Mike Lister

As I said in my post prior to the one you've just posted, I am asking for your cooperation in helping to move the narrative away from Gift Tax and tax avoidance, even though both are legal. I will really appreciate your help in doing this.

The answer to your question is in the previous post which discusses exactly this issue. The answer is yes, that remittance is subject to tax assessment in exactly the same way it would be if it was received directly by you, even though it never enters your bank account. If the remittance contains exempt funds, there is no need to assess them for tax, but if they don't they must be subject to assessment.

This is very near a final draft so I'll put it up here in case anyone has questions. When it is finalised, I will incorporate it into the document: The Tax Implications of Remittances If you receive funds in Thailand, you must determine whether they represent assessable income or not. If they are assessable, you must report them on a tax return, subject to minimum threshold amounts. You are the only person who can do this because you are the only person who knows. Similarly, if you remit funds to Thailand from overseas, to someone other than yourself, you must also determine if those funds are assessable and if they are, declare them on a tax return, subject to threshold amounts. Just because you remit funds to another person in Thailand and the money does not enter your bank account, does not mean those funds escape tax assessment. For example, a remittance from your overseas account, to a Thai property developer, in order to buy property in Thailand, must still be assessed for Thai tax. If that remittance comprises exempt income, it does not need to be declared on a Thai tax return. But if it comprises taxable income, the money must be declared. In a second example, funds that you remit to another person, from overseas, might be intended as a Gift, but for your own tax declaration this intention does not matter. If the funds you remitted to another person are from your assessable income as listed in RD 161/2566 you have to declare them and you will have to pay personal income tax on them. The recipient of the Gift, may also need to report the Gift and pay Gift Tax on the amount. Gift tax for customary gifts from close relatives is only due if the gift is more than 10m THB (20m for legally married wife, parents or descendants) Along the same lines as the above, if somebody sends you money in Thailand, it may be deemed to be a Gift, which under Gift Tax rules is not assessable here, subject to the amounts involved. The Thai Revenue may require further details of that Gift to ensure it is genuine and not income disguised as a Gift. As an over arching principle, the Thai Revenue does not care what the purpose is of the remitted funds, or their intended use. The Revenue is only interested in the amounts that you declare and what you say the source of those funds was, which you may need to prove, to the satisfaction of the TRD.

A couple of members have PM'd me with concerns that mirror my own, so I think now is the right time to raise the issue. This thread is intended to discuss a broad range of issues that are related to the new tax rule. I would expect that having spent time discussing one aspect, the debate would move on to the next. Unfortunately, we seem to have got bogged down with Gift Tax and the emphasis of the debates has centered on ways to circumvent paying tax under Gift Tax rules. I am also aware of the high viewing rate in this thread and the large numbers of people who read it daily. Increasingly there is an expectation that readers are looking for tips and ways to avoid paying tax on remitted funds, which I don't believe to be part of our agenda. This is a commercial site that does not want to develop a reputation for the wrong reasons. As a consequence, I am going to ask you all to move on from Gift Tax, even though some loose ends still exist, I'm certain they will be tied up in due course. I am going to ask you also to focus less on ways to avoid paying tax and more on the frame work within which tax here might become due. This is not a big deal at present but I'd like avoid it becoming one later. I don't think a debate on the subject is warranted, let's just simply, move on. I trust that everyone understands these concerns and will do as we have asked. Many thanks

Update 3: The Tax Implications of Remittances If you receive funds in Thailand, you must determine whether they represent assessable income or not. If they are assessable, you must report them on a tax return, subject to minimum threshold amounts. You are the only person who can do this because you are the only person who knows. Similarly, if you remit funds to Thailand from overseas, to someone other than yourself, you must also determine if those funds are assessable and if they are, declare them on a tax return, subject to threshold amounts. Just because you remit funds to another person in Thailand and the money does not enter your bank account, does not mean those funds escape tax assessment. For example, a remittance from your overseas account, to a Thai property developer, in order to buy property in Thailand, must still be assessed for Thai tax. If that remittance comprises exempt income, it does not need to be declared on a Thai tax return. But if it comprises taxable income, the money must be declared. In a second example, funds that you remit to another person, from overseas, might be intended as a Gift, but for your own tax declaration this intention does not matter. If the funds you remitted to another person are from your assessable income as listed in RD 161/2566 you have to declare them and you will have to pay personal income tax on them. The recipient of the Gift, may also need to report the Gift and pay Gift Tax on the amount. Gift tax for customary gifts from close relatives is only due if the gift is more than 10m THB (20m for legally married wife, parents or descendants) Along the same lines as the above, if somebody sends you money in Thailand, it may be deemed to be a Gift, which under Gift Tax rules is not assessable here, subject to the amounts involved. The Thai Revenue may require further details of that Gift to ensure it is genuine and not income disguised as a Gift. As an over arching principle, the Thai Revenue does not care what the purpose is of the remitted funds, or their intended use. The Revenue is only interested in the amounts that you declare and what you say the source of those funds was, which you may need to prove, to the satisfaction of the TRD.

This comes back to the old issue of whether Gift tax can be used to escape assessible tax on income. I don't believe a person can remit assessible income as a Gift to avoid paying Thai PIT on that income because the loss to Revenue is too great, potentially it reduces the tax from 35% to 5% or even 0%..

Unless I'm missing something, the PWC statements don't say anything different to what we've agreed thus far?

You haven't read the link I sent you, you really must do that. Income is either assessible to Thai tax or exempt, US SSc is exempt by treaty

Time to do some reading!

You do, according to the tax rules.

Nonsense!

The simple answer is, you are going to tell them, it's down to you to know how much you are remitting, from each source and whether they are assessible or not. Nobody else can do that, only you. What you describe is commingled funds, that's where funds from several different sources end up in the same account. You have two choices, either keep excellent records and supportive documentation, or, keep excellent records and documentation and demingle those feeder funds, into their own accounts.

The developer has a bank account too and he will undergo audits, similarly, the bank will have records that it passes along to the TRD. On your end there's the Land Office part where evidence the funds need to be seen. It's possible to wash those funds and hide them but it's not impossible to be found out either. Perhaps that's why the TRD penalties are so draconian, to compensate for the lack of foolproof processes.

OK, here's version II, perhaps others can review and see if it is accurate, complete and easily understandable. The Tax Implications of Remittances If you receive funds in Thailand, you must determine whether they represent assessable income or not. If they are assessable, you must report them on a tax return, subject to minimum threshold amounts. You are the only person who can do this because you are the only person who knows. Similarly, if you remit funds to Thailand from overseas, to someone other than yourself, you must also determine if those funds are assessable and if they are, declare them on a tax return, subject to threshold amounts. Just because you remit funds to another person in Thailand and the money does not enter your bank account, does not mean those funds escape tax assessment. For example, a remittance from your overseas account, to a Thai property developer, in order to buy property in Thailand, must still be assessed for Thai tax. If that remittance comprises exempt income, it does not need to be declared on a Thai tax return. But if it comprises taxable income, the money must be declared. In a second example, funds that you remit to another person, from overseas, might be intended as a Gift, but for your own tax declaration this intention does not matter. If the funds you remitted to another person are from your assessable income as listed in RD 161/2566 you have to declare them and you will have to pay personal income tax on them. The recipient of the Gift, may also need to report the Gift and pay Gift Tax on the amount. Gift tax for customary gifts from close relatives is only due if the gift is more than 10m THB (20m for legally married wife, parents or descendants) Along the same lines as the above, if somebody sends you money in Thailand, it may be deemed to be a Gift, which under Gift Tax rules is not assessable here, subject to the amounts involved. The Thai Revenue may require further details of that Gift to ensure it is genuine and not income disguised as a Gift. As an over arching principle, the Thai Revenue does not care what the purpose is of the remitted funds, or their intended use. The Revenue is only interested in the amounts that you declare and what you say the source of those funds was, which you may need to prove, beyond doubt.

Yes, thanks, I see I didn't go far enough with that.....I'll lift your form of words if I may.

I have read through the past few pages again and have tried to summarise some very fragmented and at times obscure explanations and make them understandable to everyone. I don't yet claim to have a 100% accurate or complete description but I think I'm nearly there, the following may be subject to change after others have reviewed and commented. The Tax Implications of Remittances If you receive funds in Thailand, you must determine whether they represent assessable income or not. If they are assessable, you must report them on a tax return, subject to minimum threshold amounts. You are the only person who can do this because you are the only person who knows. Similarly, if you remit funds to Thailand from overseas, to someone other than yourself, you must also determine if those funds are assessable and if they are, declare them on a tax return, subject to threshold amounts. Just because you remit funds to another person in Thailand and the money does not enter your bank account, does not mean those funds escape tax assessment. For example, a remittance from your overseas account, to a Thai property developer, in order to buy property in Thailand, must still be assessed for Thai tax. If that remittance comprises exempt income, it does not need to be declared on a Thai tax return. But if it comprises taxable income, the money must be declared. In a second example, funds that you remit to another person, from overseas, might be intended as a Gift, in which case, you do not need to report that Gift on a Thai tax return. However, the recipient of the Gift, may need to report the Gift and pay Gift Tax on the amount. Along the same lines as the above, if somebody sends you money in Thailand, it may be deemed to be a Gift, which under Gift Tax rules is not assessable here, subject to the amounts involved. The Thai Revenue may require further details of that Gift to ensure it is genuine and not income disguised as a Gift. As an over arching principle, the Thai Revenue does not care what the purpose is of the remitted funds, or their intended use. The Revenue is only interested in the amounts that you declare and what you say the source of those funds was, which you may need to prove, beyond doubt.

Very possibly.

OK, so you pay your rent directly to the landlords account from your overseas account, which means your landlord has his assessible income. But the funds never hit your account in Thailand which means you don't have any remittances to declare to Thai tax, how is that not evasion?

That is tax evasion. You can't Gift funds to your landlords account from an overseas account and call it a gift when you're also paying your rent with the same money.

As it turns out it is coincidently relevant but that quote was not intended to reflect that, when it was posted earlier.

OK thanks, we might just be getting there! I think my view on this, which I don't believe I have ever stated previously, within the specific context of Gift Tax is, that a genuine gift remittance is not assessable income and does not need to be declared on a tax return. It is merely coincidental that coincides with what I wrote in the Introduction.

Go and read the document on tax that we wrote, my quote sits in the Introduction and, as everyone can see, it's scene setting, not connected to or intended to be directly relevant to Gift Tax...that is indisputable. Re: sarcasm: well, one poster right after yours, asked directly if you were being sarcastic, which is exactly what I wondered also and subsequently led to your post being removed. Some of the things you wrote were pretty dubious: Nothing - not real estate purchase, new car purchase, bill paying, stock investment, soi dog foundation, and gift. And RD doesn't care if it's a real gift, or bogus -- they get their tax payment upfront, before it's distributed, as either a real gift; a bogus gift, with recipient acting as an intermediary; or as a payment to the recipient, for services or products rendered. I appreciate you write in casual American English but still, your post seemed to be more of a joke than serious. TBH I still haven't fully understood what you've written.

For clarification, the phrase above in bold....did you mean to write "unique", instead of "not unique"?

A couple of points: My quote above comes from the Introduction section of the Personal Tax document we produced and is intended to set the scene as it begins to describe the tax system in Thailand. The quote is therefore not specific and directly relevant to Gift Tax, or potentially not even relevant to it at all, and has to be seen in the context of the document and the fact it is scene setting rather than information that is specific to any aspect of tax. Secondly, it is not for me to agree or disagree with what posters have to say on any aspect of Thai tax, except where I might know that what is being said contradicts what is generally accepted as fact, in which case I will state so. Whether or not I agree with what you wrote is not relevant, as said earlier, I and others assumed your post to be sarcasm rather than an objective assessment and I'm still struggling with that, which is why I reposted it so that members can decide. To be honest, I find your post very difficult to decipher and understand exactly what you are saying so you'll forgive me if I sit and re-read it several times and try to make sence of it.

No, sorry, just take the post for the words it contains and let it be anonymous, so as not to allow knowledge of the poster to influence your views.