Legal Strategies to Reduce Thai Tax

[Mike Teavee]

1 hour ago, JohnnyBD said:

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.

Unfortunately Capital Gains on the sale of stock will be based on original costs & Thailand would tax the whole gain if you remitted the money, the only way you could have locked in the value as at 31/12/2023 would have been to have sold them.

 

E.g. Lets say I bought 1000 shares in 2020 at £1 per share & sold them tomorrow for £2 per share, I would be taxed on the whole £1,000 gain not what they were worth on 31/12/2023.

  

I do wonder what the position would be if I used the money to buy new shares (In the UK it would have to be different stock) & then sold these, my Capital gains on the 2nd sale is likely to be a loss but would the original gain be counted even though I didn't remit it to Thailand. 

 

 

Edited July 27 by Mike Teavee

[placnx]

On 5/18/2024 at 9:00 PM, Lacessit said:

The three ways I can think of in terms of reducing tax in Thailand are as follows:

 

1/ Getting married to a Thai, to take maximum advantage of allowances.

 

2/ Only remitting funds from savings which can be proved to have accrued prior to January 1, 2024.

 

3/ Bringing in cash to Thailand when returning from one's country of origin.

Concerning (2), I assume that you are thinking of transferring from an account where funds are not going in, and there is no ongoing income. I'm skeptical. If you have income from any source, to my mind normally that would count first, regardless of the account (outside Thailand) from which funds were transferred.

[JohnnyBD]

3 hours ago, Mike Teavee said:

Unfortunately Capital Gains on the sale of stock will be based on original costs & Thailand would tax the whole gain if you remitted the money, the only way you could have locked in the value as at 31/12/2023 would have been to have sold them.

I guess the only way for your capital gains to be non-assessable income is to not be a tax resident in the year you remit the proceeds to Thailand.

[Mike Teavee]

4 minutes ago, JohnnyBD said:

I guess the only way for your capital gains to be non-assessable income is to not be a tax resident in the year you remit the proceeds to Thailand.

Technically it's to be non-tax resident in the year the gain was made, but for something big like the CGT on the sale of a house I would do both (realise & remit) in a year I was non-tax resident. 

 

[Sheryl]

14 hours ago, jmd8800 said:

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.

In Thailand there is a special deduction for pension income in addition to the standard deduction and over age 65 deduction. Might  well turn out to owe no, or very little, Thai tax for 2024. If worldwide taxation is introduced then of course you'd owe more but any Thai taxes paid become a tax credit for US taxes ,and vice versa. More likely to be a paperwork hassle than an actual cost to you. 

[CallumWK]

1 minute ago, Sheryl said:

If worldwide taxation is introduced then of course you'd owe more

 

If that is ever introduced here, Thailand will be depleted of expats

[Robin]

Many thanks to the various posts and links on tax guidance.  Slowly, the situation is becoming more clear.

 

My retirement plans had been thrown into disarray by the proposed Thai tax changes, but hopefully not as badly as it first seemed.

My retirement plans were cantered  on rented property in UK, purchased from income when working.  All income was declared and taxed in UK.

My plan was; when managing rented property in  UK became too much of a chore, to sell the property and invest the monies and live on the interest.  I was also intending to draw down some of the capital to augment my income as required.  ( if the money was invested in UK., I believe I could draw down a max. of 5% a year)

With luck and planning, I should have had enough to live on and who cared if I died with only a few $$ in the bank, my dependants were already cared for.

When these plans were formulated, Thai tax allowed me to bring money earned outside Thailand into LOS with no tax liability, so the recent proposals caused some concern.

Now, if I understand the situation correctly, I need to make sure I am not a Thai Tax resident for the year I sell my UK property, or find somewhere outside Thailand to keep the money from the sales.

Am I on the right lines, or still confused?  Before making any moves, I will wait until these new rules become law n Thailand, so I know what I am dealing with, and look for professional advice if it's not clear then,

With respect, I would regard advice on thsi Forum as being suggestions and definitions of Thai law.

 

[MikePBrown]

7 hours ago, Robin said:

Many thanks to the various posts and links on tax guidance.  Slowly, the situation is becoming more clear.

 

My retirement plans had been thrown into disarray by the proposed Thai tax changes, but hopefully not as badly as it first seemed.

My retirement plans were cantered  on rented property in UK, purchased from income when working.  All income was declared and taxed in UK.

My plan was; when managing rented property in  UK became too much of a chore, to sell the property and invest the monies and live on the interest.  I was also intending to draw down some of the capital to augment my income as required.  ( if the money was invested in UK., I believe I could draw down a max. of 5% a year)

With luck and planning, I should have had enough to live on and who cared if I died with only a few $$ in the bank, my dependants were already cared for.

When these plans were formulated, Thai tax allowed me to bring money earned outside Thailand into LOS with no tax liability, so the recent proposals caused some concern.

Now, if I understand the situation correctly, I need to make sure I am not a Thai Tax resident for the year I sell my UK property, or find somewhere outside Thailand to keep the money from the sales.

Am I on the right lines, or still confused?  Before making any moves, I will wait until these new rules become law n Thailand, so I know what I am dealing with, and look for professional advice if it's not clear then,

With respect, I would regard advice on thsi Forum as being suggestions and definitions of Thai law.

 

My understanding is that you will only have a Thailand Income Tax liability on money brought into Thailand, any money held outside of Thailand will not be of concern to the TRD. If you intend to bring all of the sale proceeds into Thailand in one transfer the advice given in a previous post was to make sure you are not a Thai Tax resident for the year you sell the property and transfer the proceeds to Thailand. If you are intending to transfer the money as a when needed then you would have a tax liability for the capital gains portion - however you would probably have to prove the original purchase price was from pre 1/1/24 monies.

[MikePBrown]

7 hours ago, Robin said:

Many thanks to the various posts and links on tax guidance.  Slowly, the situation is becoming more clear.

 

My retirement plans had been thrown into disarray by the proposed Thai tax changes, but hopefully not as badly as it first seemed.

My retirement plans were cantered  on rented property in UK, purchased from income when working.  All income was declared and taxed in UK.

My plan was; when managing rented property in  UK became too much of a chore, to sell the property and invest the monies and live on the interest.  I was also intending to draw down some of the capital to augment my income as required.  ( if the money was invested in UK., I believe I could draw down a max. of 5% a year)

With luck and planning, I should have had enough to live on and who cared if I died with only a few $$ in the bank, my dependants were already cared for.

When these plans were formulated, Thai tax allowed me to bring money earned outside Thailand into LOS with no tax liability, so the recent proposals caused some concern.

Now, if I understand the situation correctly, I need to make sure I am not a Thai Tax resident for the year I sell my UK property, or find somewhere outside Thailand to keep the money from the sales.

Am I on the right lines, or still confused?  Before making any moves, I will wait until these new rules become law n Thailand, so I know what I am dealing with, and look for professional advice if it's not clear then,

With respect, I would regard advice on thsi Forum as being suggestions and definitions of Thai law.

 

Robin - a further thought is that if you sell your rental property and it is either a second home and or you are a UK non-resident at the time of selling you will have UK capital gains liability which I understand through the DTA you could use as a credit against any Thai Income Tax.

[vibration]

Sheryl could you please elaborate on the special deduction for pension income many thanks in advance.

 

21 hours ago, Sheryl said:

In Thailand there is a special deduction for pension income in addition to the standard deduction and over age 65 deduction.

 

[Sheryl]

3 hours ago, vibration said:

Sheryl could you please elaborate on the special deduction for pension income many thanks in advance.

 

 

Scroll down   to section on Tax Exemptions, Deductions and Allowances

 

 

[JBChiangRai]

 

This is why most of you should do nothing.

 

Have you been bringing money into Thailand at any time in the last decade that was not savings (eg pension or earnings) & you brought it in in the same year you earned it?

 

Guess what? Tax is due for all those years.

 

So you submit a tax return for 2024 and the revenue may ask you, what about 2023, 2022, 2021 etc etc

 

AFAIK, there are only 2 tax changes effective 1/1/2024 to need to consider.  The first is on Crypto sales on Thai exchanges and the 2nd is on bringing in money earned prior to 1/1/2024.

 

Edited July 29 by JBChiangRai
Spellification

[Yumthai]

19 minutes ago, JBChiangRai said:

The first is on Crypto sales on Thai exchanges

That was a no-go since the beginning as Thai exchanges will obediently provide all transactions history to TRD at first request.

[JBChiangRai]

2 minutes ago, Yumthai said:

That was a no-go since the beginning as Thai exchanges will obediently provide all transactions history to TRD at first request.

 

They have to provide it annually.  The difference from 1/1/2024 is that those transactions explicitly became taxable.  They were not explicitly taxable last year.

[Yumthai]

14 minutes ago, JBChiangRai said:

They were not explicitly taxable last year.

Local capital gains were always taxable at PIT rates.

[JBChiangRai]

1 minute ago, Yumthai said:

Local capital gains were always taxable at PIT rates.

 

That's why I used the term "explicitly taxable" 

 

They clairified that from 1/1/2024.

[alanrchase]

41 minutes ago, JBChiangRai said:

 

This is why most of you should do nothing.

 

Have you been bringing money into Thailand at any time in the last decade that was not savings (eg pension or earnings) & you brought it in in the same year you earned it?

 

Guess what? Tax is due for all those years.

 

So you submit a tax return for 2024 and the revenue may ask you, what about 2023, 2022, 2021 etc etc

 

AFAIK, there are only 2 tax changes effective 1/1/2024 to need to consider.  The first is on Crypto sales on Thai exchanges and the 2nd is on bringing in money earned prior to 1/1/2024.

 

Where have you got the information that you will be taxed for the previous decade from? As far as I understand the government officially stopped requiring foreigners to declare remitted money quite some time ago (late 80s?). They are reintroducing it this year so why would you have to worry about previous years? Nothing in any reports I have read make any mention of back tax. 

This is a thread about legal ways to avoid tax, your suggestion of not submitting a tax return if you have taxable money remitted to Thailand is tax evasion.

[JBChiangRai]

3 minutes ago, alanrchase said:

Where have you got the information that you will be taxed for the previous decade from? As far as I understand the government officially stopped requiring foreigners to declare remitted money quite some time ago (late 80s?). They are reintroducing it this year so why would you have to worry about previous years? Nothing in any reports I have read make any mention of back tax. 

This is a thread about legal ways to avoid tax, your suggestion of not submitting a tax return if you have taxable money remitted to Thailand is tax evasion.

 

Where have you got the information that you will be taxed from 1/1/2024?

 

The tax situation is, and always has been, the same for foreigners as it was/is for Thais.

 

Tax has always been due on earnings brought into Thailand in the same year it was earned, we have never had a pass.

Edited July 29 by JBChiangRai
Spellification

[CharlieKo]

13 minutes ago, JBChiangRai said:

Tax has always been due on earnings brought into Thailand in the same year it was earned, we have never had a pass.

Prior to 1/1/2024

 

If you were taxed in your home country on income received there, you were not required to pay tax in Thailand. Even if it was remitted in the same year. 

[motdaeng]

8 minutes ago, JBChiangRai said:

Tax has always been due on earnings brought into Thailand in the same year it was earned, we have never had a pass.

 

i think the majority of foreigners haven't been aware of it; in the past many transferred earnings

in the same year to thailand and committed technical tax evasion.

 

for this year, the rules are clear about who should file a tax return:

 

 

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

[JBChiangRai]

1 minute ago, CharlieKo said:

Prior to 1/1/2024

 

If you were taxed in your home country on income received there, you were not required to pay tax in Thailand. Even if it was remitted in the same year. 

 

That is untrue.

[motdaeng]

1 minute ago, CharlieKo said:

Prior to 1/1/2024

 

If you were taxed in your home country on income received there, you were not required to pay tax in Thailand. Even if it was remitted in the same year. 

 

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

[JBChiangRai]

1 minute ago, motdaeng said:

 

i think the majority of foreigners haven't been aware of it; in the past many transferred earnings

in the same year to thailand and committed technical tax evasion.

 

for this year, the rules are clear about who should file a tax return:

 

 

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

 

That is very true for 2024.  It was also true for 2023.

 

Historically, the RD has turned a blind eye to foreigners who money comes from overseas.  I haven't seen any evidence that has changed from the RD, I have seen it from tax advisers looking for fees.

[alanrchase]

1 hour ago, JBChiangRai said:

 

Where have you got the information that you will be taxed from 1/1/2024?

 

The tax situation is, and always has been, the same for foreigners as it was/is for Thais.

 

Tax has always been due on earnings brought into Thailand in the same year it was earned, we have never had a pass.

I agree the tax situation as written in law has always been the same, however they stopped applying it to foreigners some time ago. The government has announced that as of 01 Jan 24 they will start applying it again. They have also mentioned changing the law to tax worldwide income.

Where did I get the information from? Reports about what the government is proposing. This is a thread about those reports. 

Where have you got your information reporting that they will impose back tax?

[JBChiangRai]

1 minute ago, alanrchase said:

I agree the tax situation as written in law has always been the same, however they stopped applying it to foreigners some time ago. The government has announced that as of 01 Jan 24 they will start applying it again. They have also mentioned changing the law to tax worldwide income.

Where did I get the information from? Reports about what the government is proposing. This is a thread about those reports. 

Where have you got your information reporting that they will impose back tax?

 

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.

 

[jmd8800]

Thanks for all the responses. I'm waiting for some tax guidance from the USA accountant that files my taxes each year. Depending on what he says, and what the Thai gov't actually does, I'll make my decisions. 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.

 

I guess I won't be buying any new cars for a while.

[CharlieKo]

2 hours ago, JBChiangRai said:

 

That is untrue.

It is what I was told by the revenue department. But have it your way. I really don't give a sh....t. You are just spreading miss information. 

[alanrchase]

1 hour 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.

 

 

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.austchamthailand.com/thai-government-to-begin-taxing-foreign-sourced-income-as-of-2024/&ved=2ahUKEwjK7JybqsuHAxVjU2wGHdTaLm8QFnoECCEQAQ&usg=AOvVaw2KEfoTIuZTDHKS0dY4TCEK

 

"Have you been bringing money into Thailand at any time in the last decade that was not savings (eg pension or earnings) & you brought it in in the same year you earned it?

 

Guess what? Tax is due for all those years."

 

I don't see the words "may be due".

 

[JBChiangRai]

14 minutes ago, alanrchase said:

 

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.austchamthailand.com/thai-government-to-begin-taxing-foreign-sourced-income-as-of-2024/&ved=2ahUKEwjK7JybqsuHAxVjU2wGHdTaLm8QFnoECCEQAQ&usg=AOvVaw2KEfoTIuZTDHKS0dY4TCEK

 

"Have you been bringing money into Thailand at any time in the last decade that was not savings (eg pension or earnings) & you brought it in in the same year you earned it?

 

Guess what? Tax is due for all those years."

 

I don't see the words "may be due".

 

 

 

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.

[alanrchase]

11 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.

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.