Expats in Thailand urged not to worry about negative income tax

[ukrules]

2 minutes ago, RupertIII said:

I assume this refers only to realised capital gains, not unrealised.

Yes, for sure.

 

I sold all my assets this year, a year of non residency. I may repurchase some of them, haven't really made the decision yet.

Edited 1 hour ago by ukrules

[hotandsticky]

1 minute ago, RupertIII said:

I assume this refers only to realised capital gains, not unrealised.

 

 

It isn't a gain until it's realised

[oldcpu]

2 hours ago, TroubleandGrumpy said:

This is obviously the opinion of PWC, and therefore not fact, but if TRD has just released this 'significant development' then that second paragraph is a huge worry for all Expats in Thailand, or thinking of living/working in Thailand in the future. 

 

I think this clearly is a worry for some - but not for all.  I think there are some of us, who before 1-January-2024, brought a lot of money into Thailand already - and we can possibly live off of such for a very long time.   Also I think even more of us are in fact protected by Double Tax Agreements.

 

 

2 hours ago, TroubleandGrumpy said:

My initial read is that it means even if you bring it into Thailand in 2025 or afterwards, it is taxable income. But it also 'reads' that if you earn any income after 1 January 2024, you are liable to pay income taxes to Thailand if ay anytime in the future you become a tax resident in Thailand.

 

Yes - further to my point above, I think there are also some of us, who before 1-January-2024, also have a lot of money OUTSIDE of Thailand. We were not living year to year on our foreign Pension and other foreign income, but had salted away large savings outside of Thailand long before 1-January-2024. 

 

So for those of us, we simply create a print out dated 31-Dec-2023 of our holdings outside of Thailand, and then proceed to maintain a basic spreadsheet (backed by financial records) of any money we bring in to Thailand, so that we can show it was from income before (in many cases LONG LONG before) 1-January 2024.

 

Of course not everyone is in that situation.  But as I already noted, Double Tax Agreements (with the country of one's income) with Thailand need to be considered.

 

2 hours ago, TroubleandGrumpy said:

Surely that is not the intention and it is ridiculous that TRD would require any new Expat who becomes a tax resident in Thailand in 2030, to be liable to pay income taxes on any income earned overseas after 1 January 2024.  Surely they mean that if you were a tax resident in 2024 and earned money overseas in 2024, but then brought it into Thailand in say 2026 when you were not a Thai tax resident, that money was still taxable income.

 

I think Thailand does want to tax any global income made by resident (to Thailand) expats after 1-January-2024.  As to whether they will legally be able to do such in accordance with current Thai law is not yet 100% clear - but they (some in Thai RD) have been open in the press that that is their intent.   At present the Thai RD appears to be laying the ground work for taxing some money brought into Thailand ... and later they hope to go a step further in the future. 

 

The Thai RD, when it comes to taxes will be thou, constrained by Double Tax Agreements.  I suspect most resident expatriates income abroad has already been taxed in the source country - so again , not all expatriates (in Thailand) will be affected if there are such changes.  Only those who were able to structure their global income (outside of Thailand) such that there was no tax will likely be impacted (and also any whose income was taxed by a country with no DTA with Thailand could also be impacted).

 

As many pointed out, if one predicts they have a taxation year in which they expect a very large global income (that is not taxed) then that might as well be a good year NOT to be a tax resident to Thailand. Spend less than 180 days in Thailand for that given taxation year.

 

Edited 53 minutes ago by oldcpu

[TroubleandGrumpy]

2 hours ago, ukrules said:

 

To me it means if you were tax resident in 2024 and earned foreign sourced income but remitted zero and then became non resident in 2025 and even subsequent years and at some point remit some or all of it they will tax you in the year of remittance regardless of whether you are a tax resident during the year the year of remittance which would obviously be a future year.

 

The liability is triggered based on residency at the time of making what I'm going to call 'the capital gain'.

 

This is how I've been working it out  - make a load of money in a year when you're tax resident then that money is always taxable when remitted - for the rest of your life, even if you're a non resident - because it was earned when you were a resident.

I suspect PWC could have made this little memo a bit clearer by adding '...of remittance' onto the end of the statement.

 

That foreign sourced income diagram with the check boxes clears this up nicely.

Sounds right - and I would certainly think and hope that is what they mean. But has it been confirmed by TRD that it is what we think it is and it cannot be 'interpreted' by Somchai in the local TRD Office another way? 

And the question then becomes, how can someone who is not a tax resident lodge a tax return in the year they are remitting that money into Thailand. Do they have to lodge an updated return for the year they were a tax resident? Complicated and unclear - same as same is.

 

[TroubleandGrumpy]

48 minutes ago, oldcpu said:

As many pointed out, if one predicts they have a taxation year in which they expect a very large global income (that is not taxed) then that might as well be a good year NOT to be a tax resident to Thailand. Spend less than 180 days in Thailand for that given taxation year.

When/if TRD confirms that in its '2024 tax guide' or public statements, that would be very welcome. Because it worries me that they could actually mean that they want to stop people who in one year become a non-resident for tax purposes (<180 days) , and realise all their capital gains in that year, and then bring that money into Thailand in a later year tax free. I would assume then that the <removed> 'argument' would be that the person was a tax resident and deliberately became a non-resident for tax, for the sole purpose of avoiding income taxes.  Confusing and interesting.