Legal Strategies to Reduce Thai Tax

[gamb00ler]

1 hour ago, jmd8800 said:

Late to the party here, but are you saying that private pensions paid from work and recorded with the USA IRS with 1099=R is taxable in Thailand if I am in the country more than 180 days? I also have Social Security. After reading this I am thinking my SS won't be taxed but my 2 private pensions will. Since I am transferring 65K a month for Immigration purposes, this might be a pretty big deal.

I would recommend that you set up your US based accounts so that you have documentation that all (or as much as is possible) of the transfers to Thailand are funded by SS benefits.  Doing this should minimize the amount of your transfers that are assessable income subject to Thai income tax.

 

If you are married to a Thai, the imposition of Thai PIT now makes extensions based on marriage much more attractive than before.

Edited July 26 by gamb00ler

[gamb00ler]

1 hour ago, Bday Prang said:

So what if one arranges for a trusted acquaintance to open a bank  account in their name back in ones home country, which one then funds with ones own money, and retains possession of the ATM card to use whilst in Thailand.    Seems like an easy enough way to get cash into the country, one would just need to ensure one selected an account with the minimum card charges for foreign transactions

Did you happen to notice the title of this thread?

[Lorry]

2 hours ago, JBChiangRai said:

Just remember this.

 

If the Revenue Department want us to pay tax, they will announce it.

 

They are between a rock & a hard place, their own citizens will be in uproar if they say we are special and we don’t need to pay it. Their silence speaks volumes.

 

Until they say otherwise, don’t pay any “doom & gloom tax fee-seeking professionals” just sit still and do sweet F.A.

 

As printed on the cover of the hitchhikers guide to the galaxy “DON’T PANIC!”

Thay did announce it.

Edited July 26 by Lorry

[JBChiangRai]

25 minutes ago, Lorry said:

Thay did announce it.

No they did not.

 

They have not announced anything specifically to foreigners.

 

Read what I said about rock and hard place again.

[jmd8800]

1 hour ago, gamb00ler said:

I would recommend that you set up your US based accounts so that you have documentation that all (or as much as is possible) of the transfers to Thailand are funded by SS benefits.  Doing this should minimize the amount of your transfers that are assessable income subject to Thai income tax.

 

If you are married to a Thai, the imposition of Thai PIT now makes extensions based on marriage much more attractive than before.

SS and both pensions go into 1 account in the USA. I transfer with Wise from there.

 

I am hoping the , placed before the word pensions is the key for me. This is from the DTA USA/Thai PDF Article 20: "1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other similar remuneration..."

 

Not married to a Thai and I won't be.

[Sheryl]

11 minutes ago, jmd8800 said:

SS and both pensions go into 1 account in the USA. I transfer with Wise from there.

 

I am hoping the , placed before the word pensions is the key for me. This is from the DTA USA/Thai PDF Article 20: "1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other similar remuneration..."

 

Not married to a Thai and I won't be.

The section you quote makes it clear that private pensions are taxable in Thailand, SS and government pensions are not.

 

It would be simpler if you had your SS either directly deposited in a Thai bank, or in a separate US bank account.

 

Failing that, could logically claim that whatever your monthly SS is, is part of your monthly transfers and the rest is private pension, and thus declare only the latter as assessable income.

[Lorry]

28 minutes ago, JBChiangRai said:

No they did not.

 

They have not announced anything specifically to foreigners.

 

Read what I said about rock and hard place again.

The interviews with the embassies are nothing "specifically to foreigners"?

 

And why should there be an announcement to foreigners,  anyway?

Like "From Jan 1st 2025 onwards, foreigners in Thailand have to follow the law"?

The Thai government has never announced specifically to foreigners that we are not allowed to rob banks.  Somehow I doubt that this defense would work in a court of law.

[Bday Prang]

3 hours ago, Lorry said:

The interviews with the embassies are nothing "specifically to foreigners"?

 

And why should there be an announcement to foreigners,  anyway?

Like "From Jan 1st 2025 onwards, foreigners in Thailand have to follow the law"?

The Thai government has never announced specifically to foreigners that we are not allowed to rob banks.  Somehow I doubt that this defense would work in a court of law.

and how many do you expect to end up in a court of law for not filing a tax return?. What sort of fool would allow matters to escalate to that level ?

[JBChiangRai]

Like I said before, nothing significant has changed, there are only 2 changes, one affects Crypto and the other affects funds remitted in year(s) after they were earned.

 

Your private pension paid in all the years prior to this one is taxable here if you follow the law. Why would you submit a tax return for this year and not last year?

 

If you submit a tax return for this year, what are you going to do when they ask you about 2023, 2022, 2021 etc etc?

 

Do nothing.  Wait and see what happens.

[jmd8800]

8 hours ago, Sheryl said:

The section you quote makes it clear that private pensions are taxable in Thailand, SS and government pensions are not.

 

It would be simpler if you had your SS either directly deposited in a Thai bank, or in a separate US bank account.

 

Failing that, could logically claim that whatever your monthly SS is, is part of your monthly transfers and the rest is private pension, and thus declare only the latter as assessable income.

Thanks for the response. I'll wait and see what happens. I don't mind paying a little tax as I live here, but I'm certainly considering becoming a not-tax resident next year if the tax levied is high.

 

In my world life here after COVID has changed and over the last 2 years or so Thailand is losing its luster so maybe it is time to go.

[jmd8800]

P.S. I know this is Thailand and often times laws are merely suggestions, and everything is OK until it isn't, etc, but If I opened a second bank account in the USA to deliberately NOT show income to the taxing state (IRS in this case) I would be committing tax evasion.

 

This may be why Thailand talks about 'worldwide income' and such, I don't know. But it is going to be very hard to prove legitimate taxable income on foreign people and Thais alike unless they implement a system like the USA has where money connected to a specific person is tracked in its entirety. I think this is a daunting task for the Thai government to do.

[Lorry]

3 hours ago, JBChiangRai said:

Your private pension paid in all the years prior to this one is taxable here if you follow the law. Why would you submit a tax return for this year and not last year?

Because of the interviews with the embassies. 

And because even Issarn farmers told me "now, foreigners have to pay tax".

It was in tiktok, and tiktok rules.

 

You do have a point,  and maybe, maybe nothing will change. 

But the outcry from the foreigners was just too loud, as were the statements from the  government.  For example,  never before did a PM talk about this subject. 

 

Let's have a look at the new forms at the end of this year.

 

3 hours ago, JBChiangRai said:

If you submit a tax return for this year, what are you going to do when they ask you about 2023, 2022, 2021 etc etc?

 

Good point. 

[Robin]

Yesterday, on P19, I asked a number of questions about my tax situation in Thailand, perhaps , yes, hoping for free tax advice.  One person took a lot of effort to high-light my questions and then answer all with the advice "You need to read Thai Tax law"  

I would regad this as like Microsoft 'Help'  Absolutely correct, but absolutely no use.

 

I am not a tax expert nor a tax adviser, so when confronted with something like these proposed Thai laws, i can only ask for advice.

If someone was to post a link to an English version of  the 'Thai tax law' I would indeed read it and try to understand how it affects my situation.  Until then, I understand that I will not become a Thai Tax Resident until 5th January 2925, so have nothing to worry about.  If I had any money, I would consider bringing it into Thailand.  Who can say which tax law will be in force then?

 

[Mike Teavee]

4 minutes ago, Robin said:

Yesterday, on P19, I asked a number of questions about my tax situation in Thailand, perhaps , yes, hoping for free tax advice.  One person took a lot of effort to high-light my questions and then answer all with the advice "You need to read Thai Tax law"  

I would regad this as like Microsoft 'Help'  Absolutely correct, but absolutely no use.

 

I am not a tax expert nor a tax adviser, so when confronted with something like these proposed Thai laws, i can only ask for advice.

If someone was to post a link to an English version of  the 'Thai tax law' I would indeed read it and try to understand how it affects my situation.  Until then, I understand that I will not become a Thai Tax Resident until 5th January 2925, so have nothing to worry about.  If I had any money, I would consider bringing it into Thailand.  Who can say which tax law will be in force then?

 

You will become Tax Resident when you spend 180 days in any one calendar year so if you're saying that you will only spend 175 days in Thailand this year you won't be Tax resident, if you continue to stay in Thailand you will become Tax Resident 29th Jun 2025.

[JBChiangRai]

23 hours ago, Robin said:

I have read through all the 19 pages above, and it seems to me that much depends on the definition of 'savings' that are being brought in to Thailand.

If I sell my house in UK, is this money 'savings'  House was bought over the years with payments from my income.  Was that "savings,"

Value of house has increased during the time I have owned it, but as my 'principal dwelling ' in UK it is exempt from UK Capital gains tax.

How will RD view this money if I transfer it to my Thai bank account?  I would call it savings.

Second question;  If I give this money to a trusteed friend in UK, and they then send me 20M B as a gift, is this exempt from tax?  If they do that every year until the money is used up, is it still a tax emept gift?

 

I can't answer for your house, I would hope it is not taxed.

 

Your second point, if you give money to a trusted friend with the intention of him giving you 10M baht per year (20M baht does not apply to friends) then this is not a gift, it's tax evasion.

 

If you didn't give him money and he sent you 10M baht per year on your birthday or Christmas then it would not be taxable.

 

The reason the first case is different is because firstly you didn't gift him the money, it was intended for him to send to you, so it's tax evasion.  In the second case there was no such intent and you didn't give him the money he was just a very generous guy.  But even in this scenario it would require very careful documentation and he would have to be sufficiently wealthy for the gift to be insignificant in accordance with his wealth.

[Mike Teavee]

On 7/26/2024 at 11:49 AM, Robin said:

I have read through all the 19 pages above, and it seems to me that much depends on the definition of 'savings' that are being brought in to Thailand.

If I sell my house in UK, is this money 'savings'  House was bought over the years with payments from my income.  Was that "savings,"

Value of house has increased during the time I have owned it, but as my 'principal dwelling ' in UK it is exempt from UK Capital gains tax.

How will RD view this money if I transfer it to my Thai bank account?  I would call it savings.

Second question;  If I give this money to a trusteed friend in UK, and they then send me 20M B as a gift, is this exempt from tax?  If they do that every year until the money is used up, is it still a tax emept gift?

Any gains made on the sale of your house would be classed as "Capital Gains" and so taxable if you remit it to Thailand.

 

The fact that you bought it out of already taxed income doesn't come into it as that went to cover the Cost of the house not the gain (Same with any stocks & shares you own).   

 

Edited July 27 by Mike Teavee

[topt]

24 minutes ago, Robin said:

I am not a tax expert nor a tax adviser, so when confronted with something like these proposed Thai laws, i can only ask for advice.

If you haven't already I would suggest reading this link -

https://aseannow.com/topic/1324294-introduction-to-personal-income-tax-in-thailand/

 

Respectfully if you don't understand what is in the guide then yes you probably need to seek advice from somewhere on your specific requirements.

 

With regards to a property unless it was sold before 31/12/2023 and cash realised I don't believe selling it later would mean it counts as savings and thus falling under the added exemption of  rule 162 or whatever it was.

My understanding is that to make sure it was not taxed you would have to sell it and remit to Thailand in a year that you were not tax resident in Thailand. This is under the current legislation.

 

[motdaeng]

46 minutes ago, Robin said:

...

If someone was to post a link to an English version of  the 'Thai tax law' I would indeed read it and try to understand how it affects my situation.  

...

 

this link has been posted before. i think, it is quite useful ...

 

https://www.expattaxthailand.com/your-questions-answered/

[Bubbha]

For Forum members from the USA -

Your opinion, please.

Would income (retirement) from a ROTH account be considered assessable income by the Revenue Department in Thailand?

[jrmaanda]

22 hours ago, JBChiangRai said:

Ideally, you should stay in your home country for at least 180 days, you have to be tax resident somewhere and if you simply went on holiday the Thai authorities could argue your main residence and hence tax residence was Thailand.

 

How so? Elsewhere on this thread many people have said one cannot be resident of Thailand for tax purposes if one stays under 180 days. Do you have any authoritative source for saying Thailand simply being my "main residence" could make me liable? And why do I have to be tax resident somewhere?  I've been tax resident in Thailand for twenty years, but have never paid direct tax because I've never remitted money here in that time, having brought sufficient money in beforehand. What if I spend 178 days in Thailand, 175 days in country B (which will not consider me resident if I live somewhere else more) and 12-13 days in country C, none being my country of birth (which does not tax non-resident citizens).

 

[NoDisplayName]

4 hours ago, jmd8800 said:

P.S. I know this is Thailand and often times laws are merely suggestions, and everything is OK until it isn't, etc, but If I opened a second bank account in the USA to deliberately NOT show income to the taxing state (IRS in this case) I would be committing tax evasion.

 

This may be why Thailand talks about 'worldwide income' and such, I don't know. But it is going to be very hard to prove legitimate taxable income on foreign people and Thais alike unless they implement a system like the USA has where money connected to a specific person is tracked in its entirety. I think this is a daunting task for the Thai government to do.

 

No tax evasion.  US Sociable Security is not assessable.  You set up a new/separate bank account to receive the funds, then remit them to Thailand, avoiding co-mingling with income streams.

 

That provides a clear paper trail, if ever needed, to show that specific remitted funds were indeed excluded by DTA.

 

You're opening a second bank account to deliberately SHOW non-assessable income to the taxing state (TRD in this case).

[bkk6060]

37 minutes ago, Bubbha said:

For Forum members from the USA -

Your opinion, please.

Would income (retirement) from a ROTH account be considered assessable income by the Revenue Department in Thailand?

Yes.  Because it is not SS or a government/public pension.

Read article 20 of the USA/ Thailand tax treaty.

[alanrchase]

On 7/26/2024 at 11:49 AM, Robin said:

I have read through all the 19 pages above, and it seems to me that much depends on the definition of 'savings' that are being brought in to Thailand.

If I sell my house in UK, is this money 'savings'  House was bought over the years with payments from my income.  Was that "savings,"

Value of house has increased during the time I have owned it, but as my 'principal dwelling ' in UK it is exempt from UK Capital gains tax.

How will RD view this money if I transfer it to my Thai bank account?  I would call it savings.

Second question;  If I give this money to a trusteed friend in UK, and they then send me 20M B as a gift, is this exempt from tax?  If they do that every year until the money is used up, is it still a tax emept gift?

Where are you living? If you are living in Thailand and you sell your house in the UK you may be liable for capital gains tax in the UK.

[JBChiangRai]

21 hours ago, JBChiangRai said:

 

There are some countries where you may not be tax resident staying 183+ days per year, I don't know about yours as I don't know the country.

 

But if you are not tax resident anywhere, then it depends on 2 other things, the country where you maintain a permanent home and that countries tax rules, and your nationality.  Some nationalities are considered to be tax resident in their home country if they are not tax resident anywhere else and some countries consider you tax resident if you maintain a permanent home there and do not stay the 180/183 days per year and are not tax resident anywhere else.

 

 

 

Your text 

How so? Elsewhere on this thread many people have said one cannot be resident of Thailand for tax purposes if one stays under 180 days. Do you have any authoritative source for saying Thailand simply being my "main residence" could make me liable? And why do I have to be tax resident somewhere?  I've been tax resident in Thailand for twenty years, but have never paid direct tax because I've never remitted money here in that time, having brought sufficient money in beforehand. What if I spend 178 days in Thailand, 175 days in country B (which will not consider me resident if I live somewhere else more) and 12-13 days in country C, none being my country of birth (which does not tax non-resident citizens).

End your text

 

You make it very difficult to reply when you type within someone else's quote, so I have reproduced it here.

 

If you'd read a little further before quoting me you would have seen the above quote at the top of this post where I went on to say that some countries consider you to be tax resident if you are tax resident nowhere else but you maintain a permanent home in their country re and your home country may consider you tax resident if you are not tax resident anywhere else.

 

I don't know if Thailand is one of the countries and I don't know where your home country is, so you'd need to take expert advice.  Some nationalities do not allow no tax residence.

 

 

 

 

 

[Presnock]

2 hours ago, motdaeng said:

 

this link has been posted before. i think, it is quite useful ...

 

https://www.expattaxthailand.com/your-questions-answered/

WHile this is a tax agency, it seems to cover quite a bit of ground on this issue and would be better than just guessing by hundreds uh thousands of folks.

[gamb00ler]

7 hours ago, jmd8800 said:

but If I opened a second bank account in the USA to deliberately NOT show income to the taxing state (IRS in this case) I would be committing tax evasion.

If you're referring to my suggestion to use a second account for your private pensions, you've completely misunderstood the intent.  I assumed those reading these tax threads are aware that commingling of your funds can confuse the Thai taxing authorities.  The intent of my suggestion was to reduce the commingling of your taxable pension benefits and your non-taxable SS benefits in your monthly transfers of 65K ฿.  Doing so will make it much easier to provide accurate substantiation of your self assessments used to prepare any Thai tax filing.

[gamb00ler]

3 hours ago, Bubbha said:

For Forum members from the USA -

Your opinion, please.

Would income (retirement) from a ROTH account be considered assessable income by the Revenue Department in Thailand?

 

2 hours ago, bkk6060 said:

Yes.  Because it is not SS or a government/public pension.

Read article 20 of the USA/ Thailand tax treaty.

This is only my opinion but it is based on the premise of equitable taxation.

 

There are two components to withdrawals from Roth accounts: principal and income/profit.  US won't tax either if withdrawals meet the required qualifications.  Since Thailand doesn't recognize the special status of a US Roth account, they should only tax the income portion that has been earned since Jan 1, 2024.  The principal and pre-2024 income portions should not be assessable income for Thai tax.

[JohnnyBD]

14 minutes ago, gamb00ler said:

Since Thailand doesn't recognize the special status of a US Roth account, they should only tax the income portion that has been earned since Jan 1, 2024.  The principal and pre-2024 income portions should not be assessable income for Thai tax.

I think you're exactly correct. For example, I have a Roth which was worth X amount on Dec 31, 2023 (all in stocks). If I withdraw and remit all the dividends & interest in 2024, then it's assessable income in Thailand even though it's not taxable in the US. What's left in the Roth is still pre-2024 assets (stocks). If I sell any of the stocks and remit the monies, then I should calculate the amount of principal versus gains using the stock prices on Dec 31, 2023. The gains would then be assessable income, and the principal would not be. This seems right to me.

[JohnnyBD]

8 hours ago, jmd8800 said:

P.S. I know this is Thailand and often times laws are merely suggestions, and everything is OK until it isn't, etc, but If I opened a second bank account in the USA to deliberately NOT show income to the taxing state (IRS in this case) I would be committing tax evasion.

 

This may be why Thailand talks about 'worldwide income' and such, I don't know. But it is going to be very hard to prove legitimate taxable income on foreign people and Thais alike unless they implement a system like the USA has where money connected to a specific person is tracked in its entirety. I think this is a daunting task for the Thai government to do.

I don't think anyone is suggesting that you open a second bank account to commit tax evasion. You apparently misunderstood. For example, this is what I did:

 

I opened new accts to keep my 2023 monies separate from my 2024 monies, and to keep my Social Security payments separate from other income streams; company pension, dividends & interest. When I remit my SS to Thailand, it is clear that it was never mixed or comingled, and it is non-assessable income. I will do the same for my 2023 monies which are non-assessable. Good luck.

[jmd8800]

2 hours ago, Presnock said:

WHile this is a tax agency, it seems to cover quite a bit of ground on this issue and would be better than just guessing by hundreds uh thousands of folks.

This was excellent reading. Everything is much clearer now. Thanks a lot.