Its Happening - Law to Tax Overseas Income Now in Progress

[FruitPudding]

4 minutes ago, Ben Zioner said:

Looks like your earnings are below 1 Million.

 

My Thai earnings, yeah. 

 

Though, I do have another income stream which I'd rather wasn't taxed cos it takes me over the million threshold. 

 

 

[FruitPudding]

Just now, Gottfrid said:

Just lay it to rest. You still don´t understand what I meant. Looks like other people have managed that. 

 

What did you mean? Can you formulate a clear sentence for once?

[Mason45]

19 hours ago, 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!!!

Do you thjnk that any overseas bank would allow Thailand to access our personal banking information.

[FruitPudding]

8 minutes ago, Will B Good said:

 

I was accusing me, myself, I of being racist by singling out the Chinese as potential tax dodgers.

 

Oh, I see.

 

Nothing wrong with a bit of racism. The world is far too sensitive and woke these days.

[Gecko123]

51 minutes ago, FlorC said:

Yes I think there will be a big difference in provinces where very few farang live and  where maybe 10 thousands live like Bangkok , Chonburi , Phuket.

With a couple of hundred in a province like mine , the tax office will have more time .

 

I think I'm lucky , living off an inheritance received in 2023 and no income since 2008. Both I can prove with tax returns.

Your inheritance doesn't generate any income?

[Sigmund]

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.

[FruitPudding]

5 minutes ago, Mason45 said:

Do you thjnk that any overseas bank would allow Thailand to access our personal banking information.

 

Uhm, yeah.

 

My bank overseas already sends my yearly investment info to the Thai revenue department because they HAVE TO (to comply with some law due to Thailand being my tax residence).

[Sigmund]

8 minutes ago, Mason45 said:

Do you thjnk that any overseas bank would allow Thailand to access our personal banking information.

if the treaty has been signed, you'd be surprised how especially european banks give out all information. The only banks where things are a bit more safe are the banks of Switzerland. But even the Swiss banks need not to give out information if within the EU or the bully America.

[Gecko123]

Encouraging people to flit around the globe in order to avoid taxes is not a very environmentally friendly tax policy.

[FlorC]

7 minutes ago, Gecko123 said:

Your inheritance doesn't generate any income?

Not officially . No interest . I have no bank accounts in "home"  country.

[Fat is a type of crazy]

5 hours ago, aussienam said:

Australian private pensions, many government employee pensions and old age government pensions are tax-exempt in Australia. 

Under our Dual Taxation Agreement our pensions will be liable to being fully taxed in Thailand (being one of the contractors states entitled to tax). 

 

Our system for private pensions entails an accumulation stage beforehand into Superannuation funds. It is a lower tax rate in Superannuation as an incentive for people to contribute more to have a private pension and not become a burden to the government. 

Pension phase allows tax-free income as a result. 

 

The Thailand incoming remittance tax enforcement planned, means any of my pension money coming into Thailand faces full tax.  A huge disincentive to remain in Thailand. If remaining here, one would plan on bringing in minimal amounts to keep tax low. I have calculated that my eventual planned pension amount would be taxed around 20%.  Thailand would have just upped 20% more expensive. A fluctuating currency where our dollar can drop from near 25 to 20 Baht adds another 20% increase in cost of living if money remitted during poor exchange periods.

 

That's a cost of living increase that has a huge impact.  If they go the next step as well on taxing global income, my pension amounts kept in Australia and accumulated for emergencies will also be taxed.  

Other investments also cause severe headaches.  Investment property rental income, whereby in Australia we can claim tax deductions for various things (depreciation of building and other fixtures, rates, insurance, property management fees, maintenance, etc). This means our tax liable can be reduced well below equivalent Thai tax income rates . 

 

Will TRD recognize valid claimable deductions entitled to in Australia or will it just see that only xyx% net tax was implemented on that rental income and therefore below Thai tax rates, meaning tax liable in Thailand? 

Capital gains tax. 

In Australia a primary residence when sold is untaxed gains. An investment property is only taxed 50% capital gains. 

Many expats fund their retirement from selling property, moving that money into Thailand and/or moving money into Super fund as contributions to convert to pension. 

If worldwide tax comes in, all the tax-free gains and pensions are not safe from Thailand tax laws.  

Our Australian tax year ends 30 June. Thailand ends 31 Dec. Do I need to then prepay tax by 31 Dec to synch my taxes with Thailand? I don't pay tax until assessed in Australia and when deadlines are due and that can take many months (delays from companies with tax reports).  

 

And now the need to have dual accountants and in Oz probably a half-year tax report with prepaid tax (to my loss).  International tax advice will be needed adding $$$$.  Paperwork, certifying documents, tracking sources of income. 

This is overwhelming and severely stressful.  Not the retirement I was after with my medical condition. Heart attack inducing stuff.  

Spending time out of Thailand each year to not be a tax resident will become extremely tiring and lonely for many who want a life with community, with friends, having a relationship. Long distant relationships are stressful. There will be breakups.  Thai ladies will lose financial support and that will impact down the line to their families etc.

 

Less time in Thailand means less being spent. It means not buying property, cars, furniture etc.  It means shorter leases and less possessions.  

Better to start again in a tax-friendly country if this debacle continues.  

 

I have heard of loopholes being announced and advisors mentioning funneling pensions etc via Hong Kong pensions/trusts set up there.  Because DTA between China and Thailand is tax free for that scenario.  Global tensions and geopolitics means potential risk IMO that is concerning to me.  

 

Gifting is an option but be wary of sending funds to a partner to skip tax and use that money yourself.  That is not the intended purpose of gifting and I would not be surprised if that potential loophole becomes restricted. Plus you need a partner and someone you really trust.  But if worldwide income tax is implemented there is no hiding tax-exempt (in your country) or untaxed (savings for example) money.  

 

Is Thailand worth all of this? Being reamed with tax?  Making it so much more expensive? And zero benefits offered to you?  It is no longer becoming an expats destination, rather a tourist one only.  So damned sad and an end of an era of being a much favoured destination.  This is a death knell.  

Interesting post. I think some things though are different to what you say based on what I have picked up here and there. Happy to be corrected if there is new information 

Super for most employees when taken on retirement is tax free in Australia as you say. You can put this type of super in an annuity - subject to limits - and pay no tax on the income. 

Government employee pensions e.g. defined benefit schemes - are not tax free in Australia but have a tax offset - when I retire I am in this category .

The old age government pensions is taxable in Australia. Most don't pay tax as offsets mean no tax is payable. 

 

For the double tax agreement it appears there is a specific exclusion for government employee pensions but not for other forms of superannuation or the age pension. 

There is a video on aspects of this in Dinga's post.

 

https://aseannow.com/topic/1306896-thai-government-to-tax-remitted-income-from-abroad-for-tax-residents-starting-2024/page/282/

[KannikaP]

3 hours ago, tomkenet said:

If he brings the proceeds from that capital gain into Thailand in 2024, he must report it as assessable income when filing a tax return.

That makes sense, money into Thailand is taxed in Thailand. But not the money he has put in an overseas bank.

How would the Thai taxman know how much someone has invested in funds/ETFs/shares in say UK, and is getting dividends accumulating.

[ukrules]

6 hours ago, anrcaccount said:

All that is clear is that the RD is considering implementing some worldwide taxation changes, as was the case earlier this year. In the June report  it was "is amending" , now it is "drafting".

 

Normally you would expect the government of the day to drive major policy change that could have decades long repercussions, not some civil servant in charge of one government department.

 

Think of all those senior 'C level executives' at huge multi national companies located in Thailand, you think they're going to allow their worldwide income to be taxed in Thailand - not a chance, they will take their tens to hundreds of millions of dollars of offshore investments and leave in a heartbeat.

Why is the person in charge of the Revenue Department attempting to alter the law in favour of her department?

This sounds like a classic case of the tail attempting to wag the dog.

 

[Fat is a type of crazy]

39 minutes ago, Fat is a type of crazy said:

Interesting post. I think some things though are different to what you say based on what I have picked up here and there. Happy to be corrected if there is new information 

Super for most employees when taken on retirement is tax free in Australia as you say. You can put this type of super in an annuity - subject to limits - and pay no tax on the income. 

Government employee pensions e.g. defined benefit schemes - are not tax free in Australia but have a tax offset - when I retire I am in this category .

The old age government pensions is taxable in Australia. Most don't pay tax as offsets mean no tax is payable. 

 

For the double tax agreement it appears there is a specific exclusion for government employee pensions but not for other forms of superannuation or the age pension. 

There is a video on aspects of this in Dinga's post.

 

https://aseannow.com/topic/1306896-thai-government-to-tax-remitted-income-from-abroad-for-tax-residents-starting-2024/page/282/

To be a bit clearer for the few who care  PARTS of government employee pensions are taxable to which an offset applies. 

[gamb00ler]

3 hours ago, Jingthing said:

Also, IF they do, aren't people with Roth IRAs at risk as being taxed on withdrawals by Thailand even though they're exempt in the U.S.?

Is there really any DTA law to cover this mess?!?

If Thailand does move to worldwide income taxation, this is how I see the impact on US Roth accounts.

 

Since Thailand doesn't see a Roth account as differing from a regular investment/savings account, it will be taxed in the same manner.

 

Roth contributions and investment income prior to Jan 1, 2024 would always be treated as non-assessable in by TRD. 

 

The only difference from the current situation is that Roth income post Jan. 1 would become annual assessable income to TRD.

 

There should be no taxable event when a qualified Roth withdrawal is made.  The income inside a Roth would incur Thai tax annually, so no separate tax upon withdrawal.

[ukrules]

5 hours ago, aussienam said:

Australian private pensions, many government employee pensions and old age government pensions are tax-exempt in Australia. 

Under our Dual Taxation Agreement our pensions will be liable to being fully taxed in Thailand (being one of the contractors states entitled to tax). 

 

Our system for private pensions entails an accumulation stage beforehand into Superannuation funds. It is a lower tax rate in Superannuation as an incentive for people to contribute more to have a private pension and not become a burden to the government. 

Pension phase allows tax-free income as a result. 

 

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.

[lordgrinz]

9 minutes ago, ukrules said:

 

Normally you would expect the government of the day to drive major policy change that could have decades long repercussions, not some civil servant in charge of one government department.

 

Think of all those senior 'C level executives' at huge multi national companies located in Thailand, you think they're going to allow their worldwide income to be taxed in Thailand - not a chance, they will take their tens to hundreds of millions of dollars of offshore investments and leave in a heartbeat.

Why is the person in charge of the Revenue Department attempting to alter the law in favour of her department?

This sounds like a classic case of the tail attempting to wag the dog.

 

Typically I would agree, but she has gone from talking about "amending", to now "drafting" a law. Yet nobody above her has silenced her in several months, which leads us to believe she has the backing of the government.

[gamb00ler]

1 minute ago, ukrules said:

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

This isn't how double taxation is avoided by all DTA's that I've read (only a couple).

 

Normally country B will allow taxes paid to country A to be deducted from the tax owed to them on the income in question.

 

So, a zero tax rate generates a credit of zero.

[Etaoin Shrdlu]

19 minutes ago, lordgrinz said:

 

Typically I would agree, but she has gone from talking about "amending", to now "drafting" a law. Yet nobody above her has silenced her in several months, which leads us to believe she has the backing of the government.

 

I agree. There's no way this would arise without it being part of the government's policy. We'll hear more about what Thaksin the PM has in mind when she gives her speech next week. It has already been leaked that the new government will seek to remedy income inequality via the tax system. The question will be whether it gets a radical revamp or just the addition of worldwide taxation. There has been talk of a negative income tax for the poor. 

[Danderman123]

I know bar girls who live off overseas remittances, some fairly substantial.

 

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

[Gknrd]

My understanding of the tax treaty with the US is, if you file in the US then it will be sent to Thailand if requested. So, if any capital gains and you file , or any other income and you file. Thailand will know it . You will not be able to escape.

Unless you are already there, have ponied up the 800K,  just suck it up and pay. If not avoid Thailand as a retirement home.

I get bombarded daily on the internet with retire in Thailand and buy these high priced villas, etc.  Can you imagine the tax burden put on these folks once they get settled. 

Leasing the land that will revert back to Thailand, no medical or legal help in Thailand., no rights to speak of.  Really they are just trolling for newly retired  idiots.  People that sell out in the US that have a pocket full of money.  

[Gknrd]

22 minutes ago, Etaoin Shrdlu said:

 

I agree. There's no way this would arise without it being part of the government's policy. We'll hear more about what Thaksin the PM has in mind when she gives her speech next week. It has already been leaked that the new government will seek to remedy income inequality via the tax system. The question will be whether it gets a radical revamp or just the addition of worldwide taxation. There has been talk of a negative income tax for the poor. 

Personally I am waiting for the scheme to develop. One way or another this clan will find a way to pocket boat loads of money. Curious to see how it will develop

[Danderman123]

If Thailand imposes a worldwide income tax, Farangs will depart in droves.

 

I would reside in Thailand for 179 days a year, and visit other countries.

 

 

[gearbox]

1 hour ago, Mason45 said:

Do you thjnk that any overseas bank would allow Thailand to access our personal banking information.

Even the tax office in your home country probably doesn't have detailed transaction information, and normally they don't care. All they need is how much interest you earned and any other type of income you got. Most of this info is also  provided via CRS to countries where you are tax resident.

[Etaoin Shrdlu]

16 minutes ago, Gknrd said:

Personally I am waiting for the scheme to develop. One way or another this clan will find a way to pocket boat loads of money. Curious to see how it will develop

Yup.

[Mason45]

5 minutes ago, Danderman123 said:

If Thailand imposes a worldwide income tax, Farangs will depart in droves.

 

I would reside in Thailand for 179 days a year, and visit other countries.

 

" Farangs are a burden on Thai economy " In my 24 years in Thailand I've yet to see a service that was tax free. They even wanted to charge us for the Covid vax until they were pulled into gear by the US Government stating that the one million vax shots were a donation and must be free to all.

 

[gearbox]

1 hour ago, Fat is a type of crazy said:

Interesting post. I think some things though are different to what you say based on what I have picked up here and there. Happy to be corrected if there is new information 

Super for most employees when taken on retirement is tax free in Australia as you say. You can put this type of super in an annuity - subject to limits - and pay no tax on the income. 

Government employee pensions e.g. defined benefit schemes - are not tax free in Australia but have a tax offset - when I retire I am in this category .

The old age government pensions is taxable in Australia. Most don't pay tax as offsets mean no tax is payable. 

 

For the double tax agreement it appears there is a specific exclusion for government employee pensions but not for other forms of superannuation or the age pension. 

There is a video on aspects of this in Dinga's post.

 

https://aseannow.com/topic/1306896-thai-government-to-tax-remitted-income-from-abroad-for-tax-residents-starting-2024/page/282/

The private super in pension phase is not taxable at all, this is valid for both income stream received and the earnings of the fund.

 

I'm planning to start receiving super pension from July next year, and if the worldwide tax is implemented I'll get a hefty tax bill. The only sure way to avoid it is to stay less than 180 days in Thailand.

 

In the DTA there is a breaker rule that if you are resident of both countries you pay tax where the income is generated, but I won't rely on the taxman in Nakhon Nowhere to interpret this properly. As it stands right now I'm a tax resident of both countries.

[gearbox]

17 minutes ago, Danderman123 said:

If Thailand imposes a worldwide income tax, Farangs will depart in droves.

 

I would reside in Thailand for 179 days a year, and visit other countries.

 

 

That probably is not very practical for many who are 75-80+ years old, or those with families with children.

[Danderman123]

Just now, gearbox said:

That probably is not very practical for many who are 75-80+ years old, or those with families with children.

There would be horror stories that will drive many Farangs out of Thailand.

[chiang mai]

1 minute ago, Danderman123 said:

There would be horror stories that will drive many Farangs out of Thailand.

You're scaremongering without any basis in fact or current reality, you're hypothesising to scare people. Why do you care, you've already said you won't be tax resident.