Taxes … more fuel to the fire!!

[Daleinpattaya]

The following article is from the newsletter, ASEAN NOW … it is followed currently by 13 pages of comments … yes, 13!! Nothing really new … and doesn’t answer the gazillion questions we retirees may have. Basically, more fuel to the fire.

https://aseannow.com/topic/1328516-new- ... rk-concern

New Tax Rules for Expats in Thailand Spark Concern

Thailand's recent tax regulation changes have sent ripples through the expat community. By March 2025, foreign retirees and other expats in Thailand will be required to file income tax returns for the 2024 tax year, marking a significant shift in the nation’s approach to taxing foreign residents.
 
Background on the New Tax Rules
 
Announced by Prime Minister Srettha Thavisin in October 2023, the new tax regime aims to widen the tax base to address the fiscal challenges posed by Thailand’s ageing population. The target is to ensure both economic stability and fair distribution of tax burdens. As a result of this new regime, some retirees could see tax bills exceeding 71,000 Thai Baht.
 
Why the Change?
 
Previously, a legal loophole allowed expats to avoid income tax if they declared that their income was not earned in Thailand within the same year. This loophole, established in 1985, was abolished in September 2023, compelling expats to declare all income earned from January 2024 onwards. The move is part of a broader effort to reduce income inequality and strengthen Thailand’s economic resilience for future challenges.

Significant Impact on Expats
 
For many foreign residents, this new requirement will mean navigating unfamiliar tax waters. Tax treaties between Thailand and other countries, including Norway, Sweden, Denmark, and Finland, may offer some relief. However, expats are advised to seek professional financial advice to understand how these treaties may impact their specific circumstances, reported ScandAsia.
 
What to Expect
 
With the first tax returns due at the end of March 2025, expats will need to get acquainted with the new system quickly. This development has spurred considerable concern, particularly among retirees who have enjoyed years of tax-free income.
 
Looking Ahead
 
As the March 2025 deadline approaches, the expat community in Thailand faces significant adjustments. Despite the challenges, proper planning and professional advice will be crucial in navigating this new landscape. The move represents a pivotal shift in Thailand's tax policy, emphasizing fairness and preparation for an ageing population.

[Gaybutton]

My first question would be "Who wrote that article and how does the author suddenly know more about it than anyone else?" The author is not identified and the article contains nothing new in the first place.

In my opinion the article is nonsense and there is no reason for expats living on pensions, especially if they are from tax treaty countries, to think their incomes are going to be taxed in Thailand too.

I'll pay attention when I see information coming from the Thai government, and zero attention to an article written by an anonymous author who, again in my opinion, had nothing better to do than needlessly scaring people again.

[Jun]

Telling people to get acquainted with the new system whilst doing nothing to explain the new system is typical of modern BS journalism.

As for double tax treaties, I think some of the comments on this board show an overoptimistic interpretation of such treaties.
For Example:
1. If your home country taxes at, for example 15% and Thailand were to tax at 30%, typically the treaty just ensures you pay 30% rather than 45%.
2 The treaty might, for example, limit witholding tax to 15% in the country where an investment is held. Nothing stops the bastards there charging 30% and allowing you to reclaim that via some awkward process.

That's from my limited experience of dealing with double taxation.
Anyone interested in learning a little more could Google the treaty for the country pair, download it and read it.
Example: https://www.irs.gov/pub/irs-trty/thailand.pdf

To claim Thailand can't tax you at all on the basis of some treaty you haven't read is way too optimistic.
If that WERE the case, such treaties would fit on one page of paper. There is more to it than that.

[Harald]

Couple of points I learnt during the taxation seminar held in elite visa card headquarters this April.
1. The introduced changers are not retroactive, In other words, anything earned before 2024 outside the country and brought in Thailand is not taxable. There was an official clarification from Thai revenue service.
2. Using foreign credit cards for payments in Thailand is considered to be remittance and hence taxable. But currently Thailand cannot track these payments.

[Gaybutton]

As for double tax treaties, I think some of the comments on this board show an overoptimistic interpretation of such treaties.

You may be absolutely right, but the fact remains that we're hearing from everybody and all the "experts" except the Thai government clarifying any of this or even telling us expats that we're going to be taxed.

My position is "Don't worry until there's something to worry about." So far I see nothing to worry about, but I do see the article needlessly re-starting the brouhaha and panicking people.

[travelerjim1]

This is devastating to expat retiree's...

The Revenue Department is preparing to amend a law to collect taxes from individuals who have income from abroad, even if that income is not brought into the country.

According to Kulaya Tantitemit, director-general of the department, the current tax law calls for individuals who reside in Thailand for more than 180 days per year to pay taxes to Thailand if they have income from abroad. If that income is brought into the country, it is subject to personal income tax payments to the department.

However, she said the Revenue Department is amending the law using the principle of worldwide income, whereby taxation is based on the residency of the individual in that country, regardless of whether the income is from domestic

[Jun]

My position is "Don't worry until there's something to worry about." So far I see nothing to worry about, but I do see the article needlessly re-starting the brouhaha and panicking people.

Worrying is a waste of time.
On the other hand, calculating how much tax would be due if subject to Thai taxes and putting some money aside seems prudent.

It makes moving to Thailand less attractive.

[travelerjim1]

https://thethaiger.com/news/business/th ... remittance

[Gaybutton]

This is devastating to expat retiree's...

No it's not. You're repeating from an article that already has been addressed in the "Poll for Expats" topic and you are also misinterpreting. I'll repeat what I have said already. It has nothing to do with expats whose income is pensions and Social Security, especially expats from countries with tax treaties.

These articles are needlessly scaring people. Looks like they managed to scare you too. Ok, if you or anyone else wants to be frightened, go ahead and be frightened. But until the Thai government clearly states they are going to income tax expats living on pensions and Social Security, and they are going to do so regardless of tax treaties, I'm not worried at all.

[Jun]

I'll repeat what I have said already. It has nothing to do with expats whose income is pensions and Social Security, especially expats from countries with tax treaties.

What's your source for this?
Have you ever read any part of any double tax treaty?