The fear that retirees and other non-working expats are about to be taxed on their overseas pension income has created a field-day for internet warriors, click baiters and nervous long-term visa holders. But calmer reality suggests it may be premature to start packing your bags in utter disgust.
The Thai revenue department has recently stipulated that, from the next calendar year, “earned income from overseas” will be liable for personal income tax for those (Thais or foreigners) spending up to 180 days a year in the country. This is, in fact, an old revenue rule but has been updated to close the loophole in which those liable delayed transferring their income until a later year.
To pay personal income tax you need a TIN (tax identification number) issued by the revenue department. Without that there can be no income tax liability and, one assumes, most foreign retirees have never heard of a TIN and certainly haven’t got one. The latest move is clearly aimed at currency traders, those involved in stock market trading and anyone holding earned foreign income in an offshore account for over twelve months to avoid tax. They have always been the target.
The new ruling has nothing whatever to do with your visa which is irrelevant to tax status anyway. Let’s take a simple example. Those holding an Elite visa or an annual retirement extension might, or might not, spend more than six months a year in Thailand. There is evidence that many Chinese holders of Elite regularly come in and out of Thailand but do not clock up 180 days per annum. On the other hand, a tourist Brit or an American (amongst others) could easily reach 180 days by entering the country by air several times via the 30 days visa-exempt rule, extending at immigration and making an occasional visa run.
Thus the issue is whether or not the revenue department has now extended the residence rule (180 days in a year) to include permanent sun worshippers, expats married or with families to support, adult students learning Thais and a diverse assembly of pensioners in their 60s, 70s and beyond. Thai law and financial regulations are often kept deliberately vague and the 100 words of the Thai language devoted to the subject in question in the latest revenue announcement certainly don’t provide a definitive answer. Nor do the translations in English provided on social media.
Many active on social media are advising panicky expats to wait for a broader explanation from the revenue. Fine, except that there may never be one. If the sole purpose is to catch those TIN holders who have delayed sending their income to Thailand, there’s nothing more to say. But if there is a real attempt to punish financially all expats, as suggested, one can only imagine the bureaucratic chaos, daily huge queues at revenue offices (with too few staff to cope and knowing nothing of double taxation treaties) and the total collapse of international financial confidence. Within days, a Thai general would appear on the TV, accompanied by somber military music, to explain why tanks were in the streets of Bangkok. Apologies for the inconvenience.