Southeast Asian Tax Changes - Due to Global Pressure?
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- เผยแพร่เมื่อ 24 ก.ค. 2024
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Recently there's been some changes to tax rules in various Southeast Asian countries including Thailand, Malaysia and Singapore. Many are concerned that the timing suggests this is no coincidence and that it may be part of global pressure on these countries to tighten up their tax regimes.
In this video I provide some overview into where these pressures could be coming from in addition to my opinion on whether there should be any concern from the perspective of individuals or small businesses.
0:00 Introduction
1:21 Is there global pressure?
2:24 Will individuals / small businesses be impacted?
4:35 Concerns for future - CBDCs?
7:54 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.
Great content, thank you.
Minute 8:00 killed me 😂.The 🐔agrees to stay tuned but to not worry too much.
Haha yep he’s wiser than most 😂
Excellent video, thanks 🙏
from Korea ~~thank good video
Hi great advice, well presented...id appreciate an update on the isle of man crypto taxation from you from please, best regards
I am not a tax expert but my understanding is that Singapore thus far has introduced Section 10L which taxes capital gains made by entities that are part of consolidated multinational entities (MNE) groups where at least one member of the group has a place of business outside of Singapore. No personal income foreign source tax on individuals yet. This one is under pressure from the EU that objects to EU MNEs setting up structures to take capital gains in Singapore. I would think that Singapore and HK would try as hard as they can to keep their tax regimes as competitive as they can. The Thai Revenue Department issued order P 162/2566 on 20 lNov which exempts any income generated prior to 1 Jan 2024. The have also said it is their intention to amend the Revenue Code to introduce global taxation on any income regardless of remittance to Thailand or not. But that requires the government and parliament come on board with this idea and to legislate an amendment law which would take a couple of years. So it would not come out of the blue like these recent orders.
Andy, could you make a video regarding for Non-resident UK citizen with rental property in UK? Most efficient ways to mitigate Tax liabilities etc
Hi Chris, thanks for the suggestion - yes I can make a video covering this.
Can you make a video on Malaysia’s latest tax system for foreign expats working there. The B2B SaaS business example is a good one as you covered it previously. If the customer signs up on a US website and the contract is all online and no counter signature is required by the expat living in Malaysia would that be considered Malaysian sourced income? What about the remittance basis exemption ?
Much appreciated excellent summary, as it currently stands is it legal to be a tax nomad and live for example in 3 countries on a 4 month rota (under 183 days) and be resident and neither for someone retired earning no income ? I got my Spanish Bank account frozen due to this, no big deal because I left and was never resident there and just had a holiday home there but they absolutely wouldn't accept this scenario, once again thanks for the update and video
Thanks for the kind words, much appreciated. So yes its legal to be a tax nomad because as of today there’s no such thing as ‘international tax’ per se, there’s no overarching global body which enforces taxation. Every autonomous country has their own local tax laws & if you don’t meet tax residency in any country then you can be a tax nomad.
Note, just because it’s legal doesn’t mean its always easy because as you have experienced, there’s the logistical side too. Sometimes banks hate when you don’t have a tax residency (often their regulators require them to collect tax residency data).
However this doesn’t necessarily condemn you to issues with all banks. In reality many banks separate tax residency (which they often don’t actually care about) vs physical residency (which they more often care about). Physical residency generally just requires access to a residence address in that country which could be your own property or perhaps a family member’s.
Spain is notoriously difficult to deal with so not surprised they wouldn’t accept your holiday home address, but the UK, Ireland and many northern EU countries are more friendly. Also a lot of nomads obtain Estonian e-residency which can give them access to European banking without having a physical residency
Thanks for the reply Andy, at the moment watching the situation in Thailand before committing, best regards from Vietnam
Andy, is there any way to contact you for some advice regarding the Thai Canada tax treaty for a small questoin?
Hey feel free to reach out to my business email advisers@degenwealth.com
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A term that I haven't heard yet is "subject to tax". Your Thai interpretation would be helpful.
In Australia my pension is an income for Australian tax purposes but as I'm below the income threshold I pay no tax. But all Australian pensions are "subject to tax". The same applies to my savings in my superannuation pension income stream. It's subject to tax but no tax paid because my saving are below the threshold so no tax is paid on any interest earned.
Will be very interesting on how this all pans out and whether the Thai government use their own interpretation for Thai tax as apposed to the Australian and other governments interpretation for paying tax. Eg, Income may be subject to tax but as no tax was actually paid from income in the country of origin Thai government may review and tax calculated under Thai tax law.
Thai interpretation may be that because no tax has actually been paid even though it was SUBJECT to TAX in country of origin it allows Thailand and other countries to tax that money coming into the country.
Becomes a very murky situation indeed and can see how many expats are worried with no clarification at all coming from the Thai Government with less than 1 month before the wheels of this whole mess starts to turn.
Hi, thanks for the question and indeed this is an important point. As you say, being subject to tax doesn't necessarily mean you've actually paid tax - there's all sorts of reliefs, exemptions, lower tax bracket thresholds etc that can lead to no tax in your home country. Yes the situation could get murky if Thailand does deviate significantly from other countries, but I'm optimistic they won't because it would seem like shooting themselves in the foot. As of yet I haven't seen any Thailand announcements containing specific wording regarding 'subject to tax' treatment as it pertains to the latest rules. However, taking a parallel case, Malaysia, which recently has also changed its foreign income treatment, has defined subject to tax - and broadly anything which was earned in a country with a headline tax rate above 15% (which includes Australia) is considered to have been subject to tax and therefore non taxable in Malaysia. Malaysia doesn't care about if tax was actually paid, so long as it was subject to it. I would hope that Thailand's revenue department has a similar view on things but as you said clarification could be helpful to quell some fears
South east Asian countries will need to raise their tax take place faster than anticipated because every country has way too much debt than they can handle. Cbdc will also come faster than we first thought because fiat currencies will have to devalue as central banks will QE again this year and slash interest rate to vainly prevent a hard landing. At least you will be a busy bunny with your consultations going through the roof in latter half of the year.
Thank you. Are there any advance precautions we can take, if we have a few years to prepare?
Just be prepared to pay tax on any income you receive anywhere in the world. A Swiss banker told me that would be the future 10 years ago when they still had banking secrecy in Switzerland.
@@georgemorgan8787 yes I think this is what we have to probably resign ourselves to long term. I think a potential move in the interim could still be diversification away from the countries who are leading the charge i.e the OECD. Global changes are never evenly distributed and my hope is that many SE Asian countries along with the likes of South America, the Carribean, Middle East etc hold their ground for a few more years and resist some of the overreach. So perhaps having some backup residency/passport options and even investments (property, stocks, crypto) that aren't tied to one of the larger Western economies could be a decent mitigator.
Cambodia is good for crypto
Good content, except you could have made this video a 3mn one with exactly the same informations. Try not to make people waste their time repeating 6 times the same thing just to reach the 10mn mark in order to get your little ads revenues, that doesn’t build credibility about what you live on…
I make $0 from ads since my account is too small to qualify for the TH-cam monetisation program. Once I do qualify, I’m turning off ads because I won’t ever make much from my channel anyway, its too niche.
This was merely a train of thought, not a formal scripted video, so I just ran with it. But I’ll consider editing down in future.
That is not a very nice thing to say to someone who is trying to help and provide useful information. Keep up the good work.
@@WorldTaxAndy Andy, please ignore the haters and continue to make more content the way you do. You bring great clarity to the subjects you speak about, which is rare in the tax world! Your guidance is much appreciated and content is very thought provoking. ❤
@@FrozenSkyy Much appreciated, thank you.