Quick tax question

[cleopatra2]

The OP has spent more than 183 days in Thailand and thus a resident for tax purposes.

The question arises if section 41 of the revenue act applies. Where is the income derived from.

If the income is deemed to be from Thailand then tax is liable regardless of where it is paid.

 

It appears that the work is carried out in Thailand for overseas company . Although the remuneration is paid from abroad the income is derived from the work carried out inThailand. Thus section 41 applies.

[2530Ubon]

18 hours ago, cleopatra2 said:

It appears that the work is carried out in Thailand for overseas company . Although the remuneration is paid from abroad the income is derived from the work carried out inThailand. Thus section 41 applies.

 

So I just read section 41, and it appears that one could avoid paying tax- or cut the tax bill down considerably- by simply not binging the income into Thailand, no?

 

For example, if I kept the majority of my funds on an international pre-paid debit/mastercard and sent say only 400,000 baht a year to my bank account in Thailand (visa expenses), I would only pay around 4,000 THB tax per annum (using UOB tax calculator, after deductions), and I'd be free to use the 400k after the required amount of time in the bank (assuming I go for a marriage extension if SMART still isn't available)

 

https://www.schwab.com/checking -

https://www.fidelity.com/cash-management/atm-debit-card

https://www.capitalone.com/bank/checking-accounts/online-checking-account/

Accounts like these come with unlimited ATM surcharge rebates. Perhaps this is the new solution?

[Baerboxer]

On 12/31/2020 at 12:38 PM, 2530Ubon said:

I'm pretty clueless to be honest - as a Brit, and employed, tax was always automatically deducted. I only started working for myself for the last two years so I have no idea really.

 

It would cost you a very small amount of money to use a UK tax advisor. Plenty of very good ones about, often ex HMRC people. Their rates are, IME, reasonable and often they save you more than you pay because they know all the rules and how to follow them.

 

For Thailand, IME, local revenue offices are helpful, professional, friendly and efficient. Ask them or get a friend to. But the link Ubon Joe supplied for you explains it. 

 

Tax is nothing to do with immigration. But as with all officials, they'll express an opinion rather than say they don't know or it's nothing to do with them if you ask. 

[cleopatra2]

1 hour ago, 2530Ubon said:

 

So I just read section 41, and it appears that one could avoid paying tax- or cut the tax bill down considerably- by simply not binging the income into Thailand, no?

 

For example, if I kept the majority of my funds on an international pre-paid debit/mastercard and sent say only 400,000 baht a year to my bank account in Thailand (visa expenses), I would only pay around 4,000 THB tax per annum (using UOB tax calculator, after deductions), and I'd be free to use the 400k after the required amount of time in the bank (assuming I go for a marriage extension if SMART still isn't available)

 

https://www.schwab.com/checking -

https://www.fidelity.com/cash-management/atm-debit-card

https://www.capitalone.com/bank/checking-accounts/online-checking-account/

Accounts like these come with unlimited ATM surcharge rebates. Perhaps this is the new solution?

The first part of section 41 makes any income taxable if the work is performed in Thailand regardless of the place of payment.

The section dealing with income from abroad only taxable when brought into Thailand .Requires that the work is carried out abroad.

[ubonjoe]

10 minutes ago, cleopatra2 said:

The first part of section 41 makes any income taxable if the work is performed in Thailand regardless of the place of payment.

The section dealing with income from abroad only taxable when brought into Thailand .Requires that the work is carried out abroad.

But how would it be enforceable. How would they be able to prove it.

About the same as proving the income was earned in the same year it was transferred into the country.

[DrJack54]

14 minutes ago, cleopatra2 said:

The first part of section 41 makes any income taxable if the work is performed in Thailand regardless of the place of payment.

The section dealing with income from abroad only taxable when brought into Thailand .Requires that the work is carried out abroad.

I can just imagine the multitude of folk living in Thailand and working online are now shaking in their boots with your tax revelations. Not!

[ballpoint]

On 12/31/2020 at 2:05 PM, 2530Ubon said:

So if I said that I wait 12 months to withdraw the money from my foreign accounts on a monthly basis specifically to avoid paying tax, that would be perfectly legal? I think It would be believable as I used to work in Thailand and pay taxes for a number of years. I think I could say that these online earnings were deliberately withheld for the purposes of not paying tax on that income, and I stopped working in Thailand once enough time had passed to send the money tax free. Interesting option.

You don't have to wait 12 months to transfer your money.  Being Jan 1st, you can now transfer everything you earned in 2020 (and previous years) to Thailand tax free.  You will have to wait 12 months to transfer any money earned this month though...

[cleopatra2]

20 minutes ago, ubonjoe said:

But how would it be enforceable. How would they be able to prove it.

About the same as proving the income was earned in the same year it was transferred into the country.

That is not the question asked.

In addition to Thai tax laws the OP would have to consult the various DTT to determine who has taxing rights.

I would not be willing in an open forum to encourage a poster to engage in tax evasion.if the individual concerned wishes to not to pay tax when legally obliged , that should be up the individual alone 

[bigginhill]

On 12/31/2020 at 7:43 AM, AlexRich said:

My understanding was that, for income sourced overseas, you would only be liable to tax on income that you brought into Thailand during the same tax year.

 

If your earnings are paid into a bank in the UK then you are liable for UK tax. For example, I could live in Thailand but rent a number of houses in the UK. That UK sourced rent would still be subject to UK tax. 
 

I’m wondering if you set up a bank account in a foreign jurisdiction that doesn’t apply tax, and hold the funds until the next tax year, you might be able to legally avoid Thai tax? 

I agree, if it's paid to a UK account then, you would presume that you are self employed in the UK. 

 

It would be helpful to know what address is put on the invoice, that would be telling as to where you are declaring yourself self employed.

The bank account should be in the same country and the tax declaration also.

As far as I know, it isn't possible to declare yourself self employed (initialy) in a country that you are not living in. After setting up the paper work no one would know where you move on to, but at the start you would have to have an address in that country.

 

Also an invoice with very little fiscal/official information works in the UK but, just as an example, in Italy you could never issue one without a personal fiscal code, and a registered address. And the banks are linked to the Italian tax office so if you received payments they would know and you would be libel in Italy.

 

[2530Ubon]

17 hours ago, cleopatra2 said:

The section dealing with income from abroad only taxable when brought into Thailand .Requires that the work is carried out abroad.

 

Not according to the tax revenue site, getting paid from employment abroad/business abroad clearly states that the income is only taxable when brought into Thailand. Hence why many business' can simply avoid tax by waiting one year to bring the income into the country. :

 

https://www.rd.go.th/english/37749.html

Quote

A resident of Thailand who in the previous tax year derived assessable income under Section 40 from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax in accordance with the provisions of this Part.

 

There is also a further section which states people who are exporting goods etc can wait one tax year to bring the income in tax free. Exporting goods from Thailand is definitely working in Thailand, but the income is derived from abroad

[2530Ubon]

For those people who are going to renew their COVID extension before the 30th Jan, please be aware that they are going to ask you what you are doing here / money situation. The officer had the question on his computer screen which is why he asked me to confirm my status. I couldn't lie as they knew what I was doing already.

[userabcd]

1 hour ago, 2530Ubon said:

For those people who are going to renew their COVID extension before the 30th Jan, please be aware that they are going to ask you what you are doing here / money situation. The officer had the question on his computer screen which is why he asked me to confirm my status. I couldn't lie as they knew what I was doing already.

Of course they are going to ask about money and how it is derived as they want to know how one is supporting themselves to stay longer in Thailand. Immigration is just making simple enquiries how an applicant finances ones stay in Thailand is not by some suspicious activity whilst living in Thailand.

[problemfarang]

i would talk to a lawyer about this.

if you need one i can give you my lawyer's tel. he is in bangkok and hes really one of the bests

im pretty sure he will solve your problem in no time