Thailand to tax residents’ foreign income irrespective of remittance

[FruitPudding]

I am assuming gifts don't count, right?

 

Like if someone else sends you money from abroad to Thailand, they don't expect you to pay tax, right?

[Lorry]

22 minutes ago, John Drake said:

 

Wonder if Chinese will be exempt from the worldwide income tax or if it will just be unenforceable because can't get the information out of China. That would partially explain Chinese dominating the market.

A lot of Chinese buyers don't plan to live in Thailand more than 180 days a year. 

And as for the remittance tax, what they remit are probably mostly loans.

Mr Chen borrows 5m from Ms Li to buy a condo,  with a nice and perfectly legal loan agreement. 

Ms Li borrows 5m from Mr Chen to buy a condo,  with a nice and perfectly legal loan agreement. 

[Lorry]

9 minutes ago, FruitPudding said:

I am assuming gifts don't count, right?

 

Like if someone else sends you money from abroad to Thailand, they don't expect you to pay tax, right?

There is a gift tax if the gift exceeds 20m (gift from spouse,  kids, parents) or 10m (gift from someone else - cave: a gift from someone else has to be customary and at a traditional occasion).

[Mike Lister]

2 hours ago, Lorry said:

Bangkok Post reports today that demand for condos from foreigners is on the rise. 

Notwithstanding taxes.

50% of foreign buyers are Chinese. 

 

39 minutes ago, John Drake said:

 

Wonder if Chinese will be exempt from the worldwide income tax or if it will just be unenforceable because can't get the information out of China. That would partially explain Chinese dominating the market.

The BP also reports that new sales of greater BKK townhouses in the 5-7 mill. range, plunged to a 12 year low, a fall of 58%

[NoDisplayName]

1 hour ago, John Drake said:

 

Wonder if Chinese will be exempt from the worldwide income tax or if it will just be unenforceable because can't get the information out of China. That would partially explain Chinese dominating the market.

 

Potentially millions of Chinese in the northeast of the country can buy inexpensive vacation condos in Thailand to escape the worst of the -30C degree winter.

 

They may spend a couple months relaxing on the beach and never worry about 180-day tax residency.

 

Mr. Google says China signed the CRS and began implementation in 2018.  The US is not a participant, relying on FATCA instead.

Edited June 22 by NoDisplayName

[redwood1]

2 hours ago, NoDisplayName said:

 

Potentially millions of Chinese in the northeast of the country can buy inexpensive vacation condos in Thailand to escape the worst of the -30C degree winter.

 

They may spend a couple months relaxing on the beach and never worry about 180-day tax residency.

 

Mr. Google says China signed the CRS and began implementation in 2018.  The US is not a participant, relying on FATCA instead.

 

 

About the time I am staring in a blockbuster Hollywood movie with Brad Pitt and Tom Cruise will be when the Chinese get concerned about paying any income tax to Thailand...

 

And at 60 years old with zero acting credits, I would say my odds of staring in a big Hollywood movie are zero.....

 

I think the odds of the Chinese giving the slightest fig or paying any taxes to  Thailand  is also  very very close to Zero....Watch and see.....And you can include the Russians too....

 

 

[TheAppletons]

1 hour ago, redwood1 said:

 

 

About the time I am staring in a blockbuster Hollywood movie with Brad Pitt and Tom Cruise will be when the Chinese get concerned about paying any income tax to Thailand...

 

And at 60 years old with zero acting credits, I would say my odds of staring in a big Hollywood movie are zero.....

 

I think the odds of the Chinese giving the slightest fig or paying any taxes to  Thailand  is also  very very close to Zero....Watch and see.....And you can include the Russians too....

 

 

 

  Your putative co-stars are about your age so don't give up yet.  

[Lorry]

9 hours ago, NoDisplayName said:

Chinese ... may spend a couple months relaxing on the beach

Is this irony or do you really not understand Chinese at all?

Chinese don't fancy a couple of months relaxing.  What a waste of time, when you could earn good money in the same time!

[Mike Lister]

12 hours ago, FruitPudding said:

I am assuming gifts don't count, right?

 

Like if someone else sends you money from abroad to Thailand, they don't expect you to pay tax, right?

Funny!

 

It depends who that someone is, what the money is for, where the money came from and why it's being given to you.

[sidneybear]

On 6/21/2024 at 7:00 PM, Gknrd said:

Western expats are out, period. They are just sucking as much money out of you as they can before you leave.And of course no one will be coming to Thailand for retirement

People have been saying this for decades.

[Mike Lister]

1 minute ago, sidneybear said:

People have been saying this for decades.

I don't think Western expats were ever "in" in Thailand, Thailand has ALWAYS been an Asian dominated destination where Western expats/tourists/residents were a small minority.

[FruitPudding]

4 hours ago, Mike Lister said:

Funny!

 

It depends who that someone is, what the money is for, where the money came from and why it's being given to you.

 

How so?

 

Isn't a gift a gift?

 

Why would you have to pay tax on a gift someone gave you?

 

It isn't income right?

[Mike Lister]

5 minutes ago, FruitPudding said:

 

How so?

 

Isn't a gift a gift?

 

Why would you have to pay tax on a gift someone gave you?

 

It isn't income right?

What if somebody who you'd done work for, gave you some money and called it a gift, would that deserve to escape tax, just because somebody called it a gift?

 

What if somebody gave yo a gift of money in order to escape their tax liability, would that still be a tax free gift for everyone?

 

Here's what we know about Gift Tax in Thailand, from the tax guide linked below. As you can see, the picture is less than clear:

 

GIFT TAX  

 

67) First and foremost, our confidence levels that we understand all the Gift Tax rules is not high.

 

What the Rules Say

 

68) The TRD does not consider what the purpose is of remitted funds, only whether they are assessable or not. If a foreigner remits non-assessable funds and then gifts them in Thailand, that is the end of the matter for the gifter.

 

69) If however the foreigner remits assessable funds to Thailand and then gifts them inside Thailand, those funds must be reported as assessable income on the foreigners tax return, no matter that they are later gifted.  

 

70) The third scenario is not agreed by everyone and is contingent upon further input from the TRD. It suggests that 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.

 

71) "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.

 

72) The following gifts are exempt from PIT:

 

a) 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.

 

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

 

c) 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.

 

d) 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.

 

73) 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.

 

74) For ascendants/descendants the threshold is THB 20 mill, nor non-ascendants and descendants, it's THB 10 mill".

 

What Some Members Think:

 

75) The following summary points compiled by a member may help guide readers in the use of Gift Tax:

 

a) Gifts must be traditional gifts based around a fixed date or occasion.

b) Traditional gifts include supporting the spouse or other persons, mainly family, based on a moral obligation.

 

c) Gifts to non-family members are more likely not to meet the moral obligation criterion.

 

d) A ceremonial act may be required, in particular for non-spouses.

 

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.

 

f) Moral obligation is subject to interpretation, there is no single definition.

 

g) TRD may apply additional criteria.

 

h) TRD assessment may differ from self-assessment which risk must be evaluated in each case individually.

 

76) Additional points on this subject are:

 

a) Funds that are gifted, must be for the use of the person to whom they are gifted.

 

b) Gifts can be revoked later and reclaimed, under specific circumstances, such as if the receiver of the gift defames the Gifter or fails to take care of their serious medical needs.

 

c) Gifts to a spouse become Sin Suan Tua or the sole property of the spouse, under marital law the gift is not regarded as conjugal property.

 

d) Gifts made outside Thailand appear to be safe.

 

e) The Gift must be formally documented and recorded, the more documentation the better.

 

f) No more than THB 20 mill should be remitted to Thailand per year, unless 5% Gift Tax is paid on the balance.

 

77) Until the circumstances surrounding Gift Tax and all it entails, becomes more clear,, it is critical that anyone wishing to use Gift Tax, seeks professional advice.Note: Because Gift Tax is predominantly a domain of the wealthy and depends to a large extent on local practice, there is a shortage of confirmed information on this subject. 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. Members wishing to exercise this option should seek qualified advice before using this option to Gift untaxed funds.

 

 

 

[BobBKK]

On 6/5/2024 at 6:14 PM, AreYouGerman said:

 

I know only a handful of countries who don't tax residents (ie. 183 days+ residency) on their worldwide income. It is common - as a resident of a country - that you pay tax on your worldwide income.

 

 

 But if we pay tax on government pensions already, why must we pay again?

[BobBKK]

On 6/5/2024 at 6:54 PM, BigBruv said:

 

Instead ask yourself - what benefits do the TH government get from you being here?

 

Likely... NOTHING!   🙂

 

 

 This is nonsense! I spend all my pension here, I get taxed here (VAT, etc.), and all of my wealth comes to Thailand and stays here. Do you think all the bars, restaurants, and hotels gain nothing from our presence? Seriously?

[BobBKK]

On 6/5/2024 at 8:48 PM, vangrop said:

As I stated before, I won't declare anything and they won't find anything because I will do all my transactions in cash. When I run out of cash, I will go to neighbouring countries for refueling. I will lose on the exchange but this will be peanuts compared to what is ongoing. The only issue would be if they start a taxing system on your cash at the border, but good luck with that one

 You can only carry a certain amount of cash or risk confiscation.

[FruitPudding]

51 minutes ago, Mike Lister said:

What if somebody who you'd done work for, gave you some money and called it a gift, would that deserve to escape tax, just because somebody called it a gift?

 

What if somebody gave yo a gift of money in order to escape their tax liability, would that still be a tax free gift for everyone?

 

Here's what we know about Gift Tax in Thailand, from the tax guide linked below. As you can see, the picture is less than clear:

 

GIFT TAX  

 

67) First and foremost, our confidence levels that we understand all the Gift Tax rules is not high.

 

What the Rules Say

 

68) The TRD does not consider what the purpose is of remitted funds, only whether they are assessable or not. If a foreigner remits non-assessable funds and then gifts them in Thailand, that is the end of the matter for the gifter.

 

69) If however the foreigner remits assessable funds to Thailand and then gifts them inside Thailand, those funds must be reported as assessable income on the foreigners tax return, no matter that they are later gifted.  

 

70) The third scenario is not agreed by everyone and is contingent upon further input from the TRD. It suggests that 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.

 

71) "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.

 

72) The following gifts are exempt from PIT:

 

a) 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.

 

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

 

c) 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.

 

d) 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.

 

73) 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.

 

74) For ascendants/descendants the threshold is THB 20 mill, nor non-ascendants and descendants, it's THB 10 mill".

 

What Some Members Think:

 

75) The following summary points compiled by a member may help guide readers in the use of Gift Tax:

 

a) Gifts must be traditional gifts based around a fixed date or occasion.

b) Traditional gifts include supporting the spouse or other persons, mainly family, based on a moral obligation.

 

c) Gifts to non-family members are more likely not to meet the moral obligation criterion.

 

d) A ceremonial act may be required, in particular for non-spouses.

 

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.

 

f) Moral obligation is subject to interpretation, there is no single definition.

 

g) TRD may apply additional criteria.

 

h) TRD assessment may differ from self-assessment which risk must be evaluated in each case individually.

 

76) Additional points on this subject are:

 

a) Funds that are gifted, must be for the use of the person to whom they are gifted.

 

b) Gifts can be revoked later and reclaimed, under specific circumstances, such as if the receiver of the gift defames the Gifter or fails to take care of their serious medical needs.

 

c) Gifts to a spouse become Sin Suan Tua or the sole property of the spouse, under marital law the gift is not regarded as conjugal property.

 

d) Gifts made outside Thailand appear to be safe.

 

e) The Gift must be formally documented and recorded, the more documentation the better.

 

f) No more than THB 20 mill should be remitted to Thailand per year, unless 5% Gift Tax is paid on the balance.

 

77) Until the circumstances surrounding Gift Tax and all it entails, becomes more clear,, it is critical that anyone wishing to use Gift Tax, seeks professional advice.Note: Because Gift Tax is predominantly a domain of the wealthy and depends to a large extent on local practice, there is a shortage of confirmed information on this subject. 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. Members wishing to exercise this option should seek qualified advice before using this option to Gift untaxed funds.

 

 

 

 

Interesting.

 

So, basically "genuine" gifts (i.e. you didn't work for the money) between family members okay, so long as it is less than 20 million baht a year?

 

So under the current tax laws, for example, I could send money from overseas to my daughter's bank account in Thailand as a gift and it would be tax free?

[FruitPudding]

16 minutes ago, BobBKK said:

 This is nonsense! I spend all my pension here, I get taxed here (VAT, etc.), and all of my wealth comes to Thailand and stays here. Do you think all the bars, restaurants, and hotels gain nothing from our presence? Seriously?

 

Imagine how poor rural Thailand would be without farang money coming in from Pattaya, Phuket, Bangkok etc. etc.

 

We should be given medals for our valiant efforts.

[BobBKK]

1 minute ago, FruitPudding said:

 

Imagine how poor rural Thailand would be without farang money coming in from Pattaya, Phuket, Bangkok etc. etc.

 

We should be given medals for our valiant efforts.

 
Indeed, most of "poor rural Thailand" gets millions from poor rural girls sending money back to their poor rural families.

[FruitPudding]

3 minutes ago, BobBKK said:

 
Indeed, most of "poor rural Thailand" gets millions from poor rural girls sending money back to their poor rural families.

 

Damn right, most of these women are on 50k or more a month. That's what they would earn with a master's degree in business or banking.

[AreYouGerman]

39 minutes ago, BobBKK said:

 But if we pay tax on government pensions already, why must we pay again?

 

You won't. Depending on the DTA you could even pay less. If no DTA, then you gonna pay double.

 

The main issue is however for probably most of retirees: Extra bureaucratic stress + you have to file for taxes, meaning you will have to document everything and pay an accountant.

 

Also, for people having f. ex. a dividend paying broker account under a Caribbean offshore company, de facto paying 0% taxes, suddenly have to file and pay income taxes.

[motdaeng]

12 minutes ago, BobBKK said:

 
Indeed, most of "poor rural Thailand" gets millions from poor rural girls sending money back to their poor rural families.

 

so many foreigners think we are so important for thailand and that we help the economy. 

i think we are not. the money we spend and use to support thai families is just a drop in the ocean.

 

if we were important and value to the thai economy, they wouldn’t treat us the way they do. eg. no access to the

healthcare system, no ability to get thai residency if not working, the immigration laws, double pricing, etc.

 

[FruitPudding]

1 minute ago, motdaeng said:

 

if we were important and value to the thai economy, they wouldn’t treat us the way they do. eg. no access to the

healthcare system, no ability to get thai residency if not working, the immigration laws, double pricing, etc.

 

They are just taking maximum advantage..............a national practice. 

[AreYouGerman]

4 minutes ago, motdaeng said:

 

so many foreigners think we are so important for thailand and that we help the economy. 

i think we are not. the money we spend and use to support thai families is just a drop in the ocean.

 

if we were important and value to the thai economy, they wouldn’t treat us the way they do. eg. no access to the

healthcare system, no ability to get thai residency if not working, the immigration laws, double pricing, etc.

 

 

Yes, according to stats of GDP by 'personal remittance' we basically have no influence on the Thai economy as a whole. However on a personally level, we change entire families.

 

https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?locations=TH

Edited June 23 by AreYouGerman

[AreYouGerman]

On 6/21/2024 at 2:44 PM, JensenZ said:

A new job for Visa Agents to handle, along with an increase in fees.

 

Yep, unfortunatly.

[daveAustin]

1 hour ago, BobBKK said:

 You can only carry a certain amount of cash or risk confiscation.

$10k (equiv) a time. People without big luggage rarely get turned over anyway. 
On the whole b’locks tax thing, folk should just not spend 6 months. That is what the elitist priks in power want after all. F them!

[Mike Lister]

2 minutes ago, daveAustin said:

$10k (equiv) a time. People without big luggage rarely get turned over anyway. 
On the whole b’locks tax thing, folk should just not spend 6 months. That is what the elitist priks in power want after all. F them!

Unlimited amounts, if declared to customs on arrival or departure 

[Lorry]

On 6/5/2024 at 8:48 PM, vangrop said:

As I stated before, I won't declare anything and they won't find anything because I will do all my transactions in cash. When I run out of cash, I will go to neighbouring countries for refueling. I will lose on the exchange but this will be peanuts compared to what is ongoing. The only issue would be if they start a taxing system on your cash at the border, but good luck with that one

They may ask you where do your living expenses come from?

If you have no documentation to prove all your cash transactions, they have the right to estimate your income. 

The obvious estimate would be 65,000 B per month. 

[BobBKK]

46 minutes ago, motdaeng said:

 

so many foreigners think we are so important for thailand and that we help the economy. 

i think we are not. the money we spend and use to support thai families is just a drop in the ocean.

 

if we were important and value to the thai economy, they wouldn’t treat us the way they do. eg. no access to the

healthcare system, no ability to get thai residency if not working, the immigration laws, double pricing, etc.

 

 
Many families are supported by Farang, but besides that, many businesses are boosted by Farang income, and if we go, they will fail.

[Lorry]

50 minutes ago, AreYouGerman said:

The main issue is however for probably most of retirees: Extra bureaucratic stress + you have to file for taxes, meaning you will have to document everything and pay an accountant.

You can file yourself,  not that difficult. 

But you cannot avoid the bureaucracy, I agree that's the main issue.