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

[Presnock]

51 minutes ago, The Cyclist said:

 

Not a law that states " Pensioners "

 

I think the Law states something like " Aquire a TIN within 30 days of having assessable income "

 

Section 41 of the Revenue code applies. Which then directs you to Section 40 for the 8 Categories of " Assessable income.

 

As this leaflet explains

 

https://www.rd.go.th/fileadmin/user_upload/lorkhor/newspr/2024/FOREIGNERS_PAY_TAX2024.pdf

But even this from the TRD - they fail to mention foreign earned income exempted by LTR or DTA (i.e. US SS, civil service pension which local rd's advise that no tax id is warranted nor filing of the tax forms since in the referenced chart, it says "subject to tax" yet fails to say that these exempted sources are not subjec to tax so nothing needs to be done about them other than to be able to justify the exemption to the TRD if queried WHY no id nor tax form.

[The Cyclist]

1 minute ago, Neeranam said:

CRS reporting applies if you:
Hold a bank account in Thailand but are a tax resident in another CRS-participating country (UK, US, EU countries).

 

That is why it is commonly referred to as FATCA / CRS.

[oldcpu]

12 minutes ago, Neeranam said:

 

Now this is an issue that puzzles me. 

Did you wait a year before remitting your pension in previous years?

 

Yes

 

12 minutes ago, Neeranam said:

 

I've had countless retired foreigners asking me if they should get a tax ID and I ask them if they were only remitting monies earned in the previous year, none of them were.

 

Those foreigners remitting in the year of income earnings were subject to paying Thailand tax if their remitted income to Thailand was assessable over a certain threshold

 

However I speculate that the Thai RD knowing the loop hole (that was closed by por-161), and the RD not knowing everthing about those persons (especially since in pre-CRS days they had no access to the sum of foreigners bank accounts with other OECD countries) the RD may have decided it not worth their while to chase after such people.  Plus such foreigners who remitted their income to Thailand, may have been covered by Royal-Decree-18 and the relevant Double Tax Agreement (DTA) potentially making such income exempt for the purpose of an income tax calculation.  

 

Knowing all of that, was it worth the time of the RD to chase after foreigners?  However 161.162 closed the loophole.

 

To repeat - in short, before por-161/162,  the Thai RD may have thought it not worth their while. The Thai RD may reconsider such now.

 

 

12 minutes ago, Neeranam said:

 

How many people here were waiting a year before remitting their pensions due to the loophole? I suspect few, yet all of a sudden it is the main topic on internet forums! 

 

Pretty much every expat that I know (albeit they are not forum participants)  and i know more than a few, were relying on that loophole.

 

12 minutes ago, Neeranam said:

 

The ONLY thing that has changed is scrapping that waiting a year before remitting, so if you weren't doing it before, don't start doing it as obviously you don't understand what's the new order is all about. It's going after huge companies that were saving millions of baht in tax by using this loophole. 

 

Except now - one no longer has a legal leg to stand on, if the RD goes after one.

 

[The Cyclist]

1 minute ago, Presnock said:

But even this from the TRD - they fail to mention foreign earned income exempted by LTR or DTA (i.e. US SS, civil service pension which local rd's advise that no tax id is warranted nor filing of the tax forms since in the referenced chart, it says "subject to tax" yet fails to say that these exempted sources are not subjec to tax so nothing needs to be done about them other than to be able to justify the exemption to the TRD if queried WHY no id nor tax form.

 

I'm not getting into that debate again

 

The word exempted is open to interpretation ( And at this stage is not clear.

 

Does it mean exempt Thai Income Tax

 

Or does it mean exempt filing a tax return if you are a Thai Tax Resident.

 

I believe it means Exempt Thai Income tax. Others believe it is exempt filing a tax return.

[Guavaman]

I just spent an hour in a dialogue with a representative of the TRD on their hotline 1161 in Thai language.  Several times the TRD representative clarified my question and said: "Please hold while I check the information for your answer."  I have summarized our dialogue below.

 

Q1: If I remit U.S. Social Security benefit income, is it exempt from taxation?

A1: Remittance of U.S. Social Security benefit income is exempt from taxation.

 

Q2: Do I need to declare remittances of U.S. Social Security benefit income and file a tax return?

A2: There is no need to declare U.S. Social Security benefit income and no need to file a tax return for that income.

 

Q3: If I have an LTR Wealthy Pensioner visa, do I need to file a tax return?

A3: If you have an LTR Wealthy Pensioner visa, there is no need to file a tax return.

 

Q4: If I remit assessable income derived prior to 1 January 2024, do I need to declare it and file a tax return?

A4: If you remit assessable income derived prior to 1 January 2024, there is no need to declare it and file a tax return.

 

Q5:  What evidence is required to be kept in case of an audit of remitted income derived prior to 1 January 2024?

A5: Bank statements and evidence of withdrawals and remittances are required to be kept in case of an audit of remitted income derived prior to 1 January 2024.

 

Q6: Is a statement from a financial institution that is a stock brokerage acceptable evidence to show cash income derived prior to 1 January 2024 in a brokerage account as of 31 December 2023?

A6: A statement from a financial institution that is a stock brokerage is acceptable evidence to show cash income derived prior to 1 January 2024 in a brokerage account as of 31 December 2023.

 

There were more questions regarding gifts, but upon questioning regarding evidence required and taxability of offshore gifts, the TRD hotline representative advised to make an appointment online with a TRD specialist regarding the details of taxation of gifts involving remittances. 

 

The TRD representative was most polite and helpful, even though some questions went beyond his ability to clarify, and he then advised how to make an online appointment for in-depth consultation with a TRD expert (in Thai).

 

These answers are from the TRD information call center, not from some tax officer out in the provinces. 

 

[oldcpu]

10 minutes ago, Guavaman said:

I just spent an hour in a dialogue with a representative of the TRD on their hotline 1161 in Thai language.  Several times the TRD representative clarified my question and said: "Please hold while I check the information for your answer."  I have summarized our dialogue below.

 

 

Thankyou!

 

i wish some of the video blogger Income tax advisor companies had been as direct in asking those questions. 

 

Such questions were not in the parts of their videos that they posted on youtube.

 

And the paranoid/skeptic part of me asks, why not?  Were the 'tax advisor companies' just trying to keep this obscure, so to drum up business for themselves?

 

But I need to say to myself over and over " do not be a skeptic ...do not be a skeptic ... do no be ... "

[oldcpu]

21 minutes ago, Neeranam said:

Quote

Every foreign account in Thailand is subject to CRS reporting

 

I don't think so. 

 

I have not verified your research, but I do know that any government registered account in Thailand is NOT reported to CRS. (This typically corresponds to any Thai equivalent of a USA 401k or a Canadian RRSP/RRIF).   Can a foreigner have money in such Thai government registered accounts?  i have not checked such, but i suspect foreigners can for some of them.  But again, I have not checked such.

 

[Guavaman]

1 minute ago, oldcpu said:

" do not be a skeptic ...do not be a skeptic ... do no be ... "

The real Skeptics were the roots of the Stoics, whose ideas are most compatible with the early Buddhist teachings.

[TheAppletons]

18 minutes ago, Guavaman said:

I just spent an hour in a dialogue with a representative of the TRD on their hotline 1161 in Thai language.  Several times the TRD representative clarified my question and said: "Please hold while I check the information for your answer."  I have summarized our dialogue below.

 

  I can't believe you didn't ask "how is Thailand going to stop tax evasion using CRS"?  

 

  Or "how will you know that a remittance is non-assessable unless you subject every single man, woman, and child who has a remittance to a polygraph test"?

 

  Nice report.  Thank you for taking the initiative.

[Neeranam]

14 minutes ago, oldcpu said:

However I speculate that the Thai RD knowing the loop hole (that was closed by por-161), and the RD not knowing everthing about those persons (especially since in pre-CRS days they had no access to the sum of foreigners bank accounts with other OECD countries) the RD may have decided it not worth their while to chase after such people.  Plus such foreigners who remitted their income to Thailand, may have been covered by Royal-Decree-18 and the relevant Double Tax Agreement (DTA) potentially making such income exempt for the purpose of an income tax calculation.  

 

Knowing all of that, was it worth the time of the RD to chase after foreigners?  However 161.162 closed the loophole.

The RD didn't know they existed a they never asked for a Thai TIN. They still don't know they exist. 

[anrcaccount]

13 minutes ago, oldcpu said:

Those foreigners remitting in the year of income earnings were subject to paying Thailand tax if their remitted income to Thailand was assessable over a certain threshold

 

However I speculate that the Thai RD knowing the loop hole (that was closed by por-161), and the RD not knowing everthing about those persons (especially since in pre-CRS days they had no access to the sum of foreigners bank accounts with other OECD countries) the RD may have decided it not worth their while to chase after such people.  Plus such foreigners who remitted their income to Thailand, may have been covered by Royal-Decree-18 and the relevant Double Tax Agreement (DTA) potentially making such income exempt for the purpose of an income tax calculation.  

 

Knowing all of that, was it worth the time of the RD to chase after foreigners?  However 161.162 closed the loophole.

 

To repeat - in short, before por-161/162,  the Thai RD may have thought it not worth their while. The Thai RD may reconsider such now.

 

Lets get real.  The vast majority of foreigners remitted income whenever they felt like it, and none of them ever paid any tax on the foreign remittances. The idea that people 'relied' on the year after remittance rule is not real, because it never needed to be tested, therefore it was never relied on.

 

There's no sign or evidence that the internal directives of 161/2 have caused any change in enforcement and operation, i.e. they are not 'chasing after foreigners'. 

 

IMO, the vast majority of foreigners will not file any Thai tax return this year, despite a large % of them being technically required to, and there'll be no consequences for those who didn't file.

 

Just like last year, and the 10 years before that, when a large % of them ( remitting same year income) were technically required to, didn't, and there were no consequences.

 

 

 

 

 

T

[The Cyclist]

3 minutes ago, Neeranam said:

The RD didn't know they existed a they never asked for a Thai TIN.

 

Prior to 01 Jan 2024, I agree

 

3 minutes ago, Neeranam said:

They still don't know they exist. 

 

The RD now knows every foreigner that holds a Thai bank account.

 

Thai banks have to report on them to the RD every year.

[anrcaccount]

17 minutes ago, Guavaman said:

I just spent an hour in a dialogue with a representative of the TRD on their hotline 1161 in Thai language.  Several times the TRD representative clarified my question and said: "Please hold while I check the information for your answer."  I have summarized our dialogue below.

 

Q1: If I remit U.S. Social Security benefit income, is it exempt from taxation?

A1: Remittance of U.S. Social Security benefit income is exempt from taxation.

 

Q2: Do I need to declare remittances of U.S. Social Security benefit income and file a tax return?

A2: There is no need to declare U.S. Social Security benefit income and no need to file a tax return for that income.

 

Q3: If I have an LTR Wealthy Pensioner visa, do I need to file a tax return?

A3: If you have an LTR Wealthy Pensioner visa, there is no need to file a tax return.

 

Q4: If I remit assessable income derived prior to 1 January 2024, do I need to declare it and file a tax return?

A4: If you remit assessable income derived prior to 1 January 2024, there is no need to declare it and file a tax return.

 

Q5:  What evidence is required to be kept in case of an audit of remitted income derived prior to 1 January 2024?

A5: Bank statements and evidence of withdrawals and remittances are required to be kept in case of an audit of remitted income derived prior to 1 January 2024.

 

Q6: Is a statement from a financial institution that is a stock brokerage acceptable evidence to show cash income derived prior to 1 January 2024 in a brokerage account as of 31 December 2023?

A6: A statement from a financial institution that is a stock brokerage is acceptable evidence to show cash income derived prior to 1 January 2024 in a brokerage account as of 31 December 2023.

 

There were more questions regarding gifts, but upon questioning regarding evidence required and taxability of offshore gifts, the TRD hotline representative advised to make an appointment online with a TRD specialist regarding the details of taxation of gifts involving remittances. 

 

The TRD representative was most polite and helpful, even though some questions went beyond his ability to clarify, and he then advised how to make an online appointment for in-depth consultation with a TRD expert (in Thai).

 

These answers are from the TRD information call center, not from some tax officer out in the provinces. 

 

 

Nice report, thanks for the effort.

 

On Q6 - I'm assuming this refers to the balance of a brokerage account comprising stocks / funds held as at 31 December 2023?

 

Or,  was it a cash account held at a brokerage? 

[oldcpu]

16 minutes ago, Neeranam said:

The RD didn't know they existed a they never asked for a Thai TIN. They still don't know they exist. 

 

And I would be happy to see it stay that way.

 

But (... of course there is always a 'but' ) , ...  but I would be surprised if the Thai financial institutions (banks) are not sending most annual foreigner bank account summaries to the Thai RD ( where this is already now a OECD CRS requirement so likely Thai RD copied on such) . I suspect even before OECD/CRS the Thai banks were sending info to the Thai RD.  Was it looked at thou by the RD? Possibly not.

 

Anyway,  the RD  knows the foreigners exist - but will they follow up on such ?  Likely not follow up IMHO, unless something  catches their attention.  What could catch their attention?  Bank accounts with large amounts of money perhaps.  Also , large transfers of money to Thailand also need to be reported (I suspect) to the Thai RD.

 

So the RD needs to decide in the past, based on the money involved, if they follow up.  I speculate 99% of the time they never bothered.  But there is always that 1%.

 

Again , speculation is the operative word for both you and me.

 

[ukrules]

5 hours ago, The Cyclist said:

 

Yes, it seems pretty clear to me. If you are going to remit a large amount of money, remit it in a year you deliberately make yourself a non Resident for tax purposes of Thailand.

 

You need to be non resident in the year you make the money by selling whatever you sell, perhaps not the year you remit it. That is a contentious issue but it does come down to the source of the funds and if that source of funds is in a year when you were not resident then I would think there are no issues.

But who knows, back when Mike Lister was posting on this he kind said he would urge caution and remit during the non resident year or another year when not resident - however I now believe so long as you're non resident in the year the money is made then you should be good to remit any time later.

Also - if you are resident in the year you sell your million pound house in the UK on which zero tax is levied and remit it in a later year, even during a non resident year - then you will be charged tax on this. I looked quite deeply into this and it certainly seems to be a trap which I think many people will fall into.

 

[oldcpu]

15 minutes ago, anrcaccount said:

 

The idea that people 'relied' on the year after remittance rule is not real, because it never needed to be tested, therefore it was never relied on.

 

Speak for your experience.  I can only speak for mine.  I know many expats (a couple dozen in Thailand)  who noted that was what they did.  They deliberately waited 1 tax year before remitting.

 

15 minutes ago, anrcaccount said:

 

There's no sign or evidence that the internal directives of 161/2 have caused any change in enforcement and operation, i.e. they are not 'chasing after foreigners'. 

 

I agree.  Although we have seen RD officials and legal experts from the RD, participate in Tax Advisor youtube bloggs (where the RD officials were never fully asked the correct questions).

 

Is that a change?  Well - I don't recall seeing such videos before 161/162.

 

 

 

15 minutes ago, anrcaccount said:

 

IMO, the vast majority of foreigners will not file any Thai tax return this year, despite a large % of them being technically required to, and there'll be no consequences for those who didn't file.

 

I agree.

 

 

15 minutes ago, anrcaccount said:

 

Just like last year, and the 10 years before that, when a large % of them ( remitting same year income) were technically required to, didn't, and there were no consequences.

 

 

I don't have a prediction here.  We will just have to watch how this plays out.

 

I suspect those MOST concerned are those who remit large amounts of money to Thailand where such is NOT covered by a Royal Decree (DTAs/LTR) .  At least in my chats with fellow expats, that was my observation.

 

Most had not decided yet if they would file an income tax return.

[The Cyclist]

1 minute ago, ukrules said:

Also - if you are resident in the year you sell your million pound house in the UK on which zero tax is levied and remit it in a later year, even during a non resident year - then you will be charged tax on this. I looked quite deeply into this and it certainly seems to be a trap which I think many people will fall into.

 

I have no intention of selling my UK house. I might need it if Thailand does make a move towards global taxation.

 

The house in Thailand will become a 5 month holiday home.

[SHA 2 BKK]

27 minutes ago, Guavaman said:

I just spent an hour in a dialogue with a representative of the TRD on their hotline 1161 in Thai language.  Several times the TRD representative clarified my question and said: "Please hold while I check the information for your answer."  I have summarized our dialogue below.

 

Q1: If I remit U.S. Social Security benefit income, is it exempt from taxation?

A1: Remittance of U.S. Social Security benefit income is exempt from taxation.

 

Q2: Do I need to declare remittances of U.S. Social Security benefit income and file a tax return?

A2: There is no need to declare U.S. Social Security benefit income and no need to file a tax return for that income.

 

Q3: If I have an LTR Wealthy Pensioner visa, do I need to file a tax return?

A3: If you have an LTR Wealthy Pensioner visa, there is no need to file a tax return.

 

Q4: If I remit assessable income derived prior to 1 January 2024, do I need to declare it and file a tax return?

A4: If you remit assessable income derived prior to 1 January 2024, there is no need to declare it and file a tax return.

 

Q5:  What evidence is required to be kept in case of an audit of remitted income derived prior to 1 January 2024?

A5: Bank statements and evidence of withdrawals and remittances are required to be kept in case of an audit of remitted income derived prior to 1 January 2024.

 

Q6: Is a statement from a financial institution that is a stock brokerage acceptable evidence to show cash income derived prior to 1 January 2024 in a brokerage account as of 31 December 2023?

A6: A statement from a financial institution that is a stock brokerage is acceptable evidence to show cash income derived prior to 1 January 2024 in a brokerage account as of 31 December 2023.

 

There were more questions regarding gifts, but upon questioning regarding evidence required and taxability of offshore gifts, the TRD hotline representative advised to make an appointment online with a TRD specialist regarding the details of taxation of gifts involving remittances. 

 

The TRD representative was most polite and helpful, even though some questions went beyond his ability to clarify, and he then advised how to make an online appointment for in-depth consultation with a TRD expert (in Thai).

 

These answers are from the TRD information call center, not from some tax officer out in the provinces. 

 

 

Thank you good sir for a very good and well researched post.  I wish i could give you 10 likes!!!

[Neeranam]

10 minutes ago, The Cyclist said:

 

Prior to 01 Jan 2024, I agree

 

 

The RD now knows every foreigner that holds a Thai bank account.

 

Thai banks have to report on them to the RD every year.

Not true. The bank MAY report your account details to the Thai Revenue Department, for example if you're a tax resident in a CRS-participating country(Outside Thailand). There are also other limits like remitting more than 2 million I think every year. 

[anrcaccount]

7 minutes ago, ukrules said:

 

Also - if you are resident in the year you sell your million pound house in the UK on which zero tax is levied and remit it in a later year, even during a non resident year - then you will be charged tax on this. I looked quite deeply into this and it certainly seems to be a trap which I think many people will fall into.

 

 

There would certainly be people who have already done this in 2024, i.e. sold a high value property overseas somewhere where no tax was levied, and remitted those funds already to Thailand to buy a property. I guarantee this has occurred, many many times, already.

 

The first case of anyone ACTUALLY having declared this to the TRD, then paid the Thai tax on such a remittance, will be all over the news. Can you imagine the story, the media would have a field day!!!

 

 

 

 

[ukrules]

6 minutes ago, Neeranam said:

There are also other limits like remitting more than 2 million I think every year. 

 

Well I remitted more than 3 million last year, a year in which I was non resident.

 

Will be interesting to see if there's any response. It wasn't all at once and my balance didn't go about about 3.6 million I think.

 

I have zero plans on becoming resident again for at least another 4 or 5 years.

[The Cyclist]

Just now, Neeranam said:

Not true. The bank MAY report your account details to the Thai Revenue Department, for example if you're a tax resident in a CRS-participating country(Outside Thailand). There are also other limits like remitting more than 2 million I think every year. 

 

What do you think foreigners remitting foreign funds into a Thai Bank account would be classed as ?
 

It's all part of the being tax compliant and not engaged in Tax evasion process.

[Neeranam]

2 minutes ago, ukrules said:

 

Well I remitted more than 3 million last year, a year in which I was non resident.

 

Will be interesting to see if there's any response. It wasn't all at once and my balance didn't go about about 3.6 million I think.

 

I have zero plans on becoming resident again for at least another 4 or 5 years.

• In addition to the 2 million baht exemption, there is also a 4 million baht threshold related to the remittance of funds into Thailand.
• For amounts exceeding 2 million baht but less than 4 million baht, the remitted income still benefits from a reduced tax treatment (for example, some exemption or lower tax rate depending on the type of income).
• However, if remittances exceed 4 million baht in a year, this will be subject to closer scrutiny, and depending on the nature of the funds and your tax residency status, you might be required to pay tax on the income that exceeds this limit.

[Guavaman]

1 minute ago, anrcaccount said:

On Q6 - I'm assuming this refers to the balance of a brokerage account comprising stocks / funds held as at 31 December 2023?

 

Or,  was it a cash account held at a brokerage?

I was testing to see if the advice from Carl Turner at Expat Tax that pre-2024 income only refers to cash in the bank, so I only asked if cash in a brokerage account was acceptable or not.  I took advice from Baker McKenzie to convert investments to capital prior to 31 December 2023.  

 

It makes sense that pre-2024 income, that AN users like to call "savings" must exist in a liquid form.  For example, my brokerage account held $1m worth of stocks on 31 December 2023, bought with pre-2024 income, then I sold it in 2024, so I don't need to pay tax on remittance of the capital with which I bought those stocks.  Too difficult to assess the monetary value of those stocks.  Problem with the definition of pre-2024 income.  I did not expect that the call center representative could provide clear actionable guidance on that, so I focused on the concept of liquid assets (cash in the bank a la Carl Turner), probing to see if that concept could be extended to cash in a financial institution that is not a 'bank."   As I stated to the TRD rep:  I cannot find any official guidance on what constitutes "pre-2024 income" that is exempted under P. 162A.  He did not provide any official reference to clarify the definition of "pre-2024 income" or evidence required to prove that income is "pre-2024 income" other than the usual bank statements, etc.

[Neeranam]

5 minutes ago, The Cyclist said:

 

What do you think foreigners remitting foreign funds into a Thai Bank account would be classed as ?
 

It's all part of the being tax compliant and not engaged in Tax evasion process.

Depends on the source and purpose. 

 

 

[Neeranam]

4 minutes ago, Guavaman said:

I was testing to see if the advice from Carl Turner at Expat Tax that pre-2024 income only refers to cash in the bank, so I only asked if cash in a brokerage account was acceptable or not.  I took advice from Baker McKenzie to convert investments to capital prior to 31 December 2023.  

That guy is a charlatan, and spreading misinformation for his own personal gain. 

[Neeranam]

Interesting - 

a gift granted to a lawful spouse is exempt from Thai personal income tax up to Baht 20 Million per one calendar year, insofar as the gift is duly granted. A lawful spouse may remit such gift to Thailand tax free up to Baht 20 Million per one calendar year.

Second, a gift granted to a girlfriend (i.e. a domestic partner, a common law wife or a quasi-spouse without a marriage registration) is exempt from Thai personal income tax up to Baht 10 Million per one calendar year, insofar as the gift is duly granted.

The Revenue Department recognizes that a couple may choose not to register a marriage these days. In one recent revenue ruling, the department held that the money given by a foreign unregistered husband to a Thai unregistered wife to spend in household expenses is exempt from personal income tax up to Baht 10 Million per one calendar year. The revenue ruling clarifies that a couple must live together in accordance with the conditions laid down in the Notification Re Criteria for a Couple Living Together Without Registering for Marriage Who Shall Be Deemed (Quasi/Unregistered) Spouses of the National Anti-Corruption Commission. 

https://www.linkedin.com/pulse/guide-personal-income-tax-foreign-sourced-narit-direkwattanachai-ehdxc/

[Guavaman]

1 minute ago, Neeranam said:

hat guy is a charlatan, and spreading misinformation for his own personal gain. 

I noticed that he asked the TRD expert a leading question or asked for confirmation on the video:  

"Cash in the bank -- correct?" with no clear affirmation by the Thai RD expert.  This is not written anywhere, and appears to be a view promoted by Carl Turner.

[Yumthai]

26 minutes ago, ukrules said:

Also - if you are resident in the year you sell your million pound house in the UK on which zero tax is levied and remit it in a later year, even during a non resident year - then you will be charged tax on this. I looked quite deeply into this and it certainly seems to be a trap which I think many people will fall into.

That is unclear and anyway unenforceable since non residents do not have to file for foreign sourced income remittances.

[Aforek]

so far no news about this tax, no link to make a declaration, nothing at all, maybe the government has changed its mind or it's too complicated for them to do it ( end of January already )