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

[NoDisplayName]

8 minutes ago, Jingthing said:

The funny thing about that is that the vast majority of social security recipients are NOT taxed federally as their overall income excludes that, so the benefit  would only be to wealthier Americans. (See a pattern?) Also that policy would mean that the mandated about 20 percent cut would happen years sooner if no other funding changes are made. So be careful what you wish for.

 

Up to 85% of a taxpayer's benefits may be taxable if they are:

• Filing single, head of household or qualifying widow or widower with more than $34,000 income.
• Married filing jointly with more than $44,000 income.
• Married filing separately and lived apart from their spouse for all of 2021 with more than $34,000 income.
• Married filing separately and lived with their spouse at any time during 2021.

 

https://www.irs.gov/newsroom/irs-reminds-taxpayers-their-social-security-benefits-may-be-taxable

 

I shall wish.

[anrcaccount]

1 hour ago, Jingthing said:

I find your argument totally specious.

The environment has radically changed.

Before now, pretty much nobody, certainly not retired expats, was filing or paying Thai tax based on remittances during the current year, regardless of the vehicle. 

And TRD wasn't interested either.

Have you heard of something called POLITICS and changes of government?

The priorities and targets changed and expats would need to be totally in denial not to see that.

 

No, I disagree anything has 'radically changed'.

 

Nothing has changed, apart from 2 internal directives being released.

 

No new laws have been passed. No new enforcement related directive have been issued, no media releases have been issued. There is zero evidence the TRD has changed their focus or intention to enforce any taxation on foreign remittances. The TRD haven't stated anything is changing. There's no evidence any 'priorities or targets' have changed.  

 

The main ones making noise are the (IMO predatory) expat tax firms that have sprung up- I find their 'infotainment' as another poster nicely puts it, equally specious.

I'm still, yet to see a report of any significant foreign remittance, actually being taxed. 

[Jingthing]

5 minutes ago, anrcaccount said:

 

No, I disagree anything has 'radically changed'.

 

Nothing has changed, apart from 2 internal directives being released.

 

No new laws have been passed. No new enforcement related directive have been issued, no media releases have been issued. There is zero evidence the TRD has changed their focus or intention to enforce any taxation on foreign remittances. The TRD haven't stated anything is changing. There's no evidence any 'priorities or targets' have changed.  

 

The main ones making noise are the (IMO predatory) expat tax firms that have sprung up- I find their 'infotainment' as another poster nicely puts it, equally specious.

I'm still, yet to see a report of any significant foreign remittance, actually being taxed. 

You missed official announcements from Thai officials on these matters. I understand your POV but the practical reality is that the rubicon has been crossed and you can't reverse that

 

[Yumthai]

1 hour ago, NoDisplayName said:

Stick with capital appreciation funds, or stocks, not paying dividends, and you pay no US tax.  Sell and remit in a year not tax-resident in Thailand and your gains are not taxed here, either.

That's the way to go for US nonresident alien investors. In a year being non tax resident in Thailand, not only you can sell and remit asset proceeds covering one or more years living expense, but also set in stone end-of-year offshore accounts cash balances for later tax free remittances. Depending on one's wealth this strategy could cover many tax exempted years.

[jmd8800]

To throw one more question into the mix:

 

As a US citizen what is the value of my Social Security income for tax purposes in Thailand? Is it the gross income before the Medicare premiums are deducted, or the amount after Medicare premiums are deducted, which is then deposited into the bank.

 

 

[NoDisplayName]

1 minute ago, jmd8800 said:

To throw one more question into the mix:

 

As a US citizen what is the value of my Social Security income for tax purposes in Thailand? Is it the gross income before the Medicare premiums are deducted, or the amount after Medicare premiums are deducted, which is then deposited into the bank.

 

 

 

Zero.

 

It's non-assessable.

Exempt by DTA.

[jmd8800]

6 minutes ago, NoDisplayName said:

 

Zero.

 

It's non-assessable.

Exempt by DTA.

You still have to determine what amount is non-assessable.

[potless]

There may be a few super wealthy U.S. expats out here so I am just putting this out in case they may be unaware. I read that the USA estate and gift tax credit, currently $13.61 million, rising to $13.99 million in 2025, is due to halve in 2026. Just saying.

[NoDisplayName]

19 minutes ago, jmd8800 said:

You still have to determine what amount is non-assessable.

 

Super easy, barely an inconvenience!

 

US sociable security is 100% non-assessable.

 

If that is your only source of foreign income, you have no assessable remittances to declare, no need to file a return, and no need to get a TIN.

 

[anrcaccount]

37 minutes ago, Yumthai said:

2 hours ago, NoDisplayName said:

Stick with capital appreciation funds, or stocks, not paying dividends, and you pay no US tax.  Sell and remit in a year not tax-resident in Thailand and your gains are not taxed here, either.

That's the way to go for US nonresident alien investors. In a year being non tax resident in Thailand, not only you can sell and remit asset proceeds covering one or more years living expense, but also set in stone end-of-year offshore accounts cash balances for later tax free remittances. Depending on one's wealth this strategy could cover many tax exempted years.

 

Sure, this is rock solid, couple of thoughts:

 

First, if you don't want to leave Thailand to execute this, it seems you simply sell, rebuy something else, sell it at cost and remit. Also rock solid, you can prove the source of the remittance as the proceeds of the sale of a fund/bond/some kind of asset/watch with no gains. Remittance of original capital is not taxable. 
 
Second , let's acknowledge the nonsensical ludicrousness, that Thailand will allow you to remit as much as you want in one year, tax free, as long as you aren't there more than 179 days. Then, the next year when you want to stay there full time (huh, maybe to spend / 'invest' the funds) you'll be taxed if you remit more in!

 

Third, 'setting in stone offshore cash balance ', that's an interesting way of putting it. Do you think an offshore cash balance as at 31/12/2023 for example of $500K, means you can remit $500K to Thailand any time in the future tax free? ( regardless of what happens to that $500K itself) . I guess, even if in reality you lost the entire $500K on black at the roulette table on 01/01/2024, you can still show that bank statement, and send the funds from any other source, including technically assessable income. Remittance taxation is a joke, right?

[NoDisplayName]

16 minutes ago, anrcaccount said:

 

Sure, this is rock solid, couple of thoughts:

 

 

 

First -  Seems sensible, until it's not.  If audited (unlikely), what documentation would be required, and how far back would it need to go?  Prior year?  Pre-2024? Let 'em try to track capital that has been recycled continuously over the course of a few years!  The concern is, they can't figure it out, and as with the IRS you're guilty until proven innocent, you pay the tax and have to appeal.

 

Second -  That's the way it's always worked.  Bring in 20 million to buy a luxury condo, earned non-resident + remitted non-resident = no PIT.  That won't change, even if we've lost the prior-year loophole, but some poor souls may be asked to prove it.

 

Third - Remittance taxation is a joke.  Unless your bank account is isolated from your brokerage is isolated from your beanie baby collection, and the remittance immediately follows the transaction, being sent directly from the isolated account to your Thai account without intermediaries......well, that's why self-determination is a thing!  It is what I say it is because I say it. 

[jmd8800]

55 minutes ago, NoDisplayName said:

 

Super easy, barely an inconvenience!

 

US sociable security is 100% non-assessable.

 

If that is your only source of foreign income, you have no assessable remittances to declare, no need to file a return, and no need to get a TIN.

 

This calculation works only if your remittance in less than or equal to the amount deposited into the Thai bank.

 

Some people will have remitted more than what is deposited into their bank accounts, and they will need to know what amount needs to be reported to TRD as exempt.

[Guavaman]

4 hours ago, Jingthing said:

If the sold investment was sold into cash in a bank account before 2024, then yes that is exempt in any future year you might remit it.

If it was in a cash bucket portion in a brokerage account, I am not sure about that though. 

I asked the TRD information call center 1161 what evidence is required to show pre-2024 assessable income that can be remitted exempt of taxation under P. 162.

 

The official said: "hold the line, I will get the answer."  The answer was:  "You have to ask your local district tax office what evidence is required by them."

[anrcaccount]

10 minutes ago, jmd8800 said:

This calculation works only if your remittance in less than or equal to the amount deposited into the Thai bank.

 

Some people will have remitted more than what is deposited into their bank accounts, and they will need to know what amount needs to be reported to TRD as exempt.

 

Nope, if it's exempt, you do not report it. 

 

 

[NoDisplayName]

27 minutes ago, jmd8800 said:

This calculation works only if your remittance in less than or equal to the amount deposited into the Thai bank.

 

Some people will have remitted more than what is deposited into their bank accounts, and they will need to know what amount needs to be reported to TRD as exempt.

 

exempt = non-assessable = not taxable = not reported

only US social security = all exempt = no return = no TIN

 

You don't file a return with an attachment detailing all remittances.

You only put the total ASSESSABLE remittances on the return.

 

 

[oldcpu]

5 hours ago, NoDisplayName said:

 

Depending on how this turns out, it might be a good option for retired folks to take a 185-day break from Thailand.  Become tax UN-resident for a year, during which you can sell a suitable portion of your portfolio and repurchase, resetting the cost basis if remitted in a later tax-resident year. 

 

UN ?  Did you mean UK ? US? ( ie a typo) . .. If you mean simply not a Thai tax resident, then perhaps add a caveat to that where it depends on the DTA of one's pension income source country, and also depends if on an LTR visa, as for some of us this is no an issue due to our DTA and/or Visa.

 

My apologies if that was a typo and I didn't follow through fully.  For those of us who do not have UK nor US incomes, we tend to gloss over a bit posts specific to those two countries.

 

[NoDisplayName]

12 minutes ago, oldcpu said:

UN ?  Did you mean UK ? US? ( ie a typo)

 

NON-resident.

[jmd8800]

42 minutes ago, NoDisplayName said:

 

exempt = non-assessable = not taxable = not reported

only US social security = all exempt = no return = no TIN

 

You don't file a return with an attachment detailing all remittances.

You only put the total ASSESSABLE remittances on the return.

 

 

Tomorrow might be a better day.

[Jingthing]

5 hours ago, NoDisplayName said:

 

Up to 85% of a taxpayer's benefits may be taxable if they are:

• Filing single, head of household or qualifying widow or widower with more than $34,000 income.
• Married filing jointly with more than $44,000 income.
• Married filing separately and lived apart from their spouse for all of 2021 with more than $34,000 income.
• Married filing separately and lived with their spouse at any time during 2021.

 

https://www.irs.gov/newsroom/irs-reminds-taxpayers-their-social-security-benefits-may-be-taxable

 

I shall wish.

A typical check is 1600 a month. A typical retiree lives on social security. Do the math. Trump's proposed SS tax cut does NOTHING for the lower income masses.

[NoDisplayName]

26 minutes ago, Jingthing said:

A typical check is 1600 a month. A typical retiree lives on social security. Do the math. Trump's proposed SS tax cut does NOTHING for the lower income masses.

 

I did the math.

As of January 2024, the average monthly Social Security retirement benefit is approximately $1,907.

 

If you don't pay tax, you don't get a tax cut.

Not my problem.

 

However I'm more than willing to donate your social security check to charity.

[JimGant]

7 hours ago, Jingthing said:

Trump's proposed SS tax cut does NOTHING for the lower income masses.

Let them eat cake.

[anrcaccount]

12 hours ago, Jingthing said:

You missed official announcements from Thai officials on these matters. I understand your POV but the practical reality is that the rubicon has been crossed and you can't reverse that

 

 

I'm yet to see an "official announcement from Thai officials on these matters" .

 

If you have them, please share. All I've seen from the TRD is the POR/PAW internal directives and a single infographic.

 

I don't think the practical reality has changed at all. 

[roobaa01]

22 hours ago, jwest10 said:

That is not true there is an allowance for 100K of your pension

Yes I m aware of that but there is also a tax rebate for thb 190000 when 65 plus hence I'm I entitled to

Both tax rebate THB 100 k and THB 190 k= THB 290 k ? Who can clarify plus ?

Wbr

Roobaa01

[anchadian]

3 minutes ago, roobaa01 said:

Yes I m aware of that but there is also a tax rebate for thb 190000 when 65 plus hence I'm I entitled to

Both tax rebate THB 100 k and THB 190 k= THB 290 k ? Who can clarify plus ?

Wbr

Roobaa01

 

[Yumthai]

13 hours ago, anrcaccount said:

Do you think an offshore cash balance as at 31/12/2023 for example of $500K, means you can remit $500K to Thailand any time in the future tax free? ( regardless of what happens to that $500K itself)

Yes.

13 hours ago, anrcaccount said:

Remittance taxation is a joke, right?

I can't articulate it better.

[Yumthai]

12 hours ago, NoDisplayName said:

Second -  That's the way it's always worked.  Bring in 20 million to buy a luxury condo, earned non-resident + remitted non-resident = no PIT.

I disagree on "earned non-resident". All foreign sourced remittances are tax free while being non tax resident.

There is no written law stating: Foreign sourced income remittances are assessable for non tax residents if the foreign income was earned while being tax resident in Thailand.

 

Au contraire the tax law states:

 

https://www.rd.go.th/english/6045.html

 

1.Taxable Person

 

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

 

I believe that, as long as this rule is not amended, it prevails.

 

[JimGant]

13 hours ago, Guavaman said:

I asked the TRD information call center 1161 what evidence is required to show pre-2024 assessable income that can be remitted exempt of taxation under P. 162.

 

The official said: "hold the line, I will get the answer."  The answer was:  "You have to ask your local district tax office what evidence is required by them."

And if you E-file? Monty Python would have loved TRD for source material.

[NoDisplayName]

2 hours ago, Yumthai said:

I disagree on "earned non-resident". All foreign sourced remittances are tax free while being non tax resident.

There is no written law stating: Foreign sourced income remittances are assessable for non tax residents if the foreign income was earned while being tax resident in Thailand.

 

Au contraire the tax law states:

 

https://www.rd.go.th/english/6045.html

 

1.Taxable Person

 

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

 

I believe that, as long as this rule is not amended, it prevails.

 

 

Perhaps I was unclear.  If an expat currently tax resident in Thailand wants to remit large sums, including assessable capital gains, he can become non-resident for a year.

 

Sell the asset, realize the gains, earn the income.  Taxable perhaps in the home country, but not assessable when remitted to Thailand.  If only partially remitted, I believe he can bring it over in later years tax free.

 

That was what I meant by "earned non-resident + remitted non-resident = no PIT."  Do the thing all in one year and you're safe.

 

[Yumthai]

9 minutes ago, NoDisplayName said:

Perhaps I was unclear.  If an expat currently tax resident in Thailand wants to remit large sums, including assessable capital gains, he can become non-resident for a year.

 

Sell the asset, realize the gains, earn the income.  Taxable perhaps in the home country, but not assessable when remitted to Thailand.  If only partially remitted, I believe he can bring it over in later years tax free.

 

That was what I meant by "earned non-resident + remitted non-resident = no PIT."  Do the thing all in one year and you're safe.

Even if that expat sells the offshore asset, realizes the gains, earns the income during a year he is Thai tax resident, if he remits this said income in a later year he's not (anymore) tax resident in Thailand, this remittance is not in any way (according to the current law) assessable in Thailand.

[NoDisplayName]

3 minutes ago, Yumthai said:

Even if that expat sells the offshore asset, realizes the gains, earns the income during a year he is Thai tax resident, if he remits this said income in a later year he's not (anymore) tax resident in Thailand, this remittance is not in any way (according to the current law) assessable in Thailand.

 

You missed "he can become non-resident for a year."

Sell and remit during that non-resident year.