What are the tax implications for UK retirees spending over 180 days in Thailand?

@Tim ********

Tim, thanks for posting. Many of us will be paying 35% tax !

@William ******

as long as taxes have been legally paid, no problem.

@Pete *********

My understanding is that any funds credited to your Thai Bank account from overseas will be aggregated through the tax year and will be deemed to be 'income' for the purposes of assessing liability to taxation in Thailand.. however any tax already paid in your home country and duly evidenced will be off-set from such a liability.. assuming a double taxation agreement exists between said countries.. so in instances where the tax rate is higher in your home country there will be no further tax to pay in Thailand.. if the reverse is true then you could end up paying some tax here.. but this all goes away if you don't bring funds into Thailand but retain your deposits overseas instead.. since you have no visible income within Thailand.. at least that's my understanding of the situation.. and if I'm correct and all the expats stop moving money into Thai banks.. you can bet the Thai authorities will quickly review this tax law.. since it would not serve economic growth.. the real target was never the retired expat community or those of us married to Thai's.. i think it was intended to catch mobile workers who earn their income predominantly outside of Thailand.. people who are technically tax resident here but get paid by an overseas entity into an overseas bank.. they may take advantage of this to avoid paying tax in either country.. and Thailand no longer wants to accommodate them on a tax free basis!

@Ally ***********

ok I appreciate that. Was debating on the whole 800k baht in thai Bank or showing the 65k a month. I may just hire an agent to do all the visa and bank shenanigans and run everything out of my US bank and wise account. Thanks for the detailed reply

@Pete *********

Consider maintaining the existing balance in your Thai Bank account for your visa extensions.. then minimise any new transfers into Thailand during the current tax year.. at least until we get further clarification or a rule revision.. for expats married to Thai's.. remember they have the option of transferring overseas funds into their spouse's bank account to avoid scrutiny.. just more food for thought!

@Ally ***********

thanks Ally. Much appreciated my friend. I'm pretty sure I'll be good to go

@Pete *********

the Thai government is only concerned about income coming into Thailand, and that all taxes have been paid on those funds. They closed the loophole that was allowing untaxed income to come into Thailand.

@Kool ******

ok so if it's a portion of my government pension pretaxed in states and deposited into a Thai bank each month, I don't have to worry about taxes? Should I have my 1099R to show this? Don't want to be blindsided by any additional hits on my income not budgeted for.

@Pete *********

they aren't really concerned about those older than the retirement age in their home country, and on retirement visa extensions here. They are concerned about those under the retirement age in their home country, like under 62 in the US, and having a retirement extension here because they are over 50 years old. You can't legally work in Thailand on a retirement extension, and you are too young to be collecting a pension in your home country, so where is the money you are living here on coming from, and has the legal tax been paid on it. That is the concern, because a major loophole was ended that allowed untaxed income to come legally into the country before Jan 1st.

@Barry ******

there's nothing for the banks to know. The guidance hasn't been released by the relevant government department. They know this will affect the tax returns the are filed next year so they don't have to create the new guidelines until the end of this year.

@Barry ******

it's not the banks, it is the revenue service, tax man. Banks report all international transactions already. The government just wants to make sure all taxes have been paid on it.

@Kool ******

Banks only report transactions over 2million!!

@Barry ******

it's not for expats

@Bart *************

Not correct, if you have an investment trust and you make a profit, let's say you make 1000 quid profit and you pay 250 quid uk tax and then it's assessed in Thailand and the TH tax is 300 quid in Thailand you will pay 300-250= 50 quid Thai tax. By 100% I mean you pay 100% of the tax due in both countries minus any tax credit due to DTA.

@Graham ******

well those treaties are bilateral and hence not identical. It would be possible that the Treaty between your country and Thailand includes that arrangement. As far as I know, the rationale followed in the Dutch-Thai treaty is exclusively based on determining case by case in which of the two jurisdictions transactions are taxed.

Another notable bilateral tax treaty with a strange arrangement is the Dutch-US one. It states that people with US citizenship and working in The Netherlands DO owe tax at both places. It achieves exactly the opposite of what such treaties usually aim to prevent. These people are entirely screwed as they lose almost all their income to tax. So indeed there are exceptions.

@Bart *************

The only thing I agree with here is "they are not identical" I have read that there are already legal challenges being considered, if so this is going to be up in the air for years and years and this is the worst cases scenario that could have happened.

@Rok *******

You are absolutely correct regarding the assessment of tax and treatment of overseas tax credits by the Thai authorities 👍