Taxes … more fuel to the fire!!

[Gaybutton]

Have you ever read any part of any double tax treaty?

As a matter of fact, I have. Have you? If you haven't, here is the American treaty: https://www.irs.gov/pub/irs-trty/thailand.pdf
In the American treaty, expats are likely to be most interested in Article 20.

Here is the UK treaty (I didn't read any of that one): https://www.gov.uk/government/publicati ... x-treaties

If you can find anything in either treaty to indicate that the treaty allows for Thailand to tax the income of expats living on pensions and Social Security, please point it out.

[Jun]

Pensions are income, so there's no need to have special sections.

Now to be fair, they do seem to exclude state pensions from taxation in Thailand, so I see your point for those.
There appears to be no such clause for private pensions.

There is also scope for Thailand to tax interest and dividend income, along with capital gains. That could be a major disadvantage for anyone receiving tax free dividends or capital gains from within a UK ISA tax free wrapper.

[Gaybutton]

That could be a major disadvantage for anyone receiving tax free dividends or capital gains from within a UK ISA tax free wrapper.

I think it is a bit premature to start worrying about what could happen. All kinds of things could happen. But until something does happen, I see no reason to be guessing and speculating. To accomplish what? Many seem terribly frightened and yet there is no reason to think pensions and Social Security are going to be taxed. And definitely no reason to think Thailand has any intention of pulling out of or disregarding the tax treaties.

When an official announcement from the Thai government comes out and says those things are going to be taxed, that's when to worry and panic - and not before.

Seems to me we're busy debating an issue that doesn't exist.

Look at the bright side of could. If our income is taxed, now we have less money to spend in the bars and on the boys. They all could be forced to reduce their prices.

[Dodger]

.......Look at the bright side of could. If our income is taxed, now we have less money to spend in the bars and on the boys.

.

Interesting point.

On a broader scale what advantage would there be for Thailand to start taxing expat retirement income considering that most of the $$money$$ flowing in to retirees is directly supporting Thailand's economy and boosting its GNP? Especially when considering that to do so they would have to violate or withdraw from legal international treaties (contractual agreements) which would almost certainly have additional financial consequences.

Can you hear me snoring now...zzzzzzzzzz

[Daleinpattaya]

https://www.bangkokpost.com/business/ge ... s-proposed


New overseas income rules proposed

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

The new system would be based on the widely recognised principle of worldwide income, said Kulaya Tantitemit, the director-general of the department.

It is still in the discussion stage and it is not known when it might take effect. If enacted, it 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.

The adoption of the principle of worldwide income would bring Thailand in line with international practice, said Ms Kulaya. It would also make tax planning more challenging for individuals and businesses.

Worldwide income refers to all income earned by an individual from all sources worldwide. This can include income earned from employment, self-employment, investments, rental properties, royalties and any other sources. How it is assessed and taxed depends on the laws of the country where one is a tax resident.

In a related development, Ms Kulaya reaffirmed the department’s plan to expand the tax base by requiring online platforms with annual revenue of 1 billion baht or more to report their sources of income.

The department will use this information to verify their tax compliance, she said

[Gaybutton]

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.

Ok, while some of you still insist on panicking, have any of you who have been in residence in Thailand 180 days per year or more had your income taxed if the income was solely pensions and Social Security? The new rules are about closing a loophole, not finding new ways of parting expats from their money.

If the source of any of your income comes from any businesses you own or work you do in another country, that is what they want to tax if you bring that money into Thailand, regardless of when you bring it, not your retirement benefits. The brouhaha has to do with when people have been bringing in that money. People were able to get around that by bringing in that money in a year different from when they made it. THAT is the loophole they want to close. Now they want to tax that money no matter when it is brought in. It has absolutely nothing to do with money from pensions and Social Security.

All of my money comes from my pension and Social Security. All of it. As long as I've lived in Thailand I have never been asked to pay so much as one baht for income tax and there is nothing to indicate that is going to change.

I'm annoyed with the powers-that-be for not making that clear. It should be obvious to them that many expats are afraid they are going to have to pay a Thai income tax. Of course, maybe they think it should be just as obvious to expats that they won't.

If that still isn't reassuring enough, read Barry Kenyon's June 6 article: https://www.gaybuttonthai.com/viewtopic ... 81#p113681

[2lz2p]

GB

If the source of any of your income comes from any businesses you own or work you do in another country, that is what they want to tax if you bring that money into Thailand, regardless of when you bring it, not your retirement benefits. Th brouhaha has to do with when people have been bringing in that money. People were able to get around that by bringing in that money in a year different from when they made it. THAT is the loophole they want to close. Now they want to tax that money no matter when it is brought in. It has absolutely nothing to do with money from pensions and Social Security.

I agree the original brouhaha was just that, taxing income earned outside of Thailand that is brought into Thailand (previously it was taxable only if brought during the year earned). However this latest announcement goes further than that - at the moment it is only an announcement of intent which as I understand it will require a change in the law - the original brouhaha was a change in the rules that are based on an existing law.

The Bangkok Post article notes that the Gov't is considering adopting the policy of taxing income earned anywhere so long as the person is a "tax resident" in Thailand (i.e. being in Thailand more than 180 days in a calendar year). The USA and some other countries have such laws except the US only required they be a US Citizen or legal resident (green card I presume).

That said, we get back to the same issue as with the "rule change" which has resulted in a lot of anxiety for many Expats. For USA citizens, as mentioned by GB, the dual tax treaty with Thailand specifically exempts Social Security and government pensions. However, under its terms it does not appear to exclude private pensions. Other countries may have similar provisions, but if you are receiving a pension whether private or government from one of them, you would need to look to the existing treaty between that country and Thailand.

However for US citizens as most likely those of other dual tax treaty countries, other sources of income earned outside of Thailand and not brought into Thailand could be subject to Thai income tax under this "new" announcement as mentioned in the Bangkok Post article.

This "new" change in Thai tax law is at this stage a proposal. Until such time as it goes through the legislative process, no one know if it will in fact be passed or if so, with what modification or exemptions. Likewise, the dual tax treaties would come into play as will how "credit" will be given for income tax paid to the government of the country in which the income was earned. So, IMO, there is no use fretting about it until one knows what will really take place and how it will affect them.

Next Wednesday, at the Pattaya City Expats Club, Thomas Carden who has his accounting firm that specializes in US income tax advice and preparation service will be giving is insight the ramifications of this latest Thai government announcement. At that previous presentation, he did mention that private USA pensions would be subject to the new rule - taxable by Thailand if brought into the country.

The PCEC videotapes the presentations, so once it is uploaded, I will provide a link for those that may wish to watch it. Note, he will be the second speaker on that date. The PCEC posts their meeting program on their website home page: https://pcec.club

[Gaybutton]

I'm sure the talk by Mr. Carden will be very interesting to many, but for me it doesn't matter what he or anyone else says. The only thing that matters is what the Thai powers-that-be say and what they will do. I fail to see what difference it makes what one "expert" has to say when another "expert" will say something different.

Maybe I'm better off than some because my pension is a government pension.

Nobody can possibly have any idea yet what the Thai government is going to do, if they actually do anything. I can only repeat what I have been saying all along - Don't worry until you have something to worry about.

Those who are worrying anyway, nothing I can say will stop the worrying. Personally I'm much more worried about what I'm going to have for dinner tomorrow than I am about whether we're going to be income taxed. I just don't see it happening.

[2lz2p]

Re: By Barry Kenyon - Post by Gaybutton »

Thank you 2lz2p. I think every expat ought to watch this video.

Thomas Carden is the same person whose video is referenced. His information is usually worthwhile and based on the latest. I expect that his presentation next week will be practical and informative about the situation rather than fanning any fires of fear about new taxes. As mentioned, I will post a link to his talk when the PCEC uploads it for those that may be interested.

[Rocket]

I live for 170 days a year in Thailand, October thru April. Since I have a non- o retirement visa which enables me to stay the whole year, do you think they would make me pay any tax?
Do they go by your passport stamp?
At any rate, I was planning on wiring one million baht to my Kasicorn bank account, as I’ve run out of money finally. I guess the sooner I wire it the better.