Dogmatix

19 hours ago, rainwater said:

Do I have to pay taxes on cryptocurrency I buy with Thai baht then transfer to another wallet and lending platform to earn interest and then bring it back in through coins.th.com? How is the government going to know I even have an account with this company? I don't have a tax ID number like in America we have a social security numbers where all of our taxes are tracked, what's the deal how is this going to work is it going to affect our retirement visas somehow are we going to have to start showing more paperwork to immigration what a nightmare?

If you have earned interest overseas on the crypto that you transferred overseas and then remit that interest back to Thailand, the RD will consider it assessable income. Capital gains on the crypto would also be taxable, if they arise in Thailand, or if they arise overseas and are remitted to Thailand. Whether you have to pay Thai tax on this assessable income depends on whether you are Thai tax resident and have overall assessable income in excess of the threshold and personal deductions. 

How the RD will track this sort of income is another matter. They say they are using AI to detect tax avoidance but so far this seems directed at the vast number of Thais who doing personal business online and offline without filing tax returns.  They are analysing bank account data and sifting through Facebook accounts that Thais use to sell stuff online.  Bitkub states on its website that the RD has so far not requested account data, nor has it come up with a means of implementing the 15% withholding tax on crypto capital gains that is already on the books but not yet enforced.  Most likely in the fullness of time, the RD will come up with ways of tracking crypto income. .

I see some posters allude to the UK's regulations for remittance based taxation of non-doms who are wealthy foreigners living in the UK and taking advantage of the dregs of the UK's long standing, controversial scheme to attract them to take up residence in the UK and feel that the RD might draw some inspiration from the copious HMRC regulations relating to taxation of foreign source remittances for non-doms.  Originally the scheme allowed foreigners to take up residence in the UK and avoid paying tax on global income and gains like common or garden UK tax residents and pay tax only UK source income and remitted foreign source income indefinitely. Now non-dom status has to be purchased by paying a standing tax charge on foreign source income which makes it only worthwhile to those would otherwise pay more than the standing charge and the status is no longer indefinite. The government has always claimed it attracted a lot of rich foreigners to come and spend oodles of cash and invest in the UK but it has always been wildly unpopular with Brits who have to pay their taxes on global income and gains in full whether remitted or not.  Rishi Sunak's wealthy Indian wife, who has a vast private income from dividends in India, took advantage of the scheme and was effectively a poster girl for those who wish to abolish the scheme.

In the latest budget the Conservative government announced further restrictions to the non-dom scheme which was already on its last legs.  Since the new regulations will apply in April 2025 and the Conservative government will almost certainly have been ousted by Labour in an election before then, it is unlikely that these new restrictions will ever be applied.  Instead, it is more likely that a Labour government will announce the complete abolition of the non-dom privileged system of taxation and all UK tax residents will have to pay tax on their global income and gains, regardless or whether remitted to the UK or not.  Whether or not the RD will seek inspiration from the non-dom scheme, once it has been abolished remains to be seen.  Anyway, it is certainly highly unlikely that Thailand would ever adopt a non-dom scheme, other than the tax privilege for LTR visa holders which probably would never have seen the light of day post P. 161/2566, and may eventually be scrapped, if there is a proper reform to the tax of foreign source income via an act of parliament.  If they study the history of the UK's non-dom system, the RD will understand that it has been deeply unpopular with locals and would certainly cause a backlash from Thais investing overseas.  The RD claimed (somewhat disingenuously) that the purpose of P. 161/2566 was to promote fairness and ensure that all Thai tax residents would be treated fairly.  

13 hours ago, TonyFromItaly said:

The question is: what will happen to all the assets owned by the foreigner who will be expelled?
Because he won't have time to sell everything if he is expelled.
Will the Thai government take them? If something like this happens, foreigners will have to be very careful in the future, all it takes is that there are false accusations or a case invented with someone's complicity and they will expel us and the assets remain in Thailand at their disposal.
Think about it, it's a dangerous precedent.
Tony

His wife is Thai and probably a lot of the assets are in her name already.

On 4/12/2024 at 9:41 PM, ukrules said:

 

That page is full of nonsense and years out of date information.

 

It begins with this

 

 

That's wrong as it's been discontinued as has the VAT exemption between certain dates, it was cancelled completely.

It's hard to find any sources on this because people aren't talking about it much but the occasional announcement comes out that some government ministry has scrapped the VAT completely and the withholding tax.

It's probably more widely reported in the Thai language media than English language which is why it's hard to find this information.

There was also some talk of a 15% capital gain tax on crypto earnings, supposedly instead of income tax on the gains but that's also complete nonsense (not mentioned on that page), it's normal PIT rates all the way which can go to 35%.
 

There is a 15% withholding tax on crypto capital gains but it is not applied because it is impractical to make crypto exchanges deduct withholding tax on gains which they cannot automatically compute.  According to the amendment the taxpayer should use the 15% withheld as a tax credit and pay the difference or get a refund, if their tax rate is more or less than 15%.  It is not clear when or if the withholding tax will be implemented.

1 hour ago, BritManToo said:

But where is the crime?

Cannabis is legal in Thailand, I get it posted to my home address all the time. Post office, Flash, Kerry all handle it.

 

Overstay is a crime, posting cannabis isn't.

Cannabis needs an import license and presumably an export license but it sounds like they might just go with fining and deportations for overstaying and let the Filipino justice system deal with them which is by no means certain. A friend who was managing ships with Filipino crews sent home a ship’s cook who had murdered the Filipino first officer with a kitchen knife for complaining his pans were not clean enough. The murder happened in international waters off Curaçao where the Dutch authorities declined to arrest him. So my friend sent him back to the Philippines, giving the Filipino FBI details of the case and the cook’s flight details. The FBI claimed jurisdiction and said they would arrest him at the airport but went to meet the wrong flight Then they lost interest and the cook got a job with another Manila based ship management company.

6 minutes ago, smew said:

It is ridiculous to call police every-time you hear screams. 

One of the reports said just one neighbour heard the screams. She was said to have lived there for 50 years, so must be fairly elderly. She reportedly said she heard two screams and would have poked her head out the window, if she had heard a third. But presumably she left it at that when there were no more screams. It seems the scream count was well short of her criterion for calling the unresponsive plod. After poking her head out the window, she might have needed to see a body fall from an upstairs window before making the call.

24 minutes ago, BritManToo said:

Hooker killed by Ambassador on diplomatic passport.

So far only one photo of her which looks very posed with her holding a probably fake antiquarian book as a prop. She was young and appeared pretty in the photo but didn’t look overtly like a bar girl or hooker. It’s a rather romantic type shot. 
 

The plod have been slow off the mark but lots of material for them to investigate. Friends who reported her unresponsive need will provide details of her life in London. There is CCTV, her visa status in UK - if she really had a HK passport, she could travel on that to the UK without visa. Who rented the very expensive 5 bedroom house in prime London area. Was she staying there alone? Are the reports about a British husband true?

10 minutes ago, Mike Lister said:

Just checking that you understand the tax tax tables are stepped, only the mount of income that falls within that step is taxed at that level of the step.

 

There is an open issue about the tax on funds remitted when not tax resident and whether they could be taxed later, despite not being tax resident at the time of remittance. That issue is logged at the end of the Simple Tax Guide and is awaiting clarification.

 

My personal opinion is that the government will not want to allow this tax rule change to impact the Thai property market, hence the idea that imported funds used to buy real estate here, will be taxed, seems improbable. How this will be operationalised or what measures put in place to prevent a negative impact on the property market, is very unclear.

It is very clear from the RD's Q&A (Q9 attached) that income remitted while not yet tax resident doesn't retroactively become taxable when the remitter becomes tax resident. They give an example of a Thai person living in Taiwan and planning to remit money saved in China and return home. They say clearly that they remit the money before coming tax resident again, it is not taxable and they don't say that it becomes taxable retroactively after the person moves back. It would be rather impracticable to try to tax it retroactively anyway without any regulations to specify how far back they could go. If you remitted money to Thailand 20 years ago and then became tax resident, would that be taxable? Obviously not.  So why would it taxable, if remitted the year before you become tax resident?

I was expecting an outcry from resort condo developers and some sort of exemptions to be made for purchase of property but we are now well into the tax year and there has been no outcry from developers and nothing has happened.  It would make sense to give an exemption on income remitted to buy a condo, as long as it was owned for about 5 years, but it doesn't look like this is going to happen.  Apart from the fact no one has publicly asked for this, I would see some difficulties from the RD's perspective.  Tax in Thailand is nationality neutral.  I can think of no part of the Revenue Code that taxes Thais and foreigners differently and promotion of tourism is not the RD's job.  Any exemption would have to be applied equally to Thais and foreigners and and the RD would view allowing people exemption on income remitted to buy land and other property as an undesirable loophole.  Many Thais would rather buy a piece of land with their investment profits and hold it for 5 years than pay 35% tax on it. They will most likely get another round of profit from the land. Another issue is that an exemption would require an amendment to the Revenue Code. The government would probably just say they have already amended the Revenue Code with the Royal Decree to give complete exemption on remittances to LTR visa holders and these are the only foreigners they want to attract to stay long term.  If the others don't buy condos or leave, they don't care because they believe there are plenty more rich foreigners queuing for LTRs and this will be consistent with their long term stay policy of rich guys in, poor guys out. 

RD Order 161 2566 Q&A TH.pdf

3 hours ago, Mike Lister said:

Please bear in mind that not all readers of this thread have the same academic stamina and qualifications that you do and the average members ability to understand the Revenue Code or a DTA is not what yours might be. My biggest criticism of the thread previously is that the conversations were too complex and hi brow for many to understand, which is why a more simpler dialogue became so popular. Expat blogs and any other reasonable form of narrative that puts things simply and provides anecdotal evidence, is usefully deployed here for many, this is not a court of law or a debate in the Supreme Court!

 

I also think we can get a good indication from looking at what other countries Revenue departments do, if we want to understand how the TRD might behave in the future. Looking at gold standards or best practise or even most common practise, in the absence of first hand confirmation of local practise, is extremely helpful.

I think members should be allowed to choose their own level of discourse without requiring them to dumb down discussions to only address the lowest common denominator. If that is the case, it is hardly likely that any gold nuggets of information will ever be found in any of the threads.  As for whether RD policy makers look at gold standards from other jurisdictions as best practice they should emulate, we can only speculate on that.  Probably some do and others never even look at what happens outside the four walls of their own room. 

6 hours ago, Mike Lister said:

I may need to change my opinion on Gift Tax, I've been reading how other countries such as the UK treat Gifts and it's much more liberal than I had previously understood.

 

Gifts from overseas, to UK residents are free of tax, that being the case, overseas gifts to Thai tax residents might also be free of tax (subject to limits). One question is whether the Thai RD would look at those funds first as a Gift, or as Imported Funds that need assessment, in other words, does the Gift aspect negate the need to assess them?

 

https://community.hmrc.gov.uk/customerforums/pt/8d15fffc-4393-eb11-8ced-00155d9c86c6#:~:text=There is no income tax,be subject to income tax.

 

The US also has liberal terms on Gifts, they impose a lifetime limit of Gifts which is in the millions of Dollars.

 

On the Thai side: there appears to be a means by which previously given Gifts can be clawed back and reclaimed, under odd circumstances. The giftor can reclaim the gift from the giftee, if the giftee defames the giftor or refuses to provide funding for medical care in critical situations, when they are able to do so. 

 

"You can reclaim a gift if the recipient commits a serious crime against the donor, if the recipient seriously insults the donor or seriously undermined his reputation (defamation), and if the recipient refuses to provide the donor with the necessary assistance in the event of danger to his life .

You must submit a claim in this regard within six months of becoming aware of the incident. There is also a statute of limitations.

Theft, fraud and an attack on the donor himself can be a reason to revoke a donation. If it concerns defamation and insult, it must be serious matters. A wrong word in the family atmosphere can be too little; you have to think of public statements that seriously discredit the donor".

 

https://www.thailandblog.nl/en/expats-en-pensionado/over-schenken-en-schenkbelasting-in-thailand/

 

Another aspect is that the Gift must be intended for the Giftee and used by them.

 

My confidence level that we understand Gift Tax here is low.

 

It's all a matter of opinion but I personally have more confidence in my understanding of gift tax because it is set out in black and white in the Revenue Code and there has not any controversy over the RD's application of the gift tax exemption or any cases that suggest that since it was introduced in 2016.

Where I have really low confidence is in the application of the RD of DTAs which are not even mentioned in the Revenue Code as being applicable to PIT. That is odd as Thai statutory law would normally be amended to reflect the existence of international treaties and specify how they should be applied, as you can see in the Land Code.  The RD has had decades to amend the Revenue Code in this way but has failed to do so. There is a ruling from a few decades ago on one case that said tax credits were applicable to salary tax withheld in the Philippines under the DTA but there are few details in that ruling to say how tax credits should be applied and nothing whatsoever vis a vis investment income which we are told is the RD's main target.  That means there is no statutory low, ministerial regulations or Revenue Department regulations on how DTAs should be applied. That leaves room for a great deal of inconsistent discretion by individual RD officers and the possibility that many applications for tax credits will be rejected due to lack of acceptable documentation or due to out of synch tax years, leaving tax payers to pay the total Thai tax due and try to get a refund of the total tax paid overseas on foreign source income.

2 hours ago, Mike Lister said:

The web site belongs to Dezan Shera and Associates, a very large global firm with a substantial presence in Asia. 

 

https://www.dezshira.com/about-us/our-firm.html#

 

The usefulness of the article is to describe to foreign residents in Thailand, in simple terms, the circumstances under which their funds transfers might be assessable, under which parts of the Revenue Code, AS SHOWN IN BOLD IN THE TAX GUIUDE.  

 

Individuals, who are categorized as:

a) Thai citizens;

b) A Thai resident who filed taxes in the previous tax year;

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

 

And who receive income from inside or outside Thailand via:

 

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

b) Income from business operations is assessable under Section 40.

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

 

 

I have never heard of Dezan, Shira & Associates but it doesn't matter much what their reputation is or what resources they have in Asia because because 2 out of 7 points are nonsense:

a) Thai citizens;

b) A Thai resident who filed taxes in the previous tax year;

And the connecting phrase is misleading because it fails to draw a distinction between income received from outside Thailand that is remitted to Thailand and that which is not.

And who receive income from inside or outside Thailand via:

I don't know you would want to draw stuff from other peoples' unverified ebsites which are probably plagiarised from somewhere else, in the trust that they have read the Revenue Code in detail and thoroughly understand it, rather than based on direct reading of the Revenue Code yourself. Anyway, if you want to put that in the tax guide, I don't care because I have no interest in the guide. I also think it would be better to keep this thread for discussion of the tax change at hand and not to clutter this thread with discussion of the phraseology of the tax guide, as I am sure many others are not interested in discussing the guide  That should be done in the tax guide thread itself, or if you don't want any discussion in that for some reason, open a dedicated thread for comments on the tax guide. 

16 hours ago, Mike Lister said:

That section is a direct quote from a law firm of some repute, nevertheless, I agree it is still somewhat ambiguous. I think I'd prefer to go with a single "from", as follows.

 

 

OVERVIEW OF THE TAX LAW

 

1) Thai tax laws require a person to pay income tax to the Thai Revenue Department under the following conditions:

 

Individuals, who are categorized as:

a) Thai citizens;

b) A Thai resident who filed taxes in the previous tax year;

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

 

And who receive income from inside or outside Thailand via:

 

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

b) Income from business operations is assessable under Section 40.

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

I don't know whose website this is from but it is pretty hopeless. 

Thai citizens are not liable to pay tax unless they are tax residents or have Thai source income. 

It makes no difference whether you filed taxes the previous year or not. If you stop having assessable income, no need to keep on filing PND90/91s.

The second part creates confusion about assessability of offshore income.  The actual situation is that income paid offshore but arising from Thailand is taxable regardless of whether the recipient is tax resident in Thailand because it is Thai source income.  Foreign source income is only taxable on remittance to Thailand.

2 hours ago, Mike Lister said:

I may need to change my opinion on Gift Tax, I've been reading how other countries such as the UK treat Gifts and it's much more liberal than I had previously understood.

 

Gifts from overseas, to UK residents are free of tax, that being the case, overseas gifts to Thai tax residents might also be free of tax (subject to limits). One question is whether the Thai RD would look at those funds first as a Gift, or as Imported Funds that need assessment, in other words, does the Gift aspect negate the need to assess them?

 

https://community.hmrc.gov.uk/customerforums/pt/8d15fffc-4393-eb11-8ced-00155d9c86c6#:~:text=There is no income tax,be subject to income tax.

 

The US also has liberal terms on Gifts, they impose a lifetime limit of Gifts which is in the millions of Dollars.

 

On the Thai side: there appears to be a means by which previously given Gifts can be clawed back and reclaimed, under odd circumstances. The giftor can reclaim the gift from the giftee, if the giftee defames the giftor or refuses to provide funding for medical care in critical situations, when they are able to do so. 

 

"You can reclaim a gift if the recipient commits a serious crime against the donor, if the recipient seriously insults the donor or seriously undermined his reputation (defamation), and if the recipient refuses to provide the donor with the necessary assistance in the event of danger to his life .

You must submit a claim in this regard within six months of becoming aware of the incident. There is also a statute of limitations.

Theft, fraud and an attack on the donor himself can be a reason to revoke a donation. If it concerns defamation and insult, it must be serious matters. A wrong word in the family atmosphere can be too little; you have to think of public statements that seriously discredit the donor".

 

https://www.thailandblog.nl/en/expats-en-pensionado/over-schenken-en-schenkbelasting-in-thailand/

 

Another aspect is that the Gift must be intended for the Giftee and used by them.

 

My confidence level that we understand Gift Tax here is low.

Indeed the Civil & Commercial Code definition of a gift contradicts itself.  In the first part it says that a gift is irrevocable.  In the second part it outlines conditions for a gift to be revoked. Furthermore the CC&C definition of common conjugal property means that spousal gifts immediately become common conjugal property. 

I don't think we can get much help from unattributed views in expat blogs and the RD probably doesn't pay much attention to taxability of gifts in other countries. The Revenue Code is very open in exempting gifts up to 20 mil between married couples.  It doesn't define gifts or make any limitations. It doesn't even say that a spouse, who has received a gift may never make a gift back their spouse.  If there are other cash flows into the receiving spouse's bank account, the RD is not in a position to argue that the re-gifted amount came from the initial gift or other funds. Plus the fact that all funds received after marriage are conjugal property anyway. 

The only way to get greater clarity is to find individual cases of gifts. I found one and posted it. Then there is the case of a Potjaman's gift to her brother-in-law that was initially ruled taxable on the grounds that there was insufficient evidence that this was a gift made on a special occasion because it occurred 2 years after his marriage. Then the appeal court ruled it was in fact a wedding gift.  The fact that there may not be any others since the gift tax amendment may suggest it is not a controversial subject for the RD.  Both of these cases relied solely on what was in the statutory law and didn't bring in any other regulations or reinterpretations of the law. 

7 minutes ago, Mike Lister said:

That also has to be assumption and opinion. I personally think that if somebody was gifted 20 mill, the RD would look at both the giver and the receiver. 

They might but in that case would they worry, if the giftor claimed a 60k spouse allowance or a refund of 3k in withholding tax?   In the only case study we have so far the only things that the RD investigated was that the gift was not over 20 mil and that the couple was lawfully married.  Of course more cases may follow but anything more to do with irrecoverability and separation of assets is going to hard for them to argue, given that the CC&C makes impossible to keep ownership of conjugal assets separate. More likely they would push the finance ministry for a Royal Decree to reduce the exempt amount which is on the cards anyway along with a reduction in the 100 mil exemption on IHT.  I believe gift tax will continue to be looked in tandem with the IHT, rather than in tandem with this remittance reinterpretation.

49 minutes ago, UKresonant said:

I'm surprised if the genuine gift from overseas  from legitimate source would be problematic. Reading the posts on the UK tax Comunity forum, it does not seem to be other than straight forward there. Unless then re-transfered to a 'relavant person' (like the sender).

Perhaps the gift in a Thai context, could not be then used to purchase property.

I think it would be hard for the RD to argue in the Tax Court that a spousal gift could not be used to buy property or a car or something that the giftor might get some benefit from, when the gift already became common conjugal property the moment it arrived in the receiving spouse's bank account. So I somehow doubt the RD would want to dig into this sort of thing and risk lengthy court cases they might lose, given the lack of law and regulations to support their view.  Bear in mind that this is not going to be just an expat thing. Wealthy Thais who have made millions from investing overseas in stocks on the NASDAQ etc are also going to be gifting untaxed capital gains back to their spouses.  

33 minutes ago, Klonko said:

Thanks for the case doc.

 

Based on marital agreement concluded in Switzerland, which is honoured in Thailand, I will not have conjugal but separated property. Else it could be argued that my pension income in Switzerland is conjugal property and transfers are partially a gift from my wife to herself.

 

With respect to joint tax filing, I consider it a little contradictory to claim THB 60k spouse allowance on the one side and  keep the gift tax exempt on the other side.

 

I could organise myself with zero taxable income and provide respective documentation, but I consider to come up with a tax payable equal to the withholding tax on the interest on my Thai bank accounts, not reclaiming the withholding tax and hopefully keeping the tax man happy and less motivated for cumbersome inquiries.

Thai RD bureaucrats don't make these type of judgments.  If the Revenue Code allows you to claim a 60k allowance for having a spouse, they will let you claim it without question. Unless they investigate your wife's remittances, they won't know, she has received a tax exempt gift from you anyway because the tax return form only requires declaration of gifts in excess of 20 mil from a spouse. You don't have to declare a gift under 20 mil and then claim exemption.  They will also not care whether you claim a refund of withholding tax which is likely to be fairly miniscule, since the maximum tax free interest is 20k which at 15% withholding tax and 0.5% interest on savings accounts gives a maximum refund of 3,000. The kind things they might look at would be someone with huge interest income reported by Thai banks but very little income declared on tax returns to explain where the savings came from. 

17 minutes ago, Yumthai said:

Agreed.

Hence, it should be noted in the tax guide that:

 

53) Note: Only funds that are exempt from Thai tax or funds on which Thai tax has already been paid, can be Gifted. It is not possible to Gift funds that are assessable income, in order to avoid Thai tax.

 

is an opinion/interpretation and not from Thai official source.

Agreed.  Opinions and assumptions can be useful but should be clearly identified as such, if not supported by any evidence. 

For one of the webinars I attended I made the foolish mistake of giving my real phone number, thinking the guy was on the level.  The advice was like the curate's egg.  It was good in parts and rotten in others.  But what is the point of an egg like that?  A week after the webinar I started getting scripted cold calls from expat financial advisors offering investment services.  You know the type - unregistered anywhere and unqualified selling investment products with very high front end loads and withdrawal penalties.  Some of the investments end up worthless too, like the famous football fund and tree farms.