News Forum - Thailand’s new tax twist: Overseas earners spending 180 days face income tax

[TWS60]

2 hours ago, TSS said:

I don't keep lump sum in a Thai bank- do the monthly 65K thing. Last visa extension here, imm. required separate statements from my private pension and US social security showing  amount i received from each per year. Will those now be taxed here?

Disclaimer: I'm not an expert by any means, these are just my musings.

The Thaiger article is silent on existing dual tax agreements as noted in Guest1's post above.  Far as we know, you're still covered under Art 20 of the US/Thai agreement.  Article 10 pertains to Dividends, review that if you have an investment portfolio producing supplemental passive income. 

https://www.hlbthai.com/double-tax-agreement-between-the-united-states-of-america-and-thailand-including-examples/

My opinion only, this effort is aimed at Thais with the means to have a foreign brokerage account trading in foreign markets in the first place, and moreover, sophisticated enough to know about and exploit the 1-year deferred income clause as a tax shield when bringing those foreign proceeds on shore. 

In other words, "Hi-So" Thais, not Joe Blow farangs pulling living expenses across from a modest state pension (or portfolio income, see Art 10 as noted above).  

Again, my opinion only......  It's not uncommon for newly empowered politicians to get out over their skis with overzealous solutions and initiatives that may be correct, but ignore the realities of how Thailand works.   That said, once the Thai Hi-Sos impacted by this new rule call their mates in high level government positions, we may never hear about this again.   This is Thailand.  Possibly why the lower caste civil servant from the Thai Revenue Dept quoted in the Thaiger article, wanted to remain anonymous.

[Matt123]

A tax on already taxed foreign income transfered into Thailand at a glance seem to breach the existing tax treaties Thailand has in place with a bunch of nations specifically created to help avoid double taxing tax residents with foreigners alike being tax residents.

One curiosity is that since foreigners need to pay a condo purchase with money coming in from overseas (and if money already exists in Thailand it needs to be transfered out of Thailand and then into Thailand again 'earmarked' for condo purchase) there seem to be a risk that transfer is seen as taxable income too if any incoming transactions categorically is taxed.

Disclaimer: I do support the leadership and all policies and this post is for educational purposes only. 

[Matt123]

On 9/20/2023 at 3:24 PM, cowslip said:

Let's face it...if you live in a country you should contribute in the same way as everybody else. I've paid taxes in Thailand for 20 years..... varying amounts and even had rebates. Glad to contribute.

I also feel happy to criticise as well.

I think most people are overreacting as we haven't  yet worked out what we will end up paying

"Everybody else" is contributing by paying income tax once, not twice. Did you genuinly not comprehend the concerns of pensioners' having their already taxed funds transfered here taxed again?

Riddle me this. From what ventures is all this supposively prrviously "untaxed" funds coming from? If you work overseas you're taxed overseas regardless if you're an employee or business owner. If you profit from stock dividends, swing trade, realestate overseas - you're still liable for capital gains tax in that country.  The funds from these avenues will therefore nearly always have already been taxed before transfered to Thailand hence the existing treaty to avoid double taxation which now have left everyone wondering.

 

Edited September 21, 2023 by Matt123

[cowslip]

1 hour ago, Matt123 said:

Everybody else" is contributing by paying income tax once, not twice. Did you genuinly not comprehend the concerns of pensioners' having their already taxed funds transfered here taxed again?

You don't understand that many pensioners don't pay tax and they won't here either

It's just basically a load of fat rednecks who are pathologically opposed to paying they way.

 

If it's so unfair will you go home? If not they have assessed the market just right, haven't they?

[Marc26]

4 hours ago, Matt123 said:

"Everybody else" is contributing by paying income tax once, not twice. Did you genuinly not comprehend the concerns of pensioners' having their already taxed funds transfered here taxed again?

Riddle me this. From what ventures is all this supposively prrviously "untaxed" funds coming from? If you work overseas you're taxed overseas regardless if you're an employee or business owner. If you profit from stock dividends, swing trade, realestate overseas - you're still liable for capital gains tax in that country.  The funds from these avenues will therefore nearly always have already been taxed before transfered to Thailand hence the existing treaty to avoid double taxation which now have left everyone wondering.

Some people work as contractors and if they aren't living in their home country they either don't have to pay tax or get a big tax break

The US, your 1st 120k is tax free if you live outside the US for a certain amount of time (basically not at all)

 

Many oil workers aren't taxed in the countries they work in as well

 

So if you are from the UK, it's tax free and if from US, the 1st 120k is tax free

[Matt123]

9 hours ago, cowslip said:

You don't understand that many pensioners don't pay tax and they won't here either

It's just basically a load of fat rednecks who are pathologically opposed to paying they way.

If it's so unfair will you go home? If not they have assessed the market just right, haven't they?

The money you receive from any income pension is classed as income and most income is taxed and it's only partially tax free, example from the UK
https://www.unbiased.co.uk/discover/pensions-retirement/managing-a-pension/tax-on-pensions

As you know places such as Pattaya where presumably the 'rednecks' you refer to congregate first boomed as an R&R destination for US servicemen during the Vietnam war, so to completely discount the value of someone spending money earned overseas in Thailand to see them as 'freeloaders' is to not recognize how some of these places sprung up to begin with.

The retiree visa wouldn't have been around for so long if it wasn't financially beneficial to Thailand's economy and countries such as the Phillippines wouldn't be launching campaigns to attract foreign retirees if it wasn't seen to benefit their economy.  You write as if the expat retirees can walk into Vipavadee hospital in Bankgok slam down their fist and exclaim "Give me my free medical treatment god d---m it! "

You can see retail investment representatives coming out today to highlight the policy would hurt the economy:
https://thethaiger.com/news/business/proposed-foreign-income-tax-could-harm-small-retail-investors-warns-jitta-ceo

To defend questionable policy making with the old chestnut 'don't like it go home' isn't insightful because nations set up bilateral agreements which is why double taxation treaties were set up in the first place.

 

[Matt123]

6 hours ago, Marc26 said:

Some people work as contractors and if they aren't living in their home country they either don't have to pay tax or get a big tax break

The US, your 1st 120k is tax free if you live outside the US for a certain amount of time (basically not at all)

Many oil workers aren't taxed in the countries they work in as well

So if you are from the UK, it's tax free and if from US, the 1st 120k is tax free

You forgot the crypto traders, people creating their own stable coins, and Hunter Biden. 
 
Many oil rig workers would still have a base in countries like Australia, so you really referring to a section of a section of workers.  I doubt this exception that you found is a point that justifies the creation of a new blanket tax law. Sure, tax free brackets vary, not everyone here is from the US or UK so we don't enjoy that large tax free bracket;  Income from running a business, dividends, real-estate profit, rental income, stock appreciation and liquidation, it's all taxed and or capital gains taxed already in your home country and once its transfered here to Thailand - it will now potentially be taxed again.  

[TWS60]

Googled "Thailand changes tax rules for foreigners".   Picked up off the wires by many sites and outlets, same as Thaiger, but no further details.  One article was cognizant of the fluff this half-baked article is having on social media.

https://www.reuters.com/markets/asia/new-thai-govt-cuts-diesel-taxes-waives-visas-chinese-tourists-spur-economy-2023-09-13/

https://www.reuters.com/world/asia-pacific/thai-pm-unveil-new-policies-match-economic-challenges-2023-09-12/

Although today's offering has some promise.

https://thethaiger.com/news/business/proposed-foreign-income-tax-could-harm-small-retail-investors-warns-jitta-ceo?utm_source=Thaiger+Daily+EN&utm_medium=email&utm_campaign=2023-09-22

Edited September 22, 2023 by TWS60

[Stevejm]

No comment until it’s put into law or officially announced! Unnamed sources? AYFKM? I don’t think this is news it’s just idle gossip until an official announcement is made. Or maybe a chatGPT generated story? I have no idea but at this time I am neither concerned ( for self or others) or interested

[Marc26]

8 hours ago, Matt123 said:

You forgot the crypto traders, people creating their own stable coins, and Hunter Biden. 
 
Many oil rig workers would still have a base in countries like Australia, so you really referring to a section of a section of workers.  I doubt this exception that you found is a point that justifies the creation of a new blanket tax law. Sure, tax free brackets vary, not everyone here is from the US or UK so we don't enjoy that large tax free bracket;  Income from running a business, dividends, real-estate profit, rental income, stock appreciation and liquidation, it's all taxed and or capital gains taxed already in your home country and once its transfered here to Thailand - it will now potentially be taxed again.  

Again it won't be if there is a tax treaty

 

It's that simple

And Thailand has tax treaties with most Western countries that expats come from 

 

 

I wouldn't even worry one bit about the wealth/savings aspect

That will not apply

It will be virtually impossible and cost banks billions of dollars to comply

 

 

[Marc26]

50 minutes ago, Stevejm said:

No comment until it’s put into law or officially announced! Unnamed sources? AYFKM? I don’t think this is news it’s just idle gossip until an official announcement is made. Or maybe a chatGPT generated story? I have no idea but at this time I am neither concerned ( for self or others) or interested

Exactly

 

I actually don't see it happening simply because Thailand allows so many to stay on basically temporary visas

 

So to implement it, would be a logistical nightmare that would cost billions of baht 

[krung]

If you put a sign on a shop 20÷35 % UP on anything you buy. Would you think that anyone will enter your shop? Perhaps the present will leave.

Lets spin that a bit because there are so many implications, if i decide to buy nice 30M property in Bangkok next year sudently this property gets >35 % more expensive. What do think is going to happen in the already overpriced and oversupplied marked like Bangkok?

[Hmmmmm]

Wer in seiner heimat jahrelang gespart hat und heute in thailand lebt.er hat bereits steuern gezahlt und überweist  sein geld nach thailand.  Es ist eine frechheit, wenn thailand dieses geld nochmals besteuern will. Damit lockt thailand garantiert keine investoren ins land.aber wie so oft in thailand. Es werden Gesetze zur Luftqualität in bangkok gemacht. 100km weiter steht ein Polizeiwagen neben einer 30 Jahre alten dreckschleuder und nichts passiert. Die Farmer verbrennen ihre felder weiterhin.  Der müll wird im garten verbrannt.  Das eine ist bangkok und das Andere die Realität. Im Gesetz steht Auch,dass prostitution vetboten ist. Und dennoch schicken sogenannte väter ihre Töchter nach pattaya um geld im bett zu verdienen.  Der neue pickup muss ja abgezahlt werden. 

 

[TheDirtyDurian]

7 hours ago, Hmmmmm said:

Wer in seiner heimat jahrelang gespart hat und heute in thailand lebt.er hat bereits steuern gezahlt und überweist  sein geld nach thailand.  Es ist eine frechheit, wenn thailand dieses geld nochmals besteuern will. Damit lockt thailand garantiert keine investoren ins land.aber wie so oft in thailand. Es werden Gesetze zur Luftqualität in bangkok gemacht. 100km weiter steht ein Polizeiwagen neben einer 30 Jahre alten dreckschleuder und nichts passiert. Die Farmer verbrennen ihre felder weiterhin.  Der müll wird im garten verbrannt.  Das eine ist bangkok und das Andere die Realität. Im Gesetz steht Auch,dass prostitution vetboten ist. Und dennoch schicken sogenannte väter ihre Töchter nach pattaya um geld im bett zu verdienen.  Der neue pickup muss ja abgezahlt werden. 

Exactly what I was going to say. 

[TWS60]

18 hours ago, Hmmmmm said:

Wer in seiner heimat jahrelang gespart hat und heute in thailand lebt.er hat bereits steuern gezahlt und überweist  sein geld nach thailand.  Es ist eine frechheit, wenn thailand dieses geld nochmals besteuern will. Damit lockt thailand garantiert keine investoren ins land.aber wie so oft in thailand. Es werden Gesetze zur Luftqualität in bangkok gemacht. 100km weiter steht ein Polizeiwagen neben einer 30 Jahre alten dreckschleuder und nichts passiert. Die Farmer verbrennen ihre felder weiterhin.  Der müll wird im garten verbrannt.  Das eine ist bangkok und das Andere die Realität. Im Gesetz steht Auch,dass prostitution vetboten ist. Und dennoch schicken sogenannte väter ihre Töchter nach pattaya um geld im bett zu verdienen.  Der neue pickup muss ja abgezahlt werden. 

Google Translate does a reasonable job with German>English. 

"Anyone who has saved for years in their home country and now lives in Thailand has already paid taxes and is transferring their money to Thailand. It is an impudence if Thailand wants to tax this money again. This means that Thailand is definitely not attracting any investors to the country. But as is often the case in Thailand. Laws are being made regarding air quality in Bangkok. 100km away a police car is parked next to a 30-year-old dirt blower and nothing is happening. The farmers continue to burn their fields. The garbage is burned in the garden. One is Bangkok and the other is reality. The law also states that prostitution is prohibited. And yet so-called fathers send their daughters to Pattaya to earn money in bed. The new pickup has to be paid off."

[fanny]

This is illegal in view of the double taxation agreement, a foreigner cannot be taxed twice on his income if he already has it abroad, so I do think that concerning only countries that do not have a double taxation treaty with Thailand

[HolyCowCm]

They basically should not be able to tax anything that has say like in the USA has a Federal and if necessay a State tax form filled out for it or has been covered by one at one time. Bank interest I always put into a Federal form even if it is only $100. You just declare the interest and then not taxed if under. Bank interst is only taxable, so if they try to tax your saving then this is corrupt and illegal.

In the USA if you make under the threshhold you don't pay tax, but these ticks here will probably not take that into concideration. These leeches if go through with it will probably suck anything over 150,000 baht. Think about that. Even if you filed and did not have to pay, the puppeteer will propbably direct his puppet to start the sucking. Now for the USA you also have to pay state taxes unless you live in a tax free state as Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington or Wyoming. I am lucky in this as am regsitered in one of these states only.

 

Tax Year 2022 Filing Thresholds by Filing Status

Filing Status	Taxpayer age at the end of 2022	A taxpayer must file a return if their gross income was at least:
single	under 65	$12,950
single	65 or older	$14,700
head of household	under 65	$19,400
head of household	65 or older	$21,150
married filing jointly	under 65 (both spouses)	$25,900
married filing jointly	65 or older (one spouse)	$27,300
married filing jointly	65 or older (both spouses)	$28,700
married filing separately	any age	$5
qualifying surviving spouse	under 65	$25,900
qualifying surviving spouse	65 or older	$27,300

 

[Stevejm]

It looks like it is going to be official although double taxation agreements are specifically mentioned as being honoured!I wonder where it leaves UK pension recipients who get their pensions paid directly to Thailand and don’t submit a UK tax return?

https://www.bangkokpost.com/business/general/2652846

[HolyCowCm]

1 hour ago, Stevejm said:

It looks like it is going to be official although double taxation agreements are specifically mentioned as being honoured!I wonder where it leaves UK pension recipients who get their pensions paid directly to Thailand and don’t submit a UK tax return?

https://www.bangkokpost.com/business/general/2652846

It still is vague and as written seems to point to they will tax any of your savings from your country you send here. And what is extreme is their tax rate is very high. In say like the USA, tax exempt on anything lower than $12,950 for Federal, and if say someone makes soem money on the outside of an employer, even though exempt then as I see it Social Security and we call it Medicare has to be paid and that total amount is 15%. If you toss Thailand's tax in on it and it now is a lot of money off what ever you made. This these bozos really need to sort this out as taxing any savings of any expat is a big no no, or apply a straight rate Thai tax is a no no too. Their tax rate is way too high for us foreigners.

[TWS60]

Starting to gel a bit more with the Post article above ^. 

As I opined earlier, just my sense this is primarily directed at Thais with enough money and sophistication to have foreign brokerages and investments, dodging income tax when bringing their proceeds into Thailand.   But it also winks at farangs in Thailand with foreign investment portfolios producing passive income ultimately brought into Thailand, so that's a wrinkle to keep an eye on.

Suspect Thai Hi Sos and the Royal Loyal caste with financial interests outside Thailand, are taking a dim view on this energetic initiative in Parliament, so I'll cool my jets until we see how this plays out in reality.  

I remain mostly confident that Yanks (in particular) with plain vanilla pensions like US Military and/or Social Security, will sail through under their double tax treaty. 

[Stevejm]

1 hour ago, TWS60 said:

Starting to gel a bit more with the Post article above ^. 

As I opined earlier, just my sense this is primarily directed at Thais with enough money and sophistication to have foreign brokerages and investments, dodging income tax when bringing their proceeds into Thailand.   But it also winks at farangs in Thailand with foreign investment portfolios producing passive income ultimately brought into Thailand, so that's a wrinkle to keep an eye on.

Suspect Thai Hi Sos and the Royal Loyal caste with financial interests outside Thailand, are taking a dim view on this energetic initiative in Parliament, so I'll cool my jets until we see how this plays out in reality.  

I remain mostly confident that Yanks (in particular) with plain vanilla pensions like US Military and/or Social Security, will sail through under their double tax treaty. 

I think the BP article statement  “Also exempt will be those who have been taxed in a foreign country that has a standing double tax agreement with Thailand” should give comfort to many people. As you implied Thais with overseas investments seem to be the target. Better to wait until it gets implemented before any one gets too excited.

[Marc26]

6 hours ago, HolyCowCm said:

It still is vague and as written seems to point to they will tax any of your savings from your country you send here. And what is extreme is their tax rate is very high. In say like the USA, tax exempt on anything lower than $12,950 for Federal, and if say someone makes soem money on the outside of an employer, even though exempt then as I see it Social Security and we call it Medicare has to be paid and that total amount is 15%. If you toss Thailand's tax in on it and it now is a lot of money off what ever you made. This these bozos really need to sort this out as taxing any savings of any expat is a big no no, or apply a straight rate Thai tax is a no no too. Their tax rate is way too high for us foreigners.

The thing is that you choose to live in a high tax country and you may not want to hear this, but you have gotten away without paying taxes in Thailand that most countries would have made you pay.

 

You are sighting USA tax laws, but if the situation were reversed, the US would absolutely be taxing you up to the tax bracket there if you were living there, deriving income outside the US and not paying up to their tax bracket level.

 

As for taxing you on money brought in, I just don't think that will happen, Possibly may need to report your US accounts not, which is what the US does to their citizens(tax residents) that live overseas now

 

 

 

[Vigo]

The intent of the change in rules is in part to respond to EU and US demands to crack down on tax evasion through selection of lax jurisdictions. Thailand previously did not have the systems, nor agreements in place that would allow it to crack down on freeloaders. They are in place now and people who have  evaded paying tax over the years will have to pay now. Those who have filed tax returns in countries with tax treaties with Thailand will be protected from double taxation on general income. All countries retain the right to levy surcharges/surtaxes on special items. For example, health or pharmacare surcharges.

[Marc26]

12 minutes ago, Vigo said:

The intent of the change in rules is in part to respond to EU and US demands to crack down on tax evasion through selection of lax jurisdictions. Thailand previously did not have the systems, nor agreements in place that would allow it to crack down on freeloaders. They are in place now and people who have  evaded paying tax over the years will have to pay now. Those who have filed tax returns in countries with tax treaties with Thailand will be protected from double taxation on general income. All countries retain the right to levy surcharges/surtaxes on special items. For example, health or pharmacare surcharges.

But a tax treaty doesn't possibly help in the fact Thailand tax brackets are very high as @HolyCowCm has pointed out.

 

So even though you pay taxes in the US on your income, you may owe more taxes to Thailand because their tax brackets are much higher for lower income

 

Plus, there is the issue for US taxpayers of the foreign earned income credit of $120k as well the standard deduction of $12,950 for single filers, $25,900 for joint filers or $19,400 for heads of household

 

Which Thailand taxes a lot higher for those sums above

 

But as you and I have stated, it is common in most countries to tax that income, so people who got off pretty easy in the past may now have to make some tough decisions if this goes through against them.......

 

 

People were very lucky for a long time that Thailand wasn't taxing full time residents, I think it's a bit misplaced to call them "leeches" to now come up to the mostly standard of most countries when it is your home and you live there...............

[Haole.TH]

If this does go through and retirees do start getting taxed, then it seems and easy solution is to get a SingleEntry or MultipleEntry Visa along with your Visa Extension.  Then just leave the country (like a Visa Run) once or twice per year so you are not in the country 180 days continuously.  

Will Elite Visa holders (or do most of them come and go throughout the year already) find this too onerous and stop paying up?

Many issues Thailand hasn't thought through yet and these will come out if it gets implemented.

Maybe Thailand is trying to tax the VLoggers / Software Engineers that were working "remotely" living in Thailand, but most of these types of people are paying taxes in their home country thus will be covered under the dual tax treaty.