TAX on Income from Abroad

[wazza]

For Australians wishing to use the dual taxation agreement, you need to pay the Thai tax and then reclaim it on your Aust Tax return.

I wrote to the Australian Ambassador asking for an update , as this proposed new law affects the dual nationality agreement.

2 months later no reply, Previous Consulate correspondence referred me to Thai accountant ( who has no idea ) and Australian accountant ( who has no idea ) ATO has not published a position statement on this.


An issue that will arise is that Thailand and Australia have different Financial years. So trying to claim Thai tax , will mean 6 month delay 31/12 vs 30/6

[tamada]

Thanks STWW. I'll use her thai ID number.

To answer your other comment we have lived in tax free country in the ME for past 14 years. So she does not pay tax anywhere.

For those of us mere mortals that dwell in the lower social strata, the end of the infinitely tax-free domicile is nigh. The premise of Thailand enacting enforcement of this old tax law is the same as in the US, UK and other countries where, if you are living and breathing anywhere on the planet, you must be paying taxes somewhere on this planet.

Since people can no longer be trusted to be totally honest on where their mattress lies and what is in it and despite living legally in tax-free domiciles for decades, they need to confront this reality. With the world's tax authorities having global banking on their side via their legally mandated Know Your Customer (KYC) rules, it's a slow, unavoidable and inevitable reality.

Small people pay taxes. End of.

[Whistler]

I have a small problem about this

I am to pay taxes in both Australia and Thailand, but no voting rights and zero government services in either country.

Am I missing something here?

[wazza]

I have a small problem about this

I am to pay taxes in both Australia and Thailand, but no voting rights and zero government services in either country.

Am I missing something here?

Im.in your boat I think.

Non Resident for Taxation in Oz. No pension available.

I pay 10 % witholding tax on dividends and interest but no tax return submitted. So I cant claim the Thai tax to be paid as I dont submitt an Oz tax return.

I do pay Thai tax on the interest earned at BKK Bank deposits etc. So double dipped ???

I get a passport which is now 32 pages and not 64 but pay a fortune for it.

[tamada]

I have a small problem about this

I am to pay taxes in both Australia and Thailand, but no voting rights and zero government services in either country.

Am I missing something here?

I lived and worked legally in the US for almost twelve years, paying my taxes, including business and property taxes, and never burdening them with ill health.

No vote, no 'rights' and two years after I left, the IRS served a tax lien on me.

No, honey. You ain't missin' a goldarn thang.

[Whistler]

There are options of course, I plan on taking these.

The farang community is a significant contributor to the Thai economy, billions in foreign revenue that is spent that bolsters consumer spending, 7 percent sales tax, duties etc. An exit of those farangs to countries like Malaysia, Indonesia, Cambodia and Vietnam will hurt the Thai economy.

Meanwhile that same community takes nothing, pay over the top for medical and other two tier payment facilities. Thailand will be a less desirable choice for retires and semi retirees which over the years will bite.

A dumb move from a dumb cohort of politicians and government officials, hard to enforce as plenty of simple loopholes available to blunt its effectiveness from those who seek to avoid the tax impost.

[jackspratt]

Only income earned inside Thailand shall be subjected to tax during retirement. Therefore, you will not be obliged to pay any taxes for any income you have earned from overseas. Also, personal income taxes are not required for retirees in Thailand. Note that you can’t work in Thailand while on a retirement visa.

You would need to apply for a work permit. Once you stopped working you would have to leave Thailand and return with a 90-day OA visa and start the process again of extending the retirement visa for 1 year.

Interesting, Barney.

Can you tell us where this came from?

[sometimewoodworker]

The Thai tax is only on the money earned and bought in the same year. So just transfer after the tax year.

Only income earned inside Thailand shall be subjected to tax during retirement. Therefore, you will not be obliged to pay any taxes for any income you have earned from overseas. Also, personal income taxes are not required for retirees in Thailand. Note that you can’t work in Thailand while on a retirement visa.

You would need to apply for a work permit. Once you stopped working you would have to leave Thailand and return with a 90-day OA visa and start the process again of extending the retirement visa for 1 year.

regrettably your information is incorrect on all 3 counts

1) from tax year 2024 ALL income from 2024 onward brought into Thailand is taxable
2) personal income tax forms are probably required for retirees in Thailand. you may not have a tax bill or you may not.
3) The OA visa is 365 days, but you can probably get an O visa

[Whistler]

I have not heard anything definitive on pensions, is is not earned income, presumably that distinction rules out of being taxable in Thailand

[sometimewoodworker]

I have not heard anything definitive on pensions, is is not earned income, presumably that distinction rules out of being taxable in Thailand

The tax requirement is for income. There is nothing saying it must be earned.
Dividend payments are income and taxable.

It is also a moot point as to if pensions are earned, the majority will say that of course they are, just deferred payment.

Certainly HMRC calls them income.

However there are DTAs with most countries that may avoid payment

[tamada]

There are options of course, I plan on taking these.

The farang community is a significant contributor to the Thai economy, billions in foreign revenue that is spent that bolsters consumer spending, 7 percent sales tax, duties etc. An exit of those farangs to countries like Malaysia, Indonesia, Cambodia and Vietnam will hurt the Thai economy.

Meanwhile that same community takes nothing, pay over the top for medical and other two tier payment facilities. Thailand will be a less desirable choice for retires and semi retirees which over the years will bite.

A dumb move from a dumb cohort of politicians and government officials, hard to enforce as plenty of simple loopholes available to blunt its effectiveness from those who seek to avoid the tax impost.

Malaysia has rejigged their MM2H (Malaysia my second home) foreign retiree fishing plan to make the fiscal requirements bigger and the benefits smaller. They too seem to have an inkling there's a high net worth coffin dodger just waiting to embrace their version of the enchanted orient that includes depositing more in a Malaysian bank than we need to deposit here. My friend and business associate, after over 40 years in Malaysia, married, two condominiums, two kids and three grandkids (and counting) finds that, because he has retired and closed his Malaysian company to comply with the rules about a business that is no longer trading, his long-stay entitlement vanishes before the end of this year.

Vietnam has never had any non-immigrant retiree package plan and their visa and work permit changes are making it more difficult for the average foreign worker to make any long-term stay plans, let alone the retiree. Laos needs US$20k banked locally for a 1-year stop. Cambodia...well, you pays your money and you takes your chances. Yes their ATM's dispense crisp new US dollar bills but since when has that been evidence of a robust economy? Better not get sick and watch out for UXO too. I haven't spent much time looking at Indonesia's offerings, but while I'm here, I'll check. It's their Election Day today so maybe not a great time to ask.

The idea that the shrinking expat community ever was a major contributor to Thailand's GDP is a myth propagated by people who see their twilight/golden year planning increasingly buggered up. I agree that they appear to be squeezing us out, but I totally disagree with any notion that they're cutting off any part of their body to spite another and their regional neighbors will benefit. The ones that have left already were mostly victims of their own lack of planning or due diligence. Nor do I subscribe to the 'they don't like us' mantra of those who have either been screwed here, or are innately xenophobic, or were born a sociopath (or all of the above). FWIW, my plans to quit Isaan and relocate to the UK several tears back was scuppered by Theresa May's Draconian revamp of immigration rules and raising the bar for the indolent foreign-born that I would be importing.

There is a global trend for national immigration policies to leverage the home-grown talent over the immigrant and, unless the immigrants are low-paid manual laborers working farms and fisheries, to make it harder for those who are not contributing anything meaningful to their economy to park their RV (Retirement Vehicle).

If there's a nose to spite the face thing, it's not uniquely Thai and it cannot be fobbed off on a, "dumb move from a dumb cohort of politicians and government officials."

They're ALL at it.

[Whistler]

What is HMRC?

[Whistler]

Tam, the expat European population in 2010 was 210,000, I cannot find more recent figures but reasonable to assume it is now North of 300,000. So hardly a myth. Add to this rich Asians these figures balloon.

Based solely on Europeans, assuming average income at a modest 70,000 bhat a month, that is 252 Billion bhat annually. flowing into Thailand. That is around 1.25 percent of the gdp. These figures are conservative, I suspect it is really closer to 2%. With rich Chinese, who knows?

When you consider the government spends zero bhat on that population, it is quite a significant contributor to Thailand with no financial burdon on the country.

[sometimewoodworker]

What is HMRC?

That’s either a joke, that I don’t understand, you don’t know how a search engine works or the affluence of incohol. And tomorrow will assist.

[Whistler]

55. Maybe just a tad lazy woody.

I don't get a British pension. Whatever the UK regards a pension to be, may not necessarily be the same as the RD.

[Barney]

Only income earned inside Thailand shall be subjected to tax during retirement. Therefore, you will not be obliged to pay any taxes for any income you have earned from overseas. Also, personal income taxes are not required for retirees in Thailand. Note that you can’t work in Thailand while on a retirement visa.

You would need to apply for a work permit. Once you stopped working you would have to leave Thailand and return with a 90-day OA visa and start the process again of extending the retirement visa for 1 year.

Interesting, Barney.

Can you tell us where this came from?

https://www.thaiembassy.com/faq/do-reti ... income-tax

[newtovillagelife]

Only income earned inside Thailand shall be subjected to tax during retirement. Therefore, you will not be obliged to pay any taxes for any income you have earned from overseas. Also, personal income taxes are not required for retirees in Thailand. Note that you can’t work in Thailand while on a retirement visa.

You would need to apply for a work permit. Once you stopped working you would have to leave Thailand and return with a 90-day OA visa and start the process again of extending the retirement visa for 1 year.

Interesting, Barney.

Can you tell us where this came from?

https://www.thaiembassy.com/faq/do-reti ... income-tax

Er....outdated info...for sure.

[jackspratt]

Er....outdated info...for sure.

Add to that - that website has no official status.

[glalt]

There is no where in this developed world that we can live to avoid paying taxes. We pay for highways, schools, hospitals, welfare and sadly for useless career corrupt politicians. The infrastructure in some countries is much better than other countries. We need to stop worrying about this and continue live our lives.

Here in Thailand it is doubtful that the government would jeopardize retired farangs living here by taxing their pensions. Retired farangs pay our share with the VAT that provides the bulk of Thailand's income. That said, you can be sure that scheming politicians will try to squeeze out more income from everyone.

[Barney]

Er....outdated info...for sure.

Add to that - that website has no official status.

Sorry you may be right, it is managed by Siam Legal though.
Individuals tax implications are varied as seen by the myriad of responses on the thread. Everyone residing in Thailand has a different circumstance.
I have the Thai tax ID and my circumstance is managed by Deloitte for Thailand and I have a tax agency in Singapore for aussie tax. Whichever way you view it they are out to get you.

Below is something else from Siam legal to review for legitimacy.

Income from Business Operations
Incomes received from business operations in Thailand or overseas but brought into Thailand are subject to income tax under the new taxation law at rates ranging from 5% to 35%.

On the other hand, if you receive income as a business entity, you will be subject to corporate tax at 20%. As a Small-Medium Enterprise (SME), you will be subject to pay 20% according to the tax bracket.

However, if you receive a loss of revenue from your business venture, you are not subject to pay income tax by submitting a loss report with the Revenue Department for up to 5 years.

Long-Term Residency and the New Tax Law
The new tax law applies to Long-Term-Residency holders who receive income within Thailand or overseas. Nevertheless, there are 4 aspects in this regard:

A highly-skilled professional in a specific industry (science, technology, agriculture, and health and wellness) is not subject to the new tax law. Instead, you are subject to pay tax under the Eastern Economic Corridor Act (EECA) under these conditions:
A foreigner working in the EEC is subject to a 17% tax rate.
A foreigner working as a manager or a CEO in either a head office or an international trade company at the EEC is subject to a 15% tax rate.

A work-from-Thailand professional (digital nomad) residing in Thailand for 180 days or more is subject to pay income tax under the new tax law, regardless if the sources of income are within Thailand or from overseas.
A wealthy global citizen with investments in Thailand up to 500,000 USD or higher and residing at least 180 days is subject to income tax under the new tax law. However, such an individual may receive a reduced tax rate if the investments contribute to the country or public interests such as government bonds, real estate or land, and Foreign Direct Investment (FDI).

A wealthy pensioner residing in Thailand for at least 180 days is subject to a tax rate under the new tax law. Pensions brought from their country of origin may not be subject to the law if the person can prove that they have been taxed prior to being transferred to Thailand.
Double Tax Agreement Between Thailand and Australia
A Double Tax Agreement between Thailand and Australia classifies pensions as taxable only in 1 country, as defined in Article 18 of this DTA. If an Australian retiree moves into Thailand with pensions brought, the retiree can use it as tax credit against Thailand in paying a reduced tax rate during the Thailand residency.

Tax Evasion and Fraud
Intentions of this new tax law include to exchange information with the contractual parties to the DTA for investigating an unusual financial activity subjected to tax evasion and fraud and to spread awareness with tax players in order to increase tax revenue and fairness in taxation. Hence, the new law intends to enhance tax transparency with the contractual parties.

Encouragement or Discouragement of Residing in Thailand
This new tax law is intended to stimulate Thailand’s economy by bringing investors to invest in this country. In returning a favor for the Thai government, investors are privileged to pay less taxes as a gesture of goodwill by the Thai government in helping the prosperity of Thailand.

Simultaneously, the new law discourages foreigners from staying in Thailand for lesser financial burdens since the income tax rate ranges from 5% to 35%, which are higher than Hong Kong, Malaysia, and Singapore.

Furthermore, the new tax law does not apply to Long Term Residency holders, as their foreign-source incomes are exempt from being subject to income tax. Thus, foreigners may consider tax shopping to reduce their financial burden as much as possible.

Tax Shopping
There are several options to a friendlier tax law other than Thailand: Hong Kong and Singapore.

With such fierce competition, Thailand may need to consider reducing its tax rate in bringing foreigners into the country, should they persist in imposing their new tax law.

Hong Kong has imposed a personal income tax into 3 categories:

Employed workers with salaries are subjected to a tax rate from 2% to 17%, or 15% on personal assessable income for lowering tax liability.
Businesses impose a tax rate at 15% on businesses, or 7.5% for unincorporated businesses with the first profit of 2 million HKD.
Property tax levies at 15% flat on rental income, after a standard deduction of 20%.
Singapore has imposed a personal income tax rate from 0% to 22% for residents. Non-residents, on the contrary, are subject to a tax rate from 15% to 22%.

Prescription: Tax Return Filings
For those who have filed a tax return with the Revenue Department, the Department can inspect your record in the previous 5 years to investigate possible tax evasion or fraud.

Alternatively, the Department can inspect your financial activity in the previous 10 years should you have not filed a tax return with the Revenue Department.

Tax Law in Thailand can be complicated and may change often. It’s really important to keep up with these changes because they can greatly affect how you manage your money and what you owe in taxes. It’s a good idea to talk to a tax expert in Thailand who can give you advice that fits your situation and help you follow the most recent rules. Staying updated and getting advice from professionals are important for handling your money matters well, both in your country and in other countries.