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

[chiang mai]

14 minutes ago, shdmn said:

The question is what is considered remitted.  Some tax professionals seem to think that ATM withdrawals from a non-Thai bank account are not considered remitted.  I think it would be rather difficult for them to try track and enforce that as well, so they may not even bother trying.

This is not about the difficulty of enforcement, it's solely about whether it is assessable or not. 

 

As I said at the outset, there is little consensus on any aspect of Thai tax so different people will have different opinions, I have given you mine.

[Yumthai]

10 hours ago, ballpoint said:

With the new directive, I can well see each TRD office being given a target to look at a certain number of tax residents in their districts/areas.

Tax residents they are aware of, i.e. people who hold a Thai TIN.

[chiang mai]

10 hours ago, anrcaccount said:

 

Yet, Britain has a very similar set of deductions for rental property taxation as the US, which makes the advice/observations given that Thai deductions of 30% (gross) apply on foreign remitted rental incomes,  equally invalid and assumptive.

 

These type of statements, including ones like the below, are simply opinion, and not based on any established facts or professional accountancy advice:

 

It was discussed a long time ago that any rental income that is remitted to Thailand would be considered gross of all home country deductions which would be replaced by the 30% Thai standard deduction, or, if actual expenses were greater and all receipts were available, the greater amount

 

Which of the following are not facts:

 

There is only one TRD Code whose rules apply equally to everyone.

 

Thailand Revenue has no interest in knowing what deductions were made from overseas funds, prior to them being remitted to Thailand. TRD is only interested in knowing whether remitted funds are assessable income and of what category.

 

The TRD Code defines income in eight different categories that do not distinguish between overseas and domestic income.

 

Property rental income is defined as Category 5 income, it permits a standard deduction equal to 30% of gross rental income, or, if actual expenses are greater than 30%, the sum of actual expenses provided receipts are available.

 

https://sherrings.com/personal-income-tax-in-thailand.html

 

https://sherrings.com/personal-tax-deductions-allowances-thailand.html

 

“It was discussed a long time ago that any rental income that is remitted to Thailand would be considered gross of all home country deductions/expenses which would be replaced by the 30% Thai standard deduction, or, if actual expenses were greater and all receipts were available, the greater amount, per the TRD Code”.

 

For example, gross rental income might expect to be reduced by agent fees, local taxes, cost of repairs etc. For Thai assessable income purposes, the amount of rental income remitted to Thailand is presumed to be gross and not to have been reduced by the value of those deductions/expenses.

[anrcaccount]

4 hours ago, chiang mai said:

 

Which of the following are not facts:

 

There is only one TRD Code whose rules apply equally to everyone.

 

Thailand Revenue has no interest in knowing what deductions were made from overseas funds, prior to them being remitted to Thailand. TRD is only interested in knowing whether remitted funds are assessable income and of what category.

 

The TRD Code defines income in eight different categories that do not distinguish between overseas and domestic income.

 

Property rental income is defined as Category 5 income, it permits a standard deduction equal to 30% of gross rental income, or, if actual expenses are greater than 30%, the sum of actual expenses provided receipts are available.

 

https://sherrings.com/personal-income-tax-in-thailand.html

 

https://sherrings.com/personal-tax-deductions-allowances-thailand.html

 

“It was discussed a long time ago that any rental income that is remitted to Thailand would be considered gross of all home country deductions/expenses which would be replaced by the 30% Thai standard deduction, or, if actual expenses were greater and all receipts were available, the greater amount, per the TRD Code”.

 

For example, gross rental income might expect to be reduced by agent fees, local taxes, cost of repairs etc. For Thai assessable income purposes, the amount of rental income remitted to Thailand is presumed to be gross and not to have been reduced by the value of those deductions/expenses.

 

OK.

 

Seems difficult to apply your wording to reality.  Let's try an example to see if I am understanding your opinion on this: 

 

Foreign gross rental income - 20000

Foreign expenses deducted ( e.g. agent fees, maintenance, interest on mortgage, etc) - 10000

Net before tax - 10000

Tax paid in foreign country - 2000

Remaining- 8000 

 

8000 is then remitted to Thailand.  

How would you see that the TRD computes the assessable income, deductions, and tax credits (assume dta)  in this scenario?

 

 

[chiang mai]

9 minutes ago, anrcaccount said:

 

 

OK.

 

Seems difficult to apply your wording to reality.  Let's try an example to see if I am understanding your opinion on this: 

 

Foreign gross rental income - 20000

Foreign expenses deducted ( e.g. agent fees, maintenance, interest on mortgage, etc) - 10000

Net before tax - 10000

Tax paid in foreign country - 2000

Remaining- 8000 

 

8000 is then remitted to Thailand.  

How would you see that the TRD computes the assessable income, deductions, and tax credits (assume dta)  in this scenario?

 

 

What I wrote is very straight forward and uncomplicated,

 

which parts of it do you believe are not factual?

[oldcpu]

On 10/1/2024 at 8:00 AM, Mike Teavee said:

Edit2: And LTR holders requirements at 49:08 (Interesting that LTR holders follow the previous rules so are still liable for Tax if they bring the income into Thailand in the same year that it was earned). 

 

Hopefully, for those on an LTR visa, that the BoI statement in their marketing of the LTR visa, which on the BOI web site states: "Tax exemption for overseas income" is hopefully proven correct.

 

There is a lot of debate about this in the LTR visa thread, and some on that thread are even saying (speculating is likely a better word) the opposite of the Expat Thailand statement based on their interpretation of Royal Decree 743 (which authorizes the LTR visa), ... where those with a different view claim that money (from the income of an LTR visa holder) is not taxable if it is brought into Thailand in the year it is earned, but money from previous years (after 1-Jan-2024) will be taxable.  I am NOT one with that opinion.

 

An unofficial translation of the Royal Decree for the LTR visa for Wealthy Pensioner and Wealthy Global citizen category reads:

" Section 5 income tax under Part 2 of Chapter 3 in Title 2 of the Revenue Code shall be exempted for a foreigner categorized as a Wealthy Global Citizen, Wealthy Pensioner, or Work-from-Thailand-Professional who is granted a LTR Visa under immigration law for assessable income under section 40 of the Revenue Code derived in the previous tax year from an employment, or from a business carried on abroad, or from a property situated and brought into Thailand."

 

Note that translation states the tax of assessable income from the previous year is (tax) exempt. It does not state the income is not assessable.  So if income is assessable, it may be necessary to file a tax return, dependent on how one reads such.

 

Further, a tax return is typically filed for income of the previous year, and NOT filed for income of the current year (CLEARLY NO ONE one files a tax return for income of the current year as the current year is not yet over), so I believe that adds further lack of clarity.

 

To say there is some uncertainty here would be IMHO a very accurate description.

 

I find the "Expat Thailand" claim quoted interesting but I do not believe it dispels the confusion (rather it just adds to the confusion), as it provides no basis for their video statement other than that statement that is the interpretation of the "Expat Thailand" representative talking in the video.

Edited 2 hours ago by oldcpu

[oldcpu]

5 hours ago, Yumthai said:

Tax residents they are aware of, i.e. people who hold a Thai TIN.

 

I suspect there is a growing concern among many, that those who Thai immigration are able to determine spent >180 days in Thailand in a given calendar year, could be flagged as possible tax residents and that information could be passed to the Thai RD. 

 

Clearly that is speculation, but it is not unheard of for immigration to have communication with the Thai RD.  If there is such a communication, then the "Tax residents the RD are aware of" could be more than just those who hold a Thai TIN.

 

I believe this is an aspect many of us will be observing to see how it all plays out in the coming few years.

[Mike Teavee]

1 hour ago, anrcaccount said:

 

 

OK.

 

Seems difficult to apply your wording to reality.  Let's try an example to see if I am understanding your opinion on this: 

 

Foreign gross rental income - 20000

Foreign expenses deducted ( e.g. agent fees, maintenance, interest on mortgage, etc) - 10000

Net before tax - 10000

Tax paid in foreign country - 2000

Remaining- 8000 

 

8000 is then remitted to Thailand.  

How would you see that the TRD computes the assessable income, deductions, and tax credits (assume dta)  in this scenario?

 

As I understand it you would either use the remitted value & not try to offset any expenses incurred in Thailand (I.E. Would be £8,000 from which you can claim a tax credit against the £2,000 tax you've already paid) OR you would pro-rata the Gross Income/Tax & claim 30% of the (Receipted) expenses in Thailand, something like:-

• Gross Income £20,000
• Amount Remitted £8,000
• Tax credit = £8,000/£20,000 * £2,000 = £800
• Expenses claimable = 30% of £10,000 = £3,000. *I'm not aware of any upper limit to the expense reclaimable.

 

Edit: As I'm using UK as an example it's worth mentioning that you cannot claim Mortgage interest as an expense in the UK, have no idea whether it would be an allowable expense in Thailand if you were using US as an example.

 

Edited 1 hour ago by Mike Teavee