Taxes … more fuel to the fire!!

[Gaybutton]

Assuming working 5 days per week, that's just under 600 baht a day.

That, however, doesn't happen for all that many. The average salaried Thai, having nothing to do with the bars, is paid between 10,000 - 15,000 per month - and for most that's working 6 days per week, 9 to 10 hours per day, paid once a month.

And when you see working Thais in some sort of uniform, most of the time they have to pay for those themselves. The employer usually doesn't pay for those things.

That is why so many of them pay no income tax at all - because their annual income is less than the base for paying the tax.

On the other hand, if Thailand is so hungry for farang expat money, but can't tax us due to the international agreements, they could easily get around much of that simply by raising the price of retirement visas. Fortunately, that idea doesn't appear to be on the table.

[Jun]

That, however, doesn't happen for all that many. The average salaried Thai, having nothing to do with the bars, is paid between 10,000 - 15,000 per month - and for most that's working 6 days per week, 9 to 10 hours per day, paid once a month.

I'm sure it's tough.
We have been lucky to have been born in countries with more opportunity (so far).
The Thais have been lucky to be born in Thailand, rather than perhaps Myanmar or Laos.

Fixing the Thai economy up might start with eliminating corruption and improving education.
However, it's not our job to interfere in domestic Thai politics. If I were dumb enough to interfere where I think it's needed, I'd achieve nothing and get jailed.
So I'll just try to make the most of what Thailand offers. Including the opportunity to meet some charming Lao & Cambodian lads.

[Gaybutton]

Fixing the Thai economy up might start with eliminating corruption

Good luck with that one.

[Gaybutton]

The part of the article I boldfaced should hopefully make it perfectly clear that expats are NOT, repeat NOT, going to be income taxed for their pensions and Social Security.

However, according to the article you may have to do some paperwork - filling out and filing a tax form. That part of the article, the last part, is also boldfaced. Personally, I will want more verification of that requirement before bothering to do that.
____________________________________

New tax rules for foreign-sourced income

By Victor Wong - Financial Analyst and Tax Expert

July 4, 2024

In response to the growing concerns among expatriates, the Thai Revenue Department has issued Orders No. P. 161 and 162/2566, effective from January 2024, to provide clear guidelines on the taxation of foreign-sourced income. Here’s a detailed look at what these new regulations entail and how they impact residents and expatriates in Thailand.

Key Provisions of Order No. P. 161/2566,

* Foreign Income Reporting Starting January 1, 2024, all residents in Thailand must report income from abroad when it is brought into the country. This includes income from work, investments, and assets located outside Thailand. However, any income earned before this date can be transferred to Thailand tax-free if done by December 31, 2024.

* Residency Condition Under Section 41, Paragraph 3, anyone staying in Thailand for one or more periods totaling at least 180 days in any tax year is considered a resident and must comply with these tax regulations.

* Repeal of Conflicting Regulations Any previous regulations that contradict the new order are officially repealed. This move aims to eliminate inconsistencies and ensure a unified approach to foreign income taxation.

* Exemption for Pre-2024 Income The amendment explicitly states that income earned before January 1, 2024, is exempt from these new provisions if transferred to Thailand by the end of 2024. This provides a grace period for taxpayers to adjust to the new rules.

* Alignment with Prior Guidelines The new orders align with existing guidelines to ensure a smooth transition for both taxpayers and revenue officers. This helps in maintaining consistency and clarity in the application of tax laws.

Impact on Expatriates and Residents

The new tax rules significantly impact expatriates and long-term residents in Thailand, particularly those with foreign-sourced income. Here’s how,

– Expatriates with Taxed Income For expatriates receiving income already taxed in another country, such as pensions, these amounts will not be subject to additional Thai taxes. This is particularly relevant for retirees living in Thailand who receive pensions from their home countries.

– Income from Foreign Work or Assets Income generated from work or assets located abroad must be reported if transferred into Thailand from January 1, 2024, onwards. This includes dividends, interest, rental income, and capital gains from foreign investments.

– Professional Tax Advice Given the complexity of the new regulations, retirees and those with foreign income are strongly advised to seek professional tax advice to ensure compliance and optimize their tax liabilities.

Action Points for Taxpayers

To comply with the new regulations, taxpayers should take the following steps:

* File Form 90 Taxpayers must prepare and file the Income Tax Declaration (Form 90) by March 31, 2025. This form will include all relevant income and deductions for the tax year.

* Maintain Documentation It is crucial to keep comprehensive records of all income sources, taxes paid abroad, and any transfers into Thailand. Proper documentation will help in accurately reporting income and claiming any applicable deductions or exemptions.

Example: A German Retired Citizen Living in Thailand

Consider a German retiree, Mr. Müller, who has been living in Thailand for several years with a non-immigrant annual visa. He receives a monthly pension from Germany, which is already taxed there. Here’s how the new orders affect him,

* Pension Income Mr. Müller’s pension, taxed in Germany, will not be subject to additional Thai taxes due to the Double Tax Agreement (DTA) between Thailand and Germany. He should keep records of his pension statements and tax payments in Germany.

* Other Foreign Income If Mr. Müller has other sources of income from investments or assets abroad, he must report this income if brought into Thailand from January 1, 2024. For instance, if he receives interest from a foreign bank account or rental income from a property in Germany, this must be included in his Thai tax declaration.

* Pre-2024 Income Any income Mr. Müller earned before January 1, 2024, can be transferred to Thailand without incurring Thai taxes if done by December 31, 2024. He should document these transfers clearly to avoid any future tax issues.

* Residency Condition Since Mr. Müller stays in Thailand for more than 180 days a year, he is considered a resident and must comply with these tax regulations.

* Filing Requirements Despite his pension being exempt from additional Thai taxes, Mr. Müller must still file Form 90 by March 31, 2025, to report his income and any applicable deductions. Maintaining detailed records of all income sources and transfers will facilitate this process.

Victor Wong
Financial Analyst and Tax Expert
Tel: 062 879 5414 Email: [email protected]

[Gaybutton]

Here's the latest
_______________________________________

Law to tax income from overseas in the works

Rules will follow widely accepted international principle, says chief of Revenue Department

by Wichit Chantanusornsiri

September 7, 2024

The Thai Revenue Department is drafting a law to tax the income of individuals residing in Thailand that originates from overseas.

The draft follows the international principle of worldwide income under the residence rule, said Kulaya Tantitemit, the director-general of the department.

This principle holds that income earned by an individual, regardless of its source country, must be taxed by the country where the individual resides for a specified period.

The drafting of the law requires an amendment to Section 41 of the Revenue Code.

The amendment would stipulate that individuals residing in Thailand for 180 days or more must pay personal income tax on income earned overseas, regardless of whether that income is brought into Thailand.

Ms Kulaya said the proposed amendment would specifically target personal income tax and would not include corporate income tax or income from mutual funds investing abroad, except for private funds.

If and when it is enacted, the new law would follow a major change that took effect this year in the way income from foreign sources is treated for tax purposes in Thailand.

Current tax law calls for individuals who reside in Thailand for more than 180 days per year to pay taxes to Thailand on income earned locally and also on any income earned abroad that is brought into the country.

Previously, if an individual met the 180-day tax resident requirement and had foreign income, they paid personal income tax on that income only if it was brought into the country within the year it was earned.

This rule was revised effective from Jan 1, 2024. Tax is now payable on foreign income regardless of when it is brought into the country. To give an example, Mr A sold shares in an overseas company in 2020, realised a capital gain and banked the money in an overseas account. If he brings the proceeds from that capital gain into Thailand in 2024, he must report it as assessable income when filing a tax return.

Expats in Thailand, meanwhile, have raised questions about tax treatment of pension income from past employment when that money is brought into Thailand.

If this money is taxed in their home country and that country is one of the 61 that have agreements with Thailand to prevent double taxation, in theory there should be no problem. But debates about interpretation of the law are ongoing.

Ms Kulya said that in practice, collection of tax on foreign income will depend on international cooperation and information exchange. Thailand is already a member of the tax information exchange group spearheaded by the Organisation for Economic Co-operation and Development (OECD).

Section 41 specifies that individuals who have assessable income under Section 40 in the previous tax year from duties, work or business conducted in Thailand, or from the activities of an employer in Thailand or from assets located in Thailand, must pay taxes according to the provisions of this section, regardless of whether the income is paid within or outside the country.

Individuals residing in Thailand who have assessable income under Section 40 in the previous tax year from duties, work or business conducted abroad or from assets abroad, are required to pay income tax according to this provision when that income is brought into Thailand.

Minimum corporate tax

In addition, Ms Kulaya said the department is drafting a law to set a minimum corporate tax rate, following international agreements led by the OECD.

The principle of a global minimum tax (GMT) is to ensure that large multinational corporations pay a minimum tax rate of 15% worldwide in the countries where they operate.

If a corporation pays less than 15% in any given country, it must pay additional tax to bring the total up to 15% in the country where its parent company is headquartered.

The GMT agreement applies only to multinational companies with global revenues exceeding €750 million ($870 million) per year.

In the first 11 months of the 2024 fiscal year, the Revenue Department collected 1.963 trillion baht, exceeding its target by 0.4% or 8.44 billion baht.

The good performance was attributed to government measures to stimulate consumption, such as the easy e-Receipt programme, which increased the collection of value-added tax from domestic consumption.

Ms Kulaya said she expects that by the end of this fiscal year on Sept 30, the department will have met its target of 2.28 trillion baht.

For fiscal 2025, which begins on Oct 1, the Ministry of Finance has tasked the department with collecting a total of 2.372 trillion baht.

https://www.bangkokpost.com/business/ge ... -the-works

[Harald]

At first glance nothing new. However, the article states that foreign corporations will not be taxed on worldwide income. Some accountants said in the past that such a taxation makes the whole idea unrealistic. Now it may very well happen. For me the issue is now the US visa for my bf. So that he could stay with me in US for the half of the year.

[Gaybutton]

If Thailand really does decide to ignore tax treaties, does anyone expect the embassies, any of them, to intervene and say a single word about it?
__________________________________________

Pattaya Mail Editorial
__________________

Thai Revenue Department is drafting new tax laws

By Pattaya Mail

September 8, 2024

Kulaya Tantitemit, director-general of the Revenue Department, has indicated to the Bangkok Post that she is preparing significant new legislation. Under current rules, effective January 2024, Thais and foreigners residing here for 180 days or more in a calendar year will be taxed on foreign-sourced, assessable income when such cash is remitted into the country, regardless of when sent. A wave of panic has set in amongst the expat community, especially pensioners, although the opinions of banking and legal experts range from a don’t worry green signal to a hot potato red. Thus “savings” are not taxable, but there is no consensus about what “savings” are, or could be.

But The Revenue, as reported in the Bangkok Post as recently as September 7, is preparing to amend the law to collect tax from any Thai or foreign resident (as defined above) who derives foreign-based income even if they do not bring such income into Thailand. This is unprecedented. The director-general justifies this move by referring to the principle of worldwide income which argues that all income earned by an individual is taxed by the country of residence. Some other south east Asian countries, including Cambodia, technically can tax the overseas income of resident aliens but choose largely to ignore the issue. For now anyway.

It is important to recognize that this latest Revenue announcement would require parliamentary approval for a clear change in the tax laws. At this stage, it is not obvious that the suggestion will receive the rubber stamp of the legislature. For example, many rich and influential Thais may dislike the notion of declaring their worldwide income wealth which remains permanently overseas. There is no timescale and no evidence that the latest proposal is under parliamentary consideration even though it was first mooted last June. There is now a new premier and Cabinet in office following the resignation of prime minister Srettha Thavisin who had originally asked the Revenue to look for ways of broadening the tax base, presumably to increase government funds to pay for populist policies.

Ms Kulaya pointed out that the proposed rule changes will depend on international cooperation and information exchange as Thailand is already a member of the Organization for Economic Cooperation and Development for tax information exchange amongst countries. There are many other complications too. For example, foreign holders of the 10-year Long Term Residence visa are exempt from taxation on foreign income remitted to Thailand, a very popular marketing ploy. However, they may not be exempt from worldwide income not remitted to Thailand unless a special clause was included in any legislation.

Many of Pattaya Mail’s readers are older foreigners living here mainly or wholly on pension income and inheritances which have already been taxed in the home country. They are aware of double taxation treaties, but mostly unaware of the complex detail in 61 very different agreements and what they actually mean. The Revenue could now or in the future ignore income under double taxation arrangements, or alternatively argue that any tax paid to the home country is merely a “credit” to put alongside any further tax liability in Thailand. Generally speaking, Thai taxes are more expensive than, say, those in the US or the UK in most categories. Our advice to readers at the moment is to wait for clarification, if any, on the grounds that any tax due for 2024 is not due for collection until January-March 2025. Thailand is no stranger to surprise announcements.

https://www.pattayamail.com/latestnews/ ... aws-471430

[Rocket]

That, however, doesn't happen for all that many. The average salaried Thai, having nothing to do with the bars, is paid between 10,000 - 15,000 per month - and for most that's working 6 days per week, 9 to 10 hours per day, paid once a month.

I'm sure it's tough.
We have been lucky to have been born in countries with more opportunity (so far).
The Thais have been lucky to be born in Thailand, rather than perhaps Myanmar or Laos.

Fixing the Thai economy up might start with eliminating corruption and improving education.
However, it's not our job to interfere in domestic Thai politics. If I were dumb enough to interfere where I think it's needed, I'd achieve nothing and get jailed.
So I'll just try to make the most of what Thailand offers. Including the opportunity to meet some charming Lao & Cambodian lads.

“ Comparison is the root of one’s unhappiness “. Or something like that. It’s true. I know a retired teacher who makes the equivalent of 12 million baht, being retired, in a year. I’m a bit envious of him. However I just think of our Thai friends who would never earn that in their lifetime.

[Dodger]

Let's look at the whole picture (Just an Opinion):

1) Srettha proposed broadening tax collection to help pay for the "digital wallet" he promised Thais before he was named PM.

2) Shortly after taking office he was faced with the task of paying for the digital wallet (10,000 baht for the majority of the population) which he had no way in Hell of paying.

3) After spending months doing the Mexican Hat Dance for Thai media he conjured up this tax broadening scheme to help get the money to pay for the digital wallet.

4) The rich and influential Thais (and Chinese) who represent around 12% of the population who have all the wealth in the Kingdom went into overdrive to stop this tax plan since they would be the ones paying the highest taxes.

5) Srettha gets shown the door (with the imprint of someone's foot on his ass).

6) A new PM and cabinet are installed who have no direct obligation for supporting the digital wallet scheme - and, to date, haven't said a word (in Press anyway) about either proposal, i.e. digital wallet or tax expansion.

7) To date, from what's been reported in the news media, this flimsy tax proposal has not even been submitted for Parliamentary review yet, let alone gain any approval from the new PM or her cabinet.

One would assume (at least I do) that the new PM's cabinet, as well as other members of the Thai government, are included in that 12% of wealthy people that I mentioned earlier, who, if this new tax law is implemented, would be the ones getting taxed $$Big Buck$$.

This being the case, I put the likelihood of this new tax proposal getting implemented any time soon somewhere around ZERO.

If and when it ever does get approved and implemented all retired expats will have to be concerned with is possibly having to fill out (or have a tax consultant fill out) a tax form each year to submit to someone??? for visa extensions IMO. I say "someone" because I can't imagine Immigration taking on the task of reviewing and filing annual tax reports for 300,000 expats - and the Tax Dept. (minimum wage State workers) couldn't process 3,000 reports a year let alone 300,000. It's almost a joke...

Like I've said many time over the years..."this is Thailand's problem to unscramble - not mine".

[Gaybutton]

A new PM and cabinet are installed who have no direct obligation for supporting the digital wallet scheme - and, to date, haven't said a word

You might change your mind about that after reading this article: https://www.bangkokpost.com/thailand/ge ... this-month

As for retired expats on the retirement visa living on pensions and Social Security, I see nothing to indicate that Thailand has any intention of violating the tax treaties. Again, I'll save my worrying until there is something to worry about.

And treaties or not, while immigration laws are a pain-in-the-rear, I can't imagine that Thailand would be so stupid as to try taxing us in violation of the treaties and having it backfire on them when rather than collecting loads of money, they end up with little or nothing if they're driving us out. If we ever find ourselves taxed to the point it is hurting us financially, as much as I would hate to leave Thailand, under that kind of circumstance I would - and do so before paying them a thing. From me, they would end up collecting nothing.

However, even if we are not taxed, but still have to submit paperwork, I have a feeling it will be the visa agencies cashing in on it.