New thai tax laws 2024 on all incoming money to thailand.
Apr 25, 2024 6:22:04 GMT 7
Denis-NFA likes this
Post by bear on Apr 25, 2024 6:22:04 GMT 7
Swiss Abroad: fog clears on tax reform in Thailand
The tax reform affecting Swiss emigrants in Thailand since January 1 contains a number of grey areas. The authorities have therefore clarified the situation in recent months, particularly with regard to the taxation of pensions.
Does the reform have an impact on second or third pillar payments? Has the double taxation agreement been amended? If you can prove that you are living off your savings, do you have to file a tax return? These are just some of the questions from the Swiss Abroad that we received after our first article on the tax reform that came into force in Thailand at the beginning of this year.
Many of the 10,400 or so Swiss expats who will be living in Thailand by the end of 2023 have called for help to clarify the situation.
The tax reform affecting Swiss emigrants in Thailand since January 1 contains a number of grey areas. The authorities have therefore clarified the situation in recent months, particularly with regard to the taxation of pensions.
Does the reform have an impact on second or third pillar payments? Has the double taxation agreement been amended? If you can prove that you are living off your savings, do you have to file a tax return? These are just some of the questions from the Swiss Abroad that we received after our first article on the tax reform that came into force in Thailand at the beginning of this year.
Many of the 10,400 or so Swiss expats who will be living in Thailand by the end of 2023 have called for help to clarify the situation.
As a reminder, the tax reform drawn up by the Thai government stipulates that since January 1, 2024, resident foreigners, i.e. those staying in Thailand for at least 180 days a year, have had to pay tax on foreign income transferred to the country.
For example, a Swiss pensioner, single and without dependent children, earning the maximum old-age pension of CHF2,450 ($2,690) a month, with no second or third pillar contributions, would have to pay just under CHF3,000 a year in income tax.
However, it is possible to be taxed in Switzerland (at source) and in Thailand on third pillar assets. earned since January 1, 2024, is affected. Anyone who can prove that their income predates this date will not be taxed on these sums, even if they were transferred to Thailand after December 31, 2023.
Thailand is also planning to exempt certain categories of foreign pensioners, in particular those with an LTR (long term visa), which is valid for ten years. To obtain this visa, you need to have a pension of at least $80,000 (CHF72,900) a year, or $40,000 a year and invest $250,000 in Thailand, in property for example.
What exactly is meant by income?
For Martin Liebenow, a German tax adviser and tax director at Mazars in Thailand, the country is merely applying a “light interpretation” of the World Income Principle. This principle defines that people who are subject to tax in one country (for example, because of their residence) are taxed on their worldwide income, regardless of where this income is received.
Since the reform was announced, however, there has been some uncertainty as to what the Thai tax authorities consider to be income. Section 40 of the tax of the same name now clarifies the situation.
List of funds now considered as income
“Thailand has decided to tax only money that is transferred to its territory. Income remaining in foreign accounts is therefore not taxable in Thailand,” Liebenow says.
By transfers, the authorities mean any bank transfer from a foreign country to a Thai bank, payments with foreign credit cards, repatriation of cash and use of online payment providers such as Stripe or PayPal.
To avoid any confusion, Liebenow advises having two bank accounts: one in which to invest your capital (i.e. past savings acquired before December 31, 2023) and the other into which to pay income earned from January 1, 2024.
What about the old-age pension?
Because of the ease of tax exemption and the relatively low cost of living, many Swiss people have chosen to spend their retirement in Thailand. The outcry was therefore particularly strong among this demographic when the tax reform was announced.
Out of Sync Excerpt:-
Out of Sync Excerpt:-
"This agreement (DTA) does not apply to old-age pensions (first pillar) or individual pension benefits (third pillar). This means that “each state may tax in accordance with its domestic law”, says the State Secretariat for International Finance (SIF). * Swiss law does not provide for withholding tax on old-age (first pillar) pensions paid to non-residents, according to the SIF."
More info 👇
www.swissinfo.ch/eng/swiss-abroad/swiss-abroad-fog-clears-on-tax-reform-in-thailand/75968711
N.B. While this information is solely for Swiss Nationals, it shows that the intricacies of individual countries DTA's seem to be determining factors of who will or will not end up paying tax; notwithstanding the exemption by Royal Decree I believe was previously reported, for high wealth individuals on 10 year LTR visas. *Hopefully the fact that Australia does provide provision for a withholding tax will stand in our favour!!
Cheers 🐻
More info 👇
www.swissinfo.ch/eng/swiss-abroad/swiss-abroad-fog-clears-on-tax-reform-in-thailand/75968711
N.B. While this information is solely for Swiss Nationals, it shows that the intricacies of individual countries DTA's seem to be determining factors of who will or will not end up paying tax; notwithstanding the exemption by Royal Decree I believe was previously reported, for high wealth individuals on 10 year LTR visas. *Hopefully the fact that Australia does provide provision for a withholding tax will stand in our favour!!
Cheers 🐻