Its Happening - Law to Tax Overseas Income Now in Progress

[Danderman123]

2 hours ago, Dogmatix said:

 

How are the Venezuelan chicas there?

Didn't see any.

 

Anyway, I have moved on to Costa Rica.

 

I am literally counting the number of days that I have left to stay in Thailand in 2025, so that they don't exceed 179.  I will probably end up with 165 days in Thailand.

 

The latest problem is that I can remit dollars from the US to Thailand tax free, this year. But the dollar is so low that I get killed on the conversion. I am hoping that the baht drops by the end of the year.

[Lorry]

2 hours ago, Danderman123 said:

Didn't see any.

 

Anyway, I have moved on to Costa Rica.

 

I am literally counting the number of days that I have left to stay in Thailand in 2025, so that they don't exceed 179.  I will probably end up with 165 days in Thailand.

 

The latest problem is that I can remit dollars from the US to Thailand tax free, this year. But the dollar is so low that I get killed on the conversion. I am hoping that the baht drops by the end of the year.

Usually,  at the end of the year the baht is at its highest (tourist season)

[asia123]

The strange coincidence of the start of the DTV visa and the introduction of the new tax system

[JimTripper]

On 9/8/2024 at 1:47 AM, NoDisplayName said:

I don't think it works that way.  Your income may already be taxed, but Thailand will tax at a higher rate.  It's then up to you to (try to) claim Thai tax credit on your US returns.  I believe that's how the DTA works outside of income the US has sole right to tax.

 

All those deductions and exemptions you have under the IRS code?  Not recognized by Thailand.  Thailand will be taxing a much more bigly number.

 

You don't get the $14,600 standard deduction or the $47,150 0% LTCG tax rate (2024).  You do get the 60K baht Thai standard deduction, but your capital gains are taxed as ordinary income, possibly at up to 35%.  That's ALL your capital gains.  You don't get to offset with capital losses.

How will they know what that is? The US won't share tax info. Will Thailand require a copy of the US or home country return be provided by the taxpayer?

[chiang mai]

4 minutes ago, JimTripper said:

How will they know what that is? The US won't share tax info. Will Thailand require a copy of the US or home country return be provided by the taxpayer?

When you file, you self assess and self declare. The TRD will either accept at face value, the things you say or they will ask you to provide supporting evidence. The system is no different really to anywhere else in the world.

[JimTripper]

On 10/1/2024 at 7:04 PM, Danderman123 said:

Anyway, I have moved on to Costa Rica.

What visa will you be on and what is required?

[NoDisplayName]

1 hour ago, JimTripper said:

How will they know what that is? The US won't share tax info. Will Thailand require a copy of the US or home country return be provided by the taxpayer?

 

Currently, you declare your assessable income.  Unless there's an audit, it seems no documentation required in most instances.

 

Could that change, and TRD will require a (certified?) copy of a home country tax return?  Sure, but not likely.  Too burdensome on everyone.

[Danderman123]

4 hours ago, JimTripper said:

What visa will you be on and what is required?

I was only in Costa Rica for 2 days, on my way back to Thailand.

 

San Jose was pretty downscale.

[Danderman123]

3 hours ago, NoDisplayName said:

 

Currently, you declare your assessable income.  Unless there's an audit, it seems no documentation required in most instances.

 

Could that change, and TRD will require a (certified?) copy of a home country tax return?  Sure, but not likely.  Too burdensome on everyone.

This assumes that filing a tax return will be mandatory.

 

Just like wearing a motorcycle helmet.

[Ricohoc]

So I take it that all of these exemptions previously published are no longer in existence?

 

Quote

23. The Thai tax system contains a series of Allowances, Deductions and Exemptions that will help you reduce your tax bill and they are very generous. It is easily possible for the average expat foreign retiree to reduce their taxable income by 500,000 baht or more each year. For example, a retiree aged 65 years of age, married and living here full  time, supporting a Thai wife who has no income and doesn’t file tax return, is allowed the following:

 

a. Personal Allowance for self - 60,000

b. Personal Allowance for wife - 60,000

c. Over age 65 years exemption - 190,000

d. 50% of pension income received, up to 100k - 100,000

e. In addition, the first 150,000 of assessable income is zero rated and free of tax

 

[chiang mai]

6 minutes ago, Ricohoc said:

So I take it that all of these exemptions previously published are no longer in existence?

 

 

I don't know why you would think that, the TEDA (Exemptions, Deductions and Allowances) haven't changed.

[Ricohoc]

The Thailand Revenue Department shows something different on their website.

 

Most of what I posted above is cut in half or gone completely.

 

 

https://www.rd.go.th/english/6045.html 

[chiang mai]

4 minutes ago, Ricohoc said:

The Thailand Revenue Department shows something different on their website.

 

Most of what I posted above is cut in half or gone completely.

 

 

https://www.rd.go.th/english/6045.html 

The list you copied from the tax guide is not intended to be a complete and exhaustive list of all TEDA, only the most common ones. You should always refer to the TRD web site for the latest complete list of TEDA.

[Ricohoc]

4 minutes ago, chiang mai said:

The list you copied from the tax guide is not intended to be a complete and exhaustive list of all TEDA, only the most common ones. You should always refer to the TRD web site for the latest complete list of TEDA.

 

Where can I find an up to date list of all of the TEDA?  I have been unable to find it on that Thailand Revenue Department website.

[chiang mai]

1 minute ago, Ricohoc said:

 

Where can I find an up to date list of all of the TEDA?  I have been unable to find it on that Thailand Revenue Department website.

https://sherrings.com/personal-tax-deductions-allowances-thailand.html

 

https://taxsummaries.pwc.com/thailand/individual/deductions

 

https://www.pwc.com/th/en/tax/thai-tax-booklet-2023.html

[Ricohoc]

Thank you! 

[Presnock]

On 10/7/2024 at 9:00 PM, Danderman123 said:

I was only in Costa Rica for 2 days, on my way back to Thailand.

 

San Jose was pretty downscale.

I see that Panama is a very popular expat tax favorable location too!

[DrPhibes]

On 10/8/2024 at 11:38 AM, Ricohoc said:

The Thailand Revenue Department shows something different on their website.

 

Most of what I posted above is cut in half or gone completely.

 

 

https://www.rd.go.th/english/6045.html 

Re-writing as we speak?

[Ricohoc]

19 hours ago, DrPhibes said:

Re-writing as we speak?

 

I only recently got involved in this discussion after it became apparent that foreigners would definitely be taxed (as of this writing).

 

I found conflicting information on the TRD website, but it appears to not be up to date.  Everything else I have read shows the larger deductions.

 

All of that said, nothing has been finalized, so we still don't know what's what.

[Presnock]

On 9/8/2024 at 5:12 PM, Sigmund said:

And just how will they check on every foreigners account and see how long the falang is staying ? Wil they take tax from every foreigners account no matter if staying 1 month or 180+ days ? and then it's upto the foreigner to proove he only stays few months ? If if goes that way, every farang retiree not staying for the required 180 days,  will be shutting down their accounts.

can't believe that they would ever try that, but TIT and every department seems to like having another department do their work for them, i.e. immigration/taxes

[Presnock]

On 10/7/2024 at 4:16 PM, JimTripper said:

How will they know what that is? The US won't share tax info. Will Thailand require a copy of the US or home country return be provided by the taxpayer?

The way taxes in US are done, one should do the US taxes first, followed by the Thai as opposed to letting the Thai grab a chunk first off and try to get something back - have heard bad stories about anytime one tries to get reimbursed here,.  Just saying

[Presnock]

On 9/8/2024 at 3:38 AM, Presnock said:

If you are not in Thailand 180 or more per calendar year you are a tax resident so you wouldn't be taxed on that money.

I mistakingly dropped the "not" ...meaning if you are not in Thailand 180 or more per calendar year then you are "not" a tax resident so couldn't be taxed on that money.

[JimTripper]

1 hour ago, Presnock said:

The way taxes in US are done, one should do the US taxes first, followed by the Thai as opposed to letting the Thai grab a chunk first off and try to get something back - have heard bad stories about anytime one tries to get reimbursed here,.  Just saying

Well, yes, especially if you don't know the language. Could be pretty confusing.

[DrPhibes]

3 hours ago, Presnock said:

The way taxes in US are done, one should do the US taxes first, followed by the Thai as opposed to letting the Thai grab a chunk first off and try to get something back - have heard bad stories about anytime one tries to get reimbursed here,.  Just saying

That means you may have to show your US return to Thai officials, not going to happen.  You go on extension for your US return paying an extension estimated payment if you think your going to owe.  Then you get the Thai taxes done/paid on income that is taxable under the US/Thai tax treaty, then take the foreign tax credit on the US Federal return.  If a lot of income showing on the Thai return, it could lead to tax that is higher than the US rate.  The US return would only credit the Thai tax up to the tax that would be paid on the US return on that income with excess foreign tax credit carried over to the next year.

Edited October 12 by DrPhibes
Content

[chiang mai]

3 minutes ago, DrPhibes said:

That means you may have to show your US return to Thai officials, not going to happen.  You go on extension for your US return paying an extension estimated payment if you think your going to owe.  Then you get the Thai taxes done/paid on income that is taxable under your countries tax treaty, then take the foreign tax credit on the US Federal return.  If a lot of income showing on the Thai return, it could lead to tax that is higher than the US rate.  The US return would only credit the Thai tax up to the tax that would be paid on the US return on that income with excess foreign tax credit carried over to the next year.

Why would it be necessary to show TRD your US tax return. TRD will either accept as fact, what you have written in your Thai tax return or they will query something and ask you for proof or further information. I don't think a tax return from another country constitutes proof, only statements or similar of the item being queried meet that requirement.

[Lorry]

2 minutes ago, chiang mai said:

Why would it be necessary to show TRD your US tax return. TRD will either accept as fact, what you have written in your Thai tax return or they will query something and ask you for proof or further information. I don't think a tax return from another country constitutes proof, only statements or similar of the item being queried meet that requirement.

In the Swiss embassy video, the TRD official said you have to show your home- country tax return.  English would be ok.

[chiang mai]

2 minutes ago, Lorry said:

In the Swiss embassy video, the TRD official said you have to show your home- country tax return.  English would be ok.

Thanks, I didn't know that, it seems like an odd arrangements since it could include country specific tax breaks that don't apply in Thailand. But hey, if that's what they want, it sure makes life easier. .

[Lorry]

23 minutes ago, chiang mai said:

Thanks, I didn't know that, it seems like an odd arrangements since it could include country specific tax breaks that don't apply in Thailand. But hey, if that's what they want, it sure makes life easier. .

It won't be easier,  because TRD won't understand my foreign tax return. 

Let's start with the subtleties of the difference between Swaziland and Switzerland, or Austria and Australia...

(Of course,  in my home country they don't know the difference between Thailand and Taiwan - they are not any smarter)

[JimGant]

4 hours ago, Presnock said:

The way taxes in US are done, one should do the US taxes first, followed by the Thai as opposed to letting the Thai grab a chunk first off and try to get something back

Having a hard time envisioning this scenario, for foreign remitted income. Let me suggest a straw man, say a private pension paid by Ford, periodically. And let's say the pension is paid and remitted in the same year -- thus this straw man would apply for both a remittance and for a worldwide tax situation.

 

First -- the Thai-US DTA gives "exclusive" taxation rights for private pensions to Thailand (but the US retains secondary taxation rights, due to the "saving clause" in the DTA). Thus, in March (or is it April?) of 2025 I need to file a Thai tax return for 2024 income, assuming the Ford pension amount plus other assessable income dictates so. So I do, and say the taxes owed on the Ford income came to $2000, using the mandated FX rate (whatever that may be -- for remitted income, simply use FX for date of transfer -- but for worldwide income, either year average or end of year rate. Dunno.) Voila. Thailand, as exclusive/primary taxation authority -- gets to keep the full $2000. No "grab back" in this scenario. They just need to provide a credit amount for US taxation purposes, to avoid double taxation.

 

Now, I do my US tax return for TY2024 -- I can wait 'til June 2025 to do it, since I live abroad. And I can use the Thai $2000 tax as a one-for-one credit against my US taxes (there can be limitations -- but any disallowed credits can carry over to later years). I have to fill-out and file a Form 1116 for this credit. And also file a Form 8833 -- a form that shows that the tax treaty trumps the Tax Code, overriding the the requirement that foreign tax credits are only good for foreign taxes on foreign income.

 

Now, you can file your US tax return. TurboTax will accept a Form 1116 - but not a Form 8833. But, if you want to file electronically, TurboTax will allow you to without the Form 8833. You just have to eventually mail it to the IRS, with info associating it with your original electronic filing.

 

The US tax filing doesn't require any substantiating documents for the Thai tax credit. Thus, you could even figure out what your Thai tax would be -- on the back of an envelope. No need to wait 'til the actual filing of a Thai tax return. Thus, clear to file your US tax return early in the year.

 

As an observation. The only scenarios where Thailand would absorb a tax credit for US taxes paid -- is for rental incomes on immovable property, and for capital gains, on immovable property. This is because the DTA gives the US -- where the immovable property is located -- primary taxation authority. But, it does give secondary taxation authority to Thailand. Thus, the US keeps all the taxes collected -- but Thailand can also tax this income -- but only gets to keep what's left over after absorbing the tax credit, if any. Again, on the back of an envelope, I could determine what, if any, Thai taxes would remain after subtracting out the tax credit. If negative, I wouldn't even bother filing a Thai tax return, if this was the only income subject to taxation.

 

But what if there were some positive tax collection after the credit? I guess, then, I should file a Thai tax return. But where on this filing would I put the tax credit from my US tax return? Maybe on line 13 from this excerpt from a Thai electronic Thai return? Dunno. But, having no rental property, not overly interested.

 

 

 

Edited October 12 by JimGant

[Presnock]

41 minutes ago, JimGant said:

Having a hard time envisioning this scenario, for foreign remitted income. Let me suggest a straw man, say a private pension paid by Ford, periodically. And let's say the pension is paid and remitted in the same year -- thus this straw man would apply for both a remittance and for a worldwide tax situation.

 

First -- the Thai-US DTA gives "exclusive" taxation rights for private pensions to Thailand (but the US retains secondary taxation rights, due to the "saving clause" in the DTA). Thus, in March (or is it April?) of 2025 I need to file a Thai tax return for 2024 income, assuming the Ford pension amount plus other assessable income dictates so. So I do, and say the taxes owed on the Ford income came to $2000, using the mandated FX rate (whatever that may be -- for remitted income, simply use FX for date of transfer -- but for worldwide income, either year average or end of year rate. Dunno.) Voila. Thailand, as exclusive/primary taxation authority -- gets to keep the full $2000. No "grab back" in this scenario. They just need to provide a credit amount for US taxation purposes, to avoid double taxation.

 

Now, I do my US tax return for TY2024 -- I can wait 'til June 2025 to do it, since I live abroad. And I can use the Thai $2000 tax as a one-for-one credit against my US taxes (there can be limitations -- but any disallowed credits can carry over to later years). I have to fill-out and file a Form 1116 for this credit. And also file a Form 8833 -- a form that shows that the tax treaty trumps the Tax Code, overriding the the requirement that foreign tax credits are only good for foreign taxes on foreign income.

 

Now, you can file your US tax return. TurboTax will accept a Form 1116 - but not a Form 8833. But, if you want to file electronically, TurboTax will allow you to without the Form 8833. You just have to eventually mail it to the IRS, with info associating it with your original electronic filing.

 

The US tax filing doesn't require any substantiating documents for the Thai tax credit. Thus, you could even figure out what your Thai tax would be -- on the back of an envelope. No need to wait 'til the actual filing of a Thai tax return. Thus, clear to file your US tax return early in the year.

 

As an observation. The only scenarios where Thailand would absorb a tax credit for US taxes paid -- is for rental incomes on immovable property, and for capital gains, on immovable property. This is because the DTA gives the US -- where the immovable property is located -- primary taxation authority. But, it does give secondary taxation authority to Thailand. Thus, the US keeps all the taxes collected -- but Thailand can also tax this income -- but only gets to keep what's left over after absorbing the tax credit, if any. Again, on the back of an envelope, I could determine what, if any, Thai taxes would remain after subtracting out the tax credit. If negative, I wouldn't even bother filing a Thai tax return, if this was the only income subject to taxation.

 

But what if there were some positive tax collection after the credit? I guess, then, I should file a Thai tax return. But where on this filing would I put the tax credit from my US tax return? Maybe on line 13 from this excerpt from a Thai electronic Thai return? Dunno. But, having no rental property, not overly interested.

 

 

 

Well, I sure am glad that my tax situation is so simple.  If I had to do what you and others do then I would definitely need a tax agent.  I file my US tax as soon as the 1099R arrives in mid Jan and usually get my refund check the first week of February.  Fortunately, I only have the US civil service pension so only the US can tax it plus now with LTR nothing anyway but just that it also gets rid of the 90-day report.  Trying to get everything easier as I get OLDER and OLDER.  But, you seem to have a good handle on your taxes and can defnitely help others here.  Have a good one.