Any Westerners long staying in Thailand - ever tax investigation?

[pbrock]

In theory long stayers (more than 180 days) would have to pay tax in Thailand. Even if these are digital nomads, traders or whatever working for companies unrelated to Thailand.

 

On the other hand I heard, that if westerners go to the Thai tax authority they are more looking like "what does this stupid farang want here?!?"

 

So has there even been any clever investigation of the Thai tax authority against any of these groups, then caught and prosecuted?

[jenny2017]

You only pay tax in Thailand if you're holding a work permit. That's when taxpaying starts. I guess you meant income tax. 

[glegolo]

OMG this subject again.....   I give you an exemple. What concerns me as being a swede we have a tax-agreement with Thailand. In  short meaning that "where money earnt, that is whewre money be taxed"

 

So for me being retired my pension is earned in Sweden and being taxed there of course. I believe this is the case for many countries.

 

glegolo

[chippendale]

If you don't have a work permit, then you won't ever have to worry about income taxes. No hassle

[elviajero]

3 hours ago, pbrock said:

In theory long stayers (more than 180 days) would have to pay tax in Thailand. Even if these are digital nomads, traders or whatever working for companies unrelated to Thailand.

Not necessarily. You only have a potential tax liability on foreign income if it’s received in Thailand in the same tax year it’s earned. 

 

3 hours ago, pbrock said:

So has there even been any clever investigation of the Thai tax authority against any of these groups, then caught and prosecuted?

“Groups, almost certainly not. Individuals maybe. But the cost of trying to prove and collect tax from foreigners not working for Thai companies probably wouldn’t be worth it.

[mstevens]

Many long-stay foreigners in Thailand on visas other than a work permit + visa extension have a Thai bank account.  If for any reason the Tax Department took a look at their bank account they might have a few questions to answer if the record of transactions suggested they may be working.

 

Many, many years ago, a friend of mine was teaching without a work permit and was paid in his local bank account.  He would close the account each year and open a new one with a new bank branch.  He thought that might help avoid Tax Department problems.

[lkv]

54 minutes ago, mstevens said:

If for any reason the Tax Department took a look at their bank account they might have a few questions to answer if the record of transactions suggested they may be working.

 

Unless they are some high profile cases like Alexandre Cazes (the Alpha Bay founder that apparently killed himself in a Thai jail after being arrested upon FBI request) or similar, or local Thai politicians from the opposition, nobody will be looking into any bank account.

 

54 minutes ago, mstevens said:

Many, many years ago, a friend of mine was teaching without a work permit and was paid in his local bank account.  He would close the account each year and open a new one with a new bank branch.  He thought that might help avoid Tax Department problems.

It would not help because nobody would bother.

Edited May 20, 2018 by lkv

[mstevens]

24 minutes ago, lkv said:

Unless they are some high profile cases like Alexandre Cazes (the Alpha Bay founder that apparently killed himself in a Thai jail after being arrested upon FBI request) or similar, or local Thai politicians from the opposition, nobody will be looking into any bank account.

 

It would not help because nobody would bother.

 

Certainly, no-one is going to take a random look at someone's account.  The worry is when people get pissed off, like the language school pissed off that their teacher left without giving notice to work at another school, or the spurned lover, or something like that.

[lkv]

6 minutes ago, mstevens said:

 

Certainly, no-one is going to take a random look at someone's account.  The worry is when people get pissed off, like the language school pissed off that their teacher left without giving notice to work at another school, or the spurned lover, or something like that.

Police or any other authorities cannot just walk into banks and look into accounts without Court orders, and Courts will not bother for language school teachers or spurned lovers. Too much hassle for nothing.

 

But that's just my opinion.

Edited May 20, 2018 by lkv

[mstevens]

6 minutes ago, lkv said:

Police or any other authorities cannot just walk into banks and look into accounts without court orders, and Courts will not bother for language school teachers or spurned lovers. Too much hassle for nothing.

 

But that's just my opinion.

That's not how it works.  The Tax Department gets tipped off about someone not paying tax.  They send a letter and request that person visit them at the Tax Department.  Fail to turn up and they can pursue an investigation in which they can check the activity in any bank account in Thailand.  Depending on what they find, who knows what could happen.  Odds of it happening are not great, but it's tip-offs that lead to this sort of thing - and these tip-offs often come from relationships gone bad, be they work, personal or whatever.

Edited May 20, 2018 by mstevens

[lkv]

18 minutes ago, mstevens said:

That's not how it works.  The Tax Department gets tipped off about someone not paying tax.  They send a letter and request that person visit them at the Tax Department.  Fail to turn up and they can pursue an investigation in which they can check the activity in any bank account in Thailand.  Depending on what they find, who knows what could happen.  Odds of it happening are not great, but it's tip-offs that lead to this sort of think happening and these tip-offs come from relationships, be they work, personal or whatever going bad.

Is that the same Tax Department that laughs when farangs walk in wanting to pay tax and they are being told that, as long as they don't work with a WP, they should not bother?

 

Ah, if someone pi##es someone else off, and that someone else greases some palms at the Tax department (for them to bother to take action and investigate) -because you see in Thailand you need to pay money to start an investigation- , that's a different story. It could indeed lead to what you are suggesting.

 

Other than that, nobody would care.

 

But i still believe that relationship gone wrong is not good enough to freeze bank accounts unless the people making the complaint are very connected.  Romance scam etc (for example), that's fraud and it's in a different boat. We are talking about "not paying tax", and that is a paradox since nobody in Thailand pays any tax on foreign income, since it was always earned "last year". And that includes all the local Thai elite.

Edited May 20, 2018 by lkv

[stevenl]

10 hours ago, jenny2017 said:

You only pay tax in Thailand if you're holding a work permit. That's when taxpaying starts. I guess you meant income tax. 

Not true, quite a few pensioners are paying taxes here, sometimes triggered by questions from back home about tax payments. So in order to avoid paying back home they pay here.

[stevenl]

9 hours ago, chippendale said:

If you don't have a work permit, then you won't ever have to worry about income taxes. No hassle

Again, not true.

[stevenl]

10 hours ago, glegolo said:

OMG this subject again.....   I give you an exemple. What concerns me as being a swede we have a tax-agreement with Thailand. In  short meaning that "where money earnt, that is whewre money be taxed"

 

So for me being retired my pension is earned in Sweden and being taxed there of course. I believe this is the case for many countries.

 

glegolo

For other countries it is charged in Thailand.

[glegolo]

3 minutes ago, stevenl said:

For other countries it is charged in Thailand.

Yes I know, but thought maybe good to widen your horizon a bit, and show that there are countries that have done this the proper way, and easiest way for their own citizens.

 

glegolo

[Tanoshi]

6 minutes ago, stevenl said:

For other countries it is charged in Thailand.

Most European Countries have reciprocal Tax Treaties with Thailand.

If your income is generated and taxed in your home Country, then it isn't taxable in Thailand, that would be double taxation.

[stevenl]

12 minutes ago, glegolo said:

Yes I know, but thought maybe good to widen your horizon a bit, and show that there are countries that have done this the proper way, and easiest way for their own citizens.

 

glegolo

I think many people would prefer the other way, officially having to pay taxes in Thailand. Since it is often not charged, they are getting away with not paying taxes at all. 

Looks like this is becoming more difficult though.

[stevenl]

10 minutes ago, Tanoshi said:

Most European Countries have reciprocal Tax Treaties with Thailand.

If your income is generated and taxed in your home Country, then it isn't taxable in Thailand, that would be double taxation.

Who mentions double taxation? Tax treaties often include it should be paid in the land where they are living. So not in home country but in Thailand.

[Tanoshi]

2 minutes ago, stevenl said:

Who mentions double taxation? Tax treaties often include it should be paid in the land where they are living. So not in home country but in Thailand.

Then please explain why thousands of expats have their foreign incomes paid directly into Thai banks every month, but are not taxed by Thai revenue. That would be current income, not income from previous years.

Answer, because if the foreign income exceeded their personal allowance, it has already been taxed and is therefore not subject to tax in Thailand.

 

Whilst that may not be true of all Countries, most European Countries have these tax agreements with Thailand.

[glegolo]

13 minutes ago, stevenl said:

I think many people would prefer the other way, officially having to pay taxes in Thailand. Since it is often not charged, they are getting away with not paying taxes at all. 

Looks like this is becoming more difficult though.

So I wonder if you even really like what you are saying yourself? I mean, you work during a lifetime in your home-country, pay into your pensionfond over maybe 45 years, and then you say that people overall would prefer that USA Sweden Britain Australia should give away that tax-income to Thailand.... You didn´t think this thru I guess.....

 

glegolo

[Sakeopete]

You are more likely to be extorted as the person making the claim than the person you are ratting on. Look how many foreigners have had drugs planted in their homes or items pocketed when they have invited police in to report a break-in or complain about a neighbor. Anyone who has been on TV long enough will remember.

[topt]

16 minutes ago, Tanoshi said:

Then please explain why thousands of expats have their foreign incomes paid directly into Thai banks every month, but are not taxed by Thai revenue. That would be current income, not income from previous years.

Answer, because if the foreign income exceeded their personal allowance, it has already been taxed and is therefore not subject to tax in Thailand.

 

Whilst that may not be true of all Countries, most European Countries have these tax agreements with Thailand.

Unfortunately I think the main reason is because the Thai revenue offices have not actively looked at this and bothered to make the effort. Plus the issue about proving income vs. savings.

There have been a couple of examples quoted (one very recently) where someone was re-claiming withheld tax on Thai bank interest and was called in by the local revenue office. 

 

Unfortunately the UK does not have a DTA with Thailand that is applicable to the state and private pension payments unless you are an ex government/forces employee.

 

As others have mentioned if you can make sure you are bringing in "savings" and not income from the current calendar year then currently you should be fairly safe. 

[topt]

The recent thread I referred to above - 

 

 

[simoh1490]

There's plenty of resident (and non-resident) foreigners in Thailand who pay income tax on savings, investments, property rental income and voluntarily pay tax on overseas earnings (using tax treaties) because the rate is lower - all those people interact with The Revenue in Thailand and I have no doubt that some have been investigated, for whatever reason, foreigners are not off limits!

[Tanoshi]

9 minutes ago, topt said:

Unfortunately the UK does not have a DTA with Thailand that is applicable to the state and private pension payments unless you are an ex government/forces employee.

Wrong.

https://www.gov.uk/government/publications/thailand-tax-treaties

[simoh1490]

17 minutes ago, topt said:

Unfortunately I think the main reason is because the Thai revenue offices have not actively looked at this and bothered to make the effort. Plus the issue about proving income vs. savings.

There have been a couple of examples quoted (one very recently) where someone was re-claiming withheld tax on Thai bank interest and was called in by the local revenue office. 

 

Unfortunately the UK does not have a DTA with Thailand that is applicable to the state and private pension payments unless you are an ex government/forces employee.

 

As others have mentioned if you can make sure you are bringing in "savings" and not income from the current calendar year then currently you should be fairly safe. 

The UK does have a DTA with Thailand.

[Minnehaha]

Long discussion and interesting BUT 

Per the thread title:

Has any foreigner ever been caught by Revenue dept and forced to pay tax on income? 

Anyone? 

[Estrada]

I am retired here. I do not get taxed on my UK pension, nor do I get taxed by the Thai Inland Revenue. I have a Thai tax I.D. as I have worked here 20 years ago. I reported to the Thai Inland Revenue office and they told me that they are not interested in collecting tax from me unless I want to claim back Thai tax on  bank interest and dividend withholding tax. In that case I would have to make a tax return.

[simoh1490]

5 minutes ago, Minnehaha said:

Long discussion and interesting BUT 

Per the thread title:

Has any foreigner ever been caught by Revenue dept and forced to pay tax on income? 

Anyone? 

From previous threads on this subject I recall a small number of people being required to pay tax on income from rental property in Thailand.

[Minnehaha]

Just now, simoh1490 said:

From previous threads on this subject I recall a small number of people being required to pay tax on income from rental property in Thailand.

Thanks.