Transcript of the above video:

Since we had the video where we were talking about the recent announcement regarding overseas income, overseas money, earned, unearned, accessible income, maybe a term out there in the ether, that being said, let's just call it the recent announcement regarding tax liability in Thailand because quite honestly, my people here in the office, on the accounting side as well, we have really been going over this a lot because there are a number of permutations associated with this insofar as, and what I am trying to say is I don't think that this is as bad as I think some people perceive it as. I think there are a lot of people that are very, very upset by this that probably ought not be and then also I think that yes, this this will impact some people. I think it's going to be a very narrow subset of folks and it is not going to happen for some time; the assessment would occur in the forthcoming, effectively forthcoming calendar year and then you wouldn't really even need to be dealing with it from actually paying tax wise until the following year. That said, prior preparation is a good idea. 

So for those who are unaware and I doubt that is very many people watching this channel, yes there was a recent announcement from Thai Revenue Department where they were talking about the so-called loophole regarding foreign income was being closed. There was sort of a timing loophole where one could sort of wait a year from the time that one earned a set of income or I prefer the term, at least for now, and all of these terms are not to be used super particularly okay. I am making this video for informational purposes only; this is not a video where I am saying exactly what is going on. And the verbiage I am using, I am using it to provide insight. It should not be viewed as specific terms of art being used in terms of a legal context. Again look at it like income accrued, monies accrued, in a given year, there was a way in which to sort of stagger that and wait to bring it into Thailand the next year so that tax liability would not be applied to it. And the announcement states that that is no longer going to be possible, that whenever it was accrued again using that, that's my term but whenever the income was accrued, whenever you subsequently bring it in, there may be, and I stress may be, again it's going to be fact-based, circumstantially dependent, there may be tax liability associated with that. 

Now that said, regarding the issue of Tax IDs which we have discussed on this channel in the past, quite often actually, Tax ID numbers and Tax IDs, that is a different issue. I am mostly making this video, I am not making this video to call anybody out by any stretch of the imagination, but that said, when I see sort of misconceptions as to things, I have to say something about it and I saw one and I just have to comment on it because I think we have got to get the correct information out there. So I thought of making this video after reading a recent article from the Pattaya Mail, that is pattayamail.com, the article is titled: Moral Panic takes over the expats and Thai taxation furor. Urging those who are watching this video, go check out that article for more information. That said, quoting directly: "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." So let's start with that. Quoting directly again: "Without that," (that being TIN, tax identification number), "there can be no income tax liability." That is not strictly speaking correct. Just because one does not have a tax identification number does not mean they are not necessarily liable for Thai taxes. So as we have discussed in other videos, there is a physical presence test if you will associated with tax liability in Thailand because the statute stipulates tax residency and tax residency is determined by, in the past I used to read it said 183 days, currently I see it going around the internet 180 days. In my mind I just say okay 180 days; whatever the lesser number is just presume that. Basically half a year should be your rule of thumb if you will, 6 months if you will but 180 days. If you spend that time in Thailand then there is a pretty good chance you are going to be subject to Thai tax liability. That in and of itself is a timing thing. It doesn't matter if you have a Thai tax identification number or not, that is how it is. Again another taxable event that could occur albeit illegally, but somebody could come into Thailand a foreigner for example and be here for a day and undertake work that they are paid for, presumably let's say they get no work permit, they don't do anything, they do it all off the books, legal or illegal that is still a taxable event as far as the Revenue Department is concerned so that in and of itself could confer tax liability. So the main thrust of this video, I did want to get across, again I am not trying to call people out, the point is well made. I think the article overall, I see what they are getting at wherein yeah most retirees, I'm going to do another video contemporaneously with this one, most retirees are not going to actually be affected by this for a variety of different reasons most notably they are not earning income which in my mind is probably going to be where the rubber hits the road on this stuff; earned versus just income sitting around. The other issue is one of pension, how is that defined? Again this could get into the high weeds on pensions probably one of the reasons, I may do a video specifically on this why it might be a good idea to pull in your money now and use money in your account here in Thailand as a better way rather than try to use pension because pension may, again it is going to be fact dependent, what is considered a pension one, and then it may be factually dependent whether or not it is taxable; the Double Tax Treaties are going to come into play so it is going to be nationality dependent, I am not going to get into all of that analysis. What I am simply saying first off here is yeah tax identification number is an integral part to being taxed here in Thailand into the tax system but it in and of itself does not confer, or lack thereof fail to confer tax liability so just getting a tax identification number doesn't necessarily mean you need to pay taxes in Thailand and not getting a tax identification number does not mean that you are excluded or somehow immune from tax liability, that's the point I am trying to make. 

Quoting further: "Many active on social media are advising panicky expats to wait for a broader explanation from the Revenue," (I think they meant the Revenue Department), quoting further: "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." Well that's not the sole reason. I mean that isn't what it said in the announcement; it didn't say TIN number holder, TIN holders, tax ID number holders. It said anyone, it pertains to everyone, that is not what it says. So that is not the sole purpose. I did not, when I first read that, view that as the sole purpose of making that announcement. In fact when I first saw that, the first thing I thought of was wow okay so the deferral mechanism that was possible to use in the past wherein one deferred bringing in their money to Thailand depending on the circumstances but let's call it a year because that would be at the max, by deferring it by bringing it into Thailand after a year, folks were able to defer off their tax liability. Well that simply doesn't exist anymore. They are closing up that loophole so to speak. I always hate that term “loophole” but they closed up the ability to do that. They have made a specific announcement that you can't do that. It doesn't say anything about tax identification number holders. 

So again, I am not making this video to scare people because the analysis of whether or not someone is liable for taxes in Thailand it is going to be a pretty complex analysis and it is going to be based on the specific facts in that person's case. And one thing that may fall, one sort of how do I put it, one element of that analysis might in fact be whether or not that person had a tax identification number, what their tax status was in Thailand but that said that's only one component. That's not the end of the analysis; many things will factor into that. Now that said, as I said previously, I'm making another video with regard to this. Overall I don't think the vast majority of retirees are likely to be impacted by this but I did want to make this video because I did not want any misconceptions to start running rampant out there, not because I particularly want people to be taxed, I'm sure I am going to be burned for that in the comments that "oh I am just a shill for the tax man in Thailand!" No, I get it. People, generally speaking you want to avoid taxes you don't have to pay and yes there is going to come times where you do have to pay taxes but I am not trying to get people taxed. What I am trying to do with this video is hopefully not let people basically operate under a misconception that could get them into issues down the road. So the point of this video and the thing to take away from it is, a tax identification number, the conference of it in and of itself may not confer tax liability or it may, depending on circumstances. Well in fact the number itself doesn't confer the liability, the liability exists independent of the number whether or not it is issued. So if you have tax liability and you don't have a TIN number, you may have to go get one in order to pay your taxes and conversely, just because you don't have a TIN number does not mean you are just immune from Thai taxation or Thai tax liability. That in and of itself is not the way that the system works. Thai tax liability exists independent from the tax identification number.