Thai tax tangle: Expats warned of new rules on overseas income

[soalbundy]

11 hours ago, MikeandDow said:

They will have to be knocking on my door before i fill out any of there BS

Very laudable attitude I'm sure but ignoring the tax office isn't the same  as not paying a parking ticket. You may get away with it for several years but a knock on the door entails paying back taxes and a large fine as well as criminal proceedings. I don't know how it is here but in Europe tax evasion is a criminal offence, if that is also the case here then your visa extension could also be revoked, is it worth the risk?

 

I have several pensions but it's all quite straight forward, I have calculated my deductions and worked out my own tax bill....just over 20k. In most cases you won't need a tax consultant and I have heard that the tax office staff are very helpful for a little tea money. I don't like the idea of paying tax, who does, but I will wait until the last day and then present myself at the tax office with my calculations, I'm too much of a coward to break a lance on the doors of the tax office.

[NanLaew]

7 hours ago, gamb00ler said:

I understand that using an ATM owned by a Thai bank you can choose to allow the Thai bank to do the conversion rather than taking the card processor's rate.  Is that also possible when making a retail purchase?

 

Yes, but it is not automatic. I have not always been offered the choice when making a payment at a checkout with a touch-and-go type card payment, but I have had sales staff who are processing the payment 'manually' offer the POS device so that I can make the choice. I have noted that some sales staff will do that selection and not offer you the choice, but I am not sure if that is their employer's policy or something they do just to speed-up the payment process.

[gejohesch]

11 hours ago, Airalee said:

“All foreign income must be declared but this doesn’t always mean a tax liability.”

Clear as mud

 

It is not at all uncommon that one would have to declare for tax in a given country even if that does not involve a tax liability.

 

I give an example I know very well. Certain foreign residents in Portugal have had for years been living under the so-called RNH system ("Residente Não Habitual") with the requirement to declare their worldwide income to the Portuguese authorities while as a matter of fact the taxation rate applied to the declared income was 0% (YES!). Needless to say, that system was fiercely attacked by other countries and the taxation rate under the RNH regime is not 0% anymore (but still rather low).

[Badrabbit]

11 hours ago, MikeandDow said:

They will have to be knocking on my door before i fill out any of there BS

Ive been to my tax office, they don't speak english(not their fault) asked about paying tax on my 3 small pensions from the UK ( I pay tax on all 3 in the UK) 

Answer, "if you pay tax in your country you won't pay tax here" basically they seemed uninterested.

[Jingthing]

11 minutes ago, Badrabbit said:

Ive been to my tax office, they don't speak english(not their fault) asked about paying tax on my 3 small pensions from the UK ( I pay tax on all 3 in the UK) 

Answer, "if you pay tax in your country you won't pay tax here" basically they seemed uninterested.

So they don't understand DTA treaties or lack of them and or don't want to deal with them and consider remittances a dry well target waste of their time. Making such a general statement is objectively wrong. But they are telling you their CURRENT attitude about enforcement. 

[Jingthing]

11 minutes ago, gejohesch said:

 

It is not at all uncommon that one would have to declare for tax in a given country even if that does not involve a tax liability.

 

I give an example I know very well. Certain foreign residents in Portugal have had for years been living under the so-called RNH system ("Residente Não Habitual") with the requirement to declare their worldwide income to the Portuguese authorities while as a matter of fact the taxation rate applied to the declared income was 0% (YES!). Needless to say, that system was fiercely attacked by other countries and the taxation rate under the RNH regime is not 0% anymore (but still rather low).

Portugal is Portugal.

In Thailand no need to include non accessable income in filing and no need to file if accessable income is under the threshold.

Just keep records.

[Airalee]

28 minutes ago, gejohesch said:

 

It is not at all uncommon that one would have to declare for tax in a given country even if that does not involve a tax liability.

 

I give an example I know very well. Certain foreign residents in Portugal have had for years been living under the so-called RNH system ("Residente Não Habitual") with the requirement to declare their worldwide income to the Portuguese authorities while as a matter of fact the taxation rate applied to the declared income was 0% (YES!). Needless to say, that system was fiercely attacked by other countries and the taxation rate under the RNH regime is not 0% anymore (but still rather low).

Thanks for the clarification 🙏

[Card]

12 hours ago, MikeandDow said:

They will have to be knocking on my door before i fill out any of there BS

Google penalties fir non compliance for thailand tax. When the next rules on global assets comes in you won't be able to renew your retirement visa without filing a tax return and they will want ti know why u did not file for any taxable remittances in the previous years

[kuzmabruk]

12 hours ago, snoop1130 said:

For others, the advice is clear: obtain a tax identification number and file a return by March 2025.

By March 2025, translated into English means February 28th.   This is NOT true.   You must file by the END of March 2025.  

[Card]

12 hours ago, stubuzz said:

If you transfered money to buy proerty, would this be taxed?

It doesn't matter what the purpose of the remitted money is. It's what the source of the funds that's important. If it's taxable earnings that you transfer to buy a property then it is assessable income.

[Card]

10 hours ago, Briggsy said:

What would be the incentive to file?

 

Let me give you some completely hypothetical examples.

 

1. They refuse to extend your permission to stay unless you provide proof you have filed a tax return.

2. They issue an estimated assessment for a year you did not file.

3. They issue a fine for a year you did not file.

4. The Thai bank freezes your bank account unless you provide proof you have filed a tax return.

 

Currently these all seem very unlikely.

 

So I am back to my original question, what would be the incentive to file a Thai tax return.

Google the penalties.

[kuzmabruk]

12 hours ago, MikeandDow said:

They will have to be knocking on my door before i fill out any of there BS

I am sure they appreciate you putting your contact information at the top of the “needs to be audited” pile.  

[Jingthing]

3 minutes ago, Card said:

It doesn't matter what the purpose of the remitted money is. It's what the source of the funds that's important. If it's taxable earnings that you transfer to buy a property then it is assessable income.

Agreed. Unless they carve out an exception for real estate buying which doesn't yet exist.

[ukrules]

2 minutes ago, Jingthing said:

Agreed. Unless they carve out an exception for real estate buying which doesn't yet exist.

 

Never will either.

 

[Card]

11 hours ago, Briggsy said:

What would be the incentive to file?

 

Let me give you some completely hypothetical examples.

 

1. They refuse to extend your permission to stay unless you provide proof you have filed a tax return.

2. They issue an estimated assessment for a year you did not file.

3. They issue a fine for a year you did not file.

4. The Thai bank freezes your bank account unless you provide proof you have filed a tax return.

 

Currently these all seem very unlikely.

 

So I am back to my original question, what would be the incentive to file a Thai tax return.

But when they bring in the global assets tax soon you will have to file or not be able to renew your visa and they will want to know why u did not file for previous years if u had transferred taxable assets. Google the penalties 

[Card]

10 hours ago, nglodnig said:

Good luck with that. I'm a Brit but after Barclays kicked me out I don't have a UK bank account.  How are they going to trace me - black magic? Dowsing rods?

Through Thai financial institutions that you use to transfer cash to or from or exchange it in thailand

[bkk6060]

1 hour ago, thaibreaker said:

Chonburi Immigration stated 2 days ago at Pattaya Mail that there are no plans to link any visa or visa extension to any tax IDs, or TINs.

 

So just forget that. Won't happen.

Yes.  I know a high ranking Immigration officer they have no knowledge of, or training or information of any tax requirements for Visas or extentions at this time.

[Card]

10 hours ago, Moonlover said:

And just to add to that, were the TRD to go chasing around tracking down all us 'miscreants', they would find that most retirees won't owe them any money. Most of us are protected by DTAs in various forms or are drawing pensions that cannot be taxed in any other country anyway.

 

The yield IMO would not be worth the effort and I wouldn't like to contemplate the anguish it might cause amongst the community.

 

Let sleeping dogs lie is, by far their best policy.

The proof is on you not them. You will need to prove the transferred cash is not taxable. They don't need to prove anything.

[thpitsch]

1 hour ago, DogNo1 said:

I've never seen a Thai tax form and wouldn't be able to read it anyway.  I wonder whether there is a foreign earned income deduction available.

You can see a form at http://www.rd.go.th/fileadmin/download/english_form/2023/230367PIT91.pdf

It is exactly what the employee at the tax office used for my 2024 tax return (she filled it out herself based on my information). 

[Card]

8 hours ago, gamb00ler said:

I understand that using an ATM owned by a Thai bank you can choose to allow the Thai bank to do the conversion rather than taking the card processor's rate.  Is that also possible when making a retail purchase?

It doesn't matter how u transfer cash,  or in what currency, Thai baht or dollars. It's the source of the funds that's important. Using a fireign credit card fir goods and services in thailabd means it is assessable. Whether it's taxable earnings depends on its source.

[Kerryd]

Thailand expects you to (voluntarily) report all your income, regardless of source or country.

That would be totalled to determine your tax rate. (See table below.)

Then, any amounts that are not "taxable" - like pensions or other income covered by a Tax Treaty between Thailand and your home country - would be deducted.

Then they would apply the "personal deduction".
Jingthing mentioned 60k baht for single people and 120k for married expats.

Whatever is left would be taxed at the aforementioned tax rate.

From Siam-Legal (https://www.siam-legal.com/thailand-law/thailand-new-tax-on-foreign-income-an-overview/)
 

Thai citizens and foreigners who are permanent residents are subject to pay income tax, should they earn their annual income, at the following rates:

1. 0 to 150,000 THB is exempted from income tax.
2. 150,001 to 300,000 THB is subject to a 5% tax rate.
3. 300,001 to 500,000 THB is subject to a 10% tax rate.
4. 500,001 to 750,000 THB is subject to a 15% tax rate.
5. 750,001 to 1,000,000 THB is subject to a 20% tax rate.
6. 1,000,001 to 2,000,000 THB is subject to a 25% tax rate.
7. 2,000,001 to 5,000,000 THB is subject to a 30% tax rate.
8. 5,000,001 THB or more is subject to a 35% tax rate.
   
   
   So, if they do things "the normal way" they'd calculate your taxes like this.
   
   Example 1.
   If you earned 1,000,001 baht in total income (pensions and whatever) your tax rate would be 25%.
   Let's say 800,000 was from (foreign) Pension income covered by a Tax Treaty and 200k was from rental income not covered by that Treaty.
   
   Then, they would deduct the 800k that is covered by the Treaty, leaving you a "Net Income" of 200k.
   
   Then they would deduct the "Personal Deduction" (60k ? I haven't verified the amounts.) giving you a "Taxable Income" of 140,000.
   
   As that is below 150,000 baht, there should be no tax owed. (But ! This is Thailand ! I would not be surprised if they did tax that 140,000 baht at 25% because your "total" income was over 150,000. So you could still end up paying 35,000 baht in this case.)
   
   Example 2.
   Now lets say you get 400,000 in pensions, 400,000 in rental income and earned 400,000 as a teacher in Thailand.
   Your total income would be 1,200,000 putting you in the 25% tax rate.
   
   Then deduct the 400k in pension income (assuming it's covered by a tax treaty), leaving you a Net Income of 800,000.
   Assume you are married so you get the 120,000 deduction, leaving you with a Taxable Income of 680,000.
   
   That amount would be taxed at the 25% rate giving you a tax bill of 170,000 baht.
   
   If you were single, you'd only get the 60,000 deduction so your Taxable Income would be 740,000 and your tax bill would be 185,000.
   
   Note: Any tax paid on the rental income or deducted from your salary would be claimed as a credit on your Thai tax return - up to the the total amount owed and depending on the clauses in the Tax Treaty.
   
   (So if you owed 185,000 in Thailand and had valid tax credits equalling 200,000 baht in your home country, you would only get to claim 185,000 baht in credits. Thailand isn't going to refund you for taxes you paid in another country.)
   
   Example 3.
   You sole, total income is a meagre 400,000 from pension income covered by treaty.
   You would be in the 10% tax rate.
   
   But as your entire income is not subject to tax (by treaty) your Taxable Income would be zero, thus no taxes to be paid.
   
   But they still expect you to submit a Tax Return even if you won't owe any taxes.
   
   However ! If you are scamming the Immigration requirements by transferring 65k a month and then each month transferring it back "home" before transferring it back to Thailand again, each transfer would count as "income".
   And lol if you think you can argue with the Revenue department and try to convince them that it is the "same 65k" and should only count as "65k in income for the year".
   
   You would be assessed as having an income of 780,000 baht and be put in the 20% tax bracket. But - as all that "income" would probably be counted as "pension income", it would be deducted from your Net Income, leaving you with zero Taxable Income.
   
   However - they may demand proof that it actually is "pension income". And if you can't prove it is, the entire amount is liable to be taxed at the full (20% in this case) rate.
   
   
   And don't bother trying to argue that your pension income shouldn't be included in determining your tax rate, especially as they are just going to deduct that amount anyways.
   
   Tax people (and laws) don't work for your benefit, they work to collect the maximum amount they can (within the law).
   
   Which is why they total all of your income and use that to determine your tax rate regardless of how much of that income isn't taxable or has had tax already deducted from it.
   
   So that they can then tax the remaining amount at the highest possible rate.

[Card]

1 hour ago, Badrabbit said:

Ive been to my tax office, they don't speak english(not their fault) asked about paying tax on my 3 small pensions from the UK ( I pay tax on all 3 in the UK) 

Answer, "if you pay tax in your country you won't pay tax here" basically they seemed uninterested.

The UK DTA is to give credits against thai tax. That may mean your remitted earnings are not taxed but it doesn't mean you don't need yo file a tax return

[Card]

1 hour ago, Kenneth White said:

I have concerns about my Social Security income. This is the first time I have read the double tax agreement, which states that if I live in Thailand for more than 180 days, I am considered a resident and must fill out a tax form. It does not mention paying taxes. I am married to a beautiful Thai lady and have lived here for many years. However, each time I apply for my one-year visa extension, I have never been asked to fill out a tax form. I guess I should continue and not say anything; keep my mouth shut. 

 

I agree with most that this article is a bit ambiguous. 

They will prob start to ask fir tax filing when they bring in a global assets tax maybe this or next year

[Toby1947]

Why anyone would want to be in Thailand more than 180 days a year is beyond me. Most probably burnt their bridges, so time to pay up or ship out. 🤣😂🏴󠁧󠁢󠁥󠁮󠁧󠁿

[Badrabbit]

2 minutes ago, Card said:

The UK DTA is to give credits against thai tax. That may mean your remitted earnings are not taxed but it doesn't mean you don't need yo file a tax return

Where do I go to get help with this which isn't going to cost an arm and a leg, the tax office doesn't seem to care or are not bothered.

[gravity101]

3 minutes ago, Toby1947 said:

Why anyone would want to be in Thailand more than 180 days a year is beyond me. Most probably burnt their bridges, so time to pay up or ship out. 🤣😂🏴󠁧󠁢󠁥󠁮󠁧󠁿

Because we live here? Strange comment. 

[tomazbodner]

8 hours ago, MikeandDow said:

Your as bad as these Tax agents full of BS

You're

[thpitsch]

8 minutes ago, Kerryd said:

Then they would deduct the "Personal Deduction" (60k ? I haven't verified the amounts.) 

General deductions are:

Standard: 60,000

For the person: 100,000

If tax payer over 65 years old: 190,000

Other deductions are possible, e.g 50% from health insurance contribution, max 25,000

 

[khunjeff]

9 hours ago, MikeandDow said:

 Yes, you can use a credit or debit card to pay in US$ in Thailand, but you should be aware of fees and exchange rates.

 

The piratical DCC (Dynamic Currency Conversion) offered at some ATMs and point of sale credit card terminals - which proposes an exchange rate up to 6% worse than the one provided by Visa or MasterCard - lets you choose how you will be billed, not how you want to pay. The merchant will be paid in THB no matter which option you select. 

 

In any case, I have no idea why the speaker added the bit about credit card payments being converted to baht. Any credit card payment in Thailand could theoretically be considered a remittance, though the odds that Thai tax authorities would actually sift through hundreds of millions of card transactions looking for tax evaders seems low to non-existent.

[Card]

24 minutes ago, bkk6060 said:

Yes.  I know a high ranking Immigration officer they have no knowledge of, or training or information of any tax requirements for Visas or extentions at this time.

Until.they bring in global assets tax this year or next. All they will need to renew will be an acknowledgement from the TRD that you have filed. Just like they do fir our bank balances now