JimGant

10 hours ago, CharlesHolzhauer said:

Remit money annually from your overseas account as a gift to your wife's account, with the intention of making this a tax-compliant gift.

This thread is about what happens if Thailand switches to worldwide taxation. If they do,the remittance aspect of taxation avoidance disappears. So using remitted gifts for tax avoidance will no longer be a player.

1 hour ago, Ebumbu said:

Definitely what? Are you saying I'll be taxed on income I've already paid US income tax on? That would indeed be unacceptable.

What is it about tax credits that you don't understand? The DTA between Thailand and US designates which country has primary taxation rights -- and thus gets to keep all taxes collected -- and which country has secondary taxation rights -- and has to absorb a credit for the taxes paid to the primary country.

Have an IRA or private pension? DTA says Thailand has primary taxation rights. So, you have to file with them, and pay full-up taxes -- no credit from US. But, you also have to file with the US (per saving clause, meaning US always has at least secondary taxation rights). As such, when you file your US return, you use a tax credit for the Thai taxes paid to reduce one-for-one your US taxes for the taxes paid Thailand. Bottom line: Your tax bill under this new worldwide Thai taxation scheme will be the same as if you never paid taxes to Thailand.

So, file in March with Thailand, and pay their taxes on your declared private pensions and IRAs. Then, file with US, and reduce your tax bill by the Thai tax credit.

Like to file early with US? You can figure out on the back of an envelope what your Thai tax will be on the US pensions/IRAs, by January. US doesn't need any formal paperwork to justify the tax credit, so just go ahead with your US tax return, with the numbers from the back of the envelope. Not too complicated. No double taxation -- unless you think having to file with two countries defines "double taxation, " but ignoring the credit aspect.......?

6 hours ago, Presnock said:

If you do have assessable income in Thailand, you may have to pay some Thai tax if it is more than that taken out by the US....i.e. US tax rate is 10% and Thai tax rate on the amount is 15% then Thailand could charge you for 5% of that amount.

Two scenarios here. If Thailand, per DTA, has primary taxation rights on income, like private pensions -- they keep all the taxation, as if US taxation, and its credit, didn't exist. They don't lose any taxation collection due to a US tax credit, as no such credit needs to be absorbed. Only the US has to deal with absorbing a Thai taxation credit, due to having only secondary taxation rights.

Second scenario, much rarer is: Rental income on property in US. US has primary taxation rights on this income, thus gets to keep all taxation, without any regard to a credit. DTA, however, gives Thailand secondary taxation rights on this rental income -- but Thailand has to absorb a credit for the taxes paid to the US. Thus, credit could completely wipe out any Thai taxation - if US taxation were higher than Thai taxation. But, if Thai taxation higher, they get to keep what's left after the credit.

23 hours ago, jacob29 said:

The safe default assumption, is that it will be treated the same way the majority of countries in the world deal with it. You can explore what any other country taxing worldwide income does. Which is not always clear, but Thailand doesn't need to reinvent the wheel here.

No slam, dunk here for everyone to adopt -- but here is how a US Roth distribution is dealt with, if recipient lives in the UK:

Quote

However, the State of residence, under subparagraph (b), must exempt from tax any
amount of such pensions or other similar remuneration that would be exempt from tax in the State in which the pension scheme is established if the recipient were a resident of that State. Thus, for example, a distribution from a U.S. "Roth IRA" to a U.K. resident would be exempt from tax in the United Kingdom to the same extent the distribution would be exempt from tax in the United States if it were distributed to a U.S. resident.

https://home.treasury.gov/system/files/131/Treaty-UK-Protocol-TE-7-22-2002.pdf

The OECD is rewriting their model tax treaty, to encompass language, like the above. And, Thailand is trying hard to become recognized, by petitioning to join the OECD. Thus, I'd certainly take advantage of the prevailing winds, and certainly omit any mention to Thai tax authorities of my Roth distribution -- or similar. And since there's no mention of Roth in my Thai tax return -- or no tax return -- what's the chance TRD calls me in to chat about this? And if they did, I certainly could present an excellent case for why I didn't declare it.

Anyway, for grey areas, give yourself the advantage, particularly if you have supporting info for your stance. Certainly, don't give the other side the advantage for a grey area....

4 hours ago, Danderman123 said:

why would they ignore big remittances from abroad to Thai girls?

Would that be money remitted from a BG's foreign account? Even here, there's a chance it's not income -- if not declared as such, how is TRD going to know, unless they interview everyone that receives money from abroad (which would be absurd, as not cost effective)

If BG gets the money from someone else's foreign account,  here it's certainly not prima facie income declarable by her -- unless it's a payment for a current service being rendered, like cutting sender's grass while sender is in the States.

Anyway, the recipient of wired money from someone's foreign account, if for some reason called into TRD for a chat, could just say the money was a gift (which would put her in the 10k gift tax situation); or that she's just holding the money for the sender, until he returns to Thailand, 'cause he doesn't have a bank account; etc. Again, she's not in an income situation, unless performing current services. It's the remitter, if a tax resident of Thailand, who's on the hook for any taxes on remitted monies. But, yes -- a BG who received remittances that exceeded an amount the TRD has established as being subject to random compliance audits -- would just be another individual subject to such an audit. In which case, she could just prove she didn't send the money to herself, thus not subject to any tax (except maybe gift tax).

16 hours ago, chiang mai said:

What I get out of what you have said is that you want me/us to say that foreigners who don't have a TIN and don't have millions in the bank, are perfectly safe because they are outside the TRD system (whatever that means)

Yep. Completely under the radar. Without the equivalent of 1099s or W-2s, like in the US -- TRD has no computer tracking of taxable income -- and they're certainly aware much remitted monies are non assessable per DTA, or by the decree for pre-2024 income. So, what's TRD going to do -- call in for a chat 300,000 farangs without TINs?

And what if they did? I would imagine most could prove that their remittances are non assessable income -- or for sure, all assessable income is less than meets the taxable threshold. Thus, another reason TRD wouldn't waste resources on non-productive chats.

No, forget getting a TIN, or for filing a tax return if no taxes are owed. There are no TRD bad days in your future.

6 hours ago, chiang mai said:

If you remit funds to Thailand from overseas, you are already part of the TRD system,

Ridiculous. Only if you remit a significant amount -- like many millions during the year -- would you possibly make a list of potential folks subject to a random compliance audit. Otherwise, TRD doesn't have the resources, nor any reason, to track the average remitter.

On 9/2/2024 at 7:42 PM, oldcpu said:

For me it makes NO SENSE to have too much in Thai baht

It's only too much baht -- if you know that the baht is heading on a permanent downward spiral -- which reason tells me, you cannot know. And the last decade or so have shown the baht just muddles between 30 and 35 baht per US dollar. So, I wouldn't have the foggiest to know whether or not to bring money over here into a Thai baht bank account, or a USD account, based on FX speculation. Thus, it would just be which type account is easier to put baht notes into my hand or to pay my Thai creditor per direct debit.

20 minutes ago, JohnnyBD said:

I always wondered if one could send USD directly to their THB accts. Maybe the banks would convert it automatically.

Well, sure -- that's how most of us do it. SWIFT dollars sent will be converted to baht , at your bank, using their TT rate. WISE uses a more favorable FX rate than TT, but has more fees. Anyway, your method vs those I mentioned, will probably have timing as the determining factor as to what's best. All on the same day -- haven't a clue, but your method certainly adds a new twist to sending money to Thailand.