Does the new tax residency rule in Thailand affect expats' decision to stay long term?

@Chris ***

Thailand Revenue Office

@Mark *******

awesome

@Ronald *****

you are conflating Thai customs requirements with Thai tax requirements.

@James *****

I live here and pay no taxes

@Pertti ************

VAT is 10% but currently at a temporary time limited reduced rate of 7%.

@Paul **********

You do realise it's always been that way in Thailand? 180 days per year deems a person a tax resident. It's been like that for at least 25 years. I'm still here and still paying no tax as I have no assessable income

@Mark *******

Good for you 🤣

@Richard ******

all information is available on the Revenue website, read section 40 of the Revenue Code then read your country’s DTA.

@Pete ******

yes but how many people are actually exempt? As i understood it, those are fringe cases?

@Toon ********

not at all, it is very common to live long term in Thailand with no tax liability, Canadian pensioners, US citizens living of social security, UK pensioners living off government pensions etc etc.

@Pete ******

As i understood, pensioners would still be required to file if they stay 180 days or more. Just because there is a DTA doesn't mean they don't need to file.

@Toon ********

not true. The requirement is to have assessable income. No assessable income equals no tax filing requirement.

@Pete ******

Aren't pensions generally assessable income? You need to prove that the pension has already been taxed sufficiently in your home country for it to not be taxed additionally in thailand with a DTA. So even if you get a full tax credit in thailand due to the DTA, I think you still need to file and prove that.

@Toon ********

correct, pensions are assessable income unless exempted by a DTA. If exempted then no tax filing. If not exempted then just normal PIT rates, allowances and deductions apply with any withholding taxes paid in home country allowed as a tax credit against your Thai tax liability and again you are correct in this situation you would need to file assuming your remittances are above minimum thresholds.

@Pete ******

thanks for clarifying

@Marty ********

ah didn't realize you meant a firm in thailand

@Keith ***********

correct. That's why I said any DTA "may come into play and nothing is owed". I did not say a DTA automatically meant one would not owe taxes. Perhaps my wording wasn't the best though.

@Kevin ********************

Depends on your income bracket. Goes from 0% all the way up to 35%.

37/

@Toon ********

A lot more than in the States.

Yes. Say I'm thinking of buying a condo for 3 million baht and a new car for 1.75 million baht. If I have to pay tax on that money when I bring it in to Thailand its nit going to happen. That's 4.75 million baht that will never come to Thailand. I will continue to rent and make do with my 5 year old car.

Stick to the script "it's my life savings and I have no income " ...let them audit etc.. if it gets heated or u have doubts pack up and leave! They can't prove it ain't life savings. And it's gonna consume a lot of effort to dig deeper in foreign bank accounts around the world. They hope for the low hanging fruit of the suckers who worry and wanna pay up front.

@Nick ***********

yes. Good answer. They'll learn the hard way!

@Nick ***********

exactly my concern as well. My workaround is staying less than 180 days this year, but bringing in the money for a condo/car. Since I'm not staying 180 days, I should be able to do this tax-free. Next year i will then stay more than 180 days and bring in a lot less. But this is a one time patch workaround since I'm just moving and not everyone can do that.

@Toon ********

exactly what I am doing but I believe that any income generated in a year you are not tax resident in Thailand is never taxable in Thailand whether or not you are tax resident there in the future. I know that any savings held prior to 2024 are not taxable when remitted to Thailand. Need to get statements together to prove what was held then.

@Nick ***********

I don't think the year that the income was generated matters. It's the year that 1) you stay 180 days or more 2) you bring money into thailand.

Even if the income was generated 10 years ago, if you bring the money into thailand in 2025, you will have to file for it in 2026 if you stayed in thailand 180 days or more in 2025.

(unless it was income generated before the law took effect? not sure, and would be hard to prove i guess)

@Toon ********

I am pretty sure that any savings held prior to the end of 2023 are not assessable but yes, not easy to prove as even if you have a statement dated end of 2023 showing £ you could have spent that the next day!

@Toon ********

so in order to live comfortably in Thailand I think we could say its 15% +.

@Travis ******

actually you pay the Thai taxes first (tax residency is primary) and can deduct taxes paid from your USA taxes.

@Tony *********

I would assume it heavily depends on where the income comes from. For me, I do not pay Thailand first because my income comes from the US. My US taxes are taken out of my salary and bonus's, and paid into US bank accounts. While I am a tax resident, with a work permit, my income is derived from outside the country. This is why I suggested whoever to talk to a Thai tax expert, ideally one with experience in expats.

@Travis ******

USA DOES NOT HAVE A DOUBLE TAX TREATY WITH THAILAND.

@SJ ******

oh dear

@SJ ******

read your own link it shows they do.

@SJ ******

yes there is

@Travis ******

i will need to look into this. I have not heard that US taxes will count. I assumed I would be double taxed

@Ryan ******

seriously? Research double tax treaty. Not that hard

@Ryan ******

DTAs are in place to prevent double taxation.

@Ryan ******

yep, check with a tax agent. If you are paying US taxes you get to write that off on your Thai tax bill.

@Ryan ******

I don't believe that is correct. What I do believe is that those claiming that there is no confusion surrounding this issue are wrong.

@Peter *********

everybody says it will get dark tonight. The point is being tax resident in Thailand does not remove the confusion around whether you pay tax there or not so I stand by my comment because I am not wrong.

@Nick ***********

the question is about tax residency not tax liability....

@Pete ******

you see there is even confusion about what the op is asking. I believe it more likely that the question referred to tax liability.

@Nick ***********

Yeah… Use your left left-bound lights and then cause an accident while turning right….

“I believe it’s more likely the lights referred to a right turn”. 🤣

The judge will be really impressed with your explanation. 😉

The answer to the OP is as simple as your “It will get dark tonight”. Great example! 👍

@Peter *********

very good 😂😂😂

@Nick ***********

you are the one adding confusion. The question only asks about tax residency, and the answer to that is very simple.

@Pete ******

yes I agree with that but whether you are liable to pay tax in Thailand if there over 180 days depends on so many criteria that there is bound to be confusion surrounding that issue.

@Nick ***********

My revenue department said it clearly. You stay 180 days or more, you must declare your money. It may come out to 0 (like me), or no declaration (like others told me), but you’re liable in any case.

And to make it even worse, read here about the tax clearance certificate .html

@Robert *******

tax clearance certificates are irrelevant. Your statement stay 180 days or more you must declare your money is false. Please go read the Revenue Code.

@Pete ******

I just showed you a government page and you say it’s irrelevant.

Ok Mr Knowitall has just proven that everybody else is wrong. 🤣🤣

@Pete ******

(A bit off-topic, unrelated to the 180 days question)

Hang on… This is interesting for those who are (sometimes wrongfully) sent away!

When being sent away, always ask for a tax clearance certificate. That saves them from a ten year audit period!

@Nick ***********

I agree with you which is why it’s important to educate ourselves by reading the appropriate DTAs along with the Thai Revenue Code.

@Pete ******

I will set aside a few hours to do just that quite soon.

@Pete ******

One word "solely"

@Peter **********

but the problem is in the wording permanent home. An Aussie with for example a 1yr lease has established a permanent home in Thailand so the DTA requires you to go to section B and habitual abode comes into play. If you’re living long term in Thailand you will lose your Aussie tax residency at some point. The ATO define permanent home as the opposite to a transient home. Be careful with the terminology.

@Pete ******

Almost impossible to lose Australian Tax Residency, unless you really want to

@Pete ******

Living long term in Thailand does not result in loss of Australian Tax Residency, I don't know where you got that info. I've been in Thailand for almost 20 years but still remain an Australian Tax Resident. The home I have in Australia is more permanent than what I've got in Thailand, as I own it! I don't have a lease in Thailand. Even if you work down the criteria it still rests at "economical ties". I realise there are many Australians who have wiped their hands of Australia and have tried to become part of Thai community, even though they still have to check-in every 90 days and ask permission to stay another year on an annual basis. However many Aussies are like me. We see Thailand as a very convenient place to "hang out" but have no intention of making it our permanent home

@Peter **********

you don’t get to economical ties until you get past habitual abode. If you are living long term in Thailand you will lose your Oz residency as you will not meet the ATO residency tests.

You do actually , I have an approved ATO ruling as Australian resident for tax purposes , they'd be silly not to , as it's where the income is derived , I do 3 x tax returns per year , and have a couple of houses , neither of which I reside in .

I'm a very obvious example and frankly much better for Australia as I continue to pay medicare and private health insurance .

No doubt about my tax status and if has NOTHING to do with where you choose to live , it would be cheaper for me to try and ditch the status . I choose not to .

@David ********

Correct. I also have the residency certificate from Australia which confirms my tax status. Contrary to what

@Pete ******

is saying, it's not easy to dump Australian Tax Residency, as the criteria is very ambiguous. As you'd know there is a proposal to tighten the tax residency rules, but even then it's only a case of spending 45 days over a two year period in Australia. About 99% of my assets are in Australia, and I pay tax and Medicare there on account of my rental properties. My stock market portfolio and Superannuation funds are both located in Australia as are my family ties. Just about the only thing I have in Thailand is a solitary bank account. How anyone could even suggest that Thai Tax Residency takes precedence over the Aussie in my situation is laughable. The trump card is my local tax office even told me I don't qualify for a TIN!

@Peter **********

I refer you to the ATO Taxation Ruling Income Tax: residency tests for individuals. “As a rule of thumb an intention to live overseas for two years or more would be considered sufficient to show that the taxpayer has abandoned his Australian residence” “A person will have established a permanent place of abode overseas once they commence living permanently overseas” “Retaining a dwelling in Australia does not necessarily mean that an individual remains a tax resident “ KPMG GMS Flash Alert 2023-126.

@Pete ******

Perhaps you'd better inform the ATO that they've fraudulently issued me with an Certificate of Tax Residency! 😆. I'm afraid you're grasping at straws, I've no idea why. Both the ATO and the TRO have confirmed that I am not required to have a TIN, not to file a tax return. If either wishes to investigate my situation they are free to do so. Having an extended retirement holiday in Thailand does not constitute tax residency when I have the colossal financial ties in Australia. My Thai bank account never has more than 100,000 Baht in it. Good try but you're out of your depth!

@Peter **********

you are correct if indeed you are on an extended holiday and can evidence that, but now you are moving the goalposts. Your original claim was that you were residing in Thailand for many years….

@Pete ******

You certainly got me in! At first I thought your comments were serious, but the more I read the more I realised you're having a joke! Good one! 👍👍

@Pete ******

I have been living in Thailand for almost twenty years. I also live some of the year in Australia. I'm not "moving the goalposts", my situation has not changed. You need to read the ATO tax ruling in its entirety before you start misquoting. I don't have to "evidence" anything. The ATO already knows everything about me. You are so far out of your depth it's comical......

@Peter **********

a tax residency certificate is only valid in the tax year of issue. It has no relevance to your current tax status if it has expired which yours did last year.

@Pete ******

You are really struggling now! The Australian financial year runs from July 1 to Jun 30, so this certificate has not "expired". It certifies my tax residency for the financial year. After June 30 this year, I will obtain a certificate for the financial year, and so on, year after year. I've been doing this for several years, as I own a property in Germany on which I have to pay German taxes, but by virtue of my certificate, any other worldwide earnings are taxable only in Australia. I think you're new to this taxation gig, because you obviously don't know the tricks of the trade, to legally minimise tax. I've been doing it for years, you should try it! 👍😂

@Peter ********

Yeah , you situation is close to exactly the same as myself . Obviously there are benefits for both Australia and those of us in this situation , basically holding Australian assets .

If they eventually pass that legislation that was proposed and had bipartisan support anyhow it would not concern me at all , because you get people confusing the 180 days with " Australian resident for tax purposes " two different things

An apple v orange .

@Pete ******

Not quite true. As I say, I've lived in Thailand for many years but I am still certified as Australian Tax Resident. The residency criteria for Australia is quite ambiguous. You can have an habitual abode in both countries

@Peter **********

correct you could have a habitual abode in both countries but that would be very hard to establish unless you are bouncing back and forth on a weekly or monthly basis between Thailand and Oz. I hardly doubt that is the case if you have been living here for many years….

@Pete ******

Are you making this up as you go along? 😆😆

@Pete ******

I don't get past the "permanent home" criteria.

@Peter **********

so you don’t have a permanent abode in Thailand? You have been couch surfing of hotel hopping for many years? This comes back to my original statement of terminology. If you rent an apartment on for example a 1 yr lease you have established a permanent abode in Thailand under Australian tax law.

@Pete ******

I live with someone.

@Peter **********

yep you have established a permanent abode in Thailand. The Oz DTA is not as generous or as onerous as many other DTAs. Have a good evening.

@Pete ******

No permanent home in Thailand, only in Australia. I don't get past first base! Only a glorified tourist here! You have a great night too! 👍