New tax treaty as of 1 January 2024 at the earliest
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Extensive correspondence with the Ministry of Foreign Affairs about the new tax treaty between the Netherlands and Thailand shows that this treaty can enter into force on 1 January 2024 at the earliest.
The reply from the Foreign Office was:
Earlier this year, the Netherlands and Thailand reached an official agreement on the text of a new tax treaty to replace the tax treaty from 1975. As you yourself wrote, the Council of Ministers subsequently agreed on 2 September to conclude the treaty and to subsequently start of the approval procedure.
A signing date has not yet been announced, but it is expected that the treaty will be signed this fall or spring 2023. Shortly after signing, the text of the treaty will be published in the Tractatenblad. Unfortunately, it is not possible to share the text before the treaty is concluded.
How long it will take before the new tax treaty will apply cannot be said with certainty. After the treaty has been signed, the approval documents will be submitted to the Council of State for advice. After receiving the opinion, the approval documents go to parliament for tacit approval. This process (recommendation by the Council of State and tacit approval by parliament) usually takes about six months.
Assuming that signature is signed this fall or next spring, the Dutch approval procedure is expected to be completed in the course of 2023. Once both the Netherlands and Thailand have completed the approval procedure and both states have formally notified each other, the treaty will then enter into force. The entry into force will be published in due time in the Tractatenblad. A tax treaty always becomes applicable with effect from the calendar year following the year in which the treaty entered into force. The new tax treaty is therefore expected to become applicable on 01-01-2024 at the earliest.
Yours faithfully,
Ministry of Foreign Affairs
Directorate of Legal Affairs
Treaties Department
Thank you for your very expert and adequate information Hans Bos.
Good digging Hans.
Thanks for the clarification.
A year's delay suits me personally.
Thank you Hans
Clearly, time to get used to the idea.
Delay also hurts… But it gives people who, as a result, come under the Immigration requirements with their net income, time to take measures.
Thanks Hans for sorting this out. Gives some clarity on what to expect. Bravo.
Thanks for this information,
I read “at the earliest” so that can also be later.
Let's just hope that the T rate will work in our favor.
Alex Pakchong
Thank you also, Hans. This would also work out very well for me, just like for Jos M., if it were to be activated as of January 1, 1.
Good initiative to inform BZ yourself, Hans Bos. At least that gives clarity.
Thanks for the notification.
Thanks for the clear explanation.
Waiting to see if it's an improvement.
I am already using the old treaty and that is favorable for the income requirements of Immigration.
There is no need to wait - the content is already clear, and was already explained in detail here a few days ago::
https://www.thailandblog.nl/expats-en-pensionado/nieuw-belastingverdrag-nederland-thailand/
I entered the country on August 20.
When am I liable for tax in Thailand? Do I remember something about Lammert de Haan, from 6 months after entry?
In this case from about February 20, 2023. Until the presumed entry into force of the new treaty on January 1, 2024.
On the final effective date, I must not forget to notify my pension fund to levy income tax. This is to avoid a back payment.
But I suspect from experience that this will happen automatically immediately and without prior notice.
The Dutch tax authorities will remain in a happy and triumphant position after years of fighting with the Dutch expats in Thailand.
While Thailand will now lack a decent income! Mai pen Rai!
Also with sympathy for the emigrants who lived just on the edge of the compulsory income and now have to look for a new solution. They will have to succeed because you must not forget that you now "only" pay about half more, namely the difference between the Thai and Dutch tax.
In any case, I will not be discouraged and will remain very level-headed and satisfied with myself.
As long as you don't incur debt in the Thai way, i.e. you lose sight of reality.
Regards Martin Ayutthaya.
Martin, the calendar year also applies to tax liability in Thailand. In 2022 you will not meet the days requirement, so this year you will only be liable to tax on your Thai income if you already have it. If you have domestic income in 2023 and later, you are liable to pay tax on it.
If you are in Thailand for more than, in short, six months in 2023, you will (also) be liable to pay tax on the foreign income that you book to Thailand or withdraw from the wall. As of 1-1-24, the new treaty can enter into force and then everything will change again.
Eric thank you very much. I can now make a plan.
Martin about half more you say… if that were true I wouldn't make a big deal of it.
My first full year in Thailand was 2020.
Then I brought in 780.000 baht and was allowed to pay 11700 baht in tax.
So just over 300 euros..
The year 2021 I brought in 480.000 and didn't have to pay anything.
For I cared for my wife and mother-in-law who have no income,
If NL is allowed to levy, I will pay about 100 euros per month, so that is not more than half….
Yes, that's a different cake unfortunately. And the help you provide is probably not deductible in NL.
Thank you for your initiative and your decisiveness, Hans! You have provided us with a very good service. Keep it up