9 minutes ago, Lorry said:

I don't get that.

 

If Mr U sends a birthday gift of 1m THB from his US account to his friend's (Mr T) Thai account, Mr T would have to pay Thai gift tax (if over 10m). Sure.

And don't let us talk about US taxes.

 

Imho, Mr T does not have to pay personal income tax for this 1m, because it is a gift.  No matter,  whether any income tax in any country has been paid for this 1m.

Nor does Mr U have to pay Thai personal income tax for this 1m. He never got this money in Thailand.  (Ok, @Etaoin Shrdluthinks he got that money for an imaginary microsecond - it was still Mr U's money on the way between crossing the border and landing in Mr T's account. So, what if Mr U transferred the money to Mr T's US bank account, supposed Mr T has a US bank account?).

Am I mistaken?

 

RD 161/2566 specifies which kind of income are taxable according to RD 161/2566 - gifts are not. That has been clarified by the RD in the video Klonko posted.

Neither are inheritances, BTW. Bringing inherited money to Thailand you shouldn't have to pay personal income tax, but inheritance tax if over 100m THB. Regardless of what taxes have ever been paid for the inherited money in any other country. 

Imho.

 

I may be completely wrong, I am financially almost illiterate, please elaborate. 

 

 

 

 

 

I think that the purpose of the remittance is irrelevant with respect to the remitter's potential Thai personal income tax liability. 

 

 

 

 

 

 

2 minutes ago, Etaoin Shrdlu said:

 

I think that the purpose of the remittance is irrelevant with respect to the remitter's potential Thai personal income tax liability. 

 

 

 

 

 

 

Makes sense.

 

So if Mr U wants to gift 1m to Mr T tax-free, he has 2 choices:

1. Mr U is not a tax resident in Thailand,  then he can remit from Mr U's US account to Mr T's Thai account.

2. Mr U is a tax resident in Thailand, then he better transfers the 1m to Mr T's US account. Mr T then can remit the money to Thailand, and as a gift it would be tax-free (if customary,  and if a real gift, no sham).

 

Do you agree?

1 hour ago, Mike Lister said:

I do not agree that Thai Gift Tax has nothing to do with the source of the gift, if that source is attempting to avoid Thai tax by claiming the remittance was a Gift to another, when in reality it was intended to be returned to the gifter.

Ok. But say it was a legitimate gift -- no strings attached to the recipient. Does this now make it tax exempt? Say you, the sender, is called into RD for a chat about your remittances. And you're a Yank. Your spreadsheet shows a military pension remittance; social security remittance; and a remittance from a pre 2024 savings account. All, per DTA and recent ruling, are non assessable income, to do with as you please, including gifting, loaning, and spending. 

Now, the last entry on your spreadsheet is a private pension remittance -- which, per DTA, is the exclusive taxation right of Thailand. But you have an asterisk next to it, stating: This is now non assessable income, because I gifted it to my neighbor somchai.

 

What ruling would you show the RD clerk that makes it so? I certainly can't find any such animal.

1 hour ago, Lorry said:

So, what if Mr U transferred the money to Mr T's US bank account, supposed Mr T has a US bank account?

If Mr U had assessable income -- had it been remitted to Thailand -- then it would be subject to Thai taxation, regardless of its final destination or purpose. But, yeah, if Mr T had a US bank account, to which Mr U transferred a gift into -- then Mr T's subsequent remittance of this gift to Thailand would be non assessable. Same as if I remitted an inheritance from Uncle Bob, or a loan from Aunt Agnus -- these monies are ALL NOT INCOME -- and, of course, therefore non assessable for Thai tax purposes.

1 hour ago, Presnock said:

plus my income is a US govt pension and I have no other income so unless the tax laws are actually changed I will not have any assessable income for the next 10 years anyway.

Relax. Even with assessable income, if after all deductions and allowances, you have no taxable income -- then no TIN needed, no taxes due, and no real need to file a tax return, as they're not going to waste resources coming after you for a 2000 fine for not filing a nil tax return.

1 hour ago, Etaoin Shrdlu said:

Nor does Mr U have to pay Thai personal income tax for this 1m. He never got this money in Thailand.

For tax purposes, he effectively did.

1 hour ago, Lorry said:

Makes sense.

 

So if Mr U wants to gift 1m to Mr T tax-free, he has 2 choices:

1. Mr U is not a tax resident in Thailand,  then he can remit from Mr U's US account to Mr T's Thai account.

2. Mr U is a tax resident in Thailand, then he better transfers the 1m to Mr T's US account. Mr T then can remit the money to Thailand, and as a gift it would be tax-free (if customary,  and if a real gift, no sham).

 

Do you agree?

 

Until the RD issues clarification to the contrary, yes, at least with respect to a personal income tax liability on Mr. U. However if the purpose of the gift was to evade personal income tax on Mr. U's part, then possibly all bets are off.

 

Mr. T might be liable for gift tax if the amount were large enough.

 

 

59 minutes ago, JimGant said:

Ok. But say it was a legitimate gift -- no strings attached to the recipient. Does this now make it tax exempt? Say you, the sender, is called into RD for a chat about your remittances. And you're a Yank. Your spreadsheet shows a military pension remittance; social security remittance; and a remittance from a pre 2024 savings account. All, per DTA and recent ruling, are non assessable income, to do with as you please, including gifting, loaning, and spending. 

Now, the last entry on your spreadsheet is a private pension remittance -- which, per DTA, is the exclusive taxation right of Thailand. But you have an asterisk next to it, stating: This is now non assessable income, because I gifted it to my neighbor somchai.

 

What ruling would you show the RD clerk that makes it so? I certainly can't find any such animal.

I think if I was TRD in that scenario I might do some forensics and look at your lifestyle and your estimated monthly expenditures and also at your balance of funds in country and attempt to assess the balance of probability that the gift was genuine. You have genuine non-assessible income and you have assessable income, commingled within the remittance, and you claim Gift Tax exemption on all of it, does it appear that you are in a financial position to do that and if so, will you be able to support yourself adequately without resorting to that gift. If it appeared kosher, you might get a pass. If it appeared suspect I might dig deeper into every nook, crevice and orifice I could find along with a few I made up.

1 hour ago, Etaoin Shrdlu said:

 

I think that the purpose of the remittance is irrelevant with respect to the remitter's potential Thai personal income tax liability. 

 

 

 

 

 

 

I agree, we already said:

 

"The Thai Revenue Code does not consider the purpose of the funds that are imported, only whether the funds are assessable or not. For example, funds imported to buy real estate will be viewed in the same way that imported funds for any other purpose will be, there's nothing special about the fact those funds are buying property versus anything else". 

52 minutes ago, JimGant said:

Relax. Even with assessable income, if after all deductions and allowances, you have no taxable income -- then no TIN needed, no taxes due, and no real need to file a tax return, as they're not going to waste resources coming after you for a 2000 fine for not filing a nil tax return.

Perhaps true that they will not, but who are you or anyone else to advise how to approach the laws rather than to state what those laws are! There is nothing in the TRD Code that says JG can give you a pass on this and it will be guaranteed to be OK. Not trying to be argumentative but it comes back to a fundamental point of whether to advise or to inform, which I imagine you will brush off.

24 minutes ago, Mike Lister said:

but who are you or anyone else to advise how to approach the laws rather than to state what those laws are!

Give it a rest. Giving practical advice, that won't bite you in the a**, vs quoting what the (nonsensical) law actually says -- is probably what's best-serving on this forum on taxes.

Sure, state what the laws are -- then advise how to maneuver around them, if practical. Otherwise this forum, and thread, might as well just quote Thai tax code.

 

Sorry, my former job was helping clients navigate potential taxation gray areas, without any non ethical deviations.    ***Flame and comment on moderation removed

14 minutes ago, JimGant said:

Give it a rest. Giving practical advice, that won't bite you in the a**, vs quoting what the (nonsensical) law actually says -- is probably what's best-serving on this forum on taxes.

Sure, state what the laws are -- then advise how to maneuver around them, if practical. Otherwise this forum, and thread, might as well just quote Thai tax code.

 

Sorry, my former job was helping clients navigate potential taxation gray areas, without any non ethical deviations.    ***Flame and comment on moderation removed

You have my sympathies in respect of your former role. Whilst I don't like to play the rules card, my present role here is to ensure that:

 

You will not use ASEAN NOW to post any material which is knowingly or can be reasonably construed as false, inaccurate, invasive of a person's privacy, or otherwise in violation of any law. Topics or posts deemed to be scaremongering, deliberately misleading or which deliberately distort information will be removed. In factual areas such as news forums and current affairs topics member content that is claimed or portrayed as a fact should be supported by a link to a relevant reputable source.

 

https://aseannow.com/forum_rules/

 

Members need to be reasonable about this. We've gone out of our way to confirm that we're not providing tax advice, especially not advice that is contrary to the known laws. 

A troll / flame has been removed, if you don't like the topic then why are you reading it?

I have removed a post that describes tax evasion in some detail and honestly, the poster should know better, not only is it against the forum rules it's against the law. Further posts of anything even vaguely similar will have consequences.

4 hours ago, Mike Lister said:

"is one of those scaring Expats to use their services by stating that Govt Pensions are taxable in Thailand". 

 

"The issue of Govt Pensions and whether they will be classified as taxable income is still unclear".

 

I don't agree with either of the above statements. The issue of whether or not UK government pensions are taxable in Thailand is perfectly clear, they are not. 

 

In the video I watched, it was said that UK government pensions are not taxable here so I don't believe he is scaring anyone into believing something that's untrue, apart from perhaps you.

The Grifter's Ad found by poster = which is what I was quoting in my post.

Quote 1 =  "If the money is transferred from overseas pensions, investments, roperty rent, or salary then due to the Thai Revenue Department changes to the rules for 224, it means you probably need to file a tax return".  

Quote 2 = "Dont stress we are here to help you with a simple stress free process"

Perhaps you have not understood the first post and the response I made to it about the ad he found on a table.

 

1 minute ago, TroubleandGrumpy said:

The Grifter's Ad found by poster = which is what I was quoting in my post.

Quote 1 =  "If the money is transferred from overseas pensions, investments, roperty rent, or salary then due to the Thai Revenue Department changes to the rules for 224, it means you probably need to file a tax return".  

Quote 2 = "Dont stress we are here to help you with a simple stress free process"

Perhaps you have not understood the first post and the response I made to it about the ad he found on a table.

 

No I saw that and understand it. A couple of things:

 

Quote 1 above refers to pensions, it does not refer specifically to Government Pensions which is what you stated in your earlier post! He does not actually say that Government Pensions are taxable, as you said. He also uses the word "probably" rather than making a definitive statement. As far as his marketing and advertising blurb is concerned, I feel that what he wrote is entirely  reasonable.

 

I don't feel it's appropriate to refer to a named Thai business in derogatory terms, there are defamation issue to consider. If members wish to pass comment about the industry in general non-specific terms, that would be a better approach.

 

 

1 hour ago, JimGant said:

Give it a rest. Giving practical advice, that won't bite you in the a**, vs quoting what the (nonsensical) law actually says -- is probably what's best-serving on this forum on taxes.

Sure, state what the laws are -- then advise how to maneuver around them, if practical. Otherwise this forum, and thread, might as well just quote Thai tax code.

 

Sorry, my former job was helping clients navigate potential taxation gray areas, without any non ethical deviations.    ***Flame and comment on moderation removed

 

I first came to Thailand hired from Hong Kong to set up a business for an international group in a highly regulated sector where licenses were required but new ones were no longer issued and there were foreign ownership restrictions tighter than the Foreign Business Act.  There were already a few of our international competitors present in the Thai market using various structures - rep office, US treaty company and Thai jv.  We didn't want a jv or any Thai ownership in the initial stage, although we acquired a licensed Thai company later.  My task was to find the best legal structure and set up a business to add the Thai market to our regional network and compete aggressively with our foreign competitors who were already here or about to arrive.   To this end I make appointments with the leading international law firms.  The most useless of these was a young Thai lawyer at Baker and McKenzie who just read out excerpts from Thai laws at me for an hour and came to the conclusion that what I wanted to do could not legally be done in the Thai regulatory environment.  I saw several farang lawyers, all of course working illegally, except one who had Thai nationality, because law is a protected profession in Thailand and between them they steered in what turned out to be the right direction which was the wholly owned rep office with alien business license.  Later on I got to know one of our regulators very well who was later secretary general of his regulatory organisation and he talked openly about knowing that we and other foreign competitors were all in violation of our rep office licenses but they wouldn't do anything about it because they understood that Thai regulators had not created an appropriate legal structure for foreign firms to operate in the sector and the market needed foreign participation to generate investment and to bring expertise and training to develop the market.  Eventually foreign ownership restrictions were eased and he told me he expected foreign firms to make acquisitions or enter into technical cooperation agreements with Thai firms and they would like to phase out the rep offices operating beyond their license terms. In fact they never did completely and there are still some today. 

 

The point of this story is that the legal and regulatory structure in Thailand is somewhat flaky and often times, someone just reading out Thai laws (even worse, if it is a farang reading out iffy translations of Thai laws and not having access to Thai cases and commentary) doesn't get the job done. If I had listened to the advice of the Thai lawyer at Baker McKenzie, rather than the practical advice of the illegal farang lawyers, I would have had to resign and go home and would have missed a lifetime opportunity.  But I understand that the rules is the rules.

7 minutes ago, Dogmatix said:

 

I first came to Thailand hired from Hong Kong to set up a business for an international group in a highly regulated sector where licenses were required but new ones were no longer issued and there were foreign ownership restrictions tighter than the Foreign Business Act.  There were already a few of our international competitors present in the Thai market using various structures - rep office, US treaty company and Thai jv.  We didn't want a jv or any Thai ownership in the initial stage, although we acquired a licensed Thai company later.  My task was to find the best legal structure and set up a business to add the Thai market to our regional network and compete aggressively with our foreign competitors who were already here or about to arrive.   To this end I make appointments with the leading international law firms.  The most useless of these was a young Thai lawyer at Baker and McKenzie who just read out excerpts from Thai laws at me for an hour and came to the conclusion that what I wanted to do could not legally be done in the Thai regulatory environment.  I saw several farang lawyers, all of course working illegally, except one who had Thai nationality, because law is a protected profession in Thailand and between them they steered in what turned out to be the right direction which was the wholly owned rep office with alien business license.  Later on I got to know one of our regulators very well who was later secretary general of his regulatory organisation and he talked openly about knowing that we and other foreign competitors were all in violation of our rep office licenses but they wouldn't do anything about it because they understood that Thai regulators had not created an appropriate legal structure for foreign firms to operate in the sector and the market needed foreign participation to generate investment and to bring expertise and training to develop the market.  Eventually foreign ownership restrictions were eased and he told me he expected foreign firms to make acquisitions or enter into technical cooperation agreements with Thai firms and they would like to phase out the rep offices operating beyond their license terms. In fact they never did completely and there are still some today. 

 

The point of this story is that the legal and regulatory structure in Thailand is somewhat flaky and often times, someone just reading out Thai laws (even worse, if it is a farang reading out iffy translations of Thai laws and not having access to Thai cases and commentary) doesn't get the job done. If I had listened to the advice of the Thai lawyer at Baker McKenzie, rather than the practical advice of the illegal farang lawyers, I would have had to resign and go home and would have missed a lifetime opportunity.  But I understand that the rules is the rules.

Pot shots noted!

 

What can I say, we are a commercial site and we do have rules and when it comes to the subject of tax and the law, we will follow the rules to the letter. If members want to advise on these things they will need formal Thai qualifications and the sites owners permission. Until that time, debate away and set out options, share knowledge and opinions, no more.

4 hours ago, Klonko said:

The THB 1m gift is not subject to tax if it can be classified as traditional gift. In your example, it depends on the circumstances if it is a traditional gift.
 

AFAIK inheritances are taxable regardless of remittance to Thailand.

 

You are right re inheritances.  Inheritances from overseas are taxable for Thai tax residents, even if not remitted to Thailand but there is a threshold of 100m for direct family members and 50m for others, while spouses are exempt.  The flip side is that a beneficiary may remit their overseas inheritance to Thailand without incurring any additional tax.  

 

I think birthday gifts should qualify for exemption as gifts up to 10m, although amounts towards the upper limits might be investigated and not accepted as regular gifts. 

I have seen some suggestions recently and earlier in the thread that a gift should be made overseas and then remitted to Thailand by the recipient. While I can understand the thinking behind this I suspect that the RD might consider the remittance as the potentially taxable event and might be unwilling to apply Thai gift tax rules to a gift made outside Thailand.  That could mean they would classify the inward remittance from the recipient to himself as taxable income. At any rate for members who are considering making gifts to their Thai wife from offshore, most of the wives are unlikely to have offshore bank accounts or any means of opening them.  The RD has a case study on its website that says a remittance from offshore to a legally married spouse in Thailand would be exempt under 20m.  So why not use a methodology that the RD has already said is acceptable, rather than try to establish one for which there is no supporting evidence? 

2 hours ago, Mike Lister said:

But you have an asterisk next to it, stating: This is now non assessable income, because I gifted it to my neighbor somchai.

 

What ruling would you show the RD clerk that makes it so? I certainly can't find any such animal.

Again, this is a legitimate gift -- and you're alluding that that makes it non assessable income? Where in the tax code do you get that assumption from?

30 minutes ago, JimGant said:

Again, this is a legitimate gift -- and you're alluding that that makes it non assessable income? Where in the tax code do you get that assumption from?

I didn't allude to anything, that's your interpretation, I merely told you what I might do if I were the TRD in that scenario, that's all. If you want to quiz anyone about what might happen in hypothetical scenarios, I suggest you put your questions to a Thai certified  CPA or the RD because that's not my role.

1 hour ago, Dogmatix said:

The RD has a case study on its website that says a remittance from offshore to a legally married spouse in Thailand would be exempt under 20m.

Yes, everything over 20M will be subject to a 5% tax -- and yes, the first 20M of gift would be exempt from taxation. And, yes, it's up to the recipient of the gift to file the tax return -- not the gifter. Certainly you're not saying there's another tax angle, namely: The gifter gets a tax holiday on 20M, otherwise taxable, because it is a gift -- and not an investment or expenditure...? If you are saying this, please give me your source. Thanx.

2 hours ago, JimGant said:

Yes, everything over 20M will be subject to a 5% tax -- and yes, the first 20M of gift would be exempt from taxation. And, yes, it's up to the recipient of the gift to file the tax return -- not the gifter. Certainly you're not saying there's another tax angle, namely: The gifter gets a tax holiday on 20M, otherwise taxable, because it is a gift -- and not an investment or expenditure...? If you are saying this, please give me your source. Thanx.

 

So expats could Gift each other 2 or 3 or 5 million baht a year...

 

 2 expats with good harts giving each other money....I would consider that very legitimate.......

And and to show what a true friend you are you might just want to gift your friend a few million every year....And your friend would return the favor....

 

Thailand can be known as country full of expat gift givers...

Now that will be some good PR for Thailands expats...

2 hours ago, JimGant said:

The gifter gets a tax holiday on 20M, otherwise taxable, because it is a gift

Until we could get an official clarification, there are two ways to interpret gift tax exemptions in case of remitted foreign-sourced income regardless of the transfer mean: Gift event occurs prior remittance event or gift occurs post remittance.

I think Thai gift rules could cover the giftee as well as the gifter.

 

18 minutes ago, redwood1 said:

 

So expats could Gift each other 2 or 3 or 5 million baht a year...

 

 2 expats with good harts giving each other money....I would consider that very legitimate.......

And and to show what a true friend you are you might just want to gift your friend a few million every year....And your friend would return the favor....

 

Thailand can be known as country full of expat gift givers...

Now that will be some good PR for Thailands expats...

Although I consider Mike's approach to gifts as too restrictive and  have set up a structure with a gift component for myself, IMO your structure is tax evasion.

On 5/6/2024 at 3:00 AM, Mike Lister said:

If that capability was readily available, there's no point in have any discussions about commingled funds or capital gains or even private pension income for that matter. All everyone would have to do is to deposit all their income into a savings account overseas and then remit it here as a gift, job done! All except the first 500k which would cover TEDA of course, that could be their personal spending money whilst the rest goes to the spouse/.child, friend as a Gift, never to be returned in any way of course, cough cough. It's so simple, I'm kicking myself. I'll tear up the tax guide and make a new one that says, "everything's ok, not to worry, just claim all your remittances are gifts". 

This is because you do not understand what several layers of portections entails. The more layers you have the better.

21 hours ago, redwood1 said:

 

The more well off expats would just get a LTR visa and not have to pay 1 baht in taxes ever for the rest of their life....

 

Which would only leave the expats of more modest means who budget and watch their spending much more closely so they can lead a decent life living off their pension and savings and maybe a few small modest investments....

 

This so called income tax will not tax the rich expats at all but will pick over the bones of those expats with the least amount of money to spare, who watch their spending and budget..

 

That is if this poorly thought out mess ever goes anywhere, which is very doubtful...

 

From what I have read & videos (of Thai officials) watched, is the recent changes re: taxing money coming into Thailand, was not aimed at expats, but rather it was aimed at wealthy Thai who were avoiding paying tax on income, which the Thai government wanted to tax.

 

This 'income tax' was NOT designed to tax the 'rich nor poor expats' like I believe you infer - for as pointed out , it was aimed at the wealthy Thai.

 

It stands to reason that they would apply this tax law  to all expat residents and not just Thai citizens (who also reside in Thailand).  ... So expats are in essence 'collateral damage'.

 

The LTR is a separate case, and it was put in place in the hope to attract wealthy foreigners to stimulate the economy.  Presumably the thinking was that those who qualify for the LTR would invest & spend more money in Thailand than the average expats who can't qualify for the LTR.  As to whether that is actually going to happen, and as to how this actually plays out in the next few years - well ...  we will see, as this could all change. 

 

Further, as for well off expats not paying 1 baht in taxes for the rest of their life - I seriously doubt that.  Seriously seriously doubt that.  They will still be paying VAT, and they will still likely be paying tax in the home country(s) from which they derive their income.

.

4 hours ago, Mike Lister said:

Pot shots noted!

 

What can I say, we are a commercial site and we do have rules and when it comes to the subject of tax and the law, we will follow the rules to the letter. If members want to advise on these things they will need formal Thai qualifications and the sites owners permission. Until that time, debate away and set out options, share knowledge and opinions, no more.

Amazing that you "write" a tax guide after posting "we will follow the rules to the letter" when no foreigner is allowed to give tax advice in Thailand.

5 minutes ago, stat said:

Amazing that you then write a tax guide after posting "we will follow the rules to the letter" when no foreigner is allowed to give tax advice in Thailand.

 

From what I could read - that 'guide' does not provide advice - but rather it provides information - for the readers then to consider and come up with their own approach - or for the readers to seek actual advise from elsewhere.

 

In Canada, when I prepare my income tax, I can get over 100 pages of a tax guide from the Canadian government - and not one word in that official Canadian Government 'guide' is considered advice by the Canadian government.

 

You and I really interpret that 'guide' provided in this forum for expats on tax very very VERY differently.