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

[anrcaccount]

1 hour ago, chiang mai said:

Why do you even begin to suggest that getting the 30% deduction for expenses on overseas rental income, may not be possible, did you read something to suggest it wasn't or is it just your mistrust and fear? 

 

Because the rules are written for Thai rental income. Foreign remitted rental income has quite possibly, never been taxed in Thailand before. If you think about the different scenarios, in some of them applying that deduction defies logic. 

 

You wrote :

 

“It was discussed a long time ago that any rental income that is remitted to Thailand would be considered gross of all home country deductions/expenses which would be replaced by the 30% Thai standard deduction, or, if actual expenses were greater and all receipts were available, the greater amount, per the TRD Code”.

 

For example, gross rental income might expect to be reduced by agent fees, local taxes, cost of repairs etc. For Thai assessable income purposes, the amount of rental income remitted to Thailand is presumed to be gross and not to have been reduced by the value of those deductions/expenses.

 

 

Then you said, you'll remit your own rental income less agent fees (net, not gross) which makes it "reduced by the value of those deductions or expenses", so going against the advice provided in your own tax guide. Anyway, as you say, you're under the TEDA so it is immaterial, to you.

 

If you take the Thai standard deductions on this, you're either remitting actual gross , or you're remitting net, then getting additional deductions on top of deductions you've already made ( that would be a nice scenario). 

 

Beyond your own situation, consider one where the property is in fact highly leveraged and makes no profit (common in property investing) : here, you could be faced with situation like this:

 

Gross rent: 20000. Foreign deductions including interest: 20000

 

If you take your guide as is worded above, you could then remit 20000 'gross income'  to Thailand , claim the "actual expense method" deduction , and have no liability. 

 

 

 

 

 

 

 

 

 

 

 

[chiang mai]

15 minutes ago, anrcaccount said:

 

Because the rules are written for Thai rental income. Foreign remitted rental income has quite possibly, never been taxed in Thailand before. If you think about the different scenarios, in some of them applying that deduction defies logic. 

 

You wrote :

 

“It was discussed a long time ago that any rental income that is remitted to Thailand would be considered gross of all home country deductions/expenses which would be replaced by the 30% Thai standard deduction, or, if actual expenses were greater and all receipts were available, the greater amount, per the TRD Code”.

 

For example, gross rental income might expect to be reduced by agent fees, local taxes, cost of repairs etc. For Thai assessable income purposes, the amount of rental income remitted to Thailand is presumed to be gross and not to have been reduced by the value of those deductions/expenses.

 

 

Then you said, you'll remit your own rental income less agent fees (net, not gross) which makes it "reduced by the value of those deductions or expenses", so going against the advice provided in your own tax guide. Anyway, as you say, you're under the TEDA so it is immaterial, to you.

 

If you take the Thai standard deductions on this, you're either remitting actual gross , or you're remitting net, then getting additional deductions on top of deductions you've already made ( that would be a nice scenario). 

 

Beyond your own situation, consider one where the property is in fact highly leveraged and makes no profit (common in property investing) : here, you could be faced with situation like this:

 

Gross rent: 20000. Foreign deductions including interest: 20000

 

If you take your guide as is worded above, you could then remit 20000 'gross income'  to Thailand , claim the "actual expense method" deduction , and have no liability. 

 

What is this guide you're talking about? And why are you trying to divert away from the issue of why the expense deduction may not exist for overseas income, ditto pension expenses?

 

When I wrote what I did, I write the word "could: that doesn't mean that's what I do. If you see the spreadsheet I posted you'll se what I intend to do, which is remit partial gross rental income which includes any home country expense charges. I am however able to pass along those charges to a third party which in effect makes them part of the rental income, but I chose not to.

 

Your agenda is not to find the correct answer or even a reasonable potential answer. Your agenda is simply to disprove any scenario that has been proposed. 

 

 

Edited October 4 by chiang mai

[chiang mai]

46 minutes ago, anrcaccount said:

 

Because the rules are written for Thai rental income. Foreign remitted rental income has quite possibly, never been taxed in Thailand before. If you think about the different scenarios, in some of them applying that deduction defies logic. 

 

You wrote :

 

“It was discussed a long time ago that any rental income that is remitted to Thailand would be considered gross of all home country deductions/expenses which would be replaced by the 30% Thai standard deduction, or, if actual expenses were greater and all receipts were available, the greater amount, per the TRD Code”.

 

For example, gross rental income might expect to be reduced by agent fees, local taxes, cost of repairs etc. For Thai assessable income purposes, the amount of rental income remitted to Thailand is presumed to be gross and not to have been reduced by the value of those deductions/expenses.

 

 

Then you said, you'll remit your own rental income less agent fees (net, not gross) which makes it "reduced by the value of those deductions or expenses", so going against the advice provided in your own tax guide. Anyway, as you say, you're under the TEDA so it is immaterial, to you.

 

If you take the Thai standard deductions on this, you're either remitting actual gross , or you're remitting net, then getting additional deductions on top of deductions you've already made ( that would be a nice scenario). 

 

Beyond your own situation, consider one where the property is in fact highly leveraged and makes no profit (common in property investing) : here, you could be faced with situation like this:

 

Gross rent: 20000. Foreign deductions including interest: 20000

 

If you take your guide as is worded above, you could then remit 20000 'gross income'  to Thailand , claim the "actual expense method" deduction , and have no liability. 

 

I was just reading back over some of your earlier post of June where you were adamant that capital can be separated and remitted separately from gain, it tok pages before you finally went quiet on the subject, I suppose you're in that same mode yet again with the idea that foreigners can't use the 30% expense allowance for rental income. 

 

And subsequent to starting this post, I've now twigged what you're trying to say about tax guides. So now we really are done, I'm tired of being trolled by idiots on this game you dreamed up and have encouraged. Out

 

[stat]

2 hours ago, Lorry said:

He wrote several lengthy detailed accounts about  it! Hard to miss

Good to know that you know where it is in this thread, that really helps a lot. Will keep this in mind if ever you have question I could answer.

[Captain Flack]

A reported post and reply breaking forum rules, by publicly discussing another member has been removed. Multiple accounts by the same person are not permitted, please discuss the topic.

[Lorry]

4 hours ago, stat said:

Good to know that you know where it is in this thread, that really helps a lot. Will keep this in mind if ever you have question I could answer.

I am sorry, but I don't know where in the many threads they are buried,  i don't even remember in which one.

The latest post was very long and, I think, max 1 week ago. Even if you only peruse the tax threads, you couldn't have missed it.

Just go through all the posts of the poster ballpoint and you will see them all.

The first one was quite old (one year plus?), but, as I said,  the latest one was very recent. 

[chiang mai]

I was reading back over some old posts, yesterday was my 18th year anniversary in the forum so I was reflecting on if/how the discussions and issues have changed,,,,they haven't!

 

Back in 2017, posters were talking about getting a tax ID, some afraid to do so for fear of being taxed, not being issued one by the local TRD office, whether inbound remittances were taxable.....fast forward, same issues, same questions! 

 

Another thread with a post from an old but now  dearly departed friend, Nancy Lindley, who said that the TRD was auditing all expats requests for tax refunds that year. Nancy was a prominent figure in the Chiang Mai expat scene and chair of the Chiang Mai expat club.

 

"It does appear that they're "auditing" any and all refund requests from foreigners this year.  Wasn't the case in previous years.  I wonder how many just decide to abandon their claim?"  

 

Interesting to look back at those discussions to see the difference between then and now...same old, same old.

 

 

 

 

[tandor]

On 5/21/2024 at 2:36 PM, JohnnyBD said:

After hearing me talk about the tax on foreign monies remitted for the past couple of months, my wife talked with some of her Thai friends who are married to foreigners. Every one of them said they never filed tax returns before and do not plan to now. If they read these threads, they would probably get a good laugh at how seriously we westerners take this issue. Some of their husbands are not here for 180 days so they are not tax residents, but they send big monies over to their wives. One of them, has several rental units and she said they do not file tax returns. Then I think, what's going to change for them? Who's going to (all of a sudden) knock on their doors to ask them about their finances? I find it kind of interesting, how we take these things more seriously due to our culture, but the Thais do not. And, probably no one will ever go knock on their doors, just like they haven't in the past. This will generate more tax revenues from the westerners who voluntarily file & pay, but for those who don't, maybe nothing will change. While we all can speculate as to some level of enforcement starting, the Thais my wife talked to don't seem to be worried at all. Maybe they know something we westerners do not. Just something to think about.

Thais love to gamble and not worry too much about consequences..however a desk audit out of the blue will certainly get their attention.

[Presnock]

On 5/19/2024 at 4:37 PM, Middle Aged Grouch said:

Will banks start to deduct tax at source on every foreigners bank account even if the foreigner does not stay more then 180 days ?

can't do that legally anywhere - especially as the banks would never be able to determine if the account holder was a tax resident at that time.  Of course TIT and I am sure they would like to do that but then all the claims for illegally "stealing" money from an acct holder would bury them as fewer and fewer expats would ever become a tax resident.  There are thousands already with exemptions to the taxes IAW LTR and DTA exemptions anyway and banks wouldn't have a clue as to them either.   It will come down to the revenue department to do their job instead of having the banking or the immigration people do the RD's jobs.  Just seems like more and more problems for them doing the active parts, instead of the individual following the written laws - oh yeah that was one of the main purposes of the OECD, FACTA, and CRS regulations on taxes - individuals not paying taxes anywhere.

[Presnock]

On 5/19/2024 at 10:46 PM, Lorry said:

There is a video of a discussion about the new tax rules at the French embassy.

Discussion of this video on AN has been blocked twice, because the video is mainly in French. Moderator said an English translation or summary of the video would be ok.

I listened only to the part after 56:17 minutes where the DTA between France and Thailand is discussed  (about pensions), about 6 minutes.

 

Summary:

These 6 minutes are an incredible mess of different opinions in Thai, French and English about what the DTA says. Complete confusion. The participants of the discussion can't agree on the most basic things. 

 

What I take from this is: if the RD does something like this in front of cameras at the French embassy, I can imagine how I would fare if my view of a DTA is different from their views.

There are many on AN, especially Mike Lister, who say don't worry,  the DTAs will protect you. 

Others like me have always said the use of DTAs will be extremely complicated,  laborious and expensive.

The French video most definitely supports my point.

On the other side, I know of one case where a provincial office of the RD was very knowledgeable about a DTA and it was smooth sailing along the lines of Mike Lister et al. Hopefully these people will prevail.

 

This post uses English language only, please do not delete it.

 

 

 

 

 

FYI:  expattaxthailand.com plans webinars on DTAs with Thailand, if already done, they have it on video.  I do think that the problems will exist in the interpretation of the language of the DTA - The US is very explicit in citing what is exempted or taxed only by the US and spells that out clearly - now I have read at least one other DTA and then I learn that they call social security like in the US something different in their DTA explanation so that if the RD might have a different interpretation AGED OLD pensions are not always social security nor civil service pensions which if spelled out correctly, would be exempt in most DTAs but  sometimes the DTA only says pension and is not clear if it is a state pension or a national govt pension which the Thais do recognize (usually) as being taxed only by the paying govt.  Not sure I have clearly spelled it out but it seems to me that based on the questions that many expats write on this forum, the fault may be in the language translations being done by both parties of the DTA.  Good luck to all.

[Surasak]

Just to add the mix. I received a letter from my UK bank on Thursday 03/10/24, asking for my UK TIN number. I was given alternate means of contact, and the easiest was to phone. The questions were, am I an American citizen, NO.

Do I have a TIN number from any other country, NO.

All fine and dandy, but we are being checked upon.

Just so you know.

[kiwikeith]

On 5/19/2024 at 4:45 PM, Mike Lister said:

We do not believe that is possible in the short to medium term or even probable in the longer term.

They took tax from my pension already and I have not been here 180 days this year 

[Mike Teavee]

16 minutes ago, Surasak said:

Just to add the mix. I received a letter from my UK bank on Thursday 03/10/24, asking for my UK TIN number. I was given alternate means of contact, and the easiest was to phone. The questions were, am I an American citizen, NO.

Do I have a TIN number from any other country, NO.

All fine and dandy, but we are being checked upon.

Just so you know.

Which Bank?

 

And I wonder why a UK Bank would ask for a UK TIN Number (None of mine have my UK Tax Identifier Number) - Did they mean your National Insurance Number?

 

Maybe they can be the same thing, but everybody who files a Tax Return is given a Unique Taxpayer Reference (UTR) which is what understand to be my UK Tax Identification Number. 

 

https://osome.com/uk/blog/tax-identification-number-tin/

 

Edited October 5 by Mike Teavee
Edit to add link explaining UK TINs

[Surasak]

2 minutes ago, Mike Teavee said:

Which Bank?

 

And I wonder why a UK Bank would ask for a UK TIN Number (None of mine have my UK Tax Identifier) - Did they mean your National Insurance Number? 

 

Nationwide/Virgin Money. They asked for my UK Tax Identifier Number. What use is my NI number to a bank? Or if they did require the NI, it is on three of my pension remittances to my A/C.

[Mike Teavee]

Just now, Surasak said:

Nationwide/Virgin Money. They asked for my UK Tax Identifier Number. What use is my NI number to a bank? Or if they did require the NI, it is on three of my pension remittances to my A/C.

My mortgage is with One Account (Was Virgin One) & a couple of years back they asked me for a Thai TIN (No idea how they knew I was in Thailand as I never use that account) but they've never asked me for my UK TIN, though they would have my NI Number as part of the registration so must be happy with either/or. 

 

As an aside they're closing my account in March (Mortgage period is finished) and in their letter they offered to migrate me to a normal bank account (Natwest I believe) but I'm pretty sure that's just a standard letter and they won't let me do it because I live in Thailand.  

Edited October 5 by Mike Teavee

[chiang mai]

25 minutes ago, kiwikeith said:

They took tax from my pension already and I have not been here 180 days this year 

Who took which tax from your pension and what percentage?

 

Was it a Thai pension or overseas, which country?

 

Do you work here?

 

 

[chiang mai]

12 minutes ago, Mike Teavee said:

My mortgage is with One Account (Was Virgin One) & a couple of years back they asked me for a Thai TIN (No idea how they knew I was in Thailand as I never use that account) but they've never asked me for my UK TIN, though they would have my NI Number as part of the registration so must be happy with either/or. 

 

As an aside they're closing my account in March (Mortgage period is finished) and in their letter they offered to migrate me to a normal bank account (Natwest I believe) but I'm pretty sure that's just a standard letter and they won't let me do it because I live in Thailand.  

If you have property in the UK that should be possible, it was for me at least, HSBC. I also file a UK tax return and have UK income so that may have helped but I imagine you do also.

[CharlesHolzhauer]

20 hours ago, JimGant said:

Then, you have no reason to participate in a thread affecting expats. Jeez, it's your UK-Thai DTA that says Thailand has a secondary taxation right in your rental income. So how can you say you have no interest -- when what we're talking about is completely affected by the DTA?

His reasons are irrelevant, and if his responses in certain threads don’t appeal to you, then they simply don’t appeal to you.

[kiwikeith]

35 minutes ago, chiang mai said:

Who took which tax from your pension and what percentage?

 

Was it a Thai pension or overseas, which country?

 

Do you work here?

 

 

No, just came back and applied for non o, but when my pension arrived the BK bank took tax from it

[kiwikeith]

4 minutes ago, kiwikeith said:

No, just came back and applied for non o, but when my pension arrived the BK bank took tax from it

Sorry they took 15% tax on interest, pension arrived a few days later, I updated my book and they had taken tax on interest, NZ pension is not taxed yet.

[norbra]

6 minutes ago, kiwikeith said:

No, just came back and applied for non o, but when my pension arrived the BK bank took tax from it

Did the bank also add interest?

That would explain the tax entry

[kiwikeith]

Just now, norbra said:

Did the bank also add interest?

That would explain the tax entry

 

Just now, norbra said:

Did the bank also add interest?

That would explain the tax entry

yes

[chiang mai]

1 hour ago, kiwikeith said:

No, just came back and applied for non o, but when my pension arrived the BK bank took tax from it

Sounds like you paid tax on interest earned, that's a withholding tax that every pays on interest earned in Thailand. The tax was not on your pension.

[JimGant]

22 hours ago, chiang mai said:

Somebody somewhere may get something useful out of this to help them better understand their tax situation or maybe even help provide some tips regarding strategy.

Ah, now I understand our disconnect. You're only remitting part of your rental income. And as such, you can call that remittance from either a  gross or net figure -- and, of course, gross allows you to take the 30% deduction.

 

I'd been assuming you were remitting all your rental proceeds. And since remittances are a cash flow situation -- and since cash expenses reduce you cash rental income -- then that rental remittance cash flow to Thailand -- would be net rental income. We were on different frequencies.

 

But, when we go to worldwide income, this cash flow peculiarity will disappear -- and what will be subject to Thai taxation will be net rentals, i.e., using the US example -- the rental figure included in the "gross income" line on your 1040 (yes, a confusing contradiction of terms -- no one ever called the IRS bright).

 

I guess a discussion for another day.

[Phulublub]

6 hours ago, kiwikeith said:

On 5/19/2024 at 4:45 PM, Mike Lister said:

We do not believe that is possible in the short to medium term or even probable in the longer term.

They took tax from my pension already and I have not been here 180 days this year 

Isn't the default that banks will deduct tax at source from ALL accounts and it is up to the individual to reclaim if nothing is due?

 

PH

[chiang mai]

Just now, Phulublub said:

Isn't the default that banks will deduct tax at source from ALL accounts and it is up to the individual to reclaim if nothing is due?

 

PH

The default is that any interest income paid on any interest bearing savings account, will be taxed at 15% at source, except:

 

Interest on fixed deposits, which must be reclaimed via a tax return.

 

Interest of accounts (at the banks discretion) where the account holder has registered their TIN with the bank.

 

Deposits of pensions etc are not interest bearing or savings accounts, unless they are paid into one of those accounts and interest is actually paid, in which case, the interest is on the account, not on a particular deposit. 

[Phulublub]

58 minutes ago, chiang mai said:

The default is that any interest income paid on any interest bearing savings account, will be taxed at 15% at source, except:

 

Interest on fixed deposits, which must be reclaimed via a tax return.

 

Interest of accounts (at the banks discretion) where the account holder has registered their TIN with the bank.

 

Deposits of pensions etc are not interest bearing or savings accounts, unless they are paid into one of those accounts and interest is actually paid, in which case, the interest is on the account, not on a particular deposit. 

 Clearly they would only deduct tax from interest, not the capital (from whatever source)...the thread of posts was more about that, but I could have been clearer in my post.

 

PH

[stat]

15 hours ago, chiang mai said:

I was reading back over some old posts, yesterday was my 18th year anniversary in the forum so I was reflecting on if/how the discussions and issues have changed,,,,they haven't!

 

Back in 2017, posters were talking about getting a tax ID, some afraid to do so for fear of being taxed, not being issued one by the local TRD office, whether inbound remittances were taxable.....fast forward, same issues, same questions! 

 

Another thread with a post from an old but now  dearly departed friend, Nancy Lindley, who said that the TRD was auditing all expats requests for tax refunds that year. Nancy was a prominent figure in the Chiang Mai expat scene and chair of the Chiang Mai expat club.

 

"It does appear that they're "auditing" any and all refund requests from foreigners this year.  Wasn't the case in previous years.  I wonder how many just decide to abandon their claim?"  

 

Interesting to look back at those discussions to see the difference between then and now...same old, same old.

 

 

 

 

You fail to understand that for some (not for me) the risk of being taxed on ww income is in the Millions of USD. If I look at the Excel sheet you provided with your income and possible tax payment, frankly I would not bother to spend more then 1 hour per week in this thread, agreed. 

[stat]

14 hours ago, tandor said:

Thais love to gamble and not worry too much about consequences..however a desk audit out of the blue will certainly get their attention.

I fully agree. The story about the Thais loughing reminds me of the Germans back in the day when interest income became taxable for the first time in Germany. Everyone had a good lough and simply moved their account to Luxemburg. Years later they all got busted and paid a hefty toll, some went to jail like Boris Becker, Hoeness, Zumwinkel etc. 

[chiang mai]

7 hours ago, stat said:

You fail to understand that for some (not for me) the risk of being taxed on ww income is in the Millions of USD. If I look at the Excel sheet you provided with your income and possible tax payment, frankly I would not bother to spend more then 1 hour per week in this thread, agreed. 

You seem to think that the Thai tax issues affect only wealthy individuals and ignore the vulnerable, average and aged expat pensioner retiree who has no experience of managing or filing tax returns. My interest lies in trying to help the average and below average member, many of whom are deeply scared and confused by all things foreign tax related. My past tax, finance and Big 4 work experience, combined with the fact I have lived in Thailand full time for over 20 years, may be of help to some of that group. Those things are why I mostly ignore the never ending debates about CRS and foreign DTA's.

 

I have no interest in the tax affairs of people like you and others who talk in terms of buying 1,000 Apple and being concerned at the tax implications when you sell, or the large dividend payments given to you by your parents. If you can afford to buy 1,000 Apple you can also afford to put your hand in your pocket  and spend 20k at Ernst and Young and get the best Thai tax advice that money can buy. So exactly why you even bother to log onto this thread, especially given that you live full time over 8,500 kms away. is extraordinary, to say the least!

 

If there are members of AN who risk millions in tax as a result of CRS, they must be some of the cheapest rich people on the planet, in order to have such wealth yet seek tax advice from a social networking forum! I am personally aware of at least two  AN members who talked in terms of self harm and required support and intervention, such was their fear of what might happen to their paltry income in retirement here as a result of the tax changes. Meanwhile,  you talk about the millions at risk overseas by wealthy expat, dear Lord, we're not even on the same planet, let alone the same subject.

 

I will be very happy if you wish to add me to your ignore list, that way my contributions won't interfere with your enjoyment.

Edited October 5 by chiang mai