Confusion about Taxes for Digital Nomads

[TristanR]

Hi,

 

Let me quickly describe my situation. Several years ago I started a YouTube community account which is now being ran by multiple people. Everybody gets paid revenue over their videos on monthly basis. Whether I create new videos or not, the channel generates me passive revenue which goes to my PayPal account. 

 

I'm originally a Dutch citizen but I'm no longer registered there. I've been living in Thailand for several months now and would like to stay for the rest of the calendar year, but I'm very confused about how I should go by my taxes. Currently, I transfer my PayPal money into my Dutch bank account where I just let it sit. I had enough savings before coming to Thailand. 

 

I've read that if you bring money into the country that was earned in the previous year, it's tax exempt. Now this seems like a giant loophole to me and I'm very confused about how one should prove this. Does this mean that I can continue letting my passive revenue build up in my Dutch bank and then in the following year I can withdraw it all to my Thai bank and that'd be perfectly legal and tax free? Do I require any papers to prove it was earned in the previous year? How does it work?

 

I'm also very curious to hear if I'm legally tax exempt everywhere. Surely there must be more people here earning money online. The Dutch regulations mention that I have to pay taxes in the Netherlands if I either live there or have money earned from there... that's not the case, right? As I'm earning it from YouTube which is USA based. I'm not sure what to tell them when the bank asks me where I'm paying my taxes.

 

Lastly, do I even need a work permit for my situation? It's passive revenue. Sure maybe I'm uploading a video every now and then, but there's no way to prove that. Also, whether I do or not, the money rolls in anyway. I guess it's like comparable to money earned from real estate in a different country. I've thought about joining up with Iglu but they tax 30% and it seems a hell of a lot cheaper to just get a 5 year Thai elite visa instead, especially if I'm tax exempt anyway. Which is my main question.

[codebunny]

You can transfer it to me, and for a small fee, I'll make sure you have no taxes to worry about. ????

[ThomasThBKK]

Well if you don't make any videos urself while in thailand and earn money that way, then yeah...

 

If it's "passive", gets paid to nl bank and u bring it in the next year you are fine.

 

It's not a loophole, it's a territorial tax system, like many other countries have too. 

40 minutes ago, TristanR said:

As I'm earning it from YouTube which is USA based. I'm not sure what to tell them when the bank asks me where I'm paying my taxes.

no thai bank will ever ask you that, nor should an eu bank, it's none of their business.

[IvorLott]

As you're not registered as working in Thailand, nor have a Work Permit, tax won't be an issue for you. I'd worry more about getting return visas. The whole issue over 'digital nomads' and their status in Thailand, seems to have long been, and continues to be somewhat of a 'grey area'.

I'd keep schtum. If you are lucky enough to have a good enough income to remain in Thailand and fulfil the immigration criteria for future visas, then why bring attention to yourself or your situation? 

[TristanR]

56 minutes ago, ThomasThBKK said:

It's not a loophole, it's a territorial tax system, like many other countries have too. 

no thai bank will ever ask you that, nor should an eu bank, it's none of their business.

Territorial tax system it's called? I'll do some research to find what other attractive countries have this, thankyou.

 

The problem is actually that my Dutch bank did send a letter like that. My father received it and he mentioned not to worry because Thailand is not part of the CRS. But I guess the bank wants to know because they don't want to withhold money that is "laundered". So I just like to make sure that what I'm doing is actually perfectly legal. 

 

22 minutes ago, IvorLott said:

As you're not registered as working in Thailand, nor have a Work Permit, tax won't be an issue for you. I'd worry more about getting return visas. The whole issue over 'digital nomads' and their status in Thailand, seems to have long been, and continues to be somewhat of a 'grey area'.

I'd keep schtum. If you are lucky enough to have a good enough income to remain in Thailand and fulfil the immigration criteria for future visas, then why bring attention to yourself or your situation? 

 

Interesting. Yeah it seems like I can't get a clear answer everywhere so this forum is my last resort. I appreciate the replies so far. I'm thinking about investing in a Thai Elite visa because 500k per 5 years isn't all that much considering the amount of money I could save on taxes if all is correct. 

[ThomasThBKK]

You can get  a thai tax id and give it to your dutch bank, then they no longer report anything to dutch authorities

 

bunch of countries with these tax systems: https://nomadcapitalist.com/2016/06/13/countries-territorial-tax-system/

 

It's quite normal, france also has it (or used to - not up to date there). 

[TristanR]

3 minutes ago, ThomasThBKK said:

You can get  a thai tax id and give it to your dutch bank, then they no longer report anything to dutch authorities

 

bunch of countries with these tax systems: https://nomadcapitalist.com/2016/06/13/countries-territorial-tax-system/

 

It's quite normal, france also has it (or used to - not up to date there). 

 

Is that even possible in my case? Student visa right now but plan on doing a few border runs if possible after that. In 2021 I'll have a Thai Elite and I heard acquiring a Tax ID is no problem then. 

 

What do I even report to the Thai tax? Zero baht? lol

 

Thanks for that link. I've actually been watching some of the nomad capitalist videos the past few days and learned a lot. 

Edited February 10, 2020 by TristanR

[codebunny]

Why not actually hire someone to give you correct advice and process your case? Even if you can get free advice here, how certain can you be that every aspect of your situation will be covered by it?

[TristanR]

5 minutes ago, codebunny said:

Why not actually hire someone to give you correct advice and process your case? Even if you can get free advice here, how certain can you be that every aspect of your situation will be covered by it?

I read through some earlier threads and there's many very knowledgeable people on here but I couldn't find a topic on my situation. I'll go the professional route if necessary, but it's hard to find people who actually know how to deal with this it seems. I've written e-mails and been doing some phone calls already

[SteveK]

If you start asking questions about paying tax in Thailand, then obviously people are going to start asking if you are actually working in Thailand. Seeing as it is impossible to get a work permit for your kind of work (unless you set up a company employing a bunch of Thai people, of which you can never hold a majority stake), then you're going to end up in trouble. Digital nomads in Thailand who just do enough to survive, don't make money from Thai clients, and earn the money off-shore generally don't get into trouble, providing they don't go broadcasting what they are doing. Just don't work at a shared workspace or whatever people call them these days.

 

Makes me wonder about how some YouTubers based in Thailand (Mark Wiens for one) gets around the issue, although I suspect that his income is high enough now that he has set up a company in his wife's name to make everything fully above board.

 

I would keep earning the money to your Dutch account, and make a transfer every few months or so for as much as you need. What kind of visa are you on, by the way?

Edited February 10, 2020 by SteveK

[ThomasThBKK]

35 minutes ago, TristanR said:

What do I even report to the Thai tax? Zero baht? lol

Nothing in your case.

 

having a tax id doesnt mean u need to do tax reporting if you have nothing to report, it's just to shut up banks that want to otherwise report home.

 

Changing the address of ur dutch bank account to thailand could be enough tho.

 

They are likely to just send you away if you go there and ask them what to do, they hate having  to do work, this doesn't personally benefit them, means they couldn't care less.

 

Welcome to thailand.

[gk10002000]

So Dutch folks are not taxed on worldwide revenue by their home country?  The USA holds its citizens liable for any monies earned anywhere in the world.  You say you are not longer "registered there", which to me sounds like just a paper thing and you have to decide where you fit in the Dutch scheme of things.  Many people try and hope their definitions satisfy the home authorities. Similarly, in the USA where we have separate states, if one works in one state but maybe lives or homesteads in another state, there are criteria for what ones permanent home state/ residence is.  Just temporarily staying outside of the Netherlands could be considered a tax dodge by the Dutch tax authorities, especially if you move back there any time soon, or have any ties there.

 

"

Which income will be taxed in the Netherlands?

Resident in the Netherlands? (main personal and economic ties there) You must pay tax on your worldwide income there.

Not resident in the Netherlands? You only pay tax on income earned there.

Income from other EU countries? Make sure you never pay tax twice on the same income.

[SteveK]

14 minutes ago, gk10002000 said:

The USA holds its citizens liable for any monies earned anywhere in the world.

And they are extremely militant about it. Even for people who were born in the USA and then emigrated whilst they were still babies, they still hassle them for tax.

 

https://www.theguardian.com/us-news/2019/dec/12/eu-joins-fight-against-us-tax-on-accidental-americans

 

It means more paperwork and hassles for US citizens opening bank accounts abroad. More hassles opening an account in Thailand - I couldn't even start to get my head around that.

Edited February 10, 2020 by SteveK

[codebunny]

50 minutes ago, SteveK said:

Makes me wonder about how some YouTubers based in Thailand (Mark Wiens for one) gets around the issue, although I suspect that his income is high enough now that he has set up a company in his wife's name to make everything fully above board.

I believe you don't need a WP for online work if the server is based outside of Thailand, but this is guys working on a computer in a coffee shop or some other informal place not in a shop with a logo. It doesn't look like work to most people, just looks like students or people playing on their laptops.

[Silencer]

53 minutes ago, gk10002000 said:

The USA holds its citizens liable for any monies earned anywhere in the world.

Yep, the USA is one of the few, maybe only, country that taxes its citizens for monies earned anywhere in the world. Sucks.

[Salerno]

5 minutes ago, Silencer said:

Yep, the USA is one of the few, maybe only, country that taxes its citizens for monies earned anywhere in the world.

Sadly not, used to be but I think more and more countries are following. Know a guy that used to designs cars, must've been really good at it (or totally <deleted> so they kicked him out 555) as for a few years he was getting 6 month gigs around the world so he basically never paid tax anywhere. Aussie government closed the loophole on him and those like him.

[SteveK]

42 minutes ago, codebunny said:

I believe you don't need a WP for online work if the server is based outside of Thailand, but this is guys working on a computer in a coffee shop or some other informal place not in a shop with a logo. It doesn't look like work to most people, just looks like students or people playing on their laptops.

This is 100% wrong.

 

If you are doing the work inside the country, you need a work permit. I don't know who told you that. If you are expending energy inside Thailand with the intention of monetary gain, then you are working in Thailand, even if the server is in Ethiopia.

 

Working is working. You know if you are working. And if you are creating a website, writing content, uploading videos or whatever whilst you are in Thailand, then you are working in Thailand. And almost certainly breaking the law.

 

With the current attitude towards ai farang in Thailand, you should probably stop doing it or go to Vietnam where they welcome you into co-working spaces. Living costs are much lower, too. Of course, checking your work emails during a 2 week holiday in Phuket will never draw attention. Making YouTube videos about Thailand and uploading them whilst here will also probably go unchecked, until you p*ss someone off who reports you, then you're on your own.

 

If you are doing something in Thailand which is making you money, you need a work permit.

Edited February 10, 2020 by SteveK

[ThomasThBKK]

25 minutes ago, Silencer said:

Yep, the USA is one of the few, maybe only, country that taxes its citizens for monies earned anywhere in the world. Sucks.

 

They are the only ones now, Eritrea was doing it too but only at 2% or so.

 

USA is the only country who forces you to give up your citizenship to escape them, but that costs a heavy exit tax.

 

Don't listen to people recommanding you Vietnam, it has worldwide taxes on everything and if they catch you not paying they blacklist you from leaving the country. Horrible country for remote workers.

Edited February 10, 2020 by ThomasThBKK

[freeman01]

you have passive income earned outside of Thailand and you can live on your savings, that's the perfect case.

Thailand won't ever ask anything from you, they don't care as long as you are not working in Thailand without a work permit and more importantly taking someone's job.

 

The problem is your country, how to tell them you are no longer a tax resident there ? staying more than 183 days in Thailand is not enough, it's only a requirements for being a tax resident in Thailand and be able to fill for taxes. so figure this out first.

after that you need your bank in your country to update your address with the one in Thailand, same for paypal and youtube, not as easy as it seems, they most likely will ask for a tax id or at least the bank.

consider banking outside of you country like UK or Switzerland if you can, then no risk of your goverment knowing anything of your finances.

 

Getting a tax id for young people is not that easy, they will ask a lot of question and will be very reticent to give you one without a work permit so you need a very good reason, better get an accountant/lawyer for this.

 

Also if you do anything else that could be considered working, it's better to not stay the full year in the country and when you withdraw your income to your bank account, do it while you are outside the country. That kind of little things can make a difference in case of issues or annoying questions.

 

Elite visa is very expensive, 15k upfront is not the same as 3k per year. learn to invest with that money instead and keep this option in case there is no other way and use a loan if you do get one.

Edited February 12, 2020 by freeman01

[SteveK]

2 minutes ago, freeman01 said:

Elite visa is very expensive, 15k upfront is not the same as 3k per year. learn to invest with that money instead and keep this option in case there is no other way and use a loan if you do get one.

Plus don't forget, things are looking quite fragile politically in Thailand right now. A soldier shooting up a mall, a minister openly making a racist tirade against westerners, tourism in the toilet, locals saying awful things about the PM on Twitter, etc...

 

Who's to say that if you fork out for an elite visa that they won't shift the goalposts or revoke it when a new government comes into power? The cheapest option is about £12500, sure would be <deleted> paying that then something happens with the government and I end up with nothing somewhere down the line.

 

The only situation where I would consider the Elite would be if I was very wealthy and could accept the risk of a future government declaring it void.

[ThomasThBKK]

21 minutes ago, SteveK said:

Plus don't forget, things are looking quite fragile politically in Thailand right now. A soldier shooting up a mall, a minister openly making a racist tirade against westerners, tourism in the toilet, locals saying awful things about the PM on Twitter, etc...

 

Who's to say that if you fork out for an elite visa that they won't shift the goalposts or revoke it when a new government comes into power? The cheapest option is about £12500, sure would be <deleted> paying that then something happens with the government and I end up with nothing somewhere down the line.

 

The only situation where I would consider the Elite would be if I was very wealthy and could accept the risk of a future government declaring it void.

 

Extremely unlikely, they might as well do that with every other visa.

 

The cost of relocation is way higher for  everyone with a real life here than those peanuts for the elite visa, imagine retirement visas getting shut off and how many people own a house etc here...

[tjo o tjim]

You aren’t really a nomad; you have to have a residence somewhere.  It can be a residence of fact or convenience, but you have to have somewhere.  If you don’t, things will eventually catch up with you and get you into trouble.  (Examples could include setting up a business, drivers license/renting a car, healthcare, or any number of things that might not come up every day, but when they do are important.)

 

Personally, I am pretty much a nomad.  I will likely spend less than 9 weeks this year in my place of residence or in any other one country this year.  However, I pay taxes as a resident of my home location because failing to do that means my businesses would no longer be legal entities.  It would be nice to not pay that extra ~10% tax, but I will let go of it.

 

Specific to Thailand, without a proper Visa you are not a resident here.  You might owe taxes (or not), but you are not a resident.

[freeman01]

a very good thing about Thailand is you can open a bank account, get a driving license and get an official residence certificate all on a tourist visa.

With this you are cleared to pass any AML/KYC requirements anywhere around the world to do business, nobody will ever ask which visa you hold.

after that you just have to stay for a total of more than 183 days a year, wire like >500,000 THB in a thai bank and you can declare tax, get a tax id and a tax certificate.

 

Try to do that in any other country on a tourist visa, alleluia for Thailand !

Edited February 14, 2020 by freeman01

[jackdd]

On 2/10/2020 at 5:21 PM, TristanR said:

especially if I'm tax exempt anyway.

You are not tax exempt, currently you are just committing tax evasion.

It's not possible to run your business no where. So either you are running it in the Netherlands or Thailand, and in any case you should follow the laws, which means paying taxes, and if required having a registered business and so on.