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

[Mike Lister]

21 minutes ago, JimGant said:

Your fearmongering is unwarranted. If you have no taxable income, but you file a nil tax return, you're now on the TRD radar as a tax resident -- at least for the tax year of filing. Otherwise, they don't know if you're a tax resident, or ever have been. And, once you're on their radar screen as a tax resident -- because you filed a nil tax return -- well, you've now entered their "people of interest" data base. No thanks.

 

And I doubt that they have all the Thai banks report the names of all those with "exceptionally large" remittances. But, if they do -- for that year I sent a huge bundle for a new house -- I could survive a sit down to show it came from my savings account. Doubtful they would want to audit another 9 years of my remittances, if no bank reports of exceptionally large remittances were in evidence.

 

Anyway, this discussion is getting stale. Do what you're comfortable with. Analyze all the probabilities, particularly that TRD even knows that you're a tax resident, and that your remittances are even assessable income. And, in particular, don't let anyone suggest you're a "bad person," and that you're heading for ten years of back audits. Geez!

You know full well that those people who fail to file a tax return, even though no tax is due, are exposed to  the potential for back audits covering the past ten years, instead of only three. That is stating fact, it is nothing to do with fear mongering whatsoever. It was you who repeated told the forum over many months, that there was no penalty for not filing a tax return when no tax was due. Later we discovered that a fine is capable of being levied, then we found out about the back audits. You guess at answers, base your answers on what you think is common sense abd then offer it up as advice, despite a near total absence of any fact whatsoever.

[jayboy]

18 minutes ago, Mike Lister said:

You know full well that those people who fail to file a tax return, even though no tax is due, are exposed to  the potential for back audits covering the past ten years, instead of only three. That is stating fact

 

I must have missed that - could you please provide the reference.Many thanks.

[sometimewoodworker]

4 hours ago, Mike Lister said:

 

 

Let me say something finally that really shouldn't need saying: I will be ecstatic if a reliable authoritative source, (Big 4, Sherings, Mazars or similar) was to put in writing that my interpretation is wrong and breaching the assessible income threshold alone, is not sufficient cause to file a return. It would mean we have a reliable answer that almost everyone could hang their hat on with confidence, rather than just piecemeal anecdotes.

I have a consultation with of one of the big 4 in about a month’s time. I will certainly be extremely interested in the detail of the requirements to file a tax return. I am probably in an enviable position that I am able to structure the income I transfer to be able to bring it over the assessable threshold but under the threshold to actually pay tax. I am not going to go into detail as to how this is possible as that is irrelevant to virtually every other taxpayer, my situation is probably limited to a small handful of people non of whom reside outside the U.K. 
 

However having given a 5 minute rundown of my situation I was told that I will almost certainly not have to complete a tax return as I will be within the tax free allowance. This opinion was from a Tax Director of one of the big 4 and naturally it may change after a detailed tax assessment and consultation. If anyone wants they can contact me after the 8th of August. I doubt that I can give any other information that is not speculative before then.

Edited July 11 by sometimewoodworker

[JimGant]

35 minutes ago, Mike Lister said:

Later we discovered that a fine is capable of being levied, then we found out about the back audits.

We did? Must of missed those reported examples.

[TroubleandGrumpy]

6 hours ago, sometimewoodworker said:

Thailand has NOT announced a change to a global taxation system. That possibility has been and is being discussed, true, but is needs a change in law to come into effect. The decision to close the loophole on taxation of all income remitted into Thailand earned post 1/1/2024 was a revenue department change in interpretation and required no change in legislation.

 

If there is going to be a change to a global taxation on income remitted or not is a totally different case and is unlikely to occur soon, if ever.

I hear you - and it is not definite - but as I said, the TRD are moving in that direction.  It was announced by TRD that they are planning and looking to implement global taxation, and it has not been withdrawn or questioned by anyone in the Thai Govt. 

Thailand’s tax landscape is undergoing a significant transformation with proposed amendments aiming to tax worldwide income and expand the tax base to include online platforms. These changes, spearheaded by the Revenue Department under Director-General Kulaya Tantitemit ..............

Navigating Thailand's Tax Landscape: Implications of the Proposed Worldwide Income Tax and Online Platform Taxation - MPG (mahanakornpartners.com)

 

I am not saying they are definitely going to do it, and you might be right in that they need to change the Tax Laws, but this is Thailand and things are not always done according to the rules. They are desperate for more money - the TRD were apparently 70Billion Baht short of their 'target' last year - and it looks like anything that is likely to increase taxation grab is on the table.  Seems to me the current Govt is thinking very short term and just wants things done now, irrespective of what might happen in 2-3 years. The BOT still recommends not to do the 10K handout, but the PM is hell bent on going ahead with that election bribe - even though they were not 'elected' as such.   

[TroubleandGrumpy]

5 hours ago, Raindancer said:

May I just ask for clarification  on your statement that you don't have to lodge a tax return because you don't have to pay any Thai income tax 

 

Is that because:

1.   You don't have assessable income over 220000 baht  (married couple)?  ..or

 

2.  You do have assessable income over 220000 baht pa, but your income is lower than the current personal allowances?   (married couple etc, over 65 and pension  allowances etc) including the first 150000 that is exempt from income tax?

 

I'm not asking you to go into detail.  But a yes or no to either question would be helpful to understand.

Many thanks.

 

Yes to number 2.   My assessable income was reduced by the DTA provisions, and then after deductions and allowances my tax paid was zero. I am married so that included doing a joint return and my Thai Wife earns no income. 

[TroubleandGrumpy]

5 hours ago, Klonko said:

If you are one small fish among many in the pond, you are likely not to be targeted and my view would also be not to file tax returns if no taxes are payable. But if you are remitting millions from savings or against DTA tax credits, I would deliberately show tax assessable income and file tax returns in order to ensure that I will never have to document such remittances after nine years. I may even deliberately not reclaim withholding tax on bank interest and end up with an additional small tax payable. Leaving  5 digit THB on the table for TRD may be the better strategy than paying 0 tax.

Good point - and well noted - I will think more about that.

If things do go full bore forward and the TRD comes hunting for Expats, then in 1-2 years there will be two clear choices.

1.  Live in Thailand less than 180 days going forward, 

2. Lodge a tax return and see how it goes.

I and the Wife are very much leaning towards option 1.

In fact we plan to visit The Philippines and Malaysia (Penang) next year and take a look around. Both those countries do not tax Expats on money they bring into the country from overseas - they both have far more reasonable and sensible people running the country - and no 90 days reports and annual extensions are easy and painless.  

[TroubleandGrumpy]

2 hours ago, stat said:

Everyone is paying taxes already in the form of vat and other taxes.

Exactly - and if they increased VAT to 8, 9 or even 10% I would have no problems with that.

But hitting up long stay Tourists for income taxes without anything in return, when 70-80% of the population pays Zero income taxes, is IMO a joke that only the dheds in Thailand would try to implement.  As with most Thais, my Wife has a very large extended Family plus they are close to a lot of people in their home village. She and her Mother and Sisters have asked around, and not one of them has ever lodged a tax return - none. 

[TroubleandGrumpy]

2 hours ago, stat said:

Tax consultancies can never be cought on the wrong side of the law, so they will always tell you "does not work; it not allowed, you must file" etc. The key question to ask is what would you do if you were in my shoes?

 

I agree with you however there is a risk in not filling but apparently the draconian fine of 2000 Baht is the max you could get if I am not mistaken. So it would make perfect sense (current knowledge) to not file. For 2000 Baht I would work half an hour 😉

 

BTW: Confirmation bias works in both ways, me included.

 

As long as ww taxation (without remittance to TH) is off the table I think for people who can structure their remittance and send money from pre 2024 all is swell.

I have read probably every web page about the Thai tax change - and you are absolutely correct.  Their job is not to say what is going on - not what is actually happening.  Even if there are millions of people riding a bike without a helmet every single day and none of them get into any serious trouble (accident aside) some people will demand they are wrong and must wear a helmet.  Me - I am happy to pay a small fine on the basis that I can prove I have no income taxes to pay.   I am not avoiding them because of the rules, I am avoiding them because I know how things in Thailand actually work. And my many years on this planet has taught me that it is always wise to stay in the back when they are seeking volunteers for some stupid mission that some lunatic thought was a good idea.  

[TroubleandGrumpy]

2 hours ago, stat said:

There is no such thing as evidence based bias... Because if your finding is based only on evidence it is not biased.

Winner of the day - well done mate. 

[TroubleandGrumpy]

1 hour ago, geisha said:

One of my family members is close to deciding on a care home in Thailand. 
Now he has read that the amount he would need monthly to pay his costs is around 2500£ +  with which he is fine, but knowing that he will pay tax on this will probably change his mind. I don’t know how much tax this would be on around 30 000£,  ( excluding visa costs and health insurance). 
Will he cancel his plans, or , as I suggested, stay just under 6 months, but which means keeping his home in the UK.  He’s waiting for concrete figures. I know he would not transfer his economies to Thailand as he’s very careful with money. So it would be transferring funds when needed.,

How can he get an estimate, or is it too soon ? Thanks.

Bugger - that is a tough situation.  Couple of things to consider.

Many other countries nearby (if he likes the weather etc here) dont tax his money.

If he sells his house in UK and brings that money into Thailand it is taxable - big time. 

Sorry - but Thailand is NOT the place to come if he is bringing money into Thailand from sale of a house.

IMO Thailand is not the place to come if you are retired - if this was happening in 2012 I would have retired somewhere else.

Sorry - it is what it is and your family member is definitely not suitable for Thailand. Whilst most of us can handle whatever happens if we are audited etc. I would suggest if any chance of that happening then dont live here. 

[Mike Lister]

31 minutes ago, sometimewoodworker said:

I have a consultation with of one of the big 4 in about a month’s time. I will certainly be extremely interested in the detail of the requirements to file a tax return. I am probably in an enviable position that I am able to structure the income I transfer to be able to bring it over the assessable threshold but under the threshold to actually pay tax. I am not going to go into detail as to how this is possible as that is irrelevant to virtually every other taxpayer, my situation is probably limited to a small handful of people non of whom reside outside the U.K. 
 

However having given a 5 minute rundown of my situation I was told that I will almost certainly not have to complete a tax return as I will be within the tax free allowance. This opinion was from a Tax Director of one of the big 4 and naturally it may change after a detailed tax assessment and consultation. If anyone wants they can contact me after the 8th of August. I doubt that I can give any other information that is not speculative before then.

I am in a similar position to you in that I also can control my inbound cash flow, I suspect many people do.

 

I will be interested to hear the outcome of your meeting. I left the firm a long time ago and whilst I did work closely with them in the 1990's, I suspect anyone I knew there has now retired. It will be interesting to understand how they view the gap between what the tax law states and the practical side of tax operations.

[Mike Lister]

49 minutes ago, JimGant said:

We did? Must of missed those reported examples.

 

[Mike Lister]

I'm pretty certain now that some of you guys are not in the least bit serious about finding out the facts of this topic or providing members with a sensible balanced view. It's back again to the old tag team mischief making and disinformation of old that the first long thread became famous for.

 

Readers of the thread have all the more reason now to pay extra attention to the caution in blue at the top of the page.

[NoDisplayName]

6 hours ago, Mike Lister said:

We've been round that unproductive and inconclusive loop already. no different from random bank clerks saying you can't open a bank account.

 

Random bank clerk and government tax officer not same-same!

 

Bank clerk is lazy or incompetent, can't or won't do the job.  A minimum wage clerk is not an authority.

 

Tax officer IS the local authority.  If the desk officer and her district supervisor, and the provincial office agree, no filing needed........well, no, some clerk at Kasikorn couldn't be bothered to do FATCA forms for a foreigner?

[tarheeldan]

I should be joining y'all in Thailand next year, hopefully, so I've been following this thread closely. I think I have a pretty good handle on what the tax implications would be for my particular situation on a remittance basis once I become a tax resident - based on what's on paper from TRD

 

There's been two perspectives I've seen through the thread:

1. Going by the book, what's on paper

2. This is Thailand - let's see what actual practice is

 

As someone who lived in Thailand in 1994-1998 and has been coming "home" every 2-3 years since, it seems to me that as Thailand develops, and now with ambitions to join the OECD, things are going to be come increasingly less 2. and more 1.  I'll be keen to see if we get any more detail on treatment of expats as we get closer to the end of the year, and also how the 2024 tax filing season goes next spring. I'm advising family who qualify to look into the LTR WP visa. 

 

In the meantime, my plan is to hedge: move in 2025 but not be a tax resident (<180 days) and remit sufficient funds for 2026 or even 2027 so as not to need to remit further funds above the threshold to require a tax filing. The wind looks to be blowing towards OECD and future tax resident taxation on WW income, and I'll be prepared to split my time between 2-3 countries (still with ~175 days in BKK) if that's the case

 

If that becomes a pain, I should also be able to minimize realizing capital gains such that the tax burden to Thailand isn't too onerous and live year-round, but it would still be expensive as I believe Thailand will view Roth Conversions as taxable income, and since they also don't recognize Roth accounts so the final distributions will be taxable as well 😕

[stat]

3 hours ago, 4MyEgo said:

So I managed to transfer a couple of years worth of my monthly living expenses into my Thai Bank account prior to 31 December 2023, which should last me for 2 years.

 

From what I can gather is, if I don't transfer any money into my account from here on, I don't need to lodge a tax return right or pay tax ?

 

Just prior to my monthly living expenses running out in 2 years, now say 18 months, I am due for an overseas trip back to my homeland, and as I am taking the family, I am figuring that if I withdraw and give each person the maximum allowed under the threshold of my home country without having to declare it when I return to Thailand, I stand a good chance of not having to pay tax on it as well ?

 

I believe the maximum allowed into Thailand is about $20k USD per person ?

 

Does anyone see a problem with me bringing in an amount under the allowable amount into Thailand, e.g. 20k baht for me, same for wife and same for a couple of kids.

 

I also heard on the grapevine that using a foreign debit or credit card in Thailand does not constitute a remittance.

 

Obviously I am looking at avoiding or minimizing paying any tax legally while living in Thailand, after all, I don't get anything for it, e.g. I spend about a million a year so I contribute to the Thai economy, no free hospital cover, double charges for most National Parks etc etc.

Thx for your post! Do you get any interest on your deposit or can you do any brokerage with your deposit? Thanks!

[stat]

1 hour ago, TroubleandGrumpy said:

... She and her Mother and Sisters have asked around, and not one of them has ever lodged a tax return - none. 

This reminds me of my home country Germany where the first thing you get as a new born is a letter with your tax-ID. 2-5 days after you are born you are already in the tax system, the tax ID will stay active even 10 years after your death.

 

Thailand the land of the free, at least until now.

[stat]

7 hours ago, Mike Lister said:

We've been round that unproductive and inconclusive loop already. no different from random bank clerks saying you can't open a bank account.

It is fairly obvious why no official memorandum will be put out by the big 4 stating that there is no need for a tax declaration.

 

1. To be on the safe side
2. To generate more income for the company

Edited July 11 by stat

[redwood1]

2 hours ago, TroubleandGrumpy said:

Exactly - and if they increased VAT to 8, 9 or even 10% I would have no problems with that.

But hitting up long stay Tourists for income taxes without anything in return, when 70-80% of the population pays Zero income taxes, is IMO a joke that only the dheds in Thailand would try to implement.  As with most Thais, my Wife has a very large extended Family plus they are close to a lot of people in their home village. She and her Mother and Sisters have asked around, and not one of them has ever lodged a tax return - none. 

 

 

This is exactly right the whole tax thing stinks from top to bottom....
 

Mike posts endlessly trying to normalize the stench from this tax disaster...And get everyone onboard with the program...

 

Mike does not seem to care that this tax will cost Thailand Trillions of baht in revenue for a tea cup full of taxes....This tax is horrible for Thailand...And for expats....Its a lose lose for everyone....

 

Or how about 95% of Thai dont pay taxes....Well that does not seem to matter either..

 

Or how about expats with work permits who pay taxes have the option of getting first class heath care for a small price....But retired expats are offered zero benefits..Well that also does not seem to matter...

 

bla bla bla I could go on and on......

 

But in a nutshell this tax benefits no one..

 

 

[Phulublub]

5 minutes ago, redwood1 said:

 

 

This is exactly right the whole tax thing stinks from top to bottom....
 

Mike posts endlessly trying to normalize the stench from this tax disaster...And get everyone onboard with the program...

 

Mike does not seem to care that this tax will cost Thailand Trillions of baht in revenue for a tea cup full of taxes....This tax is horrible for Thailand...And for expats....Its a lose lose for everyone....

 

Or how about 95% of Thai dont pay taxes....Well that does not seem to matter either..

 

Or how about expats with work permits who pay taxes have the option of getting first class heath care for a small price....But retired expats are offered zero benefits..Well that also does not seem to matter...

 

bla bla bla I could go on and on......

 

But in a nutshell this tax benefits no one..

 

 

How many times does it need to be said that the vast majority of expats will have zero, or near zero, tax to pay and this new measure is not aimed at us at all, but at wealthy Thais offshoring income and bringing it back without incurring any taxes?

 

We do need to be mindful that we follow the rules and understand our own personal circumstances wrt assessable income and DTAs, but that's about it.

 

PH

[redwood1]

5 minutes ago, Phulublub said:

How many times does it need to be said that the vast majority of expats will have zero, or near zero, tax to pay and this new measure is not aimed at us at all, but at wealthy Thais offshoring income and bringing it back without incurring any taxes?

 

We do need to be mindful that we follow the rules and understand our own personal circumstances wrt assessable income and DTAs, but that's about it.

 

PH

 

Wealthy Thais will not be paying jack.....You can bet your last dollar on this.....They have all they money in the world to set up protected accounts in Singapore and other places...

[Mike Lister]

Impaired recall comes with age and lifestyle, which is why it's necessary to remind some members periodically of the things we've learned previously, this is one such instance. The following is one of many quotations available on the web:

 

13.4.2. Statute of Limitations
The statute of limitations for an audit is generally 2 years from the date the relevant tax return was submitted. For cases of suspected tax avoidance or evasion, it is extended to 5 years. If no tax return is filed, the statute of limitation is 10 years.

 

There is no statute of limitations for tax collection.

 

https://orbitax.com/taxhub/countrychapters/TH/Thailand/e5f4c7d16b644b02bdb68eb4bbc3ab94/Statute-of-Limitations-1483

 

IF you have filed every year for the past 10 years AND you have all the associated paperwork, the above is not a significant risk for many, the potential downstream problem are however several fold. The first is that accepted practise to excuse non-filers who don't owe tax, could easily become unaccepted practise, at a moment notice and without warning. It could also easily become unaccepted practise on a case by case basis, based on the whim of a TRD employee. The bigger risk, I think, is that the authorities would probably only exercise this as an option of last resort, in the event they wanted to nail you for something but couldn't get you any other way. It's similar in concept to the way in which Al Capone was finally caught for tax evasion, because they couldn't convict him of bootlegging.

 

Nobody should get too excited about this aspect but everyone needs to be aware of it and should factor it into their decision about whether to file a return or not, when there is no tax to pay but the assessable threshold has been breached. For me personally, the potential risk of those audits hanging over my head, far outweighs the 15 minutes of effort required to file a tax return every year, but that's just me, your mileage might vary.

 

 

 

Edited July 11 by Mike Lister

[MeePeeMai]

7 hours ago, tarheeldan said:

as I believe Thailand will view Roth Conversions as taxable income, and since they also don't recognize Roth accounts so the final distributions will be taxable as well

 

THIS was a huge red flag for me. 

 

When I realized the tax the tax implications for my ROTH conversions and also the future distributions (tax free in the USA but 100% taxable in Thailand), not to mention my monthly rental income from the USA... Thailand just died for me personally and was immediately removed as my permanent retirement location.

 

 

[Presnock]

12 hours ago, stat said:

Maybe TRD wants lot of tax declaration even when zero taxes have to be paid. TRD bigwigs can then hire new people. The more people they command, the more important they are. Immigration is another example where things get complicated to the absurd in order to justify more people working in immigration.

 

In the end we both do not know.

Well having worked in organizations within the govt, one is given a buget amount for a period of time based on needs.  I one tries to expand the number the workers in order to do more, then the govt usually does not provide any extra funds for the extra workers - what happens is normally either work is not done or workers are fuloughed.  This is especially true if the govt has no funds to start with so they normally tell the organizations to do more with less.  Heard it many times over the years I was working for the govt and doing budgets while being given increased tasking every year.  Just sayiing

[jayboy]

2 hours ago, Mike Lister said:

Nobody should get too excited about this aspect but everyone needs to be aware of it and should factor it into their decision about whether to file a return or not, when there is no tax to pay but the assessable threshold has been breached. For me personally, the potential risk of those audits hanging over my head, far outweighs the 15 minutes of effort required to file a tax return every year, but that's just me, your mileage might vary.

 

 

In other words it's a subjective matter on which common sense and judgement needs to be exercised.

[UKresonant]

22 hours 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

If you have the paper trail to show the funds were pure pre-2024 or non-resident  savings, perhaps it would just be the interest on the 'large amount' that needs consideration in respect to filing?

[Mike Lister]

5 minutes ago, jayboy said:

 

In other words it's a subjective matter on which common sense and judgement needs to be exercised.

For most people and as a generalisation, I think that is correct. I hesitate slightly because telling some foreigners who have been attracted to Thailand to use common sense and judgement when it comes to abiding by the laws of the land and that adherence to the law is up to you, isn't necessarily going to leave them in a good or safe position.

[jayboy]

22 minutes ago, Mike Lister said:

For most people and as a generalisation, I think that is correct. I hesitate slightly because telling some foreigners who have been attracted to Thailand to use common sense and judgement when it comes to abiding by the laws of the land and that adherence to the law is up to you, isn't necessarily going to leave them in a good or safe position.

 

You raise an interesting point and please excuse me if I slightly digress.Many people come to Thailand, often complaining of their home country restrictions and experience a liberating sense of freedom often misinterpreting Thai pragmatism with a sense of anything goes.They are completely wrong since Thailand at heart is quite a conservative country and applies its laws in a distinctly non pragmatic way.

[Mike Lister]

4 minutes ago, jayboy said:

 

You raise an interesting point and please excuse me if I slightly digress.Many people come to Thailand, often complaining of their home country restrictions and experience a liberating sense of freedom often misinterpreting Thai pragmatism with a sense of anything goes.They are completely wrong since Thailand at heart is quite a conservative country and applies its laws in a distinctly non pragmatic way.

That's pretty much what I had in mind, newbies in particular who might not read the picture accurately at first, or even after quite some time. They see locals regularly being allowed to evade various laws; conflicting and random  enforcement of other laws; open violation of certain laws; a permanent blind eye turned to yet other laws. How you give people suitable guidance in those conditions is difficult, there is no one size answer that fits all. Are you risk averse or a chancer, do you value peace and relative certainty in your retirement years, are you loaded or slightly poor, they are all parts of the formulae.