Legal Strategies to Reduce Thai Tax

[Mike Lister]

42 minutes ago, JBChiangRai said:

 

In the third scenario above, assessable income is not assessable until you bring it to Thailand. If you gift it overseas, tax has already been collected there, and you never bring it to Thailand so I'm not sure that this can be assessable income, unless there is some specific clause for this.

 

I think the whole purpose of the gift provisions is to allow wealthy Thais to avoid tax, this would seem to make it impossible for them to do so.

On the other hand, the purpose of the Gift Tax rule is to allow people to receive gifted income, largely free of tax. The benefit of the Gift is to the receiver, not the giver.

 

If you change the wording of scenario three to read, "In the third scenario, the foreigner gifts income that is assessable in Thailand, direct to a Thai resident, the foreigner must report that income as if they themselves had received it directly".

[KhunHeineken]

13 hours ago, Mike Lister said:

e) Gifts must not be returned to the donor and used as a way to avoid income taxes, except under very specific Gift Tax rules which are likely to void the earlier tax advantage.

I posted about this.  Not sure if it was deleted or the post never made it through. 

 

Doesn't this clause make the strategy that many want to implement a concern for them? 

[Mike Lister]

1 hour ago, Yumthai said:

It comes from @Mike Lister original post, I think it should be omitted with the new structure.

I don't think I agree with the reservations about the third scenario.

 

In the third scenario, if the foreigner gifts offshore assessable income direct to a Thai resident, the foreigner must report that income as if they themselves had received it directly.

 

The tax rule change last year stated that any offshore income remitted to Thailand is assessable to Thai tax, regardless of the year it was earned. By questioning the third scenario above, all anyone has to do is to remit that earned income to another person and the affect of the rule change is negated! It also means that any remitted income can be neutralised for tax, by gifting it another person.

 

I don't buy those things at all.

 

 

[JimGant]

2 hours ago, Yumthai said:

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

The UK doesn't tax gifts from overseas -- because the obligation for income taxing the sum of money gifted is on the source country. The UK, like the US and all other OECD countries, assumes the gift is an after-income tax asset. And there's nothing out there, at least that I can find, that implies Thailand is unique in treating gifts as being exempt from income tax, whether due in the source country, or due in Thailand when remitted, prior to its becoming a gift.

 

Can anyone recall where this notion that income remitted to Thailand, that is assessable income -- is somehow tax exempt if its final use is as a gift? I think that somehow wishful thinking blossomed into presumed fact....

[Mike Lister]

1 minute ago, JimGant said:

The UK doesn't tax gifts from overseas -- because the obligation for income taxing the sum of money gifted is on the source country. The UK, like the US and all other OECD countries, assumes the gift is an after-income tax asset. And there's nothing out there, at least that I can find, that implies Thailand is unique in treating gifts as being exempt from income tax, whether due in the source country, or due in Thailand when remitted, prior to its becoming a gift.

 

Can anyone recall where this notion that income remitted to Thailand, that is assessable income -- is somehow tax exempt if its final use is as a gift? I think that somehow wishful thinking blossomed into presumed fact....

Except where invoking a DTA would mean the right to tax, shifts from the UK to Thailand, which means the obligation to tax shifts also. On that basis, it is entirely possible for somebody to have Thai assessable income in the UK, because Thailand had not yet had a chance to meet its obligations and wont until it is remitted.

[JBChiangRai]

I think the issue is the tax-point when the gift changes ownership. If that is in the UK (that income has already been taxed in the UK) then it shouldn't be assessable income in Thailand, if the tax-point is in Thailand, then it's assessable income of the donor.

 

What about the scenario where there are two Thai tax residents, who also have accounts in the UK and one of them sends a gift from one to the other across UK banks. It's never remitted to Thailand, the receiver could later bring it in claiming gift allowance maybe 2 years later.  I can't see a liability on the giver.

 

 

[KhunHeineken]

22 hours ago, Dogmatix said:

 

It's hard to say that gifting is not in the spirit of this legislation because what we are talking about is not legislation. It is a reinterpretation of a 1987 ruling that clearly interpreted the RC, the recent reinterpretation of which may well be held to be unlawful, if challenged in the Tax Court. I think it would be more accurate to say that the reinterpretation is not in the spirit of the legislation. 

 

The problem for the RD is that gift tax was introduced via a Royal Decree in 2015 as an amendment to the Revenue Code. There are some vagaries in the wording, as is normal in Thai legislation which likes to keep options open for contradictory interpretation in different cases, but nothing the RD DG can get her hooks into to attempt to amend with another legally dubious departmental order like P. 161/2566.  It can only be amended by another Royal Decree, which can later be nullified by parliament, if deemed inappropriate to the emergency requirement to allow Royal Decrees to circumvent parliament, or by a proper Act of Parliament, involving public consultation and three readings in parliament.  

 

The previous treatment of gifting in the Revenue Code was that there was no tax on gifts but the definition of gifts was somewhat stringent and was the same for everybody. That definition was cut and pasted as the definition of gifts to people who are not spouses or ascendant or descendant blood relations.  However, at the same time a new definition was introduced for gifts to spouses and ascendant and descendant relatives that is very broad, in fact, seems limitless. The actual text of Revenue Code amendment 40 of 2015 promulgated in the Royal Decree of 5 August 2015 signed by Gen Prayut is บุคคลธรรมดาที่ได้รับเงินได้จากการอุปการะหรือจากการให้โดยเสน่หาจากบุพการี ผู้สืบสันดาน หรือคู่สมรส.  This means "Natural persons who receive money being support or gifts of affection to ascendant or descendant relations or spouses."  There is nothing in the thus amended Revenue Code, as some ignorant, English monoglot commentators have suggested, that delineates how spouses may utilize these love gifts or anything, as some have even more ludicrously surmised, saying that gifts may only be made from income already subjected to Thai PIT.  There is also nothing that says these gifts may not come from abroad.  Indeed there is actually a RD case study that implies quite clearly that they can be made from abroad. There is also nothing much that can be found in publicly available information providing any ministerial or departmental regulations apart from the case study referred to above.  However, the Civil & Commercial Code provides a definition of gifts that stipulates that a gift is irrevocable, except in certain circumstances delineated in the C&CC, such as bad faith of the recipient. 

 

There are several court rulings regarding the old definition of gifts, relating to a huge gift made by Thaksin's ex-wife to her brother.  Since the old definition is now the RC definition of gifts to those who are not ascendant or descendant relations or spouses, these rulings can be considered as applicable to gifts to those not directly related. The rulings make clear that the gifts have to be made on a special occasion, such as a wedding. Birthdays are not mentioned and I would be extremely wary of making gifts to unmarried partners for this reason.

 

So will the gifting rules in the RC be amended to close the loophole it appears to provide in the legally dubious P. 161/2566?  Gift tax was introduced in tandem with inheritance tax and made effective on the same day.  It is my belief that it will continue to be considered in tandem with IHT, rather than with the non-legislation of P. 161/2566.  While Gift Tax was introduced via a Royal Decree, IHT was introduced as an Act of Parliament. Srettha actually ordered the RD to review IHT and Gift Tax soon after he became PM and a few weeks later it was reported that the RD had completed its review and made suggestions as to how to tighten up IHT and gift tax to generate more tax revenue but the details were not made public.  Technically the government could do this with a Royal Decree but I feel that broadening the net of IHT which is an extremely unpopular tax in most countries through a Royal Decree would create a backlash and the government would think it safer to amend it through an Act of Parliament with token public consultation.  Of course gift tax could be amended separately with a Royal Decree but I suspect they will continue to be considered together.  The most likely outcome in my view is that thresholds for both IHT and gift tax will be reduced at some point.  The tax rates could also be raised.  If the gift tax threshold for spouses was halved to 10 million a year, that would still be fairly useful for most expats. 

 

A final point to note is that there is nothing to suggest that the spouses who receive tax exempt gifts should be Thai citizens. Foreign spouses are equally eligible.

 

 

The legislation has since been posted. 

 

I have quoted one clause of that legislation for the benefit of members. 

 

The debate continues on gifting as a tax avoidance strategy. 

[JimGant]

10 minutes ago, Mike Lister said:

Except where invoking a DTA would mean the right to tax, shifts from the UK to Thailand, which means the obligation to tax shifts also.

In either situation, the income that eventually ends up as a gift -- is taxed as income somewhere. You seem to be confusing income taxation of pre gift income with a gift tax, on a sum of after-income tax money subsequently gifted. I think when you said "the UK doesn't tax gifts from overseas." you meant: It didn't apply a gift tax to sums of money gifted from overseas. Totally separate from from any income taxation on this same pot of money.

[JBChiangRai]

1 minute ago, JBChiangRai said:

What about the scenario where there are two Thai tax residents, who also have accounts in the UK and one of them sends a gift from one to the other across UK banks. It's never remitted to Thailand, the receiver could later bring it in claiming gift allowance maybe 2 years later.  I can't see a liability on the giver.

 

 

 

Expanding on this, a tax resident foreigner who spends 5 months a yar in his home country with his wife, sends her 20M baht as a present in (say) Sweden to her bank in Sweden whilst staying there.

 

She subsequently brings it to Thailand, I can't see gifts acquired overseas being subject to Thai tax.

[KhunHeineken]

22 hours ago, BangkokHank said:

Here's what I did/plan to do: At the end of last year, I transferred into Thailand enough money to last me for a few years. Over the next few years, I will transfer into Thailand the maximum amount that I can transfer without incurring any tax obligation.

 

In the meantime, I will just let the rest of my money accumulate offshore for a few years. Then, during the year that I want to transfer into Thailand enough money to live off of for the following few years, I'll make it a point to spend just over six months out of the country, say in a cheap country like Vietnam - where I have many friends and generally enjoy being.

 

So instead of having to spend six months out of the country every year to eliminate my tax obligations in Thailand, I can do it once every three or so years. Sound like a good plan?

 

 

Interesting strategy, and I agree, it will work.

 

The only thing I can see that would be a concern is you will be paid a pittance by a Thai bank for the three years of money you have transferred in.  Never the less, not a bad plan at all. 

[Mike Lister]

3 minutes ago, JBChiangRai said:

I think the issue is the tax-point when the gift changes ownership. If that is in the UK (that income has already been taxed in the UK) then it shouldn't be assessable income in Thailand, if the tax-point is in Thailand, then it's assessable income of the donor.

 

What about the scenario where there are two Thai tax residents, who also have accounts in the UK and one of them sends a gift from one to the other across UK banks. It's never remitted to Thailand, the receiver could later bring it in claiming gift allowance maybe 2 years later.  I can't see a liability on the giver.

 

 

I don't know how valid it is to think UK income will always have been taxed hence not assessible. I can think of a number of ways that income might be received and not taxed.

 

In the second scenario: what type of income was sent from Thailand to the UK that comprised the Gift, assessable or not? You go on to say it is never remitted to Thailand but then say it is two years later. If the Gift comprised tax paid income, that entire chain is free of tax, despite it being two years later. One has to wonder why the funds need to be sent to the UK in the first place, only to be brought back later.

 

 

[KhunHeineken]

9 minutes ago, JBChiangRai said:

 

Expanding on this, a tax resident foreigner who spends 5 months a yar in his home country with his wife, sends her 20M baht as a present in (say) Sweden to her bank in Sweden whilst staying there.

 

She subsequently brings it to Thailand, I can't see gifts acquired overseas being subject to Thai tax.

She can't legally bring in the 20m gift in cash, she would have to remit it, as the owner. 

[Mike Lister]

8 minutes ago, JimGant said:

In either situation, the income that eventually ends up as a gift -- is taxed as income somewhere. You seem to be confusing income taxation of pre gift income with a gift tax, on a sum of after-income tax money subsequently gifted. I think when you said "the UK doesn't tax gifts from overseas." you meant: It didn't apply a gift tax to sums of money gifted from overseas. Totally separate from from any income taxation on this same pot of money.

My head hurts!

 

Do you agree that the Gift Tax rules, benefit the receiver of the gift rather than the gifter?

 

Do you agree that the benefit to the receiver is a zero rated or reduced rate of tax on income?

 

Do you believe there is a benefit to be derived from gifting the funds?

[Mike Lister]

2 minutes ago, KhunHeineken said:

She can't legally bring in the 20m gift in cash, she would have to remit it, as the owner. 

A person can bring in unlimited amounts of cash, as long as it is declared to Customs.

[KhunHeineken]

7 minutes ago, Mike Lister said:

A person can bring in unlimited amounts of cash, as long as it is declared to Customs.

Apologies to members.  Of course Mike is correct on this point. 

 

I was posting with my personal view that it's best to fly under the radar here for everything.  Declaring large sums of money at boarders may bring some unwanted attention. 

 

If this is no problem for some people, then they may wish to do as I suggested to another member and open a bank account in Cambodia and do the occasional "cash run" in the same way people do a "visa run." 

 

I have said I will be doing this with a Singapore bank account I have after the F1 every year, but not over the amount that must be declared. 

[JohnnyBD]

2 hours ago, JBChiangRai said:

 

In the third scenario above, assessable income is not assessable until you bring it to Thailand. If you gift it overseas, tax has already been collected there, and you never bring it to Thailand so I'm not sure that this can be assessable income, unless there is some specific clause for this.

 

I think the whole purpose of the gift provisions is to allow wealthy Thais to avoid tax, this would seem to make it impossible for them to do so.

This is very confusing to me, but I need to understand it because I send money directly to my Thai wife's Thai bank FCD account.

[Mike Teavee]

57 minutes ago, JimGant said:

The UK doesn't tax gifts from overseas -- because the obligation for income taxing the sum of money gifted is on the source country. The UK, like the US and all other OECD countries, assumes the gift is an after-income tax asset. And there's nothing out there, at least that I can find, that implies Thailand is unique in treating gifts as being exempt from income tax, whether due in the source country, or due in Thailand when remitted, prior to its becoming a gift.

 

Can anyone recall where this notion that income remitted to Thailand, that is assessable income -- is somehow tax exempt if its final use is as a gift? I think that somehow wishful thinking blossomed into presumed fact....

 

If you're talking about remitting the money to yourself & then gift it to somebody else then you are correct & you would need to pay tax on the remittance if the income was assessable. 

 

If you're talking about remitting the money directly to somebody else & it's a genuine gift, then it's not taxable... 

• TRD Section 41, points 27 & 28 https://www.rd.go.th/english/37749.html
• Sheerings - https://sherrings.com/gift-tax-law-in-thailand.html
• PWC - https://taxsummaries.pwc.com/thailand/individual/income-determination#:~:text=Gifts,type of gift and donor.

• Herrera - https://www.herrera-partners.com/2024/01/10/on-gift-tax-and-properties-in-thailand/#:~:text=The following is the criteria,receiver is other third party.

[Mike Lister]

2 minutes ago, Mike Teavee said:

 

If you're talking about remitting the money to yourself & then gift it to somebody else then you are correct & you would need to pay tax on the remittance if the income was assessable. 

 

If you're talking about remitting the money directly to somebody else & it's a genuine gift, then it's not taxable... 

• TRD Section 41, points 27 & 28 https://www.rd.go.th/english/37749.html
• Sheerings - https://sherrings.com/gift-tax-law-in-thailand.html
• PWC - https://taxsummaries.pwc.com/thailand/individual/income-determination#:~:text=Gifts,type of gift and donor.

• Herrera - https://www.herrera-partners.com/2024/01/10/on-gift-tax-and-properties-in-thailand/#:~:text=The following is the criteria,receiver is other third party.

"If you're talking about remitting the money directly to somebody else & it's a genuine gift, then it's not taxable... " I'm struggling to see where it says this in the links, that income is not assessable, if it is gifted directly to another.

[Mike Lister]

38 minutes ago, Mike Lister said:

My head hurts!

 

Do you agree that the Gift Tax rules, benefit the receiver of the gift rather than the gifter?

 

Do you agree that the benefit to the receiver is a zero rated or reduced rate of tax on income?

 

Do you believe there is a benefit to be derived from gifting the funds?

Bump

[Mike Teavee]

8 minutes ago, Mike Lister said:

"If you're talking about remitting the money directly to somebody else & it's a genuine gift, then it's not taxable... " I'm struggling to see where it says this in the links, that income is not assessable, if it is gifted directly to another.

Sorry, I should have added "Up to permissible Limits" (i.e. the 20Million / 10Million thresholds) but all of the links are very clear that genuine Gifts up to these limits are not subject to Personal Income Tax... 

 

E.g. PWC https://taxsummaries.pwc.com/thailand/individual/income-determination#:~:text=Gifts,type of gift and donor.

Gifts

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.

The following gifts are exempt from PIT:

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

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.

 

 

 

[Mike Lister]

2 minutes ago, Mike Teavee said:

Sorry, I should have added "Up to permissible Limits" (i.e. the 20Million / 10Million thresholds) but all of the links are very clear that genuine Gifts up to these limits are not subject to Personal Income Tax... 

 

E.g. PWC https://taxsummaries.pwc.com/thailand/individual/income-determination#:~:text=Gifts,type of gift and donor.

Gifts

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.

The following gifts are exempt from PIT:

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

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.

 

 

 

Yes I agree with that part and always have. Perhaps we're talking at cross purposes, I'm referring to the funds that are gifted and their accessibility on the part of the giver, not the receiver. I'm going to go and take a nice walk and clear my head and come back to this.

[JohnnyBD]

7 minutes ago, Mike Teavee said:

Sorry, I should have added "Up to permissible Limits" (i.e. the 20Million / 10Million thresholds) but all of the links are very clear that genuine Gifts up to these limits are not subject to Personal Income Tax... 

 

E.g. PWC https://taxsummaries.pwc.com/thailand/individual/income-determination#:~:text=Gifts,type of gift and donor.

Gifts

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.

The following gifts are exempt from PIT:

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

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.

 

 

 

It seems to say the PIT is levied on the assets received by the giftee (the giftee pays the tax) if over the limits, not on the gifter. If that is true, why is everyone debating about taxing the gifter. What am I not understanding?

[Mike Teavee]

20 minutes ago, Mike Lister said:

Yes I agree with that part and always have. Perhaps we're talking at cross purposes, I'm referring to the funds that are gifted and their accessibility on the part of the giver, not the receiver. I'm going to go and take a nice walk and clear my head and come back to this.

Ahh, so  we're debating whether a Thai Tax Resident sending his wife a Gift from his overseas account would be liable for Tax on the Gift even if it doesn't come into his account? 

 

IMHO the answer is NO as you are not remitting any money for yourself & (in the case of a genuine gift) will receive no benefits from that Gift 

 

 

Edit: OK TO me this says that there is no tax from either side up to the Thresholds but if you exceed these then both Gifter & Giftee could be subject to Gift Tax (5%)...

How Thailand taxes gifts

Since February 2016, gifts have been considered part of personal income. In Thailand, gift taxes can be defined as taxation on the transfer of property, and taxpayers can opt to pay a 5% gift tax on property values exceeding THB 10 or 20 million rather than including the excess into their net taxable income, which is subject to progressive tax rates. Both individuals, even if they are non-Thai citizens, and juristic persons are subject to the gift tax.

There are exemptions to the gift tax, particularly gifts worth less than THB 20 million given by a spouse or family member, or gifts worth less than THB 10 million from any other person. Gifts obtained for the purposes of preserving cultural heritage, upholding moral values, or performing parental responsibilities are also exempt.

As always, if you feel you have the need to revoke an ill-advised gift due to the reasons mentioned above, it is essential to quickly contact an experienced lawyer to guide you through this matter. Remember: the clock is ticking.

 

https://silklegal.com/law-on-gifts-in-thailand/#:~:text=Both individuals%2C even if they,million from any other person.

 

 

 

 

[JimGant]

39 minutes ago, Mike Lister said:

Do you agree that the Gift Tax rules, benefit the receiver of the gift rather than the gifter?

 

Well, if the gifter gets to exempt the full amount of the gift from Thai  income taxes, then, obviously, he benefits the most. But, I don't believe this is where Thai tax authorities are. And the receiver certainly has an out-of-the-blue windfall, 'tho she (assuming wife/mother) has to pay a 5% gift tax on amounts greater than 20M baht. Thus, the gifter may have a tax holiday in two ways -- income and gift taxes. So, I'd say he's the winner.

51 minutes ago, Mike Lister said:

Do you agree that the benefit to the receiver is a zero rated or reduced rate of tax on income?

 

The gift is not income, so income tax doesn't come into play (not to be confused with gift tax). But, yes, as a gift the first 20M is exempt from a gift tax; and the whole total amount, as long as a legitimate gift, is exempt from income taxes. So, yeah, good deal for the receiver. But, the receiver DOES have to pay the tax on the 20M excess, not the gifter. (Unlike in the US, where the gifter pays the tax, not the recipient.)

 

1 hour ago, Mike Lister said:

Do you believe there is a benefit to be derived from gifting the funds?

 

The recipient of the gift is certainly pleased. Now the gifter -- if he believes whatever amount of previously assessable/taxable income is now tax exempt -- he's, of course, now over the moon. And, if he can believe all the supporting blah blah on this forum, come next March2025, when he files his taxes, can just omit as assessable income that chunk of money he remitted in 2024 that ended up as a gift. [Mike, don't cut that, as it's just an observation, not an illegal endorsement.]

[Mike Teavee]

13 minutes ago, JimGant said:

The recipient of the gift is certainly pleased. Now the gifter -- if he believes whatever amount of previously assessable/taxable income is now tax exempt -- he's, of course, now over the moon. And, if he can believe all the supporting blah blah on this forum, come next March2025, when he files his taxes, can just omit as assessable income that chunk of money he remitted in 2024 that ended up as a gift. [Mike, don't cut that, as it's just an observation, not an illegal endorsement.]

 

Why would he be over the moon? He's 20 Million out of pocket & got zero benefit from it beyond the warm feeling of giving somebody a Gift, he'd be in a much better position if he simply left the money where it was. 

 

Edit: Again, I'm talking about a direct remittance to the Giftee from overseas & not a remittance to his Thai bank account & then a gift from there to the Giftee. 

 

[JimGant]

42 minutes ago, Mike Teavee said:

(i.e. the 20Million / 10Million thresholds) but all of the links are very clear that genuine Gifts up to these limits are not subject to Personal Income Tax... 

Not subject to a GIFT TAX. Yes, the guidance uses personal income tax in lieu of gift tax -- that makes matters all that more confusing. Gifts are NOT subject to income tax, period. Only the money that became a gift is subject to income tax.

[JimGant]

10 minutes ago, Mike Teavee said:

Why would he be over the moon? He's 20 Million out of pocket & got zero benefit from it beyond the warm feeling of giving somebody a Gift

He's over the moon because whatever he gave as a gift is (he believes) exempt from Thai income taxes. If that 20M leaves a hole in his budget, he can discuss remedies with the gift recipient. Meanwhile, he can enjoy maybe a 35% windfall on taxes.

[Neeranam]

19 hours ago, Dogmatix said:

 

Ok if the RD is not successful in getting the government to amend the RC to introduce global taxation, as they said was the ultimate goal when they introduced the reinterpretation which they said was only a stop gap solution.  In that case becoming a non-tax resident would only exempt you from Thai tax on income earned in that year, regardless of whether it was remitted or not.  However, there is a great deal of uncertainty about when or whether this can be done, as indeed there is about how the reinterpretation will be interpreted.

How many years do you estimate that it will take to implement the changes?

I'd guess at least 5.

[Mike Teavee]

3 minutes ago, JimGant said:

Not subject to a GIFT TAX. Yes, the guidance uses personal income tax in lieu of gift tax -- that makes matters all that more confusing. Gifts are NOT subject to income tax, period. Only the money that became a gift is subject to income tax.

Surely in the case where somebody sends the money directly from an overseas account, the money became a Gift before it was remitted so any tax on it would only be due in the source country unless it's value exceeded the thresholds. 

 

Just now, JimGant said:

He's over the moon because whatever he gave as a gift is (he believes) exempt from Thai income taxes. If that 20M leaves a hole in his budget, he can discuss remedies with the gift recipient. Meanwhile, he can enjoy maybe a 35% windfall on taxes.

But that wouldn't meet the definition of a Gift & could arguably be classed as Evasion which is not what we're discussing here, you can't go around taxing everybody on any Gifts they make on the off chance that they are doing it to evade paying tax.

 

 

[BangkokHank]

2 hours ago, KhunHeineken said:

Interesting strategy, and I agree, it will work.

 

The only thing I can see that would be a concern is you will be paid a pittance by a Thai bank for the three years of money you have transferred in.  Never the less, not a bad plan at all. 

I put the first tranche of the money that I sent over last December into physical gold. It's already up over 30% since I bought it six months ago. That makes up for several years worth of paltry interest at a Thai bank.