Don’t kill the golden goose! Tax reforms may drive away expats

[hwas]

I strongly suspect that once the global tax change goes into effect, the “stay in Thailand less than 180 days” loophole will also be closed.  Thailand will simply require residence visa holders to be resident in Thailand for 180 days, or the visa will be cancelled.  This is a requirement in most countries for residence visas

[TroubleandGrumpy]

When I was first researching where to retire overseas in 2010, Thailand was in the top few places in every list.

That is not the case anymore - and that 'decline' started after 2014 when the Junta took over.

This new 'tax regime' being implemented in the usual incompetent manner by Thailand has made things worse.

 

Best Places to Retire in 2024: The Annual Global Retirement Index (internationalliving.com)

https://www.kiplinger.com/retirement/best-countries-to-retire-2024-costa-rica

Best Places to Retire Overseas in 2024 | Retirement | U.S. News (usnews.com)  

 

Yes I think a lot of Expats are either leaving, planning to leave (just in case), or have already left.

 

But with regards to new retired Expats - Thailand has dropped the ball, or shot itself in the foot, or does not want them. 

[spidermike007]

I don't think they care, I don't think they give expats very much credit for the money that we bring into the economy, and I don't think they care whether or not they lose us. I don't think they have enough vision to see what we contribute, and it's very likely that the government tolerates us, but doesn't really want us here. 

[Gottfrid]

7 hours ago, Johno57 said:

Obviously this has not been thought about in depth, and their was the idea of charging the tourist a small amount to enter the country which was dismissed as it might affect tourism, and now this idea will really hurt the common thai business as NO retired person will accept a double tax and make thailand home..

Maybe I am understanding this the wrong way, but what has double taxation to do with this? If tax is due, for any reason, in another country, I understand Thailand will not apply tax on that income as it´s already paid. Tax on worldwide income, to me, sounds like they want to delete the possibility to earn money in Spain while in Thailand, and place it in your home country bank to get away from tax if you stay over 180 days in Thailand.

[Toby1947]

6 hours ago, Badrabbit said:

16 extensions and all by the book, pay tax in the UK on my 3 small pensions, so they want to tax me again, unfortunately I'm not in the position to leave so I will have to do what they decide to do in the future, doubt I would be able to afford 2 tax bills.

Just done my new extension so I'm okay untill 2025.

I don't have any bank accounts in the UK only Thailand.

Basically you have burnt your bridges, it was your decision 

[TroubleandGrumpy]

1 hour ago, BritManToo said:

How would they identify YOUR bank accounts in a foreign country?

Bob Smith in Thailand could be any of 10,000 Bob Smith in the UK.

As we have no ID cards in the UK.

I agree that it would be very difficult and far too much work.

But - it can be done if they really want to do it - I think it would go something like this.

 

All remittances into Thai Banks will be reported to TRD - probably by BOT - maybe by each bank too.

That information can be sorted based on Passport/ID number.

That information can then be collated and checked to give total amounts remitted for each person.

That information can then be checked against tax returns - Yes or No.

They can then get the information about each person with a 'No' who totalled over X Baht per year in remittances.

For Thais they check with (Dept?) against the ID number for details.

For Expats they check with Immigration against the Passport numbers.

Then they could send letter asking 'why no tax return'.

 

But will they go through all that work? Do they have the resources and expertise? Who knows.

[NoDisplayName]

7 minutes ago, Gottfrid said:

Maybe I am understanding this the wrong way, but what has double taxation to do with this? If tax is due, for any reason, in another country, I understand Thailand will not apply tax on that income as it´s already paid.

 

You are misunderstanding this.  Thailand may have a higher tax rate on certain types of income.  If not excluded by DTA, that income can be taxed.  You may, or may not, be able to claim a credit for tax paid to the other country when taxed in Thailand.  You may, or may not, be able to claim a credit for higher tax paid to Thailand.

 

Thailand does not recognize exemptions and allowances and special rates allowed under foreign country tax codes.  Thailand has it's own exemptions and allowances, and will tax the foreign income BEFORE those exemptions/allowances were applied.

 

Your home country may give you a $12,000 personal exemption.  Thailand will give you $1,750 on your foreign income before exemption.

 

Your home country may allow you to offset capital losses against capital gains.  Thailand does not.  You will be taxed on the total capital gains.  Losses are disregarded.

[ElwoodP]

Commercial YouTube video removed.

[BE88]

4 hours ago, chiang mai said:

This change to the tax laws is not aimed at you or other paranoid foreigners, you are collateral damage and nothing more, get over yourselves, you're not that important to the Thai economy. Some foreigners seem to think they are one of 300,000 rich people living in a jungle of 70 million poor people which is not even close to reality.

 

I don't know where you live, maybe in Lumpini, but that's not what I see where I live.

 

Maybe you mean to say that this tax is reserved for rich Thais and at least the Chinese middle class ?

 

Then this is the joke of the day

 

[TroubleandGrumpy]

1 hour ago, decca60 said:

All this system was initially developed to oblige the Thai citizens having revenue abroad to declare it and pay tax on it. That was a fair move looking at the very low number of tax payers in Thailand. Nevertheless the real rich have organized themselves via foreign companies or financial arrangement and they will pay ZERO additional tax. We,  long term expats will be the collateral damages of this law. Based upon what I could identify with my tax consultant, I will pay 2.5 times more tax than in my mother country. Although there is a no double taxing agreement with my country of origin, I will have to pay my full tax in advance here and HOPE to be reimbursed of the difference by the RD. I say I'm hoping because after 10 years in Thailand I know how easy they are with getting the money and how difficult they also are to give it back. So I expect an administrative nightmare and never ending battles to get my money back. I just believe this law will be voted and enforced via two easy control ways. Immigration with visas and exiting the country only if you have a tax declaration, law which already exists and could be applied in one day. We already  had the insurance on OA visas, the forthcoming one on O visas, the visa types revision this year end etc...etc....This without speaking about the various costs in tax advisors, attorneys etc etc...No way to spend a fortune living in two countries for 6 months or any other headache...

I have worked hard to get what I have and there is no way to have a never ending Damocles sword over my head asking myself what will be the next hurdles in whatever. I love Thailand but I above all love my retirement peace of mind. So my decision is made, I will leave the country soon. I'm just sorry for the people who have families there or cannot afford changing country, they will be the real victim of an idiot system thought by idiot people. And all this for not getting a single additional right in exchange...

 

It wont change the world for Thailand but you will not get a single penny from me anymore. 

Sad to say - but it is true what you said. There are many thousands of Thai families who will suffer if their Expat provider leaves the country. If I was not married to a Thai and living in a house we/she bought, I would have already decided where I will be moving to - I would not stay in Thailand.  It would be somewhere nearby - Philippines, Malaysia or Indonesia - and I would probably visit Thailand once or twice a year.

 

As it stands now, I am putting together all the documents and reasons why my self-assessment will result in myself not needing to lodge a tax return, because I will have no income taxes to pay (using a joint tax lodgement with wife).  However, if the proverbial hits the fan and myself and/or other Expats are 'nailed to the cross' by TRD, then the wife and I will be moving out.  Probably to a country nearby for a few years so visits are easy - but eventually back to Aust (wife is a citizen).

 

Both myself and the Wife are adamant that Thailand can go fornicate itself if it thinks they can hit me with income taxes, while being constantly living under an uncertain temporary non-immigrant Visa that requires reporting to Police every 3 months like a parolee, and an annual payment/application to stay and spend more in the country, plus all the other khrapp when moving or travelling inter-Province or going overseas. It is extremely annoying that despite me spending over a million baht to the Thai economy every year (which at 7% VAT is about 50-70K in taxes), that they want to squeeze more money out of me and force me to pay income taxes in return for nothing. If the local Provincial Somchais in the TRD Offices start to demand 'you Expat you pay 200K tax' (very possible) then we are out of here.  

[newnative]

3 hours ago, motdaeng said:

 

but a lot ....

     No, not a lot, in my opinion.  Certainly nobody I know would fit that description.   They might be more noticeable than other ex-pats going about their business in less visible areas but that is perception, not reality.  My Thai spouse and I live in a new housing estate on the Darkside of Pattaya, one of a very large number of housing estates that have sprung up, and are continuing to be built here in booming Pattaya. 

    Of the 30 homes in my housing project, in the 10MB range, almost all have at least one ex-pat in residence.   It was the same in the two previous housing projects that we lived at before this one.  Are we visible, on display?  Nope.  Nobody sees or notices us.  Only those down-and-out sad sack ex-pats seem to get noticed and commented on.  But, for every one of those, there are dozens more living in out-of-sight housing estates or in one of the numerous high-end condo projects that have been built, and, like the housing projects, are also still being built, to handle the demand.  

[TroubleandGrumpy]

33 minutes ago, spidermike007 said:

I don't think they care, I don't think they give expats very much credit for the money that we bring into the economy, and I don't think they care whether or not they lose us. I don't think they have enough vision to see what we contribute, and it's very likely that the government tolerates us, but doesn't really want us here. 

I think you are right. But you are referring to the wealthy and middle class Thais - IMO the majority of Thais (such as those whose votes dont count) want Expats to stay and more to come.  But not only does their votes not count, their opinions and wants dont count either. 

 

If you recall, in September 2023 there was an article in the BP that was from TAT, and it spoke of the decline in Expats working and living in Thailand (especially the Japanese and Koreans), and it stated that "The Tourism Authority of Thailand (TAT) is dedicating 2024 to expats by offering benefits to this segment.  Thapanee Kiatphaibool, the TAT governor, said the agency is preparing privileges for expats including perks they have requested for many years, such as lowering entrance fees to national parks and other attractions to the same rate as Thais."

 

And then not long after TRD announced they are going to include Expats in the 'new taxation regime' and the TAT Expat Program disappeared into the great black hole that is full of previous Thai Govt statements, promises and proposals. 

[TroubleandGrumpy]

36 minutes ago, NoDisplayName said:

You are misunderstanding this.  Thailand may have a higher tax rate on certain types of income.  If not excluded by DTA, that income can be taxed.  You may, or may not, be able to claim a credit for tax paid to the other country when taxed in Thailand.  You may, or may not, be able to claim a credit for higher tax paid to Thailand.

Thailand does not recognize exemptions and allowances and special rates allowed under foreign country tax codes.  Thailand has it's own exemptions and allowances, and will tax the foreign income BEFORE those exemptions/allowances were applied.

Your home country may give you a $12,000 personal exemption.  Thailand will give you $1,750 on your foreign income before exemption.

Your home country may allow you to offset capital losses against capital gains.  Thailand does not.  You will be taxed on the total capital gains.  Losses are disregarded.

Unfortunately you are 100% correct.  Thailand has very oppressive taxation rules when it is compared to the rules and regulations of the tax authorities in the first world countries. Perhaps they are actively working behind the scenes to modernise and rationalise their tax rules under this new taxation regime, and it will all be ready for announcement in November/December.  But IMO that is as likely as the following image. 

 

 

What will happen IMO is that a vast majority of foreign workers will not be interested in working in Thailand, if/when they implement a worldwide taxation system under TRD's current rules.  Why would anyone want to take a job in Thailand for a few years and risk being taxed heavily and clumsily on all their money and investments back in their home country?  Likewise, why would anyone with investments back in their home country even consider retiring to Thailand? They are doing exactly the opposite to what they have said they want to do - attract well off 'desirable' retired Expats.

 

 

Edited September 11 by TroubleandGrumpy

[oslooskar]

And the moral of the story is, always have a backup plan.

[Expat68]

Just now, oslooskar said:

And the moral of the story is, always have a backup plan.

Always keep a bolt hole

[spidermike007]

The government goons do not want us here.

 

But, perhaps ex-pats should be given a bit more credit, in this formula? We do bring in alot of stable income.  Even the rural folks benefit. Alot of the nicer houses in the poorer farming areas were built with money from expats. Alot of trucks, cars and income is from expats. Countless business employing many. To say it is insignificant, is a blatant misunderstanding of Thai economics. Thousands of hotels, restaurants, countless airlines and many tour companies, also benefit. By comparison, an average ex-pat spends how much per month? I would say alot of us spend 50,000 to upwards of 100,000 baht a month. I know I do. No value in that? I know some live on less. However, since the average GDP of the nation is around $570, that means about 20,000 baht a month?

 

I think xenophobia is utterly rampant, in all segments of the government here, from the feds right on down to the local amphur. However, I do not think most Thai people are that way. I think most either like us, or are indifferent to us. Which I can handle. 

 

To the contrary, I think ex-pats should be treated with the kind of respect and acknowledgement we deserve.

We have decided to change our policies, and we now realize how much you guys bring to the table.

An immigration officer will now come to your home to renew your visa, to show our appreciation, of your continued support.

You will only be required to sign one form, and we will give you a five year, multiple entry visa. Free of charge.

And we will include a 10,000 baht voucher, good for any hotel in the country, for one year. 

Princely treatment. Thank you so much for helping to rescue our economy and our people.

We appreciate it, and aim to show it for a change! We are past the era of thugs like the big joke.

And we apologize for all of his abuse.

We realize we have been moving the country backwards. 

And Covid has given us all some time to reflect.

We are going to start changing things, and attempt to move the nation forward, instead of backwards.

[JackGats]

Imagine long-term visas being henceforth denied to those who stay less than 180 days per year because they can't  by definition come up with a tax clearance. Some unexpected consequence that would be!

[VBF]

6 hours ago, mfd101 said:

7 hours ago, topt said:

Suggest you guys read up on CRS - Common reporting Standards

Here is a link from a bank to start you off

https://www.crs.hsbc.com/en/frequently-asked-questions

Yes, everyone needs to read this. No point in bleating. The Thai government having signed up - along with over 100 other governments - it now needs to at least go thru the motions ...

I think you've hit the nail on the head.

Merely IMO, but they will (probably) go through the motions, ask a few questions, then find a reason excuse not to continue.

[sandyf]

6 hours ago, Dazinoz said:

Are we not past that date already?

 

Its a pity proof reading not carried out in a lot of these stories.

The new regulations have started but nothing can be done until after the tax year ends in Dec, and it will be some time after that before any fallout will be seen, although some may go looking for it early Jan.

[Presnock]

3 hours ago, harryviking said:

How can they even think about taxing people that are not even citizens of Thailand? Will they in that case receive free healthcare like Thais?? Will they receive a Thai passport if they so chose to have one? If the answer is "NO", these people should be fired as they must have smoked something strong lately!  😫😫

Their country so they can do whatever they want especially when it comes to expats

[Jerry777]

2 hours ago, MarkBR said:

You are, I assume, correct.

US Social Security will not be taxed

[Presnock]

2 hours ago, Gottfrid said:

Maybe I am understanding this the wrong way, but what has double taxation to do with this? If tax is due, for any reason, in another country, I understand Thailand will not apply tax on that income as it´s already paid. Tax on worldwide income, to me, sounds like they want to delete the possibility to earn money in Spain while in Thailand, and place it in your home country bank to get away from tax if you stay over 180 days in Thailand.

yeah, that is true but too many people have been avoiding paying taxes on their income to any country, thus the OECD agreement to try to catch those people.

[Presnock]

4 hours ago, Sig said:

You are free to believe what you like from the mass media. Notice that they never told you how many billions US folks lost on the NYSE? Notice that they didn't define who those people were... I can pretty much guarantee you that they were idiot traders who are among the 90%+ of traders who lose their money. In other words, they are not the people who have been invested in Bitcoin. Their stat is a manipulation to support their narrative. In 2023, Bitcoin went up 156%! How do people lose billions in a bull market like that?? Gold and the Dow Jones, in the same time period went up about 13%. The S&P performed better, but still VERY far from Bitcoin, at nearly 24%. Billions upon billions are not being poured into bitcoin by ETFs and other billionaires, like Larry Fink (Blackrock), for no reason.
But there's a narrative and the mass media is sticking to it. Any guess why? There are definitely reasons.
Even Goldman Sachs has admitted that Bitcoin/Crypto has outperformed stocks, massively. But, for one reason or another, they still believe that in the long-term, gold will outperform crypto. They didn't give any confidence in stock. Since 2020, crypto has outperformed gold by 40%! and the S&P by 59%! Those are not small numbers and not over a small volatile time period. But believe what you like, it's a free world (not really...).
The US News might not make it "sound that attractive" to you, but you would be much better off to invest your money (and ideas/opinions) through your own research than by manipulative media doing the same old thing they always do. I'm glad I didn't listen to their narrative back in 2018... up about 800% so far... And cashed out some other coins for short term that did even better, but wouldn't recommend other coins to anyone other than people who have been in it for a while and understand it well.

Never considered the markets either, just too ignorant of all the ins and outs.  I had a great job, well paid and now have a great retirement income.  Can provide easily for my family and if I croak sooner then they will still receive annuity without any problems.  I do wish everyone luck in whatever they decide what they want to do except for those who just want to have some government give them free bennies without them having to pay anything.

[BangkokReady]

Quote

Don’t kill the golden goose! Tax reforms may drive away expats

 

Unfortunately, a lot of Thai people don't want to even admit that they are so reliant on foreigners.

[BritScot]

10 hours ago, FridgeMagnet1 said:

Ha ha, good lord. Describing the sad old soaks who retire to Thailand as the “Golden Goose”

A very uneducated statement.  If you hate expats so much why bother with a site that was originally started for expats? A little education about the people you have zero respect for: first they help the Thai economy with 400k or 800k sitting ideal in a Thai bank account which allows that bank to lend times 10 ie for every expat a bank can lend upto 8 million baht to Thai as expats can't even get a credit card. Those beer soaked expats may well be supporting a wife, children and even family members something many Thai men seem to have problem's with and who often disappears when their wives become pregnant. Other expats may have businesses that employ many Thais and normally those employees are treated far better than their counterparts with Thai bosses. You can also talk about the business all expats support and contribute to from food, restaurants, auto industry and even those expats who partake in the ceedy side of Thailand may partake a little private entertainment which contributes to short time hotels and helps indirectly support those children Thai men have abandoned. Think before you type very arogant and derogatory terms and as a foot note: expats are both male and female!!!! Phew!!!!

[SunsetT]

9 hours ago, ikke1959 said:

They just realize this??? It is normal to see what they are doing and the impact of things when it is too late.. and than they want to turn it back which will never be able.. Tourism they have broken down several years ago already and look how they struggle to get it resolved now.. Now the tax is again a problem that they first do and when the expats and  retirees are gone they realize they had made a mistake but they can't correct it anymore and so there are many many other things they do by not proper investigation and thinking of consequences... I know several sold their house already and left the country and more will follow as i hear in the expat community last week... Myself I am considering too what to do 

Due to the lousy education there is no rational thought enabling clear thinking and forward planning. Everything is just trial and error. 

Edited September 11 by SunsetT

[sandyf]

3 hours ago, BritManToo said:

How would they identify YOUR bank accounts in a foreign country?

Bob Smith in Thailand could be any of 10,000 Bob Smith in the UK.

 

As we have no ID cards in the UK.

The whole rhetoric of everyone seeing everyones business is getting out of hand. It is not a question of them(TRD) being able to identify your accounts somewhere else.

The banks in other countries have a legal obligation to report accounts to another tax jurisdiction if it appears an account they hold belongs to someone who is a tax resident in that jurisdiction.

If they decide to report an account, the information they provide is quite limited, mainly account value and any income credited. 

What is a bit vague is "how", as you suggest, they will identify the accounts. In the UK I think the NI number could be seen as a TIN, but I can't see how anyone in Thailand would know that.

 

Each participating country will annually automatically exchange with the other country the below information in the case of Jurisdiction A with respect to each Jurisdiction B reportable account, and in the case of Jurisdiction B with respect to each Jurisdiction A reportable account:^[16]

1. Name, address, Taxpayer Identification Number (TIN) and date and place of birth of each Reportable Person.
2. Account number
3. Name and identifying number of the reporting financial institution;
4. Account balance or value as of the end of the relevant calendar year (or other appropriate reporting period) or at its closure, if the account was closed.
5. Distributions made to the account (dividends, interest, gross proceeds/redemptions, other)  https://en.wikipedia.org/wiki/Common_Reporting_Standard#:~:text=The Common Reporting Standard (CRS,is to combat tax evasion.

[tomacht8]

It always depends on the individual case. In the years before 2024 I always brought/sent and spent at least 2-3 million TBH per year to/in. Thailand. Now in 2024 I was able to officially reduce my banktransfers to 400K. There are other ways to bring  money into Thailand. I have now completely stopped my investment plans in 2024: no 5 million condo purchase and no Thai stock purchases to set up an investment fund for my daughter (6 million TBH were planned). This will only happen once it is 100% clear that I do not have to pay taxes for the capital import from my savings (which were already taxed in my home country in the years 2000-2020).

 

And in addition, now comes the second toad that i have to swallow: I should also pay differential taxes on my dividends, rental income and interest income (which are taxed every year in my home country)? I just look at my fist and put a finger up there. The paper war with the annual extension of my marriage visa is enough for me.

 

And now also a highly complicated tax paper war, with provincial tax officials who certainly don't have the fundamental know-how, so that I then have to spend another 50K on a tax professional from Bangkok? No way. For 2025 I will 100% not stay in Thailand for 180 days+. I have too much to lose financially. I'd rather spend my hard-earned money in other countries. Southern Europe in summer and some months in wintertime like Philippines, Vietnam, etc until the fog of tax uncertainty clears.

[Wrwest]

6 hours ago, chiang mai said:

That 3% is not being chased off, AN polls have already confirmed that less than 5% of of members will leave as a result of the tax rule change. There's a lot of chest beating on this issue by foreigners but that's just noise. Most have either not done their sums on this or are just making noise out of frustration and anger. Younger guys who are highly mobile may reverse an earlier decision to live here but so what. The settled guys with homes and families here  aren't going anywhere, neither are the pensioners. 

I am thinking there can be no valid poll until the factual basis for the question asked can be ascertained. Right now it is speculation as to what will happen, if at all. It will certainly depend on the actual result with me after being here 13 years as an American. However, the worse case scenario, if absolute double taxation on worldwide income (as I am already conforming to USA worldwide income tax regulations as a citizen), would most certainly mean my removal. But that is just me, I make to prediction as to what others may chose to do. I did my homework before determining to spend my retirement income in Thailand, being a free individual I am free to move to another country. Oh, my Thai Wife?  We have discussed the issue ... she is ready to go. I croak? She is such that she would deal with staying or returning to Thailand when the fact presents itself.

[sambum]

10 hours ago, NemoH said:

The problem is that the Thai government have never cherished or respected this golden goose.
 

Expats are a silent minority in Thailand that is totally ignored by Thai government except when it comes to taking money from us.. we are discriminated against in pricing, enjoy no benefits as citizens but yet we directly n loyally support the entire Thai economy with our consistent spendings from Bangkok to Issan.

By shrinking Expat spendings, the whole Thai economy will now have to depend on the whimsical, seasonal and unpredictable tourism where all other countries will be competing with them. This tax will be the government ‘robbing’ from the very same support from which Thai economy gets its support and the ultimate real losers will be the Thai economy n the Thai common folks. 
 

The immediate glee n greed for this tax will bring long term repercussions spread to the entire Thai economy. 
 

At the end of the day, it’s just another transfer of wealth n robbing from the spendings to be earned by the Thai common folks to the government.

 

"This tax will be the government ‘robbing’ from the very same support from which Thai economy gets its support"

 

The Government seems to forget the very important role that residents/ex pats played during the Covid crisis.

 

With tourism being NIL, many Thai small businesses were kept going by the custom of "resident farangs", and let's not forget the food parcels and "soup kitchens" arranged by farang charity organisations when help from the Thai Government was virtually NIL  I vividly remember a truck parked up outside our local Macro where they were taking donations of bags of rice etc. for the poorer Thai people - and no, it wasn't an Army truck or anything connected to the Government in any way - it was a local "farang" charity organisation. I am only surprised that they weren't charged for working without a permit! 

Edited September 11 by sambum