Legal Strategies to Reduce Thai Tax

[KhunHeineken]

13 hours ago, proton said:

 

Transfer your tax free limit, then the rest as a gift to the Mrs. It's legal and what she spends it on is legal, let them audit you, no tax to pay.

It would stand to reason that they tighten this loophole and start taxing the Thai spouses on the gift amount as if it was earnings.  That policy is for 2025. 

[Mike Teavee]

2 hours ago, JBChiangRai said:

Gifts between husband and wife are considered conjugal property and therefore you have an interest in the gift and I expect the TRD would say they are taxable.

 

However, I do expect a tax accountant could draw up some kind of specific agreement to get round this, there would also be specific conditions on how the gift is spent so the gifter obtained no advantage from it and relinquished all claim on the gift save those required, defamation etc

 

Seems to answer the question for both Spouse-Spouse Gifts & Gifts from Parents etc... Any gifts received are solely owned by the person receiving the gift....

 

 

3. Property acquired by either spouse during marriage through inheritance or gift
If a spouse acquires any assets or property during marriage through inheritance, whether as a statutory heir or a beneficiary named in a will, such assets are considered personal property of the acquiring spouse. The same applies to gifts received by either spouse, which are specifically intended for them and without any consideration. Such gifts are the sole property of the receiving spouse. This principle also applies when a spouse gives a gift to the other spouse, which will be deemed the separate property of the recipient, even during the marriage.

 

https://www.lafs-legal.com/blog/9633/personal-property-and-marital-property

 

[Mike Teavee]

58 minutes ago, TroubleandGrumpy said:

Did I also popint out that big companies like Expedia dont actually pay the Hotel for every visit?  They have an Agreement and under that they make a single total payment (after fees etc) once a month to the hotel.  Friends of a mate have 3 small units in Isaan (we stayed there a few times) and they stopped using them because of the fees and late payment. 

Again, I don't want to belabour the comparison to Wise, but Wise typically doesn't remit your money as a single transaction but uses money already in Thailand to pay you out & then will settle it's own accounts periodically by moving money across.

 

So if 10 people sent £1,000 to Thailand, Wise would pay them 460,000 THB out of money in their Thai Bank accounts & at some point in the future send over the £10,000 to square their accounts, if in the meantime somebody had sent 46,000 THB back (Bad example as Wise doesn't do external transfers from Thailand but in other countries where they do) then they would square it up by sending £9,000 back 

[KhunHeineken]

2 hours ago, Yumthai said:

For those who think a gift remitted from overseas between spouses could be assessable income just use the gift rules as being the giftee when possible: A non Thai tax resident parent or child can send to the Thai tax resident child/parent giftee up to THB20M/year tax-free.

 

 

I just commented on this.  There are many relying solely on this strategy.  I would be considering a Plan B, because I can see this tightening up in the future, once the Thai government see how "gifting" is being used so easily as a tax avoidance strategy. 

[Ben Zioner]

On 5/18/2024 at 6:35 AM, Mike Lister said:

1) Do not become Thai tax resident by remaining in Thailand more than 179 days in any calendar year.

2) Do not remit more assessable income to Thailand than your tax allowances/deductions/zero rated tax band (TEDA) allow.

A couple of thoughts on that.

 

Do not try to pay zero income tax, the cost of achieving that might be higher than the tax you would have paid with a less binary attitude. Some level of contribution to the country we live in can also be gratifying, even though LOS is the most ungrateful place I have lived in.

 

You don't have to be non resident every year, depending on your income/savings configuration you could be non resident every other year, third year or fourth year. Mobilise/Remit your savings in the non resident year, to keep tax below the 20% threshold during resident years.

Edited May 21 by Ben Zioner

[ukrules]

11 minutes ago, KhunHeineken said:

Instead of leaving for Cambodia for a long trip, have you considered getting the 6 or 12 month Cambodia visa, which is needed to open a bank account in Cambodia, then have your "considerable funds" deposited into the Cambodian bank account, and then do some "cash runs" in the same way many people do "visa runs?" 

 

You and the Thai missus can bring back to Thailand just under the maximum allowed, and it can be a short break away for a few days every now and then, unless you need the lump sum here for other reasons.  You'll still be a Thai resident for tax purposes, but just have no remitted funds.  

 

If you live near a boarder, one of the many casinos set up for Thai gamblers can be used as a couple of days away and a cash run.  There's no requirement to gamble. 

 

I go to the Singapore F1 every year.  I have a bank account in Singapore.  I will be ordering a reasonable amount of Thai baht to bring back each year.  Not enough to live on for the year, but just one strategy of a few I will be using that should see me pay little to none of this tax. 

 

With guys using legal strategies to minimize / avoid paying this tax, if some type of certificate from the RD is needed at extension time, it's going to be funny when the immigration officers all around the country ask, "What money you live on in Thailand?"  The reply from guys all over the country,  "Thai lady take care me." 

 

As I mentioned in the other thread, I suspect the Thai banks will not be too happy with this policy.  

 

We're getting either a 6 month or 12 month Cambodia visa after we both received online E-Type visas that can be converted inside Cambodia. I'll do the conversion next week I think.

 

When I do remit it will be a large amount as we are likely going to buy a place to live in but I'm not ready just yet.

 

Also I will send enough into Thailand to last me for years to come without remitting anything, or perhaps a minimum amount so I don't need to deal with this or repeat it for a long time.

 

You never know though, we might really like it in Cambodia compared to Hua Hin, but they also have a 180+ day system and it's far worse, apparently their law says they can tax worldwide income - but I believe it's not something that anyone has ever paid.

 

For the time being I would like to remain unregistered and continue to have no TIN and the only way I can see this happening and being legal is to make the move now.

 

Then I'll sit back and watch how it all unfolds

 

There are some potentially interesting events unfolding with the PM this week and with this place you never know how things will turn out.

 

[JimGant]

22 minutes ago, KhunHeineken said:

If it's a debit card, it's not a loan. 

Correct. But he asked about sticking a credit card into the ATM machine. So it would be a loan, using a CC for a cash advance.

[Mike Teavee]

5 minutes ago, Ben Zioner said:

You don't have to be non resident every year, depending on your income/savings configuration you could be non resident every other year, third year or fourth year. Mobilise/Remit your savings in the non resident year, to keep tax below the 20% threshold during resident years.

There is still an outstanding question on this point - "Is any Income earned whilst a Thai Tax Resident taxable if I remit it in a year when I'm not Tax Resident"

 

My gut feel was No as you wouldn't be completing a Thai Tax Return (unless you had Thai sourced income > 60K), but others feel it is Taxable as it was earned whilst you were a Thai Tax Resident. 

 

No definitive answer but I'll be Non-Tax Resident in the year I get & remit the 25% Tax free lump sum from my pension just in case.  

[TroubleandGrumpy]

20 minutes ago, KhunHeineken said:

It would stand to reason that they tighten this loophole and start taxing the Thai spouses on the gift amount as if it was earnings.  That policy is for 2025. 

The TRD has allowed 20-30 million Thais not lodging tax returns, and they have done nothing about for many decades. Would they seriously target the partners of Expats alone and not all the other Thais - the social media outcry would be horrendous for the Govt politically. 

[TroubleandGrumpy]

23 minutes ago, Mike Teavee said:

 

Seems to answer the question for both Spouse-Spouse Gifts & Gifts from Parents etc... Any gifts received are solely owned by the person receiving the gift....

 

 

3. Property acquired by either spouse during marriage through inheritance or gift
If a spouse acquires any assets or property during marriage through inheritance, whether as a statutory heir or a beneficiary named in a will, such assets are considered personal property of the acquiring spouse. The same applies to gifts received by either spouse, which are specifically intended for them and without any consideration. Such gifts are the sole property of the receiving spouse. This principle also applies when a spouse gives a gift to the other spouse, which will be deemed the separate property of the recipient, even during the marriage.

 

https://www.lafs-legal.com/blog/9633/personal-property-and-marital-property

 

Thanks - that is even more 'evidience' that gifting is a legitimate tax avoidance strategy (for now). 

[TroubleandGrumpy]

18 minutes ago, Mike Teavee said:

Again, I don't want to belabour the comparison to Wise, but Wise typically doesn't remit your money as a single transaction but uses money already in Thailand to pay you out & then will settle it's own accounts periodically by moving money across.

 

So if 10 people sent £1,000 to Thailand, Wise would pay them 460,000 THB out of money in their Thai Bank accounts & at some point in the future send over the £10,000 to square their accounts, if in the meantime somebody had sent 46,000 THB back (Bad example as Wise doesn't do external transfers from Thailand but in other countries where they do) then they would square it up by sending £9,000 back 

I hear you - and agree that Wise was a bad example as they send money into a single person's bank account. 

[Ben Zioner]

3 minutes ago, TroubleandGrumpy said:

The TRD has allowed 20-30 million Thais not lodging tax returns, and they have done nothing about for many decades. Would they seriously target the partners of Expats alone and not all the other Thais - the social media outcry would be horrendous for the Govt politically. 

My understanding is that the year of earning is only relevant to pre 2024 income and savings. After that is remittance tax: you are taxed on what you bring in whatever it is.

[Mike Lister]

23 minutes ago, KhunHeineken said:

They would need to be able to differentiate between tourists and expats at the time of the withdrawal, at the ATM.  Not going to happen.

Your mindset is completely wrong on this. There will be no real time monitoring of ATM withdrawals and assessment of whether the person is a tourist or resident expat, that's so futuristic as to be unimaginable in Thailand presently. This entire conversation is solely about one thing and one thing only.....what is assessable income  and what is not. It's not about whether you're likely to get caught; it's not about will they monitor this or that it's not about the various workarounds, discussions about those will not be held here! At this stage there is a question mark whether CC transactions and cash advances, using foreign cards in Thailand, represents assessable income for Thai tax residents.  That issue has been put on the list of unknowns in the document, awaiting further research and clarification.

[TroubleandGrumpy]

15 minutes ago, ukrules said:

 

We're getting either a 6 month or 12 month Cambodia visa after we both received online E-Type visas that can be converted inside Cambodia. I'll do the conversion next week I think.

 

When I do remit it will be a large amount as we are likely going to buy a place to live in but I'm not ready just yet.

 

Also I will send enough into Thailand to last me for years to come without remitting anything, or perhaps a minimum amount so I don't need to deal with this or repeat it for a long time.

 

You never know though, we might really like it in Cambodia compared to Hua Hin, but they also have a 180+ day system and it's far worse, apparently their law says they can tax worldwide income - but I believe it's not something that anyone has ever paid.

 

For the time being I would like to remain unregistered and continue to have no TIN and the only way I can see this happening and being legal is to make the move now.

 

Then I'll sit back and watch how it all unfolds

 

There are some potentially interesting events unfolding with the PM this week and with this place you never know how things will turn out.

 

Maybe take a look at Malaysia and Philipinnes - I understand that they both dont tax FSI (Foreign Sourced Income) that has been subjected to the taxation system of the country of origin, and there are other exclusion conditions too.  

 

 

[Mike Lister]

A post describing how to evade Thai tax has been removed, along with a link to the same.

 

I could not have been more clear about what can and cannot be discussed here, that is strike one.

[TroubleandGrumpy]

9 minutes ago, Mike Teavee said:

There is still an outstanding question on this point - "Is any Income earned whilst a Thai Tax Resident taxable if I remit it in a year when I'm not Tax Resident"

 

My gut feel was No as you wouldn't be completing a Thai Tax Return (unless you had Thai sourced income > 60K), but others feel it is Taxable as it was earned whilst you were a Thai Tax Resident. 

 

No definitive answer but I'll be Non-Tax Resident in the year I get & remit the 25% Tax free lump sum from my pension just in case.  

IMO it is only taxable when the income is remitted and that it becomes taxable income if you are then at time of remittancxe a tax resident.  Or is Thailand going to apply back-taxes to the income of anyone retiring in Thailand in 2030 for the 6 years from 2024 to 2030?? Obviously not and they cannot do that. BUT that does not mean that Somchai in the local TRD will not try to hit you for back-taxes under your scenario, because of the incompetent rules in the Thai Tax Code and the poor (if any) training provided. Stay away from them IMO. 

[KhunHeineken]

14 minutes ago, ukrules said:

 

We're getting either a 6 month or 12 month Cambodia visa after we both received online E-Type visas that can be converted inside Cambodia. I'll do the conversion next week I think.

 

When I do remit it will be a large amount as we are likely going to buy a place to live in but I'm not ready just yet.

 

Also I will send enough into Thailand to last me for years to come without remitting anything, or perhaps a minimum amount so I don't need to deal with this or repeat it for a long time.

 

You never know though, we might really like it in Cambodia compared to Hua Hin, but they also have a 180+ day system and it's far worse, apparently their law says they can tax worldwide income - but I believe it's not something that anyone has ever paid.

 

For the time being I would like to remain unregistered and continue to have no TIN and the only way I can see this happening and being legal is to make the move now.

 

Then I'll sit back and watch how it all unfolds

 

There are some potentially interesting events unfolding with the PM this week and with this place you never know how things will turn out.

 

I commend you on having an exit strategy for Thailand.  Not because of this tax, but because things can change quickly in Thailand, either personally, or collectively, through Thai government policy.

 

This thread is discussing strategies to avoid paying the tax.  In my opinion, leaving for good may be a little rash, particularly as you can still do 6 months in Thailand every calendar year. 

 

Maybe you were close to having had enough anyway. 

 

My Plan B is Vietnam.

[JimGant]

4 hours ago, Mike Lister said:

It should be clear to everyone by now that Gift Tax is not as straight forward as first thought and that there are plenty of potential pitfalls along the way.

A gift tax is what's paid on gifts in excess of 20k to family, 10k to non family. What we're dancing around here is, whether or not a gift makes an otherwise remittance of assessable income -- no longer assessable, and thus now tax free. Sound too good to be true? You bet.

 

That's why I think the following from the Personal Income Tax guide still applies:

 

Quote

30) In a second example, funds that you remit to another person, from overseas, might be intended as a Gift, but for your own tax declaration, this intention does not matter. If the funds you remitted to another person are from your assessable income as listed in TRD 161/2566 you have to declare them and you will  have to pay personal income tax on them.

 

[Mike Lister]

28 minutes ago, Ben Zioner said:

A couple of thoughts on that.

 

Do not try to pay zero income tax, the cost of achieving that might be higher than the tax you would have paid with a less binary attitude. Some level of contribution to the country we live in can also be gratifying, even though LOS is the most ungrateful place I have lived in.

 

You don't have to be non resident every year, depending on your income/savings configuration you could be non resident every other year, third year or fourth year. Mobilise/Remit your savings in the non resident year, to keep tax below the 20% threshold during resident years.

That is sound advice. I purposely pay some tax in the UK and Thailand most years, I think it reflects positively, provides a useful paper trail and doesn't demonstrate a complete and total aversion to paying tax.

[Mike Lister]

1 minute ago, JimGant said:

A gift tax is what's paid on gifts in excess of 20k to family, 10k to non family. What we're dancing around here is, whether or not a gift makes an otherwise remittance of assessable income -- no longer assessable, and thus now tax free. Sound too good to be true? You bet.

 

That's why I think the following from the Personal Income Tax guide still applies:

 

 

Yes agreed. I'm using the term Gift Tax to cover all aspects of gifting.

[KhunHeineken]

8 minutes ago, Mike Lister said:

Your mindset is completely wrong on this.

Did you read my post? 

 

8 minutes ago, Mike Lister said:

There will be no real time monitoring of ATM withdrawals and assessment of whether the person is a tourist or resident expat, that's so futuristic as to be unimaginable in Thailand presently.

Did you see the part of my post where I said, "Not going to happen?" 

 

9 minutes ago, Mike Lister said:

This entire conversation is solely about one thing and one thing only.....what is assessable income  and what is not. It's not about whether you're likely to get caught; it's not about will they monitor this or that it's not about the various workarounds, discussions about those will not be held here! At this stage there is a question mark whether CC transactions and cash advances, using foreign cards in Thailand, represents assessable income for Thai tax residents.  That issue has been put on the list of unknowns in the document, awaiting further research and clarification.

Members were discussing if a credit card ATM withdrawal was a loan.  I simply commented that even if it was a debit card withdrawal, without, as you describe it, "futuristic" Big Brother Chinese regime style monitoring / cross referencing of all ATM withdrawals, expats WILL NOT be taxed at the ATM.

 

It doesn't matter if a debit or credit card is used, I'll say if again, "Not going to happen."

 

I hope this clarifies my "mindset" for you.   

[TroubleandGrumpy]

2 minutes ago, JimGant said:

A gift tax is what's paid on gifts in excess of 20k to family, 10k to non family. What we're dancing around here is, whether or not a gift makes an otherwise remittance of assessable income -- no longer assessable, and thus now tax free. Sound too good to be true? You bet.

 

That's why I think the following from the Personal Income Tax guide still applies:

That is why most people are not looking at Gifting as a method to evade income taxes on income earned overseas, but thery are looking to avoid being questioned by Somchai at the local Thai TRD about the amount of money (not income) they have remitted into Thailand to themselves.  Trying to remit assessable income into Thailand by Gifting and evade taxation liability is not what most people (like me) plan to do. We are just looking at ways to avoid having to deal with the Thai TRD bureacracy - especially during the first few years. 

[TroubleandGrumpy]

Just now, TroubleandGrumpy said:

That is why most people are not looking at Gifting as a method to evade income taxes on income earned overseas, but thery are looking to avoid being questioned by Somchai at the local Thai TRD about the amount of money (not income) they have remitted into Thailand to themselves.  Trying to remit assessable income into Thailand by Gifting and evade taxation liability is not what most people (like me) plan to do. We are just looking at ways to avoid having to deal with the Thai TRD bureacracy - especially during the first few years. 

I see now why some people have got somewhat angry about people discussing gifting - they see that as a way of evading taxes. But if the gift is from 'savings' or any other form of non assesable income, then the reason to do it is to evade dealing with the TRD bureacracy - legally.   

[KhunHeineken]

25 minutes ago, JimGant said:

Correct. But he asked about sticking a credit card into the ATM machine. So it would be a loan, using a CC for a cash advance.

Yes, but my point being, the chances of the Thai government taxing ATM withdrawals, regardless if a debit or credit card is used, is near impossible.

[Neeranam]

On 5/18/2024 at 8:37 PM, Yumthai said:

... said the ant, what about grasshoppers with only yearly income?

How do the frogs know that the money from yearly income was not savings from before 2024?

[Mike Lister]

1 minute ago, KhunHeineken said:

Yes, but my point being, the chances of the Thai government taxing ATM withdrawals, regardless if a debit or credit card is used, is near impossible.

Once again, the issue is not whether the TRD will tax such things, the sole issue is whether it represents assessable income that should be declared on a Thai tax return.

[Neeranam]

2 minutes ago, KhunHeineken said:

Yes, but my point being, the chances of the Thai government taxing ATM withdrawals, regardless if a debit or credit card is used, is near impossible.

Seems like an easy way to avoid taxes. 
There are many other but I don't know if I am allowed to talk about them. 

 

[Mike Lister]

2 minutes ago, Neeranam said:

How do the frogs know that the money from yearly income was not savings from before 2024?

The only person who knows is the taxpayer, the person who completes the tax return. If they say it is savings, great. But if they say it is savings and it isn't, and the TRD decides to check and ask for proof...watchout

[redwood1]

22 minutes ago, TroubleandGrumpy said:

The TRD has allowed 20-30 million Thais not lodging tax returns, and they have done nothing about for many decades. Would they seriously target the partners of Expats alone and not all the other Thais - the social media outcry would be horrendous for the Govt politically. 

 

I have brought up Thais not paying taxes loads of times but most people who post here just cant seem to get this.....And no effort has been made in the last 6 months to get Thais onboard with taxes......So it looks like the Thais will continue not paying taxes...

 

But for some reason the posters here think they will be looking over farang with a magnifying glass to try and get every last baht out of them...

[TroubleandGrumpy]

1 minute ago, KhunHeineken said:

Yes, but my point being, the chances of the Thai government taxing ATM withdrawals, regardless if a debit or credit card is used, is near impossible.

Not impossible - but extremely unlikely. There must be millions of ATM transactions in Thailand every day - IMO there is currently no system to differentiate and report to the TRD those made by each and every Expat.  They can report all the transactions made using an ATM from a Thai bank of course, but not for every ATM transaction from overseas banks - other than it total amounts - certainly not for each and every person. And even if they could, TRD would then have to sift through all those records to find those transactions just for Expats who are tax residents and those for tourists and those for Thais who have an overseas bank account.