Paying Tax on Overseas Investments

[Startmeup]

1 hour ago, JimGant said:

This gives a whole new dimension to the concept of LIFO vs. FIFO. Also, shows bureaucrats will trump the fungibility of money, if they can squeeze a taxable event out of it....

 

Actually, I'd have no problem with Thailand figuring out how to tax foreign income coming into Thailand, that tax treaties give them the right to tax. As a Yank, this would be a zero sum game for me, since what Thailand doesn't tax, Uncle Sam does. But, if Thailand finally does figure out how to take advantage of the tax treaties, Uncle Sam will match that tax with a credit. Thus, my fungible tax dollar/baht will go towards Thai infrastructure, not infrastructure in the Ozarks. Or go towards alleviating Thai poverty. Good, good.

 

But, with the rule about no taxation on income brought into Thailand in a later year in effect, not a lot is going to happen. Why? Because this rule primarily subsidizes fat cat Thais with business outside the country.

 

 

It's a tricky topic. In regards to foreigners coming into Thailand, Many people relocate to Thailand because of the tax optimisation opportunities. If Thailand decided they want to tax these earnings many will just relocate to somewhere else where their dollar goes further and they are treated better. That or else set up a structure that allows them to do it anyway. There are many options close by such as Singapore, Philippines, Hong Kong, Malaysia etc. Many options in South America, Africa and Europe too depending on your situation. There is a long list of territorial tax countries.

Does this mean they are not contributing to the Thai economy? Of course not. Id argue These types of people have a higher disposal income and are contributing much more to the economy than most of the retirees who are living off a state pension/disabilty pension from their home country. 

 

It also seems to me that the Thai government are becoming more interested in attracting higher income foreigners by the types of visas they have been offering the last couple of years so I think its safe enough that they won't be changing this rule anytime soon. 

 

Edited January 25, 2023 by Startmeup

[Startmeup]

Got my Tax ID with thanks to the information provided by the good folks on here and with thanks to my Thai friend who without I likely would not have gotten past the language barrier or been looked upon so kindly.

 

[A1Str8]

What's a tax?

[spidermike007]

If any of these entities are not asking for it, withdrawing it, or aware of it, by all means don't pay it. Only those who are overly compliant, or not rich enough, pay substantial taxes. 

Edited February 2, 2023 by spidermike007

[tomazbodner]

I still have a question here. If I buy stock at say 100k and then sell it at 110k, then transfer 110k (let's skip the fees for simplicity), then my gain was only 10k. How could I be taxed on 110k and not only 10k? How could I prove I've bought that for 100k maybe 10 or 20 years back?

 

Dividends are taxed on Nasdaq anyway, so it's just about what happens if I sell the shares and transfer? I only have online access to broker, but stopped paper statements years back. I guess it does show gain/loss on the online page, but would they accept a paper printout of something that anyone with 10 min of time could fake in Photoshop and put arbitrary numbers in?

[Startmeup]

7 minutes ago, tomazbodner said:

I still have a question here. If I buy stock at say 100k and then sell it at 110k, then transfer 110k (let's skip the fees for simplicity), then my gain was only 10k. How could I be taxed on 110k and not only 10k? How could I prove I've bought that for 100k maybe 10 or 20 years back?

I think I highlighted the nonsensical-ness you talk about. 

 

It doesn't matter if you invested $100k and lost 50% or gained 50%, if you then go ahead and transfer that sum of money into your "dedicated Thai bank account (which isn't even in Thailand)' after you already have lodged something into that account that calendar year then you are taxable on the full amount. It has nothing to do with making any gains and everything to do with lodging money at any given time of year.

 

Still makes zero sense to me now but that's what PCW say so who are we to argue? 

Edited February 3, 2023 by Startmeup

[Startmeup]

35 minutes ago, tomazbodner said:

Dividends are taxed on Nasdaq anyway

Tax how and for who? Taxation depends on your tax residency/if there is tax treaties in place etc so your tax situation could be different to everyone else but there is probably withholdings taxes on dividends in US?

Edited February 3, 2023 by Startmeup

[Startmeup]

*Deleted post edited out*

 

I found this on this website

 

https://www.thaiembassy.com/faq/do-retirees-pay-income-tax

 

Only income earned inside Thailand shall be subjected to tax during retirement. Therefore, you will not be obliged to pay any taxes for any income you have earned from overseas. Also, personal income taxes are not required for retirees in Thailand. Note that you can’t work in Thailand while on a retirement visa.

 

but then i found this also;

 

https://msnagroup.com/tax-on-monthly-pension-in-thailand/

 

Clear as mud

[Startmeup]

On 1/24/2023 at 1:03 PM, ballpoint said:

I said I wanted to reclaim interest withholding tax, and they gave me an ID with the same number as my previous one, which makes sense. 

Withholding tax on bank interest is the same for residents and non residents, it seems? 

[2009]

1 hour ago, Startmeup said:

I think I highlighted the nonsensical-ness you talk about. 

 

It doesn't matter if you invested $100k and lost 50% or gained 50%, if you then go ahead and transfer that sum of money into your "dedicated Thai bank account (which isn't even in Thailand)' after you already have lodged something into that account that calendar year then you are taxable on the full amount. It has nothing to do with making any gains and everything to do with lodging money at any given time of year.

 

Still makes zero sense to me now but that's what PCW say so who are we to argue? 

He's talking sense.

 

Aren't we supposed to be taxed on our  only on our gains? Isn't that the logical point?

 

Think it this way: he invests 100k, and makes 10k. Then, transfers the 110k and they tax him on all of it. The tax will likely be more than 10k, so he has lost all his gains, plus some more.

 

If that's the way it worked, nobody would ever make money from investing.

[Startmeup]

27 minutes ago, 2009 said:

He's talking sense.

 

Aren't we supposed to be taxed on our  only on our gains? Isn't that the logical point?

 

Think it this way: he invests 100k, and makes 10k. Then, transfers the 110k and they tax him on all of it. The tax will likely be more than 10k, so he has lost all his gains, plus some more.

 

If that's the way it worked, nobody would ever make money from investing.

For Thailand its not even just your gains because if you dont bring your gains back into the country in the CY then they won't be taxed.

If you read back through the thread I was the first one to bring this up. As in its seems like total nonsense to me too but The poster on here claimed he was audited but had consulted with PWC about the tax laws here prior to that and he explains it in earlier posts that what he was told by PWC was also told the same as he was told during the audit by revenue/immigration.

He says it has nothing to do with earning money anywhere it's only the way in which you bring it into the country or in his case keep it in a bank in Singapore. I can only think that what he says he says logically and it must be true if its coming from PWC.

Any website I read says something along the lines of 

"However, any income you earn during the year but leave in a bank account outside of Thailand is not subject to taxes. This means, if you make money abroad and don’t want to pay income taxes on it in Thailand, you must leave the money in a foreign bank account and send it to Thailand during the next calendar year. "

"If you’re a tax-resident, your foreign income will be taxed when you bring it into Thailand in the same calendar year. 

For example, if you make money abroad in 2021 and bring it into Thailand in the same year, you must pay taxes on this foreign income.

On the other hand, if you bring it into Thailand in 2022 onward, then it’s not subject to Thailand income tax. "

https://www.expatden.com/thailand/thailand-income-tax-for-foreigners/
 

 

Edited February 3, 2023 by Startmeup

[tomazbodner]

Thank you for explaining again, but it would not make any sense for any Thai tax resident to make any investments outside Thailand then.

 

Let me give an example, if same principle was done on house resale (as many foreigners buy and sell property here), and let's say the tax was 30% (it's seen as 5-35% in the post above)...

 

You buy the house for 29.5 million baht. You're moving so you sell it at 30 million. You have made 500,000 baht profit. But instead of paying 150,000 baht in tax, you need to pay 10 million baht in tax on 500,000 baht capital gain.

 

I don't doubt poster got that answer from PWC, but there must be something lost in translation somewhere as that makes no sense at all.

[JackGats]

Withholding tax on dividends is always paid to the country where the dividend originates. For example if you own Apple stocks, the dividend paid by Apple will be subject to US 30% dividend tax. If there is an agreement between the EU country and the US, this will result in 15% paid to the US and 15% paid to the EU country if you are taxable in the EU country and provided you have filed the W-8BEN form with your bank. If you are not taxable in the EU country, you'll only pay 15% to the US.

 

The W-8BEN form  requires a Thai TIN if you're declaring Thailand as your residence.  It also requires your postal (mail) address to be in the same country as your home address, ie both addresses in Thailand.

 

Capital gains on selling stocks are only taxable in the country where you are a resident. If the latter country turns a blind eye, like Thailand does, this means 0% on capital gains.

[JimGant]

3 hours ago, JackGats said:

Capital gains on selling stocks are only taxable in the country where you are a resident. If the latter country turns a blind eye, like Thailand does, this means 0% on capital gains.

.... unless you're a US taxpayer.

[Startmeup]

On 2/4/2023 at 9:37 AM, JackGats said:

If the latter country turns a blind eye, like Thailand does, this means 0% on capital gains.

Thailand doesn't turn a blind eye, It just struggles to enforce it. If they could captures those taxes no doubt they would. You can legally accrue capital gains abroad and bring into Thailand if it's not in the year you earned it. 

My understanding of US sourced dividends is what you describe.

In Australia they have whats called Fully Franked dividends where the company has already paid the tax on the earnings and it's not taxed again. In this case there is no withholding taxes on the dividends.