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

[stat]

1 hour ago, Mike Lister said:

The thing that scares me with these discussions is that they are uncontrolled and whilst people with some experience of tax will be able to wade through it all unscathed, others may not.

  

 I regret that may not be enough. I think that if we can’t establish and agree those rules, the best thing to do is to exit the debate and not be associated with it.

 

 

 

 

I think you still do not understand that this is a debate forum and people need to make up their own mind as there is no final "answer". We are talking probabilities here not facts. Feel free to leave the debate as you kindly suggested!

[Mike Teavee]

9 minutes ago, stat said:

If you can use Lifo, principal comes first when transmitted. Sherrings states as an answer from TRD in question 7 that a generally accepted accounting method is to be used, that would/could be Lifo!

LIFO = "Last In First Out" which surely means the principle comes out last as the "Last In" would be Gains/Interest 

[Mike Lister]

14 minutes ago, stat said:

Your statement "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." is simply wrong. The method of calculation Lifo, Fifo or percentage are currently unknown. If you can use Lifo, principal comes first when transmitted. Sherrings states as an answer from TRD in question 7 that a generally accepted accounting method is to be used, that would/could be Lifo!

 

Exampe you invest 100.000 USD and get 5000 USD interest. In case of Fifo accounting method you could transmit the first 100.000 USD without incurring any tax as it is principal. If Lifo is used you pay PIT on the first 5000. Only if a mixture of a capital and income is allowed/decreed as the accounting method the above statement from ML would be correct. However this method is rarely used

 

Again the method used will be the key here, I explained this several times. Caveat is that TRD accepts your documentations, a big if.

 

My take is still that TRD will let you self determine if you had any assesable income and in the case of capital gains you would be more or less tax free in most cases as you can transfer every cent of your principal before being taxed.

 

If there has been a change and TRD announced which method is to be used please let me know.

 

 

Here's the point in time where I updated the Guide, you may be able to user  that date to find the corresponding members report from a meeting with the TRD in Hua Hin where this aspect was confirmed.

 

 

[Mike Lister]

10 minutes ago, stat said:

I still do not understand why it is that Mike Lister can insult anyone on this forum without any repercussions so far.

Not an insult, a statement of fact acknowledged by the poster previously., Report it if it concerns you.

[stat]

8 minutes ago, Mike Lister said:

I'm not about to go digging for the source every of every quote that was ever made, just to prove to somebody that this or that was said, I know full well from history there's no mileage in that. If you don't want to believe the quote, it's your prerogative. 

So you do not have any document to back it up, that is exactly what I thought.  Sherrings states as an answer from TRD that an accepatable accounting method should be used. So I do not understand why you present your opinion "pro rate method will be used" as a fact but based on your history I do understand.

 

 

 

[Mike Lister]

11 minutes ago, stat said:

I think you still do not understand that this is a debate forum and people need to make up their own mind as there is no final "answer". We are talking probabilities here not facts. Feel free to leave the debate as you kindly suggested!

You may understand that, others may understand that, but there are many here who do not, they are the people I am suggesting who should not come here looking for useful information, given the present lack of rules and structure to the debate. 

[Mike Teavee]

Just now, stat said:

So you do not have any document to back it up, that is exactly what I thought.  Sherrings states as an answer from TRD that an accepatable accounting method should be used. So I do not understand why you present your opinion "pro rate method will be used" as a fact but based on your history I do understand.

 

I haven't seen a statement from Sherrings saying that so would appreciate a link to it. 

 

The Expat Tax Video Q&A sessions (freely available on YouTube & posted already on this thread) clearly stated their opinion that any remittances which included a Capital Gains element would be pro-rated based on the ratio of Investment to Gain.

 

If they are correct then repeating the example from earlier, an investment of £10,000 realising a £2,500 gain, would give a ratio of 80:20 Investment:Gain so remit £5000, £4000 would be Investment & £1,000 would be gain.   

 

 

[stat]

7 minutes ago, Mike Lister said:

Here's the point in time where I updated the Guide, you may be able to user  that date to find the corresponding members report from a meeting with the TRD in Hua Hin where this aspect was confirmed.

 

 

So seriously you have one user report versus a direct statement from TRD and you discard the TRD official statement and stick with your one user report as a 100% proven fact? In addition you put the change in your "document" as a proof to support your argument?

 

 

[stat]

2 minutes ago, Mike Teavee said:

I haven't seen a statement from Sherrings saying that so would appreciate a link to it. 

 

The Expat Tax Video Q&A sessions (freely available on YouTube & posted already on this thread) clearly stated their opinion that any remittances which included a Capital Gains element would be pro-rated based on the ratio of Investment to Gain.

 

If they are correct then repeating the example from earlier, an investment of £10,000 realising a £2,500 gain, would give a ratio of 80:20 Investment:Gain so remit £5000, £4000 would be Investment & £1,000 would be gain.   

 

 

 

 

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

Question 7 answered by TRD themself. However who decides which accounting method is to be used has not been answered so far. This is why it is obvious that the tax document is simply wrong presenting the pro rata method as a fact.

 

Edited June 24 by stat

[stat]

5 minutes ago, Mike Teavee said:

I haven't seen a statement from Sherrings saying that so would appreciate a link to it. 

 

The Expat Tax Video Q&A sessions (freely available on YouTube & posted already on this thread) clearly stated their opinion that any remittances which included a Capital Gains element would be pro-rated based on the ratio of Investment to Gain.

 

If they are correct then repeating the example from earlier, an investment of £10,000 realising a £2,500 gain, would give a ratio of 80:20 Investment:Gain so remit £5000, £4000 would be Investment & £1,000 would be gain.   

 

 

Can you kindly recall who from TRD made the statement that a pro rata method will be used? Thanks!

[NoDisplayName]

39 minutes ago, stat said:

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

Question 7

 

Question 7 explains how to calculate capital and capital gain (or loss). 

 

The answer to question 9 is more relevant.

Quote

Question 9: If yearly, I invest abroad and bring part of it back into Thailand, is the part I bring back into Thailand determined as capital or as assessable income?

Answer: For monies that are brought into Thailand, taxpayers have a duty to self-determine, based on facts and evidence, if the monies brought into Thailand are capital or assessable income.

 

Sherrings TRD response says I get to cherry pick what I remit.

 

I bought stock in 2015 for $10k, sold them this year for $15K.  I chose to reinvest $8K of the sale proceeds ($5K gains and $3K of the original capital) into NFT's.  The balance of the original capital, $7K, was remitted to Thailand.  Self-determined.

 

 

 

Edited June 24 by NoDisplayName

[Mike Teavee]

18 minutes ago, stat said:

 

 

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

Question 7 answered by TRD themself. However who decides which accounting method is to be used has not been answered so far. This is why it is obvious that the tax document is simply wrong presenting the pro rata method as a fact.

 

 

Thanks but.... 

 

... Does not say anything about LIFO/FIFO accounting methods used when remitting the money, it just says "The cost of the Investment is determined in accordance with a generally accepted accounting method that's appropriate for the Investment Type" which only impacts the Capital Gain calculation, not what happens when that money is remitted.

 

E.g. I buy some stock for a total of £20,000 & using FIFO rules, sell £10,000 of it making £2,500 profit on that tranche so my Investment to Gain ratio is 80:20, I remit £5,000 to Thailand and £4000 is investment, £1,000 is Gain. 

 

However, if I'm told to use LIFO I might only make £1,000 profit so my Investment to Gain ratio is approx. 90:10, I remit £5,000 to Thailand and £4,500 is Investment, £500 is Gain. 

 

Neither of those examples lets me remit £5,000 and claim it all came out of the original investments pool.

Edited June 24 by Mike Teavee

[Mike Lister]

15 minutes ago, stat said:

So seriously you have one user report versus a direct statement from TRD and you discard the TRD official statement and stick with your one user report as a 100% proven fact? In addition you put the change in your "document" as a proof to support your argument?

 

 

No, we also had the Expat Tax video, as MT pointed out to you already.

 

 

[Mike Teavee]

13 minutes ago, stat said:

Can you kindly recall who from TRD made the statement that a pro rata method will be used? Thanks!

As mentioned it featured in 2 Expat Tax Video Q&A sessions, Mike L has linked to one of them above. 

 

[stat]

12 minutes ago, Mike Lister said:

No, we also had the Expat Tax video, as MT pointed out to you already.

 

 

These are 2 british tax advisors talking about mainly DTA. There is no one from TRD stating anything like you claimed. Again I do not state that the accounting method is x,y,z I simply say it is wide open and it is up to TRD. So pls enlighten us why you chose to completly ignore the answer provided by TRD themself in the sherrings document.

[Mike Lister]

Just now, stat said:

These are 2 british tax advisors talking about mainly DTA. There is no one from TRD stating anything like you claimed. Again I do not state that the accounting method is x,y,z I simply say it is wide open and it is up to TRD. So pls enlighten us why you chose to completly ignore the answer provided by TRD themself in the sherrings document.

Enough! If you want details of the Hua Hin report, go trawl through the thousands of posts and find it for your self, if you don't believe what was said. Your actions now are nothing more than abiting.

[Raindancer]

17 minutes ago, Mike Lister said:

No, we also had the Expat Tax video, as MT pointed out to you already.

 

 

Hi Mike 

 

Thanks for the video.   But it is slightly confusing when he states that a 70 year old male, with spouse not working, has assessable income of 549000 thai baht.

 

Your previous tables amounted to 560000 baht for someone with the same scenario.  Or have I misunderstood the gentleman in the video?

It was also interesting to hear that even if your assessable income does fall below the TRD allowances of 560000, and thus no thai income tax liability, you still have to file a tax return, if your income is over 220000 baht.

 

 

 

 

[Mike Teavee]

1 minute ago, stat said:

ignore the answer provided by TRD themself in the sherrings document.

I’ve replied to that point above, Sherrings/TRD have made no comment about the remittance of Capital Gains. 

 

Here’s the 2nd video (CGT is around the 16 minute mark) 

 

[stat]

20 minutes ago, Mike Teavee said:

 

Thanks but.... 

 

... Does not say anything about LIFO/FIFO accounting methods used when remitting the money, it just says "The cost of the Investment is determined in accordance with a generally accepted accounting method that's appropriate for the Investment Type" which only impacts the Capital Gain calculation, not what happens when that money is remitted.

 

E.g. I buy some stock for a total of £20,000 & using FIFO rules, sell £10,000 of it making £2,500 profit on that tranche so my Investment to Gain ratio is 80:20, I remit £5,000 to Thailand and £4000 is investment, £1,000 is Gain. 

 

However, if I'm told to use LIFO I might only make £1,000 profit so my Investment to Gain ratio is approx. 90:10, I remit £5,000 to Thailand and £4,500 is Investment, £500 is Gain. 

 

Neither of those examples lets me remit £5,000 and claim it all came out of the original investments pool.

If you use FIFO in your example the first 20K would be principal i.e. tax exempt in Thailand when remitted. Other countries use all FIFO to my knowledge (US,UK, Germany etc). If that is indication enough for TRD to use Fifo no one knows besides a certain member of this forum.

[Mike Lister]

1 minute ago, Raindancer said:

Hi Mike 

 

Thanks for the video.   But it is slightly confusing when he states that a 70 year old male, with spouse not working, has assessable income of 549000 thai baht.

 

Your previous tables amounted to 560000 baht for someone with the same scenario.  Or have I misunderstood the gentleman in the video?

It was also interesting to hear that even if your assessable income does fall below the TRD allowances of 560000, and thus no thai income tax liability, you still have to file a tax return, if your income is over 220000 baht.

 

 

 

 

I don't have time to rewatch the video right now, I'll try and look into it later.

[Raindancer]

1 minute ago, Mike Lister said:

I don't have time to rewatch the video right now, I'll try and look into it later.

Ok.  Thanks

[stat]

2 minutes ago, Mike Teavee said:

I’ve replied to that point above, Sherrings/TRD have made no comment about the remittance of Capital Gains. 

 

Here’s the 2nd video (CGT is around the 16 minute mark) 

 

I was referring to Mike Lister that he is ignoring the statement from TRD not you, my apologies if I was unclear.

[stat]

4 minutes ago, Mike Lister said:

Enough! If you want details of the Hua Hin report, go trawl through the thousands of posts and find it for your self, if you don't believe what was said. Your actions now are nothing more than abiting.

There was no one from TRD in that video you linked. Your tone is simply not acceptable for a member of this forum.

[Mike Lister]

2 minutes ago, stat said:

I was referring to Mike Lister that he is ignoring the statement from TRD not you, my apologies if I was unclear.

Because that was the latest view that we observed which superseded the Sherrings statements, nothing was ignored, a view was taken based on the ExpatTax video and the Hua Hin interview with the TRD. Sorry if you don't like it but that's what happened, now stop being so argumentative and baiting..

[NoDisplayName]

7 minutes ago, Mike Teavee said:

I’ve replied to that point above, Sherrings/TRD have made no comment about the remittance of Capital Gains.

See Sherrings/TRD question 9.

[Mike Teavee]

13 minutes ago, stat said:

If you use FIFO in your example the first 20K would be principal i.e. tax exempt in Thailand when remitted. Other countries use all FIFO to my knowledge (US,UK, Germany etc). If that is indication enough for TRD to use Fifo no one knows besides a certain member of this forum.

No it wouldn't, FIFO would mean the oldest assets I own are sold first & then I'm taxed on the gain on those... 

 

E.g. £20,000 made up of:-

1. 5,000 shares at £1 
2. 2,500 shares at £2
3. 1,250 shares at £4  

Lets say those shares are now worth £5....

1. FIFO means I sell 2,000 of the 1st tranche at £5 = £10,000 for a gain (excluding costs / taper relief etc...) of £8,000
2. LIFO means I sell 1,250 from the 3rd Tranche at £5 (realising £6,250 for a profit of £1,250) & 750 from my 2nd tranche (realising £3,750 for a net profit £2,250) Total profit = £3,500.

 

Edit: Apologies if any of the maths is off but the GF is nagging to go out for dinner, hopefully people will understand the point I'm trying to make.

 

Edited June 24 by Mike Teavee

[Raindancer]

45 minutes ago, Mike Lister said:

I don't have time to rewatch the video right now, I'll try and look into it later.

Cancel that Mike. I misunderstood his comments.

 

 

[JohnnyBD]

There's about 6 acceptable cost basis methods in the US for stock sales as per the IRS. The average cost, lowest cost, highest cost, FIFO, LIFO and specified shares. I believe Fidelity uses the FIFO as default, but you can select the cost basis method you want as your default. I set my default as highest cost. But, I can still select the specific shares to sell when I place my sell order. My Fidelity tax forms show the capital gains based on which cost method I used, so that's what I would use to determine my assessable income if remitted. 

Edited June 24 by JohnnyBD

[anrcaccount]

9 minutes ago, JohnnyBD said:

There's about 6 acceptable cost basis methods in the US for stock sales as per the IRS. The average cost, lowest cost, highest cost, FIFO, LIFO and specified shares. I believe Fidelity uses the FIFO as default, but you can select the cost basis method you want as your default. I set my default as highest cost. But, I can still select the specific shares to sell when I place my sell order. My Fidelity tax forms show the capital gains based on the cost method I selected, so that's what I would use as my assessable income if remitted.

 

FIFO/LIFO and any other cost methods are only relevant for calculation of capital gains on stock sold, as it relates to shares. 

 

This does not address remittance of original capital , which IMO is not income , even consider cases where no gains, or losses, have been made.

 

I maintain Q9 of the Sherrings statement backs this up, that it is up to the individual to decide exactly what funds are remitted to Thailand and what funds remain offshore. Taxpayers can determine this. 

 

Gains are only the proceeds exceeding the original cost. OK, you can debate how this original cost is calculated, but I don't see a debate on remitting principal. 

 

Same principle applies for term deposits and on call accounts. Remitting original principal is not taxable (Q11), only income. Here's another opinion source for that referring to bonds, again, only the income is taxable, not the principal. 

https://thelegal.co.th/2023/10/18/qa-statement-issued-by-revenue-department-clarifying-taxation-applied-on-foreign-sourced-income/

[JohnnyBD]

13 minutes ago, anrcaccount said:

 

FIFO/LIFO and any other cost methods are only relevant for calculation of capital gains on stock sold, as it relates to shares. 

 

This does not address remittance of original capital , which IMO is not income , even consider cases where no gains, or losses, have been made.

 

I maintain Q9 of the Sherrings statement backs this up, that it is up to the individual to decide exactly what funds are remitted to Thailand and what funds remain offshore. Taxpayers can determine this. 

 

Gains are only the proceeds exceeding the original cost. OK, you can debate how this original cost is calculated, but I don't see a debate on remitting principal. 

 

Same principle applies for term deposits and on call accounts. Remitting original principal is not taxable (Q11), only income. Here's another opinion source for that referring to bonds, again, only the income is taxable, not the principal. 

https://thelegal.co.th/2023/10/18/qa-statement-issued-by-revenue-department-clarifying-taxation-applied-on-foreign-sourced-income/

Your point seems to be that we can determine whether we are remitting just the principal or capital gains, and I agree that we should be able to make that decision. I hope that's the case. I was just pointing out that if I did remit the principal & capital gains, I get to choose the cost basis method, not TRD.

Edited June 24 by JohnnyBD