Taxation on expats resident in Thailand

[mjakob007]

I am seeking clarity on taxation laws that impact foreigners in thailand.

 

A foreigner who spends more than 6months in thailand during a year is deemed to be a resident in thailand for tax purposes? Which period is considered a year, Is it Jan-dec or apr-mar?

 

if one is resident in thailand, is income earned abroad subjected to tax in Thailand? 

Does that tax exposure change if such income is earned in Isle of Man or jersey?

 

If a resident has paid taxes overseas, does it become taxable when that money is imported to thailand for consumption/living expenses?

 

appreciate to hear from experience of veterans in the country

 

[Pilotman]

I pay property and company tax, but no others, certainly nothing on income derived outside of Thailand. 

[topt]

34 minutes ago, mjakob007 said:

Which period is considered a year, Is it Jan-dec

For taxes Jan-Dec

35 minutes ago, mjakob007 said:

if one is resident in thailand, is income earned abroad subjected to tax in Thailand? 

Does that tax exposure change if such income is earned in Isle of Man or jersey?

As long as you remit said income after the year it was earned then currently the Thai revenue people should not bother you. That means if it is paid to your account wherever in December you can remit it to Thailand in January and have no liability.

In practice even if you remitted it during the actual year paid to you the Thai revenue people are not chasing people for tax. Monthly pensions being a classic example.

 

The only real variation is if there is some sort of DTA in place which makes it beneficial to you to pay tax in Thailand and not in your home jurisdiction. Otherwise as the previous poster mentioned no reason to pay anything.

 

There have been plenty of threads about this even recently. Have you looked?

[Trillian]

IOM, Jersey or tibuktoo makes no difference.

 

January to December.

 

As the above post says, 100% correct.

[glegolo]

It also depends from where you are. If you are swedish like me. We have a double-taxation-agreement between our two countries who clearly says that "WHERE YOU EARN YOUR MONEY THAT IS WHERE YOU SHOULD PAY YOUR TAXES"....

 

I.e. my pension is taxable of course in Sweden....

 

glegolo

[Card]

Just work on the principle that income may be taxed but capital is not. So to avoid any problems with, say interest on bank capital, just have your bank transfer any interest to a separate account from the capital. Then you can transfer to Thailand any amount from the capital account with no fear of avoiding tax because it is not income. This would be espevially important where your bank is offshore with no liability for say UK taxation which would avoid being taxed in Thailand due to double taxation agreements.

Edited June 28, 2020 by Card

[Brickbat]

17 hours ago, glegolo said:

It also depends from where you are. If you are swedish like me. We have a double-taxation-agreement between our two countries who clearly says that "WHERE YOU EARN YOUR MONEY THAT IS WHERE YOU SHOULD PAY YOUR TAXES"....

 

I.e. my pension is taxable of course in Sweden....

 

glegolo

Hi, Australia also has a Double Tax Agreement with Thailand. And I am taxed an extra 5 % in Australia which goes to the Thai Tax Office, through the Aust Tax Office. 
this only applies to personal income, not pensions or superannuation income or company profits/ income.

[TrevorC]

Jersey ???????? does Not enjoy a DTA with Thailand ????????! 

[Surasak]

20 hours ago, glegolo said:

It also depends from where you are. If you are swedish like me. We have a double-taxation-agreement between our two countries who clearly says that "WHERE YOU EARN YOUR MONEY THAT IS WHERE YOU SHOULD PAY YOUR TAXES"....

 

I.e. my pension is taxable of course in Sweden....

 

glegolo

Same Same for the UK.

[khunPer]

22 hours ago, mjakob007 said:

A foreigner who spends more than 6months in thailand during a year is deemed to be a resident in thailand for tax purposes? Which period is considered a year, Is it Jan-dec or apr-mar?

 

if one is resident in thailand, is income earned abroad subjected to tax in Thailand? 

Does that tax exposure change if such income is earned in Isle of Man or jersey?

 

If a resident has paid taxes overseas, does it become taxable when that money is imported to thailand for consumption/living expenses?

 

appreciate to hear from experience of veterans in the country

Income year, or tax-year, is 1st January to 31st December, you are tax-resident in the country you stay for 183+ days within any 12-month period.

 

You can find the Thai personal income tax rules here.

You can find a .pdf-booklet with further tax explanations here.

You can find a personal income tax calculator here.

You can find all Thai double taxation agreements here.

 

"...is income earned abroad subjected to tax in Thailand?"

All income earned abroad are subject to Thai income tax, but only if transferred into Thailand the same calendar year (i.e. tax year) as earned. See Double Taxation Agreement (DTA) between Thailand and the state in question where the income originates from for further details, some income might be agreed to be taxed in the state from where the income originates. If the DTA between Thailand and Great Britain and Northern Ireland includes Isle of Man and/or Jersey, the islands are covered by that agreement, otherwise income might be fully income taxable in both States.

 

Foreign income transferred into Thailand later than the calendar year it's earned, is considered as tax free savings. I.e. if a foreign income is earned in November and is transferred in December it's personal income taxable; whilst if the foreign income from November is transferred into Thailand in January, it's considered tax-free savings.

 

"If a resident has paid taxes overseas, does it become taxable when that money is imported to thailand for consumption/living expenses?"
Yes, all foreign income transferred same calendar year as earned are personal income taxable in Thailand. However, you need to check the Double Taxation Agreement (DTA) between the country from where the income originates and Thailand. If there is no DTA the income might be double taxed, i.e. taxed both in country of origin, and in Thailand. If there is a DTA some income might be taxed in the country of origin only, or in Thailand only. An example could be retirement pension, which in principle is personal income taxable in Thailand, but a number of countries might have a DTA where the retirement pension remain income taxable in the other State. Dividends from stock holdings might however be income taxed in Thailand only, mening that the other state cannot tax more than 10 percent of the paid out dividend.

 

I hope this answers you questions...????

 

[Max69xl]

22 hours ago, topt said:

For taxes Jan-Dec

As long as you remit said income after the year it was earned then currently the Thai revenue people should not bother you. That means if it is paid to your account wherever in December you can remit it to Thailand in January and have no liability.

In practice even if you remitted it during the actual year paid to you the Thai revenue people are not chasing people for tax. Monthly pensions being a classic example.

 

The only real variation is if there is some sort of DTA in place which makes it beneficial to you to pay tax in Thailand and not in your home jurisdiction. Otherwise as the previous poster mentioned no reason to pay anything.

 

There have been plenty of threads about this even recently. Have you looked?

"the Thai revenue people are not chasing people for tax. Monthly pensions being a classic example."

That's not a very good example. Have you heard about "double taxation treaties" between countries? You never pay tax in Thailand if there's a treaty between your home country and Thailand. You pay tax where the pension was earned. 

[4MyEgo]

5 hours ago, Brickbat said:

Hi, Australia also has a Double Tax Agreement with Thailand. And I am taxed an extra 5 % in Australia which goes to the Thai Tax Office, through the Aust Tax Office. 
this only applies to personal income, not pensions or superannuation income or company profits/ income.

I am a little confused.

 

Are you making your money back in Oz, as you said; And I am taxed an extra 5 % in Australia which goes to the Thai Tax Office, through the Aust Tax Office.

this only applies to personal income, etc, etc, etc.

 

So reading into this further, I would say you are working and earning an income here because incomes worldwide are taxable back in Oz, well so I have heard.

 

I only pay tax back in Oz, where I make some extra coin and I pay nothing here.

[topt]

9 minutes ago, Max69xl said:

"the Thai revenue people are not chasing people for tax. Monthly pensions being a classic example."

That's not a very good example. Have you heard about "double taxation treaties" between countries? You never pay tax in Thailand if there's a treaty between your home country and Thailand. You pay tax where the pension was earned. 

Incorrect again - no such thing as never. 

As has been posted on here many times before the UK has no DTA on normal pensions only government - and that does not mean the state pension. 

Since the OP is talking about the Channel Isles/IOM there is a good chance he may be UK non resident which I think makes it a very good example.......

If you had bothered to read my full post instead of trying to pick holes you would see I mention DTAs anyway. 

[4MyEgo]

On 6/27/2020 at 7:40 PM, mjakob007 said:

A foreigner who spends more than 6months in thailand during a year is deemed to be a resident in thailand for tax purposes?

I believe the correct terminology is a 'non resident' for tax purposes, i.e. on your worldwide income, i.e. regardless if it's your coming from within or outside Thailand, it's anywhere in the world and it goes back to your country of citizenship.

 

On 6/27/2020 at 7:40 PM, mjakob007 said:

if one is resident in thailand, is income earned abroad subjected to tax in Thailand? 

Does that tax exposure change if such income is earned in Isle of Man or jersey?

As you are not a citizen of Thailand I don't see what Thailand has to do with you earning a crust from overseas, although your citizenship country will want the tax on it. 

 

On 6/27/2020 at 7:40 PM, mjakob007 said:

If a resident has paid taxes overseas, does it become taxable when that money is imported to thailand for consumption/living expenses?

I don't see why, after all, you are paying taxes overseas, which your country of citizenship should receive or offset come tax time.

 

An example from my own experience. I am a non resident of Australia, I reside in Thailand, have done for the past 4.5 years, I make some money within Australia from here, doing some consultancy work from time to time, I send the report via email in a PDF file attachment to the client, the funds are paid into my Australian bank account. I pay tax in Australia as a non resident, i.e. 32c in the $, nothing to Thailand. I transfer money to Thailand to live on a couple of times a year at the most, however mostly once in a lump sum.

 

Also there are other benefits for 'non residents' who invest their savings in the stock market in Australia, as the stocks purchased don't have tax payable on them when you sell them for a gain, e.g. no capital gains tax, or no tax paid when you receive your dividend payment from the shares you hold, however if your shares aren't fully franked, i.e. they don't withhold the tax when paying you, then you have to pay that tax when tax time comes around.

 

Other countries might have a similar set up ?

 

But my take on your questions are no, zero, nothing, but always best to do your own research on Google relating to your country's tax system and or talk to an accountant.

 

[Autonuaq]

It is actually quiet easy,

 

You pay tax in thailand as well in the country where your world income does fall according to the rules.

Since most have a non-immigrant visa the world income falls in yhe country they last had registered thir domicilie.

 

Depending on the economic treaties between countries you can deduct the income tax paid in thailand from the income tax to be paid at the country your world income falls.

 

If this is not the case then you have to pay tax again over the income and assets (house, car and so on) that you already had paid tax over.

 

 

The games is simple and the revenue department always wins.

[khunPer]

1 hour ago, Max69xl said:

That's not a very good example. Have you heard about "double taxation treaties" between countries? You never pay tax in Thailand if there's a treaty between your home country and Thailand. You pay tax where the pension was earned. 

I don't think that is correct.

 

In principle you shall pay tax of retirement pension in the State where you are tax resident, i.e. Thailand – provided the money is moved into Thailand same calendar year as earned – but some DTAs, if not many (I haven't read them all), states in comments under retirement pensions that the DTA deviates from the OECD model agreement by saying that pensions can be taxed in both countries; which in practice mean that the state, where the pension is earned, also can tax the pension, and as double taxation will not take place, the other state will not tax the pension, or refund the tax.

[khunPer]

1 hour ago, 4MyEgo said:

I believe the correct terminology is a 'non resident' for tax purposes, i.e. on your worldwide income, i.e. regardless if it's your coming from within or outside Thailand, it's anywhere in the world and it goes back to your country of citizenship.

That is unfortunately wrong, your income is taxed in the country where you are tax-resident; i.e. stays 183+ days within any 12-month period. If there is no DTA you might also be taxed in your home country.

 

1 hour ago, 4MyEgo said:

An example from my own experience. I am a non resident of Australia, I reside in Thailand, have done for the past 4.5 years, I make some money within Australia from here, doing some consultancy work from time to time, I send the report via email in a PDF file attachment to the client, the funds are paid into my Australian bank account. I pay tax in Australia as a non resident, i.e. 32c in the $, nothing to Thailand. I transfer money to Thailand to live on a couple of times a year at the most, however mostly once in a lump sum.

Payment from work performed in another state (than you are tax-resident in) is only taxable in the other state (i.e. Australia), is what a DTA typically states. However, performing the work online from Thailand is in principle illegal without a work permit, and in principle also taxable in Thailand; the latter might even be less income tax than in Australia.

 

You should check the DTA between Australia and Thailand – not Google, but the actual DTA, which you can find here – you might miss some tax-benefits from staying here, might also include dividend tax from stock holdings, if Australian dividend tax is higher than 10 percent...????

Edited June 28, 2020 by khunPer

[Estrada]

9 hours ago, khunPer said:

I don't think that is correct.

 

In principle you shall pay tax of retirement pension in the State where you are tax resident, i.e. Thailand – provided the money is moved into Thailand same calendar year as earned – but some DTAs, if not many (I haven't read them all), states in comments under retirement pensions that the DTA deviates from the OECD model agreement by saying that pensions can be taxed in both countries; which in practice mean that the state, where the pension is earned, also can tax the pension, and as double taxation will not take place, the other state will not tax the pension, or refund the tax.

There is too much misinformation being posted on the taxation here of expat pensions. I used to work here and pay tax so I have a Thai tax registration and tax I.D. card. I already pay witholding tax on my investment income and bank interest. I went to the tax office here when I was about to receive my state and other pensions and they told me that they are not interested in taxing my pensions or pension lump sums.

[wordchild]

3 hours ago, Estrada said:

There is too much misinformation being posted on the taxation here of expat pensions. I used to work here and pay tax so I have a Thai tax registration and tax I.D. card. I already pay witholding tax on my investment income and bank interest. I went to the tax office here when I was about to receive my state and other pensions and they told me that they are not interested in taxing my pensions or pension lump sums.

As is often the case, there is a difference between what is enforced and what the law actually says. I doubt many Thai tax officers (say in the middle ranks) are themselves fully conversant with the intricacies of Thai tax law and, in particular,  the implications of the country's various DTA agreements. What they know is what their superiors tell them. What they focus on is what they are told to focus on.

I have worked in Thailand for more than a decade and I am a Thai tax payer. I have a number of sources of income from outside Thailand, including income from companies connected to the one that I work for in Thailand. Because the situation is somewhat complex, our company engages a leading international accounting firm (with a local office)  to give expat employees advice.

I take a very cautious approach to my tax obligations as I want to avoid future issues and also because I am concerned that , as the country needs to enhance its tax income, they will look more closely at the options they have to do so.  The taxation of expats looks, to me, to be a very obvious place for them to look for revenue raising opportunities.

What i often hear from our Thai tax advisers are phrases such as "this is a grey area" or "strictly speaking this could be taxable in Thailand but current  policy is not to enforce it." Like many people that i know, who work here, I take the conservative approach and retain overseas income outside the country , at least until the tax year following the one in which it was earned.  

For people who are retired here and especially those who are not registered  with the Thai Tax Authorities , I really doubt that there will ever be any serious issue.  However (in my opinion) those of us who are on the "tax radar", need to be cautious. Because, one day, some of these rules may be more strictly enforced. 

[Trillian]

+1

[khunPer]

8 hours ago, Estrada said:

There is too much misinformation being posted on the taxation here of expat pensions. I used to work here and pay tax so I have a Thai tax registration and tax I.D. card. I already pay witholding tax on my investment income and bank interest. I went to the tax office here when I was about to receive my state and other pensions and they told me that they are not interested in taxing my pensions or pension lump sums.

Yes, but reading individual DTAs – as I mention – is not misinformation, but facts for the individual. You need to know if there is a DTA between Thailand and the country from where you receive retirement pension, and exactly what that DTA says about taxation your type of retirement pension.

 

I also went to the tax-office, and they phoned someone "important" up in Bangkok that was very interested in taxing my retirement pension; luckily my home country has a DTA that clearly states that "retirement pension can be taxed in both States", so when already taxed by my home country Thailand cannot double-tax it...????

Edited June 29, 2020 by khunPer

[rickudon]

Although, in theory, some foreign derived income could be taxed in Thailand, the problem is PROOF. If your pension or salary is remitted directly to Thailand, there would be some proof. If you remit your income yourself, there is none. The Thai government would have to get your bank to disclose details of all your bank accounts - not very likely.

Also, if you have multiple accounts, and money moving between them, proving how much money remitted is actually income and not capital (12 month rule) is nearly impossible. Every tax claim would require an experienced tax lawyer to assess it - iF he had some evidence. Also the current law is useful to the elite with foreign investments - after 12 months, can remit tax free ....

 

As i am already taxed on my pensions in my home country, and my main pension is a government one, i would probably have no tax liability anyway. And i do not do bank to bank transfers usually, but use credit cards - another layer of fog!

[oznomad]

Sidebar:

The Australian DTA (and presumably others) says that the country that issues the state provided pension  is the one that collects the tax.

You cant opt out of this arrangement, which is unfortunate.

It does however leave the pension recipient, assuming no Thai income, with no Thai tax obligation.

But........ to be tax resident in Thailand you still need to file a return, get a tax id number and fill out the form for tax residency. Do not believe those that say 183 days here gives you tax residency. It's simply not true.

I tried a couple of times, with a few months in between, to file at the Revenue office. Got the same guy both times, and he just refused to do it. 

Anyone know an English speaking accountant in Jomtien, or Pattaya?

[YT3k72Em]

Did you manage to get a Tax ID?  if you can get that, then you can file online. (with some help)

[khunPer]

6 hours ago, oznomad said:

Sidebar:

The Australian DTA (and presumably others) says that the country that issues the state provided pension  is the one that collects the tax.

You cant opt out of this arrangement, which is unfortunate.

It does however leave the pension recipient, assuming no Thai income, with no Thai tax obligation.

But........ to be tax resident in Thailand you still need to file a return, get a tax id number and fill out the form for tax residency. Do not believe those that say 183 days here gives you tax residency. It's simply not true.

I tried a couple of times, with a few months in between, to file at the Revenue office. Got the same guy both times, and he just refused to do it. 

Anyone know an English speaking accountant in Jomtien, or Pattaya?

That is true that it's incredible difficult to be registered as tax-resident in Thailand, if you don't have a work income. Being registered as tax-resident was extremely difficult, at least where I live, when staying in the country based on extensions due to retirement; I talk from experience.

 

However, even you are not due any tax on a retirement pension because of a DTA, you might still need your tax-resident registry. I needed one for having dividend tax reduced in my home country to 10 percent instead of 27 percent, as I can according to the DTA. It might be worth it, but I could only get my tax refund by having two Thai document for each tax-year in question, i.e. "Certificate of  Residence : R.O.22" and "Income Tax Payment Certificate : R.O.21"; the latter proof of that I did pay some income tax in Thailand, wherefore tax on interest, or dividends, or anything else legal as retired in Thailand might be needed. It was needed in my case to be allowed to be registered as income tax payer...

 

About 11 percent of the Thai population is registered as income tax payers, and only little less than 5 percent of the Thai population actually pays income tax, according to a recent news article...????

[oznomad]

7 hours ago, YT3k72Em said:

Did you manage to get a Tax ID?  if you can get that, then you can file online. (with some help)

Yep. Got that one last year. I had a look at filing online but between the translation and the randomness of the formsI will go the accountant route.

[Leaver]

I wouldn't be so concerned about taxes in Thailand because you are here for more than 6 months of the year.  I would be more concerned about taxes in your home country because you are away for more than 6 months of the year.  

[Max69xl]

On 6/28/2020 at 4:42 PM, topt said:

Incorrect again - no such thing as never. 

As has been posted on here many times before the UK has no DTA on normal pensions only government - and that does not mean the state pension. 

Since the OP is talking about the Channel Isles/IOM there is a good chance he may be UK non resident which I think makes it a very good example.......

If you had bothered to read my full post instead of trying to pick holes you would see I mention DTAs anyway. 

I was referring to the not so good  "classic example" you came up with. So,next time,skip incorrect "classic examples". 

[jerry499]

On 6/28/2020 at 3:32 PM, khunPer said:

Foreign income transferred into Thailand later than the calendar year it's earned, is considered as tax free savings. I.e. if a foreign income is earned in November and is transferred in December it's personal income taxable; whilst if the foreign income from November is transferred into Thailand in January, it's considered tax-free savings.

 

Hi Kun Per, thank you for your thoughtful answers re taxation of foreign income in Thailand.

 

Could you provide a source for your statement that transfers of previous years income is not taxable in the next year?

 

Many thanks

[khunPer]

4 minutes ago, jerry499 said:

Hi Kun Per, thank you for your thoughtful answers re taxation of foreign income in Thailand.

 

Could you provide a source for your statement that transfers of previous years income is not taxable in the next year?

 

Many thanks

Quote

A resident is liable to pay tax on income from sources in Thailand on a cash basis, regardless of where the money is paid, and on that portion of income from foreign sources that is brought into Thailand in the same year that the foreign income is derived.

Source: Mazars "A CLOSER LOOK PERSONAL INCOME TAX RETURN (PND 91)"