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

[The Cyclist]

13 minutes ago, sometimewoodworker said:

This is direct contradiction to the principle in the DTC/DTA that (unless specifically excluded) you must pay the highest tax assessed not the lowest.

 

Well, there you go

 

You have identified an anomaly

 

As posted above the Thai RD says the most beneficial rate to the taxpayer.

 

You might think that RD Officials would perhaps go by what is written in their code, as they probably do not know the minutiae of some 60 DTA's

 

But yet again. People will only get a definitive answer by rocking up their local RD Office and attempting to gain a TIN ( and if they get past that stage ) actually filing a tax return.

[sometimewoodworker]

13 minutes ago, The Cyclist said:

I have read the UK - Thai DTC, the only article that really interests me is Article 19 ( 2 ) ( a )

You are therefore a recipient of a U.K. government service pension which (as long as you are not or do not become a Thai citizen) is exclusively taxed in the U.K. 

 

All other U.K. pensions are assessable in Thailand, specifically the U.K. state pension is taxable in Thailand.

13 minutes ago, The Cyclist said:

Thailand has the discretion to adopt which method it adopts desires

I have never suggested that the TRD cannot choose

 

 

16 minutes ago, The Cyclist said:

For example.

1. Applying the most beneficial tax rate to the taxpayer.

there are some cases where it must see the DTC

 

17 minutes ago, The Cyclist said:

For example.

2. Using the tax credit and refund system

there are some cases where it must see the DTC
 

 

19 minutes ago, The Cyclist said:

For example.

3. Ignoring " Assessable Income " for tax purposes, if that income has already been taxed.

That would have to be either a RD policy or discretion given to officers

23 minutes ago, The Cyclist said:

For every other Article, where it says might, could or possibly be taxed in Thailand. Does not mean that it will be taxed in Thailand,

I have never suggested otherwise

 

25 minutes ago, The Cyclist said:

You appear to have totally misunderstood the purpose of this slight tweak

 

Which was to close a loophole where people were avoiding paying tax. It is not to hammer people who are already paying tax.

You either have knowledge that is exclusive to the TRD or are making assumptions and inventing “truth”

[chiang mai]

Interesting, always the highest, hmmm.

[The Cyclist]

1 minute ago, sometimewoodworker said:

You either have knowledge that is exclusive to the TRD or are making assumptions and inventing “truth”

 

Okay

So you think that the tweak known as POR 161 & 162 was to hammer people who are already paying tax ?

 

Interesting.

 

 

[sometimewoodworker]

17 minutes ago, The Cyclist said:

Well, there you go

 

You have identified an anomaly

 

No anomaly, your misunderstanding of the TRD

[sometimewoodworker]

5 minutes ago, chiang mai said:

Interesting, always the highest, hmmm.

Unless specified in a DTA DTC or is at the discretion of a TRD officer

[The Cyclist]

1 minute ago, sometimewoodworker said:

No anomaly, your misunderstanding of the TRD

 

No, I understand what the UK - Thai DTA says.

 

I also understand that the RD faq's page, Question 5, gives the answer of applying the most beneficial tax rate to the taxpayer.

 

Which makes it highly probable, that is what the RD would apply when and if, you file a tax return at a Thai Revenue Office.

 

Of course, you could be correct, and they could trawl through about 60 DTA's to see where they might squeeze another couple of Baht out of someone who is already paying tax.

[sometimewoodworker]

4 minutes ago, The Cyclist said:

I also understand that the RD faq's page, Question 5, gives the answer of applying the most beneficial tax rate to the taxpayer.

There you are selectively quoting and as such you either don’t understand or are misunderstanding 

 

the actual FAQ FULL quote is

Quote

5.   What happens if the rate of tax stipulated in the Revenue Code is different from that of an agreement?  

- Apply the rate which is more beneficial to the taxpayer.  

since there is no rate of tax given in the DTC for most income the standard Thai income tax rates apply.

 

It is only where there is a specific rate give in an agreement that (FAQ 5) is relevant 

[sometimewoodworker]

18 minutes ago, The Cyclist said:

Of course, you could be correct, and they could trawl through about 60 DTA's to see where they might squeeze another couple of Baht out of someone who is already paying tax.

There you demonstrate that you do not understand the process. You must provide proof of your claim if challenged. They only have to check that they agree or disagree with your claim.

 

So you do the work, they choose to agree or disagree.

 

Audits, as have been mentioned, are not common, though they can be remarkably unpleasant unless you are totally sure of the correctness of your situation and can provide proof.

Edited 8 hours ago by sometimewoodworker

[The Cyclist]

5 minutes ago, sometimewoodworker said:

There you are selectively quoting and as such you either don’t understand or are misunderstanding 

 

 

1 minute ago, sometimewoodworker said:

There you demonstrate that you do not understand the process

 

Sure

 

That is my advice to those that are unsure has always been, take your paperwork to the RD Office and let them guide you.

 

That does not change my belief, that if you rock up with " Assessable Income " that has already been taxed, it will most likely not be subjected to any  further taxation in Thailand.

 

 

 

[sometimewoodworker]

33 minutes ago, The Cyclist said:

So you think that the tweak known as POR 161 & 162 was to hammer people who are already paying tax ?

It was to ensure that people are paying the correct tax and close a huge loophole in the TRD code

just because you are paying tax doesn’t mean that you are paying the correct amount of tax

[JimGant]

We seem to be on a circle jerk, separated by a common language. Take the following, explaining two methods of avoiding double taxation:

Quote

(1)   Exemption method

The country of residence does not tax the income which according to the DTA is taxed in the source country. [where the source country has exclusive taxation authority]

(2)   Credit method

The resident country retains the right to tax the income which was already taxed in the source country. It calculates its tax on the basis of the taxpayer's total income including income from the other country which according to the DTA is taxed in that other country. However, it allows a deduction from its own tax for the tax paid in the other country.

 

The highlighted text is the bone of contention -- because when presented by itself, and not in the context of "credit method," it is incorrect. But, in context, yes, certain income can be taxed by both countries. In this situation, one country is the primary taxation authority, while the other country is the secondary.

 

A good example is rental income. The following is from the technical explanation of the US-Thai DTA (I couldn't find an equivalent for the UK-Thai DTA):

 

Quote

The first paragraph of Article 6 states the general rule that income of a resident of a
Contracting State derived from real property situated in the other Contracting State may be taxed in the Contracting State in which the property is situated....This Article does not grant an exclusive taxing right to the situs State; the situs State is merely given the primary right to tax.

 

The highlighted "may be taxed" is OECD Model taxation speak for country in question has primary taxation authority; the other country, secondary. Now, if the language had said: " may ONLY be taxed" -- then, country in question has exclusive taxation authority. But, per the DTA technical explanation, rental income can be taxed by both the US and by Thailand.

 

So, my rental income on a house in the US, which I remit to Thailand, is taxed by the US, which, as primary taxation authority, gets to keep all the collected taxes -- Thailand and credits don't enter into the equation. Now, Thailand can also tax this rental income; but it has to absorb a credit for the US taxes paid. And, as such, I may owe no taxes to Thailand on this rental income, after the credit. But, if the Thai tax exceeds the credit, I owe the difference -- and I now have a higher total tax bill than if the US had exclusive taxation authority, and thus the only country I had to pay taxes to.

[The Cyclist]

11 minutes ago, JimGant said:

A good example is rental income. The following is from the technical explanation of the US-Thai DTA (I couldn't find an equivalent for the UK-Thai DTA):

 

Article 7 of the UK - Thai DTA,. Income from Immovable Property.

 

Primarily taxed in the UK for individuals.

Edited 7 hours ago by The Cyclist
typo

[sometimewoodworker]

2 minutes ago, JimGant said:

A good example is rental income. The following is from the technical explanation of the US-Thai DTA (I couldn't find an equivalent for the UK-Thai DTA):

Article 7 from the U.K. Thai DTC

 

3 minutes ago, JimGant said:

We seem to be on a circle jerk, separated by a common language.

No we are not.

I am using English and the Thai U.K. DTC 1981.

 

you are using American and the USA Thai 1997. DTC

 

So it is impossible to draw analogies. It equally impossible to say anything other than X is true in the case taxpayer Y. 

Only if taxpayer Z has identical circumstances to Y will the same be true. 

[sometimewoodworker]

22 minutes ago, The Cyclist said:

That does not change my belief, that if you rock up with " Assessable Income " that has already been taxed, it will most likely not be subjected to any  further taxation in Thailand.

That is certainly possible. But there we are talking about the law and the practice of the TRD

 

The law “assessable income over 220,000,( married) tax form required”

 

The practice in most TRD offices (example assessable income 600,000 but) “no tax to pay or refund, no TIN available or tax form accepted”

[JimGant]

28 minutes ago, The Cyclist said:

Article 7 of the UK - Thai DTA,. Income from Immovable Property.

 

Primarily taxed in the UK for individuals.

The exact wording:

 

Quote

(1) Income from immovable property may be taxed in the Contracting State in which
such property is situated

 

The OECD Model Tax treaty shorthand language, as I pointed out in a previous posting, has may be taxed to mean: Contracting country in question has primary taxation rights -- but the other country has secondary taxation rights (may ONLY be taxed gives exclusive taxation rights, thus no secondary taxation rights -- not the situation here). Thus, the UK like the US DTA, gives the UK primary taxation authority on rents, meaning, they get to keep the whole enchilada of tax collection. Thailand, however, can also tax rental income -- if remitted. However, it has to absorb a tax credit equal to the taxes paid on this rental income to the UK. So, on the back of an envelope, if you see UK tax amount (the credit) trumping the Thai taxation amount  -- forget even including it on the Thai tax return (which, for now, has no place for that UK tax credit anyway).

[Phulublub]

I have a hair that needs splitting.  Can anyone here help?

 

PH

[The Cyclist]

1 hour ago, sometimewoodworker said:

That is certainly possible. But there we are talking about the law and the practice of the TRD

 

Yes, that is what I have been saying for pages and pages.

 

We can all read our relevant DTA, we can all read the Revenue Code, what we cannot read is what Individual RD Offices will actually do ( Until we turn up there, paperwork in hand ) between Jan & March 2025.

 

What should happen in Law, and what actually happens are very often 2 different things in Thailand, as anyone who regularly visits Immigration Offices will tell you.

 

1 hour ago, sometimewoodworker said:

The law “assessable income over 220,000,( married) tax form required”

 

The practice in most TRD offices (example assessable income 600,000 but) “no tax to pay or refund, no TIN available or tax form accepted”

 

I believe that the levels of 60k / 120k / 220 Baht apply to " Assessable Income " 

 

Meaning that if you have " Assessable Income " above these limits, a TIN should be applied for and a Tax Return should be filed ( What Individual RD Offices do in practice, remains to be seen )

 

That does not mean that tax is payable at those levels. Once an Individuals TEDA's, tax credits etc, are applied, will determine at what levels tax becomes payable. And these will vary from Individual to Individual.

[sometimewoodworker]

19 minutes ago, The Cyclist said:

Meaning that if you have " Assessable Income " above these limits, a TIN should be applied for and a Tax Return should be filed ( What Individual RD Offices do in practice, remains to be seen )

So you are agreeing with my post

😉 

 

However there is no significant need to wait and see there have been numerous cases all in2024 of “no tax due or refund due no return accepted, no TIN available” irrespective of the assessable income, the only wait and see is if your tax office follows the majority if there is no 2024 precedent available to you

[The Cyclist]

48 minutes ago, sometimewoodworker said:

However there is no significant need to wait and see there have been numerous cases all in2024 of “no tax due or refund due no return accepted, no TIN available” irrespective of the assessable income, the only wait and see is if your tax office follows the majority if there is no 2024 precedent available to you

 

Yes, I was one of them who went in Feb 2024 to try and get a TIN and file a tax return for 2023 on 2 x Pensions. Details are somewhere on the forum.

 

No need, was the RD response.

 

Which wasn't really surprising as the new tweak only became effective on 01 Jan 2024 and will apply to the tax year 2024, with filings due in the period Jan - Mar 2025.

 

53 minutes ago, sometimewoodworker said:

So you are agreeing with my post

 

It would appear that you are agreeing with my comments. 

 

My stance / Interpretation hasn't changed since November 2023. Cannot say the same for your interpretation / stance over the last 5 or 6 pages.

[stat]

3 hours ago, JimGant said:

The exact wording:

 

 

The OECD Model Tax treaty shorthand language, as I pointed out in a previous posting, has may be taxed to mean: Contracting country in question has primary taxation rights -- but the other country has secondary taxation rights (may ONLY be taxed gives exclusive taxation rights, thus no secondary taxation rights -- not the situation here). Thus, the UK like the US DTA, gives the UK primary taxation authority on rents, meaning, they get to keep the whole enchilada of tax collection. Thailand, however, can also tax rental income -- if remitted. However, it has to absorb a tax credit equal to the taxes paid on this rental income to the UK. So, on the back of an envelope, if you see UK tax amount (the credit) trumping the Thai taxation amount  -- forget even including it on the Thai tax return (which, for now, has no place for that UK tax credit anyway).

Thx for your post! There is no help for some people who do not want to understand even if it es explained to them by several others 😉

[oldcpu]

3 hours ago, The Cyclist said:

I believe that the levels of 60k / 120k / 220 Baht apply to " Assessable Income " 

 

Meaning that if you have " Assessable Income " above these limits, a TIN should be applied for and a Tax Return should be filed ( What Individual RD Offices do in practice, remains to be seen )

 

That does not mean that tax is payable at those levels. Once an Individuals TEDA's, tax credits etc, are applied, will determine at what levels tax becomes payable. And these will vary from Individual to Individual.

 

My wish / hope (?) for the future is that the definition as to what is 'assessable' income, and what is not 'assessable income' becomes more clear in the future.   I do not believe that definition is as clear as some may believe it to be.

 

I am on an LTR visa (Wealthy Pensioner) and I have been watching the threads with interest to assess how much of this might impact me.

 

The Royal Decree for the LTR visa (hopefully a correct translation)  states that that Income tax (under part-2 of chapter-3 in title-2 of the Revenue code) is exempted for foreigners on LTR categorized as a Wealthy Global Citizen, Wealthy Pensioner, or Work-from Thailand Professional for assessable income under section 40 of the Revenue Code, derived in the previous tax year, from employment, or from business, or from a property situated abroad, and brought into Thailand.

 

My current interpretation (which could be wrong) is it means assessable income brought into Thailand for those LTR visa holders will be tax exempt. But it does NOT state the foreign income is not assessable (but it is tax exempt).  For me that suggests that a Thai Tax return may be required (even thou no tax due) if I bring income (earned from after 1-Jan-2024) into Thailand. 

 

There are those on the LTR visa who disagree with my interpretation of the Royal Decree translation to English and who claim that this means no Thai Tax return required for the noted LTR visa categories.  They claim the LTR means the foreign income is not assessable.  I do NOT know if their assessment is correct.  Nor do I know if mine is correct.  For all I know they may be correct.

 

Given this uncertainty in my mind (as I do not know what interpretation is correct) I have decided NOT to bring any money into Thailand for a few years, until this is clear.  By such an approach, the best I understand from a Thailand RD official (in Phuket) is that I do not need a TIN nor file a tax return, as long as I bring no money into Thailand.   I have the luxury of this 'wait and see' approach as prior to 1-Jan-2024, I brought enough money into Thailand to pay for my living here for a few years.

 

My pension comes from Canada (where the DTA says my pension is taxed in Canada) and also my pension from Germany (where the DTA says my pension is NOT taxed in Germany) and also my pension from a European government organization (where there is no DTA - although I worked in Germany at the time for this European government organisation) ...  where these may or may not be relevant given my LTR visa status. 

 

I believe some see the need to file, or the need not to file, a Thailand tax return as being crystal clear, ... but I for one, at present time, do not see this as crystal clear.

 

So I am watching this all with interest.

 

My hope is that this thread remains civil.  There is nothing (IMHO) to be gained by not being civil in our discussions.

Edited 2 hours ago by oldcpu

[The Cyclist]

13 minutes ago, oldcpu said:

My current interpretation (which could be wrong) is it means assessable income brought into Thailand for those LTR visa holders will be tax exempt. But it does NOT state the foreign income is not assessable (but it is tax exempt).  For me that suggests that a Thai Tax return may be required (even thou no tax due) if I bring income (earned from after 1-Jan-2024) into Thailand. 

 

No idea about the ins or outs of the LTR.

 

My advice would remain the same, err on the side of caution and assume that you are correct and that your income under the LTR is " Assessable " but tax exempt.

 

Take that assumption to your RD Office and let the RD tell you otherwise.

 

No harm in actually going to the RD Office now and asking if they can help you out as you are having difficulty in working out whether you need to file a tax return in Jan - March 2025  or not.

[oldcpu]

4 minutes ago, The Cyclist said:

Take that assumption to your RD Office and let the RD tell you otherwise.

 

No harm in actually going to the RD Office now and asking if they can help you out as you are having difficulty in working out whether you need to file a tax return in Jan - March 2025  or not.

 

good advice - but when I asked the Phuket RD official, he had no clue as to what an LTR visa was.  He had never heard of such.  He stated he would find out and contact my wife (and myself).

 

He never did.

 

Maybe next year, I will 'bang on his (the local RD office) door' again - but its pretty clear to me (albeit based on this one local tax (RD) official) that even the RD officials do not yet know the answer.

[The Cyclist]

1 minute ago, oldcpu said:

good advice - but when I asked the Phuket RD official, he had no clue as to what an LTR visa was.  He had never heard of such.  He stated he would find out and contact my wife (and myself).

 

He never did.

 

I would print off all the relevant details that you think you might need.

 

2 minutes ago, oldcpu said:

Maybe next year, I will 'bang on his (the local RD office) door' again - but its pretty clear to me (albeit based on this one local tax (RD) official) that even the RD officials do not yet know the answer.

 

I can see this being a bit like Immigration. Different Offices saying / doing different things.

 

I dont think there will ever be a generic answer, and it will be a case of going with the flow, of whatever your local RD Office is currently implimenting 😀😀

[Eudaimonia]

20 minutes ago, oldcpu said:

I have the luxury of this 'wait and see' approach as prior to 1-Jan-2024, I brought enough money into Thailand to pay for my living here for a few years.

 

Just a side note: the amount of people who rushed to remit money in the final months of 2023 and thus created a tax liability in 2023 is astonishing. Income remitted in the year of earning it has always been assessable, including in 2023. After the announcements, folks could have simply waited until January 2024 and remitted their money officially tax-free as 2023 savings, but no, they just had to do it all in 2023. 🤷‍♂️

 

But you have the best visa (LTR) and tax exemption in your specific case, so no harm was done. Congratulations. You will be OK until they introduce worldwide taxation regardless of remittance (if ever).

[JimGant]

30 minutes ago, oldcpu said:

My current interpretation (which could be wrong) is it means assessable income brought into Thailand for those LTR visa holders will be tax exempt. But it does NOT state the foreign income is not assessable (but it is tax exempt).  For me that suggests that a Thai Tax return may be required (even thou no tax due) if I bring income (earned from after 1-Jan-2024) into Thailand. 

It means you don't owe any taxes per the LTR decree. I'm in the same boat. The "file a return, even if no tax owed, if your assessable income exceeds 60000 baht" is a peculiar anomaly in Thai tax law. It's been mentioned that there's a 2000 baht fine for ignoring this rule (big deal). Fact: No reported incidents of this. And someone on this forum scaremongered that you might be subject to a back 10 year audit; ludicrous, because such long term audits are only for folks who, up front, didn't file with the INTENT TO TAX EVADE. That ain't you. So, relax.

 

And, for Christ's sake, don't go to your local TRD office for advice on LTR visas. Very few there are knowledgeable on LTR visa related info -- and for sure, probably none on the assessable/exempt tax question. I had to hire an agent to do my one-year LTR report, as they'd never heard of it. So, relax. No reason to call you in for an audit, unless you're remitting millions of baht. And even if they did, you're clean.

[oldcpu]

1 hour ago, Eudaimonia said:

 

Just a side note: the amount of people who rushed to remit money in the final months of 2023 and thus created a tax liability in 2023 is astonishing. Income remitted in the year of earning it has always been assessable, including in 2023. After the announcements, folks could have simply waited until January 2024 and remitted their money officially tax-free as 2023 savings, but no, they just had to do it all in 2023. 🤷‍♂️

 

Have you read a translation of the Revenue Department Order p161 and the subsequent clarification in Revenue Department Order p162?  

 

Please correct me if I am wrong,  but based on what I quoted - I suspect you did not (as my understanding is that P162 contradicts what you just posted).

 

I do hope the is no taxation re my being on the LTR-WP visa, ... however my main puzzlement is in regards to the need to file ...  or not to file ... a tax return.