as a result, I never spent 180 days anywhere. I kept a spreadsheet which I still have, it shows where I was at midnight on every day of the year for eight years. Around year 5 I think, my accountant called me to say that HMRC wanted me to demonstrate my whereabouts for a particular tax year so I sent him the spreadsheet. He was impressed, I guess HMRC was also because I never heard anything more about the matter.

[ukrules]

1 minute ago, chiang mai said:

Exactly that. I played the <180 day rule across many countries for almost eight years, my work was such that I was required to be in lots of different places and as a result, I never spent 180 days anywhere. I kept a spreadsheet which I still have, it shows where I was at midnight on every day of the year for eight years. Around year 5 I think, my accountant called me to say that HMRC wanted me to demonstrate my whereabouts for a particular tax year so I sent him the spreadsheet. He was impressed, I guess HMRC was also because I never heard anything more about the matter.

 

I print out calendars and write numbers on them, one calendar for each country, 6 months per side of A4.

 

I count the day of departure and day of arrival as being present in both countries as I know that midnight rule is a thing in the UK but I'm pretty sure many other places don't use it - including Thailand.

If you're there for a part of the day then they're going to count it - same as immigration and visa stamps.

[Schoggibueb]

In my oppinion we could all just calm down and relax a bit. NOTHING has changed so far.

 

Here just a few lines, If you want to read the full text:

https://immo-th.com/taxation-of-income-for-foreigners/

 

The Topic: Taxation of Foreign Income

As is well known and the subject of heated debate, the government plans to introduce new rules (beginning in 2024) for the taxation of income earned by foreigners staying in Thailand for more than 180 days and remitted to Thai accounts. The current lack of information has led to frustration and uncertainty among foreign retirees.

Today, we aim to address the situation especially for pensioners, as taxation for other foreigners—such as employees, digital nomads, dividend recipients, long-term visa holders, and investors with local income—is already clearly regulated. While the official announcement was made in 2023, there is still no clear guidance from the authorities on how taxpayers should be classified, how much tax should be due or how double taxation agreements shall be taken into account (status October 2024). This delay is largely due to the fact that the relevant government agencies are still reviewing the details and procedures. ...

-----

Rumors and Misinformation

In recent months, numerous articles, YouTube videos, and even TV reports in Thailand and abroad have spread misinformation, adding to the confusion. ...

How much tax will I need to pay as a pensioner in Thailand if we are required to file tax returns in the future?

 

Scenario 1:

• Your monthly pension is deposited into your account in your home country, where it may be subject to local tax regulations.
• If you withdraw funds from this account using your home country credit card at an ATM in Thailand or transfer them online to your Thai account, specifying that they are for “living expenses,” no taxes will be owed under current regulations. Tax treaties between Thailand and other countries also apply here and should be reviewed.
• In case of inquiries from Thai authorities, you can demonstrate that your funds are “old money” earned before January 1, 2024, by providing bank statements, tax returns, inheritance documents, etc., translated into English and certified by your embassy. Though this process requires effort, it will be acceptable to Thai authorities.
• However, if this approach is not feasible, or less advantageous from a tax perspective, you will need to declare your pension income in your tax return and pay taxes in the following year, assuming you have a TIN. Scenario 2 will provide a more detailed example of how tax burdens might be calculated.

Scenario 2:

• You receive your pension directly into your bank account in Thailand.
• The annual pension amount is converted into Thai Baht using a pension certificate and certified by your embassy.
• You will use Thai tax return form number 91, which is in Thai script and typically requires assistance to complete. After entering your annual income (in this case, your pension), you first deduct allowable expenses, just like in your home country’s tax return process.

Example Calculation Based on Euros for Taxation in Thailand:

The pensioner receives a net income of €1,100 per month, which is approximately 42,000 THB/month, or around 504,000 THB/year.

.....

In summary, a foreign taxpayer with a monthly pension income of €1,100, or €13,200 per year (equivalent to 504,000 THB), would pay approximately 200 Thai Baht in taxes.

 

Enjoy life, relax and take it easy.

 

[chiang mai]

14 minutes ago, Schoggibueb said:

In my oppinion we could all just calm down and relax a bit. NOTHING has changed so far.

 

Here just a few lines, If you want to read the full text:

https://immo-th.com/taxation-of-income-for-foreigners/

 

The Topic: Taxation of Foreign Income

As is well known and the subject of heated debate, the government plans to introduce new rules (beginning in 2024) for the taxation of income earned by foreigners staying in Thailand for more than 180 days and remitted to Thai accounts. The current lack of information has led to frustration and uncertainty among foreign retirees.

Today, we aim to address the situation especially for pensioners, as taxation for other foreigners—such as employees, digital nomads, dividend recipients, long-term visa holders, and investors with local income—is already clearly regulated. While the official announcement was made in 2023, there is still no clear guidance from the authorities on how taxpayers should be classified, how much tax should be due or how double taxation agreements shall be taken into account (status October 2024). This delay is largely due to the fact that the relevant government agencies are still reviewing the details and procedures. ...

-----

Rumors and Misinformation

In recent months, numerous articles, YouTube videos, and even TV reports in Thailand and abroad have spread misinformation, adding to the confusion. ...

How much tax will I need to pay as a pensioner in Thailand if we are required to file tax returns in the future?

 

Scenario 1:

• Your monthly pension is deposited into your account in your home country, where it may be subject to local tax regulations.
• If you withdraw funds from this account using your home country credit card at an ATM in Thailand or transfer them online to your Thai account, specifying that they are for “living expenses,” no taxes will be owed under current regulations. Tax treaties between Thailand and other countries also apply here and should be reviewed.
• In case of inquiries from Thai authorities, you can demonstrate that your funds are “old money” earned before January 1, 2024, by providing bank statements, tax returns, inheritance documents, etc., translated into English and certified by your embassy. Though this process requires effort, it will be acceptable to Thai authorities.
• However, if this approach is not feasible, or less advantageous from a tax perspective, you will need to declare your pension income in your tax return and pay taxes in the following year, assuming you have a TIN. Scenario 2 will provide a more detailed example of how tax burdens might be calculated.

Scenario 2:

• You receive your pension directly into your bank account in Thailand.
• The annual pension amount is converted into Thai Baht using a pension certificate and certified by your embassy.
• You will use Thai tax return form number 91, which is in Thai script and typically requires assistance to complete. After entering your annual income (in this case, your pension), you first deduct allowable expenses, just like in your home country’s tax return process.

Example Calculation Based on Euros for Taxation in Thailand:

The pensioner receives a net income of €1,100 per month, which is approximately 42,000 THB/month, or around 504,000 THB/year.

.....

In summary, a foreign taxpayer with a monthly pension income of €1,100, or €13,200 per year (equivalent to 504,000 THB), would pay approximately 200 Thai Baht in taxes.

 

Enjoy life, relax and take it easy.

 

These tax threads have been intensely debated for over a year on AN forum and virtually every video or article ever produced on the subject has been reviewed and commented upon. There is a tax guide (below) which you or others may find useful, either that or the many tax guides published by Big 4 in Thailand and even the TRD. In any event, taking your tax advice from a real estate company is perhaps not the best idea!

 

Telling people to calm down is not too helpful, AN members have been in their current intense mode on this topic for a year and a number of very helpful things have emerged from it. It is not correct to say that nothing has changed, what has changed is that expats must decide this year, whether or not to remain tax resident and also, what funds to remit and which not to, all of this in the expectation that many will file tax returns, in 1Q25.. 

 

 

[JimGant]

7 hours ago, Danderman123 said:

but my interest is whether there is any new news about the plan to force Farangs to leave Thailand by imposing onerous taxation.

Out of curiosity, what is your home country? Would love to see what onerous taxation is on the horizon, based on your DTA.

[Rolo89]

44 minutes ago, Schoggibueb said:

Enjoy life, relax and take it easy.

This is just silly and unhelpful.

 

Worldwide tax will come in as Thailand each year aligns itself with other countries, it's a matter of when. Thailand isn't HK or SP with their financial systems who aren't looking to reform tax.

 

It's better to be aware and make plans. Very unlikely to come in for Jan 2025. But quite likely to come in within 10 years.  

[Schoggibueb]

1 hour ago, chiang mai said:

These tax threads have been intensely debated for over a year on AN forum and virtually every video or article ever produced on the subject has been reviewed and commented upon. There is a tax guide (below) which you or others may find useful, either that or the many tax guides published by Big 4 in Thailand and even the TRD. In any event, taking your tax advice from a real estate company is perhaps not the best idea!

 

Telling people to calm down is not too helpful, AN members have been in their current intense mode on this topic for a year and a number of very helpful things have emerged from it. It is not correct to say that nothing has changed, what has changed is that expats must decide this year, whether or not to remain tax resident and also, what funds to remit and which not to, all of this in the expectation that many will file tax returns, in 1Q25.. 

 

 

You can find the example of deductions etc. in the link I posted above.

 

I checked shortly the link you posted. For me personally the most impportant (and for lots of others too):

 

d) Only income remitted to Thailand is potentially taxable in Thailand, income that remains overseas is not taxable for foreigners. 

f) There is no double taxation but some types of income may be taxed at a different rate, some lower, some higher or some not at all.

g) Dual Tax Agreements (DTA’s) exist between Thailand and over 60 countries, each is different, you must read and understand yours.

j) As long as the rules of the relevant DTA are followed, there should be no double taxation and income that is taxed overseas should not be taxed twice. It is possible however that the right to tax income may shift from one country to another, depending on the terms of the DTA. Any tax paid on income in one country can be used to offset a tax liability on that income in the other country. This may result in a refund/credit of tax already paid, payment of additional tax, or nothing at all. 

 

12) At the time of writing, there are still unanswered questions about exactly how the TRD  will operationalise some aspects of the tax process and how some types of income will be managed for tax, relative to foreigners tax returns and their overseas income in Thailand.

 

I really don't seem to understand the issue. If I pay taxes here or in my home country - no difference. Here I pay less...

 

[chiang mai]

19 minutes ago, Schoggibueb said:

You can find the example of deductions etc. in the link I posted above.

 

I checked shortly the link you posted. For me personally the most impportant (and for lots of others too):

 

d) Only income remitted to Thailand is potentially taxable in Thailand, income that remains overseas is not taxable for foreigners. 

f) There is no double taxation but some types of income may be taxed at a different rate, some lower, some higher or some not at all.

g) Dual Tax Agreements (DTA’s) exist between Thailand and over 60 countries, each is different, you must read and understand yours.

j) As long as the rules of the relevant DTA are followed, there should be no double taxation and income that is taxed overseas should not be taxed twice. It is possible however that the right to tax income may shift from one country to another, depending on the terms of the DTA. Any tax paid on income in one country can be used to offset a tax liability on that income in the other country. This may result in a refund/credit of tax already paid, payment of additional tax, or nothing at all. 

 

12) At the time of writing, there are still unanswered questions about exactly how the TRD  will operationalise some aspects of the tax process and how some types of income will be managed for tax, relative to foreigners tax returns and their overseas income in Thailand.

 

I really don't seem to understand the issue. If I pay taxes here or in my home country - no difference. Here I pay less...

 

It depends on the extent of income involved and also the country of origin and the associated DTA. Some people will pay less, some may pay more, unless they takes steps to mitigate the risk and organise their tax residency and remittances. For example, i appears that remitting funds to Thailand in a year when you are not tax resident here, avoids Thai tax on that remittance.

[Rolo89]

52 minutes ago, Schoggibueb said:

If I pay taxes here or in my home country - no difference. Here I pay less...

Well great for you at the moment, but this suituation can change and if taxes in Thailand end up being more Thailand could charge the difference.

[Schoggibueb]

28 minutes ago, Rolo89 said:

Well great for you at the moment, but this suituation can change and if taxes in Thailand end up being more Thailand could charge the difference.

"Only income remitted to Thailand is potentially taxable in Thailand, income that remains overseas is not taxable for foreigners."

 

If somebody spends more money in Thailand than in his home country - I agree. I have the same lifestyle and spend much less.

If my monthly pension will be taxable in Thailand is still not clear yet by the DTA between Thailand and my country.

 

Anyway, I wish all of you happy moments to come. Of course you can go on to worry about something that isn't decided yet...

[chiang mai]

1 minute ago, Schoggibueb said:

"Only income remitted to Thailand is potentially taxable in Thailand, income that remains overseas is not taxable for foreigners."

 

If somebody spends more money in Thailand than in his home country - I agree. I have the same lifestyle and spend much less.

If my monthly pension will be taxable in Thailand is still not clear yet by the DTA between Thailand and my country.

 

Anyway, I wish all of you happy moments to come. Of course you can go on to worry about something that isn't decided yet...

You could read your county's DTA, which is listed in the link given to you earlier, that way you would know.

[NoDisplayName]

19 minutes ago, Schoggibueb said:

"Only income remitted to Thailand is potentially taxable in Thailand, income that remains overseas is not taxable for foreigners."

 

That's for the other threads about the revision to the interpretation of the current law.

 

THIS particular thread is about proposed legislation instituting global taxation.

 

To implement this, an amendment to Section 41 of the Revenue Code is required. The proposed amendment would require individuals residing in Thailand for 180 days or more to pay personal income tax on overseas income, even if that income is not brought into Thailand.

 

Game-changer.

[Puccini]

11 hours ago, Danderman123 said:

You International businesspeople may be concerned about the impact of these new proposed Thai tax laws on your business empires,  but my interest is whether there is any new news about the plan to force Farangs to leave Thailand by imposing onerous taxation.

 

I don't think there is any such plan. 

[ukrules]

6 hours ago, Schoggibueb said:

Of course you can go on to worry about something that isn't decided yet...

 

That is literally the title of this thread, the Revenue Department announced last year that they want to tax our foreign earnings without them being remitted and we've been here speculating about it ever since.

They also said they will be writing a law which is odd as that's the job of government, not a tax collector - so they say a lot of things and I'm sure many people are ignoring them as it was likely driven by the former Prime Minister who is suddenly not Prime Minister any more.

 

Locking in all current profits / capital gains prior to any change of the law is a good move to make in a non resident year so it remains non taxable forever.

[shdmn]

10 hours ago, jayboy said:

 

Thanks.There have however been reports with the opposite message.It seems to depend on who one speaks to at which office.Perhaps there will be a clear ruling which will settle the matter once and for all.

 

Don't forget there are millions of Thais with no assessable income who never file tax returns (as well as many Thais who never file but do have assessable income!!) There are no special requirements for foreigners as far as I know.

As others have said, if you are there more than 180 days the onus is probably on you to file. It would be better to file even if you don't think you have to rather than having to deal with what may happen if you don't.

[chiang mai]

1 hour ago, ukrules said:

 

That is literally the title of this thread, the Revenue Department announced last year that they want to tax our foreign earnings without them being remitted and we've been here speculating about it ever since.

They also said they will be writing a law which is odd as that's the job of government, not a tax collector - so they say a lot of things and I'm sure many people are ignoring them as it was likely driven by the former Prime Minister who is suddenly not Prime Minister any more.

 

Locking in all current profits / capital gains prior to any change of the law is a good move to make in a non resident year so it remains non taxable forever.

I think changes to the Revenue Code and Thai Tax law is part of TRD's remit, they are a part of the permanent civil service infrastructure that has to deal with things on an ongoing basis, after ministers have come and gone.

[Ricohoc]

10 hours ago, Schoggibueb said:

Here just a few lines, If you want to read the full text:

https://immo-th.com/taxation-of-income-for-foreigners/

 

Scenario 1:

• Your monthly pension is deposited into your account in your home country, where it may be subject to local tax regulations.
• If you withdraw funds from this account using your home country credit card at an ATM in Thailand or transfer them online to your Thai account, specifying that they are for “living expenses,” no taxes will be owed under current regulations. Tax treaties between Thailand and other countries also apply here and should be reviewed.
• In case of inquiries from Thai authorities, you can demonstrate that your funds are “old money” earned before January 1, 2024, by providing bank statements, tax returns, inheritance documents, etc., translated into English and certified by your embassy. Though this process requires effort, it will be acceptable to Thai authorities.
• However, if this approach is not feasible, or less advantageous from a tax perspective, you will need to declare your pension income in your tax return and pay taxes in the following year, assuming you have a TIN. Scenario 2 will provide a more detailed example of how tax burdens might be calculated.

 

This reference to "living expenses" is something I have never seen before in these discussions. That is in the current tax law?

 

That's the only reason I bring any funds into Thailand every month, and almost 100% of it is food, utilities, auto fuel, home maintenance. No rent, no loans of any kind to pay off, etc. Debt free.

[chiang mai]

1 minute ago, Ricohoc said:

 

This reference to "living expenses" is something I have never seen before in these discussions. That is in the current tax law?

 

That's the only reason I bring any funds into Thailand every month, and almost 100% of it is food, utilities, auto fuel, home maintenance. No rent, no loans of any kind to pay off, etc. Debt free.

The author of that extract you quoted is a real estate agent and is confusing issues.

 

Inbound remittances must be categorised for the Central Bank to understand the purpose of the funds transfer, all inbound remittances are seen by them for currency control purposes. Funds designated as living expenses are deemed to have been spent, hence later, they cannot be remitted back overseas. This has its roots in THB being a restricted currency and the ability of foreigner's to send money out of Thailand, a picture that has eased considerably in recent years but was once very strict.

 

There is no tax aspect to remitted "living expenses" which are nothing more than inbound funds which may or may not be Thai tax assessable.

[ukrules]

1 hour ago, chiang mai said:

I think changes to the Revenue Code and Thai Tax law is part of TRD's remit, they are a part of the permanent civil service infrastructure that has to deal with things on an ongoing basis, after ministers have come and gone.

 

It's a policy change therefore a political thing.

[chiang mai]

Just now, ukrules said:

 

It's a policy change therefore a political thing.

This is chicken and egg. Did the Minister decide the need or did the TRD decide the need, I'd argue that Ministers don't decide any needs, they only pick ideas to champion, supplied to them by TRD. And who decides what policy should be in any given area, certainly not Ministers who frequently have no training or experience in the areas that they administer.

 

[Danderman123]

11 hours ago, JimGant said:

Out of curiosity, what is your home country? Would love to see what onerous taxation is on the horizon, based on your DTA.

My home country is USA.

 

There are some years where most of my income is in the form of capital gains generated in the US. So the DTA would help some, but there would still be a large Thai tax liability.

[jayboy]

4 hours ago, shdmn said:

It would be better to file even if you don't think you have to rather than having to deal with what may happen if you don't.

 

There are penalties for non filing, some of which are severe but all depend on evasion of tax and the assumption tax is actually due.If no tax is due I'm not sure anything will happen if one doesn't file.Of course one needs to be sure of one's ground and have records to prove it if needs be..

[JimGant]

3 hours ago, Danderman123 said:

There are some years where most of my income is in the form of capital gains generated in the US. So the DTA would help some, but there would still be a large Thai tax liability.

Granted. Yanks with long term cap gains, and qualified dividends, wouldn't be protected from Thai taxes by the DTA. That wasn't, initially, obvious to me, since all my cap gains are generated within my IRA, thus treated as ordinary income.

 

Haven't heard any talk lately about "if you have a DTA, and you pay income taxes in your home country, then no need to file a Thai tax return." That would be nice for us Yanks -- and, yes, would cost Thailand some tax receipts. But, for those expats currently not paying anyone taxes -- TRD might be very interested when you can't show a home country tax return.

[Danderman123]

1 minute ago, JimGant said:

Granted. Yanks with long term cap gains, and qualified dividends, wouldn't be protected from Thai taxes by the DTA. That wasn't, initially, obvious to me, since all my cap gains are generated within my IRA, thus treated as ordinary income.

 

Haven't heard any talk lately about "if you have a DTA, and you pay income taxes in your home country, then no need to file a Thai tax return." That would be nice for us Yanks -- and, yes, would cost Thailand some tax receipts. But, for those expats currently not paying anyone taxes -- TRD might be very interested when you can't show a home country tax return.

The main point is that there is still no guidance from the RD on any of these tax proposals.

[Talon]

Newton's Third Law: For every action, there is an equal and opposite reaction.

 

People will change their behavior as the tax rates are changed.

 

Foreigners are "not inert blocks of wood or chess pieces that can be moved around on a chess board." There will be a reaction; and it's been tested before in other places. The spending behavior of foreigners will change (and is already changing).

 

e.g. Foreigners will leave . Foreigners will spend less than 180 days in Thailand resulting in spending less . Foreigners who stay will bring less money to Thailand . Foreigners who stay will make budget cuts and spend less money in Thailand, which will impact VAT tax revenues for the government . Foreigners will try and avoid it through various methods

 

It will be interesting to see how it plays out.

 

Thomas Sowell always gets it right.

 

Thomas Sowell on taxes and how people change their behaviors

 

 

[chiang mai]

5 hours ago, Danderman123 said:

The main point is that there is still no guidance from the RD on any of these tax proposals.

It has long been said that further guidance would come with the release of the new tax forms and associated instructions,  at the end of the year, everyone just needs to be patient and wait for that.