Tax rates for stocks in Thailand?

[Genix]

Hey,

In the process of getting my Thai Elite and will e opening a bank account with Citibank (they have an easy offer for TE) and I'd be looking to invest with the U.S stock market.

 

Is it 10% on dividend & 10% on gains (only when sold)?

Are there any downsides (fees etc)?

 

I'd transfer funds from USD to a USD balance in Citi's bank. 

[Oxx]

I'm assuming you're not American.

 

Non-resident aliens have withholding tax deducted at 30% on dividends.  They do not pay capital gains tax.

 

However, if there is a tax agreement between the country of residence and the US, withholding tax may be at a lower rate - in the case of Thailand it's 15%.  However, not all brokers implement the lower tax rate* and tax is deducted at 30%.

 

I would suggest, however, that you check the situation with respect to US Estate tax in the event of your death.

 

 

 

* E.g. Saxo Singapore.

[TPDH]

Any specific reason you want to use Citibank for trading rather than an online broker like Interactive Brokers? Typically online brokers have less fees than banks for stock trading. 

[khunPer]

Yes, as @Oxx says, foreigners living abroad can – depending of Double Taxation Agreement (DTA) – be withheld 15 percent only in USA dividend tax, instead of 30 percent.

 

In my case the broker bank, where I have my online trading platform, takes care of the application – I just need to sign it – and it lasts for three years, where-after it need to be renewed, which my broker bank also takes care of.

 

No tax on capital gains, in USA, but if you are tax-resident in Thailand – i.e. stays here 183 days or more a year – you are due to pay tax on foreign income, including capital gain. However, foreign income are only taxed if you transfer it to Thailand during the same calendar year as it's earned; the following year, and any later years, it's considered savings, which are tax free.

 

The 10 percent tax you mention is for dividends pay from Thai stocks, and might in some cases also apply to dividend paid from stock portfolio in your home country, depending og the DTA between your home country and Thailand. There are no capital gain tax from stocks traded on SET.

[Oxx]

8 hours ago, khunPer said:

if you are tax-resident in Thailand ... you are due to pay tax on foreign income, including capital gain.

 

But has anyone actually paid this? Do the tax authorities ever check? I think this is more of a theoretical thing than a reality, otherwise all UK pensioners (and others) would be taxed here on their UK pensions.  (There's no DTA for state or private pensions between Thailand and the UK.)

[khunPer]

4 hours ago, Oxx said:

 

But has anyone actually paid this? Do the tax authorities ever check? I think this is more of a theoretical thing than a reality, otherwise all UK pensioners (and others) would be taxed here on their UK pensions.  (There's no DTA for state or private pensions between Thailand and the UK.)

The tax-man in Thailand don't seem to care much about foreigners.

 

I know from experience how difficult it is to be registered for tax as a foreigner without a work permit, living from a combination af pension, savings, dividends and capital gains.

 

For the latter – capital gains – i would think that most foreigners keep them offshore, just like me, and transfer them next calendar year or later...????

There are about 11 million people registered for income tax in Thailand, and around 4 million pays income tax. Source: The Nation Thailand "Wealthy could lose some tax-deductible privileges."

 

There can however be benefits from being registered as taxpayer in Thailand. For example is the DTA between my home country and Thailand made so that I can pay 10 percent Thai dividend tax on dividends paid out in my home country – instead of 27 percent withheld tax – but I need to be registered for tax in Thailand, and prove I also make a tax-statement (Thai tax return form) for each year, where I claim tax reduction from my home country.

 

You can find the DTA between Thailand and GB HERE, the pensions would be covered be not being double taxed, i.e. if tax is paid/withheld in GB the amount is not taxable in Thailand; I presume clause 23 "Elimination of double taxation" takes care of that (I however, havn't read it, as I'm not from GB).

[Oxx]

1 hour ago, khunPer said:

You can find the DTA between Thailand and GB HERE, the pensions would be covered be not being double taxed

 

That DTA refers to Government pensions (i.e. those paid to former civil servants); it does not cover State (i.e. paid to people who've actually done proper work during their lives) or Private pensions.  Technically the latter two types of pension should be double taxed.

[khunPer]

6 hours ago, Oxx said:

That DTA refers to Government pensions (i.e. those paid to former civil servants); it does not cover State (i.e. paid to people who've actually done proper work during their lives) or Private pensions.  Technically the latter two types of pension should be double taxed.

If have seen a few postings on the Internet about double taxation of British retirement pensions, but I cannot see that it's the case, since there is a DTA, which means that if tax has been paid in GB – for example of a retirement pension – and Thailand also tax that income, i.e. double taxation, Thailand shall deduct the tax already paid in Britain, from the tax due in Thailand. That should be covered by clause 23 "Elimination of double taxation".

[Oxx]

13 hours ago, khunPer said:

If have seen a few postings on the Internet about double taxation of British retirement pensions, but I cannot see that it's the case, since there is a DTA, which means that if tax has been paid in GB – for example of a retirement pension – and Thailand also tax that income, i.e. double taxation, Thailand shall deduct the tax already paid in Britain, from the tax due in Thailand. That should be covered by clause 23 "Elimination of double taxation".

 

The UK government publishes a "Digest of Double Taxation Treaties".  It states explicitly (note 4 for Thailand) "Treaty does not include an article dealing with Non-Government pensions. Also, no relief for State Pension or ‘trivial commutation lump sum’". 

 

In other words, the civil servants have made sure they don't have to pay tax twice on their gold-plated pensions, but don't give a damn about the rest of us.

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710099/DT_Digest_April_2018.pdf

[khunPer]

1 hour ago, Oxx said:

 

The UK government publishes a "Digest of Double Taxation Treaties".  It states explicitly (note 4 for Thailand) "Treaty does not include an article dealing with Non-Government pensions. Also, no relief for State Pension or ‘trivial commutation lump sum’". 

 

In other words, the civil servants have made sure they don't have to pay tax twice on their gold-plated pensions, but don't give a damn about the rest of us.

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710099/DT_Digest_April_2018.pdf

Thanks for your reply and link.

Sad new for Brits living on small pensions, already loosing value due to currency exchange rate – and some posters have also talked about no indexed raise in payouts – but always look at the bright side of life: You'll have full income deductions and a low tax-rate in Thailand, and furthermore only be taxed of the amount you transfer in same calendar year as earned.