Its Happening - Law to Tax Overseas Income Now in Progress

[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 October 18 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 October 18 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. 

[bkk6060]

We will see all these promises of a new tax form.

I would not be surprised if the ¨new¨ is the same form that has only the new date of 2024 at the top.

Edited October 18 by bkk6060

[anrcaccount]

3 hours ago, TroubleandGrumpy said:

I am not so sure that this is the case.  PWC issued this 'significant development' on 16 October.

 

Thailand - Individual - Significant developments (pwc.com)

 

Last reviewed - 16 October 2024

On 15 September 2023 and 20 November 2023, The Revenue Department issued No. Paw. 161/2566 and Paw. 162/2566 regarding personal income tax (PIT) for a Thai resident who brings assessable income into Thailand from abroad. This order shall come into force for assessable income brought into Thailand from 1 January 2024 onwards.

According to this order:

• A Thai resident means a person residing in Thailand at one or more times for a period equal to 180 days in any tax (calendar) year.
• If a Thai resident earns foreign-sourced income in 2024 and brings it into Thailand in the same year or any subsequent year, they will be subject to PIT on that income, regardless of whether they are resident in Thailand at the time.

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. 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.

 

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 may not be reading this correctly. But based on my read - this is just as convoluted and unenforceable as the previously discussed "rule".

 

The way to avoid paying it, in theory, would then be simply to only remit income earned SAME year, but when you are NOT a tax resident. 

 

That way the income wasn't earned as a Thai tax resident. 

 

 

 

 

 

 

[BritManToo]

10 minutes ago, anrcaccount said:

 

I may not be reading this correctly. But based on my read - this is just as convoluted and unenforceable as the previously discussed "rule".

 

The way to avoid paying it, in theory, would then be simply to only remit income earned SAME year, but when you are NOT a tax resident. 

 

That way the income wasn't earned as a Thai tax resident. 

Or spend under 650kbht a year in Thailand and only risk a tax liability of 3kbht.

 

(Personal allowance + wife's personal allowance + over 60s allowance + child in school allowance + pension income allowance + 2% tax rate on first 150kbht of taxable income)

 

That's if they even bother to try and tax retired foreigners living in Thailand, which I seriously doubt will ever happen.

[Antti]

This is a totally unenforceable mess. Determining when remitted funds were earned will be difficult for people with multiple income sources, bank accounts, brokerage accounts, etc.

 

Either taxes will continue to be something foreigners don’t have to worry about, or they will implement worldwide taxation. I don’t see this current situation being enforced.

[TroubleandGrumpy]

7 minutes ago, BritManToo said:

Or spend under 650kbht a year in Thailand and only risk a tax liability of 3kbht.

 

(Personal allowance + wife's personal allowance + over 60s allowance + child in school allowance + pension income allowance + 2% tax rate on first 150kbht of taxable income)

 

That's if they even bother to try and tax retired foreigners living in Thailand, which I seriously doubt will ever happen.

I tend to agree with that position - I doubt they will try to tax retired Expats living in Thailand.  But if I am the unlucky guy who gets 'questioned', it would be wise to have at least some idea of what TRD is doing, and be able to at least put a case forward - especially about DTAs.  Meanwhile, sorry to say, but I hope it is one of the other guys who gets 'the call/letter' - only if that happens (if it does) will we know the reality of the situation.   Although I am optimistic, if this does go ahead, I have no reason to think that the TO in the local TRD Office will be less dogmatic and unchangeable, as the IO in the local Immigration Office. I usually get a 'good one' but there has over the years been a few 'Somchais' who say - 'no, this way to do' - and of course I smile and agree. If I am 'called' by TRD and I decide to attend, I will try to remember that there is only one thing worse than telling a Thai 'Officer' that they are wrong, and that is proving it.  

[Lorry]

3 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.

Exactly,  very well explained. 

[offset]

22 minutes ago, BritManToo said:

Or spend under 650kbht a year in Thailand and only risk a tax liability of 3kbht.

 

(Personal allowance + wife's personal allowance + over 60s allowance + child in school allowance + pension income allowance + 2% tax rate on first 150kbht of taxable income)

 

That's if they even bother to try and tax retired foreigners living in Thailand, which I seriously doubt will ever happen.

If you have any saving before 2024 why pay any tax.

I will say 500000baht (my tax free  allowance is 555000baht) is related to my tax income the rest from my savings before 2024. That way it leaves me with enought Thai tax free allowance to claim back my Thai savings with held tax

I have also have received a letter from my UK bank stating what my savings we're before 2024

 

[anrcaccount]

4 minutes ago, Lorry said:

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.

 

 

Yes, but to avoid that - simply make what was called the "load of money" or "capital gain" in a year you are NOT tax resident.

 

Then it's never taxable in Thailand.

 

So, not really any different to the idea of staying a Non Thai Resident in years where you remitted, which is what people were discussing previously.

 

Either way the whole concept is seriously Unworkable/ Unenforceable IMO. 

[Lorry]

1 hour ago, TroubleandGrumpy said:

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.

Easy.

Let's say, if you aren't here in the year you remit the money, you just fly here,  file your taxes and pay them, then fly back.

If your Thai is good enough,  you may even do it online while abroad. 

No problem at all.

[Lorry]

4 minutes ago, anrcaccount said:

 

 

Yes, but to avoid that - simply make what was called the "load of money" or "capital gain" in a year you are NOT tax resident.

 

Then it's never taxable in Thailand.

 

So, not really any different to the idea of staying a Non Thai Resident in years where you remitted, which is what people were discussing previously.

 

Either way the whole concept is seriously Unworkable/ Unenforceable IMO. 

Agreed - but of course it's enforceable.

Enforcement will be unworkable for us, not for the TRD.

That's why I call it hostile. 

 

[Isaan sailor]

If it sticks, could be the final nail in the coffin for Thailand.  That, plus the crazy Baht valuation today—-DXY Tradingview shows USD at an 11-week high.  The last time it hit 103.60 we had an exchange rate near 34. on the USD/Baht.  Today, we have uSD at 33.14.

[TroubleandGrumpy]

10 minutes ago, Lorry said:

Easy.

Let's say, if you aren't here in the year you remit the money, you just fly here,  file your taxes and pay them, then fly back.

If your Thai is good enough,  you may even do it online while abroad. 

No problem at all.

Exactly - unworkable.

Or will TRD pay for the flights and 4/5 star accommodation??  Well OK then. Samui has a TRD Office. 2 weeks should do it.

[TroubleandGrumpy]

7 minutes ago, Isaan sailor said:

If it sticks, could be the final nail in the coffin for Thailand.  That, plus the crazy Baht valuation today—-DXY Tradingview shows USD at an 11-week high.  The last time it hit 103.60 we had an exchange rate near 34. on the USD/Baht.  Today, we have uSD at 33.14.

Thailand has been putting nails in it's own coffin since 2014 when the Junta re-aligned with China, implemented all the BS regulations about 'foreigners', and manipulated the Baht to make it a lot higher. They did that for buying military equipment and infrastructure projects (mainly from China and all with the usual kickbacks). The Baht has a long long way to go back down to anything near 'normal' when measured over any extended period. The Baht is massively over-valued when compared to the year the Junta took over - and the 14 years before that to the year 2000. 

 

Currency	Sept 2014	Sept 2024	Now
USD	36.3	32.7	33.3
EUR	40.5	36.1	36.3
JPY	0.31	0.22	0.22
GBP	55.1	43.3	43.5
AUD	25.5	23.2	22.4

 

[Mavideol]

Expats in Thailand urged not to worry about negative income tax

 

 

 

[Antti]

18 minutes ago, Mavideol said:

Expats in Thailand urged not to worry about negative income tax

 

 

 

Yes, I’m sure expats in Thailand need not to worry about negative income tax, which means getting money from the government. Positive (normal) income tax on the other hand, I wouldn’t be so sure about, at least in the long run.

[Danderman123]

On 10/14/2024 at 3:22 PM, Talon said:

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

 

 

Out of caution, I am traveling sufficiently this year that I will spend less than 179 days in Thailand this year. My plan is to monitor the status of the new tax regulations early next year. If it's worst case, I will look for a permanent home in another country to spend 6 months every year.

 

But it's hard to believe that the Thai government is going to force Farangs living in Isaan villages to file tax returns, given the impossibility of contacting them.

[Talon]

12 minutes ago, Danderman123 said:

Out of caution, I am traveling sufficiently this year that I will spend less than 179 days in Thailand this year. My plan is to monitor the status of the new tax regulations early next year. If it's worst case, I will look for a permanent home in another country to spend 6 months every year.

 

I have two friends who have already done the same. Between the two of them, 3 bank accounts in Thailand closed and one reduced considerably (over 3.5 million baht). They don't need to keep money here anymore.

 

Another unintended consequence of all of this Thailand tax talk.

[Lacessit]

I did my retirement visa extension today.

 

Tax or a tax ID was not mentioned, although I did include a photocopy of my pink Thai ID card.

[SiamAndy]

On 10/22/2024 at 1:45 AM, Talon said:

 

I have two friends who have already done the same. Between the two of them, 3 bank accounts in Thailand closed and one reduced considerably (over 3.5 million baht). They don't need to keep money here anymore.

 

Another unintended consequence of all of this Thailand tax talk.

I'm planning to close my Thai bank account this year also as I will only be staying in Thailand between 60-150 days going forward. If it comes to fruition, the worldwide income tax on resident expats  was the last straw for me on top of Dual Pricing at hospitals and national parks, past TM30 debacles, departure taxes built into airfare and also the new proposed arrival tax. Thailand seems to think they are the center of the universe but they are not! It makes one wonder what new scheme will they come up with next?

[Talon]

10 hours ago, Lacessit said:

I did my retirement visa extension today.

 

Tax or a tax ID was not mentioned, although I did include a photocopy of my pink Thai ID card.

 

I don't expect that it will be mentioned this year.

2025 could be different if we ever get definitive information re: filing from TRD.

[Talon]

47 minutes ago, SiamAndy said:

I'm planning to close my Thai bank account this year also as I will only be staying in Thailand between 60-150 days going forward. If it comes to fruition, the worldwide income tax on resident expats  was the last straw for me on top of Dual Pricing at hospitals and national parks, past TM30 debacles, departure taxes built into airfare and also the new proposed arrival tax. Thailand seems to think they are the center of the universe but they are not! It makes one wonder what new scheme will they come up with next?

 

New taxes are only massively successful in the first year because people are caught off guard. Eventually, people will alter their behavior and avoid the tax in many different ways.  I have already made a Plan B, C and D, which will depend on what eventually happens.  Plan A is to keep doing what I'm doing if nothing happens with this tax. 

[ukrules]

50 minutes ago, SiamAndy said:

I'm planning to close my Thai bank account this year also as I will only be staying in Thailand between 60-150 days going forward. If it comes to fruition, the worldwide income tax on resident expats  was the last straw for me on top of Dual Pricing at hospitals and national parks, past TM30 debacles, departure taxes built into airfare and also the new proposed arrival tax. Thailand seems to think they are the center of the universe but they are not! It makes one wonder what new scheme will they come up with next?

 

There's no need to close accounts when you reside for less than 180 days, it's always useful to keep some bank accounts active in different places, you never know when they will come in useful.

In fact you can send as much money in these 'off years' as you want with zero liability in Thailand, even if you made the money in the same year as you remit it.

So, sell something worth a load of cash in 2024 when you stay less than 180 days and you can remit as much as you want and it doesn't count in Thailand. Of course you may have liabilities in other countries depending on what it is that you sold, and where it and you were when it was sold, etc

[Lacessit]

3 hours ago, Talon said:

 

I don't expect that it will be mentioned this year.

2025 could be different if we ever get definitive information re: filing from TRD.

When I go to Immigration, I expect anything, because they keep changing their rules.

[Talon]

4 hours ago, ukrules said:

 

There's no need to close accounts when you reside for less than 180 days, it's always useful to keep some bank accounts active in different places, you never know when they will come in useful.

In fact you can send as much money in these 'off years' as you want with zero liability in Thailand, even if you made the money in the same year as you remit it.

So, sell something worth a load of cash in 2024 when you stay less than 180 days and you can remit as much as you want and it doesn't count in Thailand. Of course you may have liabilities in other countries depending on what it is that you sold, and where it and you were when it was sold, etc

 

All true, but each does what they consider is best for them.

[chiang mai]

4 hours ago, ukrules said:

 

There's no need to close accounts when you reside for less than 180 days, it's always useful to keep some bank accounts active in different places, you never know when they will come in useful.

In fact you can send as much money in these 'off years' as you want with zero liability in Thailand, even if you made the money in the same year as you remit it.

So, sell something worth a load of cash in 2024 when you stay less than 180 days and you can remit as much as you want and it doesn't count in Thailand. Of course you may have liabilities in other countries depending on what it is that you sold, and where it and you were when it was sold, etc

Wasn't that the shock news very recently that money sent during those "off years", still didn't escape tax? Tbh I wasn't paying close attention to the discussion because of vacation planning. And now on hols, I'm not going to look it up but I do think there is still a tax liability. Perhaps others can chip in?