Legal Strategies to Reduce Thai Tax

[JBChiangRai]

27 minutes ago, JBChiangRai said:

 

 

From your link, this is what it said about last year and prior.  I am correct in what I said.

 

Current Practice 

Before the issuance of this recent departmental directive, a Thai tax resident was subject to income tax on foreign-sourced income only if such income was transferred to Thailand within the same calendar year in which it was earned. In other words, foreign-sourced income remained non-taxable if it was brought into Thailand in the following calendar year.

 

11 minutes ago, alanrchase said:

The change is that if you have income in the tax year and remit money to Thailand that will be taxable. You will no longer be able to say I put my income in account A and remitted money to Thailand from account B which contains no income from this tax year.

 

The big change is income you bring in a year that was earned in prior years is now taxable.

 

If you (for example) a UK pensioner with a decent pension and you brought it into Thailand in the year it was earned - it was always taxable but if you left it there till the following year, even 1st January, it was not taxable and that concession has gone.

[alanrchase]

25 minutes ago, JBChiangRai said:

 

 

The big change is income you bring in a year that was earned in prior years is now taxable.

 

If you (for example) a UK pensioner with a decent pension and you brought it into Thailand in the year it was earned - it was always taxable but if you left it there till the following year, even 1st January, it was not taxable and that concession has gone.

Neither of us knows exactly what is going to be required as they haven't finalised it yet. You have your opinion on what they may do and I have mine. Everything could completely change by the time they get round to their final decision. 

[JBChiangRai]

1 minute ago, alanrchase said:

Neither of us knows exactly what is going to be required as they haven't finalised it yet. You have your opinion on what they may do and I have mine. Everything could completely change by the time they get round to their final decision. 

I agree with you there.

 

Until we hear otherwise from Government sources, do nothing different than last year.

[SS1]

On 5/20/2024 at 8:39 AM, JBChiangRai said:

If you have children you are putting through school or university (as I do), then it is more tax efficient to gift & send them taxed funds from your home country (UK in my case) and then let them pay their own expenses, clothes, education fees, cars, rent, property purchase etc than it is to give them the money here in Thailand.

 

This is very smart, if you gift money to your spouse/children that is clearly separable from your personal living expenses. 

[SS1]

I did not bother reading through the whole thread, but have foreign loans been discussed already?

 

Example; I want to buy a condo in Thailand. I take a loan from a foreign bank and remit it to Thailand. Later on, I pay back the loan using foreign income sources. From my understanding, this would not create any taxable events in Thailand. 

[Mike Teavee]

7 minutes ago, JBChiangRai said:

I agree with you there.

 

Until we hear otherwise from Government sources, do nothing different than last year.

I’ve taken the approach of only remitting up to my (& my GF’s) TEDA (total of 445K between us) & spending down savings I already have here to make up the rest of the money I need. 
 

Should be able to do this for another 3 years by which time I’m hoping things like tax on Capital Gains & UK Private Pensions (mine kick in Feb 2026) will be a lot clearer. 
 

[Yellowtail]

28 minutes ago, SS1 said:

 

This is very smart, if you gift money to your spouse/children that is clearly separable from your personal living expenses. 

Are gifts not taxable? 

[Yellowtail]

28 minutes ago, SS1 said:

I did not bother reading through the whole thread, but have foreign loans been discussed already?

 

Example; I want to buy a condo in Thailand. I take a loan from a foreign bank and remit it to Thailand. Later on, I pay back the loan using foreign income sources. From my understanding, this would not create any taxable events in Thailand. 

Or you could buy it with a credit card. Effectively the same thing. 

[JBChiangRai]

19 minutes ago, Mike Teavee said:

I’ve taken the approach of only remitting up to my (& my GF’s) TEDA (total of 445K between us) & spending down savings I already have here to make up the rest of the money I need. 
 

Should be able to do this for another 3 years by which time I’m hoping things like tax on Capital Gains & UK Private Pensions (mine kick in Feb 2026) will be a lot clearer. 
 

Very wise.

 

I am doing the same for me  and gifting from UK funds my Thai children their university fees and living expenses for the entire year in one go.

 

It also encourages them to budget.

[JBChiangRai]

10 minutes ago, Yellowtail said:

Are gifts not taxable? 

 

If constructed correctly gifts up to 10 or 20M baht per year can be tax free.

 

It's important you don’t benefit from the gift directly or indirectly.

[Lorry]

3 hours ago, JBChiangRai said:

 

I have not seen any government announcement they will start applying it again, can you post a link?

 

I answered this several days ago, you chose to ignore my answer. 

I don't know what you get out of spreading this misinformation.

But you should try another forum (pornhub, maybe?) - here everybody knows the government announcements. 

[Yellowtail]

15 minutes ago, JBChiangRai said:

 

If constructed correctly gifts up to 10 or 20M baht per year can be tax free.

 

It's important you don’t benefit from the gift directly or indirectly.

So, gifting a child money for tuition, or gifting a wife money to buy a home, would not qualify, or worse, an EV, correct? 

 

What do you think of using spending on a US credit card in Thailand, and paying the card in the US? 

 

[JBChiangRai]

4 hours ago, JBChiangRai said:

 

I have not seen any government announcement they will start applying it again, can you post a link?

 

I never said they WILL impose back tax, only that they CAN if they so wish.

 

 

5 minutes ago, Lorry said:

I answered this several days ago, you chose to ignore my answer. 

I don't know what you get out of spreading this misinformation.

But you should try another forum (pornhub, maybe?) - here everybody knows the government announcements. 

 

How can you have answered a question several days ago to a question I asked 3 hours ago when that question related to a post made a few minutes before that?

 

Do you have a time machine?

 

I have already gone through the legal situation correctly.

[Lorry]

8 minutes ago, JBChiangRai said:

 

 

How can you have answered a question several days ago to a question I asked 3 hours ago when that question related to a post made a few minutes before that?

 

Do you have a time machine?

 

I have already gone through the legal situation correctly.

You have asked the same question again and again. 

You know this. 

[CharlieKo]

4 hours ago, JBChiangRai said:

 

I have not seen any government announcement they will start applying it again, can you post a link?

 

I never said they WILL impose back tax, only that they CAN if they so wish.

 

More miss information. They have said that any funds remitted to Thailand after the 31/12/2023 or From the 01/01/2024 will be taxed if it is derived as income. In other words they have no intention of applying back taxes on any savings prior to the 1st of January 2024. 

 

Indeed I will go so far as to say. That until they actually pass the new tax rules as law there is no guarantee that this will actually become legally a law that expats need to follow. 

 

I appreciate you may have good intentions. But you really are twisting facts to suit your narrative. 

[motdaeng]

8 minutes ago, CharlieKo said:

... That until they actually pass the new tax rules as law there is no guarantee that this will actually become legally a law that expats need to follow ...

 

I appreciate you may have good intentions. But you really are twisting facts to suit your narrative. 

 

how about this? i think it's better not to point fingers at others for "twisting the facts" ...

 

 

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

[CharlieKo]

23 minutes ago, motdaeng said:

 

how about this? i think it's better not to point fingers at others for "twisting the facts" ...

 

 

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

My bad, apologies. 

[JimGant]

3 hours ago, jmd8800 said:

I'm guessing I'll pay very little tax here and deduct that tax from the taxes paid in USA so it will likely be a wash.

Indeed, yes. Have you played with any of the number combinations? If you have $1200 in SS per month to remit, towards the 65k baht requirement ($1800) -- then the remaining $600 from your private pension would not be taxable. And this is so,  even if you're under 65, so you don't yet get the extra 190k baht deduction for age, and thus your TEDA is only 310k. Turn 65 -- and you've a whole lot more wiggle room with that extra 190k.

 

Only if, for some reason, your monthly SS is only a measly $1000 -- would you owe some Thai tax on that $800 make up amount, using your private pension money. But, even here, with a 310k TEDA -- the Thai tax on $9600 would only be $50. And this would be a completely allowable tax credit against your US taxes.

 

Furthermore, unless you have a stash of Thailand-assessable income you're not remitting, particularly capital gains -- should Thailand go to a worldwide taxation system -- very little, if anything, would change for you.

 

On the other end of the scale, if somehow the $12k SS and the $9.6k private pension were your only sources of income - then you'd owe no US tax and thus the $50 Thai tax could not be used as a credit. Thus, for Yanks of little means -- yes, a Thai tax could be a net tax payout. But, not your situation, as you've indicated you pay US taxes. Anyway, do some number crunching -- you don't need to pay an accountant to do this, if you have all the facts at hand, which you should from all the info on these forums. Good luck.

 

[JBChiangRai]

1 hour ago, Lorry said:

You have asked the same question again and again. 

You know this. 

 

With all due respects, I don't ask questions to which I know the answer.  Maybe you are confusing me with someone else.  I asked for a link because I know there isn't one.

 

54 minutes ago, CharlieKo said:

More miss information. They have said that any funds remitted to Thailand after the 31/12/2023 or From the 01/01/2024 will be taxed if it is derived as income. In other words they have no intention of applying back taxes on any savings prior to the 1st of January 2024. 

 

Indeed I will go so far as to say. That until they actually pass the new tax rules as law there is no guarantee that this will actually become legally a law that expats need to follow. 

 

I appreciate you may have good intentions. But you really are twisting facts to suit your narrative. 

 

I agree with what you state.  However, that IS NOT what I said.

 

I said income transferred here in the year it was earned has ALWAYS been tax assessable.  You mentioned savings, that is a separate case and I made that clear too.

 

Nobody from the government has said that income previously transferred to Thailand in the year it was earned is NOT tax assessable, because it is!  

 

This is the situation for this year, 2023, 2022,201 etc etc

Current Practice 

Before the issuance of this recent departmental directive, a Thai tax resident was subject to income tax on foreign-sourced income only if such income was transferred to Thailand within the same calendar year in which it was earned. In other words, foreign-sourced income remained non-taxable if it was brought into Thailand in the following calendar year.

[sometimewoodworker]

On 7/26/2024 at 11:32 PM, Sheryl said:

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

 

Absolutely 

On 7/26/2024 at 11:32 PM, Sheryl said:

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

Excellent advice 

On 7/26/2024 at 11:32 PM, Sheryl said:

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.

This is where commingled funds and the treatment of them causes problems. While you can claim that you only remitted SS funds and left the majority of you assessable funds state side, I’d you get audited the TRD may strongly  disagree and insist that the funds were at least proportional payed from each source. And with commingled funds it is impossible to differentiate.

[JBChiangRai]

Let me make it clearer with an example that I hope will resonate with many people

 

Fred is 75 years old and lives off his private pension from the UK, he pays tax on it.  He has lived here more than 180 days per year for the last 10 years.

 

He has been transferring his pension here for 10 years, he has had no savings for 10 years.

 

Fred's income was tax assessable for the whole 10 years by the TRD before 1/1/2024 just as it is now.  Nothing has changed for Fred.

 

What has changed is the rule for savings overseas.  The difference is that the only savings you can bring here tax free, is those savings you had prior to 1/1/2024, in other words, that date will not advance every year as it used to do. 

 

Looking at Fred, should he do a tax return at the end of this year?  Why didn't he last year?  Why only one year out of the last 10?  Nothing has changed for Fred.

[Yellowtail]

3 minutes ago, JBChiangRai said:

Let me make it clearer with an example that I hope will resonate with many people

 

Fred is 75 years old and lives off his private pension from the UK, he pays tax on it.  He has lived here more than 180 days per year for the last 10 years.

 

He has been transferring his pension here for 10 years, he has had no savings for 10 years.

 

Fred's income was tax assessable for the whole 10 years by the TRD before 1/1/2024 just as it is now.  Nothing has changed for Fred.

 

What has changed is the rule for savings overseas.  The difference is that the only savings you can bring here tax free, is those savings you had prior to 1/1/2024, in other words, that date will not advance every year as it used to do. 

 

Looking at Fred, should he do a tax return at the end of this year?  Why didn't he last year?  Why only one year out of the last 10?  Nothing has changed for Fred.

And growth on savings? 

[JBChiangRai]

1 minute ago, Yellowtail said:

And growth on savings? 

 

I don't know.

[Yellowtail]

13 minutes ago, JBChiangRai said:

 

I don't know.

Wow, first time for everything....(just kidding) 

[Lorry]

43 minutes ago, JBChiangRai said:

Let me make it clearer with an example that I hope will resonate with many people

 

Fred is 75 years old and lives off his private pension from the UK, he pays tax on it.  He has lived here more than 180 days per year for the last 10 years.

 

He has been transferring his pension here for 10 years, he has had no savings for 10 years.

 

Fred's income was tax assessable for the whole 10 years by the TRD before 1/1/2024 just as it is now.  Nothing has changed for Fred.

 

What has changed is the rule for savings overseas.  The difference is that the only savings you can bring here tax free, is those savings you had prior to 1/1/2024, in other words, that date will not advance every year as it used to do. 

 

Looking at Fred, should he do a tax return at the end of this year?  Why didn't he last year?  Why only one year out of the last 10?  Nothing has changed for Fred.

I will follow Charlie and pretend you have good intentions (but I don't think so).

So I will explain one last time:

 

You are comingling two questions.

 

Question 1: 

1.1 If Fred had followed the law in Thailand, he should have paid tax in Thailand on his pension in all those 10 years. 

Correct.

 

1.2 TRD didn't care.

Correct. 

 

1.3 TRD could strictly follow the letter of the law and ask Fred now "what about the tax you should have paid during the last 10 years?"

Correct, but improbable - especially as TRD officials have stated publicly "in the past we didn't care"

 

Question 2:

Has anything changed for Fred?

Yes, now they DO care. 

"1.2 TRD didn't care." is not valid anymore.

Can you derive this from the letters of the regulations? No.

Can you derive this from the context and intention of the regulations? Absolutely, especially as TRD officials and even the PM have publicly said so (links to their statements - YT, press statements, you name it - are all over these threads)

 

[JBChiangRai]

1 hour ago, Lorry said:

 

Has anything changed for Fred?

Yes, now they DO care. 

"1.2 TRD didn't care." is not valid anymore.

Can you derive this from the letters of the regulations? No.

Can you derive this from the context and intention of the regulations? Absolutely, especially as TRD officials and even the PM have publicly said so (links to their statements - YT, press statements, you name it - are all over these threads)

 

 

That is your opinion.  I disagree.

 

Until they come out and say something officially, <removed> for listening to tax advisers looking for fees and nonsense in the media which has all all been about Thai people.  Nobody has said anything official, you are scaremongering.  As I said, last year is the same as this year in the circumstances I outlined.

 

 

[vibration]

I am a British Citizen retired over 65 years of age and happily married to a Thai woman.

 

I receive some small pensions from the UK that are well below the tax free threshhold in the UK and these are sent to my Bank in Norway where I worked for 32 years. I also receive State Pension and private pensions in Norway.

 

I am tax resident in both Norway and Thailand and pay tax to both countries which I have done for several years.

 

Last year I sent approximately 710 000 THB to Thailand and paid approximately 6 000 THB and I normally receive all tax paid in Norway (expected paid back in August) back because of the Double Taxation Agreement.

 

I use a Norwegian Tax Lawyer residing in Thailand to help me with my Norwegian Tax Return and I do the Thai Tax Return myself (I get the local Thai Tax Office to fill it out for me) which works out great.

 

This year I will be sending maximum 1 200 000 from Norway to Thailand and the expected Thai Tax on this will be approximately 70 000 THB.

 

We can live quite comfortably on 500 000 THB per year the other funds cover holidays, health insurance and other goods.

 

Which I believe is quite reasonable and am prepared to pay.

 

I have stopped stressing about the tax changes here starting 01 January this year.

 

Here is a Link to a Thai Tax Calculator which I have found to be quite accurate over the years.

 

https://en-1466.site-translation.com/thailand/tax/4742.html

 

I wish all Members best wishes with your tax here and in other Countries.

[Lorry]

38 minutes ago, JBChiangRai said:

you're an idiot for listening to tax advisers

Thx  a lot.

It is not just tax advisers who said it, it's TRD officials and the Prime Minister.

You know it, and you deliberately give dangerous advice. 

 

 

[JBChiangRai]

Just now, Lorry said:

Thx  a lot.

It is not just tax advisers who said it, it's TRD officials and the Prime Minister.

You know it, and you deliberately give dangerous advice. 

 

 

 

Not it isn't.  The lady head of the tax office talked about wanting to tax worldwide income (for Thais). I'm not aware of any other official statements addressed towards us.

 

This whole thing has been blown out of all proportion by those with a stake in any potential fees.

 

There may be some clarification coming but until then nothing has changed for transferring income earned this year.

 

 

[nauseus]

Looks like this topic has become even more like the weather - more cloudy every day!