Questioner: Jac
My question is about the new tax measures for Thai residents from January 1, 2024. As previously mentioned on Thailandblog, an adjusted tax regime will apply for the above group from January 1, 2024.
My question here is about income from assets abroad that I want to transfer to Thailand in 2024. It is clear to me that income received will not be taxed until the end of 2023. What is not (yet) clear to me is whether any profit increase from this capital must be realized before the end of 2023.
As an example, I take ownership of shares:
- Suppose you have owned certain shares for many years and you would make a considerable profit if you sold them.
- In the coming years I think I will sell these shares and transfer the sales amount to Thailand.
- If I have to give up the profit between the purchase and sale dates, it could be significantly taxed.
However, if I can take the value of the shares between the date of sale, for example somewhere in 2024, minus the value on December 31, 2023, then the profit is only a fraction.
Should I sell them before January 31, 2023 or not? I could sell them and buy them back straight away, but that comes at a cost that might be avoidable.
Thank you in advance for your response.
Jac,
You asked Lammert de Haan the question, but Lammert and I have decided that I will answer you.
You mention 'resident', but I assume you mean resident for tax matters and not for visa regulations. That's really something different. You take 'shares' as an example. Can I assume that you mean listed funds and not a share in, for example, a BV owned by family or friends?
The question is whether the profit someone makes on listed funds constitutes taxable income in Thailand. The provisions of the Personal Income Tax (PIT) legislation apply as follows:
Chapter 2 Tax base
Article 2.1 Assessable Income.
Point 4: income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a legal company, legal partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of legal companies or partnerships, and gains from transferring of shares or partnership holdings.
Dividend: For this I refer you to Article 10 paragraphs 1 and 2 of the treaty between NL and TH.
Profit on sale: gains from transferring of shares or partnership holdings. What exactly does it say there?
To transfer really means something different than to sell. You don't 'transfer' a listed fund, you sell it. In old-fashioned terms, through your banker's cornerman on the stock exchange, your shares go to another cornerman and the buyers remain unknown to you. Nowadays entirely via the computer, I expect.
I think that profits from the sale of listed funds do not fall under point 4 and are therefore not taxable in Thailand. But I say this with reservations. I do not know the Thai text and am aware of Thinglish's flaws, so to be sure about this aspect it may be better to consult a tax expert in Thailand. And have that advice put down on paper in Thai so that you can show it to the tax authorities if requested.
Sources: https://www.rd.go.th/english/6045.html en https://wetten.overheid.nl/BWBV0003872/1976-06-09
Eric Kuypers