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

[Mike Lister]

"I maintain that financial investments you had on 31 Dec 2023, including unrealized capital gains, are tax exempt under the one-time decree protecting remittances of pre 2024 foreign source income". @JimGant

 

Even the property portfolio that you own, you know, those financial investments that would incur capital gains when sold but are really only savings in disguise? Or is that because the gain is not realised until the investment is sold, that no income exists, ergo ,it cannot be exempt under Por 161/162

 

 

Edited June 23 by Mike Lister

[CharlieH]

Reported post containing personal remarks has been removed.

 

 

[Mike Teavee]

5 minutes ago, Mike Lister said:

"I maintain that financial investments you had on 31 Dec 2023, including unrealized capital gains, are tax exempt under the one-time decree protecting remittances of pre 2024 foreign source income".

 

Even the property portfolio that you own, you know, those financial investments that would incur capital gains when sold but are really only savings in disguise?

 

 

Have to say the examples I've seen from the likes of Expat Tax say very clearly that the Capital Gain is based on the initial costs of the assets & not the value as at 31/12/2023. 

 

 

 

[Mike Lister]

16 minutes ago, Mike Teavee said:

Have to say the examples I've seen from the likes of Expat Tax say very clearly that the Capital Gain is based on the initial costs of the assets & not the value as at 31/12/2023. 

 

 

 

I agree, I do not believe for one moment there is an opportunity to revalue the asset subsequently, except at the time of sale when the gain is calculated. Furthermore, I do not believe there is an opportunity to forgive the value of the asset under any decree. If you see things differently, please do say. It's just that I don't believe the intent of Por 161/162 was to ignore everything that existed prior to the end of 2023, if it was they would have said so.

 

EDIT TO ADD: for the avoidance of doubt.....I'm not trying to be right on this, only to find the right answer, preferably without the name calling!

Edited June 23 by Mike Lister

[Lacessit]

7 hours ago, Mike Lister said:

 

 

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 penalties may be extremely harsh; however, one has to take circumstances into account.

 

Putting someone in jail for evading taxes on millions of baht , certainly.

 

Putting an 80 yo foreign pensioner in jail for not submitting a tax return on half a million baht in yearly remittance would result in a public relations nightmare for the TRD and Thailand.

[JimGant]

51 minutes ago, Mike Lister said:

Even the property portfolio that you own, you know, those financial investments that would incur capital gains when sold but are really only savings in disguise? Or is that because the gain is not realised until the investment is sold, that no income exists, ergo ,it cannot be exempt under Por 161/162

That was all explained in a post you had removed -- that included two important links to discussion on income. Possibly, in the interest of an important discussion on savings vs investments, you might repost that removal.

[Mike Lister]

13 minutes ago, Lacessit said:

The penalties may be extremely harsh; however, one has to take circumstances into account.

 

Putting someone in jail for evading taxes on millions of baht , certainly.

 

Putting an 80 yo foreign pensioner in jail for not submitting a tax return on half a million baht in yearly remittance would result in a public relations nightmare for the TRD and Thailand.

I like to think what you say is the case but TBH I have no information on it whatsoever.

[Mike Lister]

Just now, JimGant said:

That was all explained in a post you had removed -- that included two important links to discussion on income. Possibly, in the interest of an important discussion on savings vs investments, you might repost that removal.

I have no greater say than anyone else in what gets removed or edited, if you want it reinstated, go ask  for it yourself. Perhaps if you stop making personal remarks, your posts won't get removed in the first place.

 

So, the answer to my question is, regarding property portfolio's, are they exempt under Por161/162 also, in your opinion?

[Lacessit]

2 minutes ago, Mike Lister said:

I like to think what you say is the case but TBH I have no information on it whatsoever.

IIRC the TV series "Bangkok Hilton" caused embarrassment in Thailand, due to its negative portrayal of jail conditions. And that was dealing with drug mules.

[Mike Lister]

Just now, Lacessit said:

IIRC the TV series "Bangkok Hilton" caused embarrassment in Thailand, due to its negative portrayal of jail conditions. And that was dealing with drug mules.

I think people care less these days about image, the reports posted very recently regarding conditions in the International Departures Detention Center sound appalling.

[anrcaccount]

7 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.

 

I don't see why there's any debate on this point.

 

This is simply the difference between capital, and capital gains. Or assets, and income. 

 

Notwithstanding this is unlikely to ever be enforced, let's clarify something. As you've said many times, the policy is " income earned AND remitted to Thailand". Stocks sold comprise the original capital plus gains ( if any, also can have no gains) /. If the gain is remitted, this may be taxable. If the original capital is remitted, this is principal and not subject to taxes.

 

Doesn't matter if principal is from the proceeds of a on -call savings account, a term deposit, stock sales, mutual fund sales, anything. None of these are income. 

 

Income is dividends, distributions, interest, capital gains. Only these things can be subject to tax IF remitted. It's up to the taxpayer to classify their own remittances into Thailand as capital or assessable income. Ergo, it's acceptable to remit the original capital/principal and leave the income offshore.  

 

Sources, I'll use the same ones you have cited: 

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html
Question 7, Question 9, Question 11

 

https://www.stashaway.co.th/r/thai-tax-announcement-29112023

"The principal amount is not subject to taxes"

 

What's not clear here?

 

If I'm missing your point entirely, please explain? 

[Lacessit]

8 minutes ago, Mike Lister said:

I think people care less these days about image, the reports posted very recently regarding conditions in the International Departures Detention Center sound appalling.

I understand there are two IDC's, the one at Suvarnabhuni is considerably better than the one in Bangkok city.

[UKresonant]

5 hours ago, NoDisplayName said:

 

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?

To legalize so many documents would not be viable, perhaps a legalised bank statement, showing corresponding pension payments, at worst. Not even sure some docs are on the list of items possible to legalize in the UK.

 

I think the totals of all you mention gross (ex principle perhaps), could feature, especially if tax credit relief is involved. ( But if within exempt and allowance my just listing actual net remittance to Thailand would be OK? maybe with P60 or similar)

 

 

[Mike Lister]

10 minutes ago, anrcaccount said:

 

I don't see why there's any debate on this point.

 

This is simply the difference between capital, and capital gains. Or assets, and income. 

 

Notwithstanding this is unlikely to ever be enforced, let's clarify something. As you've said many times, the policy is " income earned AND remitted to Thailand". Stocks sold comprise the original capital plus gains ( if any, also can have no gains) /. If the gain is remitted, this may be taxable. If the original capital is remitted, this is principal and not subject to taxes.

 

Doesn't matter if principal is from the proceeds of a on -call savings account, a term deposit, stock sales, mutual fund sales, anything. None of these are income. 

 

Income is dividends, distributions, interest, capital gains. Only these things can be subject to tax IF remitted. It's up to the taxpayer to classify their own remittances into Thailand as capital or assessable income. Ergo, it's acceptable to remit the original capital/principal and leave the income offshore.  

 

Sources, I'll use the same ones you have cited: 

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html
Question 7, Question 9, Question 11

 

https://www.stashaway.co.th/r/thai-tax-announcement-29112023

"The principal amount is not subject to taxes"

 

What's not clear here?

 

If I'm missing your point entirely, please explain? 

Por 162/163 are the new rules that affect remittances to Thailand. Por 162 says that income earned before 31 December 2023 is exempt. In an earlier discussion elsewhere, some posters feel that overseas stock investments in the markets are really only savings and can be remitted free of Thai tax. I maintain those investments are not savings and that they are subject to capital gains. Unless the investments were sold before 31 December 2023, they are subject to Thai tax when remitted. Others disagree and see everything as savings and/or exempt under Por 161/162.

 

Note TRD rules state that remittances of CG comprise capital and gain and that the two elements can't be separated and remitted at will with the owner stating it is one or the other.

[UKresonant]

Was thinking of various scenarios e.g. 

Non tax resident of Thailand, no Thai account, in hospital, requires a bill to be settled.

Money, say 100000 THB, sent to Thai national, tax resident to settle the bill, if they keep the receipt from the hospital, no tax to pay?  (or assume potential 35% tax.) No benefit to Thai tax payer. 

Not gift, though it could be tagged that way....

Any thoughts.

 

[anrcaccount]

1 minute ago, Mike Lister said:

Por 162/163 are the new rules that affect remittances to Thailand. Por 162 says that income earned before 31 December 2023 is exempt. In an earlier discussion elsewhere, some posters feel that overseas stock investments in the markets are really only savings and can be remitted free of Thai tax. I maintain those investments are not savings and that they are subject to capital gains. Unless the investments were sold before 31 December 2023, they are subject to Thai tax when remitted. Others disagree and see everything as savings and/or exempt under Por 161/162.

 

POR 161/162 refer to income. Not remitting original capital / principal.

 

When the investments are sold, only the gains are taxable, if remitted. 

 

Stock investments comprise capital, and gains(if any) ,when sold.  This "savings" terminology is irrelevant. When they are sold is only relevant for the income portion, if remitted, as you reference POR 161/162.  

 

What's not clear?

 

1 minute ago, Mike Lister said:

Note TRD rules state that remittances of CG comprise capital and gain and that the two elements can't be separated and remitted at will with the owner stating it is one or the other.

 

Really? So the Sherrings link , question 9, contradicts this completely? 

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

[Mike Lister]

2 minutes ago, UKresonant said:

Was thinking of various scenarios e.g. 

Non tax resident of Thailand, no Thai account, in hospital, requires a bill to be settled.

Money, say 100000 THB, sent to Thai national, tax resident to settle the bill, if they keep the receipt from the hospital, no tax to pay?  (or assume potential 35% tax.) No benefit to Thai tax payer. 

Not gift, though it could be tagged that way....

Any thoughts.

 

Wondering why they would use the intermediary in your example and not remit direct to hospital.

 

But whatever, I think that sort of pass through arrangement is probably OK, as long as receipts/invoices available.

[JimGant]

1 hour ago, Mike Teavee said:

Have to say the examples I've seen from the likes of Expat Tax say very clearly that the Capital Gain is based on the initial costs of the assets & not the value as at 31/12/2023. 

So what if the value on 31/12/2023 includes the unrealized gain from initial purchase. That unrealized gain, I maintain, can be considered "income" -- as can be shown in many scenarios from different countries. Thus, it can be considered part of the "foreign source income" from before 2024 that is given an exemption from remittance taxation. That certainly could result in a spirited discussion with a TRD official -- who, sadly, probably wouldn't have a clue. But, hey, why would you not give yourself every financial advantage, particularly if you've got several examples from the internet to support your position. Plus, you've got probably a 1% chance of being called in for a chat about the validity of remitted pre 2024 income.

[Mike Lister]

3 minutes ago, anrcaccount said:

 

 

 

 

Really? So the Sherrings link , question 9, contradicts this completely? 

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

Answer in two parts, here....second part above, yes, the latest we have on remitting capital gains comes I believe from a TRD meeting which contradicts the sherrings statement hence the tax guide was changed accordingly.

[Mike Lister]

2 minutes ago, JimGant said:

So what if the value on 31/12/2023 includes the unrealized gain from initial purchase. That unrealized gain, I maintain, can be considered "income" -- as can be shown in many scenarios from different countries. Thus, it can be considered part of the "foreign source income" from before 2024 that is given an exemption from remittance taxation. That certainly could result in a spirited discussion with a TRD official -- who, sadly, probably wouldn't have a clue. But, hey, why would you not give yourself every financial advantage, particularly if you've got several examples from the internet to support your position. Plus, you've got probably a 1% chance of being called in for a chat about the validity of remitted pre 2024 income.

That all sounds very like you don't know and are guessing and suggesting you impose your own rules once again, is that the case?

[UKresonant]

11 minutes ago, Mike Lister said:

Por 162/163 are the new rules that affect remittances to Thailand. Por 162 says that income earned before 31 December 2023 is exempt. In an earlier discussion elsewhere, some posters feel that overseas stock investments in the markets are really only savings and can be remitted free of Thai tax. I maintain those investments are not savings and that they are subject to capital gains. Unless the investments were sold before 31 December 2023, they are subject to Thai tax when remitted. Others disagree and see everything as savings and/or exempt under Por 161/162.

 

Note TRD rules state that remittances of CG comprise capital and gain and that the two elements can't be separated and remitted at will with the owner stating it is one or the other.

UK relative, I'm assuming that Thai RD cannot look inside SIPPs (UK invested pensions) as the taxable event is only at withdrawals.

I'm proceeding on the Basis that ISAs would be similar, dividends would not be tax exempt in Thailand (as they would be in UK). But looking inside the UK tax exempt .wrapper could become. very difficult,

[ThaiPauly]

3 minutes ago, JimGant said:

So what if the value on 31/12/2023 includes the unrealized gain from initial purchase. That unrealized gain, I maintain, can be considered "income" -- as can be shown in many scenarios from different countries. Thus, it can be considered part of the "foreign source income" from before 2024 that is given an exemption from remittance taxation. That certainly could result in a spirited discussion with a TRD official -- who, sadly, probably wouldn't have a clue. But, hey, why would you not give yourself every financial advantage, particularly if you've got several examples from the internet to support your position. Plus, you've got probably a 1% chance of being called in for a chat about the validity of remitted pre 2024 income.

I would think the number would be much higher than 1% of people being summoned to the tax office bearing in mind there are half a million new taxpayers and no further revenue officers being appointed and trained to my knowledge

[Mike Lister]

7 minutes ago, anrcaccount said:

 

POR 161/162 refer to income. Not remitting original capital / principal.

 

When the investments are sold, only the gains are taxable, if remitted. 

 

Stock investments comprise capital, and gains(if any) ,when sold.  This "savings" terminology is irrelevant. When they are sold is only relevant for the income portion, if remitted, as you reference POR 161/162.  

 

The CG is based on the initial cost of the asset rather than any subsequent date.

 

When remitted to Thailand, the gain is taxable according to PIT tables, rather than any CG rules.

 

The argument is whether that CG is taxable at all in Thailand, according to others it is not, because it is excluded under Por161/2. I disagree, I believe the CG is taxable when remitted, for me, nothing is unclear.

[Mike Lister]

3 minutes ago, ThaiPauly said:

I would think the number would be much higher than 1% of people being summoned to the tax office bearing in mind there are half a million new taxpayers and no further revenue officers being appointed and trained to my knowledge

We heard months ago that each of the District offices is recruiting one lawyer per, to deal with DTA related issues, we came across somebody who had applied for the role....details found in Part 1 of the thread, somewhere!

[Mike Lister]

5 minutes ago, UKresonant said:

UK relative, I'm assuming that Thai RD cannot look inside SIPPs (UK invested pensions) as the taxable event is only at withdrawals.

I'm proceeding on the Basis that ISAs would be similar, dividends would not be tax exempt in Thailand (as they would be in UK). But looking inside the UK tax exempt .wrapper could become. very difficult,

I hope they cannot look  inside SIPP's, I wonder if that will change if worldwide taxation is enacted.

[Mike Lister]

27 minutes ago, anrcaccount said:

 

Really? So the Sherrings link , question 9, contradicts this completely? 

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

From the tax guide:

 

59) We understand currently that the TRD views any remittance of assessable capital gains to Thailand as comprising both capital and gain. It cannot be claimed that the remittance contains just one or the other, it always contains both and this continues until the total amount is exhausted.

[NoDisplayName]

25 minutes ago, anrcaccount said:

Stock investments comprise capital, and gains(if any) ,when sold.  This "savings" terminology is irrelevant. When they are sold is only relevant for the income portion, if remitted, as you reference POR 161/162.  

 

What's not clear?

 

Let's say you have a checking account for handling cash expenses.  Several brokerage accounts holding stocks and bonds and ETF's.

Dividends and interest and sales proceeds are sent to your checking account as needed.

 

Sometimes, $1000 or so will go from your checking account to Wise, to be sent to your Bangkok Bank account for Thailand living expenses.

 

What's not clear?..........What exactly did you remit to Thailand?

 

Your home country taxes are no problem, as your 1099's detail your income and gains.

[anrcaccount]

3 minutes ago, Mike Lister said:

From the tax guide:

 

59) We understand currently that the TRD views any remittance of assessable capital gains to Thailand as comprising both capital and gain. It cannot be claimed that the remittance contains just one or the other, it always contains both and this continues until the total amount is exhausted.

 

Source for this? From where do "we" get the "understanding"?

 

A very unclear statement. There's capital, and then there's capital gains. Gains are income, original capital, is not income. Never has been. 

 

Always contains both?  What a strange statement. How would that possibly work? 

 

[Mike Lister]

2 minutes ago, NoDisplayName said:

 

Let's say you have a checking account for handling cash expenses.  Several brokerage accounts holding stocks and bonds and ETF's.

Dividends and interest and sales proceeds are sent to your checking account as needed.

 

Sometimes, $1000 or so will go from your checking account to Wise, to be sent to your Bangkok Bank account for Thailand living expenses.

 

What's not clear?..........What exactly did you remit to Thailand?

 

Your home country taxes are no problem, as your 1099's detail your income and gains.

We still do not know how the TRD will handle commingled accounts such as you've described but I guess it wont be favorably.

[Mike Lister]

Just now, anrcaccount said:

 

Source for this? From where do "we" get the "understanding"?

 

A very unclear statement. There's capital, and then there's capital gains. Gains are income, original capital, is not income. Never has been. 

 

Always contains both?  What a strange statement. How would that possibly work? 

 

Percentage wise I imagine.

 

As I recall a member and his lawyer met with TRD officials, some quite senior, and TRD legal staff, in Hua Hin some m onths ago and provided us with effectively minutes of that meeting. It's all set out in Part 1 of the long tax thread, if you want to trawl though it. As I recall, this issue was confirmed also vis expat tax Q&A's.