Its Happening - Law to Tax Overseas Income Now in Progress

[Mike Teavee]

Just now, VBF said:

I presume you told HMRC that you live in Thailand because you assumed it would be beneficial to you to show them that you're an expat?  Which I guess it was at the time!

 

Referring to your "aside": They are required by UK Gov to verify from time to time.

I live and pay tax in UK but this year, my tax adviser asked me for similar proof despite the fact that I've been a client for more than 30 years. Apparently the proof has some sort of "shelf life".

At the time I became Non-Tax Resident it was very beneficial to me as I was able to pay Tax on my UK Sourced salary (Working for a UK Bank) at 12% in Singapore instead of >40% in the UK, was also able to pay Voluntary NI contributions at Class2 rates (approx. £155 pa) instead of the 11% or so they take from your salary.

 

Only real downside for me is I can't add anything to my ISAs but as I don't have to pay any additional tax on dividends or capital gains in my normal Investment account it doesn't really matter to me.

 

[VBF]

5 hours ago, sandyf said:

6 hours ago, Henryford said:

In the UK you would get 12500 GBP tax free so it covers all any state old age pension.

No it doesn't.

The UK government have tried to brain wash people into seeing the state pension as a single entity.

In the UK your annual Personal allowance is £12,500.

So the first £12,500 of income per tax year is tax free, however, State Pension is included in that income. 

[cdnvic]

I've removed posts that were needless insults on others that were derailing the discussion, and taken the posting ability away from several members. If you have no useful advice, or you can't give good advice without adding insult, you aren't welcome in this discussion.

 

Once again, thank you to those making an effort to help. You are the ones who make this site useful.

[rocketboy2]

5 minutes ago, VBF said:

In the UK your annual Personal allowance is £12,500.

So the first £12,500 of income per tax year is tax free, however, State Pension is included in that income. 

 

That 12.500 personal allowance in the uk,  could be a big problem for us brits.

We do not know if Thailand will recognize that allowance or not.

 

[chiang mai]

1 hour ago, Lopburikid said:

The Thai revenue website says B150,000 un-taxable and 190,000 for over 56 is un-taxable income. Thai tax office say anything over 120,000 is taxable income. Again lying, cheating and stealing.

You don't understand the tax rules, suggest you read this:

 

 

[itsari]

Now in progress says AI Charlie

Some what amusing

[VBF]

23 minutes ago, Mike Teavee said:

At the time I became Non-Tax Resident it was very beneficial to me as I was able to pay Tax on my UK Sourced salary (Working for a UK Bank) at 12% in Singapore instead of >40% in the UK, was also able to pay Voluntary NI contributions at Class2 rates (approx. £155 pa) instead of the 11% or so they take from your salary.

 

Only real downside for me is I can't add anything to my ISAs but as I don't have to pay any additional tax on dividends or capital gains in my normal Investment account it doesn't really matter to me.

 

Understood - when i worked in the Middle East (yonks ago!) I did similar and was accepted as Non Resident for 5+ years.. I was glad I paid the NI contributions as i now have a full UK State Pension.

 

I'm sure you know that you can still put £20k annually into an ISA. I move money from my "normal" Investments into an ISA wrapper on that basis Having said that, if you're actually non-resident, you may or may not be allowed to open new ISA...that I simply do not know.I fear though that i'm going  for this thread.

[sandyf]

5 hours ago, Unamerican said:

But I  have no TIN, anywhere! 

I don't really know what you are trying to say.

I do not believe there will be the amount of data sharing going on that many want to make out.

If you are right in what you say, then it strikes me that you would be exempt from any reporting.

However I must say I find it hard to believe that you have never paid any tax anywhere.

[Andrew65]

1 hour ago, Surasak said:

That I think would depend on the hospital and or the doctor. I have had an operation in a government hospital and am pleased with the result. Admittedly I had a private room, which was in fact on a par with a private hospital as was the menu. Dont run down a service on hearsay, you may be glad of it one day?

If Donald told me that it was raining I'd have to have a look out of the window just to check that it was true!☺️

[Mike Teavee]

Just now, VBF said:

Understood - when i worked in the Middle East (yonks ago!) I did similar and was accepted as Non Resident for 5+ years.. I was glad I paid the NI contributions as i now have a full UK State Pension.

 

I'm sure you know that you can still put £20k annually into an ISA. I move money from my "normal" Investments into an ISA wrapper on that basis Having said that, if you're actually non-resident, you may or may not be allowed to open new ISA...that I simply do not know.I fear though that i'm going  for this thread.

You can't add funds to an ISA if you're non-UK Tax Resident. 

https://www.gov.uk/individual-savings-accounts/if-you-move-abroad#:~:text=If you open an Individual,stop being a UK resident. 

 

[sandyf]

24 minutes ago, VBF said:

In the UK your annual Personal allowance is £12,500.

So the first £12,500 of income per tax year is tax free, however, State Pension is included in that income. 

Why have you quoted me, I never  mentioned anything about income.

The first post implied the PA was more than the state pension, which is not true.

[Metapod]

3 hours ago, Aussie999 said:

then instead of just saying "That's not how DTA works," tell us how."

also, read this.
https://www.austlii.edu.au/au/other/dfat/treaties/1989/36.html

 

a DTA doesn't absolve you from filing a tax filing in the secondary location.

 

You will have to file in both Australia and Thailand. Even if you owe nothing in Thailand, that in itself is a huge pain in the ass. The Thailand tax calendar starts Jan 1st, the Australian tax calendar starts July 1st. That creates complexity. Then factor in getting documents translated into Thai and then getting those documents certified. Then hiring tax accountants in two countries to handle both submissions. 

 

Then discussing DTA itself, you need to look at the DTA for each category. Some will give exclusive taxing rights to one jurisdiction, others are taxed in one first and then taxed in the other. For example, if you owe 30,000 in AU but 50,000 in Thailand, you would have to pay 50,000 in Thailand and then use a tax credit against the 30,000 in AU for your AU tax return after July.

 

The short answer is this <deleted> gets complicated at the very best, and costing you more at the worst.

[aussienam]

22 hours ago, ukrules said:

 

You know there's the concept of what people think is tax free or exempt but it's actually been taxed, just at a very deliberate rate of zero percent.

So if something has already been taxed at zero percent, does it remain untaxed income or not and therefore untouchable by Thailand?

Just a thought here, the concept of 0% tax doesn't make it untaxed.

Regardless of the amount of tax or definition of 'taxed', if it is below the Thai tax thresholds as per their tax scale, then they can charge tax on the difference.  In my case with my Australian private pension, which I am planning to accumulate to near maximum contribution limits, I will be subjected to around 20% tax and more. 

 

Insane anyone's pension distribution would be taxed after being paid, but there it is.  The new status quo and if there is no way out of it, I am sadly leaving Thailand. To others, they may accept this.

 

Also, there is a whole category of certain pensions that won't be taxed in Thailand so those expats will remain.  Ex Military, certain ex government employees, US Social security recipients and other foreign pensions that are pre-taxed above or close to Thai tax rates. 

It's really an unfair system to disadvantage others, as pre-taxed pensions are on average going to be very similar in amounts to the untaxed ones - just because of the way the country has structured tax payments.  Dual Taxation Agreements have been poorly put together to disadvantage and discriminate. 

 

Wealthy retirees will just purchase a Long Term Visa and use that loophole to get out of paying tax. The rest of us are possibly screwed and it will cause a shift to other countries to retire instead.  

 

It seems for now that Thailand can no luck longer boast being a great, affordable retirement destination, especially with global income taxation on top. 

Imagine a loved one passing away to leave you inheritance? In Australia inheritance is tax-exempt. Let's say $200,000 AUD.  And I decided to bank that and keep it in Australia.  Thailand could tax me on my inheritance.  Wow.  And the money never left the Australia. A big risk is therefore having a family member, alive, who has you in their Will for a substantial inheritance and you are a Thai tax resident. You cannot predict the timing of someone's passing normally (awful to think about).

 

Same applies selling property abroad if global taxation means they can tax me on what is tax-exempt capital gains in Australia, even if I don't remit it to Thailand.  Losses of hundreds of thousands of AUD to the Thai revenue department (who will possibly also tax your tax liability funds sent to Thailand to pay the tax bill, as well because of remittance tax - tens of thousands of dollars AUD).  Absolutely ludicrous to remain in Thailand under these circumstances.  

Edited September 9 by aussienam

[anrcaccount]

4 hours ago, wmlc said:

I am so tired of this scare mongering. Does everyone see what is going on here? Post a story about tax, get a ton of unhappy expats moaning and then nothing happens. No enforcement. Get on with it already. 

 

The only thing here that matters is enforcement. No matter what the tax law is or is going to be, if the Thai government does nothing to enforce it, they can keep whistling dixie for all I care. 

 

The 180 day rule has never been enforced. It has always been a law. Then, in January 2024, they changed what is included in accessible income and everyone started moaning, but guess what, they still have n to announced any enforcement guidelines. For example, let's just say immigration were asked to start asking for proof personal income tax being filed in Thailand for qualified tax residents, something like that would need time to pass and implement. No word yet right? its almost December. 

 

Bullocks.

 

 

 

IMO, this is one of the only useful and helpful comments on this thread.

 

This is the same thread discussion as occurred in June when the same story was published, the same hysteria. Nothing new, nothing has changed.

 

Any member making a life choice or decision based on this "news" , is IMO, very unwise to do so.  E.g. the members saying they will leave the country, or spend less than 180 days.

 

Don't make any rash decisions until time has passed, and anything actually changes. Right now, it's all speculation. 

 

[aussienam]

1 hour ago, AndreasHG said:

Thank you: it is contradictory.

Actually, it's my mistake.

I should have written: "This means that, if you are resident of Thailand, your pension and annuities are only taxed in Thailand. They are not taxable in Australia..."

 

And as the vast majority of Australian pensions and annuities are tax-exempt in Australia anyway, suddenly as a Thai tax resident you are now being taxed on your normally untaxed pensions and annuities.  Zero benefits. 

[RupertIII]

16 minutes ago, aussienam said:

Imagine a loved one passing away to leave you inheritance? In Australia inheritance is tax-exempt. Let's say $200,000 AUD.  And I decided to bank that and keep it in Australia.  Thailand could tax me on my inheritance.  Wow.  And the money never left the Australia. A big risk is therefore having a family member, alive, who has you in their Will for a substantial inheritance and you are a Thai tax resident. You cannot predict the timing of someone's passing normally (awful to think about).

Unless it has changed very recently you are ok up to 100m THB.

 

The Inheritance Tax Act B.E. 2558 (2015) (“ITA”) took effect on 1^st of February 2016. It stipulates the following:

1. Inheritance Tax

a. Tax Base

The inheritance tax base shall be calculated from the inheritance, which an inheritor received from each testator, whether it is received once or several times, above 100 Million THB. (Section 12, ITA). The value of the inheritance subject to tax means the value of the asset received as an inheritance offset by the liabilities inherited.

The tax is levied on inheritors who are:

1.    Thai individuals or Thai juristic persons or foreign individuals who are resident in Thailand according to the immigration law, which inheriting assets located in Thailand and outside the country.

2.    Foreign individuals or foreign juristic persons, which inherit assets located in Thailand. (Section 11, ITA)

The spouse of the testator is exempted from inheritance tax. (Section 3(2), ITA)

Foreigners who are resident in Thailand, shall be liable to pay Inheritance Tax in the portion which exceed 100 million THB, calculated from the inherited assets in Thailand and foreign countries. Foreigner who are non-resident in Thailand, shall be liable to pay Inheritance Tax in the portion which exceed 100 million THB, calculated from only inheriting asset in Thailand.

The inheritance tax rate is 10%, except in the case of heirs who are ascendants or descendants of the testator, where the rate is 5%. Legacies received by the spouse of a testator are exempt from the tax.

The inheritance tax applies to registered assets, including residential properties, land, vehicles, bonds, equities, and deposits at financial institutions. (Section 14, ITA)

 

 

[RichardColeman]

OK, and if a thai person wants to stay in my UK for over 180 days - say a 6 month visa - do the UK government get 15-25% of all money sent from thailand to the UK ? If that were so,the hi-sos will vote against it

[parallelman]

3 hours ago, Presnock said:

go to the revenue dept webb page - in Thai and or English

 

Tried that I could only find English but not Thai. https://www.rd.go.th/english/21973.html. Clicking on the Thai icon does not give the DTA page in Thai. Nor does the Thai RD page list DTA.

[Eudaimonia]

8 hours ago, bkk6060 said:

Example:  income outside Thailand is 

$10,000 a month.  You remit $5,000 tax free.  The other $5,000 would be taxed.

LTR visa does not cover all WW income unless all income made abroad is remitted.

 

Thank you for bringing up this critical point. I had overlooked it when considering the LTR visa as a backup plan.

 

Indeed, if Thailand moves to worldwide taxation but LTR visa benefits remain, one would need to remit all income. Not that easy or convenient. Can we even transfer some of it back out again without suffering multiple currency exchange losses?

[aussienam]

14 minutes ago, anrcaccount said:

 

IMO, this is one of the only useful and helpful comments on this thread.

 

This is the same thread discussion as occurred in June when the same story was published, the same hysteria. Nothing new, nothing has changed.

 

Any member making a life choice or decision based on this "news" , is IMO, very unwise to do so.  E.g. the members saying they will leave the country, or spend less than 180 days.

 

Don't make any rash decisions until time has passed, and anything actually changes. Right now, it's all speculation. 

 

I wouldn't say it's speculation when there have been several actual announcements made by Thai Revenue.  That goes a bit above speculation.  Thailand have joined CRS - Common Reporting Standards.  There has been this new announcement by Thai government on taxing worldwide income (actually second one I have noticed over past few months).  Not speculation.  It's definitely cause for concern, not to be dismissed and ignored.  

Sure, they may backflip or water down the final decision and legislation.  But it's definitely very worthy of solid discussion on the implications. Also, there very well may be those in government who become aware of the issues raised in these forums and helps guide decisions.  There is a massive amount at stake for expats.  

I agree with you not to be making rash decisions.  I'm not leaving right now. I am playing 'wait and see', like probably most others.  But I am formulating contingency plans now as I become more and more aware of potential implications.  These forums help raise awareness of things we may not have thought of.  

As to making rash decisions on buying property, cars etc in Thailand; I'd be holding off on everything that could result in massive tax bills and hold off committing my life more to this country (not marrying, not having kids, not getting into a relationship, not accumulating any more possessions, no pets, no longer lease etc) until it is clear what is going to occur next year.  Even if it is still 'wishy washy' (uncertain) when or if it is going ahead next year as well and we are all kept in perpetual suspense, I still won't be committing.  I remain frugal this year on spending and my incoming funds. 

 

 

[Joebuzzz]

On 9/8/2024 at 5:54 AM, Gknrd said:

Wow, I thought you guys said it was not going to happen?  Hard to get my head around taxation with out any benefits what so ever.  I need to visit the Philippines before all you guys invade... haha. That will be the Philippine woman's wet dream... Ha..

Yep.

[david555]

9 hours ago, tandor said:

Sub-lease for the absent time.

if allowed ....(?) 👍

[Danderman123]

3 hours ago, Presnock said:

Though many expats here may have been required to get a Thai tax ID and to file tax forms here (after becoming a Thai tax resident have not paid income taxes here previously as that was a"gray" area, they may be required now if they have assessable income to get a TIN and file taxes.  If American, you already should have been filing for US taxes so you might check the DTA to see if any of your income is currently non-taxable in Thailand.  If you do have assessable income in Thailand, you may have to pay some Thai tax if it is more than that taken out by the US....i.e. US tax rate is 10% and Thai tax rate on the amount is 15% then Thailand could charge you for 5% of that amount.  There are still some countries (for example - the Philippines does not charge retirees on their income/pensions while other SEA countries are doing the same as Thailand for the future.  Very complicated and at this moment while one might think about it, we wait for the final forms to come out and the finale judgement of the Revenue Department for this year only on remittances.  This new scheme may never come to fruition especially in the short term.

Again, this is the world of the handful of Farangs who have been paying Thai income tax in past years.

 

For the rest of us, even if we wanted to file a tax return, just obtaining a tax ID could be impossible. 

 

For most of us, discussions about tax rates and DTAs are moot.

[Danderman123]

14 minutes ago, aussienam said:

I wouldn't say it's speculation when there have been several actual announcements made by Thai Revenue.  That goes a bit above speculation.  Thailand have joined CRS - Common Reporting Standards.  There has been this new announcement by Thai government on taxing worldwide income (actually second one I have noticed over past few months).  Not speculation.  It's definitely cause for concern, not to be dismissed and ignored.  

Sure, they may backflip or water down the final decision and legislation.  But it's definitely very worthy of solid discussion on the implications. Also, there very well may be those in government who become aware of the issues raised in these forums and helps guide decisions.  There is a massive amount at stake for expats.  

I agree with you not to be making rash decisions.  I'm not leaving right now. I am playing 'wait and see', like probably most others.  But I am formulating contingency plans now as I become more and more aware of potential implications.  These forums help raise awareness of things we may not have thought of.  

As to making rash decisions on buying property, cars etc in Thailand; I'd be holding off on everything that could result in massive tax bills and hold off committing my life more to this country (not marrying, not having kids, not getting into a relationship, not accumulating any more possessions, no pets, no longer lease etc) until it is clear what is going to occur next year.  Even if it is still 'wishy washy' (uncertain) when or if it is going ahead next year as well and we are all kept in perpetual suspense, I still won't be committing.  I remain frugal this year on spending and my incoming funds. 

 

 

Thailand wants to be a hub of Common Reporting Standards.

[Jim Blue]

On 9/8/2024 at 11:01 AM, lordgrinz said:

 

I wouldn't bet on it, but I will pray it doesn't happen.

To who ?

[Joebuzzz]

3 hours ago, TroubleandGrumpy said:

That is our Plan B (1)  - rent a small unit there and visit Thailand Visa free for 179 days in total each year. If/when that becomes too much of a problem, we will return to Australia and visit Thailand for a month or two each year.  Plan B - 2 3 4 and 5 are Malaysia, Indonesia, Vietnam, Cambodia and Laos. 

 

I'm almost ready to say, just screw it, and move to PH.  Dealing with the gov't there seems much easier.

[Danderman123]

3 hours ago, Roo Island said:

I'm no tax expert, but have been researching this for other countries. You will have to do a tax return now for Thailand and you will get credit for any taxes you paid in the US. If the tax rate is higher in Thailand, I think you will owe taxes, right?

 

https://smartasset.com/taxes/current-federal-income-tax-brackets

 

I would guess few of us are above the 22% or 24% bracket. Though things might change a bit when the tax cuts Trump implemented expire next year. He reduced the rates a bit but doubled the standard deduction.

 

https://en.m.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act

How sure are you that Bob in the village will be filing a tax return next year?

[anrcaccount]

16 minutes ago, aussienam said:

I wouldn't say it's speculation when there have been several actual announcements made by Thai Revenue.  That goes a bit above speculation.  Thailand have joined CRS - Common Reporting Standards.  There has been this new announcement by Thai government on taxing worldwide income (actually second one I have noticed over past few months).  Not speculation.  It's definitely cause for concern, not to be dismissed and ignored.  

 

There have been only 2 official releases by TRD - POR 161 and 162. There have been no "announcements" by TRD. 

 

Regarding worldwide income, there again has been no "announcement" , and certainly no "new" announcement.

 

There's been one media report in June where the TRD director shared they were considering worldwide taxation, and this weeks report with effectively the same details. Both have kicked off similar hysteria on here, the concern is caused by the reporting and the associated speculation, rather than anything concrete, at this point.

 

All of this should be seen through the lense of how TRD has operationally enforced taxation to date, as again, we have no clear indication this is going to change. Any possible change in practice is again, complete speculation at this point - discussion on this is also creating unwarranted concern.

 

 

 

 

 

 

 

 

[StandardIssue]

On 9/7/2024 at 9:34 PM, NoDisplayName said:

It's bad enough I have to pay tax on interstellar/multi-dimensional income to Uncle Sam for life, but Thailand wants a cut also?

 

I ran the numbers.........I manage my finances to remain at the zero tax limit in the USA, which will result in $10,000 paid annually to Thailand.  All capital gains are taxed as normal income with no offset for capital losses.

 

I don't think so.  How do you say 'hello' in Khmer?

The exodus has started and is now in progress!!! Phenom Phen here I come LOL.

Edited September 9 by StandardIssue

[JimGant]

22 hours ago, Danderman123 said:

Please explain why TRD does not monitor these remittances for tax liability.

You think TRD has the resources to parse all remittances into Thailand to determine assessable income?