Taxation in Thailand for long-term tourists

[Gattacibus]

Hello guys, 

This is a question for either experts of Thailand or tourists who stayed a long time in 2020 due to Covid-19.

 

I'm planning to stay in Thailand for more than 6 months in 2021 with the new Special Tourist Visa (STV). From the Thai Embassy DC website: "They (STV holders) will be allowed to stay in Thailand for a period of up to 90 days, counting from the date of entry. STV may be extended twice while the visitor is in Thailand for a period of up to 90 days per each extension"

 

I will have to file taxes for 2021 both in Thailand and my country of residence (USA), does anyone know if

a) Thailand will ask tourists to pay taxes on foreign-earned income

b) the tax treaty will apply so that I don't have to pay twice 

If nobody knows the answer can someone point me to a tax accountant that I can hire for a consultation?

Thank you 

 

Edited February 2, 2021 by Gattacibus

[soi3eddie]

 

You're a tourist. Tourists are not residents for tax purposes in Thailand. Unless you are on a non-immigrant visa with business or work in Thailand you will not need to file any tax return in Thailand. Only to USA as usual. Enjoy your stay here.

 

[DrJack54]

Earn your money in usa and pay taxes there.

Why are you asking about paying taxes in Thailand

[Gattacibus]

1 minute ago, soi3eddie said:

 

You're a tourist. Tourists are not residents for tax purposes in Thailand. Unless you are on a non-immigrant visa with business or work in Thailand you will not need to file any tax return in Thailand. Only to USA as usual. Enjoy your stay here.

 

Thank you, do you know by chance if there is a webpage that clarifies which visas require to pay taxes in Thailand? 

[sanmyintmaung]

1 minute ago, Gattacibus said:

Thank you, do you know by chance if there is a webpage that clarifies which visas require to pay taxes in Thailand? 

You can refer to this link below.

https://home.kpmg/xx/en/home/insights/2011/12/thailand-income-tax.html

[Gattacibus]

13 minutes ago, sanmyintmaung said:

You can refer to this link below.

https://home.kpmg/xx/en/home/insights/2011/12/thailand-income-tax.html

From the KPMG document:

"A resident is defined as a person present in Thailand for an aggregate of 180 days or more in any given tax year." 

It doesn't make any distinction for the type of visa held during the tax year. It's possible that I may have to file taxes in Thailand

 

Edited February 2, 2021 by Gattacibus

[jackdd]

17 minutes ago, Gattacibus said:

Thank you, do you know by chance if there is a webpage that clarifies which visas require to pay taxes in Thailand? 

It has nothing to do with the type of visa, the information from soi3eddie is wrong.

 

What sanmyintmaung quoted is the correct answer. Bring only savings into Thailand and you won't have to pay taxes.

[Gattacibus]

Just now, jackdd said:

It has nothing to do with the type of visa, the information from soi3eddie is wrong.

 

What sanmyintmaung quoted is the correct answer. Bring only savings into Thailand and you won't have to pay taxes.

Thank you jackdd, I can't bring only savings because I'm planning to buy a property in Thailand. To pay for it I'll use foreign income (e.g. property sale, dividends, capital gains), so I guess I will I have to file taxes in Thailand

[ubonjoe]

1 minute ago, Gattacibus said:

Thank you jackdd, I can't bring only savings because I'm planning to buy a property in Thailand. To pay for it I'll use foreign income (e.g. property sale, dividends, capital gains), so I guess I will I have to file taxes in Thailand

Don't worry about paying taxes. The revenue department would not know about your transfers into the country.

[Gattacibus]

1 minute ago, ubonjoe said:

Don't worry about paying taxes. The revenue department would not know about your transfers into the country.

Thanks, but if I buy a property in Thailand the transfers will be visible for sure, so I prefer to pay all taxes in case of an audit

[Crossy]

1 minute ago, Gattacibus said:

Thanks, but if I buy a property in Thailand the transfers will be visible for sure, so I prefer to pay all taxes in case of an audit

 

The Thai's have an expression that applies here "You think too mutt".

 

The revenue department have no way to verify whether the money transferred in was earned this year or 30 years ago, they certainly have no way of checking what went on back home.

 

If anyone ever asks (they won't) it was "savings".

[Pilotman]

3 minutes ago, Gattacibus said:

Thanks, but if I buy a property in Thailand the transfers will be visible for sure, so I prefer to pay all taxes in case of an audit

You are over thinking this. Funds brought into the country for the purposes of  buying property are not taxed, taxed income from abroad is not taxed here. You will pay property tax each year on your property,  but a lawyer/accountant will help you with that.  Get a beer and go sit by the pool.  

[soi3eddie]

13 minutes ago, jackdd said:

It has nothing to do with the type of visa, the information from soi3eddie is wrong.

 

You think so? How many long term residents (married and retired) who bring in foreign income from investments, property or pensions are actually registered here with the Thai tax authorities? How would authorities even know? If it was a strictly enforced requirement don't you think that we would be made aware of this? Maybe because they know that any overseas income has already been taxed and as double taxation treaties apply, it would be waste of time requiring more paperwork for no extra revenue. Anyone on a tourist visa certainly has nothing to worry about unless they wish to create more hurdles and obstacles in their lives.

 

[foreverlomsak]

37 minutes ago, Gattacibus said:

Thank you, do you know by chance if there is a webpage that clarifies which visas require to pay taxes in Thailand? 

Unless you spend more than 180 days in Thailand you are not classed as "Resident for Tax Purposes", and anyway you have to physically register with the Thai Tax Department to get a Tax ID, they are not issued on arrival, no Tax ID no tax.

[Gattacibus]

1 minute ago, foreverlomsak said:

Unless you spend more than 180 days in Thailand you are not classed as "Resident for Tax Purposes", and anyway you have to physically register with the Thai Tax Department to get a Tax ID, they are not issued on arrival, no Tax ID no tax.

Yes I plan to spend more than 180 days in Thailand

[foreverlomsak]

1 minute ago, soi3eddie said:

Maybe because they know that any overseas income has already been taxed and as double taxation treaties apply,

The double taxation agreement with the UK for example was re-written a couple of years ago, it is no longer the case of Tax paid in UK no tax due in Thailand, only certain incomes are non-taxable and you need to claim relief from HMRC for double taxation.

[foreverlomsak]

4 minutes ago, Gattacibus said:

Yes I plan to spend more than 180 days in Thailand

Check on the latest double taxation agreement between US and Thailand, as I said earlier the UK one has been changed.

 

The operative parts of the Thai Tax System is being registered for tax, that is up to individuals (80% of Thais aren't), and if the money is earned prior to the Thai Tax Year (Jan-Dec) it arrives in it is non-taxable. Example a pension payment earned Nov 2020 and brought in in Dec 2020 could be taxable, if they knew about it, earned Nov 2020 arrives in Thailand Jan 2021 no tax due.

With regards to bringing in large lumps of money for house, car, etc., I never had any issues, but that was before the recent ongoing changes due to money laundering.

[HampiK]

As you not work in Thailand, you even will have to go by a few steps (maybe not even possible) to receive a tax ID in Thailand.

Here you can read about some foreigner, who want to receive a tax ID, but were not able to receive on.

As others already told... you not need to worry, as long you not work in Thailand.

 

I only use my Tax ID for collect back the Tax on the interest they deduct... if you not fill out, they actually even will be happy, because not have to pay anything to you (when you have a thai bank account).

[DrJack54]

3 hours ago, Gattacibus said:

Thanks, but if I buy a property in Thailand the transfers will be visible for sure, so I prefer to pay all taxes in case of an audit

I purchased a property month back. Transferred 240k aud in 3 transfers with Transferwise. 

You say the transfers will be visible, so...

[Gattacibus]

 

4 hours ago, HampiK said:

As you not work in Thailand, you even will have to go by a few steps (maybe not even possible) to receive a tax ID in Thailand.

Here you can read about some foreigner, who want to receive a tax ID, but were not able to receive on.

As others already told... you not need to worry, as long you not work in Thailand.

 

I only use my Tax ID for collect back the Tax on the interest they deduct... if you not fill out, they actually even will be happy, because not have to pay anything to you (when you have a thai bank account).

Thank you HampiK, I searched for "Tax ID" but found only 13 entries in the whole forum. Does receiving the Tax ID put you under the radar of the revenue department indefinitely? In other words, let assume that I receive a Tax ID this year to file taxes for 2021, but next year 2022 I don't have any income to declare, will I have to file taxes for 2022 anyway because I have a Tax ID?

[UKresonant]

Maybe two themes on the answers running here...

 

Are you Technically Tax Resident over the 180 days in Thailand. YES

 

Is it likely by custom and practice the you will have to register and pay tax NO

 

I have to speculate...

 

Buying property as an individual as a tourist appears incompatible,  if you are happy with potentially losing all the value or locking in to a perhaps illiquid market, presume that does not worry you??

&

Why the urgency, transfer last years savings/income surplus this year and the rest January next next year. Would give you plenty to view lots of properties and be on the safe side..

 

 

Once up-on-a-time there was a Tax Clearance certificate you had to get before leaving Thailand if you had been here more than the 180 days. Custom and practice it is no longer used. Mostly a waste of revenue and individuals time anyway. But I think I found it listed on a revenue dept webpage, enquired about it, no reply!

 

Havn't read the USA DTT in detail, only know it is much better wording on Pensions, than the UK one ????

 

[Gattacibus]

8 minutes ago, UKresonant said:

Once up-on-a-time there was a Tax Clearance certificate you had to get before leaving Thailand if you had been here more than the 180 days. Custom and practice it is no longer used. 

Thank you UKresonant, I definitely want to buy a property and I will do my best to have a Tax ID to stay on the safe side. As far as you know does having a Tax ID put you on the radar of the Thai department of revenue forever?

Edited February 2, 2021 by Gattacibus

[UKresonant]

31 minutes ago, Gattacibus said:

Thank you UKresonant, I definitely want to buy a property and I will do my best to have a Tax ID to stay on the safe side. As far as you know does having a Tax ID put you on the radar of the Thai department of revenue forever?

 

I'm sorry I just don't have the experience,  never transferred income whilst  in the country more than 180 days,

Though I have been travelling to Thailand since 1991, circumstance have conspired that my longest trip to Thailand was 67 Days (planned for 84 days). If your planned property is a condo allocated for non-Thai ownership, I suppose there are some deals on offer just now. But other than that I think it is purely Thai ID card holders only. Had a discussion like that on the Subject with an American women, passing the time on a BKK-HKG flight, she had been offered a house in Phuket, by a friend of a friend, as described she could not possibly own it, but she had been convinced!  Yes, I know the work-arounds, the leases, etc. but I would never feel I owned it.

 

Edited February 2, 2021 by UKresonant

[HampiK]

59 minutes ago, Gattacibus said:

 

Thank you HampiK, I searched for "Tax ID" but found only 13 entries in the whole forum. Does receiving the Tax ID put you under the radar of the revenue department indefinitely? In other words, let assume that I receive a Tax ID this year to file taxes for 2021, but next year 2022 I don't have any income to declare, will I have to file taxes for 2022 anyway because I have a Tax ID?

This I can't tell you, as I fill out a tax ID every year, as I want back the tax from the Interest. I also have to do a wild guess and would say when you stop to send a tax form, then they don't care. Maybe someone here who filled out a tax in the past and now stopped... could be that they maybe want to know why you stop? but as it seems you want to everything in order, then even this should not be a problem for you.

[CrossBones]

Income from overseas is taxable in Thailand only if you remit it into thailand in the same year its earnt.

For example if you receive 2020 dividends in 2021 its not taxable.

 

If you spend 180 days per calendar year you legally have to pay income tax on the money you brought in, in that year (providing that money was earnt  in the same year)

 

You could easily get out of tax by waiting a year before transferring it here

 

However it might be a GOOD idea to pay tax here. You country might decide you owe them taxes if you haven't paid taxes anywhere else. So with a bit of legal above-board fiddling you can pay a certain amount of tax here, get a tax receipt and then if your country tries to tax you , you can prove you were tax resident in Thailand that year and hopefully get out of paying anything to your home country.

 

You might make $1m overseas, remit $50k into Thailand and pay tax on that $50k probably about $10k after deductions. Then your country cant tax you on $1m. Something like that. I am very surprised there arent more millionairres living in Thailand! People dont seem to have cottoned on to this.

 

You can get a tax file number on any  visa, even tourist. Just go to the tax office. They will take your money, although they might be a bit surprised!

Edited February 2, 2021 by CrossBones

[arick]

16 hours ago, Crossy said:

 

The Thai's have an expression that applies here "You think too mutt".

 

The revenue department have no way to verify whether the money transferred in was earned this year or 30 years ago, they certainly have no way of checking what went on back home.

 

If anyone ever asks (they won't) it was "savings".

I am still waiting for my 8200 baht rebate for 14 months. 

[LivinLOS]

19 hours ago, soi3eddie said:

 

You're a tourist. Tourists are not residents for tax purposes in Thailand. Unless you are on a non-immigrant visa with business or work in Thailand you will not need to file any tax return in Thailand. Only to USA as usual. Enjoy your stay here.

 

False. 

Anyone >180 days per year is a tax resident, it has no bearing whatsoever on what visa class you are on. 

Money earned in the prior calendar year is savings and not income. Savings remitted to Thailand are untaxed.
Income remitted into Thailand in the year it is earned (including many forms of tax deferred private pensions)if you are resident > 180 days, is legally taxable but unenforced. 

https://www.thailandlawonline.com/table-of-contents/thailand-tax-law-revenue-code#:

The problem for the OP sounds like, from the information in his post, he wishes to work online remotely. This is currently illegal but hard to enforce. Work of any type, online or off, paid in Thailand or not, requires a work permit, which in turn requires a domestic engagement from a Thai company. The be legal that means finding a umbrella company to process your wage taxes and employ you or forming your own company etc.. Or finally qualifying for an smart visa (sounds unlikely from the OPs post). 

There is little to no enforcement of this system, which confuses many posters as to the legality. It is easily possible to come and work illegally, though that can have significant tax ramifications for your employer. 



 

[LivinLOS]

19 hours ago, sanmyintmaung said:

You can refer to this link below.

https://home.kpmg/xx/en/home/insights/2011/12/thailand-income-tax.html

Read that carefully 
 

Is salary earned from working abroad taxed in Thailand? If so, how?

Salaries receive from employment exercises outside of Thailand are exempt from Thai tax, if not paid in or remitted into Thailand within the same calendar year it is received and provided the cost is not recharged into Thailand.

Thailand operates a physical presence test on 'work', where you physically are at the time you perform the task. If you are working in the kingdom, these are not 'employment exercises outside of Thailand', those would be an expat who is tax resident and leaves the kingdom, works, and then returns.

[LivinLOS]

19 hours ago, foreverlomsak said:

The double taxation agreement with the UK for example was re-written a couple of years ago, it is no longer the case of Tax paid in UK no tax due in Thailand, only certain incomes are non-taxable and you need to claim relief from HMRC for double taxation.

 People wildly miss understand what DTAs are and do, they do not simply allow you to chose where you pay taxes, they allow you to file and reclaim taxes deducted at source in the country you are not tax resident at the end of a tax year. 

[foreverlomsak]

44 minutes ago, LivinLOS said:

 People wildly miss understand what DTAs are and do, they do not simply allow you to chose where you pay taxes, they allow you to file and reclaim taxes deducted at source in the country you are not tax resident at the end of a tax year. 

 

I've always known that DTA's do not allow you to pick and chose where to pay taxes.

The UK / Thailand agreement was very simple previously basically it said income generated in the UK was subject to UK taxes and income generated in Thailand was subject to Thai taxes, irrespective of where paid.

Now all tax paid income brought from the UK into Thailand is potentially subject to Thai taxes, if it is brought in within the Thai tax year that it is earned / paid.

Some income items are allowed tax relief by HMRC if they are taxed by Thailand.

Qualifier - To pay Thai taxes you must be registered with them it's not automatic, if your not registered (& it's up to you at the current time if you want to be registered - about 80% of Thais aren't) they are not interested in you, other than tax withholding against bank balance interest.