Thai government to tax all income from abroad for tax residents starting 2024

[churumbelo]

Marzio said:
Nobody knows for sure BUT i don't think it's a coincidence that if they implemented this change immediately after adopting CRS. Now they will receive informations about all tax residents foreign bank accounts.
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Yes, I agree. But it makes sense that they do it based on remittance to target only rich Thais who bring the money 1st January of the next year and then they can use it tax free in Thailand, buy properties, cars, and so on, instead of foreigners. It would make more sense. In one of the statements they released, I think that was one of the three points they mentioned, they were targeting Thais doing that.
Let's see what they say next...

 

[disconnected]

The official statement of the Thai tax department posted above mentions specifically that they will only tax funds brought into Thailand. I don't understand why some people argue against the official messaging on this.

 

[Clank]

churumbelo said:
Yes, I agree. But it makes sense that they do it based on remittance to target only rich Thais who bring the money 1st January of the next year and then they can use it tax free in Thailand, buy properties, cars, and so on, instead of foreigners. It would make more sense. In one of the statements they released, I think that was one of the three points they mentioned, they were targeting Thais doing that.
Let's see what they say next...
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They won't make an exception for foreigner tax-residents.

 

[churumbelo]

Jbb1 said:
They won't make an exception for foreigner tax-residents.
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I did not say so. I meant one of their reasons it was to target Thai people doing that, waiting for the next year to remmit the money tax free. Foreigners tax-residents are just a collateral consequence. But as long as it is based on remittance, they will not make many wealthy foreigners leave the country. Unless they want to bring a lot of money to buy stuff in Thailand. I only bring money for my expenses there, but I would not bring money to buy an apartment. So I would only pay tax on that money, the rest I keep it offshore.

 

[disconnected]

Google translated official statement:

 

[wellington]

manukahoney said:
Then it shouldn't be a major problem. Have your assets and income generated offshore and either bring some minimal income to be taxed (after DTT) or just take a loan/remit as much as you can in 2023 and live tax-free after. It's basically a non-dome regime without any limitation. Don't have enough? Lose the tax residency in Thai (<180 days), then remit as much as you want as non-resident, then become a tax resident again.
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Put into perspective, the tax free amount is basically 5,000$ as you get to around 60,000$ thats around 30-35%...

We pay the nannies about 6,800 USD each a year x 4 (they don't pay tax) we set aside that out of pocket and pay it.

When you add up all the costs etc, we'd end up paying 35% which would be in the tens of thousands just for sunk costs. before moving on to everything else.

If they base it on entire world wide income, regardless of remitted, for dividends years that could be as much as 11m $ in taxes based on expected next dividends. *note these come every 5-10yrs opposed to annual, based on performance, and excess capital buffer etc

We were always making plans for the next divided period then this threw a curveball and at the wrong time (kids).

I've heard a rumour they will do inheritance tax next, so it might be time to drop citizenships etc and opt for something in the carib and go there.

Dubai looks promising but this 9% corporate tax could actually be rather painful (as shareholder)

Progressive tax rate

Last edited: Sep 19, 2023

 

[manukahoney]

wellington said:
Put into perspective
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I did.
You are living in a cheap countries and save a lot on cheap labor, accommodation, food etc. Yes, you will pay a bit more in absolute numbers to cover your costs, but it sounds a bit cheeky - you are complaining about overpaying tens of thousands in taxes while planning on tens of millions in dividends.
You don't establish a tax base in a volatile country if you earn 7-8 figures per year - you aim for stability and clear and predictable tax regime.

Back to the point - Thailand has just adjusted their tax system to better reflect what is called a remittance basis taxation. The thing is that they gave a very short notice, that bites.

 

[wellington]

manukahoney said:
I did.
You are living in a cheap countries and save a lot on cheap labor, accommodation, food etc. Yes, you will pay a bit more in absolute numbers to cover your costs, but it sounds a bit cheeky - you are complaining about overpaying tens of thousands in taxes while planning on tens of millions in dividends.
You don't establish a tax base in a volatile country if you earn 7-8 figures per year - you aim for stability and clear and predictable tax regime.

Back to the point - Thailand has just adjusted their tax system to better reflect what is called a remittance basis taxation. The thing is that they gave a very short notice, that bites.
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Theres quite a lot of assertions there.

Dividends are every 5-10 yrs, not every year, and its based on business performance results, there's nothing annually, so you earn no income annually, thus no tax annually... likewise the company liquidates its holdings/positions + revenues and these are based on forecasts, aside from the moment its figures are ok, they are not the figure mentioned above [at this time, in this day] but realised at the time thats the impact i'd feel if in a 35% tax regime even if not remitted, hence making preparations to be structured correctly opposed to being in a position that would lead to some form of tax evasion, like you read on here so often.

As for 'when realised'.

You have a pot of cash that you draw out and live on like a pension pot, there was zero interest in being paid whilst in Thailand, but relocating on the dividend period (which is likely 2025/2026 but could be as late as 2028).

That would then be in the fixed tax country or low tax or no tax.

You'd then live of those funds in Thailand + elsewhere around the respective tax policies, the recent news means they are taxable, due to the size 35%, likewise existing costs of living would result in taxes of 35% thus -280 days in Thailand.

Having said that based on a LOT of discussions and others ideas, and accountants, tax, etc my personal current moving forward plan is likely this Thailand 0% tax to avoid falling into the Thai changes.

 

[zzzzzz]

1. If you don't have bank account in TH, does that mean you don't have to file any taxes as you cannot remit any funds?
2. Do you have to file taxes in case of remittance to bank account in TH, even if it's under 150k THB (0% tax)?
3. How exactly revenue knows you are tax resident in TH (180 days)? Via immigration? You show them stamps in your passport? Lease agreement? They check your TM30 history?

 

[blastah]

https://www.thaienquirer.com/50755/...ds-risks-falling-flat-due-to-lack-of-clarity/

 

[JackAlabama]

zzzzzz said:
1. If you don't have bank account in TH, does that mean you don't have to file any taxes as you cannot remit any funds?
2. Do you have to file taxes in case of remittance to bank account in TH, even if it's under 150k THB (0% tax)?
3. How exactly revenue knows you are tax resident in TH (180 days)? Via immigration? You show them stamps in your passport? Lease agreement? They check your TM30 history?
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no one knows, its a very common thing in many countries. So just a few guesses.
1. you still could do so, so yes.
2. no idea
3. very easy to track

And again it becomes very clear while some countries are so expensive while others are not and also seemingly cannot move ahead substantially.
The allure of Thailand was to be able to live cheaply, i did not realize that notion having changed.

 

[Mercury]

wellington said:
You'd then live of those funds in Thailand + elsewhere around the respective tax policies, the recent news means they are taxable, due to the size 35%, likewise existing costs of living would result in taxes of 35% thus -280 days in Thailand.
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35% is marginal rate over THB 5M (around USD 138K at today's rate) declared income.

Average rate deducting minimum expenses & allowances (self + spouse with no income + health insurance ; could potentially deduct more) depending on income:

THB 10M (USD 276K) average rate = 30%
THB 5M (USD 138K) average rate = 24%
THB 3M (USD 83K) average rate = 20%
THB 2M (USD 55K) average rate = 15%

 

[zzzzzz]

Long tax debate on this change.