Report Foreign Earnings Taxed Under New Thai Rules - But With Exceptions

[CygnusX1]

17 minutes ago, NoDisplayName said:

Note this:

 

Of course, if these new provisions come into effect, foreign residents who remit money as it is earned abroad will not incur any tax liability.

 

Keep good records, apply current earnings to remittances, saving pre-2024 income/savings for when the economy improves and Thailand can return to Plan A.

Also from the Thai Examiner article - “A Finance Ministry source, speaking on condition of anonymity, explained that Thailand operates a residency-based tax system. Anyone living in Thailand for at least half the year is subject to tax on global income. That rule has not changed.”

That tax on global income is the key point for me, not the tax on money brought into Thailand. Until it’s clear that I won’t be paying tax on money I earn outside Thailand, I’ll continue to very carefully track my stays in Thailand on a spreadsheet to ensure I’m there less than 180 days per calendar year.

[NoDisplayName]

6 minutes ago, CygnusX1 said:

Anyone living in Thailand for at least half the year is subject to tax on global income. That rule has not changed.

 

Yes and no.

 

Global income may be assessable but only if remitted, so it's not like the US where remittance is irrelevant.  Everything everywhere all the time is taxable.

[crazykopite]

The rules of tax was always concerning Thais I never understood how foreigners managed to get mentioned it’s clear by this report that it’s the wealthy Thai tax dodgers who they are after !

[CygnusX1]

2 minutes ago, NoDisplayName said:

Yes and no.

 

Global income may be assessable but only if remitted, so it's not like the US where remittance is irrelevant.  Everything everywhere all the time is taxable.

Do you mean that only that portion of global income that’s remitted to Thailand will be taxable?

[NoDisplayName]

Just now, CygnusX1 said:

Do you mean that only that portion of global income that’s remitted to Thailand will be taxable?

 

Correctamundo.

 

No indication that has changed.

 

If Thailand were going with global income, then it would be pointless to go through this farce.  They'd simply tax the offshore funds now at the source.

[topt]

9 minutes ago, CygnusX1 said:

That tax on global income is the key point for me,

The statement you quoted from the Examiner is factually incorrect and a different quote to what was in the Bangkok post. Also the Examiner says this later in the piece -

Quote

Officials say the change will not affect those who stay fewer than 180 days a year. Nor will it apply to income earned and taxed entirely abroad that is never remitted. Indeed, this money may be taxable under the new law. Previously, it was intimated that such funds be subject to tax but this also depended on a new as yet unseen law.

So no global taxation yet.

[topt]

1 minute ago, NoDisplayName said:

No indication that has changed.

Agreed.

[Srikcir]

1 hour ago, NoDisplayName said:

foreign income

It's a bit more nuanced as referred to as earned foreign income. 

[JJ-Thailand]

Another Thai fiasco?

[tomazbodner]

16 hours ago, Crossy said:

I must admit to being totally confused by exactly what the rules are/will be.

 

This does seem to be a reversal of the old, old rule whereby if money was remitted in the year it was earned then it was subject to tax, but money earned earlier was not.

 

I daren't even dream of asking our company accountant, she's as useful as a chocolate fireguard.

It is very simple, in my opinion. Government needs money. Their very narrow view of people being stupid,stipulated them to tax the income of investors to foreign markets, expecting a big payday. But it turned out those people weren't stupid and instead stopped sending any money back to Thailand, causing a big dent in local investment. The government realised people weren't that stupid, and are now reversing the rule (until next election), where foreign income can be brought into Thailand without any taxes, because... well, they are broke...

 

In style of Aseannow: This reversal underscores Thailand's strategic push toward flip-flop legislation, laying groundwork for enhanced economic benefits from population's investment skills and good luck. As finance ministry navigates these uncertain times in search of the next idea to empty residents' pockets, Thailand embraces an "easy in, hard out" approach to replace the "rob them now" approach which achieved the opposite of expected result.

[anrcaccount]

2 minutes ago, tomazbodner said:

It is very simple, in my opinion. Government needs money. Their very narrow view of people being stupid,stipulated them to tax the income of investors to foreign markets, expecting a big payday. But it turned out those people weren't stupid and instead stopped sending any money back to Thailand, causing a big dent in local investment. The government realised people weren't that stupid, and are now reversing the rule (until next election), where foreign income can be brought into Thailand without any taxes, because... well, they are broke...

 

In style of Aseannow: This reversal underscores Thailand's strategic push toward flip-flop legislation, laying groundwork for enhanced economic benefits from population's investment skills and good luck. As finance ministry navigates these uncertain times in search of the next idea to empty residents' pockets, Thailand embraces an easy in, hard out approach to replace the "rob them now" approach which achieved the opposite of expected result.

 

Absolutely spot on, you hit the nail on the head.

 

Very well said. 

[sandyf]

1 hour ago, renaissanc said:

Why would Thais want to bring in money to be taxed up to 35%? If a Thai wants to pay for something, they can use an app so that the money doesn't go into their Thai bank account and then get taxed. The same for foreigners. We can leave the money abroad and buy things using apps. The bank interest abroad will be higher than in Thailand, for sure.

Why do some feel the necessity to read something into what gets said that isn't there.

I would have thought that this sentence is quite clear.

"Under these new rules, foreign income earned and remitted within the same or following year will not incur tax."

 

On saying that I wouldn't put much store in articles. Best do nothing until it becomes law and clarified.

[nauseus]

40 minutes ago, crazykopite said:

The rules of tax was always concerning Thais I never understood how foreigners managed to get mentioned it’s clear by this report that it’s the wealthy Thai tax dodgers who they are after !

 

There isn't much clear in this report.

[Ken444]

So if you get a pension in UK or/and Australia you do not need to pay tax if you live off of savings ???

[Thaindrew]

12 minutes ago, nauseus said:

 

There isn't much clear in this report.

 

more likely, the rich Thais didn't bring any money in from overseas to avoid tax, and now they are changing the rules to allow them to bring it back untaxed.

[Thailand J]

If i sell US stocks and transfer the proceeds to Thailand, the entire amount will be tax free, if i read the OP correctly. The cost basic was  money from  prior to 2024, and the capital gain is recent income.

[kimamey]

1 hour ago, hotchilli said:

My local tax office said they didn't know anything about it... 

I bet they can make something up though. 

[NoDisplayName]

I'll take "Thailand Tax Policy" for 500 baht, Alex!

 

[nauseus]

1 minute ago, Thaindrew said:

 

more likely, the rich Thais didn't bring any money in from overseas to avoid tax, and now they are changing the rules to allow them to bring it back untaxed.

 

Yes. That's probably the main loss.

 

I also think that the tax-liable/averse foreigners here will have either arranged to either quit the country, stay out of Thailand for more than 180 days, or have sent much less money into the country than in the past. If the treasury (as a whole) wants more foreign exchange and spending from foreigners, then the threat of personal taxation on them will discourage that very thing. But who knew? 

[kimamey]

I'm very confused about all this. When this first came up, either last year, or maybe the year before, it was claimed it wasn't anything new just existing regulations being applied where they weren't before.  I think they were rules from the 1970s, although I may well be wrong. How is it that they still haven't sorted them out yet?

Also if you send money over, how do they know which year you earned it?

[tomazbodner]

11 minutes ago, nauseus said:

 

Yes. That's probably the main loss.

 

I also think that the tax-liable/averse foreigners here will have either arranged to either quit the country, stay out of Thailand for more than 180 days, or have sent much less money into the country than in the past. If the treasury (as a whole) wants more foreign exchange and spending from foreigners, then the threat of personal taxation on them will discourage that very thing. But who knew? 

Yeah... who knew? Everyone coming up with the legislation should have.

[Sydebolle]

This month's contribution by the Revenue Department and their daydreams ....... next please! 

[topt]

10 minutes ago, kimamey said:

I'm very confused about all this. When this first came up, either last year, or maybe the year before, it was claimed it wasn't anything new just existing regulations being applied where they weren't before.  I think they were rules from the 1970s, although I may well be wrong. How is it that they still haven't sorted them out yet?

Also if you send money over, how do they know which year you earned it?

They reversed a directive that had been in place for 35 years so did not need to pass a new law.

Now they are suggesting they will be reversing it back but the devil will be in the details.

12 minutes ago, kimamey said:

Also if you send money over, how do they know which year you earned it?

It is up to you to prove it if asked.

[Sheryl]

16 hours ago, Crossy said:

I must admit to being totally confused by exactly what the rules are/will be.

 

This does seem to be a reversal of the old, old rule whereby if money was remitted in the year it was earned then it was subject to tax, but money earned earlier was not.

 

I daren't even dream of asking our company accountant, she's as useful as a chocolate fireguard.

It is actually pretty simple.

 

Old (pre 2024) rule: otherwise assessable income remitted from abroad was not assessable unless remitted in the year it was earned. In practice, little tax was paid on remittances, since it would take some doing for the RD to establish when remittances had been earned. So no disincentive to remitting overseas funds into Thailand.

 

Current rule: no matter when remitted, income is assessable unless otherwise exempted (eg under a DTA). This has had the predictable effect of discouraging remittances.  So:

 

New proposed rule: overseas income remitted into Thailand will not be assessable if remitted the year it was earned or the year thereafter. In practice I think this will just revert things to how it was under the old rule, for the same reason (difficult/time consuming to establish when remittances were earned).

 

Most expats have been unaffected by these changes so far. 

 

For your average retiree having a foreign pension or equivalent  remitted into Thailand as it is received:

 

- if the pension is non-assessable in Thailand under the terms of a DTA, it is so under all 3 scenarios, no difference

 

-if the pension is otherwise assessable, they were always technically required to declare it on a tax return, and are so now. But unless their was other income, most  would owe no tax. In practice few filed tax returns and I haven't heard of anyone having a problem as a result.  Under the proposed new change, this requirement (which few observed anyhow) will no longer exist.

 

People for whom this will make a difference (if they are currently following the letter of the law) : (1) Global nomads who are tax residents in Thailand. Currently, income they remit is tax assessable; this will cease to be the case.  (2) retirees with a lot of passive income of a type tax exempt in their home country but assessable in Thailand.

[Sheryl]

16 minutes ago, kimamey said:

 

Also if you send money over, how do they know which year you earned it?

 

They don't, unless they do a time consuming, costly investigation, which would be rare.

 

Hence under the pre-2024 rule there was little tax being paid on overseas remittances, and if the proposed new change happens things will revert to that.

 

Under the current rule, makes no difference when earned. And of course everyone has responded by minimizing remittances.

[sungod]

Wonder how many pages of conjecture this thread will run for.

 

Just ignore it and stop getting your knickers in a twist is the best advice.

[Thailand J]

13 minutes ago, Sheryl said:

People for whom this will make a difference (if they are currently following the letter of the law) : (1) Global nomads who are tax residents in Thailand. Currently, income they remit is tax assessable; this will cease to be the case.  (2) retirees with a lot of passive income of a type tax exempt in their home country but assessable in Thailand.

This is good news for those of us who have Roth IRA in US.

[JackGats]

38 minutes ago, kimamey said:

...

Also if you send money over, how do they know which year you earned it?

What can be done is this: your monthly pension, say 7677 euros, lands on your foreing bank account. On the same day or one or two days later, you transfer 7677 euros from the same bank account to your Thai bank account. The bank statement from your foreing bank account shows +7677 euros, then 2 days later -7677 euros. So this amounts really looks like it was sent to TH as soon as earnt/received. I say "looks like" because money is fungible of course.

 

Only drawback is if your pension is a small amount and you do standard SWIFT transfers, which have high percentage costs on small amounts.

[samtam]

2 hours ago, black tabby12345 said:

Repeating same old stupid article from a year ago.

Nothing concrete is set.

Thai parliament hasn't even tabled it at all while tax chief barks.

 

Accounting/law firms attempt of scare campaign for easy money from their useless "consulting" for hefty fee.

 

 

It seems even the experts are just as confused (per email from Expat Tax). The head of the Revenue Department needs to sit down, discuss with advisors, make an unambiguous decision, and publish it. We've had 21 months of ambiguity, panic, contradictory information from the Revenue Department staff in different offices, or even the same office, most completely untrained in the nuances of DTAs etc. This Thai Examiner article is certainly more detailed than the BP article, which made a confusing situation more confusing. The writer of that one may need to consider another career choice. But none the less, until an unambiguous decision is made (and enacted in law and published in the Royal Gazette), the result of uncertainty that has ensued is now all too visible to see, through the reduction of tax revenue by THB20 Billion. Until it is, that figure could certainly go northwards.

[kuzmabruk]

3 hours ago, spidermike007 said:

Since the rules are as clear as mud, I'm willing to offer the tax revenue department 1,000 baht. They just need to let me know where to send the money, that's all they're getting from me. 

Is this why you live in Thailand?  Did you tell that to your home country revenue department?  And now you are wanted for tax evasion.   I would think your home country prison would be more comfortable that the Thai prison that you might be visiting.   Tax evasion is a serious crime even in Thailand.   Be careful.