More details on Thai taxation of overseas income

[Mike Teavee]

7 minutes ago, Neeranam said:

They're are many ways to avoid paying tax on this. 

How about sending smaller payments to different bank accounts via apps like Wise? 

How about buying USDT and using P2P on exchanges like Binance? This way, you have Thai baht going to your accounts from random Thai accounts. 

 

 

My plan was* to use the money as the $250K Investment I need to make to get the LTR Visa (My Income will be > $40K but < $80K pa so I need to add the Investment to qualify).  

 

*Still is the plan, will just do a Hotblack Desiato (https://en.wikipedia.org/wiki/Tax_exile) for 1 year & declare myself dead, well non-tax resident, to Thailand

 

Edited October 4, 2023 by Mike Teavee

[BenStark]

5 minutes ago, Mike Teavee said:

The way this is normally done (e.g. for calculating Capital Gains on a Share Sale) is LIFO (Last In First Out) so if you transferred money from your account to Thailand & showed them your home country bank statements (Which you need to do as part of a Tax Return), they would go through any interest earned in that Tax Year & say that part of the Transfer was the Interest earned. 

Not sure something lost in translation here, but suppose I have an income of 200K a year (fictional figure) in my home country.

 

I have 1 million in my bank account in my home country.

 

Obviously, all money in my home country account is taxed before it get deposited, because the employer deducts taxes from your salary.

 

Now I send 200K over. Which year did I earn that?

[Mike Teavee]

6 minutes ago, BenStark said:

Not sure something lost in translation here, but suppose I have an income of 200K a year (fictional figure) in my home country.

 

I have 1 million in my bank account in my home country.

 

Obviously, all money in my home country account is taxed before it get deposited, because the employer deducts taxes from your salary.

 

Now I send 200K over. Which year did I earn that?

This year,

 

Think of it as Building Blocks with any additional Income/"Block" going on top of previous savings/"Blocks", if you move any of the Blocks you start from the Top and work down. 

 

So in your Scenario, 200K earned would be taxable (DTAs & Tax already paid aside) but anything over this would come from your 1Million Savings. 

 

Edited October 4, 2023 by Mike Teavee

[SportRider]

2 hours ago, soalbundy said:

I presume that the tax due on say pensions from abroad would be due at the end of 2024 and not monthly which gives time for things to settle down. A thought. money transfers from 'Wise' are from Thai bank to Thai bank ie. internal. Have your pension paid into a savings account in your home country and transfer the 'savings' to your Thai account split up among your partner and child, I can imagine there are many ways that a Thai tax accountant could advise.

Use a Thai Baht account on Revolut and connect it to Google Pay on your phone.  You can 'tap' pretty much everywhere now in Thailand, except for cash-only transactions.

[Celsius]

6 hours ago, webfact said:

 

The basic idea is, that when money is transferred into Thailand it should be taxed in Thailand if it is income.

 

This is actually very clear. I don't know why so many seem confused. 

 

If you make a wise transfer to Thailand, transfer money to purchase a condo, transfer your pension or transfer money to your bargirl du jour it will be taxed at 15% - just like the interest you earn on your Thai savings. It will be then up to you to claim a refund. This will, of course be an automatic withholding tax. 

 

Best to use your foreign ATM card.

 

Best to not own any property in Thailand.

 

Best to not have any business whatsoever in Thailand.

 

Best to always keep the low profile.

 

 

 

 

Edited October 4, 2023 by Celsius

[Srikcir]

A political mantra comes to mind reading about foreigner concerns about how the proposed new Thai income tax would/might be applied:

Taxation without Representation.

 

Taxed Thais taxpayers can at least vote and/or appeal to their Parliamentary representatives regarding legislation and policy.

Thai taxed resident foreigners have no political representation in Thailand.

 

Therefore, as shocking it might be to the Thai electorate and incumbent government, it would be fair and democratic that taxpaying resident foreigners can vote, at least in the National Election.

[AP2019]

My fear is that when I transfer money into Thailand the bank will automatically withhold the maximum tax amount and then tell me I need to file a tax return (with some kind of US tax documentation) for a refund.

 

Where is the thread for alternatives to Thailand? I heard that in Malaysia many people speak English, so no language issues. Also, Vietnam seems to be a good possibility...

 

[Neeranam]

16 minutes ago, Mike Teavee said:

Still is the plan, will just do a Hotblack Desiato (https://en.wikipedia.org/wiki/Tax_exile) for 1 year & declare myself dead, well non-tax resident, to Thailand

interesting, I might do the same.

[Neeranam]

2 minutes ago, AP2019 said:

My fear is that when I transfer money into Thailand the bank will automatically withhold the maximum tax amount and then tell me I need to file a tax return (with some kind of US tax documentation) for a refund.

 

Where is the thread for alternatives to Thailand? I heard that in Malaysia many people speak English, so no language issues. Also, Vietnam seems to be a good possibility...

 

Irrational fear. 

Learn Thai.

[soalbundy]

1 minute ago, SportRider said:

Use a Thai Baht account on Revolut and connect it to Google Pay on your phone.  You can 'tap' pretty much everywhere now in Thailand, except for cash-only transactions.

You still have to show 65k monthly remittance from abroad if you are on the monthly pension method. That might work if you have 800k in a Thai bank method but then you could just as well use an ATM to take funds from abroad.

Basically if they are determined to tax pensions we are frucked, Taxation and death are impossible to beat in the long run.

[Neeranam]

5 minutes ago, Srikcir said:

A political mantra comes to mind reading about foreigner concerns about how the proposed new Thai income tax would/might be applied:

Taxation without Representation.

 

Taxed Thais taxpayers can at least vote and/or appeal to their Parliamentary representatives regarding legislation and policy.

Thai taxed resident foreigners have no political representation in Thailand.

 

Therefore, as shocking it might be to the Thai electorate and incumbent government, it would be fair and democratic that taxpaying resident foreigners can vote, at least in the National Election.

There are very few foreigners that this will affect, and those that are affected will be OK with a decent accountant. 
These changes are for Thais, like me who have income from abroad. 

[VocalNeal]

7 minutes ago, Celsius said:

If you make a wise transfer to Thailand, transfer money to purchase a condo,

I don't understand your logic. Transferring funds into Thailand to purchase a condo is not income. It is simply a capital  transfer.

 

Income would be dividends or interest earned on overseas stocks????

[BenStark]

4 minutes ago, VocalNeal said:

I don't understand your logic. Transferring funds into Thailand to purchase a condo is not income. It is simply a capital  transfer.

 

Income would be dividends or interest earned on overseas stocks????

Whatever reason you write on the transfer slip will not make a difference for it to be considered income or not

[Mike Teavee]

6 minutes ago, VocalNeal said:

I don't understand your logic. Transferring funds into Thailand to purchase a condo is not income. It is simply a capital  transfer.

 

Income would be dividends or interest earned on overseas stocks????

Depends where the money came from that you Transferred, e.g. If you got a $20,000 dividend & added it to $80,000 savings to transfer $100,000 for a Condo purchase then the $20,000 is taxable (DTAs & Tax already paid aside). 

 

 

[Celsius]

3 minutes ago, VocalNeal said:

I don't understand your logic. Transferring funds into Thailand to purchase a condo is not income. It is simply a capital  transfer.

 

Income would be dividends or interest earned on overseas stocks????

 

It is not my logic, this is what I see when reading the childishly written original post.

 

Of course it is not an income, but a Thai bank may see it as an income and it will be taxed accordingly. It will be up to you then to claim back the withholding tax and go through all the BS to get your money back.

 

 

[James105]

1 hour ago, Tom H said:

Thats the “existing law”, the guy forgot to tell that this 1 year thing will change.

That is quite the important omission.   I even read the linked article and am none the wiser about how you ascertained this was for the existing law and not the new one.  

 

 

[SportRider]

1 hour ago, koolkarl said:

Still clear as mud.  They don't mention the most important thing which is the automatic exchange of asset and income info yearly between members of this OECD  CRS agreement.

This already exists and in place for well over 100 countries, not just OECD.  It's for information exchange, to facilitate taxation but does not reflect on taxation policy of any country.

[Mike Teavee]

20 minutes ago, Celsius said:

or transfer money to your bargirl du jour

I don't see how they can link it to you but I read on another thread that you're allowed to "Gift" up to 20Million so you would just say it was a gift (One of my "Plans" is to "Gift" the GF 1 Million Baht each year & let her pay all the bills) ???? 

 

I've mentioned this scenario before on another thread but every year I give my mate approx. £10,000 in the UK (money for his Kids presents & money he invests in the UK) & he pays me back in Thailand, I guess technically it could be said that I'm bringing this money into Thailand but how would they ever link the 2 things together? & if he's paying me back £3,000 125,000b for a flight to the UK that I paid for am I really bringing this money into Thailand?

 

[Ben Zioner]

29 minutes ago, Celsius said:

 

This is actually very clear. I don't know why so many seem confused. 

 

If you make a wise transfer to Thailand, transfer money to purchase a condo, transfer your pension or transfer money to your bargirl du jour it will be taxed at 15% - just like the interest you earn on your Thai savings. It will be then up to you to claim a refund. This will, of course be an automatic withholding tax. 

 

Best to use your foreign ATM card.

 

Best to not own any property in Thailand.

 

Best to not have any business whatsoever in Thailand.

 

Best to always keep the low profile.

 

 

 

 

Best  not to  be in Thailand.

[bob smith]

1 hour ago, NorthernRyland said:

Once they realize this is unenforceable given their lazy and incompetent workforce the whole scheme will fall apart and be ignored.

yep. it will all be brushed under the carpet as just another misunderstanding. 

[Celsius]

6 minutes ago, Mike Teavee said:

I don't see how they can link it to you but I read on another thread that you're allowed to "Gift" up to 20Million so you would just say it was a gift (One of my "Plans" is to "Gift" the GF 1 Million Baht each year & let her pay all the bills) ???? 

 

I've mentioned this scenario before on another thread but every year I give my mate approx. £10,000 in the UK (money for his Kids presents & money he invests in the UK) & he pays me back in Thailand, I guess technically it could be said that I'm bringing this money into Thailand but how would they ever link the 2 things together? & if he's paying me back £3,000 125,000b for a flight to the UK that I paid for am I really bringing this money into Thailand?

 

 

Like I said, if they implement the withholding tax, this absolutely won't matter. It will be up to you to prove the money was already taxed back home.

 

 

[zzzzz]

so  they require you have 800,000 (or 400,000 if ur married)in the bank
and they want tax you on it when you send it here?

wow
 

Edited October 4, 2023 by zzzzz

[proton]

4 hours ago, alanrchase said:

My take on it is that the only thing that is changing is that money bought into Thailand by a person who is here long enough each year to be considered tax resident will have to be declared on a yearly tax form. If it is declared as income it will be liable for tax, if it is declared as savings it won't. 

so will pensions be classed as income or savings?

[BenStark]

22 minutes ago, BenStark said:

Whatever reason you write on the transfer slip will not make a difference for it to be considered income or not

What confuses you about my post @Celsius?

 

It is not the reason for the transfer that determines if it is income or not, regardless of the fact that you don't understand the OP with you childish brain

[Ben Zioner]

5 minutes ago, zzzzz said:

so  they require you have 800,000 (or 400,000 if ur married)in the bank
and they want tax you on it when you send it here?

wow
 

No, you don't have to be "tax resident" when you transfer this money. It is a matter of timing.

[BE88]

1 hour ago, freeworld said:

Does it state in the tax code that savings is income?

 

For most people income is money earned:

ordinary income ie. from Investments, interest, dividends, salaries and wages.

 

Income from capital gains.

Interesting question that you ask and I ask it in different terms, is a pension income a profit or a savings? The answer in our civilized countries is no.

 

The pension is a savings and for this reason it is not taxed in our countries of origin because the contribution we have made in our years of work was a savings set aside to be received when one enters retirement and therefore I repeat the pension is a savings not a earnings and should not be taxed in Thailand.

 

If the Thailand government wants to tax it, it is an abuse.

 

[Bangkok Barry]

This link explains exactly what double taxation is and which countries have an agreement with Thailand. Many of us will be from countries on the list, but it doesn't include France. How it will actually work, I have no idea.  According to the link there are various ways of operating it.

https://www.belaws.com/thailand/double-tax-agreements/

[CartagenaWarlock]

2 hours ago, buriram39 said:

What if the income received overseas is exempt frommtax innthe country of origin?

If it's exempt in the country of origin (for example some Capital gains in the US), and there is a tax for the same in Thailand, you pay taxes in Thailand. It's that simple. 

[DjChris28]

5 hours ago, NanLaew said:

That is NOT the way a "double tax agreement" works.

 

If tax has already been paid in the country where the money comes from, it does not need to be deducted again on receipt in Thailand.

 

I am sure that in their mangling of their language means to say that the amount of tax paid in the source country can be deducted from the amount of any tax owed in Thailand.

Incorrect. When I was working in thailand, my tax rate was 20%, but my Australian tax rate was %30. 

 

I paid 20% to thailand and 10% to Australia. 

[bamnutsak]

In the case of Social Security direct transfers, and 65,000 baht qualifying transfers, will some percentage tax be withheld by the receiving bank? Is the gross or net amount count as qualifying for the ext stay/ret-income?

 

65,000/month is in the 20% bracket. 156,000 is a pretty big carve out. 

 

You'd then file a return in hopes of showing all of that is post-tax in the U.S.?