How Has Thailand’s New Income Tax Law Affected Your Spending Habits?

[Jingthing]

2 minutes ago, Airalee said:

Correct me if I’m wrong but I remember reading that it was the entirety of all global income and not just the amount remitted into Thailand.

Wrong now but the Thai government is considering changing to that.

[Jingthing]

23 minutes ago, helloagain said:

Your wrong its not all cash transfers if you are retired.

Being retired is irrelevant but many foreign pensions are exempt depending on what it is and the double taxation agreement with your nation.

[Airalee]

1 minute ago, Jingthing said:

Wrong now but the Thai government is considering changing to that.

Yes….that is what I read and is why I am taking the preemptive moves that I am.

 

If they do decide to, one thing to take into consideration is that Thailand will tax capital gains as income so instead of only paying the 15% on US capital gains (up to $518,900), we will be into the 25 to 35% brackets here in Thailand.  So there is an extra 10-20% that will be owed on capital gains.

[NoDisplayName]

10 minutes ago, Airalee said:

Yes….that is what I read and is why I am taking the preemptive moves that I am.

 

If they do decide to, one thing to take into consideration is that Thailand will tax capital gains as income so instead of only paying the 15% on US capital gains (up to $518,900), we will be into the 25 to 35% brackets here in Thailand.  So there is an extra 10-20% that will be owed on capital gains.

 

And that will be ALL your gains, with no offset for losses.

[chiang mai]

40 minutes ago, Airalee said:

Correct me if I’m wrong but I remember reading that it was the entirety of all global income and not just the amount remitted into Thailand.

No, the global income option has not been agreed.

[Airalee]

I believe that Thailand thinks that Vietnam is still below them and don’t realize how far they have come in the last 10 years.   Da Nang has an excellent food scene….much better than Hanoi had 10 years ago.  And they are also constructing apartments that are equal to those on offer in Thailand.  Just in the neighborhood surrounding me (Khue Mai) there are at least 8 buildings that are nearing completion.

 

It’s all much cheaper too.

 

The international hospital (Vinmec) is also quite nice and less expensive than the hospitals in Thailand.

[Airalee]

1 minute ago, chiang mai said:

No, the global income option has not been agreed.

Not yet…but it would behoove the Thai government to get off their ass and clarify things regarding their “penny wise, pound foolish” taxation scheme.

[kinyara]

28 minutes ago, Airalee said:

I believe that Thailand thinks that Vietnam is still below them and don’t realize how far they have come in the last 10 years.   Da Nang has an excellent food scene….much better than Hanoi had 10 years ago.  And they are also constructing apartments that are equal to those on offer in Thailand.  Just in the neighborhood surrounding me (Khue Mai) there are at least 8 buildings that are nearing completion.

 

It’s all much cheaper too.

 

The international hospital (Vinmec) is also quite nice and less expensive than the hospitals in Thailand.

 

Is there a 1 year retirement visa option in Vietnam yet ?  Surely that's the major consideration for a retiree, all the rest is pretty pointless if you can't actually stay there long-term.

[chiang mai]

43 minutes ago, Airalee said:

Not yet…but it would behoove the Thai government to get off their ass and clarify things regarding their “penny wise, pound foolish” taxation scheme.

Closing that tax loop hole was a sensible move that was aimed at middle and upper class Thais who had been evading taxes, foreigners were  just collateral damage. It will take a couple of years I would imagine, for the global tax bill to be tabled, debated, voted upon, approved and implemented, it wont be a quick process.

[Airalee]

10 minutes ago, kinyara said:

 

Is there a 1 year retirement visa option in Vietnam yet ?  Surely that's the major consideration for a retiree, all the rest is pretty pointless if you can't actually stay there long-term.

There is no official retirement visa option but there are agents who get the 90 day visas renewed without having to leave the country.  All completely legit from what I understand.  This can be done over and over and over ad infinitum as far as I know as my brother has been doing it for close to 15 years now.  
 

Longer “business” visas are also available but I’m not sure what that entails.

[ChaiyaTH]

On 12/18/2024 at 5:37 PM, scubascuba3 said:

I'll be bringing in the minimum, I've even started paying using contactless with UK cards and Wise card, I'll also use Wise to pay larger amounts, common fees, maybe even much larger purchases 

You understand that as soon Thailand sees you as their tax resident, and they request CRS information, this will all be visible just as easy right? It doesn't really changes much to the reality if they actually start enforcing it.

 

Best would be some offshore business with a bank card and then do cash withdrawals (outside Thailand) which you fly back in from short holidays.

[Airalee]

5 minutes ago, chiang mai said:

Closing that tax loop hole was a sensible move that was aimed at middle and upper class Thais who had been evading taxes, foreigners were  just collateral damage. It will take a couple of years I would imagine, for the global tax bill to be tabled, debated, voted upon, approved and implemented, it wont be a quick process.

Yes.  I understand what the intention of the law was and that it was aimed at Thais.  I also understand that the legislative wheels turn slowly here….but in reality, how hard would it be to just come out and exclude foreigners who are on Non-O visa extensions based on retirement?  I would prefer to stay, but if treated like a tax donkey while they drag their feet (and kept in a perpetual state of uncertainty and the accompanying stress)….I voted with my wallet and bailed.

 

Of course….nothing is ever simple here.

[scottiejohn]

6 minutes ago, ChaiyaTH said:

You understand that as soon Thailand sees you as their tax resident, and they request CRS information, this will all be visible just as easy right? It doesn't really changes much to the reality if they actually start enforcing it.

 

Best would be some offshore business with a bank card and then do cash withdrawals (outside Thailand) which you fly back in from short holidays.

And the cost of the flights etc would be greater or less than the possible tax?

[ChaiyaTH]

7 minutes ago, scottiejohn said:

And the cost of the flights etc would be greater or less than the possible tax?

I doubt that flight costs or border trips would the costs, that's not that much at all, peanuts even at just moderate income and taxes here. However to have like a proper offshore company etc like that, would easily add a few K a year to the costs.

Unless being quite wealthy I would say they are really closing the gates everywhere. Governments are desperate and broke.

[SiSePuede419]

12 hours ago, chiang mai said:

POR 161 and POR 162, reinterpretation of the current year remittance rules, dated September and November last year

Out of sight, out of mind.

AFAIK, those laws don't affect me.

I comply with all tax rules in America and pay both Federal and State taxes there.

https://www.irs.gov/pub/irs-trty/thailand.pdf

 

[chiang mai]

14 minutes ago, Airalee said:

Yes.  I understand what the intention of the law was and that it was aimed at Thais.  I also understand that the legislative wheels turn slowly here….but in reality, how hard would it be to just come out and exclude foreigners who are on Non-O visa extensions based on retirement?  I would prefer to stay, but if treated like a tax donkey while they drag their feet (and kept in a perpetual state of uncertainty and the accompanying stress)….I voted with my wallet and bailed.

 

Of course….nothing is ever simple here.

I suspect the revenue they will gain from taxing those Thai tax evaders, will far outrip any losses from foriegners who leave.

 

Why not exclude foreigners? Why should they?

[Gobbler]

On 12/18/2024 at 4:57 PM, BangkokBernie said:

Now that nearly a year has passed since the Thai government put a new law into affect that created a personal income tax on all cash transfers into Thailand which applies to all residents of Thailand, I’m curious how this change has affected your lifestyle and spending habits over the past year.

A new law was passed? And published in the Royal Gazette? 

 

Show me. 

 

You can't. 

[Wrwest]

On 12/18/2024 at 4:57 PM, BangkokBernie said:

Now that nearly a year has passed since the Thai government put a new law into affect that created a personal income tax on all cash transfers into Thailand which applies to all residents of Thailand, I’m curious how this change has affected your lifestyle and spending habits over the past year.

 

Have you found yourself reducing your spending in Thailand and/or canceling or indefinitely postponing any large purchases you were planning to make here?

 

Personally, while I’ve continued spending about the same amount, I’ve made a conscious decision to stop bringing significant sums of money into the country and to avoid keeping it in Thai banks. My Thai bank account balances have been steadily decreasing rather than staying stable or increasing. This approach, I think, isn’t achieving the taxation benefits the Thai government was hoping for. Instead, I’ve started using overseas debit cards for a lot of my spending here. While I understand that, technically, these transactions are also supposed to be reported to the Thai Revenue Department (TRD) and taxed, I’ll be honest, that’s not going to happen.

 

I’m struggling to see how this policy is a win for the Thai government. They aren’t going to collect any income tax from the money I spend in Thailand from my overseas savings, and, like many others, I’ve scaled back on transferring as much cash as possible into Thailand. The result is that they’re likely receiving less revenue from foreigners overall.

 

Maybe this policy benefits the TRD on Thai nationals earning money abroad and transferring it back home. But for foreigners, I think it’s far more likely to discourage spending and investment in the country. In fact, it already serves as a deterrent for retirees and potential long-term residents. If you don’t already have the ฿800,000 in a Thai bank account required for a retirement visa, who’s going to transfer that amount in (plus 20% more) and then lose 20% of it to taxes just to meet the visa requirement?

 

This feels like a long-term misstep for Thailand. Policies like this may discourage large purchases, property investments, and even retirement plans for foreigners who might otherwise bring significant amounts of money into the country.

 

The only way I see this policy working in Thailand’s favor is if it were limited to taxing Thai nationals on any overseas income they repatriate while leaving foreigners out of it. That way, foreigners could continue to spend freely, providing a big boost to the Thai economy.

No change. 65K required income per month for Non-O Retirement (yes, I am aware of other methods). I am thinking a non issue for me with USA already requiring income tax on global income, the existing tax treaty, my retirement income being derived from Social Security and retirement from government employment. None of this applies? Then I am free to move to another low cost country, several of which will allow me to join their national healthcare system after a period of residency and no threat of income taxation as a retiree.

[Airalee]

57 minutes ago, chiang mai said:

I suspect the revenue they will gain from taxing those Thai tax evaders, will far outrip any losses from foriegners who leave.

 

Why not exclude foreigners? Why should they?

I never claimed that the taxes from the Thai tax evaders was insignificant.  But as foreigners are small potatoes in comparison, why include them?  Are they really that desperate for money?  As I said….penny wise and pound foolish.
 

If they want to tax our income, perhaps we should get some of the benefits that Thais also get such as the opportunity to buy into the Thai social health insurance plans for ฿600/month.

 

If they didn’t have as many foreigners, who’s gonna buy all the empty condos?

 

I suspect that other countries will gladly take our money and be grateful for it.

[scottiejohn]

1 hour ago, ChaiyaTH said:

I doubt that flight costs or border trips would the costs, that's not that much at all, peanuts even at just moderate income and taxes here. However to have like a proper offshore company etc like that, would easily add a few K a year to the costs.

Unless being quite wealthy I would say they are really closing the gates everywhere. Governments are desperate and broke.

Would you care to rewrite that tomorrow in plain English please!

it makes little sense in it's present form!

[anrcaccount]

As was very well said by someone else, we've still not seen any NEW enforcement of the OLD tax laws.

 

IF and WHEN we do, that'll be newsworthy.

 

Otherwise, it's status quo, which is, foreigners who don't work in Thailand, don't pay tax. 

[Gobbler]

2 hours ago, Airalee said:

But as foreigners are small potatoes in comparison,

 

Thais call all of us potatoes.

 

[ukrules]

I haven't changed my spending habits at all, I buy whatever I want or need whenever I want or need it.

That said I don't in any way live an extravagant lifestyle.

What I did alter is my location, I spent half the year in Cambodia this year.

 

 

[Airalee]

13 minutes ago, Gobbler said:

 

Thais call all of us potatoes.

 

Actually, I believe it would be guavas. 😁

[Gobbler]

44 minutes ago, Airalee said:

Actually, I believe it would be guavas. 😁

 

Potatoes as well. 

[chiang mai]

6 hours ago, Airalee said:

IBut as foreigners are small potatoes in comparison, why include them?  Are they really that desperate for money?  As I said….penny wise and pound foolish.
f they want to tax our income, perhaps we should get some of the benefits that Thais also get such as the opportunity to buy into the Thai social health insurance plans for ฿600/month.

 

If they didn’t have as many foreigners, who’s gonna buy all the empty condos?

 

I suspect that other countries will gladly take our money and be grateful for it.

Playing devils advocate:

 

If foreigners were excluded, wouldn't that discriminate against Thai people and put them at a financial disadvantage? I wonder how we might feel if this was our home country and the government announced that foreigners wouldn't be taxed but we would! I'm pretty sure in that case I'd be very unhappy.

 

 

[chiang mai]

5 hours ago, anrcaccount said:

As was very well said by someone else, we've still not seen any NEW enforcement of the OLD tax laws.

 

Otherwise, it's status quo, which is, foreigners who don't work in Thailand, don't pay tax. 

 

Members of AN are hardly in a position to see what TRD is and isn't doing, there aren't enough of us with sufficient reach to be able to understand that. Anyway, any report of TRD action by a member would only ever be regarded as anecdotal, quite rightly too.  

[chiang mai]

7 hours ago, Gobbler said:

A new law was passed? And published in the Royal Gazette? 

 

Show me. 

 

You can't. 

It isn't a new law, it's a reinterpretation of an existing law, which doesn't need to be gazetted.

[Airalee]

9 minutes ago, chiang mai said:

Playing devils advocate:

 

If foreigners were excluded, wouldn't that discriminate against Thai people and put them at a financial disadvantage? I wonder how we might feel if this was our home country and the government announced that foreigners wouldn't be taxed but we would! I'm pretty sure in that case I'd be very unhappy.

 

 

Then they shouldn’t have a problem with us getting subsidized healthcare either.

 

Touché

[chiang mai]

2 hours ago, Airalee said:

Then they shouldn’t have a problem with us getting subsidized healthcare either.

 

Touché

 

I don't get this wanting something in return for paying tax. Getting something for paying into say the Social Security fund every month is similar to paying National Insurance contributions in the UK, it's a club where you make contributions and you get something in return and that is different from personal income tax.  But taxes in most countries, pay for the infrastructure or fabric that everyone uses or exists for the benefit of everyone, I also don't think it's right that people are able to move from their home country where tax is medium/high, to another country that is poorer where tax collection is low and escape tax completely in the process.

 

Many argue that VAT is a tax that everyone pays and that is fair, so why not increase the VAT rate? I think VAT puts the poor at a disadvantage whilst the wealthy  can easily afford any increase so I don't see a VAT increase as fair, not unless the rest of the tax system is fully implemented and fully operational.

 

I think there's a price to be paid for living in any country and that is to become a part of their tax system. Changing countries to escape tax takes things in the wrong direction and it seems to me that is the problem the global tax system is trying to fix.......something else I agree with in principle.

 

BTW this is not a competition, I thought we were debating an issue, not competing against each other for points!