Legal Strategies to Reduce Thai Tax

[Lorry]

32 minutes ago, JBChiangRai said:

The lady head of the tax office talked about wanting to tax worldwide income (for Thais).

You changed the subject again.  This is not what we are talking about. 

We are talking about the situation since 2024/01/01.

 

If you are not aware of publicly easily available statements of TRD and Prime Minister...sorry, I don't believe that

[JBChiangRai]

20 minutes ago, Lorry said:

You changed the subject again.  This is not what we are talking about. 

We are talking about the situation since 2024/01/01.

 

If you are not aware of publicly easily available statements of TRD and Prime Minister...sorry, I don't believe that

You're right, I am not aware of any of them addressed to foreigners living here regarding overseas income.

[Lorry]

3 minutes ago, JBChiangRai said:

You're right, I am not aware of any of them addressed to foreigners living here regarding overseas income.

I am aware of them. 

So, just do nothing,  up to you. 

But don't give inaccurate advice.

[gamb00ler]

6 hours 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.

This example doesn't give enough detail to say if it is correct or not.

 

If account B consists entirely of accumulated savings from before 1/1/2024 it will never be assessable in Thailand.  If you remit funds from account B to Thailand it will not be taxable at any time unless of course they change the law.

[gamb00ler]

3 hours ago, Yellowtail said:

And growth on savings? 

It will be assessable income except you may get an exemption on the first 20K ฿ of interest.  I haven't seen it specified that the normal interest exemption is not applicable to foreign interest.

[Expat68]

10 hours ago, motdaeng said:

 

it depends. if the tax in thailand is higher than in your home country, you have to pay the difference to the TRD ...

I fill a UK self assessment in every year. HRMC sends me a detailed statement for each Tax Year. If it comes down to it, I will just produce that to the Thai tax department, if they want to dispute this that is up to them because it will be them who are calling HMRC liars not me

[sometimewoodworker]

1 hour ago, Expat68 said:

I fill a UK self assessment in every year. HRMC sends me a detailed statement for each Tax Year. If it comes down to it, I will just produce that to the Thai tax department, if they want to dispute this that is up to them because it will be them who are calling HMRC liars not me

The majority of U.K. tax payers will have a Thai tax liability, depending on the total amount remitted to Thailand. 
this is because the U.K. tax free allowance £12,570 is above the Thai tax allowances. Depending on individual circumstances it is likely to be a small amount until you are sending more than about £20,000 per year

[jmd8800]

5 hours ago, JimGant said:

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.

 

Thanks for your response.

 

My SS is well over the $1200 you mentioned but also my transfers have been over 65,000 baht per month. But, I think the numbers will just scale out OK. I'll simply transfer just a little bit over 65k for the rest of the year and hope for the best. I am over 65. I think I'll be fine.

 

 

[anrcaccount]

8 hours ago, JBChiangRai said:

I agree with you there.

 

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

Good advice.

 

Do whatever you did last year- which for 99.9% of readers is nothing, regarding tax in Thailand. 

 

 

 

[JBChiangRai]

My opinion on this whole fiasco, is that September's announcement aimed at Thai people should have just slid under the radar.

 

A minor change that would probably impact foreigners in a minor way or not at all has been picked up the expat community and trumpeted from the rooftops as doom & gloom and because of all that "noise" it now faces the risk of becoming a self-fulfilling prophecy.

 

The change was simple and to earned income being transferred in a year subsequent to when it was earned.  My accountant told me years ago that they would close this avenue.

 

Expats started noisily shouting "What about me, What about me?" 

 

What everyone failed to notice was that we have always been liable to Thai Income Tax on earned income brought here in the same year.  They have never enforced it, now because of all this noise they may in the future.

 

Thai governmental style is to float something in the media and quietly watch the reaction.  You've seen it recently with Cannabis legislation.  If the public hate it, then they issue a statement saying it's not going ahead.  All the noise from Expat's has been incredibly damaging.

 

Absolutely the worst thing that could happen now is hundreds or thousands of expats start filling in tax returns.   You want to make the whole expat community an easy mark?  Then go ahead.

 

If you want this to disappear, then keep quiet and do nothing and wait for clarification addressed specifically to us.

 

It's important that any kind of public feedback you give furthers the cause of this disappearing.  DO NOT publicly say you will fill in a tax return.

 

When I received the questionnaire from Thai Privilege Company I told them unequivocally that I would leave Thailand if they taxed me transferring funds from the UK.  Feedback is important - don't make this a self-fulfilling prophecy!

[anrcaccount]

57 minutes ago, JBChiangRai said:

My opinion on this whole fiasco, is that September's announcement aimed at Thai people should have just slid under the radar.

 

A minor change that would probably impact foreigners in a minor way or not at all has been picked up the expat community and trumpeted from the rooftops as doom & gloom and because of all that "noise" it now faces the risk of becoming a self-fulfilling prophecy.

 

The change was simple and to earned income being transferred in a year subsequent to when it was earned.  My accountant told me years ago that they would close this avenue.

 

Expats started noisily shouting "What about me, What about me?" 

 

What everyone failed to notice was that we have always been liable to Thai Income Tax on earned income brought here in the same year.  They have never enforced it, now because of all this noise they may in the future.

 

Thai governmental style is to float something in the media and quietly watch the reaction.  You've seen it recently with Cannabis legislation.  If the public hate it, then they issue a statement saying it's not going ahead.  All the noise from Expat's has been incredibly damaging.

 

Absolutely the worst thing that could happen now is hundreds or thousands of expats start filling in tax returns.   You want to make the whole expat community an easy mark?  Then go ahead.

 

If you want this to disappear, then keep quiet and do nothing and wait for clarification addressed specifically to us.

 

It's important that any kind of public feedback you give furthers the cause of this disappearing.  DO NOT publicly say you will fill in a tax return.

 

When I received the questionnaire from Thai Privilege Company I told them unequivocally that I would leave Thailand if they taxed me transferring funds from the UK.  Feedback is important - don't make this a self-fulfilling prophecy!

 

Very well said.

 

[Lorry]

2 hours ago, JBChiangRai said:

My opinion on this whole fiasco, is that September's announcement aimed at Thai people should have just slid under the radar.

 

A minor change that would probably impact foreigners in a minor way or not at all has been picked up the expat community and trumpeted from the rooftops as doom & gloom and because of all that "noise" it now faces the risk of becoming a self-fulfilling prophecy.

 

The change was simple and to earned income being transferred in a year subsequent to when it was earned.  My accountant told me years ago that they would close this avenue.

 

Expats started noisily shouting "What about me, What about me?" 

 

What everyone failed to notice was that we have always been liable to Thai Income Tax on earned income brought here in the same year.  They have never enforced it, now because of all this noise they may in the future.

 

Thai governmental style is to float something in the media and quietly watch the reaction.  You've seen it recently with Cannabis legislation.  If the public hate it, then they issue a statement saying it's not going ahead.  All the noise from Expat's has been incredibly damaging.

 

Absolutely the worst thing that could happen now is hundreds or thousands of expats start filling in tax returns.   You want to make the whole expat community an easy mark?  Then go ahead.

 

If you want this to disappear, then keep quiet and do nothing and wait for clarification addressed specifically to us.

 

It's important that any kind of public feedback you give furthers the cause of this disappearing.  DO NOT publicly say you will fill in a tax return.

 

When I received the questionnaire from Thai Privilege Company I told them unequivocally that I would leave Thailand if they taxed me transferring funds from the UK.  Feedback is important - don't make this a self-fulfilling prophecy!

Agreed. Very well said.

[CharlesHolzhauer]

4 hours ago, JBChiangRai said:

My opinion on this whole fiasco, is that September's announcement aimed at Thai people should have just slid under the radar.

Then why, I wonder, would the TRD go through the trouble of having their rules translated into English?

https://www.rd.go.th/english/6045.html

1.Taxable Person

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

[JBChiangRai]

13 minutes ago, CharlesHolzhauer said:

Then why, I wonder, would the TRD go through the trouble of having their rules translated into English?

https://www.rd.go.th/english/6045.html

1.Taxable Person

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

Are you saying that is the only thing they translated to English, or is it their policy to translate everything?

[CharlesHolzhauer]

1 minute ago, JBChiangRai said:

Are you saying that is the only thing they translated to English, or is it their policy to translate everything?

I don't know their policy. But what I've read thus far seems pretty straightforward

[JimGant]

17 hours ago, jmd8800 said:

My SS is well over the $1200 you mentioned but also my transfers have been over 65,000 baht per month. But, I think the numbers will just scale out OK. I'll simply transfer just a little bit over 65k for the rest of the year and hope for the best. I am over 65. I think I'll be fine.

If your SS is $1800, that would cover the whole 65k monthly remittance, i.e., no Thai tax. In fact, with your TEDA now at 500k, you could transfer another $1160 per month with still no Thai taxable income. Send an extra $3000 per month -- Thai taxes would be $2900. Assuming you're paying more than this in US taxes -- this $2900 would be a one-for-one tax credit against your US taxes. Yes, Forms 1116 and 8833 would need to be filed. But you say you use an accountant, so no big deal.

 

You seem to be the average American. So, as has been said all along, Yanks, already taxed on all our income, won't be financially affected by this new situation (nor most, if worldwide income taxation comes in). Unpack your bags.

[jmd8800]

10 minutes ago, JimGant said:

If your SS is $1800, that would cover the whole 65k monthly remittance, i.e., no Thai tax. In fact, with your TEDA now at 500k, you could transfer another $1160 per month with still no Thai taxable income. Send an extra $3000 per month -- Thai taxes would be $2900. Assuming you're paying more than this in US taxes -- this $2900 would be a one-for-one tax credit against your US taxes. Yes, Forms 1116 and 8833 would need to be filed. But you say you use an accountant, so no big deal.

 

You seem to be the average American. So, as has been said all along, Yanks, already taxed on all our income, won't be financially affected by this new situation (nor most, if worldwide income taxation comes in). Unpack your bags.

Thanks again.

[redwood1]

On 7/29/2024 at 8:47 PM, anrcaccount said:

Good advice.

 

Do whatever you did last year- which for 99.9% of readers is nothing, regarding tax in Thailand. 

 

 

 

 

I think this is the perfect plan for all expats for the future....I guarantee you this is the only tax planning the Chinese, Russians, or Indians will ever be doing.....Whether its next year or 20 years from now...

[Expat68]

8 hours ago, redwood1 said:

 

I think this is the perfect plan for all expats for the future....I guarantee you this is the only tax planning the Chinese, Russians, or Indians will ever be doing.....Whether its next year or 20 years from now...

If it's not broken don't fix it!!

[motdaeng]

10 hours ago, redwood1 said:

I think this is the perfect plan for all expats for the future....I guarantee you this is the only tax planning

the Chinese, Russians, or Indians will ever be doing.....Whether its next year or 20 years from now...

 

at first, i thought your post was sarcastic, but no, it seems you were completely serious ... (with guarantee)

 

i think, this taxes won't disappear! hopefully, the global income tax doesn't come into effect,

as that would be a real game-changer.

[acepredator]

On 5/19/2024 at 3:08 AM, Lorry said:

Buy a condo from savings you had before 2024. Do not rent.

 

Bring things to Thailand . Don't bring money to buy those things here (if price is similar). Remitting money is taxed, bringing stuff is tax-free.

E.g. buy from iHerb (pay with your home-country account), not from a local (who imports from iHerb anyway).

Buy your mobile at home,  it just got 35% more expensive here.

 

Spend your holidays outside Thailand, the family trip to Samet could become a family trip to Malaysia, which isn't more expensive but has a lot more snob-appeal. Pay in Malaysia with money from your home country.

 

Buy air tickets abroad,  don't buy them in Thailand (often cheaper abroad anyway)

 

Do not be the banker for other people (mostly family), all must use their own accounts for their expenses.

 

Do not sponsor too many girls with regular payments.  There are other ways to help them.

 

 

 

 

Bring things to Thailand rather than buying them here. What a great suggestion. All I have to do is fly to my home country and bring back enough gasoline to power my Yamaha motorbike for the next year. Also, I'll bring enough food to eat for the next year. Genius. Why didn't I think of that?

[Lorry]

10 minutes ago, acepredator said:

Bring things to Thailand rather than buying them here. What a great suggestion. All I have to do is fly to my home country and bring back enough gasoline to power my Yamaha motorbike for the next year. Also, I'll bring enough food to eat for the next year. Genius. Why didn't I think of that?

You do realize that many people fly home quite often,  e.g. during the rainy season?

I, for example,  bought a little general purpose  tanker from a buddy in O&G, 70,000 barrels, that should be enought to fuel my 70s gas guzzler for  the next winter. 

[bkk6060]

3 hours ago, acepredator said:

Bring things to Thailand rather than buying them here. What a great suggestion. All I have to do is fly to my home country and bring back enough gasoline to power my Yamaha motorbike for the next year. Also, I'll bring enough food to eat for the next year. Genius. Why didn't I think of that?

One could bring in 700 MREs in a couple of very large suitcases.  Just say you are going to help feed the hungry.

[bkk6060]

I believe India is taxing the use of India credit cards that are used to make purchases in foreign countries.  But, there are reports Thailand wants to tax their use as income for residents?  Sorry, it is not income, it is debt. Income is part of your net worth.  Using a credit card for groceries, a hotel, going on a boat tour does not change your worth.  I don't know of any country that taxes the use of a foreign or domestic credit card for their residents as income.  I guess they can do what they want, just seems unreasonable and unlikely.

[NoDisplayName]

On 7/30/2024 at 7:48 AM, JBChiangRai said:

Thai governmental style is to float something in the media and quietly watch the reaction.  You've seen it recently with Cannabis legislation.  If the public hate it, then they issue a statement saying it's not going ahead. 

 

So you're saying we really, really need to organize and make lots of noise,.........complain so much they'll let it drop?

 

On 7/30/2024 at 7:48 AM, JBChiangRai said:

If you want this to disappear, then keep quiet and do nothing

 

60 percent of the time, it works every time!

[acepredator]

6 hours ago, bkk6060 said:

One could bring in 700 MREs in a couple of very large suitcases.  Just say you are going to help feed the hungry.

I think that 700 MREs would require a much bigger shipping container than a suitcase, no matter how many. Also, as a U.S. Army veteran with two honorable discharges, I can attest to the fact that MREs grow tiresome very quickly. I couldn't eat seven MREs in a row, never mind 700. 

[topt]

On 7/31/2024 at 7:56 PM, bkk6060 said:

I don't know of any country that taxes the use of a foreign or domestic credit card for their residents as income. 

Been posted quite a few times already. Non doms in the UK.

https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm36130

[chiang mai]

On 7/29/2024 at 8:19 PM, sometimewoodworker said:

The majority of U.K. tax payers will have a Thai tax liability, depending on the total amount remitted to Thailand. 
this is because the U.K. tax free allowance £12,570 is above the Thai tax allowances. Depending on individual circumstances it is likely to be a small amount until you are sending more than about £20,000 per year

I'm not sure that everyone understands the process involved, perhaps it's worth explaining. This is not a simple and straight forward matter of saying that no Thai tax is due, just because a tax return was filed overseas.

 

In a simple and uncomplicated example....if a person earns say 13k Pounds in the UK, 12,570 of that will be covered by the UK Personal Allowance hence only the difference, 13,000 less 12,750 will be taxed at 20%, by the UK HMRC.

 

If that 13k Pounds was then remitted to Thailand, the full 13,000k would need to be declared to Thai tax, assuming it was tax assessable income under Thai rules. The point here is that the UK Personal Allowance is not relevant to Thailand for tax purposes. Instead, Thai TEDA would have to be used to reduce the taxable amount and TEDA will vary from person to person based on age and circumstances. The other point to bear in mind is the GBP/THB exchange rate. The difference between 13k Pounds at 47 baht per Pound versus 13k Pounds at 40, may mean the difference Thail tax being due or not.

 

If all of the above comes out to be that Thai tax is due and payable, the taxpayer will need to invoke the UK/Thai DTA in order to use the tax paid in the UK, to offset tax due in Thailand. By all accounts that is not a straight forward process and is complicated further by non-aligned tax years and tax credits that cannot always be carried forward. 

 

[lelapin]

3 hours ago, chiang mai said:

I'm not sure that everyone understands the process involved, perhaps it's worth explaining. This is not a simple and straight forward matter of saying that no Thai tax is due, just because a tax return was filed overseas.

 

In a simple and uncomplicated example....if a person earns say 13k Pounds in the UK, 12,570 of that will be covered by the UK Personal Allowance hence only the difference, 13,000 less 12,750 will be taxed at 20%, by the UK HMRC.

 

If that 13k Pounds was then remitted to Thailand, the full 13,000k would need to be declared to Thai tax, assuming it was tax assessable income under Thai rules. The point here is that the UK Personal Allowance is not relevant to Thailand for tax purposes. Instead, Thai TEDA would have to be used to reduce the taxable amount and TEDA will vary from person to person based on age and circumstances. The other point to bear in mind is the GBP/THB exchange rate. The difference between 13k Pounds at 47 baht per Pound versus 13k Pounds at 40, may mean the difference Thail tax being due or not.

 

If all of the above comes out to be that Thai tax is due and payable, the taxpayer will need to invoke the UK/Thai DTA in order to use the tax paid in the UK, to offset tax due in Thailand. By all accounts that is not a straight forward process and is complicated further by non-aligned tax years and tax credits that cannot always be carried forward. 

 

My money gets transferred from the UK into a sterling account at Bangkok bank. What rate of exchange would they use to calculate how much I have received in baht as I convert it in various amounts as and when I need it when the rate of exchange that day is good.

[chiang mai]

2 hours ago, lelapin said:

My money gets transferred from the UK into a sterling account at Bangkok bank. What rate of exchange would they use to calculate how much I have received in baht as I convert it in various amounts as and when I need it when the rate of exchange that day is good.

It would be the actual exchange rate you received when the funds were withdrawn from from the foreign currency account and exchanged for THB, that would be regarded as the day the funds were remitted.