TAX on Income from Abroad

[tamada]

I expect to pay little if any tax in Thailand, as i qualify for about 300,000 baht of Thai tax allowances, apart from anything due under double taxation agreements . However, my current remittance stream is the last step in a series of account transfers in the UK, and it may be hard to provide reasonable proof that the income is not taxable. Yes awaiting advice from Thai RD later this year, but without knowing what is required for the 2024 year, hard to make changes (some of which I might have to do in the UK, rather than electronically).

Indeed, the RD's tax allowances are generous and if one needs an extra cushion, one can always move Yai back into the household. She doesn't eat all that much anyway.

[Khun Paul]

I think despite all the hyperbole. the simple fact is that until the ink is dry on paper nad listed in the Royal Gazette as to actual law, the amounts they wish to claim from Foreign expats will not be known. A question I posed to my accountant , who by the way is finding it difficult to gt any sensible answer, was that IF I am a resident from TAX purposes what other advantages will that give me. No more dfual pricing perhaps. Allowed top get everything at Thai Resident prices. Ease of documentation. I mean if we are paying into the general Tax Pot, like every Thai who gets a lot free, so to should all tax paying expats.

[newtovillagelife]

I expect to pay little if any tax in Thailand, as i qualify for about 300,000 baht of Thai tax allowances, apart from anything due under double taxation agreements . However, my current remittance stream is the last step in a series of account transfers in the UK, and it may be hard to provide reasonable proof that the income is not taxable. Yes awaiting advice from Thai RD later this year, but without knowing what is required for the 2024 year, hard to make changes (some of which I might have to do in the UK, rather than electronically).

Indeed, the RD's tax allowances are generous and if one needs an extra cushion, one can always move Yai back into the household. She doesn't eat all that much anyway.

I am assuming that the allowance is 300,000 baht because you are married. If you can live on close to that, then you are ok.

[tamada]

I expect to pay little if any tax in Thailand, as i qualify for about 300,000 baht of Thai tax allowances, apart from anything due under double taxation agreements . However, my current remittance stream is the last step in a series of account transfers in the UK, and it may be hard to provide reasonable proof that the income is not taxable. Yes awaiting advice from Thai RD later this year, but without knowing what is required for the 2024 year, hard to make changes (some of which I might have to do in the UK, rather than electronically).

Indeed, the RD's tax allowances are generous and if one needs an extra cushion, one can always move Yai back into the household. She doesn't eat all that much anyway.

I am assuming that the allowance is 300,000 baht because you are married. If you can live on close to that, then you are ok.

Allowances in this context are tax deductions, it not like the UK's 'family allowance' of yore where the government pays you money.

Say you bring into Thailand 1 million baht a year, all that that may be considered as taxable at the 20% rate or 200,000 baht. However, there are several personal allowance/deduction that one may qualify for.

"There is a personal allowance of THB 60,000 each for the taxpayer and the taxpayer’s spouse (provided that the taxpayer's spouse does not file one's own return). There is also an allowance of THB 30,000 for each child and an additional THB 30,000 for the second child onwards born in or after 2018. Moreover, an allowance for parental care of THB 30,000 per parent is deductible. A non-resident is allowed deductions for spouse, children, and parent only if they are resident in Thailand."

So, with a non-filing spouse, that's a 120,000 baht deductible, i.e. deduct from the 1 million = 880,000 baht. That attracts the lower tax rate of 20% or 176,000 baht.

Then, if you have (say 2) kids still at school. That attracts 30,000 baht deduction EACH so take that off the 880,000 baht and leaves 820,000 baht. That stays in the same 20% tax band for 164,000 baht tax.

If Yai still lives with you, that's another 30,000 baht deductible or, if she's disabled, that's 60,000 baht deductible. So either 790,000 baht (20% tax rate) or 158,000 baht tax, or 760,000 baht (15% tax rate) or 114,000 baht tax.

So my theoretical 200,000 baht tax bill drops to 114,000 a 43% tax saving if I break Yai's leg (again).

Note that you can also claim a 60,000 baht deduction if you are caring for a disabled or an incapacitated person other than a family member. So sick 'Loong Archa' over in Nongbua Lamphu will get you an even better tax break.

There's also deductions for life and health insurance, capped but still claimable. Got a mortgage? There's tax relief for that too.

https://taxsummaries.pwc.com/thailand/i ... nal-income

[glalt]

I just read an interview from a blogger interviewing a Thai lawyer. The lawyer plainly stated the US Social Security and pensions would NOT be taxed. I doubted that the Thai government would shoot themselves in the foot by discouraging future retirees from retiring here in Thailand. We already pay our share of taxes from VAT and that would be lost.

[sometimewoodworker]

NB the information under is strictly for U.K. taxpayers
If you pay taxes in any other jurisdiction specially the US different rules probably apply to you, if you are not a British national different rules apply

I expect to pay little if any tax in Thailand, as i qualify for about 300,000 baht of Thai tax allowances, apart from anything due under double taxation agreements . However, my current remittance stream is the last step in a series of account transfers in the UK, and it may be hard to provide reasonable proof that the income is not taxable. Yes awaiting advice from Thai RD later this year, but without knowing what is required for the 2024 year, hard to make changes (some of which I might have to do in the UK, rather than electronically).

It is extremely likely that you will have to prove that any money transferred into Thailand is not income and that unless proved it will all be assumed to be income.

It is extremely unlikely that the taxation department will have to prove that money transferred is income.

I haven’t got direct taxation advice on my situation yet but as from this year the majority (if not all) of the money transferred into Thailand for us is a gift from a relative and there is a direct trail, I think that I am unlikely to have a tax liability.

There are 60 double tax treaties each one is different

The U.K. setup is that your income is taxed after the £12,570 personal allowance has been exceeded

The Thai setup is likely (there is not enough information to be sure but talking a worst case scenario) to be that your Thai tax liability will be assessed to be that any funds transferred into Thailand that have been gained after January 1 2024 and that are income (this includes rents, capital gains, dividends, pensions etc) will be taxable.

Deductions from the total assed will be personal allowances (the 300,000 seems rather higher than is likely) and

It is probable that the total U.K. tax paid will be deducted from the total Thai tax owed

Thai tax rates are

From PricewaterhouseCoopers

Personal allowances
There is a personal allowance of THB 60,000 each for the taxpayer and the taxpayer’s spouse (provided that the taxpayer's spouse does not file one's own return). There is also an allowance of THB 30,000 for each child and an additional THB 30,000 for the second child onwards born in or after 2018. Moreover, an allowance for parental care of THB 30,000 per parent is deductible. A non-resident is allowed deductions for spouse, children, and parent only if they are resident in Thailand.

In addition, a deduction is allowed for the care of disabled or incapacitated family members of THB 60,000 per person and for the care of a disabled or an incapacitated person other than a family member of THB 60,000 in total.

NB the PWC website has not been updated to address the 2024 change in when incoming is taxable.

[Udon Map]

No more dfual pricing perhaps. Allowed top get everything at Thai Resident prices.

You would have to end up with some type of Thai ID card, otherwise the ticket sellers at the national parks, for example, would have no way of knowing. FWIW, my Thai driver's license gets me the Thai Resident prices about half the time.

[pipoz4444]

My only question about all of this today is, if you are not yet a Tax Resident as defined by the Thai Tax Office (i.e. someone who doesn't stay in Thailand for more than 180 Days per Year),

Q1. Can you still continue to transfer in as much as you like into Thailand (through a O/S Bank to Thai Bank system - electronically), without any of that transfer amount being subject to any Thai Tax, until after the date that you officially reside in Thailand for more than the 180 Days per year and so become that Thai Tax Resident.

In other words move it all into Thailand before you take up semi permanent residence for more than 180 day per Year.

pipoz4444

[sometimewoodworker]

My only question about all of this today is, if you are not yet a Tax Resident as defined by the Thai Tax Office (i.e. someone who doesn't stay in Thailand for more than 180 Days per Year),

Q1. Can you still continue to transfer in as much as you like into Thailand (through a O/S Bank to Thai Bank system - electronically), without any of that transfer amount being subject to any Thai Tax, until after the date that you officially reside in Thailand for more than the 180 Days per year and so become that Thai Tax Resident.

In other words move it all into Thailand before you take up semi permanent residence for more than 180 day per Year.

pipoz4444

My reading is that if in any tax year you become tax resident by being in Thailand for 180 days all income in that tax year will be taxed.

However income is taxed, or not taxed, on an annual basis, so if you are not tax resident in 2024 and you bring in $2 million you pay no tax, you can then be tax resident in the next 10 tax years and as long as you are spending the $2 million again you pay no tax.

Tax becomes due if you are tax resident and you bring in any money that was earned or generated in or after 2024

If you become tax resident in 2024 and you have savings that are provably accrued before 2024 you are not liable for tax on the money transferred.
However unless you bed and breakfasted in 2023 you are going to have a difficult time proving to the Thai tax authorities that the profits are not taxable. It is you that must prove that money is not taxable it is not the tax authorities job to prove that it is taxable

For all those who are stashing their money overseas because of the higher interest and easier trading, you are going to get caught by the law change unless you are bringing in so little money you are under the tax free allowance.

[jackspratt]

For all those who are stashing their money overseas because of the higher interest and easier trading, you are going to get caught by the law change unless you are bringing in so little money you are under the tax free allowance.

If you are keeping your money in an overseas bank, and you can get a credit or debit card from that bank, use that for major purchases and shopping at Big C.

Even better, open a Wise account, get a Wise debit card, open a Thai Baht wallet within that account, transfer money from your main bank account into the Wise Baht wallet, and use that wherever possible.

Thereby minimising the amount of cash you need to transfer to Thailand each month.

[David Chop]

I just got done talking to my accountant/tax guy (it's that time of year in the US) and I asked him about this. A couple disclaimers: 1) He's not an expert on foreign taxes in general or Thailand in particular and 2) I'm a bit green on this as I've only been retired/living overseas for three years.

That said, I'm living off investments (too young for social security as yet) so I guess this is "income," though that's highly debatable according to Tax Guy. Some of my investments are in foreign/'non-US funds that are taxed in their overseas jurisdictions. My tax guy *is* familiar with how this works from a US perspective and I get credit for foreign taxes paid against what I owe in the US. (I hope that makes sense. If it doesn't, well, that's why I pay someone else to do my taxes for me. )

Anyway, here's how the relevant part of the conversation went:

Me: What do we need to do about this new Thailand tax situation?
Tax Guy: Have you been filing taxes in Thailand?
Me: No.
Tax Guy: Why would you start now?
Me: ...

Kind of joking but that did happen. The real bottom line was (Tax Guy:) If the government sends you a document of some sort or your bank withholds some substantial amount, call me; otherwise do nothing.

[joepai]

Even better, open a Wise account, get a Wise debit card, open a Thai Baht wallet within that account, transfer money from your main bank account into the Wise Baht wallet, and use that wherever possible.

Thereby minimising the amount of cash you need to transfer to Thailand each month.
[/quote]
But there's not a Wise debit card for Thailand

[jackspratt]

But there's not a Wise debit card for Thailand

That's correct, joe.

The Wise account would be opened (subject to their normal conditions) in your "home" country, which is also where you would be banking most of your money.

Once issued, the Wise card - which is linked to Visa - should work OK in Thailand. I haven't had any problem using mine, both online, and physically, eg tapping.

[pipoz4444]

My only question about all of this today is, if you are not yet a Tax Resident as defined by the Thai Tax Office (i.e. someone who doesn't stay in Thailand for more than 180 Days per Year),

Q1. Can you still continue to transfer in as much as you like into Thailand (through a O/S Bank to Thai Bank system - electronically), without any of that transfer amount being subject to any Thai Tax, until after the date that you officially reside in Thailand for more than the 180 Days per year and so become that Thai Tax Resident.

In other words move it all into Thailand before you take up semi permanent residence for more than 180 day per Year.

pipoz4444

My reading is that if in any tax year you become tax resident by being in Thailand for 180 days all income in that tax year will be taxed.

However income is taxed, or not taxed, on an annual basis, so if you are not tax resident in 2024 and you bring in $2 million you pay no tax, you can then be tax resident in the next 10 tax years and as long as you are spending the $2 million again you pay no tax.

Tax becomes due if you are tax resident and you bring in any money that was earned or generated in or after 2024

If you become tax resident in 2024 and you have savings that are provably accrued before 2024 you are not liable for tax on the money transferred.
However unless you bed and breakfasted in 2023 you are going to have a difficult time proving to the Thai tax authorities that the profits are not taxable. It is you that must prove that money is not taxable it is not the tax authorities job to prove that it is taxable

For all those who are stashing their money overseas because of the higher interest and easier trading, you are going to get caught by the law change unless you are bringing in so little money you are under the tax free allowance.

Thanks STWW, so better to play it safe finish work on 02 January 2025 or 02 July 2025. Does the Thai Tax for Tax Assessment Year run from 01 July to 30 June or from 01 Jan to 31 Dec

pipoz4444

[sometimewoodworker]

Thanks STWW, so better to play it safe finish work on 02 January 2025 or 02 July 2025. Does the Thai Tax for Tax Assessment Year run from 01 July to 30 June or from 01 Jan to 31 Dec

pipoz4444

when you finish work has little to no effect after 1 January 2024, from this year it is when the income is brought in not when it was earned.

The Thai tax year is the calendar year

The big difference is in which year you decide to become tax resident

All income/money you bring in to Thailand in non tax resident years are not taxable

If you can delay becoming tax resident until 2026 you can bring in as much as you like this year and next year.

To be safe do not move to Thailand until August of any year because you will not breach the 180 days in that year

[pipoz4444]

STWW

Just a thought

Lets say one moves / transfers in enough money in this year 2024, for ones living for next five years and then retires to Thailand on 02 Jan 2025, living comfortably in 2025, 2026, 2027, 2038 and 2029, without having to pay Tax on what he moved into Thailand in 2024.

Then when the pot is getting a bit low in late 2029, he moves to a neighboring country and lives in that neighboring country from 01 Jan to 31 July 2030. Therefore he no longer resides in Thailand for 180 Days during the Year 2030, so he is no longer a Thai Tax Resident as he only ends up staying in Thailand in 2030 for 152 Days. Can he then drag in another 5 years worth of income from outside of Thailand in say September 2030 without being subject to Tax on the second 5 years bundle.

He simply breaks the cycle every 5 years and has a longer external holiday outside of Thailand

pipoz4444

[sometimewoodworker]

I just got done talking to my accountant/tax guy (it's that time of year in the US) and I asked him about this. A couple disclaimers: 1) He's not an expert on foreign taxes in general or Thailand in particular and 2) I'm a bit green on this as I've only been retired/living overseas for three years.

That said, I'm living off investments (too young for social security as yet) so I guess this is "income," though that's highly debatable according to Tax Guy. Some of my investments are in foreign/'non-US funds that are taxed in their overseas jurisdictions. My tax guy *is* familiar with how this works from a US perspective and I get credit for foreign taxes paid against what I owe in the US. (I hope that makes sense. If it doesn't, well, that's why I pay someone else to do my taxes for me. )

Anyway, here's how the relevant part of the conversation went:

Me: What do we need to do about this new Thailand tax situation?
Tax Guy: Have you been filing taxes in Thailand?
Me: No.
Tax Guy: Why would you start now?
Me: ...

Kind of joking but that did happen. The real bottom line was (Tax Guy:) If the government sends you a document of some sort or your bank withholds some substantial amount, call me; otherwise do nothing.

The unknown is what will happen if you do nothing. It is equally unknown what approach the tax department is going to take.

Your tax guy understands the way the US operates. His is the best advice for the US, it could be totally wrong for Thailand

[sometimewoodworker]

STWW

Just a thought

Lets say one moves / transfers in enough money in this year 2024, for ones living for next five years and then retires to Thailand on 02 Jan 2025, living comfortably in 2025, 2026, 2027, 2038 and 2029, without having to pay Tax on what he moved into Thailand in 2024.

Then when the pot is getting a bit low in late 2029, he moves to a neighboring country and lives in that neighboring country from 01 Jan to 31 July 2030. Therefore he no longer resides in Thailand for 180 Days during the Year 2030, so he is no longer a Thai Tax Resident as he only ends up staying in Thailand in 2030 for 152 Days. Can he then drag in another 5 years worth of income from outside of Thailand in say September 2030 without being subject to Tax on the second 5 years bundle.

He simply breaks the cycle every 5 years and has a longer external holiday outside of Thailand

pipoz4444

That is a rather interesting idea.

It could be that it will work.


It could be that the Thai taxation department makes becoming non tax resident a much longer process.
This will be a question for a Thai taxation expert in a couple of years time.

Becoming non tax resident in the U.K. is not a simple process.

[David Chop]

The unknown is what will happen if you do nothing. It is equally unknown what approach the tax department is going to take.

Your tax guy understands the way the US operates. His is the best advice for the US, it could be totally wrong for Thailand

Yep, making decisions in the face of unknowns. I understand that; I'm comfortable with that.

It's not perfect advice, but it's the best I've got. Which is to say, in case I'm being to subtle, I take it as better advice (for now) than the hair on fire speculation and general barstool bulls**t that's been going around in expat circles. A local (Thai) CPA would certainly be more knowledgeable, but I suspect asking would be like asking the barber if I need a haircut. If I do at some point get an official government memo or bank action I'll re-think my strategy but for now I'm sticking with the "continue doing as you've been doing" plan, as advised by my (admittedly imperfect) tax guy.

[jackspratt]

That is a rather interesting idea.

What is interesting to me would be - what is your money doing while it is sitting idle in a Thailand bank for that 5 year period?

If it is earning interest, and as it is obviously a big lump, it is taxable.

And what rate of interest is it earning - could it be earning far more offshore?

Rinse and repeat.

An awful lot of speculation, perhaps futile planning, and twisted knickers in the meantime.

As much as I respect your attention to detail on immigration, the last person I would be going to for tax advice is a random guy on the internet.