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

[sometimewoodworker]

19 minutes ago, chiang mai said:

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.

I had assumed that the words Since the gift is remitted directly to the recipient there is no tax. It is not income! Implied that the transfer to the recipient was directly from overseas and so was not made in Thailand.

 

To be absolutely clear the gift is directly sent to the recipient from overseas. Thus the gifter has received no assessable income in Thailand.

 

Of course if the funds first go to the donor it maybe assessable income.

The recipient has no income they have a gift so no tax liability.

[chiang mai]

I suspect there may be members who think that gifting  funds to another person, allows the person who gifts the funds, to escape tax, which of course is not necessarily true. Remitting funds to another person does not mean the remitter escapes tax, if those funds are assessable. The person who receives the funds (the gift) may well escape tax, if all the planets align and all the rules are followed. But the person who does the giving, still has to contend with the issue of assessability of those funds, just as if they were remitted to their own account.

[chiang mai]

2 minutes ago, sometimewoodworker said:

I ad assumed that the words Since the gift is remitted directly to the recipient there is no tax. It is not income! Implied that the transfer to the recipient was directly from overseas and so was not made in Thailand.

 

To be absolutely clear the gift is directly sent to the recipient from overseas. Thus the gifter has received no assessable income in Thailand.

If the gifter of the funds is tax resident in Thailand and gifts funds from overseas, to another person who also tax resident here, that action does not exempt the gifter from assessment or tax. I do not think there is a tax exemption allowed for giving gifts, only receiving them.

[sometimewoodworker]

4 minutes ago, chiang mai said:

But the person who does the giving, still has to contend with the issue of assessability of those funds, just as if they were remitted to their own account.

Please explain, using current rules, exactly how there is any liability to the gifter if the funds do not touch their Thai accounts?

The funds originate from overseas and do not touch the gifters accounts.

the gifter has not received anything so there is nothing to assess!

 

NB the gifter must receive no money at all from the giftee 

[sometimewoodworker]

6 minutes ago, chiang mai said:

If the gifter of the funds is tax resident in Thailand and gifts funds from overseas, to another person who also tax resident here, that action does not exempt the gifter from assessment or tax.

Back up your statement with facts and quote the exact TRD position that supports your theory.

The gifter has not remitted taxable funds to themselves, tax is due on remitted funds only (this may change), they have received no funds, the funds were not earned in Thailand, Q.E.D. They have no tax liability 

[chiang mai]

2 minutes ago, sometimewoodworker said:

Please explain, using current rules, exactly how there is any liability to the gifter if the funds do not touch their Thai accounts?

The funds originate from overseas and do not touch the gifters accounts.

the gifter has not received anything so there is nothing to assess!

 

NB the gifter must receive no money at all from the giftee 

If the gifter uses non-assessable funds, there is no issue. But if tax assessable income is remitted from the home country account, gifting the income overseas does not allow the gifter to escape tax. Tax still has to be paid on that income, in either the home country or in Thailand.

[sometimewoodworker]

19 minutes ago, chiang mai said:

Remitting funds to another person does not mean the remitter escapes tax, if those funds are assessable.

But prove that they are assessable!

[chiang mai]

1 minute ago, sometimewoodworker said:

But prove that they are assessable!

Person X works as a contractor and his fees are paid into HSBC UK. Twice a year he remits the balance of that account to his Thai wife as a gift. He cannot escape tax on that income, just by gifting, if he could, everyone would be doing it.

[chiang mai]

5 minutes ago, sometimewoodworker said:

But prove that they are assessable!

Stupid word game on your part, you omitted the last part of my quote which reads,  "if those funds are assessable"!!

[sometimewoodworker]

1 minute ago, chiang mai said:

If the gifter uses non-assessable funds, there is no issue. But if tax assessable income is remitted from the home country account, gifting the income overseas does not allow the gifter to escape tax. Tax still has to be paid on that income, in either the home country or in Thailand.

Posit

The funds exist, they are not illegal in the origin country.

They may have been taxed or not in the country of origin. The taxation or not outside Thailand is irrelevant.

They may be assessable if remitted to a foreigner who earned them.

The are not assessable if received by a Thai taxpayer as a gift 

The foreigner has received nothing so has no tax liability 

 

[sometimewoodworker]

5 minutes ago, chiang mai said:

Person X works as a contractor and his fees are paid into HSBC UK. Twice a year he remits the balance of that account to his Thai wife as a gift. He cannot escape tax on that income, just by gifting, if he could, everyone would be doing it.

Prove your claim!

Prove that it is not being done!

 

NB he would have to receive some income for personal expenses 

 

Just because you don’t know enough people with enough trust in their spouses doesn’t mean they don’t exist.

[chiang mai]

1 minute ago, sometimewoodworker said:

Posit

The funds exist, they are not illegal in the origin country.

They may have been taxed or not in the country of origin. The taxation or not outside Thailand is irrelevant.

They may be assessable if remitted to a foreigner who earned them.

The are not assessable if received by a Thai taxpayer as a gift 

The foreigner has received nothing so has no tax liability 

 

I said that gifting funds does not allow them to escape tax. If the funds have been taxed in the country of origin then they have been taxed, if they have not, there is an issue that neither one of us fully understands how it is addressed.. 

[chiang mai]

Just now, sometimewoodworker said:

Prove your claim!

Prove that it is not being done!

 

NB he would have to receive some income for personal expenses 

 

Just because you don’t know enough people with enough trust in their spouses doesn’t mean they don’t exist.

What nonsense you write sometimes! 

 

Prove what is not being done? That people are escaping tax by gifting, along the lines I described with Person X? And the trusting spouses nonsense, what's all that about for gods sake!

 

The entire point here is that neither you nor I have the full picture of what happens with gifting under TRD rules, as we have both said many times. So stop challenging me and trying to win every encounter you engage in and accept there are things we don't know that need clarification.

[sometimewoodworker]

1 minute ago, chiang mai said:

I said that gifting funds does not allow them to escape tax.

It certainly can.

2 minutes ago, chiang mai said:

. If the funds have been taxed in the country of origin then they have been taxed,

Obviously but irrelevant 

3 minutes ago, chiang mai said:

if they have not, there is an issue that neither one of us fully understands how it is addressed.

You don’t know my level of knowledge and understanding.

 

if funds have been taxed in the origin country is only relevant in the possible tax relief if remitted to the person who earned or generated them

 

you are fixated on the source of the funds. If you didn’t earn them it doesn’t matter 

[sometimewoodworker]

7 minutes ago, chiang mai said:

The entire point here is that neither you nor I have the full picture of what happens with gifting under TRD rules,

You may not.  My meeting with one of the big 4’s tax directors was instructive.

“I can explain it to you, but I can't comprehend it for you.”

[chiang mai]

21 minutes ago, sometimewoodworker said:

It certainly can.

Obviously but irrelevant 

You don’t know my level of knowledge and understanding.

 

if funds have been taxed in the origin country is only relevant in the possible tax relief if remitted to the person who earned or generated them

 

you are fixated on the source of the funds. If you didn’t earn them it doesn’t matter 

I'm not going to debate this with you any more, your remarks are becoming silly plus you are twisting words to suit. I have said repeatedly that the only issue is with assessable funds so of course it doesn't matter if they weren't earned. Perhaps you ought to think about what happens when somebody remits assessable income to Thailand, directly to a developers account, to pay for the condo he's buying. Those are funds that never hit the remniters Thai bank account so I suppose he doesn't need to file a Thai tax return there either! Too silly for words really.

 

Good bye

[Lorry]

1 hour ago, chiang mai said:

I'm not going to debate this with you any more, your remarks are becoming silly plus you are twisting words to suit. I have said repeatedly that the only issue is with assessable funds so of course it doesn't matter if they weren't earned. Perhaps you ought to think about what happens when somebody remits assessable income to Thailand, directly to a developers account, to pay for the condo he's buying. Those are funds that never hit the remniters Thai bank account so I suppose he doesn't need to file a Thai tax return there either! Too silly for words really.

 

Good bye

Unfortunately, I agree.

If ww feels like it, I have someone better than us mere mortals with whom he can discuss this issue: HMRC. 

If Ms X sends some of her billions from her Indian bank account directly to her beloved husband's bank account in London, HMRC considers this a taxable remittance of  Ms X's money.

What TRD thinks, nobody knows. 

[chiang mai]

5 hours ago, Lorry said:

Unfortunately, I agree.

If ww feels like it, I have someone better than us mere mortals with whom he can discuss this issue: HMRC. 

If Ms X sends some of her billions from her Indian bank account directly to her beloved husband's bank account in London, HMRC considers this a taxable remittance of  Ms X's money.

What TRD thinks, nobody knows. 

Of course they do, that's precisely the model I was following. Remitting funds from overseas, directly to a third party account in order to pay a bill or pay for a purchase, perhaps the purchase of real estate, paying for medical services, doesn't negate the assessability of those funds, at least it didn't when I worked for PWC.

[chiang mai]

A ten year old blog from World Bank still relevant today. Note what is written about taxing inward remittances.

 

https://blogs.worldbank.org/en/peoplemove/why-taxing-remittances-bad-idea

[SouthThailand]

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

If a spouse receives 5 million baht, 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?

 

Normal government agencies will ask you to prove that you did not benefit.

They do not have to prove anything.

 

 

[chiang mai]

30 minutes ago, SouthThailand said:

 

Normal government agencies will ask you to prove that you did not benefit.

They do not have to prove anything.

 

 

Tax audits globally are somewhat unique, taxpayers must prove innocence rather than the Revenue proving guilt.

[chiang mai]

I saw this in the pinned document:

 

THE TAX IMPLICATIONS OF REMITTANCES

 

22) If you receive funds in Thailand, you must determine whether they represent assessable income or not. If they are assessable and they exceed the reporting threshold, you must report them on a tax return. You are the only person who can do this because you are the only person who knows. 

 

23) Similarly, if you remit funds to Thailand from overseas, to someone other than yourself, you must also determine if those funds are assessable and if they are, declare them on your tax return, subject to threshold amounts. Just because you remit funds to another person in Thailand and the money does not enter your bank account, does not mean those funds escape your tax assessment. 

 

24) For example, a remittance from your overseas account, to a Thai property developer, in order to buy property in Thailand, must still be assessed for Thai tax. If that remittance comprises exempt income, it does not need to be declared, but if it comprises taxable income, the money must be declared. 

[Lorry]

3 hours ago, chiang mai said:

I saw this in the pinned document:

 

THE TAX IMPLICATIONS OF REMITTANCES

 

22) If you receive funds in Thailand, you must determine whether they represent assessable income or not. If they are assessable and they exceed the reporting threshold, you must report them on a tax return. You are the only person who can do this because you are the only person who knows. 

 

23) Similarly, if you remit funds to Thailand from overseas, to someone other than yourself, you must also determine if those funds are assessable and if they are, declare them on your tax return, subject to threshold amounts. Just because you remit funds to another person in Thailand and the money does not enter your bank account, does not mean those funds escape your tax assessment. 

 

24) For example, a remittance from your overseas account, to a Thai property developer, in order to buy property in Thailand, must still be assessed for Thai tax. If that remittance comprises exempt income, it does not need to be declared, but if it comprises taxable income, the money must be declared. 

This is all very obvious. 

Otherwise I would pay my rent,  electricity,  water,  phone and internet from my bank account abroad. 

Also girls, hotels, whatever. 

Even 10B for the motorcycle  to the BTS I would pay by WISE within seconds.  Tax-free living in Thailand?!

 

I have really never understood why this should be different with gift tax.

But then,  I have never understood Thai gift tax anyway.

For  a start,  I never got clarity who is the one who owes gift tax? The receiver or the gifter? Or both?? Is the gift tax somehow "owed by the gift"?

This is how this is always phrased,  and in that case I could imagine a gift sent directly from abroad to the receiver in Thailand to be tax-free for everybody,  sender and receiver. 

 

No idea.

 

 

[sometimewoodworker]

25 minutes ago, Lorry said:

I have really never understood why this should be different with gift tax.

But then,  I have never understood Thai gift tax anyway.

For  a start,  I never got clarity who is the one who owes gift tax? The receiver or the gifter? Or both?? Is the gift tax somehow "owed by the gift"?

This is how this is always phrased,  and in that case I could imagine a gift sent directly from abroad to the receiver in Thailand to be tax-free for everybody,  sender and receiver. 

if you consider the gift to be like income (of course it isn’t exactly but it maybe easier to understand if thought of like income) a gift can be property or some other item as well as cash.

There are 2 allowances before tax is due;

gifts to ascendants, descendants, or spouses, the allowance is ฿20 million per year per recipient. Then the tax is 5%

For gifts to others, the allowance is ฿10 million per year per recipient. Then the tax is 5%
The gift tax must be paid by the receiver of the gift

 

This is the essence, however there is paperwork required that I’m not going to get into.

 

Quote

Gift tax is a type of personal income tax, and the tax is imposed on money or assets given to parents, ascendants, descendants, spouse or others as a gift and exceed the threshold.

Assets or money given that do not exceed the threshold are exempt from gift tax.

The person making the gift gets no tax benefit by making the gift if the funds or items are in Thailand.

 

I will not go into making a gift from overseas as there are people here who strongly disagree with professional advice.

[chiang mai]

26 minutes ago, Lorry said:

This is all very obvious. 

Otherwise I would pay my rent,  electricity,  water,  phone and internet from my bank account abroad. 

Also girls, hotels, whatever. 

Even 10B for the motorcycle  to the BTS I would pay by WISE within seconds.  Tax-free living in Thailand?!

 

I have really never understood why this should be different with gift tax.

But then,  I have never understood Thai gift tax anyway.

For  a start,  I never got clarity who is the one who owes gift tax? The receiver or the gifter? Or both?? Is the gift tax somehow "owed by the gift"?

This is how this is always phrased,  and in that case I could imagine a gift sent directly from abroad to the receiver in Thailand to be tax-free for everybody,  sender and receiver. 

 

No idea.

 

 

The gift tax is payable by the receiver of the gift, above the threshold level.  Let me just state the obvious here and add that if the gifter is not tax resident in Thailand, the assessability issue doesn't arise.

[4MyEgo]

1 hour ago, chiang mai said:

The gift tax is payable by the receiver of the gift, above the threshold level.  Let me just state the obvious here and add that if the gifter is not tax resident in Thailand, the assessability issue doesn't arise.

 

I just thought of something else as I am always looking at trying to find a way around paying tax here, legally of course, they make the rules, and I am look for a legal loop hole.

 

Example: I sign a contract with my son who lives overseas and is a resident of that country for tax purposes, the contract is to loan him money in my old country to the value of say a million baht or more, the contract stating that he must pay me back, interest free, with the funds transferred to my Thai account in a lump sum or whatever sum I request, from his bank account, when I require it.

 

How would this scenario go with the Thai Tax Revenue Department, after all, it is not me remitting the said funds, it is a loan being paid back to me, it is not a gift and is not from my account overseas being remitted here in the LOS.

 

 

 

[chiang mai]

51 minutes ago, 4MyEgo said:

 

I just thought of something else as I am always looking at trying to find a way around paying tax here, legally of course, they make the rules, and I am look for a legal loop hole.

 

Example: I sign a contract with my son who lives overseas and is a resident of that country for tax purposes, the contract is to loan him money in my old country to the value of say a million baht or more, the contract stating that he must pay me back, interest free, with the funds transferred to my Thai account in a lump sum or whatever sum I request, from his bank account, when I require it.

 

How would this scenario go with the Thai Tax Revenue Department, after all, it is not me remitting the said funds, it is a loan being paid back to me, it is not a gift and is not from my account overseas being remitted here in the LOS.

 

 

 

I would prefer not to comment on complex tax avoidance schemes because they nearly always cross the line into what is tax avoidance. A couple of things I learned years ago as an audit senior with the firm and their interactions with HMRC include the following:

 

1) the more complex the avoidance measures appears to be, the closer it will be inspected.

2) any loan arrangement involving relatives that results in a reduction of tax paid, is akin to putting up a sign to attract attention of the Revenue Department.

[Presnock]

On 8/7/2024 at 4:41 PM, Cameroni said:

 

Well, the DTA doesn't really "protect" you, it just means you're taxed in your home country, where tax is most likely considerably higher than in Thailand.

No the US DTA is specific, govt pension is only taxable by the US govt which they do regularly!  With the Thai rate it might be 35% which would be higher than the US rate.

[4MyEgo]

1 hour ago, chiang mai said:

1) the more complex the avoidance measures appears to be, the closer it will be inspected.

2) any loan arrangement involving relatives that results in a reduction of tax paid, is akin to putting up a sign to attract attention of the Revenue Department.

 

1) IMO, no one is avoiding paying tax, as no one is remitting money here as assessible income.

Perhaps gifting is another way, as I am already aware that there is no tax in my home country for gifting to a family member, i.e. unless that money goes onto create money, then it will be taxed in my home country, e.g. my son would have to pay tax on what he earned from that gift.

 

He could then gift it to me, however, I would have thought a loan would be better, as a gift here is taxable from my understanding, and as I would presume that as there would be no tax payable as a loan, only on any interest earned by myself from the loan to my son, and as there wouldn't be any interest charged, I can't see a problem, as I wouldn't be earning any money from interest repayments, so it's not assessible income IMO.

 

2) I can't see how a no interest loan arrangement is reducing tax to be paid when there is no tax payable in the home country, as taxes would have already been paid on the funds being advanced for the interest free loan.

 

The concern I would have is what Thailand's interpretation would be on the remitted income, if I could show them it was indeed a interest free loan being paid back.

 

[chiang mai]

6 minutes ago, 4MyEgo said:

 

1) IMO, no one is avoiding paying tax, as no one is remitting money here as assessible income.

Perhaps gifting is another way, as I am already aware that there is no tax in my home country for gifting to a family member, i.e. unless that money goes onto create money, then it will be taxed in my home country, e.g. my son would have to pay tax on what he earned from that gift.

 

He could then gift it to me, however, I would have thought a loan would be better, as a gift here is taxable from my understanding, and as I would presume that as there would be no tax payable as a loan, only on any interest earned by myself from the loan to my son, and as there wouldn't be any interest charged, I can't see a problem, as I wouldn't be earning any money from interest repayments, so it's not assessible income IMO.

 

2) I can't see how a no interest loan arrangement is reducing tax to be paid when there is no tax payable in the home country, as taxes would have already been paid on the funds being advanced for the interest free loan.

 

The concern I would have is what Thailand's interpretation would be on the remitted income, if I could show them it was indeed a interest free loan being paid back.

 

Or you could meet under a bridge at midnight wearing raincoats with the collar turned up and hat pulled down over the eyes. You both carry identical brown paper bags, one containing money, the other containing bologna sandwiches. Then, just as you pass each other you could exchange bags and nobody will be the wiser.

 

Sorry, couldn't resist. 🙂

 

Whatever floats your boat.