Transcript of the above video:

As the title of this video suggests, we are discussing the tax system here in Thailand yet again. This seems to be causing a great deal of consternation for folks especially in the expat community, especially the older retirees. I reiterate and I have said this in other videos, this is a major change but it is not something to freak out about just this moment. Don't fret, take a deep breath. In most cases, well I shouldn't say this but, in many cases it's probably not going to have any impact on an individual here in Thailand, foreign nationality, retiree whoever, it's not going to have much impact to begin with; on some people it might. But again it is going to be very fact dependent and this isn't happening imminently. It is going to transpire over the course of roughly the next 14 to 18 months I would say.

So I thought of making this video after reading recent article from the Thai Examiner, that is thaiexaminer.com, the article is titled: Change in the tax law does target expats living in Thailand and extends reporting obligations. Now that title may seem a little bit blunt but it is on point. It is changing, the rules here. Now again, this is not the end of the world and I have noticed especially out on the ether of the internet, it seems to be kind of divided. There seem to be people who are sort of pulling their hair out over this and then there seems to be people who are telling people to be far too complacent about it. I'm trying to sort of maintain a middle path here and tell people "Hey this is something to be concerned about but it's not something that is imminently going to destroy your retirement. It may down the line require a bit more documentation associated for example with visas here in Thailand. I have made videos contemporaneously with this one where I discuss how this may interact with like Retirement Visa Extension etc. but again it's not coming down the pike in the next 15 minutes; this is going to be implemented over the course of months, if not years. And again we are not even fully sure what the rules are going to look like because again this was an administrative rule, there was essentially a Memorandum that was issued stating that they were changing the interpretation of the relevant law and how they applied it in their administrative rulings. We don't exactly know moving forward exactly what it will look like. So again, there is an element of this that it is going to be speculation no matter who it comes from but I want to be up front and clear about that because there are a lot of people out there talking as if they have like unfettered authority, they know without any equivocation exactly what is going to transpire with respect to these rule changes and the way that it is going to be applied when in fact I think that is impossible to believe that. We just don't know, we don't know exactly what the future holds but as with all the videos on this channel, we report it as it comes. That said, quoting directly, again Thai Examiner, thaiexaminer.com, "New regulation changes an interpretation which disregards when money was earned abroad" (probably a better word is "accrued" abroad) quoting further: "money was earned abroad and taxes all income if not already taxed by Treaty countries."

So that is another one. I have noticed a lot of people oversimplifying the issue of Tax Treaties. They just sort of say "well there is a Tax Treaty, so I don't need to worry." That is not necessarily the case and on top of that, all Tax Treaties are different; there are no uniform tax treaties. It is not just "oh my country and Thailand have a Tax Treaty, therefore I am hunky dory, because Tax Treaties are just good." There is just kind of this general glossing over of what that actually means. Quoting further: "The new order issued by the Revenue Department clarifies that income tax must be paid on income brought in from abroad," (again income is not the correct word; "accrued capital" might be the better term because "earned income" is a specific type of taxable type of Revenue if you will. There is "unearned income" as well, Interest for example is unearned income. So maybe the phrase that I have been using just in my own head is "accrued capital”), quoting further: "Brought in from abroad from another jurisdiction whether or not the income was generated within the scope of the present tax year."

Now yes, under the rule that will be ending come January 1, 2024, in the past if you brought money into Thailand in a different tax year from the year it was accrued, you didn't necessarily have tax liability on it. Quoting further: "The new definition of income tax for foreigners in Thailand, which is what this is," (no it is not, that's not what it is.) Quoting further: "has already bred unease and uncertainty because of the potentially wide-ranging implications of the move." 

No this is not an income tax per se. This is tax liability which may or may not be essentially applied to foreign nationals in Thailand pursuant to their Treaty obligations, pursuant to the terms of the underlying Tax Treaty. It's not an income tax on foreigners. I know people out there say "well these are semantic points!" No they are not because when this stuff gets said, things like “income tax”, then that goes through the ether of the internet and people now think you have got an income tax in Thailand. It is not the case. Thailand is just like any other country around the world. It has Double Tax Treaties with other countries; it is also part of the pretty uniform rule which is 180 day tax residency, that is the other part of this analysis. You have to be deemed to be a tax resident in Thailand but at the end of the day no, it is not income tax per se. What it might be is the assessment of tax liability on offshore accrued capital if one brings it into Thailand and one is a tax resident. So again, not to get too specific here, but be very careful with who and what you are listening to on this topic because there is a lot of vagueness that is still out there and on top of that, look Tax Law is almost esoteric in certain ways. So again to be listening to people that have a very simplistic, I really like Thai Examiner by the way and it's not usual that I find anything to kind of nitpick on them but again at the end of the day, journalists are lay people and I am not faulting them for using layman's terms, but this is not an income tax on foreigners in Thailand. What it is is it is basically an alignment with Thailand's Treaty obligations as well as basically as noted in that article, it is an expansion of the tax base by changing an internal rule within the Revenue Department. So again, people may find that to be semantic - maybe it is, maybe it isn't - but at the end of the day, you need to be aware of all these little nuances if you really want to analyze this thing thoroughly and that is what I am trying to do here. 

So the thing to take away from this video and the thing to understand is I get people are uneasy about this. It is probably not going to impact the vast majority of expats in Thailand, it just probably won't. That said, it could have an impact on a certain number of expats in Thailand especially possibly retirees or folks that are so-called "digital nomads" or work in various jurisdictions. Again, for this reason, it may not be a terrible idea to contact a legal professional, gain some real insight into how best to proceed.