Tax residency in Thailand and taxing overseas income

[Dannie Boy]

That’ll be far more than the amounts expats transfer to Thailand!!

[Big Boy]

No, of course not, but it all amounts up, and it none of it is going in the direction the powers that be want it to go.

[404cameljockey]

It says any person who stays in Thailand for more than 180 days, which includes foreigners on long-stay visas. So I presume this rule change applies to us as well.

The rest of the article only refers to Thais. So I took the reference to mean 'any Thai person' who stays in the country for more than 180 days. I don't see any mention of non-Thais anywhere in the article, hence I wonder whether this applies to us or not.

[Dannie Boy]

The way the article is written you’d easily conclude that it doesn’t apply to foreign nationals, but of course it wouldn’t be the first time something hasn’t been crystal clear!!

[kwajdiver]

Sounds good. From my reading the Thai tax code does not differentiate between Thais and non-Thais – if you spend 180 days or more you are a Thai tax resident.

Also agree that they probably saw a significant decline in foreign income coming into Thailand from both Thais and expats, and from I read they really need it for the economy. Expat retirees don’t bring money into Thailand to save it – they spend it on daily living expenses, taking trips within Thailand, buying houses and cars, supporting families…….. The government is spending a lot of money to try and encourage domestic tourism, and we usually take 3-4 trips a year within Thailand where we use hotels and eat out at restaurants, but we had temporarily delayed these trips when this tax stuff first started.

If this is adopted, I hope, but don’t really expect it, that a written clarification will be issued about reporting or not reporting this income - we will probably again see different tax offices saying different things. From my previous reading many believe that if the money you transfer into Thailand is considered non-assessable income you do not have to submit a Thai income tax form each year reporting this income. If so, per this article, if you transfer the same year as the income was earned the income would be considered non-assessable; therefore, no Thai tax return would be required…..I hope this is true.

[Martinoo]

I submitted in March, asking for a refund according my calculation...
They asked for additional documents which I submitted the week after.
I check online every month and no further requirements and all quiet on the eastern front....

[Martinoo]

Thai Revenue planning new decree making remitted foreign funds within one year tax-free for residents
https://www.thaiexaminer.com/thai-news- ... residents/

How long will it last until they recall this information??

[buksida]

Indeed, as reported in the BK post on the 19th: viewtopic.php?t=36607&start=653

[buksida]

Clear as mud ... looks like another famous u-turn in progress after their foreign inflows were predictably decimated ...

New approach to overseas income aims to spur inflows
The Revenue Department is shifting its approach on how it taxes income sourced from abroad.

Rather than taxing every baht of income brought into the country, the department is moving towards granting tax exemptions for income promptly remitted to Thailand, hoping to create momentum for economic stimulation by encouraging capital inflow.

Stimulus goal
According to Pinsai Suraswadi, director-general of the Revenue Department, the agency is preparing to draft legislation to amend the collection of income tax to allow income sourced from abroad to be brought back into Thailand without tax liability. The goal is to accelerate the repatriation of investment funds held by Thais abroad, estimated at 2 trillion baht, to help stimulate the domestic economy.

He said the 2 trillion baht is currently invested abroad in various forms such as land purchases, insurance, or foreign funds, generating annual income of hundreds of billions of baht.

Mr Pinsai said the proposed amendment is being prepared as a ministerial regulation by the Finance Ministry, exempting personal income tax for individuals who reside in Thailand for at least 180 days -- whether continuously or not -- within a calendar year.

If such individuals earn income, whether that income arises in Thailand or comes from a foreign source, they are generally subject to personal income tax payable to the Revenue Department.

However, the exemption of personal income tax on foreign-sourced income will apply for only two years: the year in which the income is earned and the following year. If the income earned abroad is brought into Thailand in the third year after it was earned, it will be subject to normal taxation.

Currently, the criteria for collecting personal income tax on income sourced from abroad require that, regardless of whether the money is brought into the country in the year the income is earned or in any subsequent year, it is subject to personal income tax payable to the Revenue Department.

This regulation has been in effect since Jan 1, 2024.

Prior to Jan 1, 2024, the criteria for collecting personal income tax on income sourced from abroad stipulated that if the income was brought into the country after the year in which it was earned, it would not be subject to any personal income tax.

https://www.bangkokpost.com/business/ge ... ur-inflows

Nowhere does it say that all foreign residents are required by law to report to the tax office, this appears to have been a spate of paranoia.

[Big Boy]

It should be a lot easier to prove (last year, I had to use my P60, which only actually shows tax paid up until early April). However, last year they would not accept an official UK document as proof, without verification from the Thai Embassy in the UK. Certainly in the UK, all taxpayers receive the same document, so should have had the same proof.

I wonder what proof they will require this time. Pay slips? Do pay slips still exist in this digital age? I have no problem whatsoever reporting my taxable income - I'd been doing it every year for over 40 years before moving to Thailand. However, for me, it would help if they told us what evidence will they require as proof of earnings.

[buksida]

Not sure how they can use payslips for residents on retirement visas, as you are not allowed to work in Thailand ... and that could open up another bureaucratic quagmire.

[Big Boy]

Yes, that is my worry. I receive a notification of what Civil Service Pension (CSP) I will will receive for the year, but we receive nothing regarding Old Age Pension. Even the CSP notification is only a letter that could easily be be forged. Proving authenticity will be a challenge.

[Martinoo]

Nowhere does it say that all foreign residents are required by law to report to the tax office, this appears to have been a spate of paranoia.

Indeed, but it clearly states the tax residency/180 days rule and tax residents need to follow tax legislation which means submit tax documents before April 1...

[Martinoo]

Yes, that is my worry. I receive a notification of what Civil Service Pension (CSP) I will will receive for the year, but we receive nothing regarding Old Age Pension. Even the CSP notification is only a letter that could easily be be forged. Proving authenticity will be a challenge.

Do you pay taxes in the homeland, than use that official document from the Revenue Department, it could that you do not have that at April 1, mention it and don't sign or submit the application!!! If you don't pay taxes, well then you are expected to be taxable and pay taxes here.
If you are transferring (larger) amounts from saving, you should have the documentation about that ready as well, bank statement is enough.
Gains from sales of real estate or other assets are subject to capital gains, but that could be the same in the homeland, use that information/documentation to support the Double Tax Treaty

[Big Boy]

Tried that - laughed at by the tax office. They needed proof that everything was genuine. I had to get everything authenticated by the British Embassy. If it isn't a cocktail party, the British Embassy is not interested in British citizens - of course they wouldn't help.

In the end, I had to get my documents authenticated by the Thai Embassy in London. However, that took a lot of research to identify the service was even available.