Thai gov. to tax (remitted) income from abroad for tax residents starting 2024 - Part II

[Mike Lister]

An interesting diversion but still very related is the 2022 AMLO report into Money Laundering Risks, of which Tax Evasion and Fraud is a key element. It's an interesting read because it puts tax fraud into context of the wider picture and helps explain why the current actions are being taken. Narcotic is the largest most prosecuted crime in this basket but if I read it correctly, tax fraud generated the most by way of seizures which makes it a cash cow:

 

"The largest amount of seizures between 2018 to 2020 were tax evasion and tax fraud with 1,692,205,790 Baht/year on average, or 32.23%"

 

https://www.amlo.go.th/amlo-intranet/media/k2/attachments/NRAYThailandYforYPublicationYEnglish_6112.pdf

 

Another useful quote that's worth remembering is that some small accounts, typically pensioner based, are not required to be reported and shared under international rules. Hopefully this relieves some of the stresses from expat pensioners who fear becoming an equal subject of scrutiny as the drug trafficker and billionaire evader.

 

There's a second paper which also includes some useful insights and helps fills some information gaps about the shadow economy and tax losses. As discussed previously, the black and white are simple to understand but the grey is tricky:

 

"2.1. Tax avoidance and evasion There is a distinction in the literature between “tax evasion” and “tax avoidance”. For example, The International Bureau of Fiscal Documentation (IBFD) highlights that “avoidance is a term used to describe taxpayer behaviour aimed at reducing tax liability that falls short of tax evasion” (IBFD, 2009, p. 30). Thus, tax avoidance is seen as legal. By contrast, tax evasion is defined as the illegal non-payment of tax; this non-compliance with tax legislation is a crime which is punishable by some sanction. In practice the differences between tax evasion and tax avoidance activities are “complex with numerous shades of grey in between legal and illegal practices” (Sikka, 2014, p. 135). The difference depends on the legitimacy of a taxpayer’s activities (Sandmo, 2005) and this legitimacy will often have to be decided by a court if there is “a legal challenge by the tax authorities” (Sikka, 2014, p. 135)".

 

https://pure.strath.ac.uk/ws/portalfiles/portal/173682872/Natpraypant_etal_AF_2023_The_introduction_of_anti_tax_evasion_legislation_in_Thailand.pdf

 

 

[stat]

15 hours ago, Lorry said:

Me too, but I don't have specific reasons except my general impression of Cambodia. 

Foreign friends who moved from Thailand to Cambodia think I am prejudiced. 

Can you name specific reasons?

 

BTW if asking for brokerage,  too, then I really wouldn't know any respectable place that's not in FATCA/CRS

Do you really need a specific reasons to not trust an autocratic regime with an instable banking system?

 

Ok here you go:

 

https://countryeconomy.com/ratings/cambodia

 

Nothing against cambodia and putting 5K in a bank there but that would be the maximum for any prudent person.

 

If a developed country like malaysia imposed capital controls you can imagine what could happen in Cambodia.

 

 

[topt]

7 hours ago, Mike Lister said:

Another useful quote that's worth remembering is that some small accounts, typically pensioner based, are not required to be reported and shared under international rules.

Mike thanks for those interesting links but can you remember where the above came from as I could not see it in either of those links when I read/skipped through them.?

[Mike Lister]

4 minutes ago, topt said:

Mike thanks for those interesting links but can you remember where the above came from as I could not see it in either of those links when I read/skipped through them.?

I do not but I will look and I'm sure I can find it again and will let you know.

[Mike Lister]

32 minutes ago, topt said:

Mike thanks for those interesting links but can you remember where the above came from as I could not see it in either of those links when I read/skipped through them.?

The quote regarding largest seizure of assets appears on page 19 of the AMLO report.

 

I'll let you know the other shortly

 

 

[Lorry]

59 minutes ago, stat said:

Do you really need a specific reasons to not trust an autocratic regime with an instable banking system?

 

Ok here you go:

 

https://countryeconomy.com/ratings/cambodia

 

Nothing against cambodia and putting 5K in a bank there but that would be the maximum for any prudent person.

 

If a developed country like malaysia imposed capital controls you can imagine what could happen in Cambodia.

 

 

Yes, that was my general feeling too...

There were posters on AN proud of the high interest their USD account in Cambodia had, I always felt this was completely crazy

Edited June 27 by Lorry

[stat]

24 minutes ago, Lorry said:

Yes, that was my general feeling too...

There were posters on AN proud of the high interest their USD account in Cambodia had, I always felt this was completely crazy

You can "invest" some "play" money in cambodia but not your nestegg.

[Mike Lister]

2 hours ago, topt said:

Mike thanks for those interesting links but can you remember where the above came from as I could not see it in either of those links when I read/skipped through them.?

It's buried in the link somewhere because that's where I first saw it, currently however it's elusive! The link below says the same thing"

 

"What are non-reportable accounts under CRS?

 

Non Reportable Accounts Include retirement and pension accounts; non-retirement tax-favoured accounts; term life insurance contracts; estate accounts; escrow accounts; depository accounts due to not-returned overpayments; other low-risk excluded accounts".

 

Also, the TRD guidance on CRS, FYI

 

https://www.rd.go.th/fileadmin/user_upload/FATCA_File/crs/Thailand_CRS_Guidance_180823_VF.pdf

 

[Lorry]

1 hour ago, Mike Lister said:

It's buried in the link somewhere because that's where I first saw it, currently however it's elusive! The link below says the same thing"

 

"What are non-reportable accounts under CRS?

 

Non Reportable Accounts Include retirement and pension accounts; non-retirement tax-favoured accounts; term life insurance contracts; estate accounts; escrow accounts; depository accounts due to not-returned overpayments; other low-risk excluded accounts".

 

Also, the TRD guidance on CRS, FYI

 

https://www.rd.go.th/fileadmin/user_upload/FATCA_File/crs/Thailand_CRS_Guidance_180823_VF.pdf

 

This is all very nice. 

And when I was young and naive I studied these things in detail and believed them. 

Now I have learned what banks and tax offices actually do in reality,  and how little relationship there is to all these nice rules. 

 

[KhunHeineken]

On 6/27/2024 at 8:58 AM, stat said:

You can "invest" some "play" money in cambodia but not your nestegg.

Nest egg in Singapore, play money in Cambodia, and elsewhere.  

[stat]

https://youtu.be/ljy7qdhy4VU

 

Interview with a tax professional, some interesting statements

Edited June 29 by stat

[Mike Lister]

According to the video, foreign ATM and credit card transactions are not assessable income (albeit I couldn't find the spot again where I first heard him say that). Do I believe that? .......I don't think I do, I mean, a person could quite happily and easily live here year round using an overseas account and an ATM card, I know people who do that. The fact the account is located outside Thailand's borders doesn't pass my sniff test, but that's just me. What they might be saying is that such transactions are too difficult to track and enforce so we'll give them a pass, or, it might just be a WAG on his part....dunno.

[Mason45]

When's this tax grab due to commence?

[Mike Lister]

5 minutes ago, Mason45 said:

When's this tax grab due to commence?

Not really a tax grab, for most people.

 

This years earnings, due to be reported in the tax return dated next 1 January.

 

 

[Mason45]

16 minutes ago, Mike Lister said:

Not really a tax grab, for most people.

 

This years earnings, due to be reported in the tax return dated next 1 January.

 

 

Thanks for that.

[dinga]

1 hour ago, Mike Lister said:

Not really a tax grab, for most people.

 

This years earnings, due to be reported in the tax return dated next 1 January.

 

 

Shouldn't this read "This years REMITTANCES, due to be reported in the tax return dated next 1 January"??????   The reporting of earnings is not a current requirement - simply a mooted change that I'd expect to be years away if at all

[Mike Lister]

12 minutes ago, dinga said:

Shouldn't this read "This years REMITTANCES, due to be reported in the tax return dated next 1 January"??????   The reporting of earnings is not a current requirement - simply a mooted change that I'd expect to be years away if at all

Yes, lazy English on my part....sorry! 

 

It should really read, remitted earnings or more perfectly, assessible income.

[Presnock]

On 6/24/2024 at 6:23 PM, JohnnyBD said:

There's about 6 acceptable cost basis methods in the US for stock sales as per the IRS. The average cost, lowest cost, highest cost, FIFO, LIFO and specified shares. I believe Fidelity uses the FIFO as default, but you can select the cost basis method you want as your default. I set my default as highest cost. But, I can still select the specific shares to sell when I place my sell order. My Fidelity tax forms show the capital gains based on which cost method I used, so that's what I would use to determine my assessable income if remitted. 

well one advice or comment listening to numerous you tube videos on this subject, a senior US tax (director) said that one "most likely" will have to have an expert tax advisor to help with anything other than a simple financial situation - his office will expand both foreigners and especially Thai tax people because they will decide how to interpret foreign tax laws so it seems to me that in the case mentioned here, no matter what the American might claim, it will most likely only be selected by the Thai advisors on the interpretation of the TRD but, TIT so anything could be possible once the final paper is published.

[topt]

4 hours ago, Mike Lister said:

albeit I couldn't find the spot again where I first heard him say that)

ATM card 11m 50 seconds.......

 

He also said that under LTR the tax rate was 17% (around 16m in). I thought there was no tax?

 

I know he was generalising but when asked about some specific examples he didn't once mention any allowances which would be applicable. 

[Lorry]

15 minutes ago, topt said:

ATM card 11m 50 seconds.......

 

He also said that under LTR the tax rate was 17% (around 16m in). I thought there was no tax?

 

I know he was generalising but when asked about some specific examples he didn't once mention any allowances which would be applicable. 

Look at who this guy is - corporate lawyer -  look at the numbers the video is talking: 3000 USD monthly pension,  1,5m USD for a house... Taking about this kind of money,  the allowances don't matter much. 

Rumour has it there are some pensioners who have less than that. 

 

 

 

[Lorry]

5 hours ago, Mike Lister said:

According to the video, foreign ATM and credit card transactions are not assessable income (albeit I couldn't find the spot again where I first heard him say that). Do I believe that? .......I don't think I do, I mean, a person could quite happily and easily live here year round using an overseas account and an ATM card, I know people who do that. The fact the account is located outside Thailand's borders doesn't pass my sniff test, but that's just me. What they might be saying is that such transactions are too difficult to track and enforce so we'll give them a pass, or, it might just be a WAG on his part....dunno.

TRD has said in the Swiss embassy video that ATM withdrawals are assessable. They certainly will first concentrate on bank transfers. If they find that these have all but disappeared but there are always long lines of foreigners at ATMs in Pattaya and Phuket, they will come up with a solution. 

[Ben Zioner]

34 minutes ago, topt said:

He also said that under LTR the tax rate was 17% (around 16m in). I thought there was no tax?

This is the Tax charge to people who are are highly skilled professionals and benefit from a specific LTR visa.

[Ben Zioner]

55 minutes ago, Lorry said:

Rumour has it there are some pensioners who have less than that. 

They probably shouldn't be in Thailand then. And don't say "they have been here for 20 years", the reality is that over the past years Thailand has become a dangerous place for the low income retiree. A "perfect storm", to reuse @Sheryl's words.

 

 

Edited June 30 by Ben Zioner

[Lorry]

22 minutes ago, Ben Zioner said:

A "perfect storm", to reuse @Sheryl's words.

Can you please link to her post? 

I would like to read what she had to say to this topic. 

[Sheryl]

20 minutes ago, Lorry said:

Can you please link to her post? 

I would like to read what she had to say to this topic. 

He is referting to a post here

 

Not specific to tax issues and indeed the people referred to would be unlikely to owe tax. 

 

 

[topt]

1 hour ago, Ben Zioner said:

This is the Tax charge to people who are are highly skilled professionals and benefit from a specific LTR visa.

Thanks. IMO sloppy then that the interviewer" didn't pick up on it.

[Ben Zioner]

1 hour ago, topt said:

Thanks. IMO sloppy then that the interviewer" didn't pick up on it.

And he was plain wrong about the ATM withdrawals, RD people are adamant that they are indeed remittances, just ad credit card payments are.

[topt]

3 minutes ago, stat said:

Amazing when someone without much knowledge about taxes "knows" more then a partner from a tax consultancy...

I don't think I have a dog in this fight.......but there is clearly confusion when a seniorish RD official has been on screen saying that they are assessable - so does the RD guy know less or more..........

There were also, as already mentioned, several gross generalisations in that interview that could suggest that particular managing partner may not be as clued up on some of the nitty gritty smaller stuff that would affect most of our readership......or he was being deliberately obtuse.........just my opinion of course.

[UKresonant]

If the mney has arrived in Thailand, by whatever transmission method from assessable source, of course it should be on your return .

 

Some Experts seem to be discussing  the detectability 

 

Anything digital is tracable if linked to the conventional banking system, if attention is drawn and effort above and beyond is thought worthwhile.

 

If you have filed a plausible return and paid the tax, other minority peripheral items may be in a Grey area, that do not warrant the further attention. 

 

But you can visualize some that take money from the credit card, bank it and then the  inbounds, just don't add up, compared with the declared

 

 

[stat]

15 hours ago, Mike Lister said:

According to the video, foreign ATM and credit card transactions are not assessable income (albeit I couldn't find the spot again where I first heard him say that). Do I believe that? .......I don't think I do, I mean, a person could quite happily and easily live here year round using an overseas account and an ATM card, I know people who do that. The fact the account is located outside Thailand's borders doesn't pass my sniff test, but that's just me. What they might be saying is that such transactions are too difficult to track and enforce so we'll give them a pass, or, it might just be a WAG on his part....dunno.

A tax partner is stating that foreign ATM credit cards withdrawal are not assessable income, period. Pls specify the law that says it is remittance if you believe otherwise. There is some serious doubt about if it is a remittance or not.

Edited June 30 by stat