The worry that retirees and other non-working expats would soon be taxed on their foreign pension income has given internet trolls, click-bait writers, and anxious long-term visa holders a field day. However, a more sober reality may indicate that it is not yet time to begin packing your bags in absolute disdain.
The Thai Revenue Department recently announced that beginning in the following fiscal year, “earned income from overseas” for anyone (Thais or foreigners) spending up to 180 days per year in the nation will be subject to personal income tax. This is an outdated version of an ancient revenue rule that allowed liable parties to postpone transferring their profits to a subsequent year.
A TIN (tax identification number) issued by the revenue department is required to pay personal income tax. Without that, there can be no income tax liability, and it is likely that the majority of overseas retirees have never heard of and do not own a TIN. The most recent action is obviously directed at currency dealers, stock market participants, and anyone storing earned foreign money in an offshore account for more than a year in an effort to dodge taxes. They’ve always been the intended victim.
Your visa, which is unrelated to your tax status in any case, has absolutely nothing to do with the new rule. Take a straightforward illustration. Those with an Elite visa or an annual retirement extension may or may not stay in Thailand for longer than six months each year. There is proof that many Chinese Elite cardholders often enter and exit Thailand but do not log 180 days annually. On the other hand, a tourist from the UK or the US (among others) may easily exceed 180 days by flying into the country multiple times, extending their stay at immigration, and occasionally doing a visa run.
The question is whether the revenue department has now expanded the residence regulation (180 days per year) to cover year-round sun worshippers, expats who are married or have kids to support, adult students learning Thai, and a diverse group of retirees in their 60s, 70s, and beyond. The 100 words in the Thai language devoted to the issue in question in the most recent revenue release probably don’t provide a conclusive solution because Thai law and financial laws are sometimes kept purposefully ambiguous. Neither do the English translations posted on social media.
Many social media users who are active advise anxious expats to wait for a more thorough justification from the revenue. Okay, but there might never be one. There is nothing more to say if the only goal is to find TIN holders who have delayed submitting their money to Thailand. However, one can only image the administrative turmoil, daily long lines at revenue offices (with insufficient staff to handle them and an ignorance of double taxation treaties), and the complete loss of confidence in the world’s financial system if there is a true attempt to punish financially all foreigners, as indicated. A Thai general would soon be seen on television, accompanied by grim military music, to explain why tanks were in Bangkok’s streets. We apologize for the trouble.
Panic takes over the expats and Thai taxation
