My take on the new tax modifications

[YaDongImproved]

I had a fascinating conversation with a client this afternoon that I believe warrants broader sharing. Please note that I am neither a tax nor financial advisor. Thus, the information provided here is purely for your information and entertainment.

 

As someone well-versed in navigating various government authorities in Thailand, having my personal accountant for 17 years, successfully sued the Thai government twice, and managed both corporate and personal taxes for years, I've acquired a certain knack for this. I've also coached accountants to approach their work with a bit more ingenuity.

Significant changes to the Thai Revenue Code concerning income earned abroad have been initiated as of January 1, 2024, sparking considerable debate among Thai and foreign residents alike. Let's delve into the details:

 

What’s Changing?

In the past, Thailand taxed foreign-sourced income only if it was remitted to the country within the same tax year it was earned. However, the recent Departmental Instruction No. Paw 161/2566 (2023) revises Section 41 of the Revenue Code. Now, any income earned abroad by a Thai tax resident will be subject to personal income tax upon remittance to Thailand, regardless of when it was earned, excluding income earned before 2024.

 

Who is Affected?

The amendment primarily impacts Thai tax residents, defined as individuals who spend 180 days or more in Thailand within a tax year. This group includes Thai citizens and foreign nationals who meet the residency requirement. For example, a client I spoke to was transferring money to his wife from his overseas company monthly. Such practices of earning foreign income and failing to declare it are precisely what the current government aims to curb, including closing loopholes involving cryptocurrencies in foreign countries, among others. Notably, this does not concern pensioners in Thailand.

 

Potential Impacts:

• Increased Tax Burden: Thai residents with significant foreign income may face a heftier tax bill, especially if they have not previously declared or paid taxes on such income. For instance, the client I spoke with today was using an overseas company to pay his wife a salary – a clear instance of undeclared foreign income that must now be reported.
• Compliance Challenges: Navigating and adhering to the new rules could be complex, particularly for those not acquainted with Thai tax laws. Professional consultation with a tax accountant or lawyer is advisable. In Thailand, the tax period starts on January 1 and concludes on December 31. Tax declarations for individuals are due by March 31 of the subsequent year, while companies have until May 31.
• Influence on Business Decisions: This new regulation may affect decisions regarding investment or business conducted abroad, as individuals may need to consider the potential tax implications. For example, those with substantial incomes might opt to establish companies in locations like Dubai or the Isle of Man or to draw their salaries as dividends, typically taxed at a lower rate.

 

Exemptions and Considerations:

• Double Taxation Agreements: Thailand has entered into double taxation agreements with numerous countries, providing potential relief from double taxation on foreign income. Most pensioners and retirees in Thailand need not worry excessively; they are required to declare their foreign incomes but should not be subject to additional taxation. Given the complexities of Thai bureaucracy, there is a personal concern regarding the potential confusion this may cause with foreign incomes, as well as how the revenue department and immigration authorities will manage this. For example, immigration authorities have previously requested my personal tax documents from Thailand before granting my visa extensions. I recall they requested my tax returns from 2012 to 2014 when I applied for a marriage-based extension. And because my extension was always around March, I did not always had it done. But I had no choice. Just imagine the mess if immigration request foreign tax documents. But right now, it is too early. Nobody knows how they will deal with it in 2025.

• Specific Types of Income: Some foreign income types, such as capital gains from assets located abroad, may be exempt from Thai taxation, provided specific conditions are met.

• Thresholds and Deductions: The application of certain thresholds and deductions will vary based on the amount of income and the individual's circumstances.

In summary, the recent amendments to the Revenue Code mark a considerable shift for Thai residents with foreign income. The full extent of the impact is yet to be determined; therefore, it is essential for individuals to comprehend their responsibilities and seek professional advice when necessary.

This client was paying a salary to his Thai wife through his foreign company. It would clearly be a foreign income for her. So he asked me: "What if it's not a salary but a gift?" This situation alters the scenario significantly.

 

The following gifts are exempt from personal income tax:

• Income from the transfer of immovable property received by a lawful child, up to THB 20 million within a tax year.
• Maintenance income or gifts received by ascendants, descendants, or a spouse, not exceeding THB 20 million throughout a tax year.
• Maintenance income or gifts received by a non-relative on occasions of tradition or custom, up to THB 10 million within a tax year.
• Income from gifts intended for use in education, religion, or public benefit, in line with the donor's wishes, as specified in the Ministerial Regulations.

Income or gifts exceeding the above thresholds will incur personal income tax at a rate of 5%.

Thus, an individual could give up to 20 million baht per year without incurring taxes.

 

Another client discussed his situation this week, inquiring whether he should declare sporadic monetary receipts. If these are foreign income, then the answer is yes. However, if it's a loan from a family member, like a brother, it is not considered foreign income. If you're already paying taxes, don't worry. While it requires more paperwork, you won't be taxed twice.

It's worth noting that with high incomes, setting up a company in places like Dubai or the Isle of Man is an option. Instead of a salary, you could pay yourself in dividends. There are many legal avenues available. Thailand aims to ensure its citizens pay taxes, as many Thais do not. This is evident everywhere: ask your wife, your local noodle seller or favorite masseuse. They do not pay taxes.

 

Sebastien 

[1FinickyOne]

Thanks - this still seems to have complications... 

 

If I am reading this correctly, then since my income earned on Treasuries and stocks in the USA are already taxed, then I will not owe additional taxes on this? 

[Celsius]

51 minutes ago, YaDongImproved said:

As someone well-versed in navigating various government authorities in Thailand, having my personal accountant for 17 years, successfully sued the Thai government twice, and managed both corporate and personal taxes for years, I've acquired a certain knack for this

 

What? Times New Roman font?

 

Looks like copy paste.

[MistyBlue]

1 hour ago, YaDongImproved said:

 Specific Types of Income: Some foreign income types, such as capital gains from assets located abroad, may be exempt from Thai taxation, provided specific conditions are met.

Thanks for posting.  I'm very interested in what you have written in this bullet point I've quoted.  Would you be willing to provide further discussion/explanation on this particular point, please?  Thanks.

[scorecard]

1 hour ago, YaDongImproved said:

I had a fascinating conversation with a client this afternoon that I believe warrants broader sharing. Please note that I am neither a tax nor financial advisor. Thus, the information provided here is purely for your information and entertainment.

 

As someone well-versed in navigating various government authorities in Thailand, having my personal accountant for 17 years, successfully sued the Thai government twice, and managed both corporate and personal taxes for years, I've acquired a certain knack for this. I've also coached accountants to approach their work with a bit more ingenuity.

Significant changes to the Thai Revenue Code concerning income earned abroad have been initiated as of January 1, 2024, sparking considerable debate among Thai and foreign residents alike. Let's delve into the details:

 

What’s Changing?

In the past, Thailand taxed foreign-sourced income only if it was remitted to the country within the same tax year it was earned. However, the recent Departmental Instruction No. Paw 161/2566 (2023) revises Section 41 of the Revenue Code. Now, any income earned abroad by a Thai tax resident will be subject to personal income tax upon remittance to Thailand, regardless of when it was earned, excluding income earned before 2024.

 

Who is Affected?

The amendment primarily impacts Thai tax residents, defined as individuals who spend 180 days or more in Thailand within a tax year. This group includes Thai citizens and foreign nationals who meet the residency requirement. For example, a client I spoke to was transferring money to his wife from his overseas company monthly. Such practices of earning foreign income and failing to declare it are precisely what the current government aims to curb, including closing loopholes involving cryptocurrencies in foreign countries, among others. Notably, this does not concern pensioners in Thailand.

 

Potential Impacts:

• Increased Tax Burden: Thai residents with significant foreign income may face a heftier tax bill, especially if they have not previously declared or paid taxes on such income. For instance, the client I spoke with today was using an overseas company to pay his wife a salary – a clear instance of undeclared foreign income that must now be reported.
• Compliance Challenges: Navigating and adhering to the new rules could be complex, particularly for those not acquainted with Thai tax laws. Professional consultation with a tax accountant or lawyer is advisable. In Thailand, the tax period starts on January 1 and concludes on December 31. Tax declarations for individuals are due by March 31 of the subsequent year, while companies have until May 31.
• Influence on Business Decisions: This new regulation may affect decisions regarding investment or business conducted abroad, as individuals may need to consider the potential tax implications. For example, those with substantial incomes might opt to establish companies in locations like Dubai or the Isle of Man or to draw their salaries as dividends, typically taxed at a lower rate.

 

Exemptions and Considerations:

• Double Taxation Agreements: Thailand has entered into double taxation agreements with numerous countries, providing potential relief from double taxation on foreign income. Most pensioners and retirees in Thailand need not worry excessively; they are required to declare their foreign incomes but should not be subject to additional taxation. Given the complexities of Thai bureaucracy, there is a personal concern regarding the potential confusion this may cause with foreign incomes, as well as how the revenue department and immigration authorities will manage this. For example, immigration authorities have previously requested my personal tax documents from Thailand before granting my visa extensions. I recall they requested my tax returns from 2012 to 2014 when I applied for a marriage-based extension. And because my extension was always around March, I did not always had it done. But I had no choice. Just imagine the mess if immigration request foreign tax documents. But right now, it is too early. Nobody knows how they will deal with it in 2025.

• Specific Types of Income: Some foreign income types, such as capital gains from assets located abroad, may be exempt from Thai taxation, provided specific conditions are met.

• Thresholds and Deductions: The application of certain thresholds and deductions will vary based on the amount of income and the individual's circumstances.

In summary, the recent amendments to the Revenue Code mark a considerable shift for Thai residents with foreign income. The full extent of the impact is yet to be determined; therefore, it is essential for individuals to comprehend their responsibilities and seek professional advice when necessary.

This client was paying a salary to his Thai wife through his foreign company. It would clearly be a foreign income for her. So he asked me: "What if it's not a salary but a gift?" This situation alters the scenario significantly.

 

The following gifts are exempt from personal income tax:

• Income from the transfer of immovable property received by a lawful child, up to THB 20 million within a tax year.
• Maintenance income or gifts received by ascendants, descendants, or a spouse, not exceeding THB 20 million throughout a tax year.
• Maintenance income or gifts received by a non-relative on occasions of tradition or custom, up to THB 10 million within a tax year.
• Income from gifts intended for use in education, religion, or public benefit, in line with the donor's wishes, as specified in the Ministerial Regulations.

Income or gifts exceeding the above thresholds will incur personal income tax at a rate of 5%.

Thus, an individual could give up to 20 million baht per year without incurring taxes.

 

Another client discussed his situation this week, inquiring whether he should declare sporadic monetary receipts. If these are foreign income, then the answer is yes. However, if it's a loan from a family member, like a brother, it is not considered foreign income. If you're already paying taxes, don't worry. While it requires more paperwork, you won't be taxed twice.

It's worth noting that with high incomes, setting up a company in places like Dubai or the Isle of Man is an option. Instead of a salary, you could pay yourself in dividends. There are many legal avenues available. Thailand aims to ensure its citizens pay taxes, as many Thais do not. This is evident everywhere: ask your wife, your local noodle seller or favorite masseuse. They do not pay taxes.

 

Sebastien from ThaiLawOnline

 

 

Very much appreciate your post

Your Exemptions and Considerations comments:

 

"Most pensioners and retirees in Thailand need not worry excessively; they are required to declare their foreign incomes but should not be subject to additional taxation."

 

Do you mean they will be required to declare their purely pensions income under the new rules or has this ben the case in the past?

 

And how does the 180 rule connect into this?

 

Appreciate any further comment you could share.

[proton]

So all you have to do is say its a gift or maintenance and transfer into the mrs account up to 20 mil, and you pay no tax? Seems very unlikely.

[CharlieKo]

21 minutes ago, proton said:

So all you have to do is say its a gift or maintenance and transfer into the mrs account up to 20 mil, and you pay no tax? Seems very unlikely.

If you read the RD tax rules you will see this is correct.

[Eudaimonia]

2 hours ago, YaDongImproved said:

For example, those with substantial incomes might opt to establish companies in locations like Dubai or the Isle of Man or to draw their salaries as dividends, typically taxed at a lower rate.

 

Foreign-sourced dividends are taxed progressively using the same personal income tax rates as salary.

 

2 hours ago, YaDongImproved said:

For instance, the client I spoke with today was using an overseas company to pay his wife a salary – a clear instance of undeclared foreign income that must now be reported.

 

A salary is probably not foreign-sourced income, unless the wife travels abroad monthly to perform her duties. If she stays in Thailand and draws a monthly salary, it has been local, taxable, reportable income even before 2024.

[YaDongImproved]

17 hours ago, 1FinickyOne said:

Thanks - this still seems to have complications... 

 

If I am reading this correctly, then since my income earned on Treasuries and stocks in the USA are already taxed, then I will not owe additional taxes on this? 

Yes. But you might have to declared them if you live 180 days per year in Thailand or more.

[YaDongImproved]

16 hours ago, MistyBlue said:

Thanks for posting.  I'm very interested in what you have written in this bullet point I've quoted.  Would you be willing to provide further discussion/explanation on this particular point, please?  Thanks.

These are explains one by one in the double taxation treaties. It depends on your country. This is just in general. 

[YaDongImproved]

16 hours ago, scorecard said:

 

 

Very much appreciate your post

Your Exemptions and Considerations comments:

 

"Most pensioners and retirees in Thailand need not worry excessively; they are required to declare their foreign incomes but should not be subject to additional taxation."

 

Do you mean they will be required to declare their purely pensions income under the new rules or has this ben the case in the past?

 

And how does the 180 rule connect into this?

 

Appreciate any further comment you could share.

That’s my interpretation. However, nobody knows who will do it. For example, will it be at the revenue department? Will immigration request foreigners to give their annual tax income from Thailand. Will your Thai bank give the information to the revenue department? All of this sounds very messy and maybe impossible to really apply.

Someone sent me this useful reply finding my text interesting but I am not sure I agree  with his second point: 

 

Clearly the details of how this will work in practice still need to be worked out by the Thai RD. 
In addition to the points you make in your summary  I understand the following:

 

1. Under the rules of CRS Thai banks must report to the RD any foreign transactions paid into a Thai bank.  So if an individual remits funds to Thailand via bank transfer then the RD will know about it. 

2. The burden of proof of the type of funds (ie. Taxable/non-taxable) remitted to Thailand is on the Tax Payer. Therefore it’s important to keep records that prove the source of the funds so (if required) you can provide as evidence when submitting a Thai PIT return. 

3. Application of Double Taxation rules is not done by default (ie. You need to apply for it). In the case of UK if an individual wishes to pay PIT in Thailand they need to apply to HMRC for tax relief at source by submitting a completed DT-Individual form to HMRC. 

4. If an individual wishes to pay tax in their ‘home’ country (eg. UK) and not pay PIT on the funds they remit to Thailand then they will need to apply for a tax credit in Thailand. The process for this is unclear (to me at least) and would likely involve translation and certification of any supporting documentation (not to mention the stress of trying to submit this at your local Amphur RD office). 

[YaDongImproved]

16 hours ago, CharlieKo said:

If you read the RD tax rules you will see this is correct.

It is a law called the “Gift Tax” and applying since 1 February 2016.

[YaDongImproved]

15 hours ago, Eudaimonia said:

 

A salary is probably not foreign-sourced income, unless the wife travels abroad monthly to perform her duties. If she stays in Thailand and draws a monthly salary, it has been local, taxable, reportable income even before 2024.

Exactly but who checks bank accounts of individuals in Thailand? How can they know if it is a salary or a gift? Now, they put a mechanism to make it mandatory to declare the foreign incomes if you are a tax resident in Thailand. They want to cut loopholes, not for foreigners, for Thai people. They know most foreigners pay taxes. 

[proton]

2 hours ago, YaDongImproved said:

It is a law called the “Gift Tax” and applying since 1 February 2016.

 

So you can claim its a gift when its not, how is anyone to know?

[scorecard]

4 hours ago, YaDongImproved said:

That’s my interpretation. However, nobody knows who will do it. For example, will it be at the revenue department? Will immigration request foreigners to give their annual tax income from Thailand. Will your Thai bank give the information to the revenue department? All of this sounds very messy and maybe impossible to really apply.

Someone sent me this useful reply finding my text interesting but I am not sure I agree  with his second point: 

 

Clearly the details of how this will work in practice still need to be worked out by the Thai RD. 
In addition to the points you make in your summary  I understand the following:

 

1. Under the rules of CRS Thai banks must report to the RD any foreign transactions paid into a Thai bank.  So if an individual remits funds to Thailand via bank transfer then the RD will know about it. 

2. The burden of proof of the type of funds (ie. Taxable/non-taxable) remitted to Thailand is on the Tax Payer. Therefore it’s important to keep records that prove the source of the funds so (if required) you can provide as evidence when submitting a Thai PIT return. 

3. Application of Double Taxation rules is not done by default (ie. You need to apply for it). In the case of UK if an individual wishes to pay PIT in Thailand they need to apply to HMRC for tax relief at source by submitting a completed DT-Individual form to HMRC. 

4. If an individual wishes to pay tax in their ‘home’ country (eg. UK) and not pay PIT on the funds they remit to Thailand then they will need to apply for a tax credit in Thailand. The process for this is unclear (to me at least) and would likely involve translation and certification of any supporting documentation (not to mention the stress of trying to submit this at your local Amphur RD office). 

Just one point, seems to me this will remain the responsibility of the Revenue Dept., (RD).

 

Probably not monitored / managed by Immigration. Although many foreigners are on 'retirement' visa (which can be extended by a renewal application, an there's other similar visas, in other words Immigration do see these visa / applications for renewal annually.

 

On the other hand there's foreigners who have Thai Permanent Residence (PR) which is issued for lifetime and is not subject to review. i.e. Immigration not in the picture. 

 

I wonder about state pensions.

 

 

E.g. Pension funds sent from Centrelink in Australia to pensioners living abroad, the details attached to each transfer indicate it's a state pension. 

Will the Thai RD classify these specific payments as 'untouchable'?

 

Also some Australians living in Thailand receive permanent 4 weekly War Service disability compensation payments. Within Australia these payments are not considered to be income. Will the Thai RD have the same attitude?  

 

My OAP 4 weekly payments go to my joint savings account at K Bank. It's easy enough to set up a permanent e.mail advice notice when every OAP payment is received at K Bank and I guess these could be easily saved as proof to show the RD if needed. I guess other Thai banks have very similar processes. 

 

 

[YaDongImproved]

6 hours ago, scorecard said:

 

 

On the other hand there's foreigners who have Thai Permanent Residence (PR) which is issued for lifetime and is not subject to review. i.e. Immigration not in the picture. 

 

I wonder about state pensions.

 

 

 

 

 

1) I have permanent residency and declare incomes in 2 countries. I am not worried.

2) do not be worried for state pension. They will never touch that in Thailand. They never did, and will never do. They are not that stupid.

[jerrymahoney]

On 1/9/2024 at 11:56 PM, proton said:

So all you have to do is say its a gift or maintenance and transfer into the mrs account up to 20 mil, and you pay no tax? Seems very unlikely.

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/?do=findComment&comment=18559204

 

To which the answer to that (AMCHAN) query was NOT:

 

Foreign sourced tax-free gifts up to 20 million baht as maintenance to spouse? You Betcha. We do that for our mega-wealthy tax clients all the time. Beats paying 35% tax on that 5 - 20 million baht of the gift component. Been that way since FEB 2016.

 

[Moonlover]

On 1/9/2024 at 11:16 PM, Celsius said:

 

What? Times New Roman font?

 

Looks like copy paste.

What a dumb comment! 

 

Neatly typed up on a word processor, using the world's most popular font and then copy pasted into ASEAN NOW.

 

Or is that too sophisticated for you?

[Celsius]

3 minutes ago, Moonlover said:

What a dumb comment! 

 

Neatly typed up on a word processor, using the world's most popular font and then copy pasted into ASEAN NOW.

 

Or is that too sophisticated for you?

 

For this crowd....well yes.....yes it is

[Rhys]

Thanks for the insights and report.

[digital]

This Thai gift allowance seems too good to be true, but seems it is. 

 

It's very generous, in the UK gifts to spouse are tax free, but otherwise there is an annual £3000 limit (provided you live 7 years more) and unlimited small £250 gifts. Thailand is allowing 20m THB to close relative, or 10m THB to anyone else annually it seems.

 

What's to stop you transferring in funds from abroad declared as a gift and then that gift being gifted back to you, anything?
Husband > wife (or whoever) > Husband

 

 

[jerrymahoney]

1 hour ago, digital said:

What's to stop you transferring in funds from abroad declared as a gift and then that gift being gifted back to you, anything?
Husband > wife (or whoever) > Husband

At least that I've been able to find, there is no documented evidence from any Thai Accountancy or law firm that such an arrangement and tax-declaration has ever taken place since that law was enacted FEB 20016.

[Moonlover]

On 1/9/2024 at 10:18 PM, YaDongImproved said:

Notably, this does not concern pensioners in Thailand.

 

Would you please clarify what you meant when you wrote this line. Do you mean 'Thai citizens who are pensioners',  'pensioners in general', or are you referring solely to 'expat pensioners?'

[CapraIbex]

20 hours ago, YaDongImproved said:

They want to cut loopholes, not for foreigners, for Thai people. They know most foreigners pay taxes. 

They (RD) indeed cut the "one-year-grace" loophole for anybody remitting funds to Thailand! The RD is not interested about anybody's financial affairs in foreign countries. 

10 hours ago, YaDongImproved said:

They will never touch that in Thailand. They never did, and will never do. They are not that stupid.

Again, the RD is not interested about anybody's financial affairs in foreign countries - they never have and probably never will but with the increasing digital banking co-operation of other countries may access pertinent information concerning the remittance. As it stands now, the RD will be focusing on the amount of money brought into Thailand.

"People residing in Thailand for more than 180 days per tax year are supposed to file a tax return and declare their assessable income. Just because the Thai tax authorities didn't press the issue does not mean that retirees are exempt."

[Mike Lister]

3 minutes ago, CapraIbex said:

They (RD) indeed cut the "one-year-grace" loophole for anybody remitting funds to Thailand! The RD is not interested about anybody's financial affairs in foreign countries. 

Again, the RD is not interested about anybody's financial affairs in foreign countries - they never have and probably never will but with the increasing digital banking co-operation of other countries may access pertinent information concerning the remittance. As it stands now, the RD will be focusing on the amount of money brought into Thailand.

"People residing in Thailand for more than 180 days per tax year are supposed to file a tax return and declare their assessable income. Just because the Thai tax authorities didn't press the issue does not mean that retirees are exempt."

Very much agreed. And all income is likely to be treated equally, there is no reason why a certain class off assessible income is going to be excluded, just because it involves retirees.

[Yumthai]

6 hours ago, digital said:

What's to stop you transferring in funds from abroad declared as a gift and then that gift being gifted back to you, anything?
Husband > wife (or whoever) > Husband

 

As stated by Thai law:

- You have the right to gift (wherever it comes from) your wife up to 20M THB per calendar year tax-free in Thailand (Tax may arise for the gifter from the country where the gift is originated though).

- Your wife has the right to gift (wherever it comes from) you up to 20M THB per calendar year tax-free in Thailand.

- There is no law/rule stating that a gift gifted back to the gifter becomes assessable income and, as such, has to be taxed.

 

[jerrymahoney]

2 hours ago, Yumthai said:

You have the right to gift (wherever it comes from) your wife up to 20M THB per calendar year tax-free in Thailand 

Can you find one instance of any reputable Thai-based accountancy or tax law firm that the above 'wherever it comes from' i.e. tax-free gift directly from a foreign source has ever happened since the gift tax went into effect in  FEB 2016?

 

(...or as I have written already as regards the above topic at the recent AMCHAM conference)

 

To which the answer to that query was NOT:

 

Foreign sourced tax-free gifts up to 20 million baht as maintenance to spouse? You Betcha. We do that for our mega-wealthy tax clients all the time. Beats paying 35% tax on that 5 - 20 million baht of the gift component. Been that way since FEB 2016.

 

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/?do=findComment&comment=18559204

 

[Mike Lister]

2 hours ago, Yumthai said:

 

As stated by Thai law:

- You have the right to gift (wherever it comes from) your wife up to 20M THB per calendar year tax-free in Thailand (Tax may arise for the gifter from the country where the gift is originated though).

- Your wife has the right to gift (wherever it comes from) you up to 20M THB per calendar year tax-free in Thailand.

- There is no law/rule stating that a gift gifted back to the gifter becomes assessable income and, as such, has to be taxed.

 

A back to back gift scenario such as you've described is almost certainly going to come under scrutiny. I would be very surprised if it was not found to be evasion since the purpose of the gift is solely to evade tax, which is of course a topic that may not be discussed here.

 

 

[Yumthai]

2 hours ago, jerrymahoney said:

Can you find one instance of any reputable Thai-based accountancy or tax law firm that the above 'wherever it comes from' i.e. tax-free gift directly from a foreign source has ever happened since the gift tax went into effect in  FEB 2016?

 

The interpretation of any accountancy or tax law firm remains an interpretation of the law.

 

I turn the question around: Can you find one instance in the Thai law that clearly states gift law is only related to gifts within Thailand and gifts coming from foreign sources are taxable?

 

What matters is TRD point of view, and they are supposed to strictly apply what is written in the law, not what isn't.

 

[Yumthai]

3 hours ago, Mike Lister said:

A back to back gift scenario such as you've described is almost certainly going to come under scrutiny. I would be very surprised if it was not found to be evasion since the purpose of the gift is solely to evade tax, which is of course a topic that may not be discussed here.

 

Are you saying that once a spouse has gifted his/her partner, the said partner can't gift his/her spouse anymore?

Is there a waiting period? Should the partner wait for one week/month/year/decade before gifting again? Should they divorce and marry again?

 

All this need way more clarity. There isn't. As for now, the law would have to be amended regarding "gifting back" in order to be enforced.

 

Indeed, if you gift 100K to your spouse and she gifts you back 100K the next day, multiple times a year it will be clear and obvious that you want to use a tax loophole. Anyway, no need to gift back 100% of the amount right away, also money can be used to pay for stuff/services etc. Prerequisites: you trust your spouse.