Legal Tax minimization for foreigners

[Ben Zioner]

5 minutes ago, Mike Lister said:

I think we've all said broadly the same things, the identity of a card holder is capable of being found out but tracing them is the exception rather the rule, at present. Whether or not an investigation into tax evasion constitutes a serous crime is not unclear, I suppose it will depend on the scale and amounts of losses.

Indeed, but one should be aware that any withdrawal made since jan 1, 2024 will leave data that can be used effectively in any tax evasion inquiry, at any time. The 20,000 you withdraw today could well cost you 60,000 in 5 years time; penalties plus 1.5% a month.

[gearbox]

19 minutes ago, Mike Lister said:

I think we've all said broadly the same things, the identity of a card holder is capable of being found out but tracing them is the exception rather the rule, at present. Whether or not an investigation into tax evasion constitutes a serous crime is not unclear, I suppose it will depend on the scale and amounts of losses.

I'm not a tax person but I've done some technology work for large overseas entities involved in these areas and know a few bits and pieces. The amount of funds transferred this way would be quite limited. I would say 500-600k baht won't raise any flags, but if you try to withdraw 1+ million and above, your own bank may lodge suspicious transactions report with the authorities in the home country. It is their judgement, but the AML legislation has a lot of requirements and the banks are getting penalised if not identifying suspicious transactions.

 

Moderation Note: removed a para advising how to evade tax.

 

[Mike Lister]

26 minutes ago, jerrymahoney said:

REDUX:

 

I agree that self-appraisal and self-assessment may be the only practical solution. But then the Thai Rev folks have to acknowledge that there will be (I will be polite) fudging of opinions as to what deductions and exemptions to which some expats claim they are entitled.

 

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/?do=findComment&comment=18605638

 

So if I want to say (to myself) that all my remittances this year are from an inheritance from my Aunt Dolores and thus not assessable for  Thai income tax purposes, does that mean I ever had to actually have an Aunt Dolores dead or living?

 

But Self Appraisal and Self Assessment is always the way the system has been here and is the way it is intended to remain, I don't know about anyone else but I never imagined for one nano second there would be anything else. It is down to tax payer to decide whether to file or not, it is also down to them to decide what to declare or not. There will not be anyone else in that decision process, UNLESS somebody decides not file or not declare, and it become apparent that they haven't when they should have. By all means keep using dear departed Aunt Delores inheritance to account for your transfers, just be prepared to prove it is so, if/when the RD asks for more details.

[Mike Lister]

Please remember to keep your comments, very much on the right side of avoidance rather than evasion, this is seriously important.

[jerrymahoney]

12 minutes ago, Mike Lister said:

By all means keep using dear departed Aunt Delores inheritance to account for your transfers, just be prepared to prove it is so, if/when the RD asks for more details.

Based mainly upon my observing the willingness of (American) expats to lie and cheat on their sworn US Embassy statements for extension of stay income affidavits (RIP) -- even when doing so would be a possible felony in the US -- it is my opinion regarding immigration and/or revenue matters that, if an expat feels he/she can cheat and get a away with it, they will.

Edited January 15 by jerrymahoney

[Mike Lister]

3 minutes ago, jerrymahoney said:

Based mainly upon my observing the willingness of (American) expats to lie and cheat on their sworn statements US Embassy statements for extension of stay income affidavits (RIP) -- even when doing so would be a possible felony in the US -- it is my opinion regarding immigration and/or revenue matters that, if an expat feels he/she can cheat and get a away with it, they will.

Everyone makes their own decisions on these things so they have nobody else to blame if it doesn't work as planned. Personally, I would not cheat on US or UK taxes because the risk vs the reward was never worth it. Similarly here in Thailand, why would a retiree or an expat married with family here, chance their future in Thailand over relatively small change. I wouldn't even consider it.

[jerrymahoney]

24 minutes ago, Mike Lister said:

Everyone makes their own decisions on these things

Some do these things because their finances are otherwise not sufficient and some just do it for sport.

 

Early on, I made the comment that -- without any Social Security or other DTA-type exemptions -- with only the deductions in the current Thai tax law, my tax bill might be about $US 100 per month. I wouldn't like it, but doable.

 

And someone came on and rightly said that, even if that amount is no big deal for you, for some retired types already marginal, that 3000 or 4000 baht per month could make a big negative difference in their life.

Edited January 15 by jerrymahoney

[Presnock]

12 hours ago, Mike Lister said:

XE is part of Euronet, the third largest currency exchange organization  in the world, I think we have to give them some credit for their expertise. But I agree the XE statement alone is not sufficient to guarantee correctness, which is why I asked if you have proof/links to the contrary rather than just a subjective view.

actually, of the 138 countries that signed the OECD agreement, many are probably looking at THEIR tax programs right now and we might see even more changes from our own country.  Is this progress?  positive or negative?

[Presnock]

17 minutes ago, jerrymahoney said:

Some do these things because their finances are otherwise not sufficient and some just do it for sport.

but on the other hand, just like one of the reasons for the OECD agreement is the willingness due to GREED or HONESTY of the individual.  Just look at the US politicians - a true bunch of GREEDY individuals.  I would never consider not filing US taxes every year and have done so for over

50 years, some were tax nil as in a war zone too but still had to file!  Because so many people do use any means not to file including false information, it in the end causes effects that affect the rest of the folks - this is one of the perfect examples of such activity in my opinion.

[jerrymahoney]

2 minutes ago, Presnock said:

information, it in the end causes effects that affect the rest of the folks - this is one of the perfect examples of such activity in my opinion.

My comment earlier today:

 

But then the Thai Rev folks have to acknowledge that there will be (I will be polite) fudging of opinions as to what deductions and exemptions to which some expats claim they are entitled.

[Presnock]

2 minutes ago, jerrymahoney said:

My comment earlier today:

 

But then the Thai Rev folks have to acknowledge that there will be (I will be polite) fudging of opinions as to what deductions and exemptions to which some expats claim they are entitled.

Then, not long after that, new regulations on providing proof by all for any deductions/unassessible funds...though that may come at the beginning next March too.  

[jerrymahoney]

Some say the trick is now to stay under the RD radar . I use the 65K+ per month FTT deposit for extension of stay. I am already a big hit on the RD radar screen.

 

...So I already have the proof documents for at least that stated income.

Edited January 15 by jerrymahoney

[Old Croc]

In 13 years here I don't know of any Thai who files a tax return.

Obviously, I haven't been taking a poll, but in discussions the answer is always - don't do.

Their salaries are generally between 10 and 30k and they all consider they don't earn enough to have to file. My wife has always worked but doesn't even know how to lodge a form. 

We now live in a remote farming community and, since this came up, I've asked the wife to check with others in the village if they lodge. No one does. All work is casual, piecemeal, or bartered and rarely recorded. They are more likely to be collecting funds from the government for various reasons than giving any.

As far as I'm concerned, I moved sufficient funds last year (last month) to cover this year, so no return needed in 2025. I can't see myself lodging a nil return unless somehow Immi gets involved and forces the issue. This is not the West where there is little chance of ducking out of the obligation.  I am retired, not a working expat with a big company in Bangkok and will follow the lead of a large proportion of the locals and not bother with tax, unless/until they insist. 

I expect the RD will have sorted out the rules for us lot by 2025, and I will play the "minimization" game with them at that stage.

[Ralf001]

1 minute ago, Old Croc said:

In 13 years here I don't know of any Thai who files a tax return.

Obviously, I haven't been taking a poll, but in discussions the answer is always - don't do.

Their salaries are generally between 10 and 30k and they all consider they don't earn enough to have to file. My wife has always worked but doesn't even know how to lodge a form. 

 

 

I know plenty that lodge tax returns.... they have little choice as it is done via the HR and Finance departments in the companies they work for.

[Old Croc]

1 minute ago, Ralf001 said:

 

I know plenty that lodge tax returns.... they have little choice as it is done via the HR and Finance departments in the companies they work for.

Obviously.

I wasn't suggesting no one pays tax here, just highlighting the huge numbers who don't and expressing a wish to be treated like all other tax residents without copping special falang only treatment.

[Ralf001]

4 minutes ago, Old Croc said:

Obviously.

I wasn't suggesting no one pays tax here, just highlighting the huge numbers who don't and expressing a wish to be treated like all other tax residents without copping special falang only treatment.

 

People earning over 10k a month should be lodging a return.

 

Wonder what the repercussion are for not doing so ?

[Old Croc]

Just now, Ralf001 said:

 

People earning over 10k a month should be lodging a return.

 

Wonder what the repercussion are for not doing so ?

Nothing, apparently.

[jerrymahoney]

7 minutes ago, Old Croc said:

Obviously.

I wasn't suggesting no one pays tax here, just highlighting the huge numbers who don't and expressing a wish to be treated like all other tax residents without copping special falang only treatment.

The big difference is that the locals don't have to deal with Immigration. Then again, some non-Thais, for one reason or another, don't either.

[Old Croc]

1 minute ago, jerrymahoney said:

The big difference is that the locals don't have to deal with Immigration. Then again, some non-Thais, for one reason or another, don't either.

Yes, as I stated above, Immigration's role, if any, is a big unknown.

[jerrymahoney]

16 minutes ago, Old Croc said:

Yes, as I stated above, Immigration's role, if any, is a big unknown.

Yes. I saw your comment above. But that all becomes a function of, not just what revenue does, but how any expat deals with or somehow avoids dealing with immigration.

[FritsSikkink]

On 1/14/2024 at 9:04 AM, KhunLA said:

Keep the 400k or 800k in the bank for IMM, and bring in your living expenses via ATM.  Not sure how they would tax that, as hard to tell if you're an expat or tourist.   

Very easy to see on what type of visa you are here.

[1FinickyOne]

17 hours ago, Mike Lister said:

That is correct. And anyway, this is one of those wait and see what the RD announces issues, a known unknown

I am confused... there is a big difference between money earned [all of mine is taxed but sometimes at different rates as it is a long standing account... and money brought into the country??

 

Which is taxed and how much? 

 

If I have an account that combines all of my earned money, who would know which money has been spent? I have capital gains from stock trading, dividend income, social security income - 

 

ps - my interest earnings on my bank account here is also figured into my USA taxes... 

 

How does this all get sorted out?

[Mike Lister]

4 hours ago, 1FinickyOne said:

I am confused... there is a big difference between money earned [all of mine is taxed but sometimes at different rates as it is a long standing account... and money brought into the country??

 

Which is taxed and how much? 

 

If I have an account that combines all of my earned money, who would know which money has been spent? I have capital gains from stock trading, dividend income, social security income - 

 

ps - my interest earnings on my bank account here is also figured into my USA taxes... 

 

How does this all get sorted out?

The existing tax reporting system is geared towards Thai's who derive their income from onshore, it does not extensively cater to those with overseas earnings that may or may not be income and those that are subject to Dual Tax Agreements.

 

The current forms and rules are being redesigned, as soon as we have sight of them, we will post them.

 

In the meantime, the assumption is that the RD will consider many if not most overseas inbound funds transfers to be income, unless and until they are shown to be otherwise. This means you will have to complete a Thai tax return, assuming your income is above a low predefined level (120k Baht per year). At that point you will have some choices. You must declare anything that is actually income and explain anything that is not, eg savings, either by not declaring it because the money is exempt by RD definition or because a Tax Treaty says it is.   

[UWEB]

6 hours ago, Old Croc said:

Obviously.

I wasn't suggesting no one pays tax here, just highlighting the huge numbers who don't and expressing a wish to be treated like all other tax residents without copping special falang only treatment.

Only 11 million out of a population of 72 million are registered in the Thai Tax System, and out of this 11 million only 3.3 million are filing a Tax return.

[Mike Lister]

8 minutes ago, UWEB said:

Only 11 million out of a population of 72 million are registered in the Thai Tax System, and out of this 11 million only 3.3 million are filing a Tax return.

The tax net comprises about 11 million people, those are people who file a tax return. Of that number, around 6 million people pay tax but only about 4% pay via a PAYE equivalent. Self employed tax status is the most common form of tax filer, these are people who work cash in hand and those who make and sell things and are able to manipulate their books, before a tax return is filed.

[treetops]

17 hours ago, Foresttrump said:

I am not a tax resident of Thailand at present but will be in May 2025.

 

Can you explain why that is the case?  My understanding is the requirement is 180(?) days in a calendar year.  By May 2025 there will only have been 151 days elapsed so you can't know at that point, or is there another reason you chose that date?

[Mike Lister]

10 hours ago, Ralf001 said:

 

People earning over 10k a month should be lodging a return.

 

Wonder what the repercussion are for not doing so ?

If no tax is owed, there are no penalties for not filing.

[Foresttrump]

10 hours ago, treetops said:

 

Can you explain why that is the case?  My understanding is the requirement is 180(?) days in a calendar year.  By May 2025 there will only have been 151 days elapsed so you can't know at that point, or is there another reason you chose that date?

 

 

Sorry treetops, I may have confused everyone including myself.  I currently visit Thailand for less than the required 179 days to be a resident for tax purposes, I will be retiring to Thailand in May 2025 full time, so will become a tax resident thereafter.  My concern is not my tax circumstances but the money that I send home to Thailand to my partner, obviously it's not income to her but it is from oversea's and doe's this make it taxable.  Thanks for your interest. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[mudcat]

23 hours ago, Presnock said:

see articles 20 and 21 of the DTA between USA and Thailand

Here is single document with the Thai/U.S. Tax Convention (DTA) interleaved with the U.S. Treasury Departments 'Technical Explanation).

This should save some scrolling back and forth and allows one to highlight provisions that apply to your situation. Articles covered are 1 (Personal Scope), 20 (Pensions and Social Security), and 21 (Government Service).  

 

ARTICLE 1 Personal Scope, 20-21 Pensions and Social Security Payments.docx

[EVENKEEL]

23 hours ago, Ben Zioner said:

Indeed, but one should be aware that any withdrawal made since jan 1, 2024 will leave data that can be used effectively in any tax evasion inquiry, at any time. The 20,000 you withdraw today could well cost you 60,000 in 5 years time; penalties plus 1.5% a month.

So, you're saying that the Thai authorities will take the info from millions upon millions of foreign ATM swipes at Thai banks and my name will pop up as someone who hasn't reported the transaction as income. Really?????