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

[Mike Lister]

Just now, stat said:

Why would you pay your pension directly into your Thai bank account while being aware that this practice puts you at risk (I do not know for sure) of having to hand in a tax declaration? Why not season it?

50% of that pension comes from the UK State pension, the other 50% comes from US Social Security. US Social Security will only pay into a bank in the country where I live, ergo, that must be in Thailand. I like to play straight with DWP and my State Pension, they know I live in Thailand because I've told them so there's no point in seasoning the state pension, it falls within my TEDA anyway whereas the US SSC is treaty exempt. So no point in seasoning, may just as well have the convenience of DD into Thailand, all currency exchanges done at a decent rate of exchange and no need to worry about bank transfers. That just leaves my rental income which remains in the UK and my investment account or SIPP which is onshore also.

[anrcaccount]

On 6/21/2024 at 1:24 AM, Mike Lister said:

Now they realise that was actually a very very risky game. The cars and houses that were paid for using current year investment and pension pot income (tax free 25%), many will now realise it was quite scary to behave that way. 

 

Wow the fearmongering has really dialed up a level , I thought your philosophy was to share information to put peoples minds at ease? 

 

Anyone reading these threads, needs to realize , at the most, they're simply an academic debate on policy at this stage.

 

As anyone who has lived in Thailand knows, policy and reality are very often wildly divergent. I think it's also fair to describe the threads as 'absolute speculation based on multiple non definitive sources" 

 

I think a poster said it best in another thread,  bears repeating:

 

"Considering that the 180 day rule has been around for years and just some changes on what income is included were amended this year, I would say everyone  is overreacting about all this tax news. Why? Because of enforcement. Until they announce any enforcement measures, I would not even worry. The more logical statement is "IF" they announce. I don't think there will be a "when". Why? Because they didn't enforce it before, so they likely won't enforce it now. Regarding ways they could enforce it. 

 

Currently, they only enforce the filing of personal income tax in Thailand when one needs to renew a work permit."

[Ben Zioner]

8 hours ago, jayboy said:

It was therefore possible to preserve the fiction - where necessary - that remittances to Thailand were derived from past savings.

Not a fiction at all, I used to transfer my earnings of year -1 on the first business day of the new year. Now I don't know if RD was expecting you not to comply, neither do you, but as I said before I'd tread very carefully with them when dealing with them in the forthcoming years.

[Ben Zioner]

On 5/20/2024 at 5:26 AM, Everyman said:

For resident that brings in enough money to live on or even buy a [few] condo[s] or build a house for an Isaan girl or even start a small business, there’s not enough reason to do anything at all, and certainly not to “avoid Thai tax residency” which there is no evidence the TRD can track anyway or is interested in tracking.

What you must do is to be ready to prove that the money you bring in this year has been earned in 2023 or prior to that. An keep that proof for the forthcoming years in case they audit you. Audit will occur, when and how many we don't know yet.

 

Retirement lump sums will be nightmares... 

[jayboy]

1 hour ago, Ben Zioner said:

Not a fiction at all, I used to transfer my earnings of year -1 on the first business day of the new year. Now I don't know if RD was expecting you not to comply, neither do you, but as I said before I'd tread very carefully with them when dealing with them in the forthcoming years.

 

You overlooked my caveat, "where necessary." You say you made efforts to ensure remittances were not sent in the year they were earned; therefore I agree that in your case there was no element of fiction (except of course taking as fully legal a delayed remittance approach which isn't embodied in Thai law). By the way there's plenty of anecdotal evidence RD went along with this.Of course all has changed now.

 

For the avoidance of any misunderstanding I am at all times referring to retired resident expatriates who have no Thai income.

 

You seem to be suggesting that there is a credible chance of RD doing checks on expatriates who have not filed tax returns in past years.I think this is highly unlikely and your advice about treading carefully is misplaced (though of course any dealings with tax authorities should be carefully conducted). I agree that the risk is slightly higher for those who remitted earnings directly to their Thai bank accounts - but even here the audit risk is minuscule.

[metisdead]

Some troll posts contravening our Community Standards have been removed.

[Ben Zioner]

1 hour ago, jayboy said:

You seem to be suggesting that there is a credible chance of RD doing checks on expatriates who have not filed tax returns in past years.I

This is not what I am saying here. I suggest that they will audit people in the forthcoming years, this is where someone might get caught with a post jan 1, 2024 indiscretion and then inevitably become subject to a full investigation of the 10 previous years if he hasn't made tax returns. Mike would be investigated only for 5 years since he filed tax returns.

 

In other words: be extremely thorough from now on.

[jayboy]

37 minutes ago, Ben Zioner said:

This is not what I am saying here. I suggest that they will audit people in the forthcoming years, this is where someone might get caught with a post jan 1, 2024 indiscretion and then inevitably become subject to a full investigation of the 10 previous years if he hasn't made tax returns. Mike would be investigated only for 5 years since he filed tax returns.

 

In other words: be extremely thorough from now on.

 

It's always a good idea to be careful on tax matters in any jurisdiction.It's now as we all know particularly important to keep records.

 

You have now introduced  a new factor - "someone might get caught with a post jan 1, 2024 indiscretion." Of course as from 2024 the new circumstances suggest careful adherence is needed to what is required by RD.I expect the practical details will become much clearer over the next year.But I don't think the RD will be going after retired expatriates with (almost always) relatively modest pensions.Your talk of 10 years investigations of elderly pensioners is  - how to put it politely - somewhat exaggerated.

 

Thanks to many members but particularly Mike LIster we now have a pretty good understanding of the subject, but as always the devil is in the detail - and it will be at least another year before full clarity is available including , critically, what RD actually expects of resident expatriate pensioners.Dare I say it but one or two people seem to have the proverbial bees in their bonnets and lean towards scaremongering on a very flimsy basis.

[Ben Zioner]

3 minutes ago, jayboy said:

Your talk of 10 years investigations of elderly pensioners

Elderly pensioners audited and caught defrauding the Thai Revenue. 

[Mike Lister]

8 hours ago, anrcaccount said:

 

Wow the fearmongering has really dialed up a level , I thought your philosophy was to share information to put peoples minds at ease? 

 

Anyone reading these threads, needs to realize , at the most, they're simply an academic debate on policy at this stage.

 

As anyone who has lived in Thailand knows, policy and reality are very often wildly divergent. I think it's also fair to describe the threads as 'absolute speculation based on multiple non definitive sources" 

 

I think a poster said it best in another thread,  bears repeating:

 

"Considering that the 180 day rule has been around for years and just some changes on what income is included were amended this year, I would say everyone  is overreacting about all this tax news. Why? Because of enforcement. Until they announce any enforcement measures, I would not even worry. The more logical statement is "IF" they announce. I don't think there will be a "when". Why? Because they didn't enforce it before, so they likely won't enforce it now. Regarding ways they could enforce it. 

 

Currently, they only enforce the filing of personal income tax in Thailand when one needs to renew a work permit."

There's no fearmongering involved in a retrospective view of past behaviour, what seemed appropriate to do at the time, turned out to be less than desirable or appropriate later, with the benefit of hindsight. People do that sort of thing often, about many aspects of their lives, do they  not. The philosophy is to share information but there's no harm in sharing lessons learned also, that's not fearmongering, that's being grown up and intelligent about the issue. 

 

I note that several posters have deployed the word "fearmongering" more often of late. My take on this is that the tax narrative has now moved on to a subsequent lower level of detail and many are now starting to think more deeply about different aspects.......coins are finally dropping in some quarters, which can only be a good thing. There was a mini debate recently about whether investments in the equities markets were regarded as savings for tax purposes or are they, as the name implies, investments that occur a Capital Gain. I had that debate many many years ago, others are now having it for the first time but see the topic itself as fearmongering. Well no it's not that at all really, the fact that "you've" only just woken up to the existence of the question, doesn't mean I'm fearmongering, it means you've just had an epiphany moment and are struggling to understand it but can't so you blame it on the behaviour of others.

[anrcaccount]

4 hours ago, Mike Lister said:

There's no fearmongering involved in a retrospective view of past behaviour, what seemed appropriate to do at the time, turned out to be less than desirable or appropriate later, with the benefit of hindsight. People do that sort of thing often, about many aspects of their lives, do they  not. The philosophy is to share information but there's no harm in sharing lessons learned also, that's not fearmongering, that's being grown up and intelligent about the issue. 

 

I note that several posters have deployed the word "fearmongering" more often of late. My take on this is that the tax narrative has now moved on to a subsequent lower level of detail and many are now starting to think more deeply about different aspects.......coins are finally dropping in some quarters, which can only be a good thing. There was a mini debate recently about whether investments in the equities markets were regarded as savings for tax purposes or are they, as the name implies, investments that occur a Capital Gain. I had that debate many many years ago, others are now having it for the first time but see the topic itself as fearmongering. Well no it's not that at all really, the fact that "you've" only just woken up to the existence of the question, doesn't mean I'm fearmongering, it means you've just had an epiphany moment and are struggling to understand it but can't so you blame it on the behaviour of others.

 

Putting aside that verbose spiel above, what I refer to as fear mongering is you making statements like these:

 

 

"You have to tell them and if you lie and they check, you get to go to the big house for a few years, vaseline not included."

 

and

 

"Now they realise that was actually a very very risky game. The cars and houses that were paid for using current year investment and pension pot income (tax free 25%), many will now realise it was quite scary to behave that way."

 

[jayboy]

8 hours ago, Mike Lister said:

I note that several posters have deployed the word "fearmongering" more often of late.

 

I am afraid you have been scaremongering which is a pity because your overall contribution on this subject has been great.

 

 

[Rimmer]

A flame has been removed

[Mike Lister]

3 minutes ago, jayboy said:

 

I am afraid you have been scaremongering which is a pity because your overall contribution on this subject has been great.

 

 

If you're not able to understand what I've written, in the way it's intended, then you need to put me on your ignore list. 

[Mike Lister]

4 hours ago, anrcaccount said:

 

Putting aside that verbose spiel above, what I refer to as fear mongering is you making statements like these:

 

 

"You have to tell them and if you lie and they check, you get to go to the big house for a few years, vaseline not included."

 

and

 

"Now they realise that was actually a very very risky game. The cars and houses that were paid for using current year investment and pension pot income (tax free 25%), many will now realise it was quite scary to behave that way."

 

I'm sorry you were unable to understand what I wrote but that's the full and complete explanation.

 

The first quote was intended to humorous but is indeed based on fact. The penalties for tax evasion are extremely harsh and do involve jail time, those things are well documented and understood.

 

The second statement was retrospective look at past behaviour which I feel certain many expats may now wish they had handled differently.

[Mike Lister]

There is a disagreement between some members as to whether funds used to buy stock market investments such as stocks or equities is considered to be savings. I maintain the two things are very different and that savings are only considered savings, as  long as they have not been used to buy something else, if they have, they change their form and become something else. Others disagree and have said I am scaremongering!

 

For the most part, stock market purchases involve either short or long term capital gains which is only realised when the stock is sold. Savings on the other hand remain liquid, subject to any time deposit constraints. I appreciate that different jurisdictions may view this issue differently hence I have only looked at the UK position on this. The HMRC example below clearly spells out the difference, savings and investments in stock purchases are very different animals.

 

https://community.hmrc.gov.uk/customerforums/cgt/84e4d0f2-0b73-ee11-a81c-00224800f95d

 

https://www.investopedia.com/articles/investing/072313/investment-tax-basics-all-investors.asp

 

I'm happy to be contradicted on this point but the proof I am not correct, needs to be conclusive.

 

 

 

[jayboy]

54 minutes ago, Mike Lister said:

If you're not able to understand what I've written, in the way it's intended, then you need to put me on your ignore list. 

Believe it or not, I'm trying to be helpful. I find it useful from time to time to reflect that I may not have reacted the right way or in too hotheaded a manner.Perhaps more importantly, I try to consider whether I have got things quite right and to learn from those who have more experience of a business environment.Above all because I have behaved in a certain way and think in a certain manner, I try (not always successfully) to understand why some people think differently.So far you have shown yourself to be technically sound but a bit inflexible. and sometimes poor in judgement.My advice is not to react too quickly to something on the forum you disagree with - wait a day perhaps.That way you can reach your full potential.

[RupertIII]

26 minutes ago, Mike Lister said:

There is a disagreement between some members as to whether funds used to buy stock market investments such as stocks or equities is considered to be savings. I maintain the two things are very different and that savings are only considered savings, as  long as they have not been used to buy something else, if they have, they change their form and become something else. Others disagree and have said I am scaremongering!

 

For the most part, stock market purchases involve either short or long term capital gains which is only realised when the stock is sold. Savings on the other hand remain liquid, subject to any time deposit constraints. I appreciate that different jurisdictions may view this issue differently hence I have only looked at the UK position on this. The HMRC example below clearly spells out the difference, savings and investments in stock purchases are very different animals.

 

https://community.hmrc.gov.uk/customerforums/cgt/84e4d0f2-0b73-ee11-a81c-00224800f95d

 

https://www.investopedia.com/articles/investing/072313/investment-tax-basics-all-investors.asp

 

I'm happy to be contradicted on this point but the proof I am not correct, needs to be conclusive.

 

 

 

Some years back I rec'd an inheritance (tax exempt under Thai tax law) which I placed in an offshore investment portfolio consisting of investment funds and some stocks. I am assuming that the original capital element of this would still be considered as an exempt inheritance or would you suggest otherwise?

[Presnock]

On 6/20/2024 at 8:02 PM, jayboy said:

 

Evidence? I doubt whether there is anyone who feels he should have been filing tax returns when there was no need to do so.

 

I'm aware you have been filing tax returns for many years because you have advised the forum accordingly.Most informed people would have considered this unnecessary but it was your call and we can leave it there.However for most resident retired expatriates - and I know a lot - it is only developments over the last year that has turned their attention to the possibility of filing tax returns.I don't know any who believes he should have been filing returns in the past when it certainly wasn't expected by the RD.(On reflection there may be one but he has business interests in Thailand. which obviously would make filing necessary)

 

 

 

 

 

Actually I never did think about it as I was paying my US taxes and thought that was all okay.  Fortunately from those AN'ers that have enlightened me tremendously (and I do thank all of you  that have jumped up and spent a lot of your time) for providing guidance on the tax issue.  I in following your guidance learned where I could read for myself exactly what the tax code has been and realize that I would not have had to pay any taxes anyway as I only have a US govt pension.  I don't think that I will be troubled at all when the final bell for 2024 tax law interpretation takes place.  They may indicate a change in the tax laws that makes all us get a Tax ID number from the RD and to provide sufficient proof to exempt any funds remitted into Thailand.  I am prepared for these changes if they come about as we have had proper guidance for many months on what could happen if the worse case ruled but which most have said will most likely not affect most of us in a negative fashion anyway.  Hoping that all come out after the tax filing season for 2024 is over in a very upbeat manner and grin that we worried uselessly just because TIT.

[NoDisplayName]

8 minutes ago, RupertIII said:

Some years back I rec'd an inheritance (tax exempt under Thai tax law) which I placed in an offshore investment portfolio consisting of investment funds and some stocks. I am assuming that the original capital element of this would still be considered as an exempt inheritance or would you suggest otherwise?

 

That's the thing.  There is a law, and there is implementation, and then there are dozens of district offices that interpret the law in new and exciting ways, and then there are hundreds of tax officers that interpret the interpretation according to how much sleep they had the night before.

 

Under the old rules, you simply claimed remittance was prior savings.  I'm not aware of anyone that had to prove that, as one would assume prior savings would exist.  Has anyone been required to show proof, and was a brokerage statement showing total assets sufficient?

 

The new remittance rule will likely require some sort of documentation.  But what will be allowed, what will be excluded, how will it be interpreted, how will it be enforced?

 

Other than a dedicated bank passbook savings account, how will the victim point to any specific asset as the source of the funds remitted?

[dinga]

57 minutes ago, jayboy said:

Believe it or not, I'm trying to be helpful. I find it useful from time to time to reflect that I may not have reacted the right way or in too hotheaded a manner.Perhaps more importantly, I try to consider whether I have got things quite right and to learn from those who have more experience of a business environment.Above all because I have behaved in a certain way and think in a certain manner, I try (not always successfully) to understand why some people think differently.So far you have shown yourself to be technically sound but a bit inflexible. and sometimes poor in judgement.My advice is not to react too quickly to something on the forum you disagree with - wait a day perhaps.That way you can reach your full potential.

DEAD RIGHT!

[Mike Lister]

1 hour ago, jayboy said:

Believe it or not, I'm trying to be helpful. I find it useful from time to time to reflect that I may not have reacted the right way or in too hotheaded a manner.Perhaps more importantly, I try to consider whether I have got things quite right and to learn from those who have more experience of a business environment.Above all because I have behaved in a certain way and think in a certain manner, I try (not always successfully) to understand why some people think differently.So far you have shown yourself to be technically sound but a bit inflexible. and sometimes poor in judgement.My advice is not to react too quickly to something on the forum you disagree with - wait a day perhaps.That way you can reach your full potential.

I am not just a little inflexible, I am extremely so, especially when I say things such as, I filed tax returns because I was required to do so by law. Even though the same posters tell me repeatedly, over many months, that I didn't need to, I don't relent and finally take their side and agree that I was wrong, despite the continuing onslaught of criticism, I hold my ground. You can do that sort of thing, when you are certain of your facts. Similarly, when you don't watch an embassy tax video and explain why, there's little point in changing your story to agree that you should have watched it, even when reminded that you didn't some ten times or more. Some of us are comfortable and secure in the knowledge that we have and only find it necessary to deal with an issue once, rather than regurgitate it constantly in the hope the answer will change.

[NoDisplayName]

1 hour ago, RupertIII said:

Some years back I rec'd an inheritance (tax exempt under Thai tax law) which I placed in an offshore investment portfolio consisting of investment funds and some stocks. I am assuming that the original capital element of this would still be considered as an exempt inheritance or would you suggest otherwise?

 

Implementation.

 

Will TRD allow you to link remittance to any specific transaction any time throughout the year, or prior years, as cost basis?  Would they have staff capable of that task?

 

Or will TRD require (legalized?) copies of your home country tax return and end-of-year bank statement and use total amounts from them - total salary, total capital gains, total dividends, original capital, passbook savings - to somehow calculate which percentage of each applies to your remittance?

[jayboy]

1 hour ago, Mike Lister said:

I am not just a little inflexible, I am extremely so, especially when I say things such as, I filed tax returns because I was required to do so by law. Even though the same posters tell me repeatedly, over many months, that I didn't need to, I don't relent and finally take their side and agree that I was wrong, despite the continuing onslaught of criticism, I hold my ground. You can do that sort of thing, when you are certain of your facts. Similarly, when you don't watch an embassy tax video and explain why, there's little point in changing your story to agree that you should have watched it, even when reminded that you didn't some ten times or more. Some of us are comfortable and secure in the knowledge that we have and only find it necessary to deal with an issue once, rather than regurgitate it constantly in the hope the answer will change.

 

Ah well I tried. Good luck to you and thanks for the great contribution you've made on this subject and which I have always acknowledged.

[Klonko]

3 hours ago, RupertIII said:

Some years back I rec'd an inheritance (tax exempt under Thai tax law) which I placed in an offshore investment portfolio consisting of investment funds and some stocks. I am assuming that the original capital element of this would still be considered as an exempt inheritance or would you suggest otherwise?

FIFO (tax free remittance up to the initial investment) or LIFO (remittance only tax free if relevant income/capital gains have been transferred from the investment "account" to another offshore account prior to a remittance) or another accounting method (pro rata would make tax free remittances rather impossible) has not been decided yet by TRD, and may be never clarified generally. I doubt that TRD will establish a general standard across all offices. Ideal solution would be to let the taxpayer choose an accounting method going forward, else tax planning will remain difficult or impossible until court decisions may give guidance.

[Mike Lister]

2 minutes ago, Klonko said:

FIFO (tax free remittance up to the initial investment) or LIFO (remittance only tax free if relevant income/capital gains have been transferred from the investment "account" to another offshore account prior to a remittance) or another accounting method (pro rata would make tax free remittances rather impossible) has not been decided yet by TRD, and may be never clarified generally. I doubt that TRD will establish a general standard across all offices. Ideal solution would be to let the taxpayer choose an accounting method going forward, else tax planning will remain difficult or impossible until court decisions may give guidance.

Agreed, completely.

 

This is the problem with deciding your own accounting method, some may agree, some will not, eventually many use different ones, some will win, others will loose. The Thai's are unlikely to take the issue to court and the farangs are not likely to be successful, the uncertainty could exist for a long time without anyone being able to resolve it. There is no  incentive benefit for the TRD to arrive at a standard.

[Mike Lister]

4 hours ago, Mike Lister said:

There is a disagreement between some members as to whether funds used to buy stock market investments such as stocks or equities is considered to be savings. I maintain the two things are very different and that savings are only considered savings, as  long as they have not been used to buy something else, if they have, they change their form and become something else. Others disagree and have said I am scaremongering!

 

For the most part, stock market purchases involve either short or long term capital gains which is only realised when the stock is sold. Savings on the other hand remain liquid, subject to any time deposit constraints. I appreciate that different jurisdictions may view this issue differently hence I have only looked at the UK position on this. The HMRC example below clearly spells out the difference, savings and investments in stock purchases are very different animals.

 

https://community.hmrc.gov.uk/customerforums/cgt/84e4d0f2-0b73-ee11-a81c-00224800f95d

 

https://www.investopedia.com/articles/investing/072313/investment-tax-basics-all-investors.asp

 

I'm happy to be contradicted on this point but the proof I am not correct, needs to be conclusive.

 

 

 

Anyway, back on this savings issue:

 

If savings dated pre 31 December 2023 are free of tax when remitted to Thailand, some think this statement includes "savings" that are held as stocks and shares investments. I don't see how that can possibly even be a starter. The investment is exactly that, an investment, its value is not known until it is sold and a capital gain is realised. The value of savings is known because the principle is multiplied by the interest rate, voila, but not so a CG investment! Sooooo, you hold stocks in mid 2023 (or earlier) and in January (or later) 2024 you sell them, are they tax free when remitted to Thailand....how can they be!

 

EDIT TO ADD: The above is not to say that some TRD offices may decide to say that everything owned pre 31 December 2023 is tax free, but thus far the rules don't say that. Thus far they say only income is  tax free and since the CG is not realised until the stocks are sold, that's not yet income if sold in 2024.

[aldriglikvid]

2 minutes ago, Mike Lister said:

Anyway, back on this savings issue:

 

If savings dated pre 31 December 2023 are free of tax when remitted to Thailand, some think this statement includes "savings" that are held as stocks and shares investments. I don't see how that can possibly even be a starter. The investment is exactly that, an investment, its value is not known until it is sold and a capital gain is realised. The value of savings is known because the principle is multiplied by the interest rate, voila, but not so a CG investment! Sooooo, you hold stocks in mid 2023 (or earlier) and in January (or later) 2024 you sell them, are they tax free when remitted to Thailand....how can they be!

From the looks if it, I probably made a big blunder earlier this spring transferring 6 million thb to my Thai bank account.

Myself, and approx. 41% of the working total population of my country (incl. elders/retirees) invest in Stocks/Bonds/Mutual Funds (etc.) via a "Investment Account" (free translation). 

 

In short, I pay capital gains tax (that's how its presented on official statement from the RD) once per year - irrespective if I sold or bought anything. The tax doesn't take account if you made profits or losses (and you don't declare them in separate). It's simply a % of total value, and all deposits.

Details: 
 

Taxation of ISK Accounts

1. Annual Taxation on Account Value:

   • ISK accounts are subject to a standardized annual tax based on the value of the account, rather than on the individual gains or withdrawals. This tax is calculated on the average account balance throughout the year.
   • The tax rate is determined by the government and is typically a small percentage of the account value. This means that you pay tax regardless of whether you make withdrawals or realize gains.

2. No Capital Gains Tax:

   • One of the main advantages of an ISK account is that you do not pay capital gains tax on the profits from the sale of securities held within the account.
   • Dividends and other returns are also not taxed individually but are instead included in the annual tax calculation.

Withdrawals from ISK Accounts

• Tax Treatment of Withdrawals:
  • Withdrawals from an ISK account are not taxed separately at the time of withdrawal. The taxation is already accounted for through the annual tax based on the account's value.
  • This means that you can withdraw money from your ISK account without incurring additional tax liabilities.

Implications for You

Any withdrawals you make from this account should be seen as already taxed under the ISK's annual taxation regime. This means you do not need to pay additional taxes on the withdrawals themselves.

 

// End of Details. 

 

 

The 6 million thb sent to my Thai bank earlier this spring is a withdrawal from the aforementioned investment account. Add to it, all the deposits into this investment account was made pre 2024 and no deposits in 2024 (reminder: we're taxed on all deposits on top of the annual tax on the balance average). 

 

I figured this would be protected under the DTA (as my country classify it as capital tax on the annual statement). Would you agree or how do you all see about it? Thanks 🙂

 

[Mike Lister]

7 minutes ago, aldriglikvid said:

From the looks if it, I probably made a big blunder earlier this spring transferring 6 million thb to my Thai bank account.

Myself, and approx. 41% of the working total population of my country (incl. elders/retirees) invest in Stocks/Bonds/Mutual Funds (etc.) via a "Investment Account" (free translation). 

 

In short, I pay capital gains tax (that's how its presented on official statement from the RD) once per year - irrespective if I sold or bought anything. The tax doesn't take account if you made profits or losses (and you don't declare them in separate). It's simply a % of total value, and all deposits.

Details: 
 

Taxation of ISK Accounts

1. Annual Taxation on Account Value:

   • ISK accounts are subject to a standardized annual tax based on the value of the account, rather than on the individual gains or withdrawals. This tax is calculated on the average account balance throughout the year.
   • The tax rate is determined by the government and is typically a small percentage of the account value. This means that you pay tax regardless of whether you make withdrawals or realize gains.

2. No Capital Gains Tax:

   • One of the main advantages of an ISK account is that you do not pay capital gains tax on the profits from the sale of securities held within the account.
   • Dividends and other returns are also not taxed individually but are instead included in the annual tax calculation.

Withdrawals from ISK Accounts

• Tax Treatment of Withdrawals:
  • Withdrawals from an ISK account are not taxed separately at the time of withdrawal. The taxation is already accounted for through the annual tax based on the account's value.
  • This means that you can withdraw money from your ISK account without incurring additional tax liabilities.

Implications for You

Any withdrawals you make from this account should be seen as already taxed under the ISK's annual taxation regime. This means you do not need to pay additional taxes on the withdrawals themselves.

 

// End of Details. 

 

 

The 6 million thb sent to my Thai bank earlier this spring is a withdrawal from the aforementioned investment account. Add to it, all the deposits into this investment account was made pre 2024 and no deposits in 2024 (reminder: we're taxed on all deposits on top of the annual tax on the balance average). 

 

I figured this would be protected under the DTA (as my country classify it as capital tax on the annual statement). Would you agree or how do you all see about it? Thanks 🙂

 

I can't help much with this one I'm afraid, I can give you a theoretical opinion but that's all and it's probably not helpful. Some random points:

 

The funds came from an investment account this year but the payments in to it were made last year so there may or may not be some relief under Por 161/162.....that is exactly the point I'm trying to bottom out currently.

 

The upside is that any tax paid is likely to be capable of being offset against any that is due in Thailand.

 

I can't speak to how the DTA may offer some relief because I have not read it.

 

Do you still have a chance to not be Thai tax resident this year, if so, that may be an option to consider?

 

Sorry I can't help more with this, the Por 161/162 relief looks like the most hopeful route.

 

 

[JimGant]

3 hours ago, jayboy said:

Ah well I tried. Good luck to you and thanks for the great contribution you've made on this subject and which I have always acknowledged.

jayboy, I like your inputs. Hang around some more.