Its Happening - Law to Tax Overseas Income Now in Progress

[KhunHeineken]

On 11/5/2024 at 9:10 AM, spidermike007 said:

I see there's a lot of discussion about the fact that the authorities don't seem to be willing to acknowledge the fact that many affluent foreigners who live here full time will be lost. The important aspect of this is that I think that's what they want. I don't think they put any value on us as contributors to the economy or to Thai society on any level, and I think quite the opposite might be true. Their arrogance is stunning and they're ignorance is enormous, so vision is not exactly their strong suit.

 

They have no desire or ability to objectively evaluate just how much we bring to the table as relatively affluent expats. 

Maybe the Thai's are just happy to have tourism, rather than be colonized, because that's pretty much what expats have done, colonized Thailand,  from north to south, and east to west. 

[freedomnow]

I mean at this late stage, have they clairified the key worry - are they going to double-tax which nowhere else seems to do ?

 

I think it will just fall apart at the last stage, its got to hit the condo demand market...

 

Maybe Shinawatras will sweep it away ?

[KhunHeineken]

11 minutes ago, freedomnow said:

I mean at this late stage, have they clairified the key worry - are they going to double-tax which nowhere else seems to do ?

DTA's ensure no double taxation, however, DTA's simply allow the taxation to be shared, and not exempted. 

 

11 minutes ago, freedomnow said:

I think it will just fall apart at the last stage, its got to hit the condo demand market...

One particular member believes not.  Tax or no tax the following year, the Chinese and Russian will keep the Thai property market afloat. 

 

He may be right, but in my opinion, anyone doing their due diligence would hold off to see how this tax unfolds, and a I gave an example in another thread of the exact demographic who should not be rushing in.

 

Another member said the Chinese and Russians simply want / need to get their money out of their country, and I accept that, but I also mentioned if they are "parking" that money in Thai property, then it's creating a "bubble."

 

11 minutes ago, freedomnow said:

Maybe Shinawatras will sweep it away ?

I have never trusted any government here.  That's why I have nothing here I can leave behind in a matter of hours and head straight to the airport.  This is by design.   

 

They can do anything, at anytime, and foreigners have no rights. 

 

That retirement visa / extension is nothing more than a 1 year tourist visa. 

[freedomnow]

4 minutes ago, KhunHeineken said:

DTA's ensure no double taxation, however, DTA's simply allow the taxation to be shared, and not exempted. 

 

 

With a simple example..In the sense that country of residence tax at 10% and Thailand taxes at 16% so Thailand takes the 6% slice from the expat resident in Thailand ?

[KhunHeineken]

5 minutes ago, freedomnow said:

With a simple example..In the sense that country of residence tax at 10% and Thailand taxes at 16% so Thailand takes the 6% slice from the expat resident in Thailand ?

That is basically how it works. 

 

Many members seem to think DTA's stop their money being taxed in two countries.  This is incorrect.  DTA's simply stop the same money being taxed twice. 

 

I posted this on another thread.  I'll post it again on this thread for your benefit.  He explains it quite well. 

 

 

[freedomnow]

12 minutes ago, KhunHeineken said:

That is basically how it works. 

 

Many members seem to think DTA's stop their money being taxed in two countries.  This is incorrect.  DTA's simply stop the same money being taxed twice. 

 

I posted this on another thread.  I'll post it again on this thread for your benefit.  He explains it quite well. 

 

 

Right so for UK expats who harness their tax-free allowance with UK residence rental income up to £12,570

I'm guessing the Thai system will tax that with no equivalent.

[freedomnow]

Based on the last sentence below, I think the multinationals will flex on this signalling relocation to VietNam and Malaysia and it will crumble for individuals as well...

 

"Under the proposed framework, multinational corporations with annual global revenues exceeding US$870 million would be subject to a worldwide minimum tax (GMT) rate of 15 percent, regardless of the jurisdiction in which they operate. If these companies pay less than this minimum rate in a particular country, they must pay additional taxes to meet the 15 percent threshold."

[spidermike007]

15 hours ago, KhunHeineken said:

Maybe the Thai's are just happy to have tourism, rather than be colonized, because that's pretty much what expats have done, colonized Thailand,  from north to south, and east to west. 

I do agree tourism is a bit much in some areas. But let's go ahead and count your reply as the silliest post of the day. Surely there are a lot of tourists and expats in Thailand but there are tons of areas that barely ever see a foreigner much less have foreigners that live there, and if you subtract Phuket, Pattaya, Bangkok, Samui and Chiang Mai from the equation there are many significant sized cities here in Thailand that have very few expats and very few tourists.

 

So none of us have any idea what you're talking about. 

[chiang mai]

14 hours ago, freedomnow said:

Right so for UK expats who harness their tax-free allowance with UK residence rental income up to £12,570

I'm guessing the Thai system will tax that with no equivalent.

The Thai system ignores the UK personal Allowance and requires taxpayers to use the Thai system, which for under age 65 year olds, is paltry. After age 65 years, the allowances are comparably to the UK Personal Allowance.

 

Rental income must be declared gross here, before any deductions. The option then exists to take a standard deduction against Thai tax, equal to 30% of gross rental income, or, itemise all the expense but provided you have all the receipts.

 

By way of example, I'm over 65 years and the Thai deductions are nearly exactly what my UK Personal Allowance would be, plus, the 30% standard deduction on rental income, exactly covers my uk expenses. Horses for courses, in my case.

[anrcaccount]

1 hour ago, chiang mai said:

Rental income must be declared gross here, before any deductions. The option then exists to take a standard deduction against Thai tax, equal to 30% of gross rental income, or, itemise all the expense but provided you have all the receipts.

 

I'm not sure this is accurate in terms of it applying to remitted foreign rental income. Not arguing for the sake of it, but it just doesn't seem to be workable. 

 

What about partially remitted foreign rental income? How do you declare that "gross"?

 

What can be used as "actual expenses"? Mortgage interest for example....where are the eligible expenses listed for the "actual" method?

 

Example 1

 

A foreign rental property rents for 30000 gross. Expenses are 15000 ( foreign rates/property tax, maintenance, insurance, property management fees).

 

Net 15000

 

10000 of this is remitted to Thailand.

 

How would this be computed?

 

Example 2 

 

A foreign rental property rents for 30000 gross. Expenses are 30000 ( foreign rates/property tax, maintenance, insurance, property management fees, PLUS mortgage interest).

 

Net 0

 

10000 of this is remitted to Thailand. 

 

( Other offshore funds used to cover the property expenses) 

 

How would this be computed?

 

How can you deduct an actual foreign expense against income remitted to Thailand - it just doesn't logically add up. 

 

I haven't even mentioned that tax is already likely to be paid on the net income, in the country where the rental property is located.

 

Remitting the rental income as gross - doesn't seem to be workable or logical.

 

 

 

[chiang mai]

13 minutes ago, anrcaccount said:

 

I'm not sure this is accurate in terms of it applying to remitted foreign rental income. Not arguing for the sake of it, but it just doesn't seem to be workable. 

 

What about partially remitted foreign rental income? How do you declare that "gross"?

 

What can be used as "actual expenses"? Mortgage interest for example....where are the eligible expenses listed for the "actual" method?

 

Example 1

 

A foreign rental property rents for 30000 gross. Expenses are 15000 ( foreign rates/property tax, maintenance, insurance, property management fees).

 

Net 15000

 

10000 of this is remitted to Thailand.

 

How would this be computed?

 

Example 2 

 

A foreign rental property rents for 30000 gross. Expenses are 30000 ( foreign rates/property tax, maintenance, insurance, property management fees, PLUS mortgage interest).

 

Net 0

 

10000 of this is remitted to Thailand. 

 

( Other offshore funds used to cover the property expenses) 

 

How would this be computed?

 

How can you deduct an actual foreign expense against income remitted to Thailand - it just doesn't logically add up. 

 

I haven't even mentioned that tax is already likely to be paid on the net income, in the country where the rental property is located.

 

Remitting the rental income as gross - doesn't seem to be workable or logical.

 

 

 

 

For example, I rent out a one bedroom retirement flat that I own outright, for 600 Pounds a month. The agent charges me a fee, I pay the Service Charge and I pay Landlords insurance, book keeping fees and any misc costs towards repair. That broadly leaves me with two thirds of my gross rent as profit but for Thai tax purposes I declare 600 Pounds a month, pro rata for however how many months rental income I chose to remit. Recently I remitted 6 months rental income  or 3,600 Pounds. When I declare that income I will take the standard deduction of 30%, about the same amount as my actual costs. That leaves my with 2,700 as profit which falls nicely within my TEDA.

 

How people declare mortgage interest, I have no idea, I'm not sure that you can. Meanwhile, when I file my UK return I will declare the full year rental income of 6k Pounds and take actual costs that are equal to around 30% of the income value, the profit from which falls within my UK Personal Allowance.

[mudcat]

Some DTAs do serve to exempt some income from being taxed by the other country, in our case by Thailand.  The U.S. Thailand tax convention reserves for the U.S. taxation of U.S. Social Security and government pensions for U.S. persons who are not also Thai nationals.

 

The result of these two reservations and standard deduction for a married couple results in an effective tax rate of less than 9% on a gross income of around $95,000.

 

 

 

[chiang mai]

3 minutes ago, mudcat said:

Some DTAs do serve to exempt some income from being taxed by the other country, in our case by Thailand.  The U.S. Thailand tax convention reserves for the U.S. taxation of U.S. Social Security and government pensions for U.S. persons who are not also Thai nationals.

 

The result of these two reservations and standard deduction for a married couple results in an effective tax rate of less than 9% on a gross income of around $95,000.

 

 

 

On $30k it can easily be zero, that equates to 85k Baht a month which provides a good standard of retirement living.

[KannikaP]

18 hours ago, KhunHeineken said:

because that's pretty much what expats have done, colonized Thailand,  from north to south, and east to west. 

So glad I live right in the middle.....no expat colonizers.

[TheAppletons]

10 minutes ago, mudcat said:

Some DTAs do serve to exempt some income from being taxed by the other country, in our case by Thailand.  The U.S. Thailand tax convention reserves for the U.S. taxation of U.S. Social Security and government pensions for U.S. persons who are not also Thai nationals.

 

The result of these two reservations and standard deduction for a married couple results in an effective tax rate of less than 9% on a gross income of around $95,000.

 

 

 

 

  I'm guessing you have other income not covered by the DTA?  Or are you saying your overall tax rate - US and Thailand combined - is less than 9%?

 

  Otherwise, I would have estimated your Thailand tax rate at 0% if your income is comprised solely of SS and government pensions.

[KannikaP]

2 hours ago, chiang mai said:

I'm over 65 years and the Thai deductions are nearly exactly what my UK Personal Allowance would be,

GBP 12750 is Bht 545176 right now. As far as I have been informed, an over 65 year old can get 190k + 60k+ 150k =400k before tax here.

Any explanation please.

[chiang mai]

5 minutes ago, KannikaP said:

GBP 12750 is Bht 545176 right now. As far as I have been informed, an over 65 year old can get 190k + 60k+ 150k =400k before tax here.

Any explanation please.

Plus 100 k pension in come expense, plus 46k rental income expense.

[KannikaP]

2 minutes ago, chiang mai said:

Plus 100 k pension in come expense, plus 46k rental income expense.

What is the 100k Pension income expense please, my Tax Officer never told me about that. 

[TheAppletons]

4 minutes ago, KannikaP said:

What is the 100k Pension expense please, my Tax Officer never told me about that. 

 

  Perhaps you should just read the tax guide pinned at the top of the forum.  It's all there for people who don't need to be spoon fed information.

[jwest10]

2 hours ago, chiang mai said:

The Thai system ignores the UK personal Allowance and requires taxpayers to use the Thai system, which for under age 65 year olds, is paltry. After age 65 years, the allowances are comparably to the UK Personal Allowance.

 

Rental income must be declared gross here, before any deductions. The option then exists to take a standard deduction against Thai tax, equal to 30% of gross rental income, or, itemise all the expense but provided you have all the receipts.

 

By way of example, I'm over 65 years and the Thai deductions are nearly exactly what my UK Personal Allowance would be, plus, the 30% standard deduction on rental income, exactly covers my uk expenses. Horses for courses, in my case.

Agreed it is very comparable to the UK assuming the present 500K or 560K Thai allowances but there is no forms and no one knows if there will be and ok 3 January and nothing???

[anrcaccount]

41 minutes ago, chiang mai said:

For example, I rent out a one bedroom retirement flat that I own outright, for 600 Pounds a month. The agent charges me a fee, I pay the Service Charge and I pay Landlords insurance, book keeping fees and any misc costs towards repair. That broadly leaves me with two thirds of my gross rent as profit but for Thai tax purposes I declare 600 Pounds a month, pro rata for however how many months rental income I chose to remit. Recently I remitted 6 months rental income  or 3,600 Pounds. When I declare that income I will take the standard deduction of 30%, about the same amount as my actual costs. That leaves my with 2,700 as profit which falls nicely within my TEDA.

 

Thanks for providing your own case, but I think you missed the point of my examples. 

 

Did you take professional Thai accounting advice on this method or you are making your own interpretation?

 

Have you ever declared foreign rental income remitted in the past?

 

I cannot see logically how what you suggest is possible. Anything remitted is net by definition , to declare it as gross and then apply deductions makes no sense.

 

What you are proposing to do here is declare the same gross income in 2 countries, then taking 2 separate sets of deductions on the same income, using a different method for each country. It doesn't seem logical or workable. 

 

I think-  the Thai rules for rental income are written for Thai sourced, and have never been applied to foreign sourced remitted, and as written cannot be workable for foreign sourced rental income, remitted. 

 

 

41 minutes ago, chiang mai said:

 

How people declare mortgage interest, I have no idea, I'm not sure that you can. Meanwhile, when I file my UK return I will declare the full year rental income of 6k Pounds and take actual costs that are equal to around 30% of the income value, the profit from which falls within my UK Personal Allowance.

 

On mortgage interest, many countries allow this as 100% deductible expense. UK used to have this until 2017, now there's a tax credit system of calculation.

 

For example if your property was mortgaged and in a 100% deductible expense environment, you could then find yourself with 0 profit, very common for investment property .

 

Then, on remitting, using your gross income method, you would be asking Thailand to charge tax on the gross. It does not compute. 
 

[KannikaP]

2 minutes ago, TheAppletons said:

 

  Perhaps you should just read the tax guide pinned at the top of the forum.  It's all there for people who don't need to be spoon fed information.

Sorry, I see no Tax Guide pinned, please direct me to it. Who posted it in the 44 pages of replies?

And less of the insults please.

[chiang mai]

5 minutes ago, KannikaP said:

What is the 100k Pension income expense please, my Tax Officer never told me about that. 

50% of remitted pension income, max 100k

[KannikaP]

Just now, chiang mai said:

50% of remitted pension income, max 100k

ALL of my income is from my State and small private income totalling about GBP 10560 or THB 450k, which is sufficient for us to live on, house, car & schools paid for. My Taman has done the allowances which I indicated earlier, ie 190k + 60k+ 100k @ 0%. 

Does the 50% go on top of those allowances?

[chiang mai]

3 minutes ago, anrcaccount said:

 

Thanks for providing your own case, but I think you missed the point of my examples. 

 

Did you take professional Thai accounting advice on this method or you are making your own interpretation?

 

Have you ever declared foreign rental income remitted in the past?

 

I cannot see logically how what you suggest is possible. Anything remitted is net by definition , to declare it as gross and then apply deductions makes no sense.

 

What you are proposing to do here is declare the same gross income in 2 countries, then taking 2 separate sets of deductions on the same income, using a different method for each country. It doesn't seem logical or workable. 

 

I think-  the Thai rules for rental income are written for Thai sourced, and have never been applied to foreign sourced remitted, and as written cannot be workable for foreign sourced rental income, remitted. 

 

 

 

On mortgage interest, many countries allow this as 100% deductible expense. UK used to have this until 2017, now there's a tax credit system of calculation.

 

For example if your property was mortgaged and in a 100% deductible expense environment, you could then find yourself with 0 profit, very common for investment property .

 

Then, on remitting, using your gross income method, you would be asking Thailand to charge tax on the gross. It does not compute. 
 

I have declared rental income here in the past. Remitted rental income has a Standard deduction which is not limited to just Thai property. Even if I didn't take the SD, the income still falls within TEDA. I'm satisfying the tax rules of the UK and Thailand, without invoking the DTA.

[chiang mai]

2 minutes ago, KannikaP said:

ALL of my income is from my State and small private income totalling about GBP 10560 or THB 450k, which is sufficient for us to live on, house, car & schools paid for. My Taman has done the allowances which I indicated earlier, ie 190k + 60k+ 100k @ 0%. 

Does the 50% go on top of those allowances?

Huh!

 

190k over age 65

60k personal allowance

150k zero rated

100k pension income expense 

 

Sorry, am using hone for this, power cut at home.

[chiang mai]

13 minutes ago, KannikaP said:

Sorry, I see no Tax Guide pinned, please direct me to it. Who posted it in the 44 pages of replies?

And less of the insults please.

He's talking about listers introduction to Thai tax in the other thread.

[KannikaP]

2 minutes ago, chiang mai said:

Huh!

 

190k over age 65

60k personal allowance

150k zero rated

100k pension income expense 

 

Sorry, am using hone for this, power cut at home.

Sorry for the typo, yes it is 150k zero rated. So that is between 400 & 500k before any tax is due, yes?

[anchadian]

7 minutes ago, KannikaP said:

Sorry for the typo, yes it is 150k zero rated. So that is between 400 & 500k before any tax is due, yes?

My case is similar to yours, you'll have no tax to pay.

[chiang mai]

11 minutes ago, KannikaP said:

Sorry for the typo, yes it is 150k zero rated. So that is between 400 & 500k before any tax is due, yes?

Using those numbers, 500k before it's due