Tax residency in Thailand and taxing overseas income

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404cameljockey
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Re: Tax residency in Thailand and taxing overseas income

Post by 404cameljockey »

PET wrote: Sat Nov 04, 2023 6:30 am
Thank you very much for this - easily the most sensible and authoritative comments I have seen in the posts on this matter.
It gives no new information at all (as there is none) and contains this man's speculations, and the statement that nothing will actually be done until 2024 at the earliest. So what?
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Re: Tax residency in Thailand and taxing overseas income

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Thank you, a much more detailed examination of the mess the government finds itself in. I'm not sure many will read it all. There will be either new law, new Revenue Code provisions or both, or the the reinterpretation of those now existing. And the application of the same will be a minefeld for all.

Anyway, tax reform is coming in some form or other. I'd say that all that expats can do right now is satisfy themselves that they are in a position to prove by documentation the sources of their income. Even those on low income seemingly will still be expected to prove the source of their government pension, private pension, income from renting out your sole residency overseas, etc. These people may not be the target of any reform, but it seems certain that they will still need to prove themselves liable or not for tax, whether a dual taxation treaty exists or not with the overseas territory. A net for big fish also catches some small fish.

The idea of 'low income' is very different in the minds of many Thais than expats, if you consider the income levels of the huge number of very low paid Thai workers. If you bring in THB 70k a month you're rich by comparison, whatever level of unavoidable expenditure you have taken upon yourselves.
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Re: Tax residency in Thailand and taxing overseas income

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404cameljockey wrote: Mon Nov 06, 2023 10:27 am Anyway, tax reform is coming in some form or other. I'd say that all that expats can do right now is satisfy themselves that they are in a position to prove by documentation the sources of their income. Even those on low income seemingly will still be expected to prove the source of their government pension, private pension, income from renting out your sole residency overseas, etc. These people may not be the target of any reform, but it seems certain that they will still need to prove themselves liable or not for tax, whether a dual taxation treaty exists or not with the overseas territory. A net for big fish also catches some small fish.
I agree 100%.

I am generally quite happy with the situation. My worry comes when I have the occasional BIG expense e.g. when my son got married. I brought a lot more money to Thailand that year than my pensions would ever pay. OK, the money was savings on which tax would have been paid at the time of income. I just fear that if money I bring to Thailand was actually legitimately earned in a different tax year(s), I don't think I'll be able to prove it.

Thankfully, events such as my son's wedding don't happen too regularly :D
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Re: Tax residency in Thailand and taxing overseas income

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Yes tell him not to do it again!!

Seriously, this will hopefully end up as another burden to complete as part of the annual visa extension, but not result in having to pay any extra tax.


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Re: Tax residency in Thailand and taxing overseas income

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Big Boy wrote: Mon Nov 06, 2023 11:06 am when my son got married. I brought a lot more money to Thailand that year than my pensions would ever pay.
You're very old school and props to you for that. I think that these days the only people who pay for their son's wedding are either well off or old school. :thumb:

I guess slowly accumulated cash under the mattress to suit the Thai economy is best, except when you can pay by overseas debit/credit card where you will pay a small surcharge anyway, as far as I know. And when you have visitors ask them to draw some of your cash and bring it in. I've always believed that depreciation aside cash is king, and at least here you're not looked at 'funny' when you use it.555
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Re: Tax residency in Thailand and taxing overseas income

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I have incoming coming in from both Hong Kong and Australia,

at present the money from hong kong is paid direct from my company business account in hong kong to my thai bank.

I will not be doing this in future , I will transfer from the company account to a personal account in my own name, then transfer to my thai bank.
I am pretty confident that anything transfered from a personal account in your own name will get flagged for tax.

with airwallex, wise and plenty of other solutions it is fairly easy to make money look like it is coming from a savings account
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Re: Tax residency in Thailand and taxing overseas income

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Jose wrote: Tue Nov 14, 2023 5:26 am I have incoming coming in from both Hong Kong and Australia,

at present the money from hong kong is paid direct from my company business account in hong kong to my thai bank.

I will not be doing this in future , I will transfer from the company account to a personal account in my own name, then transfer to my thai bank.
I am pretty confident that anything transfered from a personal account in your own name will get flagged for tax.

with airwallex, wise and plenty of other solutions it is fairly easy to make money look like it is coming from a savings account
Just to clarify, you mean you believe attention would be attracted by: "anything transferred from a company account", not personal account, yes? Otherwise why would you remit from your personal account?
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Re: Tax residency in Thailand and taxing overseas income

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404cameljockey wrote: Wed Nov 15, 2023 9:17 am
Jose wrote: Tue Nov 14, 2023 5:26 am I have incoming coming in from both Hong Kong and Australia,

at present the money from hong kong is paid direct from my company business account in hong kong to my thai bank.

I will not be doing this in future , I will transfer from the company account to a personal account in my own name, then transfer to my thai bank.
I am pretty confident that anything transfered from a personal account in your own name will get flagged for tax.

with airwallex, wise and plenty of other solutions it is fairly easy to make money look like it is coming from a savings account
Just to clarify, you mean you believe attention would be attracted by: "anything transferred from a company account", not personal account, yes? Otherwise why would you remit from your personal account?

Yes apologies, I meant make sure any transfers into Thailand are from a personal account with same name as Thai account.

Anything from a company account will attract attention
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Re: Tax residency in Thailand and taxing overseas income

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Thai Revenue offers glimmer of clarification on tax changes
The Revenue Department this week has reassured Thais and expats living here that the new rules on taxation apply only from January 2024 and not earlier. There had been speculation that the Revenue might start probing cash transactions to Thailand in earlier years as, in theory, they have the power to do.

This is the first statement by the Revenue about the taxation changes since September 2023 when it announced its intention to tax income from overseas by tax residents – anyone who lives here for at least six months in a year – no matter when the cash was or will be transferred. The statement at least shows that the Revenue is aware of the complexity of the whole issue.

Expats in Thailand, mostly ignored until now by the tax authority unless legally working here, are concerned that they might be taxed in future on income already taxed in their country of nationality. Typically, state or private pensions, social security payments and some inheritances fall into this category. Many countries have double-taxation agreements with Thailand, although the precise relevance varies from treaty to treaty.

Most Thai legal experts say that the Revenue is primarily interested in Thais or expats with offshore banks accounts, a history of currency speculation or profit-making business enterprises overseas. However, the only way of distinguishing them from typically retired “tax residents” would be for all to register with the Revenue for a tax identification number. That procedure, if required in future, does not necessarily mean that tax would be due.

It is unlikely that the many ambiguities in this saga will be resolved by January 1 next year. This is not a law passed by Parliament but a reinterpretation of traditional Revenue policy which could even be challenged in court. Hence, Revenue clarifications (assuming there are any) are likely to be announced throughout 2024. Any tax due would be payable in 2025.

The best advice to worried expats, notably those retired or living here on family or Elite visas, is to wait for instructions from a government or Revenue authority. For many reasons, that wait may be a long one. It is even possible that, for the first year or two, registration with the Revenue might be “voluntary”, that is only those who believe they are eligible to pay tax should come forward. Overseas cash transactions can be monitored by Thai tax authorities in any case.

https://www.pattayamail.com/news/thai-r ... ges-446133
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Re: Tax residency in Thailand and taxing overseas income

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Clarification has been given and is supposed to be final now.

Income Tax Changes in Thailand

On 15 September 2023, the Thai Revenue Department issued a change to personal income tax implications of foreign-sourced income brought into Thailand by Thai tax residents (Any person staying in Thailand for a period or periods aggregating 180 days or more in any tax year shall be deemed a tax resident of Thailand). Under these proposed new rules, Thai tax residents who earn income from abroad could be subject to personal income tax on such income upon bringing it into Thailand in any calendar year from 1 January 2024 onwards "known as Paw. 161".

UPDATE
The Thai Revenue Department has subsequently now issued an additional instruction, Paw.162, introducing a crucial grandfathering provision in connection with Paw.161. This provision aims to limit the scope of foreign-sourced income subject to Thai personal income tax and exempts income earned before 1 January 2024. As per Paw.162 instruction, only foreign-sourced income earned from 1 January 2024 onwards, and the individual having been a Thai tax resident in same the year of earning, would be subject to Thai personal income tax in the year whenever it is brought into Thailand.

This means that only foreign sourced income created from 1 January 2024 onwards, and created while simultaneously a Thailand tax resident, will be subject to Thai Income Tax from 1 January 2024, when the income is brought into Thailand (regardless of the tax year it is brought into Thailand the future).

Further Clarifications:
• Who is considered a Thai Tax Resident? Any individual or natural person, regardless of nationality or race, who resides in Thailand for an aggregate accumulated period of 180 days or more in the calendar year concerned.
• What is Assessable Income? Assessable income from foreign sources that is subject to personal income tax is determined on the basis of assessable income under Section 40 (1) to (8) of the TRC. This is subject to any exemptions available under the TRC, e.g., receiving an inheritance or receiving a gift from a parent, descendant or spouse not exceeding THB 20 million over the tax year, etc.
• What is classed as Remittance into Thailand? ‘Bringing income into Thailand’ means acting by any means to bring assessable income into Thailand, such as transferring assessable income through a bank account, transferring assessable income through online systems, or physically bringing assessable income into the country, etc.

Taxpayers should retain the records of funds, which may consist of capital, principal and income records in their accounts before 1 January 2024, and income generated on or after 1 January 2024. Any supporting documentation, e.g., credit/bank advice, withholding tax certificate issued by competent authority in other countries, etc., should be properly maintained for self-declaration purposes.
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Re: Tax residency in Thailand and taxing overseas income

Post by brianks »

HUH? What is the status of my retirement income as it has already been taxed in the U.S.?
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Re: Tax residency in Thailand and taxing overseas income

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Well if you read the last sentence of the above post, it clearly mentions that you will need to retain any evidence of tax withholding to be able to avoid double taxation!!
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Re: Tax residency in Thailand and taxing overseas income

Post by migrant »

So what do they define as "earned income". For instance social security and other pension payouts are not deemed to be "earned income" in the US.
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Re: Tax residency in Thailand and taxing overseas income

Post by hhinner »

Maybe this is a stupid question. UK tax certificates for previous year (P. 60) are issued in April (UK tax year starts April). Thai tax year starts in January. How should the different periods be reconciled for Thai tax purposes?
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