Mike Lister

We're still not on the same page with this yet. The issue is the money that is used to pay the credit card bill, not just the use of the creditcard alone. The TRD will never be interested in casual credit card usage abroad. But if someone uses a foreign credit card to live off in Thailand, and they don't file a tax return because they were tax resident, they could easily become interested. If the person has extensive savings that were earned prior to 1 January 2024, living off a credit card will not be an issue as long as those savings were used to pay the bill and a tax return was filed. But, if for the sake of an extreme example, a digital nomad earns income that is banked tax free, uses that income to pay of their credit card bills every month and fails to file a tax return, that's an issue for the TRD. All of this is to say that using a foreign credit card in Thailand is not tax evasion in itself but the extent to which it is used, combined with the nature of the funds used to pay the bill, along with a failure to file a tax return, is tax evasion.

Income is very well defined: https://library.siam-legal.com/thai-law/revenue-code-assessable-income-and-income-tax-sections-40-64/ But the issue is not, what is income, the issue is whether credit card spending is a assessible or not or whether it is exempt because it is credit.

I've always liked the 60/40 approach and now, following a hit in 2022, faith is being restored. Coincidently, I'm currently 59/41 as we speak: https://markets.businessinsider.com/news/etf/60-40-portfolio-bounces-back-from-2022-slump-is-it-the-right-investment-strategy-for-2024-1032930011

I don't see that anyone has suggested that all transfers are regarded as income, only that they are potentially assessable. The CC holder cares about the differences you outlined but the TRD doesn't. The TRD doesn't distinguish between funds that are immediately available in liquid form and funds that represent debt. Liquid funds are easier and simpler to classify to determine if they are assessable to Thai tax or not. Funds that represent debt are more difficult because the means used to repay the debt overseas must first be established to determine if they are assessable or not. Goods and services purchased here must have a visible method of being acquired. If that method is cash, it's easy enough to determine the source, either it was from inside Thailand or outside. If it was outside there was a transfer of some sort, a funds transfer, cash was carried or a debit card was used. Those things are easy enough to establish accessibility to Thai tax. A debt mechanism such as a loan or prepaid credit are more complex because there is an additional step in the end to end process. But just because there is an additional step, doesn't automatically mean there is no assessability to Thai tax. Goods or services were still acquired using funds from overseas, the exact same principle applies. Having said all those things, I doubt very much that today, the TRD is interested in the average expats CC spend using overseas cards, whether or not they might be in the future is unclear. Much will depend on the extent to which they are used to circumvent tax and the scale involved. This discussion is more about the theoretical rather than the practical, in that respect, the evidence points firmly, I think, to CC spending being assessable. If the CC used their overseas CC for all their Thai based expenses and they were extensive, it certainly would be assessable in the TRD eyes, I'm certain of that.

See para 30 of the link below: 30) The way in which overseas Funds Transfers are received in Thailand does not change their definition. Bank transfers, cheques, cash or overseas ATM withdrawals can also be income, the latter because overseas funds were imported to pay for goods or services in Thailand. If you pay for something in Thailand (or anywhere else), you receive goods or services in exchange for remuneration. If you argue that by paying for something using an overseas credit card, you didn't actually import funds into Thailand, how did you manage to buy the thing that you bought? In fact what I think you probably did was to export whatever you bought, even if it was only the experience. You used overseas funds to buy something in Thailand that was later exported to your home country.

If you're going to quote things, quote fully along with context: The poster wrote: "Not in the sense that it would be in any way visible to the RD".

We're not discussing enforcement, have you read the OP? But since you raised the question, hypothetically: foreigner lives here year round hence is tax resident, but has no assessable income. At visa extension time, Immigration says, show us your bank book/statements for living expenses (they do this from time to time in various locations and have done this to me several times) and the foreigner says, ah, I don't have any! Immi., asks, really, why don't you have any, are you working here illegally? Foreigner says no, I use my overseas credit card for all my Thai based expenses. Really says Mr Immi. man, that probably means you don't have to pay Thai tax, right? Yup says the foreigner, smart eh? Indeed, says Mr Immi man, reaching for the phone to dial his TRD counterpart.

Correct.

OK. If the CC payments are made in the home country bank, the line between convenience and evasion is cloudy. If I make ALL my purchases via the overseas card and ALL the payments overseas, surely that is evasion. Borrowing overseas and transferring the debt into Thailand is, once again, a red herring! The TRD doesn't care about the debt liability in the home country. All it cares about is the purchase was made using overseas funds that were imported to buy goods or services. We can agree to disagree on this and that would be OK, since I presume neither of us is a lawyer or forensic accountant.

A debit card is the same as cash, using an overseas debit card is exactly the same as importing funds into Thailand and should be reported accordingly. We may not be able to agree regarding the use of overseas credit cards in Thailand. In my world, the transaction or sale of goods or service are complete when the seller receives payment and the goods/services are passed to the buyer, here in Thailand. There was an offer to sell, acceptance of the terms and there was remuneration, the sale is complete and transacted on Thai soil. If a foreigner, for example, spent their entire year in Thailand, charging their rent, food and living expenses, to their UK credit card which was later settled in the UK, using UK resident funds, the foreigner could easily be guilty of evading Thai taxes. If they used the credit card sparingly, from time to time, probably not. Where that mid point might be is unclear.

No, my comment is a fact, it can be obtained from specific pharmacies that are licensed for this purpose but it cannot be sold OTC, it requires a prescription. "If you read the full text of the Psychotropic Substances Act 1975, you'll see it CAN be bought and dispensed here... BUT... now it may only be done so only via a licensed pharmacy who has the proper permits from the Ministry of Health and/or the Narcotics Board to do so.. So, you are correct in that no, it cannot be bought "over the counter"-- which was the norm some years back as you note.. but.. yes.. it still can be legally obtained in the Kingdom, but may now be done only via licensed and controlled sources". https://www.tripadvisor.com/ShowTopic-g293916-i3687-k4382288-o10-Diazepam-Bangkok.html

With that sort of response, don't expect me to try and help you with anything again.

It's a Class 4 controlled drug, available only from hospitals or specific pharmacies, it's certainly not available OTC anywhere in TH.

For my benefit as much as anything else, just so we're all on the same page on this: The TRD doesn't care what the purpose is of the funds that are remitted to Thailand or how they are used. The TRD only cares whether the funds are exempt or assessable, ergo, arguing they will be used to pay off overseas debt is a red herring at best.

I doubt that tax treaties have two sets of rules, one for the IRS and one for poorer countries. The IRS may have a long reach but I doubt that in law it is any longer than that of the TRD.

I think this is about borders. The Thai RD doesn't care what financial arrangement's you have overseas, all it cares about is that your purchased goods or services here in Thailand and that ultimately you paid for them using overseas funds. The definition of an international tourist, in economics terms, is somebody from outside Thailand's borders who holidays in Thailand using overseas funds that are brought into the country and the holiday experience is then taken home again. It doesn't matter that those funds are borrowed funds or on credit, as many will be. Once the purchase is made, it gets logged against Thai GDP. So the tax resident who uses an overseas credit card in Thailand to finance his/her 181 day stay, may pay off their credit card bill using savings, or income, one being taxable, the other not, potentially. The fact the cardholder choses to draw out reimbursement of the credit card bill using extended payments, is not a matter for the TRD.,

With your permission I will lift parts of your post and include them in the Simple Tax Guide, it will be helpful for other to know about this? @UKresonant FYI

Indeed that is true, I filed last year and had no tax to pay, which led the young lady to ask why I'd even bothered. A moment later the coin dropped and she said, ah, I understand.

I think the taxable event occurs when the cardholder transacts against the card in Thailand and that nothing else matters.

Certainly visible to the Central Bank since it involves currency exchange, whether or not the RD has saight also, is unclear.

Get a big red sign made up telling people its for sale and showing your phone number and stick it on the side of the house and wait, a more effective method than using agents.

In Thai tax law, income is defined as something that is received, not necessarily earned, it can even be like or in kind. Knowing that, I personally wouldn't want to mess around trying to second guess whether something is or isn't.

Umm, not really. The issue is the date of the transaction, that's the date when the seller was paid by the card holder, that is the date the transfer of funds into Thailand was deemed to have been made. The fact the card holder used old funds to pay the bill, in another country, is not really relevant.

Just evasion actually. On the positive side, no more visa issues, no 90 day reports and no cost of living worries, plus free room and board and one square meal a day, all gratis.

Which is tax evasion and since its illegal, can't be discussed here. Regardless, using a foreign credit card in Thailand to make payments kere, is still considered to be remitted funds.