Tax implication in Thailand

[Aussieroaming]

I would appreciate some advise in regards to transferring my salary into my bank account in Thailand. This is the scenario:

1. My wife and I have a joint bank account

2. We currently live in another asian country because I work there.

3. I pay local tax on my salary (10%) and then my salary is transferred to my Thai Bank Account.

4. My last  long stay extension (based on retirement) lapsed a couple of years ago, I had a few of these (marriage and retirement)

5. The transfers into my account are very obvious as being wage transfers as they are always identical in value and i presume somewhere in the system is registers the transferee (the company i work for)

 

Is there any risk that the Thai Government could request or force me to pay additional taxes on the income? The amount that has been transferred isnt insignificant and hence a tax levy would be a sizable amount. Additional to that I have been offered another 2 year minimum on my contract and i want to know whether i should be moving the cash elsewhere.

 

Thanks

 

 

[Ricardo]

Perhaps direct your pay to an offshore-account, Singapore or Hong Kong (?) or Channel-Islands rather than to Thailand, and only move it here if/when you need to ? 

 

Or bring it here in-cash when you visit, convert & deposit it then, rather than by regular bank-transfer ?

 

Moving last-year's earnings into Thailand this-year ought IMO to avoid any potential problem.

 

But you will still be exposed to currency-movements meanwhile.

[Aussieroaming]

Ricardo thanks but i dont want to set up an off-shore account, I just want to know whether there is any tax levy that Thailand could impose. Thailand is my point of hire for my contract as i was living there fulltime until this residential role came up and we intend moving straight back to Thailand after the conclusion of the contract. Your point about current year income being taxed is the one that concerns me, though I'm not sure that it affects me as I'm not currently listed as resident in any way, shape or form in Thailand at the moment. I just happen to have a bank account there that i am sending money to.

[Aussieroaming]

1 hour ago, Ricardo said:

Perhaps direct your pay to an offshore-account, Singapore or Hong Kong (?) or Channel-Islands rather than to Thailand, and only move it here if/when you need to ? 

 

Or bring it here in-cash when you visit, convert & deposit it then, rather than by regular bank-transfer ?

 

Moving last-year's earnings into Thailand this-year ought IMO to avoid any potential problem.

 

But you will still be exposed to currency-movements meanwhile.

Also when i transfer money to Thailand it sits in a vaccuum, not actually appearing on my statement until we advise the bank to move the payment and convert from US$. They allow it to sit there for 12 months, which is what we were doing until recently when Trumps rhetoric made me concerned about the US$ tanking.

[Oceanbat]

I think as long as you are living in another country and considered a tax resident of that country there is no issue. The only tax due would be the tax on an interest earned on your accounts here. 


            Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand

Based on the above definition if you are spending <180 days in Thailand you are a non-resident and only should be taxed on income earned in Thailand.

OB

Edited September 4, 2017 by Oceanbat

[recycler]

Year to date the US$ dropped 6% against the THB compared to the average exchange rate of 2016, so you might be loosing on your income.

I wouldn't worry about the tax as long as you are not here and working here.

Given the insecure outlook of Thailand I would also advice to get an off shore account and move at least part of my income there.

[blackcab]

(1) You have to be physically resident for over 180 days to become tax resident.

 

(2) Income that is earned outside of Thailand more than 1 year ago and then transferred to Thailand after the one year period is non taxable in Thailand.

 

(3) Even then some countries have taxation treaties to avoid double taxation, however this is a specialist area of accountancy.

 

(4) You can always voluntarily complete a tax return should you feel compelled to do so.

 

The thing is that nobody is actually checking (2) unless the amounts you are talking about stand out like a sore thumb. Anything over USD 50,000 per month might attract scrutiny, but then the examiner would have to physically see a pattern. As soon as you transfer to a different bank in Thailand the pattern is broken as the computer systems used here are not exactly joined up.

 

There was an article in the Bangkok Post in 2010 which stated that Only 2.3m Thais Pay Income Tax. Out of the entire population, only 60,000 people declared an income of more than 4 million baht, and these 60,000 people accounted for 50 per cent of all income tax that was collected. Only 2,400 people earned more than 10 million baht per year and these 2,400 people paid one third of all income tax that was collected...

[Aussieroaming]

1 hour ago, recycler said:

Year to date the US$ dropped 6% against the THB compared to the average exchange rate of 2016, so you might be loosing on your income.

I wouldn't worry about the tax as long as you are not here and working here.

Given the insecure outlook of Thailand I would also advice to get an off shore account and move at least part of my income there.

Yes, thanks thats why i cashed out a significant sum before the 12 month holding period, because the dollar keeps losing value because of all the talk with Trump and NK. 

 

What is the reference to insecure outlook in Thailand though? 

[Aussieroaming]

30 minutes ago, blackcab said:

(1) You have to be physically resident for over 180 days to become tax resident.

 

(2) Income that is earned outside of Thailand more than 1 year ago and then transferred to Thailand after the one year period is non taxable in Thailand.

 

(3) Even then some countries have taxation treaties to avoid double taxation, however this is a specialist area of accountancy.

 

(4) You can always voluntarily complete a tax return should you feel compelled to do so.

 

The thing is that nobody is actually checking (2) unless the amounts you are talking about stand out like a sore thumb. Anything over USD 50,000 per month might attract scrutiny, but then the examiner would have to physically see a pattern. As soon as you transfer to a different bank in Thailand the pattern is broken as the computer systems used here are not exactly joined up.

 

There was an article in the Bangkok Post in 2010 which stated that Only 2.3m Thais Pay Income Tax. Out of the entire population, only 60,000 people declared an income of more than 4 million baht, and these 60,000 people accounted for 50 per cent of all income tax that was collected. Only 2,400 people earned more than 10 million baht per year and these 2,400 people paid one third of all income tax that was collected...

I wasnt concerned about point 1, but i was concerned about point 2 as we have deposited all of this years earnings in due to the declining exchange rate. I first heard about point 2 about a week ago, which is what triggered my question. Prior to that i thought i was in the clear in regards to Thai Tax laws.  Monthly salary is less than the 50 you state by about 13K per transaction, but we have made 20 transactions so far and will continue to do this, with 12 of the transfers occuring in one day when we cleared the backlog. The issue with the taxation treaty is that you normally have to pay the gap between tax rates in the country that you work and country that you reside, that why I have stayed out of my home country, so that i can declare non-residence for tax purposes. 

[Saladin]

To be on the safe side why don't you vary the value of the deposits each time so as not to create a pattern that search engines can find and keep them below $10,000.

 

[Aussieroaming]

2 minutes ago, Saladin said:

To be on the safe side why don't you vary the value of the deposits each time so as not to create a pattern that search engines can find and keep them below $10,000.

 

Because the transfers are done directly by the company and not me. They allow 2 transactions only, one of which is to a local bank so that i have money to pay my apartment rent and out-goings while in-country.

[blackcab]

1 hour ago, Saladin said:

so as not to create a pattern that search engines can find

 

There are no search engines.

 

The bank of Thailand relies on reports being sent by each retail bank. There is no "big computer" these are fed into and cross referenced.

[blackcab]

@Aussieroaming Don't forget to go to your Thai bank and get either a FET form or the equivalent bank letter to show proof of the incoming funds and the rate they were exchanged at.

 

Firstly this will allow you to buy a condo in your name if you so wish. Secondly this is the proof you need to send the funds out of Thailand (assuming you don't have a work permit in Thailand/own a business that can handle the transfers).

[khunPer]

To my knowledge you need to be resident for 180 days or more, to be taxable in Thailand. If you have given up your extension for staying in the Kingdom, you named based on retirement or marriage, you should not be taxable.

 

Income from abroad – when being taxable resident in Thailand – are only due to taxation, if it's brought in the same calendar year as it's earned; otherwise it's saving and not taxable in Thailand (Thai politicians called it "tax planning" in a recent article in the ThaiVisa news feed, believe it was from The Nation).

 

If your income is from a country with double taxation agreement with Thailand, and your income is already taxed in said country, you shall not be taxed in Thailand also (still need to be tax-resident) – that's the case for many a retired receiving retirement pension from original home country.

 

Presume many people live/survive here from savings coming from abroad...

 

I don't think Thai banks gives information to the revenue department (taxman), but if it look like white-washing – presume that need to be amounts of a certain size – information may be given to some respective official department...

[topt]

3 hours ago, Aussieroaming said:

What is the reference to insecure outlook in Thailand though? 

Just his view - if you don't share it ignore it as most will.........

 

As others have intimated you should not have any issues as you are not currently living in Thailand.

One concern for the future maybe if, and more likely when, Thailand signs up to CRS but that is unlikely to happen before 2020 at the earliest. Even then you should still be in the clear due to the residency issues.

[Aussieroaming]

3 hours ago, blackcab said:

@Aussieroaming Don't forget to go to your Thai bank and get either a FET form or the equivalent bank letter to show proof of the incoming funds and the rate they were exchanged at.

 

Firstly this will allow you to buy a condo in your name if you so wish. Secondly this is the proof you need to send the funds out of Thailand (assuming you don't have a work permit in Thailand/own a business that can handle the transfers).

Thanks, we have all the evidence that the funds coming in are legitimately earnt and we quite often transfer funds to Australia, that's never been an issue. Seems like the tax is a non issue, which is what I needed to know.

[Aussieroaming]

2 hours ago, khunPer said:

To my knowledge you need to be resident for 180 days or more, to be taxable in Thailand. If you have given up your extension for staying in the Kingdom, you named based on retirement or marriage, you should not be taxable.

 

Income from abroad – when being taxable resident in Thailand – are only due to taxation, if it's brought in the same calendar year as it's earned; otherwise it's saving and not taxable in Thailand (Thai politicians called it "tax planning" in a recent article in the ThaiVisa news feed, believe it was from The Nation).

 

If your income is from a country with double taxation agreement with Thailand, and your income is already taxed in said country, you shall not be taxed in Thailand also (still need to be tax-resident) – that's the case for many a retired receiving retirement pension from original home country.

 

Presume many people live/survive here from savings coming from abroad...

 

I don't think Thai banks gives information to the revenue department (taxman), but if it look like white-washing – presume that need to be amounts of a certain size – information may be given to some respective official department...

This is good information because when we were living in Thailand before I was working fi/fo and based in Thailand. Luckily (or not) I was doing a 6/2 roster so wouldn't have reached the 180 day ruling.