TAX on Income from Abroad

[jackspratt]

Lots to ponder there, Barney - particularly if still working out of country.

I have made the decision not to worry too much until some firm guidance comes out from the Thai Tax Office. Given the number of permutations of different income streams, from different countries, and with different double-tax agreements, it is definitely not a one size fits all situation.

Que sera sera.

[Whistler]

I think the RD has made the regulations clear as mud. Thanks Barney for posting Siam Legal's advice. Lots of things up in the air still.

Pensions a case in point. No tax payable on pensions within some countries with a DT agreement with Thailand. So ponder me this.

If Pension is not taxed in home country, but taxed in Thailand with an offset against tax paid in country of origin, the offset is zero. In that case would a 100% of the pension be taxable in Thailand? As Jack said he will wait for clarification, what happens if the clarification is provided at the end of 2024 claiming the tax on all income is to be levied for that year? That could be a hefty tax debt.

My approach until such time as it is clear, I will transfer nothing to Thailand, simply have everything paid into my Oz bank and take it out using ATM. Yes fees and a poorer exchange rate, but seems a safe option.

[noosard]

Not sure trying to beat a maybe tax by paying high bank fees and poor exchange rate is the way to go

[Whistler]

Nor am I noo, but a safe way until things are clarified. The department responsible have been disgraceful for not making things clear.

[sometimewoodworker]

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.

Just a tad!

I know of no country that considers pensions as a class of income to be tax free today, in the past possibly certain specific pensions possibly but in general? no. Certainly the Thai revenue department regards pensions as taxable income.

From the Tax Code section 40 (1)

(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.

[Whistler]

My take on this is the words 'income derived from emplyment' is definitive. A pension from the government does not meet this test.

[sometimewoodworker]

My take on this is the words 'income derived from emplyment' is definitive. A pension from the government does not meet this test.

You are incorrect, virtually all pensions are derived from employment.

A pension from the government is paid depending on your contributions, the vast majority of them collected during your employment.

To get the full basic state pension you must have 35 years of contributions (work) to get the maximum.

It is possible that some countries give a pension with zero requirement to have worked, Brunei maybe one

[Whistler]

Not in Australia woody, it is based on residency not on contribution nor employment. You can go through life without having worked for a single day, you can go through life without paying one cent in tax, but still be entitled to a full pension based on age and residency.

[Whistler]

Another interesting wrinkle is using Wise.

Wise sends money from source country to Wise bank account on Thailand. The money that hits a farangs account in Thailand does not come from overseas, it comes from Thailand. No swift codes, maybe a bit hard to trace.

I am of the view that this is a rushed policy that has not been thought through very well.

[sometimewoodworker]

Not in Australia woody, it is based on residency not on contribution nor employment. You can go through life without having worked for a single day, you can go through life without paying one cent in tax, but still be entitled to a full pension based on age and residency.

As I said virtually all pensions

As to Wise
If you wish to use the payments for immigration then Wise will provide proof into a few banks that it is an international transfer into your account, usually it’s a domestic transfer but not always if you request it be provably international.

[Whistler]

As I said before Woody, this seems a rushed and deeply flawed policy. Badly publicised and chock full of holes.

Wise Bangkok to Thai account. Messy to trace at best.

Wise to thai partner's bank, pretty hard to track. (No comments please)

ATM withdrawal from foreign bank, almost impossible to track.

Cash withdrawal in country of origin and cash delivered to Thailand by DHL or similar, hard to track.

That is just my thoughts, how about wealthy Chinese who have a PhD in tax avoidance?

[pipoz4444]

As I said before Woody, this seems a rushed and deeply flawed policy. Badly publicised and chock full of holes.

Wise Bangkok to Thai account. Messy to trace at best.

Wise to thai partner's bank, pretty hard to track. (No comments please)

ATM withdrawal from foreign bank, almost impossible to track.

Cash withdrawal in country of origin and cash delivered to Thailand by DHL or similar, hard to track.

That is just my thoughts, how about wealthy Chinese who have a PhD in tax avoidance?

Like Item 4, doing a 90 day short visa run and "walking" back in with ................USD cash even harder to trace.

I have never had my handbag searched

And, I watched "The Wolf of Wall Street"



pipoz4444

[sometimewoodworker]

As I said before Woody, this seems a rushed and deeply flawed policy. Badly publicised and chock full of holes.

I agreed with the appearance. But the appearance may be completely false. As to chock full of holes, quite possibly but only holes large enough for minnows, large transfers are notifiable to authorities in all financial systems

The majority of commenters miss that the people whose money it is targeting are not the small fry foreigners who are being (probably) caught. The targets are the super wealthy Thai and Thai Chinese families who have been avoiding paying millions (possibly billions) in tax by using the loophole of last years income being tax free

As the main targets are those individuals there is not a great motivation to write an English explanation.

Wise Bangkok to Thai account. Messy to trace at best.

That depends on your intended use
If you are talking about avoiding having a transfer that is reportable to the Thai tax authorities quit possibly correct

Wise to thai partner's bank, pretty hard to track. (No comments please)

ATM withdrawal from foreign bank, almost impossible to track.

Cash withdrawal in country of origin and cash delivered to Thailand by DHL or similar, hard to track.

That is likely the most difficult to hide at both ends, if not in transit, if you do it regularly.

If you try personal courier transport the cash dogs in the airports are a risk.

You then need to either use cash or get it back into the banking system, neither a simple task on a regular basis

[glalt]

When I apply for my retirement visa extension, part of the requirements is a copy of every page of my bank book. The Thai government has a record of all my financial records. That makes it difficult to hide very much. I don't use my US bank card to receive money from ATM's because it is simply too expensive. Anyone using their home bank account through ATM machines is just throwing money away. That said, depending on what this tax fiasco ends up like, using your home bank account for ATM transactions may become a way around it. It is indeed a can of worms. At this point in my life it would be nearly impossible to leave Thailand.

[Potamoi]

I don't use my US bank card to receive money from ATM's because it is simply too expensive. Anyone using their home bank account through ATM machines is just throwing money away.

I have a different experience with ATMs.

My US bank (Wells Fargo) reimburses 1 international ATM access fee per day on one of my accounts so when I use it I always get 30,000 to take advantage of this and use Krungsri Bank. Yesterday's transaction fee of 220 THB was reimbursed with $6.24 so I got an extra ~5 THB off the fee. Then starting this year I now see the ATM offering to do the exchange for you for a 5% fee so I decline that.

When comparing my banks forex rate against Google (which seems to split the diff between buying and selling rates) on the day I end up paying 1.02% whis is fair enough so I dont find it that expensive compared to a Wise transfer when using the max ATM withdrawl amount.

Perhaps your Wise or other methods get a better forex rate than I do but rule of thumb is generally 1% each way is it not?

Or am I missing something? I'm asking this genuinely. Am I missing something? Hate to think I have been miscalculating this for a few years.

[Whistler]

Pot, if you compare the currency conversion rate from Wise and very low fees, I suggest you will save a lot.

[sometimewoodworker]

Perhaps your Wise or other methods get a better forex rate than I do but rule of thumb is generally 1% each way is it not?

Or am I missing something? I'm asking this genuinely. Am I missing something? Hate to think I have been miscalculating this for a few years.

The differential is dependent on the currency, amount being transferred and method.

So in short you have to check for the amount you want and the exact amount that any method will give.

If you want an amount you are happy with the fees then great.

But it is unlikely that Wells Fargo will both eat the transaction fee and provide the best exchange rate.
It may do and horses with a single horn may exist, both are equally likely.

[sometimewoodworker]

Pot, if you compare the currency conversion rate from Wise and very low fees, I suggest you will save a lot.

I agree, the time it becomes possible that wise may not be best is when you are talking of amounts in the tens of thousands of dollars

[Whistler]

I put a mate onto wise two years ago. His first transfer was 500,000 baht. Saved nearly 50,000 over using Westpac from Australia. I had heard that before, Wise not good for large amounts, but this dingle transaction made me wonder if this is the case.

[sometimewoodworker]

I put a mate onto wise two years ago. His first transfer was 500,000 baht. Saved nearly 50,000 over using Westpac from Australia. I had heard that before, Wise not good for large amounts, but this dingle transaction made me wonder if this is the case.

Wise is dependent on the origin and destination charges.

So there is on one answer
There are usually several different possible ways to transfer money and several different places where a currency exchange can take place

The general rule is that exchanging a foreign currency in Thailand gets a better exchange rate (Wise is of course an exception)

However U.K. to Thailand a sterling SWIFT transfer of that kind of amount will probably be a couple of thousand cheaper than Wise, but you can’t get an exact quote.