Using an overseas Debit Card to minimise paying tax for those of us staying over 180 days

[sometimewoodworker]

6 hours ago, Geir Rasch said:

That depends on the tax treaty between Thailand and your home country. In my case my country pays back tax on pension taxed in Thailand, so for me it is a very good deal paying tax to Thailand.

However quite a reasonable number of people have income that must be declared and taxed in the home country, so have no option, also a country that refunds tax paid in Thailand has an extremely rare DTA/DTC

[stat]

On 8/9/2024 at 5:32 AM, sometimewoodworker said:

That is why the U.K. doesn’t have worldwide taxation 

There are only 2 countries that have actual world wide taxation 

and as I have said it’s unlikely that Thailand will join the club of 2

There are way more countries with ww income taxation then countries with territorial taxation. Nearly the whole of Europe taxes ww income. Vietnam, Laos, Cambodia, Indonesia also at least according to their tax laws.

 

I think you are confusing ww income taxation with taxing their citizens regardless if they are tax residents in said country. Only Erithrea and US tax their citizens on ww income even if they live abroad.

[Geir Rasch]

2 hours ago, sometimewoodworker said:

However quite a reasonable number of people have income that must be declared and taxed in the home country, so have no option, also a country that refunds tax paid in Thailand has an extremely rare DTA/DTC

Sorry for my ignorance, but what is DTA/DTC?

[chiang mai]

32 minutes ago, Geir Rasch said:

Sorry for my ignorance, but what is DTA/DTC?

Double Tax Agreement

[Cameroni]

19 hours ago, chiang mai said:

Thai Gift Tax rules don't apply only to wives but to all relatives and others also. 

 

https://sherrings.com/gift-tax-law-in-thailand.html

 

 

What about if you give the gift to your long term live-in partner, but you are not married to her, would that also be a way to avoid tax liability?

Edited August 10 by Cameroni

[chiang mai]

2 hours ago, Cameroni said:

What about if you give the gift to your long term live-in partner, but you are not married to her, would that also be a way to avoid tax liability?

The Gift Tax rules seem complex, somebody wrote them up in the following link and they are complicated, maybe worth a read.

 

 

[jerrymahoney]

On 8/9/2024 at 4:38 PM, spidermike007 said:

is it even possible that the revenue department is even going to consider the possibility that the husband would not benefit from it, much less be able to prove it?

As with Tax related issues most likely anywhere, if the Revenue folks think something is amiss, they do not have to prove that it is, you have to prove that it isn't.

[sometimewoodworker]

7 hours ago, chiang mai said:

7 hours ago, Geir Rasch said:

Sorry for my ignorance, but what is DTA/DTC?

Double Tax Agreement

Double Tax Agreement/Double Tax Convention

 

(UK/THAILAND DOUBLE TAXATION CONVENTION SIGNED 18 FEBRUARY 1981)

(THE CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE KINGDOM OF THAILAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME, SIGNED AT BANGKOK, NOVEMBER 26, 1996)

[kwak250]

Just about to have £40k sent to my Kasikorn bank 

Will this be taxed as i sent £20k just before the new year before what everyone said would be fine as it was before the start of the year and it was not taxed.

 

Thinking of doing it in smaller amounts maybe 4 x £10k over the next month

Edited August 11 by kwak250

[sometimewoodworker]

6 minutes ago, kwak250 said:

Just about to have £40k sent to my Kasikorn bank 

Will this be taxed as i sent £20k just before the new year before what everyone said would be fine as it was before the start of the year and it was not taxed.

 

Thinking of doing it in smaller amounts maybe 4 x £10k over the next month

It will not be taxed by the bank.

you will have to decide if it is assessable for Thai tax and if so file a tax return and pay tax

if you decide it isn’t assessable then no tax return no tax to pay.

 

the only tax banks deduct and pay to the TRD is on interest payments in Thailand 

[Henryford]

On 8/6/2024 at 10:27 PM, rhodie said:

Just send the money to your wife's account as a gift. No tax on gifts. 

 

Surely you are still remitting income to Thailand. Does it matter to which account?

[Yumthai]

12 minutes ago, Henryford said:

Surely you are still remitting income to Thailand. Does it matter to which account?

What you remit does not belong to you, it's been gifted beforehand.

[KhunHeineken]

29 minutes ago, Yumthai said:

What you remit does not belong to you, it's been gifted beforehand.

A loophole surely to close in the near future. 

[Henryford]

45 minutes ago, Yumthai said:

What you remit does not belong to you, it's been gifted beforehand.

 

The Revenue would never accept that otherwise everyone with a partner would do it and there would be no tax due.

Edited August 11 by Henryford

[chiang mai]

2 minutes ago, Henryford said:

 

The Revene would never accept that otherwise everyone with a partner would do it and there would be no tax due.

Maybe:

 

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.

[Rob Browder]

On 8/9/2024 at 9:05 PM, Mike Teavee said:

Edit: Now I re-read your post, I think what you might have being trying to say was you would use DTVs so you could bring the 800K in gradually over a few years, If it were me I would simply bring it all over in a year where I spent < 180 days in Thailand.

Yes, that was my thinking - and agree the DTV doesn't grant any special tax-benefit. 

 

What you describe is a good way to do it, also - but this foolish policy will deter many from making the move.  Consider, they can't easily open a bank-account if coming in-advance on a Tourist-Visa in the preliminary-step for their planned retirement here.  Even a "one time / one year" tax-exemption policy on bringing in a lump-sum would help.

[Rob Browder]

On 8/10/2024 at 2:02 AM, Scouse123 said:

There will be an exodus of foreigners.

I doubt that - those already here are likely "set up" - and will primarily be remitting living expenses.

On 8/10/2024 at 2:02 AM, Scouse123 said:

People will stop transferring to buy condos, cars.

That is true - and makes the policy foolish - and will deter some future retirees.

[jerrymahoney]

4 hours ago, chiang mai said:

.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.

Since the Gift Tax Ruling No. 40 went into effect FEB 2016, it seems nobody wealthy or otherwise since then has made it their business to find out.

[Yumthai]

52 minutes ago, jerrymahoney said:

Since the Gift Tax Ruling No. 40 went into effect FEB 2016, it seems nobody wealthy or otherwise since then has made it their business to find out.

Au contraire, if you can't find any report it's because there is no audit/enforcement.

[jerrymahoney]

7 minutes ago, Yumthai said:

Au contraire, if you can't find any report it's because there is no audit/enforcement.

And not one Thai accounting or tax attorney firms including those staffed with prior Revenue Department employees has written in their guidelines that a gift with funds originating ex-Thailand can be remitted tax free up to 20 million baht.

 

 

[Yumthai]

1 minute ago, jerrymahoney said:

And not one Thai accounting or tax attorney firms including those staffed with prior Revenue Department employees has written in their guidelines that a gift with funds originating ex-Thailand can be remitted tax free up to 20 million baht.

Maybe because first they have no clue and secondly they still have to make some business.

[jerrymahoney]

11 minutes ago, Yumthai said:

Maybe because first they have no clue and secondly they still have to make some business.

No clue. Right.

 

One firm states:

 

"... if an expat sends money from overseas to their Thai spouse and it covers their living expenses, it is not considered a gift. Attempting to bypass the tax regulations in this way is likely to be considered tax evasion, potentially resulting in severe penalties."

 

This seems to be what most every potential gifter on here is planning to do.

Edited August 11 by jerrymahoney

[Yumthai]

37 minutes ago, jerrymahoney said:

One firm states:

 

"... if an expat sends money from overseas to their Thai spouse and it covers their living expenses, it is not considered a gift. Attempting to bypass the tax regulations in this way is likely to be considered tax evasion, potentially resulting in severe penalties."

Their interpretation of the rules, this is nowhere written in the Thai Gift Law.

Anyway any legal advice will have no ground opposed to the incoherent opinion of the official behind the desk, if that day happens.

 

[jayboy]

On 8/8/2024 at 9:38 AM, chiang mai said:

Isn't this what Por 162 makes clear?

 

Not that I can see

[jerrymahoney]

28 minutes ago, Yumthai said:

Their interpretation of the rules, this is nowhere written in the Thai Gift Law.

Anyway any legal advice will have no ground opposed to the incoherent opinion of the official behind the desk, if that day happens.

 

And my observation is that if what you suggest were feasible, it would be commonplace tactic.

 

[gamb00ler]

On 8/10/2024 at 8:25 AM, gamb00ler said:

Even in Thailand, the banks have very large data centers.  The BiB show up one day and ask for a file that contains all the deposits that exceed the threshold that interests them to accounts that don't have a Thai tax ID associated with it.

 

23 hours ago, Scouse123 said:

Nothing to do with the BIB

 

I was thinking that BiB would accompany the TRD staff as part of the process to collect the data that TRD wanted from the bank.  I don't know how seizures are enforced in Thailand.   I assumed law enforcement would be involved.

[Lorry]

3 hours ago, jerrymahoney said:

No clue. Right.

 

One firm states:

 

"... if an expat sends money from overseas to their Thai spouse and it covers their living expenses, it is not considered a gift. Attempting to bypass the tax regulations in this way is likely to be considered tax evasion, potentially resulting in severe penalties."

 

This seems to be what most every potential gifter on here is planning to do.

I agree. 

 

But there are many farang here who give genuine gifts to in-laws, ex-girlfriends, village orphans, (step) children at university, you name it. Not the wife or live-in gf whith whom they share living expenses. Not buying a car "for the wife" that you will drive.

The TRD official from one of the embassy videos did say these were tax free (if they fulfill the other conditions,  like "customary", "moral obligation " etc)

[sometimewoodworker]

5 hours ago, jerrymahoney said:

And not one Thai accounting or tax attorney firms including those staffed with prior Revenue Department employees has written in their guidelines that a gift with funds originating ex-Thailand can be remitted tax free up to 20 million baht.

Really you should read more.

https://sherrings.com/gift-tax-law-in-thailand.html 

while they do not specifically use the words you like, it is implicit.

 

Quote

Subject to tax on the amount of the gift received in excess of 20 million baht in a tax year.

Since the gift is remitted directly to the recipient there is no tax. It is not income!

Since the gifter has not remitted the money to himself there is no tax.

If the money is given to the gifter it is no longer a genuine gift and is liable to tax

 

The person giving the gift must document the gift, there must be no conditions to the gift. The giftee must be able to do anything they want with the money, there can be no restrictions on the use if the gift

Edited August 11 by sometimewoodworker

[chiang mai]

6 minutes ago, sometimewoodworker said:

Really

https://sherrings.com/gift-tax-law-in-thailand.html

 

Since the gift is remitted directly to the recipient there is no tax. It is not income!

Since the gifter has not remitted the money to himself there is no tax.

If the money is given to the gifter it is no longer a genuine gift and is liable to tax

 

The person giving the gift must document the gift, there must be no conditions to the gift. The giftee must be able to do anything they want with the money, there can be no restrictions on the use if the gift

If it is a genuine gift that meets all the requirements, it is not income to the recipient. But if the Gifter has gifted assessable income it must be declared on the gifter tax return, subject to tax residency, TEDA and thresholds etc.

[sometimewoodworker]

From https://www.herrera-partners.com/2024/01/10/on-gift-tax-and-properties-in-thailand/#:~:text=Legal Concept of Gift,the receiver accepts such property.”

 

“

Legal Concept of Gift

Section 521 of Thai Civil and Commercial Code states that “A gift is a contract whereby a person. Called the donor, transfers gratuitously a property of his own to another person, called the receiver, and the receiver accepts such property.”

As it is pointed out by the regulator, gifting is one of the legal actions clearly stated in Thai civil and commercial code. This legal action must consist at least 2 parties, the donor, and the receiver, to form a legal action.

For example, a father gives a car to a daughter. In this circumstance, the father is the donor and the daughter is the receiver. The legal action cannot be completed with only one party.

Section 523 of Thai Civil and Commercial Code stated that “A gift is valid only on delivery of the property given.”

Moreover, the gift legal action will be valid when a gift is given to the receiver. As long as the receiver does not receive the property/asset, the legal action will not be considered as valid.

The donor must also be alive while the receiver receives such property. Otherwise, if the donor is not alive while gifting, such legal action will be considered as inheritance.

From section 521 and section 523 of Thai civil and commercial code, it shows the qualification of the gifting. We can examine the legal action of gift must contain all these elements. We do not need to point out that without one of these elements, the legal action will not be considered as gift.

1. The donor must show the intention of gifting the property.
2. The receiver must show the intention of receiving the property.
3. The receiver must be existing in the gifting period.

This legal action differs from the inheritance. In gifting circumstance, the properties will be transferred to the receiver while both parties are alive. On the other hand, the donor must die first in the inheritance circumstance. If a property is transferred by inheritance, the outcome of the action such as the form of the action or the taxation can be different from the gifting. Hence, it is important to examine the circumstance thoroughly to examine whether it is a gifting or inheritance.

Thai Gift Tax

Gift tax is a personal income taxation made from the property that is given or received from a legal action of gifting before the donor passes away. Because gifting is a legal action that does not need any compensations from the receiver or the donor, the Thai regulator consider that there are many circumstances that the gift is made with the aim to avoid the taxation emerged from selling or purchasing. Hence, gift tax is collected to prevent inheritance taxation avoidance.

Although the gift tax is a taxation on gifting, not every gifting has to be taxed according to Thai Tax Law. The following is the criteria for gifting that will have to be taxed according to personal tax law.

• 5% of the exceeding value of 20 million Thai Baht in case the receiver is the spouse, parents, or descendants of the donor.
• 5% of the exceeding value of 10 million Thai Baht in case the receiver is other third party.

If the value of the property is less than 10 million or 20 million Thai Baht, the receiver does not have to pay the personal income tax for the received property.

In other words, gifting a property, which has a value not more than 10 million or 20 million Thai Baht, is not obliged to be taxed for 5% of the value of the property. Nonetheless, each circumstance is subjected to different tax regulation. Although the circumstance may not be taxed according to the gift tax regulation, it may be taxed by other sections of the law. Therefore, it is essential to examine case by case and consult Tax advisers in Thailand.”

Edited August 11 by sometimewoodworker