Thai national tax liability on incoming foreign transfers

[SmokeandIce]

What is the tax liability for a Thai citizen when receiving money from overseas ? 

[CharlieH]

MOVED to Finance forum, numerous threads on this topic.

[norbra]

4 minutes ago, SmokeandIce said:

What is the tax liability for a Thai citizen when receiving money from overseas ? 

1st 150,000thb is tax free

[UWEB]

17 minutes ago, SmokeandIce said:

What is the tax liability for a Thai citizen when receiving money from overseas ? 

Same like for Foreigners.

[proton]

If it's a 'gift' 20 million baht a year!

[foreverlomsak]

41 minutes ago, SmokeandIce said:

What is the tax liability for a Thai citizen when receiving money from overseas ? 

Like asking how long is a piece of string, depends on current income, allowances and deductions, how much is to be received (is it a Gift or salary from abroad) to name but a few of the items that will effect the treatment.

[JBChiangRai]

46 minutes ago, proton said:

If it's a 'gift' 20 million baht a year!

if it’s a gift 10 million baht, double that if you are husband and wife or parent and child.

 

However, for no tax to be due, it is important that you never benefit from the gift, which means if you are closely related, then the recipient needs to be able to prove where the money was spent, and none of it went back to the giver.

[proton]

1 hour ago, JBChiangRai said:

if it’s a gift 10 million baht, double that if you are husband and wife or parent and child.

 

However, for no tax to be due, it is important that you never benefit from the gift, which means if you are closely related, then the recipient needs to be able to prove where the money was spent, and none of it went back to the giver.

 

So if spent on a car or house for her that's OK, it's impossible to prove it's been mispent

[JBChiangRai]

9 minutes ago, proton said:

 

So if spent on a car or house for her that's OK, it's impossible to prove it's been mispent

if you sent the money from your home country to her bank and she bought a house and car, that is fine. But she cannot give you any of the money and you have to pay your own way not have her pay for everything.

 

In any event, you both have to sign at the Land office to say it’s her money and therefore her house and that you have no interest in it, this is normal anyway I believe.

[Mike Lister]

It depends on the relationship of the person who receives the money to the person sent it.

 

If you say it is a Gift, the rules below apply. Beyond the Gift Tax rules is the tax guide which you may want to read.

 

If the recipient treats the funds as income, standard Personal Income Tax rules apply and these are listed in the document below.

 

GIFT TAX 

 

60) "PIT is levied on gifts given by persons who are still alive. The tax is collected on the assets or the amount given to parents, ascendants, descendants, spouse, or others based on the value of the gift that exceeds a prescribed threshold, which depends on the type of gift and donor. Assets or amounts given that do not exceed the threshold are exempt from tax.

 

61) The following gifts are exempt from PIT:

 

a) Income derived by a parent 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 THB 20 million throughout a tax year in respect of each child.

 

b) Maintenance income or gifts from ascendants, descendants, or spouse, in the amount not exceeding THB 20 million throughout a tax year.

 

c) Maintenance income derived under a moral obligation or gifts made in a ceremony or on occasions in accordance with established custom from persons who are not ascendants, descendants, or spouse, in the amount not exceeding THB 10 million throughout a tax year.

 

d) Income from gifts in the case where the person who receives the gifts will use them for religious, educational, or public benefit purposes according to the intention of the donors under the criteria and conditions referred to in the Ministerial Regulations.

 

62) Gifts in excess of the above thresholds will be subject to PIT at the rate of 5% and will not need to be included together with other income when computing the annual PIT liability.

 

63) For ascendants/dependants the threshold is THB 20 mill, nor non-ascendants and dependants, it's THB 10 mill".

 

https://taxsummaries.pwc.com/thailand/individual/income-determination

 

64) Note: Because Gift Tax is predominantly a domain of the wealthy and depends to a large extent on local practise, there is a shortage of confirmed information on this subject. One field of thought is that Gift Tax cannot be used to escape Thai tax by Gifting untaxed money from overseas. On the other hand, many Western countries, including the UK, do not tax gifts from overseas. Members wishing to exercise this option should seek qualified advice before using this option to Gift untaxed funds.

 

65) Two additional points on this subject are: 1) Funds that are gifted, must be for the use of the person to whom they are gifted. 2) Gifts can be revoked later and reclaimed, under specific circumstances, such as if the receiver of the gift defames the Gifter or fails to take care of their serious medical needs. Issues arise here when the receiver is the spouse of the gifter and under marital law, the gift is regarded as conjugal property. Until this becomes more clear, it is critical that anyone wishing to use Gift Tax, seeks professional advice.

 

 

 

[Rimmer]

A misleading / unattributed troll post and reply has been removed

[JBChiangRai]

Let me explain what I will do regarding tax free gifts.  I am single, but have 2 adopted daughters. I have a moral obligation to look after them.

 

Instead of giving them a monthly allowance, paying their university degrees, buying houses for them and buying them their cars.

 

I will gift them once a year transferring from the uk to their Thai banks.

 

They can pay all those expenses themselves, the cars they have which are registered in my name, they can buy off me, and I will transfer them into their names, they can pay their own university fees, and their own living expenses at university. There is also a house I bought for them at university, I will take advice on the money being a loan for them to repay.

[loong]

15 hours ago, JBChiangRai said:

if you sent the money from your home country to her bank and she bought a house and car, that is fine. But she cannot give you any of the money and you have to pay your own way not have her pay for everything.

 

In any event, you both have to sign at the Land office to say it’s her money and therefore her house and that you have no interest in it, this is normal anyway I believe.

Unless things have changed, I believe that you only have to sign this declaration if you are married to each other.

[Skeptic7]

18 hours ago, proton said:

If it's a 'gift' 20 million baht a year!

Supposedly correct, if married...

 

For a gift received by a person who is an ascendant, a descendant or a spouse

Subject to tax on the amount of the gift received in excess of 20 million baht in a tax year.

 

If not married, B10 million per year...

 

For a gift received by a person who is not an ascendant, descendant or spouse on occasions of tradition or custom

Subject to tax on the amount of the gift received in excess of 10 million baht in a tax year.

 

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

[Troy Tempest]

So does that mean if you send your girlfriend a gift not exceeding 10 million she will not have to pay tax on it and theoretically she can give you it back in small amounts as pocket money thereby negating any tax liability to yourself for money received from abroad?

 

I am sure you know where I am coming from?

 

 

 

[Mike Lister]

1 minute ago, Troy Tempest said:

So does that mean if you send your girlfriend a gift not exceeding 10 million she will not have to pay tax on it and theoretically she can give you it back in small amounts as pocket money thereby negating any tax liability to yourself for money received from abroad?

 

I am sure you know where I am coming from?

Where you're coming from is enquiring about tax evasion so please don't go there.

 

But to answer your question:

 

65) Two additional points on this subject are: 1) Funds that are gifted, must be for the use of the person to whom they are gifted.

 

If your girlfriend does as you suggest, that once again is tax evasion, the penalties for which in Thailand are draconian.

 

 

[Troy Tempest]

3 minutes ago, Mike Lister said:

Where you're coming from is enquiring about tax evasion so please don't go there.

 

But to answer your question:

 

65) Two additional points on this subject are: 1) Funds that are gifted, must be for the use of the person to whom they are gifted.

 

If your girlfriend does as you suggest, that once again is tax evasion, the penalties for which in Thailand are draconian.

 

 

 

Thanks Mike!

 

 

[MikePBrown]

Hi I have a question which I think is relevant to this thread. If an expat Thai  tax resident sends a gift ( money transfer) to someone in Thailand from abroad and if the Thai tax authorities some how know this is the situation, wouldn’t the tax authorities consider this as taxable income of the expat but an income exempt gift for the recipient. @mike lister do you have a view on this? Thks

[JBChiangRai]

8 minutes ago, MikePBrown said:

Hi I have a question which I think is relevant to this thread. If an expat Thai  tax resident sends a gift ( money transfer) to someone in Thailand from abroad and if the Thai tax authorities some how know this is the situation, wouldn’t the tax authorities consider this as taxable income of the expat but an income exempt gift for the recipient. @mike lister do you have a view on this? Thks

I am sure Mike will answer, but this my take.

 

Income is only taxable when you bring it here.

 

When you send money from overseas to a third party, the tax liabilities are defined for you in the remitting country and the recipient in the receiving country.

 

You have to send it direct to the recipient and not via your Thai bank account.

 

You must gain no benefit from it here.

[Mike Lister]

45 minutes ago, MikePBrown said:

Hi I have a question which I think is relevant to this thread. If an expat Thai  tax resident sends a gift ( money transfer) to someone in Thailand from abroad and if the Thai tax authorities some how know this is the situation, wouldn’t the tax authorities consider this as taxable income of the expat but an income exempt gift for the recipient. @mike lister do you have a view on this? Thks

It would be taxable on the receiver, the Thai Revenue doesn't care who sent it.

[Toby1947]

On 5/2/2024 at 8:45 AM, JBChiangRai said:

if you sent the money from your home country to her bank and she bought a house and car, that is fine. But she cannot give you any of the money and you have to pay your own way not have her pay for everything.

 

In any event, you both have to sign at the Land office to say it’s her money and therefore her house and that you have no interest in it, this is normal anyway I believe.

And some mugs will actually do this, quoting " she lubs me " 🤣😂🤣

[Dogmatix]

8 hours ago, Troy Tempest said:

So does that mean if you send your girlfriend a gift not exceeding 10 million she will not have to pay tax on it and theoretically she can give you it back in small amounts as pocket money thereby negating any tax liability to yourself for money received from abroad?

 

I am sure you know where I am coming from?

 

I think the problem is that the RD seems to give far less leeway on gifts that are not to spouses, children or parents.  The wording sounds broad, "Maintenance income derived under a moral obligation or gifts made in a ceremony or on occasions in accordance with established custom..."  but there is a RD case study where the RD disallowed the payment of "maintenance" by a farang overseas to his gf in Thailand on the grounds that that they were not officially married. If they had been married, the implication is that it would have been accepted. There are other cases when a lower court disallowed a gift to a relative who was not a spouse, parent or child on the grounds that it was not made on the occasion of a ceremony or occasion (such as marriage).  

 

So I would avoid gifts to a partner to whom you are not legally married to completely to be safe.  For gifts to spouses, children and parents, there is no case material that I have been able to find giving any indication of how the RD, in the total absence of any detailed regulations, might check that the giftor has not be able to benefit from the gift. This would be particularly difficult in the case of spouses who typically have comingled funds and whose assets acquired after marriage are automatically deemed common conjugal assets under the Civil and Commercial Code, regardless of which spouse's name they are in. Perhaps some cases will emerge in future.

Gift Tax Case RD KK0702-530 11 Feb 2023.docx

[john donson]

thailand, so weird... can gift 10 million but if I want to buy a condo now with my own money, I will be taxed 25-35% on my savings, which in my stupid country means 20 years at 1-2% gross interest... after 2008 the local banks gave 0,01% interest...

[Lorry]

To add to dogmatix post: if you want to send gifts to your TGF, at least choose an "occasion"  as required by the RC.

In farang culture,  occasions where gifts are customary are birthday and Christmas.

In Thai culture, Jan 1st.

[Freddy42OZ]

On 5/2/2024 at 2:52 PM, Mike Lister said:

b) Maintenance income or gifts from ascendants, descendants, or spouse, in the amount not exceeding THB 20 million throughout a tax year.

 

 

Does this include what my mother used to call 'housekeeping money'. ie the money my father gave her to pay our maids, the gardener and our drivers and all other household expenses. 
What about the money you give your wife so she can buy anything she wants and can make sure the kids have whatever they need or want.

 

[Mike Lister]

2 hours ago, Freddy42OZ said:

 

 

Does this include what my mother used to call 'housekeeping money'. ie the money my father gave her to pay our maids, the gardener and our drivers and all other household expenses. 
What about the money you give your wife so she can buy anything she wants and can make sure the kids have whatever they need or want.

 

Yes. A gift is either that or it isn't, what it is pent on makes no difference.

[Jonathan Swift]

On 5/2/2024 at 12:18 PM, SmokeandIce said:

What is the tax liability for a Thai citizen when receiving money from overseas ? 

Why don't you go online and actually find out from the tax department rather than cluelessly insinuate? Or is that too much work and not as much fun as whining about how unequal and unfair it is here?

[Jonathan Swift]

The question is, how are they going to know what's in your bank account? Will banks be required to report all transfers to the tax dept? I think I will ask my bank about that. 

[Mike Lister]

2 minutes ago, Jonathan Swift said:

The question is, how are they going to know what's in your bank account? Will banks be required to report all transfers to the tax dept? I think I will ask my bank about that. 

Banks already report interest paid and tax with held, plus all international transfers are communicated to BOT as a currency control. Whenever I've filed tax return here, I only have to enter details of one of my accounts into the TRD system and ALL my accounts show up where tax has been with held.

[JBChiangRai]

1 hour ago, Jonathan Swift said:

The question is, how are they going to know what's in your bank account? Will banks be required to report all transfers to the tax dept? I think I will ask my bank about that. 

When I applied for the Elite Visa, they asked me about large withdrawals made in Australia with my Bangkok Bank Debit Card.

 

I never disclosed that account, I think you can take it as read that they know all your banking transactions.