Any Westerners long staying in Thailand - ever tax investigation?

[Peterw42]

7 minutes ago, Naam said:

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.

That's my point, 1,000s of expats send there monthly income to Thailand in the year it was earned and pay no tax in thailand. As you say, because its already been taxed in another country and "not" subject to thailand tax as others say.

 

[Naam]

4 hours ago, Peterw42 said:

4 hours ago, Naam said:

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.

That's my point, 1,000s of expats send there monthly income to Thailand in the year it was earned and pay no tax in thailand. As you say, because its already been taxed in another country and "not" subject to thailand tax as others say.

Fact is that Thai tax authorities don't care whether that income from abroad is already taxed or not.

[andux]

7 hours ago, Peterw42 said:

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

 

That law only applies to tax residents (i.e., those staying in Thailand for more than 6 months in a calendar year). Most tourists don't stick around that long.

 

7 hours ago, Peterw42 said:

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.

 

I'm guessing that there are specific cases that are easy to prove. For example, an actor who lives in Thailand, goes to Los Angeles to film a movie, earns millions of dollars, and then brings part of that to Thailand in that same year for whatever reason they may have for not waiting longer. That person is in the public spotlight, so he probably won't try anything funny.

 

For the average person bringing a few hundred thousand baht from unknown sources, the government won't even bother. Furthermore, the tax on 300,000 baht, for example, is like 4,000 baht after allowances. Getting court orders and launching international investigations just for the tiny possibility of collecting 4,000 baht from someone doesn't make much sense.

 

[pbrock]

13 hours ago, Peterw42 said:

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

No, because one also has to be tax resident in Thailand which requires to say in aggregate more than 180 days in Thailand in a calendar year. http://www.rd.go.th/publish/6045.0.html

Most tourists stay much shorter, therefore are not tax resident.

13 hours ago, Peterw42 said:

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.

Now you are mixing up ability to determine, the ability of investigation and enforcement with what is legal and what not.

How they are doing in some Western countries is to shift the burden of proof. They send a tax bill and will only revise it when proven otherwise.

[Naam]

22 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.

none of the money i brought into Thailand during the last 14 years was taxed as our assets are held in a in a Singapore corporate account.  

[Naam]

On 8/5/2018 at 6:38 AM, greenchair said:

After you deposit 10 million in your bank, the bank will inform the tax department.

that's a fairy tale

[THAIJAMES]

In regards to bringing money earned overseas to Thailand.  If you don't have a company in Thailand, then there is no need to declare to tax authorities money that you bring in for your own personal use.

 

If you do have a company and this income was generated as part of your business, make sure the keep the money overseas until the next tax year and no tax is due. (crazy tax loophole but its the law)

 

If your company generates its income overseas and you manage wisely, you should pay almost no taxes.

 

However in my more than 18 years having companies here in Thailand I have been "investigated" a number of times.  (just called in to pay some more taxes)

 

Once every few years they see that you have not paid much taxes and they ask you to "contribute" by basically giving you a random amount of tax to pay. 

 

This amount has usually has only been  1-2 % of company declared income for that year.

I just pay it to avoid problems for a few more years. 

 

So in the overall picture it is a small amount.  But they will do this regardless if you have had a profit or loss for that year. (It has usually been when company did not make a profit)

 

So a lot of companies that generate money overseas or in cash just make sure that they are paying a few % in taxes to keep the tax people off their back.

 

Thats the Thai way of collecting taxes because a lot of people get their income in cash and they need to use other methods to asses and collect taxes.

 

 

Edited August 6, 2018 by THAIJAMES

[greenchair]

5 hours ago, Naam said:

that's a fairy tale

That's a vague answer. 

Does it mean fairytail in that they report to the tax department every deposit for the year. 

Or fairtail they don't report over 10 million per year in deposit? ?

[elviajero]

On 8/4/2018 at 8:14 PM, gk10002000 said:

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?

It would be considered unearned income. Received is probably a better way of putting it than 'earned'.

 

Here is a link to the Revenue Department website. All the info you need is there. http://www.rd.go.th/publish/6045.0.html

[elviajero]

On 8/5/2018 at 6:09 AM, Peterw42 said:

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

No it wouldn't. You would have to live in the country for more than 180 days of the tax year before any potential tax liability on foreign income would kick in. Visitors that stay longer than 6 months are considered "tax residents".

[Naam]

19 hours ago, greenchair said:

On 8/6/2018 at 7:51 AM, Naam said:

that's a fairy tale

That's a vague answer. 

Does it mean fairytail in that they report to the tax department every deposit for the year. 

Or fairtail they don't report over 10 million per year in deposit? ?

fairy tale applies to both as there is no established standard for reporting any amount.

source: Siam Commercial Bank early 2017

 

[Rally123]

At the beginning of this year I kept getting requests from my UK bank regarding my paying of tax in Thailand. My wife is named in my joint account also received these notifications. They also wanted something called a 'TIN'. I haven't a clue as to what they were on about as I don't, or my wife, pay tax in Thailand.

Anyway after about 4 requests for this info we received no more. Can someone please explain in simple terms why they need to know how much I pay tax here?

 

 

[ubonjoe]

2 minutes ago, Rally123 said:

They also wanted something called a 'TIN'. I haven't a clue as to what they were on about as I don't, or my wife, pay tax in Thailand.

A TIN is a Tax Identification Number. You can get one at the Thai revenue department.

[Rally123]

1 minute ago, ubonjoe said:

A TIN is a Tax Identification Number. You can get one at the Thai revenue department.

Should every farang have one and what about my wife?

[ubonjoe]

7 minutes ago, Rally123 said:

Should every farang have one and what about my wife?

I would say most don't have one.

More than one UK bank has been asking for one.

Here is topic about one case.

 

[Horace]

On 5/21/2018 at 3:42 AM, 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 thing - and these tip-offs often come from relationships gone bad, be they work, personal or whatever.

This is correct.  For example, imagine getting a windfall from a selling a company in Europe or the US, and then bringing the funds into Thailand the same year as the sale.  And then a tip-off from a disgruntled girlfriend, business partner, competitor, jealous neighbor.  Odds are not great, but the sort of jealousy that leads to those kind of tip-offs is not uncommon here.  

[kannot]

On 5/20/2018 at 8:47 PM, 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. 

A friend of mine had no work permit, owned about 70 condos and he was checked for tax about 2  years ago. He  did not work in the business he  appointed others to do it for him and did  not need a  work permit.

[andux]

5 hours ago, Rally123 said:

At the beginning of this year I kept getting requests from my UK bank regarding my paying of tax in Thailand. My wife is named in my joint account also received these notifications. They also wanted something called a 'TIN'. I haven't a clue as to what they were on about as I don't, or my wife, pay tax in Thailand.

Anyway after about 4 requests for this info we received no more. Can someone please explain in simple terms why they need to know how much I pay tax here?

 

This seems related to the new Automatic Exchange of Information (http://www.oecd.org/tax/transparency/automaticexchangeofinformation.htm). The basic idea is that banks exchange non-resident financial account information with the tax authorities in the account holders’ country of residence.

 

In your case, you are not a resident of the UK, and so your bank doesn't know what country to share information with. Thailand will start exchanging information in 2020-2021, so in theory you could get a Thai TIN number and give that to your UK bank. They will then start sharing information with Thailand in a couple of years.

 

As usual in these types of situations, proceed with caution.

 

 

[Horace]

Death and taxes are inevitable so this is an issue all of us face.  For  example, what if a parent dies in the U.S. and leaves, say US$2 million, to a son or daughter (or anyone else for that matter) who is Thai resident for tax purposes and lives in Thailand legally on a permanent basis (PR status, Thai national or dual national).  No expert of US probate law, but I don't think there is any probate tax on an inheritance of that amount in the US. 

 

Are the inherited funds subject to Thai tax when the funds are remitted into Thailand?  If it is subject to Thai tax, can that tax be avoided by remitting the funds into Thailand a year after the funds are "inherited"?  (And, as a bonus, question, when is Thai tax resident deemed to have "earned" or acquired the foreign funds?  When there is a right to the funds or when the funds are actually distributed to the Thai tax resident?) 

 

Anyone living in Thailand with parents in the US or Europe that are reasonably comfortable faces this issue.  A US$2 million inheritance is not really a large amount of money and I can imagine that its not unusual for Thai tax residents to inherit money from relatives abroad.  Anyone know? 

[nrasmussen]

A TIN is a Tax Identification Number. You can get one at the Thai revenue department.

I tried to get one when my Danish bank requested it, but since I don't pay any taxes (I don't have any income) they (Hat Yai office) refused to issue a TIN.

I told my bank, and they just said: "OK, if you don't have it, we don't need it."

[topt]

11 hours ago, Rally123 said:

At the beginning of this year I kept getting requests from my UK bank regarding my paying of tax in Thailand. My wife is named in my joint account also received these notifications. They also wanted something called a 'TIN'. I haven't a clue as to what they were on about as I don't, or my wife, pay tax in Thailand.

Anyway after about 4 requests for this info we received no more. Can someone please explain in simple terms why they need to know how much I pay tax here?

 

 

Rally if you are a UK citizen just give them your UK NI no. If you are registered with HMRC as not registered for tax (and genuinely don't need to pay any) it won't make any difference and will solve all the issues.

If you put CRS (Common Reporting Standards) in the TV search function it will bring up a whole host of threads over the last 18 months. As someone has suggested if you get a TIN (as many people have to reclaim tax on interest withheld in Thai accounts) it potentially gives them an obvious target for the future when/if Thai Revenue implement CRS themselves.

[Naam]

15 hours ago, Horace said:

Death and taxes are inevitable so this is an issue all of us face.  For  example, what if a parent dies in the U.S. and leaves, say US$2 million, to a son or daughter (or anyone else for that matter) who is Thai resident for tax purposes and lives in Thailand legally on a permanent basis (PR status, Thai national or dual national).  No expert of US probate law, but I don't think there is any probate tax on an inheritance of that amount in the US. 

 

Are the inherited funds subject to Thai tax when the funds are remitted into Thailand?  If it is subject to Thai tax, can that tax be avoided by remitting the funds into Thailand a year after the funds are "inherited"?  (And, as a bonus, question, when is Thai tax resident deemed to have "earned" or acquired the foreign funds?  When there is a right to the funds or when the funds are actually distributed to the Thai tax resident?) 

 

Anyone living in Thailand with parents in the US or Europe that are reasonably comfortable faces this issue.  A US$2 million inheritance is not really a large amount of money and I can imagine that its not unusual for Thai tax residents to inherit money from relatives abroad.  Anyone know? 

Thailand does not levy any inheritance tax. transfer of any amount inherited is not income! as simple as that, case closed.