If passed, how likely is global income tax in 2025? Or is 2026 more likely?

[TPDH]

Hi

 

The global income tax bill is currently being drafted and it seems safe to assume that Pheu Thai is behind it. With the Peoples Party (Move Forward Party) being progressives and heavily inspired by the west, I assume they'd vote for this as well meaning the bill would get a majority vote and most likely pass. 

 

1. Do you also think the bill will most likely pass? 

2. If the bill is passed, how likely is it to be in effect for the tax year of 2025? 

 

Perhaps someone here is familiar with how quickly new laws are passed in Thailand. I asked ChatGPT and got a decent answer: 
"Passing a tax law on global income in Thailand would likely take more than three months due to the complex legislative process. It involves drafting, Cabinet approval, multiple parliamentary readings, and royal assent, followed by implementation procedures. A realistic timeframe is closer to six months to a year or more. "

[ukrules]

I have some thoughts on this issue

 

Firstly, they put out a clarifying memo on the new remittance based system stating that only income accrued after 31 Dec 2023 will be assessed if remitted in 2024 - that was effectively a delay of 1 year meaning the new change isn't being implemented this year as was originally announced - they rolled it back 1 year already.

 

I expect them to roll this back again and perhaps again until they sort out what they're doing with any global tax changes - because implementing 2 completely new and different schemes which contradict each other at the same time simply isn't practical on any level.

 

Then I would expect that any change to global income tax may not even make it to parliament, all you have right now is some official in the RD saying they want to collect more tax (that's their literal job description) - this person was 'anointed' under the now fired and therefore defunct governments leadership.

 

He's gone (old PM), this new PM could be gone soon and the old guard are coming for them all.

 

Just some wild speculation.... but I will be surprised if there isn't a second delay like the first one of Dec 31 2023 to Dec 31 2024 coming soon.

[motdaeng]

3 hours ago, ukrules said:

Frstly, they put out a clarifying memo on the new remittance based system stating that only income accrued after 31 Dec 2023 will be assessed if remitted in 2024 - that was effectively a delay of 1 year meaning the new change isn't being implemented this year as was originally announced - they rolled it back 1 year already.

 

sorry, it's maybe the early morning, but I have no clue what you are saying ... what was rolled back 1 year? 

[ukrules]

19 minutes ago, motdaeng said:

 

sorry, it's maybe the early morning, but I have no clue what you are saying ... what was rolled back 1 year? 

 

When they first announced this it was going to begin on Jan 1 2024 and apply to 2023 and prior income - so it was an immediate change with just a few months notice and all income in 2023 and before would be taxable in 2024 regardless of remitting it in 2024 using  the previous year remittance rule.

 

This did not exist for more than a few weeks, but the articles are still out there from this time period for anyone who cares to look.

 

Then there was an announcement which changed all that - this is when they announced that Dec 31, 2023 would be the cut off date  and anything earned in any year prior to this cut off of would be excluded.

 

That is a 1 year roll back - the first back pedal and it happened without many people here noticing it - I pointed this out the day it was announced somewhere on this forum.

 

Many people seemed to miss this as they moved very quickly to correct the colossal mistake they had made.

 

Regardless of how they worded this it meant that income earned in 2023 would not be taxable in 2024 - but that's the exact system they had just cancelled - where I come from this is called back pedaling - but just by 1 year - at this point in time.

 

They've back pedaled before and they will do it again - just watch over the next couple of months.

 

So it wasn't announced as a 1 year roll back but they introduced a new cut off date which is exactly the same thing - so nothing changed for 2024 if you're remitting 2023 income.

 

And that's what I'm referring to, maybe someone else can explain it a little more elegantly.

 

I believe that this cut off date of December 31, 2023 will be altered to December 31 2024 while they get organised internally

Lets watch and see - we will know in a couple of short months one way or another.

 

 

[chiang mai]

3 hours ago, ukrules said:

I have some thoughts on this issue

 

Firstly, they put out a clarifying memo on the new remittance based system stating that only income accrued after 31 Dec 2023 will be assessed if remitted in 2024 - that was effectively a delay of 1 year meaning the new change isn't being implemented this year as was originally announced - they rolled it back 1 year already.

 

I expect them to roll this back again and perhaps again until they sort out what they're doing with any global tax changes - because implementing 2 completely new and different schemes which contradict each other at the same time simply isn't practical on any level.

 

Then I would expect that any change to global income tax may not even make it to parliament, all you have right now is some official in the RD saying they want to collect more tax (that's their literal job description) - this person was 'anointed' under the now fired and therefore defunct governments leadership.

 

He's gone (old PM), this new PM could be gone soon and the old guard are coming for them all.

 

Just some wild speculation.... but I will be surprised if there isn't a second delay like the first one of Dec 31 2023 to Dec 31 2024 coming soon.

That's not quite correct!

 

The original rule change was announced in Por 161, that did away with the tax loop hole.

 

A concession was then granted via Por 162 which exempted any income earned prior to 31 December 2023.

 

OP: it's work in progress, nobody knows or understands the likelihood or timing yet, it's still very early days.

[ukrules]

7 minutes ago, chiang mai said:

A concession was then granted via Por 162 which exempted any income earned prior to 31 December 2023.

 

Ok, that's the part I was referring to - Por 162 made the expected instant change not become effective for another year because without that exemption all of the 2023 income would have been subject to tax in 2024.

 

It wasn't a roll back in name but that's effectively what it did by introducing this newly mentioned cut off date which didn't exist before.

 

So they did it once already, extending this date whilst considering implementation details for further changes is going to be the easiest face saving thing they can do.

 

[chiang mai]

1 minute ago, ukrules said:

 

Ok, that's the part I was referring to - Por 162 made the expected instant change not become effective for another year because without that exemption all of the 2023 income would have been subject to tax in 2024.

 

It wasn't a roll back in name but that's effectively what it did by introducing this newly mentioned cut off date which didn't exist before.

 

So they did it once already, extending this date whilst considering implementation details for further changes is going to be the easiest face saving thing they can do.

 

Well, sort of! Por 162 exempted income earned prior to 31 December 2023, it didn't delay anything, Por 161 is still in effect and operational, just not for pre 12/23 earnings.

[ukrules]

4 minutes ago, chiang mai said:

Well, sort of! Por 162 exempted income earned prior to 31 December 2023, it didn't delay anything, Por 161 is still in effect and operational, just not for pre 12/23 earnings.

 

Ok, here we go - so prior to Por 162 this change was going to apply to 2023 earnings.

 

Then Por 162 was issued and suddenly it didn't apply to 'previous year' earnings from 2023.

 

It was a complete 180 for 1 year - so far.

 

That my friend is a back pedal which delays it for exactly a year.

 

You think they can't alter that date again? Remember where we are......like I mentioned before - this is speculation.

 

 

[chiang mai]

25 minutes ago, ukrules said:

 

Ok, here we go - so prior to Por 162 this change was going to apply to 2023 earnings.

 

Then Por 162 was issued and suddenly it didn't apply to 'previous year' earnings from 2023.

 

It was a complete 180 for 1 year - so far.

 

That my friend is a back pedal which delays it for exactly a year.

 

Agreed that delay was one of the effects of the change, but the rule change was implemented as an  exemption to a specific group of financial assets.

 

EDIT TO CLARIFY:

 

"DI No. 162/2566 was issued to clarify that the interpretation provided in Clause 1 of DI No. 161/2566 should not apply to foreign-sourced income derived before 1 January 2024".

 

https://kpmg.com/th/en/home/insights/2023/11/th-tax-news-flash-issue-146.html

 

As you can see, ALL income earned before that date becomes exempt.

[Porthos]

They want to implement it next year.

 

"We are currently drafting a law and will expedite the proposal of a law to create fairness. We will try to start using it in 2025,” said the Director-General of the Revenue Department.

https://www.infoquest.co.th/2024/427464

 

This part needs to be amended in order to create fairness for taxpayers and wants to enforce it as soon as possible in the year 2025."

https://www.prachachat.net/finance/news-1647438

 

[ukrules]

5 hours ago, Porthos said:

They want to implement it next year.

 

They don't always get what they want, remember this person is not in any way an elected official

 

[TPDH]

5 hours ago, Porthos said:

They want to implement it next year.

 

"We are currently drafting a law and will expedite the proposal of a law to create fairness. We will try to start using it in 2025,” said the Director-General of the Revenue Department.

https://www.infoquest.co.th/2024/427464

 

This part needs to be amended in order to create fairness for taxpayers and wants to enforce it as soon as possible in the year 2025."

https://www.prachachat.net/finance/news-1647438

 

 

 

So that confirms they want to implement it next year. So then the only remaining questions are whether it'll be implemented at all (most likely it will) and if next year is feasible (which still seems like a stretch for such a big change). 

 

[wwest5829]

“They” have a concept of a plan. Where have I heard this recently?

[retarius]

Will certainly come in year 2025. The question is will the TRD come after you. First the department is initially at least going to rely, as the US does, on voluntary submissions of tax returns before end March 2026. If they are sensible they will chase up a few non filers and make an example of them to frighten people into filing for 2024 and in the future. 

I think if you file and get a TIN number in 2024/5 to file for 2024 taxes on remittances, you will be first in line to be chased up for 2025 taxes (in 2026) as the TRD has all the information it needs to get hold of you easily. Ease of getting hold of you will be important  as I imagine the department will be understaffed with qualified inspectors.

No one knows at the moment but Thailand will have access to information about your income in countries that have signed ups to the sharing agreement Thailand joined last year. Some people think they need your bank account data, but they don't need that they need info from the sources of income that you report in countries you earn income in. 

I have been an expat for donkeys' years and a US tax-payer and filer on world wide which is US law. They have DTA agreements with different countries to avoid double taxation, they problem is in the US if you are in the 28% tax band and your income in Country X puts you a tax band at only charges 35%, the US will disallow writing off the extra 7% payable in Country X. I have always been a corporate expat and corporations (large ones protect you against this particular form of double taxation). Now I will have to eat it, and to avoid it will become a tax exile from Thailand and become a tax resident in the US (as I have always been). 

[topt]

3 minutes ago, retarius said:

Will certainly come in year 2025.

Can I ask why you seem so sure?

[chiang mai]

3 minutes ago, retarius said:

Will certainly come in year 2025. The question is will the TRD come after you. First the department is initially at least going to rely, as the US does, on voluntary submissions of tax returns before end March 2026. If they are sensible they will chase up a few non filers and make an example of them to frighten people into filing for 2024 and in the future. 

I think if you file and get a TIN number in 2024/5 to file for 2024 taxes on remittances, you will be first in line to be chased up for 2025 taxes (in 2026) as the TRD has all the information it needs to get hold of you easily. Ease of getting hold of you will be important  as I imagine the department will be understaffed with qualified inspectors.

No one knows at the moment but Thailand will have access to information about your income in countries that have signed ups to the sharing agreement Thailand joined last year. Some people think they need your bank account data, but they don't need that they need info from the sources of income that you report in countries you earn income in. 

I have been an expat for donkeys' years and a US tax-payer and filer on world wide which is US law. They have DTA agreements with different countries to avoid double taxation, they problem is in the US if you are in the 28% tax band and your income in Country X puts you a tax band at only charges 35%, the US will disallow writing off the extra 7% payable in Country X. I have always been a corporate expat and corporations (large ones protect you against this particular form of double taxation). Now I will have to eat it, and to avoid it will become a tax exile from Thailand and become a tax resident in the US (as I have always been). 

Not certain at all, far from it. The bill has to pass Parliament and receive royal ascent first. That process will take time and it's now nearly 4Q24. In order to be implemented by the 2025 tax year, it will need to be done and dusted in three and a half months time....highly unlikely.

[TroubleandGrumpy]

My understanding is that TRD has been looking into a 'global tax' system, ever since they were ordered by the new (then) PM to change the rule regarding tax free earnings overseas after 12 months. I recall an interview on youtube early this year where a Thai TRD Official answered some questions (sort of), and he said a global taxation system would be coming next in a few years.  Most countries do that for tax residents - Thailand was one of the few that only taxed foreign income when it was remitted into Thailand (and only taxed it if it was earned in the same year). 

 

So my answer is that IMO the global tax system will start in 2026.  But will TRD be ready and capable of managing such a drastic change - my answer is a resounding NO. And therefore my advice to avoid TRD for the next few years, if at all possible. This aint Kansas guys - there is SFA appeals available when Somchai in the local Provincial TRD Office decides you have to pay income taxes of XYZ Baht. They are incompetent, ignorant and inherently corrupt - so stay away from them until this all settles down.  Hopefully, before this year ends TRD will provide a detailed explanation and clarifications on all the complications involved in taxing Expats money from overseas. But I aint holding my breath - I am keeping my head down.

[jwest10]

3 minutes ago, TroubleandGrumpy said:

My understanding is that TRD has been looking into a 'global tax' system, ever since they were ordered by the new (then) PM to change the rule regarding tax free earnings overseas after 12 months. I recall an interview on youtube early this year where a Thai TRD Official answered some questions (sort of), and he said a global taxation system would be coming next in a few years.  Most countries do that for tax residents - Thailand was one of the few that only taxed foreign income when it was remitted into Thailand (and only taxed it if it was earned in the same year). 

 

So my answer is that IMO the global tax system will start in 2026.  But will TRD be ready and capable of managing such a drastic change - my answer is a resounding NO. And therefore my advice to avoid TRD for the next few years, if at all possible. This aint Kansas guys - there is SFA appeals available when Somchai in the local Provincial TRD Office decides you have to pay income taxes of XYZ Baht. They are incompetent, ignorant and inherently corrupt - so stay away from them until this all settles down.  Hopefully, before this year ends TRD will provide a detailed explanation and clarifications on all the complications involved in taxing Expats money from overseas. But I aint holding my breath - I am keeping my head down.

The local office has basically told  me the same and in any case several times told me in your personal circumstances you do not need  to file a tax form but wait for more official clarification but they did not have any clue on the new forms and wonder if they ever will?

[JohnnyBD]

19 hours ago, TPDH said:

1. Do you also think the bill will most likely pass? 

2. If the bill is passed, how likely is it to be in effect for the tax year of 2025? 

Just my opinion:

1. Yes, it will eventually pass, but not in 2024

2. If passed in 2025, my guess is that it would go into effect for tax year 2026 or later

[thailand49]

21 hours ago, TPDH said:

Hi

 

The global income tax bill is currently being drafted and it seems safe to assume that Pheu Thai is behind it. With the Peoples Party (Move Forward Party) being progressives and heavily inspired by the west, I assume they'd vote for this as well meaning the bill would get a majority vote and most likely pass. 

 

1. Do you also think the bill will most likely pass? 

2. If the bill is passed, how likely is it to be in effect for the tax year of 2025? 

 

Perhaps someone here is familiar with how quickly new laws are passed in Thailand. I asked ChatGPT and got a decent answer: 
"Passing a tax law on global income in Thailand would likely take more than three months due to the complex legislative process. It involves drafting, Cabinet approval, multiple parliamentary readings, and royal assent, followed by implementation procedures. A realistic timeframe is closer to six months to a year or more. "

There has been articles to this tax within the same articles it also states how a monumental task with all the other counytries laws etc it isnt as simple as passing a law.

The leaders I dont care who or where they are from Pita Harvard lots of talk wanting to be part of the International community they not a clue but that isnt going to stop these brain drad corrupt leaders to continue to make Thailand the Hub of dreams!🤑

[TroubleandGrumpy]

20 hours ago, jwest10 said:

The local office has basically told  me the same and in any case several times told me in your personal circumstances you do not need  to file a tax form but wait for more official clarification but they did not have any clue on the new forms and wonder if they ever will?

Mate - IMO they will never have a clue. How can Somchai and Pornchai in a local Provincial TRD Office (where PTI tax returns are done) be expected to understand the DTAs of 61 different countries.  And given how Immigration Officers all 'interpret' things differently and are sometimes 'biased' - I doubt they will always give a fair and balanced and correct decision, when they assess your tax return - so IMO dont do it unless absolutely mandatory (you earn 'real' income).

 

Maybe TRD is going to 'centralise' PTI tax returns from Expats due to the complexities of of the different DTAs - that might work out. But leaving it in the hands of under-educated under-trained TRD locals is not something that an Expat should try to deal with.  More likely they are going to demand that any Expat using a DTA for exemptions and reductions, must use a registered tax agent - which I am told will cost a lot when it comes to DTA issues.  One company quoted me 20K+ for a basic return that included DTA work - and it could cost a lot more if a local TRD Officer questions anything and wants more details.