JimGant

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.

Right. But only after you declare that assessable income on your tax return -- so (I don't know what charitable deduction rates are) it's probable the deduction won't completely zero out the tax on your remitted assessable income.

Nope. Not sure there are any official links mentioned on this, and similar, threads.

Why define the nature of the 200MB? The gift tax journey is about having Thai fat cats having to pay (or have their recipients pay) a tax for bygone future estate inheritance tax receipts on assets that may have been given away as gifts. Don't define it as a gift, but as a loan, due in 30 years (or some ridiculous term, known only to you, not the tax folks). Bottom line: No gift tax, since no gift. And why would she have to pay income tax on the 200M -- no earnings indicated here.

She had to pay tax on the "bogus" gift amounts given to her cooks, gardeners, drivers, etc, from whom the proceeds were redeposited into her bank account. Pretty sloppy job of disguising gifts.

Of course. Once that money crossed the border, it makes no never mind where it ended up. It is now remitted, assessable income (assuming it's assessable per the DTA). Nookie can call that cash input anything she wants, best just not call it anything. If she called it income for some kind of services provided, then she'd be subject to having to file a Thai tax return. Calling it a gift -- then, yeah, the 20M cutoff for gift tax. Or if the gifter said, "Pay me back in 30 years," then it's now a loan, not a gift. Anyway, Nookie just remain quiet. Cyril, pay the man for that remittance -- again, final destination of remittance completely irrevelant to income tax situation.

Yes, gifts may only be made from income already subjected to Thai PIT, or per DTA, income subjected to home country taxation.

Remitted assessable income is subject to Thai taxation -- regardless of where this money eventually ends up.

He's over the moon because whatever he gave as a gift is (he believes) exempt from Thai income taxes. If that 20M leaves a hole in his budget, he can discuss remedies with the gift recipient. Meanwhile, he can enjoy maybe a 35% windfall on taxes.

Not subject to a GIFT TAX. Yes, the guidance uses personal income tax in lieu of gift tax -- that makes matters all that more confusing. Gifts are NOT subject to income tax, period. Only the money that became a gift is subject to income tax.

Well, if the gifter gets to exempt the full amount of the gift from Thai income taxes, then, obviously, he benefits the most. But, I don't believe this is where Thai tax authorities are. And the receiver certainly has an out-of-the-blue windfall, 'tho she (assuming wife/mother) has to pay a 5% gift tax on amounts greater than 20M baht. Thus, the gifter may have a tax holiday in two ways -- income and gift taxes. So, I'd say he's the winner. The gift is not income, so income tax doesn't come into play (not to be confused with gift tax). But, yes, as a gift the first 20M is exempt from a gift tax; and the whole total amount, as long as a legitimate gift, is exempt from income taxes. So, yeah, good deal for the receiver. But, the receiver DOES have to pay the tax on the 20M excess, not the gifter. (Unlike in the US, where the gifter pays the tax, not the recipient.) The recipient of the gift is certainly pleased. Now the gifter -- if he believes whatever amount of previously assessable/taxable income is now tax exempt -- he's, of course, now over the moon. And, if he can believe all the supporting blah blah on this forum, come next March2025, when he files his taxes, can just omit as assessable income that chunk of money he remitted in 2024 that ended up as a gift. [Mike, don't cut that, as it's just an observation, not an illegal endorsement.]

In either situation, the income that eventually ends up as a gift -- is taxed as income somewhere. You seem to be confusing income taxation of pre gift income with a gift tax, on a sum of after-income tax money subsequently gifted. I think when you said "the UK doesn't tax gifts from overseas." you meant: It didn't apply a gift tax to sums of money gifted from overseas. Totally separate from from any income taxation on this same pot of money.

The UK doesn't tax gifts from overseas -- because the obligation for income taxing the sum of money gifted is on the source country. The UK, like the US and all other OECD countries, assumes the gift is an after-income tax asset. And there's nothing out there, at least that I can find, that implies Thailand is unique in treating gifts as being exempt from income tax, whether due in the source country, or due in Thailand when remitted, prior to its becoming a gift. Can anyone recall where this notion that income remitted to Thailand, that is assessable income -- is somehow tax exempt if its final use is as a gift? I think that somehow wishful thinking blossomed into presumed fact....