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

[Phulublub]

36 minutes ago, sometimewoodworker said:

Your supposition is not correct that they will have little tax to pay but correct that a reduction in income will have a lifestyle impact 

case in point

a British pensioner is receiving a pension of £12,000 he currently pays no tax in the U.K. and has paid no tax in Thailand due to remitting the pension in the following year. He now has a Thai tax bill of ฿17,000+  

After perosnal allowance, age allowance and zero band, remainder would be taxed at 5% - total about 7.5K.  But can also make deductions for spouse, insurance premiums....so about £14 a month. 

 

Beware jumping into what may appear to be a greemner field without doing proper research.

 

PH

[KhunHeineken]

55 minutes ago, sometimewoodworker said:

Your supposition is not correct that they will have little tax to pay but correct that a reduction in income will have a lifestyle impact 

case in point

a British pensioner is receiving a pension of £12,000 he currently pays no tax in the U.K. and has paid no tax in Thailand due to remitting the pension in the following year. He now has a Thai tax bill of ฿17,000+  

Whilst I'm no Musk or Bezos, or a Saudi prince, I don't consider 17,000 baht a lot of money.  I see it as another member said, "near zero tax to pay."  

 

That said, I do take your point, and I did mention it myself, that small money out of small money could impact the lifestyle of some here. 

 

55 minutes ago, sometimewoodworker said:

There I completely disagree. There is plenty of information about how to remain legally.

1) calculate your income.

2) calculate the tax due

3) assuming a tax liability file a tax return and pay your taxes.

4) alternatively if there is no tax liability either file a tax return (many offices do not want zero returns) or don’t, pay no tax

5) alternative 2 if you are due a refund of withholding tax from banks, file a tax return, collect your refund.

 

how is that not clear?

None of what you have posted accounts for a DTA, amongst other this as well. 

 

Has the Thai authorities stated how they will process a foreigner's tax affairs in relation to EVERY expat from EVERY country that Thailand has a DTA with?

 

What you have posted is the law in its simplicity.  It goes a lot deeper than the five points you posted, for many expats.   

 

 

 

[sometimewoodworker]

13 minutes ago, Phulublub said:

After perosnal allowance, age allowance and zero band, remainder would be taxed at 5% - total about 7.5K.  But can also make deductions for spouse, insurance premiums....so about £14 a month. 

 

Beware jumping into what may appear to be a greemner field without doing proper research.

 

PH

He is un married, pays no insurance so my calculations are correct and his tax bill is £30 per month

 

it is correct that various allowances may reduce his tax liability as can doing things like charitable donations. But he now has a Thai tax liability that did not exist before.

[Phulublub]

1 minute ago, sometimewoodworker said:

He is un married, pays no insurance so my calculations are correct and his tax bill is £30 per month

 

it is correct that various allowances may reduce his tax liability as can doing things like charitable donations. But he now has a Thai tax liability that did not exist before.

Nope.  My £14 a month assumes no other deductions after his own personal allowances

 

PH

[sometimewoodworker]

5 minutes ago, KhunHeineken said:

None of what you have posted accounts for a DTA. 

You are incorrect as I said in point number 1

6 minutes ago, KhunHeineken said:

1) calculate your income.

You are the one who has the duty and responsibility of knowing your country’s DTA so understanding what is assessable income and what is not. You calculate your income.

The TRD doesn’t hold your hand.

If they disagree with your return they can challenge YOU to justify YOUR calculation.

 

12 minutes ago, KhunHeineken said:

What you have posted is the law in its simplicity.  It goes a lot deeper than the five points you posted, for many expats.   

Of course it does, and of course many will need advice on the various points.

 

BUT that doesn’t invalidate the fact that the law is really really simple for many who just have a pension or 2

[Mike Lister]

4 minutes ago, Phulublub said:

Nope.  My £14 a month assumes no other deductions after his own personal allowances

 

PH

I find it confusing to make these calculations in two currencies. 

 

If the amount is 12,000 Pounds, at 45 that equalls 540,000 baht.

 

Deduct:

60k Personal Allowance

190k over age 65 Allowance

100k Remitted Pension Allowance

150k zero rated tax band, that totals 500,000 baht

 

The remaining 40,000 baht is taxable at 5% so 2,000 baht in tax or at 45 per Pound, 44 Pounds.

 

"After perosnal allowance, age allowance and zero band, remainder would be taxed at 5% - total about 7.5K.  But can also make deductions for spouse, insurance premiums....so about £14 a month". 

 

I rushed that and didn't check it but I think it's right.

 

 

 

 

[sometimewoodworker]

16 minutes ago, Phulublub said:

Nope.  My £14 a month assumes no other deductions after his own personal allowances

 

PH

[Mike Lister]

1 minute ago, sometimewoodworker said:

I think you may have missed two TEDA elements, see my list above.

[KhunHeineken]

51 minutes ago, Mike Lister said:

That's not entirely correct because the terms of a DTA over ride national tax laws. That means that whilst a pension might be considered to be income from employment, the DTA may rule it as exempt, which would take precedent.

My understanding is a DTA ensures money is not taxed twice.  A DTA sets out which country has primary taxing rights, and which country must give tax credits to the funds that have already been taxed.

 

This is a short 9 minute youtube clip that explains the "myth" that if money is taxed in one country, it can not be taxed in another country. 

 

 

[topt]

I note that the Pattaya Mail have finally issued a (sort of) "correction" to the previous articles from their "tax expert".............dated today

https://www.pattayamail.com/latestnews/news/navigating-foreign-pension-income-tax-for-expatriates-in-thailand-465500

Quote

Notably, P.O. 162 explicitly states that foreign-sourced pension income received before January 1, 2024, can be brought into Thailand without incurring local taxes, at any future point. 

No mention in the article that in the previous articles he got it wrong and even the above statement mentions only pension income .......

[Mike Lister]

3 minutes ago, KhunHeineken said:

My understanding is a DTA ensures money is not taxed twice.  A DTA sets out which country has primary taxing rights, and which country must give tax credits to the funds that have already been taxed.

 

This is a short 9 minute youtube clip that explains the "myth" that if money is taxed in one country, it can not be taxed in another country. 

 

 

That's not really the correct interpretation.

 

The purpose of a DTA is to determine which country has primary taxation rights over the various types of income and to set out secondary rights or even exclusions.

 

It's too simplistic to say that a DTA prevents double taxation, despite what the revered YouTube says! In a worst case scenario, the DTA may switch the right to tax income from one low level taxation country, to another that taxes the same income at a higher rate. 

[KhunHeineken]

21 minutes ago, sometimewoodworker said:

You are incorrect as I said in point number 1

A DTA sets out taxing rights, not percentages, thresholds etc.  

 

23 minutes ago, sometimewoodworker said:

You are the one who has the duty and responsibility of knowing your country’s DTA so understanding what is assessable income and what is not. You calculate your income.

The TRD doesn’t hold your hand.

If they disagree with your return they can challenge YOU to justify YOUR calculation.

So if everyone simply states they have no tax to pay, what do YOU think the TRD will do?  

 

24 minutes ago, sometimewoodworker said:

Of course it does, and of course many will need advice on the various points.

 

BUT that doesn’t invalidate the fact that the law is really really simple for many who just have a pension or 2

You have contradicted yourself, and your post only focuses on pensioners.  Any advice for the many who are not on a pension???? 

[sometimewoodworker]

1 minute ago, Mike Lister said:

I think you may have missed two TEDA elements, see my list above.

This is why people will benefit from advice tailored to their personal circumstances.

you have assumed that the person was over 65, I did not. There could be a ‘100k Remitted Pension Allowance“ there may not I am waiting for my consultation next month to be sure exactly how much of my assessable income I can bring in tax free

[Mike Lister]

1 minute ago, sometimewoodworker said:

This is why people will benefit from advice tailored to their personal circumstances.

you have assumed that the person was over 65, I did not. There could be a ‘100k Remitted Pension Allowance“ there may not I am waiting for my consultation next month to be sure exactly how much of my assessable income I can bring in tax free

I haven't assumed anything, that poster does tell us he's a pensioner who is remitting pension hence he's over 65 years:

 

"a British pensioner is receiving a pension of £12,000 he currently pays no tax in the U.K. and has paid no tax in Thailand due to remitting the pension in the following year. He now has a Thai tax bill of ฿17,000+".  

[KhunHeineken]

2 minutes ago, Mike Lister said:

That's not really the correct interpretation.

 

The purpose of a DTA is to determine which country has primary taxation rights over the various types of income and to set out secondary rights or even exclusions.

 

It's too simplistic to say that a DTA prevents double taxation, despite what the revered YouTube says! In a worst case scenario, the DTA may switch the right to tax income from one low level taxation country, to another that taxes the same income at a higher rate. 

I get what you are saying, Mike, but it's "baby steps" for many on this forum. Let's just start with the basics and progress from there. 

 

I know from another thread many are / were under the belief that if their money was taxed in one country, it can't be taxed in another country, which is not correct. 

[sometimewoodworker]

10 minutes ago, KhunHeineken said:

My understanding is a DTA ensures money is not taxed twice.  A DTA sets out which country has primary taxing rights, and which country must give tax credits to the funds that have already been taxed.

That is partly correct, but missed the point that all DTAs are country specific and some of them specifically exclude certain categories from being assessed for Thai income 

[sometimewoodworker]

22 minutes ago, Mike Lister said:

I haven't assumed anything, that poster does tell us he's a pensioner who is remitting pension hence he's over 65 years:

There you go again making an assumption.

A pension can be paid to someone who is under 65. 
That the vast majority of pension recipients are over 65 does not stop someone under 65 being in receipt of a pension.

indeed, though it would be exempt due to the DTA, a U.K. armed forces pension is immediately payable for someone retiring at 60.

 

NB pensioner NOUN 

• a person who receives or lives on a pension.

please note there is no definition of age in the dictionary 

 

EDIT note

RAILWAYS PENSION

”If you were a member of the Railways Pension Scheme after 5 April 2006 but before 4 November 2021 and were born before 6 April 1973, the earliest you can claim your pension is 55”

 

[Mike Lister]

Just now, sometimewoodworker said:

There you go again making an assumption.

A pension can be paid to someone who is under 65. 
That the vast majority of pension recipients are over 65 does not stop someone under 65 being in receipt of a pension.

indeed, though it would be exempt due to the DTA, a U.K. armed forces pension is immediately payable for someone retiring at 60.

 

NB pensioner NOUN 

• a person who receives or lives on a pension.

please note there is no definition of age in the dictionary 

Whatever you want it to be is fine.

 

.

[Mike Lister]

32 minutes ago, topt said:

I note that the Pattaya Mail have finally issued a (sort of) "correction" to the previous articles from their "tax expert".............dated today

https://www.pattayamail.com/latestnews/news/navigating-foreign-pension-income-tax-for-expatriates-in-thailand-465500

No mention in the article that in the previous articles he got it wrong and even the above statement mentions only pension income .......

Face saving exercise.

[sometimewoodworker]

5 minutes ago, Mike Lister said:

Whatever you want it to be is fine.

 

.

The point is that all tax advisors need to know much more than the majority have any need to share to share in a public forum.

Quite a reasonable number of readers will benefit from the advice of a professional 

[KhunHeineken]

28 minutes ago, sometimewoodworker said:

That is partly correct, but missed the point that all DTAs are country specific and some of them specifically exclude certain categories from being assessed for Thai income 

True, but like I said in a post to Mike, perhaps start with "baby steps" for members who are trying to navigate through the information about this tax/s. 

 

There are some difficult decisions coming up for many expats in the near future.  Basically, Thailand may no longer be a value for money retirement destination, and there is a very real possibility some may have to seek out another country in which to reside in for their twighlight years.   

[Mike Lister]

3 minutes ago, sometimewoodworker said:

The point is that all tax advisors need to know much more than the majority have any need to share to share in a public forum.

Quite a reasonable number of readers will benefit from the advice of a professional 

We've already been down that road many times and have said repeatedly that everyone should consider consulting an expert in Thai tax, if they have any doubts or concerns whatsoever. In the information guide we compiled (linked below), we repeat that sentiment about half a dozen times at least.

 

The other point to make is that many of us have tried very hard to ensure that no tax advice is given here, only information about Thai tax and the Revenue Code, in fact, we have had a number of fallings out where members have tried to give advice. 

 

 

 

[Ben Zioner]

2 hours ago, Mike Lister said:

That's not entirely correct because the terms of a DTA over ride national tax laws. That means that whilst a pension might be considered to be income from employment, the DTA may rule it as exempt, which would take precedent.

I only quoted and underlined TRD's definition of "income from employment". I am not concerned by DTA's.

[stat]

11 hours ago, TroubleandGrumpy said:

Mate - IMO it will be difficult to 'declare correctly' any financial information to TRD under a global system - let alone a brokerage account. Just look at all the impossible BS Immigration requires from us with regards to their forms and documents - and from Immigration, Foreign Affairs, and the Amphur when we get officially married.  I cannot see that TRD will just accept a bank statement made by a foreign bank printed out from an online download - just look at what they demand from their own banks. How about 'taxation records' from your home country's Tax Dept - from January to December when their financial year is July to June or May to April - and getting that in an approved format and quickly enough to lodge before end March?  Good luck with getting all that done - I know mu Tax Dept in Australia will say No - because I already asked - and fair enough, imagine all their work if every taxpayer can get detailed records from any month to any month - they aint gonna do it.  IMO under a global system it will be extremely difficult to provide 'correct'  financial records to TRD for those reasons above, and because under the PIT system in each Province the TRD Officers have little to no understanding or knowledge of how overseas financial arrangements work in each country.   If Thailand goes to a global system of taxation, and therefore taxes are liable on all money overseas, not just that remitted into Thailand, then that becomes a whole new level of difficulty.  My advice from one of those legal/tax companies was that companies get that all done by accredited tax/legal agents (and pay big for it) and that TRD rarely ask for further details - but those same TRD Officers are not those in the Provinces doing PIT returns.  

Spot on! In Germany there are very few tax consultants who understand brokerage accounts and know the rules. Thailand does not even have rules regarding treatment of complicated instruments/accounting methods which could be good or bad.

[TroubleandGrumpy]

22 hours ago, JimGant said:

Right. Be firm. That's why my posts are so adamant about: Don't just listen to Mike Lister's monotonous dialogue about having to file a tax return, 'cause you have X amount of assessable income, and because it's the law. Use your head; evaluate other poster's inputs on "no reports of any enforcement." Or, if ever enforced, what damage could be done. But relatedly, yes, if you can file online in 10 minutes, maybe you should (but, again, now you'll be in the TRD tax filer data base -- which makes you a bigger target than if you weren't in the data base). Or, worst case, spend a day, hunt for parking, and  pay 10000 baht -- to one of these tax preparers whose only interest is their own, not yours (go back and read about fiduciaries).

 

Anyway, inputs here, in addition to Mike Lister's, are, I believe, helpful for allowing the reader to better make a decision. Unfortunately, Mike views these inputs only as personal attacks and thread creep -- and as unhelpful. Sigh.

 

Yes indeed Jim - he takes it far too personally. Here is my latest take on one of those issues we disagree about - Gifts.

 

Section 38_64 | The Revenue Department (English Site) (rd.go.th)

 

Go to Section 42 - Paragraphs 27, 28, 29

 

IMO everyone should read the whole Section in detail - I have found several more exemptions.

I know some people say "but this/that/it only applies to Thais and Thai things"

But I say BS - there is nothing that says it does not refer to Foreigners.

 

TRD is going to provide an updated Tax Code and Guide to Personal Income Tax Return for 2024 later this year. Perhaps that will also detail and explain those things Expats have been 'discussing'. 

Year 2023 | The Revenue Department (English Site) (rd.go.th)

Please not that the Guide to Personal Income Tax Return (ภ.ง.ด.90) is the PIT Guide for people "who received incomes not only from employment" and that Guide to Personal Income Tax Return (ภ.ง.ด.91) is the PIT Guide for people "who received incomes from employment only."   

 

As I have said before, and been advised, IMO unless you have to pay income taxes, after all exemptions and allowances and DTA provisions, then you do not have to lodge a tax return.  The Tax Code and Guide will help you calculate if you do have to pay income taxes, but the DTAs are a specialist area and each Country's DTA with Thailand does vary somewhat.  As a person that dealt with Contract Law for over 30 years in business, I have some experience in reading detailed lengthy technical and legal documents. 

 

My advice to all, is that many people (laymen and professionals) will point to one clause/part and then say "see you do have to ........"   I have read a fair bit of the Thai Tax Code and Guides and they are full of contradictions and confusion.  IMO there is not one TRD Officer who fully understands how those DAT documents apply when a PIT person is using their Country's DTA to claim exemptions/allowances. There are 61 DTAs and they have been clearly written for Companies with PIT provisions tacked on.  As far as I have been told, TRD overall relies on the professional tax companies who use those DTAs for the Company taxation returns that they receive and process. 

[TroubleandGrumpy]

14 hours ago, KhunHeineken said:

There are some difficult decisions coming up for many expats in the near future.  Basically, Thailand may no longer be a value for money retirement destination, and there is a very real possibility some may have to seek out another country in which to reside in for their twighlight years.   

I have to say that in response to your "may no longer be a value for money retirement destination" that the fact is that for many people Thailand IS no longer a value for money retirement destination. When I first started looking at where to retire overseas in 2010, the number 1 or 2 in the World Lists for SEAsia was always Thailand.  Now Vietnam, The Philippines, Malaysia and Indonesia (and even one list Cambodia) are listed above them on most lists.  This change started happening after the Junta started making it less attractive for retired Expats (remember - bad guys out). This new tax situation has now placed Thailand last - because no one else taxes their incomes from overseas - every single one of those other countries either excludes retired Expats specifically or provides them an exemption (as long as the money brought into the country is not for 'activities' in their country).

 

Thailand is clearly hell bent on no longer being the chosen destination for retired Expats in SEAsia.  I think of it this way - when a Tourist enters any country he/she and brings with them their money to pay for things while on holiday.  That money they bring in can be in currency, or transfers, or credit cards, or ATMs, or into a Thai bank account, etc.  What sort of idiot country would try to apply income taxes to Tourists who stay more than 179 days in the country over a one year period, bringing in and spending their money - and paying all the local country taxes such as VAT etc.  Well, that is what we are in Thailand - long-stay Tourists who 'report' every 90 days, because that is the longest legal stay in Thailand for a Tourist. If this was 2010, I would be looking at The Philippines or Malaysia - absolutely - planned visits to Thailand only. 

[Mike Lister]

16 minutes ago, TroubleandGrumpy said:

I have to say that in response to your "may no longer be a value for money retirement destination" that the fact is that for many people Thailand IS no longer a value for money retirement destination. When I first started looking at where to retire overseas in 2010, the number 1 or 2 in the World Lists for SEAsia was always Thailand.  Now Vietnam, The Philippines, Malaysia and Indonesia (and even one list Cambodia) are listed above them on most lists.  This change started happening after the Junta started making it less attractive for retired Expats (remember - bad guys out). This new tax situation has now placed Thailand last - because no one else taxes their incomes from overseas - every single one of those other countries either excludes retired Expats specifically or provides them an exemption (as long as the money brought into the country is not for 'activities' in their country).

 

Thailand is clearly hell bent on no longer being the chosen destination for retired Expats in SEAsia.  I think of it this way - when a Tourist enters any country he/she and brings with them their money to pay for things while on holiday.  That money they bring in can be in currency, or transfers, or credit cards, or ATMs, or into a Thai bank account, etc.  What sort of idiot country would try to apply income taxes to Tourists who stay more than 179 days in the country over a one year period, bringing in and spending their money - and paying all the local country taxes such as VAT etc.  Well, that is what we are in Thailand - long-stay Tourists who 'report' every 90 days, because that is the longest legal stay in Thailand for a Tourist. If this was 2010, I would be looking at The Philippines or Malaysia - absolutely - planned visits to Thailand only. 

Can you point us to anywhere in any of your posts on tax in the past six months that has a good word or anything positive to say about Thailand?

[roobaa01]

Gday

Today the new visa exemption rules comes into effect so anyone from the 93 countries entitled receives the 60 days stamp. 60 days plus 30 extension at the 1900 . So I can do that for 2 times more in one year reaching 270 days am I then a tax resident as being a tourist?

 

Secondly a German pension receives age pension euro 1245 after deduction of health care he receives Euro 1104 net. The pensioner is still registered in Germany with a residential address thus makes him liable to file an income tax return and pay taxes. But euro 1104 is still within a threshold of euro 11680 so non taxable. However the pensioner stays more than 180 days in Thailand is he to file an income tax ?

Wbr

Roobaa01

 

[TroubleandGrumpy]

16 hours ago, KhunHeineken said:

My understanding is a DTA ensures money is not taxed twice.  A DTA sets out which country has primary taxing rights, and which country must give tax credits to the funds that have already been taxed.

 

This is a short 9 minute youtube clip that explains the "myth" that if money is taxed in one country, it can not be taxed in another country. 

 

Not saying that guy is right or wrong - but IMO he is wrong.

 

The Revenue Department has adjusted the criteria for collecting taxes from income sources outside Thailand (Part 2) | Publications | Knowledge | Nishimura & Asahi

Furthermore, for income that is exempt from tax in Thailand according to a Double Tax Treaty (“DTA”) - or if the DTA specifies the other contracting states (foreign countries) that are designated as the tax collectors and Thailand has no authority to collect tax according to the DTA - if such income is brought into Thailand in the case mentioned above, the Revenue Department has not yet issued clear criteria or guidelines to determine whether or not such income is subject to tax according to Section 41, paragraph two of the Revenue Code. If tax exemptions are not applicable, the Revenue Department will need to determine measures or methods to eliminate the double taxes and how to use foreign tax credits if such income is brought into Thailand in a different tax year from the year in which the income was received. The ambiguity in this law contradicts the principles of good tax collection and is a crucial issue which the Revenue Department must expedite in setting clear guidelines; otherwise, the collection of such taxes could become an obstacle to the development and enhancement of Thailand's tourism sector, which is a significant revenue source.

If the Revenue Department pursues taxation on foreign-sourced income, it may bring a small amount of revenue inflow into the system. However, it could impact the tourism sector and employment in the tourism industry, including elderly care services and other sectors that heavily rely on income from foreign tourists who plan to be long-term residents in Thailand. Some tourist operators and those reliant upon the tourism sector may decide not to continue their businesses if the criteria for collecting such taxes are unclear and unfair.

 

Navigating Foreign Pension Income Tax for Expatriates in Thailand - Pattaya Mail

Role of Double Taxation Agreements (DTAs)
Thailand’s network of Double Taxation Agreements (DTAs) plays a crucial role in the implementation of these regulations. These agreements, designed to prevent the same income from being taxed by two countries, ensure that pensions are taxed only in the country of origin. Under the new rules, DTAs will continue to protect expatriates by preventing Thailand from taxing pension incomes that have already been taxed abroad or are set to be taxed by retirees’ home countries. However, should there be any discrepancy in tax rates, additional taxes may still be collected in Thailand, although such measures are not yet officially declared and enforced.

 

 

What this shows to me is that this whole can of worms and every point of concern in it, is far from certain and there is as yet no final decision and may never be until a precedent occurs.  Anyone stating 'definites' based upon Tax Codes or Guides, or as above from tax professionals' websites, is not absolutely correct - nothing is certain and that is the only certainty.  Until TRD make definitive statements about each and every point of concern (if they do), then no one is absolutely certain of anything - other than that TRD changed their tax rule for income seasoned for 12+ months, and had little idea of the downstream ramifications from taking that action (or they did and told the Minister and he said 'do it anyway'. 

[OJAS]

16 hours ago, Mike Lister said:

It's too simplistic to say that a DTA prevents double taxation

 

Indeed the UK/Thailand DTA does not appear (to my eyes at any rate) to prevent double taxation in the case of the UK State Pension and company pensions - simply because it makes absolutely no mention of either pension type in its text anywhere. So how could it be said to afford protection against double taxation in the case of these 2 particular pension types?

 

While current TRD exemptions and allowances would, in practice, result in a zero tax liability for those whose sole source of assessable income is the UK State Pension (as in my case), they would presumably prove insufficient to prevent any double taxation arising for those in receipt of company pensions - all the more so if they are also in receipt of the State Pension.

 

In any event, it would IMHO be extremely foolish to rule out entirely the possibility of the TRD at some future date reducing - or even completely abolishing - all existing exemptions and allowances.