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

[BeastOfBodmin]

7 hours ago, Jingthing said:

With expats they will often see large remittances so therefore a potential target to audit.

They wouldn't want to waste work on dry wells.

Goldilocks IMO. If you are too wealthy, they will be tied up in court for years, same as anywhere else in the world.

[SunnyinBangrak]

It was a huge upheaval but so relieved we left last year for more a favourable tax climate. We had been looking to buy a villa but a $1.5m villa would effectively be costing an extra 30% due to transferring from abroad, er no thanks. Plus the drama and uncertainty of filing Thai tax returns again years after retiring and stopping doing returns. Bet there were lots of happily retired families like us that bailed.

[shortstop2]

17 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.

Good post.

 

One incentive would be to get a refund of withheld tax.  I put lots of effort into arranging with banks not to have tax on interest withheld.  But in December my banks all started withholding but not an amount greater than the December interest payment.  It appears that somehow the banks knew that my total interest payments at all banks combined  were greater than 20K even though I didn't earn more than 20K in interest at any individual bank.  A friend of mine that earned less than 20K interest at all banks did not have tax withheld at the same bank in which I had tax withheld.

 

So the question is whether to not file to get a relatively small amount of withheld refunded so as not to get into the tax system not to file since it appears we might be required to file even if we are in a 0% tax bracket.  That;s one reason to consider filing.

 

Referring to hypothetical #1 above, it is probably not easy for the Revenue Dept and Immigration Dept to coordinate so that refusing to issue an extension of stay will almost certainly not happen  this year. But two simple questions on the extension of stay form, even if not followed up, might induce tax residents to file. The questions are 1) Did you stay in the Kingdom for more than 180 days last year?  and 2) Did you file a Thai tax return this year?

 

 

[NoDisplayName]

11 minutes ago, The Cyclist said:

 

Yet again, Royal Decree dated 31 March 2023, will allow Thailand ( without any new Laws, pending legislation, or farts in space ) to implement whatever is required to comply with CRS, rules and regulations.

 

I can appreciate that some people do not want to hear that. That is the reality of signing up to International Agreements.

 

Which for the taxpayer involves nothing more than identifying themselves as tax resident in other jurisdictions, which gives TRD/BOT notice to include them in the list of potential tax evasion targets they send to each member nation.

 

Nothing to do with individual taxpayers reporting all remittances throughout the year.

 

Same as with FATCA.  Taxpayer simply fills out an IRS identification form when opening an account with a financial institution self-declaring their US affiliation.

 

FATCA, as CRS, does not require me to declare all remittances into Thailand on my Thai tax forms.

[kimothai]

19 hours ago, MikeandDow said:

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

I'll 2nd that.  Social media has vastly over-stated this Thai tax that doesn't apply to most.

[NoDisplayName]

15 minutes ago, StayinThailand2much said:

Thailand Revenue Department know whether such transferred money came out of my savings, or last tax year's income?

 

They don't.

 

The taxpayer determines what funds they remitted, whether those forms are assessable.  If not assessable, not reported.  If under the filing requirement (60K assessable?), no filing required.  If over the that threshold, but under TEDA, file listing assessable remittances only, but no tax due.

 

In practice, though, most persons attending a TRD office with assessable income above the filing limit, but with zero tax due, will be told not to file.....unless they want a refund of tax withheld by Thailand.

[The Cyclist]

3 minutes ago, NoDisplayName said:

 

Which for the taxpayer involves nothing more than identifying themselves as tax resident in other jurisdictions, which gives TRD/BOT notice to include them in the list of potential tax evasion targets they send to each member nation.

 

Nothing to do with individual taxpayers reporting all remittances throughout the year.

 

Same as with FATCA.  Taxpayer simply fills out an IRS identification form when opening an account with a financial institution self-declaring their US affiliation.

 

FATCA, as CRS, does not require me to declare all remittances into Thailand on my Thai tax forms.

 

And what has the above got to do with 

 

Yet again, Royal Decree dated 31 March 2023, will allow Thailand ( without any new Laws, pending legislation, or farts in space ) to implement whatever is required to comply with CRS, rules and regulations.

 

Which was in response to your stupidity, about New Laws and pending laws ?

[CharlesHolzhauer]

16 minutes ago, Lapun said:

For anyone interested, this is my take on the Double Tax Agreement between Thailand & Australia.

 

Also, as far as I know, the Thai Revenue Code is existing legislation that the Revenue Department has asked the department to enforce.

Slice it or dice it - whichever you prefer - the fact remains that as a tax resident of Thailand, you are obligated to pay your dues.

Tax-Free Status in Australia:
The fact that the pension payments are tax-free in Australia due to their nature (private pension earnings approved by the government as tax-free) does not change their treatment under the DTAA. The DTAA determines which country has taxing rights, not the domestic tax status.

Taxation in Thailand:
Article 18 states that pensions (not related to government service) paid to a resident of Thailand are taxable only in Thailand. This means that once the funds are remitted to Thailand, Thai tax laws will govern their taxation.

Private Pension Clarification:
While Article 18 does not explicitly differentiate between public and private pensions, it broadly covers pensions. Private pension payments are likely considered taxable in Thailand under Thai law, even if not taxed in Australia.

[NoDisplayName]

2 minutes ago, The Cyclist said:

 

And what has the above got to do with 

 

Yet again, Royal Decree dated 31 March 2023, will allow Thailand ( without any new Laws, pending legislation, or farts in space ) to implement whatever is required to comply with CRS, rules and regulations.

 

Which was in response to your stupidity, about New Laws and pending laws ?

 

It has everything to do with it.

 

Royal decree can implement CRS, but CRS puts no obligations on individual taxpayers, other than self-reporting their affiliation with other tax residences.

 

 

[thaibreaker]

6 hours ago, Kerryd said:

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.

You won't be "put in one or any bracket". You will have to pay tax from several brackets if you exceed a certain threshold. Thai tax system is progressive in the way that if you end up paying tax from 1 million baht, you will only pay 20% tax of the amount between 750k to a million. Between 500k to 750k, you will still pay 15%, 300k to 500k you will pay 10%, and so on. You'll probably end up paying less than 10% of the total sum, after deductions. Been there, done that.

[BeastOfBodmin]

7 hours ago, gejohesch said:

I'm not clear about what you want to say here, but one thing I can tell you to make it clear is that a DTA (Double Taxation Agreement) is not an agreement that allows 2 countries to tax you on the same item. On the contrary, it is an agreement to avoid double taxation.

Now, each DTA between "Country 1" and "Country 2", be it Germany-Zimbabwe, USA-Timbuktu or Croatia-PNG will have all sorts of bells and whistles and they will differ from DTA to DTA. Certain income items will be taxable in Country 1 and not in Country 2, others will be taxable in Country 2 and not in Country 1 - and yet other items might not be taxable at all.

Exactly. One deducts the taxes paid in Country A from the due taxes in Country B. The reminder is the tax bill. Problem is that the Thai tax system has a relatively low tax threshold versus "The West", and you quickly hit the highest tax bracket.

 

Thai Tax Calculation

 

I am effectively retired here, though I draw no pensions as yet. The below is the result of THB 83,000 per month (~ 1mm p.a.), spouse does not work, one child in education, no other deductions at all.

 

I would have to cough up THB 64,000 i.e. 6.4% in income tax before deducting taxes already paid in Country A.

 

I assume you have to be working in Thailand to contribute to RMF, SSF & ESG, even though they want to tax as income monies that may not be income?

[sabaijai]

17 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.

 

If you're on a work visa & work permit, you're supposed to provide a current tax return when applying for extension of stay. 

[ukrules]

25 minutes ago, stubuzz said:

So, buy a condo and receive a 30% tax bill the folowing year. Not going to help the housing market.

 

Nah, the reason it's a 'maybe' depends on the number of days you spend in Thailand in the year you earned the money.

 

If it's less than 179 days then I believe you will pay zero tax on that money when it's remitted - forever. Even if you move it into Thailand in a subsequent year when you are a resident.

 

Consider it the same as savings from 2023 or before as that's how it's treated.

 

There were some lingering questions about whether it also needs to be remitted during a non resident year - but I believe that's been cleared up - maybe - but that's a slightly different conversation. Selling the assets and remitting during the same non resident year is the cleanest, quickest and easiest way though.

 

So if you act on the safe side and sell some house you own in another country, your primary residence which often attracts 0% tax in many countries. The main thing is you paid less or no tax than would be due in Thailand.

Do this in say March 2025, send all the money you need to Thailand for whatever condo you want to purchase but make sure you do not spend more than 179 days in Thailand during the year you send it then you're not paying any tax on it, and you have the receipts.

 

 

[Mattd]

38 minutes ago, StayinThailand2much said:

 

Sorry, but that raises so many questions, e.g.:

 

1. 'Income' from when, 1975 (or whenever it was earned), since residing in Thailand, or just for the tax year?

2. If I hold $20,000 in savings, had a taxable income overseas of $5,000 last year, and transfer $3,000 to Thailand, how does the Thailand Revenue Department know whether such transferred money came out of my savings, or last tax year's income?

 

1. I am not 100% sure, the code states the previous tax year and not years, but this could also be a mistake in the translation, the statute of limitations for tax liability in Thailand is 10 years AFAIK.

2. It would be up to you to prove.

 

The TRD will only question those tax returns that that they believe warrant such, I'd imagine that most will be accepted, to investigate all would take a massive amount of resources.

[RubenRemus]

14 hours ago, Gknrd said:

 

 

Hard to believe the changes. Not long ago I could go to a Thai bank and bring in thousands of dollars free, No 800K in the bank to get the yearly retirement. 

 

Got to feel for anyone that actually fell for the scams in Thailand.  Government is just as bad as most gold digging women in LOS's  A joke... 

 

As the guys are forced out it is going to put a real hardship on the good Thai women there.  

 

Instead of being so greedy they should of grandfathered in the old timers.

LOL. Sure. 

[Expat68]

19 minutes ago, BeastOfBodmin said:

Exactly. One deducts the taxes paid in Country A from the due taxes in Country B. The reminder is the tax bill. Problem is that the Thai tax system has a relatively low tax threshold versus "The West", and you quickly hit the highest tax bracket.

 

Thai Tax Calculation

 

I am effectively retired here, though I draw no pensions as yet. The below is the result of THB 83,000 per month (~ 1mm p.a.), spouse does not work, one child in education, no other deductions at all.

 

I would have to cough up THB 64,000 i.e. 6.4% in income tax before deducting taxes already paid in Country A.

 

I assume you have to be working in Thailand to contribute to RMF, SSF & ESG, even though they want to tax as income monies that may not be income?

I am pretty sure there are other deductables before you get to that figure 

[samtam]

27 minutes ago, NoDisplayName said:

 

No documentation needed.

 

When you file online, you list ONLY Thai-sourced income and assessable foreign remittances.

 

You are not even required to upload tax withholding statements from your bank/broker to get a refund, as TRD (apparently) has access to current year tax withholding data.

 

For prior years filed late, TRD (apparently) does not have ready access to this data, so a request is sent for a bank withholding statement.

 

No documentation is needed (not employed in Thailand, so that may be different) unless you're called in for an audit.  I've only read of two individuals on this here forum that have been audited, and I believe one was employed here but stopped filing, and the other had a business here.

 

 

 

Thank you very much. That makes sense, in a subject that veers wildly from one opinion to another.

 

My apologies, I have to "eat my hat" on another subject we discussed, the issuance of TINs. I maintained from the conversations my Thai interlocutor had with Bangkok Revenue in Sathorn, that they would issue me with a completely different TIN to my pink ID. This morning I went with said person, and he completed on my behalf a Lor.Por10. In the process of doing this I flashed my Thai pink ID, and the clerk's eyes lit up, and so this pink ID number is indeed my TIN. The Lor.Por10 is the registration of that pink ID, (and it has to be registered for it to be activated). It has now apparently been activated, and I will file online tomorrow using the TIN. Well, to be precise, my Thai interlocuter will file for me as the Por.Ngor,Dor90, (as I only have foreign sourced income, none from Thailand*, as I am not permitted to work in Thailand under my visa), can only be completed in Thai online.

 

(*I am not clear whether the P.N.D.90 allows one to claim withholding tax refund, or whether I will have to file a P.N.D.91as my THB800k Thai deposit for visa extension pays interest - income - in Thailand, and has withholding tax deducted.)

 

What follows thereafter may also vary from what was previously advised by RD, including use of foreign credit cards not considered as tax assessable, unrelated to when funds were earned.

 

The OP seems to suggest a volte face, despite saying in an interview with Jett Gunther that credit card transactions are not included.

[Card]

30 minutes ago, sabaijai said:

 

If you're on a work visa & work permit, you're supposed to provide a current tax return when applying for extension of stay. 

That will apply to retirement visa extensions when they bring in global earnings tax this year ir next in my opinion.

[Lopburikid]

1 hour ago, black tabby12345 said:

 

That date is long gone...

That 'news' first  made a headline in May last year.

9 months on, no real new development though.

All we could ever hear was,  the Empty Bark of the tax chief and these lousy accounting firms(targetting expats).

I have been to my local Tax Revenue office, and they tell me the same as they said last year "no tax retirement". visa, "no tax pension". it is totally confusing!

[Card]

10 minutes ago, samtam said:

 

Thank you very much. That makes sense, in a subject that veers wildly from one opinion to another.

 

My apologies, I have to "eat my hat" on another subject we discussed, the issuance of TINs. I maintained from the conversations my Thai interlocutor had with Bangkok Revenue in Sathorn, that they would issue me with a completely different TIN to my pink ID. This morning I went with said person, and he completed on my behalf a Lor.Por10. In the process of doing this I flashed my Thai pink ID, and the clerk's eyes lit up, and so this pink ID number is indeed my TIN. The Lor.Por10 is the registration of that pink ID, (and it has to be registered for it to be activated). It has now apparently been activated, and I will file online tomorrow using the TIN. Well, to be precise, my Thai interlocuter will file for me as the Por.Ngor,Dor90, (as I only have foreign sourced income, none from Thailand*, as I am not permitted to work in Thailand under my visa), can only be completed in Thai online.

 

(*I am not clear whether the P.N.D.90 allows one to claim withholding tax refund, or whether I will have to file a P.N.D.91as my THB800k Thai deposit for visa extension pays interest - income - in Thailand, and has withholding tax deducted.)

 

What follows thereafter may also vary from what was previously advised by RD, including use of foreign credit cards not considered as tax assessable, unrelated to when funds were earned.

 

The OP seems to suggest a volte face, despite saying in an interview with Jett Gunther that credit card transactions are not included.

Using a foreign credit card from your home country fir goods and services in thailabd is treated the same as paying fir them with remitted funds. If the credit card us paid with funds in your home country and those funds are taxable in thailand then they are assessable. If not then they are not assessable. Do Some people really think the Thai tax dept like others that di the same around the workd haven't thought of such a potential.loophole?

[Card]

10 minutes ago, Lopburikid said:

I have been to my local Tax Revenue office, and they tell me the same as they said last year "no tax retirement". visa, "no tax pension". it is totally confusing!

They just want to get rid of you. Answering questions just gives them a headache. To be certain you need ti get something in writing and officially stamped just as they do.

[samtam]

6 minutes ago, Card said:

Using a foreign credit card from your home country fir goods and services in thailabd is treated the same as paying fir them with remitted funds. If the credit card us paid with funds in your home country and those funds are taxable in thailand then they are assessable. If not then they are not assessable.

 

Yes, my Revenue Department staff source of information seems to be variable at best, and completely incorrect at worst. Makes life a bit harder, although it's not surprising that there is confusion within the ranks of RD staff; similar variations on a theme exist throughout Thai officialdom.

[Briggsy]

44 minutes ago, sabaijai said:

 

If you're on a work visa & work permit, you're supposed to provide a current tax return when applying for extension of stay. 

This thread is primarily aimed at those not working in Thailand, chiefly retired and now worrying about their foreign income being taxed.

 

When I was on a work permit, there was no need to file a tax return. However the employer may have had to show tax receipts. That was all done by the employer. But I definitely did not file a tax return and my WP and extension was renewed every year without fail. This must be a new thing that you are referring to.

[oldestswinger]

7 hours ago, kuzmabruk said:

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

What should be said is "before 1st April 2025."

[Jabberwocky]

When using a professional, we have at least 14 months to file our papers at home (e.g. until February 2026 for the year 2024). In Thailand it is only 3 months. So how could this ever work, as proof of tax paid at home is always a year late?

 

Furthermore: Where exactly is it written (in the Royal Gazette?) that credit card usage counts? This contradicts the "transferring income" wording, as the money is actually taken from a foreign account, not a Thai account. Did anyone ask for proof?

[Phillip9]

7 hours ago, Card said:

Using a fireign credit card fir goods and services in thailabd means it is assessable. Whether it's taxable earnings depends on its source.

That makes no sense at all.  Only income made in the current year is assessable.  With a credit card you are borrowing money.  You could pay off that credit card with savings made many years earlier.  Spending has nothing to do with income.

[Jaggg88]

20 hours ago, snoop1130 said:

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

That is their considered opinion but I will wait for the official announcement. As tax advisors, they have a vested interest in everyone getting involved with the Thai tax system.

 

20 hours ago, snoop1130 said:

In a surprise revelation, it was disclosed that foreign credit card usage in Thailand, if converted to Thai baht, is now considered taxable income

This would require cooperation from ALL credit card issuers worldwide and thus make it almost impossible to police

[bkk6060]

36 minutes ago, Lopburikid said:

I have been to my local Tax Revenue office, and they tell me the same as they said last year "no tax retirement". visa, "no tax pension". it is totally confusing!

Confusing?  Sounds pretty clear to me.

[Briggsy]

14 minutes ago, Jabberwocky said:

Furthermore: Where exactly is it written (in the Royal Gazette?) that credit card usage counts? This contradicts the "transferring income" wording, as the money is actually taken from a foreign account, not a Thai account. Did anyone ask for proof?

I think it was use of a foreign credit card which is de facto remitting of funds to Thailand just as withdrawing cash using a foreign debit card would be.

 

It is the remitting of funds which is key to any liability.

 

However, I repeat my point that very few retirees here will have need to file a return let alone pay any tax due as

 

i) most will be remitting funds derived from income paid in previous tax years and

ii) the Double Taxation Agreement will credit the Thai tax due down to zero if any was owing in the first place.

 

That is why whenever anyone on here asks the Revenue Dept, they tell them they don't need to file if their income was taxed overseas. They know it is a waste of their time as very few will have untaxed foreign income that they remitted to Thailand in the same tax year as it was paid to them.

 

All a fuss about nothing with the tax lawyers trying to get everybody to panic.

[digger70]

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

 

Tax tangle alright, Wy do they have to know what ones income is abroad? 

It's bad enough that they want to tax expats on the money that one bring into the country . Everything that one buys  here one has to pay tax on.