TAX on Income from Abroad

[sometimewoodworker]

It seems that there is considerable confusion regarding several points.

1) there is a grandfather clause.
The effect of this clause is that you can bring money into Thailand after 2024 without being liable for Thai tax as long as it was accrued before Jan 1st 2024

2) dual taxation treaties:
Each one is different so you need to either read your countries treaty extreme carefully (Thai tax officials will not know the details of every one so you must know them to check that you aren’t taxed if the treaty has an exemption)

An example (I haven’t studied the treaty as it doesn’t affect me so I maybe mistaken) USA citizens have some pensions that are exempt from Thai taxation.

dual taxation treaties generally work by your filling in a tax return in your home country, you are charged tax. Subsequently you fill in a Thai tax form. Your tax liability is assessed.
If you have paid more tax (or the same amount) in your home country you have nothing to pay in Thailand
If you have paid less tax in your home country the amount of tax paid is deducted from your Thai tax due and you are required to pay the difference


Just because you have paid tax in your home country DOES NOT exempt you from declaring and paying tax in Thailand


This is a general overview and is based on advice from a major international tax advisor

Advice specific to a U.K. national

• Overseas income in the form of interest, dividend, gains, rent and pensions will be subject to Thailand income tax at your marginal rate of tax IF brought into Thailand

• If the money is kept overseas and spend whenever you are outside of Thailand, you would not need to report this income for Thailand tax purposes

• For the 2024 tax year and each subsequent tax year, you will need to file your Thailand tax returns by March of the following year e.g. for the 2024 tax year, the filing would need to be done by March 2025

• For capital gains, there will be an exemption on part of the capital gain before the rest is subject to UK income tax

• Any assets sold in a tax year, which are at a loss, cannot be used to offset a gain achieved by selling an asset with a gain in that tax year

Based on the above there is no requirement to complete a Thai return in 2024 if you haven’t already been filling them in.

[sometimewoodworker]

For the normal Retired Expat bringing in a modest lifestyle amount into Thailand each month, from
1.That which he has accrued in an off-shore Savings Account over many years (before moving to Thailand) and or
2.Funds derived as a Pension were deposited into his Bank Account back in UK etc and then wired/transferred to him in Thailand.

It will have no financial impact on him.

pipoz4444

A Retired Expat bringing in a modest lifestyle amount into Thailand each month may well be impacted.

The pension is not exempted from taxation, (Possibly it is if you are from the USA) definitely not from the U.K.
The modest amounts brought in to Thailand each month are almost certainly above the tax free allowance of ฿12,500.
(Note you can’t get a retirement extension without being liable for a large percentage of your income being taxable)
The Retired Expat may not have paid enough tax in their home country to balance the amount due in Thailand.

[semperfiguy]

For the normal Retired Expat bringing in a modest lifestyle amount into Thailand each month, from
1.That which he has accrued in an off-shore Savings Account over many years (before moving to Thailand) and or
2.Funds derived as a Pension were deposited into his Bank Account back in UK etc and then wired/transferred to him in Thailand.

It will have no financial impact on him.

pipoz4444

A Retired Expat bringing in a modest lifestyle amount into Thailand each month may well be impacted.



The pension is not exempted from taxation, (Possibly it is if you are from the USA) definitely not from the U.K.
The modest amounts brought in to Thailand each month are almost certainly above the tax free allowance of ฿12,500.
(Note you can’t get a retirement extension without being liable for a large percentage of your income being taxable)
The Retired Expat may not have paid enough tax in their home country to balance the amount due in Thailand.

IMG_7890.jpeg

I seriously can't conceive that Americans will be taxed on their meager amounts of Social Security gross income if that's the only income one has. Plus, we are taxed, or not taxed, on the Adjusted Gross Income after allowing for certain deductions. If worse comes to worse and we are in fact taxed in Thailand, surely the figure they would use to ascertain taxes would be our Adjusted Gross Income in the USA which is generally nil. Comments are encouraged!

[sometimewoodworker]

[googlevideo][/googlevideo]

I seriously can't conceive that Americans will be taxed on their meager amounts of Social Security gross income if that's the only income one has.

Check your dual taxation treaty. I have seen a report that USA citizens have a clause that exempts it

Plus, we are taxed, or not taxed, on the Adjusted Gross Income after allowing for certain deductions.

That is, AFIK, standard in all countries though the term “Adjusted Gross Income” is not usual.

If worse comes to worse and we are in fact taxed in Thailand,

The proposed change is that you will probably be required to complete a tax return, if you are liable to pay tax is a different question. The answer being; Yes. No. Maybe yes. Maybe no.

surely the figure they would use to ascertain taxes would be our Adjusted Gross Income in the USA which is generally nil.

Extraordinary unlikely that that is true (I believe impossible)

Your liability for taxation will be based on a tax return completed in Thailand based on the exemptions allowed in Thailand.

I can guarantee that an assessment in a foreign country will be totally irrelevant to and ignored by a Thai tax officer.

I have completed tax returns in 2 countries for the same tax years the reports were completely independent. The complication comes from the dual taxation treaty.

Comments are encouraged!

That income brought into Thailand will be taxable is known. Totally unknown is the exact ways that the rate will be determined.

It is extremely likely that the tax authorities themselves haven’t crystallised the rules since though the income is taxed from 2024 the payment and return is in 2025. Plenty of time for changes/adjustments.

[sometimewoodworker]

A retirement extension requires that if all your income for the extension is taxable your liability for Thai tax based on you bringing in the minimum your bill is ฿ 48,501.80. That is with nothing but the basic exemptions

A marriage extension, incurs, a liability of ฿ 4,500.60

A ฿ 125,000 income incurs, a liability of ฿ 200,000

These do not have any deductions

[Sport]

Maybe a black market for money exchange on the horizon.

[sometimewoodworker]

I can see that a an advisor like Mazars will save more than their fee in the first tax year alone.

[pipoz4444]

My understanding is those who are required to pay thai INCOME Tax are at risk. UNLESS you have a work permit and pay tax, you do not have a Tax code / number. NOT ON THE RD radar and as previously stated Tax treaties are sacrosanct. HOWEVER I pointed out in a previous post as LONG as you can prove that you paid Tax in your own country , I forsee no problems. HOWEVER THOSE WHO use offshore accounts and other means to avoid payuinbg tax anywhere MAY have a problem`.

For those who haven't moved full time to Thailand Yet:

My reading of Section 41 is that, until you physically move to Thailand prior to deciding to move to Thailand full time and establish your abode and that the prior to living in Thailand for a period that is equal to or exceeds 180 Day period in any one calendar year, you can still freely move as much of your overseas cash assets into Thailand, without being at risk of classified as a "Thai Resident for Tax purpose". Best bet is to find a reliable Thai Bank and dump as much as you can into that Bank in advance of your move.

Also for those contemplating a future move to Thailand, ideally can plan to arrive on 06 July, then you will only spend 179 Days Thailand in that first year, so strictly speaking you should not become a Resident for Tax on income brought in, purpose until the following year.

Extracts:

INTERPRETATION OF SECTION 41 OF THE THAI REVENUE CODE:
An individual, whether Thai or foreigner, who resides in Thailand at one or more times for an aggregate period of 180 days or more in any tax (calendar) year will be deemed as a resident of Thailand for Thai income tax purposes (“Thai Tax Resident”) and thus subject to personal income tax (“PIT”) on income derived from sources outside Thailand. Income from sources outside Thailand includes income from employment, a post or office held outside Thailand, income from a business carried outside Thailand, income from a property situated outside Thailand (“Foreign-Sourced Income”).

pipoz4444

[pipoz4444]

For the normal Retired Expat bringing in a modest lifestyle amount into Thailand each month, from
1.That which he has accrued in an off-shore Savings Account over many years (before moving to Thailand) and or
2.Funds derived as a Pension were deposited into his Bank Account back in UK etc and then wired/transferred to him in Thailand.

It will have no financial impact on him.

pipoz4444

A Retired Expat bringing in a modest lifestyle amount into Thailand each month may well be impacted.

The pension is not exempted from taxation, (Possibly it is if you are from the USA) definitely not from the U.K.
The modest amounts brought in to Thailand each month are almost certainly above the tax free allowance of ฿12,500.
(Note you can’t get a retirement extension without being liable for a large percentage of your income being taxable)
The Retired Expat may not have paid enough tax in their home country to balance the amount due in Thailand.

IMG_7890.jpeg

HI STWWK

Is that to say that all those living on pension income, who arguably regularly transfer on a month to month basis, USD 1,000 - USD 3,000 per into Thailand from their Overseas Account (i.e. presumably where pension monies are initially deposited into in UK, USD or AUS etc.) will soon have to pay 5% Tax on that income/pension stream, for the future privilege of living in Thailand for more than 180 days each calendar year.

pipoz4444

[pipoz4444]

A Retired Expat bringing in a modest lifestyle amount into Thailand each month may well be impacted.

The pension is not exempted from taxation, (Possibly it is if you are from the USA) definitely not from the U.K.
The modest amounts brought in to Thailand each month are almost certainly above the tax free allowance of ฿12,500.
(Note you can’t get a retirement extension without being liable for a large percentage of your income being taxable)
The Retired Expat may not have paid enough tax in their home country to balance the amount due in Thailand.

IMG_7890.jpeg

I presume the Figures in the Table represent Taxable Income per Calendar Year 01 January to 31 December ?

IMG_7890.jpeg (12.59 KiB) Viewed 2823 times

pipoz4444

[sometimewoodworker]

HI STWWK

Is that to say that all those living on pension income, who arguably regularly transfer on a month to month basis, USD 1,000 - USD 3,000 per into Thailand from their Overseas Account (i.e. presumably where pension monies are initially deposited into in UK, USD or AUS etc.) will soon have to pay 5% Tax on that income/pension stream, for the future privilege of living in Thailand for more than 180 days each calendar year.

pipoz4444

Hi Pip

It is rather more complex than a simple number

At the high end you are transferring 1.25 million assuming 12 months $3000
I don’t know the Australian tax regime but if your income is taxed in Australia then the amount of that you pay there is deducted from your Thai tax bill
If you pay no tax on the income in any country with a tax treaty, or just pay no tax on it and you make no deductions
You will have a tax bill of ฿137,000 - 22,000 of the bill is at 25%


At the low end 1 year is ฿420,000 assuming 12 months $1000
You will have a tax bill of ฿5,500 all is at 5%

It is extremely likely that you will have allowances available that will reduce the taxable income.

I presume the Figures in the Table represent Taxable Income per Calendar Year 01 January to 31 December ?

The figures are total income subject to tax yes and it is fiscal 2023, in Thailand fiscal and calendar are the same.

[sometimewoodworker]

There are a significant number of possible plans that will reduce any tax liability.

Some of them may be completely viable others borderline to illegal.

NOTE it is income that is liable for tax.
You really need a tax professional for advice but:
Any savings from any source before 2024 are tax free
Capital released that has no gain should also be tax free
Ensure that all dividends and anything that could be taxed remain outside Thailand, sell stocks and securities at cost so there is no gain = no tax.
Bed and breakfast all investments as close to 1st Jan 2024 BUT NOT after

AND MOST IMPORTANTLY DOCUMENT, DOCUMENT, DOCUMENT so you can prove the statements you make on your Thai tax return.

[pipoz4444]

Hi Pip

It is rather more complex than a simple number

At the high end you are transferring 1.25 million assuming 12 months $3000
I don’t know the Australian tax regime but if your income is taxed in Australia then the amount of that you pay there is deducted from your Thai tax bill

If you pay no tax on the income in any country with a tax treaty, or just pay no tax on it and you make no deductions
You will have a tax bill of ฿137,000 - 22,000 of the bill is at 25%
At the low end 1 year is ฿420,000 assuming 12 months $1000
You will have a tax bill of ฿5,500 all is at 5%

It is extremely likely that you will have allowances available that will reduce the taxable income.

I presume the Figures in the Table represent Taxable Income per Calendar Year 01 January to 31 December ?

The figures are total income subject to tax yes and it is fiscal 2023, in Thailand fiscal and calendar are the same.
[/quote]

Hmmm

I presume you know where I am. I am not planning to take up the 180 days per year Residency thing in Thailand any time soon. I still travel in and out of Thailand on a 30 day Tourist visa and will do so for a while yet.

So ideally I have some time and presume that I can slowly move assets in to Thailand as a "Non Resident for Tax Purpose" during all of next year, before I take that leap of faith into Thailand and before I bridge the 180 days stay period (only to then be reclassified), all without having to pay any Tax on those assets, next year. Is that correct?

My income outside of Thailand is not taxable.

pipoz4444

[FrazeeDK]

Here's the Thai Treasury link with PDF's for ALL Double Taxation treaties by country
https://www.rd.go.th/english/766.html

Here's the applicable extract from the US-Thai Taxation Treaty for us older pensioners. The whole treaty is in the above link and is pretty obtuse in dealing with a number of other income issues.

ARTICLE 20
Pensions and Social Security Payments
1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), 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.

2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar
public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen
of the United States shall be taxable only in the first- mentioned State.

3. Annuities derived and beneficially owned by a resident of a Contracting State shall be
taxable only in that State. The term "annuities" as used in this paragraph means a stated sum paid
periodically at stated times during a specified number of years, under an obligation to make the
payments in return for adequate and full consideration (other than services rendered).

4. Alimony paid to a resident of a Contracting State shall be taxable only in that State. The
term "alimony" as used in this paragraph means periodic payments made pursuant to a written
separation agreement or a decree of divorce, separate maintenance, or compulsory support, which
payments are taxable to the recipient, under the laws of the State of which he is a resident.

5. Periodic payments, not dealt with in paragraph 4, for the support of a child made pursuant
to a written separation agreement or a decree of divorce, separate maintenance, or compulsory
support, paid by a resident of a Contracting State to a resident of the other Contracting State, shall
be taxable only in the first-mentioned State.

[FrazeeDK]

looking through the string and the treaty no real discussion of what documentation might be needed for Immigation if any. In my situation as a US citizen drawing Social Security and a government pension, the treat specifically exempts me from taxation here since I pay it already in the States. So, other than money I transfer in from my pension/SS several times a year, what paperwork might they require to prove what I'm getting?

[jackspratt]

I am happy to wait to see what unfolds next year, both in interpretation and enforcement, because speculation has been rife.

From a quick look at the Oz-Thai Tax Agreement however, I am pretty comfortable that my income into Thailand, which is all based on my tax free superannuation (ie pension) payments in Oz, will not be subject to local tax.

[sometimewoodworker]

Hmmm

I presume you know where I am. I am not planning to take up the 180 days per year Residency thing in Thailand any time soon. I still travel in and out of Thailand on a 30 day Tourist visa and will do so for a while yet.

Yes I know where you are when in Thailand assuming no move

So ideally I have some time and presume that I can slowly move assets in to Thailand as a "Non Resident for Tax Purpose" during all of next year, before I take that leap of faith into Thailand and before I bridge the 180 days stay period (only to then be reclassified), all without having to pay any Tax on those assets, next year. Is that correct?

As far as I know there is no tax payable by non resident visitors.

my remarks were not addressed to you as I have no idea of exactly what you want to be general knowledge, along with the fact that the village grapevine is often not accurate.

Given the information above you are almost certainly able to bring in any amount you decide is sensible without tax implications.

Do note the benefits of arriving so that you will not cross into the 180 days in the year you arrive.

My income outside of Thailand is not taxable.
pipoz4444

To be clear when you are a tax resident all income outside of Thailand IS taxable BUT only if you bring it into Thailand

From personal knowledge I would suggest that you should talk to a specialist Thai tax accountant, likely Mazars are going to be a good contact.
However in your case you are probably looking at a few years before you will plan and since the situation is remarkably fluid now and in 2024 I would not rush to get advice.

[Khun Paul]

Personally and IF ( a big if ) they decide to try to taxme, I will opt for Thai TAXC as it will be cheaper than the tax I CURRENTLY pay in the UK >
That will never happen as my TAX is deducted at source being a Public Pension even my NCOME AX went up when receiving my TAX FREE OLD AGE PENSION .

[sometimewoodworker]

Personally and IF ( a big if ) they decide to try to taxme, I will opt for Thai TAXC as it will be cheaper than the tax I CURRENTLY pay in the UK >
That will never happen as my TAX is deducted at source being a Public Pension even my NCOME AX went up when receiving my TAX FREE OLD AGE PENSION .

Regrettably becoming a Thai taxpayer will not reduce the U.K. tax that you have to pay

[glalt]

I would guess that those of us who are living off pensions will not be bothered. I think they are after money laundering suspects and those companies who are evading their home country taxes.