Yumthai

16 minutes ago, Mike Lister said:

I do not disagree that Gift Tax has a place for certain segments of the population, which I suspect is the wealthier part rather than the less wealthy. The problem is that many will see Gift Tax as a panacea for everyone, which it is not.

On the legal side, why would the gift tax fit for the wealthiest and not for the less wealthy ones? Please elaborate.

As long as gift conditions are met rules are the same for everyone.

Obviously you need someone to gift to, and gifting to an unrelated third-party is not risk-free.

7 hours ago, JimGant said:

Yes, but again it is the recipient, not the giver, who's on the hook for taxation above a certain amount of gift:

Quote

Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year.

 Or ten million baht, for GF's.

 

Nothing in this about how, why, or when taxation takes place for the amount gifted. Meaning, amounts of assessable income remitted to Thailand for the initial, or subsequent, purpose of being gifted -- are treated without consideration of their final gift purpose.

To me, unless officially stated otherwise, gift prevails over remittance (if any).

If gifter decides to give $1,000 (money abroad) to giftee, gift is acted then remittance (tax-free up to THB10M/20M since it's a gift) will occur for the giftee not the gifter.

39 minutes ago, JimGant said:

But if that gift you gave was assessable remitted income to Thailand

Gifts are exempted for the purpose of income tax calculation according to RD Section 42 (27) (28) (29). No mention of remittance.

https://www.rd.go.th/english/37749.html#section42

28 minutes ago, Mike Teavee said:

it’s really easy for them to ask all the banks to submit details of any foreign transfers, set a limit & flag people who bring in more than that. 

No it's not that easy. Even if technically feasible, these actions if implemented could bring more damages than benefits for Thailand either political, social or financial.

5 hours ago, Dioj said:

Unfortunately I think that is going to be the case because it will serve as the easiest mechanism of enforcement that they have to ensure that foreigners are complying with the recent changes to the Thai personal income tax laws on overseas income remitted into Thailand. 

How will TRD deal with the millions of Thai citizens who wrongly don't file tax returns, will they be yearly required to pass through immigration too?

32 minutes ago, JohnnyBD said:

My question still stands, what makes some think this will be strictly enforced now?

The people you mention are among those who are, presumably, filing and paying tax in Thailand for years.

They may feel it's unfair and secretly hope that TRD will eventually come after the huge majority of non-filing non-paying Thai tax residents, applying to them harsh penalties nay jail/ban terms retroactively.

Then, they could flood the tax threads with a big and deserved "I told you so!".

1 hour ago, 4myr said:

According to this TRD leaflet, my case is the 2nd 1st of the table, so ANSWER should be NO YES! 

The issue with this leaflet is they nowhere mention the tax residency status of the individual who remits the income, as if it does not matter. But it does.

That is inconsistent and in contradiction with the current law: "A non-resident is, however, subject to tax only on income from sources in Thailand."

However, the leaflet title may refer to Thai tax residents only: "HOW DO FOREIGNERS LIVING IN THAILAND PAY TAX?", implying that a foreigner who lives in Thailand spend de facto 180+ days in the country then is obviously tax resident.

11 hours ago, 4myr said:

because CC 1161 is in line with a written FAQ question 1 from TRD [only in Thai language available], I have to agree reluctantly with CC 1161.

 

On the other hand the owner of the expat tax filing service company has very good contact with TRD people in Bangkok. I can't understand why he is wrong in this:

 

"If you are in Thailand for under 180 days per calendar year, you are a non-tax resident and you do not have to file a Thai tax return for foreign-sourced income. If you have income within Thailand, you may need to still file a return."

 

Above is in line with  https://www.rd.go.th/english/6045.html - "A non-resident is, however, subject to tax only on income from sources in Thailand.” However this statement is more generic than the specific FAQ question 1 case.

https://www.rd.go.th/fileadmin/user_upload/lorkhor/newspr/2024/FOREIGNERS_PAY_TAX2024.pdf

Foreign-sourced income
If a foreigner derives income from sources outside Thailand, such income is subject to income tax if the two following conditions are met:
- such income has been earned in any tax year starting from 1 January 2024 onward by a foreigner who stays in Thailand for 180 days or more in a tax (calendar) year, and;
- such income earned has been remitted to Thailand (wholly or partially), even if that remittance occurs in a later tax year.

The second condition does not precise what the individual tax residency status is (or has to be) when the remittance occurs.

Either it is interpreted like CC 1161 i.e.: tax residence does not matter, then this will override the current law stating "A non-resident is, however, subject to tax only on income from sources in Thailand.",

OR

it is interpreted like the tax filing service company, CC 1111, and Prachuap i.e.: Thai tax residence is implied when the remittance occurs, matching with the current law stating "A non-resident is, however, subject to tax only on income from sources in Thailand."

Choose your side, I vote for the majority.

3 hours ago, Dogmatix said:

Anyone who wants a TIN and is refused one face to face should ask the official to put that in writing or film him or her saying that.

Challenging Thai authority is hit-and-miss, either you get a positive outcome or get into deeper trouble.

Better deal with another officer/come back another day/try another TRD office.

If outcome is still negative the good news is you don't have to pay tax.

2 hours ago, Mike Lister said:

A few people have asked that I update the para on tax filing because many members have never even been into a TRD office and want to understand the end to end process. There's not much else that I can think of to include thus below is how it appears at present. If anyone has suggestions?

 

77) Tax returns must be filed between 1 January and 31 March each year, if you file later than that, penalties will apply. Tax filing is electronic or paper based. the address where paper based returns must be sent can be found in the link below. Whichever method you use to file, you must obtain a TIN first.

 

Completing a tax return is a simple affair for most people, if you have difficulty, the Revenue Department staff are extremely helpful. If you want to file electronically, you should ask the TRD office to set up your on-line account and show you how to use the system. If you are not fluent in Thai it may help to take somebody with you who is. If you want to try doing this yourself at home, the TRD e-filing site is where you can apply for an e-filing account, submit forms and also practise using the system.

 

https://efiling.rd.go.th/rd-cms/

Maybe indicate that, as per several people reports, getting a TIN and being able to file a tax return is not 100% granted and at local TRD discretion.

18 minutes ago, Mike Lister said:

The issue with all of these things is to determine if they are true and exist or not, not whether they are actively enforced or the likelihood of them being enforced, or the logical difficulties of enforcing them. If we can do that, members can then decide whether they wish to accept the risk of each one, or not. I don't think for one moment that our role is to say yes, rule XY or Z exists but we don't know of anyone who has ever been impacted by it hence everyone can safely ignore it!

IMO both information are valuable and should come along: describing the rules as they truly are and whether it is enforced or not.

Then everyone can decide accordingly.

Again, Thailand is not the West and law enforcement level is key part of the equation of any decision.

13 minutes ago, paddypower said:

After  26 years here full time, the golden rule is ''you must obey the law'' - and, in case you were not aware, the law is whatever is interpreted by the officer/court/whatever.

"You must obey the law" in any country worldwide but here the interpretation and enforcement of the rules vary greatly depending on the location, time and, as you mentioned, the authority you deal with.

I've learnt along the decades that sticking to the law and willing to anticipate any forthcoming rules is counterproductive to say the least, considering the unreliability and corruption level of the Thai system. Since then, I move with the crowd (locals), being flexible pragmatic rather than proactive, being aware of what rules are enforced/followed and what are not, and my life is way stress-less.

30 minutes ago, paddypower said:

It's a minuscule point: but one day, you may consider to apply for Thai citizenship

I will never consider this.

3 hours ago, JimGant said:

Yumthai, did you mean "taxable income," not "assessable income?"

Yes, you're correct.

I'd rather reformulate: No tax to pay, no need to file a tax return.

11 hours ago, Dogmatix said:

A good example of why you need to be able read Thai and make the effort to look at the original to opine on this stuff.  Nearly all the farang tax advisors are illiterate in Thai and just read translations and/or rely on unreliable Thai staff and often jump to conclusions that are completely wrong.

Absolutely. That's why I think we won't be able to articulate an accurate and reliable version of these equivocal rules.

At the end of the day, the only law interpretation that matters is the official one coming directly from the horse's mouth.

According to several reports, it seems that the general consensus from various RD offices is: "If you have no tax to pay you don't need to file a tax return", conversely to "You must file a tax return in any case even if eventually your tax burden is 0".

For people who worry about enforcement the most relevant thing to do is to reach their local RD office in person to get proper (written if possible) answers about their tax situation.

1 hour ago, Dogmatix said:

Section 56 Every taxpayer except a minor or a person adjudged incompetent or quasi-incompetent shall, on or before the last day of March every year, file to the official appointed by the Minister a tax return reporting the assessable income received in the preceding tax year in the form prescribed by the Director-General, if such person-¹²

¹²N.DG.IT.No.28

(1) has no spouse and has the assessable income of the preceding tax year exceeds 60,000 baht,

(2) has no spouse and has the assessable income of the preceding tax year under only Section 40 (1) exceeds 120,000 baht,

(3) has a spouse and the assessable income of the preceding tax year exceeds 120,000 baht, or

(4) has a spouse and the assessable income of the preceding tax year under only Section 40 (1) exceeds 220,000 baht.

 

Section 35 Any person failing to comply with Sections 17, Sections 50 Bis, Sections 51 or Sections 69, unless in case of a force majeure, shall be subject to a fine not exceeding 2,000 Baht.

 

Section 17 In relation to tax return filing, it shall be filed within the time limit specified in the Chapters regarding taxes and in accordance with the form prescribed by the Director-General.

 

In fact the threshold for filing a tax return is 60,000 for single taxpayers or 120,000 for married taxpayers, if there is any income under sections of RC other than Section 40.1 which is income from employment (including occupational pensions).  For those with only income from employment or occupational pension the threshold for filing a tax return is 120,000 for a single or 220,000 for a couple.  

 

This means for example that, if you remit pension income plus some interest income or income from dividends or capital gains and it is over 60,000 or 120,000 for a couple, you have to file a tax return.  Another issue is Section 49which allows an RD official make up his assessment of what a tax resident's income may have been, if he doesn't file a tax return.  As already mentioned, they are have not been know to harass low income Thais for not filing tax returns and hopefully they will not harass expat pensioners either.  However, that doesn't rule out the possibility of shaking down expats living in ostentatious mansions in rural villages, even if they have filed tax returns.

 

Section 49. In the case where a taxpayer deriving income does not file a tax return, or the assessment official considers that he underreports the amount of his taxable income, the assessment official with the approval of the Director-General shall have the power to determine the amount of his net income on the basis of the money or property owned or possessed by such taxpayer, his expenditure or standard of living or his behavior, or the income statistics either of the taxpayer or of other persons carrying on a similar business. The official shall make an assessment accordingly and give the taxpayer a notice of the amount of tax payable. In this respect, the provisions of Sections 19 through 26 shall apply mutatis mutandis.

All these quotes refer to "taxpayer" which is an individual who effectively has tax to pay.

By definition, people who assess (rightly or wrongly) that they are not liable to tax are not (yet) taxpayers.

IMHO If TRD wanted to target a larger audience they would have used the wording "tax resident" or just "resident" (as it's usually used implying tax resident) rather than "taxpayer".

3 hours ago, JimGant said:

Section 90 The following persons failing to comply with the provisions stated below shall be fined not more that 2,000 Baht-

(3) person liable to tax failing to file a tax return under Section 83/2;

(4) person liable to tax return filing failing to file a tax return under Section 83/3;

Section 90 falls under Chapter 4 Value Added Tax.

However we could assume the same logic is applied for income tax: fine arises when a person liable to tax fails to file a tax return.

22 minutes ago, Mike Lister said:

The message that there are no penalties for not filing when no tax is due, has been repeatedly endlessly in these threads, by prominent posters and read by potentially thousands of people.

https://www.rd.go.th/english/37745.html

Section 17 In relation to tax return filing, it shall be filed within the time limit specified in the Chapters regarding taxes and in accordance with the form prescribed by the Director-General.

https://www.rd.go.th/english/37746.html

Section 35 Any person failing to comply with Sections 17, Sections 50 Bis, Sections 51 or Sections 69, unless in case of a force majeure, shall be subject to a fine not exceeding 2,000 Baht.

IMHO, the Section 17 statement implies tax return shall be filed if there is taxable income.

I can't find any reference of the 2,000 THB fine for not filing from the most prominent law firms.

How come? Could the English version of the RD pages be mistranslated?

If the fine for not filing statement is correct then all locals and foreigners must file, which is far from the case.

3 hours ago, Dogmatix said:

A Thai woman received remittances from her foreign boyfriend abroad and it was deemed taxable income because they were not married.

How unlucky... I'm pretty sure the thousands of Thai "girlfriends" who receive multiple remittances from their sponsor boyfriends do not pay any single satang of tax on that money.

3 hours ago, Dogmatix said:

I think the HK export allowance is the lower amount and is about US$10,000 now (previously no limit).

No need to declare up to HKD120,000 (US$15K) in/out HK.

11 minutes ago, 4myr said:

At the end she had a simple advice, which will save time for me and the tax office. In the situation that I need to transfer sums of money, make sure I stay less than 180 days in that year in Thailand.

That alone confirms that any remittance done in a year someone is non-resident for tax purposes is tax-free, regardless of tax residency when the money was earned.

1 hour ago, Mike Lister said:

My very clear interpretation of the above is that the TRD can make you produce whatever paperwork they require, and fine you for not filing a return (unless your income was under the 120k threshold), if that's what they wanted to do.

The single one fine modality for not filing tax returns is given in the link from Sherrings you quote: "200% of the assessed amount of tax that is payable". No other penalty is mentioned. In other words, no tax due no fine.

1 hour ago, Ben Zioner said:

LTR catches the middle class

LTR catches the upper middle class of the top tier countries with the highest incomes.

10 hours ago, JimGant said:

In your reference link, you forgot to go to the next paragraph, which says:

"Residents normally pay UK tax on all their income, whether it’s from the UK or abroad. But there are special rules for UK residents whose permanent home (‘domicile’) is abroad."

And that's where they go on to explain taxes on remitted income.

What you quote refers to UK (tax) residents having domicile outside UK, not UK people being non-residents for tax purposes.

I think all non-residents for tax purposes Brits as @topt mentioned can confirm that they do not pay tax on their foreign-sources income even remitted in UK.

11 hours ago, JimGant said:

Anyway, my point was that Thailand, having only one other country that taxes remittances to imitate, may very well dictate new guidance, following the Brits, on the taxation of remittances from Thai citizens/permanent residents who took a long holiday in the hopes of avoiding taxation on their remittances.

I get your point. Thailand will have to amend its current tax and residence law in order to tax non-residents for tax purposes on their foreign-sourced income.

https://en.wikipedia.org/wiki/International_taxation#cite_note-tj1-129

When sorting by "Taxes foreign income of non-resident citizens" column, few countries appear to tax foreign income under certain specific conditions/exceptions.

1 hour ago, JimGant said:

Only the UK, that I can find. Their explanation is somewhat convoluted to my reading; but it seems to say that a Brit citizen or permanent resident who expatriates (takes up a foreign domicile) and has foreign income while living in that domicile -- and who remits that income to the UK -- now has to pay UK taxes on it. Fair enough. Unlike the US, who would tax this income, remitted or not, the UK exempts its expats from paying UK taxes on foreign income -- unless remitted.

Source?

Official information I can find online seems to indicate UK non-residents do not pay UK tax on their foreign-sourced income.

Your UK residence status affects whether you need to pay tax in the UK on your foreign income.

Non-residents only pay tax on their UK income - they do not pay UK tax on their foreign income.

https://www.gov.uk/tax-foreign-income/residence