21 hours ago, Mike Lister said:

FWIW I'm going to take some time with the Simple Tax Guide offline, and without the irritation that one or two posters bring with them, and try to update it alone. I will also sort out the links problems. Afterwards, I'll start a new thread and post the updated version but probably in a locked thread. If anyone needs help with anything I can be PM'd and will happily try and help. 

 

I'm not sure what would be the point of a locked thread.  No one would able to point out anything that is misleading or incorrect.  Anyway isn't the purpose of a forum like ASEAN NOW to encourage members to comment and debate topics?  There are other places on the Internet where static Thai tax guides produced by professional tax advisors can be found.  Describing other forum members as "irritations" and hindrances to developing a thread doesn't seem to be in the spirit of an open forum community.

1 hour ago, Dogmatix said:

 

I'm not sure what would be the point of a locked thread.  No one would able to point out anything that is misleading or incorrect.  Anyway isn't the purpose of a forum like ASEAN NOW to encourage members to comment and debate topics?  There are other places on the Internet where static Thai tax guides produced by professional tax advisors can be found.  Describing other forum members as "irritations" and hindrances to developing a thread doesn't seem to be in the spirit of an open forum community.

Aspects of the guide can always be discussed and debated in this thread, a few members said they wanted this thread left open to do just that so go ahead and debate it here. What we've seen is that there is a substantial and clear need for members to have easy access to facts and related information, without having to trawl through 250 pages of frequently emotive discussion posts and unrelated half page rants, in order to try and find answers. My role currently is to extract the few relevant facts that do emerge from threads such as these and express them simply and concisely for the benefit of members, in the simple tax guide.

 

There are several agenda's in play in these threads: one is the need to debate and post; another is to try to find answers and information about tax; mine is to develop a tax guide that is as complete and as simple to understand as possible; another agenda is to derail my agenda. It is clear from the letter writing campaigns, the abusive PM's and the abusive posts of the past four months that a couple of posters are as intent as ever in derailing the tax guide....I called them irritants and hindrances, I think that was very mild.

 

It is indeed unfortunate that the Simple Tax Guide thread had to be closed but there was no alternative, if we were to avoid turning it into a clone of this thread. Members desperately need a safe place they can go to obtain information and get their questions answered, the simple guide thread was that for a while and saw lots of people field their issues and get them answered. Now they have lost out, simply because of the agenda of a couple of persistent selfish posters who want to constantly run interference.

 

 

 

3 hours ago, Mike Lister said:

The latest version of the Simple Tax Guide is in the first post of the thread of the same name that is now closed.

 

Did a search on Asean Now on 'simple Tax Guide' and the search results gave me 42.862 results. Can you please be a bit more specific ?

Thanks....

2 minutes ago, Halfaboy said:

 

Did a search on Asean Now on 'simple Tax Guide' and the search results gave me 42.862 results. Can you please be a bit more specific ?

Thanks....

Sorry, my fault, I took it for granted that everyone understood it was the same thread that has been reposted at least a hundred times and is linked once again below. 

 

It's real name is, Personal Income Tax Guide for Foreigners.

 

 

Reported post with unsupported facts, etc have been removed. 

 

Please ensure you provide a link to the source of any material you present.

 

 

On 4/2/2024 at 10:14 AM, Mike Lister said:

FWIW I'm going to take some time with the Simple Tax Guide offline, and without the irritation that one or two posters bring with them, and try to update it alone. I will also sort out the links problems. Afterwards, I'll start a new thread and post the updated version but probably in a locked thread. If anyone needs help with anything I can be PM'd and will happily try and help. 

Yes please start your own thread with the tax guide and leave this thread alone much obliged. The tax guide is a good thing as long as it allows for open discussion in a thread. Thanks!

At the end of the day nobody seems to have a concise and reliable answer to all the doubts of taxing the retirees in Thailand and their pensions.

 

Many retirees in Thailand could start selling their property and perhaps are looking to relocate in other countries in the region that are more foreigner and tax friendly.

Reported posts and response removed.

 

Do not discuss other members and stay on topic please.

2 hours ago, SingAPorn said:

At the end of the day nobody seems to have a concise and reliable answer to all the doubts of taxing the retirees in Thailand and their pensions.

 

Many retirees in Thailand could start selling their property and perhaps are looking to relocate in other countries in the region that are more foreigner and tax friendly.

Hopefully most fulltimers in Thailand (over 65) will be able to coast through on their basic 65k THB/month and some actual experience reports at the start of 2025 filing will enlighten. That would upto circa 280k exposed to tax but at the lowest two bands 5 and 10%.

 

Would have to hope the other countries don't issue a memo.

Was thinking whilst browsing the English pages of the RD site, this section could be of interest to posters much earlier in the Thread with various work arounds, cash in the suitcase etc not having a plausible amount of declared income etc.

https://www.rd.go.th/english/37748.html

https://www.rd.go.th/english/37749.html#section49

Section 49. In the case where a taxpayer deriving income does not file a tax return, or the assessment official considers that he underreports the amount of his taxable income, the assessment official with the approval of the Director-General shall have the power to determine the amount of his net income on the basis of the money or property owned or possessed by such taxpayer, his expenditure or standard of living or his behavior, or the income statistics either of the taxpayer or of other persons carrying on a similar business. The official shall make an assessment accordingly and give the taxpayer a notice of the amount of tax payable. In this respect, the provisions of Sections 19 through 26 shall apply mutatis mutandis. ( https://www.rd.go.th/english/37745.html )

 

 

44 minutes ago, UKresonant said:

Was thinking whilst browsing the English pages of the RD site, this section could be of interest to posters much earlier in the Thread with various work arounds, cash in the suitcase etc not having a plausible amount of declared income etc.

https://www.rd.go.th/english/37748.html

https://www.rd.go.th/english/37749.html#section49

Section 49. In the case where a taxpayer deriving income does not file a tax return, or the assessment official considers that he underreports the amount of his taxable income, the assessment official with the approval of the Director-General shall have the power to determine the amount of his net income on the basis of the money or property owned or possessed by such taxpayer, his expenditure or standard of living or his behavior, or the income statistics either of the taxpayer or of other persons carrying on a similar business. The official shall make an assessment accordingly and give the taxpayer a notice of the amount of tax payable. In this respect, the provisions of Sections 19 through 26 shall apply mutatis mutandis. ( https://www.rd.go.th/english/37745.html )

 

 

Ouch, that should incentivise people to pay attention.

EY presentation on tax changes for Thai Privilege:

 

https://www.facebook.com/watch/live/?ref=watch_permalink&v=1149895986005482

4 hours ago, K2938 said:

EY presentation on tax changes for Thai Privilege:

 

https://www.facebook.com/watch/live/?ref=watch_permalink&v=1149895986005482

 

I watched that, was a complete waste of time.

 

One of the morons in the audience thought he could transfer in as much money as he wanted until he had stayed for 180 days in a given year and taxation only kicked in after he crossed the 180 day threshold and only for money received after the 180 days. What a genius 🙄

 

Anyway due to personal circumstances over the next couple of years I've decided that I will almost certainly move to Cambodia for just under 6 months of each year as I want to avoid becoming tax resident in Cambodia as well. They have a 182 day rule down there.

I'll then take a short holiday somewhere else for a couple of weeks to top up the number of days so I remain non resident anywhere, perhaps Malaysia or Vietnam or maybe I'll even head back over to Europe for a couple of weeks.

 

I do plan to remit a large sum of money during this period and I absolutely must be able to prove without any doubt for 10 years to come that I was non resident when it is 'earned' and remitted or I will get hit with a massive tax bill of millions of Baht so this is well worth it I think.

 

I think I'll pop down to Phnom Penh for a week later this month and rent an apartment or house with the intention of keeping it for about 2 years.

On 4/2/2024 at 3:14 PM, Mike Lister said:

FWIW I'm going to take some time with the Simple Tax Guide offline, and without the irritation that one or two posters bring with them, and try to update it alone. I will also sort out the links problems. Afterwards, I'll start a new thread and post the updated version but probably in a locked thread. If anyone needs help with anything I can be PM'd and will happily try and help. 

I seem to have missed this Simple Tax Guide. Pls where can I find it?

1 minute ago, Letseng said:

I seem to have missed this Simple Tax Guide. Pls where can I find it?

See link below. There's a new version coming out tomorrow but you can start with this one.

 

https://aseannow.com/topic/1319807-personal-income-tax-guide-for-foreigners-thailand/

 

 

On 4/3/2024 at 6:50 PM, SingAPorn said:

At the end of the day nobody seems to have a concise and reliable answer to all the doubts of taxing the retirees in Thailand and their pensions.

 

Many retirees in Thailand could start selling their property and perhaps are looking to relocate in other countries in the region that are more foreigner and tax friendly.

My personal income qualifies for the LTR visa, but not my employer's, only the parent company of my employer qualifies.

 

So this means: A select few farangs (westernes) employed directly by very big companies with huge salaries will get to enjoy Thailand without having to pay any tax (congratulations Thailand, awsome tax policy).

 

For me, earning a mere 3,4 million Baht a year, this is basically Thailand telling me to .... off. Which I will. In fact, on Sunday.

 

All I can say to the Thailand mafia elite who run things here, keep enjoying your more than 4 million immigrants (slaves) from neighbouring countries, out of which 3,5 million are illegal. 

 

Good luck Thailand (probably not so much for the people of Thailand)

22 hours ago, ukrules said:

 

I watched that, was a complete waste of time.

 

One of the morons in the audience thought he could transfer in as much money as he wanted until he had stayed for 180 days in a given year and taxation only kicked in after he crossed the 180 day threshold and only for money received after the 180 days. What a genius 🙄

 

Anyway due to personal circumstances over the next couple of years I've decided that I will almost certainly move to Cambodia for just under 6 months of each year as I want to avoid becoming tax resident in Cambodia as well. They have a 182 day rule down there.

I'll then take a short holiday somewhere else for a couple of weeks to top up the number of days so I remain non resident anywhere, perhaps Malaysia or Vietnam or maybe I'll even head back over to Europe for a couple of weeks.

 

I do plan to remit a large sum of money during this period and I absolutely must be able to prove without any doubt for 10 years to come that I was non resident when it is 'earned' and remitted or I will get hit with a massive tax bill of millions of Baht so this is well worth it I think.

 

I think I'll pop down to Phnom Penh for a week later this month and rent an apartment or house with the intention of keeping it for about 2 years.

There is also the option of moving to the PH. Tax wise you are tax free there with your worldwide income. I cannot comment on quality of life in the phils, but taxwise it is a better solution compared to moving around as you can present your banks with a bona fide tax residency. Would love to hear from people that have made the move. I would rather not move around 3 times a year but I am a serious homebody 😉

48 minutes ago, stat said:

There is also the option of moving to the PH. Tax wise you are tax free there with your worldwide income. I cannot comment on quality of life in the phils, but taxwise it is a better solution compared to moving around as you can present your banks with a bona fide tax residency. Would love to hear from people that have made the move. I would rather not move around 3 times a year but I am a serious homebody 😉

 

I only intend to move back and forth a bit for this year and perhaps next year unless I get all my foreign business done this year - which is a possibility.

 

I've never been to PH but I've been to Cambodia a number of times and it seems like a good fit, it will do for six and a bit months I think.

 

This change in the rules comes at an unfortunate time for me as I had planned to use the previous year method to make my transfers into Thailand non taxable.

 

In fact I could just stay in Cambodia for 7 months, so long as I only remit into Thailand I suspect that won't be an issue. Maybe I'll get a local account in Cambodia for living expenses which I can wire in from the UK.

 

The end result is the same and I really don't care if I sit here in Hua Hin or in Phnom Penh for half a year, even if I split it into 2 or 3 trips throughout the rest of the year which is a possibility.
 

The importat thing is that if I send say $500k (not the actual amount, just an arbitrary signifcant sum of money) then I don't want to pay personal income tax on that - the money is completely untaxed anywhere else so it would be subject to full income tax if I were resident during the year of liquidation and remittance - which is easy to avoid and I would be regretting it if I didn't make the move now.

So I'm moving to avoid all doubt. Even if they reverse this decision I'm out of here for just over 6 months this year and maybe next year as well.

 

Maybe I'll really like it over there....you never know.

The decision has been made - I just need to find a nice apartment or house in Phnom Penh which I will secure in a little recon trip coming up soon.

 

My banks think I live in England, that's incorrect but not my problem as I'm not really ever going back. My Elite visa here is all set until 2040 as well.

 

I just completed my PND 90 tax return online as well as the wife's a few days ahead of the 9 April deadline for online filing (the deadline for paper filing was 31 March.  I have filed hers separately this year, as she started earning enough of her own money to make it worthwhile. I used to file jointly. I will get a tax refund of nearly 450k and the wife will get a small tax refund too.  That is more than we paid in withholding tax due to the way taxes on Thai sourced dividends are calculated to recognise that they are paid out of already taxed corporate income,. The process is not particularly user friendly towards farangs. I would say you a need pretty good knowledge of Thai and how Thai personal income tax works to even bother trying. You need to get everything prepared before you start and be ready to do the whole thing in one sitting. Otherwise you are likely to get logged out and have to key most of the data in from scratch.  

 

Nowadays there is a lot that is filled in automatically due to e-filings which get linked to the individual taxpayer.  Most of my charitable donations and the wife's insurance premiums were already up there and dividends on Thai stocks can be downloaded directly from the share registry. Possibly the RD will eventually be able to pre-load all overseas remittances to personal accounts and let the taxpayer deduct DTA tax credits.  But that is probably many year away.

3 hours ago, ukrules said:

 

I only intend to move back and forth a bit for this year and perhaps next year unless I get all my foreign business done this year - which is a possibility.

 

I've never been to PH but I've been to Cambodia a number of times and it seems like a good fit, it will do for six and a bit months I think.

 

This change in the rules comes at an unfortunate time for me as I had planned to use the previous year method to make my transfers into Thailand non taxable.

 

In fact I could just stay in Cambodia for 7 months, so long as I only remit into Thailand I suspect that won't be an issue. Maybe I'll get a local account in Cambodia for living expenses which I can wire in from the UK.

 

The end result is the same and I really don't care if I sit here in Hua Hin or in Phnom Penh for half a year, even if I split it into 2 or 3 trips throughout the rest of the year which is a possibility.
 

The importat thing is that if I send say $500k (not the actual amount, just an arbitrary signifcant sum of money) then I don't want to pay personal income tax on that - the money is completely untaxed anywhere else so it would be subject to full income tax if I were resident during the year of liquidation and remittance - which is easy to avoid and I would be regretting it if I didn't make the move now.

So I'm moving to avoid all doubt. Even if they reverse this decision I'm out of here for just over 6 months this year and maybe next year as well.

 

Maybe I'll really like it over there....you never know.

The decision has been made - I just need to find a nice apartment or house in Phnom Penh which I will secure in a little recon trip coming up soon.

 

My banks think I live in England, that's incorrect but not my problem as I'm not really ever going back. My Elite visa here is all set until 2040 as well.

 

To my understanding you are a tax resident of Cambodia after 182 days and they tax your worldwide income, so take care. There even is a country that considers you a resident after only 90 days if you are a nomad. Can't remember if it is Vietnam or Cambodia. CG Tax rate is 20% in Cambodia!

 

https://www.aseanbriefing.com/news/cambodia-delays-capital-gains-tax-to-2024/

 

Watch out to burn all bridges in the UK as you may need a passport from them in the future in case you are british.

 

Godspeed!

The “Simple Tax Guide” has been substantially updated and is linked below. When a newer version becomes available, it will replace the version in the OP and members will be notified. Readers of the guide should note the following para, from the guide:

 

9)  We are aware of several activities that are under way currently that may affect what is written in this guide but they have not yet concluded decisively. Readers should remain vigilant for changes in the following areas:

 

a) We understand that several Dual Tax Treaty Agreements (DTA’s) are being renegotiated at present, you should check to see if the agreement between Thailand and your home country is updated because this may affect you.

 

b) It has been rumoured that the new interpretation of the tax rule might be challenged in court and potentially overturned, to date we have not seen news about any challenge.

 

c) We are told that the tax return forms are being redesigned, the new forms may yield some clues as to what additional information will be required of taxpayers. Readers should remain alert for news about the new forms, when they are issued.

 

Anyone who has questions about the guide or how the contents affect them, can raise them here where several people should be able to help. If anyone has tax guide or related issues they can’t get answers to, they should feel free to PM me and I will  see if I am able to help further.

 

The Tax Guide thread is locked to prevent debate about tax occurring in too many different locations that are difficult to keep track of for both members, Moderators and me.   Another major reason is to avoid confusing readers who are only looking for answers to basic questions, without scrolling through hundreds of pages of frequently unclear and complex debate.

 

We are aware of a graphics issue when a link to the guide is cut and pasted into a thread and displays an old graphic heading in green, which is misleading but erroneous. Said graphics character has proved elusive but the display can be safely ignored, the guide applies to taxpayers with overseas income also, even if the heading suggests it doesn’t.

 

The Simple Tax Guide is a community project that has been viewed over 70,000 times. It has helped several hundred AN members with their taxes and alleviated a lot of unnecessary worry, particularly from older members. If you would like to participate in the construction of the guide by suggesting ways to improve it, or by drafting new sections for the guide, you are most welcome to do so and should contact me via PM.

 

 

Talking with a good friend this morning who is very intelligent and understands Thailand well....he said to me, I don't know what to make of this tax issue any longer, there's so much information flying around and so much of it is the opposite of what I'd previously understood.

 

 My advice to him was to go back to basics and to ignore all the videos, webinars, articles by all sundry, mostly all aimed at jumping on the bandwagon and trying to make money out of the tax rule change but cunningly disguised as other things. The basics are:

 

1) The Thai Revenue Tax Code has been in place for decades.

2) A single rule was reinterpreted in September last year and partially mitigated by a concession granted in November.....this is not a new law.

3) That is the full extent of what is known as fact today.

4) The Revenue has conducted several Q&A sessions with some of the tax consultancies and these are widely available and are in the Simple Tax Guide. Those Q&A's answer some of the basic questions.

5) Everything else is noise, assumption, guesswork and scare tactics designed to steer people into buying accountancy or financial services.

 

When something significant happens that is factual, you will learn of it and it will be unmistakable, members in this thread will ensure that.

 

 

 

2 hours ago, Mike Lister said:

The “Simple Tax Guide” has been substantially updated and is linked below. When a newer version becomes available, it will replace the version in the OP and members will be notified. Readers of the guide should note the following para, from the guide:

 

9)  We are aware of several activities that are under way currently that may affect what is written in this guide but they have not yet concluded decisively. Readers should remain vigilant for changes in the following areas:

 

a) We understand that several Dual Tax Treaty Agreements (DTA’s) are being renegotiated at present, you should check to see if the agreement between Thailand and your home country is updated because this may affect you.

 

b) It has been rumoured that the new interpretation of the tax rule might be challenged in court and potentially overturned, to date we have not seen news about any challenge.

 

c) We are told that the tax return forms are being redesigned, the new forms may yield some clues as to what additional information will be required of taxpayers. Readers should remain alert for news about the new forms, when they are issued.

 

Anyone who has questions about the guide or how the contents affect them, can raise them here where several people should be able to help. If anyone has tax guide or related issues they can’t get answers to, they should feel free to PM me and I will  see if I am able to help further.

 

The Tax Guide thread is locked to prevent debate about tax occurring in too many different locations that are difficult to keep track of for both members, Moderators and me.   Another major reason is to avoid confusing readers who are only looking for answers to basic questions, without scrolling through hundreds of pages of frequently unclear and complex debate.

 

We are aware of a graphics issue when a link to the guide is cut and pasted into a thread and displays an old graphic heading in green, which is misleading but erroneous. Said graphics character has proved elusive but the display can be safely ignored, the guide applies to taxpayers with overseas income also, even if the heading suggests it doesn’t.

 

The Simple Tax Guide is a community project that has been viewed over 70,000 times. It has helped several hundred AN members with their taxes and alleviated a lot of unnecessary worry, particularly from older members. If you would like to participate in the construction of the guide by suggesting ways to improve it, or by drafting new sections for the guide, you are most welcome to do so and should contact me via PM.

 

 

 

It will be interesting to see what changes, if any, will be made to the PND 90 form and its onllne equivalent.  The 2023 online version already allows you to fill income from overseas.  So they just need to add in a space to deduct tax already paid that is deductible according to a DTA.  You can already fill in tax withheld in Thailand but that requires the TIN of the entity that deducted it that can be linked in the RD's system. Currently they have a pretty neat system for online filing, compared to what it was 10 years ago. Thai dividends can now be loaded straight into your tax account with their tax implications calculated in a second by clicking on an icon, whereas previously you enter all them manually with the tax rates paid by the company.  The e-filing system is now getting real momentum too.  My tax deductible purchases in the shopping rebate scheme were all loaded straight into my tax account along with insurance premiums and most of my charitable donations.  Even temples are now able to input donations into the RD system.  In the past the system was hard to get into near the deadline and used to crash a lot, forcing me to start the whole thing again a few times each year.  Now it is usually possible to do the whole filing at a sitting without being forcibly logged out, unless you pause too long.

 

Given the near state of perfection of the RD's current system (surprising in and of itself), I doubt they will want to allow taxpayers to fill in foreign tax credits that can't be verified by the system and which require cross referencing with DTAs.  So I imagine that, even if they add a place in the hardcopy forms for tax credits., it will remain a manual face to face system.  Of course, there is also a strong likelihood that individual RD officers with demand a level of government certification of foreign tax documents that is not possible in most Western countries.   

 

 

As per Mike's comprehensive and deserving tax guide: "Only funds that are exempt from Thai tax or funds on which Thai tax has already been paid, can be Gifted. It is not possible to Gift funds that are assessable income, in order to avoid Thai tax.".

 

I understand there is the argument that funds transferred from a Thai resident benefactor's untaxed foreign income to the Thai account of the beneficiary may be assessable income in Thailand.

 

On the occasion of the Swiss embassy town hall February 27, 2024, after discussing tax qualification of foreign income , the senior Thai RD tax expert answered to the question "How are pre-inheritance and gift funds taxed when transferred from abroad?" with "Under Thai domestic law, exemptions are for example provided for gifts to ascendants or descendants or support payments to spouses and children. In these cases, up to THB 20 million per year are exempted. Exemptions are also provided for payments to persons who are not ascendants,descendants or spouse, if they have moral purpose or and or are in accordance with customs (maximum exempted amounts = THB 10 million).".

 

The quote is from the embassy's transcript and I would assume that the transcript was verified with Thai RD. The quote would not make sense if funds gifted from foreign income accounts were assessable income and not exempt from Thai taxes in principle.

 

Based on this  statement, I deem it legal tax optimisation and not illegal tax evasion to transfer untaxed pension funds from my Swiss bank account to my wife's Thai bank account, provided the amounts transferred are less than 50% of our joint living expenses and not passed on to my Thai bank account, and we do not file a joint tax return.

 

Is there any official statement of Thai RD to the contrary? I would not put too much weight on tax consultants with their fee based bias, but rather plan my taxes based on the recent statement from Thai RD.

For one of the webinars I attended I made the foolish mistake of giving my real phone number, thinking the guy was on the level.  The advice was like the curate's egg.  It was good in parts and rotten in others.  But what is the point of an egg like that?  A week after the webinar I started getting scripted cold calls from expat financial advisors offering investment services.  You know the type - unregistered anywhere and unqualified selling investment products with very high front end loads and withdrawal penalties.  Some of the investments end up worthless too, like the famous football fund and tree farms.

10 minutes ago, Klonko said:

As per Mike's comprehensive and deserving tax guide: "Only funds that are exempt from Thai tax or funds on which Thai tax has already been paid, can be Gifted. It is not possible to Gift funds that are assessable income, in order to avoid Thai tax.".

 

I understand there is the argument that funds transferred from a Thai resident benefactor's untaxed foreign income to the Thai account of the beneficiary may be assessable income in Thailand.

 

On the occasion of the Swiss embassy town hall February 27, 2024, after discussing tax qualification of foreign income , the senior Thai RD tax expert answered to the question "How are pre-inheritance and gift funds taxed when transferred from abroad?" with "Under Thai domestic law, exemptions are for example provided for gifts to ascendants or descendants or support payments to spouses and children. In these cases, up to THB 20 million per year are exempted. Exemptions are also provided for payments to persons who are not ascendants,descendants or spouse, if they have moral purpose or and or are in accordance with customs (maximum exempted amounts = THB 10 million).".

 

The quote is from the embassy's transcript and I would assume that the transcript was verified with Thai RD. The quote would not make sense if funds gifted from foreign income accounts were assessable income and not exempt from Thai taxes in principle.

 

Based on this  statement, I deem it legal tax optimisation and not illegal tax evasion to transfer untaxed pension funds from my Swiss bank account to my wife's Thai bank account, provided the amounts transferred are less than 50% of our joint living expenses and not passed on to my Thai bank account, and we do not file a joint tax return.

 

Is there any official statement of Thai RD to the contrary? I would not put too much weight on tax consultants with their fee based bias, but rather plan my taxes based on the recent statement from Thai RD.

 

There is no evidence for the view that gifts are only exempt, if they are made from income on which Thai tax has already been paid. The provision on gifts in the Revenue Code makes no mention of this and there are no ministerial or RD regulations to this effect. The only case study on the RD's website about gifts is an example about a foreigner who sent remittances from abroad at irregular intervals to his Thai girlfriend.  Some of the remittances were of a size that could have been regarded as maintenance and others which significantly larger than this.  The RD didn't question that the remittances were from abroad and therefore obviously not out of income taxed in Thailand or that some were too much for regular maintenance.  The only point at issue for the RD was that the couple wasn't legally married and therefore the gifts were assessable for the woman's PIT. I seem to recall they said in the commentary that the gifts would all have been exempted, if they had been legally married.  As you say, a gift from overseas is unlikely to have been taxed in Thailand, unless you earned the money in Thailand and remitted it overseas before gifting it back to Thailand and the RD official talking at the Swiss Embassy would probably have mentioned that gifts from overseas were effectively not exempted, if this were the case.

21 minutes ago, Dogmatix said:

 

There is no evidence for the view that gifts are only exempt, if they are made from income on which Thai tax has already been paid. The provision on gifts in the Revenue Code makes no mention of this and there are no ministerial or RD regulations to this effect. The only case study on the RD's website about gifts is an example about a foreigner who sent remittances from abroad at irregular intervals to his Thai girlfriend.  Some of the remittances were of a size that could have been regarded as maintenance and others which significantly larger than this.  The RD didn't question that the remittances were from abroad and therefore obviously not out of income taxed in Thailand or that some were too much for regular maintenance.  The only point at issue for the RD was that the couple wasn't legally married and therefore the gifts were assessable for the woman's PIT. I seem to recall they said in the commentary that the gifts would all have been exempted, if they had been legally married.  As you say, a gift from overseas is unlikely to have been taxed in Thailand, unless you earned the money in Thailand and remitted it overseas before gifting it back to Thailand and the RD official talking at the Swiss Embassy would probably have mentioned that gifts from overseas were effectively not exempted, if this were the case.

Thank you very much for case evidence.

58 minutes ago, Dogmatix said:

There is no evidence for the view that gifts are only exempt, if they are made from income on which Thai tax has already been paid. The provision on gifts in the Revenue Code makes no mention of this and there are no ministerial or RD regulations to this effect.

Agreed.

Hence, it should be noted in the tax guide that:

 

53) Note: Only funds that are exempt from Thai tax or funds on which Thai tax has already been paid, can be Gifted. It is not possible to Gift funds that are assessable income, in order to avoid Thai tax.

 

is an opinion/interpretation and not from Thai official source.

 

56 minutes ago, Klonko said:

Thank you very much for case evidence.

 You are welcome. For your interest I have attach the RD case study which is quite recent from Feb 2023.  At the beginning is a google translation but the original is at the bottom.

 

A further complication in considering gifts to spouses is the provision in the Civil and Commercial Code that any income or assets acquired after marriage become part of the the common conjugal assets means that the gift to your spouse immediately becomes your joint property, not her sole property. I think that will make it very difficult for the RD to pursue spousal gifts to try to argue they were not irrecoverable gifts, as also defined in the CC&C.  It would also be a nightmare to try to establish that, for example, you got benefit from a house or a car she bought with the gift because you used it.  If she used it for household expenses, as the person in the house study claimed, you would obviously get some benefit too. 

 

Your point about filing separate tax returns is an interesting one.  I hadn't thought of that, although I just filed a separate tax return for the missus for the first time because she started to get some income that would have been taxed in a higher tax bracket, if I had continued to file jointly.  I am not sure though it would make any difference.  Filing a joint tax return doesn't imply that you have pooled your assets, which are legally pooled under the CC&C anyway.  It only implies that your spouse has not much assessable income, so that you can take advantage of her allowances without being affected by her income.  Anyway the clause in the RD about spousal gift exemption is very broad:

 

42 (27) Income derived from maintenance and support or gifts from ascendants, descendants or spouse, but only for the portion not exceeding twenty million Baht throughout the tax year.

 

The clause does mention maintenance or support but adds "or gift" which presumably means that exempted gifts to spouses are not restricted to sums needed for household subsistence but that any gifts under 20 million. whatever the purpose, are exempted. At any rate there are very few households that need 20 million in after tax income to run smoothly, which if restricted to half the maintenance costs would limit it even further to 40 million households. Looking at the history of gift tax, it was introduced in 2016 on the same day as the revival of inheritance tax and was intended to be used in tandem.  The gift exemptions were intended as sweeteners to get IHT through the coup legislature and Council of State and avoid a backlash.  Inheritances to spouses are tax exempt but the 20 million exemption allows billionaires to pass on their estates to children tax free while they are still alive.  That can be the only reason for a 20 million cap and it is unlikely that the RD has been audition offspring from ultra wealthy families to check that their living expenses are 20 million a year. Will the RD take an different approach when the gift exemption emerges as a loophole in its new remittance tax.  Who knows?  They might wish to but also might not find much support in existing laws and regulations which are bare bones. The big problem for he RD is that they are imposing this remittance tax by themselves with no supporting legislation or ministerial regulations and there is a limit to their powers to change laws. 

Gift Tax Case RD KK0702-530 11 Feb 2023.docx

17 minutes ago, Yumthai said:

Agreed.

Hence, it should be noted in the tax guide that:

 

53) Note: Only funds that are exempt from Thai tax or funds on which Thai tax has already been paid, can be Gifted. It is not possible to Gift funds that are assessable income, in order to avoid Thai tax.

 

is an opinion/interpretation and not from Thai official source.

 

Agreed.  Opinions and assumptions can be useful but should be clearly identified as such, if not supported by any evidence.