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

[KhunHeineken]

3 minutes ago, MartinBangkok said:

'Foreigners will be happy because it's only 1000 baht when they should be paying more, so no need to leave Thailand for 6 months."

 

How can you @KhunHeineken, and everyone likeminded to you, accept to pay even 1 Baht tax to Thailand?

 

It just baffles me.

 

Simple, because we have no rights here. 

 

I've said it before.  When the Thai government says to foreigners "Jump."  Foreigners ask "How high?"

 

That 12 month visa / extension is basically just a 12 month tourist visa.    

 

If you don't want to pay 1 baht tax, what do you do when they want 300 baht for a Certificate of Residence?  You pay, just like every other foreigner pays. 

 

The Certificate of Clearance could end up being the same. 

 

Now, if they really go hard at this, it's 6 months Thailand and 6 months Vietnam for me, and Thailand will get zero tax from me.  I really don't care what happens.   I have no emotional, and very little financial ties here. 

[oldcpu]

28 minutes ago, MikeandDow said:

well how are we suposed to learn ! if you dont no bugger all about this,   i know guys not on the intenet live a quite life out in the sticks

 

To quote from the Wizard of Oz .. "We are not in Kansas anymore".

 

If one is no longer living in the country of one's citizenship, ... and if a foreigner to the country where one lives,  and if one is not an officially recognized permanent resident by local law, then we are not only expected to comply with local law - but also -  its up to us to find out the law.

 

No one said it would be easy.

 

Ok ... apologies for being hard nosed about this. ... That is the truth.  Now forums like this help provide information ... and the internet is a great tool ... but I repeat ... its unlikely anyone will hold our hands.

.

[oldcpu]

25 minutes ago, KhunHeineken said:

The Certificate of Clearance could end up being the same.

 

 

... and it might not.  TIT. Who knows?

[scottiejohn]

4 minutes ago, oldcpu said:

 

... and it might not.  TIT. Who knows?

The usual scaremongers are out enjoying themselves! 

They will be telling us we have to wear a Tin yellow star until we get an RD TIN next!

[Guavaman]

8 hours ago, The Cyclist said:

Others are free to cherry pick between the revenue Code and DTA's to come up with answer that suits them

 

The TRD approach to assessable income that is exempt for the purpose of income tax calculation under Section 42 is demonstrated in the following examples --- there are no provisions on the tax forms to declare & exempt these types of assessable income for income tax calculation:

 

(10) Income derived from an inheritance.

(15) Income of a farmer from sale of rice cultivated by the farmer and/or his family.

(23) Income from sale of investment units in a mutual fund.

(27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year.

 

Even though Royal Decree No. 18 on DTAs was promulgated in 1962, the TRD has not included any provisions for claiming exemptions or foreign tax credits in the forms for filing personal income tax returns for 64 years; this demonstrates the TRD approach.

[oldcpu]

21 minutes ago, Guavaman said:

Even though Royal Decree No. 18 on DTAs was promulgated in 1962, the TRD has not included any provisions for claiming exemptions or foreign tax credits in the forms for filing personal income tax returns for 64 years; this demonstrates the TRD approach.

 

Thanks for the reference to Royal Decree No.18, B.E.2505 (1962).

 

I note (an English language translation) in Section-3 states:

 

Quote

 

"Section-3: Taxes and duties under the Revenue code shall be exempted for persons in accordance with the agreements on avoidance of double taxation which the government of Thailand has entered into or shall enter into with the government of foreign countries".

 

"Section-4:  The Minister of Finance shall be in charge and control of the execution of this Royal Decree".

 

 

So that makes it clear that taxes on income can be exempt dependent on the wording of a DTA.  Further, the Minister of Finance is the one who needs to implement any of the details in regards to foreign tax credits ... and also if such tax exempt income need be included in a tax return.

 

Given the Minster of Finance (via the Revenue Department) has elected to put no place in the Thailand tax return forms (neither English language nor Thai language that I can find) for such exempt income to be listed as tax exempt, then I believe that supports the viewpoint that such tax exempt income (per the specific DTAs as authorized by Royal Decree 18) need not be included in a Thailand tax return.

 

Edit: Obviously this is my opinion.  I am not a tax advisor nor a tax expert.

 

[Felt 35]

9 hours ago, NoDisplayName said:

 

PN91 is for income from employment only.

PN90 is for income from employment AND all other forms.

 

Hmm...I have used PN 91 for 15 years and get the forms it sent to me every year with my name and TIN ready printed and that is tax on pension from abroad, but maybe it's different online?

Felt 35

[Guavaman]

19 minutes ago, oldcpu said:

Given the Minster of Finance (via the Revenue Department) has elected to put no place in the Thailand tax return forms (neither English language nor Thai language that I can find) for such exempt income to be listed as tax exempt, then I believe that supports the viewpoint that such tax exempt income (per the specific DTAs as authorized by Royal Decree 18) need not be included in a Thailand tax return.

 

It appears that the RD has finally issued clarification in the form of a handout for foreign taxpayers to be provided by local tax offices. This has been reported twice now, with the most recent case in Chiang Mai. In the box on the bottom, it states: 

 

You can choose to calculate money in 2 ways.

 

1. Income imported into Thailand (in a calendar year) Calculated according to Thai methods

 

So that’s it: simply calculate your income tax according to Thai methods.

 

 

[oldcpu]

7 minutes ago, Guavaman said:

 

It appears that the RD has finally issued clarification in the form of a handout for foreign taxpayers to be provided by local tax offices. This has been reported twice now, with the most recent case in Chiang Mai. In the box on the bottom, it states: 

 

You can choose to calculate money in 2 ways.

 

1. Income imported into Thailand (in a calendar year) Calculated according to Thai methods

 

So that’s it: simply calculate your income tax according to Thai methods.

 

 

 

 

The small print at the bottom is interesting where it states:

 

Quote

In the case of a country with a double tax treaty. There is no need to present a tax return in Thailand. Except in cases ...

 

It has me thinking the view of some of us that remitted pension income noted in a DTA as not being taxable in Thailand , but only taxable in the pension source country, does not need to go on a Thai tax return.  Further if that is one's only income then there is no need to submit a Thai tax return.

 

...and it goes on a bit to provide some ?? guidance where a DTA provides for both countries (source & Thailand) to tax a pension.

[NoDisplayName]

7 minutes ago, Felt 35 said:

 

Hmm...I have used PN 91 for 15 years and get the forms it sent to me every year with my name and TIN ready printed and that is tax on pension from abroad, but maybe it's different online?

Felt 35

 

PN90  Personal Income Tax Return
for taxpayer with income not only from employment

 

PN91  Personal Income Tax Return
for taxpayer with only income from employment

under Section 40 (1) of the Revenue Code Only

 

(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.

 

Makes sense.  PN91 is the short form, only for employment income.

Under the rules, pension is considered derived from employment.

 

You have no other income streams?  No Thai sourced interest or dividends?  No remittances of capital gains or dividends from outside?

 

Maybe you can answer some of our questions:

 

Is your pension non-assessable, excluded by DTA?

If so, if entered on your PN91, how do you deduct it?

 

Do you pay any tax on your pension in your home country?

If so, how do you claim a credit for foreign tax paid?

 

 

[lordgrinz]

7 minutes ago, Guavaman said:

 

It appears that the RD has finally issued clarification in the form of a handout for foreign taxpayers to be provided by local tax offices. This has been reported twice now, with the most recent case in Chiang Mai. In the box on the bottom, it states: 

 

You can choose to calculate money in 2 ways.

 

1. Income imported into Thailand (in a calendar year) Calculated according to Thai methods

 

So that’s it: simply calculate your income tax according to Thai methods.

 

 

 

Number 7 is the one I warned about long ago, translating all documents to Thai?! Talk about a nightmare in the making!

[CallumWK]

1 minute ago, oldcpu said:

 

The small print at the bottom is interesting where it states:

 

 

It has me thinking the view of some of us that remitted pension income noted in a DTA as not being taxable in Thailand , but only taxable in the pension source country, does not need to go on a Thai tax return.  Further if that is one's only income then there is no need to submit a Thai tax return.

 

You beat me to it.

To me that sounds as if the revenue office in your home country, automatically will forward all your earnings to the Thai revenue department.

And that was also what my bank told me, when I was asked where my tax residency would be. If I select Thailand as my tax residency, I will be exempt of withholding on my interests, but it comes with a caveat.

 

If you use the tax exemption, the document is valid for one year and the taxes are passed on to the selected tax office.

 

I decided to keep my tax residency in my home country.

[oldcpu]

7 minutes ago, CallumWK said:

 

You beat me to it.

To me that sounds as if the revenue office in your home country, automatically will forward all your earnings to the Thai revenue department.

And that was also what my bank told me, when I was asked where my tax residency would be. If I select Thailand as my tax residency, I will be exempt of withholding on my interests, but it comes with a caveat.

 

If you use the tax exemption, the document is valid for one year and the taxes are passed on to the selected tax office.

 

I decided to keep my tax residency in my home country.

 

May I ask what country?

 

In the case of Canada - only Canada can tax Canadian sourced pension even if one is a Thailand resident. Thailand is not to tax such (per the Canadian-Thai DTA). I doubt Canada forwards anything to Thailand.

 

In the case of Germany?  its the opposite.  Only Thailand can tax a German sourced pension if one is a Thailand resident. Germany is not to tax such (per the German-Thai DTA).  Germany might ??? forward something to Thailand.

 

but ...  its not clear.

 

Important here is one still has to remit the German pension income into Thailand to be taxable by Thailand.  This is also true for other foreign sourced income. Currently if the income is left outside of Thailand it is not taxable in Thailand.

[NoDisplayName]

9 minutes ago, oldcpu said:

In the case of a country with a double tax treaty. There is no need to present a tax return in Thailand.

 

What does that mean before translation into English?

 

If my country has a DTA with Thailand, then

 

1)  I don't need to file (present) a Thai tax return at all?

2)  I don't need to submit (present) a copy of my national tax return when I file a Thai tax return?

[CallumWK]

1 minute ago, oldcpu said:

May I ask what country?

 

Belgium.

 

2 minutes ago, oldcpu said:

Important here is one still has to remit the German pension income into Thailand to be taxable by Thailand.  This is also true for other foreign sourced income. Currently if the income is left outside of Thailand it is not taxable in Thailand.

 

I don't remit anything to Thailand, so for now it's not taxable, unless the rumours of worldwide income tax get enforced in the future

[oldcpu]

Just now, NoDisplayName said:

 

What does that mean before translation into English?

 

If my country has a DTA with Thailand, then

 

1)  I don't need to file (present) a Thai tax return at all?

2)  I don't need to submit (present) a copy of my national tax return when I file a Thai tax return?

 

 ...  further - you need to read a bit further as there is "except in cases where it is necessary to show ..."  and at that point it gets even more confusing.

 

But re: your question, what does the DTA of the source country of your income say?

[oldcpu]

35 minutes ago, CallumWK said:

 

Belgium.

 

I don't remit anything to Thailand, so for now it's not taxable, unless the rumours of worldwide income tax get enforced in the future

 

I took a quick look at the pension section in the Belgium-Thai DTA.  From that DTA:

 

Quote

Subject to provisions of article-18, pensions or other remunerations for past employment arising in a Contracting State (Belgium) and paid to a resident of the other Contracting state (Thailand) may be taxed in the first-mentioned state (Belgium).

...

note the words "may be taxed" ...  That suggests to me both states (Thailand and Belgium) may be able to tax the pension.

 

Why do I think that?  Well contrast that to the words in the Canada-Thai DTA which state:
 

Quote

"Pensions and other similar remuneration, whether they consist of periodic or non-periodic payments, for past employment, arising in a Contracting State (Canada) and paid to a resident of the other Contracting State (Thailand) shall be taxable only in the first-mentioned State (Canada).

 

Note the difference in wording.  The Belgium-Thai DTA states "may be taxed" while the Canada-Thai DTA states "shall be taxable only".

 

The Belgium-Thai DTA goes on to note Belgium civil service pensions are only taxed in Belgium (unless one a Thai citizen).

 

Although I believe for Belgium (non-civil service) pension income to be taxed in Thailand one needs to remit that income to Thailand.  Where your approach not to remit seems to work to manage your tax exposure.

 

... anyway ... its interesting to see differences in the DTAs. 

 

as for residency, in the case of me and Canada, becoming a  Canadian tax resident would be a big mistake for me, as Canada would then go after all of my global income and assets.  Its better for me at present time to be a Thai tax resident. I suspect everyone is different here.

 

Note also - I am no tax expert , so readers should come to their own conclusions - and not blindly follow my opinions.

 

[oldcpu]

49 minutes ago, NoDisplayName said:

 

What does that mean before translation into English?

 

If my country has a DTA with Thailand, then

 

1)  I don't need to file (present) a Thai tax return at all?

2)  I don't need to submit (present) a copy of my national tax return when I file a Thai tax return?

 

My non-expert view on this is if your income source country DTA with Thailand says the income can only be taxed in the income source country, then  there is no need to include remitted foreign income (from that source country to Thailand) in a Thai tax return - and if that is one's only income, there is no need to file a Thai tax return.

 

However I speculate the "except in cases ... " wording could apply if one's DTA with Thailand allows Thailand to tax the pension.  That could mean filing a Thai tax return is needed (only) if foreign income remitted to Thailand.  As to how the details work out on the tax return ... I don't know and I have not looked at that as such does not apply for me, given I am on an LTR visa and further given that I am remitting no foreign money to Thailand at present time (I remitted a bunch previously when I was a non-resident to Thailand).

 

[Guavaman]

5 hours ago, NoDisplayName said:

What does that mean before translation into English?

 

If my country has a DTA with Thailand, then

 

1)  I don't need to file (present) a Thai tax return at all?

2)  I don't need to submit (present) a copy of my national tax return when I file a Thai tax return?

 

It is highly unlikely that the RD intends to instruct foreign taxpayers from DTA countries that there is no need to file a tax return by a footnote in an unofficial handout with no logo or government agency identity.

 

How about a third possible interpretation?  Something like this:

3) There is no need to present a [copy of one's national] tax return in Thailand. Except in cases where it is necessary to show it to the agency that needs it only [such as offices of the Revenue Department for the process of calculation of tax on assessable income or for audits.]

 

Note: Item 3 instructs the taxpayer to "Please attach a copy of your bank statement." With this, the RD will see incoming remittances into your bank accounts in Thailand, including both assessable income and income that is exempt from calculation of income tax, such as government pensions, social security, inheritances, etc. If this is done in person, the tax officer could screen out exempted assessable income items that have no place to be reported on a tax return.

 

It remains to be seen how RD officers will interpret the "clarifications" provided in the unofficial handout. It is likely that we will read about this as more reports appear in these threads. It is to be expected that there will be diverse interpretations by the tax offices and officers, as we know well from experience with immigration offices.

 

 

[motdaeng]

that's a good one ... " ... by the Thai Embassy located in Thailand .... " 

 

[rickudon]

Just a couple of points.

First, many posters seem to be unaware of many of the Thai tax allowances (especially if retired and on a pension). Most retirees will not pay tax on the first 500,000 baht of income (includes the 150,000 zero rate tax). There are other allowances, but not available to all. Look at Mike Listers tax thread started last year, or do your own research.

 

Second. We do not really know how much information will be made available under CRS (common reporting standard) but probably very limited. Complicated if more than one bank involved. Credit cards may not even be covered.

 

Third - what documentation will be required, and will we really be expected to provide Thai translations? That will cost more than the tax itself! Also my pensions are processed through different banks before the money is sent to Thailand, and never is paid directly into a Thai bank (cash from Credit card). If audited, could take years....  and i remit less than my tax allowances anyway (plus qualify under a DTA).

 

For me, very much wait and see.

[Badrabbit]

I've received an email from Expat Thailand  they get the TIN for you at a cost of 7,000bht.

Is this good, all they need is your passport and vise page (copies).

[lordgrinz]

2 hours ago, motdaeng said:

that's a good one ... " ... by the Thai Embassy located in Thailand .... " 

 

 

I assume they mean MFA, which is still a nightmare, requiring all documents be translated to "certify authenticity". How certifying authenticity would happen is beyond me, the process for apostille (which in the USA would be almost impossible for financial documents - and more expensive then you could dream), if that's what they are referring to, is a complete nightmare.

[The Cyclist]

10 hours ago, Guavaman said:

The TRD approach to assessable income that is exempt for the purpose of income tax calculation under Section 42 is demonstrated in the following examples

 

I'm not sure what point you are trying to make, but the list below does not mention Pensions.

 

10 hours ago, Guavaman said:

(10) Income derived from an inheritance.

(15) Income of a farmer from sale of rice cultivated by the farmer and/or his family.

(23) Income from sale of investment units in a mutual fund.

(27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year.

 

So are you agreeing with my reasoning, that Pensions are in fact assessable income, and should be reported in a tax filing ?

[The Cyclist]

9 hours ago, Felt 35 said:

 

Hmm...I have used PN 91 for 15 years and get the forms it sent to me every year with my name and TIN ready printed and that is tax on pension from abroad, but maybe it's different online?

Felt 35

 

Just over 2 weeks ago I went to the Big RD Office and asked if I needed to file a tax return for my UK Government Pension.

 

The lady said yes and I asked her how I go about filing as I had never done it before. She then went and got a PND 91 and filled it in with pencil for me to use as a template. Posted the whole thing on here, including a photo of the PND 91.

 

9 hours ago, NoDisplayName said:

Maybe you can answer some of our questions:

 

Is your pension non-assessable, excluded by DTA?

If so, if entered on your PN91, how do you deduct it?

 

Do you pay any tax on your pension in your home country?

If so, how do you claim a credit for foreign tax paid?

 

Are you starting to panic ?
 

I told you my Gov Pension is only taxable in UK due to DTA ( Please note, yet again. That No DTA, stipulates whether a Pension is assessable or non assessable in Thailand )

 

 * Excluslive / Primary / Secondary taxing rights ( Or words to that effect )

 

Tax is deducted at source on my UK Gov Pension

 

I posted a photo of the PND 91 she draft filled in for me.

[Badrabbit]

3 minutes ago, The Cyclist said:

 

Just over 2 weeks ago I went to the Big RD Office and asked if I needed to file a tax return for my UK Government Pension.

 

The lady said yes and I asked her how I go about filing as I had never done it before. She then went and got a PND 91 and filled it in with pencil for me to use as a template. Posted the whole thing on here, including a photo of the PND 91.

 

 

Are you starting to panic ?
 

I told you my Gov Pension is only taxable in UK due to DTA ( Please note, yet again. That No DTA, stipulates whether a Pension is assessable or non assessable in Thailand )

 

 * Excluslive / Primary / Secondary taxing rights ( Or words to that effect )

 

Tax is deducted at source on my UK Gov Pension

 

I posted a photo of the PND 91 she draft filled in for me.

My tax office said no so who the fuffing hell is right.

[lordgrinz]

1 minute ago, Badrabbit said:

My tax office said no so who the fuffing hell is right.

 

TIT....Like Immigration Offices, they are basically independent, running things whatever way they see fit, with almost no oversight. 

[The Cyclist]

4 hours ago, Guavaman said:

Note: Item 3 instructs the taxpayer to "Please attach a copy of your bank statement." With this, the RD will see incoming remittances into your bank accounts in Thailand, including both assessable income and income that is exempt from calculation of income tax, such as government pensions, social security, inheritances, etc. If this is done in person, the tax officer could screen out exempted assessable income items that have no place to be reported on a tax return.

 

And that brings to mind a little snippet from 2 weeks ago.

 

When I was getting an annual bank printout, the lady dealing with me asked if it was for tax filing 😀😀

 

[The Cyclist]

6 minutes ago, Badrabbit said:

My tax office said no so who the fuffing hell is right.

 

If I had a true and honest answer, I would give you it.

 

But as I don't, that is why, whether it is right or wrong, I'm going with what my Local RD Office says.

[Badrabbit]

11 minutes ago, The Cyclist said:

 

If I had a true and honest answer, I would give you it.

 

But as I don't, that is why, whether it is right or wrong, I'm going with what my Local RD Office says.

I would get a TIN but it's very difficult to obtain, documents from your home country, translated into Thai by the Thai embassy in Bangkok, authentication by your countries embassy, ridiculous.