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

[4MyEgo]

4 minutes ago, chiang mai said:

You will note that investment income is Category 4 income, for which there is no corresponding deductible expense, all the other income categories have a deductible percentage.

 

Interesting, so does that mean if Mr 4MyEgo remits assessible income from the sale of shares, he gets SFA zero deductibles ?

[4MyEgo]

4 minutes ago, NoDisplayName said:

but it seems fair to self-assess that gains are kept offshore, and only original principal is remitted.

 

Absolutely as the original principal would be deemed as savings, for without those savings invested, there would be no gains.

 

 

 

Edited August 12 by 4MyEgo

[NoDisplayName]

6 minutes ago, chiang mai said:

You will note that investment income is Category 4 income, for which there is no corresponding deductible expense, all the other income categories have a deductible percentage.

 

Those income streams already have special rules.  Interest is taxed at 15%, dividends at 10%, and zero tax on capital gains from stock sales (SET listed).

[chiang mai]

6 minutes ago, 4MyEgo said:

 

Interesting, so does that mean if Mr 4MyEgo remits assessible income from the sale of shares, he gets SFA zero deductibles ?

That's the interpretation I get from reading the PWC handbook but there may be more detail we have yet to uncover. Stay tuned.

[chiang mai]

5 minutes ago, NoDisplayName said:

 

Those income streams already have special rules.  Interest is taxed at 15%, dividends at 10%, and zero tax on capital gains from stock sales (SET listed).

Right, so no blanket deductible......amen!

[chiang mai]

6 minutes ago, 4MyEgo said:

 

Absolutely as the original principal would be deemed as savings, for without those savings invested, there would be no gains.

 

 

 

I don't want to get into it tonight but there's two issues here. The first is commingled accounts and the second is the TRD treatment of CG remittances, which I understand to be that every remittance contains both capital and gain, until the total amount is remitted. In other words, you cannot say you are remitting only capital and leave the gain offshore. Let's save that for another day shall we, or you can continue without me if you wish of course.

[4MyEgo]

3 minutes ago, chiang mai said:

Let's save that for another day shall we, or you can continue without me if you wish of course.

 

Ok, thanks for your assistance, so for now we will stick with savings only remitted. 

[sometimewoodworker]

1 hour ago, 4MyEgo said:

 

All I would assume are gains, that said, I would have the choice to either say they are savings or gains, whichever suits me, as it is a mixed account, i.e. savings and shares, money in, money out.

An account with commingled funds is a vey difficult one to justify the source of funds.
 

if you are audited the Tax authorities will  always assume that the origin of the funds are the kind that makes you owe the most tax. It is then up to you to prove that the tax authorities assumptions are wrong and you cannot do that.

 

This is why you should have separate accounts where there is no commingling 

[gamb00ler]

1 hour ago, NoDisplayName said:

Those income streams already have special rules.  Interest is taxed at 15%

Are you claiming that if a taxpayer had 4M ฿ of interest income that his tax rate on that income would never exceed 15%?

 

I think that 15% figure comes from the fact that banks withhold 15% of interest payments.  I think the taxpayer would owe more tax on that interest than was withheld.

[chiang mai]

7 minutes ago, sometimewoodworker said:

An account with commingled funds is a vey difficult one to justify the source of funds.
 

if you are audited the Tax authorities will  always assume that the origin of the funds are the kind that makes you owe the most tax. It is then up to you to prove that the tax authorities assumptions are wrong and you cannot do that.

 

This is why you should have separate accounts where there is no commingling 

 

COMINGLED FUNDS 

 

81) Funds from various sources that are all contained in the same bank account are referred to as commingled funds. Trying to account for them separately can be difficult, unless you keep complete records that show the individual sources of those funds. Much of this comes down to individual discipline and the ability to retain and file receipts and statements. 

 

82) Many tax authorities have policies regarding commingled funds, policies such as LIFO, (last in, first out) which is primarily an inventory management technique but could be used with commingled fund accounts. The UK says that capital and gain entering a mixed or commingled account, loses its identity and that any remittance from the fund, is income first, capital second. Yet another option might be that any remittance is viewed as comprising interest/gain or income first and capital second. We are not aware of the TRD policy regarding commingled funds or even if one exists. If you hold funds in this way, until such time as the TRD policy on this is made clear, you only have two options open to you. The first is to keep detailed records that describe all the feeds into the commingled account and hope that will be sufficient, or separate the sources into their own accounts. 

 

It is more probable that the funds in a commingled account will lose their identify and that the entire account will be classed as income, unless audit trail is of a sufficient standard to persuade otherwise.

 

[NoDisplayName]

12 minutes ago, gamb00ler said:

Are you claiming that if a taxpayer had 4M ฿ of interest income that his tax rate on that income would never exceed 15%?

 

I think that 15% figure comes from the fact that banks withhold 15% of interest payments.  I think the taxpayer would owe more tax on that interest than was withheld.

 

Well, if you have ฿800,000,000 in a fixed account at a Thai bank earning a princely ฿4,000,000 then you probably have an entire fleet of tax accountants on retainer and won't be worried.

 

As for the rest of us, it seems interest earned in Thailand is taxed at 15% with no upper limit.  I assume it's entitled to a rate lower than top tax rate to incentivize savings....but that's just a guess.  With my measly ฿4,000 interest on retirement bail bond, I get a refund.

 

I'm not for shirley, but I believe some DTA's specify maximum tax rates on dividends and interest.  Foreign interest and dividends?  I dunno.......are they taxed as regular income?

 

[CharlesHolzhauer]

On 8/11/2024 at 9:37 PM, sometimewoodworker said:

My meeting with one of the big 4’s tax directors was instructive.

So are most other posts in this and other tax related threads. Your quoted phrase is meaningless and is riddled with ambiguities.

[chiang mai]

10 hours ago, 4MyEgo said:

 

Ok, thanks for your assistance, so for now we will stick with savings only remitted. 

It will help you in the future if you can hold your savings in one bank account and your investment income in another, that way the funds are totally separate and there can be no question as to which is which. Perhaps something you can look into. I think this is the most important item of all. 

 

The other aspect of your income that needs looking into is whether any of your investments produce capital gains, if they do, the remittance of them is different from standard profit or dividend income. Dividend income is income you receive that comes out of the profits of the company that you hold shares in. Savings income is interest paid on the savings capital. Ideally, savings interest will be paid away into a separate account so that the principle amount is clearly ring fenced and easily identifiable. A capital gain (CG) is where you sell those shares (or other instrument) at a higher price than the amount you paid for them. If you buy and sell shares regularly, you are likely to have a CG.

 

The final aspect of your affairs is that you should try to understand how much tax has been paid on what income because this may be useful to understand in the future, if you ever need to invoke a dual tax treaty agreement (DTA) and use the tax already paid overseas to offset any Thai tax that may be due.

[Yumthai]

1 hour ago, chiang mai said:

It will help you in the future if you can hold your savings in one bank account and your investment income in another, that way the funds are totally separate and there can be no question as to which is which.

From TRD current point of view there is no future savings to be made post 31/12/2023, maybe you mean future tax exempted income?

 

[4MyEgo]

3 hours ago, chiang mai said:

It will help you in the future if you can hold your savings in one bank account and your investment income in another, that way the funds are totally separate and there can be no question as to which is which. Perhaps something you can look into. I think this is the most important item of all. 

 

Thanks, I do have another account with another bank, however I barely use it as the bank pays very little interest, so I am thinking of transferring what I remit here annually, into that account just before I am ready to remit it and then use Wise to remit it to my Thai account so that there is a clear trail.

 

Do you see a problem with this ?

 

3 hours ago, chiang mai said:

The other aspect of your income that needs looking into is whether any of your investments produce capital gains, if they do, the remittance of them is different from standard profit or dividend income. Dividend income is income you receive that comes out of the profits of the company that you hold shares in. Savings income is interest paid on the savings capital. Ideally, savings interest will be paid away into a separate account so that the principle amount is clearly ring fenced and easily identifiable. A capital gain (CG) is where you sell those shares (or other instrument) at a higher price than the amount you paid for them. If you buy and sell shares regularly, you are likely to have a CG.

 

My investments don't have a capital gains tax event in my home country as long as I remain a non resident for tax purposes, dividends are already taxed before they pay me. Interest has a withholding tax already taken out, i.e. 10% on all interest paid.

 

3 hours ago, chiang mai said:

The final aspect of your affairs is that you should try to understand how much tax has been paid on what income because this may be useful to understand in the future, if you ever need to invoke a dual tax treaty agreement (DTA) and use the tax already paid overseas to offset any Thai tax that may be due.

 

Unfortunately the DTA has nothing good in it for my position, the fact that I am a non resident speaks for itself, i.e. I pay no tax in my home country unless I make an income there, excluding shares, and as mentioned they do not hit you with a capital gains tax event if you invest in the stock market, which is the bonus for me when I buy and sell shares.

 

Withholding tax is the only charge and as mentioned it's 10% taken out by the bank on whatever interest I earn per month.

 

I believe the transfer of what I require to the account that I barely use, and then transferred to here is the best scenario. If they ask where the money comes from, I can justify it is from my bank account as savings, whether that satisfies them or not is another matter I suppose.

 

Who said life is getting difficult in the LOS 🙂

 

 

 

[chiang mai]

1 hour ago, Yumthai said:

From TRD current point of view there is no future savings to be made post 31/12/2023, maybe you mean future tax exempted income?

 

Yes, I mean it is highly desirable to be able to clearly distinguish between the various categories of funds, exempt, interest on exempt, capital and and income. If they are clearly separate and easily definable, the issue of commingled accounting goes away.

[chiang mai]

2 minutes ago, 4MyEgo said:

 

Thanks, I do have another account with another bank, however I barely use it as the bank pays very little interest, so I am thinking of transferring what I remit here annually, into that account just before I am ready to remit it and then use Wise to remit it to my Thai account so that there is a clear trail.

 

Do you see a problem with this ?

 

 

My investments don't have a capital gains tax event in my home country as long as I remain a non resident for tax purposes, dividends are already taxed before they pay me. Interest has a withholding tax already taken out, i.e. 10% on all interest paid.

 

 

Unfortunately the DTA has nothing good in it for my position, the fact that I am a non resident speaks for itself, i.e. I pay no tax in my home country unless I make an income there, excluding shares, and as mentioned they do not hit you with a capital gains tax event if you invest in the stock market, which is the bonus for me when I buy and sell shares.

 

Withholding tax is the only charge and as mentioned it's 10% taken out by the bank on whatever interest I earn per month.

 

I believe the transfer of what I require to the account that I barely use, and then transferred to here is the best scenario. If they ask where the money comes from, I can justify it is from my bank account as savings, whether that satisfies them or not is another matter I suppose.

 

Who said life is getting difficult in the LOS 🙂

 

 

 

I don't see a problem with it today but the mind set you need to adopt is, what will it look like if the TRD asks me to prove something in the future and how difficult will it be to do so. In a perfect world, we'd each have separate accounts for every type of income and capital but that is just not practical for most people. The next step down is a couple of accounts and lots of supporting audit trail evidence by way of statements etc. It's all about trade offs.

[sometimewoodworker]

10 hours ago, CharlesHolzhauer said:

On 8/11/2024 at 9:37 PM, sometimewoodworker said:

My meeting with one of the big 4’s tax directors was instructive.

So are most other posts in this and other tax related threads. Your quoted phrase is meaningless and is riddled with ambiguities.

Unless you can point out exactly what is confusing you and how you have found so many ambiguities in the quotation I can’t help.

[acepredator]

On 8/6/2024 at 7:55 PM, norbra said:

There's a lot of information on the forums re reducing your tax liability.

When the news first broke about the closing of the loophole regarding remits,I ran my numbers against TH taxable income and I was looking at 60,000baht tax pa.

But keeping up with the many posts I was able to determine that as a single,aged pensioner I can claim 500,000 thb as allowable deductions so with out trying to find further loopholes my liabilty is now 3,000 thb pa.

With 5 months remaining in this tax year I could reduce my remits to a level where i am tax free.

Remember all earnings prior to 2024 you may have saved and remitted are not assessable.

 

Last month The Thai revenue department refused my application for a Tax Identifier Number because my income was in my home country currency and I had no income from employment in Thailand.

So I cannot file a tax return because I don't have a tax id number.

Go see your revenue office and get current information about your circumstsances

How do you get 500,000 baht in allowable deductions? Every taxpayer gets a 60,000 baht deduction. Those over 65 years of age get an additional 190,000 baht deduction. That adds up to 250,000 baht in deductions. Where does the other 250,000 come from? Also, I have never worked in Thailand but I have a Thai taxpayer ID. Why would you have been refused? The Thai Revenue Dept. wants foreigners to pay taxes, so of course they gladly issue us taxpayer ID numbers. It's a very simple process. What you said in your post just doesn't add up.

[acepredator]

On 8/6/2024 at 8:21 PM, advancebooking said:

I think a lot of (honest) farang are worried about the new tax laws bc they were raised in a nanny state. They do not understand that TIT. The revenue dept's in your local province where you live have NO idea. They cannot even effectively tax their own citizens. 

 

Why on earth would you worry or abide by the new proposed laws. The rev dept will be relying on people to be honest and declare the said income. BUT if you dont do you think they can do anything about it....

The Revenue Department sends a letter to my address every year telling me that I have to file a tax return by March 31st. Clearly they know who I am and where I live. Your contention that the Revenue Department can't enforce the tax laws against foreigners, or even against Thais, is patently ridiculous.

[freedomnow]

No doubt Shinawatra will nulify this new tax system on expats as it will be unworkable as we see in pages of pages expats doing backflips to avoid it already....

 

Take the money they bring in to spend, and be glad of that.

Edited August 16 by freedomnow

[acepredator]

On 8/7/2024 at 11:11 AM, norbra said:

Self care 60k

Aged allowance 190k

Pensioner 100k

Tax free threshold 150k

The tax free threshold of 150k is not a deduction. That amount is not subtracted from your gross income to arrive at your net income. The 0 to 150k is merely an income range at which no taxes are levied. In my case, my gross income is 1,000,000 baht (not counting my government pension, which is 100% deductible). I deduct 60k for self care and 190k for aged allowance, giving me a net income of 750,000 baht. I cannot deduct a further 150,000 baht for the tax free threshold. This would give me a net income of 600,000, which is not the case. As stated, my net income is 750,000 baht. It pains me to inform you that you do not understand what the word "deduction" means, at least as that word applies to gross versus net income for taxation purposes. 

[Mike Teavee]

7 hours ago, freedomnow said:

No doubt Shinawatra will nulify this new tax system on expats as it will be unworkable as we see in pages of pages expats doing backflips to avoid it already....

 

Take the money they bring in to spend, and be glad of that.

Problem is I don't think they'll announce that they've nullified it, but will drop it quietly & so leave us all in a state of limbo where technically we still need to follow the change in rules but practically TRD won't be enforcing it. 

Edited August 16 by Mike Teavee

[anrcaccount]

14 hours ago, Mike Teavee said:

Problem is I don't think they'll announce that they've nullified it, but will drop it quietly & so leave us all in a state of limbo where technically we still need to follow the change in rules but practically TRD won't be enforcing it. 

 

i.e.  the status quo that has existed for many many years, and nothing has changed.

 

[KhunHeineken]

3 hours ago, anrcaccount said:

 

i.e.  the status quo that has existed for many many years, and nothing has changed.

 

If that was the case, why would they seek to wake the sleeping dragon now, unless they wanted MONEY?

Edited August 17 by KhunHeineken

[KhunHeineken]

17 hours ago, Mike Teavee said:

Problem is I don't think they'll announce that they've nullified it, but will drop it quietly & so leave us all in a state of limbo where technically we still need to follow the change in rules but practically TRD won't be enforcing it. 

Why would they "drop it" when they have farang by the b*lls to pay "something?"  When I say "something" I mean it may not necessarily be an individual's correct amount of tax, but "something."  

 

The law has been there for years.  They have done nothing about it for years.  In 2024 they have decided to pull the trigger.  Why would they "drop it quietly" in 2025? 

 

As I have said, they may just make most of us pay 1000 baht for some BS document or stamp.  That's all it may be, but "drop it quietly" I don't think so, particularly as it was announced, would cause a loss of "face" and is an easy earner, legit or otherwise. 

[KhunHeineken]

On 8/16/2024 at 3:33 PM, freedomnow said:

No doubt Shinawatra will nulify this new tax system on expats

Why would she? 

 

It's MONEY MONEY MONEY from people who can not vote, and from people who mostly can not leave, so must pay. 

Edited August 17 by KhunHeineken

[Lorry]

1 hour ago, KhunHeineken said:

from people who mostly can not leave, so must pay. 

Thais cannot leave

I don't know any foreigner who cannot leave - certainly some think is not worth it.

I know several farang who have left,  all of them married, very settled in Thailand 

[chiang mai]

5 hours ago, anrcaccount said:

 

i.e.  the status quo that has existed for many many years, and nothing has changed.

 

I will be extremely surprised if that happens, far too much high profile noise has been made about this to suddenly see it fizzle without some sort of accompanying announcement. One solution might be that the status quo becomes policy and the tax free status for foreigners become an official  perk of living here, they could look good if they did that. That however would rankle locals and provide them with an escape clause for imported funds. Allowing it to merely fizzle would become embarrassing as the TRD would be in the spotlight and increasingly, questions will be asked that are difficult to answer.

 

My best guess is that they will proceed with the current plan  without any fanfare and slowly increase the tax net with foreigners who feel obliged to file a return..... those people will hardly be turned away.  If, for example, only 5% of foreigners file currently, this might result in an increase to say 25% or 30% who are civic minded or afraid. At some point, the link with Immigration and visa's will be made and that will cause the numbers to jump, but the surprise and shock of it all will have disappeared by then....say within three years.

[gearbox]

If you take the route using debit cards for transfers the Wise card looks cumbersome to me. If you withdraw the max Krungsri amount of 30k with a proper debit card, the fees are similar to a Wise bank transfer of 30k.

 

Here is the list of suitable cards:

 

https://www.ozbargain.com.au/wiki/cards_with_no_overseas_transaction_fees

 

I have ING (Visa), Macquarie (MasterCard), HSBC (MasterCard), NAB (MasterCard), Ubank(Visa). Used all of them so far except Ubank, all work great. They can also be used outside Thailand for ATM fee free and currency conversion fee free withdrawals. I'm outside Thailand for the last 2 months, I use them all the time.