Thailand Tax Rules 2024 - Income or Savings?
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- เผยแพร่เมื่อ 24 ก.ค. 2024
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In response to my last video • Thailand New Tax Rules... , I had a lot of questions about how to differentiate between savings and income for tax purposes. This can hopefully provide a little more clarity before we get further guidance from Thailand.
0:00 Introduction
0:32 What is income vs savings?
1:44 How do we determine taxable income?
2:41 Bringing historic savings into Thailand?
3:29 Complexities - savings reinvested?
4:32 How do I prove my money is from Savings?
5:33 'Subject to Tax'
6:42 What evidence should I keep?
8:24 My bank has old savings & new income - how to identify?
9:57 Summary
A BIT ABOUT ME
I've been advising on international tax since 2014, and qualified as a Chartered Accountant in 2018. I worked for consulting firms PricewaterhouseCoopers and BDO, before I started a remote international tax consultancy firm, Degen Tax Advisers, in 2020.
I work with online entrepreneurs to help them navigate the complex world of international tax. I work with e-commerce businesses, digital nomads, content creators, tech startups, crypto investors and many more in the digital space. Like my clients I'm pretty nomadic. I've lived in the UK, US, Japan, South Korea, China, Malaysia, Thailand, Vietnam and Singapore. Currently I'm spending most of my time around Southeast Asia.
DISCLAIMER
My videos are for general guidance, education and providing you an introduction to the concepts of international tax. They in no way constitute specific advice to your specific circumstances. I accept no liability for any reliance placed upon the content of these videos or references, therein.
I pay tax on my UK property [2 properties] rental, but my Thai accountant said no to every proof I gave, that i had already paid my tax. The only thing they were interested in was a dual tax treaty exemption from HMRC. In the end i just paid double tax for a quiet life. It is based on what i remit to Thailand. I have been paying dual tax here for the last 6 years. HSBC UK started this nightmare, when they asked to see my TIN number, otherwise close my Uk bank account. Btw, to compound the problem, the HMRC dual treaty form is extremely detailed, and i couldn't possibly attempt to fill it out myself. My Uk accountant was absolutely not interested in helping me with it. It's a nightmare scenario, because my income isn't much at all, usually below the UK threshold, but i have to go through this crap each year! Pay two accountants, when i am barely liable for tax in either country. Sorry, rant over,🤣pardon the word salad also!
Hi, thanks for the comment and sorry to hear you've had these issues. Banks can bring additional headaches because even if you've sorted out your situation from a tax perspective, they can ask for info like tax residencies, tax returns etc for their own regulatory compliance.
So HSBC likely were not allowed to provide services to Thai residents without proof of their tax residence. I've also seen many reverse situations where UK banks shut down the accounts of expats because they were no longer UK tax resident.
It should just be this form (certificate of tax residency) that you request from HMRC to show to Thailand. www.tax.service.gov.uk/shortforms/form/PT_CertOfRes?_ga=2.86127071.675114208.1698721298-591528167.1681233282
Note that whilst under the UK / Thai treaty the UK has taxing rights for UK property, Thailand's local rules stills allow them to tax your worldwide income, but the treaty means you get a credit for tax paid in the UK. This means if the tax rate in Thailand is higher, you would need to pay the difference to Thailand
Andy, thanks for this, the "subject to" information is good to know.
Great video again, thanks 🙏
A good rational explanation that takes out a lot of the concern. I've worked in Thailand before and I've found the tax authorities to be quite fair. All this does is close a loop-hole. We would pay tax in our domiciled countries, and all this does is state that it will be the same in Thailand. It's a scaled system as in UK or Australia, where my money is, and presumably the tax treaties will apply anyway ? I may be moving to Thailand next year, when for at least the first 6 months, I intend to live off savings. I may keep the savings in Australia where the hefty non-resident tax will swallow up any liability. I guess it's just a matter of keeping records and being transparent.
Yep I'd agree, it's really nothing ground breaking or overly aggressive by Thailand. Some commenters have suggested it somehow makes Thailand an uncompetitive tax system which is a little hysterical to me, because the remittance basis in itself will remain which is a very tax friendly system that almost no other countries in the world have. And Thailand's double tax treaties will continue to apply, they have a good network of those and no suggested plans to terminate these (now THAT would be something to get concerned about but in today's global landscape that would be close to economic suicide & simply wouldn't happen)
Thanks for digging deeper into this, this is way better info than any other channel provide. I see so many complicated questions spinning off from all this though, for example:
If I have a long term investment, e.g. a stock fund with large unrealised profits before I move to Thailand, then I move to Thailand and sell the fund after becoming a Thai tax residence. Can Thailand tax me for profits that was built up before I came to Thailand? assuming I realised it after I came to Thailand and doesn't have to pay tax in my home country?
Will historical unrealised profits be "nulled" from Thailand point of view if I live in Thailand less than 180 days one year and come back and live there full time the next year?
No problem. And yes when it comes to complexities such as unrealised capital gains there can still be some issues. Under the law, Thailand taxes Thai tax residents on capital gains (at the standard income tax rates) IF that money is brought into Thailand. The calculation for a capital gain is proceeds less acquisition costs. The acquisition cost is the cost the asset was required irrespective of whether you were a Thai tax resident when you acquired it. So in effect yes they can tax you on the build up of profits over time if you eventually become Thai tax resident, sell that asset, and then bring the funds into Thailand.
But your last question is possibly a reasonable mitigation strategy. If you're not a Thai tax resident you don't fall under the Thai income tax net thus selling the assets during this period could be workable. Note, many countries have 'anti-avoidance' provisions in their tax laws to protect against this happening (UK and many EU countries I've worked with) however Thailand does not have any anti avoidance provisions. But when it comes to anything tax authority related, as with any country, nothing is bulletproof.
What a mess this is, I was about to move there next year and now I'm second thinking my options with this new Tax situation.
How are they really going to determine the difference? Lets say I had $100k on my US brokerage account in the beginning of the year, made 50k income and transferred 20k to Thailand during the year. Are these 20k from my initial 100k savings or from 50k income? And where I can find a clear answer in their laws?
Question.... . Pensions in UK have to fall within the tax free allowance otherwise you pay tax. Therefore providing your income from earnings plus pension is declared on a UK self assessment, then it has been through the tax system already as tax free or tax paid. In that case if you provide your UK self assessment, is that not proof enough you don't need to be taxed in Thailand?
Hey, generally yes this should be fine if you've declared it on a UK self assessment. This would show the income has been subject to tax. I'd say that on the whole retirees shouldn't be too concerned about these changes.
Thank you - another very helpful video actually looking into the rules and not just wildly speculating.
It does seem rather daunting if Thai revenue dept starts demanding foreign tax returns and similar records - seriously, they’ll review, say, French, German, Japanese, etc. tax returns? Just, how? They literally won’t even be able to read them. Would the taxpayers be required to provide certified translations? It just looks like a logistical nightmare if they actually do go down a strict enforcement route….
Yes exactly, whilst I'd always recommend any taxpayer for their own peace of mind to keep records as accurate as they practically can, this is only on the premise that one day you're actually asked to hand this over to a tax authority. Of course the probability of this happening is dependent on the tax authority in question.
The RD may ask for these documents to notarised by the foreign tax authority, stamped by a Thai embassy in that country, translated with the translation certified by the Ministry of Foreign Affairs. That's what district offices want just to add parents' names and nationalities to a house registration book.
Thanks for the video which focuses on some key issues. From one perspective we can say this is all new and we have no idea yet how the Thai RD is going to implement this. From another perspective we can say that this is not new at all and the RD is already implementing it. So there will be no clarification or refinement of rules. There has been no amendment to the Revenue Code and the director-general is assuming powers that he doesn't appear to have to amend the law through a P. order which is a directive to staff, but not legally binding on taxpayers, to reinterpret the law in a way very unfavorable to taxpayers, which goes against Thailand's principles of taxation. The existing interpretation is that foreign source income is taxable, if remitted to Thailand in the year it was earned but the law doesn't specify that DTAs may be applied to PIT. However, there is a ruling from 2004 that says DTAs may be applied to PIT and there are many cases where PIT has been collected on foreign source income according to DTAs. There is also a lot of case law about how DTAs are applied to foreign source corporate income which has always been taxable whether remitted or not. But normally claiming foreign tax credits for corporate income is a complex business that requires a skilled Thai tax accountant or lawyer. My point is that there is no particular reason the RD will feel under any obligation to clarify something that in principle is not new and, since they are attempting to amend the law in an unlawful wait bypassing the proper legal and constitutional framework, it may not be appropriate to attempt to issue new regulations on a legal amendment that has not taken place because they don't have the authority to do it. Welcome to Thailand under Thaksin's Pheua Thai Party - rule by edict.
Thank you George, really informed comment which helps bring more technical nuance to this. Indeed the overwhelming expectation from expats and advisors alike for more guidance/clarity may be driven out of hope but maybe it's unrealistic to expect it given the points you illustrated.
Good point. What if they leave this new interpretation deliberately vague and apply it on a case-by-case basis…. Presumably someone would take the govt to court eventually as this sounds highly suspect, but in the meantime we might have to just play it by ear….
We have a good tax agreement between Norway and Thailand that defines very good how to handle this, and when split the pension income between Thailand and Norway the total tax paid to both countries is always a lot lower than if pay the tax to Norway alone. In many cases a good tax planning can make you pay 0 tax in Norway and just a little in Thailand as you only pay taxes in thailand of what you transfer as income (pension), then there is always the question on definiton of savings and how long you need keep the remaining money in your Norwegain bank account before you can transfer them as savings to Thailand, and therefor not taxable.
Solution. In case of doubt spend just under 180 days in 2 countries, and float for a few days in a third. Your only a tax resident if your in the country for 180/183 days. If you have dual tax treaties then panic over, unless your really trying to stay off the radar... Wise comes in handy 😅, as does Crypto 😊.
Appreciate the video. Whatif I get a loan or cash advance and bring that into Thailand?
Thanks for the kind words and very good question.
So assuming you have assessable Thai income which hasn't been brought into Thailand yet, and instead of doing so in a typical way like transferring to a local bank account, you borrow the cash from your foreign account instead - the way Thailand sees it generally is that paying off a debt in relation to Thailand economic activities can be taxable. Its a method of 'bringing money into Thailand'. But taking out debt in the first place is not taxable. So I'd say its more important about how (and where) you repay your loan.
This is potentially a grey area but lets say you 'borrow' in 2024 whilst you're a Thai tax resident, but you plan to move to Bali in 2025. You repay the loan in 2025, is this taxable? I don't see why it would be. If ever questioned though you'd want to have some sort of basic loan agreement drawn up and charge a market rate of interest.
Given that the new rules are scheduled to come into force on 1 January 2024, would it not make sense that the authorities in future should define saving as “capital accumulated before 1 January 2024”?
Yes absolutely, this would be a brilliant starting point for any additional guidance we could see.
I did also see one of the larger consultancy firms suggest that Thailand could potentially impose a 'flat rate' of tax on foreign incomings (which would be lower than the normal income tax rates), to simplify the entire process. I'm not sure how popular this would be though given it would bring into tax some cash movements, which as rules currently stand, wouldn't be taxable. But the Thai authorities could be swayed by the simplicity aspect given the practical implications of the guidance as it currently stands
Having read so many alternative viewpoints, potential issues & opinions from expats & other consultants over the past few weeks I think it's inevitably we will get some updated guidance one way or another
Article 20 Pensions and Social Security Payments of the Double Tax agreement is clear about (not) taxing money already taxed by the Contracting State.
For Americans, yes. For many others, it’s unfortunately not so clear
That was all very helpful! Given that US stocks held by a non-US resident are taxed at 25% at source, do you think that tax would still be owed in Thailand? I am a Canadian resident of Thailand, with a USD account in a third jurisdiction overseas. Thank you!
Thanks for the kind words! So actually you may be eligible for a reduced rate of withholding tax. There's two countries with potential claim to tax here - Thailand as your tax residence, and US as the source of income. Under the US / Thai Double Tax Treaty, the withholding tax rate on dividends is limited to 15%. So it could be worth mentioning to your broker (if this is how you hold your shares) of your Thai tax residence. You may have to complete a W-8BEN form to verify your Thai residence.
If your top progressive tax rate in Thailand comes to 30% or 35%, they could theoretically tax you the difference of 5% or 10%, if you can submit a tax credit for 25% under the US DTA, or they could decide to leave it, as the other contracting state has already taxed it. I receive US dividends in a Swiss bank account and the Swiss withhold some additional tax after the US has taken its cut. If I decide to remit the income to Thailand, I wonder, if I will have to pay tax a third crime or will I have to try to find both US and Swiss tax credits.
@@Arkady231 That's an interesting scenario and its very rare to encounter a triple taxation event - but if you do end up in the top Thai tax brackets, then in theory the could ask for amounts which top up your tax to the Thai 30% or 35% rate. In practice, I'm not sure how likely this is, especially if you have evidence of the US / Swiss taxes paid at source.
So anyone being in Thailand for 180 days will require TIN and submit a tax return presumably through a Thai tax accountant (which will not be cheap) regardless of being below the 150k baht limit and likely whatever tax certificate is issued will become part of annual retirement / marriage visa extension paperwork? Is UK state pension going to fall under "taxable"?
Hi, not necessarily. If you have no taxes to pay in Thailand then a TIN should be unnecessary.
The new rules do not change anything about how UK state pensions are viewed. Whatever income types were taxable/non taxable in Thailand before the rule change remain taxable / non taxable in Thailand after the rule change.
In terms of UK state pensions, for expats which have this as their income source I’ve never seen any run into issues by treating this as UK sourced income thus non taxable in Thailand (and non taxable in UK as its below the personal allowance). Things could get more complex though if you have more income sources
This will have strength in #'s. Anyone not sending in very large amounts of money should just not file. And that'll be the end of that. There will be a very small amount of people they locate and deal with to make an example; and those folks will just have to pay some money and be on their way. @@WorldTaxAndy
Hi, I am an expat and concern about the Thai new tax law. First of all, there are treaties that Thai Government signed with 61 countries that relate to taxation. For an example the treaty between the US and Thai government total of 31 paragraphs, treaty defines US income as the taxable income by the US Federal government except for payment for social benefits (social security payment, railroad retirement payment, and other retirement benefits). This exception is defined in Article 2, Paragraph 1., and sub b and Article 20, paragraph 1. Link to English version of the Treaty.
My interpretation of the Treaty is that for retirement income, it is exception from the new “Thai Tax” law because of paragraphs 2 and 20 already make an exception. Yes, I am still liable for the US tax. For other types of income, tax payment is subject to residency testing.
From the same link, you can access other Treaties both English version and Thai version.
Hi, thanks for your comment. I agree with your interpretation regarding social security income - the treaty gives US taxing rights thus no Thai taxes on this. For other types of income, as a Thai tax resident, you'll mostly owe Thai taxes and if US tax is paid, you can get a credit of this tax paid allocated against your Thai tax liability.
Hi Andy. I wonder whether you have any comments on the Thai UK double tax treaty as it affects retirees. Many UK tax treaties, for example the Philippines one, contain an explicit provision dealing with pensions, which say that they are taxable only in the country of origin. The Thai treaty however contains no such provision. Where does that leave UK pensioners?
Hi thanks for the question. So the UK / Thai Double Tax Treaty does frustrate me to read because as you noticed, the Philippines (and almost every other UK DTT I've worked with) has a specific provision for pensions which makes it clear who has taxing rights. Unfortunately the UK Thai DTT doesn't have this so we've always been a little in the dark here. A theory I've heard is that because it was written in 1981 it was largely targeted at corporations (it used to be much more rare for individuals to face double taxation issues) but it's a shame this hasn't been addressed in recent years.
Now I've worked with UK accountants before who have interpreted the DTT "Article 23: Elimination of Double Taxation" to mean that even though pensions aren't specifically addressed, this allows the aggregate of all income to be ignored for tax purposes in Thailand, but to be honest I disagree on this if we're reading the actual wording literally. My interpretation is if we read the letter of the law, tax should probably be declared in Thailand.
Nevertheless an approach I've seen most take is simply declare pension in UK self assessment on the basis that it's UK sourced income, and assume that Thailand simply won't come after this. In practice, I've yet to see any expats run into issues with this. And in all likelihood the reason this has been the case is probably due to practicalities - I would find it strange if Thailand took an aggressive approach to Brits on a pension because how much tax could they realistically capture? Every time I've helped a UK expat work out their income tax on pensions its came to a few £ hundred max for the entire year.
So in summary it's not something I'd be overly concerned about as a pensioner, but from a purely administrative point its another frustrating thing that we really should have had guidance on a long time ago
Thank you very much for this thorough reply!
It’s up to you, of course, but if you chose to offer contact details for your professional services, I would be interested in them.
@@Diogenes515 No problem at all, feel free to check my company's website www.degenwealth.com or email advisers@degenwealth.com
One thing many Brits don't realise, if you retire to Thailand you will not receive your annual state pension increase..
Ok Andy just a little enquiry about tax on money gifts from abroad. My daughter in the Uk tops up my pension with a money gift each year. This brings my income in Thailand to just below the Uk personal allowance for non tax . Will I still have to pay tax on the money gift here in Thailand?
Hi John, so gift tax generally does not apply to most because the thresholds are so high. For a gift received from your daughter these have to be above 20 million Baht / roughly £450k for gift tax to come into play. So given its going to be around the UK personal allowance you have no concerns here.
Cheers Andrew, your a Saint 🏴.
I’m a U.S. citizen here on a retirement visa. If I borrow funds abroad, then transfer those borrowed funds into Thailand, would those funds be taxable here? Borrowings normally aren’t considered “income”.
Hi, yes indeed borrowings are not considered to be "assessable taxable income" under Thailand's Revenue Code, so there would be no tax concerns bringing these into the country.
So are we saying we will be submitting Thai tax returns in 2024? The not issuing Thai tax numbers yet makes sense the returns are not due till 2025.
Hi, tax returns are due in the April following the end of the tax year. For for the 2023 tax year, if you're a Thai tax resident the return is due by April 2024. For the 2024 tax year it's due April 2025, and so on.
I think a decision needs to be made by the ruling party on how to proceed with this. Since the PM is also finance minister with direct responsibility for the Revenue Department, they will look bad, if this goes off at half cock and there is a lot of backlash and lawsuits. But that assumes the party has competent people who are able to think things all the way through, which seems not to have happened with the digital wallet.
I have savings from money I earned 20 years ago. I doubt I still have those tax returns or if the Thai authorities would accept them as proof I’ve already paid my taxes. It sounds like a foreigner living in Thailand would be subject to whatever tax laws the authorities there want to enforce. Best to avoid the whole mess.
Maybe the Thai authorities will reconsider once foreign investment in the country falls off a cliff. Nobody will want to bring funds into the country to invest in real estate, a business or a project of any sort if they’ll be subject to this type of capricious tax enforcement.
Hi, technically Thailand doesn't need to necessarily know that you've paid taxes on that income - its more that they need to be sure it's not taxable Thai income (e.g has it been accrued whilst in Thailand). This is why many commentators are rightly suggesting its digital nomads, remote employees, business owners who should probably be more careful with these new rules.
That said, in any case no one wants to have to justify that their historic savings are indeed their old savings. Thinking practically I couldn't see this happening to a large degree (I just find it unlikely Thailand is going to start going through expat bank transfers rigorously and demanding evidence of where the cash came from) but I understand expats preferring to avoid the possibility and potential hassles altogether. Indeed many I've spoken to are just going to spend below the 180 day threshold in Thailand from now on & spend the rest of the time in the Philippines, Malaysia, Indonesia etc.
Hi Andy. In your simple example of the UK State Pension, currently below the UK threshold for tax, if this was subject to tax, (based on your definition), but no tax was paid, (because it was below the threshold), then no UK tax return was submitted to HMRC. How can one obtain certification from HMRC that you paid no tax, if no tax was due?
My concern is about providing satisfactory documentation to Thai RD, when there is none available. I feel pretty sure HMRC will not provide this, but maybe with your presumed UK tax knowledge, you would say otherwise. In my case, I have not submitted a UK tax return since I left UK in 1976, as I have worked abroad, (worldwide) since then until I retired 26 years ago, but have now drawn my UK State Pension since April 2023.
It may not surprise you that I have not retained documentation of my entire working life; long since binned. Trying to prove "income" and expenditure for the 20 years I have lived in Thailand is also not something I have kept any records for either, except bank statements which are I think available for the last 7 years.
Hi, thanks for the question. Indeed tax returns won't be possible in your case, but it's still possible to evidence your source of income. For example, you should be able to get correspondence in relation to your pension (such as letters from the Department of Work & Pensions), perhaps screenshots from your Government Gateway account if you have one (if you don't I believe it's relatively straightforward to set up with your national insurance number) or exerts from your bank statement showing it was the department of pensions which paid this into your account.
In terms of historical records, the Thai tax revenue general has a two-year limitation period in which they can assess you - this can be extendable to a maximum of five years in the case where the taxpayer has sought a refund or the case of 'tax avoidance' the definition of which can be vague. But worst case scenario 5 years records is as far back as it would ever go in practice.
@@WorldTaxAndy Thank you for your reply. Reassuring-ish. Are you based in Bangkok? If the SHTF, I will want to see you. (the "F" stands for "fan".)
@@corinthiancolumnist7057 Haha sure, I'm typically in BKK or Singapore depending on client demands
@@WorldTaxAndy Also Andy, I may have a misunderstanding, but my reading of hundreds or thousands of comments on various channels in respect of this new Thai RD interpretation, is that assessable tax will start from 1 January 2024. If that is a correct assumption, then why would anything brought into Thailand before that date be assessable? Perhaps you could clarify that for me.
The mind boggles if Thai RD are going to review 2 years of transactions for 200,000 to 500,000 newly registered taxpayers, (I'm excluding migrant workers), in various different languages and formats; in relation to the latter, when my annual visa extension comes around my required funds have to be shown in one format only - a Thai bank passbook savings account. Any other format seems to be beyond their understanding, although passbook savings are now about as rare as hens teeth in the world of international banking.
@@corinthiancolumnist7057 I'm not sure what other channels have said specifically - but nothing changes regarding assessable income.
Assessable income is formalized in Thailand's Income Tax Code (which is not changing). Assessable income basically means the income that can be taxed in Thailand.
The recent guidance doesn't change what is or isn't assessable income. The recent guidance says that IF its assessable income AND its brought into Thailand at any time, its potentially taxable in Thailand in the year its brought in (but still not guaranteed to actually be taxed as its still pending any potential double taxation mitigation if applicable).
At the moment, anything brought into Thailand in 2023 would be taxable IF its assessable income (e.g wages, salary, pension distributions) AND the income was generated in 2023 (And, assuming, it wasnt already taxed and not eligible for double taxation relief). So there's a few moving parts here and its understandable why there's so much confusion
So basically wait for more official announcements, as this is now unlikely to go into force, as announced.
Malaysia starting to look attractive all over again for retirees. Very favorable tax laws for expats.
Hi Andy. Great video 🤗 I'm a content creator and I do ecommerce. I am Italian but I live 8 months a year in the Philippines. Under Italian law you can be considered resident abroad if you live abroad for more than 183 days. Since my income is produced by clients all over the world, wouldn't I be taxed in the Philippines? Could I in this case open an LLC in Deleware or do you suggest anything else?
Thanks and happy new year!
Hi thanks for the kind words and happy new year! So yes PH doesn't tax foreign sourced income, so if your income is via clients worldwide and its routed via an LLC or other non PH company, you generally have a strong case that you don't have a tax liability in PH. However, you'd just have to be careful not to create a permanent establishment in PH, which could include opening an office, hiring full time employees, having a warehouse etc. By the sounds of it your current set up shouldn't be at risk of this though.
What about "retirement income"..??
In particular... what about US Social Security..? Will they be taxed if brought into Thailand..?
US social security is taxable only in the US according to the US / Thai Double tax treaty so I wouldn't be concerned if this is your source of income.
@@WorldTaxAndy Thank you..!!
Is money remitted to the UK from abroad also taxed for non residents?
No this is not taxable for non-residents. No need to worry about remittances unless you're in the unique position of using the 'non dom remittance basis' of UK taxation, which if you were, you'd be aware of (its something you have to claim every year)
@@WorldTaxAndythanks for your helpful reply Andy and great clear information you put out, no doubt your channel will grow substantially, cheers and subscribed
Okay here is the simple question. How would Thailand know what is income versus savings if your money is all held in your home country outside of Thailand? If you wire money from your overseas account to your Thailand bank account it is just money moving from one account to another.
I don’t see how Thailand could tax that because they can’t determine how to categorize the money. They don’t have any jurisdiction to a foreign countries tax system or employment system.
The way the tax system operates, they wouldn't know automatically because tax returns are self reported in the first instance.
Should they open an audit then they can ask for evidence that you didn't have any Thai taxable income. Under the Common Reporting Standard they could get some bank data from your home country too. This is all quite theoretical though because in practice this can be extremely rare for most people.
But in a worst case scenario that you're audited it would still be useful to show that you were merely moving money between your own accounts rather than concealing taxable income. You could do this by showing old payslips, tax returns, broker statements etc, anything which could provide proof that the money was not sourced as taxable Thai income.
@@WorldTaxAndy Will wait and see. In the USA the only way a foreign country can gain access to your financials and tax related document is make a request. That request has to be associated with money related crime which is typically reserved for money laundering and drug smuggling. It’s also for large sums of money typically in the millions of USD.
This is also my understanding. Meaning nobody has anything to worry about unless they're sending over millions of baht at a time. @@WorldTaxAndy
dude, none of us have anything to worry about with this nonsense. Sending 5k per month USD (half to your thai bank account/half to your girl's) will never result in anything happening as long as you don't voluntarily start stuff. This would only matter if you want to send over large amounts of money in one shot, and there are even ways of dealing with that if need be. This is going to shake out hte weak hands, and make things better and less competitive for the rest of us. @@commanderbishop
Sale of a UK residential property produces capital - this capital will not be taxed if remitted to thailand. Importantly, its source is easily provable.
Yes thankfully when it comes to UK property it’s extremely clear cut where the source is. The double tax treaty is also very clear on where taxing rights lie i.e in the country of the property itself
@@WorldTaxAndy I am not so sure the RD will leave CGT on sales of UK property alone. Many wealthy Thais buy high end properties in Knightsbridge and thereabouts for kids to live in while studying in London a nd hope to sell for profit later. So this will be very much on their radar. The DTA only says that income or capital gains from immoveable property "may be" taxed in the country of the property, "shall be" which allows the other contracting state to tax it. With CGT being 28% in the UK and the top progressive tax rate in Thailand being 35%, the RD could take the difference of 7% without any tax free threshold, since cap gains are just taxed as income in Thailand. For Thais who remitted money out of Thailand to buy property, at least, the principle is clearly not taxable. But for Thais and non-Thais who purchased property with money that was already in the UK, it may not be easy to avoid paying tax at up to 35% on the entire principle as well.
@@georgemorgan8787 Hi George thanks for the comment and great point - whilst Thai tax may not be applicable in most cases, the wealthy elite Thais (and indeed high net worth / high income generating foreigners) could definitely still be liable for that additional 7% in Thailand especially if they remit this. Where that 7% amounts to significant figures in potential tax revenue, I doubt Thailand would let this slip - indeed a lot of speculation has been that the recent rules changes are mostly intended to target Thailand's wealthy elite more than any other group.
I thought US and Thailand have a tax treaty agreement. Your income should not be double taxed. Is this new Thai law superseding this? I’m confused.
No nothing changes in this regard and apologies if any confusion. If your income is subject to US tax then double taxation should not happen in most cases.
Ultimately the real change happening here is that income previously exempt from tax under the "+1 rule" (which allowed you to pay no tax on foreign income if delayed bringing it to Thailand until the following year) will now be subject to tax if brought into Thailand.
If you earn income that was previously already covered under your double tax treaty then nothing should change for you. This new rule change does not introduce double taxation.
Looked at several videos on this and learned it's been put back to July. This is a typical Thai trend to drop it and for this tax plan, come up with another idea focussed on Thai nationals tax codes.
After all the majority of us are tourists, guests no right to government services. They will know our banks and income, issue a tax code and still have to do 90 day reporting.
It's an office I need now.
My gut feeling is they are not discussing as per, just a money grab idea. Why pay tax for thais benefit and get nothing from our contribution. Just a guest, not a resident and Cambodia is back on the side line.
For me it's easier to visit Thailand and stay within 180 days using tourist visas. Sick and tired of heart stopping announcements when all I want is stay at my house with a peaceful retirement. Like most, my patience is lost. Here we go again sit in the dark and nothing announced, only TH-cam videos.
I once sat in my bank for 3 hours just to register my phone to use the banks app. Tax? Having a laugh.
Back to July? What is your source for that info? Thanks
If I stayed in Thailand more than 180days 2 years ago because I couldn't travel during the covid period, am I already a Tax resident in Thailand?
Hi, the residency rules are on a year-by-year basis, meaning what you did 2 years ago is not relevant for the current year. You are only tax resident in Thailand for 2023 if you spend > 180 days in Thailand in 2023.
@@WorldTaxAndy I can transfer as much money as possible to Thailand in 2024 and don't stay more than 180days in 2024. After that, I stay more than 180days in 2025 and don't transfer. In this case, no need to pay tax, right?
@@thevagabond5596 in general yes. If you're transferring historic cash (not earned in Thailand) and you're not a tax resident of Thailand (spend < 180 days) then no tax. For 2025 if you don't transfer in funds then also no tax to pay.
@@WorldTaxAndy Thank you so much. Everything is clear now.
Hi can you do a video on andorra?
HI thanks for the suggestion - I do work with Andorran tax residents so yes I can work on pulling something together
Savings are held in a savings account. A savings account is usually the only sort of bank account a farang can have in Thailand and it needs to be in their name only if being used as evidence of income for Thai Immigration purposes.
I only keep just enough money in Thailand to live off. However Thai Immigration need you to have more money in your Thai bank than you need.@EastAsianExpatRentals
Bay bay Thailand.. move out😊
How about U S social security?
The US has the right to tax social security if you're an American citizen, so nothing should change here if this is your income source.
Is this all starting from January?
As of the latest announcement the plan was to introduce the new guidance from 1 January 2024. But with nearly 2 months left until then, I'd be surprised if we didn't get further guidance or even amendments to it
If you are in Thailand for over 6 months are you only taxed on money you transfer from abroad into a Thai bank account?
Or would they still tax you on rental income in the USA that you do not transfer into Thailand.
In other words can you live there over 6 months and just take money from your US bank account to live off daily without paying taxes?
Thanks for any information you can give me.
Hi Mike, as of now, Thailand taxes you on remittances (that is, money brought into Thailand). Those remittances also have to be taxable Thai income (so they don't tax you on ALL remittances, just the ones that are Thai taxable income).
So if you keep money in the US, this won't be taxed. However, if you spend the money in Thailand, this is viewed as 'bringing into Thailand'. So technically you'd have to keep track of whatever money you did spend in Thailand via your USD account.
Note: your rental income may not necessarily be taxed in Thailand anyway if you've already paid US tax on this (it depends on your tax bracket).
If I understand correctly, from now on, foreign residents will have to show their home country tax returns to the Thai tax authorities.
Hi Peter, it's a theoretical possibility which you should always be prepared for. But it's not going to be an immediate requirement or something foreigners will need to hand over as part of their tax filings. But in the event of a tax audit, they may ask for this - so it's good to keep a few years of tax records to hand (such as home country returns) to support your claims.
I am so confused by all of this. I guess as long as you don’t spend more then 6 months in Thailand 🇹🇭 you won’t be taxed??
Indeed, as the current rules stand, you need to spend 6 months at least in a calendar year before being a Thai tax resident.
@@WorldTaxAndy good information 🙏🏾
Andy, I am a Uk citizen who has just been approved for old 5 year Thai elite visa. I am looking to leave the Uk as of April 2024 (start of Uk tax year) and will notify HMRC of being non tax resident. If I rent a condo for 12 months in Thailand but only reside in it for less than 180 days, would I be considered Thai resident for tax? Happy to chat about this offline too.
@@davebrown6547 Hi Dave, yes from a Thai tax residence perspective its all about days physically spent in Thailand, so having a rented condo in isolation would not make you tax resident.
And as Thailand tax works on a calendar year basis, whilst UK is April to April, you you’d only need to spend just over 3 months outside of Thailand between April & December 2024 to stay non Thai tax resident. Then going forward (2025g you’d need to spend at least 6 months outside Thailand to stay non resident
Can't you just leave your money in a foreign bank and then use the atm to get cash? And not take money into a thai bank?
Also use your credit card to buy things and then pay it with your foreign bank. Why bring cash into a thai bank to pay taxes?
@@527ctguy It's possible and indeed many do this. That said, technically spending money in Thailand counts as 'bringing into' Thailand. So regardless of whether its via an ATM/foreign card, it can potentially be assessed.
But of course there's the question of enforceability - do they actually track this/how can they know? Personally I don't think they have the capabilities and any chasing of this is highly unlikely. But just good to be aware there's a theoretical risk.
I agree. That would be a ton of work to track all money taken out of atms and charged to credit cards assigning it to one person. And then probably a majority would have already been taxed. A more likely scenario would be to try to tax the minimum amount required for the retirement visa. @@WorldTaxAndy
This law is nonsensical. Instead of taxing income, which is understandable, they're taxing savings, which is not considered income. Furthermore, we're required to prove it and file taxes in Thailand. Why should I give a foreign government my personal social insurance number and TIN number from my home country? What if they lose it or it gets stolen? It's too much of a hassle and dangerous.
Hi, thanks for the comment and I agree, which is why I personally don't think this will really apply in practice. Ultimately we won't really know how Thailand enforces the new changes until the tax filing season for the current year starts in 2025, but I think as we get closer to then there will be some updated guidance / clarifications. The administrative burden of the Thai authorities assessing historic tax records from other countries seems extremely wasteful. So I just doubt that we'll ever actually see them do anything as onerous as this.
Thanks for the clarification, but we still need clarification from Thai authorities 😂
Very true, this is becoming a common theme 😅
I'm a lawyer, I do taxes and I'm confused. My recommendation for foreigners not already living there is to stay away until they get their heads out of their asses and clarify the rules so that normal people can understand. They don't sound like they really want foreigners anymore. Regardless, they created the mess, let them clean it up. If we're all confused, imagine their tax people making judgments on whether you need to pay or not. Sounds like a recipe for disaster.
Yeah I think that's a fair approach if you're not already living in Thailand. Hard to know whether any further guidance/clarifications will be issued - despite the outrage over the past 2 months they've remained quiet. There are much easier countries to move to when it comes to getting tax clarity
That makes no sense. Income that you made in the past is not taxable in thailand. Just because you lived in Dubai where it hasn't been subject to tax doesn't make it taxable in Thailand. Thailand can tax only income you make in the year you are a thai tax resident
Yes this is true, but this is a problem people are worrying about how they prove their income is not taxable (i.e how do I prove the money I'm bringing in is not taxable Thai income).
In most cases, people's income would have been subject to tax elsewhere, but of course UAE is an exception and in this case an income tax return would not be possible, but proof of your residency in UAE at the time of earning the cash would be useful, as would proof that the money was actually earned in a year in which you werene't Thai resident (perhaps an invoice from a customer, business accounts etc).
Easy solution: Stay away from Thailand and look at expat friendly locations.😊
Buh bye.
So it sounds like a positive for us people with usa citizenship that are supposed to file taxes with usa even if not in the usa. Hehehehhe. 555
elaborate please.
@@luxuryseaviewvillas6744 oh man... I made my comment 3 weeks ago and I can not remember which part of the video gave me hope.. sorry
lol, no worries. in any event, there's no reason to worry about anything for now.@@melissaakey4631
Move across the border
Indeed a very effective tax mitigation strategy is to simply leave :)
I think a lot of people who can travel and can't be bothered with all this complexity will rotate between countries. The biggest problem being what do you do with storing your stuff
Pensions are not income.
7:02 evidence of "witholding tax on pension distributions"
Whilst correct that the pension itself is not, the distribution can often be deemed income for tax purposes, so it's important to understand when this distinction applies
My Australian disability is pention is not a taxable income I do not pay tax on it so how can they tax me here it is my sole income
Pay your taxes…if you’re tax at your Homeland you came from, regardless if it’s from a pension that is tax free from the country you originated from and you live in Thailand…pay your taxes to Thailand.
@chrisbucko2611 your Australian pension is 'subject' to tax, it simply is below the tax free threshold and thus does not incur a tax liability.
If you have earnings on top of your disability pension they would be tax in aggregate with your pension
I feel dumber having watched this video. You talk about fungibility of money and what is savings and what is income. You're missing the whole point on the proposed tax change. It's simply if you received income then you pay tax. Doesn't matter whether the money you bring into Thailand you call as "savings" or not. You had an income, it's taxable. This is the same way income is taxed in many western countries. Why is this so.difficult for people to understand.
Hi, you should watch the original video. My point is moving money between your own savings is not taxable. The same treatment as Western countries.
Of course the original income is taxable. You likely paid your taxes on that. If you haven't, then perhaps you will have taxes to navigate.
@@WorldTaxAndy obviously moving money from one account to another is not a taxable event, but I can't understand why so many people are panicking as if it is. Have they never filed a tax return in their life?
Not only that, you also seem to be misleading people into thinking that just because foreign income was already assessed for taxes in the source country and no taxes owed in those countries does not necessarily mean you wouldn't owe taxes in Thailand. Thailand's tax rate is generally higher than other countries so any assesable foreign income you would need to pay the difference between what Thailand say you owe minus.what you already paid in the source country (with a few exceptions specified in any tax treaty)
@@HyperspaceHoliday this video is mostly trying to address the most common scenario I have been asked where people are asking about historic savings i.e savings they accumulated outside of Thailand whilst they were not a Thai tax resident.
In which case, there should be no concerns about double taxation because Thailand held no taxing rights at the time they accumulated their savings.
Yes, people need to be careful once they are a Thai tax resident and they now have potentially two countries to consider with regards tax - but this is a different issue because we're back into the realm of talking about tax on earned income as opposed to tax on accumulated prior savings.
If I have 100.000 profit from my llc in usa, and i do NOT bring in thailand. My tax will be 0%. Correct?
Correct, it remains untaxable so long as its unremitted to Thailand.
@@WorldTaxAndy maybe we should move malaysia or phillipines. I heard it is a pure territorial system
@@lucionelucione generally yes, I’ve made videos on these two countries as well. They’re slightly more tax friendly than Thailand when it comes to foreign income.
Where did your savings come from ? Income ?
Me personally - income through my business & previous employment which I was taxed on in the UK.