You've probably seen the panic online regarding the changes to tax policy on foreign income remittance to Thailand. Many expats are scaring themselves and others with speculation over how the changes will impact life in Thailand.
To help separate the truth from the speculation and keep you all properly informed, I have enlisted the help of tax professionals to provide accurate information on this subject.
Should you need further advice, TTL readers can get a free Thai tax guide and a complimentary tax consultation from Expat Thai Thailand at this link.
Contents
- Tax Residency Rule
- Previous Tax Rule
- New Tax Rule
- Why the Change in Law for Expats?
- Who Has to File?
- What Is Taxable (Assessable) Income?
- What Is Not Taxable (Assessable) Income?
- Eligible Tax Deductions
- Tax Credits
- Double Taxation Agreements (DTA)
- The Filing System
- Enforcement
- Webinar with Expat Thailand (professional advice)
The Thai Tax Residency Rule
To understand whether or not this change affects you, let's first define a resident, or rather, a tax resident in Thailand. In Thai law, a tax resident is defined as an individual who stays in Thailand for a period or periods aggregating 180 days or more in any tax year.
If you fall outside of this rule, you need not worry about this subject matter, as the change won't affect you. If you do fall into this bracket, please read on.
The Previous Tax Rule
As it stands, the assessable income received by a Thai tax resident through employment, an overseas business, or property located abroad would be subject to Thai personal income tax only if the earnings were remitted to Thailand within the same tax year.
For example:
Sarah lives in Thailand for 180+ days per year, and works as a consultant for an international company based in the United States.
Under the previous tax regulations, if Sarah earned $50,000 from her overseas job in January 2022 but choose not to transfer the funds to Thailand until February 2023 , she was not required to pay Thai personal income tax on that income for the year 2022.
Under the new law, Sarah would now be required to pay personal income tax on that income.
The New Tax Rule as of 2024
Under the rule, which started January 1, 2024, foreign-sourced income over 120,000 THB (or 220,000 THB for married couples) repatriated to Thailand will be eligible for Thai income tax, regardless of the tax year in which the income was earned.
Here are some further examples provided by the revenue department:
- Mr. A is in Thailand every day from January to December 2024 for a total of 366 days. Mr. A is deemed a resident of Thailand in tax year 2024.
- Miss K is in Thailand during odd months in 2024 for a total of 184 days. Ms. K is deemed a resident of Thailand in tax year 2024.
- Mr. C was in Thailand from January to December 2024 for a total of 179 days. Mr. C is not deemed a resident of Thailand in tax year 2024.
- Mrs. D has been in Thailand continuously for a total of 250 days with the first 100 days being in 2024 and the last 150 days being in 2025. Therefore, Mrs. D is not deemed a resident of Thailand in both tax year 2024 and tax year 2025 because Mrs. D was in Thailand for less than 180 days in both tax years.
When the wallet is turned on, you can use the V buttons to navigate through the menu. Pressing simultaneously confirms the selection. It's a fairly clunky system, and would have been more convenient with at least three buttons or a touchscreen. But you also need to use Ledger Live.
Income Earned Before 2024
What about income earned before 2024 but brought into Thailand in 2024, will it be subjected to taxation?
The revenue department says:
Foreign-sourced income earned before January 1, 2024, won't need to be declared in Thai tax returns, irrespective of when it’s brought into the country.
Income Earned Prior to Living/Retiring in Thailand
There has been much speculation on how accumulated income prior to living in Thailand will be assessed. For example, a person lives and works in a foreign country and later retires to Thailand with his/her overseas earned income. Will such a person have to pay taxes on these earnings?
The revenue department says:
No. This is because the said accumulated earnings came from assessable income that occurred in the tax year in which the person stayed in Thailand for less than 180 days. Example: Mrs. D. is of Thai nationality and has been living in China since 2007. But in 2024, Mrs. D. wants to travel back to live in Thailand permanently, so she brings back her accumulated earnings from working in China. As such, Mrs. D. is not obliged to pay any personal income tax on money brought into Thailand in 2024 because the said accumulated money comes from assessable income that occurred in the tax year in which Mrs. D. was not a resident of Thailand.
Why Is Thailand Changing the Law for Expats?
It is all about raising money, not about targeting expats.
One assumes the legislative changes are aimed at wealthy Thai citizens with foreign income sources. Unfortunately, foreigners with residence permits or long-stay visas have been caught in the cross-fire, so to speak.
As Prime Minister Srettha Thavisin explained quite bluntly:
You should pay tax on income you earn, no matter how you earn it.
Who Has to File a Tax Return in Thailand?
- Anyone who remits (transfers) assets into Thailand that are ‘assessable income': pension income, investment gains, property rental income, property sale gains, dividends, etc.
- If the amount is greater than THB220,000 as a joint married couple or THB120,000 as an individual.
- Regardless if tax is paid in another jurisdiction, if you have assessable income over the above threshold you have to file a Thai tax return. It doesn't mean you will have tax to pay, though, as you may receive tax credits.
- If you are remitting non-taxable assets (like cash from previous tax years, or inheritance in cash) then you don't have to add this to your tax return and don't have to file if that is your only source.
- It isn't a requirement for Visa renewal to have a tax ID and file a tax return, as some people don't have to file or get a Tax ID.
What Is Taxable (Assessable) Income?
- Direct and indirect financial transfers, ATM withdrawals and credit card spending, if sourced from overseas, are considered remitted and therefore assessable income for tax purposes.
- Cash or assets physically carried across the border, or through the airport are also classed as remittance and should be declared on the tax return.
Pension Taxation
State pensions are assessable income. That doesn't mean you will have to pay tax, it means that you will need to declare payments if the amount goes over the tax allowance. It may be the case that, due to deductions, or tax already paid under a DTA, that you receive a credit and do not pay tax.
US Social Security
US social security is not considered assessable income.
What Is Not Taxable (Assessable) Income?
- Any asset or income that isn't transferred or spent in Thailand if left overseas. Tax is only on remittance, not global taxation on worldwide assets.
- Remittance of income from previous tax years when not a Thai-tax resident.
- Remittance of any cash in the bank as of 31st December 2023 (as per the November announcement).
- Remittance of original capital (from investments, property, etc).
- Inheritance.
- Gifts (potentially taxable under gift tax rules).
- Loans.
Eligible Tax Deductions
Thailand offers personal and family allowances which can significantly reduce taxable income. These allowances are available for the taxpayer, spouse (if not filing jointly), and children (subject to specific conditions).
- Deductions can be claimed for medical expenses, including health insurance premiums. There are caps on the amount that can be claimed, and specific criteria must be met.
- Interest paid on a mortgage in your name for a Thai property can be claimed as a deduction.
- Expenses for your own or your dependents’ education in Thailand are deductible.
- Donations to approved charities and religious institutions in Thailand are tax-deductible.
- Contributions to approved retirement funds are eligible for tax deductions. There are annual limits on the amount that can be deducted.
Tax Credits
The tax credit system means you can potentially offset some of all of your Thailand personal income tax with tax already paid. You will need to consider the following:
- If a DTA allows you to be taxed in Thailand on remittance, then you need to calculate the tax already paid.
- You will need a tax certificate showing the taxed paid in the other jurisdiction.
- The credit is submitted with the tax return.
- In most cases, a tax credit calculation and assessment is needed due to differing tax years.
Double Taxation Agreements (DTA)
A double tax treaty, also known as a tax treaty or a bilateral tax treaty, is an international agreement between two countries designed to address and mitigate the issue of double taxation for individuals and businesses with economic activities or income sources in both countries. The main purposes of double tax treaties are:
- Avoidance of Double Taxation: Double taxation occurs when a taxpayer is liable to pay taxes on the same income or capital in both their home country (where they are a resident) and in a foreign country (where the income or capital is generated). Double tax treaties provide mechanisms to prevent or reduce this double taxation.
- Prevention of Tax Evasion: These treaties also aim to prevent tax evasion by requiring the exchange of information between the two countries, which helps tax authorities in each country verify income and enforce tax laws.
Thailand has double-tax treaties with 61 countries.
The revenue department has stated:
If you are deemed a a tax resident of Thailand (staying in Thailand for 180 days or more), the tax paid abroad can be credited against the tax paid in Thailand in the tax year that assessable income was brought into Thailand according to the provisions of the Double Tax Treaty to which Thailand is a contracting party.
The double tax position depends on each country's DTA agreement with Thailand and how specific assets are treated. Each DTA is a separate International Treaty, with different provisions, so it is advisable to check the precise terms that apply in your situation.
Note: Regardless of the tax treaty, you may still have to declare the income in Thailand as part of your tax return, and, as stated by the revenue department, you will be credited for the tax already paid.
Common Misconceptions of DTAs
- A DTA in place means that individuals are protected from being taxed in Thailand (false).
- Being taxed in another country on assets already exempts the from taxation in Thailand (false).
- A DTA in place means that nothing needs to be filed or reported as tax was paid in the other country (false).
General DTA Principles
- Check each DTA for the jurisdiction in which your assets are based.
- Look for exclusions or exemptions or special rules pertaining to that country.
- In principle, the majority of articles show that if assets are remitted to Thailand, you can use tax paid as a credit. Not in all cases though, as some assets are only taxable in Thailand and you'd have to claim back the tax in the other country.
- Use Thai personal allowances not overseas allowances when considering tax credit calculations.
How Will The Filing System Work?
If you do remit foreign sourced income to Thailand, you will need to obtain a Tax Identification Number (TIN) to file a tax return.
An online portal for tax filing exists, but it is currently available only in Thai. Efforts to include English support are being considered. However, it is best to file through a tax professional.
Essential Documents
A complete set of documents is needed for a hassle-free tax filing experience. This includes identification documents, income statements, and documentation of deductions and allowances claimed.
Specific Documents
Typically, you will need your passport, work permit (if applicable), annual income statements, receipts for allowable deductions, bank statements, and documents for any tax exemptions claimed.
Filing Deadlines
The deadlines for filing tax returns in Thailand are critical to meet to avoid penalties. The Thai tax year runs from 1 January to 31 December.
End of Year: PND90/91 personal tax returns need to be submitted within 3 months of the year-end date for paper filings and 3 months and 8 days of the year end for eFilings
Half year: PND94 personal tax return (within 3 months of the half year-end date): Individuals who have received income under section 40 (5) – (8) of the Revenue Code, with non-salary income like as income from rent, commissions, royalties, professional fees, dividends etc, have to report income earned from January to June and pay taxes with the a half-year personal income tax return (PND 94 form).
Ensure you know the exact filing deadline for the relevant tax year and mark it in your calendar.
Enforcement (Penalties for Not Filing)
One of the most common questions/comments I've seen is “How will they enforce this?” “They can't track every transaction!”
Well, they can, if they want to.
They can do this via the The OECD Common Reporting Standard (CRS).
The CRS is an internationally agreed standard for the automatic exchange of financial account information between tax authorities of different countries. Developed by the Organisation for Economic Co-operation and Development (OECD), the CRS aims to combat tax evasion and enhance tax transparency on a global scale.
Under the CRS, financial institutions, such as banks, investment funds, and insurance companies, are required to collect and report information on financial accounts held by foreign tax residents to their respective tax authorities. This information includes details such as the account holder's name, address, tax identification number, account balance, and income earned.
Tax authorities then exchange this information with the tax authorities of other participating countries on an annual basis, allowing for greater transparency and cooperation in tackling cross-border tax evasion. The CRS is based on the principle of automatic exchange of information (AEOI), which ensures that tax authorities have access to comprehensive and up-to-date information on the financial activities of their residents held abroad.
Since its introduction, the CRS has been adopted by over 120 jurisdictions worldwide, including major financial centers and tax havens.
Penalties:
- Penalties for failing to file tax returns up to 200% of the assessed amount of tax that is payable.
- Surcharge of 1.5% for each month since the tax was owed.
- Penalties intentionally avoiding / evading payment of tax by failing to file a tax return can be punished by imprisonment for a term of up to 1 year and / or fine up to 200,000 THB.
Get Further Information on Tax Policy Changes
If you're unsure how these tax changes will affect you, and want clarification on areas such as Double Taxation Agreements (DTAs), available deductions and credits, and how to file in Thailand, TTL readers can get a free Thai tax guide and a complimentary tax consultation.
+ You can register your interest at this link.
Disclaimer:
Please note that I am not a tax advisor, and none of the information in this article constitutes financial advice. The information detailed on this page is based on information provided by the Thai Revenue Department and Expat Tax Thailand.
If you have any questions or comments, please feel free to drop them below.
Last Updated on
Max says
Nov 29, 2023 at 7:55 pm
Mike Baker says
If you qualify as a tax resident, then any remittances to Thailand may be subject to Thai tax.
But.... subject to a lot of exceptions, allowances, tax treaties....
Nov 29, 2023 at 8:03 pm
Sebastian says
It is being enforced to catch those who remit money from off shore and not pay taxes but all and sundry are caught up in this fiasco. And it is to do with the new global banking regulations as well.
This is why I shall receive my inheritance into my Thai bank, easily live off that with the family and keep my pension payments in UK bank for when I visit there.
Nov 29, 2023 at 8:05 pm
Sebastian Barrow says
Nov 29, 2023 at 11:41 am
TheThailandLife says
Nov 29, 2023 at 5:50 pm
Mike Baker says
Loads of questions are arising. Hopefully in time they will be answered.
If an inheritance has been invested, then cashed and brought into Thailand, will it not have to be declared?
If income earned before 2024 is exempt, it has been said it need not be put on a return. So, I can see many tax returns from those of us retired, if insisted upon, will have nothing on them (pensions I believe, are viewed as earned from a previous employment so will be exempt, savings will be from previous employment, investments the same?). This will surely lead to questions from the Revenue Dept if they see remittances reported by the banks. In turn, they may require evidence that this income should not be included on a return.... sort of negating the statement it need not be reported.
So, as I have suggested in other comments, I can see the Revenue Dept leaving ex pats without Thai companies or rental income from Thailand well alone as they will end up with a huge paper flow, from an unfamiliar financial environment, proving no tax is actually due.
As an aside, the change of policy to require an up to date TM30 each time one enters Thailand seems to be a way of reporting potential tax liabilities that may not currently be known to the Revenue Department by identifying the property owner, be it a Thai, a foreigner or a Thai Company. I understand this to be the case from conversations within Immigration, Chonburi, (Jomtien).
Nov 29, 2023 at 6:22 pm
Sebastian says
I think you would find that the original inheritance amount would not be subject to tax but any profits would be. The paperwork around the original inheritance would have to be accompanying the transaction to prove to the RD what is what. A headache I would not want!!
Nov 29, 2023 at 6:40 pm
Mike Baker says
I just can't see them wading through thousands of people's foreign paperwork and financial statements when in their heart they know all this money has already been taxed by a legitimate tax regime and will likely lead to nothing except turning off the tap of free bank liquidity and a regular foreign currency income stream.
If I say it frequently enough, I hope it will come true......
Nov 29, 2023 at 7:11 pm
Mike Baker says
Revenue dept quote:
"Foreign-sourced income earned before January 1, 2024, won't need to be declared in Thai tax returns, irrespective of when it’s brought into the country."
Shortly afterwards you say "Let's say you come into an inheritance, you sell a property back home, or you cash out of a bond you've been holding for a couple of years, and you want to bring that money into Thailand. Regardless of when that money was earned, be it two or five years ago, under the proposed legislation it will be subject to tax."
Your later statement seems to contradict the revenue dept quote.
Also, if you already hold a property or bond and are merely selling it, surely the asset was paid for with earned income before 1st Jan 2024 and so will not be subject to tax?
Nov 29, 2023 at 11:37 am
TheThailandLife says
Nov 29, 2023 at 5:54 pm
Mike Baker says
This time it is from the horses mouth. The quote from the Revenue Department in this article says:
"Foreign-sourced income earned before January 1, 2024, won't need to be declared in Thai tax returns, irrespective of when it’s brought into the country."
But referring to the Q&A document referred to by David, it says the opposite.
Namely:
Question: When does the Revenue Department’s Order No. Di. Por.161/2023 dated 15th September 2023 come into effect? Answer: Applicable to all assessable incomes irrespective of when they occur if they are brought into Thailand from 1st January 2024 onwards.
Nov 29, 2023 at 6:38 pm
TheThailandLife says
Nov 29, 2023 at 6:45 pm
Sebastian says
Nov 29, 2023 at 6:46 pm
Mike Baker says
So already out of date and unreliable?
Oh dear.
Nov 29, 2023 at 7:13 pm
Sebastian says
Any taxes that are paid in UK will be credited against any tax owing in Thailand which does make for a crazy situation for many expats.
For me personally, I will have my inheritance sent here direct, easily live of that and let my pensions accumulate in UK for when I visit. This avoids all the tax hassles here in Thailand.
Nov 29, 2023 at 7:42 pm
Sebastian says
Nov 29, 2023 at 7:48 pm
AndyPat says
Nov 29, 2023 at 10:41 am
AntCap says
Oct 27, 2023 at 9:36 pm
Daniel Whiteside says
Not tax (or legal,) advice...but, there it is.
Nov 29, 2023 at 9:58 am
AndyPat says
I wonder how the thais will see that?
Nov 29, 2023 at 10:47 am
David says
I would copy and paste the bit here but i cannot it wont allow me to do that but look at #4:
https://www.carlturnerfinancial.com/wp-content/uploads/2023/11/Revenue-Department-Di.-Por.161-2023-QA.pdf
Nov 29, 2023 at 11:38 am
Sebastian says
Nov 29, 2023 at 6:13 pm
Mike Baker says
We need a flow chart on the subject, because there are a lot of conditions to be met before deciding whether a remittance should appear on a tax return.
However..... there will be only 2 pieces of information the Revenue Department will know for certain, assuming they have access to immigration records and bank records.
1. Whether you qualify as a tax resident.
2. How much you have received in a tax year by way of remittances from abroad.
Everything else they get from you. It will be interesting to see what evidence is required to support any information one submits.
Nov 29, 2023 at 6:58 pm
Sebastian says
I am having my inheritance sent straight to my Thai bank as I am unable to open another account in UK thanks to Brexit.
Nov 29, 2023 at 6:29 pm
Martin says
Oct 27, 2023 at 8:00 pm
TheThailandLife says
Oct 27, 2023 at 8:20 pm
Martin says
Oct 27, 2023 at 8:22 pm
TheThailandLife says
Oct 27, 2023 at 10:24 pm
Mike Baker says
"Article 16 Dependent Personal Services (1) Subject to the provisions of Articles 19 and 21, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State."........
I would suggest that the vast majority of us residing in Thailand would fund our lives just by pensions. Hopefully on this basis we have little to worry about except, perhaps, new paperwork requirements by immigration.
As most pensioners are not required to submit a tax return as any tax is taken automatically, this would be one complication to overcome.
However, I would suggest immigration will be quite far behind the curve on this as they will need to know how the taxation department handles all of this before they can implement new requirements.
Oct 27, 2023 at 10:15 pm
Joao says
Oct 27, 2023 at 8:10 am
TheThailandLife says
Oct 27, 2023 at 4:38 pm
JamesE says
Oct 27, 2023 at 10:44 pm
Mike Baker says
Oct 30, 2023 at 10:22 pm
TheThailandLife says
Oct 30, 2023 at 11:02 pm
Mike Baker says
Leaving changes encompassing every person defined as a tax rodent, I mean resident, allows them flexibilty but like many laws in Thailand, it doesn't necessarily mean they will implement it (for small fry).
I know this is all conjecture and discussion, but I imagine the taxman already knows who they want to target and achieve the best tax take from with very little effort.
Oct 31, 2023 at 12:48 am
JamesE says
But, as you say, it's all conjecture and pot-stirring at this point. Given the way many of these proposals go, a special interest group will throw a wrench into the works at the last minute and nothing will change. Like the perennial ฿300 arrival fee. It will always be in play but never get implemented.
Oct 31, 2023 at 1:28 am
Mike Baker says
As you said.... shooting and foot reside in the same sentence.
We will see, but let me state the obvious to get it off my ageing chest:
We pay our way by keeping billions in the banking system that we cannot touch, thereby supporting the liquidity requirements; we import valuable foreign currency to live on, so supporting the exchange rate; we spend all this on the Thai economy and we are entitled to nothing - no right to vote, no healthcare, no right to reside. We cost the economy nothing.
Happy days!
Oct 31, 2023 at 3:44 pm
Jerry says
So, if allowed to post, I did some math for my fellow expats to give a ball park idea of how the tax changes could impact their life.
In business, a big boss would tell the minions build me a chart on the best case, worst case most probable outcome, so I can decide on a plan of action.
Using that logic, I am sharing a worse case outcome. The Thai Dept of Revenue posts the PIT income and tax rates on their site. The logic I used ... the following table uses the posted rates, with no allowances, or deductions included (max pain). It means they tax an expat on all the funds transferred into Thailand as income, ignoring the source.
The table columns ... Income Ranges from website in Thai Baht, the tax due for each range, the cum total (add ranges together), then the Baht converts to USD at fx rates 30, 33, 35. All annual amounts, so if you transfer 1M baht per year, your USD Thai tax at an fx of 30 is 3833 per year.
Income Range Tax per Range Cum Total USD fx 30 33 35
0-150K +(149,999×0)=0 0
150K-300K +(150,000×0.05)=7,500 7,500 250 227 214
300K-500K +(200,000×0.10)=20,000 27,500 917 833 786
500K-750K +(250,000×0.15)=37,500 65,000 2167 1970 1857
750K-1M +(250,000×0.20)=50,000 115,000 3833 3485 3286
1M-2M +(1,000,000×0.25)=250,000 365,000 12167 11061 10429
Keep in mind this is the worst case, but only each person knows how much money they bring in each year. And there is no deductions, or allowances in the table, hence worse case. Example data, not official number, to help expats know the impact on their budgets.
** For US expats, if you transferred 1M THB per year, that would be about $30K USD rounded at fx 30 THB, or $28K USD rounded at fx 35 THB.
A single US taxpayer for CY2023, using standard deduction only, with "gross" pension or soc sec income would have a federal tax due on $33K of $2078, on $28K it's $1478.
That would mean on 1M baht transferred into Thailand your Thai Tax would be reduced by the US tax already paid, if the tax treaty is followed.
The math in that example ...
1M transfer at 30 THB $3833 - $2078 (US tax paid) = $1755 USD or 52,650 THB Thai tax due
1M transfer at 35 THB $3286 - $1478 (US tax paid) = $1808 USD or 63,280 THB Thai tax due
In the above example, a US expat would have their monthly cost increase by about $150 USD if they tranferred 1M THB in a year.
I posted my work so expats can do their own math. Only each person knows their annual transfers, and taxes they paid back home. Hope the table helps people figure out how much the rule change may impact their individual budget.
And of course lower their stress level over this issue.
Oct 24, 2023 at 11:44 am
TheThailandLife says
Oct 24, 2023 at 9:26 pm
JamesE says
Oct 24, 2023 at 11:13 pm
TheThailandLife says
Oct 24, 2023 at 11:46 pm
JamesE says
Oct 26, 2023 at 11:16 pm
TheThailandLife says
Oct 27, 2023 at 12:19 am
Alan Williams says
- I guess your referring to social security payments administer by the US government, and from my understanding there is a DTA (double tax agreement) between Thailand and the USA).
- Ultimately my question is whether the "...not taxable..." also applies to state based pensions from other countries e.g. the Australian Old Age pension? I should mention there is a long-existing DTA (double tax agreement) between Thailand and Australia.
Oct 27, 2023 at 4:31 pm
Alan Williams says
Would appreciate f you would pleae confirm this.
Bottom line; as you have no doubt noticed there's been dozens of posts on various websites posing this exact question but never any real answers.
Your kind comment seems to make it very clear that (in my case) my 4 weekly old age pension on from Australia will not suddenly be taxable in the Thai tax system.
I also receive (in Thailand) a 4 weekly permanent (lifetime) disability compensation* payment from the Autralian DVA (Dept., of Veteran Affairs) for injuries suffered during my war service in Vietnam. I'm guessing that (repeat guessing) that in the Thailand personal tax reguations this payment would not be subject to tax.
* for decades this was labelled as a DVA Disability Pension but about six months ago the DVA changed the label to permanent (lifetime) disability compensation payment.
Oct 27, 2023 at 4:51 pm
Wayne Bear says
Nov 30, 2023 at 1:40 pm
JamesE says
Hi Jerry,
"A single US taxpayer for CY2023, using standard deduction only, with "gross" pension or soc sec income would have a federal tax due on $33K of $2078, on $28K it's $1478."
Something to consider here is that this does not take into account the fact that only 50% of SSA income is considered taxable and that due to exemptions and standard deductions it's possible (it's what I do) to "earn" up to about $35K - as a combination of SSA and IRA/SEP/Pension - and have zero taxable income. My big question on the whole thing is: Does that mean I have no taxable income as far as Thailand is concerned - matching my US AGI - or, leading to your worst case scenario, does it mean that 100% of my income is now taxable in Thailand (assuming I bring all of it in)?
TTL's point about SSA income not being subject to Thai tax may be moot. First, it's basically impossible to get an income certification from the SSA or a US Embassy. The SSA only generates an income letter which works in the US but does not work in Thailand due to the lack of official signatures, stamps, and seals. The same is true with the IRS if trying to use a tax return to prove income. Second, and IMO a bigger issue, the proposed tax changes are against income brought into Thailand regardless of the year it was earned. This means that basically every expat (including the ones off reading something more interesting) will be required to file and pay the tax and then, as TTL says, have to claim the tax back and wait for a refund. But US expats don't have a way to officially verify their income's source. This will be an administrative nightmare of biblical proportions.
Oct 26, 2023 at 11:13 pm
Jerry says
Finally, I could see the Immigration wanting to see a copy of your "Thai" Tax Return each year you applied for your "extension of stay," ......
Oct 06, 2023 at 9:41 am
Jerry says
Income is usually considered "earned" from either work, or services rendered. Or the bucket is "passive" which comes from, rental income, interest, dividends etc.
Most expats have either personal savings, pensions, social security, or the funds from passive items.
The Tax Treaty is clear on the big items for most expats, pensions, and social security income.
The articles I read talk about "funds brought into Thailand" as income. What I think is the source of the funds is more important, and complicates the issue for taxing. My opinion only, I repeat, my opinion only ... money transferred into Thailand from "personal savings" is NOT income, and should NOT be included in the equation. If it is, then it would be the same as taxing an entity every time they transferred funds from Kasikorn Bank to Siam Commercial Bank. And maybe that would be easier to implement (sarcasm).
Your US expat readers can do a simple search "US and Thailand Tax Treaty" and will get two documents they can refer to for insight. The Tax Treaty, and the Technical Explanation, both on the IRS website as pdf files.
The Technical Explanation was written by the US Treasury and gives a longer more in depth explanation of was is meant by each article within treaty. For example the text on pensions reads ... "pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State." ... but the Technical Explanation is a few paragraphs that defines what is "meant" by the term "pensions." And for US citizens it includes social security, 401K, 403B, IRA type income in the definition as pension type of incomes.
The most relevant articles for US expats would be 10 dividends, 11 interest, 20 pensions & social security, and 24 other income.
To me it seemed like dividends and interest income could be taxed in the US, then if the tax paid was less than the 15% treaty rate you might owe the difference to the Thai taxing authorities. Example: you paid 12% tax on interest in the US, you owe 3% to Thai taxing authority. Again, my understanding only. More importantly, subject to Thai Revenue Departments version of what the Tax Treaty means.
The Thai Tax form (PND-91), really isn`t setup for foreign income under the new rules from what I can see. It is a pdf file, and can be done online also.
Where I see the bigger problem is compliance, and what documents the Thai Revenue Department might start requesting. US tax code is complex, most Thai's would get a headache just like everyone else that deals with it.
Finally, I could see the Immigration wanting to see a copy of your Tax Tax Return each year you applied for your "extension of stay," which is all of three pages. If that`s all that this ends up being, paying a few hundred USD or less each year, and adding three pages to the annual renewal, it may not warrant all the worries going on.
Sorry about the long post.
Oct 06, 2023 at 9:38 am
TheThailandLife says
Oct 06, 2023 at 6:38 pm
JamesE says
Oct 06, 2023 at 10:59 pm
TheThailandLife says
Oct 06, 2023 at 11:38 pm
JamesE says
Oct 06, 2023 at 11:51 pm
preston says
Dec 20, 2023 at 12:36 pm
Mike Baker says
However, we need to know how, under the various double taxation agreements, this will in practise be administered.
It seems to me there are currently too many unknowns.
Will remitted funds be the subject of reporting to the tax authority?
Will foreign currency exchanges on the high street be subject to reporting?
Will everything be taxable and it is up to us to claim it back?
Will the tax authority link in with immigration?
What proof of foreign income will be required?
Will gifts be taxable?
Is the intention to target the Thai big earners who currently avoid tax or the retired ex pat community who generally have a modest income?
I can see this causing them major admin problems as they have tens of thousands of ex pats to deal with, most of whom will be covered by tax treaties anyway and end up just being a processing cost rather than an income source.
Oct 29, 2023 at 10:12 am
Jerry says
What I found out is there is another PIT form, PND-90, which has 8 types of income, most likely the form expats would use. There are online versions.
After looking things over, I think most US expats getting there income from pensions, social security, or retirement savings plans might not be impacted too much. But, that is based on the fact they would need to have taxes taken out of those funds at the time they are paid, or have paid taxes directly to the US govt on an annual US tax return.
They key is the tax credits you would get on the Thai Tax Form, for taxes already paid. The tax credit might be enough to cover the Thai tax liability. I plan to go see a tax professional in Thailand and have them confirm my findings.
I just wanted to share that the amount may be less than say 5K baht for the year after all is said and done.
** Disclaimer: I used my own data, for MY tax situation to get an idea. Your situation may have you paying more in taxes, or less in Thai taxes depending on your income types, and amounts.
I guess I just wanted to share that after more research, this change may not imapct my life in Thailand as an expat very much. More of a speedbump in the road, than a life changing event.
Also, My guess is we (expats) might have to show a copy of our tax return to get the annual extension of stay, my opinion only. Based on the Thai govts love of paperwork ... 555
So, we get one more item added to the annual checklist maybe.
I hope I'm correct and this turns out to be a non event for all of the expats living here.
Oct 23, 2023 at 10:53 am
Daniel Whiteside says
(Exactly what I think. Income or not...that is the crux of the matter.)
Nov 29, 2023 at 10:16 am