Legal Tax minimization for foreigners

[KhunLA]

25 minutes ago, Moonlover said:

Being what I imagine is 'Mr. Average Income' for a pensioner at around 800,000 THB per year, using a spreadsheet and the figures kindly provided by @Mike Lister in (yet another) thread on this subject, I was able to calculate that I would be liable for around 12,000 THB P/A in tax to  the Thai RD. Not a sum I'm going to panic over. I'm more bothered about having to do yet more paperwork rather than the sum involved.

 

Personally though I'm not bothered at all. I'm still holding to the one statement that we have all read regarding this matter:

 

'Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand'.

 

Thai Enquirer Sept 18th 2023

 

I calculated we would have 600k worth of deduction, once daughter drops off as a dependent.   I wish my pension was enough to get taxed, at least a wee bit ...    Depending on exchange rate, it barely breaks the yearly 120k mark 😭

 

My pension is a pittance, but since we lowered our mandatory monthly bills to basically food & water, its actually enough to live on, if had to.   Owning house & EVs, (car, MB & ebike), along with Solar to energize all eliminates most bills others have.  The garden after 1 year is even starting to supply some nice fruits & veggies.  Now if I only had some hens & a fishing rod.

[mokwit]

3 hours ago, Ralf001 said:

 

Would one be a foreigner at home ?

If you are English, these days, yes.

[Mike Lister]

14 minutes ago, KhunLA said:

I calculated we would have 600k worth of deduction, once daughter drops off as a dependent.   I wish my pension was enough to get taxed, at least a wee bit ...    Depending on exchange rate, it barely breaks the yearly 120k mark 😭

 

My pension is a pittance, but since we lowered our mandatory monthly bills to basically food & water, its actually enough to live on, if had to.   Owning house & EVs, (car, MB & ebike), along with Solar to energize all eliminates most bills others have.  

That's sort of what I thought! Your income is assessable, that means it has to be declared on a tax return, if it's over 120k. The tax return process assesses whether the income you've declared is taxable or not, in your case it isn't. But you can't do what you've you've done and say my deduction's and allowances mean I wont pay tax so I'll skip the tax filing part. You will basically be filing a nill return which has been the topic of much debate of late. The bottom line at present, until we hear more, is that the RD require anyone with assessible income over 120k, to file a return. The other point to make is that your SSc income is tax exempt in Thailand, as is mine. When the new tax form is finished it will almost certainly contain a section where you can put excluded income, that means the amount doesn't even enter into the tax calculation process.

 

EDIT TO ADD: The above having been said, there is no penalty due when no tax is owed.

[KhunLA]

31 minutes ago, Mike Lister said:

That's sort of what I thought! Your income is assessable, that means it has to be declared on a tax return, if it's over 120k. The tax return process assesses whether the income you've declared is taxable or not, in your case it isn't. But you can't do what you've you've done and say my deduction's and allowances mean I wont pay tax so I'll skip the tax filing part. You will basically be filing a nill return which has been the topic of much debate of late. The bottom line at present, until we hear more, is that the RD require anyone with assessible income over 120k, to file a return. The other point to make is that your SSc income is tax exempt in Thailand, as is mine. When the new tax form is finished it will almost certainly contain a section where you can put excluded income, that means the amount doesn't even enter into the tax calculation process.

 

EDIT TO ADD: The above having been said, there is no penalty due when no tax is owed.

Noted, although bringing in that pension, is voluntary.   Skip a month or two, and it would probably be under the 120k.   I don't need the pension, as SS is more than enough to meet the 65k monthly income for IMM.  

 

We bank half my SS, so when I stated on that other thread 'how much baht you got', that we have a bit more than enough, that was a bit of an understatement.  Fortunate enough to still live a pretty comfy lifestyle.  With deductions, and if all was taxable income, we'd still only be in the 20-25% tax liability bracket.   Beats the 40% (fed + state) that I got hit with in the USA a few times.

 

I like the very fair flat tax of VAT here that most pay.   USA could learn a lesson in fairness ... topic for another thread.

 

Spend it people, you can't take it with you.... tick tock

[CharlieKo]

48 minutes ago, Mike Lister said:

But you can't do what you've you've done and say my deduction's and allowances mean I wont pay tax so I'll skip the tax filing part.

With respect unless you are an accountant or Lawyer registered here in Thailand, you don't know that for sure!

 

For one, there are many Thai farmers who earn more than the 120K per year who have never filed a tax return. Even if after deductions they don't have to pay one baht in tax.  

 

Second, I know of a Thai person working for a US company here in Thailand, who was contacted about paying taxes here in Thailand. Once he showed he paid US income tax on his earnings. the RD accepted his situation. NOTE that he was contacted by the RD. 

 

Thirdly, As I no longer have an income, I am not expected to file a tax return in the UK, all I get is the UK state pension. My point being, that I doubt very much that the RD want expats to be filing tax returns when there is no tax due. I don't know how many expats live here in Thailand, but if we say it's about 300,000. That is an awful amount of work the RD have to do for no tax due! Again If HMRC don't want to be bothered with tax returns where no tax is due, Why would the Thai RD be bothered to waste their time doing that? Note that expats working here in Thailand and have a tax id are probably already in the system so this doesn't relate to them, Just expats who have a pension and savings.

 

I shall wait to be contacted by the RD if they think I must pay tax on my pension. As I think it quite reasonable that if I must pay taxes here in Thailand, That the RD contact me first. I think this is a reasonable approach.  

[Mike Lister]

18 hours ago, CharlieKo said:

With respect unless you are an accountant or Lawyer registered here in Thailand, you don't know that for sure!

 

For one, there are many Thai farmers who earn more than the 120K per year who have never filed a tax return. Even if after deductions they don't have to pay one baht in tax.  

 

Second, I know of a Thai person working for a US company here in Thailand, who was contacted about paying taxes here in Thailand. Once he showed he paid US income tax on his earnings. the RD accepted his situation. NOTE that he was contacted by the RD. 

 

Thirdly, As I no longer have an income, I am not expected to file a tax return in the UK, all I get is the UK state pension. My point being, that I doubt very much that the RD want expats to be filing tax returns when there is no tax due. I don't know how many expats live here in Thailand, but if we say it's about 300,000. That is an awful amount of work the RD have to do for no tax due! Again If HMRC don't want to be bothered with tax returns where no tax is due, Why would the Thai RD be bothered to waste their time doing that? Note that expats working here in Thailand and have a tax id are probably already in the system so this doesn't relate to them, Just expats who have a pension and savings.

 

I shall wait to be contacted by the RD if they think I must pay tax on my pension. As I think it quite reasonable that if I must pay taxes here in Thailand, That the RD contact me first. I think this is a reasonable approach.  

RD rules are very clear regarding the criteria for who must file a tax return and what the income threshold is. Just because someone doesn't owe tax, doesn't over ride those rules. I agree it makes no sense to file a nill return, but that's not the point. And the fact lots of. Farmers don't file either, also doesn't over ride the rule. But as also said, as and when the RD makes things more clear, this point may become moot.

[zlodnick]

My wife is a dual citizen, (US THAI), and a USSS recipient.

 

I read somewhere that USSS is tax exempt, EXCEPT, if the recipient is a Thai citizen.

 

Is there somewhere I can see if this is true?

[CharlieKo]

12 minutes ago, Mike Lister said:

RD rules are very clear regarding the criteria for who must file a tax return and what the earnings threshold is. Just because someone doesn't owe tax, doesn't over ride those rules. I agree it makes no sense to file a nill return, but that's not the point. And the fact lots of. Farmers don't file either, also doesn't over ride the rule. But as also said, as and when the RD makes things more clear, this point may become moot.

I appreciate rules are rules. The point is the RD have enough on their hands getting Thai people to file tax returns. As I am sure farmers not filing tax returns is just the tip of the iceberg. There being many Thai's who earn more than 120K per year who work under the radar!

 

That is not to excuse anything. It is a shame that the RD haven't come out with clear information about the new tax rules. I think they have their work cut out for themselves, just dealing with Thai nationals. 

 

It may very well be that having submitted a Nil tax return once, we will be informed that we do not need to submit future returns for nil tax due. But until the Thai RD give clear advice on the subject. I personally think it's best not to rush into filing a return. Not to mention that there are probably many expats who do not have a Thai tax number, and may not even be aware of these new rules. The RD would need to contact those they think should be paying taxes. 

 

This isn't about avoiding paying tax. But at the same time I'm not volunteering financial info unless I am asked to by the RD. Besides with the new global reporting of large money transfers, it shouldn't be a problem for the RD to know who should be paying taxes on inbound funds.

[sirineou]

As with my now famous thread on how to fly a plane , 

" first take of, and avoid crashing until you land"

I think you will all find my advice in  limiting you tax liability invaluable.  

"minimise your taxable income, and increase your non taxable assets" 

No! no need to thank me , your admiration is enough reward for me.

 

Moderators please pin this post for reference by future generations

Thank you.

[Presnock]

1 hour ago, zlodnick said:

My wife is a dual citizen, (US THAI), and a USSS recipient.

 

I read somewhere that USSS is tax exempt, EXCEPT, if the recipient is a Thai citizen.

 

Is there somewhere I can see if this is true?

read the DTA US with Thailand Article 20 and 21 spell it clearly.  Even if a person (Thai American) has only been paying US taxes, the articles state that only the US can tax US govt payouts unless the recipient is a Thai citizen and resident in Thailand.  She can always file a form with the IRS to stop them deducting taxes on her SS and/or pension - BLV it is form W4.  Read the DTA, it is in English and in Thai also

[retarius]

4 hours ago, smokie36 said:

 

Unless you're using Chase or the like isn't this going to cost 220 Baht per transaction?

 

Not very attractive proposition to me.

I'm going back to the US to open a Chase account soon. You seem familiar with them, are their rates OK?

I'm not really concerned with individual cost items, but more with the overall net result....so a composite of rate, total costs and total amount transferred netting out at the best deal. 

[retarius]

I have a question about cash brought in from outside. My understanding is that you are allowed $10,000 equivalent per trip. Would this be part of income as defined in the tax code? Since amounts below $10,000 do not need to be declared, they cannot be tracked presumably. 

[retarius]

Another different question.....gift tax is 5% as I understand it. Suppose I 'gift' my g/f (18 years together, not someone I met on Soi 6 last night) 5 million baht, and she puts the money into a joint account? Tax rate on 5 million is 25% or 40% or so (I can't remember) so a gift might be a considerable saving if the g/f doesn't run off with it. Anybody know how this would play out?

[Watchit]

1 hour ago, CharlieKo said:

 

 Not to mention that there are probably many expats who do not have a Thai tax number, 

 

 

And we won't be rushing out to get one either. 

 

Sit tight and wait for them to contact you first

[Mike Lister]

26 minutes ago, retarius said:

I have a question about cash brought in from outside. My understanding is that you are allowed $10,000 equivalent per trip. Would this be part of income as defined in the tax code? Since amounts below $10,000 do not need to be declared, they cannot be tracked presumably. 

The amount is USD 15k max, above which you are required to sign a Customs Declaration, which would be needed if you wanted to deposit it into a bank. And yes, it's income!

[CharlieKo]

9 minutes ago, Mike Lister said:

The amount is USD 15k max, above which you are required to sign a Customs Declaration, which would be needed if you wanted to deposit it into a bank. And yes, it's income!

It is not income if it is savings. 

[Mike Lister]

9 minutes ago, CharlieKo said:

It is not income if it is savings. 

It is technically income that is remitted to Thailand and is therefore regarded as assessible income. All anyone knows at that stage is that funds have been remitted to Thailand, albeit in cash and they should be assessed via a tax return filing. Subsequently, it may be deemed to be non taxable or exempt but it is supposed to be assessed first. In other words, it's ruled in, until it's ruled out. Please see the link below:

 

 

[retarius]

1 hour ago, Mike Lister said:

The amount is USD 15k max, above which you are required to sign a Customs Declaration, which would be needed if you wanted to deposit it into a bank. And yes, it's income!

Thanks. Is that $15000 per trip, or 15k per year?

How about gifting money to a girlfriend?

[topt]

11 minutes ago, retarius said:

Thanks. Is that $15000 per trip, or 15k per year?

How about gifting money to a girlfriend?

15k per trip.

Gifting - was this not extensively discussed earlier or is that in another thread?

[NanLaew]

8 hours ago, Mike Lister said:

Let me just pre-empt and reiterate that Tax Avoidance is quite legal, but if it crosses the boundary and even begins to smell like Tax Evasion, that is illegal and so we wont go there, I feel certain of that. :)

 

Thanks

 

I think that Avoidance and Evasion are way too similar, and tend to draw the same unwelcome attention. I much prefer to call my strategy Tax Mitigation.

[Foxx]

1 hour ago, retarius said:

Another different question.....gift tax is 5% as I understand it. Suppose I 'gift' my g/f (18 years together, not someone I met on Soi 6 last night) 5 million baht

 

Nothing to worry about.  Gift tax is only applicable on gifts above 10 million baht for non-relatives.

https://sherrings.com/gift-tax-law-in-thailand.html

[topt]

19 minutes ago, topt said:

Gifting - was this not extensively discussed earlier or is that in another thread?

@retarius here

https://aseannow.com/topic/1316643-my-take-on-the-new-tax-modifications/

 

[MistyBlue]

This seems an appropriate thread to raise discussion on the following scenario.

 

Looking in to the future, say one is a Thai tax resident for 2024 and 2025 but remit none of the income made overseas.  In 2026 go traveling and only stay in Thailand for 5 months (under 180 days) and in that year remit the overseas income for 2024 and 2025, no return needed in 2026 as not tax resident for that year.  Then in 2027 stay more than 180 days and become tax resident again, the unknown (to me) is whether there would there be a liability for past income remitted into the country that was made when one was a tax resident.

 

I raise this because all the information I've found so far discusses income made and remitted when resident,  but not income made when resident but remitted when non-resident.

 

Maybe one to watch unfold in the future...

[Crossy]

6 minutes ago, NanLaew said:

I think that Avoidance and Evasion are way too similar, and tend to draw the same unwelcome attention. I much prefer to call my strategy Tax Mitigation.

 

Yeah, we went through several iterations of thread title before settling on "Minimisation".

[MrMuddle]

6 hours ago, Moonlover said:

Being what I imagine is 'Mr. Average Income' for a pensioner at around 800,000 THB per year, using a spreadsheet and the figures kindly provided by @Mike Lister in (yet another) thread on this subject, I was able to calculate that I would be liable for around 12,000 THB P/A in tax to  the Thai RD. Not a sum I'm going to panic over. I'm more bothered about having to do yet more paperwork rather than the sum involved.

 

Personally though I'm not bothered at all. I'm still holding to the one statement that we have all read regarding this matter:

 

'Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand'.

 

Thai Enquirer Sept 18th 2023

 

Doesn't the UK have one of these, does this mean UK citizens who pay ANY tax, won't be liable for tax in Thailand?  I'm taxed on Savings interest in the UK. 

[CharlieKo]

14 minutes ago, MistyBlue said:

This seems an appropriate thread to raise discussion on the following scenario.

 

Looking in to the future, say one is a Thai tax resident for 2024 and 2025 but remit none of the income made overseas.  In 2026 go traveling and only stay in Thailand for 5 months (under 180 days) and in that year remit the overseas income for 2024 and 2025, no return needed in 2026 as not tax resident for that year.  Then in 2027 stay more than 180 days and become tax resident again, the unknown (to me) is whether there would there be a liability for past income remitted into the country that was made when one was a tax resident.

 

I raise this because all the information I've found so far discusses income made and remitted when resident,  but not income made when resident but remitted when non-resident.

 

Maybe one to watch unfold in the future...

I'm sure some one will correct me if I'm wrong. But only funds remitted to Thailand are taxable. This is not a tax that includes  global income. As long as you don't spend more than 180 days in the country in any tax year. Then you are not liable for tax. 

[Negita43]

I find reading all these posts quite "taxing" in themselves

[Mike Lister]

1 minute ago, MrMuddle said:

Doesn't the UK have one of these, does this mean UK citizens who pay ANY tax, won't be liable for tax in Thailand?  I'm taxed on Savings interest in the UK. 

Yes indeed we do, but everyone of them could easily say something different.

 

We are waiting currently for the Revenue Department to tell us what the rules will be in this area. As things stand presently, any savings earned before 1 January 2024, are free of Thai tax.

[Mike Lister]

1 minute ago, CharlieKo said:

I'm sure some one will correct me if I'm wrong. But only funds remitted to Thailand are taxable. This is not a tax that includes  global income.  

Correct

[Mike Lister]

Just now, Negita43 said:

I find reading all these posts quite "taxing" in themselves

How do you think I feel. :))