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

[john donson]

simply do nothing till one day immigration tells you, on top of your 30 other copies, you now need a tax return...  guess that will be time to find greener pastures

[JohnnyBD]

I was reading on another expat site regarding foreign income, and someone posted that as long as you are transferring monies for the purpose to support family, then it's not taxable income. Does anyone know if that is true? He did not specify who it was being transferred to. If it was being transferred to his spouse from overseas, would that make it not taxable?

His quote is shown below:

 

To all,

Any links, threads, comments including mine are superseded by calling your bank or accountant.

You will not be taxed when transferring monthly income with the following reason

Support family..........

Doing this every month... never hear from anyone

[Mike Lister]

1 hour ago, JohnnyBD said:

I was reading on another expat site regarding foreign income, and someone posted that as long as you are transferring monies for the purpose to support family, then it's not taxable income. Does anyone know if that is true? He did not specify who it was being transferred to. If it was being transferred to his spouse from overseas, would that make it not taxable?

His quote is shown below:

 

To all,

Any links, threads, comments including mine are superseded by calling your bank or accountant.

You will not be taxed when transferring monthly income with the following reason

Support family..........

Doing this every month... never hear from anyone

The fact that he has never heard from anyone means nothing whatsoever, the TRD is highly unlikely to know about those payments, unless he files a tax return....at least for now! Neither the TRD nor the banks are watching those payments flow through but that is not the issue. The problem will happen downstream when in later years the TRD has cause to ask, "why were those payments not reported on your tax return"? And of course, not reporting them is tax evasion, assuming they represent tax assessable income and he is tax resident here.

 

This then comes back to the open issue we have in our log where we are unsure if assessable income remitted from overseas, directly to a third party in Thailand, escapes Thai tax or not and/or who must report that income, if anyone at all. If those payments were a Gift, fine, but do they meet all  the requirements of the Gift Tax law, another factor we don't know the answer to with certainty?

 

It seems to me the person on the other site who reported those payments and bragged that nothing bad happened, isn't the sharpest knife in the drawer! That's not unlike running across a six lane freeway with your eyes closed and bragging that it's perfectly safe!

[Mike Lister]

6 hours ago, john donson said:

simply do nothing till one day immigration tells you, on top of your 30 other copies, you now need a tax return...  guess that will be time to find greener pastures

Members who regard Thailand as their home, those who have families here and have lived here for decades and have no other place to go, don't want to wait until they reach that point!

[Yumthai]

4 hours ago, Mike Lister said:

Members who regard Thailand as their home, those who have families here and have lived here for decades and have no other place to go, don't want to wait until they reach that point!

Long-term residents who assess there is a non-zero probability of tax audit/enforcement and need certainty should, in coherence, consider quitting Thailand tax residence status asap.

 

Why? Because the huge majority of non-working foreign residents in Thailand has never paid tax for decades on their foreign-sourced remittances (based on the old remittance rule that was not strictly followed and this income potentially not fully exempted) and they are now living with the Sword of Damocles hanging over their head, which could harshly fall with up to 10 years retroactive fines & penalties at any random audit.

Do I believe this will happen? Not.

 

[EVENKEEL]

5 hours ago, Mike Lister said:

Members who regard Thailand as their home, those who have families here and have lived here for decades and have no other place to go, don't want to wait until they reach that point!

There will be an agent to handle this, I'm quite sure. I started with an OA visa and when Insurance became mandatory I didn't need the ins. so instead of buying a 40-70K policy I didn't want an agent handled it for 3K baht.

[kevinsan]

For those here in the 80's till the tax office mysteriously burned down in 1992. This is how it was done.

 

After 180 days, if one desired to leave the country, they needed a tax stamp in their passport. No tax stamp no exit.

 

The process. Go to the tax office. You wait to be seated with the auditor. They look at you and demand a number. You plead poverty and counter. A number is negotiated and the stamp added.

 

These days the minimum tax would be 20% on 65k per month minus the 140,000 or more for deductions. Or around 130k baht for most single retirees. Excluding government pensions of course.

 

For reference, a few expats realized that provincial tax auditors would issue the stamp for 500 baht. But that was back when Thailand was really fun.

 

Either way, this issue needs to be clarified by the tax office by mid June. No taxation without education.

[topt]

1 hour ago, kevinsan said:

Either way, this issue needs to be clarified by the tax office by mid June. No taxation without education.

I take it you mean June 2024 and which particular issue are you referring to?

 

Oh and I think your calculations are quite a bit out..........IE far too much

[DrPhibes]

On 5/23/2024 at 5:53 PM, Mike Lister said:

Whenever I've filed my Thai tax returns, the TRD has not bothered to enter my US SS into their system and has regarded it as excluded income.

Yes, depending on each countries tax treaty, some items of income are excluded from declaring (such as US Social Security), some types of income are taxable to the country you where you reside with a tax credit to the country where the income comes from if taxed there, and some are taxed only in the country you reside in. Each countries tax treaty is different on the aforementioned treatment.  You really think the TRD is going to be versed on each countries tax treaty?  They can't ignore them,  these are actual treaties between countries that are higher than any authority the TRD has.  Do taxes in the US for a living with about 50 guys living overseas.  Not sweating this until there is more clarification out of the Thai gov.

 

[andre47]

6 minutes ago, DrPhibes said:

Yes, depending on each countries tax treaty, some items of income are excluded from declaring (such as US Social Security), some types of income are taxable to the country you where you reside with a tax credit to the country where the income comes from if taxed there, and some are taxed only in the country you reside in. Each countries tax treaty is different on the aforementioned treatment.  You really think the TRD is going to be versed on each countries tax treaty?  They can't ignore them,  these are actual treaties between countries that are higher than any authority the TRD has.  Do taxes in the US for a living with about 50 guys living overseas.  Not sweating this until there is more clarification out of the Thai gov.

 

As far as I understand the Thai tax law, you must report all amounts that you transfer to Thailand in a year in your tax return, regardless of whether they are taxable or not. You then state the origin of the respective amounts and whether you consider them to be taxable or, if not, for what reason they are tax-free. You will probably have to prove the reason for exemption for amounts that are tax-free.

[Mike Lister]

2 minutes ago, andre47 said:

As far as I understand the Thai tax law, you must report all amounts that you transfer to Thailand in a year in your tax return, regardless of whether they are taxable or not. You then state the origin of the respective amounts and whether you consider them to be taxable or, if not, for what reason they are tax-free. You will probably have to prove the reason for exemption for amounts that are tax-free.

There is nowhere on the tax return forms to declare excluded income. It is not a requirement to list non-assessible income

 

There is also np requirement to prove anything, unless audited and asked to do so.

[andre47]

24 minutes ago, Mike Lister said:

There is nowhere on the tax return forms to declare excluded income. It is not a requirement to list non-assessible income

 

There is also np requirement to prove anything, unless audited and asked to do so.

I agree. You seem to be right about that. 

[jaideedave]

On 5/20/2024 at 1:38 PM, Dogmatix said:

 

Clearly things will be extremely chaotic in implementing a most likely unlawful re-interpretation by a bureaucrat without any supporting regulations or preparation whatsoever and involving the application of dozens of slightly different DTAs which RD officers have never had a reason to even look at, let alone fully understand how to implement them. 

 

I was giving some thought to what types of remittance will be easiest to handle and which will, in my humble opinion alone, be least likely to attract unwelcome attention from the RD.  I give my own rankings. Others will have different opinions.

 

1.  Documented loan from offshore company.

2. Gift to spouse.

3. Remittance from balance already in bank account prior to 1 Jan 2024.

4. Remittance of capital gains from stocks where no tax has been paid (this one is easy because no DTA tax credit is available - just pay Thai tax in full.)

4. Remittance of income from employment or pension claiming DTA tax credit.

5. Remittance of dividends or investment gains claiming DTA tax credits.

6. Remittance of rental income on a monthly or quarterly basis. (This one is a complete PITA because you have to file a mid year PND 94 with estimate of full year income as well as year end PND 90. In addition you will have to claim tax credits under DTAs.  Probably best never to remit post 2024 property income, sell the property and/or leave Thailand, if you are dependent on rental income to survive in Thailand.)

 

Just my ideas that don't constitute advice to anyone.

Will my simple theory work? Income 80k baht/mon.Transfer 40k to my wife and 40k to myself from abroad. Pay any taxes due on 480k annual income.

[kevinsan]

3 hours ago, topt said:

I take it you mean June 2024 and which particular issue are you referring to?

 

Oh and I think your calculations are quite a bit out..........IE far too much

Just read the 2023 forms and rates. I'm a bit high.

 

Single with exemption like most retirees without government pension:

65k x 12 = 780,000. 780,000 - 150,000 exemption = 630,000. Between 500k and 750k the tax rate is 12,500 plus 15% tax on amount over 500k. 630,000 - 500,000 = 130,000. 130,000 x .15 = 19,500. So simple tax  would be 12,500 + 19,500 = 32,000.

 

Single without exemption:

780,000. Between 750k and 1m tax rate is 65,000 plus 20% on income over 750k. Same math as above gives a tax rate of 65,000 + 6000 = 71,000.

 

Just a cursory read. Obviously other income streams are taxed at different rates. Clarification by mid-June 2024 would be nice.

[Mike Lister]

24 minutes ago, kevinsan said:

Just read the 2023 forms and rates. I'm a bit high.

 

Single with exemption like most retirees without government pension:

65k x 12 = 780,000. 780,000 - 150,000 exemption = 630,000. Between 500k and 750k the tax rate is 12,500 plus 15% tax on amount over 500k. 630,000 - 500,000 = 130,000. 130,000 x .15 = 19,500. So simple tax  would be 12,500 + 19,500 = 32,000.

 

Single without exemption:

780,000. Between 750k and 1m tax rate is 65,000 plus 20% on income over 750k. Same math as above gives a tax rate of 65,000 + 6000 = 71,000.

 

Just a cursory read. Obviously other income streams are taxed at different rates. Clarification by mid-June 2024 would be nice.

I suggest you read the following:

 

 

[Mike Lister]

1 hour ago, jaideedave said:

Will my simple theory work? Income 80k baht/mon.Transfer 40k to my wife and 40k to myself from abroad. Pay any taxes due on 480k annual income.

It depends on several factors:

 

Is that income Thai tax assessable?

 

The amount of your TEDA

 

Presumably you will use Gift Tax law to transfer to your wife? If so, does the Gift meet the requirements of the law and whether or not the income is assessable.

 

[chang50]

14 hours ago, Mike Lister said:

Members who regard Thailand as their home, those who have families here and have lived here for decades and have no other place to go, don't want to wait until they reach that point!

Exactly many of us have burned our bridges..

[chang50]

After studying the tax return form 90 and the notes for filling it in I can't see a section for claiming tax credit under a dta with one's home country or where you put the 150.000 baht allowance on the attachment.Perhaps someone could do an example form as was done with form 91?Thanks.

[Mike Lister]

1 minute ago, chang50 said:

After studying the tax return form 90 and the notes for filling it in I can't see a section for claiming tax credit under a dta with one's home country or where you put the 150.000 baht allowance on the attachment.Perhaps someone could do an example form as was done with form 91?Thanks.

We are awaiting the release of the redesigned tax form in the hope that it allows for this.

[chang50]

3 minutes ago, Mike Lister said:

We are awaiting the release of the redesigned tax form in the hope that it allows for this.

Thanks Mike very helpful as always.

[0ffshore360]

3 hours ago, Mike Lister said:

There is nowhere on the tax return forms to declare excluded income. It is not a requirement to list non-assessible income

 

There is also np requirement to prove anything, unless audited and asked to do so.

I extract on an ad hoc basis funds derived from pre taxed savings . I find no reason to declare to the TRD foreign exchange that is 100% entered into the Thai economy.

IMHO any foreign individual that is deemed to be a taxpayer to the TRD should also then be eligible for participation in the SS system as are those who pay taxes from employment on work permits.

I for one am not about to subject myself to the TRD unless summoned.

[Mike Lister]

An off topic post has been removed 

[Yumthai]

56 minutes ago, 0ffshore360 said:

I for one am not about to subject myself to the TRD unless summoned.

At this point that's by far the smartest move.

[UKresonant]

3 hours ago, kevinsan said:

Just read the 2023 forms and rates. I'm a bit high.

 

Single with exemption like most retirees without government pension:

65k x 12 = 780,000. 780,000 - 150,000 exemption = 630,000. Between 500k and 750k the tax rate is 12,500 plus 15% tax on amount over 500k. 630,000 - 500,000 = 130,000. 130,000 x .15 = 19,500. So simple tax  would be 12,500 + 19,500 = 32,000.

 

Single without exemption:

780,000. Between 750k and 1m tax rate is 65,000 plus 20% on income over 750k. Same math as above gives a tax rate of 65,000 + 6000 = 71,000.

 

Just a cursory read. Obviously other income streams are taxed at different rates. Clarification by mid-June 2024 would be nice.

If funds are from pre-taxed overseas assessable income, what are you stating on the form?

 

Gross 

or 

Net  remitted?

[BillyBloggs]

One good thing for Aussie ex military and civil servants our so called pensions are exempt, so I will only be bringing in that money from now on and if top up needed any money from bank account held before 1jan2024 and dividends that have already been taxed. Aged pension is not exempt, use it to pay for travel etc with a Oz travel agent.

[Dogmatix]

On 5/25/2024 at 1:31 PM, kevinsan said:

For those here in the 80's till the tax office mysteriously burned down in 1992. This is how it was done.

 

After 180 days, if one desired to leave the country, they needed a tax stamp in their passport. No tax stamp no exit.

 

The process. Go to the tax office. You wait to be seated with the auditor. They look at you and demand a number. You plead poverty and counter. A number is negotiated and the stamp added.

 

These days the minimum tax would be 20% on 65k per month minus the 140,000 or more for deductions. Or around 130k baht for most single retirees. Excluding government pensions of course.

 

For reference, a few expats realized that provincial tax auditors would issue the stamp for 500 baht. But that was back when Thailand was really fun.

 

Either way, this issue needs to be clarified by the tax office by mid June. No taxation without education.

 

I was here for a about the last year of tax clearances but I had no idea what the process was like. My secretary used to take my passport and give to a messenger in the morning who went to the tax office and brought it back the same afternoon with a tax clearance stamp in it. I would sign an approval for petty cash to pay for it but can't remember how much it cost. 

[Dogmatix]

18 hours ago, Mike Lister said:

We are awaiting the release of the redesigned tax form in the hope that it allows for this.

 We might wait a long time for the redesigned PND 90 tax return form with the spaces to claim tax credits.  Tax credits have already been claimed under DTAs without a new form, so they may not feel a strong compulsion.  PND 90 only covers income from employment.  So they would also need to redesign PND 91 covering income from other sources.

 

Since it is unclear whether foreign state pensions are considered income from employment, which technically they are not, or income from other sources Or perhaps are not assessable at all like the Thai old age allowance).  If they are considered income from other sources state pension income should be reported on the PND 90 tax return which is more detailed and complicated to file than PND 91.  Anyone who remits post-2024 interest or dividend income or cap gains & etc will have to fill in PND 91 anyway.

 

Whether income, including state pensions, are considered PND 91 or 90 affects the threshold for filing a tax return.  If it is PND 91 (income from employment only) the threshold for tax filing is 120k but, if it is PND 90, it is 60k only.   

[Dogmatix]

Something to watch out for. Scammers are sending letters that look exactly like letters from the RD saying they have received details of your income that have been posted to your tax accoubt  and asking you to log in to a fake RD site from a QR code to check but actually to provide personal details in a phishing scam. I saw it in a Thai language LINE group. 
 

Once you have a TIN you could fall for something like this, if you get a Thai to read the letter for you. Thai government officials, bank staff and others sell genuine names, addresses, phone numbers and ID numbers to scammers by the thousands. Foreign names don’t necessarily deter them. I was harassed by one of the fake Thai police station call centre scams for months. They make background noise that sounds exactly like a Thai police station from somewhere in Cambodia near the border and intimidate you claiming you have transferred money to someone involved in money laundering or drug dealing. They try to get you to disclose bank statements to prove you didn’t transfer to that person and you are done. They had all my personal details including both my middle names and ID number which could only have been provided by a corrupt government official, banker or similar.

 

The other issue raised is that the RD might eventually get details of overseas remittances and genuinely post them as income to your tax account.

 

 

[Mike Lister]

A Monday morning update regarding the contents of the list of unknowns/unclear issues.

 

k) - how does the TRD distinguish between principal (funds from legacy investments, inheritance, original investment principal) versus earnings (interest, dividends, remuneration) from commingled funds, determination of applicable foreign currency exchange rates for tax assessment, etc. 

 

P) - Returned to the list: The issue of whether income earned in a year when tax resident but remitted to Thailand in a year when not tax resident………….is it taxable? Many contradictory reports on this, even from within TRD and tax consultants themselves. 

 

Q) - Does the TRD regard credit card spending in Thailand, using a foreign credit card, assessable income. The early indication on this point is yes, it does.

 

R) - Is foreign loan monies remitted to Thailand, considered assessable income, eg for the purchase of a vehicles, condos, property, etc. 

 

S) -  If a foreigner gifts offshore assessable income, direct to a Thai resident, is the foreigner required to report that income, as if they themselves had received it directly?

 

[hcvc]

Seeking some clarification on monies I remitted to Thailand in 2023.

 

Three banks in the US.

Bank (A) receives payments from my IRS - Traditional IRA.

Bank (B) receives pension payments which may be taxable under the DTA. Bank (C) consists of savings accrued prior to my coming to Thailand.

 

In 2023 I only utilized Bank (C) to remit money to Thailand. Savings accrued prior to my coming to Thailand.

 

My questions – relating to tax rules in place before January 2024.

 

Are funds derived from savings and remitted to Thailand considered taxable income?

 

Is income held in a US bank (Bank A and Bank B) - but not remitted directly to Thailand considered assessable and/or taxable income by the Thai Revenue Department?

 

Any helpful insights to my questions will be appreciated.