Guavaman

If you want to use the strategy of declaring your assessable income with the remittances, one way to do this would be to label them as: "Assessable income remitted" or for Social Security benefits: "Assessable income from US Social Security exempt from taxation in Thailand under DTA". By labelling the remittances upfront: 1) this amount is taxable, or 2) this amount is "assessable but exempt from taxation under Thai-US DTA", you create an audit trail for your claims when filing your tax return.

Regarding gifts on occasions: One reason given by the Thai court for not accepting the argument that Potjaman gave the money as a wedding gift, was that she made the gift more than a year after his wedding. So bear that in mind.

In that case, the annual total should not exceed 10m Baht. Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation: (27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year. (28) Income derived from maintenances and support under moral purposes or gifts received in a ceremony or on occasions in accordance with custom and tradition from persons who are not ascendants, descendants or spouse, but only for the portion not exceeding ten million baht throughout the tax year. The issue of remittance and evidence of the gift remains. If you receive the gift offshore, and then remit to Thailand, then you have remitted assessable income that is exempt under 42 (27) or (28), so it would not be reported on the tax filing form unless the amount exceeds 10m or 20m. If the RD assessor looks at your bank book remittances, you need to be prepared to document the gift to their satisfaction. Maybe a signed note from the giver of the gift stating that it was a birthday present?, for example. It is up to the taxpayer to convince the assessor, somehow.

It is advisable for expat tax residents to know the consequences of intentional actions to evade taxes in Thailand: Section 37 Any person who: (1) intentionally notifies false statement or gives false statement or answers with a false statement or shows false evidence in order to evade taxes or request for tax refund under this Title, or (2) by fault, fraud, scheme or any other method of similar nature, evades or attempts to evade tax or request for tax refund under this Title, shall be subject to an imprisonment from 3 months to 7 years and a fine from 2,000 Baht to 200,000 Baht. Section 37 Bis Any person intentionally fails to file tax returns prescribed under this Title in order to evade or in an attempt to evade tax, shall be subject to a fine not exceeding 200,000 Baht or an imprisonment for a term not exceeding 1 year or both.

Investigators say the share transfers were liable for capital-gains tax and that the family misrepresented them as a gift. Tax Break Article_November 2008 Gifts May be Taxed under a Catch All Provision The defense argument that shares were tax free as they were transferred as a wedding gift did not work as the Court deemed that gifts are assessable. This is despite section 42(1) of the Revenue Code which states that “maintenance income derived under moral obligation, corpus of a legacy or inheritance, or gifts made in a ceremony or on occasions in accordance with established custom” are exempt from tax. Invocation of Previously Unused Section of the Revenue Code Section 37 is particularly onerous and decrees that as a result of knowingly making false statements or producing false evidence with a view to evading tax, there is a punishment of between 3 months to 7 years and / or a fine of Bt 200,000. ----- Note: These cases took place prior to the Revenue Code Amendment Act (No. 40) B.E. 2015 on gift tax. A failed attempt to claim exemption of tax on a "gift" by the recipient.

Mr Bhanapot made the purchase using $15m that his sister gave him, ostensibly as a wedding gift, and bought the shares from a family maid. At the time officials judged the share transfer a gift to mark a special occasion and thus not taxable. But after the coup, authorities called it a handout and liable for tax. The court said there was insufficient evidence against Potjaman Na Pombejra and her secretary, who along with her brother were found guilty in August 2008 of evading 546 million baht ($18 million) in taxes. The court upheld Bannapot's guilty verdict for not paying tax on his earnings from the share acquisition. But it reduced his sentence from three years in jail to two years' suspended.

Potjaman was the giftor and she was convicted of colluding in tax evasion; it was not about the amount, although she was acquitted for lack of evidence. Her brother as the giftee was not acquitted. We wouldn't want to find ourselves in the role of the giftor, who might be acquitted, while our wife who was the giftee, was convicted. It is not about the amount. It is about the allowability of the gift and remittance.

For US citizens, under the DTA private pensions also includes IRAs, 401ks, and annuities; all are considered assessable income taxable upon remittance to Thailand.

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer. (1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.

Assessable but exempt from tax -- if under 10m or 20m. #4 QUESTION: Question: What types of assessable income are subject to income tax according to Section 41, paragraph two, of the Revenue Code? ANSWER: Assessable income from foreign sources that is subject to income tax is assessable income according to Section 40 (1) to (8) of the Revenue Code. However, if it is assessable income that is exempt from tax according to law, taxpayer does not have to bring that assessable income to pay tax in Thailand, such as inheritance or income received from support from parent, descendant, or spouse, only for the amount of income that does not exceed twenty million baht throughout that tax year, for example.

Beware of using gifts to evade taxes: Thaksin’s wife Pojaman, her brother and her secretary Kanjanapa Hongheun were convicted in July 2008 of colluding to evade tax worth 546 million baht. She claimed that a 1997 transfer of shares in Shinawatra Computer and Communication, which later became Shin Corp. was a wedding gift to her brother – a year after the wedding. She and the maid were later acquitted -- two weeks after Thaksin’s sister was sworn in as Prime Minister in 2011; however, the court found Potjaman’s brother, Bhanapot Damapong, guilty of tax evasion, but reduced his sentence to two years and a 100,000 baht fine.

It appears that she would be accepting a gift from her spouse. Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation: (27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year. You would have to gift her 20,210,000, then she would report 210K as non-exempt taxable income as per Section 42.

The RD provided a hint of their way of thinking here: #4 QUESTION: Question: What types of assessable income are subject to income tax according to Section 41, paragraph two, of the Revenue Code? ANSWER: Assessable income from foreign sources that is subject to income tax is assessable income according to Section 40 (1) to (8) of the Revenue Code. However, if it is assessable income that is exempt from tax according to law, taxpayer does not have to bring that assessable income to pay tax in Thailand, such as inheritance or income received from support from parent, descendant, or spouse, only for the amount of income that does not exceed twenty million baht throughout that tax year, for example. Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation: (27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year. Gift income is assessable but not reported on the tax filing form unless the amount exceeds 20. So it is not reported as income on the tax form and then subtracted if it is exempt (<20m). It appears that RD needs to include another category under Section 42 for assessable income exempt from taxation under DTAs. The gift tax example is practised as not reported unless the amount exceeds 20m.

The tax filing forms do not appear to be set up to allow for implications of DTAs: untaxable pensions, social security, tax credits, etc. One can't claim exemption for untaxed income remitted, or even to show the amounts of remitted income, using the tax form.

Does the system bottom line include the amount from SSc? Is it possible that she doesn't report SSc as income and then exempts it on the form -- that it does not show up on the tax return form?

How do you declare SSc it on the tax form -- income from employment? No. 1 Assessable Income Under Section 40 (1) (2) How do you exclude it from calculation -- where on the tax form ภ.ง.ด.90?

The Thai tax law on gifts does not mention anything about the one who gives the gift other it must be an ascendant, descendant, or spouse. No mention of tax residency of the giftor or where the gift occurs. There is no tax implication to the giftor. The giftee has the liability to pay tax, if any. #4 QUESTION: Question: What types of assessable income are subject to income tax according to Section 41, paragraph two, of the Revenue Code? ANSWER: Assessable income from foreign sources that is subject to income tax is assessable income according to Section 40 (1) to (8) of the Revenue Code. However, if it is assessable income that is exempt from tax according to law, taxpayer does not have to bring that assessable income to pay tax in Thailand, such as inheritance or income received from support from parent, descendant, or spouse, only for the amount of income that does not exceed twenty million baht throughout that tax year, for example. 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 parent, descendant or spouse.

Transferring 1m Baht into a foreign currency account owned by a Thai already raises a red flag in the banking system. If you transfer in as Baht using Wise, it shows up in your wife's Thai Baht account as a local transfer from Kasikorn Bank -- no red flags.

If the Thai wife has a Wise account or any bank account offshore, and the gift funds are transferred to that account, then she receives the gift offshore. When she transfers those funds to her account in Thailand, she is transferring gift funds that are exempt from tax calculation. Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation: (27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year.

According to Section 1471 of Thailand’s Civil and Commercial Code, which governs matters related to family, personal property is defined as follows: 1. Property that is owned by either spouse prior to their marriage. 2. Personal effects, clothing, or ornament appropriate for the status of either spouse or tools necessary for their professions 3. Property acquired by either spouse during marriage through inheritance or gift. If a spouse acquires any assets or property during marriage through inheritance, whether as a statutory heir or a beneficiary named in a will, such assets are considered personal property of the acquiring spouse. The same applies to gifts received by either spouse, which are specifically intended for them and without any consideration. Such gifts are the sole property of the receiving spouse. This principle also applies when a spouse gives a gift to the other spouse, which will be deemed the separate property of the recipient, even during the marriage.

It is clear from the gift tax amendment of 2015 that it is the person who receives money who is liable to pay taxes, only if > 20m annually. Google Translate 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 parent, descendant 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 parent, descendant, or spouse. (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 parent, descendant, or spouse, 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 parent, descendant, or spouse, 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. (5) Filing of tax returns: Taxpayer has a duty to file a personal income tax return (P.N.D. 90) within deadline for filing personal income tax returns which can choose to pay tax at the rate 5 percent of the value of assets in excess of 20 million baht or 10 million baht or will be included in the calculation with other income. (6) Withholding tax: none

Here is a translation of the law on gift tax: Google Translate 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. (5) Filing of tax returns: The taxpayer has a duty to file a personal income tax return (P.N.D. 90) within deadline for filing personal income tax returns which can choose to pay tax at the rate 5 percent of the value of assets in excess of 20 million baht or 10 million baht or will be included in the calculation with other income. (6) Withholding tax: none 2. In the case of giving real estate (1) Person liable to pay taxes: Parents who transfer ownership or possession rights in real estate to their children are also eligible. Laws which do not include adopted children (2) Property subject to tax: All types of real estate (3) Income that is exempt: Income from the transfer of ownership or possession of real estate without compensation given to legitimate children, which does not include adopted children Only income that does not exceed 20 million baht throughout the tax year. (4) Tax rate: The rate is 5 percent of the value of the real estate in excess of 20 million baht. (5) Filing of tax returns: The taxpayer has a duty to file a personal income tax return (P.N.D. 90) within deadline for filing personal income tax returns . You can choose to pay income tax at the rate of 5 percent of the value of assets exceeding 20 million baht or will be included in the calculation with other income. (6) Withholding tax: Withholding tax must be deducted in the case of transfer of ownership or possession rights in real estate at the same time with a value exceeding 20 million baht, withholding tax will be deducted at the rate of 5 percent of property value exceeding 20 million baht 3. Effective date The Revenue Code Amendment Act (No. 40) B.E. 2015 comes into force after the expiration of the deadline 180 days from the date of announcement in the Royal Gazette -------------------------------------------------- -----------

I have been digging on this -- there doesn't appear to be any mention of the "Giftor" in the Gift Tax Law.

Here is a better translation from someone who has worked here for 37 years: #4 QUESTION: Question: What types of assessable income are subject to income tax according to Section 41, paragraph two, of the Revenue Code? ANSWER: Assessable income from foreign sources that is subject to income tax is assessable income according to Section 40 (1) to (8) of the Revenue Code. However, if it is assessable income that is exempt from tax according to law, taxpayers do not have to bring that assessable income to pay tax in Thailand, such as inheritance or income received from support from parents, descendants, or spouses, only for the amount of income that does not exceed twenty million baht throughout that tax year, henceforth.

This is what happens when you dig deep enough into the inconsistencies in the Thai legal system. Technically, one could only make a gift of personal property (assets held before marriage, inheritance, and a few other exceptions), since all income & assets acquired after marriage are community/conjugal property. However, a gift could be made to a descendant or ascendant. I haven't been able to find any references to the tax residency of the giftor or the giftee or the source of funds related to gifts, seasoning offshore, etc. The gift rules seem to be delightfully vague, thereby providing opportunities for the type of Thai taxpayers who might be making gifts up to 20m, e.g. tycoons, Generals and their wives and children.