Should I worry about Thai income tax? getting paid in Thai bank account by overseas company

[doomslayerxyz]

I am a EU (eastern europe) citizen. I get paid regularly every month by an Australian company. 

 

I am considering starting to receive this salary directly in my Thai bank account and bypass my home country.

 

Should I worry about the Thai government asking me for income tax? Theory and practice may be different - has anyone had issues in practice with a similar situation? 

It would be a decent sum, about 400K baht per month if that's relevant.

 

I live here with my Thai wife, non-O visa, >180 days in a year although I am moving back to my country in January - so I suppose I won't even be a tax resident then ...

 

Is this a good way to "optimize" my tax situation?

 

 

[SCOTT FITZGERSLD]

Generally speaking, the tax laws in Thailand apply only to income generated in Thailand.

It is called territorial tax system.

Thai law also determines that a Thai tax resident (anyone who stay in thailand more than 180 days in a year)  must pay taxes on capital gains if you trasfer it into thailand in the same year you earned it.

So if you get the payments from australia for work which has nothing to do with thailand, than thai tax authorities will propably not care about it.

However, in case you will want to transfer large amounts from your thai bank account, you might be required to show some documents that you did pay taxes on the money in the country where the payment is destined.

each country has different requirements.

Also, any transfer which is larger than 2 million baht must be reported to bank of thailand, but that does not

mean they will want to tax it.

So to conclude, Thailand can be seen as a semi tax shelter, where you can park semi-large amounts of  money without being worried about taxes, as long as this money is not sourced from income generated in thailand.

[userabcd]

If you are resident in Thailand and remit earned income to Thailand in the year it was earned then you are tax liable in Thailand (if tax was paid else where that you could prove and then claim a rebate on the Thai tax owed) The income should be declared and tax return submitted.

 

If you are resident in your foreign country then you would have to see the  tax rules related to residence, declaring foreign earned income and earning income whilst living and resident in your country and if taxes are to be paid.

[jojothai]

Thailand has committed to join the "common reporting standard" and you need to get familiar with what that means. It should start soon here, but COVID 19 has put things back. Perhaps it may be another year or three. TIT.

All banks and financial institutions in countries abiding by it have to get your tax identification details. Countriss will make agreements to exchange details of your account with other countries.

This is already being implemented by many countries and it is a matter of time until it fully comes to happen

A few years, 5 years . Who knows.

You need to figure out the implications.

Its not urgent now if you are tax resident in thailand but if you become resident elswhere then you need to figure out what they are doing about it.

All the accounts i have outside thailand have demanded the tax identifocation.

Even china has signed up and started to implement.

when thailand implements it, the first thing is that the banks will insist that they need your tax ID for you to maintain the account. You can stall for a year or so.

The old days of thinking you just put money earned wherever you want to hide it from tax authorities are starting to close and people are going to have to figure this into their plans in the near future.

Thailand can be a good place to be tax resident if you earn money outside and keep it outside, bringing it in as you need to avoid or minimise the tax here.

For the situation you are saying, you need to properly check what the rules are concerning bringing income into the country and what constitutes local income subject to tax, whether you are fully resident or not.

Having to declare to the bank where you are tax resident and a tax ID when it comes may cause a lot more problems for some people than they realise now.

Think ahead.

I am not in any kind of business concerning this and simply search and find out what i need to know for my own situation.

 

 

[jojothai]

9 hours ago, SCOTT FITZGERSLD said:

Thai law also determines that a Thai tax resident (anyone who stay in thailand more than 180 days in a year)  must pay taxes on capital gains if you trasfer it into thailand in the same year you earn it.

As i understand it, see in all tax guidance and have been advised, it is income earned outside the country that you transfer in, and not just capital gains.

Pension income included.

Can you advise which requirememt states just capital gains. I would be grateful to know please.

It is a very big difference from what i read and will make very significant difference concerning pension income from overseas.

[Seeall]

keep it shut please... dont give them ideas...!! if u want give cash away dontate it to the local monks, evebn then, keep it shut!!

[DrPhibes]

I actually keep an account where the years earnings (we will live on next year) are deposited into it on Jan 2nd of the next year.  Very clean, problem solved.

[Seeall]

1 hour ago, jojothai said:

Thailand has committed to join the "common reporting standard" and you need to get familiar with what that means. It should start soon here, but COVID 19 has put things back. Perhaps it may be another year or three. TIT.

All banks and financial institutions in countries abiding by it have to get your tax identification details. Countriss will make agreements to exchange details of your account with other countries.

This is already being implemented by many countries and it is a matter of time until it fully comes to happen

A few years, 5 years . Who knows.

You need to figure out the implications.

Its not urgent now if you are tax resident in thailand but if you become resident elswhere then you need to figure out what they are doing about it.

All the accounts i have outside thailand have demanded the tax identifocation.

Even china has signed up and started to implement.

when thailand implements it, the first thing is that the banks will insist that they need your tax ID for you to maintain the account. You can stall for a year or so.

The old days of thinking you just put money earned wherever you want to hide it from tax authorities are starting to close and people are going to have to figure this into their plans in the near future.

Thailand can be a good place to be tax resident if you earn money outside and keep it outside, bringing it in as you need to avoid or minimise the tax here.

For the situation you are saying, you need to properly check what the rules are concerning bringing income into the country and what constitutes local income subject to tax, whether you are fully resident or not.

Having to declare to the bank where you are tax resident and a tax ID when it comes may cause a lot more problems for some people than they realise now.

Think ahead.

I am not in any kind of business concerning this and simply search and find out what i need to know for my own situation.

 

 

the NEED this NEED that..  I NEED air, moneey and pussy ...  you must NEED be from the us I NEED to think?

[Pdavies99]

6 hours ago, userabcd said:

If you are resident in Thailand and remit earned income to Thailand in the year it was earned then you are tax liable in Thailand (if tax was paid else where that you could prove and then claim a rebate on the Thai tax owed) The income should be declared and tax return submitted.

 

If you are resident in your foreign country then you would have to see the  tax rules related to residence, declaring foreign earned income and earning income whilst living and resident in your country and if taxes are to be paid.

In theory correct, but unless you have a Resident basis and no longer domiciled in another country then you will not be taxed on income earnt abroad even if paid in Thailand. Note: Having a retirement "Visa" does not mean you are resident in Thailand, it merely allows you to live in Thailand for one year and then renewed. 

 

Sure I think many will argue this fact, but I have been working on this basis for over 10 years and I am Thai registered for Taxes and UK registered for taxes, neither request Tax on my foreign earnings and I declare it every year.

[SCOTT FITZGERSLD]

15 hours ago, jojothai said:

Can you advise which requirememt states just capital gains

i found this advice on the internet. you can google thailand tax laws and find lots of information.

 i think that you are right, the rule of TAX ALL THAT IS SENT SAME YEAR apply to all kind of incomes,

and depands of course on the tax treaties with the country where the money came from.

for example, if the country where the money came from has 20% tax on it, AND  a tax treaty, than

thailand will tax the money only with the difference between thai tax and the 20% tax.

for example, if the thai tax is 35% and 20% allredy paid, that thailand will tax another 15% .

https://sherrings.com/capital-gains-personal-income-tax-thailand.html

One difference between income earned abroad and capital gains earned abroad is that

income is usually consumed - sent to thailand - close to the time it is earned, and capital gains are

usually left to grow for years.

this has huge consequences for ROI and other gains.

i know some very rich people who hate thailand but moved to live here most of the year

becuase this way they can save a FORTUNE !!

 

Edited December 25, 2020 by SCOTT FITZGERSLD

[SCOTT FITZGERSLD]

13 hours ago, Pdavies99 said:

Having a retirement "Visa" does not mean you are resident in Thailand

YOU are wrong. anyone who stay in thailand for more than 180 days in a year is considered

a thai tax resident, regardless of the type of visa, or no visa at all.

there is a difference between tax resident and resident. for tax porpuses, you can be asked to pay

taxes in thailand even if you just visit on tourist visas for more than 180 days in a year, and on the other hand,

you can claim to another country that you are a tax resident in thailand, even if you stay in thailand illegally

for more than 180 days in a year.

https://sherrings.com/personal-income-tax-in-thailand.html

Edited December 25, 2020 by SCOTT FITZGERSLD

[SCOTT FITZGERSLD]

14 hours ago, Seeall said:

keep it shut please... dont give them ideas...!! if u want give cash away dontate it to the local monks, evebn then, keep it shut!!

that is also a good advice.

do not volunteer to pay taxes until you are called to do so.

remember that once a tax payer, allways a tax payer. it means that once you paid tax, you are

registered in the system and they will be expecting you to do it over and over again.

this depands on the amount, of course.

if it is huge amount that you are forgetting to pay, you might end up in jail.

[Jenkins9039]

On 12/24/2020 at 3:28 AM, doomslayerxyz said:

I am a EU (eastern europe) citizen. I get paid regularly every month by an Australian company. 

 

I am considering starting to receive this salary directly in my Thai bank account and bypass my home country.

 

Should I worry about the Thai government asking me for income tax? Theory and practice may be different - has anyone had issues in practice with a similar situation? 

It would be a decent sum, about 400K baht per month if that's relevant.

 

I live here with my Thai wife, non-O visa, >180 days in a year although I am moving back to my country in January - so I suppose I won't even be a tax resident then ...

 

Is this a good way to "optimize" my tax situation?

 

 

Set up a transferwise account and have paid into that in their local currency (australia) then transfer the funds into the thai bank in your account there at interbank rates, and remit them to your thai local bank.

[seancbk]

21 hours ago, userabcd said:

If you are resident in Thailand and remit earned income to Thailand in the year it was earned then you are tax liable in Thailand (if tax was paid else where that you could prove and then claim a rebate on the Thai tax owed) The income should be declared and tax return submitted.

 

If you are resident in your foreign country then you would have to see the  tax rules related to residence, declaring foreign earned income and earning income whilst living and resident in your country and if taxes are to be paid.

 

I've always wondered how they calculate this "year it was earned".  Let's say I earn 10,000 oranges a year, and then in year 10 I transfer 10,000 oranges to Thailand.  Who decides if those 10,000 oranges where the ones I earned this year or the ones I earned 5 years ago?  
 

[foreverlomsak]

21 hours ago, userabcd said:

If you are resident in Thailand and remit earned income to Thailand in the year it was earned then you are tax liable in Thailand (if tax was paid else where that you could prove and then claim a rebate on the Thai tax owed) The income should be declared and tax return submitted.

 

If you are resident in your foreign country then you would have to see the  tax rules related to residence, declaring foreign earned income and earning income whilst living and resident in your country and if taxes are to be paid.

There are double taxation agreements in place between Thailand and other countries.

UK used to be "earned in UK taxed in UK, earned in Thailand taxed in Thailand, cannot be taxed twice on the same amount"

That is no longer the case, money can be taxed twice now. Check up un the tax laws of country for an equivalent agreement.

Note tax years between 2 countries may not be the same, UK is 6th April to 5th April (weird dates I know but it's historical, or do I mean hysterical) Thailand is per calendar year,

[foreverlomsak]

22 minutes ago, seancbk said:

I've always wondered how they calculate this "year it was earned".  Let's say I earn 10,000 oranges a year, and then in year 10 I transfer 10,000 oranges to Thailand.  Who decides if those 10,000 oranges where the ones I earned this year or the ones I earned 5 years ago?  

Income in Dec 2020, paid in 2020 is subject to tax, however Income in Dec 2020 arriving in January 2021 is not subject to tax. It is up to you to prove that the incoming money was earned in previous tax year.

The only way I can think of to avoid double taxation is to be able to produce a bank statement showing X value at 31 Dec 2020 and then transferring to Thailand X-5,000 Baht in early January 2021.

Anybody got any better solutions?

[ballpoint]

1 hour ago, seancbk said:

 

I've always wondered how they calculate this "year it was earned".  Let's say I earn 10,000 oranges a year, and then in year 10 I transfer 10,000 oranges to Thailand.  Who decides if those 10,000 oranges where the ones I earned this year or the ones I earned 5 years ago?  
 

It would depend on how many oranges you still had at the beginning of year 10.  If you show that you had 10,000 oranges at that date, then you can transfer 10,000 over in that year.  If, however, you only had 5,000 oranges at the beginning of year 10, and transferred 10,000 in the same year, then it would be deemed that 5,000 of those oranges were earned that year and would be taxable.

 

In real terms, if you transferred, say, $100,000 from an overseas bank account this year, the best proof that you didn't earn that money this year would be to show that there was already $100,000 in that account on January 1st 2020, (or that the money was transferred into that account from another one that already had $100,000 in it).  At the moment, I doubt if the Thai tax department are seriously checking on this, but, with the introduction of CRS here sooner or later, it's conceivable that they do start checking on the origin of all funds transferred into the country at some point.  Transferring $100,000 into Thailand without being able to show that you had possession of that sum on January 1st, or that you earned it and paid taxes elsewhere, equal to or more than the Thai rate, could make you liable for a tax payment here.  (Total failure to account for where you got it from could also lead to far more serious questioning, but that's another story).

[natway09]

If you are bringing earned income into Thailand which there has been no tax paid elsewhere it is liable to Thai tax although unless it is an obviously large amount the Thai Tax Dept will possibly never know about it.

Not so Australia though

[jackdd]

There are certain thresholds (1 or 2 million or something in this region), if you receive more than this per year in your bank account the bank has to report this, I assume to the revenue department.

Maybe nothing happens, but if you are unlucky they might request evidence from you where the money is coming from you. And if they see that it's salary they would not only want the tax from you, but somebody might also investigate further if you have correctly registered a business and if you have a work permit.

[jojothai]

On 12/24/2020 at 5:16 PM, Seeall said:

the NEED this NEED that..  I NEED air, moneey and pussy ...  you must NEED be from the us I NEED 

If the OP does not know about the CRS already that shows he still has a lot to figure out in relation to his plans.

Giving advice may help the OP.

Its up to him if he wants to take any notice of what i say.

He will find out for himself sooner or later.