Thai Tax Laws for Expats: the Practical Implications versus the Realities

[SoCal1990]

There has been a lot of confusion and speculation regarding the recent changes to income tax laws and filing requirements in Thailand. However, in practice, the actual impact of these changes is likely to be much less burdensome than many expect. It’s possible that the authorities won’t begin actively enforcing tax laws on foreigners for at least a few years, and even then, it would likely be only if those foreigners are living in Thailand as full-time residents and fail to file tax returns altogether. For the first few years, it’s likely that nothing will happen, as the authorities will probably give it some time to see how well people are complying and whether or not they need to start enforcing any aspects of the tax laws or not on foreign residents who aren’t working.

 

The most likely scenario is this: if foreigners don’t get their tax filings in order after a few years, they may find themselves unable to renew their long-stay visas until they do. But even this is speculative. There’s no guarantee that the immigration and revenue departments will link their systems in such a way that one triggers the other.

 

While the immigration and revenue departments theoretically have access to each other’s systems, the idea that they will actively use this access to block visa renewals is still highly questionable.

 

As long as you file a tax return each year, you should be fine. By doing so, you demonstrate your intention to comply with the law, which is all they really expect. It’s doubtful they have the resources to start auditing individuals or scrutinizing bank accounts to track overseas transfers. File your return on time each year, and you’re unlikely to face any issues.

 

Even if someone were audited, it seems highly unlikely that the authorities would investigate overseas credit or debit card spending in Thailand, this is in regards to foreigners who aren’t transferring money into the country and are simply making digital payments for everything in Thailand. Those foreigners could refuse to hand over overseas banking documents, and there would be no way for the authorities to force them to do so. For local bank accounts, the Thai Revenue Department could request statements from the banks, but they have no access to overseas banking or credit card records.

 

Realistically, they’d likely never even bother trying to obtain overseas bank statements. So in my view, the whole debate about spending in Thailand using mainly an overseas debit card, and having to pay personal income tax on that money in Thailand is moot. Legally, yes, there are rules, but in practice, it’s straightforward: file a tax return, show that you’re playing by the rules, and you should be fine. If you’re bringing in a small or reasonable sum each year, you’re unlikely to raise any red flags regarding unpaid taxes, money laundering, or anything else. The government has limited resources and much bigger fish to fry when it comes to enforcement.

 

One crucial point that many seem to be overlooking is that for money to be taxable in Thailand, it must have been earned either in 2024 or sometime after that year. So, even if you transferred ฿10 million into Thailand in 2024, if you can provide an overseas bank statement from 2023 showing a balance of ฿10 million, that money wouldn’t technically be taxable anyway because it was part of your savings earned prior to 2024.

[CharlieH]

FINANCE - MOVED

[jumbo]

Expats that have worked here and/or filed before cannot escape, expats staying here on income are running the risk that Thai revenue department gets 'smart' and links-up with immigration ( i know stretching it a little bit, hehe)
But as usual they invoke an existing (old) law but do not have the manpower to follow up as with all laws here so physical checks are something for the not so near future..

 

[bogozy]

45 minutes ago, jumbo said:

Expats that have worked here and/or filed before cannot escape, expats staying here on income are running the risk that Thai revenue department gets 'smart' and links-up with immigration ( i know stretching it a little bit, hehe)
But as usual they invoke an existing (old) law but do not have the manpower to follow up as with all laws here so physical checks are something for the not so near future..

 

No imagine the lack of manpower! Very easy, You go to immigration office, they ask your tax return file. So simple, no necessary any New clerks.

[Guderian]

It's interesting to learn that Thailand has two separate tax codes, one for its own citizens and a different one aimed only at foreign tax residents. Odd that I've never been able to find a copy of the foreign one. It must be the case, though, otherwise how can you explain the draconian measures people say the TRD will enact against farangs who don't file a tax return, while never bothering the millions of their own citizens who haven't bothered getting a TIN or offering to pay tax? My Thai builder is a prime example, he earns a lot of money and is in his late-50's, but decided a long time ago that the benefits of joining the Thai tax and social security system were far less than the tax he would have to pay, so he has never filed a tax return in his life. And the TRD hasn't sent its boot boys out to rough him up yet, whereas they'll soon be knocking down the door of any dirty foreigner who hasn't filed his paperwork.

[Presnock]

14 minutes ago, Guderian said:

It's interesting to learn that Thailand has two separate tax codes, one for its own citizens and a different one aimed only at foreign tax residents. Odd that I've never been able to find a copy of the foreign one. It must be the case, though, otherwise how can you explain the draconian measures people say the TRD will enact against farangs who don't file a tax return, while never bothering the millions of their own citizens who haven't bothered getting a TIN or offering to pay tax? My Thai builder is a prime example, he earns a lot of money and is in his late-50's, but decided a long time ago that the benefits of joining the Thai tax and social security system were far less than the tax he would have to pay, so he has never filed a tax return in his life. And the TRD hasn't sent its boot boys out to rough him up yet, whereas they'll soon be knocking down the door of any dirty foreigner who hasn't filed his paperwork.

One reason is that locals with foreign bank accounts never worried that the over seas banks would advise the TRD of the Thai individuals' bank accounts.  Now with the joining of Thailand with all the rest of the OECD and CRS FACTA exchange of banking information, the TRD may learn about citizens that have those foreign bank accounts.

[JoeRan]

Great, simple info and advice from the OP. So much misinformation and fear mongering going on about this subject. 
Just relax and see how things play out. Remember, TIT. 

If you are a simple person living here on a pension or investment income from another country, and you pay taxes in that said country, enjoy your time here.
If you are earning income in Thailand, legally or illegally, the future may become clearer for you.

[khunjeff]

20 hours ago, SoCal1990 said:

Legally, yes, there are rules, but in practice, it’s straightforward: file a tax return, show that you’re playing by the rules, and you should be fine.

 

A very large part of the discussion and angst about this issue has been precisely the question of who actually has to file a tax return, what information would be included on it, and how to account for income that is not taxable in Thailand due to DTAs, LTR status, etc. - so I'm afraid it's not nearly as straightforward as you say.

[JustinCredible]

1 hour ago, bogozy said:

No imagine the lack of manpower! Very easy, You go to immigration office, they ask your tax return file. So simple, no necessary any New clerks.

 

I filed my Return on Monday. I was told specifically to keep the papers "safe" because it was quite probable that Immigration would ask for them at some in the future.

[Raindancer]

2 minutes ago, JustinCredible said:

 

I filed my Return on Monday. I was told specifically to keep the papers "safe" because it was quite probable that Immigration would ask for them at some in the future.

More scaremongering about immigration requiring these tax documents.  Chonburi Superintendent has said not necessary or planned for the future.

 

Yesterday I asked the Chiang Mai superintendent the same question.   His reply was the same as  Chonburi Superintendent.