Thai gov. to tax (remitted) income from abroad for tax residents starting 2024 - Part I

[stat]

11 hours ago, Mike Teavee said:

It depends on "Who" they're sending the money to,  "What" they're sending the money over for & "How Much" they're sending, but based on current rules & the fact that there have been no announcements changing the "Gift" part of these, IMHO...

1. If they're sending money back to themselves then there should be no tax liable from the Thai national as they're not Tax Resident. 
2. If the money is below 20M & being gifted to a Spouse or a Child for their use only & they get no direct financial benefit from it (e.g. the money could not be used to buy land/property in the Senders name) - No Tax is liable
3. If the money is below 10M & a gift to a close friend/partner to mark a significant occasion (e.g. Wedding) or to provide support (Moral Obligation) & they get no direct financial benefit from it (again, couldn't be used to buy anything in the senders name) - No Tax is liable
4. If the money is above the 10/20M thresholds & is a "Gift" then 5% tax to pay by the person receiving it. 

However, as has been discussed in the thread already, the 10/20M "Gift" loophole would seem to make a mockery of the new rules so although I believe it will stay in some form (maybe a reduced limit to 1/2M THB) I would image any such "Gifts" would be intensely scrutinised. 

 

 

 

I think it would be rather safer (in terms of the wife or gf leaving) to receive money from abroad as a "gift" :-) However it gifts can be used as a workaround remains to be seen (my take is they should).

[stat]

8 hours ago, positivevibes said:

This tax nonsense is never gonna happen. You are a complete mug if you declare any income here.

 

Key to success in this country is to stay under the radar. Those who ignore this often end up taking base jumps from condos.

How do you intend to stay under the radar if Thai Immigration can easily ascertain that you are a tax resident?

[stat]

2 hours ago, beautifulthailand99 said:

There is an underground money transfer service. I know it operates in London and agents go around Thai businesses on a weekly basis and take cash that appears within hours on their Thai bank accounts at close to the exchange rate. It is widely used as to how it works god only knows.

Common knowledge how it works. It is also common knowledger that there is a good chanceit will put you on a nice list that the US immigration and the FBI will pull out next time you visit the US as for t... financing. I know a lot of foreign arabic guest workers uses it but I would not touch it with a 10 foot pole.

[Danderman123]

1 hour ago, stat said:

Common knowledge how it works. It is also common knowledger that there is a good chanceit will put you on a nice list that the US immigration and the FBI will pull out next time you visit the US as for t... financing. I know a lot of foreign arabic guest workers uses it but I would not touch it with a 10 foot pole.

My original question still stands:

 

A Thai national living abroad who remits 1M baht as gifts for his family in Thailand. Let's assume they use Western Union.

 

What are the tax implications?

Edited December 13, 2023 by Danderman123

[jerrymahoney]

7 hours ago, Danderman123 said:

My original question still stands:

 

A Thai national living abroad who remits 1M baht as gifts for his family in Thailand. Let's assume they use Western Union.

 

What are the tax implications?

Sending a large money transfer to Thailand? What to know about taxes

 

Don't get caught off guard. If you need to send a large money transfer to Thailand, make sure you know what kind of taxes you (or your recipient!) might be responsible for.

February 1, 2021 

 

<>

 

Income Tax
The gift tax might or might not apply when you send money to Thailand, but the income tax almost always applies. Additionally, Thailand’s tax penalties are rather harsh. High fines and even jail time are rather common, even for rather innocent mistakes.

 

https://www.xe.com/blog/money-transfer/sending-a-large-money-transfer-to-thailand-what-to-know-about-taxes/

 

[Mike Lister]

15 minutes ago, jerrymahoney said:

Sending a large money transfer to Thailand? What to know about taxes

 

Don't get caught off guard. If you need to send a large money transfer to Thailand, make sure you know what kind of taxes you (or your recipient!) might be responsible for.

February 1, 2021 

 

<>

 

Income Tax
The gift tax might or might not apply when you send money to Thailand, but the income tax almost always applies. Additionally, Thailand’s tax penalties are rather harsh. High fines and even jail time are rather common, even for rather innocent mistakes.

 

https://www.xe.com/blog/money-transfer/sending-a-large-money-transfer-to-thailand-what-to-know-about-taxes/

 

 "but the income tax almost always applies".......a sweeping generalisation that doesn't appear to have any basis in fact.

[jerrymahoney]

5 minutes ago, Mike Lister said:

 "but the income tax almost always applies".......a sweeping generalisation that doesn't appear to have any basis in fact.

A proud part of Euronet
We are proudly part of the Euronet Worldwide (NASDAQ: EEFT) family, who are recognized as formidable leaders in currency exchange. Together, we form the third largest money transfer business in the world. We strive to offer the most simple, reliable, and friendly money transfer service.

https://www.xe.com/company/

 

(Their opinion; not mine.)

 

Edited December 13, 2023 by jerrymahoney

[Mike Lister]

3 minutes ago, jerrymahoney said:

A proud part of Euronet
We are proudly part of the Euronet Worldwide (NASDAQ: EEFT) family, who are recognized as formidable leaders in currency exchange. Together, we form the third largest money transfer business in the world. We strive to offer the most simple, reliable, and friendly money transfer service.

https://www.xe.com/company/

 

(Their opinion; not mine.)

 

Yes, sorry Jerry, I didn't mean to imply this was your view.

 

It just seems to be an odd statement for a company like XE to make.

[jerrymahoney]

9 minutes ago, Mike Lister said:

It just seems to be an odd statement for a company like XE to make.

OK. I was just looking to find ANY reference to tax treatment of international transfers TO Thailand gift or otherwise and the above was about all I could find.

[Mike Lister]

6 minutes ago, jerrymahoney said:

OK. I was just looking to find ANY reference to tax treatment of international transfers TO Thailand gift or otherwise and the above was about all I could find.

The reference to Gift Tax is of course very useful but its credibility is undermined somewhat by the statements about income tax. It comes across as scaremongering, or maybe that's just the way I read it.

[jerrymahoney]

The reference to the up to 20 million baht maintenance gift tax-free originates in the ruling of February 1, 2016.

 

In that time, as best I can tell, no Thai-based law firm or accountancy while quoting that ruling has ever made a reference to whether such gifts apply solely to funds domestic or might also include international transfers which would mean someone could import about 600,000 US$ per year tax free as long as structured as a gift.

 

 

Edited December 13, 2023 by jerrymahoney

[PingRoundTheWorld]

8 hours ago, Danderman123 said:

A Thai national living abroad who remits 1M baht as gifts for his family in Thailand. Let's assume they use Western Union. What are the tax implications?

A Thai national living abroad is not a Thailand tax resident, therefore income tax does not apply. Gift tax won't apply either since it's not a large enough sum. Bottom line: a Thai overseas worker who lives there for more than half of the year won't have to pay Thai taxes on money they send their family.

 

If you want to complicate this further: What if you gifted (transferred) money to a Thai person's overseas bank, then they transferred it to Thailand? It cannot possibly be income to them since it was a gift, and it's not bringing money into Thailand for you, since it's not you who transferred it to Thailand. Of course it all depends on how Thai RD and courts interpret such events, but likely they won't bother with small amounts.

 

Some good news I read today was that on Nov 20 they clarified that any income made before 2024 will NOT be subject to the new rule. So any savings you accumulate before the end of the year will not be taxable next year regardless of when you transfer it (but you should probably be prepared to show/prove you had those savings on Dec 31...)

 

[jacko45k]

10 hours ago, stat said:

How do you intend to stay under the radar if Thai Immigration can easily ascertain that you are a tax resident?

Are you suspecting they will look at every single visitor to Thailand and add up their days in country and then insist those exceeding 180 days, all get a tax ID and submit a form? It might be easier to reintroduce the tax paid certificate for those leaving the country that show up as having been in for a longer period. That won't get the Expats who never go out though. 

[Mike Lister]

5 minutes ago, jacko45k said:

Are you suspecting they will look at every single visitor to Thailand and add up their days in country and then insist those exceeding 180 days, all get a tax ID and submit a form? It might be easier to reintroduce the tax paid certificate for those leaving the country that show up as having been in for a longer period. That won't get the Expats who never go out though. 

No, but conceivably, Immi will easily see from your passport when you leave the country, how many days you've been in Thailand and then ask if you've filed a tax return or similar.

[Danderman123]

17 minutes ago, PingRoundTheWorld said:

A Thai national living abroad is not a Thailand tax resident, therefore income tax does not apply. Gift tax won't apply either since it's not a large enough sum. Bottom line: a Thai overseas worker who lives there for more than half of the year won't have to pay Thai taxes on money they send their family.

 

If you want to complicate this further: What if you gifted (transferred) money to a Thai person's overseas bank, then they transferred it to Thailand? It cannot possibly be income to them since it was a gift, and it's not bringing money into Thailand for you, since it's not you who transferred it to Thailand. Of course it all depends on how Thai RD and courts interpret such events, but likely they won't bother with small amounts.

 

Some good news I read today was that on Nov 20 they clarified that any income made before 2024 will NOT be subject to the new rule. So any savings you accumulate before the end of the year will not be taxable next year regardless of when you transfer it (but you should probably be prepared to show/prove you had those savings on Dec 31...)

 

There is no way the "income earned before Jan 1" ground rule could be implemented, in actual reality.

 

A billionaire could transfer millions of dollars for many years tax free under that concept.

 

I might transfer $50,000 into Thailand in 2026, and show that I had $50,000 in tbe bank in 2023. Is it the same $50,000? How can RD say no?

[Ben Zioner]

24 minutes ago, Danderman123 said:

There is no way the "income earned before Jan 1" ground rule could be implemented, in actual reality.

 

A billionaire could transfer millions of dollars for many years tax free under that concept.

I might transfer $50,000 into Thailand in 2026, and show that I had $50,000 in tbe bank in 2023. Is it the same $50,000? How can RD say no?

Whatever you don't transfer before December 31, you must freeze in a separate bank account. 

[david555]

42 minutes ago, Mike Lister said:

No, but conceivably, Immi will easily see from your passport when you leave the country, how many days you've been in Thailand and then ask if you've filed a tax return or similar.

Another profitable reason for them to make you use an agent ....so they would look not to close to that ....another profit earner ...

[Mike Lister]

5 minutes ago, david555 said:

Another profitable reason for them to make you use an agent ....so they would look not to close to that ....another profit earner ...

How are you going to use an agent to avoid Immi checks when you leave the country? 

[david555]

24 minutes ago, Mike Lister said:

How are you going to use an agent to avoid Immi checks when you leave the country? 

My comment was just for  in any contact with immigration ,not by leaving ....example extensions etc.

Immigration is the best placed service to keep record if a foreigner is taxable ( 180 days in Thailand )

[jacko45k]

1 hour ago, Mike Lister said:

No, but conceivably, Immi will easily see from your passport when you leave the country, how many days you've been in Thailand and then ask if you've filed a tax return or similar.

Immigration leaving the country, or domestic immigration, say when doing a Tm30, Extension or Re-Entry permit? You suggest the former, so what happens if none has been submitted, prevented from leaving?

[Mike Lister]

Just now, jacko45k said:

Immigration leaving the country, or domestic immigration, say when doing a Tm30, Extension or Re-Entry permit? You suggest the former, so what happens if none has been submitted, prevented from leaving?

You're asking me what action Immi might take in a hypothetical scenario in the future, that's difficult to answer!

 

Potentially the answer must be yes. Years ago the US had a similar system for green card holders, I couldn't leave the country unless the US Revenue had cleared me to do so, the airlines simply won't check you in.

[jacko45k]

1 minute ago, Mike Lister said:

You're asking me what action Immi might take in a hypothetical scenario in the future, that's difficult to answer!

 

Potentially the answer must be yes. Years ago the US had a similar system for green card holders, I couldn't leave the country unless the US Revenue had cleared me to do so, the airlines simply won't check you in.

I believe Thailand had a system too for people leaving the country who were not tourists....  a long time ago. With the numbers we have nowadays, a formidable effort. 

[Mike Lister]

Just now, jacko45k said:

I believe Thailand had a system too for people leaving the country who were not tourists....  a long time ago. With the numbers we have nowadays, a formidable effort. 

Yes, as I recall there is already a law that covers this point but it is not enforced currently.

[Mike Lister]

12 minutes ago, jacko45k said:

I believe Thailand had a system too for people leaving the country who were not tourists....  a long time ago. With the numbers we have nowadays, a formidable effort. 

Here you go, Thailand Tax Clearance Certificate.

 

https://www.rd.go.th/english/23518.html

[jerrymahoney]

As I posted in one of the parallel topics:

 

All this talk of international banks sharing info with the Thai government is very Hi-tech. Something like this would be very Low-tech:

 

To: Director, Thailand Immigration
From: Director, Thailand Revenue Department

 

Dear Sir/Madam:

 

We call to your attention to the practice of certain Immigration offices accepting payments via agent intermediaries to waive bank deposit requirements for one-year extensions of stay. This practice aids and abets such aliens in evasion of income remittances that might otherwise be subject to tax.

 

We request your full attention to this matter; if not, Thailand Revenue Department may request a list of all those expats who have been granted one-year extensions of stay without providing evidence of Thai deposits as specified in your current RTP Police Order No.654/2564 2.22

[Mike Teavee]

11 hours ago, Danderman123 said:

My original question still stands:

 

A Thai national living abroad who remits 1M baht as gifts for his family in Thailand. Let's assume they use Western Union.

 

What are the tax implications?

 

Neither the PWC or HSBC articles I've read on Gift tax state whether the money being "Gifted" has to come from within Thailand or can come from abroad

PWC: https://taxsummaries.pwc.com/thailand/individual/income-determination

HSBC:https://www.expat.hsbc.com/expat-explorer/expat-guides/thailand/tax-in-thailand/#:~:text=Inheritance and gift taxes&text=However%2C gifts received from a,year) are exempt from tax.

 

I guess the safest thing would be for them to send the money to their own Bank Account in Thailand (No Tax as they're Non Tax Resident) & then "Gift" it from there. 

 

 

[jerrymahoney]

54 minutes ago, Mike Teavee said:

I guess the safest thing would be for them to send the money to their own Bank Account in Thailand (No Tax as they're Non Tax Resident) & then "Gift" it from there. 

2.2.1 Persons with Thai nationality
The assets of Thai nationals and juristic persons are taxable regardless of their
location.

 

https://www.bakermckenzie.com/-/media/files/insight/events/2016/11/32nd-aptaxconference/20161116/2016aptc_thailand.pdf

[jerrymahoney]

1 hour ago, Mike Teavee said:

Neither the PWC or HSBC articles I've read on Gift tax state whether the money being "Gifted" has to come from within Thailand or can come from abroad

Maybe they forgot.

[Yumthai]

31 minutes ago, jerrymahoney said:

2.2.1 Persons with Thai nationality
The assets of Thai nationals and juristic persons are taxable regardless of their
location.

 

https://www.bakermckenzie.com/-/media/files/insight/events/2016/11/32nd-aptaxconference/20161116/2016aptc_thailand.pdf

This is referring to assets location under inheritance tax with an exemption of 100M THB per inheritor.

[TroubleandGrumpy]

On 12/12/2023 at 5:45 PM, kuma said:

The 'process' is not a bug its a feature, imo. They save untold millions on consultants and 1000, nay 1,000,000s of hours of effort (net of work to analyze all the input), system wide, by throwing out these policies, partially conceived, to the  populace - then sit back and scoop absolutely tons of free input, from so many perspectives. It  actually allows for low cost lobbying to occur, as all this feedback is grass roots generated and - using this forum as an example (NOT saying they would refer to this forum, but they are getting loads of input from affected Nationals, etc, online) virtually free for individuals to raise a voice. So flipping it on its head, this is a more democratic and equal method for people to have their voices heard - as opposed to say the absolutely corrupted lobbyist models that exist in much of the world...where special interests w deep pockets and few morals have a stranglehold on how policy will be formed.

I never thought of it like that - and that is definitely a more 'grassroots' way to ascertain the downsides to anything.   I do not think that Thais do that deliberatly and with forethought, but it certainly results in lots of 'genuine' feedback about the cons of any new initiative, and saves a fortune on consultants and review panels.  Whilst the Thai RD members of the review committee would not be directly 'listening' to the forums like this, there are several representative groups and other parties that would be looking and seeing what the feedback is (and using it for their own reasons).  Very interesting point mate - the old 'throw them in at the deep end' and dont get involved if you are not needed.