Will Thai condo sales to foreigners become seasonal because of tax enforcement??

[jas007]

I guess the question is that is considered "income" in Thailand? Any gain from whatever source is income?  In some countries, there's a difference between earrings from wages and long term capital gain, for example.  Taxed at different rates, or perhaps not at all, depending..  Or what about inheritance funds?  

 

I can't believe that any money simply transferred into Thailand is automatically "income" for purposes of Thai Taxation. 

[chiang mai]

Just now, Jingthing said:

I own a foreign freehold condo which I paid a premium for that status. 

I'm concerned that Thailand's changed tax policies which might even eventually spread to global income and assets is going to soften the demand by foreigners as if I ever sell would be the target market.

I'd be willing to bet that any drop in demand by Westerners will be rapidly absorbed by Chinese and Russian buyers, there are millions and millions more of them than there are of us. The area where I live in the North is dominated by Chinese buyers who have money and are very keen to buy here.

[Jingthing]

Btw if you are audited as any other country the burden of proof about the source of money is fully on you and bull<deleted> stories won't cut it. Only clear documentation will.

[jas007]

3 minutes ago, Jingthing said:

I own a foreign freehold condo which I paid a premium for that status. 

I'm concerned that Thailand's changed tax policies which might even eventually spread to global income and assets is going to soften the demand by foreigners as if I ever sell would be the target market.

It certainly could.  That's real money people will have to pay. 

[chiang mai]

1 minute ago, jas007 said:

I guess the question is that is considered "income" in Thailand? Any gain from whatever source is income?  In some countries, there's a difference between earrings from wages and long term capital gain, for example.  Taxed at different rates, or perhaps not at all, depending..  Or what about inheritance funds?  

 

I can't believe that any money simply transferred into Thailand is automatically "income" for purposes of Thai Taxation. 

No that's not the case. I suggest you read the following document:

 

 

[Jingthing]

8 minutes ago, jas007 said:

I guess the question is that is considered "income" in Thailand? Any gain from whatever source is income?  In some countries, there's a difference between earrings from wages and long term capital gain, for example.  Taxed at different rates, or perhaps not at all, depending..  Or what about inheritance funds?  

 

I can't believe that any money simply transferred into Thailand is automatically "income" for purposes of Thai Taxation. 

Good question.

Again it's not only income.

Capital gains on any assets are taxed as income if imported.

Pensions including retirement account withdrawals if not specifically exempted by your DTA also taxable if imported.

Happily for Americans social security is fully exempt because of the dta.

I'm pretty sure inheritances are exempt as well.

[jas007]

5 minutes ago, Jingthing said:

Good question.

Again it's not only income.

Capital gains on any assets are taxed as income if imported.

Pensions including retirement account withdrawals if not specifically exempted by your DTA also taxable if imported.

Happily for Americans social security is fully exempt because of the dta.

I'm pretty sure inheritances are exempt as well.

I wouldn't get too worked up about any of this until the dust settles.  There are all sorts of tax treaties to be considered, as well, and I'm sure the real estate industry will chime in.

[CallumWK]

34 minutes ago, chiang mai said:

So your story is, hey Mr Thai Tax Man, I didn't have 5 million in income since January 2024 and there's no possible way I could have stolen it or earned it from illegal activities such as my part time job as a smack dealer ergo, the 5 mill.

 

So you are now stating that the RD will accuse all foreigners of having illegal activities? How would that work out for a pensioner who lives in Thailand 365 days a year, and as the only source of income has his pension deposited on his account in his home country?

 

26 minutes ago, chiang mai said:

It's odd however that there's nothing in the TRD Code, or anything put out by the tax consultancies, to support your claim..

 

It has been clearly stated in other threads on this forum, that were started by another know it all bank janitor, that savings are not taxed.

[Jingthing]

Savings in the bank before December 31, 2023 only 

Any money after that including asset sale profits needs to be indentified as far as source if importing.

It's not so much about criminal activities but more like people claiming an import is exempt and the tax man if auditing saying prove it and if you can't you're screwed. My understanding is the penalty is the due tax doubled.

[chiang mai]

8 minutes ago, CallumWK said:

 

So you are now stating that the RD will accuse all foreigners of having illegal activities? How would that work out for a pensioner who lives in Thailand 365 days a year, and as the only source of income has his pension deposited on his account in his home country?

 

 

It has been clearly stated in other threads on this forum, that were started by another know it all bank janitor, that savings are not taxed.

Thailand operates a self assessment system of tax, it relies on you to declare your income truthfully. If TRD doesn't believe you or has questions, they will ask you to verify what you said is true and to supply evidence that it is so. That evidence must be positive evidence and not the default that you propose.....I didn't earn it so it must be savings simply wont fly, you need to demonstrate that it is actually savings using statements etc etc..

 

Now you've started to become irritating, you've been given all manner of helpful information and you;re calling people names so enough is enough...slot 3, welcomes you, your time with me is up.

[topt]

19 minutes ago, jas007 said:

and I'm sure the real estate industry will chime in.

Well they have had more than a year so far and I have not seen anything that suggests that they may be actively trying to find a solution.........which in itself seems strange.

[anrcaccount]

This is a good example of the absolute nonsense of remittance based taxation and why almost nowhere in the world does it.

 

If and when they ever enforce tax on foreign income remitted, can you imagine the number of work-arounds that could be put in place to avoid a punitive additional tax on real estate purchases:

 

• Loan agreements- anything that flows in is a loan
• Purchasing agencies based offshore that are non resident
• Sellers gaming the payment timings in order to ensure the buyers remit when non resident
• Nominees purchasing 
• Gifting used extensively
• Probably many other ways to approach, no doubt a goldmine for creative accounting! 

If it ever is actually enforced (IMO unlikely), I think a swift back pedal will occur or, something like has been suggested above, an exemption, maybe granted. 

 

It would just create nonsensical outcomes. 

 

Are there other jurisdictions worldwide that impose personal income tax on foreign source funds remitted for a real estate purchase?

[CallumWK]

9 minutes ago, chiang mai said:

.slot 3, welcomes you, your time with me is up.

 

I can't thank you enough for that. Now shall I look up the posts where you wrote that you have an extensive list with tens of members, simply because they don't agree with your unsustained drivel?

[Jingthing]

1 minute ago, anrcaccount said:

This is a good example of the absolute nonsense of remittance based taxation and why almost nowhere in the world does it.

 

If and when they ever enforce tax on foreign income remitted, can you imagine the number of work-arounds that could be put in place to avoid a punitive additional tax on real estate purchases:

 

• Loan agreements- anything that flows in is a loan
• Purchasing agencies based offshore that are non resident
• Sellers gaming the payment timings in order to ensure the buyers remit when non resident
• Nominees purchasing 
• Gifting used extensively
• Probably many other ways to approach, no doubt a goldmine for creative accounting! 

If it ever is actually enforced (IMO unlikely), I think a swift back pedal will occur or, something like has been suggested above, an exemption, maybe granted. 

 

It would just create nonsensical outcomes. 

 

Are there other jurisdictions worldwide that impose personal income tax on foreign source funds remitted for a real estate purchase?

Great question!

But on the other hand I doubt expats will welcome global taxation on income and assets either!

[chiang mai]

1 hour ago, topt said:

Well they have had more than a year so far and I have not seen anything that suggests that they may be actively trying to find a solution.........which in itself seems strange.

Perhaps that's because they don't see it as a problem.

[scubascuba3]

What benefits do we get if we start paying thai tax?  deductable against immigration costs, govt healthcare?

[Yumthai]

15 minutes ago, scubascuba3 said:

What benefits do we get if we start paying thai tax?  deductable against immigration costs, govt healthcare?

You mean the agent fees you have to pay in order to get a 1 year extension of stay stamped without meeting any financial requirement?

[scubascuba3]

29 minutes ago, Yumthai said:

You mean the agent fees you have to pay in order to get a 1 year extension of stay stamped without meeting any financial requirement?

for me just the 1900 baht but others have visa fees, extension fees etc

[Scouse123]

8 hours ago, Jingthing said:

Well the import money thing is one time on purchase.

For expensive condos of course the tax bracket would be high. 

I think a foreigner can import the money to a Thai to gift the real estate in the Thai's name without import tax but then you don't own it. 

 

 

We wouldn't own it, and why should we do it?

 

We have options and alternatives to Thailand, and I, for one, will not be held to ransom just because my partner is Thai.

[Searat7]

The real Elephant in the Room is the possibility of income tax on Worldwide Income. This could be a game changer for many and would certainly discourage some from moving here and buying condos. My thinking is that they would have to announce something very soon or the earliest year where this could be applied would be 2026. 

[anrcaccount]

4 hours ago, Jingthing said:

4 hours ago, anrcaccount said:

Are there other jurisdictions worldwide that impose personal income tax on foreign source funds remitted for a real estate purchase?

Great question!

But on the other hand I doubt expats will welcome global taxation on income and assets either!

 

I suspect the answer is none , or very few, as it is a ridiculous concept, unworkable in reality.

 

Sure, global taxation would be unwelcome, but it would be much simpler / clearer for the authorities to administer, and is much more common, with hundreds of jurisdictions taxing residents on worldwide income (assets, not so much).

 

 

 

[john donson]

nevermind, chinese and russian scammers that want to hide their money here in condos, will continue to do so, no need to live here as expats

[oldcpu]

8 hours ago, jas007 said:

I can't believe that any money simply transferred into Thailand is automatically "income" for purposes of Thai Taxation. 

 

Which is why many of us are paying close attention to the Thai Revenue Department (RD) issued documents Paw.161 and 162, ... and from those documents is why some claim any income/savings prior to 1-Jan-2024 will be not taxable even if brought into Thailand in a subsequent year.

 

And of course even 'if' such is considered 'income'  other factors come into play such as Double Tax Agreements (DTAs) with the source country of one's income ... and of course whether one is on an LTR visa or not ... plus other factors which have been mentioned in this thread (loans , gifts , etc ... ) to provide deductions.

 

This can all get quite complex.

[ukrules]

9 hours ago, Jingthing said:

Savings in the bank before December 31, 2023 only

 

That only applies if you're a 180+ day resident during the year you sell your house, condo, pile of gold, etc.

If you're not a resident during the year of sale then it is also not considered as income and certainly not taxable in Thailand regardless of when it's remitted.

For example if you're non resident this year and sold your $2m million house and sent over $1m this year while non resident then you have zero liability on that remittance.

Now, if you're audited at some point in the future then they're going to want to see the date / source of those funds and that you were non resident in the year they were 'realized' - that's all that matters - residency during the year you make the profit, not the year of remittance.

[Jingthing]

2 hours ago, ukrules said:

 

That only applies if you're a 180+ day resident during the year you sell your house, condo, pile of gold, etc.

If you're not a resident during the year of sale then it is also not considered as income and certainly not taxable in Thailand regardless of when it's remitted.

For example if you're non resident this year and sold your $2m million house and sent over $1m this year while non resident then you have zero liability on that remittance.

Now, if you're audited at some point in the future then they're going to want to see the date / source of those funds and that you were non resident in the year they were 'realized' - that's all that matters - residency during the year you make the profit, not the year of remittance.

Yes of course.

I have already well covered that you need to be a Thailand tax resident in the year of import for there to be a tax lssue with transfers.

[ukrules]

40 minutes ago, Jingthing said:

Yes of course.

I have already well covered that you need to be a Thailand tax resident in the year of import for there to be a tax lssue with transfers.

 

Only if the year of remittance is the same year of the sale of the assets and you're also a resident.

To ensure there is no liability whenever the funds are remitted you need to sell the asset(s) during a year you're non resident in Thailand and that's what makes the difference, not when you bring it into Thailand.

So sell something for some large profit during a non resident year and it's treated just the same as 'savings' from Dec 31, 2023 or before.

[chiang mai]

3 hours ago, Jingthing said:

Yes of course.

I have already well covered that you need to be a Thailand tax resident in the year of import for there to be a tax lssue with transfers.

Just to  reinforce what ukrules says, year earned AND year of remittance, to be safe.

[Scouse123]

12 hours ago, Searat7 said:

The real Elephant in the Room is the possibility of income tax on Worldwide Income. This could be a game changer for many and would certainly discourage some from moving here and buying condos. My thinking is that they would have to announce something very soon or the earliest year where this could be applied would be 2026. 

 

If they play that card, I definitely think that will be the final nail in the coffin and an exodus of foreign retirees.

 

They won't be able to use all their past claims about it being retiree friendly etc as other countries in the region, and Europe, offer better.

[chiang mai]

4 minutes ago, Scouse123 said:

 

If they play that card, I definitely think that will be the final nail in the coffin and an exodus of foreign retirees.

 

They won't be able to use all their past claims about it being retiree friendly etc as other countries in the region, and Europe, offer better.

Don't forget that the TRD's primary objective is that it wants to tax wealthy Thai nationals who invest offshore and avoid tax. The benefit to them of doing that is almost certainly far greater than the loss of a few foreign expats, if world wide income tax is implemented.

[phetphet]

I agree with Yumthai, that there will be some form of exemption for property purchase. But, however they do this, it will surely affect both the property market, and the local economies. Just by the fact of taking money spent out of circulation through taxation.

I have definitely tried to reduce what I have transferred into the country this year, in expectation of a tax bill. Paying for GF's daughter's education and extra curricular lessons is now a real worry.

For a foreigner, it will make everything more expensive, not just property. 

We are the low hanging fruit. Easy to  tax, and subjected to double pricing. I wonder if that one will now stop. I doubt it.