Proposed changes to taxation

[Gaybutton]

They should come out with a new newspaper directed solely at the expat community called "SHOCKWAVE". They certainly have enough qualified reporters...

Good point. No disagreement there. On the other hand, I wouldn't be too complacent either. I think it's more 'wait and see' rather than 'this is how it will be'.

You say expats already on the "O" retirement visa have nothing to worry about regarding any potential rule and requirement changes and you say we don't have anything to worry about regarding finding ourselves income taxed.

I sure hope you're right.

[Jun]

61 countries, including the U.S. and Great Britain, signed agreements with Thailand in 1996 to avoid Double Taxation.

This could still be bad news for some people.

1 From my limited grasp of these things, I gather avoiding double taxation just means you pay the higher of the two rates. e.g. If you pay 10% tax on a overseas income in the foreign country and the tax rate where you reside is 20%, you pay the extra 10% locally. That's how it seems to work where I've had taxable overseas investments.

2 If you have investments in countries where dividends are not taxed, presumably the dividends would now be drawn into the Thai tax system.

3 If your affairs are now drawn into the Thai tax system, there is presumably the risk of having to do a Thai tax return ? I wonder if that's any more efficient than other Thai admin processes ?

[Gaybutton]

The vast majority of retired expats are here on "temporary stay extensions" and are not "Residents".

That is a very good point and my guess is ultimately expats are not "residents" at all. That, along with the double tax agreements, my interpretation, so far, is expats on the retirement visa will not be subject to this tax.

Of course, at this point we still don't know, but at least to me, that seems to be the way we can expect it to work out.

[Dodger]

1 From my limited grasp of these things, I gather avoiding double taxation just means you pay the higher of the two rates. e.g. If you pay 10% tax on a overseas income in the foreign country and the tax rate where you reside is 20%, you pay the extra 10% locally. That's how it seems to work where I've had taxable overseas investments.

2 If you have investments in countries where dividends are not taxed, presumably the dividends would now be drawn into the Thai tax system.

3 If your affairs are now drawn into the Thai tax system, there is presumably the risk of having to do a Thai tax return ? I wonder if that's any more efficient than other Thai admin processes ?

Like you, I'm just starting to read about this subject and certainly no expert.

Some thoughts about the (3) statements above:

1) My understanding (right or wrong) is that when you avoid double taxation it means exactly that - you avoid being double taxed.
I think the scenario you presented may sometimes apply if there is no double tax agreement in place.

2) I have no idea. But again it's my opinion that expat retirees won't be drawn into the Thai tax system anyway.

3) As we all know, the Thai admin processes are third-world at best. They don't even know how many people live here because their systems are so antiquated and disjointed - let alone have the capability to handle the multitude of complexities involved in international taxation. This won't change in our lifetimes...even if you were just 10 years old...555.

[Jun]

But again it's my opinion that expat retirees won't be drawn into the Thai tax system anyway.

Inverting this, do you know of any country where retirees are exempt from tax ? Usually, the only retirees that escape tax are those earning below the tax free allowance.

Some countries don't tax overseas income, but that's the very thing Thailand is changing.

[Dodger]

Inverting this, do you know of any country where retirees are exempt from tax ? Usually, the only retirees that escape tax are those earning below the tax free allowance.

Some countries don't tax overseas income, but that's the very thing Thailand is changing.

Here's a quote from the article that billyhouston shared with us at the start of this post.

"The program will begin January 1, 2024 and apply only to tax residents in Thailand meaning tourists and short term workers will be exempt. Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand".

Works for me!

[Jun]

"The program will begin January 1, 2024 and apply only to tax residents in Thailand meaning tourists and short term workers will be exempt. Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand".

As long as you have been taxed in another country.

I suspect that will mean as long as you have paid that type of tax in another country & probably paid it at at least the same rate as in Thailand.

I think the one saving grace here is that Thai tax rates appear to be lower than in our home countries ?

[Gaybutton]

I suspect that will mean as long as you have paid that type of tax in another country & probably paid it at at least the same rate as in Thailand.

I would be in full favor of paying a Thai income tax if you get to decide for yourself which country to pay the tax, your home country or Thailand, but of course not both. I would bet the farm that the amount I would have to pay Thailand would be far, very far, less than I pay the USA.

Unfortunately, it doesn't work that way.

If expats do end up having to pay a Thai income tax along with their home country's income tax, a question came up asking what if you simply don't pay the Thai tax? My guess would be at the very least you could say goodbye to your retirement visa.

I did see a post on the Sawatdee board saying if expats, even on the retirement visa, stay in Thailand more than 180 days per year, now we are considered residents for tax purposes - regardless of agreements with our home countries. The poster did not say where he got that from, but if he is correct, that's news to me. I have not seen or heard about any such thing.

In other words, it seems like those of us posting what we think will happen is we doubt expats on the retirement visa will be subject to this tax. However, in case we are wrong, we will either have to deal with whatever comes and 1- pay up or 2- start packing our bags.

[Dodger]

I stand corrected:

According to some more reading it appears as if expats are in fact considered "Residents" by Thailand's Revenue Department (similar to the U.S. IRS) any time a foreigner remains in country for +180 days (6 months). Never heard that before! Wouldn't it be nice if Thailand's Immigration Department would get on the same bandwagon - where annual visa renewals would no longer be required for those classified as "Residents"?

It still appears (to me anyway) that the Double Tax Agreement prevents non-working retired expats from being double taxed on retirement income they may be receiving in Thailand. If they were still working (either in Thailand or abroad) it would be a different story. At least that's the way I see it.

I can see it now:

Tens of thousands of Thai nationals and working foreigners (including 5 million Chinese businessmen), all bombarding Thailand's Revenue Department (which probably consists of an old brick building with a dozen low paid clerks sitting around munching on fried grasshoppers) with tax reports that the Department can't comprehend, let alone process. Maybe that would result in the emergence of "Tax Agents" as the solution to the bottleneck to create another value-stream? Why not? This was Immigration's solution several decades back (Tea Money Express)

I found the Guide below helpful:

https://brighttax.com/blog/us-expat-tax ... rom-a-cpa/

Here's a refreshing video - I'll call it "cutting to the chase":

https://www.google.com/search?q=utube+t ... sMzUU,st:0

[Gaybutton]

Wouldn't it be nice if Thailand's Immigration Department would get on the same bandwagon - where annual visa renewals would no longer be required for those classified as "Residents"?

I'd love to see exactly that actually happen. If expats are residents for tax purposes, maybe a lawsuit or two would clear the way for expats on the retirement visa, now also paying Thai income tax, to be considered legal residents for all purposes, including immigration.

I could see it both ways. You get a choice - if you are on the retirement visa, but now paying taxes in Thailand, now you are a legal resident and no longer required to have the retirement visa or any other visa. -OR- Choose not to pay the tax, but be required to continue annual extensions of the retirement visa.

I would love such a choice. I'll let you folks decide for yourselves which one I would choose.

But since the chances of such a choice actually happening are between zero and nil, it's just a passing pipe dream.