Its Happening - Law to Tax Overseas Income Now in Progress

[FruitPudding]

1 hour ago, JohnnyBD said:

I knew a work colleague who was from the UK, but lived in Thailand. He told me he didn't pay income taxes anywhere because he worked in Saudi which was a non-income tax country, he stayed in Thailand less than 180 days due to his job, and he had no income from the UK. If what he was doing was legal, then it appears he wasn't a tax resident anywhere.

 

Yeah, this is legal.

[chiang mai]

1 hour ago, Yumthai said:

There is no must, it all depends on your country(ies) of citizenship. For some/many countries being tax resident somewhere is not a requirement to become non tax resident. Need to dig in each country tax residence criteria. Agreed that being tax resident nowhere is not a long-term safe situation for not well-structured wealthy individuals.

Whilst that is strictly correct, I had in mind the Western countries that most members involved in these threads will originate from....my apologies to those members that hail from Saudi, Caymans, Bermuda etc!  That is unless a person chooses not to hold a mainstream bank account or other typical financial products such as pension etc.

[JackGats]

On 11/2/2024 at 7:31 AM, Njoku said:

You are not very intelligent or are very rich, the pittance in tax you would need to pay here or none at all would pale in airfares and hotels before finding somewhere to rent in foreign lands....

Not if you live in hotels or very short-term rentals anyway, like I do.

[JackGats]

2 hours ago, JohnnyBD said:

I knew a work colleague who was from the UK, but lived in Thailand. He told me he didn't pay income taxes anywhere because he worked in Saudi which was a non-income tax country, he stayed in Thailand less than 180 days due to his job, and he had no income from the UK. If what he was doing was legal, then it appears he wasn't a tax resident anywhere.

In my opinion what he was doing was legal, in that he couldn't be charged with tax evasion. However, he could be claimed as a taxpayer by some other country, like his country of citizenship or the country where he was banking. It would be a civil lawsuit, not a criminal one.

[ukrules]

4 hours ago, JackGats said:

like his country of citizenship or the country where he was banking. It would be a civil lawsuit, not a criminal one.

 

Not if he comes from the UK and doesn't meet the 'Statutory Residence Test' - no chance of that.

If he's from a handful of other countries then yes, absolutely they could tax him, but he's not and was clearly well informed as that's how the UK system works, it's the only real advantage you have....while it lasts.

Some people still seem to believe that being tax resident is 'optional' in the UK - it's not. Non residence under this SRT is automatic and has been for over 10 years now.

 

[dlclark97]

On 9/8/2024 at 12:53 AM, Danderman123 said:

All of my worldwide income is taxed in the USA, so no tax is due Thailand.

Your statement may not be entirely correct.  If the Thailand tax due is greater than the amount paid in the USA, you will have to pay the difference to Thailand.  Tax due in USA 15K, tax due in Thailand 20K, you pay Thailand the 5K difference.

[shdmn]

14 hours ago, JackGats said:

In my opinion what he was doing was legal, in that he couldn't be charged with tax evasion. However, he could be claimed as a taxpayer by some other country, like his country of citizenship or the country where he was banking. It would be a civil lawsuit, not a criminal one.

I don't think citizenship determines your tax residency.  At least not in Canada, but I am pretty sure it's the same in most other G20 countries.

[Phulublub]

50 minutes ago, shdmn said:

I don't think citizenship determines your tax residency.  At least not in Canada, but I am pretty sure it's the same in most other G20 countries.

Ordinarily it does not, but for a nomad who does not qualify as tax resident in any of the countries thye stay in for shorter periods, then tax residency may rvrt to citizenship.  It is certainly agrey area for the UK as some HMRC advice suggests it is, but there does not appear to be aby legislation on the matter..

 

PH

[Srikcir]

On 9/8/2024 at 3:18 AM, tomacht8 said:

Well-off pensioners

May qualify for the 10-year Long Term Resident visa costing 50,000 baht to avoid taxation.

[JimGant]

1 hour ago, shdmn said:

I don't think citizenship determines your tax residency. 

It could as a tie breaker. Here's a long-winded excerpt from the tech explanation of the US-Thai DTA. Most other DTAs, since most rely on Model OECD tax treaty language, say the same:

 

Quote

If, under the laws of the two Contracting States, and, thus, under paragraph 1, an
individual is deemed to be a resident of both Contracting States, a series of tie-breaker rules are provided in paragraph 2 to determine a single State of residence for that individual. These tests are to be applied in the order in which they are stated. The first test is based on where the individual has a permanent home. If that test is inconclusive because the individual has a permanent home available to him in both States, he will be considered to be a resident of the Contracting State where his personal and economic relations are closest (i.e., the location of his "center of vital interests"). If that test is also inconclusive, or if he does not have a permanent home available to him in either State, he will be treated as a resident of the Contracting State where he maintains an habitual abode. If he has an habitual abode in both States or in neither of them, he will be treated as a resident of his Contracting State of citizenship.

 

[placnx]

On 9/8/2024 at 12:53 AM, Danderman123 said:

All of my worldwide income is taxed in the USA, so no tax is due Thailand.

It's an interesting question how this will work for Americans. I believe that in US double taxation agreements with other countries, the US gives credit up to the amount of tax due in the US, so if Thailand charges more than the US you end up having to pay that amount above what you would have paid to the US.

 

Another commenter suggested that Thailand treats capital gains as ordinary income. Also, at higher incomes, Thailand's rates are higher than US rates. This will really be problematical for retired Americans living here.  

[oldcpu]

1 hour ago, Phulublub said:

Ordinarily it does not, but for a nomad who does not qualify as tax resident in any of the countries thye stay in for shorter periods, then tax residency may rvrt to citizenship. 

 

I confess I had never heard of tax residency 'reverting' due to citizenship ... [and of course in case of USA citizenship, one is always liable to tax due to citizenship and not residency]

 

I had always (possibly mistakenly) believed that in addition to permanent assets in a country that residency continuity is a factor. 

 

I have Canadian citizenship.  After my moving from Canadian residency to German residency (before year 2000), I obtained a letter from Revenue Canada noting I am no longer a Canadian resident.  Since then I have NOT increased my 'ties' to Canada.  

 

I now reside in Thailand (since 2019) and Germany no longer considers me a resident of Germany (and I have a letter from Germany noting such).

 

While I currently spend > 180days/year in Thailand, I suspect if I were to spend (say 179 days in Thailand), and 60-days in Canada, 60-days in NewZealand/Australia, and 61-days in Europe), as long as I did not set down any big 'roots' in any of those countries,  I don't think any of those countries would consider me a 'tax resident'.

 

Possibly, as pointed out previous, the key factor is that banks in countries such as Canada and Europe wish to know one's residency for their records.  To satisfy those banks, I think one could accurately and legally state Thailand is one's residence given the ~179-days present in Thailand (even if it is not a tax residence).  Further, in that hypothetical case, given one is not a Thai tax residence, I don't think one's tax residency would automatically revert to either country (ie back to Canada or back to Germany).    I note that 'tax residency' and 'residency' may not be the same thing.

 

But I could be wrong. 

[Presnock]

On 9/7/2024 at 9:16 PM, Pouatchee said:

happy days... not

so now the nightmare begins

 

 

so now they will have access to our home records... big brother... reallyyyy. 

 

double taxation? these matters really need to be cleared up and imho double taxation is just plain wrong... hope tere will be provisions blocking this.

 

NO TAXATION WITHOUT REPRESENTATION!!!

If your income is a pension then hope it is specified in the DTA with your country as to which country can tax.  Some funds not taxed by your home country probably will be taxable here.  I fortunately have a very basic financial situation so no matter what they do with the new scheme, I shouldn't be affected but after all TIT.  Plus if Trump wins tomorrow, Ilon or RFK, jr have mentioned that benenfits will be cut and many will suffer (just like billionaires, cut the funds of the middle class and poor and give bigger cuts to the rich and their businesses that since his last cuts have been making record profits while even though the news says inflation in the US now is only 2.1% yet no prices have come down at all, and some are still climbing.  Good luck citizens of the US tomorrow, I hope you get the best for you and the country.  Records that they can automatically get or request are not that detailed from what readers of the CRS and FACTA have mentioned.  The tax agencies don't seem to be in a better knowledgeable situaion either att and hope it all becomes clearer soonest.  

[Danderman123]

17 minutes ago, placnx said:

It's an interesting question how this will work for Americans. I believe that in US double taxation agreements with other countries, the US gives credit up to the amount of tax due in the US, so if Thailand charges more than the US you end up having to pay that amount above what you would have paid to the US.

 

Another commenter suggested that Thailand treats capital gains as ordinary income. Also, at higher incomes, Thailand's rates are higher than US rates. This will really be problematical for retired Americans living here.  

You are correct, and I was wrong.

[Danderman123]

2 hours ago, shdmn said:

I don't think citizenship determines your tax residency.  At least not in Canada, but I am pretty sure it's the same in most other G20 countries.

The bottom line in Thailand is residency.

[Danderman123]

Once again, the details are not clear, but they don't matter.

 

If Thailand starts taxing worldwide income for resident Farangs in 2025, there will be a giant sucking sound as thousands of Farangs head for the exit.

[oldcpu]

1 hour ago, JimGant said:

It could as a tie breaker. Here's a long-winded excerpt from the tech explanation of the US-Thai DTA. Most other DTAs, since most rely on Model OECD tax treaty language, say the same:

 

 

 

Re DTAs - you had me curious. So (mostly for hypothetical curiousity in my case) I took a look at the Thai-Canadian DTA:

Looking at Canada-Thailand DTA, Article IV:
 

Quote

 

1. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management, place of incorporation, or any other criterion of a similar nature.

 

2. Where by reason of paragraph 1 an individual who is a resident of both Contracting states, then his residence shall be determined as follows ....

 

Para-2 applies to someone who is a resident of BOTH contracting states.  THAT LEADIN is VERY IMPORTANT.  For what if one meets neither residency criteria of para-1?

 

As noted, I already have a letter from Revenue Canada noting I am not a Canadian tax resident.  Further, Thailand now defines a tax residence as to being someone who spend 180 days or more in Thailand.  

 

Para-2(c) of Canada/Thai DTA does state

Quote

"If he has an habitual abode in both States or in neither of them, he shall be deemed a resident of the State in which he is a national".

 

However that QUOTE Above is from Article IV, para-2(c) the lead in to para-2 is clear that para applies to apply to a person who is already a resident given the criteria for both contracting states - and this is needed to decide of which state one is a resident.  It does NOT state one MUST be a resident of either country.

 

IMHO , in the case of Thailand/Canada, just because one is a citizen, does not mean para-2(c) applies. 

 

I do plan to be a Thai resident - but its always useful to know the possibilities when reviewing one's plans.

 

[Presnock]

On 9/7/2024 at 9:16 PM, Pouatchee said:

happy days... not

so now the nightmare begins

 

 

so now they will have access to our home records... big brother... reallyyyy. 

 

double taxation? these matters really need to be cleared up and imho double taxation is just plain wrong... hope tere will be provisions blocking this.

 

NO TAXATION WITHOUT REPRESENTATION!!!

If your income is a pension then hope it is specified in the DTA with your country as to which country can tax.  Some funds not taxed by your home country probably will be taxable here.  I fortunately have a very basic financial situation so no matter what they do with the new scheme, I shouldn't be affected but after all TIT.  Plus if Trump wins tomorrow, Ilon or RFK, jr have mentioned that benenfits will be cut and many will suffer (just like billionaires, cut the funds of the middle class and poor and give bigger cuts to the rich and their businesses that since his last cuts have been making record profits while even though the news says inflation in the US now is only 2.1% yet no prices have come down at all, and some are still climbing.  Good luck citizens of the US tomorrow, I hope you get the best for you and the country.  Records that they can automatically get or request are not that detailed from what readers of the CRS and FACTA have mentioned.  The tax agencies don't seem to be in a better knowledgeable situaion either att and hope it all becomes clearer soonest. 

expattaxesthailand.com/tax-info-webinar

[oldcpu]

1 hour ago, JimGant said:

It could as a tie breaker. Here's a long-winded excerpt from the tech explanation of the US-Thai DTA. Most other DTAs, since most rely on Model OECD tax treaty language, say the same:

 

Quote

If, under the laws of the two Contracting States, and, thus, under paragraph 1, an individual is deemed to be a resident of both Contracting States, a series of tie-breaker rules are provided in paragraph 2 to determine a single State of residence for that individual. ....  If he has an habitual abode in both States or in neither of them, he will be treated as a resident of his Contracting State of citizenship.

 

 

Yes, but one must 1st be considered to be a resident of both states - and meet the residency requirement.  In Thailand it is the 180 day number.  I don't know what it is in the other state, but possibly a permanent home.

 

If one does not meet the residency requirement of both contracting states, the residency does NOT revert to citizenship from what I read in what you quoted.

[Chivas]

This is beyond farcical

In real time today I checked my own Government Gateway account in UK to see current tax situation in light of this thread

 

As of 5th November "tax year of 2023/2024" has still not yet been completed (been the same since April 2024)

 

How the hell is Thailand going to tax me remotely accurately should I stay 181 days lol

 

This is going to be one monster clusterf**k

[chiang mai]

Just now, Chivas said:

This is beyond farcical

In real time today I checked my own Government Gateway account in UK to see current tax situation in light of this thread

 

As of 5th November "tax year of 2023/2024" has not yet been completed (been the same since April 2024)

 

How the hell is Thailand going to tax me remotely accurately should I stay 181 days lol

 

This is going to be one monster clusterf**k

Thailand will tax you (or not), depending on what you declare (or not) in your Thai tax return, and they will do that accurately. The onus is on you, not on the TRD.

[Chivas]

10 minutes ago, chiang mai said:

Thailand will tax you (or not), depending on what you declare (or not) in your Thai tax return, and they will do that accurately. The onus is on you, not on the TRD.

 

Well unless I move into a retirement postion (visa wise)  II'll just wait to someone comes knocking at my door

 

When they send me an explanatory letter in perfect English on what needs to be recorded where and by when and what details they currently hold from HMRC in the UK (good luck with that even I cant get it) then I'll view it as another fiasco thats gets swept under the carpet here in Thailand

 

[Chivas]

17 minutes ago, chiang mai said:

Thailand will tax you (or not), depending on what you declare (or not) in your Thai tax return, and they will do that accurately. The onus is on you, not on the TRD.

 

Polite question and the first one

Whats Thailands position on spreads accounts.....??

[oldcpu]

1 hour ago, JimGant said:

 Most other DTAs, since most rely on Model OECD tax treaty language, say the same:

 

 

 

Again, you had me curious, ... looking at German-Thailand DTA, Article 4:

 

Quote

1. For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, incorporation, seat (Sitz), place of managementor any other criterion of a similar nature.

 

That para-1 is key and it decides residency (ie the laws of the individual states).  Para-2 is a 'tie-breaker'.

 

Now again, for Germany/Thaliand,  if para-1 indicates one meets the criteria of being a resident of BOTH countries, the case is determined by the details of para-2, and it goes on to note 'permanent home' being a reason, and 'nationality' be a (tie breaking (my words)) reason for deciding whether a resident of Thailand or of Germany.

 

But AGAIN, the sub clauses to para-2 are only applicable if "by reason of paragraph-1 an individual is a resident of both Contracting states".

 

So paragraph-1 is KEY.  If one is NOT a resident per para-1, then para-2 (which has 'nationality' as a potential criteria) is not applicable.

 

[JackGats]

28 minutes ago, oldcpu said:

 

Again, you had me curious, ... looking at German-Thailand DTA, Article 4:

 

 

That para-1 is key and it decides residency (ie the laws of the individual states).  Para-2 is a 'tie-breaker'.

 

Now again, for Germany/Thaliand,  if para-1 indicates one meets the criteria of being a resident of BOTH countries, the case is determined by the details of para-2, and it goes on to note 'permanent home' being a reason, and 'nationality' be a (tie breaking (my words)) reason for deciding whether a resident of Thailand or of Germany.

 

But AGAIN, the sub clauses to para-2 are only applicable if "by reason of paragraph-1 an individual is a resident of both Contracting states".

 

So paragraph-1 is KEY.  If one is NOT a resident per para-1, then para-2 (which has 'nationality' as a potential criteria) is not applicable.

 

Indeed this tie-breaker aspect is reiterated on this webpage (in German, search for ""Staatsbürgerschaft steuerpflichtig"):

 

https://staatenlos.ch/lifestyle/7-irrtuemer-der-steuerpflicht-in-deutschland/

 

 

[andre47]

23 hours ago, ukrules said:

 

183 days is the cutoff in Cambodia, then there's the fact that there is no personal income tax filing system in Cambodia at the moment. They plan to introduce it but they're not there yet. It was delayed until the end of this year with no new announcements yet.

Then there's holidays to other countries to consider, a simple 5 to 10 day trip to Vietnam or some other nearby country any time during the year would leave you below the number of days threshold everywhere for the year in question.

It's not hard.
 

The problem is that many banks and stock brokers are demanding your tax ID and tax residency. Without ID no account. If you give them a ID which is not correct or your ID does not currently match your tax residency there is a risk of committing a crime.

[chiang mai]

44 minutes ago, Chivas said:

 

Polite question and the first one

Whats Thailands position on spreads accounts.....??

I don't know.

[chiang mai]

47 minutes ago, Chivas said:

 

Well unless I move into a retirement postion (visa wise)  II'll just wait to someone comes knocking at my door

 

When they send me an explanatory letter in perfect English on what needs to be recorded where and by when and what details they currently hold from HMRC in the UK (good luck with that even I cant get it) then I'll view it as another fiasco thats gets swept under the carpet here in Thailand

 

Give it a rest chivas! If you don't understand, just say so. Why would TRD be holding any of your HMRC details!

[Confuscious]

On 9/7/2024 at 6:49 PM, stoner said:

 

don't bother sending yourself money. take the few dollars hit at the ATM. if its only 2 months you wont need to visit the ATM more than a couple times. so 50 bucks to get them off your back sounds reasonable. 

The new ATM's (seen a lot of them) which require the insertion of your ID-Card will identify money from abroad.
Soon, all ATM's will be equipped with identification.
Thailand is not as stupid as you think.

[Yumthai]

13 minutes ago, andre47 said:

The problem is that many banks and stock brokers are demanding your tax ID and tax residency. Without ID no account. If you give them a ID which is not correct or your ID does not currently match your tax residency there is a risk of committing a crime.

There are plenty of countries that do not tax or issue TIN to its residents, I doubt all these people have no access to international banking and brokers.