Dear readers,
At the end of this month I will report to the tax office on Koh Samui to ask whether I have to pay taxes in Thailand for 2024. Because of my situation I have a few questions about this, so that I can go to the “friends of the Thai tax authorities” as well prepared as possible.
My situation is as follows:
- 55 years old, resident of Thailand (yellow booklet, pink ID card), Non O-Retirement visa.
- Deregistered and not liable for tax in the Netherlands.
- Officially still married to a worthless, lying and stealing Thai bitch (the judge has ruled for divorce as of December 17, 2024, but she is still considering an appeal within the applicable time limits and the verdict is therefore not yet final).
- No paid or other work, no benefits or pensions from the Netherlands.
In 2022, I deposited an amount into an investment account in the United States (Charles Schwab). After 2022, I have not made any new deposits to that account. I have used it to buy American stocks and bonds. I currently live off the interest and dividends that those stocks and bonds pay out.
It goes like this:
The companies pay the dividend/interest to my account at Schwab. The US tax authorities automatically deduct 15% dividend tax from this. Once a month (on average) I transfer the net amount of dividend and interest in dollars from my US investment account to my Wise (dollar) account. With some costs and exchange rate loss I transfer those dollars in Thai baht to my Thai bank account. And that is what I live on. On average it is about USD 2.000 per month, about 68.000 THB.
The first and most important question is whether dividend payments and interest on (non-Thai) shares and bonds are considered income for Thai tax purposes. Is that so?
If so, the second question is whether I have to pay taxes on it for tax year 2024, knowing that the source of that income is the year 2022, the year in which I put the amount in the US investment account.
Question three is whether – if, despite questions 1 and 2, I still have to pay taxes in Thailand for 2024, I can deduct the 15% dividend tax already paid in and to the United States from the Thai tax.
Question four is whether, due to the fact that the Thai secret was unfortunately still allowed to call herself my legal wife in 2024, I can deduct the well-known THB 60.000 for her (because of course she doesn't work and lives on the money stolen from me).
Final question five is whether I can claim exemptions and what percentage tax I will probably have to take into account (if I have to pay).
Of course I have transcripts and such to back it all up.
I am wondering if, according to you, I should pay taxes in Thailand for 2024 and if so, what deductions I can make about it.
Of course, I would like to thank you very much for your answers to my questions and (possibly) further advice!
Yours faithfully,
Mark
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Dear Mark, thank you for your extensive description of the situation and the resulting problem statements, because that makes it easier to formulate an answer and solution. Many people prefer to see a maximum solution with as little information as possible. But all that aside. After waking up in the fresh coolness of the Thai dawn, I like to have a question statement like yours with a firm cup of black coffee to a) activate my brain as an anatomical organ, and b) to thereby stimulate my intellectual capacities to new activities. So on to the issues you raised:
Ad 1: TH doesn't care how you handle your money. But if you bring money into TH, it is seen as 'income' and you are PIT taxable and, as will become apparent in your case, liable to pay taxes. Article 40 of Thailand's Tax Law, section 4, sub a- and b-, deals with interest and dividends from investments placed in Thailand. Those at the 'Stock Exchange of Thailand' are already tax-free. All other interest and dividends are considered 'income'. Which implies that “Capital gains and investment income earned by a resident from sources outside Thailand are not taxable unless remitted to Thailand in the year of receipt.” https://taxsummaries.pwc.com/thailand/individual/income-determination
Ad 2: If you brought in ฿2024K TH in interest and dividends from your US investment portfolio in 720, that portfolio will remain irrelevant because it rests in the US. And even if it was paid for with money from 2022: you don't bring in any of that money itself! It is the total of brought in interest and dividends that count as 'income'. So it is that amount of ฿720K that appears to be PIT-subject.
Ad 3: Article 25 of the DTA treaty US-TH stipulates that you can reclaim tax paid in TH on those interests and dividends in the US. There is no reduction scheme or tax credit in TH, but there is a kind of one in the US. In short: first pay tax in TH, then negotiate a discount on that 15% paid in the US. https://www.rd.go.th/fileadmin/download/nation/america_e.pdf
Ad 4: If you are married in 2024, you can also deduct ฿60K for your spouse from your taxable income. Thai law does not apply criteria that only deductions apply in case of devotion or sweetness of the spouse. If you get divorced this year, you will pay more tax from next year.
Ad 5: As a resident of Thailand you have all the regular 'deductions and allowances' like everyone with PIT in TH. In your case ฿100K because of acquisition income, and ฿120K because of marriage. As a 55 year old not the ฿190K 'elderly' deduction.
For more deductions see: https://www.pwc.com/th/en/tax/assets/thai-tax/thai-tax-booklet-2024-25.pdf
Based on the two deductions mentioned, the following tax calculation can be made:
Income: ฿720K; deduct ฿220K; ฿500K remains taxable. The first ฿150K exempt; the following
฿150K at 5%, and the remaining ฿200K at 10%. Total payable: ฿27K. As married.
After divorce taxable: ฿560K. Tax becomes ฿27K plus 15% of ฿60K. Total: ฿36K
Did you know: all capital, assets and savings accumulated up to and including 2023 can be brought in tax-free TH. If you transfer ฿720K of your '2023' assets to TH each year, and prove this, you will not pay PIT. You could then reinvest the annually generated interest and dividends.
The last remark is the way to live from investments. But how do you prove that the money you transfer comes from savings and not interest or dividend or capital gains from selling shares?
Anyone with experience with that?
Josef, question regarding ad3: what are the specific conditions to fall under the DTA VS/T? Citizenship? Resident? Or just having an account there? Sometimes DTAs are set up in such a way that they only apply if you have the nationality, for example, or if you are a resident there.
That is a very comprehensive and clear response, which I can certainly take to the “friends of the Thai Tax Authorities”. So many thanks, Jozef! Kop khun maak kap, and greetings from a warming Samui.
Mark, see my answer to Erik below from 02:05. Please add 15% of ฿100K extra to your tax to be paid. So as a married person: ฿42,5K and soon as a regained single: ฿51,5K. Unfortunately. Taxes? I made it easier for you, but not more fun now!
That Jozef is well informed about tax matters.
Good that there are specialists on the forum
Erik wanted to quit after he was insulted by a commenter who never showed up again.
Luckily, we now also have Josef.
Rvhm, I had planned to stop when the new treaty is in place. Then I will be 80! I am phasing out here at an accelerated pace after what happened.
Jozef, I wonder if the deduction of acquisition costs of max. one ton thb is possible for interest, dividend and such. Acquisition costs are costs for acquisition, collection and retention and do not apply to that category in my opinion.
Dear Erik, all respect for all the work you have done for the readers of Thailandblog, and from that respect I have presented your comment regarding Art 40/4 to my stepdaughter, my tax whisperer, working in a 'finance office' with a focus on: “salary managing, tax regulations, consulting and managing, business consulting, accounting, transaction managing and administration overall”. Especially that “overall”. And as if all that is not enough: “with a network of professional staff here and abroad, bringing you a level of sophistication which has no competition.” Well, what more could you want? When a Thai person promotes himself, he is not being modest. But be that as it may: my stepdaughter knows what she is doing. And she drew my attention to the following TRD powerpoint: https://www.rd.go.th/fileadmin/user_upload/SMEs/infographic/Pit_63_4.pdf
You are right: there is no deduction for operating costs for income from investments.
Hi Joseph,
the link you refer to is it somewhere in english
https://www.rd.go.th/fileadmin/user_upload/SMEs/infographic/Pit_63_4.pdf
and while I'm at it, many thanks to thailandblog.nl (this one) for your converter to multiple languages, including French, which is phenomenal since here in Belgium many of my friends do not speak Dutch (Brussels people like me and Walloons) I can now directly recommend your website