Do Thais Report Foreign Income On Taxes?

[MattFS218]

I was wondering if there were any reporting requirements for foreign sourced income on a thai tax return for thai residents. Is there?

[GuestHouse]

Well there is between the UK and Thailand (also Italy and Thailand), while ever a Thai is tax resident in both places - Joint Tax agreements.

I'm working with Thais who are having to make those declarations in Thailand, UK and Italy.

There is a list of countries with which Thailand has such joint tax agreements, you might find in on TV if you search.

[Wekhin]

I was wondering if there were any reporting requirements for foreign sourced income on a thai tax return for thai residents. Is there?

If that income is brought into Thailand, Thai resident must report and pay tax on that income. If the source country has double taxation treaty with Thailand and he is already taxed in the source country, he can utilise terms and conditions of the treaty by paying only the difference, if any.

[MattFS218]

Okay, so there is no reporting of foreign sourced income that stays abroad for thai's on a yearly tax return or anything, correct? Thanks for the help!

[Wekhin]

Okay, so there is no reporting of foreign sourced income that stays abroad for thai's on a yearly tax return or anything, correct? Thanks for the help!

Not quite. Let me put it this way.

Income from work done and paid abroad needs no tax filing unless it is brought into the country.

Income from work done in the country but paid abroad must be filed.

These rules apply to all income earners, Thais and foreigners, who stay in the country more than 180 days a year.

[MattFS218]

Okay, so there is no reporting of foreign sourced income that stays abroad for thai's on a yearly tax return or anything, correct? Thanks for the help!

Not quite. Let me put it this way.

Income from work done and paid abroad needs no tax filing unless it is brought into the country.

Income from work done in the country but paid abroad must be filed.

These rules apply to all income earners, Thais and foreigners, who stay in the country more than 180 days a year.

From Revenue Dept Website: http://www.rd.go.th/publish/6045.0.html

A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

She is receiving from sources outside of Thailand. I read this as taxation is based on if you are being paid by a foreign or thai company. Regardless of where the work occurs. Please help me be legal

[kudroz]

You said in another thread that she was selling a domain name. In your case, the domain name will be deemed to be a personal property, except in the case that selling domain names is part of the normal course of her business, if that is the case it will be deemed inventory property and is treated differently for tax purposes.

She is (seller) a resident of Thailand selling the intangible property to a resident of the US (buyer), is this correct? Matt, this topic is very complex, you want to get professional advise from a tax attorney. Let me give you a rundown of how it is likely to go if you are doing everything legally - but please note that certain things might apply or not depending of your particular situation.

Backgrounds

A personal property (intangible or real) needs to be located somewhere. In your case, it will generally be the jurisdiction where she is resident for tax purposes.

She is alienating by an act (selling, transferring) the said property. The gain or loss from the alienation of the property will generally be sourced in the jurisdiction where the property is located.

US Tax Liability

You will only be liable for US Taxes if the intangible personal property has a contingent on its use, productivity, performance or disposition. I.e.: The buyer may not use the domain for certain things prescribed in the selling agreement, or the price of the domain is determined by the revenues generated in a certain period of time. In that case, there is a condition (contingent) on the use and productivity of the intangible personal property.

If this is the case, it is treated as being effectively connected income (ECI) with a trade or business conducted in the US and you are subject to US taxes.

Thai Tax Liability

Every person (Thai resident or not) are subject to Thai Tax on their Thai source income. In your case, if the property is located in Thailand; the gain or loss from the alienation of the property will be deemed to be of Thai source. Therefore, the gain or loss will be subject to Thai taxation regardless of how, when or where the gain is remitted.

[MattFS218]

kudroz, thanks for your detailed response. I've read through all threats on TV related to this, and you by far seem to know the most.

So, a domain name is virtual, and doesn't really have a source within Thailand. The registrar I use, is located in the U.S., so I think I can assume the domain "property" is located in America. In this case, it is sourced in the U.S. and I shouldn't be taxed in Thailand..correct?

I do not believe the U.S. taxes foreign residents when investing in the U.S. be it property or stocks. Am I correct here also? Thanks again for your A+ advise.

[kudroz]

kudroz, thanks for your detailed response. I've read through all threats on TV related to this, and you by far seem to know the most.

So, a domain name is virtual, and doesn't really have a source within Thailand. The registrar I use, is located in the U.S., so I think I can assume the domain "property" is located in America. In this case, it is sourced in the U.S. and I shouldn't be taxed in Thailand..correct?

I do not believe the U.S. taxes foreign residents when investing in the U.S. be it property or stocks. Am I correct here also? Thanks again for your A+ advise.

Yes, like you say a domain name is virtual - the term for this is "intangible property". If your normal course of business is not selling domain names, it is deemed "personal intangible property" (not inventory intangible property).

So your property has to be located somewhere. The location of a personal intangible property is generally located in the jurisdiction where the owner of property is resident for tax purposes. So, if your friend has her tax residence in Thailand, the property would be located in Thailand. (it doesn't matter if it was registered with a US domain name registrar, the rights of ownership belongs to someone who is, I assume, a resident of Thailand for tax purposes).

Therefore, the gains from the alienation (selling) of a property located in Thailand is liable for Thai taxation. With the information you've given so far, I believe that you are liable for Thai tax because the domain name is located in Thailand for tax purposes, and the gains from the sale of this domain name will incur taxation in Thailand.

Section 40 (8) of the Thai Revenue Code defines as assessable any income derived from business, commerce or other transactions sourced in Thailand. But please, I'm no specialist and I'm speaking of personal experience... I'm merely 24 years old and I may be wrong.

Edited November 5, 2006 by kudroz

[kudroz]

do not believe the U.S. taxes foreign residents when investing in the U.S. be it property or stocks.

Actually they do, non-resident alien are taxed on US source income and on income effectively connected with the trade or business conducted in the US (ECI). There are a few exemption under the Section 864 of the US Tax code such as; trading in stocks or securities through an agent of independent status.

[MattFS218]

do not believe the U.S. taxes foreign residents when investing in the U.S. be it property or stocks.

Actually they do, non-resident alien are taxed on US source income and on income effectively connected with the trade or business conducted in the US (ECI). There are a few exemption under the Section 864 of the US Tax code such as; trading in stocks or securities through an agent of independent status.

Where are you getting this information from? and why does a 24 year old know this stuff?

Edited November 5, 2006 by MattFS218

[MattFS218]

I was reading the wording closly on the thai revenue department website...and it clearly says "sources" not "sourced"

A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid

sources clearly means payment from a Thai company or individual...doesn't it?

[kudroz]

do not believe the U.S. taxes foreign residents when investing in the U.S. be it property or stocks.

Actually they do, non-resident alien are taxed on US source income and on income effectively connected with the trade or business conducted in the US (ECI). There are a few exemption under the Section 864 of the US Tax code such as; trading in stocks or securities through an agent of independent status.

Where are you getting this information from? and why does a 24 year old know this stuff?

I've been there and dealt with this in the past, I got this information from my tax attorneys, advisers and from research I did at the time.

[kudroz]

I was reading the wording closly on the thai revenue department website...and it clearly says "sources" not "sourced"

A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid

sources clearly means payment from a Thai company or individual...doesn't it?

"source of income" is generally defined either by the location of the payer, where the service is performed, where the property is located and/or the type of payment made. There are specifics and many rules to this, and I tried to give my advise as per your situation, but it'd be best to consult with a tax professional and have a look at the Section 39 to 41 of the Thai Revenue Code (not available online) that explains the assessable income.

[kudroz]

Umm... I was looking at some correspondence I had, and here is a line that was written to me by my tax attorney in Thailand:

[...] Gains arising from your transfer of assets will be taxed unless you can show you've acquired your personal property with no intention to trade or make profit. [...] (emphasis added)

Might be something worth looking into.

Edited November 5, 2006 by kudroz

[MattFS218]

https://www.lexmundi.com/images/lexmundi/PD...ax/Thailand.pdf

an interesting overview of Thai Tax law written in Feb 2006...

Would you mind sharing who your tax attorney in Thailand is? I might be intersted in using their services. Thanks again!

[kudroz]

https://www.lexmundi.com/images/lexmundi/PD...ax/Thailand.pdf

an interesting overview of Thai Tax law written in Feb 2006...

Would you mind sharing who your tax attorney in Thailand is? I might be intersted in using their services. Thanks again!

For what you need, I'd suggest

KPMG (Bangkok)

66 (2) 677 2000

[siriratc]

I was wondering if there were any reporting requirements for foreign sourced income on a thai tax return for thai residents. Is there?

The conditions of paying tax in Thailand for foreign source income ,you have to meet both of the following conditions:

1.You stay >180 days in Thailand that year

2.You bring in the money from foreign source the same year that the income derived

[siriratc]

The conditions that force you to pay tax in Thailand for foreign source income , if only you meet both of the following conditions:

1.You bring in the money to Thailand the same year that the income derived

2.You stay in thailand that year >180 days

[Naam]

The conditions that force you to pay tax in Thailand for foreign source income , if only you meet both of the following conditions:

1.You bring in the money to Thailand the same year that the income derived

i would like to see that point verified. can you?