What is Going on With Thailand's New Foreign Tax Rule?

Is This a Sign of Things to Come Elsewhere?

Solar eclipse photo from Mexico as posted on Gregory Lessing Garrett’s substack.

Overheard at the Las Vegas DMV this morning:

“Excuse me sir are you registered to vote?” Asked a 20ish year old Hispanic woman with a clipboard to a 70ish year old white, Vietnam veteran looking guy.

“The choice is between Satan versus Lucifer. What’s the difference?” He said as he ambled away. Governments are going to govern.

I ended up spending 5 hours of my day and $170 securing a title and registration for a new to us 1999 Nissan. They sent me away the first day I tried to do it because I had not booked an online appointment. I can’t book an online appointment because the Nevada DMV website helpfully informed me that I could register the car online as long as I had the dealer number. There was no dealer as it was a private sale. So that left me waiting in a long line on the only day walk ins are accepted, which is Wednesday at this location.

Has anyone else noticed that despite assurances that these automated systems are going to make life easier they usually result in things becoming more complex? Time is wasted checking websites and scrolling through pages of obscure FAQs just to determine that yes, my question or issue is not addressed at all and I need to interact with a real human being just like I was trying to do from the start. Are we in the Great Taking already?

The DMV did provide ample people watching opportunities, so it was not a terrible experience for me. People are conversing more with strangers than I have seen since 2017 or so. I think we have hit peak smartphone already:

The Automated Internet, the Conspiratorial Internet, and the Reconquista of the Real

Regarding Thailand it has been suffering from the effects of a strong US dollar. The gold price was going straight up during my short month there the buying went from 31,900 to 36,5000. I suspect some things are going on behind the scenes in money markets that we all should be paying attention to. When the money dries up and the workers can’t get paid, construction stops. My husband Ka is, incidentally, now on a fishing boat.

When Thailand is desperate it squeezes the farang for money. I have noticed as I am sure everyone in my Thailand expats and friends group has. Since Gab is now blocked in Thailand without a VPN this conversation might need to be covened elsewhere. I came across a major change in the tax law starting on January 1, 2024.

This Asean briefing explains it:

If a person resides in Thailand for 180 days or more during the tax calendar year, that person is taxed for income from that year. As of January 1, 2024 onwards, this income is subject to tax. Individuals must account for income tax in the 2024 tax calendar year and must submit income tax forms no later than March 2025.

This provision requires a person to pay income tax to the Thai Revenue Department under the following conditions:

Individuals, who are categorized as:

• Thai citizens;

• A Thai resident who filed taxes in the previous tax year; or

• Foreigners who reside in Thailand for one or more periods with at least 180 days in one tax calendar year.

Receive income inside or outside Thailand via:

• Income from employment (wages, salaries, remuneration, etc.) assessable under Section 40 of the Revenue Code;

• Income from business operations is assessable under Section 40.

• Passive or property income (interest, dividends, rental income, goodwill, etc.) based on Article 41 paragraph 2 of the Revenue Code.

Thai citizens and foreigners who are permanent residents will be subject to income tax, if they earn annual income at the following rates:

• 0 to 150,000 baht (US$4,177) is exempt from income tax;

• More than 150,000 baht (US$4,177) and up to 300,000 baht (US$8,354) are subject to a 5 percent tax rate;

• More than 300,000 baht (US$8,354) and up to 500,000 baht (US$13,923) are subject to a 10 percent tax rate;

• More than 500,000 baht (US$13,923) and up to 750,000 (US$20,884) are subject to a 15 percent tax rate;

• More than 750,000 (US$20,884) and up to 1 million baht (US$27,846) are subject to a 20 percent tax rate;

• More than 1 million baht (US$27,846) and up to 2 million baht (US$55,683) are subject to a 25 percent tax rate;

• Over 2 million baht (US$55,683) and up to 5,000,000 baht (US$139,201) are subject to a 30 percent tax rate; and

• More than or more is subject to a 35 percent tax rate.

Instruction No. P 161/2566 brings significant changes to the income tax offering in Thailand, and thus for foreign investors. The latest changes are aimed at fostering a fairer tax system, particularly among taxpayers who have income from foreign and domestic sources.

I’m going to parse how insane this is with my own real world examples. I have lived in Thailand for 10 years or so, though not consecutively. Most years of that it was greater than 180 days and most years recently it was under a marriage visa to my Thai national husband (until that got revoked with 5 days to leave Thailand last October). I was exempt from the bank holding and income requirement rules in place for foreign nationals with Thai wives because my husband (s) is supposed to support me. Although Oh and more recently Ka have worked when and where they can, I was always the primary breadwinner with income supplemented from writing and editing work from the USA, where I already pay self employment income taxes.

Incidentally if I was an American man staying with my Thai wife in Thailand, my minimum income requirement is 40,000 baht per month, or 480,000 baht per year. This would put me at a flat 10% tax rate on that income at the absolute bottom of the scale. If I was a man of means it could easily jump to the 35% rate, which starts at 140K per year. I know plenty of people who make more than that. Are you renting out your chateau in France on airbnb, or doing some consultancy work for friends back home? This gets nasty real quick.

I’ve had years where I stayed in Thailand where this new rule would put me under the 20% tax rate, which at $24,000 a year or so would mean that I would have owed a tax bill of $4000 to Thailand. I’m talking US dollars not Thai baht.

Of course there is the matter of enforcement, which I presume would be done through visa renewals at the immigration office. Perhaps I’m missing some loopholes that make this into no big deal. I also recognize tht many expats already work in Thailand or perhaps have investment income there which would exempt this. I’d love any and all of my Thailand Expats and friends group to chime in.

I’m thinking the Great Taking is happening already…

Buy me a ko-fi