Höstens flygresande har fått en stabil start drivet av en stark efterfrågan på utrikesflygresor som håller i sig och främst inom Europa. Under månaden flög närmare tre miljoner resenärer via Swedavias flygplatser, en ökning med fem procent jämfört med september i fjol, enligt ett pressmeddelande.
Totalt reste nära 3 miljoner resenärer via Swedavias flygplatser under september, vilket är en ökning med 5 procent jämfört med september 2022 och utgör 80 procent av resandet före pandemin, 2019. Utvecklingen är fortsatt främst driven av ett ökat utrikesresande via Sveriges största flygplats, Stockholm Arlanda Airport. Utrikesresandet ökade totalt sett med 8 procent till drygt 2 miljoner resenärer jämfört med september förra året, medan inrikesresandet minskade med 5 procent till drygt 740 000 resenärer.
Stockholm Arlanda Airport hade nära 2 miljoner resenärer under månaden, en ökning med 6 procent jämfört med september förra året. Utrikesresandet ökade med 8 procent till nära 1,7 miljoner resenärer medan inrikesresandet minskade med 2 procent till drygt 300 000 resenärer.
Göteborg Landvetter Airport hade nära 500 000 resenärer under september, en ökning med 8 procent jämfört med förra årets september. Utrikesresandet ökade med 11 procent till drygt 400 000 resenärer medan inrikesresandet minskade med 12 procent till drygt 57 000 resenärer.
Övriga Swedavia-flygplatser hade en varierad utveckling under september. Resandet vid Malmö Airport och Bromma Stockholm Airport hade en svagare utveckling, driven av ett något minskat inrikesresande under september och antalet resenärer minskade med 9 procent respektive 10 procent jämfört med september i fjol.
The Thai Revenue Department has in a press release explained more about the taxation of income overseas which will affect both some foreigners and some Thai people.
The basic idea is, that when money is transferred into Thailand it should be taxed in Thailand if it is income. If the income has been received in another country and later within the same tax year is being transferred to the taxpayer's account in Thailand it must be taxed in Thailand. If Thailand has a double tax agreement with the country where the money comes from, the tax paid in that foreign country can be deducted in Thailand according to the rules in the double tax agreement.
According to Mr. Winit Wisetsuvarnabhumi Deputy Director General and Spokesperson of the Revenue Department, the new rule basically follows the many international tax treaties, which Thailands is a signatory to. The implementation follows the development of information technology which makes it easier now for Thailand to live up to these agreements.
The Revenue Department Order will soon be followed up with administrative directives to the local revenue departments around the country, explaining how the new order must be administered, what kind of documentation is needed, etc. Transfer of savings from another country is e.g. an area that needs clarification. Savings is not classified as income – but a part of it may be identified as interest income that must be taxed in Thailand regardless of the year it was earned when transferred into Thailand.
If you want to talk to your auditor, the new rule is in the Revenue Department Order No. P.363/2017 regarding payment of income tax according to Section 47, paragraph two of the Revenue Code, dated September 15, 2023,
The World Bank has adjusted its growth projections downward for developing countries in the East Asia and Pacific region due to the continued slowdown of China's economy and global uncertainties, such as high interest rates and sluggish trade.
The World Bank has released a report in October, revising down its economic growth forecast for Thailand this year to 3.4%, reflecting a slower recovery compared to other countries in the ASEAN region.
The World Bank has adjusted its growth projections downward for developing countries in the East Asia and Pacific region due to the continued slowdown of China's economy and global uncertainties, such as high interest rates and sluggish trade. For Thailand, the economy continues to recover at a slower pace compared to its ASEAN counterparts, and reduced exports pose challenges for the Thai economy. The World Bank has revised its economic growth forecast for Thailand for this year from the previously estimated 3.9% in April to the current 3.4%, following a 2.6% expansion in 2023. The bank also forecasts a 3.5% growth for Thailand in 2024, slightly lower than the previous estimate of 3.6% in April.
The Thai economy in 2023 is being driven by resurgence in the tourism sector and private consumption. However, exports are expected to contract by 2.1% in terms of US dollars due to reduced demand from key trading partners. The delayed formation of the Thai government after recent elections has led to a slowdown in public and private sector investment.
The report suggests that tourism and domestic consumption are likely to offset weaknesses in foreign demand, with foreign tourists expected to return to pre-COVID-19 levels by the end of 2024.
The World Bank also predicts that Thai inflation will moderate to 1.5% in 2023, which is lower than most emerging market economies. This is due to the decline in global energy prices and stable commodity prices.
It is also anticipated that Thailand's public debt in 2023 will remain high, exceeding 60%, and the country will return to a current account surplus of 0.5% of GDP this year, ending two consecutive years of deficits in 2021 and 2022. (TNA)
Western expats worry mostly about income tax and hospital bills.
The new top concern of Pattaya expats, almost 60 percent, is the recent announcement of the Thai internal revenue service to tax all income brought into Thailand by both Thai nationals and farang residing here over 180 days in a calendar year. According to a straw poll of 150 expats (UK, US, EU, Australia), conducted in Jomtien soi five from 26-28 September, the subject has displaced visa and insurance concerns from their traditional first place in past polls.
"Touch my pension and I'm out of here, was the response of many expats. Some, mostly retirees, said they were reviewing their options such as moving to Cambodia or the Philippines where tax laws are believed to be softer or ignored for foreign residents. However, about a quarter of the respondents had never heard of the proposal or thought it did not apply to them. Five respondents thought it only referred to currency speculators, holders of off-shore accounts in Hong Kong or elsewhere or rich investors in overseas businesses.
Pattaya Mail contacted a Thai tax lawyer for his personal perspective. Here is his reply, "Thai revenue is simply updating an old law by saying that tax must be paid, from next year, on foreign income even if the incoming money's arrival is delayed into a future tax year. But there is no intention to tax again income that has already been taxed abroad. For example, the pensions of most foreign retirees are taxed initially in their home country and there are, in any case, double taxation treaties with 61 countries. The issue is whether all resident expats will need to register with Thai revenue to obtain a tax identification number (TIN) to explain their individual circumstances. Nobody can answer detailed questions until the revenue issues more guidelines for the non-business community."
Second subject choice for most respondents was concern that more long term visas would soon require compulsory hospital insurance. The prime worry was amongst the holders of non "O" retirement extensions or the annual extension granted to foreigners with a Thai spouse. There have been no official announcements, but remarks earlier in the year by a deputy national police chief, Surachate Hakparn, seem to be the main source of worry. Several respondents said they had now moved to Elite visas which guarantee multiple-entry to Thailand for 5-20 years depending on the initial cash sum paid, starting with 900,000 baht. The whole subject is controversial in Thai government circles as the evidence shows that most non-payment of hospital bills by foreigners arises from motorbike accidents involving short-term tourists under 40.
Other subjects of worry raised in the field study included the future of night life in the city which some see as short-term as the Pattaya tourist profile changes to Asia and away from Europe and the future of ganja leisure smoking in view of recent government announcements to restrict use to medical treatment. Brits are understandably upset by their "frozen" old age pensions here, although respondents seem resigned to the inevitability of discrimination. Four respondents primarily raised the issue of inflation in supermarket products, whilst three referred to traffic jams which they blamed on city hall or too many music festivals. A sole Australian expat said she was really worried about an influx of Americans if Donald Trump won the general election next year.
In a move designed to close legal loopholes and boost tax revenue, Thailand's Revenue Department recently issued a new directive effective from January 1, 2024. The order targets individuals—both Thai citizens and foreigners—earning income from abroad, requiring them to pay Thai taxes when that income is brought into the country. While the intent may be laudable, the manner of its implementation risks destabilizing the country's attractiveness to foreign investors and the burgeoning community of digital nomads and remote workers.
At its core, the directive's Achilles' heel is ambiguity. Section 41, paragraph 2 of the Revenue Code is already a complex piece of legislation that has been open to various interpretations. This new order adds another layer of uncertainty, with unclear stipulations on who is precisely liable to pay these new taxes and when. Such legal murkiness is a red flag for foreign investors who prize stability and predictability in tax regimes.
Thailand has long been a haven for digital nomads, offering an attractive blend of low living costs, good weather, and a vibrant culture. These individuals contribute not just to the economy but also bring with them a milieu of innovation and expertise. The new tax directive casts a dark shadow over this arrangement. Unclear tax rules make Thailand less appealing to these location-independent workers, who could very well opt for other countries with more favorable tax regimes.
The COVID-19 pandemic has shifted the landscape of work dramatically, making remote work not just an option but often a necessity. The new tax rule could disincentivize companies from setting up remote teams in Thailand or even leveraging local talent, as the tax implications could become too complex to navigate.
Foreign direct investment (FDI) is crucial for any economy, more so for a developing economy like Thailand. The new tax regulation adds a layer of complexity that could very well deter FDI. The lack of clarity in the tax laws could be perceived as a lack of transparency, eroding trust between the government and foreign investors.
While the Thai government's intention to increase tax revenue is understandable, the approach taken with this new directive is fraught with challenges. For a country aiming to be at the forefront of the evolving global economy, alienating foreign investors and the digital workforce seems like a step in the wrong direction. A revisit and possible restructure of this tax directive might be essential to maintain Thailand's competitiveness on the global stage.
As the world moves toward a more flexible, digital-first working environment, Thailand risks being left behind unless it can provide a stable, transparent, and welcoming atmosphere for people and businesses of the future.
Passengers flying from Suvarnabhumi's new terminal advised to have at least 20 minutes in hand
People taking flights at Suvarnabhumi International Airport have been advised to check their flight information carefully to avoid confusion now that the new satellite terminal has been opened.
Expats are being warned that a four-decade tax vacation is under review.
Prime Minister Srettha Thavisin couldn't be clearer: "You should pay tax on income you earn no matter how you earn it." He was referring to the revenue department's "clarification" that, from January 2024, it planned to the tax foreign income on all individuals, Thai or foreign, who have resided annually in the country for over six months. The department's statement specifically closed the loophole, under existing law, that anyone could escape the tax by delaying transfer of the funds until a later tax year, for example by holding it in offshore funds.
It is commonly understood that the incoming Pheu Thai government must raise mega-funds for its welfare policies, for example the US$16 billion (560 billion Thai baht) wallet scheme to pay 10,000 baht to all adult Thais as a regenerative economic move. However, the policy has clearly shocked Thailand's expat community who though they were tax-free unless officially working in Thailand. Indeed, the previous government, led by general Prayut Chan-o-cha, had marketed its long stay visas, especially Elite, precisely on the grounds that foreigners were mostly excused paying income tax here.
The first grey area for expats is registration. Contrary to some reports, there will be no deduction of funds on arrival. The system initially will be self-registration with taxable expats staying in Thailand longer than 180 days registering online with the revenue authority to receive a TIN or Tax Identification Number. Presumably, there will be further guidance on this procedure in later announcements. Of course, the self-registration is backed up by all the details of foreign transactions which are now easier to trace thanks to technological advancement. Wealthy expats are likely to choose a tax lawyer to fill in forms on their behalf.
The next ambiguity for foreigners is the double taxation agreement (DTA) which exists between 61 countries and Thailand. This means that some expats can benefit from Thai taxation relief by tax exemptions or tax credits where specific conditions are fulfilled. The most frequently example is pension income (state or employment) which is taxed in the source country. Not to mention that the income might well be taxed in the home country even though there is no formal agreement with Thailand. This whole area needs official clarification to avoid a bureaucratic nightmare and gross disillusionment.
The latest income tax rules won't apply to a foreigner residing in Thailand for less than 180 days in a year. If he or she transferred, say, four million baht to Thailand to purchase a condominium unit, personal income tax as recently defined would not operate. But an expat, living here for most of the year, could find a similar transfer might get tangled in the revenue net. Many other examples, beyond property purchases and sales, could be quoted to illustrate the devil will be in the detail. What is absolutely clear is that the Thai income tax tentacles are broadening beyond rich Thais earning cash abroad (or at home) and hiding it in offshore accounts or foreign banks.
For the past four decades, foreigners (unless working here with employment permits) have mostly been excused interference by the revenue department. It has been a discretion not a right. Some Thais have also been included in this category, for example overseas workers transmitting small amounts back to their families in Thailand. There is already much talk in expat circles about quitting Thailand. What is required is a policy statement by the revenue or Cabinet authorities even whilst acknowledging that a complex situation is in a trial period and may remain so for months. Sometimes silence is the best policy. Not in this case.
Incarcerated former Prime Minister Thaksin Shinawatra will be eligible to apply for the suspension of his remaining one-year sentence as early as February 2024, after he has served six months, albeit in a hospital, Senator Somchai Sawangkarn informed Thai media on Monday, September 25th.
Somchai said the duration Thaksin spent in the Police General Hospital is considered served time, so he is set to complete six months of his prison sentence in February.
The senator, who chairs the Senate's Standing Committee on Human Rights, Rights and Liberties and Consumer Protection, explained that inmates are eligible to seek sentence suspension or commutation from His Majesty the King once they have completed either one-third or six months of their sentence. He further noted that the suspension and commutation are typically granted on significant occasions like the King's birthday on July 28th, King Bhumibol's birthday on December 5th, and Queen Sirikit's birthday on August 12th.
Thaksin has been under the custody of the Department of Corrections since August 22nd, although he mostly spent his jail time at a suite room at the police hospital due to his alleged health conditions.
Somchai continued that Thaksin may very likely be eligible for a suspension of his term and release because he is over 74 years old, which passes the 70-year-old criteria.
He further stated that Thaksin may be allowed to stay at home without having to wear electronic monitoring (EM) bracelets. However, he would probably be restricted from leaving the country.
In response to calls to disclose details of Thaksin's illness, some legal experts came out to say that the action could constitute a violation to the National Health Security Act, which bars physicians from disclosing patients' health condition without consent.
The tax change which has already been defended by Prime Minister Srettha Thavisin as a move against income inequality, is coming with Thailand in talks with economic powers such as the European Union to put in place new trade and investment pacts. It comes after the previous government had launched long-term visa regimes highlighting the zero tax imposed by the Thai government on income not generated in Thailand. This new move is already causing anxiety among foreigners living in the kingdom with passive income from abroad as well as retirees who are still thought to be exempt from tax. However, for the new tax regime to generate extra revenue to fund government stimulus efforts, some foreigners must end up paying more.
There are growing concerns among foreigners about moves by the new Thai government to widen the country's tax base. They fear this could lead to all incomes earned by foreign residents in the kingdom being subject to tax. It follows an announcement by the Revenue Department in mid-September which is leading to calls for greater clarification and indeed for the government to make it clear that there will be no attempt to impose tax on retirement or pension income from abroad.
On September 15th, the Revenue Department in Thailand issued a clarification stating that from the 1st of January 2024, it planned to tax foreign income on all individuals in the kingdom who have been resident in the country for over 180 days.
Speaking in the last week about the announcement, new Prime Minister and current Minister of Finance, Srettha Thavisin, suggested apologetically that the move was a push by his government to increase tax receipts and the kingdom's tax base to fund such measures as the ฿10,000 giveaway which is scheduled to proceed on the 1st of February 2024.
This will disburse ฿10,000 in digital credits to over 55 million people in Thailand over the age of 16 years.
More tax receipts needed by the new Pheu Thai-led government to pay for economic stimulus measures such as the ฿10,000 Digital Wallet says the new PM
The new government estimates that the cost of this measure alone will be ฿560 billion.
Speaking to the announcement, Mr Srettha did not pull any punches and strongly justified the move to bring foreigners into the tax net based on addressing Thailand's chronic levels of inequality, which are thought to have widened since 2018, even before the pandemic crisis, and during that period to have been exacerbated further again by trends in the economy.
It is accepted by most analysts that the wealthiest in Thailand have earned more while those who are most vulnerable have earned less because of the pandemic crisis. What has been less speculated on is the growing number of foreigners who are tax resident in the kingdom.
Up to this year, figures kept by the Thai government only focused on foreigners who were registered as employees or self-employed with the Revenue Department with figures for the first three months showing that 156,596 fit into this category.
The top three nationalities for these workers are Japanese, Chinese and Indian.
Difficulties ascertaining the exact number of foreigners in Thailand due to different kinds and constant movement driven by tourism and migration
There are problems identifying the exact number of foreigners in Thailand with no official data available but it is known from Thai authorities that up to four million non-residents live in the kingdom.
There is also open debate about the real population of the kingdom with economic analysts putting the figure at 71.82 million while official figures suggest 66.15 million.
However, most analysts suggest that the affluent expat population is approximately 500,000 to 600,000 given that for instance at any one time, there are up to 3 million short-term tourists in Thailand with a growing number of frequent visitors in the last two decades some of whom maintain a residential base in the country.
According to 2018 figures, Thailand issued 80,000 retirement visas for elderly foreigners but there are estimated to be the same number between those holding marriage visas and those living in the kingdom on short-term dispensations.
This gives a figure of 320,000 affluent foreigners from among the three to four million non-nationals who live in the kingdom at any one time.
Capital flows out of Thailand to achieve higher returns at a time when the government is also facing an impeded economy due to chronic private borrowing
The move to widen the tax base and actively target more foreigners is coming with reports of capital flowing out of the kingdom in a slow-motion response to the kingdom's comparatively lower interest rate for deposit accounts and the wider movement of funding worldwide from East to West since the US Federal Reserve brought in its determined policy of higher interest rates from March 2022.
This has seen US banks offering interest rates at a 22-year high.
It is also coming at a time when Thailand's financial system is feeling pressure from large levels of revolving household debt which has impeded economic growth and is now threatening a surge in non-performing loans.
Amidst this tension, the new government is seeking to use public funding to stimulate the economy, a move which is drawing criticism from its hawkish central bank with scepticism on public policy plans last week openly expressed by Bank of Thailand Sethaput Suthiwartnarueput.
Thai economy is driven and owned by a small elite
This is leading to the government seeking a wider tax base with much of the country's wealth, held by a small elite in holdings that are mobile and able to be managed against changes in the country's tax code.
Because of this imbalance in power, such tax changes run a risk of disrupting the country's economy which is very much dependent on this elite class.
Despite a narrowing tax base, however, the previous government consistently reported higher tax receipts since the economy was reopened after the pandemic
It had already begun taxing commercial property holdings amid changes pushed by officials to widen the kingdom's tax base which has been declining.
At the height of the COVID-19 crisis in August 2021, a survey showed that 1.6% of the population with accounts over ฿1 million accounted for 91.22% of funds deposited.
Foreigners in Thailand control 3.52% of bank funds
The same survey showed that foreigners held 3.52% of funds in Thai banks despite being only 0.75% of the population.
A programme by the last government which targeted one million high-spending foreigners coming to live in Thailand over 5 years by offering long-term visas to the ultra wealthy and high earners was launched in 2022.
Figures released this March show that it only drew a limited response with 2,920 applicants including 195 high-net-worth individuals, 1,011 foreign retirees with a level of assets and income, 771 working executives who moved to Thailand and 943 individuals who qualified through having specialist skills or sponsored employment in Thailand.
Poor response to elite visa offer for wealthy foreigners to come live and work in Thailand launched in 2022 by the previous government led by Americans
Americans were the leading group of this new visa class with 518 applicants followed by the Chinese with 325 new tax residents.
The programme helped with the facilitation of investment projects from the United States, Singapore, Hong Kong and France.
The new visa regime became controversial in November last year when the government was forced to cancel plans to offer these visa holders an opportunity to own lands in Thailand in their own right.
The move sparked a groundswell of public opposition which was led by the Pheu Thai Party which leads the new government.
Tax change announced last week causing nervousness among affluent expats in Thailand, most of whom have passive income from abroad of some kind
The tax change announced last week by the Revenue Department and Prime Minister Srettha Thavisin who is also Minister of Finance, is causing quite a stir among the expat population in Thailand and growing numbers of foreigners abroad thinking of retiring to the kingdom.
It is thought to be significant and is already leading to calls for both clarification and a rethink by the new government.
Up to now, it has been thought that retirement income or pension income received by foreigners in Thailand was not subject to income tax.
This is still assumed to be the case, but the nature of the change announced by the Revenue Department is raising questions.
The tax collection agency has pointed out that up to 1st January 2024, income earned in a foreign country by individuals or entities not within the current tax year was not subject to tax in Thailand.
The change announced on September 15th technically means that any income repatriated from a foreign country to Thailand is liable to taxation.
This is now to be judged as subject to income tax in the kingdom, no matter in what period the money was earned.
Prime Minister's statement on the issue failed to ease concern and fears that the move may target all offshore income earned by foreigners in Thailand
Mr Srettha, in his statement to reporters last week, appeared apologetic as he said: 'Some people may not be happy I am digging into this area, but inequality is a big issue.'
The Prime Minister explained: 'The principle of tax is that you must pay tax on income you earn, no matter how you earn it.'
Of course, the statement from the Revenue Department does not address concerns by expat retirees as it refers to all overseas income coming into Thailand.
While the response from the government and the Prime Minister has been to justify the move based on raising government funding to address income inequality, it does not remove growing fears among hundreds of thousands of foreigners living in Thailand, supported by passive income from abroad.
Foreigners who work and earn income in Thailand are the only ones, up to now, liable to file Revenue income tax returns on a monthly and annual basis
Under the current law, foreigners living in Thailand who are not retired are liable to file income tax returns on a monthly basis at the beginning of the month.
This is achieved by filing a PND 90 monthly return, declaring income earned while an annual PND 91 return is required by the Revenue Department.
In practice, for quite some time, this has not been the case with only foreigners actively employed or registered for business purposes making such returns.
Tax was levied only in respect of all self-employed people in the kingdom or those who are not covered under company payrolls, which are also subject to social security charges.
The income tax regime in Thailand does not require a return for income tax on a monthly basis for income not exceeding ฿60,000 per month.
In respect of annual returns, income tax or an income of ฿120,000 is also exempt from reporting while income tax under ฿150,000 per year is not subject to tax by the authorities.
The current level of taxation in Thailand is still quite low in comparison with other countries, especially for those on lower to middle incomes.
Thailand has tax agreements and treaties with many countries across the world with respect to foreign nationals who become tax resident in the kingdom
For foreigners already living in Thailand or thinking of moving to the kingdom, the country has tax agreements with many countries across the globe.
In most cases, foreigners living in the country fill in forms issued by corresponding tax agencies in other countries as required, declaring they are tax resident in Thailand to cancel withholding taxes and other deductions in the home country that might be typically applied.
All this is very much dependent on the country of origin and the passive income source of the retiree or expat who has moved to Thailand with laws and regulations varying significantly between countries.
Many retirees in Thailand will have gone through the process of obtaining certification that they are tax resident in Thailand to remove withholding taxes often applied against retirement incomes sent from abroad, with regulations and requirements varying according to country.
For United States citizens, for example, the situation is quite different as American citizens are required to file tax returns to authorities in the United States on an annual basis in any event.
This is because living abroad does not allow them to waive obligations to file and pay taxes according to the American Tax Code.
The only way for an American to avoid paying taxes if he or she is a resident of Thailand is to surrender their American citizenship, which is an unappealing prospect to many.
Obtaining citizenship in Thailand for foreigners is a particularly difficult process with only a small number granted annually.
Further clarification on the September 15th announcement is required and awaited by concerned foreigners.
It is not yet clear what the text or detail of the decision made on September 15th is, but there is likely to be some confusion until matters are clarified.
The matter is quite similar to announcements made in recent years relating to insurance for retirees in Thailand, which is a requirement for obtaining a retirement visa before entering the kingdom.
However, it has not been applied universally to those seeking retirement visa extensions and even new visas throughout the country in recent years.
The regime for retirees in Thailand has, in the past two decades, been considered quite attractive and has led to hundreds of thousands of Westerners moving to the kingdom because of the lower cost of living and better climate.
In recent years, Thailand has faced strong competition from countries such as Malaysia, Vietnam and Cambodia for this market. This continues to be the case.
Thailand competes well for retirement with other Southeast Asian countries due to a sense of welcome
The kingdom has competed quite well based on the lifestyle and the comparatively welcoming social climate.
The previous government sought to capitalise on this when it launched its programme in 2022 to attract very wealthy Western investors and workers to the kingdom with a long-term visa and attractive tax regime being among the benefits advertised.
The proposal for elite visas approved by the previous government in September 2021 and launched in 2022, did not meet with the large number of takers that had been anticipated.
At that time, up to one million visa holders were targeted by the government of Prayut Chan-Ocha in a scheme orchestrated between the Ministry of Labour, the Ministry of Interior, the Royal Thai Police and the Finance Ministry while promoted by the Centre for Economic Situation Administration led by then Deputy Prime Minister Supattanapong Punmeechaow.
The former J.P. Morgan Bank boss in Thailand, Mr Chayotid Kridakon, was said to be the mastermind behind the plan.
The programme, advertised last year, highlighted the zero tax on offshore income as a key attraction to those interested.
Tax-free status for offshore income as advertised last year in respect of new elite visas may not go down well with other countries and trade blocs
It should be noted that Thailand is currently in talks with the European Union and other key economic players with a view to new trade agreements and this sort of appeal to personal sources of foreign capital is not something which would meet with the approval of the international order which is increasingly moving towards greater transparency, reporting and tax compliance with pressure being put on tax havens such as Switzerland and Ireland to roll back concessions.
In November last year, by then advanced plans to allow elite visa holders to purchase land and property in their own right under the 10-year visa were axed by the Cabinet after widespread opposition from the public and indeed from the opposition parties at the time, including the Pheu Thai Party which now leads the current government.
Public concern about that issue was fanned by widespread unease at the influx of Chinese grey capital groups who have proved adept at abusing the country's visa systems and concessions provided by authorities to attract inward investment.
Fears the new tax move may have severe ramifications
Most retirees in Thailand are required to deposit ฿800,000 in a bank account before obtaining a retirement visa or an extension of an existing facility or else are required to show proof of adequate monthly income of at least ฿65,000 per month.
This would, in theory, subject retirees in Thailand to a tax if retirement income is taxable, albeit at a modest rate.
The order issued by the Revenue Department on the 15th of September is number 16-2023 and analysts, at present, believe that it may have significant implications for residents in the Kingdom from abroad in all respects.
It also applies to those who possess assets located overseas.
The order, in its fundamental terms, means that any income earned from abroad by individuals now tax resident in Thailand must be declared to the Revenue Department which does appear to refer to income from work duties, business activities, investments funds and business interests outside of Thailand apart from retirement investments or income.
Expert suggests it appears to propose a new regime for taxation of foreign residents in Thailand across the board and therefore more reporting burdens
Tax experts in Thailand have been struck at the nature of the order which appears to suggest a new approach to how foreigners living in the Kingdom are assessed on potential income coming from abroad and indeed their assets abroad.
It should be noted that up to now, it had been assumed that retirement income earned from abroad or sent from abroad was not subject to income tax in Thailand.
This is a key question that must be answered for the 1st of January next year.
The news in relation to income tax changes comes as the Deputy Director General of the Business Development Department Mr Jitakorn Wongkhatekorn has issued a warning in respect of nominee shareholders which are often used by legal firms and accountancy practitioners on behalf of foreigners in Thailand.
Tightening of the screws on nominee shareholders in what is an ongoing process targeting Chinese mafia groups who have also infiltrated the economy
The Business Development Department recently announced the investigation of 439 firms in Chiang Mai and Chonburi targeted because of their involvement in potential tourism businesses and links with Chinese investors.
Under Thailand's Foreign Business Act, companies in the kingdom must be 51% controlled by Thai shareholders.
Often, this shareholding is provided by nominees who hold non-voting shares while 49% of the voting shares are held by foreigners.
The control and direction of companies is an important area for authorities as companies can be used to purchase properties and control of business concerns in Thailand.
This undermines the country's Foreign Business Act and restrictions on foreigners owning land and property as well as being involved in key business activities linked, for instance, to tourism.
'The majority of nominee violations are often a result of Thai individuals accepting benefits, giving their consent or seeking legal advice to evade the law. We want to emphasise that Thais should not be misled into providing assistance or support or holding shares on behalf of foreigners to allow foreign individuals to illegally conduct business here,' Mr Jitakorn warned last week. 'Such actions may result in legal consequences for legal entities, those providing assistance and Thai shareholders owning companies on behalf of foreigners. The penalties include imprisonment for up to three years or fines ranging from ฿100,000 to ฿1 million. In addition, daily fines of ฿10,000 to ฿50,000 may be imposed on those involved in such violations until they cease.'
BANGKOK, Sept 25 (TNA) – Cyber police officers have conducted a search at the house of Deputy National Police Chief Pol. Gen. Surachate Hakparn after arrest warrants were issued for nearly 30 members of his team in connection with online gambling.
It is still unknown in which online gambling network they are allegedly involved in. (TNA)
The Thai Revenue Department's recent announcement to impose taxes on funds entering the country from abroad sent ripples through the elite society and financial sectors over the weekend. In a nation where such a taxation scheme is unprecedented, the buzz was loud enough to compel newly appointed Prime Minister Srettha Thavasin to issue a statement, stressing the initiative's aim to narrow the wealth gap. However, the government's opaque approach and questionable execution raise several red flags.
First and foremost, the private banking industry is unambiguously unsettled by the announcement. Banks, after all, are gatekeepers to the capital flows that keep an economy robust. Their clients, many of whom have already moved funds out of Thailand, are now confronted with a policy quagmire that could have been avoided with clearer guidelines. While PM Srettha Thavasin speaks of an equitable society, the current ambiguity seems more likely to generate confusion and economic instability.
The banking sector's alarm has cascaded down to individual clients who now face a predicament about the future of their investments. Without clear directives on how the new tax structure will be implemented, the government risks inciting a fiscal exodus or, at the very least, a chilling effect on future investments.
Compounding the issue is the lack of clarity about what kinds of funds will be subject to this taxation. Is it aimed solely at profits, or does it also include principal amounts? Such distinctions are crucial, not just for the elite who park their money offshore, but also for the average investor looking to diversify their portfolio internationally.
It's not just the elite who stand to be impacted. Thailand has a sizable population of migrant workers in countries like Israel and Taiwan, which do not have double taxation agreements with Thailand. As per data from the Bank of Thailand, remittances play a significant role in the Thai economy. Taxing these remittances would mean that these workers get taxed twice: once in their country of work and again when they send money home. This could have catastrophic implications for families reliant on these funds.
Lawan Saengsanit, the Director-General of the Revenue Department, promises hearings and focus groups to clarify rules and listen to concerns. However, such afterthoughts indicate a lack of preparation and foresight, which only adds to the skepticism surrounding the initiative. Though the Revenue Department aims for clarity in the long run, the absence of it in the initial stages could be costly.
The Thai government's intention to address social inequalities through taxation is commendable but requires a well-thought-out strategy. Without comprehensive planning and clear communication, the initiative is set to sow more chaos than benefits. In a world where capital flows are as agile as a click of a mouse, clarity is not just advisable; it's imperative.
This ambitious tax reform agenda needs to be more than just a headline. It should be a meticulously crafted policy that serves its constituents — both the haves and the have-nots — without sacrificing economic stability. As it stands, the proposed taxation on incoming funds is a well-intended but half-baked plan, a ship sailing into murky waters without a compass.
The Khao Kheow Open Zoo in Sri Racha, not far from Pattaya, welcomed a second baby white rhino.
Mr. Tewin Rattanawongsawat, the zoo's director, revealed to the Pattaya News on Friday (September 22nd) that the second rhino baby 'Top' was born on July 15th this year but has just grown enough to be displayed to the public. Top is a male born to an 8-year-old mother "Zilla" and an 18-year-old father "Zoody." The baby is in good health and strong and is under close monitoring by veterinarians. There are now six white rhinos at the zoo.
Every September 22nd of each year is celebrated as Rhino Day. Rhinos are a wild animal which are at risk to be extinct. Rhino Day activities are being held at the zoo from September 22nd to September 24th.
The White Rhino is the second biggest terrestrial animal after elephants. The biggest white rhino can be up to five meters wide, two meters tall and weigh up to 2,700 kilograms. Its lifetime is up to 55 years. White rhinos are originally from South Africa.
