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

[oldcpu]

48 minutes ago, Guavaman said:

Regarding the reference to Ministerial Regulations in the Revenue Code, there are only two that are specified in a footnote to category (17):

 

Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation:

(17) Income prescribed for exemption by Ministerial Regulations.¹²

¹²M.R. No. 126, No. 201 B.E. 2539

 

Ministerial Regulation No. 126, (B.E. 2509) Issued under the Revenue Code Regarding Revenue Tax Exemption

Clause 2 The following incomes shall be prescribed as incomes under (17) of Section 42 of the Revenue Code as amended by the Revenue Code Amendment Act (No. 10), B.E. 2496 :

 

95 types of exempted income are listed with descriptions; the English translation appears on the RD website here:

https://www.rd.go.th/fileadmin/user_upload/kormor/eng/MR_126.pdf

 

The only other Ministerial Regulation referred to in Section 42 (17) is M.R. No. 201 (B.E. 2539) covering exemption from personal income tax on compensation from transfer of ownership in real estate in the Pa Sak Basin Development Project.

 

I saw those foot notes before, but did not spend much time going through them. 

 

This time, I also asked myself, must the Ministerial Regulations be confined to those listed in a footnote? 

 

...  and I also asked,   if subsequent to Ministerial Regulation No.126 (B.E.2509) there were newer Ministerial interpretations and/or Royal Decrees, must they also be included as a consideration in Tax code section 42(17).    I speculate the answer is yes, ... but then speculation is just that ... speculation. 

 

Anyway ,those 95 !! exemptions in MR.126 was an interesting skim through, albeit  I was getting very fatigued toward the end.

 

That Ministerial Directive 126 does not state its exact date that I could decipher.  I note already some of its has been repealed by Ministerial Regulation No.307 (B.E.2558) - and that in particular was reflected in that recent unofficial translation (the link to which you posted).

 

While that specific repeal is not relevant to our discussion, it makes me wonder, if other Ministerial Regulations exist  that have repealed or added relevant sections for Ministerial Regulation No.126 , but not yet reflected in the latest MR-126 version ? And could that also be the case for recent Ministerial interpretations/instructions (such as POR-161/162) and the Royal Decree 743 (LTR).

 

Anyway, I note in the MR-126 you linked:

 

Item(36) in MR-126 regarding provident funds appear to apply to certain types of pensions.  It does not state these provident funds must only be Thailand provident funds. There other sections more specific to pensions.  But I speculate this could apply to certain pensions also flagged as tax exempt in DTAs.

 

I thus speculate with Item(36) in Ministerial Regulation No.126 (B.E.2509) as called up by Section-42(17) of the Thai tax code, one could make a legitimate argument that exempt income (such as that specified in certain DTAs) are not to be included in a Thai tax calculation.

 

Slightly off topic, in MR No.126, I noted Item(62) on condominium sales and exemptions if person is properly registered ( I suspect registered via yellow book registration) was an interesting surprise to me in regards to limited tax exemption when selling the condo (although it only goes as far as the 'appraised' value which is typically less than the sale value.

 

While scrolling through the Ministerial Regulations I also stumbled across this wording on Double Taxation Agreements (DTAs) on the Thai RD web site:  https://www.rd.go.th/english/21973.html  

 

In particular I note the words: 

Quote

 

Each DTA may prescribe different methods of elimination of double taxation of a person by the resident country:

(1)   Exemption method

The country of residence does not tax the income which according to the DTA is taxed in the source country.

(2)   Credit method

The resident country retains the right to tax the income which was already taxed in the source country. 

 

 

So clearly there are incomes from foreign countries, that are exempt Thailand taxation by the "exemption method" to avoid double taxation (and are NOT to be confused with incomes from foreign countries where double taxation is prevented by the "credit method").

 

[KhunHeineken]

On 1/18/2025 at 1:48 AM, EVENKEEL said:

Sounds like you're a tax refugee. Good luck.

I wouldn't say a tax refugee. 

 

I've paid more than my fair share of tax over my working life.  None too happy that any of it went to people who have never worked a day in their life,  but that's for a different thread.

 

By choice, I remained a tax resident of Thailand in 2024. Depending on how this unfolds,  it will determine if I decide to remain a tax resident of Thailand in 2025. 

 

Unlike others, I can easily do 6 month outside Thailand a year.  So, Vietnam may see me as a tax refugee of Thailand, along with many others.    

 

 

[KhunHeineken]

On 1/18/2025 at 1:18 AM, scottiejohn said:

More bloody scaremongering!

Give it a rest please!

"scaremongering" - what a load of BS.  It's called freedom of speech.   

 

Thailand has the death penalty for drug trafficking.  There's no death penalty for tax evasion.

 

We often discuss people caught for drug trafficking who are facing the death sentence,  but dare to discuss a fine, or a possible visa violate attached to not paying a tax liability in Thailand, and you call it "scaremongering."  Really????

 

"scaremongering" - is that the best you've got? 

[NoDisplayName]

21 minutes ago, oldcpu said:

Item(36) in MR-126 regarding provident funds appear to apply to certain types of pensions.  It does not state these provident funds must only be Thailand provident funds.

 

Unless someone successfully claims a deduction for a foreign pension as A provident fund, then assume this is only for THE provident fund, that being the legal definition of a Thai fund legally registered with the SEC.

 

The Provident Fund is a fund established for voluntary participation between companies and employees, serving as a source of funds for employees in cases such as resignation,　retirement, illness, or death. Governed by the Provident Fund Act, the Thai government　regulates the Provident Fund, ensuring the rights of employees within the fund.
(Source: Krungsri Asset)

 

The deduction or provident fund on the PN90 is for contributions TO the fund, not withdrawals FROM the fund.  Regardless, if a provident fund is a pension, that is taxable unless exempted by DTA. 

 

 

[oldcpu]

37 minutes ago, NoDisplayName said:

 

Unless someone successfully claims a deduction for a foreign pension as A provident fund, then assume this is only for THE provident fund, that being the legal definition of a Thai fund legally registered with the SEC.

 

The Provident Fund is a fund established for voluntary participation between companies and employees, serving as a source of funds for employees in cases such as resignation,　retirement, illness, or death. Governed by the Provident Fund Act, the Thai government　regulates the Provident Fund, ensuring the rights of employees within the fund.
(Source: Krungsri Asset)

 

The deduction or provident fund on the PN90 is for contributions TO the fund, not withdrawals FROM the fund.  Regardless, if a provident fund is a pension, that is taxable unless exempted by DTA. 

 

 

 

I note the word "established for voluntary participation between companies and employees, serving as a source of funds for employees in cases such as resignation,　retirement, .." ....

 

Is that not what a pension is?   Is that ONLY for Thai Provident Fund and not for a foreigners (because it has to be governed by the Thai government, while a foreign pension is not governed by the Thai government)?

 

I find this interesting.

 

MR.126(36) notes:

Quote

(36) Any money or benefit received by employees from a provident fund under the law governing provident funds as follows:
(a) any money or benefit received by an employee when he or she leaves employment due to ... or the leaving occurs after the employee is 55 years old.

 

Again, recall MR.126(36) is the footnote-12 of tax code section-42(17) which lists tax exemptions that are not  to be included in a tax calculation.

 

This brings to mind where someone(?) / more than one(?) ,...  on AsianNow went to their local RD and were told that if they were on a pension then they had no tax obligation (ie their pension income not to be included in a tax calculation).  Of course - others went to their local RD and were told their pensions were DEFINITELY taxable (which happens to be my view - if not excluded in a DTA).

 

I assume then, looking at the quote of your post, that this refers to only Thai person's pensions governed by the Thai government , and not foreigner's pensions (that are governed by the foreigner's government)?

 

That seems a bit unfair. ...  But I guess This is Thaliand.

[KhunHeineken]

1 hour ago, Nik23 said:

where do i have to sign up in order to do a Personal Income tax?  Link?

 

Why do you want to sign up? 

 

Have you not read all the posts from members that all of this will never happen? 

 

It will just all go away. 

[oldcpu]

1 hour ago, Nik23 said:

where do i have to sign up in order to do a Personal Income tax?  Link?

 

 

You need to get a tax ID number first. 

 

I suppose you could just show up at your local Revenue Department (RD) office, with all your needed paperwork , and try to file your tax return then, but i suspect you would be missing some paperwork and have to do one or more trips back home to get the paperwork.

 

You would need to bring paperwork to both (1) get a tax ID number, and (2) supporting financial info for your tax return.

[KhunHeineken]

6 hours ago, redwood1 said:

 

Sir you have gone completely MAD......

 

If you think the Indian the Chinese or the Russian expats which VASTLY VASTLY out number the farang expats will be lifting so much as a finger to slave over or fill in tax forums or dig up bank records, or burn the midnight oil trying to figure out the vastly complicated DTAs.,or  having sleepless nights over accessible and non  accessible income...

 

Nope, they are not going to do Jack.....Not now not ever...

 

Its just a small number of western farang  who seem desperate to get in the tax system....And no one else..

So, you are basing YOUR actions on what you think, but do not know for sure, Chinese, Russian, and Indian expats will, or will not do. 

 

Good Luck with that.

 

BTW, please supply a link as to what they are doing. 

[NoDisplayName]

26 minutes ago, oldcpu said:

Is that not what a pension is? 

But there is nothing there to help us.

 

Perhaps a form of pension, but that doesn't make it non-assessable.  It appears withdrawals or payments FROM the provident fund, or any provident fund, are taxable as pensions, unless covered by DTA

 

There is only a line item for deduction of contributions TO the fund, which you could only take if you were employed in Thailand.  That would not apply as any money you put into the fund in your home country, stays in your home country, and can't be remitted or claimed as a tax credit.

 

 

[Guavaman]

2 hours ago, oldcpu said:

While that specific repeal is not relevant to our discussion, it makes me wonder, if other Ministerial Regulations exist  that have repealed or added relevant sections for Ministerial Regulation No.126 , but not yet reflected in the latest MR-126 version ?

Regarding the reference to Ministerial Regulations in the Revenue Code, there are only two that are specified in a footnote to category (17) that appear in the English translation on the RD website; however, on the Thai website, the following additional Ministerial Regulations are also listed in the footnote to category (17): Google Translate

 

230 BE 2544  Give as much money as was paid for the purchase of the building. Building with land Apartments or land along with the construction of a building on the land within a period of 1 year are exempt income.

 

241 BE 2546  Concerning the exemption of revenue, add (62) of Section 2 of Ministerial Regulation No. 126 (B.E. 2509), granting income from the sale of real estate. Real estate including land and apartments are exempt income. Amendment No. 126

 

252 BE 2548  Specifies that the assessable income of those damaged by a geological disaster is income that is exempt from being included in the calculation of income tax.

 

254  BE 2548  Tax exemption Tax benefits for civil servants who left government service according to government measures in 2004 and civil servants who left government service according to government measures in 2005.

 

385 BE 2565  Issued in accordance with the Revenue Code. Exemption from income tax for community enterprises only that are general partnerships or groups of persons that are not juristic persons. Additional amendments (No. 126)

 

386 BE 2565  Issued in accordance with the Revenue Code. Regarding tax exemption Measures to shop well and have returns in 2023. (Announcement from the Director-General of the Revenue Department About income tax (No. 431) etc.)

 

387 BE 2565  Regarding tax exemption Tax measures to support the filming of foreign films in Thailand

 

388 BE 2565 Regarding tax exemption Personal income tax exemption measures for compensation support or any other benefits received from the government in tax year 2022

  

https://www.rd.go.th/6160.html