[Tax] foreign income bring into thailand

[SatoshiNakamoto]

Hi,

 

Thailand doesnt collect tax for foreign income bring into thailand if its not derived from the same year.

 

So have you done this really? i mean bringing some big amount of money from your own country to thailand to spend here, and to avoid tax.

 

and have you experienced that the tax man looked into it and ask you questions?  If it happens, how do you prove the money you bring into thailand is not derived from the same year?

And if you cant prove, will you have trouble?

 

im thinking its really hard to prove, the money in your foreign bank acct, can be some made from the past years and some made this years, and all kept in the same acct.

You cant tell your bank to only transfer the money you made from the past, and do not touch the money made this year.

 

Edited August 2, 2019 by SatoshiNakamoto

[Sheryl]

In all my years on this board I have not seen a single case where someone was taxed on money they brought in or had to prove in what year it was earned.

 

Doesn't seem to happen. Probably because it would be more hassle than it is worth for the govt.

 

In addiiton to income from abroad not being taxable unless brought in the same year as earned, Thailand has double taxation  treaties with many nations.

 

 

[manarak]

Quote

im thinking its really hard to prove, the money in your foreign bank acct, can be some made from the past years and some made this years, and all kept in the same acct.

You cant tell your bank to only transfer the money you made from the past, and do not touch the money made this year.

you got it the wrong way around - in order to pay tax, it must be proven that the money IS NOT older than 12 months.

so check the foreign balance 12 months ago - that is the amount that can be brought in tax free.

 

2 minutes ago, Sheryl said:

In all my years on this board I have not seen a single case where someone was taxed on money they brought in or had to prove in what year it was earned.

we don't have many rich Thai businessmen on the forum discussing tax matters, so it's hardly surprising we never heard about the issue. another thing is, they usually let their lawyers handle it.

 

as far as farangs or other foreigners are concerned, it wouldn't make sense for Thailand to try to tax them on money they bring into Thailand.

 

[ThomasThBKK]

22 hours ago, manarak said:

you got it the wrong way around - in order to pay tax, it must be proven that the money IS NOT older than 12 months.

so check the foreign balance 12 months ago - that is the amount that can be brought in tax free.

 

we don't have many rich Thai businessmen on the forum discussing tax matters, so it's hardly surprising we never heard about the issue. another thing is, they usually let their lawyers handle it.

 

as far as farangs or other foreigners are concerned, it wouldn't make sense for Thailand to try to tax them on money they bring into Thailand.

 

No, not 12 months ago, at the end of last calender year so basically 30. December.

It's per fiscal year.

[manarak]

24 minutes ago, ThomasThBKK said:

No, not 12 months ago, at the end of last calender year so basically 30. December.

It's per fiscal year.

do you have an authoritative source for that?

[ThomasThBKK]

10 minutes ago, manarak said:

do you have an authoritative source for that?

Yeah.

 

https://www.mazars.co.th/Home/Doing-Business-in-Thailand/Tax/Basis-of-Thai-personal-income-tax

Quote

An individual will be considered a Thai tax resident in a particular calendar year if he lives in Thailand for 180 days or more in that calendar year

For example, based on these rules, if a Thai tax resident receives foreign-sourced income overseas on 31 December 2016, and deposits it in his foreign bank account, and then transfers it to his Thai bank account the next day (1 January 2017, the calendar year after that in which he received the income), the income would not be taxed in Thailand.

 

Calender year is correct word tho, fiscal year can be different in theory, no idea why i wrote fiscal in the second sentence.

 

The other big accounting firms KPMG, Deloitte, E&Y, PWC have similar guides on their websites.

 

Here is it in "tax speak" from the thai government: https://www.rd.go.th/publish/6045.0.html

[manarak]

thanks

it really seems to be a calendar year then.

I knew the KPMG document from 2008, and I seem to remember they stated 12 months, but there was a controversy about the exact interpretation of Thai tax law.

BTW, the document from the revenue department you included does nothing to hint at the existence of the loophole.

 

in the Mazars document, the relavant part is this one:

Quote

2. If such income is considered foreign-sourced income (income derived from work performed outside of Thailand, business conducted outside of Thailand, or property situated outside of Thailand) it will be taxed in Thailand only if: (1) an individual is a Thai tax resident; and (2) the individual brings such income into Thailand in the same calendar year that he receives it.

 

Edited August 3, 2019 by manarak

[ThomasThBKK]

15 hours ago, manarak said:

thanks

it really seems to be a calendar year then.

I knew the KPMG document from 2008, and I seem to remember they stated 12 months, but there was a controversy about the exact interpretation of Thai tax law.

BTW, the document from the revenue department you included does nothing to hint at the existence of the loophole.

 

in the Mazars document, the relavant part is this one:

 

well it specifies the timeframe: 

"accordingly on a calendar year basis."

 

It's not a loophole, it's simply classified as non-assesable income due to thailand using the territorial based tax system, as others countries do to.

 

If you look into Section 41 in the tax law: http://library.siam-legal.com/thai-law/revenue-code-assessable-income-and-income-tax-sections-40-64/

 

Quote

A taxpayer who in the previous tax year derived assessable income under Section 40 from an employment or from business carried on in Thailand, or from business of an employer residing in Thailand or from a property situated in Thailand shall pay tax in accordance with the provisions of this Part, whether such income is paid within or outside Thailand.

 

A resident of Thailand who in the previous tax year derived assessable income under Section 40 from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax in accordance with the provisions of this Part.

 

Any person staying in Thailand for a period or periods aggregating 180 days or more in any tax year shall be deemed a resident of Thailand.

 

It classifies the income only as assessable if derived in the previous tax year and brought in, meaning it has to be arrived and brought in into the country within the same tax year/calender year.

[ThaiBunny]

15 minutes ago, ThomasThBKK said:

It classifies the income only as assessable if derived in the previous tax year and brought in, meaning it has to be arrived and brought in into the country within the same tax year/calender year.

AND the recipient has to classed as Thai tax resident

[ThomasThBKK]

Just now, ThaiBunny said:

AND the recipient has to classed as Thai tax resident

Sure that's what the last sentence i in my quote says, all of us expats living here are usually thai tax residents.

[ThaiBunny]

18 minutes ago, ThomasThBKK said:

all of us expats living here are usually thai tax residents

You may be ordinarily resident but you're definitely not a tax resident in any effective sense. The very first thing I'd like to see if you really are an effective tax resident as you claim is a copy of your tax registration with the Thai tax authorities. While you live here for the statutory 180 days and technically qualify as a tax resident, unless you come from some really obscure country, your home country will have a double tax treaty with Thailand that effectively makes your home income not subject to Thai tax

Edited August 4, 2019 by ThaiBunny

[ThomasThBKK]

2 hours ago, ThaiBunny said:

You may be ordinarily resident but you're definitely not a tax resident in any effective sense. The very first thing I'd like to see if you really are an effective tax resident as you claim is a copy of your tax registration with the Thai tax authorities. While you live here for the statutory 180 days and technically qualify as a tax resident, unless you come from some really obscure country, your home country will have a double tax treaty with Thailand that effectively makes your home income not subject to Thai tax

 

Everyone who stays in Thailand over 180 days per calender year is a tax resident. No exception to that. 

There's no such thing as an effective tax resident or not, you are either a tax resident of a country or you aren't.

if you have no assessable income you don't need to make a tax report each year obviously.

Double tax treaties have nothing to do with tax residency per se.

 

Quote

unless you come from some really obscure country, your home country will have a double tax treaty with Thailand that effectively makes your home income not subject to Thai tax

 

I guess you've never read the DTT your home country has with Thailand.

They are all indexed here: https://www.rd.go.th/publish/766.0.html

Why on earth would someone prefer to pay income tax in germany instead if he's not a german tax resident? Makes absolutely no sense. And would lose me a lot of money.

 

I don't live in my extremely obscure home country called "Germany" anymore. and have no assets there that generate income,  thus have absolutely nothing to do with their tax system even if i would get paid some income for work from german clients. Like every other non-EU entity/person too, with the exemption of rental and pension income which i don't have, as that would be taxed at source in most countries.

Double tax treaties are between countries, doesn't matter if i am german by birth or not, if i am not a german tax residence or have a company there they are irrelevant, they effect me as little as the DTT between Spain and Thailand - not at all.

 

If i would move my regularly earned income from offshore work, dividends or other assessable income into Thailand in the same calender year i would def. need to pay income taxes on it by law, like every other expat.

 

DTT don't mean u need to necessarily pay taxes in your home country, that's why portugal is pissing off the rest of EUROPE as they have a tax free sheme for pensions, meaning germans, brits and co living there don't pay taxes at source in germany and co due to DTT and portugal doesn't want taxes either: https://www.blevinsfranks.com/news/article/Portugal-time-to-secure-tax-free-pensions-NHR

 

Double tax treaty are there to avoid paying taxes twice, that's all. Meaning u can claim back taxes in the country you are not residing in as a tax residence - initially you have to pay it there. It all depends on the SOURCE of income.

 

And of course i have a tax id here, attached is how the paper looks.

I would recommend everyone to get one and give it to each of your banks, so they won't  report your assets to your home country or wherever else you lived when you opened the account (CRS - Common reporting standard, soon also implemented in Thailand).

Everyone who lives here is entitled to have one, i've posted a a manual somewhere on here on which documents you need to get one with an elite visa.

That however does not mean you have to necessary fill a tax report each year if you don't have taxes to pay, once again two completly different things.

Edited August 4, 2019 by ThomasThBKK

[topt]

On 8/4/2019 at 9:57 AM, ThaiBunny said:

unless you come from some really obscure country, your home country will have a double tax treaty with Thailand that effectively makes your home income not subject to Thai tax

Another example of a "really obscure country" is the UK where there is a DTA but does not include most pensions......