Tax residency in Thailand and taxing overseas income

[kwajdiver]

Not good news – although I don’t understand what they mean by a platform of one billion baht. It also says regardless of when the money was brought into Thailand.

Thailand to tax residents’ foreign income irrespective of remittance

Thailand to tax residents' foreign income irrespective of remittance | Thaiger (thethaiger.com)

The Revenue Department of Thailand will amend a law to tax individuals with foreign income, even if that income is not brought into Thailand.
Director-General of the Revenue Department, Kulaya Tantitemit stated that the current tax law mandates individuals residing in Thailand for over 180 days per year to pay taxes on foreign income if it is brought into the country.

This income is currently subject to personal income tax payments to the department. The department is now working to amend the law based on the principle of worldwide income.

This principle taxes individuals based on their residency within the country, irrespective of whether the income is sourced domestically or internationally.

Kulaya mentioned plans to expand the tax base by requiring platforms with an income of 1 billion baht or more to report their sources of income.
She added that the department will use this information to verify their tax compliance.

Previously, the department revised the criteria for tax residency, mandating that individuals residing in Thailand for at least 180 days per year and earning foreign income must pay personal income tax if that income is brought into the country within the same year it was earned.
However, this rule will be revised again, effective from 2024, requiring tax payment on foreign income regardless of when it is brought into the country, reported Bangkok Post.

[Dannie Boy]

But if this is talking about only those with more than one billion Baht, it’s hardly likely to affect the average Farang?


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[kwajdiver]

On another forum there is discussion as to whether the one billion or more applies to individuals or businesses.
Unfortunately, speculation rather than real-time clarification may be the pattern.

[Big Boy]

I’ve looked at the author – a journalism student, still at a Thai University. Sounds a bit iffy to me – trying to make a name for himself? He’s also published Thailand to introduce carbon tax next year at the same time. Scare mongering?

[caller]

Nothing really changes for me. 3 sources of income, all taxed in the UK. The only question is whether the UK tax free allowance, which is still a component part of the overall tax calculation, can be taxed in Thailand?

I can't help but think that this is going to be a nightmare to administer for the Thai authorities

[Dannie Boy]

With a bit of luck they’ll put it in the “too difficult” box!!

[STEVE G]

Kulaya mentioned plans to expand the tax base by requiring platforms with an income of 1 billion baht or more to report their sources of income.
She added that the department will use this information to verify their tax compliance.

This seems to me to be part of a different issue to the taxation of foreign income and involves taxation on ecommerce:

E-commerce faces tax crackdown

https://www.bangkokpost.com/business/ge ... -crackdown.

[PeteC]

I don't think they're concerned about foreign retirees, all or most of which will have very limited or no liability because of tax treaties.

They want the wealthy Thais who have been playing the system for generations with investment income, real estate purchase/sale income and a whole host of other foreign earned income. How many times have we heard about wealthy families sending their kids to prestigious universities overseas, and those kids never return to Thailand with their money until it's time for them to retire.

The problem is that it's those people who put and keep these politicians in office. Push the wrong people too hard and the entire new tax initiative may be tied in knots for years.

[Green Nomad]

I can go back a few years to a point when I was going through a similar scenario over taxation in Spain. The Spanish government wanted to tax all income from overseas, it didn't bother me, as at the time I was working outside Spain, as I am now and the earnings were going to the UK, my Spanish mortgage was covered by rental payments and that was taxed. This Thailand idea smacks of the same set up, targeting wealthy citizens international income.

[Hahuahin]

https://www.bangkokpost.com/business/ge ... s-proposed

So, we can look forward to paying tax on interest on inherited savings back home which never anything of have or will be transferred to Thailand. Well, if so, happen then 28 years is enough at least for me.
hahuahin

[404cameljockey]

I imag[in]e it would be difficult to argue that your income has not already been taxed?

I'm interested to see whether Thailand will consider the UK personal tax allowance as 'income not taxed in the UK'. That's currently over half a million Baht a year.

PS - sorry, I see that caller already raised that question earlier this week.

[kwajdiver]

An interesting article from the Thai Examiner. Below are some excerpts.
I wonder when we will hear exact details.....

Thai taxman now plans to tax foreigners on all income whether it is remitted to the kingdom or not under global tax rule
• June 5, 2024 at 11:33 am
• by Joseph O' Connor
• in Economy, Living, Politics, Thailand

[media]Thai taxman now plans to tax foreigners on all income whether it is remitted to the kingdom or not under global tax rule - Thai Examiner[/media]

Prime Minister Srettha Thavisin ordered the tax regime for foreigners changed as soon as he took up office last year as Minister of Finance as well as PM

On September 15th, 2023, order P 161/2023 made any income related to Thailand, irrespective of what year it was earned, subject to tax.
Thailand’s Revenue Department is planning legal changes to treat all foreign residents in the country similar to Thai nationals in relation to tax reporting. In effect, from 2025, the plan is to tax foreign residents as defined by Section 41 of the tax code on all income, whether remitted to Thailand or not.

Revenue Department has set its eyes on all income earned in 2024 and is requiring tax returns from all Section 41 foreign residents by March 31st 2025.

In brief, this will require legislation or approval from the cabinet to change key regulations. These legal changes are now being looked at by Ms Kulaya’s department.

[StevePIraq]

And now to add icing to the cake the government is going to initiate worldwide income, as America and some other countries do.

[fft100]

Steve,

unless i am mistaken, all european countries tax worldwide income, unless you are registered as non tax resident. i,e, in the UK if classified as tax resident you should report all overseas income / CGT / etc

The USA and eritrea are the only countries that tax your income based on nationality - so that even if you live outside the USA all year, you still have to report all overseas income / dividends / cgt etc. It *may* then be subject to dual taxation agreements, and you may have a USA tax liability.

It looks like Thailand is going the same route as european countries (and most others).

[buksida]

Whatever the outcome, this is causing quite a stink. I've spoken to a few folks who are prepared to ditch Thailand for at least half a year if this comes in (myself included) ... the gooberment could find itself losing money/income/foreign investment instead of making it.

Foreigners are frantic about Thai income tax blurs
The Thai government expects its Revenue arm to collect 100 billion baht more to help fund the digital wallet give-away scheme. This surely explains why, from January 1 2024, assessable foreign income transmitted to Thailand by tax residents (Thais or foreigners here for six months plus in a calendar year) will be subject to personal income tax via Revenue tax forms. Those have to be completed no later than the end of March next year.

A recent informal survey of retirees in Pattaya suggested that over 90 percent were in a state of utter confusion. What is assessable income? Does it include pensions already taxed in the home country? What about sending your cash to your wife as a gift? How to make sense of double taxation treaties which are undecipherable to most folk? Will visa renewal be dependent on having a Thai tax identification number? What will it cost to hire accountants?

It’s no wonder that many expats are muttering, or talking openly, about leaving Thailand or at least making sure they are in the country for fewer than 183 days to escape the tax residence trap. Typical retirees here live on already-taxed pensions. Getting involved with a second tax authority, accountants and tax specialists is just about the last thing they want. Not to mention the potential costs of this bureaucracy. Nonsense on social media, such as the claim that Thai banks are now deducting tax international cash arrivals, is rampant.

There’s a well-known truism that Thai authorities don’t take any notice of what foreigners think. The issue here is whether those same authorities are prepared to see the expat market, especially for retirees and global citizens, collapse under the pile-up of unanswered questions. What about the future of the Elite visa? What about the thousands of farang men married to Thais and with families to support? What about the property market, especially the purchase of condominiums? How can the understaffed Revenue suddenly deal expeditiously with hundreds of thousands of forms and accompanying documentation in a foreign language?

Maybe, official clarification is just around the corner. Maybe. Meanwhile, accountancy firms are busy enrolling frightened expats with the promise of updates whenever possible. What would help, of course, is a statement from official Thai authorities that income already taxed elsewhere will not be re-taxed here. Or that certain types of visa, for example annual extensions for retirement or marriage, are exempt from the tax regulations on the grounds they are not “residence” permits. Sometimes silence is the best policy. But not tax reform on this scale.

https://www.pattayamail.com/latestnews/ ... urs-463107