Many retired expats believe that income tax clarification is already overdue.
editorial
The Thai government expects the Revenue Department to collect an additional 100 billion baht to fund the digital wallet distribution plan. This clarifies why, from 1 January 2024, taxable foreign income remitted to Thailand by tax residents (Thais or foreigners residing in Thailand for more than six months in a calendar year) will be subject to personal income tax through tax returns filed with the Revenue Department. These returns must be completed by the end of March next year.
A recent informal survey of retirees in Pattaya found that over 90% were completely confused. What is taxable income? Does it include pensions already taxed in your home country? What about sending cash to your wife as a gift? How do you make sense of the double tax treaty that most people can’t understand? Do I need a Thai tax ID number to renew my visa? How much will it cost to hire an accountant?
It is no wonder that many foreigners tweet or openly talk about leaving Thailand, or at least staying in Thailand for less than 183 days to escape the residency tax trap. The typical retiree here is living off an already taxed pension; the last thing they want is to have to deal with a second tax authority, accountants and tax professionals, not to mention the potential costs of this bureaucracy. Nonsense on social media is rampant, such as the claim that Thai banks are now deducting tax on cash inflows from overseas.
It is a well-known truism that Thai authorities pay no attention to what foreigners think. The question is whether those same authorities are prepared to see the foreign market, especially for retirees and international citizens, collapse under a mountain of unanswered questions. What will the future hold for elite visas? What will happen to the thousands of foreign men who have to marry Thais and raise families? What will happen to the real estate market, especially apartment purchases? How will the understaffed tax office suddenly and quickly process hundreds of thousands of forms and accompanying documentation written in foreign languages?
Perhaps an official clarification is on the horizon. Maybe it is. Meanwhile, accounting firms are busy registering frightened expats, promising to keep them up to date whenever possible. Of course, an official statement from the Thai authorities that income already taxed in other countries will not be retaxed here would help. Or that certain types of visas, for example retirement or annual extensions due to marriage, are exempt from tax regulations because they are not “residency” permits. Sometimes silence is the best policy. But not with a tax reform of this magnitude.