Any Westerners long staying in Thailand - ever tax investigation?

[topt]

49 minutes ago, OJAS said:

Not 100% accurate - see my posting at #36.

I thought you were saying the same thing?

[OJAS]

18 hours ago, topt said:

I thought you were saying the same thing?

He stated: "the UK double taxation agreement only applies to Civil Service UK pensions and only to those  individuals holding Thai citizenship".

 

Whereas Article 19(2)(a) states: "Any pension paid by the Contracting State or a political subdivision or a local authority thereof to any individual in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof shall be taxable only in that State." In other words, not just Civil Service occupational pensions, but local authority ones as well. Hence my reference to "public sector".

 

And he has completely overlooked the fact that Article 7 covers income generated from UK properties.

 

On the other hand, I am not aware of any provision which specifically restricts the application of the agreement to Thai nationals, as he contends.

Edited May 24, 2018 by OJAS

[ubonjoe]

I think it is time for this topic to get back on topic. The topic is not about the DTA for the UK or for any other country.

This is the title of the topic. "Any Westerners long staying in Thailand - ever tax investigation?".

 

[Thingamabob]

For heaven's sake leave this alone. If you go on and on about this you will generate unwanted attention. If you don't work here you don't pay tax. End of story.

[stevenl]

25 minutes ago, Thingamabob said:

For heaven's sake leave this alone. If you go on and on about this you will generate unwanted attention. If you don't work here you don't pay tax. End of story.

So why did you put this topic back in the attention by posting in a 1.5 months old thread?

[Curious Jorge]

 

On 5/21/2018 at 12:26 PM, Paulbuick1 said:

Those who live in Thailand for more than half the year are considered to be resident in the country for the purposes of tax. If you are resident then you are expected to pay taxes on all income that you earn worldwide. If you are not a resident and are in the country for less than 180 days each year then you are only expected to pay tax on the income that you get from within Thailand.

On 5/21/2018 at 9:29 AM, impulse said:

I envision the day that some will be stopped on exit at Swampy and presented with a tax bill based on years and years of unreported earnings that come to light as tax department technology develops to where they can figure out how much that travel blog is making, and tax treaties share more and more information.  Or, fill in a thousand other tricks that work today.

 

My bet for the first thing that's going to bite someone?  That idea that income earned outside the country in one year isn't taxable in Thailand if it's brought in the following year.  As if you can segregate money in your account so that only the untaxable part of your savings account comes to Thailand.

Can anyone shed a bit more light on this for me and answer any/all of the Qs below?

 

It looks like those of us who have income generated abroad are in the clear as long as we don't go over 180 days. If we stay longer then, in theory, this income is taxable, subject to any DTA (in my case there is no relevant DTA). Reading these posts though, it sounds like you are still not liable for Thai income tax on foreign income (even if you go over the 180 days, I mean) as long as the money you bring into Thailand has been earned in a previous tax year.

 

Now I get that it's one thing to be technically liable and another to actually get a bill / knock on the door, but I'd still like to know if this "previous year" thing is official/legal (where is it stated?) and how you would show that the money you had brought in had been earned in a previous year. Would you have to run separate accounts?

 

Also, is the Thai tax year just the calendar year?

 

 

[stud858]

One year while working under a WP for a school I was handed a tax refund cheque.  The school took care of initiating and submitting tax,  but I was amazed that I got some back.  

Didn't ask for details.  Was only about 2000 Baht. 

I think many Thai businesses just skip the tax thing. There incomes are so low to start with and there is a tax free threshold anyway.

Some free threshold business types require withholding tax that you need to pay but will get back if still in the tax free threshold.  Eg. Renting out a house.  You need to submit withholding tax.

 

I've never heard of any one being hassled regarding taxes.. I wouldn't worry.  Go about your finances. 

 

Edited August 2, 2018 by stud858

[homeseeker]

On ‎5‎/‎24‎/‎2018 at 9:44 AM, ubonjoe said:

I think it is time for this topic to get back on topic. The topic is not about the DTA for the UK or for any other country.

This is the title of the topic. "Any Westerners long staying in Thailand - ever tax investigation?".

 

I have not read all the pages but my answer to the question is:

 

Almost 20 years in Thailand on extension renewals (retirement) and no tax investigations.

If you stay under the radar and do not ask for a tax investigation all will be ok.

Should be simple....

[Wilson Smith]

13 hours ago, stud858 said:

I've never heard of any one being hassled regarding taxes.. I wouldn't worry.  Go about your finances. 

Now that sounds like some bad advice!

[stud858]

25 minutes ago, Wilson Smith said:

Now that sounds like some bad advice!

Is that because you've heard of someone being fined for not registering or paying tax?

 

[stud858]

25 minutes ago, Wilson Smith said:

Now that sounds like some bad advice!

Is that because you've heard of someone being fined for not registering or paying tax?

 

[mokwit]

Would be interested to know how RD looks at tax history for those who have been registered for tax, worked in an informal situation or didn't work and then returned to a tax registered situation e.g. many long time resident English teachers (of yore?) who might have worked with a WP + taxed, then worked "informally" and then moved back to a WP+ Tax situation. Does the RD inquire about what you have been doing in the interim between tax paying jobs and investigate for any back tax deemed due?

[stud858]

33 minutes ago, mokwit said:

Would be interested to know how RD looks at tax history for those who have been registered for tax, worked in an informal situation or didn't work and then returned to a tax registered situation e.g. many long time resident English teachers (of yore?) who might have worked with a WP + taxed, then worked "informally" and then moved back to a WP+ Tax situation. Does the RD inquire about what you have been doing in the interim between tax paying jobs and investigate for any back tax deemed due?

Good point. I'm registered and have been for a long time and then a long time not submitted anything. Never been investigated. I know in Australia audits happen often. My brother was audited. But in Thailand I've never heard of any body being audited (exception,politicians) . My condo submits documents to land office with accountant audit failure documents and they don't care.

I have no evidence to suggest tax checking exists in Thailand.

[balo]

I think we can conclude that Thais do not care , unless you own a company. 

Edited August 4, 2018 by balo

[gk10002000]

On 5/20/2018 at 1:06 PM, elviajero said:

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. 

 

“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.

Just as a question, when you say money is "earned".  In the USA that means wages, salaries or tips and one would have a W2.  Do you think the Thais would consider passive income, i.e. dividends, interest, capital gains as money that is "earned"?  Do they have such distinctions in their policies?

[greenchair]

After you deposit 10 million in your bank, the bank will inform the tax department. I'm not sure what the time frame of depositing the 10 million is. I went out to changwattana tax office and filled the forms to pay tax myself, even though I didn't have to. I use the roads, the health care, and many other services. It's only right to pay some taxes. I always feel better about it. At least I can say, I pay my taxes whilst criticising any government office. 

[Naam]

On 5/21/2018 at 9:25 AM, Happy enough said:

as far as i understand it you are supposed to pay witholding tax on any money brought over here, that includes money earnt abroad

wrong understanding!

[james1995]

Yeah right.  Taxing a tourist?  I'm having a laugh.  Hardly anybody pays taxes in Thailand.  Not even Thais.

[DavisH]

Only when I make claims (such as insurance), to reduce my taxable income. So, usually, if you are owed money by the government, they will ask for evidence before you get your tax return cheque. 

[Peterw42]

I think people tend to overcomplicate this. Basically, money is paid (employer, business income,pension) into a bank account and then subject to the taxation laws of that country, 5 minutes after its in the account, its then savings. Presuming you meet, or will meet, that countries taxation laws, you are free to do anything later with your savings.

 

Its only when employer, business, pension income, somehow bypasses the original home countries account and tax laws, that it becomes subject to Thai taxation. Then Tax treaties take over, providing the means to tax non-taxed income paid directly into a Thai account, either at the source or in Thailand, and some safeguards that its not being taxed twice.

 

Is anyone, besides drug dealers and money launderers, managing to get chunks of money into thailand that hasn't already been taxed. If its already been taxed, its savings not income.

[anon789561]

2 hours ago, Naam said:

wrong understanding!

that's helpful. reply to a comment from months ago just to simply say wrong understanding without adding why. cheers for that

[OJAS]

29 minutes ago, Peterw42 said:

Its only when employer, business, pension income, somehow bypasses the original home countries account and tax laws, that it becomes subject to Thai taxation. Then Tax treaties take over, providing the means to tax non-taxed income paid directly into a Thai account, either at the source or in Thailand, and some safeguards that its not being taxed twice.

My understanding is that it is the double taxation treaties which determine at the outset the extent to which income derived in a particular home country can legitimately bypass that country's taxation requirements.

[KittenKong]

2 hours ago, Peterw42 said:

I think people tend to overcomplicate this. Basically, money is paid (employer, business income,pension) into a bank account and then subject to the taxation laws of that country, 5 minutes after its in the account, its then savings.

 

2 hours ago, Peterw42 said:

Is anyone, besides drug dealers and money launderers, managing to get chunks of money into thailand that hasn't already been taxed. If its already been taxed, its savings not income.

 

I am neither a money-launderer nor a drug dealer, but I manage to do this easily. How? Because my income is paid tax-free where I receive it and I never send it here in the year in which it is earned.

 

Thai tax law is quite specific in that foreign income is considered to be taxable in Thailand if it is received in Thailand in the year in which it was earned. So your five-minute-rule never applies under any circumstances. To be exempt from Thai tax the money must be savings from last year or earlier.

[Tanoshi]

2 hours ago, Peterw42 said:

Is anyone, besides drug dealers and money launderers, managing to get chunks of money into thailand that hasn't already been taxed.

Yes, British pensioners.

Hundreds, if not thousands of British pensioners have their pension paid directly into their Thai bank accounts.

It is neither eligible for tax in the UK or Thailand because it falls below the personal taxation allowance of both Countries.

[SpaceKadet]

2 hours ago, Peterw42 said:

...

Is anyone, besides drug dealers and money launderers, managing to get chunks of money into thailand that hasn't already been taxed. If its already been taxed, its savings not income.

I do, as do a lot of expats working in exotic locations that do not impose taxation.

[Peterw42]

41 minutes ago, KittenKong said:

 

 

I am neither a money-launderer nor a drug dealer, but I manage to do this easily. How? Because my income is paid tax-free where I receive it and I never send it here in the year in which it is earned.

 

Thai tax law is quite specific in that foreign income is considered to be taxable in Thailand if it is received in Thailand in the year in which it was earned. So your five-minute-rule never applies under any circumstances. To be exempt from Thai tax the money must be savings from last year or earlier.

That would mean that all the spending money in tourists pockets is subject to Thai tax, if they earned it this year. 

You may have a unique situation where you you make money and dont have to pay tax but for most its unavoidable, and after you earn it and pay the appropriate tax its no longer income, its just money in your bank account that you can do whatever you like with. The only time Thai gov can tax it is if it gets "paid" directly into a thai account. Transferring your own money isnt income.

There is a difference between transferring your own money already earned in another country and an income paid directly into thailand. 

How can the Thai gov determine which dollar I transfer, the one I earned last week or the one I earned last year, they can only ever look at the source of the money, ie: if it says "monthly salary Mr smith" or transfer from savings account.

Edited August 5, 2018 by Peterw42

[Peterw42]

1 hour ago, KittenKong said:

 

 

I am neither a money-launderer nor a drug dealer, but I manage to do this easily. How? Because my income is paid tax-free where I receive it and I never send it here in the year in which it is earned.

 

Thai tax law is quite specific in that foreign income is considered to be taxable in Thailand if it is received in Thailand in the year in which it was earned. So your five-minute-rule never applies under any circumstances. To be exempt from Thai tax the money must be savings from last year or earlier.

Woudnt that mean that anyone on the 65k a month income for a retire visa has a huge unpaid tax liability ?

By it very definition it's income earned this month, not last year.

 

 

[Naam]

1 hour ago, KittenKong said:

3 hours ago, Peterw42 said:

Is anyone, besides drug dealers and money launderers, managing to get chunks of money into thailand that hasn't already been taxed. If its already been taxed, its savings not income.

 

I am neither a money-launderer nor a drug dealer, but I manage to do this easily. How? Because my income is paid tax-free where I receive it and I never send it here in the year in which it is earned.

 

Thai tax law is quite specific in that foreign income is considered to be taxable in Thailand if it is received in Thailand in the year in which it was earned. So your five-minute-rule never applies under any circumstances. To be exempt from Thai tax the money must be savings from last year or earlier.

first paragraph applies to me "same same not different". however Thai tax law does not contain a clause that transfers to Thailand  are tax free if savings/not same year earned. it's Thai tax practice that they are not taxed.

[Naam]

5 minutes ago, Peterw42 said:

Woudnt that mean that anyone on the 65k a month income for a retire visa has a huge unpaid tax liability ?

By it very definition it's income earned this month, not last year.

Thai tax practice assumes that a retiree's income has been taxed already before being transferred to Thailand and therefore does not levy any tax.

[manjara]

Not as an individual, but my Thai company got on the Tax dept radar and I had to spend some serious tea-money to make it go away. I couldn't even put that on the company books so it came out of my pocket. It's not easy to have expenses on a Thai company, even legitimate ones! (and forget overseas expenses!)