Residency and tax.

[khunPer]

3 minutes ago, LivinLOS said:

If you had for example UK property income, and paid UK taxation on it, while resident of Thailand, and remitted that income to Thailand within that year, that would be covered by a DTA and would not incur a second tax obligation.  

Isn't that what I'm saying..?

[rockingrobin]

42 minutes ago, LivinLOS said:

Do you have any link or source of that information. 

 

The tax code does explicitly include pensions, not merely covering it in income but names it as a source that is taxable under the Thai tax code. 

 

I have yet to see any ministerial exemption, only a lack of enforcement. I always think this presents a additional risk to anyone using the monthly pension declaration system as they are effectively declaring they do not have savings and rely on drip feeding money in, in a way the tax code says is taxable. 

Thai revenue code chapter 3, section 42(17) , 

In the ministerial regulation 126 , the references to pensions are found within different clauses depending upon the specifics of the source of income.

e.g. clauses 56 for retirement mutual funds 

[elviajero]

11 hours ago, simoh1490 said:

Income that is paid directly into a bank account in Thailand in the year it was earned, salary and pension, for example, is technically liable to Thai tax but the Thai Revenue is not actively trying to tax those payments, nor are the banks set up to collect such tax.

It doesn't matter if the income earned is paid directly or indirectly to a bank account in Thailand. If you earn income and it finds it's way to Thailand within the same tax year there may be a tax liability. You declare that income on a tax return.

[simoh1490]

Just now, elviajero said:

It doesn't matter if the income earned is paid directly or indirectly to a bank account in Thailand. If you earn income and it finds it's way to Thailand within the same tax year there may be a tax liability. You declare that income on a tax return.

But as discussed at length previously, how does Thai Revenue differentiate between income that is earned and savings that have accrued over time in a bank account in say the UK, unless the account holder declares the income - the answer is they can't.

[LivinLOS]

30 minutes ago, rockingrobin said:

Thai revenue code chapter 3, section 42(17) , 

In the ministerial regulation 126 , the references to pensions are found within different clauses depending upon the specifics of the source of income.

e.g. clauses 56 for retirement mutual funds 

http://www.rd.go.th/publish/fileadmin/user_upload/kormor/eng/MR_126.pdf

 

Clause 2 The following incomes shall be prescribed as incomes under (17) of
Section 42 of the Revenue Code as amended by the Revenue Code Amendment Act (No.
10), B.E. 2496 : 

 

(56) Any money or benefit that the holders of investment units in a retirement mutual fund under the law governing securities and exchange received from such fund due to old age, infirmity, or death, subject to the rules, procedures and conditions prescribed by the Director-General of Revenue Department. (Amended by the Ministerial Regulation No. 228, (B.E. 2544) which has come into force as from 1 January B.E. 2544)

 

That would not seem to be saying that is an exemption ??? It reads to me like its clearly 'including' it as income, not excluding. 

Edited December 27, 2017 by LivinLOS

[simoh1490]

2 minutes ago, LivinLOS said:

http://www.rd.go.th/publish/fileadmin/user_upload/kormor/eng/MR_126.pdf

 

Clause 2 The following incomes shall be prescribed as incomes under (17) of
Section 42 of the Revenue Code as amended by the Revenue Code Amendment Act (No.
10), B.E. 2496 : 

 

(56) Any money or benefit that the holders of investment units in a retirement mutual fund under the law governing securities and exchange received from such fund due to old age, infirmity, or death, subject to the rules, procedures and conditions prescribed by the Director-General of Revenue Department. (Amended by the Ministerial Regulation No. 228, (B.E. 2544) which has come into force as from 1 January B.E. 2544)

 

That would not seem to be saying that is an exemption ??? It reads to me like its clearly 'including' it as income, not excluding. 

The clause refers specifically to Thai mutual and ltf retirement funds, not overseas pensions.

[elviajero]

3 minutes ago, simoh1490 said:

But as discussed at length previously, how does Thai Revenue differentiate between income that is earned and savings that have accrued over time in a bank account in say the UK, unless the account holder declares the income - the answer is they can't.

That is irrelevant to the point you made that I corrected/clarified.

 

It is up to the tax payer to declare the income. If you were to get audited by the Revenue Department it would be up to you to show/prove where the money had come from.

 

 

[simoh1490]

Just now, elviajero said:

That is irrelevant to the point you made that I corrected/clarified.

 

It is up to the tax payer to declare the income. If you were to get audited by the Revenue Department it would be up to you to show/prove where the money had come from.

 

 

It is hugely relevant since the issue is when it is remitted to Thailand, there is no requirement to declare income that is not remitted! I agree that in a perfect world everyone should be absolutely honest and never tell any fibs, it's just that trying to separate savings from pension income in the same account, offshore, is almost impossible since it can be argued both ways with equal success. Joe punter would have just as much difficulty trying to prove that the fifty quid he just transferred to Thailand was savings and not his regular pension payment as Revenue would have trying to argue the opposite and who is to say either one is correct. 

[elviajero]

9 minutes ago, simoh1490 said:

It is hugely relevant since the issue is when it is remitted to Thailand, there is no requirement to declare income that is not remitted! I agree that in a perfect world everyone should be absolutely honest and never tell any fibs, it's just that trying to separate savings from pension income in the same account, offshore, is almost impossible since it can be argued both ways with equal success. Joe punter would have just as much difficulty trying to prove that the fifty quid he just transferred to Thailand was savings and not his regular pension payment as Revenue would have trying to argue the opposite and who is to say either one is correct. 

You said, "Income that is paid directly into a bank account in Thailand in the year it was earned, salary and pension, for example, is technically liable to Thai tax".

 

I am clarifying that it doesn't matter if the income is paid into a Thai bank directly or indirectly or even at all. If I receive a salary in the UK at the end of this month, and withdraw that money from my UK bank using an ATM in Thailand, it is potentially taxable in Thailand if I am resident for tax in Thailand.

 

Are you going to argue semantics over "remitted"?

[simoh1490]

Just now, elviajero said:

You said, "Income that is paid directly into a bank account in Thailand in the year it was earned, salary and pension, for example, is technically liable to Thai tax".

 

I am clarifying that it doesn't matter if the income is paid into a Thai bank directly or indirectly or even at all. If I receive a salary in the UK at the end of this month, and withdraw that money from my UK bank using an ATM in Thailand, it is potentially taxable in Thailand if I am resident for tax in Thailand.

 

Are you going to argue semantics over "remitted"?

I have 50k Pounds in my savings account in the UK, I also receive state pension of 470 Pounds per month and this is paid into the same UK account.

 

Twice a year I transfer 10k Pounds to Thailand from that account.......what have I remitted, earned income or savings!

[elviajero]

16 minutes ago, simoh1490 said:

I have 50k Pounds in my savings account in the UK, I also receive state pension of 470 Pounds per month and this is paid into the same UK account.

 

Twice a year I transfer 10k Pounds to Thailand from that account.......what have I remitted, earned income or savings!

More deflection, and not relevant to the example I gave! We are talking about earned income being received in Thailand in the year it's earned, not the transferring of savings. Note that I used the word "potentially" in my example.

[rockingrobin]

1 hour ago, LivinLOS said:

http://www.rd.go.th/publish/fileadmin/user_upload/kormor/eng/MR_126.pdf

 

Clause 2 The following incomes shall be prescribed as incomes under (17) of
Section 42 of the Revenue Code as amended by the Revenue Code Amendment Act (No.
10), B.E. 2496 : 

 

(56) Any money or benefit that the holders of investment units in a retirement mutual fund under the law governing securities and exchange received from such fund due to old age, infirmity, or death, subject to the rules, procedures and conditions prescribed by the Director-General of Revenue Department. (Amended by the Ministerial Regulation No. 228, (B.E. 2544) which has come into force as from 1 January B.E. 2544)

 

That would not seem to be saying that is an exemption ??? It reads to me like its clearly 'including' it as income, not excluding. 

Section 42 is defining incomes that are tax exempt

[rockingrobin]

1 hour ago, simoh1490 said:

The clause refers specifically to Thai mutual and ltf retirement funds, not overseas pensions.

If the exemption was not to apply to foreign pensions from similiar source, this would equate to unlawful discrimination , and become in effect an introduction of a new tax 

[Get Real]

8 hours ago, GOLDBUGGY said:

No doubt this Tax Law is rather confusing. It can be interpeted several different ways. But back tracking some it goes like this:

 

Any money earned and owned by you, prior to moving to Thailand, is your free and clear. So no problems transfering money to buy a Condo or such, as it is not considered for tax purposes. 

 

They have 2 catigories for Personal Income Taxes in Thailand. Either being a "Resident" or being a "Non-Resident". To be a Non-Resident means that you actually resided in Thailand less than 180 Days. But this does not mean you are not subject to taxes. You are required to pay Income Taxes on all money earned in Thailand. That is stardard for most countries. Go work in the USA for 3 months and you will find the same. 

 

The other catigory is being a "Resident". To be a Resident for Income Tax purposes in Thailand you have had to live in Thailand in the tax year for 180 days or more. If that is the case then Thailand is considered your home. You are subject to all income earned in Thailand as well as all world wide income. Part of the confusion lies in when or if you bring this money into Thailand. How would they know this money was earned money, or money from you previous savings account?  Well, and as far as I can tell, they wouldn't know. 

 

Generally speaking, most people who  live in Thailand longer than 180 days a year work in Thailand also. Even Overseas Work where you work a 28 //28, with travel time you would be in Thailand less than 180 days a year, so a "Non-Resient", and not have to declare this income. But this doesn't address the many people living here on Pensions, Stocks and Bonds, Dividends, or Saving Accouunts. That is the Grey Area. 

 

Many of these payment have withholding tax from the country they are earned. Thailand has many tax treaties with many different countries. So as long as you are paying income Taxes to somebody else on this income, you shouldn't be liable to taxes in Thailand also. But???

Keep on living in the land of dreams. I sincerely hope you are happy.

[simoh1490]

35 minutes ago, elviajero said:

More deflection, and not relevant to the example I gave! We are talking about earned income being received in Thailand in the year it's earned, not the transferring of savings. Note that I used the word "potentially" in my example.

I'm not deflecting at all, perhaps you should go back and read through our exchanges.

[simoh1490]

13 minutes ago, rockingrobin said:

If the exemption was not to apply to foreign pensions from similiar source, this would equate to unlawful discrimination , and become in effect an introduction of a new tax 

Unlawful discrimination, which country's laws are you referring to, certainly not Thailands!

[Maestro]

9 hours ago, Harveyboy said:

just to add the money i have in my account is joint account with my wife would this be looked into as much as it being in my name only.. we pay tax on the interest yearly  ..i have a single account keeping enough to prove my status when applying for my visa ..i read in one of the posts proof of where the money came from ie earnings in my country the money came from sale of my house obviously there are records of this would this stand to be taxed tks for any info 

 

Money from the sale of property being credited to your bank account is not taxed as income.

[rockingrobin]

2 hours ago, simoh1490 said:

Unlawful discrimination, which country's laws are you referring to, certainly not Thailands!

Apologies , I did not clarify the grounds for non discrimination come from the DTT non discrimination clause

 

In the case of  GB -Thailand can be found in article 24 , which basically states that a national  of a contracting state cannot be treated less favourably than a national of the other state ,where the circumstances are similar.

Thus if pension income is tax exempt for Thai nationals  then foreign pension income is also tax exempt 

 

I have not checked other DTT , but the non discrimination article is part of the OECD model for tax treaties 

[Maestro]

1 hour ago, rockingrobin said:

In the case of  GB -Thailand can be found in article 24 , which basically states that a national  of a contracting state cannot be treated less favourably than a national of the other state ,where the circumstances are similar.

 

There are over 200 countries in the world. What made you mention Great Britain? I believe if the OP wanted advice on a double taxation treaty, he would have mentioned his nationality.

[KiChakayan]

I think that page 185 summarises quite well this debate.. It is only the opinion of one Tax office insider but makes good sense, I reckon.

There are also some thoughts on immigration, for those who are interested.

This girl did a pretty good job, didn't she?

 

 

 

FarangsInThailand.pdf

[JimGant]

Quote

Money from the sale of property being credited to your bank account is not taxed as income.

.....unless part of those proceeds consists of capital gains -- and the relevant tax treaty gives Thailand the right to tax such capital gains -- and (again) if such gains end up in Thailand in the year obtained:

 

Quote

"Most types of capital gains are taxable as ordinary income. Capital gains from the sale of shares in a company listed on the Stock Exchange of Thailand (if the sale is made through a licensed broker) or from the sale of investment units in a mutual fund are exempt from tax. Any capital gain or investment income from sources outside Thailand is not subject to taxation unless a resident taxpayer remitted the process into Thailand within the same calendar year it is received."

https://home.kpmg.com/xx/en/home/insights/2011/12/thailand-income-tax.html

 

[JimGant]

Quote

It is up to the tax payer to declare the income. If you were to get audited by the Revenue Department it would be up to you to show/prove where the money had come from.

And if your home country/offshore bank account, into which your going-to-Thailand income is deposited, had more money in it on Dec 31 than was deposited into it during the whole of the next year -- you've got reliable proof, as well as ethically solid ground, that monies from this account ending up in Thailand are not taxable -- thank you fungibility.

 

Now, if you had your retirement check direct deposited to a Thailand bank, well, maybe 10 years from now, as FATCA and GATCA mature, Thai revenuers might be interested in you. Today, they just don't have the data and resources to track this, including whether or not you're even a tax resident (here 180 days). Plus, the quaint rule about last year's income not being taxable is quite an out (primarily, I'm sure, for Thai fat cats). But, this is costing Thailand serious tax revenue, and maybe someday they'll change it.... (unlikely).

 

Meanwhile, taxability of your income brought into Thailand is affected by one's tax treaty with Thailand. For US citizens, a direct deposit of a government pension check to a Thai bank would be no problem, since the tax treaty gives the US exclusive tax authority for government pensions Not so, however, for private pensions. Thus, private pensions should be filtered through an offshore/home country financial institution.

 

Or, why not send all the money you'll need for the year by wire on Jan 1st.......

[TravelerEastWest]

On 12/27/2017 at 4:37 PM, LivinLOS said:

If I was in that position, I would simply maintain 2 bank accounts outside of Thailand.. Fill account A one year, fill account B the next, and only take money into Thailand from the account which was not being filled that calender year. 

Simple, easy to verify, and provably not 'earned in the year it was remitted'.

 

Clever thinking!

[juice777]

So if someone is living here on rental income from there own country is Taxable or not?

And if you pay tax in your home country and don't have a Thai bank account surely it's not. I know its unlikely that will ever happen but What dose the actual law say?



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[LivinLOS]

On 3/7/2018 at 7:44 PM, juice777 said:

So if someone is living here on rental income from there own country is Taxable or not?

And if you pay tax in your home country and don't have a Thai bank account surely it's not. I know its unlikely that will ever happen but What dose the actual law say?
 

 

If you have rental income in the west, AND you bring that rental income into Thailand in the year it was earned, then you by law should declare it in a Thai tax return. 

 

If you need to pay tax on that income will hinge on factors like where you were tax resident that year and if you were tax resident in Thailand can you get non resident tax relief in the country where is was earned. Again if yes to all of that the tax would be due in Thailand. If you cannot get tax relief, you need to look at the dual taxation agreement between thailand and the course country, it is often possible to offset one against the other paying only any higher burden to Thailand. A lot of this depends on how your home country charges taxes on passive income like rents. 

[JimGant]

Quote

So if someone is living here on rental income from there own country is Taxable or not?

Depends on your tax treaty. Here is the technical explanation from the US-Thai tax treaty concerning rental income:

 

Quote

The first paragraph of Article 6 states the general rule that income of a resident of a
Contracting State derived from real property situated in the other Contracting State may be taxed in the Contracting State in which the property is situated. The paragraph specifies that income from real property includes income from agriculture and forestry. Paragraph 3 clarifies that the income referred to in paragraph 1 also means income from any use of real property, including, but not limited to, income from direct use by the owner (in which case income may be imputed to the owner for tax purposes) and rental income from the letting of real property. This Article does not grant an exclusive taxing right to the situs State; the situs State is merely given the primary right to tax. The Article does not impose any limitation in terms of rate or form of tax on the situs State.

Thus, a Yank living 180 days plus in Thailand, with US rental income, could be taxed by Thailand if, some day, they get their game in order to tax all that farang income allowed in all those tax treaties. But, as the US is primary, and Thailand thus secondary for rental income (per the tax treaty), why bother to tax the Yank, since unless he was in a higher Thai tax bracket than his US bracket, all those Thai taxes paid against this rental income would be "refunded" as a credit -- up to the amount of US taxes on this same income. But, just as no Yank is declaring his private pensions or IRAs as income subject to Thai tax ('cause of the earned in a previous year understanding), so too rental income. However, if sometime in the future Thailand starts taxing all the income stipulated in the treaty -- regardless of year earned -- and you then added your rental income to this declaration -- all the Thai tax on this rental income that exceeded your US tax on same income would be kept by Thailand. So, by only having a "primary" right to tax, thus allowing Thailand to also tax (unlike the "exclusive" right to tax for US Gov't pensions, which means Thailand can't tax it, period), you might just be out of pocket more than if you didn't live in Thailand.

 

Anyway, we'll all be dead by the time Thailand figures out all the money they're losing, right? Hmmmmm.

 

[juice777]

So if someone is living here on rental income from there own country is Taxable or not?

Depends on your tax treaty. Here is the technical explanation from the US-Thai tax treaty concerning rental income:
 

The first paragraph of Article 6 states the general rule that income of a resident of a
Contracting State derived from real property situated in the other Contracting State may be taxed in the Contracting State in which the property is situated. The paragraph specifies that income from real property includes income from agriculture and forestry. Paragraph 3 clarifies that the income referred to in paragraph 1 also means income from any use of real property, including, but not limited to, income from direct use by the owner (in which case income may be imputed to the owner for tax purposes) and rental income from the letting of real property. This Article does not grant an exclusive taxing right to the situs State; the situs State is merely given the primary right to tax. The Article does not impose any limitation in terms of rate or form of tax on the situs State.

Thus, a Yank living 180 days plus in Thailand, with US rental income, could be taxed by Thailand if, some day, they get their game in order to tax all that farang income allowed in all those tax treaties. But, as the US is primary, and Thailand thus secondary for rental income (per the tax treaty), why bother to tax the Yank, since unless he was in a higher Thai tax bracket than his US bracket, all those Thai taxes paid against this rental income would be "refunded" as a credit -- up to the amount of US taxes on this same income. But, just as no Yank is declaring his private pensions or IRAs as income subject to Thai tax ('cause of the earned in a previous year understanding), so too rental income. However, if sometime in the future Thailand starts taxing all the income stipulated in the treaty -- regardless of year earned -- and you then added your rental income to this declaration -- all the Thai tax on this rental income that exceeded your US tax on same income would be kept by Thailand. So, by only having a "primary" right to tax, thus allowing Thailand to also tax (unlike the "exclusive" right to tax for US Gov't pensions, which means Thailand can't tax it, period), you might just be out of pocket more than if you didn't live in Thailand.
 
Anyway, we'll all be dead by the time Thailand figures out all the money they're losing, right? Hmmmmm.
 
You seem know your stuff

So if for example someone from the UK was renting out property but was just shy on of the £11500 Taxable amount but dose a tax return in the UK but has never really paid much tax on them. So please if you don't mind in simple terms is that person breaking any laws and do they owe money. I imagine even if that person doesn't owe money to that Thai government because of any Tax treaty but maybe could now be fined.

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[JimGant]

Don't quite follow.....fined for what reason? Anyway, I'm a Yank and don't know much about British taxes. We stopped paying those when we threw the tea into Boston harbor. :)

[juice777]

Don't quite follow.....fined for what reason? Anyway, I'm a Yank and don't know much about British taxes. We stopped paying those when we threw the tea into Boston harbor. :)

Fined for not doing a Tax return even if I don't have to pay anything. I wonder if I have to do still a Tax return.

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[JimGant]

Do you really think that the Thai tax folks are interested in seeing 95,000 farang tax returns showing nothing owed? And if they did want you to file (which they don't), then any fine would be a percentage of taxes owed. Lemme see -- 25% of nothing equals nothing. So, go have a beer and quit worrying about nothing.