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

[sirineou]

21 minutes ago, sometimewoodworker said:

PDA?Personal digital assistant?

PDF  (a typo) , all the tax recipricity agreements I have seen are in PDF  format, obviously  I did not mean that I read the US on on a personal assistant. 

PS: I have a degree in Aeronautical engineering, I know how to read a document, and my way around Basic, Fortran and spreadsheets. shows you how old I am, 

Also hold a full book at the international brotherhood of Carpenters, Local 212 , but I am more of a bucher than a carpenter, since I got this because the company I worked for specialising in concrete forms was a union shop and it was nessacery for my to belong to the union that managed concrete forms.  

[TroubleandGrumpy]

On 7/30/2024 at 9:44 AM, JBChiangRai said:

 

It comes from Income.

Then it is possible that the TRD could decide you only did that to avoid taxation on that income.

However, perhaps TRD has already ruled/decided that income that is gifted is not taxable income - I do not know.

However, I am very sure that for the recipient it is not taxable income under the gifting rules.

 

I think you should find a good honest Expat tax accountant and get their advice on what to do.

[TroubleandGrumpy]

On 7/30/2024 at 9:56 AM, Yumthai said:

There is no issue as long as there is no individual audit to be seen and reported.

IMO all relevant tax discussions should only focus on how/when TRD plans to enforce their statements, collect money and address penalties.

Everything else is pure speculation and scaremongering.

Not IMO - I am more than happy to discuss the rules, interpretations of the rules, past decisions about the rules, and the possible consquences of what could happen when/if the rules are interpreted or enforced or not enforced etc etc. 

 

Being in business for many decades, I am used to planning for and discussing the 'rules' - it is not a matter of doing that for reasons of fear  or scaremongering - it is simply planning ahead by examining the options and the upsides and downsides of any possible course of action. 

 

However, if anyone does get scared or worried about all this, then IMO they should avoid these 'discussions' and wait until December 2024 and only then check in on what is happening. 

[TroubleandGrumpy]

On 7/30/2024 at 10:41 AM, JBChiangRai said:

I agree most gifts should be made on a special occasion as you describe.

The Thai tax code specifically lists a different situation and that is a gift under moral obligation.  There is no expected timing on that.

I have brought my daughters from 5 & 8 years old, clearly I have a moral obligation to educate them.

Anyone thinking of using the 'gifting' rule needs to be very careful and double check, perhaps including getting professional advice.

 

The gifting rule means that a person who RECEIVES a gift (such as money, house, cars, etc) is not liable for taxation if it is under that clause/rule (as determined by the TRD) and they are eligible, and it is below 20 or 10 Million Baht (depending on who they are).  The rule was made to stop people gifting their houses/fortune to their wife/kids as a means of avoiding inheritance taxes - that is why the limit is 20/10 Million Baht.

 

IMO that does not mean that someone can give their total salary from employment to their wife and/or kids as a gift, and not be subjected to scrutiny by the TRD for doing that only as a method of tax evasion.  Otherwise of course, everyone would do that.  The use of gifting needs to be very carefully considered, if the form of the money being gifted is, or could be, declared by the TRD as taxable income.

[TroubleandGrumpy]

On 7/30/2024 at 12:31 PM, Presnock said:

Yes, I just re-read the TRD english version and it specifically says ss and pensions can only be taxed by the US and that too will be my response if

I am contacted by the TRD to explain why I didn't get a Tax ID nor file taxes on the money I remitted this year to THailand.  I also have an LTR so shuldn't have to pay anything to them.

May I give some advice to you and anyone else who does get contacted by the TRD in 2025/2026 and asked to explain why they did not lodge a tax return for 2024 and/or 2025, because they remitted XYX Million Baht into Thailand (as shown in their banking records).

 

Make sure you have all written records of all the banking transactions (in Thailand and in the home country) and proof of social security payments (Govt letter etc) - if anything is online then save them and print them off at the end of each year and file away (just in case).  

 

If you are asked to attend an appointment then take those docs and go see a tax accountant and show them all that - the tax consultant that you will take to see the TRD Officer with you.  If it is in the Provincial TRD then get a local one, if it is in Bangkok then get one from there.  If the request asks you to respond in writing, then do the same as above and get the tax specialist to write the letter for you - in both English and Thai.

 

If that is not an option (using and paying for a tax specialist) then get all those docs and write a response in English. Then get all the docs and letter translated into Thai - there are many online resources these days.  Take all those to the appointment, or send them if a written response required. 

 

If TRD does go ahead and start to enforce this new 'tax regime', then IMO some of us will be sent a 'request for information' in the next few years.  The only reason is because all that TRD gets is the amounts of banking transactions - they do not get an explanation of what the money is and where it came from - so they could ask.  Best to be prepared in advance, just in case asked.

 

IMO it is best not to do things that are clearly tax evasion, because it is 'unfair' to tax Expats - better not to stay in the country for 180+ days. But if someone did evade taxes deliberately and they got that call/letter in 2025/2026 - IMO they should probably immediately invoke Plan B.

 

[Presnock]

7 minutes ago, TroubleandGrumpy said:

May I give some advice to you and anyone else who does get contacted by the TRD in 2025/2026 and asked to explain why they did not lodge a tax return for 2024 and/or 2025, because they remitted XYX Million Baht into Thailand (as shown in their banking records).

 

Make sure you have all written records of all the banking transactions (in Thailand and in the home country) and proof of social security payments (Govt letter etc) - if anything is online then save them and print them off at the end of each year and file away (just in case).  

 

If you are asked to attend an appointment then take those docs and go see a tax accountant and show them all that - the tax consultant that you will take to see the TRD Officer with you.  If it is in the Provincial TRD then get a local one, if it is in Bangkok then get one from there.  If the request asks you to respond in writing, then do the same as above and get the tax specialist to write the letter for you - in both English and Thai.

 

If that is not an option (using and paying for a tax specialist) then get all those docs and write a response in English. Then get all the docs and letter translated into Thai - there are many online resources these days.  Take all those to the appointment, or send them if a written response required. 

 

If TRD does go ahead and start to enforce this new 'tax regime', then IMO some of us will be sent a 'request for information' in the next few years.  The only reason is because all that TRD gets is the amounts of banking transactions - they do not get an explanation of what the money is and where it came from - so they could ask.  Best to be prepared in advance, just in case asked.

 

IMO it is best not to do things that are clearly tax evasion, because it is 'unfair' to tax Expats - better not to stay in the country for 180+ days. But if someone did evade taxes deliberately and they got that call/letter in 2025/2026 - IMO they should probably immediately invoke Plan B.

 

Yes I do remit at least 3 million baht a year into Thailand and figure that they will contact me if that is over their bottom limit..however since I have an LTR and only US govt pension feel safe so far that I have nothing to worry about and can easily provide govt documentation of those.  BTW, the American Citizens Abroad advised me that they have petitioned the US Congress and which the Congress will hold a hearing on possible changes to the taxation of US citizens working overseas so that double taxation or credits do not become necessary.  Anything else I get on this I will pass along too.  Have a good day

[dinga]

On 7/30/2024 at 3:01 PM, sometimewoodworker said:

That is where you really should read the revenue code section 3

https://www.rd.go.th/english/37749.html

you are inventing out of whole cloth a liability that does not exist. 

you should also read the Marriage and contracts concerning property of husband and wife is governed by the sections 1465 to 1469 of the Thailand Civil and Commercial Code.

there you will find that unless declared in writing at the time that the gift was given  to be Sin Somros that all gifts are personal property of the recipient and are  Sin Suan Tua.

so there you will find that even the simplest of reading shows that a true gift can never be considered by the TRD as party the property of anyone other than the recipient of the of the gift.

 

stop spreading FUD the Thai law on gifts within marriage is clear

 

I am not inventing absurdities -  20+ years of relevant experience in Thailand has taught me the importance of considering all possible risks and alternative views under ALL of the applicable laws.  I've seen many examples where simplistic interpretations have foundered on the rocks of Thai realities. 

 

My clear understanding is that real property purchased during a marriage is treated as Joint Property - regardless of the source of the funds.  Another clear understanding is that, in order for the TRD to accept the bona fides of a gift, the 'giftor' should not benefit in any way from the use of the gift.  [there are a number of other differing views on the TRD risks re. the acceptability of gifts].  My recollection is that there are no definitive clarifications from the TRD on any of these different views.

 

Given the uncertainities, I simply urge anyone who is seriously considering the gifting of funds to their wife in order to purchase real property, to get professional advice BEFORE proceeding.

 

You of course can rely on your dogmatic view and bush lawyer interpretation, but given the potential consequences for 'getting it wrong', I think others should be far more comfortable obtaining prior informed and professional advice.  But as always, up to everybody to make their own decisions....

 

  

[beammeup]

All this talk about gifting... I thought we established that the gifting (once the funds are in Thailand) is tax free up to 20 mil but the money needs to be remitted first and that may be taxable. One of those things that need clarification. It would be nice if someone has done this and can tell us how it went. Probably we will need to wait until mid next year to find out.

[Ricardo]

3 hours ago, beammeup said:

All this talk about gifting... I thought we established that the gifting (once the funds are in Thailand) is tax free up to 20 mil but the money needs to be remitted first and that may be taxable. One of those things that need clarification. It would be nice if someone has done this and can tell us how it went. Probably we will need to wait until mid next year to find out.

I read it as you remitting money from overseas, direct to your spouse/family-members' Thai bank-account, so not remitting it in-your-own-name to your own account first ?  Or else, as you say, it risks being taxable here.

[beammeup]

Yah there is a bunch of squareheads who say everything is clear just read the docs. they cant comprehend for us. Well when you get tough questions they disappear.

[Tony M]

I posted this in another thread  also, but nobody seems to want to answer. Any ideas ?

I think I understand the ins and outs of the state pension thing, and it is assessable income if it is not a government pension, etc, etc ......  The DTA says -  "Any pension paid .. in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State."  My pension was a civil service pension, until I changed it to an overseas QROPS pension.  So, although it is now an overseas pension does it still remain a pension "in respect of services of a governmental nature rendered to that State............".     Assessable or non-assessable ?

[Lorry]

8 hours ago, beammeup said:

It would be nice if someone has done this and can tell us how it went. Probably we will need to wait until mid next year to find out.

No, you will have to wait much longer, until someone has done it and has later been audited. 2027 maybe?

Then he can tell us whether it was accepted or not by the TRD.

 

[Lorry]

2 hours ago, beammeup said:

Yah there is a bunch of squareheads who say everything is clear just read the docs. they cant comprehend for us. Well when you get tough questions they disappear.

They don't disappear,  they just don't know. 

And, people get tired of answering the same questions to newcomers in the tax threads again and again, questions that have already been discussed last year.

You really should read the tax threads,  at least the pinned one.

[Phulublub]

14 hours ago, Tony M said:

I posted this in another thread  also, but nobody seems to want to answer. Any ideas ?

I think I understand the ins and outs of the state pension thing, and it is assessable income if it is not a government pension, etc, etc ......  The DTA says -  "Any pension paid .. in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State."  My pension was a civil service pension, until I changed it to an overseas QROPS pension.  So, although it is now an overseas pension does it still remain a pension "in respect of services of a governmental nature rendered to that State............".     Assessable or non-assessable ?

Which Country are you from?  Suspect UK, but hesitant to comment without confirmation as DTAs differ.

 

PH

[BritManToo]

14 hours ago, beammeup said:

Yah there is a bunch of squareheads who say everything is clear just read the docs. they cant comprehend for us. Well when you get tough questions they disappear.

I don't think it's clear anyone wants foreigners living but not working in Thailand to pay income tax in Thailand.

And until the Thai tax department approaches me and requests me to fill out forms (printed in English), with rules (also printed in English), there's no question I or anyone else can answer with certainty.

[chiang mai]

18 hours ago, Tony M said:

I posted this in another thread  also, but nobody seems to want to answer. Any ideas ?

I think I understand the ins and outs of the state pension thing, and it is assessable income if it is not a government pension, etc, etc ......  The DTA says -  "Any pension paid .. in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State."  My pension was a civil service pension, until I changed it to an overseas QROPS pension.  So, although it is now an overseas pension does it still remain a pension "in respect of services of a governmental nature rendered to that State............".     Assessable or non-assessable ?

The answer is in what you wrote, you said  it, "was a Civil Service pension, until I changed it to an overseas QROPS".

 

I think the pension is now, assessable, because it is no longer a civil service pension.

[CharlesHolzhauer]

4 hours ago, BritManToo said:

I don't think it's clear anyone wants foreigners living but not working in Thailand to pay income tax in Thailand.

And until the Thai tax department approaches me and requests me to fill out forms (printed in English), with rules (also printed in English), there's no question I or anyone else can answer with certainty.

Since you are an individual residing in Thailand, the onus may be on you to determine whether or not you need to lodge a tax return.

https://www.rd.go.th/english/6045.html

[OJAS]

19 hours ago, beammeup said:

Yah there is a bunch of squareheads who say everything is clear just read the docs. they cant comprehend for us. Well when you get tough questions they disappear.

 

I would respectfully suggest that you take the trouble to purchase a suitably reliable crystal ball in order to provide what you consider to be satisfactory answers to your various questions. If and when you have succeeded in making the necessary purchase, please then share the details of how you went about this with us since I can see no lists of suitable balls for sale on Lazada.

[Tony M]

1 hour ago, chiang mai said:

The answer is in what you wrote, you said  it, "was a Civil Service pension, until I changed it to an overseas QROPS".

 

I think the pension is now, assessable, because it is no longer a civil service pension.

 

You may well be right.   But the wording  (my emphasis) - "Any pension paid .. in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State."   is slightly ambiguous ?   My pension is certainly "any pension".  It was certainly paid "in respect of services of a governmental nature."  (In this case the UK government) "...... shall be taxable only in that State."  

 

It remains "any pension".  Whether it matters if it is or was a civil service pension is unclear in the wording and the pension funds do come from services in respect of a governmental nature and "shall be taxable only in the UK".   I'm not saying that I am right or that you are wrong, I'm just trying to determine the ambiguity.  

[chiang mai]

1 minute ago, Tony M said:

 

You may well be right.   But the wording  (my emphasis) - "Any pension paid .. in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State."   is slightly ambiguous ?   My pension is certainly "any pension".  It was certainly paid "in respect of services of a governmental nature."  (In this case the UK government) "...... shall be taxable only in that State."  

 

It remains "any pension".  Whether it matters if it is or was a civil service pension is unclear in the wording and the pension funds do come from services in respect of a governmental nature and "shall be taxable only in the UK".   I'm not saying that I am right or that you are wrong, I'm just trying to determine the ambiguity.  

Perhaps look at it from the TRD perspective and ask yourself what they will see when they look at that pension.

[Tony M]

2 minutes ago, chiang mai said:

Perhaps look at it from the TRD perspective and ask yourself what they will see when they look at that pension.

Presumably they wouldn't see it until, and if, they audit the tax return as there is no need (?) to file a tax return if there is no assessable income ?  Then it would be necessary to provide documentation to evidence the civil service pension  being converted to a QROPS, and the DTA wording.   Help, I need a tax specialist.

 

Does the fact that you suggest looking at it from the TRD point of view mean that you might see some merit in the argument from my perspective ?

[chiang mai]

2 minutes ago, Tony M said:

Presumably they wouldn't see it until, and if, they audit the tax return as there is no need (?) to file a tax return if there is no assessable income ?  Then it would be necessary to provide documentation to evidence the civil service pension  being converted to a QROPS, and the DTA wording.   Help, I need a tax specialist.

 

Does the fact that you suggest looking at it from the TRD point of view mean that you might see some merit in the argument from my perspective ?

I wish I could but sorry, no I don't. To me it very much looks like you've converted it from a Civil Service pension to something else, the TRD is more likely to care about what it is now, not what it once was.

[Tony M]

1 minute ago, chiang mai said:

I wish I could but sorry, no I don't. To me it very much looks like you've converted it from a Civil Service pension to something else, the TRD is more likely to care about what it is now, not what it once was.

I tend to agree, but can't get over the ambiguity (to me) of the wording . I would love to be in a position to "fight" it.

[UKresonant]

On 8/1/2024 at 2:39 PM, Tony M said:

I posted this in another thread  also, but nobody seems to want to answer. Any ideas ?

I think I understand the ins and outs of the state pension thing, and it is assessable income if it is not a government pension, etc, etc ......  The DTA says -  "Any pension paid .. in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State."  My pension was a civil service pension, until I changed it to an overseas QROPS pension.  So, although it is now an overseas pension does it still remain a pension "in respect of services of a governmental nature rendered to that State............".     Assessable or non-assessable ?

It will be assessable.

I have two pensions which in all other ways arise from a continuous  period of service the Civil service pension segment not taxable in Thailand, the second segment may be taxed in Thailand unless they took the name of the scheme at face value .

 

[Tony M]

6 hours ago, UKresonant said:

It will be assessable.

I have two pensions which in all other ways arise from a continuous  period of service the Civil service pension segment not taxable in Thailand, the second segment may be taxed in Thailand unless they took the name of the scheme at face value .

 

Thanks for the response. I'm not sure that I understand the last part of your reply ?   Take what scheme at face value (that may be taxed) ?

[TroubleandGrumpy]

I have had a few questions via PMs and someone just sent some xxcellent questions.

After writing and reading my replay, I decided to post this on the forum.

In My Opinion - as always, everything below is IMO.

 

Can you please explain why TRD,in the past have not pursued their share of tax from expats remits that are assessable income as defined in most DTA's?   I visited TRD office to enquire about a TIN, I was advised that I do not require a TIN as my pension/income is from my home country and I only need TIN if I have Thai income.  

 

In the past TRD ignored all Expats incomes from overseas because it was too complicated and not worth all the trouble.  That was because of many reasons, but the main one is that Govt Pension payments were/are not taxable as per the USA-Thai DTA, and most Expats back in the early days (70s/80s) were US Citizens. The other main reason is that it was assumed that any money an Expat brought into Thailand would have been 'held' for 12 months to enable it to be tax free.  Those reasons are the main reasons why local TRDs who have been approached by retired Expats since this 'new tax regime' announcement in September 2023, have said no to a TIN, because it is not needed unless the Expat is working in Thailand. In Thailand things do not change easily or quickly, and it has been 'common practice' by the TRD for decades, not to expect Expats and most Thais to lodge a tax return (nor enforce).

 

Following this statement in my view they ignore the  tax benefits to Thailand by not pursuing DTA benefits available to them. So have they never collected this money?

 

The new PM (Srettha) instructed TRD to broaden its tax base to get more tax money because the economy is screwed, and that included removing that 'rule' that meant income/investments earned overseas was only taxable if brought into Thailand in the same year. This removed one of the main reasons they did not enforced the taxation of Expat's money remitted into Thailand, and the PM said that it was OK to do that (tax Expats).

 

TRD did not (and does not) want to enforce the taxation of Expats, because the efforts required to assess all those retired Expats who are on a Government Pension is not worth the effort. Thailand has 61 DTAs and therefore each TRD Office would need to know all the exemptions and allowances in each of those DTAs in order to be able to process the tax return of an Expat. Perhaps TRD is going to centralise the method by which all Expats lodge a tax return, including those that earn money through working and/or investments here.  And remember, all Expats means not only the 400-500 working and non-working 'western' Expats, it includes the 2 million workers employed in Thailand who are citizens of other countries, but who also mostly dont lodge tax returns (most earn SFA).  Right now all PIT tax returns are processes (and taxes paid) in the local Province TRD Office (that includes online lodgement), located mostly within the local Amphur Office, and they aint going to 'give up' that money (or Office and staff) easily - so that it can all be transferred to the Bangkok HQ - and if that transfer did happen, any such change will take a long time to implement.

 

As they have not created any new "Tax laws" I expect that things will stay the same. Your thoughts?

 

I expect the vast majority of TRD Offices in the Provinces and Bangkok, will not to be able to deal with this new BS from this BS PM, and therefore they will carry on as per normal. You can almost guarantee they will get no extra staff and no extra budget and SFA training - which when added to the above means to me that nothing is going to change for a long time.

 

 

However, that does not mean that at some time in the future the TRD will not centralise the lodgement of all Expat tax returns, and then comb through the financial arrangements of some Expats, and then pursue them for past tax returns. However, reality tells me that if/when they centralise all Expat's tax returns, unless an Expat has over many years been regularly remitting into Thailand large amounts of money, being well over the amounts from a Govt Pensions and some Retirement savings, then it is unlikely that they will bother most Expats. The 'alternative universe' in which every Provincial TRD Office is fully staffed and trained on all the different DTAs that Thailand has with other countries, does not and never will exist - in my opinion.

 

However Part 2 - TRD is planning on implementing a worldwide taxation system and if that happens, then the goalposts will be moved, and the game will be changed, and everything I stated above may not apply. There is a lot of negative feedback, both external and internal, going to TRD and the Thai Govt about the possibility of implementing a worldwide tax system. Much of that negative feedback is about the internal TRD processes and systems - they are not capable of dealing with the complications of worldwide tax system as they are currently structured, and staffed, and their IT systems. Expats have to wait and see if TRD goes this way, because the ramifications could be huge for us. But that could also mean nothing - who knows what they will do - TiT.

[TroubleandGrumpy]

On 8/1/2024 at 8:39 PM, Tony M said:

I posted this in another thread  also, but nobody seems to want to answer. Any ideas ?

I think I understand the ins and outs of the state pension thing, and it is assessable income if it is not a government pension, etc, etc ......  The DTA says -  "Any pension paid .. in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State."  My pension was a civil service pension, until I changed it to an overseas QROPS pension.  So, although it is now an overseas pension does it still remain a pension "in respect of services of a governmental nature rendered to that State............".     Assessable or non-assessable ?

 

 

[Tony M]

36 minutes ago, TroubleandGrumpy said:

 

 

Great info, many thanks.  It will take me weeks to understand it !  I do see your paragraph on non-discrimination (Article 25), and that seems to inly that the AUS aged pension cannot be taxable in Thailand because the Thai "aged pension" is not taxed.  The UK-Thailand DTA seems to echo this :

Article 24 Non-discrimination (1) The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected.

 

Does that mean that the UK state pension is also not taxable in Thailand for the same reason?  I know that I sounds a little "stupid" of me, but that seems to be very clear and I have not seen it mentioned before (although it might have been).

[Tony M]

2 minutes ago, Tony M said:

Great info, many thanks.  It will take me weeks to understand it !  I do see your paragraph on non-discrimination (Article 25), and that seems to imply that the AUS aged pension cannot be taxable in Thailand because the Thai "aged pension" is not taxed.  The UK-Thailand DTA seems to echo this :

Article 24 Non-discrimination (1) The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected.

 

Does that mean that the UK state pension is also not taxable in Thailand for the same reason?  I know that I sounds a little "stupid" of me, but that seems to be very clear and I have not seen it mentioned before (although it might have been).

 

Can I add this from the UK-Thailand DTA (non-discrimination):

(5) In this Article the term "taxation" means taxes of every kind and description.

 

What are the implications of that statement ?

[topt]

5 hours ago, Tony M said:

Does that mean that the UK state pension is also not taxable in Thailand for the same reason? 

No.

The DTA digest clearly shows that the state pension is not included in the DTA - as has been discussed ad nauseum in tax threads for the last 9 months.......

Page 34 Thailand see note 4 on the far right

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710099/DT_Digest_April_2018.pdf

 

As the previous poster mentioned whether they would bother is another story.