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

[gk10012001]

33 minutes ago, Mike Lister said:

Time to do some reading!

 

Again it says the word assessible income, but what is assessable income?  Is USA Social Security income considered pension income?  I doubt it

 

[gk10012001]

37 minutes ago, Mike Lister said:

You do, according to the tax rules.

the tax rules I have read do not detail what is considered assessible, they just repeat the word.  So I am free to say none of my income is assessible?

[Mike Lister]

Just now, gk10012001 said:

 

You haven't read the link I sent you, you really must do that.

 

Income is either assessible to Thai tax or exempt, US SSc is exempt by treaty

[Mike Teavee]

FWIW, here is where I get most of my Tax information from (due to the fact that the Global Bank I worked for used PWC to assist us when working in a number of different countries including filing local & UK Tax Returns for us).

 

From page 13 of the attached PDF.

 

Gift Tax

Gifts that are given by a living person are subject to personal income tax under the Revenue Code.  The income tax is levied on the value of the assets or the amount given to parents, ascendants, descendants, spouse or others that exceeds the prescribed threshold, which depends on the type of gift and donor.

 

The assets or amounts given that do not exceed the threshold and will be exempt from personal income tax are as follows:

1. Income derived from the transfer of ownership or possessory right in an immovable property without any consideration to a legitimate child, excluding an adopted child, in the amount not exceeding Baht 20 million in respect of each child throughout a tax year.
2. Maintenance income or gifts from ascendants, descendants or spouse, in the amount not exceeding Baht 20 million throughout a tax year.
3. Maintenance income derived under a moral obligation or gifts made in a ceremony or on occasions in accordance with established custom from persons that are not ascendants, descendants or spouse, in the amount not exceeding Baht 10 million throughout a tax year.
4. Income from gifts which will be used by the person who receives them for religious, educational or public benefit purposes according to the intention of the donor under criteria and conditions referred to in ministerial regulations.

 

Income in excess of the above thresholds will be subject to personal income tax at the rate of 5% and will not need to be included together with other income when computing the annual personal income tax liability. 

 

 

Seems pretty clear cut to me that a legitimate gift (up to the limits mentioned) to your Wife, Daughter etc... is exempt from PIT so does not need to be declared on your Tax Return, and if that Soi Dog Foundation mentioned was a registered charity deemed to be providing a public benefit then donations to them would be exempt from PIT also. 

 

So, in a nutshell, it does matter who you're sending the money to & what the money is for but it's for you to assess that & report it accordingly, TRD will only assess it if you're audited. 

 

thai-tax-booklet-2023-24.pdf

Edited May 9 by Mike Teavee

[Mike Lister]

9 minutes ago, Mike Teavee said:

FWIW, here is where I get most of my Tax information from (due to the fact that the Global Bank I worked for used PWC to assist us when working in a number of different countries including filing local & UK Tax Returns for us).

 

From page 13 of the attached PDF.

 

Gift Tax

Gifts that are given by a living person are subject to personal income tax under the Revenue Code.  The income tax is levied on the value of the assets or the amount given to parents, ascendants, descendants, spouse or others that exceeds the prescribed threshold, which depends on the type of gift and donor.

 

The assets or amounts given that do not exceed the threshold and will be exempt from personal income tax are as follows:

1. Income derived from the transfer of ownership or possessory right in an immovable property without any consideration to a legitimate child, excluding an adopted child, in the amount not exceeding Baht 20 million in respect of each child throughout a tax year.
2. Maintenance income or gifts from ascendants, descendants or spouse, in the amount not exceeding Baht 20 million throughout a tax year.
3. Maintenance income derived under a moral obligation or gifts made in a ceremony or on occasions in accordance with established custom from persons that are not ascendants, descendants or spouse, in the amount not exceeding Baht 10 million throughout a tax year.
4. Income from gifts which will be used by the person who receives them for religious, educational or public benefit purposes according to the intention of the donor under criteria and conditions referred to in ministerial regulations.

 

Income in excess of the above thresholds will be subject to personal income tax at the rate of 5% and will not need to be included together with other income when computing the annual personal income tax liability. 

 

 

Seems pretty clear cut to me that a legitimate gift (up to the limits mentioned) to your Wife, Daughter etc... is exempt from PIT so does not need to be declared on your Tax Return, and if that Soi Dog Foundation mentioned was a registered charity deemed to be providing a public benefit then donations to them would be exempt from PIT also. 

 

So, in a nutshell, it does matter who you're sending the money to & what the money is for but it's for you to assess that & report it accordingly, TRD will only assess it if you're audited. 

 

thai-tax-booklet-2023-24.pdf 991.06 kB · 0 downloads

Unless I'm missing something, the PWC statements don't say anything different to what we've agreed thus far?

[Mike Teavee]

20 minutes ago, Mike Lister said:

Unless I'm missing something, the PWC statements don't say anything different to what we've agreed thus far?

TBH the discussion about Gift tax has gotten a bit confusing (not helped by the fact I was travelling back from the UK so skim-read posts to catch up) but a few of the guys (e.g. @Lorry, sorry I'm not singling you out) seem to be saying that Gifts to your Wife are liable for PIT & need to be reported on your return 

 

 

 

Edited May 9 by Mike Teavee

[TroubleandGrumpy]

12 hours ago, Lorry said:

This discussion mixes up two completely different situations:

 

Situation 1 (the situation most posters talk about):

A foreigner, tax resident in Thailand,  transfers money from abroad to the Thai bank account of another person in Thailand. The other person may be his wife or the Soi Dog Foundation, doesn't matter.  The money is a gift.  The money never goes into the foreigner's Thai bank account. 

 

Does the foreigner - who never controls the money since it left his bank account abroad - have to pay personal income tax on this money?

 

@Etaoin Shrdlu thinks yes, and @JimGanttoo, if I understand him correctly.

I would like to know from native speakers of English and/ or Thai ( @Dogmatix?) whether a "remittance" according to RD 161/2566 necessarily means a remittance to oneself or not.

 

Situation 2 (the situation @stat is taking about)

Another person,  e.g. a close relative like stat's father,  who is not a tax resident in Thailand,  sends money as a gift from abroad to his beloved son's (who is a tax resident in Thailand) Thai bank account (not so much as to buy a Ferrari, that would not be customary, see @Klonko's video).

Has the son to pay personal income tax on this money?

 

@stat thinks no, I agree with him. Anybody thinks otherwise? 

 

 

My read is that the tax resident person in Thailand who receives the money, is the only person who has a potential taxation liability to Thailand. That person has to 'determine' if it is a gift or not (meets the rules) - and they must also have the necessary documents/information to later show why they determined it was not assesable (from husband, wife, etc etc), if they are ever questioned by the TRD.

 

Example - If I was to transfer XYZ Baht from my home country bank account into my Wife's Thai bank account (single transfer or multiple), that could be a 'gift'.  IMO that would especially 'qualify' as a gift/s, if I was to make 1 or more large transfers to enable her to buy a house or a car (in her name of course). 

If I was to regularly transfer say 50-100K per month, that could easily be 'questioned' by the TRD if that money was also being spent on myself - that is not to say it would not be viewed a sa gift, because that could be determined to be 'support'.

IMO both circumstances are likely to be OK, but if she was to then transfer 50-100K to your bank account in Thailand, then that is unlikely to be accepted by TRD as a gift. However, even then, the taxation obligation would fall on the wife and not myself - although I am sure there is some 'rule or interpretation' that would allow TRD to charge me with 'conspiracy to avoid tax or tax evasion' - so I would not ever think that would be a wise thing to do - because the penalties are huge.   

Edited May 9 by TroubleandGrumpy

[Mike Lister]

58 minutes ago, TroubleandGrumpy said:

My read is that the tax resident person in Thailand who receives the money, is the only person who has a potential taxation liability to Thailand. That person has to 'determine' if it is a gift or not (meets the rules) - and they must also have the necessary documents/information to later show why they determined it was not assesable (from husband, wife, etc etc), if they are ever questioned by the TRD.

 

Example - If I was to transfer XYZ Baht from my home country bank account into my Wife's Thai bank account (single transfer or multiple), that could be a 'gift'.  IMO that would especially 'qualify' as a gift/s, if I was to make 1 or more large transfers to enable her to buy a house or a car (in her name of course). 

If I was to regularly transfer say 50-100K per month, that could easily be 'questioned' by the TRD if that money was also being spent on myself - that is not to say it would not be viewed a sa gift, because that could be determined to be 'support'.

IMO both circumstances are likely to be OK, but if she was to then transfer 50-100K to your bank account in Thailand, then that is unlikely to be accepted by TRD as a gift. However, even then, the taxation obligation would fall on the wife and not myself - although I am sure there is some 'rule or interpretation' that would allow TRD to charge me with 'conspiracy to avoid tax or tax evasion' - so I would not ever think that would be a wise thing to do - because the penalties are huge.   

This comes back to the old issue of whether Gift tax can be used to escape assessible tax on income. I don't believe a person can remit assessible income as a Gift to avoid paying Thai PIT on that income because the loss to Revenue is too great, potentially it reduces the tax from 35% to 5% or even 0%..

[Mike Teavee]

2 minutes ago, Mike Lister said:

This comes back to the old issue of whether Gift tax can be used to escape assessible tax on income. I don't believe a person can remit assessible income as a Gift to avoid paying Thai PIT on that income because the loss to Revenue is too great, potentially it reduces the tax from 35% to 5% or even 0%..

Gifts can be used to avoid tax on remitted (not domestic) income as long as the relationship between the person giving/receiving the gift & the purpose of the gift fall within the approved criteria. 

 

Gifts cannot be used to evade tax on domestic income.

[JimGant]

5 minutes ago, Mike Teavee said:

Gifts can be used to avoid tax on remitted (not domestic) income as long as the relationship between the person giving/receiving the gift & the purpose of the gift fall within the approved criteria. 

Got a source for that?

[Mike Teavee]

17 minutes ago, JimGant said:

Got a source for that?

PWC Doc attached in the post above...

[JimGant]

4 minutes ago, Mike Teavee said:

PWC Doc attached in the post above..

I can't seem to find the 'remitted income' exception anywhere in that pub. A little help, please. Thanx.

[Yumthai]

17 hours ago, oldcpu said:

As we all know' ?  .. My alternative opinion:   You are speaking for yourself and not for 'all'.

Ignorance is bliss.

 

18 hours ago, oldcpu said:

I never thought I would see the day on Asean Now when someone claims a visa was created to compensate wealthy foreigners.   lol ! lol !

My comment on LTR is a bit exaggerated and provocative, but I meant "compensate" taxwise compared to the wealthy Thai counterpart who somehow don't pay what they should.

[Mike Teavee]

23 minutes ago, JimGant said:

I can't seem to find the 'remitted income' exception anywhere in that pub. A little help, please. Thanx.

True, it doesn't say "Remitted Income" so I might be wrong about not being able to use Gifts as a way to limit tax on Income earned in Thailand, but that document (& the crux of this thread) is aimed more about Expat's being taxed on money remitted into Thailand for which Gifts can be used to limit how much Tax you need to pay. 

 

Edit: Having a quick look through the TRD document, it doesn't mention remitted income in there either so strengthens the argument that Gift's can be used to reduce tax on income earned in Thailand.

 

Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation: para 27... 
 

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

 

 

 

Edit: Just struck me that your question might be more around only domestic Gifts being eligible, this article is all about remitting money to Thailand & lists the same criteria listed many times before...  https://www.xe.com/ar/blog/money-transfer/sending-a-large-money-transfer-to-thailand-what-to-know-about-taxes/

 

Gift Tax

For many decades, Thailand did not tax gifts, just income. But that changed in 2016. The government not only imposed taxes; it also changed the definition of a “gift.” 

Any property, including money, which is transferred to another person, and there is no expectation of any tangible return, is a gift. Interest-free loans and property sales at substantially below market value are also gifts.

 

In many countries, gifts also have relational components. But in Thailand, you can give a gift to anyone, at least for tax purposes, if it exceeds the following amounts:

• Inheritances above ฿100 million THB (about $335,000 USD),
• Non Transferable property rights above ฿20 million THB (about $67,000 USD), and
• Any property transfer, including foreign remittances, which meet the gift criteria discussed above.

 

A number of exemptions apply. This list includes: 

• Gifts from relatives under ฿20 million THB
• Gifts from non-relatives under ฿10 million THB (about $33,000 USD).
• Gifts made for educational or religious purposes (such as college tuition payment transfers)

 

Although relationship does not enter into the definition of a “gift,” there is a relational aspect to the amount of the tax. Thailand’s gift tax is 10% in most cases, and 5% if the recipient is a descendant or ascendant. Most relationships via marriage, such as step-siblings, do not qualify for the reduction, at least in most cases.

Edited May 9 by Mike Teavee
Added XE Link

[Lorry]

3 hours ago, Mike Teavee said:

FWIW, here is where I get most of my Tax information from (due to the fact that the Global Bank I worked for used PWC to assist us when working in a number of different countries including filing local & UK Tax Returns for us).

 

From page 13 of the attached PDF.

 

Gift Tax

Gifts that are given by a living person are subject to personal income tax under the Revenue Code.  The income tax is levied on the value of the assets or the amount given to parents, ascendants, descendants, spouse or others that exceeds the prescribed threshold, which depends on the type of gift and donor.

 

The assets or amounts given that do not exceed the threshold and will be exempt from personal income tax are as follows:

1. Income derived from the transfer of ownership or possessory right in an immovable property without any consideration to a legitimate child, excluding an adopted child, in the amount not exceeding Baht 20 million in respect of each child throughout a tax year.
2. Maintenance income or gifts from ascendants, descendants or spouse, in the amount not exceeding Baht 20 million throughout a tax year.
3. Maintenance income derived under a moral obligation or gifts made in a ceremony or on occasions in accordance with established custom from persons that are not ascendants, descendants or spouse, in the amount not exceeding Baht 10 million throughout a tax year.
4. Income from gifts which will be used by the person who receives them for religious, educational or public benefit purposes according to the intention of the donor under criteria and conditions referred to in ministerial regulations.

 

Income in excess of the above thresholds will be subject to personal income tax at the rate of 5% and will not need to be included together with other income when computing the annual personal income tax liability. 

 

 

Seems pretty clear cut to me that a legitimate gift (up to the limits mentioned) to your Wife, Daughter etc... is exempt from PIT so does not need to be declared on your Tax Return, and if that Soi Dog Foundation mentioned was a registered charity deemed to be providing a public benefit then donations to them would be exempt from PIT also. 

 

So, in a nutshell, it does matter who you're sending the money to & what the money is for but it's for you to assess that & report it accordingly, TRD will only assess it if you're audited. 

 

thai-tax-booklet-2023-24.pdf 991.06 kB · 4 downloads

As dogmatix has said, we should read the Thai wording of the law, not the English wording of someone else. I can't read the Thai law, so I try to read the English as given by PWC.

 

They are talking about taxes exempt from personal income tax - but WHOSE taxes?

 

The second paragraph says, what is "exempt from personal income tax".

 

It is 1. "Income derived from the transfer of..."

Now, WHO has income derived from the transfer of property? Certainly not the gifter. The giftee has income from that transfer and doesn't have to pay PIT. Nothing in this sentence says anything about the gifter's tax burden. 

 

Income exempt from personal income tax is also 

2. "Maintenance income ...from ..." 

WHO has maintenance income that would be taxable if it weren't tax exempt? The recipient of the gift. They are talking about the recipient's taxes, not about the giver's taxes.

 

Tax exempt is also

3. "Maintenance income derived..." The giver doesn't have any maintenance income that now is tax exempt.  The recipient has.

 

And last

4. "Income from gifts ..." The Soi Dog Foundation has a lot of income from gifts and doesn't have to pay taxes on it. I, who loves soi dogs so much, get all my income from work. I have no income from gifts. I get no tax exemptions if I give all my money to the Soi Dog Foundation.

 

I originally thought like Mike Teavee, it was JimGant's Soi Dog Foundation who made me understand all this.

 

2 caveats:

- I don't know the Thai wording of the law

- I don't know how the RD sees things.  Dogmatix has said he is not aware of any other gift tax cases. And anyway, with gifts from abroad the view of the RD might change,  for practical reasons. Nobody knows.

 

 

 

 

 

 

[JimGant]

1 hour ago, Mike Teavee said:

Having a quick look through the TRD document, it doesn't mention remitted income in there either so strengthens the argument that Gift's can be used to reduce tax on income earned in Thailand.

 

The reason the gift tax came about at the time the inheritance tax did, was to have fat cats realize a penalty if they tried to give away enough of their estate to slide below the 100M threshold for the inheritance tax. So, yeah, the govt gets to collect some of those taxes lost by the fat cat's estate dipping below 100M due to gifting. But the fat cat doesn't really pay a financial penalty, since the gift recipient is paying the tax (if any) -- and the govt doesn't really care who pays it, so long as the future loss of inheritance tax is mitigated, to some extent, by the gift tax.

 

Having said that, do you think the govt is going to allow the fat cat to exempt from taxation all those funds going as gifts? Not only would this widen the gap between lost inheritance taxes and collected gift taxes -- but it would reward the fat cat by possibly pushing him down to a lower tax bracket (well, maybe not, as he's probably well above the 35% marginal tax rate). In any event, the govt is not going to reward, via tax exemption, someone gifting away his estate in order not to have his estate eventually pay inheritance taxes.

 

 

Edited May 9 by JimGant

[Mike Teavee]

52 minutes ago, Lorry said:

Caveat1 My answers below are my opinion on overseas income being remitted into Thailand as a legitimate Gift & meeting all the criteria of being a gift, in particular the ones around not receiving any direct/benefits from it. 

 

Caveat2 I'm assuming that they Gifter sends the Giftee money directly from their overseas account, if they sent it to themselves 1st then I'm assuming that they would need to declare it as personal income (you can't make a Gift to yourself), possibly pay tax on it & then (try to) claim it back.

 

 

As dogmatix has said, we should read the Thai wording of the law, not the English wording of someone else. I can't read the Thai law, so I try to read the English as given by PWC.

I agree, but like you I can't read Thai so rely on the wording on the TRD website as well as articles from the large accounting firms, all seem to be more or less in agreement about the rules on taxing Gifts.

 

They are talking about taxes exempt from personal income tax - but WHOSE taxes?

Gifter as if they gift the money to somebody else instead of receiving it then there is no tax to pay on it, so they'd be in the same tax position as if they hadn't given he gift 

Giftee as if they receive the gift with no tax obligations. 

 

 

The second paragraph says, what is "exempt from personal income tax".

 

It is 1. "Income derived from the transfer of..."

Now, WHO has income derived from the transfer of property? Certainly not the gifter. The giftee has income from that transfer and doesn't have to pay PIT. Nothing in this sentence says anything about the gifter's tax burden. 

Per above, the Gifter has no Tax Burden & the Giftee doesn't have to pay tax on the Gift, however if that Gift (e.g. Property) then started to generate an income, they would have to pay tax on the income.

 

Income exempt from personal income tax is also 

2. "Maintenance income ...from ..." 

WHO has maintenance income that would be taxable if it weren't tax exempt? The recipient of the gift. They are talking about the recipient's taxes, not about the giver's taxes.

The person who is receiving the Maintenance would be liable to tax if it wasn't exempt. 

 

Tax exempt is also

3. "Maintenance income derived..." The giver doesn't have any maintenance income that now is tax exempt.  The recipient has.

 

And last

4. "Income from gifts ..." The Soi Dog Foundation has a lot of income from gifts and doesn't have to pay taxes on it. I, who loves soi dogs so much, get all my income from work. I have no income from gifts. I get no tax exemptions if I give all my money to the Soi Dog Foundation.

If the Soi Dog Foundation is a registered organisation that is adjudged as offering a Public Service then Gifts to it would be exempt from Tax 

 

I originally thought like Mike Teavee, it was JimGant's Soi Dog Foundation who made me understand all this.

I thought @JimGant was in mainly in agreement on the rules around taxing of Gifts so I'd be interested in why you & he think it's any different than I've posted above. 

 

2 caveats:

- I don't know the Thai wording of the law

- I don't know how the RD sees things.  Dogmatix has said he is not aware of any other gift tax cases. And anyway, with gifts from abroad the view of the RD might change,  for practical reasons. Nobody knows.

That part we can all agree on !!! 

 

 

I've answered as best I can inline in your post...  

Edited May 9 by Mike Teavee

[Lorry]

1 hour ago, Mike Teavee said:

Gifter as if they gift the money to somebody else instead of receiving it

NOooo

The gifter HAS received the money,  and then gifts it.

One cannot gift money one has not received first.

And one receives it as a salary from one's work, as capital gains, whatever. 

When one receives it one has to pay tax on it.

How one then uses the money (buy beer, gift it to Thai wife, whatever), is irrelevant for ones taxes.

 

Money Mr X gets is tax-free if Mr X got this money as a gift from a relative. 

Talking about Mr X's tax-burden here.

Not talking about the relatives tax-burden.

 

A practical example:

Noi works at True call center, 35,000 per month

Daeng is a manager at a bank branch, 60,000 per month

Pat is an executive at a company, 120,000 per month

Som is a surgeon at a private hospital,  350,000 per month

Tik is a smart investor and makes about 1m a month

 

They all gift all their income to their parents.  According to your logic, they all wouldn't pay any taxes. 

Thais would have found out about this tax-avoidance scheme a long time ago.

I will have to ask some Thais whether this works.  Unfortunately,  I don't know Tik, the smart investor, and Som might be reluctant to talk about her taxes. Noi probably knows nothing... Anybody can help here?

 

What @Mike Teaveemeans is, basically you can deduct up to 10m resp. 20m for gifts for relatives from your taxable income. 

The opposite opinion is, only the giftee doesn't have to pay taxes on gifts.

Any middle class Thai or Thai tax adviser should know the answer...

 

Edited May 9 by Lorry

[Mike Teavee]

18 minutes ago, Lorry said:

NOooo

The gifter HAS received the money,  and then gifts it.

One cannot gift money one has not received first.

And one receives it as a salary from one's work, as capital gains, whatever. 

When one receives it one has to pay tax on it.

How one then uses the money (buy beer, gift it to Thai wife, whatever), is irrelevant for ones taxes.

Per the 1st caveat, I was referring to people remitting money to Thailand as a Gift, how they 1st came by this money & what tax was paid on it is of no concern to TRD as long as (per 2nd Caveat) they are not remitting it to themselves before gifting it on. 

 

E.g. I send some money directly to my daughter from the UK as a Wedding Present, no tax implications on me. 

I send some money to myself & then forward it on to my daughter as a Wedding Present, I need to declare the money coming in (It can't possibly be a Gift at this point as the Sender & Receiver are the same) and then (try to) claim that the money was ultimately intended as a Gift to my daughter as a Wedding Present (Something I think you'd have no problem doing if you can evidence the money coming into your account and then going into hers). 

 

 

 

18 minutes ago, Lorry said:

 

 

Money Mr X gets is tax-free if Mr X got this money as a gift from a relative. 

Talking about Mr X's tax-burden here.

Not talking about the relatives tax-burden.

 

A practical example:

Noi works at True call center, 35,000 per month

Daeng is a manager at a bank branch, 60,000 per month

Pat is an executive at a company, 120,000 per month

Som is a surgeon at a private hospital,  350,000 per month

Tik is a smart investor and makes about 1m a month

 

They all gift all their income to their parents.  According to your logic, they all wouldn't pay any taxes. 

Thais would have found out about this tax-avoidance scheme a long time ago.

I will have to ask some Thais whether this works.  Unfortunately,  I don't know Tik, the smart investor, and Som might be reluctant to talk about her taxes. Noi probably knows nothing... Anybody can help here?

Again: I'm referring to money being remitted into Thailand not income from work inside of Thailand, all the people in your example would pay PAYE Tax on their income & would need to try to reclaim any money "Gifted" back via a Tax Refund claim. 

 

What @Mike Teaveemeans is, basically you can deduct up to 10m resp. 20m for gifts for relatives from your taxable income. 

I am @Mike Teavee 🙂 

 

The opposite opinion is, only the giftee doesn't have to pay taxes on gifts.

Any middle class Thai or Thai tax adviser should know the answer...

 

 

Edited May 9 by Mike Teavee

[Lorry]

3 minutes ago, Mike Teavee said:

: I'm referring to money being remitted into Thailand not income from work inside of Thailand, all the people in your example would pay PAYE Tax on their income & would need to try to reclaim any money "Gifted" back via a Tax Refund claim. 

So, can they claim it back?

I really don't know,  but I doubt it.

[Mike Teavee]

4 minutes ago, Lorry said:

So, can they claim it back?

I really don't know,  but I doubt it.

 

I'm assuming you can get a Tax adjustment somehow as the TRD says you can get Tax relief for Gifts, so in your examples where you've already paid PAYE Tax on the income it makes logical sense that you can claim some relief, however the (English Version) of the Tax Return Guide doesn't mention gifts anywhere so again we're back to the question "Can Domestic Gifts be given Tax Free"   (I don't see how you could pre-claim it & avoid paying PAYE income but I've never worked in Thailand so wouldn't know) - All the more reason to remit the Gift directly to the Giftee & not send it via your Thai Bank account. 

 

If the answer is "No, Domestic Gifts cannot be given Tax Free" then it doesn't make sense to have a Gift Tax rule at all unless it's for just for Remittances & surely the receiver of a Domestic sourced Gift would not pay tax on it as that income has already been taxed.  

 

 

 

 

Ironically enough there is space on the Tax Return form to claim relief for charitable donations so your donation to the Soi Dog Foundation would (if they're an approved charity) give you some relief... 

 

https://www.rd.go.th/fileadmin/download/english_form/030265guide91.pdf

 

[Mike Teavee]

8 minutes ago, Mike Teavee said:

I'm assuming you can get a Tax adjustment somehow as the TRD says you can get Tax relief for Gifts, so in your examples where you've already paid PAYE Tax on the income it makes logical sense that you can claim some relief,

I'm stepping back from any discussions on Tax from any Income arising in Thailand as it doesn't directly impact me but here are the Thai rules around Gift Tax https://www.rd.go.th/43338-1/clear-cut-ภาษีการรับให้-gift-tax-ใครต้องเสียภาษี.html (Chrome should translate it for you).

 

And here's the translated summary table... 

 

Enjoy 🙂 

[Etaoin Shrdlu]

Since gift taxes are levied on the recipient of the gift, not the giver, it would seem that any exemptions and special rates would apply to the recipient's tax liability, not the remitter.

 

Since the giver is the remitter of the gift, then the new interpretation of the rules regarding remittances and the standard PIT deductions and rates would apply to the remitter, not the recipient.  

 

Recipient of gift: Subject to gift tax rules.

Giver of gift: Subject to PIT and rules on remittances.

 

Both the giver and recipient may be liable for taxes depending upon the various factors involved.

[Lorry]

10 minutes ago, Mike Teavee said:

I'm stepping back from any discussions on Tax from any Income arising in Thailand as it doesn't directly impact me but here are the Thai rules around Gift Tax https://www.rd.go.th/43338-1/clear-cut-ภาษีการรับให้-gift-tax-ใครต้องเสียภาษี.html (Chrome should translate it for you).

 

And here's the translated summary table... 

 

Enjoy 🙂 

Interesting.

If the gift is real estate "the transferor deducts tax"

Otherwise,  "the recipient chooses to pay tax"

(The Soi Dog Foundatio  seems to be treated differently again)

 

I have gone through all the usual English tax websites, Mazars etc. They all seem to imply that the receiver of a gift pays the gift tax, but very few clearly state it:

 

an individual receiving certain types of gifts in excess of the tax-free thresholds will be subject to personal income tax at the rate of 5 percent of the exceeding portion

 

https://www.thanathippartners.com/insights/legal-update/inheritance-tax-and-gift-tax-t2u2.html?show=4

 

 

 

Gift Tax

The Gift Tax is a particular type of PIT for which the above source rule and/or residence rule also apply. In this case, a foreigner receiving movable properties (cash, car, jewelry, etc.) from an ancestor, a descendant, or a spouse as a sustentation, support, or gift, will be subject to a 5% Gift Tax on the portion exceeding 20 million THB, in each tax year.

However, if the movable properties are given to the foreigner in the event of a formal ceremony, on customary occasions, or under moral responsibility, by a person who is not an ancestor, a descendant, or a spouse, the 5% Gift Tax will apply on the portion exceeding 10 million THB, in each tax year.

Lastly, the 5% Gift Tax shall be applied on the portion exceeding 20 million THB of the appraised value of immovable assets (land, building, condominium unit, etc.) per legitimate child, in each tax year, which ownership is transferred without compensation from Parents to their legitimate children (but not adopted children).

 

https://www.ilct.co.th/taxation-for-foreigners-under-thai-laws/

 

 

But:

 

Say you and your spouse are freelancers with all clients based abroad. If you’re earning $60,000 a year and your spouse is making $80,000, you could “gift” $3,000 to them so you stay within the 25% tax bracket. With the extra $3,000, your spouse will still be well within the same 30% tax bracket. You’ve reduced your tax burden and kept your spouse’s virtually the same. 

 

https://btisolutions.co/will-you-be-impacted-by-thailands-revised-tax-code/

 

(I think this guy is wrong)

 

 

 

[Lorry]

22 minutes ago, Etaoin Shrdlu said:

Since gift taxes are levied on the recipient of the gift, not the giver, it would seem that any exemptions and special rates would apply to the recipient's tax liability, not the remitter.

 

Since the giver is the remitter of the gift, then the new interpretation of the rules regarding remittances and the standard PIT deductions and rates would apply to the remitter, not the recipient.  

 

Recipient of gift: Subject to gift tax rules.

Giver of gift: Subject to PIT and rules on remittances.

Agreed

[Mike Lister]

Update 3:

 

The Tax Implications of Remittances

 

If you receive funds in Thailand, you must determine whether they represent assessable income or not. If they are assessable, you must report them on a tax return, subject to minimum threshold amounts. You are the only person who can do this because you are the only person who knows.

 

Similarly, if you remit funds to Thailand from overseas, to someone other than yourself, you must also determine if those funds are assessable and if they are, declare them on a tax return, subject to threshold amounts. Just because you remit funds to another person in Thailand and the money does not enter your bank account, does not mean those funds escape tax assessment.

 

For example, a remittance from your overseas account, to a Thai property developer, in order to buy property in Thailand, must still be assessed for Thai tax. If that remittance comprises exempt income, it does not need to be declared on a Thai tax return. But if it comprises taxable income, the money must be declared.

 

In a second example, funds that you remit to another person, from overseas, might be intended as a Gift, but for your own tax declaration this intention does not matter. If the funds you remitted to another person are from your assessable income as listed in RD 161/2566 you have to declare them and you will  have to pay personal income tax on them.

 

The recipient of the Gift, may also need to report the Gift and pay Gift Tax on the amount. Gift tax for customary gifts from close relatives is only due if the gift is more than 10m THB (20m for legally married wife, parents or descendants)

 

Along the same lines as the above, if somebody sends you money in Thailand, it may be deemed to be a Gift, which under Gift Tax rules is not assessable here, subject to the amounts involved. The Thai Revenue may require further details of that Gift to ensure it is genuine and not income disguised as a Gift.

 

As an over arching principle, the Thai Revenue does not care what the purpose is of the remitted funds, or their intended use. The Revenue is only interested in the amounts that you declare and what you say the source of those funds was, which you may need to prove, to the satisfaction of the TRD.

[Mike Lister]

A couple of members have PM'd me with concerns that mirror my own, so I think now is the right time to raise the issue. 

 

This thread is intended to discuss a broad range of issues that are related to the new tax rule. I would expect that having spent time discussing one aspect, the debate would move on to the next. Unfortunately, we seem to have got bogged down with Gift Tax and the emphasis of the debates has centered on ways to circumvent paying tax under Gift Tax rules. I am also aware of the high viewing rate in this thread and the large numbers of people who read it daily. Increasingly there is an expectation that readers are looking for tips and ways to avoid paying tax on remitted funds, which I don't believe to be part of our agenda.

 

This is a commercial site that does not want to develop a reputation for the wrong reasons. As a consequence, I am going to ask you all to move on from Gift Tax, even though some loose ends still exist, I'm certain they will be tied up in due course. I am going to ask you also to focus less on ways to avoid paying tax and more on the frame work within which tax here might become due. This is not a big deal at present but I'd like avoid it becoming one later. I don't think a debate on the subject is warranted, let's just simply, move on.

 

I trust that everyone understands these concerns and will do as we have asked.

 

Many thanks

 

 

 

 

 

 

 

 

[TroubleandGrumpy]

6 hours ago, Mike Lister said:

This comes back to the old issue of whether Gift tax can be used to escape assessible tax on income. I don't believe a person can remit assessible income as a Gift to avoid paying Thai PIT on that income because the loss to Revenue is too great, potentially it reduces the tax from 35% to 5% or even 0%..

While I hear your point, I will firstly state that tax avoidance measures are legal, but tax evasion is illegal. Under the current rules and interpretations, as I read them and as stated by the TRD website info, sending income to Thailand as a gift is not tax evasion, because it is within the rules and it is therefore a loophole that can be exploited (until closed). This is very similar to the previous loophole that allowed 12 months 'seasoning' of income earned overseas to avoid income tax obligations, and is likely why there was no point in closing this loophole back then. 

 

As you say, the potential tax revenue will be lost if Thais (or Expats) can now just remit their income as a gift, instead of seasoning it for 12 months.  I agree that means at some point TRD will also be looking at closing this loophole too.  If the TRD ever rules (or interprets) that income cannot be gifted from overseas to avoid potential taxation obligations, then that changes things - and as you say it is likely that they will one day. But as it stands now it is IMO OK - just another loophole they have not closed yet. 

 

Many Expats, myself included, will be remitting part of our retirement savings to the wife's Thai bank account, purely because that bypasses the complications of dealing with the TRD if we remit that to our own Thai bank accounts. If the TRD asks an Expat's wife for details about where those remiitance/s to her bank account came from, it would be wise for all Expats doing this to keep all records and have an audit trail to show that the transfers were from savings. 

 

[TroubleandGrumpy]

26 minutes ago, Mike Lister said:

A couple of members have PM'd me with concerns that mirror my own, so I think now is the right time to raise the issue. 

 

This thread is intended to discuss a broad range of issues that are related to the new tax rule. I would expect that having spent time discussing one aspect, the debate would move on to the next. Unfortunately, we seem to have got bogged down with Gift Tax and the emphasis of the debates has centered on ways to circumvent paying tax under Gift Tax rules. I am also aware of the high viewing rate in this thread and the large numbers of people who read it daily. Increasingly there is an expectation that readers are looking for tips and ways to avoid paying tax on remitted funds, which I don't believe is be part of our agenda.

 

This is a commercial site that does not want to develop a reputation for the wrong reasons. As a consequence, I am going to ask you all to move move on from Gift Tax, even though some loose ends still exist, I'm certain they will be tied up in due course. I am going to ask you also to focus less on ways to avoid paying tax and more on the frame work within which tax here might become due. This is not a big deal at present but I'd like avoid it becoming one later. I don't think a debate on the subject is warranted, just simply, move on.

 

I trust that everyone understands these concerns and will do as we have asked.

Many thanks

I just posted my reply to your post on gifts from ealier today - before I read this post asking to stop commenting on gifts.  I am happy to leave that/this as my last statement on the matter of gifts. 

[Mike Lister]

1 minute ago, TroubleandGrumpy said:

While I hear your point, I will firstly state that tax avoidance measures are legal, but tax evasion is illegal. Under the current rules and interpretations, as I read them and as stated by the TRD website info, sending income to Thailand as a gift is not tax evasion, because it is within the rules and it is therefore a loophole that can be exploited (until closed). This is very similar to the previous loophole that allowed 12 months 'seasoning' of income earned overseas to avoid income tax obligations, and is likely why there was no point in closing this loophole back then. 

 

As you say, the potential tax revenue will be lost if Thais (or Expats) can now just remit their income as a gift, instead of seasoning it for 12 months.  I agree that means at some point TRD will also be looking at closing this loophole too.  If the TRD ever rules (or interprets) that income cannot be gifted from overseas to avoid potential taxation obligations, then that changes things - and as you say it is likely that they will one day. But as it stands now it is IMO OK - just another loophole they have not closed yet. 

 

Many Expats, myself included, will be remitting part of our retirement savings to the wife's Thai bank account, purely because that bypasses the complications of dealing with the TRD if we remit that to our own Thai bank accounts. If the TRD asks an Expat's wife for details about where those remiitance/s to her bank account came from, it would be wise for all Expats doing this to keep all records and have an audit trail to show that the transfers were from savings. 

 

As I said in my post prior to the one you've just posted, I am asking for your cooperation in helping to move the narrative away from Gift Tax and tax avoidance, even though both are legal. I will really appreciate your help in doing this.