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

[oldcpu]

1 minute ago, The Cyclist said:

 

I have just booked my Interuptor for a lunch date tomorrow, followed by a visit to my local TD Office to ask the question ( Again )

 

* The last time I asked, I was told yes, and given a pencilled in PND 91, to use as a template.

 

Lets see what I am given tomorrow.

 

Good luck.

 

I hope this goes well for you.

[anchadian]

 

[Guavaman]

7 minutes ago, oldcpu said:

If a Thailand tax forum needs not to be submitted for those exempt incomes (such as US Social Security and LTR selected visa holders), I think it supports a view that such DTA/LTR exempt incomes are not to be considered assessable income for the tax calculation and not considered assessable for the purpose of determining if a Tax return is needed to be submitted.

I specifically tried to limit the scope of the inquiry to clear examples that could form the basis to infer the principle in the tax code: exempt from inclusion in tax calculation = not reportable = no need to file.

[SHA 2 BKK]

3 minutes ago, The Cyclist said:

 

I have just booked my Interuptor for a lunch date tomorrow, followed by a visit to my local TD Office to ask the question ( Again )

 

* The last time I asked, I was told yes, and given a pencilled in PND 91, to use as a template.

 

Lets see what I am given tomorrow.

Fair approach mate - stand your ground and ask the hard questions - truly wish you Chockdee.

[The Cyclist]

Just now, oldcpu said:

 

Good luck.

 

I hope this goes well for you.

 

Good luck doesn't come into it.

 

File, don't file, I could not care less. I just don't want to be in a position to be bitten on the **** at some date in the future.

 

Be academic anyway, if Thailand goes ahead with the reported Global Taxation, I'm off.

[Neeranam]

7 minutes ago, SHA 2 BKK said:

You could argue that it is an "early inheritance".  My parents, who are still alive,  gave all us kids access to some of their estate.  A solicitor drew up the documents and its totally tax free in Australia - may hold true in Thailand but TIT.  My parents reasoned they didn't need that part of their estate and were pleased to see kids and grandkids (now also great grandkids) enjoy the inheritance whilst they are alive.  Unless the value is over 100m baht you may be on solid ground.

Do you mean the issue would be with the UK RD? I suppose my UK bank would tell my Thai bank. 

[SHA 2 BKK]

1 minute ago, Neeranam said:

Do you mean the issue would be with the UK RD? I suppose my UK bank would tell my Thai bank. 

 

I don't know the tax law surrounding inheritance in the UK but as your mother gave title to you this well before January 1 2024, as part of your inheritance, and from your further posting its valued at less than 100m baht I think it would not be assessable in Thailand.  

 

I just googled inheritance in the UK and for Children the following showed before it is a taxable event in the UK - but as with all tax matters I would seek expert advice or do more research.  Perhaps even have a UK solicitor note the early inheritance from your mum in an updated Will or letter?

 

"If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren your threshold can increase to £500,000."

[Wyabcp]

The fact that there is a DTA with UK, does this mean any income I'm taxed on in the UK, eg. Pension, Rent, interest , dividends etc, is exempt from taxation in Thailand ? I understand that the tax free UK personal allowance is taxable in Thailand and 25% pension lump sum is also taxable. I also know tax credits can also be used.

 

I'm in UK now going through redundancy, and the plan was to move over in the next couple of months. I have no problem in getting a tax ID, however, if Thailand tax's me on income I've already been taxed on, I'm seriously reconsidering my move...

 

 

[SHA 2 BKK]

Just now, Wyabcp said:

The fact that there is a DTA with UK, does this mean any income I'm taxed on in the UK, eg. Pension, Rent, interest , dividends etc, is exempt from taxation in Thailand ? I understand that the tax free UK personal allowance is taxable in Thailand and 25% pension lump sum is also taxable. I also know tax credits can also be used.

 

I'm in UK now going through redundancy, and the plan was to move over in the next couple of months. I have no problem in getting a tax ID, however, if Thailand tax's me on income I've already been taxed on, I'm seriously reconsidering my move...

 

 

It depends on when you move to Thailand - if you have concerns move here after July 2 and remit the funds then.  You won't become a tax resident until you stay here 179 days in a calendar year.  Yes your UK Tax payments should be offset by a DTA but it depends on the marginal rates of tax on the UK and Thailand.  But to be totally tax free in Thailand on remittances move here in the second part of the year and remit the funds before the end of the sane year.

[Wyabcp]

14 minutes ago, Neeranam said:

Do you mean the issue would be with the UK RD? I suppose my UK bank would tell my Thai bank. 

If the property was gifted to you over 7 years ago, then there is no UK tax liability. 

[Neeranam]

1 minute ago, Wyabcp said:

If the property was gifted to you over 7 years ago, then there is no UK tax liability. 

Yes, that was why we did it, however one lawyer did say they could contest this, 

[Wyabcp]

9 minutes ago, Neeranam said:

Yes, that was why we did it, however one lawyer did say they could contest this, 

wrong thread for this 🙂 but, as long as she doesn't  live in or make use of the property, (even beyond 7 years), there won't be any tax. Oh, and it must have been her main residence.

[Guavaman]

1 hour ago, The Cyclist said:

* The last time I asked, I was told yes, and given a pencilled in PND 91, to use as a template.

Fellow TROT (Tax Resident Of Thailand),

 

I suspect that the last time you went there, her penciled calculation based upon 480 per month multiplied by the exchange rate into Baht was her helpful attempt to cancel out your apparent tax liability (which shouldn't have appeared) on your foreign-sourced income by entering that amount at item 13 as withholding tax to cancel-out the tax liability that appeared at item 12. 

 

She entered the exact amount of your tax liability on item 12 into item 13, even though her calculation of your "withholding tax" exceeded the tax liability by almost tenfold. So she merely hacked the system by entering only the exact amount needed to cancel-out your apparent tax liability. Problem solved for her and for you, even though it might be difficult to explain to AN English-speaking expats, AN users, and such perfectionists.

 

 

Look at item 13 Withholding Tax

 

Here is the same item in unofficial translation of PND 90:

 

 

Notice that item 13 is "withholding tax and tax credit."

 

She gave you a tax credit for something -- ? the tax you paid in the UK @480 monthly. And that hack by her solved her problem of how to absolve you of an apparent tax liability -- she did her best to help you, even though she mistakenly entered your tax-exempt UK govt. pension into the PND 91 form that she never had to use if she understood the DTA. But she didn't, yet she did her best to hack the system to solve her problem of how to get rid of you while performing her duties correctly. 

 

Mai pen rai -- happy to help you, TIT!

 

And for your nemeses on AN:  Here is a place where a DTA tax credit can be accessed in the Thai income tax filing form PND 90 and PND 91 on the paper forms!

 

PND 90 states "tax credit" in Thai.

[NoDisplayName]

3 hours ago, oldcpu said:

 

it is fascinating - I still can't find that in the tax code - but I assume its there.

 

(I tend to be skeptical sometimes and like to find the most official source).

 

In section 1, I enter total earned, total tax withheld, and taxpayer ID for dividends and for bank interest.

 

The form instructions tell me I only need to enter that information if I want to have the amounts included in the PIT calculations.  If I prefer to forego the refund, I can leave it out completely.

 

I don't know if that is available for earned income or non-assessable pensions, or what sort of documentation would be acceptable to upload to the online system.  No mention of that option in all the threads, so I'ma'ssume not available.

[Wyabcp]

22 minutes ago, SHA 2 BKK said:

It depends on when you move to Thailand - if you have concerns move here after July 2 and remit the funds then.  You won't become a tax resident until you stay here 179 days in a calendar year.  Yes your UK Tax payments should be offset by a DTA but it depends on the marginal rates of tax on the UK and Thailand.  But to be totally tax free in Thailand on remittances move here in the second part of the year and remit the funds before the end of the sane year.

thanks yes, I'm aware of the tax differences, for me I'm happy to swallow that.

Looking at the calendar, I think it's actually July 5th I should move over 🙂 

[potless]

7 minutes ago, Wyabcp said:

thanks yes, I'm aware of the tax differences, for me I'm happy to swallow that.

Looking at the calendar, I think it's actually July 5th I should move over 🙂 

Do not enter Thailand before the 6th. 

[oldcpu]

23 minutes ago, Guavaman said:

She entered the exact amount of your tax liability on item 12 into item 13, even though her calculation of your "withholding tax" exceeded the tax liability by almost tenfold. So she merely hacked the system by entering only the exact amount needed to cancel-out your apparent tax liability. Problem solved for her and for you, even though it might be difficult to explain to AN English-speaking expats, AN users, and such perfectionists

 

You are right - that would drive me nuts ...  if not withhold tax - it shouldn't be in 'withholding tax' area.  lol !!

I confess thou - I have not read the guide - maybe the guide states to do that.

 

How would that stand up to a future audit?   If it were me, and the amount substantial (which it is not in the noted case) I would probably lose sleep over it.

 

This is going to be an interesting year in Thailand to observe (and to a limited extent participate in) as all these tax topics play out.

 

[JimGant]

2 hours ago, The Cyclist said:

Perhaps, because at this moment in time I do not have a TIN ? And it would be pretty stoopid doing what you suggest without one.
 

A  good enough reason, or would you like to open your mouth and let your belly rumble some more ?
 

Not very bright, are you

You really are certifiable. Pistols or swords?

[NoDisplayName]

2 hours ago, anrcaccount said:

• 31/12/2023- you have a brokerage account with $1m USD worth of stocks in it
• Sometime in 2024 - you sold all of these stocks  ( what did you sell them for? $1M, $1.2M, 900K???) 
• So, you don't need to pay any tax on remittance of funds up to $1M.......? ( in fact, your $1M of stocks may have been purchased for $600K 5 years ago and grown via capital gains to $1M as of 31/12/2023)

 

I think he's bed-&-breakfasting, since most explanations about pre-2024 "savings" seem to revolve in actual cash-in-the-bank.  It would work something like this:

 

• 28/12/2023- you completely liquidate a brokerage account with $1m USD worth of stocks in it.
• T+2 would be settlement date (?), so you would then have an actual settled (not pending) cash balance of ~UDS$1 million.
• As of Jan 01,2024 you have $1 million of cash available to remit as prior savings.

What you do with those funds afterwards?:

• remit the cash as non-assessable
• buy stocks, sell the entire holding at a loss.  no gain = no income = not assessable.
• buy stocks, sell the entire holding at a gain.  remit the entire proceeds, the original capital is not assessable, the gain only is assessable. 

Then it gets fuzzy:

• Do the above, but only transfer a portion of the proceeds?  no guidance yet as to how the partial transfer is viewed.  Can you just remit the capital, and hold the gains overseas, or must each remittance include a percentage of both capital AND gain?
• What to do with sales of stocks held prior to the cut-off date?  Use cost basis at purchase, use value 31 Dec 2023 as value of original capital?capital gains to $1M as of 31/12/2023)

Another problem.........they guy that on 28 Dec 2023 B&B'd his entire account valued at $1 million likely owes the IRS a massive payment on the capital gains.

 

 

[NoDisplayName]

2 hours ago, oldcpu said:

I don't fully understand what is meant by " instead of calculating the amount of tax as under (1) and (2) " but it could mean not being assessable income as part of the determination for filing a tax return (in addition to not being included in a tax return). 

 

I see it as an option for those with Thai employment income or large assessable remittances.

 

By not including interest/dividend income in the PIT calculations (and foregoing a potential refund of withholding tax), the taxpayer may be able to avoid getting bumped into a higher tax bracket.

[NoDisplayName]

2 hours ago, JimGant said:

Right. Now can anyone answer my question on being able to mail to TRD my self assessed hard copy tax return -- or, if not, drop it off at the front door of TRD, without any further discussion. Thanx.

 

Those who have income as specified are obliged to submit the Personal Income Tax Return, along with paying the tax (if any), at the following places:

1. Any local Revenue Department branch office.
2. Post offices, only those located in Bangkok. They can send their tax return by registered mail together with a check or money order for the total tax due, within the tax return submission deadline, to the Revenue Management and Revenue Division, the Revenue Department, 90 Phaholyothin 7, Phayathai, Phayathai, Bangkok 10400
3. Online via www.rd.go.th or through the RD Smart Tax Application on mobile phones.

https://thailand.go.th/public/issue-focus-detail/007_056

 

[Guavaman]

14 minutes ago, NoDisplayName said:

Do the above, but only transfer a portion of the proceeds?  no guidance yet as to how the partial transfer is viewed.  Can you just remit the capital, and hold the gains overseas, or must each remittance include a percentage of both capital AND gain?

According to Carl Turner at Expat Tax, we can use FIFO for remittances. The TRD crypto handbook states that a taxpayer can use FIFO, LIFO, or cost averaging, but the same method must be used for an entire tax year.

[NoDisplayName]

1 minute ago, Guavaman said:

According to Carl Turner at Expat Tax, we can use FIFO for remittances. The TRD crypto handbook states that a taxpayer can use FIFO, LIFO, or cost averaging, but the same method must be used for an entire tax year.

 

Which one is Carl?  Is he the one who said US social security is assessable?  Hard to keep track of all the self-proclaimed experts.

[NoDisplayName]

2 hours ago, Neeranam said:

Do you mean if one sells one's house in the UK, you must prove to the Thai RD that you bought it? 

I'd just gift the cash to my wife or kids I guess, it is worth around 19 million baht. 

 

You'd have UK tax records for the year you sold it.  You'd probably pay tax on the increase in value, with the cost basis taken from the point it was transferred into your name. (?)

[NoDisplayName]

2 hours ago, SHA 2 BKK said:

You could argue that it is an "early inheritance".

 

Or claim it was a gift.

[NoDisplayName]

2 hours ago, The Cyclist said:

a visit to my local TD Office to ask

 

I think you mentioned two offices.  Your last meeting was at the main office in Pak Chong as you were in the area.  Are you going to the same Pak Chong office, or to the local office responsible for your area?

[NoDisplayName]

1 hour ago, Guavaman said:

So she merely hacked the system by entering only the exact amount needed to cancel-out your apparent tax liability.

 

This should be only Thai-source income credits from PN93 and PN94, or the interest/dividend withholding credits from withholding tax claimed in section 1.  This would be similar to deductions for health and life insurance premiums only applying to Thai insurance carriers.

 

On my online returns, the withholding tax I entered in section 1 is automatically entered in section 11(13) as a withholding tax credit.  I don't enter anything in section 11.  That portion is fully automated online.

 

She hacked the system, meaning she fudged the numbers manually.

 

 

 

No. 11 item 13. Withholding tax credit and tax credit for tax paid in accordance with ภ.ง.ด. 93 and ภ.ง.ด. 94

When you received income during a tax year, the law requires the payer to withhold income tax for some types of income. In some countries, this is called “pay as you go” or “pay as you earn”.  In Thailand, it is called “withholding tax”. The payer is also required to issue you a withholding tax certificate similar to this picture.

If the payer refused to issue a withholding tax certificate, the payer is subject to a criminal penalty. You may receive many withholding tax certificates if you have received income from different payers.  The form should tell you how much of income tax was withheld. The withholding tax can be used as a tax credit.

Other items may also be used as a tax credit, such as:
1. Income tax that you have paid using ภ.ง.ด. 94 (half year filing).
2. Income tax that you have paid using ภ.ง.ด. 93 (advanced filing).
3. Dividend tax credit (only in the case that you have filled in No. 3 item 5. and item 6. The amount is the same amount in No. 3 item 6.

Please add up all the creditable tax in No. 11 item 15. This amount will then be deducted from your tax payable in No. 11 item 14. You will have to provide documents to the Revenue Department to prove the amount of withholding tax.

 

https://www.rd.go.th/fileadmin/download/english_form/2023/GUIDE_90_66_Complete.pdf   [page 39]

[MartinBangkok]

2 hours ago, SHA 2 BKK said:

It depends on when you move to Thailand - if you have concerns move here after July 2 and remit the funds then.  You won't become a tax resident until you stay here 179 days in a calendar year.  Yes your UK Tax payments should be offset by a DTA but it depends on the marginal rates of tax on the UK and Thailand.  But to be totally tax free in Thailand on remittances move here in the second part of the year and remit the funds before the end of the sane year.

Wrong! 180 days, not 179!

[JimGant]

2 hours ago, Guavaman said:

It appears that some advisers/experts are stating that only cash in the bank qualifies as pre-2024 income, referred to by AN users as "savings." This appears to be a practical approach to implementing P. 162 exempting taxation on pre-2024 income. 

Actually, it appears to be a cop out. For clarity, let's look at the other side of the Por 162 coin:

Quote

If a foreigner derives income from sources outside Thailand, such income is subject to income tax if such income has been earned in any tax year starting from 1 January 2024 onward by a foreigner who stays in Thailand for 180 days or more in a tax (calendar) year.

 

Money cashed out from my IRA, not to exceed the value on 12/31/23, is certainly all pre 2023 income -- the tax deferred earnings used to fund the IRA, plus the annual reinvested capital gains. And, for sure, any post 2023 withdrawals, turned into cash, would NOT be post 2023 earned income, if remitted to Thailand. That it took 15 hours to convert the IRA withdrawal to a bank deposit -- how does that make it so different from a liquid bank account on 12/31/23?

 

Sell my car, bought with pre 2023 income, and send that money to Thailand post 2023. No remitted income here (and, as a non collector's item, no cap gain). Samo samo golf clubs, household furniture, boat, blah blah.

 

Stock mutual funds held by Schwab. All cap gains/dividends have either been reinvested or paid to me. In either case, the value of this mutual fund on 12/31/23 represents all pre 2023 income. Sell enough to represent 12/31/23 value and remit to Thailand -- no post 2023 income here.

 

That some advisors are saying "only cash in the bank only qualifies as pre-2024 income" -- doesn't cut it, when contrasted to the other side of the Por 162 coin, namely: Only post 2023 earnings are subject to Thai income tax, if remitted. All those cash-outs I've mentioned hardly qualify as "post 2023 earnings." (assuming you didn't exceed their 12/31/23 value).

 

[JimGant]

56 minutes ago, NoDisplayName said:

• Any local Revenue Department branch office.
• Post offices, only those located in Bangkok. They can send their tax return by registered mail together with a check or money order for the total tax due,

Thanx for the reply. Only Bangkok post offices seems a little lame...