Belgians living in Thailand – Tax on foreign income in Thailand (reader submission)
With the newsletter of October 31, 2023, the Belgian embassy in Bangkok informed Belgians living here that they were aware of the Thai government's announcement that they want to tax all income from abroad from 2024. It was stated that the impact of the new measures is currently being discussed with various experts. We would be kept informed of the outcome of those discussions.
With no news to date, I sent an email to the Belgian embassy on the 21st of this year asking whether additional information had been received in the meantime.
Yesterday I received the following answer from the consul, Marie-Charlotte Annez:
"Thanks for your mail. The Embassy is not authorized to provide tax advice. If you have any questions about Thai tax law, we recommend that you contact the Revenue Department/a lawyer.
DI No. 161/2566 provides a new interpretation of Section 41 paragraph 2 of the Thai Tax Law: the taxable income under Section 40 of the Tax Law derived by a resident of Thailand in the previous tax year and brought into Thailand shall be subject to income tax in the tax year in which the said taxable income is brought to Thailand. This rule should apply to taxable income brought into Thailand from January 1, 2024.
Until 31/12/23 you do not have to declare foreign (Belgian) income if you do not bring that income into Thailand in the year you received it.
Belgium has signed a treaty to combat double taxation with Thailand: International agreements | FPS Finance (belgium.be) https://financien.belgium.be/nl/particulieren/internationaal/internationale-akkoorden#q1
We will not hesitate to send further information by newsletter once the Thai authorities have given us more details.
Sincerely,"
Good to know that the Belgian embassy takes this subject to heart. However, I fear that further clarification will not be immediate.
If there are Belgian readers who already have other information about this from other sources, it would be useful to let the blog readers know.
Submitted by JosNT
Okay, I may not be Belgian, but today I found a text in Lexology (no. 162/2566) in which this is also discussed.
It also concerns the taxability of trading/investing in listed funds, which I previously discussed in this blog in response to a question, and then made a reservation about its taxability. I will try to get in touch with the questioner at the time: Jac. See https://www.thailandblog.nl/expats-en-pensionado/belasting-thailand/thailand-belasting-vraag-nieuwe-belastingmaatregelen-voor-thai-residenten-vanaf-1-januari-2024/
The text today in 162/2566 reads, in English:
Furthermore, for income that is exempt from tax in Thailand according to a Double Tax Treaty (“DTA”) – or if the DTA specifies the other contracting states (foreign countries) that are designated as the tax collectors and Thailand has no authority to collect tax according to the DTA – if such income is brought into Thailand in the case mentioned above, the Revenue Department has not yet issued clear criteria or guidelines to determine whether or not such income is subject to tax according to Section 41, paragraph two of the Revenue Code.
If tax exemptions are not applicable, the Revenue Department will need to determine measures or methods to eliminate the double taxes and how to use foreign tax credits if such income is brought into Thailand in a different tax year from the year in which the income was received .
So the department is still working on it. Well, it is high time for legal certainty for our own people and long-stay guests.
Eric, thanks for the information and following up on this topic.
JosNT
Hi Eric
Just wanted to let you know that I just read this message
Everything is still unclear as you say.
Thank you very much for doing your research.
Sincerely. Jac
This law applies more to Thai citizens who work abroad and send their income to Thailand or expats who have an income in Thailand, I am retired and pay in Belgium on my income, my bank accounts in Thailand have withheld income tax for interest on deposits received correctly.
Dree, do you have a source? I do not come across your view in legislation.
A few weeks ago, an entire page on this subject in the Bangkok Post also stated that a decision would be made by the Thai government in early 2024, but it will not be for pensioners who already pay tax in their country.
Dree, I prefer to wait for the message from the Thai government; I think the Bangkok Post knows as much as the Thai tax advisors and they now have doubts about the coincidence with the double taxation treaties.
The core issue is not tax on income, but on bringing money into Thailand and where it is saved. So we wait...
Dear Eric,
I have often wondered how you can conclusively prove that money comes from 'savings' and is already 1 year old..
A transfer shows the date of transfer but not the date of contribution. For someone who transfers his pension monthly, you would then have to have two accounts: one from the previous year and one from the year itself. I do have questions about whether that is all correct...
Lung Addie, you hit the nail on the head! Income up to and including 2023 will remain outside the levy if you bring it to TH, but newer money and old savings?
How do you prove the origin and age of the money? And what evidence does the official want to see; Our 'bank notes' have almost all become electronic, so that will be a print in NL or English and does that person want to accept it or does it have to be translated and by whom with what diploma, do they want a stamp from Chaeng Wattana, in short, such an official? can be terribly annoying. In addition, the current treaty between NL and TH has various types of pension that will be taxed in one country or the other; Fortunately, people with Belgian pension income do not have that problem.
Unfortunately, the Thai government is not really making any progress and they are entering the new year without knowing exactly what awaits you in 2025 if you file your Thai tax return for 2024. You know the slogan of the tax authorities in the Netherlands: 'we can't make it more fun'. They must have taken that over in TH….
If we (pensionados who live in TH/stay longer than 6 months per year) had to demonstrate from January 1, 2024 that the money we transfer to TH is pension money, we could use pension statements and the tax letter to support this. But the direct transfer of our pension to our Thai bank account can also serve as proof for the application of the treaty to combat double taxation before the Thai tax authorities.
Let's think about it... A foreigner buys a condo in TH. He brings a few million THB into the country for this. It is difficult to demonstrate that this money falls under a treaty to combat double taxation.
Those millions would then be taxed at approximately 35%. I can already see that, a significant part of the real estate market, collapsing. Could Prime Minister Seethra, Thai real estate magnate, have already assessed this consequence?
The existing uncertainty is difficult and the consequences once the changes come into effect will be the same for many. A strange policy to make TH more attractive to foreigners, right?
Mark, the limit is not six months. This is 180 days or more according to Thai law. Treaties usually use 183 days.
Unfortunately, we do not yet know how the new tax approach will work.
Dree, just continuing your view that this law applies more to Thai citizens who work abroad and send their income to Thailand.
My wife has dual nationality (TH/BE) and will be entitled to a survivor's pension after my death (I receive a retirement pension as a former civil servant). That pension will then be paid directly from Belgium to her Thai bank account. And fully taxed in Belgium. I am still left wondering how the Thai government will make the distinction between income from work and as a pension.
In my opinion, much is still unclear.
JosNT
Dear Josh,
you don't have to worry about that.
Your widow, like other retired Belgians, will receive a pension statement every year. This contains the pension paid out as well as the deductions. She will also receive a tax return and an annual statement, in which all details of the deductions are stated.
A bank statement will also indicate where the monthly amount she has received from the Belgian pension service comes from.
I don't think you can provide more evidence to distinguish between income from work or pension.