Mike Lister

Bump

"If you're talking about remitting the money directly to somebody else & it's a genuine gift, then it's not taxable... " I'm struggling to see where it says this in the links, that income is not assessable, if it is gifted directly to another.

A person can bring in unlimited amounts of cash, as long as it is declared to Customs.

My head hurts! Do you agree that the Gift Tax rules, benefit the receiver of the gift rather than the gifter? Do you agree that the benefit to the receiver is a zero rated or reduced rate of tax on income? Do you believe there is a benefit to be derived from gifting the funds?

I don't know how valid it is to think UK income will always have been taxed hence not assessible. I can think of a number of ways that income might be received and not taxed. In the second scenario: what type of income was sent from Thailand to the UK that comprised the Gift, assessable or not? You go on to say it is never remitted to Thailand but then say it is two years later. If the Gift comprised tax paid income, that entire chain is free of tax, despite it being two years later. One has to wonder why the funds need to be sent to the UK in the first place, only to be brought back later.

Except where invoking a DTA would mean the right to tax, shifts from the UK to Thailand, which means the obligation to tax shifts also. On that basis, it is entirely possible for somebody to have Thai assessable income in the UK, because Thailand had not yet had a chance to meet its obligations and wont until it is remitted.

I don't think I agree with the reservations about the third scenario. In the third scenario, if the foreigner gifts offshore assessable income direct to a Thai resident, the foreigner must report that income as if they themselves had received it directly. The tax rule change last year stated that any offshore income remitted to Thailand is assessable to Thai tax, regardless of the year it was earned. By questioning the third scenario above, all anyone has to do is to remit that earned income to another person and the affect of the rule change is negated! It also means that any remitted income can be neutralised for tax, by gifting it another person. I don't buy those things at all.

On the other hand, the purpose of the Gift Tax rule is to allow people to receive gifted income, largely free of tax. The benefit of the Gift is to the receiver, not the giver. If you change the wording of scenario three to read, "In the third scenario, the foreigner gifts income that is assessable in Thailand, direct to a Thai resident, the foreigner must report that income as if they themselves had received it directly".

The original read as follows: The TRD does not consider what the purpose is of remitted funds, only whether they are assessable or not. If a foreigner remits non-assessable funds and then gifts them in Thailand, that is the end of the matter for the gifter. If however the foreigner remits assessable funds to Thailand and then gifts them inside Thailand, those funds must be reported as assessable income on the foreigners tax return, no matter that they are later gifted. In the third scenario, the foreigner gifts assessable income direct to a Thai resident, the foreigner must report that income as if they themselves had received it directly. I need to pay around with Yumthai's draft which is much improved but can still use a tweak or two.

I don't believe they would say that publically, partially because of the individual nuances associated with each case.

Yes, agreed, that makes better sense, I'll take steps to make the change.....thanks.

I interpret, rightly or wrongly, 1 January 2024 as being the start date and that in general, any event prior to that date will be given a pass, excluding of course blatant tax evasion and large scale tax fraud. This is merely my opinion however.

The wealth distribution in this country is very uneven, if we learned that 10 people or 100 had used that method, would that be meaningful? I suggest it would not.

Data from a single source remains anecdotal. Anyway, quantify "multiple", it's all subjective.

Simple! Really! If it were simple, which it is far from, what you're left with is anecdotal data that is largely meaningless.

Reading some of the recent posts on tax made me realise that several members do not really understand where we are with the tax issue and are looking far beyond what the issues really are. Somebody wrote, "this tax policy is such a mess that we can expect changes in the future, I think we all know this. There's already been discussion on what the Thai government will have to change for this policy to even have the slightest chance of being even the least bit effective." The Thai tax system and the Revenue Code (tax rules) have existed for decades. For better or worse, those things represent a system whereby tax is collected, albeit many people pretend it doesn't exist and ignore it. One small change was made to a single tax rule and this has ensnared foreigners into the tax net, along with nationals who were evading it. Today there are two problems. The TRD's problem is the tax net is too small, there aren't enough people in the net, paying tax. The second problem is ours, not the TRD's. The first part of our problem is that we don't understand all the rules and the way the system operates. The second part is that in the absence of that knowledge, some of us seem to expect it will function in the same way the tax system does in our home country or according to our own logic. Those expectations are not realistic. Suggesting that the tax policy is a mess isn't really relevant because it's existed for a long time, anyway, how would we know when we don't fully understand what it comprises and how it operates! Expecting a change in policy or awaiting some sort of big announcement is a cop out, what those people are really saying is, "I don't understand how the system operates so I will do nothing except wait and see". Trying to fill the knowledge gaps with hypothesis and conjecture is only useful to a degree, beyond that point it breeds paranoia and fear because the "whatiffery" becomes fact in the minds of some people and they begin planning and acting on the basis of assumption, which is a very bad thing.

A poster in another thread passed comment about the tax guide that made me think, The following is my reply which I'm cross posting here in order to get thoughts and opinions: I recognised some weeks/months ago that the entire document needs to be rewritten/reformatted and structured differently, it has grown because new pieces have been added/inserted piecemeal, to the point where it is now clumsy and confused reading. What I had wanted to do was to provide two parts to each topic, "what the rules say" and "what we think". I haven't had the time to do that recently, mostly because tax thread management has taken up so much of my time......(you know who you are!). If you or anyone else has thoughts about this, I'll be interested to hear them. Similarly, if there's anyone out there who is interested in participating in this rewrite, please contact me.

A poster in another thread passed comment about the tax guide that made me think, The following is my reply which I'm cross posting here in order to get thoughts and opinions: I recognised some weeks/months ago that the entire document needs to be rewritten/reformatted and structured differently, it has grown because new pieces have been added/inserted piecemeal, to the point where it is now clumsy and confused reading. What I had wanted to do was to provide two parts to each topic, "what the rules say" and "what we think". I haven't had the time to do that recently, mostly because tax thread management has taken up so much of my time......(you know who you are!). If you or anyone else has thoughts about this, I'll be interested to hear them. Similarly, if there's anyone out there who is interested in participating in this rewrite, please contact me.

Thinking about this issue some more.....I recognised some weeks/months ago that the entire document needs to be rewritten/reformatted and structured differently, it has grown because new pieces have been added/inserted piecemeal, to the point where it is now clumsy and confused reading. What I had wanted to do was to provide two parts to each topic, "what the rules say" and "what we think". I haven't had the time to do that recently, mostly because tax thread management has taken up so much of my time......(you know who you are!). If you or anyone else has thoughts about this, I'll be interested to hear them. Similarly, if there's anyone out there who is interested in participating in this rewrite, please contact me.

The standard tax form does not contain a section that allows filers to activate the terms of DTA and note the tax paid overseas. As previously said, we are waiting for the new tax form to be unveiled, which should be shortly.

Can you tell me where you think it's mixed and not clear? I've re-read it several times and it appears to me to be mixed but it's clear that it is and is delineated by section. The first three para's are I believe a factual overview of remittances. Para's 66-69 are the rules, 70-71 are interpretations whilst 72 is clearly the rules. It's probable that I am too close to what is written to not see the overlaps that you see so please be specific.

There is no place on the current form to put that information because it means invoking the DTA. We're waiting to see what the new tax form looks like in the hope it will yield some clues about what is required.

The section on Gift Tax is shown below: The TRD does not consider what the purpose is of remitted funds, only whether they are assessable or not. If a foreigner remits non-assessable funds and then gifts them in Thailand, that is the end of the matter for the gifter. If however the foreigner remits assessable funds to Thailand and then gifts them inside Thailand, those funds must be reported as assessable income on the foreigners tax return, no matter that they are later gifted. In the third scenario, the foreigner gifts assessable income direct to a Thai resident, the foreigner must report that income as if they themselves had received it directly. GIFT TAX 66) "PIT is levied on gifts given by persons who are still alive. The tax is collected on the assets or the amount given to parents, ascendants, descendants, spouse, or others based on the value of the gift that exceeds a prescribed threshold, which depends on the type of gift and donor. Assets or amounts given that do not exceed the threshold are exempt from tax. Our confidence levels that we understand all the Gift Tax rules is not high. 67) The following gifts are exempt from PIT: a) Income derived by a parent from the transfer of ownership or possessory right in an immovable property without any consideration to a legitimate child, excluding an adopted child, in the amount not exceeding THB 20 million throughout a tax year in respect of each child. b) Maintenance income or gifts from ascendants, descendants, or spouse, in the amount not exceeding THB 20 million throughout a tax year. c) Maintenance income derived under a moral obligation or gifts made in a ceremony or on occasions in accordance with established custom from persons who are not ascendants, descendants, or spouse, in the amount not exceeding THB 10 million throughout a tax year. d) Income from gifts in the case where the person who receives the gifts will use them for religious, educational, or public benefit purposes according to the intention of the donors under the criteria and conditions referred to in the Ministerial Regulations. 68) Gifts in excess of the above thresholds will be subject to PIT at the rate of 5% and will not need to be included together with other income when computing the annual PIT liability. 69) For ascendants/dependants the threshold is THB 20 mill, nor non-ascendants and dependants, it's THB 10 mill". https://taxsummaries.pwc.com/thailand/individual/income-determination Gift Tax Parameters 70) The following summary points compiled by a member may help guide readers in the use of Gift Tax: a) Gifts must be traditional gifts based around a fixed date or occasion. b) Traditional gifts include supporting the spouse or other persons, mainly family, based on a moral obligation. c) Gifts to non-family members are more likely not to meet the moral obligation criterion. d) A ceremonial act may be required, in particular for non-spouses. e) Gifts must not be returned to the donor and used as a way to avoid income taxes, except under very specific Gift Tax rules which are likely to void the earlier tax advantage. f) Moral obligation is subject to interpretation, there is no single defintion. g) TRD may apply additional criteria. h) TRD assessment may differ from self-assessment which risk must be evaluated in each case individually. 71) Note: Because Gift Tax is predominantly a domain of the wealthy and depends to a large extent on local practise, there is a shortage of confirmed information on this subject. One field of thought is that Gift Tax cannot be used to escape Thai tax by Gifting untaxed money from overseas. On the other hand, many Western countries, including the UK, do not tax gifts from overseas. Members wishing to exercise this option should seek qualified advice before using this option to Gift untaxed funds. 72) Two additional points on this subject are: 1) Funds that are gifted, must be for the use of the person to whom they are gifted. 2) Gifts can be revoked later and reclaimed, under specific circumstances, such as if the receiver of the gift defames the Gifter or fails to take care of their serious medical needs. Issues arise here when the receiver is the spouse of the Gifter and under marital law, the gift is regarded as conjugal property. Until this becomes more clear, it is critical that anyone wishing to use Gift Tax, seeks professional advice.

Thread participants have been cautioned several times but seem unable to follow direction, fortunately there are plenty more threads on this subject.. The OP may wish to follow other aspects of the debates about Thai tax in the link below. This thread is now closed.

Yes, and it is off topic.