Expats seek income tax clarification from the prime minister

[reader]

From Pattaya Mail

By Barry Kenyon

A group of Pattaya-based retirees say they are both confused and aggrieved by continuing ambiguity about their Thai tax liability from January 1 2024. Thai Revenue stated many months ago that “most” overseas income transmitted to Thailand from that date would be subject to personal income tax, to be collected the following year. The requirement applies to all tax residents, namely Thais or foreigners residing in the kingdom for at least six months in a calendar year. The policy is said to be principally aimed at closing tax loopholes exploited mostly by super-rich Thais in the past.

Kurt Fischer told the Pattaya Mail, “We are appealing to the Thai premier to order a clarification for the 500,000 or so foreign tax residents here. Our group are all retirees who live exclusively on income and pensions already taxed in our home country. We do not run businesses abroad, indulge in currency speculation or salt away money in offshore bank accounts, but the advice from so-called tax experts is flatly contradictory. Some say that pension income already taxed in the home country is absolutely exempt, whilst others maintain that it’s just a tax credit against payments due here in Thailand.”

Another group member Kevin Haddon explained, “There are all sorts of rumors, for example that you will need to obtain a tax identification number from the Revenue to qualify for a one year extension of stay, or that you can ignore the whole thing if your country (one of 61) has concluded its own double taxation treaty with Thailand. Some people have been told by experts to use an international credit card, with headquarters outside Thailand, for as many transactions as possible in order to avoid detection.”

The group observed that the lack of definitive information was leading some expats to consider moving abroad, whilst others were simply burying their head in the sand, ostrich-style, and hoping the horror will pass them by. “The confusion is really bad for the future of the traditional retirement market in Thailand. The confusion is obviously a paradise for tax lawyers and accountants,” one told Pattaya Mail, “but an absolute nightmare for us.”
 

[reader]

From Pattaya Mail

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.

 

 

[TMax]

Just my thoughts but I don't think the government is giving many answers because they don't know the details yet themselves and are just stumbling from day to day on this. Ahh yes, of course they need to pay for the "give" us your vote scheme some how ⤵️

1 hour ago, reader said:

The Thai government expects its Revenue arm to collect 100 billion baht more to help fund the digital wallet give-away scheme.

 

[TMax]

The new tax and lack of credible information from the government / tax office is one of the things that's turning me off moving to Thailand for now. My retirement income fund (not a state pension) in Australia is now tax free and has been for 5 years but from what I have read (right or wrong) is that if I were living there and transferred that money into a Thai bank for living expenses, fun etc it would then be taxed. I also think there may well be a lot of expats just hanging on for clarification of the new tax rules and if not favourable will be inclined to move to other Asian countries, the Philippines is what I am thinking would be a reasonable  alternative. The problem I see with the Philippines is that the infrastructure is not as good as Thailand, healthcare for those that can afford private health insurance is ok as there are some quality private hospitals in Manila (if you can get to them in time).

A positive for the Philippines is the retirement visa (SRRV) to me is so much easier and less mucking around than the Thai one, or do what a lot of expats do and just live on a tourist visa and keep extending it for up to 36 months then slip out to another country and start all over again on return. A down side for me is the city I would like to live there hasn't got much of a gay scene at all and neither has the Philippines in comparison with Thailand for that matter. Hmmn food for thought for when it becomes decision time. 

[bkkmfj2648]

I attended the 12 June 2024 PCEC (Pattaya City Expat Club) meeting PCEC where a presentation was given about the Thai government's new proposal to tax our global income if we are deemed to be tax residents (living in Thailand for more than 180 days - but the expert quoted 183 days - which I found strange).

Below is the Youtube link to the 53 minute presentation that was given by Thomas Carden and related Q&A.

 

He basically gave 3 possible alternatives:

1. Make sure that you do not become a tax resident - live in Thailand less than 180 days.  At the timestamp = 27.32 in the above Youtube video, I asked the hypothetical question about living in 3 countries for 4 months each (Thailand, Vietnam, Malaysia - or any other country that you desire) - and which country for your @home tax filing would be your primary out of home country primary residence?
2. Move your out of Thailand assets to a special trust in Hong Kong - where they would not be taxable when the funds would be sent into Thailand.  I found this part of the meeting difficult to follow - especially for us retirees who already reside in Thailand and are already receiving active pension payments from countries outside of Thailand - as to how these assets would be moved to Hong Kong and even if I would want to even contemplate this idea.  I remained skeptical.
3. Remain in Thailand as tax resident and request a Thailand tax ID and make the required tax filing.  Obviously, you would need to find a tax accountant who would be specialized in tax treaties to avoid double taxation who would understand your specific financial situation as well as your back @home tax filing (if required).

I can tell you that the mood in the packed meeting was not pleasant and many people were quite surprised what we were hearing the speaker say.

Below are links to 3 related articles written by the local Pattaya journalist, Barry Kenyon, who writes for the Pattaya Mail.  Barry is also a frequent speaker at the PCEC meetings and was in attendance at this 12 June 2024 meeting.

https://www.pattayamail.com/news/forensic-handwriting-analysis-and-thailand-proposal-to-tax-global-income-were-the-two-topics-at-the-pattaya-city-expats-club-463293

https://www.pattayamail.com/latestnews/news/dont-panic-experienced-tax-adviser-tells-expat-club-in-pattaya-463018

https://www.pattayamail.com/latestnews/news/foreigners-are-frantic-about-thai-income-tax-blurs-463107

I complained to one of my local astute Thai friends about all of this and he replied to me, "it is your European OECD that is pushing Thailand to tax global income...."

Also, what was illuminating is that one of the recent Thai election campaign promises was to give Thai citizens a digital wallet with 10.000 baht in it.  Well now the Thai government is looking for ways to fund this HUGE campaign promise and us tax resident farangs are an easy target as we don't have a voice nor any rights to protest about it - except with our feet - because, if this global taxation is realized, some of us will choose to only live in Thailand part time or not live in Thailand at all.

So, what will that cost the government?

Thoughts / comments ?   Would this influence your decision to retire in Thailand ?

 

[Moses]

36 minutes ago, bkkmfj2648 said:

for more than 180 days - but the expert quoted 183 days - which I found strange

183 days is precise number of days what makes person resident of country of the stay: 183 is exactly minimal number for "more than half of year" (365/2 = 182.5)

[Moses]

1 hour ago, bkkmfj2648 said:

Make sure that you do not become a tax resident - live in Thailand less than 180 days.  At the timestamp = 27.32 in the above Youtube video, I asked the hypothetical question about living in 3 countries for 4 months each (Thailand, Vietnam, Malaysia - or any other country that you desire) - and which country for your @home tax filing would be your primary out of home country primary residence?

This may not work.

Especially for such cases, in treaties on the avoidance of double taxation there is the concept of “center of vital interests” - the place where a person spends significant time and on which the income of this person depends. If the Thai Tax Department recognizes Thailand as your center of vital interests, then, based on the above-mentioned treaty, it may recognize you as a resident of Thailand even if you have not lived in the country for 183 days. Whether this actually happens depends on the content of the double taxation treaty, and what that treaty provides for persons with a “centre of vital interests” in Thailand, if that concept is included in the treaty.

And, conversely, if the center of your vital interests is recognized as the country from which you receive your pension, then in Thailand you will not pay anything, since you will not be a resident.

But there is another option: you can be recognized as a resident of both countries. Yes, this is also possible. This is especially true for US citizens, who, in order to become a US resident, need to live in the US not 183, but only 31 days during the year or 183 days within 3 years, for citizens of Israel (30 days within year), Cyprus (60 days within year), citizens of UK, who has property in UK and lives there 30 days within a year (in some cases only 16 days).

Bottom line: everything, once again: EVERYTHING depends on the existence and content of an agreement between Thailand and the country of your citizenship on the avoidance of double taxation. Moreover, you will need the services of both a Thai consultant and a consultant from your country.

[bkkmfj2648]

Thanks Moses for your very thorough explanation and guidance.

There was talk about (rumor) where they would count the number of actual days spent in Thailand as displayed in your passport (for citizens of multiple countries [with multiple passports] - the one that has your Thailand visa) to determine the 183 days threshold and maybe tying that to your visa renewal with immigration - where if you exceeded the 183 days immigration may ask to see your Thai tax ID number and related Thai tax filings (if required).

In tax year 2023, I was outside of Thailand for 7 months for work reasons but I maintained a 12 month "residence" in Thailand - and I declared this as my bona-fide residence for purposes of determining my primary residence - as I had 2 residences in 2023 - but the other residence back in Europe was not "permanent" in nature as it was connected to my temporary work contract.

So, if in tax year 2025, I were to live in 3 different countries - but maintained a 12 month "residence" in one of these 3 countries (demonstrated by a 12 month rental agreement), wouldn't that country be my primary bona-fide residence - as it would also be linked to my 12 month visa in said country (with a right to stay as displayed on the visa) ?  

[Moses]

1 hour ago, bkkmfj2648 said:

There was talk about (rumor) where they would count the number of actual days spent in Thailand as displayed in your passport (for citizens of multiple countries [with multiple passports] - the one that has your Thailand visa) to determine the 183 days threshold and maybe tying that to your visa renewal with immigration - where if you exceeded the 183 days immigration may ask to see your Thai tax ID number and related Thai tax filings (if required).

This is a general rule.

But it is important to understand that if there is a double tax treaty between your country of citizenship and your country of residence, then the rules from this treaty will apply, and not the “183 day rule”, since international treaties have greater force than local legislation, if not the opposite is stated. Therefore, it is extremely important to study this particular agreement in order to avoid “surprises”. That is, you should start studying the problem with “what country am I a citizen of?” Then - “is there a double tax treaty between my country and the country where I live?” If it is not there, then you can study what the Thai government is now trying to change, and if it is, then you should only worry about what is in the treaty, provided that there is a clause that it is stronger than local legislation.

Another thing you need to pay attention to: if you have real estate in Thailand as your own, or you are the owner of a Thai company, then the Thai tax department has very good reasons to consider Thailand your center of vital interests and not pay attention to how many days within 365 days in a row you actually live in Thailand. But renting a home is not a basis for applying the “center of vital interests” rule.

Another mistake you make is that you count years in “tax years” and calendar years. But for residence, the calculation is carried out as “the number of days in the country in any consecutive 365 days”, unless the tax treaty provides otherwise.

[vinapu]

1 hour ago, Moses said:

 But renting a home is not a basis for applying the “center of vital interests” rule.

 

Is some cases it may,  as most treaties state as second  among conditions for centre of vital interests " where person has permanent abode available " , right after where their family lives . "Permanent abode " in this context may mean rental accommodation if place is rented on long time lease.

In cases where establishing residency is   difficult, there's provision in treaties that competent authorities of both countries may decide it  between themselves.

It's not consolation to stressed out expats but Thailand move is in line with what exists in many other countries where residents are taxed on worldwide income and foreign tax credit or income exemption is granted in case income was already taxed. As you said , tax treaties , if any , need to be carefully examined  because they are minefield.

I'm privy to case where I live , where foreign pension received was taxed in source country . Foreign tax was claimed as usually is but it was denied. Why ? Because tax treaty clearly says that  pension received by resident of either contracting country must be taxed only in country of residence so in effect source country was withdrawing tax  in contradiction to treaty provisions.

[bkkmfj2648]

Another update regarding the Thai tax situation as prepared by the famous Youtube star, Chris Parker's channel = Retired Working for You. 

 

[bkkmfj2648]

Ben Hart, from Integrity Legal - just put out this short 4 minute video about a new Immigration Form being requested when renewing your long stay visa (Retirement and/or Marriage) regarding your bank account details.  Ben is worried that this new form is the first step towards eventually wanting to see our Thai tax return and/or tax payment in order for our long term stay visa to be renewed?

One of the Youtube comments is VERY interesting for us retirees living here in Thailand:

• Ben, my question is. I have 800,000. Baht in a Thai Bank account to keep a Retirement Visa. If they decide to Tax it. It now drops below the 800,000. Baht. Do I no longer qualify for the Retirement Visa? Your thoughts please.

I see fun times ahead  :>))

[bkkmfj2648]

partial screenshot of NEW immigration form regarding our bank details:

 

 

[reader]

From Pattaya Mail 

New tax rules for foreign-sourced income

In response to the growing concerns among expatriates, the Thai Revenue Department has issued Orders No. P. 161 and 162/2566, effective from January 2024, to provide clear guidelines on the taxation of foreign-sourced income. Here’s a detailed look at what these new regulations entail and how they impact residents and expatriates in Thailand.

Key Provisions of Order No. P. 161/2566,

1. Foreign Income Reporting Starting January 1, 2024, all residents in Thailand must report income from abroad when it is brought into the country. This includes income from work, investments, and assets located outside Thailand. However, any income earned before this date can be transferred to Thailand tax-free if done by December 31, 2024.
2. Residency Condition Under Section 41, Paragraph 3, anyone staying in Thailand for one or more periods totaling at least 180 days in any tax year is considered a resident and must comply with these tax regulations.
3. Repeal of Conflicting Regulations Any previous regulations that contradict the new order are officially repealed. This move aims to eliminate inconsistencies and ensure a unified approach to foreign income taxation.
4. Exemption for Pre-2024 Income The amendment explicitly states that income earned before January 1, 2024, is exempt from these new provisions if transferred to Thailand by the end of 2024. This provides a grace period for taxpayers to adjust to the new rules.
5. Alignment with Prior Guidelines The new orders align with existing guidelines to ensure a smooth transition for both taxpayers and revenue officers. This helps in maintaining consistency and clarity in the application of tax laws.

6. Impact on Expatriates and Residents
   The new tax rules significantly impact expatriates and long-term residents in Thailand, particularly those with foreign-sourced income. Here’s how,

   – Expatriates with Taxed Income For expatriates receiving income already taxed in another country, such as pensions, these amounts will not be subject to additional Thai taxes. This is particularly relevant for retirees living in Thailand who receive pensions from their home countries.

7. – Income from Foreign Work or AssetsIncome generated from work or assets located abroad must be reported if transferred into Thailand from January 1, 2024, onwards. This includes dividends, interest, rental income, and capital gains from foreign investments.

   – Professional Tax Advice Given the complexity of the new regulations, retirees and those with foreign income are strongly advised to seek professional tax advice to ensure compliance and optimize their tax liabilities.
   

   Action Points for Taxpayers
   To comply with the new regulations, taxpayers should take the following steps:

8. File Form 90 Taxpayers must prepare and file the Income Tax Declaration (Form 90) by March 31, 2025. This form will include all relevant income and deductions for the tax year.
9. Maintain Documentation It is crucial to keep comprehensive records of all income sources, taxes paid abroad, and any transfers into Thailand. Proper documentation will help in accurately reporting income and claiming any applicable deductions or exemptions.

Example: A German Retired Citizen Living in Thailand
Consider a German retiree, Mr. Müller, who has been living in Thailand for several years with a non-immigrant annual visa. He receives a monthly pension from Germany, which is already taxed there. Here’s how the new orders affect him,

1. Pension Income Mr. Müller’s pension, taxed in Germany, will not be subject to additional Thai taxes due to the Double Tax Agreement (DTA) between Thailand and Germany. He should keep records of his pension statements and tax payments in Germany.
2. Other Foreign Income If Mr. Müller has other sources of income from investments or assets abroad, he must report this income if brought into Thailand from January 1, 2024. For instance, if he receives interest from a foreign bank account or rental income from a property in Germany, this must be included in his Thai tax declaration.
3. Pre-2024 Income Any income Mr. Müller earned before January 1, 2024, can be transferred to Thailand without incurring Thai taxes if done by December 31, 2024. He should document these transfers clearly to avoid any future tax issues.
4. Residency Condition Since Mr. Müller stays in Thailand for more than 180 days a year, he is considered a resident and must comply with these tax regulations.
5. Filing Requirements Despite his pension being exempt from additional Thai taxes, Mr. Müller must still file Form 90 by March 31, 2025, to report his income and any applicable deductions. Maintaining detailed records of all income sources and transfers will facilitate this process.

Victor Wong
Financial Analyst and Tax Expert
Tel: 062 879 5414 Email: victorlawpattaya@gmail.com

[bkkmfj2648]

3 hours ago, reader said:

File Form 90 Taxpayers must prepare and file the Income Tax Declaration (Form 90) by March 31, 2025. This form will include all relevant income and deductions for the tax year.

He fails to mention that you first need to request a Thai Tax ID number from the Thai Revenue Department - which must be done in person by going there and requesting one. = Yuck

4 hours ago, reader said:

File Form 90 Taxpayers must prepare and file the Income Tax Declaration (Form 90) by March 31, 2025. This form will include all relevant income and deductions for the tax year.

This is going to really suck - another tax filing and to maintain tax records for both your citizenship country and for your tax residence country.  Also, the Thai tax deadline is prior to the USA one, so I would need to accelerate my tax filing in the USA in order to be able to do the additional Thai tax filing in time - after reviewing for all of the DTA (Double Tax Agreement) line items.

4 hours ago, reader said:

Pre-2024 Income Any income Mr. Müller earned before January 1, 2024, can be transferred to Thailand without incurring Thai taxes if done by December 31, 2024. He should document these transfers clearly to avoid any future tax issues.

Is this suggesting that we front-load (top up) our Thai bank accounts prior to 31 December 2024 to avoid taxes in future tax years, because we would not have any need to top-up and fund our Thai bank accounts in future years - thus avoiding the Remittance Tax regime for each tax year that we would not have any remittances into Thailand?

When all of this started - back in September 2023 - I decided to pre-fund and top up my Thai bank account in year 2023 to avoid that I would have any remittances coming into Thailand in tax year 2024.  So far, so good.  But, with the 800.000 Thai baht minimum balance requirement (to get your yearly retirement visa renewed), I will need to top up my Thai bank account in 2025 - but based on the above clause - it would seem more financially prudent to top up my 2025 requirements before 31 Dec 2024.

I am also seriously thinking of implementing a 4-4-4 tax minimalization plan where I would live in 3 different countries to avoid the 180 day threshold stated above to be considered a tax resident within a year in Thailand.

The idea is to live in 3 different countries in future tax years as follows:

• 4 months in Thailand,
• 4 months in Vietnam,
• 4 months in (to be determined - could be Malaysia or the Philippines).

Is anyone else who is an expat in Thailand taking any pro-active tax planning actions regarding all of this?

any suggestions ?

Within the next 2 weeks I should have a meeting with OffShore in Asia https://offshoreinasia.com/

as he recently posted a tax minimalization strategy video that I really clicked with and is where I got the above mentioned 4-4-4 idea.

 

 

[bkkmfj2648]

Furthermore, when you look at the PIT (Personal Income Tax) rates of Thailand versus your home/citizenship tax country - you will see that you may be quickly pushed into a higher tax bracket in Thailand than in your home/citizenship tax country - consequently, the delta of your home/citizenship PIT rate country versus Thailand's PIT rate would need to be paid to Thailand.

The below PIT rate chart was taken from Price Waterhouse at:  https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income

I superimposed in the color orange the USD equivalents of the different tax brackets displayed in THB - as of today, 05 July 2024.

any thoughts ?

[reader]

From Pattaya Mail

By Barry Kenyon

Countless foreign tax residents of Thailand daily search the internet for answers, but ignorance is not bliss. How does the Department of Thai Revenue (DTR) rule to tax remitted income from overseas from the start of 2024 affect me? Do I need to fill in a Thai tax form in the new year 2025 even if I think I do not have assessable income in 2024? How can I obey the tax laws if I can’t find out what they are? Will I be arrested? Meanwhile, the DTR remains inscrutable as the relentless calendar year passes the half-way mark.

To address the void, various scenarios are springing up on the internet and at webinars or meetings of various kinds. Mike Lister, a widely-respected and “advanced member” of the Asean Now popular forum on the subject, has suggested in a personal capacity that the remitted tax rule will be introduced softly at first. Overstretched DTR officials will concentrate on the big fish with large and untaxed remitted income and will leave largely unscathed the little fish such as run-of-the-mill pensioners (unless they are spotlighted for some reason).

If true, it could take several years of semi-implementation before every foreign tax resident is the glum recipient of a tax identification number and the provider of a multi-page, completed PND 90 tax form. The downside of this view is that typical expats may spend the next few years still muddled and fearful about their personal futures. Incidentally, the PND 90 tax form is available in English contrary to some social media warriors, although reports say it will anyway be altered soon. Another reason for waiting.

Another softish approach to DTR was provided in a recent Pattaya Mail article by financial analyst and tax expert Victor Wong. He gave a lot of common-sense advice, such as keeping all your financial documentation in good order and – very importantly – emphasizing that submitting tax forms does not necessarily mean you have anything extra to pay. He also committed himself to the view that, because of double taxation treaties, elderly foreign residents here would not pay more cash in Thailand on previously taxed pensions.

Hopefully, this broad interpretation of double taxation treaties will stand the test of time. It should, however, be noted that the 61 international agreements with Thailand are far from unanimous in scope. For example, the US one insists that social security payments may only be paid in America, whereas the British equivalent covers only “government” pensions and also excludes the state or old-age pension. Moreover, some analysists maintain that double taxation treaties may only give limited cover because exempt income allowances may be more generous abroad than in The Land of Smiles. Thus the international agreement may only give a tax credit for Thailand rather than total immunity here.

All commentators agree that there are so many unanswered questions. Even an obvious matter such as whether use of a foreign (non-Thai) credit card is remitted income, in whole or in part, is the subject of blistering debate on social media. There is also much nonsense out there such as the claim expats will be taxed by Thai banks a uniform 35 percent on foreign remittances or that annual extensions of stay in some immigration offices already require proof of a Thai tax identification number. Like the tale that Adolf Hitler escaped Berlin and retired to a relaxing hill resort in Paraguay, such tales are best regarded as click bait.

The whole issue of taxing more thoroughly Thai or foreign residents was raised by prime minister Srettha Thavisin in the first two weeks after the Pheu Thai election victory last year: he wants more Treasury cash and quickly. The DTR responded with alacrity and, last month, went so far as even to speculate (that’s what it is) that from 2025 all worldwide income would become taxable whether remitted to Thailand or not. Given the Thai government’s ambitious policy to recruit one million wealthy foreigners to Thailand over five years, a rethink is already overdue. The prime minister started this whole ball game but has been silent publicly ever since. He should “come-out” clearly on the tax issue scope, or exempt certain categories, or even delay any move until proper research has been completed. The current silence is truly deafening.

[bkkmfj2648]

2 hours ago, reader said:

The current silence is truly deafening.

The new Thailand Remittance Tax scheme - already in effect since 01-Jan-2024 and the now proposed World Income Tax scheme proposed for tax year 2025, has made it VERY difficult to implement a strategic tax plan without clarifications that should be forthcoming from the Thai government.

My personal action plan for now (in order to allow myself to find peace and harmony) will be to take advantage of the below cited new exemption that was offered by the Thai Revenue Department (shown above in the Victor Wong article shared with us by @reader) - where I will front-load (pre-anticipate) my 2025 Thai bank account remittance replenishment in December of this year 2024, using pension income earned/accumulated from before January 1, 2024.

1. Exemption for Pre-2024 Income The amendment explicitly states that income earned before January 1, 2024, is exempt from these new provisions if transferred to Thailand by the end of 2024. This provides a grace period for taxpayers to adjust to the new rules.

That will buy me some more time to understand what would be a good tax strategic plan - while the Thai government does what it does best = create chaos - and then bring clarity later on - or in the best case scenario, drop the entire thing.

I will keep my fingers crossed for a good outcome - but I also don't want to be an ostrich with my head in the sand forever....

 

 

[bkkmfj2648]

Some positive news everybody.

Based on the article that @reader shared with us above written by Victor Wong - I wrote to Victor to see if he would agree with my short term tax strategy.  It seems that he does and I am happy to share what he wrote below.  This is truly a breath of fresh air to reduce my anxiety regarding this entire ugly tax topic.

 

== 06-Jul-2024 response from Victor Wong, regarding one way to take advantage of the Thai Revenue Department exemption regarding remittances into Thailand ==

Dear bkkmfj,

Thank you for reaching out and for your kind words about my article in the Pattaya Mail. I’m glad to hear it has been useful to you as you plan your tax strategy here in Thailand.

Regarding your question about advance funding your Thai bank account, based on the exemption you've cited, here is my understanding:

The Thai Revenue Department’s exemption for pre-2024 income does indeed provide a grace period allowing taxpayers to adjust to the new rules by transferring income earned before January 1, 2024, into Thailand by the end of 2024 without it being subject to the new remittance tax rules.

As per the Revenue Department's order P.O. 162/2566, income generated from foreign sources before the year 2567 (2024) is exempt from tax if it is brought into Thailand starting from the year 2567 (2024) onwards, regardless of the year it is brought in. This policy aims to allow income to be realized this year, before January 1, 2567 (2024), ensuring that if you bring this income into Thailand in a different tax year—specifically from 2567 onwards—you will not be subject to personal income tax as per Revenue Department order P.O. 161/2566.

The Revenue Department issued Revenue Department Order No. P. 162/2023 to exempt income generated from overseas sources before 2024. It will be exempt from paying taxes if it is brought back into Thailand from 2024 onwards.

As a result of Order P. 162/2023, investors who have transferred money to invest abroad will not be liable for personal income tax in Thailand if assessable income arising from foreign sources that occurred before 2024 is brought back into the country from 2024 onwards, regardless of the year it was brought in.
This is in order for the said income to be realized this year before January 1, 2024. Therefore, if you bring income from sales into Thailand in different tax years, that is, imported into Thailand from 2024 onwards, you will not have to pay personal income tax according to the Revenue Department's order No. P. 161/2566.

To clarify, the policy outlined in Revenue Department Order No. P.O. 162/2566 indeed specifies that offshore-sourced income received before January 1, 2024, can be brought into Thailand on or after January 1, 2024, without being subject to Thai personal income tax. There is no explicit deadline mentioned for when this remittance must occur, meaning that there is no requirement for the income to be transferred to Thailand before the end of 2024. This allows for more flexibility in managing your financial arrangements without immediate tax implications under Thai law.

Further, as outlined in Revenue Department Order No. P. 162/2023, this exemption applies to any assessable income arising from foreign sources before 2024, which is brought back into Thailand from 2024 onwards, regardless of when it is brought in. The intent is to facilitate the realization of income in a way that complies with Thai tax law while recognizing the timelines that may affect international financial planning.
Given that you are planning to transfer funds in December 2024 for your 2025 expenses, and these funds are from pension income accumulated before 2024, your plan aligns with the conditions of the exemption. You can advance fund your Thai bank account in December 2024 with these pre-2024 earnings, and these funds should not be subject to the new taxation rules regarding foreign-sourced income remitted to Thailand.

However, it’s important to document the source of these funds clearly, showing that they were indeed earned before 2024. This documentation will be crucial in case of any inquiries from the tax authorities. Additionally, while the current exemption allows for such a strategy, I recommend keeping abreast of any further announcements or changes to tax regulations that may occur, as tax laws can be subject to amendments.

If you require further assistance with your tax planning or need help preparing the necessary documentation, please feel free to contact me. Ensuring that you have a clear and compliant tax strategy is essential, and I am here to help you navigate these processes.

Thank you again for reaching out, bkkmfj. I look forward to assisting you further.

Best regards,

Victor

[10tazione]

Lets say I have 10000 $ on my bank account, 5000 from 2023, 5000 from 2024. Now I transfer 3000 $ to Thailand. How can I prove it is from 2023, there is no tag on that money saying "earned in 2023" ?

[bkkmfj2648]

Before I relocated to Thailand for my retirement, I set up a new bank account as my remittance conduit account to fund my new Thai retiree life.

To satisfy this Thai Revenue Department requirement for the exemption on pre-2024 income, I will use the FIFO (First In First Out) methodology.  Therefore, what I sent to Thailand will be the "oldest" of my funds first.  Eventually, this methodology will run out as the FIFO methodology will exhaust those funds that were prior to pre-2024 income.

Hopefully, I can get 1 or 2 more tax years of this useful use of this exemption to avoid the Assessable Income issue that arises from incoming remittances.

However, as Victor mentions above, we need to stay aware of additional changes regarding Thai income tax - especially if the government will officially adopt the World-Wide Income tax regime.

[vinapu]

4 hours ago, bkkmfj2648 said:

 

To satisfy this Thai Revenue Department requirement for the exemption on pre-2024 income, I will use the FIFO (First In First Out) methodology. 

I was about to write the same advice , good that I read your post first.  

[Moses]

On 7/1/2024 at 5:41 AM, bkkmfj2648 said:

Ben, my question is. I have 800,000. Baht in a Thai Bank account to keep a Retirement Visa. If they decide to Tax it. It now drops below the 800,000. Baht. Do I no longer qualify for the Retirement Visa? Your thoughts please.

Looks like nobody listen this guy from legal company (video above): if person had this amount BEFORE Jan 1 2024, then nobody in Tax dep will care about these money.

Also: it totally useless to ask that question without start "I'm citizen of ...." and only then ask question. Because of agreements of double taxations.

 

By the way, for citizens of UK https://assets.publishing.service.gov.uk/media/5a80bddc40f0b623026953eb/uk-thailand-dtc180281_-_in_force.pdf

Pensions should be taxed in the country of residence, if you are living in TH more than 180 days in 2024, then you should be taxed in TH.

[khaolakguy]

In this proposal it is not clear to me how the Thai Revenue Department can/will distinguish between "income" and "assets". Eg if a retired expat resident were to transfer assets to Thailand after January 2025 would the Thai Revenue Department expect to tax any transfers on the basis that all transfers are deemed as overseas "income", which as an example could be taxed income that has been accumulated in the expat's country over his working life.

 

Is the Thai Revenue Department really going to have the resources to check thirty or forty years of overseas tax returns(if they were available) to confirm whether the transfer was of already taxed assets rather than income. 

[Moses]

1 hour ago, khaolakguy said:

how the Thai Revenue Department can/will distinguish between "income" and "assets"

Thailand signed MCAA at the end of 2022 and since 2023 participating in tax data exchange. All incomes from MCAA-countries (more than 150 countries in World), are transparent to Thai tax dep. Records started in 2014 for G-20 + few more countries, Thai govt has access to this data.

https://en.wikipedia.org/wiki/Common_Reporting_Standard

All that they need - to issue to resident expats Thai tax ID. They will do it when you will fill form.