Thailand's Expats Urged to Register with TRD for Tax, Says Expert

[jojothai]

11 minutes ago, lordgrinz said:

 

Actually, remittance earned in the same year was always taxable.

Yes, you are correct . I stand to be corrected, but we are talking about the new rule changes here and if tax returns will now be required.

There is likely to be a lot more attention from the TRD for any remittances.

Edited November 8 by jojothai
Add text

[chiang mai]

3 minutes ago, jojothai said:

Why would they have declared the remittances?

The remittance tax change was from 1st jan 2024. So there has been no need for the retirees using the income method to file tax returns previously.

But the remittances became a taxable amount this year, then the retirees soon have to decide what to do.

Next year we should expect to start to see how this develops.

I recall from previous year posts about visa's and living costs that a fairly large number of members were having their overseas pensions remitted directly to Thailand each month, they needed the money to qualify for their visa and also to live on. Even today, my pensions are remitted directly to Thailand as they have been for many years. I don't do it that way for any reason other than it's convenient and most years I don't have to pay any tax. I recall others saying that convenience was the biggest reason it meant not having to worry about exchange rates and trying to time them. A lot of expats got burned by exchange rates from 2010 onwards, they were used to seeing 60 and 70 to the Pound and all of sudden it ended up in the 50's. Thereafter, many said screw it, just send it to me every month so I don't have to worry about it.

[cowellandrew]

So if you leave Thailand after staying 179 days then re enter for another 179 days

Are you liable for tax?

[chiang mai]

5 minutes ago, cowellandrew said:

So if you leave Thailand after staying 179 days then re enter for another 179 days

Are you liable for tax?

Yes, the 180 days is cumulative in any given calendar year. Six months in , six months out, would work.

[scottiejohn]

5 hours ago, chiang mai said:

Expats are required to hold between 400k and 800k per year in a bank account, in order to qualify for a visa. The amount is indicative of the cost to live here for a year and by all accounts isn't too far off the mark.

So you now agree that just because you have that money in a bank account is NOT a reason to file a tax return?

[jayboy]

35 minutes ago, lordgrinz said:

 

Actually, remittance earned in the same year was always taxable.

 

They were and I think most sentient retirees were aware of this.However given that inward transfers were fungible and (a) earnings from previous years were not taxable and (b) no checks were ever made which years transfers related to and (c) no system for making checks existed and (d) the TRD wasn't interested - the vast majority of non working retirees without Thai income did not file tax returns.Many including myself tried to keep in mind it would be best not remit current income.But it wasn't a big deal if one did and certainly the idea of submitting a tax return never entered the mind.All changed now of course.

 

So I don't think many people in the category I described were submitting tax returns in the past.Can I prove it ? No other than anecdotally and the application of common sense.I put this matter to a senior foreign tax/accountancy guy (well known firm) and he agreed my assessment - though making the point that the situation has now changed.

 

I'm aware that a few people submitted returns to claim back interest on savings.One struggles to understand why they would want to enter the tax system for miserable financial returns given the interest rates payable - but perhaps they had astronomical holdings.

 

There is a certain sort of person that loves to have every remote possibility covered.They derive pleasure from completing and submitting tax returns even when there was no real need.Even more they enjoy the virtuous feeling and the potential ability to rebuke others for their shortcomings/incomprehension.It takes all sorts.

 

Anyway the matter is excellently covered in the recent PWC tax publication for which there is a link elsewhere.Pay attention to that and not to people like me and certainly not the Eeyores out there.

[JimGant]

15 minutes ago, jayboy said:

They derive pleasure from completing and submitting tax returns even when there was no real need

Naaaaa. That would really be retarded.

[Captor]

21 hours ago, Gottfrid said:

Sure, continue complain. If you wish to live in Thailand, that´s what you need to do. Stop whining about it. It´s another option. Go home and get something for you paid tax.

Who is whining? I just answered your question.

[thailand49]

 

 

2 hours ago, chiang mai said:

The problem is that it has started but you don't seem to understand that. What hasn't started yet is the tax on world wide income or the negative income tax proposals, they are not still being discussed. But the rule change regarding remittances was put into effect last October using Por 161 and became effective on 1 January this year, the first day of the new tax year.

Ok if that is the road you want to travel down and understand knock yourself out I dont plan to jump and obtain an tax ID, until Im force to do it is that just too hard to understand for you. 

Im not confused but I do wonder if Im talking to a wall?

 

[Rampant Rabbit]

should retitle the thread "Pot Boiler"

Other suggestions

1 Ex  pats shot at dawn for failing to register with TRD

2 ex pats to be deported  if  tax forms  not  filled in

3 ex  pats to be strip searched to find  hidden arssets

4 My life in hell because i didnt fill in tax  forms

5 Trump condemns Thai Tax laws

6 Trans allowed to declare half their income untaxable as theyre in 2  minds about it

[JimGant]

21 hours ago, Etaoin Shrdlu said:

Is this the same tax adviser who was telling Americans that their IRA/401k withdrawals were not subject to US Federal income tax due to the operation of the Thai-US DTA and also were not subject to Thai taxation due to the prior-year remittance rule?

Yep. He "interpreted" (misrepresented for profit is a better descriptor) the Thai-US DTA's "saving clause" as NOT being applicable to remitted IRA proceeds -- making Thailand the only country where US persons, being tax residents of Thailand, did not have to declare their IRA income on their US tax return -- because the DTA gave Thailand "exclusive taxation rights" on IRAs. And not having to pay Thai taxes, 'cause of the "not remitted in year earned" rule. Result: Pay no one any taxes on your annual IRA RMD cashout, if you spend 180 days in Thailand, and don't remit that RMD cashout until the next year. Too good to be true? Duh.

 

And, yes, the DTA does say Thailand has "exclusive taxation rights" on private pensions and IRAs. But, the US inserts a "saving clause" into every one of its DTAs, allowing in all but a few situations (e.g, alimony, child support) US taxation authority override of DTA language. Sounds arrogant, right? But in actuality it doesn't override any of the spirit of a DTA, namely prevention of double taxation. What it does do, however, is prevent double No taxation. For example, in this case, where Thailand doesn't take advantage of its exclusive taxation right of IRAs -- the "saving clause" allows the US to tax this IRA -- and keep all the proceeds. No double taxation violation here. But if Thailand did tax the IRA, then the US would have to absorb a tax credit for this Thai taxation -- again, no double taxation. The OECD loves the concept of the saving clause, as it prevents a no no taxation situation, which is at the heart of the OECD's new Model Tax Treaty language.

 

I won't belabor the point -- this IRA "saving clause" situation was settled in similar situation involving Switzerland -- and can be found at the below link. But Thomas Carden has successfully sold the IRA tax avoidance scheme to, apparently, many Yanks here in Thailand -- and the scheme is, apparently, too complex for the GS-11 at the IRS to see through (the Swiss example was solved by the senior lawyer on the IRS staff).

https://aseannow.com/topic/1008555-tax-specialist-in-chiang-mai/page/2/

 

But now with all remittances, regardless of year remitted, being taxable -- Carden's snake oil bubble regarding IRAs has burst. Good. He's a licensed Enrolled Agent for the IRS -- and like with CPAs, he takes a fiduciary oath to protect his clients, and the US. Some of us take that oath seriously -- others apparently don't. So, beware of anything Carden is selling.

 

 

 

[chiang mai]

1 hour ago, scottiejohn said:

So you now agree that just because you have that money in a bank account is NOT a reason to file a tax return?

That was never a question or an issue, of course you don't need to file, just for having money in the bank!!!

[chiang mai]

1 hour ago, thailand49 said:

 

 

Ok if that is the road you want to travel down and understand knock yourself out I dont plan to jump and obtain an tax ID, until Im force to do it is that just too hard to understand for you. 

Im not confused but I do wonder if Im talking to a wall?

 

I don't care what you do or don't do, only that the current circumstances are clear and that you and everyone else understands that the new tax rule is currently in force and has been all year..

[chiang mai]

1 hour ago, jayboy said:

 

They were and I think most sentient retirees were aware of this.However given that inward transfers were fungible and (a) earnings from previous years were not taxable and (b) no checks were ever made which years transfers related to and (c) no system for making checks existed and (d) the TRD wasn't interested - the vast majority of non working retirees without Thai income did not file tax returns.Many including myself tried to keep in mind it would be best not remit current income.But it wasn't a big deal if one did and certainly the idea of submitting a tax return never entered the mind.All changed now of course.

 

So I don't think many people in the category I described were submitting tax returns in the past.Can I prove it ? No other than anecdotally and the application of common sense.I put this matter to a senior foreign tax/accountancy guy (well known firm) and he agreed my assessment - though making the point that the situation has now changed.

 

I'm aware that a few people submitted returns to claim back interest on savings.One struggles to understand why they would want to enter the tax system for miserable financial returns given the interest rates payable - but perhaps they had astronomical holdings.

 

There is a certain sort of person that loves to have every remote possibility covered.They derive pleasure from completing and submitting tax returns even when there was no real need.Even more they enjoy the virtuous feeling and the potential ability to rebuke others for their shortcomings/incomprehension.It takes all sorts.

 

Anyway the matter is excellently covered in the recent PWC tax publication for which there is a link elsewhere.Pay attention to that and not to people like me and certainly not the Eeyores out there.

Between 2004 and 2008, interest rates of 5% plus could be had from the banks here. At the time, I started a thread called bank interest rates which was the first of many. Foreigners were falling over themselves to take out fixed deposits plus banks like CIMB were paying above average market rates. Hundreds if not thousands of farangs were flocking to the TRD in the new year to get their tax on interest returned because at 5% it meant something, many of us had many millions on deposit at the time. ALL of those foreigners entered the tax system, the moment they applied for their refunds, many stayed there, some left and some passed away but there will still be a sizeable number of people still registered from that period.

[Etaoin Shrdlu]

27 minutes ago, JimGant said:

Yep. He "interpreted" (misrepresented for profit is a better descriptor) the Thai-US DTA's "saving clause" as NOT being applicable to remitted IRA proceeds -- making Thailand the only country where US persons, being tax residents of Thailand, did not have to declare their IRA income on their US tax return -- because the DTA gave Thailand "exclusive taxation rights" on IRAs. And not having to pay Thai taxes, 'cause of the "not remitted in year earned" rule. Result: Pay no one any taxes on your annual IRA RMD cashout, if you spend 180 days in Thailand, and don't remit that RMD cashout until the next year. Too good to be true? Duh.

 

And, yes, the DTA does say Thailand has "exclusive taxation rights" on private pensions and IRAs. But, the US inserts a "saving clause" into every one of its DTAs, allowing in all but a few situations (e.g, alimony, child support) US taxation authority override of DTA language. Sounds arrogant, right? But in actuality it doesn't override any of the spirit of a DTA, namely prevention of double taxation. What it does do, however, is prevent double No taxation. For example, in this case, where Thailand doesn't take advantage of its exclusive taxation right of IRAs -- the "saving clause" allows the US to tax this IRA -- and keep all the proceeds. No double taxation violation here. But if Thailand did tax the IRA, then the US would have to absorb a tax credit for this Thai taxation -- again, no double taxation. The OECD loves the concept of the saving clause, as it prevents a no no taxation situation, which is at the heart of the OECD's new Model Tax Treaty language.

 

I won't belabor the point -- this IRA "saving clause" situation was settled in similar situation involving Switzerland -- and can be found at the below link. But Thomas Carden has successfully sold the IRA tax avoidance scheme to, apparently, many Yanks here in Thailand -- and the scheme is, apparently, too complex for the GS-11 at the IRS to see through (the Swiss example was solved by the senior lawyer on the IRS staff).

https://aseannow.com/topic/1008555-tax-specialist-in-chiang-mai/page/2/

 

But now with all remittances, regardless of year remitted, being taxable -- Carden's snake oil bubble regarding IRAs has burst. Good. He's a licensed Enrolled Agent for the IRS -- and like with CPAs, he takes a fiduciary oath to protect his clients, and the US. Some of us take that oath seriously -- others apparently don't. So, beware of anything Carden is selling.

 

 

 

 

Yeah, I had no illusions about the DTA over-riding the saving clause.

 

I find it hard to believe anyone would take this approach seriously.

 

[jayboy]

36 minutes ago, chiang mai said:

Between 2004 and 2008, interest rates of 5% plus could be had from the banks here. At the time, I started a thread called bank interest rates which was the first of many. Foreigners were falling over themselves to take out fixed deposits plus banks like CIMB were paying above average market rates. Hundreds if not thousands of farangs were flocking to the TRD in the new year to get their tax on interest returned because at 5% it meant something, many of us had many millions on deposit at the time. ALL of those foreigners entered the tax system, the moment they applied for their refunds, many stayed there, some left and some passed away but there will still be a sizeable number of people still registered from that period.

 

It's true that rates hit a peak in 2006 though as I recall 5% was not easily available (more like 3.5%) and in any case rates fell steadily from then on to the paltry position of the last few years.Assuming we are talking about Baht deposits the return calculation must also take account of what FX was brought in and when.

 

You mention CIMB: as it happens, I remember there was some concern about rates offered by CIMB about that time - not on the conventional rates for depositors which tend to be pretty standard across the sector but on some weird hybrid products with very high returns.

 

Whether thousands of farang were "flocking" to TRD who can tell? What one can say is that people would need to be very smart to take advantage of the very few spikes in rates and avoiding the long years of rates lower than inflation.I doubt for most people it made sense to enter the tax system given the poor returns available over any reasonable stretch of time, to say nothing of the opportunity cost.

Edited November 8 by jayboy

[scottiejohn]

48 minutes ago, chiang mai said:

That was never a question or an issue, of course you don't need to file, just for having money in the bank!!!

Thank you for clarifying your previously misleading statement on the subject!

[JimGant]

21 minutes ago, Etaoin Shrdlu said:

Yeah, I had no illusions about the DTA over-riding the saving clause.

 

I find it hard to believe anyone would take this approach seriously.

Well, Carden did a convincing sales job -- you give a speech with confusing  treaty language, interspersed with US Tax Code confusing lingo -- and with a "just pay me $500, and save $5000 on taxes" -- what's not to like? And he even sold the 'file 3 years of amended returns' to get back all those taxes on previous IRA distributions. Christ, why not? What could go wrong? You either didn't get the IRS on-board ('cause the average IRS agent wasn't versed in treaty language) -- or if they saw it was a sham, you'd only be out the tax you rightfully owed, plus interest. Thomas Carden would face other charges -- but, I'm sure, he could tap dance a, "gee, this is how the treaty language appeared to me, blah blah." Anyway, many Yanks have saved on taxes on their IRAs, per Carden's ploy -- and have probably gotten away with it. Not surprisingly, none would share their Form 8833 with me -- the form Carden has to provide the IRS, in support of his treaty argument.

 

Looks like your game is over, Thomas. So solly.

[chiang mai]

13 minutes ago, jayboy said:

 

It's true that rates hit a peak in 2006 though as I recall 5% was not easily available (more like 3.5%) and in any case rates fell steadily from then on to the paltry position of the last few years.Assuming we are talking about Baht deposits the return calculation must also take account of what FX was brought in and when.

 

You mention CIMB: as it happens, I remember there was some concern about rates offered by CIMB about that time - not on the conventional rates for depositors which tend to be pretty standard across the sector but on some weird hybrid products with very high returns.

 

Whether thousands of farang were "flocking" to TRD who can tell? What one can say is that people would need to be very smart to take advantage of the very few spikes in rates and avoiding the long years of rates lower than inflation.I doubt for most people it made sense to enter the tax system given the poor returns available over any reasonable stretch of time, to say nothing of the opportunity cost.

I was getting 2 and 3 year fixes at 5.5% from CIMB and other banks in 2006, the potential downside of entering the tax system at that time wasn't on anybody's radar, it was never mentioned.

[The Cyclist]

8th November, and despite more words being typed thanthe internet can cope with still the same questions are being asked.

 

1. If you live and work in Thailand, file a tax return and the Revenue Code is your bible.

 

2. If you are a ( Non working in Thailand ) tax resident of Thailand and remit income from overseas, a DTA is your bible.

 

a. If you remit income that is non taxable in Tailand due to a DTA. You do not need to file a tax return ( As it is not assessable income )

 

b. If you remit income that could be taxable under a DTA. File a tax return.

 

c. In both cases, keep records including any tax payments made.

 

For Brits. Government pensions ( This covers many employments ) are not taxable in thailand, they're not assessable income.

 

State Pensions are not Government Pensions and depending on your circumstances, are most likely will be considered assessable income.

[NoDisplayName]

8 hours ago, chiang mai said:

Expats are required to hold between 400k and 800k per year in a bank account, in order to qualify for a visa. The amount is indicative of the cost to live here for a year and by all accounts isn't too far off the mark. That means, each expat earns/spend between 400k/800k per year to live in Thailand, I know I spend in that range and many others do also.

 

This doesn't make any sense.

 

A retiree's immigration-mandated security bond of 800K in the bank is no indication of actual living expenses.  This is money held hostage, sitting in an account, not income.

 

My wife's house and truck are paid off, we have no debt.  Why would we need to spend 67K baht/month?  We can easily get by on 15K/month.

 

 

[chiang mai]

Just now, NoDisplayName said:

 

This doesn't make any sense.

 

A retiree's immigration-mandated security bond of 800K in the bank is no indication of actual living expenses.  This is money held hostage, sitting in an account, not income.

 

My wife's house and truck are paid off, we have no debt.  Why would we need to spend 67K baht/month?  We can easily get by on 15K/month.

 

 

The "bond" of 400k and 800k was estimated to be equivalent to one years living expenses for a foreigner in their respective category, that was my understand of why it was set at that level. As it turns out, it's not that far off the mark although it is overdue to be increased for inflation.

[Rimmer]

A personal attack has been removed

[NoDisplayName]

1 minute ago, chiang mai said:

The "bond" of 400k and 800k was estimated to be equivalent to one years living expenses for a foreigner in their respective category, that was my understand of why it was set at that level. As it turns out, it's not that far off the mark although it is overdue to be increased for inflation.

 

Or the bond was set at the then current exchange rate equivalent of $20K, randomly selected at random by some random official, which coincidentally happens to coincide with your personal anecdotal spending habits.

 

Nothing to do with taxation, and no way indicative of what the average foreigner remits or spends monthly.

[chiang mai]

19 minutes ago, NoDisplayName said:

 

Or the bond was set at the then current exchange rate equivalent of $20K, randomly selected at random by some random official, which coincidentally happens to coincide with your personal anecdotal spending habits.

 

Nothing to do with taxation, and no way indicative of what the average foreigner remits or spends monthly.

I think most readers will agree that very few foreigners in Thailand, exist here on less than 50k baht per month, if all the threads about how much does it cost to live in Thailand are true. I've been reading those threads for twenty years and 50k is the minimum mentioned in recent years, That equates to 600k baht a year, minimum and is more than three times the level of average earnings by Thai's. 

 

From my personal perspective, my cost of living has reduced, as I've grown older but 50K a month is what I spend, my wife has income that is similar and our house and cars are paid off and we have no debt either. 

 

 

Edited November 8 by chiang mai

[NoDisplayName]

4 minutes ago, chiang mai said:

I think most readers will agree that very few foreigners in Thailand, exist here on less than 50k baht per month, if all the threads about how much does it cost to live in Thailand are true. I've been reading those threads for twenty years and 50k is the minimum mentioned in recent years, That equates to 600k baht a year, minimum and is more than three times the level of average earnings by Thai's. 

 

From my personal perspective, my cost of living has reduced, as I've grown older but 50K a month is what I spend, my wife has income that is similar and our house and cars are paid off and we have no debt either. 

 

 

 

I can't imagine spending that much.

 

Last month I purchased a new lawn mower and a new water pump, and wifey has 3 cats to feed.

 

Nothing to do with income or taxation.

[redwood1]

4 hours ago, chiang mai said:

Yes, the 180 days is cumulative in any given calendar year. Six months in , six months out, would work.

 

How about 178 days till December 31st then leave and come back January 1st for another 179 days......So there is one full year ......lol......With out going over 180 days in one year..

 

Not that anyones going to be paying any tax anyways...

Edited November 8 by redwood1

[Banana7]

If you are Canadian and have a Canadian bank account, some banks are now asking their customers to sign a form which includes foreign tax identification numbers (TIN), TD is one such bank. The form also says, that if in the future, you obtain a foreign TIN, the Canadian bank needs to be notified of the foreign TIN, within 30 days. There have been reports that some Canadian banks are closing accounts/freezing accounts that fail to comply.

 

So if you get a Thai tax TIN, even if you don't pay taxes or file a Thai return, you are obligated to notify your Canadian bank and of course that bank will notify Revenue Canada, and it may become the start of a tax nightmare.

 

Little details like this, which are conveniently omitted by the tax expert, can screw you in the future. I highly recommend to avoid obtaining a Thai TIN until it is required by law.

 

[daveAustin]

On 11/7/2024 at 7:16 AM, chiang mai said:

FWIW I agree that everyone should be proactive, but that doesn't mean rushing out to obtain a TIN or buying his or anyone else's tax services. Everyone should understand the issues as they relate to their particular unique  situation and calculate their own exposure to Thai tax using pen and paper. Set up a spread sheet and update it every month with your income and your TEDA and see what the end of the year position looks like, that's sensible.

Totally get that dude but Thailand is taking the Michael a bit here. Anyone with half a brain knows what they’re doing … visit and then <deleted> off!  They (the <deleted> in office) do not really want you here. Will see how it goes but if they start bunging silly thresholds tax then they can <deleted> off and baulk at a booming Vietnam! 

Edited November 8 by metisdead
You will not post vulgarities, obscenities or profanities.

[Lacessit]

22 hours ago, chiang mai said:

How far under the radar can a resident foreigner be in Thailand! Immigration has all our bank details, the bank has our Immigration/visa details, everyone has copies of our passports, the BOT sees all our inbound and outbound TT's, the TRD gets details of tax withheld on savings accounts, etc etc etc. 

The only bank account Immigration knows about is the 800 K baht on deposit. I have two other accounts here they know nothing about.

 

I do not have a Thai tax number. I have a pink Thai ID card which is occasionally useful.

 

The TRD is welcome to the tax on the pitiful interest I earn on accounts here. I am not interested in claiming it back.

 

The Thai government knows nothing about the investments and bank account I have in Australia.

 

Everyone has copies of our passports, true. So what? No skin off my nose if Thailand wants to drown itself in paper.