Dogmatix

They have no plan to make Thai manufacturers more competitive. They just want to protect Thai importers who mark up the prices with no value added. No helpful to Thai consumers.

The health minister is one of the Thaksin appointments that he is rumoured to be reviewing for replacement in a cabinet reshuffle. Given his slaughter of 2,000 alleged drug dealers he may feel Cholnan is being too soft on drugs.  Anyway Cholnan vowed to quit if PT formed a coalition with the uncle parties. So why is he still around?

At least the MRNA vaccines apparently worked to some extent.  What are long term effects of Sino Vax and Sino Pharm which did nothing except line the pockets of certain Thai politicians and Thai Chinese owned businesses?

To follow on re gift tax and IHT.  Although the RD apparently prepared some draft amendments to toughen up these taxes at the request of Srettha, they haven't been publicised and don't seem to be a priority for PT at the moment.  Srettha is finance minister as well as PM but has probably only been to the Finance Ministry once to light some joss sticks at the spirit house and order a costly renovation of the minister's office, given the previous incumbent was there for 8 years. As finance minister his only remit from PT/Thaksin is to get the digital wallet done and even this he has left largely to his deputy.  Given the powerful PT factions and coalition parties, he has a very limited remit on things he can actually do on domestic policy and the party factions may not be keen on gift tax and IHT (or remittance tax).  It looks like Srettha is short dated and is only left in place to fall on his sword, if there are legal problems with the digital wallet.  Either way he will probably be pushed out by Thaksin soon after the digital wallet.  I guess that by 2025 we will be looking at a new PM and finance minister who may or not get tough on all these taxes.  But I seriously doubt that Srettha will get done whatever he ordered the RD to draft on IHT and gift tax.

2 hours ago, Yumthai said:

Will be closed ... or not.

Again, do not underestimate Thai RD lawyers and officials vision. My view is gift tax rules have been elaborated on purpose, allowing wealthy locals to avoid tax burden and keep money from overseas flowing into Thailand. Foreigner residents are just a tiny community collaterally and positively impacted by this.

If ever they close this kind of tax loopholes, legal new ones will be implemented if they want to avoid an economical suicide.

  

The purpose of the gift tax imposed by the coup government was made quite clear when it was introduced in 2015.  It was intended to close a potential loophole when they introduced inheritance tax. When you think that IHT kicks in at 100 million charged to heirs, not to the estate, it makes sense.  Spouses are exempted from IHT but the 20 million exemption from gift tax also applies to parents and children who are not exempted from inheritance tax.  Thus, if you were to spend 7 years gifting 20 million a year to a child and died at the end of that, you could effectively give a tax free estate of 240 million including the 100 million IHT exemption.  (I use 7 years to make a parallel with the UK gifting limit, although there is requirement to survive 7 years in Thailand.

Srettha said he ordered the RD to review IHT and gift tax when he first took office to increase revenue and the RD announced that it had done so soon afterwards. But no more has been heard of that until now.  Bear in mind that the sleight of hand tactic employed by the RD to completely change the tax regime for foreign remittances by reinterpretation is not going to be available for amending IHT and gift tax thresholds and rates.  These will have to be amended by Act of Parliament.  I am sure change is coming to gift tax but I guess it will again be in tandem with IHT amendments, not related to this reinterpretation by the RD DG which may not survive anyway, since it is only an admin order to staff by a civil servant and neither a Royal Decree nor an Act of Parliament.  

17 hours ago, proton said:

Have they fitted him up to get rid of him?

Who knows but remember he was into some pretty murky stuff that led to his sacking from the police under the Prayut govt. Rumour had it that he upset someone very important and Pravit was only just able to save him from a lengthy prison term.  As head of Immigration in the Prayut govt he flew around the country involving himself in many matters, particularly big cash generating illegal businesses including gambling dens, that had absolutely nothing to do with Immigration.  Rumour also had it that his rapid promotion in the force was due to Pravit's influence and that he was a bagman for that gentleman. Another rumour had it that when he rolled up the corrupt police in the overweight trucks racket who were also involved in the killing of a senior cop by a kamnan he also upset the current police chief who was reportedly close to the murdered police officer.  These rumours may or may not be true but there may be many more stories and allegations out there about him too.  When he appeared in front of the TV cameras in his boxers it was an a kind of estate of houses that he owns and rents out.  I think he uses the classic wealthy wife cop out to explain otherwise unexplained personal wealth but anyway he lacks the image of an honest cop living in a modest wooden house and only in it for the police awards.  So anything could be true or not. 

14 hours ago, Muhendis said:

What on earth are they are talking about

Degenerative bone disease is simply a posh name for arthritis for which there is no "cure".

Correct.  They said he had arthritis in the spine before he came back. I also it and in the neck too.  I would guess that a large percentage of Thais of his age also have it but they just can't afford treatment. So they just grin and bear it.  What a total shamster!

24 minutes ago, Danderman123 said:

With Thailand installing automatic gates for departure, lots of people won't have exit stamps in their passport.

 

So, how to prove your length of residence in Thailand if you don't have exit stamps when you go abroad for 6 months?

I would keep copies air tickets, evidence of arriving in the other country - entry stamp, hotel bill etc. The RD should theoretically be able to verify departure and entry dates from Immigration but that would involve the dreaded interaction between government departments.

On 2/20/2024 at 5:33 AM, CharlesHolzhauer said:

I appreciate your contribution and personal views regarding the gift tax issue in both this and previous posts;

It reads and sounds reassuring, providing a sense of confidence and comfort. Apart from the 'Gift Tax Case' you provided in another thread, would you be able to lay your hands on the Royal Decree amending the Revenue Code, which includes gifts originating from abroad?

Gifting relatively large sums of money on an annual or bi-annual basis without a specific worded document from RD is wide open for different interpretations; It could come back to haunt either the Gifter or Giftee, depending on the official in charge assessing the gift.

Sorry. It was an Act of Parliament amending the RC.  Here is google translate.

Gift Tax Case RD KK0702-530 11 Feb 2023.docx

Revenue Code Amendment Act (No. 40) B.E. 2015

1. In the case of giving movable property

  (1) Person liable to pay taxes:

(a) a natural person who receives money from support or from a gift from parents, descendants or spouse

(b) a natural person who receives money from patronage out of duty of morality; or from giving by affection during ceremonies or on occasions of customs and traditions From another person who is not parents, descendants, or partners

Married

  (2) Property subject to tax:

  All types of movable property that can be calculated in terms of money

  (3) Income that is exempt:

·         Income received from support or from gifts from parents, descendants, or married spouses, only income that does not exceed 20 million baht throughout that tax year.

·         Income received from patronage as a duty of moral conduct or from gifts given in ceremonies, or according to customary occasions, from persons who are not parents, descendants, or spouses, only money received in an amount not exceeding 10 million baht throughout that tax year.

·         Income received which the giver expresses or is seen to intend to use for the benefit of the business, religion, educational affairs, or public interest affairs According to the criteria and conditions specified in the ministerial regulations.

  (4) Tax rate:

  The rate is 5 percent of the value of the property received in excess of 20 million baht or 10 million baht.

I attach the case study from 11 Feb 2023 in google translate and in the original.

The military seemed think at the time it was an open and shut case of LM and made the complaint to the police, vowing to ensure Thaksin faced prosecution.  The military seems as gentle as a lamb on this LM case now.  From I recall about it Thaksin stated in a Korea TV interview that the Privy Council was behind the 2014 coup.

7 hours ago, Mike Lister said:

As Ukresonant implies, just going through the process of gifting and then giving it back, doesn't meet the spirit of the Gift Tax rule. if it is a Gift it must be gifted and remain gifted.

The Civil & Commercial Code defines a gift as something irrevocable but then goes on to describe grounds under which a gift can be reclaimed.  More importantly the Civil & Commercial Code also makes all assets acquired by either spouse after marriage as common conjugal property.  So once the gift has been received in Thailand by the recipient spouse, it is legally common property. Another way of looking at it would be your spouse already has 5 million in her bank account and you gift her 2 million.  Then the following year she gifts you 2 million. Who can say whether she gifted you the 2 million you gifted her the year before or another 2 million that was already in her bank account (or that it was merely a shuffling around of conjugal common property)?  Gift tax has only been in Thailand for a few years and there are probably very few cases on record about it. As usual the decree was drafted leaving plenty of room for interpretation which has yet to be done.

I would expect a tightening up of the gift tax law but properly by reducing the tax exempt amount from 20 to 10 million for spouses and 10 to 5 million for others, rather than by going to the trouble of drafting pages and pages of regulations which is not the way the RD or the politicians work. The RD is extremely sparse compared to tax codes in developed countries.  That is the lazy way of legislating which also leaves open the possibility of interpreting in favour of people with money and influence, in the way we have seen several apparently open and shut cases of tax fraud eventually go in favour of the Shin family on appeal. 

9 hours ago, DrPhibes said:

Sorry but jumping in a bit late on this topic.  So, if I gift my non-working thai wife 3,000,000 baht of US work earnings to her separate US bank account yearly in the United States, create a doc that specifies that it is a gift, then wire that money from that separate account to my wife's separate Thai bank account, then she moves a bit of that money into my separate Thai bank account to add to my US Social Security (non-taxable to Thailand by virtue of tax treaty) coming to my separate account, we have no tax obligation to Thailand.

 

Sound about right?

 

Hope all well with everyone.

Gifting it to her in the US might not pass a sniff test by the RD.  Because the gifting didn't take place in Thailand, they might argue it was a transfer from your wife to herself and therefore assessable for Thai tax.  Personally I would make the gift transfer from one spouse's overseas account to the other spouse's Thai account.  Anyway it is uncharted waters, so your idea may well work but looks higher risk to me.

The bit about transferring to your Thai bank account to add to your US Social Security account I don't understand. How can you add to your US Social Security account in Thailand?

Pity there is no informed discussion of the legal situation in Thailand just feeble rants between the two camps.  What a waste of thread.

On 2/14/2024 at 4:46 PM, Kalasin Jo said:

Well Mike I guess that is the issue. I'm not an accountant, let alone a tax expert here or anywhere else. How do the Thai RD define "income" then? Is it any  (all) money sent to Thailand from overseas in their tax year regardless of source overseas?. That could include the sale proceeds of a capital item such as a house, a car, jewellery, watch etc etc remitted here as cash. What of the sum required to be in a Thai bank remitted from abroad and/or topped up from abroad for extensions of visas?

 

Am I being a pain ? Sorry if I am. I do hope absolutely clear guidance will be forthcoming from the Thai RD. Wishful thinking may be? Lost in translation may be, or simply the whim of your local office(er) as often with the Immigration regs? Some years back my local RD office were totally uninterested implying I should go away and stop making waves! So I did. Why did I even try? Well, it was based on my experience in France where I was resident for many years. There there is a legal obligation on you to register and make tax declarations if in country more than 180 days. Naively I thought it would be the same here

 

There are some, and I am one, that think that if the Thai government are going to regard retirees living 180 days or more here on foreign pensions and nothing else as tax resident, requiring annual tax declarations and potentially tax bills they should extend to them the same rights as Thai taxpayers and not regard us as long staying visitors/tourists with no rights. That should mean giving access to the thai state healthcare and welfare system, remove us from the dual pricing they apply to foreigners, give us a route to permanent resident immigration status, ending the forever annual extensions and reporting requirements when that is achieved ( 5 years of residency seems sensible and is used by other countries).

Or of course the government could simply maintain the status quo and exempt those with retirement visas /extensions.

Or we could spend less than 180 days a year here but for those with spouses and families here that is not necessarily realistic.

I do hope this "curve ball" and the alarm it has caused some foreign retirees  ( others just don't believe it), often supporting Thai  spouses and Thai families on their modest pensions, and the quid pro quo issues I raise are being drawn to the attention of those in power here by some with more clout than little old me! As far as I can see the Embassies have been silent.

Cheers!

No, It was the bit in the RD case study where they suggested that rules for asset declaration by political office holders required them to report assets and liabilities of live in common law spouses as if they were lawful spouses.  The RD said that these rules implied that Thai law could recognize common law marriage which might be relevant in the tax case i.e. allowing a 20 million exemption of common law spouses.  I didn't go into detail on this, as I thought it convoluted and not something that farangs could put any faith in.  But the confirmation of that overseas remittances from foreigners to Thai spouses count for 20 million exemption is positive in my view. 

Not two PMs - just one.  Thaksin will call the shots.  Srettha will either step aside completely to make way for Ung Ing who will let her father decide everything, or will just continue racking up air miles to sell land bridges and stuff.

4 hours ago, spidermike007 said:

When you have a crisis that is not being addressed, by do nothing politicians like the current PM, this is what happens. Real problems need real solutions. I could come up with 10 of them but so far the people in charge have not come up with one, other than discouraging people from burning incense during Chinese New Year. 

The PM is busy trying to please his master by making great efforts to sell the unviable land bridge to foreigners (to get big consulting contracts) and get the digital wallet done, which will probably tie him up in legal knots and pave the way for the master's daughter to step in. 

This ridiculous rule was a revolutionary decree in 1972 from a military junta that seized power in an illegal coup. It was enforced at first and then ignored until the first Thaksin regime decided to dust it off as part of its social order campaign.  The government shouldn't have the slightest hesitation in scrapping it.

If they are so keen to have tourists plastered all day long, they should also continue to allow them to be stoned all day long and not go ahead with another ridiculous plan to walk back some but not all of the cannabis liberalisation. I think police stings to extort money from tourists for recreational use of cannabis in private will go viral on social media, like the Taiwanese gal who was shaken down for having vapes which are only illegal in the sense that import duty as not been paid on them because imports are illegal. Two many pointless laws aimed at generating backsheesh for cops already.

5 hours ago, TroubleandGrumpy said:

Everything that is written in the Thai RD Tax Code is written specifically for salary earners and recipients of income in Thailand, who are tax residents.  It has been and still is my belief that unless a person has to pay income taxes, then they do not have to lodge a tax return in Thailand.  The vast majority of Thai citrizens do not lodge tax returns - a google search indicates that only 6-9 million people lodge a tax return out of a population of over 50 million over the age of 18.  Unlike other countries, the Thai RD does not want everyone to lodge a tax return.

 

The application of everytghing in the Thai RD Revenue Code is not automatic, as some people think - otherwise every single person leaving Thailand would be fined 1000 Baht for not getting a tax clearance.  When it comes to application of the Code, it is not automatic that it will be against all money received/earned overseas by Expats and remitted into Thailand. DTAs have a big impact on those forms of income, as does the application of the Thai RD Tax Code in each and every single situation (and as directed by the Thai Govt). So does the application of the tax laws in Thailand against Expats (which have not been tested in a Court - yet).  No part of this 'new rule' ramifications have been 'tested' in a legal manner (Court), and the Thai RD often loses Court challenges. Depending on how they implement this new rule change, they are going to get a lot of new 'challenges' by Thai citizens for changing a system used for 30 years, with 3 months notice.

 

I am not keen to lodge a tax return in Thailand - ever.  I do not believe Thailand has the legal or moral right to force retired or married Expats to do so - unless they are using their Visas to avoid taxes overseas, or are earning money in Thailand.  That viewpoint is based upon how Thailand legally treats retired/married Expats.  Legally and technically, all Expats staying in Thailand long term are doing so as a tourist - we are not here as an immigrant - the 90 day reporting and annual renewals is due to the Visa being an extended tourist Visa - that is why we have the same 'legal rights' as a tourist. Thailand does not and cannot legally tax tourists, unless they are earning income while they are in Thailand.  There are Visas that actually give legal rights (such as the LTR), but the standard Visa that most Expats used when entering Thailand, is an extended tourist Visa - we are all tourists (visitors).  But I am not going to take that legal 'argument' further and get it tested in the Thai RD Tribunal or Court - only because that would be extremely expensive.

 

I will also point out that there is SFA arrangements in place at the Thai RD for the lodgement of a tax return in Thailand under which the terms and conditions of a DTA can be utlised. Both the written and online versions of the Thai RD tax lodgement do not cater for that situation.  Therefore, should any Expats wish to lodge a tax return and claim that certain money is not taxable under a DTA with their country, it will be an expensive exercise if we use a tax expert - and it could be very expensive if it goes to a Tribunal.  Plus I am certain that the Thai RD does not have the time and resources available to manage that anyway, should every Expat who receives over 120K Baht from a Pension lodge a tax return claiming they owe no taxes (or a very small amount) due to their interpretation of a DTA. Who the hell at the Thai RD is going to be able to deal with exemptions claimed under the DTAs that Thailand has with over 60 different countries. 

 

Unless I am working/earning income in Thailand (legally available only with a work permit), then I see no legal reason for a retired or married Expat to pay income taxes.  My calculations are that they get zero from myself anyway, but it is the principle of the matter.  When a Thai Court has ruled that Expats can be legally charged a much higher rate in a State hospital, because they are not Thai citizens and have more money, that clearly states we dont have the same legal rights as a Thai citizen. And there are so many other situations (like dual pricing, courts, etc.) where it is very clear what our/my legal status is in Thailand. Implicit in that is that we dont have to pay income taxes 

 

Thailand will find out soon enough that if they start applying income taxes against many Expats (especially their Pensions) then they will not stay living here in Thailand full-time.  Obviously some Expats have no choice and cannot easily move out, but many Expats can and will either just visit Thailand (<180 days), or they will take up other options.  It is no coincidence that the Taxation Minister in Malaysia, who introduced this same new rule in 2022, has stated that they have no intention of taxing the money of retired/married Expats that they bring into the country. As she said that is wrong because that is all 'new money' being broguht into the country, and it would be a massive disincentive for Expats to bring money into Malaysia if it is going to be taxed.  The implementation of this new tax rule is about removing the loophole that allowed citizens and companies to invest their money (earned in their country) overseas and to then bring that money back and not pay taxes on the earnings made on that investment overseas. The associated 'global taxation' system that is now being employed in many countries, is about stopping people living in one country for long periods, just so that they can avoid income taxation in another (and money laundering).

 

I think the situation is that the RD requires any tax resident with over 120k in income to file a tax return but it is rather pointless because the tax threshold starts at 150k plus a 60k basic allowance. So it is not enforced. I am not sure what law or regulation requires this but it is to be found on the RD's website without cited any legislation to support it. Thus I don't know, if there is any penalty for not filing a tax return for those who have income over 120k but not enough to pay tax. I don't think so and this regulation seems not to be enforced. AFAIK there are only penalties for not filing tax returns and paying tax on income over the threshold and allowances.

Re DTAs I have heard from professional tax advisors that claiming tax credits from corporate income tax under DTAs can be a complex and costly business. The RC doesn't ever specify that DTAs are applicable to PIT but there is a ruling to that effect.  So perhaps it is unsurprising that there is no space on the PND 90/91 forms, as this is unsupported by any section of the RC which is always referred on the forms. 

You say the reinterpretation is intended to tax corporate and personal income derived from funds that originated in Thailand. This is not an issue in the case of corporate income tax because companies already have to pay tax on income arising overseas whether it is remitted to Thailand or not. However, most Thai companies do not have income overseas in their own names.  They have income in overseas subsidiaries that is taxable in their country of domicile, while dividends remitted to the Thai parent are taxable in Thailand but subject to DTAs as they usually taxed in the country of origin. There are other cases like Thai companies earning capital gains from investments in businesses overseas that they sell for a profit.  This has always been taxable. Also where tax companies own property overseas.