How expats can live in Thailand and legally avoid income tax

[jkthai]

Good thread

 

, this is a major reason for me relocating here.

 

I also am retired and on dividends/savings for income

 

I have tried a  couple of lawyers to obtain a TIN and both looked very bemused whilst explaining there is no point in bothering.

 

My reason for not trying the revenue office directly is I travel within LOS for most of the winter and spend 4/5 Months back in Europe , so although I am over 183 day most years , I don;t have a permanent address.

 

Would be interested if anyone else in this position ,that could offer any insights

[Crisu]

 

 

 

 

 

I have tried a  couple of lawyers to obtain a TIN and both looked very bemused whilst explaining there is no point in bothering.

 

My reason for not trying the revenue office directly is I travel within LOS for most of the winter and spend 4/5 Months back in Europe , so although I am over 183 day most years , I don;t have a permanent address.

 

Would be interested if anyone else in this position ,that could offer any insights

 

 

The only reason why i applied for a thai TIN was, that some banks are asking for it and i want just to be prepared in case my banks should request it in future too.

I did it in bangkok revenue office without lawyer but with a thai friend.

As reason for asking for thai a TIN i told them i want to ask for return of withholding tax on my thai fixed deposit account.

 

I showed them my rental agreement, thai driving licence, bank book and passport.

First they asked me for work permit which i not have. What they need is a proof of adress so any other document would be good e.g. certificate of redidence from immigration

 

PS: I am not sure if i really will make a tax declaration for this withholding tax since i have the TIN now and the tax is not a huge amount.

Maybe its better to no wake up a sleeping dog

 

 

 

 

 

 

 

[scubascuba3]

As many people are transferring in to Thailand current years income (i.e. pensions), isn't it a matter of time before they try to tax it?

[Pib]

25 minutes ago, scubascuba3 said:

As many people are transferring in to Thailand current years income (i.e. pensions), isn't it a matter of time before they try to tax it?

Anything is possible, but a will depend on the tax agreement that may exist between the two countries.  You can check to see if a tax treaty exists between a person's home country and Thailand at below Thai Revenue Dept webpage.

http://www.rd.go.th/publish/766.0.html

 

For example, below partial quote from the from USA and Thailand Double Tax Agreement talking taxing of pension, annuities, etc.   Basically taxable by the country paying the pension, annuity, etc.   For example US social security, military retirement, just any govt pension is not taxable by Thailand...but you still have give Uncle Sam his tax share since US persons are taxed on a worldwide basis.

 

Quote

 

ARTICLE 20 Pensions and Social Security Payments

1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.

2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first- mentioned State.

3. Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State. The term "annuities" as used in this paragraph means a stated sum paid periodically at stated times during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered).

 

 

[AlexRich]

In the same year it is earned? 

 

Is the tax year in Thailand a calendar year? 

Does the period mean 12 months?

 

So if you received a dividend in a foreign account in December, you could transfer it to a Thai Bank in January without a tax liability? Or does it have to be at least 12 months later? In which case you can only transfer the following December?

[scubascuba3]

In the same year it is earned? 
 
Is the tax year in Thailand a calendar year? 
Does the period mean 12 months?
 
So if you received a dividend in a foreign account in December, you could transfer it to a Thai Bank in January without a tax liability? Or does it have to be at least 12 months later? In which case you can only transfer the following December?

The way i see it, if you transfer cash over (previous years income Jan-Dec) then it doesn't count, but if you transfer a pension straight over then that is current income, but they don't appear to care so let's not get too excited, but i do wonder if one day they might decide to try to collect it

[watcharacters]

On 3/6/2019 at 1:58 PM, myshem said:

Not paying tax in EU is not difficult either.

 

Tax evasion isn't limited to any particular country.    

 

There are however a slew of loopholes to allow for tax avoidance for  offshore workers..

[AlexRich]

4 minutes ago, scubascuba3 said:

18 minutes ago, AlexRich said:

In the same year it is earned? 
 
Is the tax year in Thailand a calendar year? 
Does the period mean 12 months?
 
So if you received a dividend in a foreign account in December, you could transfer it to a Thai Bank in January without a tax liability? Or does it have to be at least 12 months later? In which case you can only transfer the following December?

The way i see it, if you transfer cash over (previous years income Jan-Dec) then it doesn't count, but if you transfer a pension straight over then that is current income, but they don't appear to care so let's not get too excited, but i do wonder if one day they might decide to try to collect it

Sure, but it would be useful to have clarity on this point and play within the rules. As technology becomes more sophisticated and foreign banks cooperate more you never know when they might want to audit a Farang. A risk to anyone who has assets, family etc in Thailand and plans to stay forever.

[wordchild]

1 hour ago, AlexRich said:

Sure, but it would be useful to have clarity on this point and play within the rules. As technology becomes more sophisticated and foreign banks cooperate more you never know when they might want to audit a Farang. A risk to anyone who has assets, family etc in Thailand and plans to stay forever.

if you want COMPLETE clarity on your personal tax situation, then better to go talk to a Thai Tax lawyer.

However, FWIW, the exemption (or rather exclusion from your Thai tax calculation) is  for income earned outside Thailand , in a prior tax year (1 Jan to 31 Dec): so, on 1 Jan you bring into country income earned (outside Thailand)  the day before, ie  Dec 31 then you have no Thai tax liability  on that income.

This is an established part of Thai Tax Law; the exemption/exclusion is available to both Thai nationals and foreign residents of Thailand. 

The OP posted a document from one of Bangkok's leading law firms and there has been a fair amount posted on this forum, on this subject, over many, many years. 

How long this rather agreeable tax treatment remains ,  is another matter!  

Edited March 10, 2019 by wordchild

[Rod the Sod]

On 3/9/2019 at 2:53 PM, Sheryl said:

 

Yikes! Is that true even if you had no tax liability???

 

I've been here some 15 years and never "declared tax". I have just put money in a Fixed Deposit so was thinking of trying to claim the refund on the tax witheld on the interest. but 15 * 200 is likley more than the witheld tax will be.

 

If thsi is really ther case then I will nto bother.

 

But most countries do not require one to file a tax declaration if no tax liability.

 

???

Hi Sheryl

 

When I tried to explain why I needed to have a certified tax return (without one you will not get a Tax Cert of Res) the Tax Officer thought I had lost it. I then showed him that for my TB200 penalty investment I would get back TB1,800 from the Tax Office as repaid Withholding Tax. That makes sense in itself. I am fortunate enough to have some shares in a Swiss Company and they withhold 35% tax from my dividend. With a Thai Tax Cert of Res I can get 25% of that back. That is worth about £2,200 a year to me. So all in all with the TB1,800 it just has to be done.

 

So whilst I do not have to fill in a tax return as I am not liable to tax, I chose to do so and pay the penalty being the only way to get this precious letter for Switzerland.

 

Just a rough calculation for you. If you get TB1,800 for 15 years then for a penalty of TB3,000 (15x200) you will get back TB27,000. Your choice, but I would certainly check it out.

 

Hope it helps.

 

Cheers

 

RtS

[topt]

14 hours ago, Rod the Sod said:

Just a rough calculation for you. If you get TB1,800 for 15 years then for a penalty of TB3,000 (15x200) you will get back TB27,000. Your choice, but I would certainly check it out.

I think (but may be wrong) that you can only claim for 2 (possibly 3?) years of back claims.

[kiever]

On 3/6/2019 at 10:59 AM, Rod the Sod said:

Oznomad, first go to your local Tax Office and register for tax (take passport, Blue Book etc.) and they give you a number. The tax year runs Jan 1 - Dec 31 and so before end March go and ask to complete a tax return taking your Tax Number with you. If you are late they charge you TB200 penalty. They will probably complete it for you. If you are reclaiming withholding tax on Bank deposit interest you need a certificate from your Bank beforehand (just ask them for it). After two weeks you receive your tax refund. So that is your tax registration and return completed. Now armed with a copy of your tax return (duly stamped and signed by the Tax Office to show it is legit) and usual ID/Blue Book papers you go to the Department that issues Tax Residency Letters. I asked the first tax officer and he gave me the details for my area (if you are in Wattana BKK I can let you know these). The only other thing you need do is photocopy your passport pages and highlight the entry and exit stamps. You need to show that you have been in Thailand for 181 days (I think or thereabouts), so I created a table in "Word" that showed them the dates and I cross referenced to the photocopy stamp pages. They were happy that I had taken away the hard work for them and was told to return 2 weeks later. I claimed Tax Residency letters for 2017 and 2018 and on the due date, there they were. Without these you cannot claim tax back under double taxation laws so well worth the small amount of effort involved. Good luck. Let me know if you need to know anything else. RtS

 

Hello. First of all thank you for your post. I was trying to exactly same thing. I spent more than 180 days in Thailand until today in 2019. I have some questions:

 

I need tax residency letter for 2019. For that :

- I need to wait until first three months of  2020 to apply 2019 tax residency certificate ? Because I can only complete pnd90 for 2019 in first three months of 2020 and until end of March ? 

- I don’t want to pay any taxes in Thailand. Because I have no income in Thailand also I didn’t bring any money from overseas same year I Earned. I transferred money to Thailand that I earned previously years. In this case I will pay no tax in Thailand ? 

- in tax office , they will help me to fill tax return ? and again ,I should complete pnd 90 until end of March of 2020 ? Not before ? 

- is it ok to pay zero tax and complete pnd90 tax return with zero income - zero tax ? 

- and do you think I should get help from accountants? 

- I quoted for tax residency letter from law offices between 4500 baht -30000 baht. Your post is great. Almost for one year I was trying to find answers for this. Many thanks again. 

 

[Rod the Sod]

17 hours ago, kiever said:

 

Hello. First of all thank you for your post. I was trying to exactly same thing. I spent more than 180 days in Thailand until today in 2019. I have some questions:

 

I need tax residency letter for 2019. For that :

- I need to wait until first three months of  2020 to apply 2019 tax residency certificate ? Because I can only complete pnd90 for 2019 in first three months of 2020 and until end of March ? 

- I don’t want to pay any taxes in Thailand. Because I have no income in Thailand also I didn’t bring any money from overseas same year I Earned. I transferred money to Thailand that I earned previously years. In this case I will pay no tax in Thailand ? 

- in tax office , they will help me to fill tax return ? and again ,I should complete pnd 90 until end of March of 2020 ? Not before ? 

- is it ok to pay zero tax and complete pnd90 tax return with zero income - zero tax ? 

- and do you think I should get help from accountants? 

- I quoted for tax residency letter from law offices between 4500 baht -30000 baht. Your post is great. Almost for one year I was trying to find answers for this. Many thanks again. 

 

For the year ending 2019 you go in March 2020 and complete a Tax Return. They will help you and you simply tell them you have no earned income and you are doing this to get a refund of WT. They will be quite happy with that and you will not get a tax demand. Income from previous years appears to be treated as savings and is not subject to Thai tax.

 

The Tax Man thought it was hilarious that I wanted to complete a zero tax return and pay a late fee of TB200 for 2017, until I explained how much I would get back from Switzerland in refunded WT. Then he got it, so no problems doing that. No need for an Accountant if you follow my guide.

 

Glad I could help.

 

Cheers

 

Rod

[topt]

13 minutes ago, Rod the Sod said:

For the year ending 2019 you go in March 2020 and complete a Tax Return.

You have until March 31st to file for the previous year. Best to go in January as the tax office gets a lot busier in March. 

[SantiSuk]

1 hour ago, topt said:

You have until March 31st to file for the previous year. Best to go in January as the tax office gets a lot busier in March. 

Stated more fully "You have until March 31st to file for the previous year without any penalty being levied".

 

However filing late only incurs a 200baht charge.

 

I don't know whether the 200 baht penalty increases over time - I typically file in July/August when there are very few people in the local tax office and it's still only 200 baht

[kiever]

14 hours ago, Rod the Sod said:

For the year ending 2019 you go in March 2020 and complete a Tax Return. They will help you and you simply tell them you have no earned income and you are doing this to get a refund of WT. They will be quite happy with that and you will not get a tax demand. Income from previous years appears to be treated as savings and is not subject to Thai tax.

 

The Tax Man thought it was hilarious that I wanted to complete a zero tax return and pay a late fee of TB200 for 2017, until I explained how much I would get back from Switzerland in refunded WT. Then he got it, so no problems doing that. No need for an Accountant if you follow my guide.

 

Glad I could help.

 

Cheers

 

Rod

MAny thanks for your help and answer. 

I have lots of wt tax in my home country , but I have no wt in Thailand because I have no deposit account in thailand. 

This is a problem ? Tax man will want to see a proof of wt in Thai bank ? Or it will be enough to declare I will get back wt from my home country and I have no wt in Thailand ? 

Edited August 30, 2019 by kiever

[Rod the Sod]

2 hours ago, kiever said:

MAny thanks for your help and answer. 

I have lots of wt tax in my home country , but I have no wt in Thailand because I have no deposit account in thailand. 

This is a problem ? Tax man will want to see a proof of wt in Thai bank ? Or it will be enough to declare I will get back wt from my home country and I have no wt in Thailand ? 

I would not worry. Just go and say you want to be a good citizen and keep all your papers in order and file a zero tax return.

[kiever]

Thank you so much.  You answered all questions in my mind 

[watcharacters]

On 3/9/2019 at 2:53 PM, Sheryl said:

I've been here some 15 years and never "declared tax". I have just put money in a Fixed Deposit so was thinking of trying to claim the refund on the tax witheld on the interest. but 15 * 200 is likley more than the witheld tax will be.

 

When I checked into a savings account refund,  receiving the tax ID number required producing my home country tax returns along with other documents.

 

I chose to let the government keep the  withholdings on my bank account.

 

[topt]

1 hour ago, watcharacters said:

 

When I checked into a savings account refund,  receiving the tax ID number required producing my home country tax returns along with other documents.

 

I chose to let the government keep the  withholdings on my bank account.

 

Where and how long ago was this?

[kidcosmique]

Hi all, thank you for this topic, it's making me very excited ;-) 

 

I have a LTD company in UK in which I have some capital. I have received an offer for a perm job in Thailand and I've been trying to find out what is the best option for me for the duration of my planned 3 year stay. Closing the company and withdrawing using ER (10% on all capital + £2K fee) or putting the company into dormant mode (£8 per month with my current Accountant) where I don't take salary anymore, but continue paying dividends. I've been trying to find what is the tax on dividends in Thailand, and so far I've come to conclusion that it's 10%, but according what I've read here, it could be even 0% for me?

 

I'm moving in November, so if I understand correctly - if I don't withdraw any dividends until the start of 2020, and begin in the new year I will not have to pay any tax, even 10%? Thank you for your help in advance.

[Nick Stevens]

How do I file an Income Tax Return when the company I worked for didn't file any?
I am getting a new Non B visa to work in a new company and the document requirement also include Income Tax Return from past year.
I did not earn any income last year as I got my work permit on December 17, but I worked for roughly 2 months this year in Jan and Feb and the income was too small for any tax liability. I have to show the Income Tax Returns even if it says zero.
I am really confused how to do this. The Revenue Office in Sutthisan has no one who speaks english and they don't understand anything. I want PND 91 or PND 1 to submit with my application for a new Non B visa.

Does anyone know how to do it and where it can be done in easiest and fastest way in Bangkok?
Also I am on a tourist visa right now as my previous Non-B and work permit were cancelled after I resigned. So is it possible to do it on tourist visa by showing that I previously worked here?

Edited September 12, 2019 by Nick Stevens

[SS1]

10 hours ago, kidcosmique said:

Hi all, thank you for this topic, it's making me very excited ????

 

I have a LTD company in UK in which I have some capital. I have received an offer for a perm job in Thailand and I've been trying to find out what is the best option for me for the duration of my planned 3 year stay. Closing the company and withdrawing using ER (10% on all capital + £2K fee) or putting the company into dormant mode (£8 per month with my current Accountant) where I don't take salary anymore, but continue paying dividends. I've been trying to find what is the tax on dividends in Thailand, and so far I've come to conclusion that it's 10%, but according what I've read here, it could be even 0% for me?

 

I'm moving in November, so if I understand correctly - if I don't withdraw any dividends until the start of 2020, and begin in the new year I will not have to pay any tax, even 10%? Thank you for your help in advance.

It's not about when you withdraw the dividends, but when/if the funds are remitted into Thailand. You could withdraw the dividends anytime to your personal bank account in the UK (or elsewhere outside of Thailand) which wouldn't yet create a taxable event in Thailand. If you then hold onto sending these funds to Thailand until the start of 2020, they would be considered savings and non-taxable income. 

I don't recommend taking a salary from the UK Ltd as technically this could be considered income derived from work done from Thailand, which might have tax implications was the revenue department look into that. 

But the conclusion is indeed if you pay yourself dividends, you can do it in a way that you pay 0% tax on them whilst a tax resident of Thailand. 

[kidcosmique]

2 hours ago, SS1 said:

It's not about when you withdraw the dividends, but when/if the funds are remitted into Thailand. You could withdraw the dividends anytime to your personal bank account in the UK (or elsewhere outside of Thailand) which wouldn't yet create a taxable event in Thailand. If you then hold onto sending these funds to Thailand until the start of 2020, they would be considered savings and non-taxable income. 

I don't recommend taking a salary from the UK Ltd as technically this could be considered income derived from work done from Thailand, which might have tax implications was the revenue department look into that. 

But the conclusion is indeed if you pay yourself dividends, you can do it in a way that you pay 0% tax on them whilst a tax resident of Thailand. 

Thank you. So, if I stay long enough in Thailand to be considered a tax resident, say 180 days, and then pay the dividends from the company's bank account straight into a Thai personal bank account that would yield 0% tax? Does it have to be a Thai bank account even when I'm already a Thai resident or can it be a UK one too? What paperwork do I have to complete first? 

[kidcosmique]

Sorry, my bad, I didn't read that well...

 

Quote

It's not about when you withdraw the dividends, but when/if the funds are remitted into Thailand. You could withdraw the dividends anytime to your personal bank account in the UK (or elsewhere outside of Thailand) which wouldn't yet create a taxable event in Thailand.

 

Suppose I am a Tax Resident in Thailand already, If I withdraw dividends into my UK bank current account, will I still have to pay UK dividend tax because the money hasn't really left the country, or will the fact that I am no longer a UK tax resident take hold meaning I pay no tax in the UK and effectively no tax as well when the money is transferred to my thai current account?

[SS1]

On 9/13/2019 at 12:10 PM, kidcosmique said:

Thank you. So, if I stay long enough in Thailand to be considered a tax resident, say 180 days, and then pay the dividends from the company's bank account straight into a Thai personal bank account that would yield 0% tax? Does it have to be a Thai bank account even when I'm already a Thai resident or can it be a UK one too? What paperwork do I have to complete first? 

 

No - this would create taxable income. If you withdraw the dividents directly to your Thai bank account, that would be foreign income earned in the same tax year. You should withdraw them first to a personal account outside of Thailand, then transfer them here only once time has passed over to the following tax year. 

 

8 hours ago, kidcosmique said:

Sorry, my bad, I didn't read that well...

 

 

Suppose I am a Tax Resident in Thailand already, If I withdraw dividends into my UK bank current account, will I still have to pay UK dividend tax because the money hasn't really left the country, or will the fact that I am no longer a UK tax resident take hold meaning I pay no tax in the UK and effectively no tax as well when the money is transferred to my thai current account?

No worries. For that I cannot answer and I would recommend checking with a UK-based accountant or tax advisor. However, to my best knowledge, if you are no longer a tax resident in the UK (over 183 days in Thailand) you wouldn't be liable for taxes there. 

[Peter Denis]

Hi, very interesting topic brought up by Rod!

My official residence is in Belgium but I am living in Thailand on a Non-Imm OA Visa and stay there more than 180 days a year.

One simple question from my part:

Are you also eligible to reclaim the 1800 THB withdrawal tax on the 800.000 THB from your thai bank account, when your official residence is not in Thailand?

 

[Rod the Sod]

On 9/14/2019 at 1:33 PM, Peter Denis said:

Hi, very interesting topic brought up by Rod!

My official residence is in Belgium but I am living in Thailand on a Non-Imm OA Visa and stay there more than 180 days a year.

One simple question from my part:

Are you also eligible to reclaim the 1800 THB withdrawal tax on the 800.000 THB from your thai bank account, when your official residence is not in Thailand?

 

Hi Peter

I am sure that it doesn't matter where your official residence is because after 180 days you are a TAX RESIDENT of Thailand. That is all you need. So pop along and take all the papers I mentioned earlier and tell the nice man that you have been in Thailand for more than 180 days and would like to file your tax return. Hand him the Bank Certificate of WHT paid and there you go. Presumably you have no earned income from the current tax year coming into Thailand (or else you will get taxed on that). Now follow the rest of the instructions :-))

[Peter Denis]

On 10/21/2019 at 5:33 PM, Rod the Sod said:

Hi Peter

I am sure that it doesn't matter where your official residence is because after 180 days you are a TAX RESIDENT of Thailand. That is all you need. So pop along and take all the papers I mentioned earlier and tell the nice man that you have been in Thailand for more than 180 days and would like to file your tax return. Hand him the Bank Certificate of WHT paid and there you go. Presumably you have no earned income from the current tax year coming into Thailand (or else you will get taxed on that). Now follow the rest of the instructions :-))

Hi Rod, I will drink a good Belgian beer on your health when recovering the Thai tax paid.

Thanks again for the tip!

[mahjongguy]

There seems to be a misunderstanding here. You don't need to be in TH for any specified period of time in order to reclaim bank interest withheld. If you show the bank document proving the withholding, they will process your filing. If you don't already have a TIN they will issue one.