Thailand to amend tax on foreign income remittance

[whatspat]

There is no interpretation here, the law is unambiguous and nearly⁠ identical in effect to many other countries. What happens in practice due to ignorance, lack⁤ of enforcement or other reasons is as you say, but it’s not correct legally.

TRD isn’t preventing people from getting bank accounts, that’s mostly down︁ to the banks lack of interest, incompetence, or concern about the new AML regulations which︂ expose them to liability and penalties. Saying “no” is the easy option for them.

TID is a different matter; the system is old fashioned and designed with an assumption that︃ taxpayers would be working for a local entity (same assumption underpins labor law regarding work︄ permits). In the past, wanting to claim back tax withheld from bank account interest payments︅ was sufficient to obtain a TID, not sure if it’s still the case.

The law︆ states that all tax residents (visa type has no bearing on this factual matter) are︇ obliged to obtain one and file an annual return; this doesn’t mean the bureaucracy makes︈ it easy to comply.

 

[xhomer2020]

• Active income, such as salaries or⁠ freelance earnings from a foreign employer or clients, is considered foreign-sourced if the employer or⁤ client is located outside Thailand and the income is paid to an overseas account. As⁣ long as this income is not brought into Thailand (e.g., transferred to a Thai bank⁢ account), it remains exempt from Thai income tax, even if you are a tax︀ resident.
  
• However, if you are working remotely in Thailand for a Thai employer or client︁, the income is considered Thai-sourced and is taxable in Thailand, regardless of whether you︂ are a tax resident or where the income is paid.
  

What you describe is worldwide︃ income taxation and is not implemented in thailand, is remittance basis.

 

[Davis123]

So CRS is not going to report your︁ account held overseas to Thailand ? This is confusing.

 

[Davis123]

Very expensive island for sure.‌

 

[Davis123]

We understand remittance based taxation but we simply︁ don't know how CRS will not report to Thailand

 

[xhomer2020]

You have to understand CRS:

1) USA dont‍ use CRS use FACTA so no bank account in USA will report to thailand what⁠ you have there. So any bank account you have there will not report into CRS.⁤
2) Most people with banks accounts overseas in europe have their bank account with their⁣ original home address so they will not report to thailand neither but to their home⁢ country.

 

[xhomer2020]

3) even the case you have bank account overseas in CRS country with your thailand‌ residence address i never heard anyone reporting thailand is claiming taxes for their not remitted‍ income. Even the remitted income they dont check you put the right amount , you⁠ just put what you want but you dont have to justify the amount and i⁤ dont know anyone who has been audited on this and fined or asked for more⁣ taxes. If anyone know a single case please send link to it.

I think law⁢ is so old that by that time they couldnt imagine internet and online remote work︀ would be possible some day and many people would be working from their room online︁ for remote companies.

 

[whatspat]

I don’t know what you’re quoting, but it’s︁ wrong. See the definitions here https://rd.go.th/english/6045.html under 2.1, or here https://taxsummaries.pwc.com/thailand/individual/income-determination which states it more︂ directly. Assessable income such as from an employer or business doesn’t mention where that employer︃ or business is located, nor where the money is received (and PwC makes the latter︄ point explicit). I’m done trying to educate you; the source of active income is yourself,︅ and you can’t be foreign with respect to your location when you earn it. If︆ you perform those services outside of Thailand, the income would be considered foreign source.

You’re trying to apply rules relating to foreign source income to income which is not foreign︇ source. In general, foreign source income is passive income.

 

[Davis123]

Most expats opened up companies in Dubai or other gulf countries. Got their residencies and lived⁣ in Thailand most of the times. Just made a 1 or 2 day back every⁢ six months to Dubai or gulf countries to keep visa valid.

 

[A2934]

Of course it is. The CRS reporting does‍ not make any exceptions for non-remitted or whatever.

 

[A2934]

Go through the FATCA agreement between Thailand and⁠ the US and you will see that they do report.

 

[Davis123]

Fatca is actually two way. Most folks‍ often miss this.

 

[xhomer2020]

here say his clients pay 0 taxes in thailand with llc, just pay tax for‌ money remitted to thailand and many places report the say only remitted income. I think‍ you are refering you an interpretation of law that is not applied. Just post a⁠ case of a farang having to pay taxes for worldwide active income.


https://www.reddit.com/r/LLcMasterclass/comments/1l5r9a0/can_you_live_in_thailand_and_pay_zero_taxes_with

 

[Davis123]

Well he wants to get more clients signed up with him. But⁤ you have to ask Thai tax experts. They are more knowledgeable on this.

 

[xhomer2020]

another thread explaining after talking with tax attorneys... saying the same if you dont have‌ thai bank and dont remit money to thai bank account you dont have to pay‍ taxes. I think is so confusing that nobody know what to do.


https://www.reddit.com/r/digitalnomad/comments/1kn3ikv/update_talked_with_2_thai_tax_attorneys_about_dtv

 

[Davis123]

So what about the people who don't want to put money in⁠ us llc or us banks ? My broker overseas doesn't want any money from USA.⁤

 

[JackAlabama]

this is wrong! The law does not state that.
Only if income over 65k.

But quoting laws are pretty much moot and instill a wrong︆ sense of confidence as can be observed daily and im sure you well know that,︇ the landscape changes monthly. 😉

 

[shimo]

The truth is most digital nomads in Thailand only pay tax on money they bring‌ into the country. So far, there are no known cases of anyone being taxed on‍ income kept overseas. Are they?

If Thailand ever starts taxing foreign income that is not⁠ remitted, many people will just leave. It would feel unfair, especially with the high tax⁤ rates and few benefits.

Things might change in the future, but for now, the system⁣ works on a remittance basis in practice.

 

[xhomer2020]

agree with this,⁢ if this change and they enforce taxing overseas active income not remitted to thailand most︀ digital nomads and farangs with high income in thailand will leave to another territorial country︁ where they are not taxed. There is no point to stay in thailand and pay︂ such a high PIT taxes similar to europe.

 

[Mercury]

The truth is most of residents, and‍ specifically foreigners, do not pay tax in Thailand because there is no tax enforcement.

The only ones who consistently pay tax are those who earn enough local income from Thai⁠ company to have tax withheld from their salary or dividend.