Slowly but surely, the Thai net is closing in on the taxpayer
Editorial credit: aquatarkus/Shutterstock.com
Foreigners who pay no or too little tax, take note! The Thai tax authorities have recently been able to use CRS, the Common Reporting Standard Exchange. This was set up internationally to combat tax avoidance and to properly map the flow of taxes in the participating countries. Thailand is one of the participants.
CRS enables the tracking of money entering Thailand by both banks and the tax authorities. In principle, this is done automatically, but it is questionable whether the Thai Revenue Department has reached this point. And for the time being, manual control is a major task.
So even if a foreigner does not declare the incoming funds, the tax authorities can request the data from the banks. Incorrect declaration can result in a hefty fine or even imprisonment. A bank that does not cooperate runs the risk of a fine of 200.000 THB, but that seems like a small amount to the bank.
The CRS will operate over the current tax year, which means that we will only know in June 2025 whether the system will work when the 2024 tax return is checked afterwards. This not only concerns deposits and withdrawals, but also the use of credit cards, etc.
The question remains to what extent the Thai tax authorities want and can monitor and what policy will be implemented with, for example, savings from before January 1, 2024. Prepare yourself for intensive discussions with local tax offices…
About this blogger
- Almost 20 years ago, journalist Hans Bos moved to Bangkok. Almost from the beginning, he was involved in the birth of Thailandblog. As a journalist, he worked for Limburg newspapers and for the travel trade journals of what was once called Elsevier. Hans (76) has lived in Hua Hin for 14 years, with his wife Raysiya and daughter Lizzy. He was secretary and vice-chairman of the Dutch association in Hua Hin and Cha Am for about nine years.
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What do you mean which policy will be implemented with, for example, savings from before 2024? That has been clearly communicated: have amounts entered Thailand in 2024 and does this concern (savings) money from before 2024 and can this be demonstrated then it is simple, namely then it is not income belonging to the year 2024. As long as the Thai Tax Authorities do not ask for this and you know that the money is from before 2024 and you leave this outside the Thai income tax return then it is correct. Scaremongering about discussion in this is not necessary.
Ger, it will soon be about demonstrating that. Translated and/or legalized? Logic dictates that every amount becomes savings if it does not go directly from the source (employer, pension fund, SVB) to a Thai account. Do you understand the problem? The tax authorities will soon be able to easily map all the funds using CRS, but will the recipients agree with the outcome?
Hans and Ger, I share the concern. That CRS will arrive in Thailand (and in our countries) in June 2025 and then it has to be in the electronic files of the farang. Or is that done manually? I don't see that being available so soon and then people have to be willing to compare the declarations...
The Dutch who brings in AOW and pension every year will not experience any strange things. If there is a house and a car, you can live on your income and the big money stays elsewhere, or that is already in.
But if, in addition to pension and such, money comes in from NL or BE or from another foreign country, then you get questions. Then the farang has to prove from which year that money comes and whether that is a year in which the farang was not in Thailand for 180 or more days. Does everyone know this link from the Thai tax authorities? https://www.rd.go.th/fileadmin/user_upload/lorkhor/newspr/2024/FOREIGNERS_PAY_TAX2024.pdf
And of course, that's completely different in your tax office because 'This is Thailand'. No advisor can compete with that. Maybe you can make some arrangements with the civil servant here and there. By the way, we are still waiting for an announcement from the Thai government about how they want to deal with savings from older years and how proof should be provided. Thai? English? A bank statement from your own printer?
Stay calm at the tax office and take a Thai with you unless you speak Thai well yourself. You may refuse to accept the conclusions and you can say that you first want to consult with a Thai tax advisor. But don't come there on March 20; the agenda is full then. And their rates are not bad; someone informed me that a simple declaration quickly costs 7.500 thb and that is 200 euros. But for more complicated matters you are quickly above 10 thousand thb and 20 thousand is also possible.
Remember that many farang come there with a pension income of 65.000 baht a month or more and that is the salary of a very high civil servant. With a clerk in front of you who doesn't even get half for his efforts... Stay polite as is the main rule in Thailand.
For now, it is still quite easy to prove: show your bank balances as of 31-12-2023 on paper.
Every year, you will receive a statement of the balance on the account on 1 January from every bank account of every bank. This means that the savings are fixed every year, also that as of 1.1.2024.
I have previously asked here whether that amount would also continue until 2025 and the response was positive (with some reservations).
Yes, the Thai tax authorities can ask for more information from foreign banks, but whether that will happen is doubtful in my opinion. To begin with, the Thai tax authorities have never used the possibilities they already have. They can ask all banks in Thailand what each foreigner has brought in from abroad. And now the Thai tax authorities are also given the authority to ask this abroad. But I suspect that the foreign banks will not be prepared to filter out all transfers to Thailand from their clients if Thailand, as mentioned, does not want to do it itself with its own banks. The Dutch banks may say: just give us the names of whom we can send you information!! And, we are not going to find out what and when they sent money to Thailand. to make available
there are more aspects that most likely cannot be done for various reasons. And, to dot the i's, The CRS, common reporting standard obliges all banks only to provide an extensive set of information without questions from the foreign bank. This includes the final balance of customers but absolutely no further information. That will be expired if the other country asks for this separately, probably every client named.!!
further addition.
The CRS is a very important change but be careful that fear does not run away with you. Much information is too extensive and much information leads to doom thinking: nothing is allowed anymore, everything is known. It is really all less drastic for "ordinary people" than is sometimes said or suggested. Just search for "CRS" and you will get ground under your feet again.
A nice note is for example Question and Answer “Common Reporting Standard and your tax residence or establishment”
Not that I have the pretension to orate from a digital pulpit that I know it all, but I already posted some information about CRS in a response to a question to what extent banks in Thailand exchange information with the Revenue Office. For those who really want to know it all, read this PDF from the Thai Tax Office itself. It is 67 pages long.
https://www.rd.go.th/fileadmin/user_upload/FATCA_File/crs/Thailand_CRS_Guidance_280823.pdf
Thus: Thailand adheres to the Common Reporting Standards (CRS) and the Automatic Exchange of Information (AEOI) protocol, which means that financial data is automatically exchanged between banks and governments. TH has only been participating for a short time - since January 2022, and fully active since 2023. https://www.forvismazars.com/th/en/insights/doing-business-in-thailand/tax/automatic-exchange-of-information
As it turns out, it all fits nicely with the new tax initiatives of September last year: if you live in Thailand for >180 days and bring money in, you are taxable. Although the plans were actually intended to target the richer Thai themselves with all their foreign 'assets'.
The CRS is a 2014 OECD protocol, created at the request of the G20 countries to combat tax evasion. https://web-archive.oecd.org/tax/automatic-exchange/common-reporting-standard/index.htm
The protocol involves cooperation between countries and ensures that banks and financial institutions automatically send financial account information to tax authorities. Identity, tax numbers, account balances and financial activities are reported back and forth. So also of pensioners, living in Thailand. All this information goes to tax authorities in countries where immigrant foreigners are considered taxable. Depositing or withdrawing money in Thailand from a foreign or Thai bank account, or transferring money via your own bank or Wise, paying a person or institution, even with a foreign credit card, etc. etc. etc.: CRS automatically forwards all these transactions to the Revenue Department. If a transaction belongs to “income” and does not fall under an “exempt”, a bell rings there.
Do I understand correctly that if you are in Thailand for less than 180 days per year, you are not liable to pay tax in Thailand?
Freek Vermolen, no, you are not seeing that correctly. Thai law makes a distinction between a stay of up to and including 179 days, and a stay of 180 days and more. NOT: >180 days as is sometimes claimed….
Up to and including 179 days you are liable for tax in Thailand for domestic income such as wages and (bank) interest. If you are here for more days, and these do not have to be consecutive, then you are also liable for tax on income brought in from abroad, but then under conditions since the measure of September last year. You can find these conditions in this link of the Thai tax authorities: https://www.rd.go.th/fileadmin/user_upload/lorkhor/newspr/2024/FOREIGNERS_PAY_TAX2024.pdf
In addition, it is important whether a treaty has been concluded with the country where the money comes from. That treaty determines where that income is taxed, and whether arrangements have been made for progression reservation.
There is still no new tax law, so to date everything remains as it has been for years, with the old tax law.
It is being investigated, we are almost at the end of 2024 and as of yet no new guidelines have been published.
If one wants to tax worldwide income, one will have to change the law and that could take some time, if one even wants it!?
And perhaps pensioners will be exempted from income tax, as in some other countries, although I doubt that in this greedy money country where people count themselves rich every day before the income comes in.
Have a nice day.
Max, you are confusing things. The measure from September last year has been implemented; we have been writing about it here for a year and you cannot have missed it.
The new rules for 'world income' are in preparation and whether TH will achieve this before the upcoming 1-1 is very much the question.
Pension is simply taxed in TH and that has been the case for a long time. That is also the case in NL and I think in most countries. Do not expect an exemption for pensions, then the disappointment will not be so great later ... By the way, where your pension is taxable is determined in the treaty between your home country and Thailand, and if there is no treaty then two countries can levy.
Hi Max,
I hope that pensioners will be exempt from income tax, because I have been supporting the family for 22 years, if I really have to pay tax it will soon be over and then I will go elsewhere!
good day
In principle there is a double taxation treaty. A pension is therefore already taxed in the source country. But whether TH will want to adhere to this or is aware of it seems doubtful to me, especially since every civil servant here applies his own rules. In addition, we have family pensions in Belgium that are already taxed less, just like a state pension may only be taxed in the source country and never ever in another country. Then there are not only B and NL, but how will that work with the taxes for Koreans and Japanese and many other nationalities, each with their own system. Then there is that 180-day rule... will they check the entry and outbound stamps in every expat's passport? What about an unbound tourist who somehow stays here for just a little more than 180 days? As with many things, I think it will become a mess in TH again, where you will be dependent on where you are and when you present yourself. If it really gets too crazy I'm gone... I don't feel like going to accountants or translation agencies or legalization agencies when I'm older. I have to go to all kinds of agencies more than enough here (driver's licenses immigration certificates 90 d notifications bank certificates etc...) and all that to be able to spend my well-earned pension here.
Fred, I don't understand your distrust. For ten years now, there have been experiences of emigrants and advisors here about the treatment of pensions from abroad. For Belgians, it's simple: only your home country levies. For Dutch people, it's much more complicated, but I haven't read anywhere, not even in other media, that TH ignores those rules.
I think you have Belgian income. Have you had any bad experiences with the Thai tax authorities? No, I think, because then we would have read that already.
You are responding now because in Thailand there is a new implementation of rules that have existed for many years. Why would it suddenly go wrong now? And that you have to go to all kinds of agencies, you have that in your home country too, don't you? Or do you buy your bank certificate there at Hema?
Now just wait and see what happens next year. No one benefits from panicking.
I have just retired and have just been in Thailand for 2 weeks with a Non-Immigrant O visa. In December I will apply for my retirement visa. Now my question is whether I have anything to fear from the Thai tax rules because tax is already being withheld from my pension and AOW in the Netherlands. Or do I have to pay tax again in Thailand? I am absolutely not aware of all the rules and would not want to have anything to fear from Thai taxes.
Rob, you don't say what kind of pension you have. Your AOW is taxed in NL but also in TH and then TH must grant a reduction on that. Company pension is only taxed in TH, just like pension from an official company such as a municipal transport company. NL does withhold payroll tax but you can reclaim that on a C-form. Once you have filed a return in TH, you request form RO22 and you will be exempt from payroll tax in NL. Pure official pension is only taxed in NL.
There will be a new treaty and it is expected that all income from NL will then only be taxed in NL, although TH may have made a progression reservation. But the text is not yet known. I expect the new treaty to enter into force on 1-1-26 but don't hold me to that...
By the way, you are only two weeks in TH so you will not reach the 180 days this year. Then you are not liable for foreign income in TH this year.
What if you still pay taxes in the Netherlands? I have been living in Thailand since 1999 and stopped working when I was 47. And I receive AOW for married. So I only get a little AOW and a very small pension. And normally you only have to pay taxes in 1 country. Does the SVB exempt you from collecting taxes if you are taxed here in Thailand?
Cees 1, whether you have to file a tax return for your pension in TH depends on the type of pension. Look at my answer to Rob above. AOW is taxed in both countries.
I think you just let the withholding of wage tax on your pension run, like so many Dutch people. That means that many people pay too much tax on company pensions. On your small pension in the Netherlands, if you don't change anything, you will pay 8,17% next year, in TH that could well be zero, but I don't know any amounts of your income.
The SVB never issues exemptions, only the tax authorities do that, and you really don't get them for AOW.
Dear Hans ,
In 2026 (May) I will retire as a Belgian, I will move to the North of Thailand with a family pension, which means for me that this is not a large pension 50/50 employee/self-employed and I choose not to have a deduction made in Belgium.
My Thai wife, who also has Belgian nationality and has had a factory career of 30 years, is ending it and we are going to sit in the sun under an umbrella,
Will there be a tax withheld? And if so, is my wife Belgian at that time? Should the compensation be split in 2? What I mean is, do you take into account that this amount is for 2 people? And what is the taxable amount or %.
Peter, Hans Bos and I have agreed that I will give you an answer. A Belgian friend has given me some details about the Belgian pension system because that is not my field.
Withholding of corporate tax (what you call wage tax in the Netherlands) and other contributions will not be possible unless you fall below the legal minimum. I suggest you ask the Belgian pension and/or tax authorities. I do not know the amounts involved. Belgian pension is assigned to the source country under the BE-TH treaty in articles 17 and 18.
Your emigration date; I suggest you emigrate between July 10 and December 31, 2026. Then you will not be in Thailand for 180 days and you can book larger amounts tax-free (as Thai law currently states) without paying income tax in Thailand and/or getting difficult questions.
Dear Erik,
Thanks for your answer, I have lived in the north of Thailand Lampang & Chiang Mai for 3 years in the past, I have no knowledge of ever paying taxes.
Only enough in the bank account as proof of survival.
Had several houses (my wife) and also sold them except for 1 and cars (new) and simply transferred them back to Belgium when we decided to move back, never had any problems with them.
According to the Belgian pension service, as far as I understand it, you can receive your gross and pay tax in the country where you reside if, as in the past, you are fully deregistered in Belgium.
I must and will indeed make further inquiries about this and, if so, compare where I can best pay for it.
But my thinking is, my wife is Thai with acquired Belgian nationality, can she be 100% Thai if she receives a pension as a Belgian for the tax authorities? And / or will the income then be divided in 2.
Or is this pension amount only considered mine and is she, as a Thai, simply added to it?
Belgian law provides that if you apply for a family pension, the amount will be increased by 25% for the partner.
I still have some time and if I have clear information myself I will share it and maybe I can be of service to others. Apparently a lot has changed in the last 8 years and I have never eaten much cheese in this matter
Thank you for your response,
Peter, you have no choice where you pay tax on your pension. The treaty is binding. The Belgian pension service can say what it wants, better ask the Belgian tax authorities or follow this blog; many Belgians also write here.
Is the pension in your name? Then your wife doesn't count, so to speak.
If she receives an independent pension, the treaty also applies to her. But as far as I know, only with GOVERNMENT PENSION can it count that she will soon be a resident AND subject of Thailand and then Thailand may tax her pension. Article 18 paragraph 2 letter b. If I read your message correctly, your wife was not a civil servant.
Dear Peter,
I was that Belgian friend that Eric asked for information.
I'm going to add a few things to this now:
If your wife, who is going to stop working in Belgium when moving to Thailand, and as you write, then has a 30-year career in Belgium, she is entitled to her own pension when she reaches the retirement age (not before). As long as she has not reached that age, you are indeed entitled to a family pension because she has no income. Once she is entitled to her own pension, you have the choice between: both receiving their own pension or a family pension. Not both: both receiving their own pension and you receiving a family pension. You then look at which of the two options is the most advantageous and make your choice.
Receiving a “gross pension” is impossible because there is always a social security withholding of +/- 13.3%, regardless of the amount of the pension. This social security withholding will first be withheld from the gross pension and only then will the tax calculation be made. If the joint income falls below the tax-free amount, currently 13.500EU/year, taking into account the marriage coefficient (maximum 12.500EU), then there are no taxes and the pension service will not withhold any withholding tax without you having to request it yourself. They know your income perfectly well, as far as pension is concerned, and take this into account when withholding the obligatory withholding tax. If the result is ZERO due to the fact that your joint income falls below the tax-free amount, then no withholding tax will take place. But because of the social security withholding tax, that is still not the true GROSS income.
I have been filing my tax return here for 5 years, always done by Lammert de Haan… But due to his passing, I had to do it myself this year.
Armed with a copy of my bank book in which 12 times 65,000 is credited from my Dutch ING account, I report that amount.
I provide a copy of my AOW pension and use that amount, supplemented with personal savings, to arrive at 12 times 65,000 = 780,000.
I tried as best I could to imitate the calculations as Lammert did for me, on a separate piece of paper. The young lady behind the counter looked at it with some awe and approved it within a minute.
I paid the 5000+ baht from my calculation and declaration in cash, plus the 200 baht fine for being a few days late.
For that 100 baht a week I would gladly be rid of any misery.
Greetings, John