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

TroubleandGrumpy · July 20, 2024

3 hours ago, KhunHeineken said:

Good post.

I think you will find many countries will be jumping on the "world wide income tax" band wagon in the future.

There will be no where for anyone, or their money, to hide. The countries you mention are behind, and I have no problem with people moving to these countries to avail themselves of tax free living until they implement the same as Thailand. Even 3rd World Countries will be forced into the global income tax system. It's just different countries are on different time frames.

Times are changing. Mass surveillance is not just on individuals, but also their money. Governments all around the world are broke. They will be chasing every dollar of tax they can get, and for generations to come.

Thanks. And Yes and No regarding those other countries taxing foreigner's income.

You have raised a massive issue regarding international taxation that is at the heart of the issues with Thailand applying income taxation to Foreigners' money earned overseas. Thailand like most other countries uses a 'residence based' taxation, but they only apply taxation to the income that is brought into Thailand - a long existing exemption for income not brought into Thailand in the same year was cancelled this year.

International taxation - Wikipedia

Most other countries have moved to taxing income from overseas brought into their countries in line with CRS etc., but they also tax income made anywhere in the world - but they provide exemptions to retired Expats living in their countries. They all provide those exemptions and allowances to retired Expats through their tax codes - or through separate determinations. Malaysia in the most common example - they tax overseas earnings, but they exempt income already subjected to taxation overseas - that has been the case for many years.

Other countries using a resident based tax system and taxing foreign earnings, have managed and dealt with those issues for years. Thailand is not prepared for all the complications involved in taxing income from overseas - especially for foreigners - and that is why they let it go in the past so to speak. Now they have suddenly and out of the blue, both removed the 12 month tax exemption and also stated that all Foreigners must pay PIT income taxes on their foreign earnings brought into Thailand when it was never enforced before. The fact is that was always technically the case - the rule change meant nothing - but they are desperate to increase the tax base and they have just gone ahead and done it, with no idea what that entails and all the problems involved. The best analogy I have heard is that Thailand has been operating as a cheap small town lawyer, and has just decided to go and do work in the Supreme Court. They have no idea what is involved and their systems and processes are immature and backward, and their staff are completely unprepared and do not know what is going on. Just walk into your local TRD Office and you will see that - as posters have done.

IMO it is best to avoid TRD while they find out what is in that can of worms and deal with it over the next 2-3 years I reckon. Meanwhile, the advice I have received to not lodge a tax return in my situation is the advice that I will be following. This is Thailand.

stat · July 20, 2024

According to a report in a newspaper TRD has send out letters to 100.000 people and entities to report to pay tax . Sp apparently they have not filed for taxes before.

It is my understanding that links are not allowed here.

"Economy in bad shape as the Revenue Department ramps up demands for more taxpayers to pay up"

cdnvic · July 20, 2024

18 minutes ago, stat said:

It is my understanding that links are not allowed here

It depends where they originate. Citing your sources is encouraged, but linking to other forums is not allowed.

https://aseannow.com/forum_rules/

topt · July 20, 2024

24 minutes ago, stat said:

It is my understanding that links are not allowed here.

Well I posted in in the week so here it is again if interested -

https://www.pattayamail.com/latestnews/news/dont-panic-because-thai-revenue-has-written-to-100000-tax-residents-urging-registration-465598

Just now, cdnvic said:

but linking to other forums is not allowed.

Sorry if this is wrong but as mentioned had already posted earlier this week......

stat · July 20, 2024

Same topic but I read it from another source that examines 🙂 Thai news, thanks!

stat · July 20, 2024

https://www.thaiexaminer.com/thai-news-foreigners/2024/07/15/economy-in-bad-shape-as-revenue-department-ramps-up-demands-for-more-taxpayers-to-pay-up/

Here the link to the article in the Thaiexaminer.

EVENKEEL · July 21, 2024

9 hours ago, stat said:

https://www.thaiexaminer.com/thai-news-foreigners/2024/07/15/economy-in-bad-shape-as-revenue-department-ramps-up-demands-for-more-taxpayers-to-pay-up/

Here the link to the article in the Thaiexaminer.

Good news for the tax experts on AN, for sure.

Lorry · July 21, 2024

Using foreign credit cards abroad and buying tickets from foreign airlines:

( I know we don't know the rules, I know they will probably never find out - but what are the rules under the British system of remittance taxation for non-doms?)

1. Buying goods and services from abroad when I myself am physically abroad, and paying for them with a foreign credit card. That should be tax free, even in a year I am a tax resident in Thailand?

Example: I buy a sex doll in Shanghai, paid with my Chinese credit card, during my visit to China.

I don't bring the sex doll to Thailand (it's illegal, and no need anyway).

2. If I use said services (that I bought abroad and paid with my foreign credit card) at the time I am in Thailand, that should count as a remittance, right?

Example: I don't buy a sex doll, I buy a subscription of the "MAGAzine" and I watch it when I am in Thailand. Or I buy an airline ticket with CAL to or from BKK, during my trip to China.

3. All tickets I buy from TG are remittances, right? Never mind I am abroad when I buy them, and never mind how I pay.

Practical consequences in my everyday life:

- I might use different foreign credit cards when I am in Thailand and when I am abroad. Just to keep records separated.

- I will not pay for other people's (e.g. non-resident relatives) connecting flights through Bangkok with my credit card, let them pay themselves.

- Never fly TG or buy a ticket for other people from TG using my own (albeit foreign) credit card, no matter where I am at the time of purchase.

garygooner · July 21, 2024

On 7/20/2024 at 10:06 AM, jonwilly said:

friend has informed me yesterdat that it is now nessary to have a Tgai tax I.D. to open a bank account with Bangkok Bank.

john

I'm pretty sure that an agent would still be able to 'assist'

KhunHeineken · July 21, 2024

19 hours ago, TroubleandGrumpy said:

There are links provided in that post of mine - perhaps you missed them. Those quotes are from those websites.

I would also point out something else - DTAs are not just Double Tax Agreements to avoid double taxation.

The full name of the Thailand-Australia Agreement is " an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income,"

australia : article 1-5 | The Revenue Department (English Site) (rd.go.th)

DTAs cover not only provisions to ensure the double application of taxation on incomes, but they also provide for taxation exemptions, reductions and allowances by tax residents and Citizens/Nationals of each country. However, as stated by several members besides myself, TRD Officers are not overall very aware of this fact and most believe DTAs only mean Foreigners can only get tax credits on the income taxes paid already in their home country.

Can you show me where in the DTA between Australia and Thailand is says "Thailand has no authority to collect tax?"

Here's the DTA.

https://www.rd.go.th/fileadmin/download/nation/australia_e.pdf

Article 1: "Personal Scope" - This agreement shall apply to persons who are residents of one or both of the contracting states.

Article 2: "Taxes Covered" - 1) The existing taxes to which this agreement applies are: a) in the case of Thailand - 1) income tax.

b) in the case of Australia - 1) income tax.

Etc, Etc, Etc.

It appears to me the DTA between Australia and Thailand DOES give authority for Thailand to collect tax.

KhunHeineken · July 21, 2024

On 7/20/2024 at 3:06 AM, jonwilly said:

A friend has informed me yesterdat that it is now nessary to have a Tgai tax I.D. to open a bank account with Bangkok Bank.

john

They are starting to connect all the dots.

I would not be surprised if current bank account holders are given notice that they have to supply a tax number before a certain date, similar to the way we had to register sim cards.

Failure to supply the tax number before the date will most likely see the account frozen until a tax number is supplied.

TroubleandGrumpy · July 21, 2024

32 minutes ago, KhunHeineken said:

Can you show me where in the DTA between Australia and Thailand is says "Thailand has no authority to collect tax?"

Here's the DTA.

https://www.rd.go.th/fileadmin/download/nation/australia_e.pdf

Article 1: "Personal Scope" - This agreement shall apply to persons who are residents of one or both of the contracting states.

Article 2: "Taxes Covered" - 1) The existing taxes to which this agreement applies are: a) in the case of Thailand - 1) income tax.

b) in the case of Australia - 1) income tax.

Etc, Etc, Etc.

It appears to me the DTA between Australia and Thailand DOES give authority for Thailand to collect tax.

I am not sure what you mean - of course Thailand can collect income taxes from tax residents - Australian or otherwise.

DTAs provides provisions for conditions, exemptions and allowances for the collection of income taxes between Thailand and Australia.

Here is the 'proper' Thai-Aust DTA - I suggest you start reading at the start and dont stop until the finish.

australia : article 1-5 | The Revenue Department (English Site) (rd.go.th)

KhunHeineken · July 21, 2024

19 hours ago, TroubleandGrumpy said:

Thailand is not prepared for all the complications involved in taxing income from overseas - especially for foreigners - and that is why they let it go in the past so to speak. Now they have suddenly and out of the blue, both removed the 12 month tax exemption and also stated that all Foreigners must pay PIT income taxes on their foreign earnings brought into Thailand when it was never enforced before. The fact is that was always technically the case - the rule change meant nothing - but they are desperate to increase the tax base and they have just gone ahead and done it, with no idea what that entails and all the problems involved.

I tend to agree. It will be chaos. However, they either have something up their sleeve, or, as I have said, it might be like the Certificate of Residence that should be free, but we all pay 300 baht for.

It may be possible that to get a tax clearance certificate, or similar, you just pay 300, 500, 1000 baht, or whatever, to the TRD, and you are good to go. It may simply be just another backhander foreigners have to pay, and we know the money goes up the ladder. Who knows?

Of course, for high net worth individuals, or tax evaders, or criminals, they can apply this law as it would be well worth it for them to do so.

We will all get to see how this unfolds early 2025, but I just can't see an announcement from the Thai government early 2025 that the whole policy has been scrapped and it all goes away.

JohnnyBD · July 21, 2024

18 minutes ago, KhunHeineken said:

They are starting to connect all the dots.

I would not be surprised if current bank account holders are given notice that they have to supply a tax number before a certain date, similar to the way we had to register sim cards.

Failure to supply the tax number before the date will most likely see the account frozen until a tax number is supplied.

I opened 3 SCB accounts recently, and was not required to have a TIN.

KhunHeineken · July 21, 2024

16 minutes ago, TroubleandGrumpy said:

am not sure what you mean - of course Thailand can collect income taxes from tax residents - Australian or otherwise.

Yes, that's right. You have contradicted yourself.

This is from your previous post.

"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."

See where it says, "Thailand has no authority to collect tax according to the DTA?" You posted it, not me.

I have linked the DTA between Australia and Thailand. Can you show me where it says "Thailand has no authority to collect tax according to the DTA?"

16 minutes ago, TroubleandGrumpy said:

Here is the 'proper' Thai-Aust DTA - I suggest you start reading at the start and dont stop until the finish.

The one I posted is worded the same.

Here's the Australian one from the treasury department. It's also worded the same.

https://www.austlii.edu.au/au/other/dfat/treaties/1989/36.html

From the treasury department.

https://treasury.gov.au/tax-treaties/income-tax-treaties

I have read it, have you?

Where does it say "Thailand has no authority to collect tax according to the DTA?"

OJAS · July 21, 2024

On 7/20/2024 at 12:25 PM, Mike Lister said:

You have nothing to be concerned about, your calculations are correct and you have plenty of room to spare.

And @AdamWest1974 might, of course, have even more wriggle room than 10k if his planned 450k transfer(s) for this year include both assessable (e.g. State and company pensions) and non-assessable (e.g. Government pensions and income earned before 1/1/24) items!

OJAS · July 21, 2024

On 7/19/2024 at 11:14 PM, CharlieKo said:

I think it really depends. As a UK citizen All I get is my state pension. But I do have quite a lot of savings in a UK bank. HMRC have told me that as a non resident they will not tax the interest I get on those savings. Indeed the bank do not deduct tax on the interest.

To avoid double taxation you may need to apply for non resident status as far as UK taxes are concerned. Which then means any taxes due on dividends would be paid to the Thai Revenue Department. Besides that if you did have to pay UK taxes, you would be able to show a letter from HMRC stating how much tax was due.

It would mean jumping through hoops which is a pain. But is doable if approached right.

The following link sets out the hoops which would need to be jumped through in the case of us Brits:

https://www.gov.uk/guidance/claim-personal-allowances-and-tax-refunds-if-you-live-abroad#information-youll-need-to-claim

topt · July 21, 2024

1 hour ago, KhunHeineken said:

They are starting to connect all the dots.

I would not be surprised if current bank account holders are given notice that they have to supply a tax number before a certain date, similar to the way we had to register sim cards.

Failure to supply the tax number before the date will most likely see the account frozen until a tax number is supplied.

I would be as if the foreign bank account holder does not stay 180 days then he does not need a TIN...........

Could it happen, of course. But like clearance certificates for all it seems unlikely in the near future.

KhunHeineken · July 21, 2024

49 minutes ago, topt said:

I would be as if the foreign bank account holder does not stay 180 days then he does not need a TIN...........

I'm Australian. In Australia, if you do not give your bank your Tax File Number (TFN) the bank taxes any interest at the highest marginal rate.

I am sure other countries have a similar system, yet here you are saying Thailand will not implement something similar?

Also, my bank occasionally asks me to declare my resident status.

52 minutes ago, topt said:

Could it happen, of course.

Glad we sorted that out then. :smile:

53 minutes ago, topt said:

But like clearance certificates for all it seems unlikely in the near future.

Why is that? It's their easiest way of enforcement. It brings the foreign tax payer to them, so no chasing.

You already have to provide documents by way of a bank statement/s. Add one more document to the list. Even better for them if you have to pay for the document even if you don't have to pay any tax. Just another little earner for them, either legit or otherwise, like the Certificate of Residence.

motdaeng · July 21, 2024

45 minutes ago, topt said:

Could it happen, of course. But like clearance certificates for all it seems unlikely in the near future.

i agree with you, but even the unlikely has some likelihood too.

after 20 years in the land of smiles, i know everything is possible. the thai government hasn't cared in the past and

will not care in the future about long-time "visitors" living in thailand. they will create and enforce new laws as they please.

i believe, for us "farangs", it will not become easier to live here in the long term ...

KhunHeineken · July 21, 2024

11 minutes ago, motdaeng said:

i agree with you, but even the unlikely has some likelihood too.

after 20 years in the land of smiles, i know everything is possible. the thai government hasn't cared in the past and

will not care in the future about long-time "visitors" living in thailand. they will create and enforce new laws as they please.

i believe, for us "farangs", it will not become easier to live here in the long term ...

Yes, it's also unlikely there will be yet another military coup, until the next military coup. :cheesy:

It's funny to read many members putting forward reasons why this won't happen and why that won't happen, but they overlook the main reason why the Thai government is doing this, and that is, MONEY.

Why would they walk away from a policy that involves MONEY????

TroubleandGrumpy · July 21, 2024

42 minutes ago, KhunHeineken said:

Yes, that's right. You have contradicted yourself.

This is from your previous post.

"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."

I see that perhaps I could have written that better - the point was that under the DTA, Thailand (or Australia) is not able to apply income taxes to certain income - meaning that it is exempt from taxation. Mate - the DTA exemptions opens up a whole can of worms that the vast majority of people have no idea about, and certainly not TRD either.

Just one example - in Australia the sale of a person's main house is not subject to income taxes in Aust - but in Thailand it is. IMO under the DTA Australians have an exemption from this income/money being taxed by Thailand. Likewise, an inheritance is not taxable in either Thailand or Australia (up to a certain amount), but it is taxable in other countries and their DTAs deal with that. And on and on and on it goes. How will it all pan out for TRD dealing with all those variations and complexities across 61 countries that they have DTAs with?? Who knows. Number one plan for me is to (legally) avoid dealing with TRD for a few years, while they ..... A. screw it all up completely B. Work things out and get it all sorted C. Change everything 2-3 times and then reverse it all back again. My bet is on A and/or C. I reckon there will be a Land Bride, a F1 Race Track, and Thailand will be the Financial Hub of SEAsia - all before they sort out all their tax issues and problems if/when they move to a global tax system - this residential based system is going to take a while to sort out.

KhunHeineken · July 21, 2024

1 hour ago, TroubleandGrumpy said:

I see that perhaps I could have written that better - the point was that under the DTA, Thailand (or Australia) is not able to apply income taxes to certain income - meaning that it is exempt from taxation. Mate - the DTA exemptions opens up a whole can of worms that the vast majority of people have no idea about, and certainly not TRD either.

Just one example - in Australia the sale of a person's main house is not subject to income taxes in Aust - but in Thailand it is. IMO under the DTA Australians have an exemption from this income/money being taxed by Thailand. Likewise, an inheritance is not taxable in either Thailand or Australia (up to a certain amount), but it is taxable in other countries and their DTAs deal with that. And on and on and on it goes. How will it all pan out for TRD dealing with all those variations and complexities across 61 countries that they have DTAs with?? Who knows. Number one plan for me is to (legally) avoid dealing with TRD for a few years, while they ..... A. screw it all up completely B. Work things out and get it all sorted C. Change everything 2-3 times and then reverse it all back again. My bet is on A and/or C. I reckon there will be a Land Bride, a F1 Race Track, and Thailand will be the Financial Hub of SEAsia - all before they sort out all their tax issues and problems if/when they move to a global tax system - this residential based system is going to take a while to sort out.

Firstly, you have to live in that "main house" for 12 months, otherwise, any capital gain can be taxed.

I have never suggested it's not going to be chaos. I have never suggested this is a well thought out and well planned policy. I have never suggested the TRD has been recruiting and training staff to gear up for this.

What I have suggested is the Thai's won't miss a chance to turn a baht out of it. It could be as simple as paying 500 baht for a TRD document for your extension, much in the way you pay 300 baht for a Certificate of Residence, even though they are free.

It could also be showing the TRD a balance sheet from your bank showing total money deposited and that's what you pay in tax.

I don't know what January to March 2025 is going to look like, and neither do you, but I can't see the Thai's missing out on their chance for more MONEY from farang, especially when this is a global tax.

I'll ask you the same question I asked another member. Say this does all just go away, how do you think the Thai's will withdraw from it?

stat · July 21, 2024

2 hours ago, KhunHeineken said:

...

I'll ask you the same question I asked another member. Say this does all just go away, how do you think the Thai's will withdraw from it?

Lots of options to withdraw:

All just a missunderstanding
Change of PM
Changes will not be enforced
Exception for expats
Postponement to 2121 (remember the bridge to Koh Samui, the metro in Pattaya, the 300 Baht tourist tax?)
Military coup
No explanation and quietly dropped
etc

I do not care how they withdraw just that they do 😉
😉

KhunHeineken · July 21, 2024

2 hours ago, stat said:

Lots of options to withdraw:

All just a missunderstanding

Change of PM

Changes will not be enforced

Exception for expats

Postponement to 2121 (remember the bridge to Koh Samui, the metro in Pattaya, the 300 Baht tourist tax?)

Military coup

No explanation and quietly dropped

etc

I do not care how they withdraw just that they do 😉
😉

All possible, but are they probable?

I could address each of your 8 points, but how relevant are they?

You have to remember, MONEY, MONEY, MONEY is there for the taking, in one way or another, and farang are soooooooo easy targets.

Have you ever known Thai's to walk away from easy MONEY?

ukrules · July 21, 2024

2 hours ago, KhunHeineken said:

You have to remember, MONEY, MONEY, MONEY is there for the taking

It's not though, money and those who have plenty of it are highly mobile if needed.

They're not getting mine as I won't allow it, that's why I'm now sitting in my apartment in Phnom Penh considering buying somewhere down here.

Mike Teavee · July 21, 2024

5 hours ago, KhunHeineken said:

All possible, but are they probable?

I could address each of your 8 points, but how relevant are they?

You have to remember, MONEY, MONEY, MONEY is there for the taking, in one way or another, and farang are soooooooo easy targets.

Have you ever known Thai's to walk away from easy MONEY?

Bearing in mind an Expat bringing in 1Million THB of already taxed income (e.g. Pension) from the UK is liable to a max of 1,000B (One Thousand Baht) tax for the year.

1Million THB = approx. £21,300
UK Tax on £21,300 .= approx. £1,750 = approx. 82,000 THB Tax already paid
Thai tax on 1,000,000 after minimum TEDAs = approx. 83,000 THB

... I just can't see see how Thailand won't lose Money (from Expats) by introducing this as it will drive people to:-

Not remit as much money & find ways of reducing their spends in Thailand (e.g. have more holidays outside of Thailand)
Not make any large purchases (Condos cars etc...)
Spend <180 days per year here.
Choose somewhere else to live.

There are obvious exceptions of Expats who get their income from things like Capital Gains where they haven't paid any tax but these are the guys who are even more likely to choose Options 3 or 4 and not only will Thailand not get any Tax from them, but they'll lose all of the money they would have spent if they were living here year round.

Phulublub · July 22, 2024

4 hours ago, Mike Teavee said:

Bearing in mind an Expat bringing in 1Million THB of already taxed income (e.g. Pension) from the UK is liable to a max of 1,000B (One Thousand Baht) tax for the year.

1Million THB = approx. £21,300

UK Tax on £21,300 .= approx. £1,750 = approx. 82,000 THB Tax already paid

Thai tax on 1,000,000 after minimum TEDAs = approx. 83,000 THB

... I just can't see see how Thailand won't lose Money (from Expats) by introducing this as it will drive people to:-

Not remit as much money & find ways of reducing their spends in Thailand (e.g. have more holidays outside of Thailand)

Not make any large purchases (Condos cars etc...)

Spend <180 days per year here.

Choose somewhere else to live.

Really? Paying THB 1K a year is going to have people going elsewhere?

PH

Mike Teavee · July 22, 2024

51 minutes ago, Phulublub said:

Really? Paying THB 1K a year is going to have people going elsewhere?

PH

TBH I'm unsure of my maths now as I used this site https://ata-outsourcing.com/calculate-your-personal-income-tax/ which says that if you have an income of 84,000 pm you'll pay 6,900 THB tax which comes out at 82,800

But if I do it myself using the published tax bands then I come up with

60K @ 0% = 0 (Personal Allowance)
150K @ 0% = 0
150K @5% = 7,500
200K @ 10% = 20,000
250K @ 15% = 37,500
190K @ 20% = 38,000

... Total of 103,000 THB - So it might be you owe 21K pa if you've already paid UK Tax on the 1Million remitted.

Obviously if you have additional allowances (e.g. Wife, Kids, >65, Health Insurance etc...) then the number comes down.

jwest10 · July 22, 2024

Not important tried to delete a post but again the system went down where I live and ignore

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

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