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

[atpeace]

8 minutes ago, Mike Lister said:

A huge amount really, but not everything sadly.

 

It depends which camp you're in and there are at least three. 

 

1) I need to file, I will file

 

2) I think I don't need to file, according to my interpretation, so I probably wont.

 

3) Sitting on the fence, waiting for a big announcement and things to be made more clear 

 

I'm in camp 1 because that's what my interpretation of the rules suggests. If I need to change to camp 2 later, that's a bonus. Those in camp 2 however, may have a problem switching to camp 1 later, without some explanation and scrutiny. As for camp 3 folks, what can be said, "hope springs eternal".

 

 

I'm in all camps at the same time if you include "if" to number 1.  This was my opinion October last year as I stated in the first thread.   

 

The intension is not to go after expats that have filed taxes in their country  but to tax Thais and the rare expat here that is a tax resident but doesn't pay taxes in their country of citizenship.  This is a global issue countries are struggling with at the moment.  Certain individuals are living internationally to avoid paying taxes which is not fare IMO.

 

Again, nothing new and no worries but I'm interested in how Thailand and other countries will deal with mobile workers and investors.

[shdmn]

On 6/29/2024 at 3:51 PM, Mason45 said:

When's this tax grab due to commence?

2024 tax year, so it already has.  The whining will only increase once everyone has to start filing their 2024 tax returns and paying any taxes owed next year.  For 2024, the hardcopy filing deadline is 31 March 2025, 8 April for online filing. Those dates seem to change a little from time to time and are announced early in 2025.  I suspect there will be tax services for farangs popping all over the place in the coming months.  Probably will be a lot of visa agents getting in on the action as well.

Edited July 10 by shdmn

[NoDisplayName]

22 minutes ago, Mike Lister said:

A huge amount really, but not everything sadly.

 

It depends which camp you're in and there are at least three. 

 

1) I need to file, I will file

 

2) I think I don't need to file, according to my interpretation, so I probably wont.

 

3) Sitting on the fence, waiting for a big announcement and things to be made more clear 

 

I'm in camp 1 because that's what my interpretation of the rules suggests. If I need to change to camp 2 later, that's a bonus. Those in camp 2 however, may have a problem switching to camp 1 later, without some explanation and scrutiny. As for camp 3 folks, what can be said, "hope springs eternal".

 

 

 

4) I know I don't need to file, according to my interpretation, but I'll do it anyway.  Ten minutes online is cheap insurance and costs nothing.

[OJAS]

On 7/6/2024 at 1:42 PM, NoDisplayName said:

Just march your little butt down to the local tax office and apply.  I believe you only need to show passport with long-stay visa, no residence certificate required.  Others who have applied recently can confirm.  You'll likely be told you don't need one, but the claim that you need it to file taxes to claim interest tax refund should be sufficient reason.

 

Yep, matches my experience in obtaining a TIN a few weeks ago.

 

[jwest10]

5 hours ago, Mike Lister said:

So this whole story about having to pay tax on remitted assessable income from overseas has just been one big misunderstanding and you believe that?

Oh seems no one knows for sure and most of all the tax experts who are having differing opinions and the Revenue at the Department of Taxation do not even know hat forms are what.
BTW not in any way having a go at you Mike and you know this.
We await for later developments later on in the year as suggested by many.

 

[Mike Lister]

5 hours ago, Klonko said:

Tax consultants state truthfully that tax returns must be filed even if no tax payable. It is i the law. But they do not opine on the  tax practice by TRD which is relevant to most people. I am almost sympathetic with tax consultants not to elaborate on the alleged practice, because it would mean loosing potential mandates. But you cannot use the tax consultants' statements to argue such tax practice by TRD does not exist. In the opposite, we know that at least many do not file taxes and have not been fined, and the silence of the tax consultants on this practice rather supports the point of view that tax returns "must" not be filed when no taxes are payable. 
 

No tax resident, except may be yourself 😉, would probably like TRD to abandon a tax practice contradicting written tax law but beneficial to the tax resident.

In this part of the evil plot, tax consultancies are complicit in the subterfuge, in order to maximise their revenue? "We won't tell the punters that they don't really need to file, instead, we'll take their 7.5k/10k in fees, because the law says we'd be OK to do so. Later, when they find out they've been shafted, we can claim the moral high ground for being technically correct"?

 

This is all very plausible of course, except it achieves the exact opposite of what the TRD wants. TRD, allegedly, doesn't want lots of nil returns clogging up their systems and lots of enquiring farangs descending on their offices, all jabbering away in foreign tongue's and upsetting TRD's natural equilibrium, because there's nothing in it for them. Hmmm, tricky this! Should TRD come clean and damage tax consultancy revenue income streams and risk losing face with Joe Public, or stay schtum? 

 

I think if I was head of TRD, I'd want nirvana to be where I held a tax record on everyone in the country. Perfection would be, everyone telling me once a year, how much money they did or didn't make that was taxable. At that point, TRD is doing the best job possible and is maximising the tax take, under current rules. If that's their mentality, TRD is also following the law, just like the tax consultancies. In fact, the only people who aren't following the law are those who think "it's a stupid idea" to file a nil return! This reminds me of always looking left, right then left again, before crossing the road. Whatever is the point of doing that when there's no traffic coming!

 

Stay tuned for subsequent installments.

[NoDisplayName]

51 minutes ago, Mike Lister said:

This reminds me of always looking left, right then left again, before crossing the road. Whatever is the point of doing that when there's no traffic coming!

 

But Mike!  We're in Thailand.

They (sometimes when sober) drive on the left!

 

At the kerb halt!
Eyes right,
Eyes left,
Eyes right again.
If the road is clear,
Quick march—walk straight across.

[Mike Lister]

I decided to look in places other than tax consultancies for the definitive answer to this issue so I turned to law firms, one of which is Tilleke, now Tilleke and Gibbons, arguably the premier law firm in Thailand. Unsurprisingly they sing from the same hymn sheet as PWC hence there is no misinterpretation of the prior PWC quote. Tilleke says:

 

"Every person, except a minor or a person adjudged incompetent or quasi incompetent, must file an income tax return if such person:

 

a. has no spouse and the assessable income of the preceding tax year exceeds Baht 30,000;

 

b. has no spouse and the assessable income of the preceding tax year arises exclusively under Section 40(1) and exceeds Baht 50,000;

 

c. has a spouse and the assessable income of the preceding tax year exceeds Baht 60,000;

 

d. has a spouse and all of the assessable income of the preceding tax year arises exclusively under Section 40(1) and exceeds Baht 100,000".

 

https://www.tilleke.com/wp-content/uploads/2011/05/Thailand-Tax-Guide.pdf

 

The above is quoted in the Introduction to Thai Tax document, albeit the numbers have changed over time. This is not much help in answering the question, except to confirm that Big 4, legal firms and the TRD are all saying the same thing, which is that everyone who exceeds the low threshold, must file a return, even though there is no tax to pay. 

 

At this stage, I just need to remind everyone what the question is that we're trying to answer, I think it is whether or not accepted practise differs from tax law and whether we can safely ignore tax law as a result and that there will be no negative consequence, as a result. Frankly, I don't see evidence that anyone in the Government, Tax, Accountancy or Legal professions, here or overseas , stating that is so. In fact, all I see is  evidence to the contrary, apart from one anonymous Bangkok tax firm, quoted by third hand, who appears to have gone rogue and broken the code of tax Omerta.

 

 

Edited July 10 by Mike Lister

[Mike Lister]

What are the risks of ignoring the law and not filing a tax return, even though no tax was due but the assessable minimum level was breached? I guess the answer must be, somewhere between 0% and 100%, based on the individual, their circumstances and the staff at the local TRD office. For people who want certainty in their lives, that's nightmarish.

 

In one scenario, the (example) person has assessable income of say 200k per year but doesn't file a return, because there was no tax to pay. Fast forward to some years later when a TRD employee decides to maximise the tax haul or even falls out with the taxpayer over something that was said or done. Perhaps the person legitimately remitted a large amount one year, perhaps from the sale of overseas property. Hmm says the TRD man, this person only filed returns for two of the past ten years, we need to take a closer look at those ten years. Oops, mea culpa, no defense possible and the effort involved would be horrendous, the financial cost would not be small. 

 

That's what I think the risk is of ignoring the tax rule about who should file.

 

 

 

[Mike Lister]

Come to think about it, I think the real risk of not filing a return is that of getting caught up in action against locals, just as foreigners were with the overseas remittances. At some point, somebody in the TRD or government will say they've had enough of locals saying they don't make enough money to file a return when everyone knows they do and they will clamp down and make everyone file, according to the law.

[dinga]

2 hours ago, Mike Lister said:

What are the risks of ignoring the law and not filing a tax return, even though no tax was due but the assessable minimum level was breached? I guess the answer must be, somewhere between 0% and 100%, based on the individual, their circumstances and the staff at the local TRD office. For people who want certainty in their lives, that's nightmarish.

Hair on Fire!!!!

Forget about conjecture, what does the Revenue Code prescribe????   Section 37/ 2 A person intentionally fails to file tax returns prescribed under this Title in order to evade or in an attempt to evade tax, shall be subject to a fine of not exceeding 5,000 Baht or an imprisonment for a term not exceeding 6 months or both.  Can't see any penalty for other circumstances where a tax return was NOT filed.

 

 

2 hours ago, Mike Lister said:

 

In one scenario, the (example) person has assessable income of say 200k per year but doesn't file a return, because there was no tax to pay. Fast forward to some years later when a TRD employee decides to maximise the tax haul or even falls out with the taxpayer over something that was said or done. Perhaps the person legitimately remitted a large amount one year, perhaps from the sale of overseas property. Hmm says the TRD man, this person only filed returns for two of the past ten years, we need to take a closer look at those ten years. Oops, mea culpa, no defense possible and the effort involved would be horrendous, the financial cost would not be small. 

Forget about conjecture, what does the Revenue Code prescribe????  Again, my quick read is that the audit period is usually 2 years which the TRD can request be extended to 5 years [only in cases of tax evasion, I understand the prescription period is a maximum of 10 years]

2 hours ago, Mike Lister said:

 

That's what I think the risk is of ignoring the tax rule about who should file.

 

 

 

Forget about conjecture based upon what may or may not happen elsewhere.  "Read the words", understand the Thai environment and accept the possibility that different interpretations may be applied by TRD officers.  We are not in a risk-free space but common-sense usually prevails

[Mike Lister]

1 minute ago, dinga said:

Hair on Fire!!!!

Forget about conjecture, what does the Revenue Code prescribe????   Section 37/ 2 A person intentionally fails to file tax returns prescribed under this Title in order to evade or in an attempt to evade tax, shall be subject to a fine of not exceeding 5,000 Baht or an imprisonment for a term not exceeding 6 months or both.  Can't see any penalty for other circumstances where a tax return was NOT filed.

 

 

Forget about conjecture, what does the Revenue Code prescribe????  Again, my quick read is that the audit period is usually 2 years which the TRD can request be extended to 5 years [only in cases of tax evasion, I understand the prescription period is a maximum of 10 years]

Forget about conjecture based upon what may or may not happen elsewhere.  "Read the words", understand the Thai environment and accept the possibility that different interpretations may be applied by TRD officers.  We are not in a risk-free space but common-sense usually prevails

We agree on this, remarkably! The problem is that there are others here who think that common sense and custom take precedent over the law, it's them you need to quote and challenge, not me.

[dinga]

2 minutes ago, Mike Lister said:

We agree on this, remarkably! The problem is that there are others here who think that common sense and custom take precedent over the law, it's them you need to quote and challenge, not me.

 

I am merely trying to provide some much needed balance & perspective - not interested in 'challenging' individuals, only the positions espoused 

[Mike Lister]

3 minutes ago, dinga said:

 

I am merely trying to provide some much needed balance & perspective - not interested in 'challenging' individuals, only the positions espoused 

 

On the one hand we have very recent posters who have argued for over seven months that filing a tax return when there's no tax to pay is insane and unwanted, regardless of what the law says. On the other hand we have me who quotes the law  and Big 4 guidance and suggests the best course of action is to follow it. You appear to agree with my view on this. It wont provide the definitive answer but it will helpful to understand what others think is the entrenched arte to be persuaded.

[NJHOUSE]

 

@Mike Lister: Mike I cannot follow everything written so sorry if you've made this clear but do you recommend getting a tax id number and/or filing a return even though according to the law I do not own tax since the money I remitted is from savings...Reason I ask is because the remitted funds were rather large amount. thanks

[dinga]

3 minutes ago, Mike Lister said:

 

On the one hand we have very recent posters who have argued for over seven months that filing a tax return when there's no tax to pay is insane and unwanted, regardless of what the law says. On the other hand we have me who quotes the law  and Big 4 guidance and suggests the best course of action is to follow it. You appear to agree with my view on this. It wont provide the definitive answer but it will helpful to understand what others think is the entrenched arte to be persuaded.

No I don't agree. 

 

If I was in the position where (a) I was a Thai tax resident and had never before lodged a tax return as I had no tax to pay; (b) For 2024 & beyond under the recent remitted income interpretation, I continue to have no tax liability despite having over the minimum assessible income; and (c) and in the apparent absence of any penalty for not lodging a tax return in these circumstances; I would continue to NOT lodge a return.  I don't see a risk/reward analysis would reach any other conclusion. 

 

Two qualifiers though:

 

1.  I have been lodging tax returns for some 20 years so my stated position is theoretical and NOT a recommendation on how others should proceed 

 

2. As necessary, I would get advice to ensure the correctness & supportability of my self-assessment that no tax was payable. 

 

But that's just me...    

[Mike Lister]

4 minutes ago, NJHOUSE said:

 

@Mike Lister: Mike I cannot follow everything written so sorry if you've made this clear but do you recommend getting a tax id number and/or filing a return even though according to the law I do not own tax since the money I remitted is from savings...Reason I ask is because the remitted funds were rather large amount. thanks

I cannot tell you what you should do but I can tell you what I do and that is, to file a tax return, if my assessable income from overseas exceeds 120k baht per year (which it does), for which I would need a TIN. BUT if my income from overseas comprised all savings, earned before 1 January 2024, I wouldn't have any assessable income, ergo, I wouldn't have to file. I hope that helps.

[Mike Lister]

1 minute ago, dinga said:

No I don't agree. 

 

If I was in the position where (a) I was a Thai tax resident and had never before lodged a tax return as I had no tax to pay; (b) For 2024 & beyond under the recent remitted income interpretation, I continue to have no tax liability despite having over the minimum assessible income; and (c) and in the apparent absence of any penalty for not lodging a tax return in these circumstances; I would continue to NOT lodge a return.  I don't see a risk/reward analysis would reach any other conclusion. 

 

Two qualifiers though:

 

1.  I have been lodging tax returns for some 20 years so my stated position is theoretical and NOT a recommendation on how others should proceed 

 

2. As necessary, I would get advice to ensure the correctness & supportability of my self-assessment that no tax was payable. 

 

But that's just me...    

Fair enough. Since you've been filing for 20 years, you don't have the 10 year back audit threat to worry about so that greatly reduces your risk. 

[OJAS]

On 7/7/2024 at 11:12 AM, TroubleandGrumpy said:

The tax experts showed me what I did not know - TRD are caught in a very hard place - they are being pushed by the Thai Govt to start making Thais and Expats pay more income taxes. Their new Boss (Ms.Kulaya Tantitemit) is being very compliant to the new Govt,  and like all Thai bosses she has the 'Picard Syndrome' and thinks if she says 'make it so' - it will just happen.

 

Personally, I am  now seriously wondering whether one way in which "the Thai Govt could start making Thais and Expats pay more income taxes" with minimal additional effort on the TRD's part in the short term would be through reductions in - or even the complete abolition of - the various generous allowances and exemptions, the continued existence of which we seem, to date, to have taken as read.

 

Edited July 11 by OJAS

[dinga]

19 minutes ago, OJAS said:

 

Personally, I am  now seriously wondering whether one way in which "the Thai Govt could start making Thais and Expats pay more income taxes" with minimal additional effort on the TRD's part in the short term would be through reductions in - or even the complete abolition of - the various generous allowances and exemptions, the continued existence of which we seem, to date, to have taken as read.

 

Simplest way would be to increase the 7% VAT to 10% [which has been put off for decades].  But political realities remain the impediment... 

Edited July 11 by dinga

[jwest10]

13 minutes ago, dinga said:

Simplest way would be to increase the 7% VAT to 10% [which has been put off for decades].  But political realities remain the impediment... 

 

14 minutes ago, dinga said:

Simplest way would be to increase the 7% VAT to 10% [which has been put off for decades].  But political realities remain the impediment... 

Indeed but my question is on the personal  allowances and not listed anywhere but the accountants for example the OAE Age over 65 Exemption and is there a form for this and can only see the 60l and 120K on the Thai forms and written in Thai?
We have been advised to wait until later on in the year and my local tax office do not know about this income tax issue, let alone the forms and stated not do anything but led to believe by some Thai friends more updated forms available later on in the year but who knows and doubt the Tax offices do

[TroubleandGrumpy]

16 hours ago, NoDisplayName said:

Shirley that would be ASSESSABLE sources only!

Seems clear that assessable income under the threshold does not require filing.

AND it also means that if you have allowances and exemptions - under TRD Tax Code ORT under your Country DTA - then no need io file a tax return.

There is a RULE in the tax code that some people quote as if it is the Bible, that states ALL Foreigners must get a tax clearance certificate before leaving Thailand. That rule is not enforced.  Nor is many other 'rules' in the Tax Code. 

I believe the tax professional - the one with integrity that did not want me to pay them for the unnecessary lodgment of a PIT tax return, based upon their working knowledge of what TRD wants PIT people to do. 

[TroubleandGrumpy]

16 hours ago, NoDisplayName said:

 

In that case, we should all be hitting the tax office prior to international travel!

 

Section 4 novem (9) A foreigner departs Thailand without Tax Clearance Certificate as required by the Revenue Code shall be subject to a fine not exceeding 1,000 Baht, or an imprisonment not exceeding 1 month, or both.

 

A foreigner attempts to do as such shall be subject to the same punishment.

 

I am just catching up on posts - I could not have said that better myself 🙂

 

[TroubleandGrumpy]

16 hours ago, Klonko said:

Statements of the big 4 or other tax advisors are driven by the quest for new mandates and may be biased. Written tax law and TRD practice has been and can continue to be contradictory. It may however still be in the interest of the taxpayer to file tax returns in order to limit tax audits.

Yes and No.  It is up to you of course, and there is an upside to lodging. BUT there are many downsides too - and IMO for the next 1-2 years all Expats should avoid raising their head above the rampart, unless they have to pay income taxes - just in case. 

[TroubleandGrumpy]

16 hours ago, JimGant said:

Sigh. I'll just let it lie that others here have substantiated that TRD is not interested in folks filing tax returns where no taxes are owed. Again, let the reader decide on, whether reality or legality, makes more sense.

Well said mate - in Thailand there is legality and then there is reality - and reality always wins. Anyone living here for a long time knows that fact, and it astounds me anyone would not realise that reality is the real winner. 

[JohnnyBD]

2 hours ago, Mike Lister said:

BUT if my income from overseas comprised all savings, earned before 1 January 2024, I wouldn't have any assessable income, ergo, I wouldn't have to file.

Mike, could you give your opinion on whether pre-2024 income has to be remitted by Dec 31, 2024 to be exempt, or can it be remitted in 2025 and still be exempt. Thank you.

The article below was on Pattaya Mail today.

 

By Victor Wong July 11, 2024

Key Provisions of Order No. P. 161/2566,

1. Foreign Income Reporting Starting January 1, 2024, all residents in Thailand must report income from abroad when it is brought into the country. This includes income from work, investments, and assets located outside Thailand. However, any income earned before this date can be transferred to Thailand tax-free if done by December 31, 2024.
2. ----
3. ----
4. Exemption for Pre-2024 Income The amendment explicitly states that income earned before January 1, 2024, is exempt from these new provisions if transferred to Thailand by the end of 2024. This provides a grace period for taxpayers to adjust to the new rules.

New tax rules for foreign-sourced income - Pattaya Mail

Edited July 11 by JohnnyBD

[Mike Lister]

9 minutes ago, JohnnyBD said:

Mike, could you give your opinion on whether pre-2024 income has to be remitted by Dec 31, 2024 to be exempt, or can it be remitted in 2025 and still be exempt. Thank you.

The article below was on Pattaya Mail today.

 

By Victor Wong July 11, 2024

Key Provisions of Order No. P. 161/2566,

1. Foreign Income Reporting Starting January 1, 2024, all residents in Thailand must report income from abroad when it is brought into the country. This includes income from work, investments, and assets located outside Thailand. However, any income earned before this date can be transferred to Thailand tax-free if done by December 31, 2024.
2. ----
3. ----
4. Exemption for Pre-2024 Income The amendment explicitly states that income earned before January 1, 2024, is exempt from these new provisions if transferred to Thailand by the end of 2024. This provides a grace period for taxpayers to adjust to the new rules.

New tax rules for foreign-sourced income - Pattaya Mail

There is no time limit, the Pattaya Mail subsequently acknowledged their error.

[TroubleandGrumpy]

14 hours ago, atpeace said:

I'm in all camps at the same time if you include "if" to number 1.  This was my opinion October last year as I stated in the first thread.   

 

The intension is not to go after expats that have filed taxes in their country  but to tax Thais and the rare expat here that is a tax resident but doesn't pay taxes in their country of citizenship.  This is a global issue countries are struggling with at the moment.  Certain individuals are living internationally to avoid paying taxes which is not fare IMO.

 

Again, nothing new and no worries but I'm interested in how Thailand and other countries will deal with mobile workers and investors.

Well said. And in answer to your question, my anecdotal information is that mobile workers and investors are looking at Thailand a lot more negatively nowadays since this rule change was announced.  And they are downright antagonistic towards Thailand ever since they announced that they will be moving to a global taxation system for tax residents, and will be taxing all their incomes earned overseas, whether remitted into Thailand or not.  Imagine being a successful person and you are offered a role that means living and working in Thailand  for a year or two - but they will be taxing you on the money you make in your home country and anywhere else in the world. Obviously 'No Thank You' - you have anything in Singapore?  Likewise, why retire to Thailand and get hit with income taxes (here and at home) when The Philippines, Malaysia, Indonesia and Vietnam dont tax either the money you remit or the money you make back home.  Same applies to Laos, Cambodia and many other countries worldwide.  IMO any American thinking of retiring here is being stupid - the 'retirement deals' on the table from Columbia, Panama, Ecuador and many other Latin American countries is so much better (and much closer to 'home' if things dont work out).  I have noticed a lot less Yanks here than when I first came in 2012 - they started to slow down since the Coup, but post-Covid they are not coming much at all. IMO if you are single - get out of Dodge and try another country near here - and visit now and then (under 180 days a year). 

[TroubleandGrumpy]

2 hours ago, dinga said:

No I don't agree. 

 

If I was in the position where (a) I was a Thai tax resident and had never before lodged a tax return as I had no tax to pay; (b) For 2024 & beyond under the recent remitted income interpretation, I continue to have no tax liability despite having over the minimum assessible income; and (c) and in the apparent absence of any penalty for not lodging a tax return in these circumstances; I would continue to NOT lodge a return.  I don't see a risk/reward analysis would reach any other conclusion. 

 

Two qualifiers though:

 

1.  I have been lodging tax returns for some 20 years so my stated position is theoretical and NOT a recommendation on how others should proceed 

 

2. As necessary, I would get advice to ensure the correctness & supportability of my self-assessment that no tax was payable. 

 

But that's just me...    

Good advice.

I got advice and the advice was that I dont need to lodge a tax return because I dont have to pay any income taxes.

I posted that on AN - because several others kept saying we must lodge a return no matter what (because they do).

Advice given and posted - and in the end it is up to you what you do.  

[TroubleandGrumpy]

14 hours ago, NoDisplayName said:

 

4) I know I don't need to file, according to my interpretation, but I'll do it anyway.  Ten minutes online is cheap insurance and costs nothing.

Unless Somchai thinks you made a mistake and asks for more detailed information. 

I am not saying dont lodge - but dont assume that will automatically be the end of it.

PIT returns are 'assessed' in the local TRD Provincial Office - not Bangkok. 

Most local TRD Offices are not up to date on DTAs and in speaking English - and IMO will probably never be.