TAT latest: Elite card holders who buy a condo can stay "long term" and get work permit - but there's a catch

[elgenon]

Maybe the Chinese will do it. Oops, they can't get the money out to launder.

[humbug]

22 hours ago, donnacha said:

There was some discussion of this news when I posted it yesterday in a related thread. I was not able to create a new thread here in the News section, seems to be restricted.

My own take is that this move actually indicates a direction that would be a lot smarter for Thailand than it at first appears.

https://forum.thaivisa.com/topic/1184176-tat-turning-to-the-super-wealthy-to-boost-domestic-tourism/?do=findComment&comment=15848334

In short, some bright spark has figured that taxes in most of the world are going to rocket post-Covid and that, along with the swing towards remote working, there will be a big increase in the number of individuals and families attracted by the loophole of Thailand not taxing income generated abroad.

Thailand's tax system is designed to benefit rich Thais but, at this crunch-time for the Thai economy, they can leverage that to attract a significant number of well-heeled expats. Not quite the actual super wealthy who can afford the Bahamas, but a wider target that, in particular, takes in the European middle classes, the same audience that Mohammad Bin Salman is targeting with Neom.

They will just keep referring to the "super wealthy" it order to make it easier for the ultra-nationalists to swallow these concessions.

 

 

the nationalists and the chinese nationalists with thai id's are the issue here, its not something you can trust, your posted article and this threads article are quite different, which happens a lot on the elite info, this threads mentions more about the application process changing which means more structural changes that might eliminate some future applicants, your posted article, which i think is closer, mentions added on features, for those that want the extra feature,  but its not structural changes.

 

we had the nationalists all over this 18 years ago over the one rai land, then ten years ago over this programme, it feels more about the future agreements to allow chinese to live here, like in many of the other belt and road secret agreements, and any other foreingners who stay, won't get as easy time as the chinese, but as the wealthy are fewer, their greed makes exceptions, it feels we are going down this path

[Pravda]

3 hours ago, donnacha said:

Grabbing a few hundred thousand foreigners as they flee punitive post-Covid taxes in their own countries, and getting them each to pump a million dollars into Thailand, is the easiest way to prop up the property market while also keeping the ultra-nationalists happy that these aren't just any dirty farangs, these are "super wealthy" farang.

 

I can assure you that wealthy foreigners have been avoiding taxes for decades already. They don't have to come to Thailand. 

[donnacha]

1 minute ago, Pravda said:

 

I can assure you that wealthy foreigners have been avoiding taxes for decades already. They don't have to come to Thailand. 

Of course. As I keep stressing, the actual, real super wealthy have been using far more advanced solutions for decades. That market is well catered for and billionaire tax exiles have far nicer places to live than Thailand.

What the Thais are figuring out here is now to ramp up usage of the basic loophole that foreigners here are already using and use it to lure the new class of middle-class professionals working remotely or online business owners, people who have never before sought to avoid taxes but who are about to get hammered by financial reality.

I am not even saying that Thailand will be the best option for those people. I would expect the various Emirates to be competing in this space, along with the new territory of Neom, and any other independent country whose existing arrangements have been derailed by the pandemic.

 

[dbrenn]

23 hours ago, BritManToo said:

Doubt anyone with $1M to play with would want to live in Thailand, or even holiday here more than once.

I certainly wouldn't.

 

I'd like to ask TAT ...... why do you think rich foreigners would want to live in Thailand? (or even holiday here?)

Britain beckons. 

[donnacha]

 

52 minutes ago, humbug said:

added on features, for those that want the extra feature,  but its not structural changes.

I think what the second article managed to obscure was the revealed intent behind the changes. The details in the first article suggest that, despite appearances so far, the government actually are aware of how much trouble economy is in due to the disappearance of foreign tourism, and are breaking out the emergency option of becoming a sort of "tax haven lite".

They already are that for many of us, but the requirements they are adding are necessary if they are going to scale that up as much as they will need to.

 

52 minutes ago, humbug said:

we had the nationalists all over this 18 years ago over the one rai land, then ten years ago over this programme, it feels more about the future agreements to allow chinese to live here, like in many of the other belt and road secret agreements, and any other foreingners who stay, won't get as easy time as the chinese, but as the wealthy are fewer, their greed makes exceptions, it feels we are going down this path

Much as I dislike the current government, they do have the advantage of themselves being nationalists. They understand what is necessary to allow this scheme to fly with the other nationalists. They will keep referring, again and again, to the "super wealthy", even though their actual target is essentially middle class professionals and small business owners.

They have chosen the figure of one million dollars because they know that it sounds like a lot to most Thais, but is actually not so much, and it appears that they are allowing a lot of latitude in what you invest in, so, that also makes it easier.

You are undoubtedly right that the Chinese will continue to get major concessions and, if not for the pandemic, it is likely that the generals planned a future with the Chinese as sole resident foreigners. Now, however, the harsh reality of how much trouble Thailand is in means they have lowered their standards and once again welcome our money.

 

[ThaidDown]

8 minutes ago, donnacha said:

Another twist worth noting is that the better and one-day earlier article from the Bangkok Post was not used here because the ThaiVisa editors refuse to use content from there. I can understand the commercial imperative, as this forum is owned by The Nation but, in addition to the underplaying of major stories such as the anti-army protests, it all results in a limited and skewed reflection of what is happening in this country.

 

 

You have it the wrong way round. It's Bangkok Post that does not allow links or their content to be used. Has been that way for years.

 

[donnacha]

3 minutes ago, ThaidDown said:

You have it the wrong way round. It's Bangkok Post that does not allow links or their content to be used. Has been that way for years.

Ah, okay, thank you. I have amended that post.

That is truly insane on the part of the Bangkok Post.

 

[wealthychef]

Thank god the rich are getting some relief in these trying times!  I'm so tired of governments only helping the poor.  

[DrTuner]

Came to me who this scheme is for. Chinese running illegal hotels. No wonder it didn't make any sense to me.

[DrTuner]

3 hours ago, Straight8 said:

Why can't I know any rich people?? How do you get to know all these rich people in Thailand???

You need to be rich yourself. Then you'll find out there's only a few places these people hang out at and use the same very few service providers that cater for special needs. It's a very small world and you'll end up seeing the same faces again and again. Same everywhere, birds of feather.

[Eibot]

5 hours ago, donnacha said:

Under Thai tax laws, you do not have to pay tax on foreign income that has been in your possession for 12 months before you transfer it to Thailand. That is not tax evasion because you have fulfilled your tax obligation.

With respect, if you didn't know that, and have actually been paying taxes on income from abroad, you probably shouldn't be giving tax advice.

Sure, but that will mean you have already paid income tax in the country where you obtain this "income". Obviously you're not going to pay tax twice over the same amount thus not tax evasion. I'm talking about income that comes into your possession while your have your domicile in Thailand, and have de-taxed from your home tax system due to living in more than 180 days of the year in Thailand. 

 

5 hours ago, donnacha said:

The point of the work permits, collectively, is to strengthen the overall case of the Thai authorities that all of these foreigners are legitimately subject to the Thai tax system rather than their home country's system

I don't see the point in that. Your legal work status has nothing to do with who you pay tax. Even if I have a Thai work permit, if I spend more than an X amount in country Z, I'll automatically become liable for income tax in that particular country as my domicile switches. 

 

Domicile is not calculated on your legal status, but rather the place where you reside the most in the year. Obviously if we can set up a Thai Company, than it could be more attractive. 

[DrTuner]

1 hour ago, donnacha said:

I am not even saying that Thailand will be the best option for those people. I would expect the various Emirates to be competing in this space, along with the new territory of Neom, and any other independent country whose existing arrangements have been derailed by the pandemic.

With Emirates and Saudis you need to be aware they could go full sharia fatwa on you any time. There's always a downside.

[donnacha]

30 minutes ago, Eibot said:

Sure, but that will mean you have already paid income tax in the country where you obtain this "income".

No, you don't pay income tax if you are not resident in the country and the work has been performed elsewhere.

For example, say you own a brewery in Ghana and need to hire a designer to create new labels for Your "Eibot Special Reserver" lager. You might find a freelancer from Brazil but living in Thailand. You would pay the money into their non-resident bank account in Europe, and they would later transfer that money to their Thai bank account.

It would work exactly the same way if you were hiring a full-time book-keeper from India. You would not apply income tax at source to outsourced positions. It is up to them to handle their tax arrangements.

A more complicated situation would be if you decided that, due to the pandemic, any of your office workers who want to work remotely can do so from now on. Any employee wishing to move to Thailand would probably have to notify the Ghanian authorities of their intention to leave and settle any outstanding taxes owed (I have actually been through this process in the UK). From that point on, your payroll staff would treat that wage like an outsourced role and stop removing income tax at source.

 

30 minutes ago, Eibot said:

I don't see the point in that. Your legal work status has nothing to do with who you pay tax.

It is, absolutely, 100% one of the factors used to determine your "economic center".

I have actual acquaintances who have lived in Thailand for years but were presented with horrific back-dated tax bills by their home countries on the basis that they had no legal right to earn money in Thailand. The EU is getting very serious about this.
 

30 minutes ago, Eibot said:

Domicile is not calculated on your legal status, but rather the place where you reside the most in the year.

Nope. Residing over a certain number of days per year in your home country does mean they will automatically consider you tax liable to them, but they can make the same determination due to other factors, even if you have not spent a day in your home country in years. Property, bank accounts, contact with any businesses you might have there etc.

The work permit has nothing to do with you as an individual. It is part of an overall narrative that the Thai's need to carefully craft if they are going to transition to this "tax haven lite" model to replace their no-longer-viable mass tourism model. Thailand is too big and too dependent on exporting to risk annoying the world's big boys. They have to do what they have to do, but hope to delicately avoid pariah status by not being quite as blatant as the smaller, proper tax havens that service the truly wealthy.

So, by default, as they scale this up, everyone will have a plausible story. Retirement, marriage, parent, real job, or significant investor. The existing Elite Visa has worked well but it simply won't be sufficiently bulletproof as the Western economies become far more aggressive about retaining their tax livestock.

 

[Stevebond]

There is a loophole they won’t tell you

if you go on the net 

covid19.tgia.org

you can get expat $100,000 USD and it covers COVID-19 

3,000baht do it on line and they will send you cover in seconds of credit card payment 

I submitted it to the consulate last month prior to them giving me a Visa now I’m in Thailand with full cover

[donnacha]

42 minutes ago, DrTuner said:

With Emirates and Saudis you need to be aware they could go full sharia fatwa on you any time. There's always a downside.

Sure, you can never be sure of anything, just look at how much the situation in Thailand has changed over the past decade.

The Saudi approach to Neom is somewhat reassuring, with English common law in place rather than Saudi law, so, don't worry, you will be able to keep blowing policemen.

But, yes, that could all fall apart if the House of Saud regime falls.

 

[Eddy Ozark]

If it was ever a good idea to buy a condo here, then the time to do so is not now. There is an oversupply of them and has been for the past few years, as far as I know.

[chilli42]

On 9/24/2020 at 7:57 PM, donnacha said:

There was some discussion of this news when I posted it yesterday in a related thread. I was not able to create a new thread here in the News section, seems to be restricted.

My own take is that this move actually indicates a direction that would be a lot smarter for Thailand than it at first appears.

https://forum.thaivisa.com/topic/1184176-tat-turning-to-the-super-wealthy-to-boost-domestic-tourism/?do=findComment&comment=15848334

In short, some bright spark has figured that taxes in most of the world are going to rocket post-Covid and that, along with the swing towards remote working, there will be a big increase in the number of individuals and families attracted by the loophole of Thailand not taxing income generated abroad.

Thailand's tax system is designed to benefit rich Thais but, at this crunch-time for the Thai economy, they can leverage that to attract a significant number of well-heeled expats. Not quite the actual super wealthy who can afford the Bahamas, but a wider target that, in particular, takes in the European middle classes, the same audience that Mohammad Bin Salman is targeting with Neom.

They will just keep referring to the "super wealthy" it order to make it easier for the ultra-nationalists to swallow these concessions.

 

 

Agree.  You don’t need to be uber rich to afford 1-2 million for a residence permit ... and 1 million for a residence is small.  The 1-2 million is well in line that many other countries are offering to entice well off foreigners.  Some of these people are looking for a second country bolt hole.  It’s smart move by Thailand and far from a unique plan to attract well heeled foreigners.

[donnacha]

24 minutes ago, chilli42 said:

Agree.  You don’t need to be uber rich to afford 1-2 million for a residence permit ... and 1 million for a residence is small.

The most interesting twist is that the $1m doesn't need to be spent on a residence, as so many in this thread are presuming. It can apparently be any investment in property, or an existing business, or starting your own, or any combination.

Presuming prices drop quite a bit next year as currently overextended businesses flame out, and presuming an effective vaccine emerges, and presuming the world slowly swings back to normality, it could actually work out pretty well over a ten-year span.

The pandemic may drag on for longer than we hoped but next year will surely be the low point economically as the chaff gets blown out.

 

[lkv]

3 hours ago, donnacha said:

it could actually work out pretty well over a ten-year span.

Thailand will make sure, somehow, that you arrive with 1 million dollars and leave with 1 million baht, if you are lucky.

 

They have experience in playing this game.

[DBath]

47 minutes ago, lkv said:

Thailand will make sure, somehow, that you arrive with 1 million dollars and leave with 1 million baht, if you are lucky.

 

They have experience in playing this game.

Yes, I think so. It’s taken me about 5 mos. to figure this out. It’s gotten to point I don’t feel line tipping anymore. That’s probably terrible, I know, but there is a marked difference between how I was treated here 3 years ago and now. Since I’m retired, I resent people trying to screw me out of my hard earned $’s. 

[raccos21]

For now Thailand is not the best choice.Maybe after the new government.

 

 

[Eibot]

7 hours ago, donnacha said:

No, you don't pay income tax if you are not resident in the country and the work has been performed elsewhere.

For example, say you own a brewery in Ghana and need to hire a designer to create new labels for Your "Eibot Special Reserver" lager. You might find a freelancer from Brazil but living in Thailand. You would pay the money into their non-resident bank account in Europe, and they would later transfer that money to their Thai bank account.

Just to be clear here I'm talking personal tax - Who doesn't need to pay income tax and why?

 

8 hours ago, donnacha said:

It would work exactly the same way if you were hiring a full-time book-keeper from India. You would not apply income tax at source to outsourced positions. It is up to them to handle their tax arrangements.

How is this relevant?

 

8 hours ago, donnacha said:

It is, absolutely, 100% one of the factors used to determine your "economic center".

It might help, but it's most definitely not a must. I run my business from the UK, my clients are all over Europe. I moved to Thailand with my family, informed HRMC (de-taxed), confirmed my domicile with HRMC (proof of residence - proof of tax paid in Thailand). Also having no property, physical business or family members in the UK is important to change domicile. 

 

8 hours ago, donnacha said:

I have actual acquaintances who have lived in Thailand for years but were presented with horrific back-dated tax bills by their home countries on the basis that they had no legal right to earn money in Thailand. The EU is getting very serious about this.

To vague to use this as a relevant argument for this. 

a) Which country where they from? US tax for example is a different cookie

b) Are they registered for a business? If so, where?

c) Do they have a company or sole trade/freelance?

d) Have they informed tax authorities they are moving (de-taxed)

e) Have they confirmed changing of domicile with the relevant tax authority?

f) Have they done their periodic self assessment for their respected tax authority?

g) most importantly - have they paid their tax in Thailand and can they proof this back to their respected tax authority? (my bet is they haven't paid a penny)

 

Also there is no such thing as "right to earn money". I presume you mean "right to work"? It seems very unlikely their respected tax authorities are claiming that tax has to be paid based on immigration laws from a foreign country...

 

Also the EU is not a tax authority (not sure that you mean that per se). Taxation in let's say Italy couldn't be more different than taxation in let's say The Netherlands. 

 

8 hours ago, donnacha said:

Nope. Residing over a certain number of days per year in your home country does mean they will automatically consider you tax liable to them, but they can make the same determination due to other factors, even if you have not spent a day in your home country in years. Property, bank accounts, contact with any businesses you might have there etc.

True, but you physical location is the most important factor. But to truly cut loose of one tax system the whole picture has to be there. This will also depend on which tax system you leaving and which one your entering. 

 

9 hours ago, donnacha said:

The work permit has nothing to do with you as an individual. It is part of an overall narrative that the Thai's need to carefully craft if they are going to transition to this "tax haven lite" model to replace their no-longer-viable mass tourism model.

In previous posts you mentioned people working online as to who this might be of interest for, hence I replied. People earning money from oversees but living here can already pay Thai tax without a WP, thus in a sense it's already a tax haven. I don't see who could possible benefit from a 1 million baht WP....

 

[bwpage3]

14 hours ago, donnacha said:

Sure, I am aware of the problems.

As I said, the terms do not restrict the nature of your investment. It can be in any sort of business, including one you run yourself.

As this scheme is aimed at high earners who make the majority of their income online or remotely, they will be saving at least a few grand every week in taxes. That will be their primary reason for participating.

I gave the example of a small block of condos as a relatively easy business to run on the side, while also solving your own accommodation needs. While many condos lie empty, it is clear that an Internet-savvy native English speaker is better able to find tenants or Airbnb guests. There is a big difference between being a silent partner and actually putting some effort behind your investment.

Of course, right now, practically every business is an uncertain prospect, especially those geared towards Western customers or guests. Any investment in these strange times is a gamble. On the other hand, the pressure that undercapitalized or indebted businesses will be under as we head into next year with no relief in sight will mean far more fire-sales, and far lower prices for those who do have cash.

It will take Thailand time to recover but, for those who wish to escape unprecedented levels of taxation in their own countries over the next decade, and who plan to be here that long, it is actually a pretty good deal.

 

I would love to see your list of people working online that can afford a million dollar condo?

 

The majority of people in that range would never live in Thailand.

 

Fire sales don't mean a damn thing in Thailand.

 

Do you really think Thai's would give up a financial cash-cow?

 

The evidence of the fire sale is proof itself.

 

Any person from any country could have lost it all in this pandemic. 1997 many lost it all.

 

Thailand or any country, there is no guarantee the rest of your life.

 

Business is a risk, couple with the fact, that Thai's like to copy businesses that are making money and open right next door, under-cutting you is evidence.

 

Does Thailand really need 7/11's 100 meters from each other.

 

For every ex-pat with an extremely financially successful business in Thailand, there are 99% of the rest not so fortunate.

 

People move to Thailand for the most part to live because it is cheap. Not because they are millionaires.

 

You see anyone of your friends living in ocean front mansions or driving Lamborgini's?

 

Most are having a happy existence with that their life long work earned them (retirement) or others suffice with working as teachers.

 

The saying has rung true for years on this forum.

 

Never invest what you cannot afford to lose.

 

Plus if you do lose it all, you better have a pension or other guaranteed income you can live on the rest of your life.

 

You cannot predict the economy or political nature of 3rd world countries.

 

One swipe of the pen and you could lose it all.

[bwpage3]

2 hours ago, DBath said:

Yes, I think so. It’s taken me about 5 mos. to figure this out. It’s gotten to point I don’t feel line tipping anymore. That’s probably terrible, I know, but there is a marked difference between how I was treated here 3 years ago and now. Since I’m retired, I resent people trying to screw me out of my hard earned $’s. 

You have a good point.

 

I think economically, working class Thai people as a whole, are struggling and it shows in their attitude.

[thailand49]

Can someone wake this fool up! " interest - expect "  this is what happens when you are given the job because you are family!

[wordchild]

My feeling is that ,in principal , Thailand is well placed to benefit from ,let’s call them wealthy  “fiscal Refugees “.  
And I know that there are a number of economically  significant, Thai business people, who are frustrated at the lack of imagination shown by the current govt, in terms of taking advantage of this. The problem, as others pointed out above, are the ultra conservative/nationalists many of whom sit within important Government Departments.
There are many smart people within the Thai business community who are pretty progressive and are trying to help the current, dire situation , and move things along, pushing new ideas. However  there is much dead wood and, from what I hear,  some ,frankly appalling , racist individuals, who stand in the way.

This current proposal is an example of this.
I have some distant knowledge of this, and I believe that the genesis of this scheme was a proposal to re-jig the current torturous PR process and attempt to target it more at attracting wealthy individuals and entrepreneurs who might bring something new and help rejuvenate the Thai economy. Rather than the current focus which is on long term , time serving, working expats, with Thai families, but with relatively low paying jobs.
As I understand it, the original proposal was a fast track route to PR for those wealthy individuals and entrepreneurs who were prepared to substantially relocate themselves to Thailand, with some promise of investment.
One early suggestion, I understand, was that the Thai language requirement (for PR)  should be dropped completely. One can only imagine how this proposal went down with the Ultra Nationalists!

in any event, the whole thing seems to have been watered down significantly to a point where , as Eibot pointed out above, ( with just a WP on offer) the marginal benefit, for most expats seems to be somewhat limited.
 

[onebir]

23 hours ago, wordchild said:

I believe that the proponents of this (current scheme)  realize that, in order for it to be significantly attractive to the wealthy people that they wish to attract, then a route to PR needs to be on offer. Not just a WP. 

If so, why isn't PR on offer?

(or, heaven forfend... citizenship!)

[onebir]

3 hours ago, raccos21 said:

For now Thailand is not the best choice.Maybe after the new government.

A Malaysian friend of mine described the country as a "multi-racist society". She also told me about the religious police: https://en.wikipedia.org/wiki/Islamic_religious_police#Malaysia

 

Quote

Punishable offenses include khalwat, the offense of being in close proximity to any forbidden member of the opposite sex*. Adultery is also an offense and may lead to up to two years in prison. According to local newspapers, the moral police have stopped hundreds of couples.^[16] Other offenses include extra-marital sex, alcohol consumption, not fasting during Ramadan, and not visiting the mosque during Friday prayer.

*I believe this includes Muslim/non-Muslim couples.

[ukrules]

17 hours ago, donnacha said:

Under Thai tax laws, you do not have to pay tax on foreign income that has been in your possession for 12 months before you transfer it to Thailand. That is not tax evasion because you have fulfilled your tax obligation.

Riddle me this : Say I borrow $200k from a 'bank' or company or 'friend' and then transfer it to Thailand, what happens then?

 

Lets assume I take out the loan on January 10 and send it on January 11, the following day of any given year.