Thailand a tax haven?

[makescents]

I’ve read from multiple sources (KPMG, HSBC etc) that Thailand doesn’t tax its tax-residents on income earned abroad provided it wasn’t remitted to Thailand in the same year.

 

This appears to contract the English language section of the Thai Revenue website which seems all income remitted to Thailand is taxed and doesn’t mention this loophole.

 

Is this the case? They must be loosing a lot of money from such a provision. 

Edited March 14, 2022 by makescents

[userabcd]

Think this needs to be confirmed as do not see it anywhere on the Thai revenue department websites.

 

Think accountants list this assuming that tax has already been paid on the income in else where or in ones home country.

 

Think Thailand does not offer a tax free existence as most countries do not and DTA will cover where taxes are to be paid and rebate claimed for tax already paid.

 

Theoretically all 180 day and over residents should be reporting their income streams according to Thailand tax rules.

 

You could always ask an accountant to apply for a tax directive with RD department relating to taxes on your income streams.

Edited March 14, 2022 by userabcd

[KhunBENQ]

German pension: no tax. Never heard anyone paying.

It's an endless fight of words between experts in German language forums since years.

I just keep silent and don't wake up sleeping dogs.

I have a Thai tax number from a tax on interest refund many many years ago (when interest still existed). Also never heard anything from them again.

[topt]

11 hours ago, makescents said:

Is this the case?

yes currently. Enjoy it while it lasts.

 

This has been discussed so many times and not sure why @userabcd does not seem to accept it however I do note he uses the word "theoretically" at one point 

 

We then invariably get bogged down in details about individual country DTAs most of which have no relevance to the relevant OP concerned.........

 

4 hours ago, KhunBENQ said:

I just keep silent and don't wake up sleeping dogs.

Couldn't agree more 

[Moonlover]

The UK and Thailand have a double tax treaty, wherein earnings such as pensions that have been taxed at source in the UK will not be subject to any further taxation in Thailand.

 

Germany also has a similar agreement with Thailand. Many other countries seem to have similar agreements as well, the details of which you can find here https://www.rd.go.th/english/809.html

 

[topt]

16 minutes ago, Moonlover said:

The UK and Thailand have a double tax treaty, wherein earnings such as pensions that have been taxed at source in the UK will not be subject to any further taxation in Thailand.

Sorry Moonlover but that's not 100% correct. The DTA between UK and Thailand on pensions only applies to civil service type pensions and I think armed forces (what they seem to call Government pensions) but not the state or company private pensions.

Easier to see here in the digest

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

Page 34 and note 4 on the right hand side -

Quote

Treaty does not include an article dealing with DT-Company Non-Government pensions. Also, no relief for State Pension or ‘trivial commutation lump sum’.

 

[Moonlover]

14 minutes ago, topt said:

Sorry Moonlover but that's not 100% correct. The DTA between UK and Thailand on pensions only applies to civil service type pensions and I think armed forces (what they seem to call Government pensions) but not the state or company private pensions.

Easier to see here in the digest

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

Page 34 and note 4 on the right hand side -

 

Thanks but I'll not loose any sleep over it. ????

 

[makescents]

I'm still of working age so not thinking from a pension point of view.

 

I'm hoping to relocate to Thailand in the near future and work as a W-8BEN contractor for a US corporation.

 

So if I keep my money in US/Canada and remit it in the next calendar year I won't be liable for Thai taxes? This seems like a gaping tax loop hole to me.

 

I have to file taxes in Thailand as I need to provide the Canadian Revenue with evidence I am a tax resident outside of Canada and I'm gunning for PR/citizenship.

 

The problem I see though is how a work permit fits into this...

[Captain Monday]

9 hours ago, KhunBENQ said:

German pension: no tax. Never heard anyone paying.

It's an endless fight of words between experts in German language forums since years.

I just keep silent and don't wake up sleeping dogs.

I have a Thai tax number from a tax on interest refund many many years ago (when interest still existed). Also never heard anything from them again.

Same here on TVF . Every few weeks almost under different user names. Provocation to re-hash the same old same old. Thailand does not care where you think you are "tax resident" that is between an expat and their country. There is no regulation that attracts a  tax of foreign earned income unless it is brought into Thailand the same year it is realized. Some people want to plan  it that way if they can avoid a higher tax rate in their homeland. 

 

Money is fungible. I  never remit funds to Thailand the same year they are earned. My only income in Thailand is Bank interest. Corporations use this strategy in jurisdictions all over the world. 

[Oxx]

17 hours ago, userabcd said:

Theoretically all 180 day and over residents should be reporting their income streams according to Thailand tax rules.

Nope.  Only if their income is over a certain threshold.  (And then, also only domestic income, which is what I presume you meant.)

[userabcd]

4 hours ago, Oxx said:

Nope.  Only if their income is over a certain threshold.  (And then, also only domestic income, which is what I presume you meant.)

Yes, if the income is over a certain threshold according to Thai tax rules.

 

I would argue it is not only limited to domestic income but also income sources remitted to Thailand from abroad and how that income is treated according to the dta and Thailands tax laws.

Avoiding Double Taxation

A government signs a double tax treaty with another country to protect its citizens and businesses against the risk of double taxation.

When there is a DTA between two countries, taxpayers would pay taxes in one jurisdiction only. Thus, saving them from additional costs of taxes.

Avoiding Tax Evasion

Perhaps the most important motive for governments to sign tax treaties is avoiding tax evasion. Taxpayers may evade taxes if they are tax residents of more than one country. They may do it deliberately or due to a lack of legislative enforcement.

[userabcd]

13 hours ago, makescents said:

I'm still of working age so not thinking from a pension point of view.

 

I'm hoping to relocate to Thailand in the near future and work as a W-8BEN contractor for a US corporation.

 

So if I keep my money in US/Canada and remit it in the next calendar year I won't be liable for Thai taxes? This seems like a gaping tax loop hole to me.

 

I have to file taxes in Thailand as I need to provide the Canadian Revenue with evidence I am a tax resident outside of Canada and I'm gunning for PR/citizenship.

 

The problem I see though is how a work permit fits into this...

Recommend if not already done, you should read Canada's tax rules/laws and breaking tax residency.

Edited March 15, 2022 by userabcd

[userabcd]

17 hours ago, topt said:

yes currently. Enjoy it while it lasts.

 

This has been discussed so many times and not sure why @userabcd does not seem to accept it however I do note he uses the word "theoretically" at one point 

 

We then invariably get bogged down in details about individual country DTAs most of which have no relevance to the relevant OP concerned.........

 

Couldn't agree more 

Tax should be paid somewhere.

Edited March 15, 2022 by userabcd

[topt]

13 hours ago, makescents said:

The problem I see though is how a work permit fits into this...

Simplistically it doesn't unless the US corp has an entity in Thailand to employ you?

Not sure you can get one on the basis you describe - suggest you start a new thread or perhaps look through and read some back threads.

[Whale]

19 hours ago, topt said:

yes currently. Enjoy it while it lasts.

I agree. One day the penny will drop in some government backroom office. 

Rich Thais may fight it but once they figure that other countries tax expatriates and long stayers the party is soon over.

[topt]

20 minutes ago, Whale said:

Rich Thais may fight it

And this is also important as it will likely affect them far more than us so hopefully they will keep it off the agenda for as long as possible but yes, at some point, it will change.

[wordchild]

3 hours ago, topt said:

And this is also important as it will likely affect them far more than us so hopefully they will keep it off the agenda for as long as possible but yes, at some point, it will change.

This is exactly right.

Many many wealthy Thais with overseas assets take advantage of this. My guess is that it will last for a time yet, but, in the future, who knows!

[makescents]

On 3/15/2022 at 2:30 AM, topt said:

Simplistically it doesn't unless the US corp has an entity in Thailand to employ you?

Not sure you can get one on the basis you describe - suggest you start a new thread or perhaps look through and read some back threads.

Exactly!

 

Even if they did I can't take advantage of the delayed remittance as my employer would have to pay a salary via a Thai corp which would be taxed. It appears as though only PRs and citizens can take advantage of this "loophole".

 

Edit: Actually PRs require a permit so they can't use this either.

Edited March 17, 2022 by makescents

[Whale]

I was watching something online, and a tax lawyer in the European country being discussed was discussing tax on crypto currencies. The tax lawyer said something very interesting, it quite shocked me being a European tax lawyer talking about tax in her own jurisdiction. It made me think about the actual mechanisms of tax assessment in Thailand. She said (of the developed European country):

 

Do you think the tax office is tracking you like some international criminal investigator? Their ability to look into things outside of your tax return is very limited and they would not even bother to assign resources below a minimum threshold.

 

I was quite taken aback. I can't imagine the Thai revenue dept being anymore incompetent than the rest of the government. Can you?

[smutcakes]

Speaking from a UK/Thailand perspective, income earned in the UK is expected to be taxed in the UK, likewise income from Thailand is taxed in Thailand and not the UK.

 

It is the duty of care from the tax payee to be able to prove that any income remitted from the UK has been taxed in the UK in the particular calendar year it was earned. For this reason my tax consultant advised me to make annual fund transfers on the 2nd or 3rd January each year to make it easy to prove that money was not earned in that calendar year but was earned and taxed in the UK the previous year.

[wordchild]

On 3/18/2022 at 4:08 AM, smutcakes said:

Speaking from a UK/Thailand perspective, income earned in the UK is expected to be taxed in the UK, likewise income from Thailand is taxed in Thailand and not the UK.

 

It is the duty of care from the tax payee to be able to prove that any income remitted from the UK has been taxed in the UK in the particular calendar year it was earned. For this reason my tax consultant advised me to make annual fund transfers on the 2nd or 3rd January each year to make it easy to prove that money was not earned in that calendar year but was earned and taxed in the UK the previous year.

Not all income earned in the UK is taxable in the Uk if one is not a UK resident, eg dividends from UK PLC,s.

Such income is also not subject to taxation in Thailand if remitted in the following calendar year.

[smutcakes]

11 hours ago, wordchild said:

Not all income earned in the UK is taxable in the Uk if one is not a UK resident, eg dividends from UK PLC,s.

Such income is also not subject to taxation in Thailand if remitted in the following calendar year.

Sure, but the duty of care is on you to prove all this, so easier to just transfer funds at the beginning of the year as it is far easier to prove.

[Whale]

Has anyone ever been asked to prove this rule by the tax office? i.e. prove your remittance is for funds older than 1 year?

[foreverlomsak]

On 3/14/2022 at 8:31 PM, Moonlover said:

Germany also has a similar agreement with Thailand. Many other countries seem to have similar agreements as well, the details of which you can find here https://www.rd.go.th/english/809.html

That page has not been updated since 2011, 

[Moonlover]

10 minutes ago, foreverlomsak said:

On 3/14/2022 at 8:31 PM, Moonlover said:

Germany also has a similar agreement with Thailand. Many other countries seem to have similar agreements as well, the details of which you can find here https://www.rd.go.th/english/809.html

 

10 minutes ago, foreverlomsak said:

That page has not been updated since 2011, 

That's no doubt because it doesn't need updating. Such legislation tends to be written in stone anyway.

[userabcd]

42 minutes ago, foreverlomsak said:

That page has not been updated since 2011, 

You could always visit your home countries tax dept website where a copy of the DTA would also exist.