Are Incoming Funds Scrutinized By Bank / Tax Officials?

[retiree]

While another thread has been talking about US authorities looking at outgoing transfers, I'm curious as to whether or not incoming funds -- say, $50,000 over the course of a year or so -- sent into Thailand attract any notice (along the line of "isn't this income that you should be reporting?")? Or is the desire of foreign men to send large amounts of money to Thailand for no reason at all just taken for granted ;-)

[expatwannabe]

While another thread has been talking about US authorities looking at outgoing transfers, I'm curious as to whether or not incoming funds -- say, $50,000 over the course of a year or so -- sent into Thailand attract any notice (along the line of "isn't this income that you should be reporting?")? Or is the desire of foreign men to send large amounts of money to Thailand for no reason at all just taken for granted ;-)

It's not income unless it's "earned." A wire is just money transferred. The Thais have no claim to taxes on it, except on the interest it would earn in a Thai bank.

Further, they'll be thrilled to see the money coming in. Did you want that in 500 Baht notes or 1,000's?

.. oh, while I think of it. If you have foreign accounts worth US$10,000 you do have to report them on your IRS filing. You're not taxed any more - they just want you to report where your money is.

Edited June 23, 2007 by expatwannabe

[samran]

If you are resident in Thailand (stay for 183+ days) and this money was earned in the year you transfer it, then generally speaking, what is bought in is taxable.

If however, what you bring in is savings, earned in previous years, then the Revenue Department doesn't care.

[retiree]

If you are resident in Thailand (stay for 183+ days) and this money was earned in the year you transfer it, then generally speaking, what is bought in is taxable. If however, what you bring in is savings, earned in previous years, then the Revenue Department doesn't care.

Actually, the original question was not about transfers to oneself. It was whether or not Thai nationals had to be concerned about incoming funds being treated as income (or even as a gift, if Thailand has gift taxes).

[expatwannabe]

If you are resident in Thailand (stay for 183+ days) and this money was earned in the year you transfer it, then generally speaking, what is bought in is taxable.

"generally speaking?"

Thailand doesn't tax foreign income. That's the responsibility of the foreign country. Even if you bring it into Thailand in the same year that you earn it abroad.

I don't have an authoritative answer about the "gift tax," but given the number of transfers Mssr. Thaksin has made to his children, cousins, distant relatives, business acquaintances, and anyone else willing to hide assets - I'd predict Thailand doesn't have one. Otherwise, the media would have mentioned it, and the Junta would have added it to all the other lawsuits for tax evasion.

Edited June 23, 2007 by expatwannabe

[lopburi3]

Thailand taxes worldwide income exactly as explained by samarn. They normally do not go out of there way to find such income but if they do it will be taxed. There may be dual tax treaties that will effect who pays what to whom but the rule is current income brought into Thailand is subject to Thai tax.

[Maestro]

I shall try to rephrase the question of the OP the way I understand that question.

Khun Lek is a Thai citizen and lives in Thailand.

Mr. John Doe is a US citizen and lives in the USA.

John makes periodic remittances from the USA to the bank account of Lek in Thailand. Within a calendar year, these remittances add up to USD 50,000

Question: under Thai law, is Lek liable to declare the money, ie the gifts, received from John and to pay income tax on it?

--

Maestro

[Jimjim]

That's kind of how I was seeing it. He wants to know about a Thai receiving the money in their account, yes?

Edited June 24, 2007 by Jimjim

[retiree]

That's kind of how I was seeing it. He wants to know about a Thai receiving the money in their account, yes?

As the OP, yes. But it wasn't a technical query about whether or not Thais owe taxes on work-income from overseas. Rather, it's whether or not poor Khun Lek is likely to get a phone call asking her to explain why the money shouldn't be presumed to be taxable income.

[blizzard]

as long as there is good reason to send money in i dont think anyone cares.

what other reason than to support , you know , ladies of lub, is there to send money in to los if you a foreign man.

and believe me guys it happens. many request s for money done over cam in public internet cafes.

and why so much? lek can live on a lot less.

Edited June 24, 2007 by blizzard

[samran]

From the criteria outlined in section two of this link, my first impression would be no tax is payable:

http://www.rd.go.th/publish/6045.0.html

[Maestro]

...my first impression would be no tax is payable:

http://www.rd.go.th/publish/6045.0.html

Very useful link; saved it to my hard disk. Anyway, gifts are not listed as assessable income for the purpose of personal income tax.

... it's whether or not poor Khun Lek is likely to get a phone call asking her to explain why the money shouldn't be presumed to be taxable income.

You are right; I overlooked that. It boils down to the question whether Khun Lek’s bank routinely informs the revenue department of inward remittances, if so for remittances exceeding what amount, or if the revenue department otherwise has access to this data and uses it for the determination of possible tax liability of natural persons (individual persons), and would investigate the individual for possible tax evasion.

While it has become apparent that Khun Lek owes no tax on such remittances received as gifts, this question whether the revenue department has routine access to this type of bank data, without a court order for each and every case, must be of general interest. What say the tax experts?

Incidentally, most banks have made it a strict rule that for outward remittances, eg your remittances to a friend in Thailand, must state a reason for the remittance. The payment order usually has a field “Message for beneficiary” that can be used for this purpose. If the Thai revenue department should have access to the bank data and if you want to make sure that the revenue department cannot count the money as “income from personal services”, “income from liberal professions” or any other form of assessable income on the part of Khun Lek, you may want to indicate on your payment orders something like “gift for personal use”. Just a thought.

--

Maestro

[Old Man River]

As the OP, yes. But it wasn't a technical query about whether or not Thais owe taxes on work-income from overseas. Rather, it's whether or not poor Khun Lek is likely to get a phone call asking her to explain why the money shouldn't be presumed to be taxable income.

The receiver of the funds will have to sign a Bank of Thailand (BOT) form (TD3) which will be prepared by the receiving bank. This form documents the reasons for incoming remittances and will be sent to the BOT which holds them as a matter of record. This has absolutely nothing to do with taxes and is more a way to track incoming and outgoing foreign exchange (outgoing remittances also have to be documented with the BOT).

Other than the above, the incoming transfers will go unnoticed.

[Wekhin]

Thailand tax system is a self assessment system. So, income earner will be fined a double if found out that he does not pay, if any. Taxable incomes are those as in the link posted by Samran above.

There is no tax on cash received as a gift.

Receiver of incoming remittance from 2M baht will have to declare its source to the bank who will report it to Anti Money Laundering Office.