Who do I pay taxes on foreign income while living in Thailand on SETVs ?

[Nellaa]

Hello,

 

I am trying to figure out whether I can claim tax residency in Thailand, if I am staying here on SETVs for more than 6 months out of the year ?

I want to take advantage on tax exemption in Thailand for revenue earned outside of Thailand, but since I dont have a Thai tax ID... 

 

Also, what steps do I need to take with authorities in my country to change my tax residency ? I am Estonian. And even though I live out here, I am registered to an address back home with the municipality. Does that incriminate me to income and capital gains tax back home ?

 

Thank you for your time.

Edited January 11, 2020 by Nellaa

[Sheryl]

I am moving this to the Home Country Forum.

 

Please indicate your nationality as different countries have different laws. If US, also indicate the state.

 

Also indicate in what country the income is earned.

[Oxx]

Your tax residency, both in Thailand and Estonia, is simply determined by the number of days in a tax year you spend in the country.  If it's 180 or more in the calendar year, you're tax resident in Thailand.  For Estonia it's 183 days in a rolling 12 month period.

 

You don't need a Tax ID number in Thailand unless you have income here.

 

The form for reporting residency (or rather, non-residency) in Estonia you'll need to complete Form R from the Estonian Tax & Customs Board.  

[userabcd]

Suggest you read the information on tax laws related to residency and taxes on the web site of your home country.

 

A quick web search for capital gains gives:

Estonia natural person income tax is considered to be proportional, but, due to basic exemption, it is actually progressive. ... There is no capital gains tax but gains from transfer of securities or other financial assets are subject to standard income tax.

 

It may also depend on residence and what the CG are on and where the CG arise, In Estonia??

Also I'm sure they will have reference to the double tax treaty to avoid double taxation and where certain income may be taxed, this would be available on your home country web site and Thai RD website

 

What did your home countries tax office say about the basic tax inquiries you have related to residency, income earned, capital gains and where it is generated and paid?

Edited January 11, 2020 by userabcd

[Just Weird]

1 hour ago, Nellaa said:

I am trying to figure out whether I can claim tax residency in Thailand, if I am staying here on SETVs for more than 6 months out of the year ?

I want to take advantage on tax exemption in Thailand for revenue earned outside of Thailand, but since I dont have a Thai tax ID... 

 

Also, what steps do I need to take with authorities in my country to change my tax residency ? I am Estonian. And even though I live out here

Your tax issues may be the least of your problems if you're announcing that you're living here on a Tourist Visa.

[mokwit]

1 hour ago, Nellaa said:

staying here on SETVs for more than 6 months out of the year ?

You might not be able to stay long enough on SETV's to have to worry about tax residency. You need to update yourself on visa viability - what was once easily possible is now uncertain if even possible.

[saengd]

You need to look at both halves of the picture:

 

1) does Estonia allow you to escape tax in a single calendar year simply by being resident in another country during that year, many countries such as the US do not allow this. Capital gains in particular is hard to escpae just by being outside of your home country for a single year, you need to check these things with your home tax authority.

 

2) Thai Revenue Dept. will not issue you with a tax ID unless you have a visa that allows you to stay in Thailand for more than 183 days, a tourist visa will not suffice for this, they will ask to see the visa.

[freeman01]

If you want this to work the easiest way is to cut all financial tie with your home country, 183 days in a country to claim tax residency is a requirements for most countries but is not enough in itself.

 

If you paid taxes before in your country you'll likely have to tell them your new country of residence and they might want to see proof. Ultimately they will want a thai tax certificate.

 

A thai tax id will ne required sooner or later by the banks, its easy to get one in thailand, many threads in this forum about it.

[freeman01]

35 minutes ago, saengd said:

You need to look at both halves of the picture:

 

1) does Estonia allow you to escape tax in a single calendar year simply by being resident in another country during that year, many countries such as the US do not allow this. Capital gains in particular is hard to escpae just by being outside of your home country for a single year, you need to check these things with your home tax authority.

 

2) Thai Revenue Dept. will not issue you with a tax ID unless you have a visa that allows you to stay in Thailand for more than 183 days, a tourist visa will not suffice for this, they will ask to see the visa.

The US is very particular as they are among the very few countries that tax on citizenship rather than residency.

 

You absolutely can get a tax id on a tourist visa in Thailand, many many reports of people who have done it.

 

[FritsSikkink]

The way immigration is looking at people staying here for a longer period, it will be highly unlikely that you will stay here more than 180 days on SETV for a couple of years.

[saengd]

56 minutes ago, freeman01 said:

The US is very particular as they are among the very few countries that tax on citizenship rather than residency.

 

You absolutely can get a tax id on a tourist visa in Thailand, many many reports of people who have done it.

 

It used to be easy but in the past two years it's become very difficult to get one, especially without a visa.

[Max69xl]

On 1/11/2020 at 12:35 PM, userabcd said:

Suggest you read the information on tax laws related to residency and taxes on the web site of your home country.

 

A quick web search for capital gains gives:

Estonia natural person income tax is considered to be proportional, but, due to basic exemption, it is actually progressive. ... There is no capital gains tax but gains from transfer of securities or other financial assets are subject to standard income tax.

 

It may also depend on residence and what the CG are on and where the CG arise, In Estonia??

Also I'm sure they will have reference to the double tax treaty to avoid double taxation and where certain income may be taxed, this would be available on your home country web site and Thai RD website

 

What did your home countries tax office say about the basic tax inquiries you have related to residency, income earned, capital gains and where it is generated and paid?

Due to double tax agreement and income earned in Estonia he's paying tax in Estonia. On top of that he's here on a tourist visa,so the possibility of paying taxes in Thailand is zero.

[Oxx]

29 minutes ago, Max69xl said:

Due to double tax agreement and income earned in Estonia he's paying tax in Estonia. On top of that he's here on a tourist visa,so the possibility of paying taxes in Thailand is zero.

Score out of 10 for accuracy:  zero.

 

 

[gaikhao]

Have you considered consulting with a qualified tax professional, actually competent to provide a  reliable tax law opinion? It's like asking  the local massage parlour for medical advice.

[Baerboxer]

On 1/11/2020 at 12:34 PM, Oxx said:

Your tax residency, both in Thailand and Estonia, is simply determined by the number of days in a tax year you spend in the country.  If it's 180 or more in the calendar year, you're tax resident in Thailand.  For Estonia it's 183 days in a rolling 12 month period.

 

You don't need a Tax ID number in Thailand unless you have income here.

 

The form for reporting residency (or rather, non-residency) in Estonia you'll need to complete Form R from the Estonian Tax & Customs Board.  

 

I'm not from Estonia, but do their tax authorities base residency simply on days spent in/out of country?

 

 

[Felt 35]

http://www.rd.go.th/publish/6045.0.html

 

http://download.rd.go.th/fileadmin/download/nation/Estonia_e.pdf

[khunPer]

You shall first of all read the double taxation agreement between Estonia and Thailand. You'll find all countries with double taxation agreement with Thailand here, just click on Estonia in the table.

 

In theory you are tax resident in the country you stay in more than 180 days. However, you need to check your home country's rules for giving up full taxation, which could be giving up a permanent address, or like, in your home country. In my Scandinavia home country I would not be allowed to own property specified for permanent residence – whilst a so-called summer house with permitted residency less than 180 days is accepted – or a flat registered for permanent residency.

 

You register for tax at the local Revenue Office in the amphor where you live in Thailand. Without a Work Permit it might be difficult to be registered as income tax payer; you might need to prove that you have an income that should be taxed in Thailand.

 

You might however need a tax-residency declaration from the Thai Revenue Office for certain tax-deductions in Estonia – check the local Estonian tax laws – that is a document you need to obtain for each tax (calendar) year. 

 

• You'll find the government information about Thai income tax here,
• and an informative tax-booklet (pdf) here.
• There's a simple income tax calculator here.
• From the government page with tax forms (in English language) you'll find the tax-residency form here.

 

Only 11 million out of the almost 70 million Thai population are registered for income tax, and only some 4 million pay income tax (according to a recent news article published in Thaivisa News).

 

If you succeed in de-register from income tax in your home country – might be called partly taxable – your foreign income should not be taxed there, if not earned in Estonia. If you still work in the country, the income from work would normally be taxable in the country you perform the work, even you are not a permanent tax resident, whilst non permanent working income could be free of income tax; which for example could be fees for being a bord member in a company, or income as artist/musician, or like; depending of your national tax laws.

 

Foreign income not brought into Thailand the same calendar year as earned – i.e. foreign income earned in 2019, but transferred in 2020 – is not taxable in Thailand, but regarded as tax free savings. Living from your savings, you don't need to register as income tax payer, as you have no income.

 

Thai withheld taxes from bank interest, 15 percent; and dividend from equity, 10 percent; and some other withheld taxes; can be considered as full and final tax without declaring or registering anything to the revenue office. Capital gains from SET traded stocks are free of income tax.

 

The legal "trick" might well be to de-register as permanent resident in one's home country, i.e. Estonia, and do nothing in Thailand, and of course (officially) wait transferring the income till the next calendar year, or later...????

[Max69xl]

48 minutes ago, Oxx said:

Score out of 10 for accuracy:  zero.

 

 

Are you saying that a tourist from Estonia with an income from back home can choose to pay taxes in Thailand? I really doubt that. 

Edited January 12, 2020 by Max69xl