JimGant

Actually, they just sent me an email, stating my photo sucked, er, wasn't sharp enough; please submit another. Gave me a reference number to cite -- but kept all of the original submission. [Note: Photoshopped pictures may eliminate your zits -- but can cause acceptability problems.]

Why they left re-sourcing out of the Thai-US DTA is a question researched by others. See page 19 of the below reference for a rationale that re-sourcing was a given, and not necessary to be specifically addressed: https://nysba.org/NYSBA/Sections/Tax/Tax Section Reports/Tax Reports 2014/1313 Report.pdf I'd cite Article 25(1) on my Form 8833: This, along with an explanation in that two miles of space they give you -- should suffice, by addressing the forest, and not all those piddling re-sourcing trees. The forest, of course, is the treaty to eliminate double taxation. And a treaty that gives Thailand primary taxation rights on certain US Income, namely private pensions and IRAs. But without a Form 8833 permission to trump the Internal Tax Code that says: ..... how can you eliminate double taxation if you can't take a tax credit on your US tax return -- for those taxes you paid Thailand for their taxation of your US private pension or IRA? Obviously you can't, otherwise the treaty is worthless. Thus, the lack of a re-sourcing paragraph in the treaty, that you can cite on your Form 8833 -- is a non starter. The forest -- and common sense -- rule. Note the last para in Article 25 of the Technical Explanation: Written 26 years ago -- with no subsequent protocol to incorporate re-sourcing language. May be they figured the treaty wasn't broken -- and no protocol needed. Or, maybe they were just plain lazy. Anyway, I can't see a problem with any Form 8833 filings (other than they have to be mailed in, and can't be included with your electronic TurboTax filing. Oh well.

Good catch. And, yes, the US-Thai DTA does not have a re-sourcing clause. But, that omission is not critical to allowing a tax credit for Thai taxes on US income. This is all accomplished by attaching a Form 8833, along with your Form 1116 (tax credit form), to your tax return. What the Form 8833 explains away is that, per tax treaty, the Internal Revenue Code that says tax credits are only allowed on foreign income, not US income -- is overridden by the tax treaty -- specifically, that tax credits are a major part of the treaty, precluding double taxation. And, yes, this means a credit for Thai tax on US income taxable by Thailand. Here from the Form 8833 instructions: That the Thai-US DTA doesn't have a re-sourcing clause is a minor oversight -- and not one that would preclude the Form 8833 from allowing a tax credit for Thai taxes on US income specifically allowed to be taxed primarily by Thailand.

Well, you'll continue to pay Thai taxes -- on those remitted incomes the DTA says are primarily taxable by Thailand. But, yes, those Thai taxes, in the form of a tax credit, can be deducted from the US tax bill on the same income. Assuming US taxes on this income are higher than you paid in Thailand, your total tax bill, between the two countries, would be the same as if you didn't have to pay taxes to Thailand. But, now, Thailand gets to keep all the taxes -- and the US takes a hit equal to the credit. Fair is fair.

Not unless she provided a product or service of equal or near equal value to the amount of money you sent her. Then, yes, it's income earned in Thailand and she's then on the hook for income taxes in Thailand. Otherwise, the money you send her could be 1. a gift; 2. a loan; or 3. your money, to be held temporarily by her, until you arrive to pick it up (a situation that could occur, should you not have a Thai bank account). In these three situations, the wife/gf is not subject to income tax. The only potential tax is a gift tax, for amounts over 20M/10M baht (wife/gf). You, however, are subject to Thai income tax on remitted assessable income (as stipulated in the tax treaty) and earned after Jan 1 2024. [There's a question on whether or not a gift might be tax exempt; the jury is still out on this question.]

Are you a Yank? If so, this cannot be a non-taxable event -- because of the peculiar nature that all our DTAs have a savings clause, whereby the US always has at least secondary taxation rights on income -- meaning that you'll always pay taxes to someone (which the OECD is trying to make standard for all its community). So, the argument about whether or not gifts remitted to Thailand are exempt from Thai taxation -- is a non player for Yanks. Why? Because, if you pay no taxes to Thailand on this gift -- because you believe all the gossip about it being tax exempt -- then you'll have no Thai taxes to offer as a credit against that other tax obligation, the one to the US. So, you pay full bill to Uncle Sam. Yeah, if you sent a pile of gift money to Thailand, the Thai taxes you avoided may exceed the full bill you pay Uncle Sam; but we're talking a lot of remittance. Anyway, bottom line: Yanks, don't get too excited about maybe getting a tax break by remitting gift money to Thailand.

What's the source of those resources? If last year's savings or from income exempt from Thai taxes via DTA -- the taxability of the gift is irrelevant. But, if done with income assessable by Thailand, the jury is still out on whether or not, as a gift, this income is tax exempt. Unless things have changed since I did it, you'll have to go to the land office and both you and the wife will have to certify that the land is being bought with her money. The land office won't care that she obtained the money as a gift. But the TRD someday may want further assurance that it was a gift -- thus, that certification done at the land office should provide such assurance. And, yes, she'll be responsible for a 5% gift tax on the amount over 20M baht that you gave her -- assuming she received the gift in Thailand, and not overseas.

That should do it. But, no harm uploading other 1099s of passive income, allowable towards, or over, the 80k requirement.

I guess I really can't read, because it appears you're saying money used to payback a loan, that is money assessable as income by Thailand -- if it were remitted to Thailand (I hope you're not confusing the loan and payback as one in the same monies?) -- but it's not assessable, because it's not remitted -- represents contrived tax evasion.? Any referees here?

Nope. It's still a loan. And it's not assessable income paying back the loan overseas -- because assessable income, for Thai tax purposes, has to be remitted -- and the paybacks are not. Now, if Thailand were on the worldwide tax system, yes, if the payback money for the loan was subject to Thai taxation, via the DTA, then, yes, what was originally a tax free loan into Thailand -- would now be converted to a taxable event consisting of the payback monies for the loan. But the situation we're discussing here involves the quirky Thai remittance system, that says, no taxable event has occurred without remittance. And the payback of the loan is with NON REMITTED monies. End of story, end of any potential tax event. End of any tax evasion, by treating the loan as a taxable event (am I able to say that without any pushback?)

Just write on a blank piece of paper, which later doubles as the cover letter.

Ok, my read on this is, you're saying your sniff test says the foreigner has just committed tax evasion -- 'cause the loan, when paid back, has now become assessable income -- even tho' it (the payback part) has not been remitted. You're saying, at least as I interpret, that when Dog says, 'remitting a loan in this manner is not assessable' -- you say: IT IS NOT. What am I missing about you and loans?

Ok, reading isn't maybe a strength. Just so I understand -- are you saying, then, there is NO taxable event when it becomes payback time? Please help me understand. Thanx. That really is key, especially in the FDI scenario.

I previously reported that I did not submit my 1040 tax return, since it was joint. However, I just looked at my submission file, and I had submitted my 1040. But I did submit my applicable joint 1040, along with a cover letter explaining joint returns, 1099's, and why they accompanied the package (actually, I think somewhere in all the guidance I had seen where they wanted 1099's, along with the tax return). I did ask about whether or not they wanted the past two years' tax returns (again, there had been some mention of two years' worth, but maybe that was not for WP applications) -- but they said only last year's return. So, as long as you accompany your joint tax return with your 1099's -- you should be just fine.

The OECD is working on this in their new Model tax treaty publication. Some treaties have already incorporated language to treat tax exempt income the same in both treaty countries. Others have adopted protocols (treaty amendments) to accomplish the same. Here is a blurb from the technical explanation of the US-UK DTA: Yes, nothing like this in the US-Thai DTA. But we see what the OECD community thinks about this. And Thailand is petitioning to join the OECD community. You think they might be sympathetic to me not including a Roth remittance to Thailand as assessable income? Anyway, I've might have gone too far with the above hint, as I've been banned, under threat of expulsion, from giving any tax advice on this forum.

Get a grip. Read the technical explanation of the US-Thai tax treaty, if you need tighter explanations. Yes, govt pensions and social security payments are exclusively taxable by the US. But, for payouts of standard (vice Roth) IRAs, Thailand -- per DTA -- has primary taxation rights, and the US secondary taxation rights (due to the savings clause). Big deal. So you pay tax on your IRA distribution to Thailand, then pay tax to the US on same, but taking a tax credit. Result: No net gain in taxation, but Thailand finally gets to collect taxes it's owed via the tax treaty. You, the US taxpayer, are no worse off financially -- it's just your tax money is now fixing roads in Utapao, not East Jesus, Iowa. Oh, based on a later post of yours, there is NO confusion about where you're a tax resident -- 180 days plus in Thailand, you're solely a tax resident of Thailand, per the DTA. You confused the language "treated as if a tax resident" for actually being treated as a legal resident of the US. By the way, you'll know what your Thai tax credit will be -- for future inclusion on your US tax return -- since you need to file your Thai tax return by March, I believe. Plenty of time before your US tax return is due in June to plug in that tax credit. Hey, relax. For Yanks, these new rules have little to no effect on our total tax bill between countries. Only, maybe, having to take time to file a Thai tax return. Ho hum.

Nonsensical. We're completely adrift on how to handle foreign remitted income -- in many situations, like gifts -- because the Thai authorities have not clarified, or even defined, the laws related to such remittances. So, why in the world would a forum that's trying to give options to its readers -- options that DON'T violate any existing law -- be told by its leader to not provide any options?

My apologies. I didn't read deeply what you said, but I guess it had to do with applicability to gift taxes, since you've put to rest the notion that remittances that become gifts somehow have an exemption from income tax. Thank you for shutting that door.

Geez, how'd you go so far adrift. Whether Cyril remits money to Nookie, to the builder of his new condo, to the soi dog foundation -- makes no matter. None of those are on the hook to pay income taxes on Cyril's remittance. Cyril is. Self-assessment. He goes to RD, says he remitted X amount of assessable income, so I am liable. RD doesn't care where the money ended up -- that's not a taxable event. Remember, that was an earlier argument, where we concluded, for sure, the final use of the money has no impact on its income taxation liability. Huh? All along I've been saying Cyril is paying income tax to either home country, or Thailand. No attempt at avoid tax by remitting to wife. And no possible way of avoiding income tax -- by saying the remitted monies are a gift.

So, you're saying the act of gifting some how affects the taxability of the money being gifted? Don't think so.

So what? Does that make Nookie liable for the income tax on it? It makes no difference what the characterization of the remitted money to Nookie's account is. The pension money remitted has had income taxes paid on it, by home country or Thailand, by Cyril. It you then want to characterize that remitted money as a loan, a gift, or just money I want my daughter's bank account to temporarily hold for me -- so be it. Only when you remitt money in excess of 20M baht does anybody care about the gift aspect. There's NO further income tax aspect to that money in Nookie's account, at least related to its remittance into the account. o This observation points out the total misunderstanding about tax relief on gifts. The above observation assumes there's a 20M tax holiday on gifts -- taken as a tax credit against income given as a gift. This is baloney. The 20M tax exemption is just against the first 20M baht of gift -- given from proceeds AFTER INCOME TAX HAS BEEN PAID. Not sure why this is so hard to understand. Maybe, because it's not what tax-adverse folks want to hear.

Huh? That's Cyril's pension, not Nookie's. Why would she be responsible for paying income tax on it? If this is a govt pension, whereby home country has exclusive taxation rights on it, well, the tax situation is handled by the home country, without any regard of that cash leaving for Thailand. And, once in Thailand, since DTA says it's non assessable income (govt pension, remember), that the money that ends up in Nookie's bank account is a non income taxable event. Nookie can do what she wants with this money, with no income tax obligation. Maybe she makes a deal with Dad to act as a funds intermediary, to pay out to him what he wants. Or maybe they classify it as a loan. Or maybe a gift. But as a gift, and being well down from the 20M baht threshold to pay a gift tax -- nobody will know, or care, that this was a gift. You don't just drop the RD a line that says, oh, I made a gift to my daughter. RD is only interested in those fat cat Thais, who would like to gift their estates away, so that no inheritiance tax with be owed. This is where gifts, and subsequent gift tax, become important. Oh, yeah. If pension is a private pension, whereby DTA gives Thailand exclusive taxation rights on it -- then Cyril now has to pay income tax to Thailand, not the home country. Same result -- money arriving in Nookie's bank account is after tax money. And NO tax holiday for being a gift.

There's no free lunch for grif..., er, gifters.

Nope. Two kinds of taxation -- income and gift. If I give my nephew $20000 out of my after tax savings, I'm nailed for a gift tax on $1000 (other countries, the recipient would be nailed for the gift tax). Certainly not double taxation in the classical sense. I'm afraid some of the confusion on this thread is not differentiating between income and gift taxes. And it certainly doesn't help that Thai RD refers to gift taxes as "PIT."

Because it became income, not a gift. Why she, not the workers, had to pay the tax -- dunno. This whole drill was a sham.