Thailand to tax residents’ foreign income irrespective of remittance

[mfd101]

I bring in to Thailand every year roughly AUD80,000 [c1,900,000฿]. None of this is 'income'. 90% of it is my Australian federal government superannuation, which is funded annually by the Oz Government out of consolidated revenue (ie the annual budget) and it is heavily taxed in Oz because I am a 'non-resident for tax purposes'.

 

A small amount is derived from my investment of the non-taxable lump sum I received on my retirement 20 years ago.

 

On my reading of the relevant parts of the Oz/Thai DTA, none of this can be taxed in Thailand. I take it from the bits of the discussion I have browsed on this thread, as well as other threads, that I should nevertheless prepare to do my first-ever tax return in Thailand next Jan-March, with a view to my funds being rated assessable but non-taxable. Am I right in this?

 

I must confess that trying to persuade the local office here in Surin province on all of that strikes me as a tall order. I doubt their English will be up to the job and my b/f's English certainly isn't. My inclination is to do nothing.

[Mike Lister]

57 minutes ago, beammeup said:

How about if you have a joint account offshore with you Thai missus, and funds are sent to an account solely in her name. Any chance the husband will get dinged for tax?

It depends on whether or not you or your Mrs declare the funds as assessable income.  Just sending money from one account to another, doesn't imply a tax liability, it depends on what that money is and what it represents.

[Mike Lister]

2 minutes ago, mfd101 said:

I bring in to Thailand every year roughly AUD80,000 [c1,900,000฿]. None of this is 'income'. 90% of it is my Australian federal government superannuation, which is funded annually by the Oz Government out of consolidated revenue (ie the annual budget) and it is heavily taxed in Oz because I am a 'non-resident for tax purposes'.

 

A small amount is derived from my investment of the non-taxable lump sum I received on my retirement 20 years ago.

 

On my reading of the relevant parts of the Oz/Thai DTA, none of this can be taxed in Thailand. I take it from the bits of the discussion I have browsed on this thread, as well as other threads, that I should nevertheless prepare to do my first-ever tax return in Thailand next Jan-March, with a view to my funds being rated assessable but non-taxable. Am I right in this?

 

I must confess that trying to persuade the local office here in Surin province on all of that strikes me as a tall order. I doubt their English will be up to the job and my b/f's English certainly isn't. My inclination is to do nothing.

Somebody more familiar with the Oz Superannuation program will need to answer your questions with more certainty but a here's a few pointers to consider in the meantime.

 

You say your super is not income but the TRD doesn't see it that way, pension income is still income.

 

The fact a pension is taxed overseas, typically means the taxpayer will need to declare the income and invoke their DTA to offset any tax paid back home, against any that is due in Thailand.

 

I don't know what your DTA says about taxation rights of your super income but that may save you, have you read the DTA to understand what it says?

 

 

[mfd101]

18 minutes ago, Mike Lister said:

Somebody more familiar with the Oz Superannuation program will need to answer your questions with more certainty but a here's a few pointers to consider in the meantime.

 

You say your super is not income but the TRD doesn't see it that way, pension income is still income.

 

The fact a pension is taxed overseas, typically means the taxpayer will need to declare the income and invoke their DTA to offset any tax paid back home, against any that is due in Thailand.

 

I don't know what your DTA says about taxation rights of your super income but that may save you, have you read the DTA to understand what it says?

 

 

Here it is. And it's extremely difficult - even for a former bureaucrat! - to work out what it means. Each time I reread it I change my mind ...

 

ARTICLE 19 Government Service
1. Remuneration (other than a pension) paid by one of the Contracting
States or a political subdivision of that state or a local authority of that State to any individual in respect of services rendered in the
discharge of governmental functions shall be taxable only in that State. However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the recipient is a resident of that other State who:
(a) is a citizen or national of that other State; or
(b) did not become a resident of that other State solely for the purpose of performing the services.
2. Any pension paid to an individual in respect of services rendered
in the discharge of governmental functions to one of the Contracting States or a political subdivision of that State or a local authority
of that State shall be taxable only in that State. Such pension shall, however, be taxable only in the other Contracting State if the recipient is a resident of, and a citizen or national of, that other State.

 

On rereading it now, I think the 1st para. is not relevant (because it's about 'remuneration'). The first sentence of para. 2 seems the relevant one ("shall be taxable only in that State") and the following sentence is not relevant because, though I may be considered a 'resident' of Thailand, I am not a 'citizen' or 'national'.

Edited July 14 by mfd101

[Mike Lister]

3 minutes ago, mfd101 said:

Here it is. And it's extremely difficult - even for a former bureaucrat! - to work out what it means. Each time I reread it I change my mind ...

 

ARTICLE 19 Government Service
1. Remuneration (other than a pension) paid by one of the Contracting
States or a political subdivision of that state or a local authority of that State to any individual in respect of services rendered in the
discharge of governmental functions shall be taxable only in that State. However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the recipient is a resident of that other State who:
(a) is a citizen or national of that other State; or
(b) did not become a resident of that other State solely for the purpose of performing the services.
2. Any pension paid to an individual in respect of services rendered
in the discharge of governmental functions to one of the Contracting States or a political subdivision of that State or a local authority
of that State shall be taxable only in that State. Such pension shall, however, be taxable only in the other Contracting State if the recipient is a resident of, and a citizen or national of, that other State.

I really cant help you with this, I'm sorry. There have been dedicated threads on this subject and member T&G may have a view (he usually does on most things)....here's one of his posts on the same subject.

 

 

[beammeup]

34 minutes ago, Mike Lister said:

It depends on whether or not you or your Mrs declare the funds as assessable income.  Just sending money from one account to another, doesn't imply a tax liability, it depends on what that money is and what it represents.

There is nothing useful in this response. You are stating the obvious.  Anyone else?

[Mike Lister]

19 minutes ago, beammeup said:

There is nothing useful in this response. You are stating the obvious.  Anyone else?

Well, that's the way it works so good luck finding a different answer.

[JohnnyBD]

3 hours ago, beammeup said:

How about if you have a joint account offshore with you Thai missus, and funds are sent to an account solely in her name. Any chance the husband will get dinged for tax?

Just my opinion, but it seems like your missus would be considered as having remitted the money to her Thai account, and therefore she may have some tax liability depending on what type of income it is (assessable or non-assessable), when it was earned (pre-2024 is exempt, but 2024 income is taxable), and how much assessable income is remitted (over the deductions and allowances).

Edited July 14 by JohnnyBD

[beammeup]

10 hours ago, JohnnyBD said:

Just my opinion, but it seems like your missus would be considered as having remitted the money to her Thai account, and therefore she may have some tax liability depending on what type of income it is (assessable or non-assessable), when it was earned (pre-2024 is exempt, but 2024 income is taxable), and how much assessable income is remitted (over the deductions and allowances).

Assuming its assessable. My income from sale of investment, but in a joint offshore account and she remitts to herself. I have no issues with her being liable, I just want to be sure I am not somehow liable.

[Mike Lister]

22 minutes ago, beammeup said:

Assuming its assessable. My income from sale of investment, but in a joint offshore account and she remitts to herself. I have no issues with her being liable, I just want to be sure I am not somehow liable.

If it's assessable income, the source and nature of the income needs to be understood before it can be taxed appropriately because different types of income attract different levels of tax. It comes back to which of you will declare the income and it sounds like you want her to. Given she will declare it, how will she do so, as a gift, because it sounds like that's what it is? But if she's then going to give it back to you once it hits her Thai account, it's not longer a gift so that route is closed. It doesn't seem she can declare it as income from the sale of investments because she didn't have any, unless the investments were in joint names. 

 

Cut a long complicated story short, you're flirting with tax evasion, which is illegal.

 

 

 

[Mike Lister]

44 minutes ago, Mike Lister said:

If it's assessable income, the source and nature of the income needs to be understood before it can be taxed appropriately because different types of income attract different levels of tax. It comes back to which of you will declare the income and it sounds like you want her to. Given she will declare it, how will she do so, as a gift, because it sounds like that's what it is? But if she's then going to give it back to you once it hits her Thai account, it's not longer a gift so that route is closed. It doesn't seem she can declare it as income from the sale of investments because she didn't have any, unless the investments were in joint names. 

 

Cut a long complicated story short, you're flirting with tax evasion, which is illegal.

 

 

 

 EDIT TO ADD: Whoever declares the remitted income, must be prepared to prove the source is what they say it is.

Edited July 15 by Mike Lister

[redwood1]

1 hour ago, beammeup said:

Assuming its assessable. My income from sale of investment, but in a joint offshore account and she remitts to herself. I have no issues with her being liable, I just want to be sure I am not somehow liable.

 

Good plan.....Everyone needs to do their best to reduce their taxes....And after reading thousands of posts here....Every single poster I would say is scheming to pay as close to zero taxes as possible......And no one can say I am wrong.....

 

The people who pay taxes through a work permit are treated very fairly by Thailand and rightly so offered good benefits like healthcare......This sham retiree tax offers nothing.....So all this has to be taken under consideration..

Edited July 15 by redwood1

[beammeup]

OK so If we have a joint offshore account, I gift her funds (offshore), she remitts to herself. This should be non assessable ( gift) no? And legal.

Edited July 15 by beammeup

[Mike Lister]

8 minutes ago, beammeup said:

OK so If we have a joint offshore account, I gift her funds (offshore), she remitts to herself. This should be non assessable ( gift) no?

At the risk of annoying you even further......yes, possibly!

 

Is your missus your legal wife?

 

Is the joint account offshore or merely a joint account in your home country? The distinction here is that offshore accounts typically exist in tax avoidance areas (Caymans, Antigua, Hong Kong etc) and transactions from them attract more attention than from say a joint account at a high street bank in your home country.

 

If you go the Gift Tax route, you should understand the rules, the most important of which is that once the gift is made, YOU must not benefit from the gift. A second consideration is that the gift is not regarded as  a conjugal asset, it belongs solely to the giftee.

 

Documenting the gift is important, as is the date, perhaps read the following:

 

 

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.

 

 

 

.

 

 

[Dogmatix]

On 7/13/2024 at 1:30 AM, JimGant said:

And my question to her: How would you know if I have over 120k in assessable income, since I'm an expat, and all my income is foreign source income, most, if not all, is non assessable via DTA. Or, under the old rules, was remitted from a previous year's financial account. Are you going to arbitrarily start calling in some farangs for a discussion on their remitted cash flow -- just to see if they should have filed, even with not taxable income?  I didn't think so.

 

 

 You would just get a confused look and she would repeat her answer.

[Dogmatix]

I came across the following Q&A on the UK HMRC community forum.  It is a pity that the RD has not studied how the UK and other developed countries handle DTAs and the regulations and spaces on tax return forms they have developed to cope with them.  Only a few months to do now and the top RD officials are just sitting on their backsides waiting for the deluge to hit their untrained and inexperience staff.  Breathtaking negligence and incompetence!

 

How to correctly enter US dividends in online tax return?

 

Posted 2 years ago by 

 

I have >£2000 of foreign dividends and therefore need to fill in the foreign dividends online pages. The US dividends have been charged a 15% withholding tax at source by the US authorities since a W8-BEN has been filled in. How do I enter these dividends into the online self-assessment form? I understand I have to submit the gross dividend and the tax paid. But should I tick the "foreign tax credit relief" box or not? And it I did so, what is the correct rate of relief allowed? I cannot understand the guidance on the HMRC website. Thanks, David

Posted 2 years ago by HMRC Admin 32 

 

Hi,

Article 10(2)(b) of the UK and USA double taxation agreement allows for both countries to tax the dividends and limits Foreign Tax Credit Relief for dividends to a maximum of 15%.  

Uk/USA Double Taxation Agreement - 2002

In the section of the online tax return for foreign dividends, you should enter a reference for the dividends (to help you identify them), the country they are from, the amount of dividend and the tax deducted. The special witholding tax box is for tax deducted under the terms of the European Savings Directive and equivalent third party agreements. This tax will be in addition to any foreign tax deducted by the country of origin of the payment. Please select the rate of 15% and then select yes to the Foreign Tax Credit Relief, only if you want to claim this relief. Click 'add'. Repeat this process until you have entered all of the dividends. You should complete all of the tax return before viewing your calculation. Take a note of the tax due on your dividends. The FTCR is up to a maximum of 15% of the tax deducted in the USA.

Thank you.

Edited July 15 by Dogmatix

[TroubleandGrumpy]

18 hours ago, beammeup said:

How about if you have a joint account offshore with you Thai missus, and funds are sent to an account solely in her name. Any chance the husband will get dinged for tax?

IMO no.   You only liable for taxes on money in your own name - brought to your own account.

But if they are 'gifts' for the purposes of supporting family - then she does not have to declare them.

But she may one day in the future be asked to account for those transfers - highly unlikely IMO - but keep detailed records.

Below is TRD Tax Code - up to 20Million baht per year allowed - 10million to family (kids etc.).

 

Section 38_64 | The Revenue Department (English Site) (rd.go.th)

Go to Section 42 - Paragraphs 27, 28, 29

In fact have a good read of all those Paragraphs that detail what is exempt from income taxes.

IMo everyone should read the whole Section in detail - I have found several more exemptions.

I know some people say "but this/that/it only applies to Thais and Thai things"

But I say BS - there is nothing that says it does not refer to Foreigners.

 

TRD is going to provide an updated Tax Code and Guide to Personal Income Tax Return for 2024 later this year. Link below to last year's Guides (and those previous).  Year 2023 | The Revenue Department (English Site) (rd.go.th)

Please not that the Guide to Personal Income Tax Return (ภ.ง.ด.90) is the PIT Guide for people "who received incomes not only from employment" and that Guide to Personal Income Tax Return (ภ.ง.ด.91) is the PIT Guide for people "who received incomes from employment only."   As I have said before, and been advised, IMO unless you have to pay income taxes, after all exemptions and allowances and DTA provisions, then you do not have to lodge a tax return.  But the Code and Guide will help you calculate if you do have to pay income taxes, but the DTAs are a specialist area and each Country's DTA with Thailand does vary somewhat. 

 

My advice to all, is that many people (laymen and professionals) will point to one clause/part and then say "see you do have to ........"   I have read a fair bit of the Thai Tax Code and Guides and they are full of contradictions and confusion.  IMO there is not one TRD Officer who fully understands how those DAT documents apply when a PIT person is using their Country's DTA to claim exemptions/allowances. There are 61 DTAs and they have been clearly written for Companies with PIT provisions tacked on.  As far as I have been told, TRD overall relies on the professional tax companies who use those DTAs for the Company taxation returns that they receive and process. 

 

[Ned]

They'll take their cut when your money is transferred into Thailand..... whether it is ultimately taxable or not. Your job then will be to try to get it back. 

[Mike Lister]

1 minute ago, Ned said:

They'll take their cut when your money is transferred into Thailand..... whether it is ultimately taxable or not. Your job then will be to try to get it back. 

Utter nonsense.

[Dogmatix]

5 hours ago, beammeup said:

OK so If we have a joint offshore account, I gift her funds (offshore), she remitts to herself. This should be non assessable ( gift) no? And legal.

 

I wouldn't recommend this. If she remitted the money to herself, it would not be considered a gift.  In this case, half of the remittance is technically a gift and the other a transfer to herself but the RD might choose to consider all of it a transfer to herself.  I don't know of any Thai cases where ownership of assets in joint accounts is considered by the RD but, in other jurisdictions the assets are deemed owned by the account holders pro rata. For inheritance tax which is a common area where jointly owned assets are taxed, this is usually the case.   The US goes further and asks surviving account holders to prove they funded their share of the account themselves.

[Mike Teavee]

Just now, Dogmatix said:

 

I wouldn't recommend this. If she remitted the money to herself, it would not be considered a gift.  In this case, half of the remittance is technically a gift and the other a transfer to herself but the RD might choose to consider all of it a transfer to herself.  I don't know of any Thai cases where ownership of assets in joint accounts is considered by the RD but, in other jurisdictions the assets are deemed owned by the account holders pro rata. For inheritance tax which is a common area where jointly owned assets are taxed, this is usually the case.   The US goes further and asks surviving account holders to prove they funded their share of the account themselves.

Interesting, when it comes to Joint Debts (in the UK at least) they're usually considered "Joint and Several" which means either party can "Own" up to 100% of the debt (i.e. One party cannot just say here's my 1/2 I'm clear). 

 

Also, in the event of one of the joint holders dying then (in the vast majority of cases) all of the joint assets are considered owned by the surviving partner (Law of Survivorship) & do not form part of their estate so can be withdrawn without probate.

 

Given this, IMHO Your wife sending herself money from a joint account is basically the same as her sending it from her own account.  

[Mike Lister]

17 minutes ago, Dogmatix said:

 

I wouldn't recommend this. If she remitted the money to herself, it would not be considered a gift.  In this case, half of the remittance is technically a gift and the other a transfer to herself but the RD might choose to consider all of it a transfer to herself.  I don't know of any Thai cases where ownership of assets in joint accounts is considered by the RD but, in other jurisdictions the assets are deemed owned by the account holders pro rata. For inheritance tax which is a common area where jointly owned assets are taxed, this is usually the case.   The US goes further and asks surviving account holders to prove they funded their share of the account themselves.

I'm not certain that the identity of the remitter changes the nature of the gift, which was made outside of Thailand borders anyway. 

[Dogmatix]

5 hours ago, Mike Lister said:

At the risk of annoying you even further......yes, possibly!

 

Is your missus your legal wife?

 

Is the joint account offshore or merely a joint account in your home country? The distinction here is that offshore accounts typically exist in tax avoidance areas (Caymans, Antigua, Hong Kong etc) and transactions from them attract more attention than from say a joint account at a high street bank in your home country.

 

If you go the Gift Tax route, you should understand the rules, the most important of which is that once the gift is made, YOU must not benefit from the gift. A second consideration is that the gift is not regarded as  a conjugal asset, it belongs solely to the giftee.

 

Documenting the gift is important, as is the date, perhaps read the following:

 

 

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.

 

 

I think it is important to point out that these are not rules derived from the Revenue Code or from case studies from the Supreme Court or the RD's own website or the Civil and Commercial Code. There is very little information or case studies on gifts, other than the bare bones section in the Revenue Code and the one case study on the RD website. It is up to members to decide how useful are purported rules that don't cite the references from which they are derived.

 

The thing about gifts having to be connected to some special occasion is not in the Revenue Code but it is to be found in case studies.  However, the case studies only stipulate the special occasion test for gifts to those who are not spouses or ascendant or descendant relatives.  The case study about spousal gifts doesn't make this point at all.  It is also logical that spousal gifts for the purpose of maintenance should be permitted but not to less immediate family or friends. Incidentally, no allowance is made for gifts to common law spouses and a case study specifically excludes this category of gift.

 

The thing about gifts to a spouse being personal property of that spouse and not conjugal property is a pure concoction that has no basis in the Civil and Commercial Code or any case studies that I am aware of.  According to the Civil and Commercial Code all assets acquired by either party to a marriage after the date the marriage was registered automatically become conjugal property. The only exceptions are income and gains derived from person property of either spouse that was acquired before marriage.  One of the accountants from Mazars pointed out in a webinar I attended that the Civil and Commercial Code was in conflict with the Revenue Code regarding spousal gifts because there was no way to separate the gift from conjugal assets.  This would probably have to be resolved by the Tax Court, if challenged. 

 

 

 

[Mike Teavee]

1 hour ago, Dogmatix said:

The thing about gifts to a spouse being personal property of that spouse and not conjugal property is a pure concoction that has no basis in the Civil and Commercial Code or any case studies that I am aware of.  According to the Civil and Commercial Code all assets acquired by either party to a marriage after the date the marriage was registered automatically become conjugal property.

Agree with everything you said apart from this part, as "Gifts" are usually Personal/Non Marital property (Sin Suan Tua) 

 

I've posted a link previously that probably covers this better but can't find it now & gotta run, so here's the 1st one I came across... 

 

https://thailand.acclime.com/guides/marital-property-assets/

What is Sin Suan Tua?

Sin Suan Tua or personal property consists of (section 1471):

• Property belonging to either spouse before marriage
• Property for personal use, dress or ornament suitable for station in life, or tools necessary for carrying on the profession of either spouse
• Property acquired by either spouse during marriage through a will or gift
• Dowry

If the Sin Suan Tua has been exchanged to other property, other property has been bought or money has been acquired from selling it, the property or money acquired is Sin Suan Tua.

 

 

However, it is possible for the gift to be marital assets (Sin Somros) IF the condition of the Gift (or Will) states that it's made to both spouses...  

What is Sin Somros?

Sin Somros or marital property consists of (section 1474):

• Property acquired during a marriage
• Property acquired by either spouse during marriage through a will or gift made in writing
• Fruits of personal property (eg income in the form of rent from personal property)

 

I think your parents giving you & your wife a Gift & stating that it's a Joint gift would be OK but I don't think you would get away with giving your wife a gift and saying "This is for both of us", at best it would be considered 1/2 the Gift was for your wife but could be ruled as an invalid specification & 100% to your wife. 

Edited July 15 by Mike Teavee

[Jinxed1]

On 7/10/2024 at 2:31 AM, Mike Lister said:

 

 

The video was the subject of an earlier debate, there is incorrect information in there so be careful. I'll look tomorrow doe that discussion and try to give you the link.

Which informations are incorrect about this video?

[Mike Lister]

3 minutes ago, Jinxed1 said:

Which informations are incorrect about this video?

Sorry, which one? I see a lot of videos and most seem to contain incorrect information of some sort. 

 

EDIT TO ADD: Assuming the one below? The TRD has said in a presentation in Hua Hin that ATM transactions from foreign banks, can represent assessible income, ditto credit card transactions.

 

 

Edited July 15 by Mike Lister

[redwood1]

2 hours ago, Mike Lister said:

Sorry, which one? I see a lot of videos and most seem to contain incorrect information of some sort. 

 

EDIT TO ADD: Assuming the one below? The TRD has said in a presentation in Hua Hin that ATM transactions from foreign banks, can represent assessible income, ditto credit card transactions.

 

 

 

Your sole purpose of posting seems to be to get everyone on the tax paying train....But Why ?....It just goes on and on....Is it your job?......

 

Get real....Even the USA IRS does not snoop on everyone credit card transactions.....No way EVER could a dysfunctional country ever pull this off...

[Mike Lister]

15 minutes ago, redwood1 said:

 

Your sole purpose of posting seems to be to get everyone on the tax paying train....But Why ?....It just goes on and on....Is it your job?......

 

Get real....Even the USA IRS does not snoop on everyone credit card transactions.....No way EVER could a dysfunctional country ever pull this off...

Rubbish! The poster asked a question and I responded. We had the discussion weeks ago regarding the video above and whether or not ATM/CC transactions could be assessable income.....the devate has been held many times over the months. The TRD officer at the latest Hua Hin meeting said they were, that's what I have reported back to the poster. 

 

I do not care one iota whether anyone files a tax return or not and I care far less if anyone pays tax, what people do is their business. I'm in the business of providing information and fact, is that getting through to you yet! To be crystal, the issue is whether or not those transactions are assessable, NOT whether they will ever be detected or taxed.

Edited July 15 by Mike Lister

[EVENKEEL]

16 minutes ago, Mike Lister said:

 I'm in the business of providing information and fact

What business might that be? 

[Klonko]

5 hours ago, Mike Teavee said:

Agree with everything you said apart from this part, as "Gifts" are usually Personal/Non Marital property (Sin Suan Tua) 

 

I've posted a link previously that probably covers this better but can't find it now & gotta run, so here's the 1st one I came across... 

 

https://thailand.acclime.com/guides/marital-property-assets/

What is Sin Suan Tua?

Sin Suan Tua or personal property consists of (section 1471):

• Property belonging to either spouse before marriage
• Property for personal use, dress or ornament suitable for station in life, or tools necessary for carrying on the profession of either spouse
• Property acquired by either spouse during marriage through a will or gift
• Dowry

If the Sin Suan Tua has been exchanged to other property, other property has been bought or money has been acquired from selling it, the property or money acquired is Sin Suan Tua.

 

 

However, it is possible for the gift to be marital assets (Sin Somros) IF the condition of the Gift (or Will) states that it's made to both spouses...  

What is Sin Somros?

Sin Somros or marital property consists of (section 1474):

• Property acquired during a marriage
• Property acquired by either spouse during marriage through a will or gift made in writing
• Fruits of personal property (eg income in the form of rent from personal property)

 

I think your parents giving you & your wife a Gift & stating that it's a Joint gift would be OK but I don't think you would get away with giving your wife a gift and saying "This is for both of us", at best it would be considered 1/2 the Gift was for your wife but could be ruled as an invalid specification & 100% to your wife. 

I posted this already some time ago: in some home countries, it is possible for a foreign-Thai couple to elect fully separated property instead of conjugal property for income during the marriage, which makes gift remittances from foreign income more robust and distribution of the estate after death much easier.