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

[KhunHeineken]

On 8/22/2024 at 7:25 PM, Lorry said:

It is not "technically" tax evasion - it is tax evasion. 

 

Por. 161/2566 talks about money you "bring in" into Thailand - 

นำเงิน...เข้ามา.

And that's what you are doing.

It doesn't prescribe by which means the money has to be brought in.

I hear you, but that would definitely be beyond Thailand's, and most other country's, capabilities to enforce, with the caveat on the declarable amounts, but I have NEVER suggested to try to bring in over the declarable amount, thus, drawing attention to one's self, both in Thailand, and one's home country.

 

Given around 17% to 20% of Thailand's GDP, possibly a bit higher, relies on tourism, there's no chance they will be searching foreigners at every boarder for cash amounts under the declarable amount.  

 

Try to bring in a suit case full of cash, sure, one would have problems, but I've never suggested that. 

 

One can remit an amount that is either under the taxable amount, or to a point they can afford to pay their tax liability, or personally feel it's still worth it for them to pay it, and any shortfall can be made up with a "cash run" and come back in as any other tourist does with some cash.   

[KhunHeineken]

On 8/22/2024 at 7:02 AM, freedomnow said:

Haha, dream on - the very fact you switch from remitance to physical cash over a border says it all....

Addressed in another post. 

 

Who says "I switched?"  You did, not me. 

 

I went on a short holiday.  That's why it's called a "re-entry permit." 

 

So, "haha dream on" about the Thai's capability to detect i have cash (under the declarable of course) AND prosecute me for some form of tax "evasion."  

[freedomnow]

18 hours ago, KhunHeineken said:

Addressed in another post. 

 

Who says "I switched?"  You did, not me. 

 

I went on a short holiday.  That's why it's called a "re-entry permit." 

 

So, "haha dream on" about the Thai's capability to detect i have cash (under the declarable of course) AND prosecute me for some form of tax "evasion."  

Yes, as long as you know its clear tax evasion if resident over 180 days in 1 tax year in LoS.

Is all I'm saying....

[KannikaP]

On 8/6/2024 at 11:00 PM, proton said:

 

But wise transfers do not show up as coming from abroad they look like internal transfers, at least that's what they told me

Not if you click purpose as Long Term Stay in Thailand and use Bangkok Bank. It shows as FTT, International Transfer, but takes 24 hours longer to arrive, so send it one day earlier.

[spidermike007]

My woman, like a lot of Thais has never paid taxes in her entire life, so how is she a tax resident? And if she is not a tax resident how is she liable for any proceeds from a gift from her husband? 

[chiang mai]

Just now, spidermike007 said:

My woman, like a lot of Thais has never paid taxes in her entire life, so how is she a tax resident? And if she is not a tax resident how is she liable for any proceeds from a gift from her husband? 

She is tax resident because she spends more than 180 days per calendar year in Thailand, just like anyone else. The fact she has never paid tax is not relevant to anything.

 

 

[Presnock]

On 8/19/2024 at 6:59 AM, Nemises said:

Fly back to Aus every time you need cash. Bring back the folding stuff, but don't put it in your Thai bank. Instead, keep it under the bed and buy everything in cash. Rinse and repeat when it runs out. Never pay the tax you mention. Just a thought!

bring back cash?  how about when you go exchange that cash for baht - will have to show your passport right? Then they have a paper trail on you.

[freedomnow]

8 minutes ago, spidermike007 said:

My woman, like a lot of Thais has never paid taxes in her entire life, so how is she a tax resident? And if she is not a tax resident how is she liable for any proceeds from a gift from her husband? 

That is actually a good point.

 

Swelling foreigner wife bank accounts nationwide..

 

The aseannow REMITTANCE LOOPHOLE MEME has been minted.

 

 

 

[chiang mai]

20 minutes ago, spidermike007 said:

My woman, like a lot of Thais has never paid taxes in her entire life, so how is she a tax resident? And if she is not a tax resident how is she liable for any proceeds from a gift from her husband? 

Gifts between husband and wife must follow certain protocols and conventions and must be documented. It's not a straight forward matter of simply giving your wife money and calling it a tax free gift, there are rules that must be followed.

 

Most importantly, if the giver of the gift is Thai tax resident and gifts money to their wife in Thailand, those funds may still be assessable to Thai tax on the part of the person making the gift. A person cannot escape Thai tax by gifting remitted assessible income to a spouse, if they are both tax resident here. The giving of the gift does not imply any form of tax immunity on the part of the giver, nor does it magically negate any tax that would be otherwise due from the giver. The receiver of the gift is free of tax by receiving the gift, as long as the amount does not exceed the current gift tax threshold but nothing changes on the part of the person making the gift..

[spidermike007]

1 hour ago, chiang mai said:

She is tax resident because she spends more than 180 days per calendar year in Thailand, just like anyone else. The fact she has never paid tax is not relevant to anything.

 

 

It's relevant to a lot, she's not in the system, meaning she's undetected, meaning she's unknown, meaning she's not a person of record. End of story. You are referring to the letter of the law, I am referring to practical steps that one likely may be able to take. 

Edited August 26 by spidermike007

[chiang mai]

1 minute ago, spidermike007 said:

It's relevant to a lot, she's not in the system, meaning she's undetected, meaning she's unknown, meaning she's not a person of record. End of story. 

What you've just defined is tax evasion, hiding out and working cash in hand and never declaring income....that's a whole different story. I gave you an answer that complies with tax law and the Revenue rules that exist and doesn't define what happens if you break those rules and act differently.  So no, it's not the end of the story, not if one day somebody from the Revenue has cause to begin asking questions which become difficult or impossible to answer.

[BE88]

1 hour ago, chiang mai said:

Gifts between husband and wife must follow certain protocols and conventions and must be documented. It's not a straight forward matter of simply giving your wife money and calling it a tax free gift, there are rules that must be followed.

 

Most importantly, if the giver of the gift is Thai tax resident and gifts money to their wife in Thailand, those funds may still be assessable to Thai tax on the part of the person making the gift. A person cannot escape Thai tax by gifting remitted assessible income to a spouse, if they are both tax resident here. The giving of the gift does not imply any form of tax immunity on the part of the giver, nor does it magically negate any tax that would be otherwise due from the giver. The receiver of the gift is free of tax by receiving the gift, as long as the amount does not exceed the current gift tax threshold but nothing changes on the part of the person making the gift..

 

I find the whole exact process that could be applied in the case of the two declarants residing in Thailand, make a donation of twenty million you should document where you got that money and if you imported it to pay a tax on it before making the donation.

 

So this talk of making a donation by taxes and making a donation only if you are not a resident less than 180 days.

 

So this declaration is rather a trap of Thai taxes.

[chiang mai]

1 minute ago, BE88 said:

 

I find the whole exact process that could be applied in the case of the two declarants residing in Thailand, make a donation of twenty million you should document where you got that money and if you imported it to pay a tax on it before making the donation.

 

So this talk of making a donation by taxes and making a donation only if you are not a resident less than 180 days.

 

So this declaration is rather a trap of Thai taxes.

Which can be avoided if the giver is not tax resident when the gift is made and all the rules of Gift Tax are followed. The most important one being that the giver of the gift must not benefit from the gift, in any way..

[Nemises]

2 hours ago, Presnock said:

bring back cash?  how about when you go exchange that cash for baht - will have to show your passport right? Then they have a paper trail on you.

As already mentioned in this thread I won’t be exchanging anything. That’s being done by others.  Please scroll up and read what was posted before asking more already-asked-and-answered questions. 

[jacob29]

29 minutes ago, Nemises said:

As already mentioned in this thread I won’t be exchanging anything. That’s being done by others.  Please scroll up and read what was posted before asking more already-asked-and-answered questions. 

Which pushes the tax liability onto them, which probably won't be an issue unless the amounts involved get high.

 

I would think the first victims of this change (low hanging fruit) would be locals receiving large lump sum remittances into their accounts, though I wonder how far the definition of gift can stretch.

[chiang mai]

19 minutes ago, jacob29 said:

Which pushes the tax liability onto them, which probably won't be an issue unless the amounts involved get high.

 

I would think the first victims of this change (low hanging fruit) would be locals receiving large lump sum remittances into their accounts, though I wonder how far the definition of gift can stretch.

20 million baht per year is the maximum. But no, the gift does not push the tax liability to the receiver of the gift. The tax liability remains with the giver of the gift, if the funds were assessible. See a few posts further up the page.

Edited August 26 by chiang mai

[Nemises]

28 minutes ago, jacob29 said:

I wonder how far the definition of gift can stretch.

It won’t be a gift, it’s payment for accommodation - as already explained above. 

[Yumthai]

2 hours ago, chiang mai said:

Which can be avoided if the giver is not tax resident when the gift is made and all the rules of Gift Tax are followed. The most important one being that the giver of the gift must not benefit from the gift, in any way..

This is again an authoritative formulated opinion/interpretation not backed by any official source.

[chiang mai]

19 minutes ago, Yumthai said:

This is again an authoritative formulated opinion/interpretation not backed by any official source.

If the giver is not Thai tax resident in the year the gift if remitted, the funds cannot be  Thai assessible since Thailand taxes tax residents on a remittance basis only.

 

Question 5 of the attached link helps.

 

https://sherrings.com/foreign-source-income-personal-tax-thailand.html

Edited August 26 by chiang mai

[anrcaccount]

3 hours ago, chiang mai said:

Gifts between husband and wife must follow certain protocols and conventions and must be documented. It's not a straight forward matter of simply giving your wife money and calling it a tax free gift, there are rules that must be followed.

 

Most importantly, if the giver of the gift is Thai tax resident and gifts money to their wife in Thailand, those funds may still be assessable to Thai tax on the part of the person making the gift. A person cannot escape Thai tax by gifting remitted assessible income to a spouse, if they are both tax resident here. The giving of the gift does not imply any form of tax immunity on the part of the giver, nor does it magically negate any tax that would be otherwise due from the giver. The receiver of the gift is free of tax by receiving the gift, as long as the amount does not exceed the current gift tax threshold but nothing changes on the part of the person making the gift..

 

You're making this up based on prior ramblings in related threads.

 

Have any of these gift scenarios you state as fact ever occurred and been tested, where the person making the gift has been found liable and paid the tax?

 

Please stop scaremongering, by posting these kind of statements as fact.

 

 

 

[chiang mai]

1 hour ago, anrcaccount said:

 

You're making this up based on prior ramblings in related threads.

 

Have any of these gift scenarios you state as fact ever occurred and been tested, where the person making the gift has been found liable and paid the tax? The tax benefit is for the person receiving the gift, it becomes non-taxable income, up to 20 million baht, thereafter it is taxable at 5%.

 

Please stop scaremongering, by posting these kind of statements as fact.

 

 

 

What are you talking about, scaremongering!

 

If income is assessible it is taxable, giving away your income doesn't negate tax, where is it said that you can do that? If that were the case, everyone would earn income and immediately give it to somebody and nobody would ever pay tax!

 

Show me where it is said that there is a tax benefit to the gifter by gifting income, any source will do.

 

 

Edited August 26 by chiang mai

[Lorry]

6 hours ago, chiang mai said:

The giving of the gift does not imply any form of tax immunity on the part of the giver, nor does it magically negate any tax that would be otherwise due from the giver. The receiver of the gift is free of tax by receiving the gift, as long as the amount does not exceed the current gift tax threshold but nothing changes on the part of the person making the gift..

Do you really know this for sure?

I used to agree, and I think logic dictates that it is this way.

But several knowledgeable members in the old tax thread think the giver would be tax-free.

I gave up and just accepted that I have no idea what is true.

So, do you just think it is obvious and logical (like I think),  or do you have sources like TRD or Big4 for this? 

[Lorry]

3 hours ago, anrcaccount said:

 

You're making this up based on prior ramblings in related threads.

 

Have any of these gift scenarios you state as fact ever occurred and been tested, where the person making the gift has been found liable and paid the tax?

 

Please stop scaremongering, by posting these kind of statements as fact.

 

 

 

 

As @chiang mai just wrote,  to say the gifter is free from PIT for money he gifts just doesn't make sense.

 

About the scenarios you would like to see:

- @Dogmatix posted several times scenarios (one from the Shinawatra family, one from the TRD). But they didn't help me to understand gift tax better.

- one scenario you do NOT see is rich Thais  repatriating money by gifting it to their kids.

- and you don't see Thai tax consultants recommend gifting as a loophols to remit income tax-free. Why?

 

 

[gearbox]

8 hours ago, Presnock said:

bring back cash?  how about when you go exchange that cash for baht - will have to show your passport right? Then they have a paper trail on you.

You can bring Thai baht cash directly, already converted.

[chiang mai]

3 hours ago, Lorry said:

Do you really know this for sure?

I used to agree, and I think logic dictates that it is this way.

But several knowledgeable members in the old tax thread think the giver would be tax-free.

I gave up and just accepted that I have no idea what is true.

So, do you just think it is obvious and logical (like I think),  or do you have sources like TRD or Big4 for this? 

There is no exemption, deduction or allowance for any of the eight types of incomes that allow tax to be reclaimed or negated when a gift is given, plus I have not seen anywhere on the tax forms that tax can be zeroed or reclaimed when it is. Finally, there is nothing that I have seen in the Code that says gifted assessable income becomes not assessable. when it is gifted.

 

If a gifter was able to negate tax on gifted assessable income, every husband and wife in the country would be gifting their salaries to their partner every year, in order to avoid tax and the country would have no tax receipts.....every foreigner married to a Thai would be remitting assessable income from overseas, to their spouse, to avoid tax and no married foreigner would pay tax.

 

In Western countries, there is a tax deduction or allowance for gifting funds, within low limits, to charitable and tax free organisations, those donations benefit the gifter but the gift is given far beyond their reach. If Thailand is unique in that it allows givers to escape income assessability by gifting to their partner, the Revenue Code doesn't mention or even imply this. If the Revenue Courts have determined it is possible, I have never seen or heard word one about it and would need to see first hand proof of it before I begin to believe it to be true.

 

I would add here that it's called Gift Tax, a tax or tax benefit on gifts, that is not a tax benefit on donated income. The gift tax rule is intended to benefit the receiver of the gift, not the giver and certainly not both.

Edited August 26 by chiang mai

[Lorry]

45 minutes ago, chiang mai said:

There is no exemption, deduction or allowance for any of the eight types of incomes that allow tax to be reclaimed or negated when a gift is given, plus I have not seen anywhere on the tax forms that tax can be zeroed or reclaimed when it is. Finally, there is nothing that I have seen in the Code that says gifted assessable income becomes not assessable. when it is gifted.

 

If a gifter was able to negate tax on gifted assessable income, every husband and wife in the country would be gifting their salaries to their partner every year, in order to avoid tax and the country would have no tax receipts.....every foreigner married to a Thai would be remitting assessable income from overseas, to their spouse, to avoid tax and no married foreigner would pay tax.

 

In Western countries, there is a tax deduction or allowance for gifting funds, within low limits, to charitable and tax free organisations, those donations benefit the gifter but the gift is given far beyond their reach. If Thailand is unique in that it allows givers to escape income assessability by gifting to their partner, the Revenue Code doesn't mention or even imply this. If the Revenue Courts have determined it is possible, I have never seen or heard word one about it and would need to see first hand proof of it before I begin to believe it to be true.

 

I would add here that it's called Gift Tax, a tax or tax benefit on gifts, that is not a tax benefit on donated income. The gift tax rule is intended to benefit the receiver of the gift, not the giver and certainly not both.

 

Yes, that's how I would see it, too.

Sec 40 (27) and (28) of the RC seem very clear to me:

Exempt from PIT is "Income derived from maintenance and support or gifts"

So the receiver is exempted from paying tax on the gift he got.

It says nothing about the gifter. 

 

Sherrings says it this way: the RC "grants receivers of  ... gifts the right to exclude (it) from ...tax"

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

Gift tax is paid by the receiver and has nothing to do with the gifter. 

The same here:

 an individual receiving certain types of gifts in excess of the tax-free thresholds will be subject to personal income tax at the rate of 5 percent of the exceeding portion

https://www.thanathippartners.com/insights/legal-update/inheritance-tax-and-gift-tax-t2u2.html?show=4

 

I have always wondered why so many people see gifting as a loophole.

BUT

1. I cannot read the RC in the Thai original,  I rely on English language sources

2.All of the above is only logic and matter of course. Not things that would bother a bureaucrat.

3. In the Swiss (?) embassy video, the TRD official said a gift to your son would be tax-free (not, if it's a Ferrari) - and he wasn't talking about the taxes of your son.

It would be nice to know some precedents.

[chiang mai]

1 hour ago, Lorry said:

 

Yes, that's how I would see it, too.

Sec 40 (27) and (28) of the RC seem very clear to me:

Exempt from PIT is "Income derived from maintenance and support or gifts"

So the receiver is exempted from paying tax on the gift he got.

It says nothing about the gifter. 

 

Sherrings says it this way: the RC "grants receivers of  ... gifts the right to exclude (it) from ...tax"

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

Gift tax is paid by the receiver and has nothing to do with the gifter. 

The same here:

 an individual receiving certain types of gifts in excess of the tax-free thresholds will be subject to personal income tax at the rate of 5 percent of the exceeding portion

https://www.thanathippartners.com/insights/legal-update/inheritance-tax-and-gift-tax-t2u2.html?show=4

 

I have always wondered why so many people see gifting as a loophole.

BUT

1. I cannot read the RC in the Thai original,  I rely on English language sources

2.All of the above is only logic and matter of course. Not things that would bother a bureaucrat.

3. In the Swiss (?) embassy video, the TRD official said a gift to your son would be tax-free (not, if it's a Ferrari) - and he wasn't talking about the taxes of your son.

It would be nice to know some precedents.

If there is a historic precedent derived from the Court of Appeals, I would have expected the Code to have been updated to reflect such a ruling, that would make it clear for future claimants. As things stand currently, the English language version of the Tax Code leaves the giver of any gift, tax unaffected by the Gift Tax rule and playing no part in it, only the receiver is granted rights. Perhaps if @anrcaccount can supply the facts that led to his accusation of scaremongering, things will become a little clearer.

[jerrymahoney]

It seems to me the main purpose of the Feb 1, 2016 Gift Tax revision was to close the loophole on tax free gifts in excess of 20 million baht per year -- not to allow tax-free foreign sourced gifts under 20 million baht per year.

[chiang mai]

3 minutes ago, jerrymahoney said:

It seems to me the main purpose of the Feb 1, 2016 Gift Tax revision was to close the loophole on tax free gifts in excess of 20 million baht per year -- not to allow tax-free foreign sourced gifts under 20 million baht per year.

20 million per year is extremely generous, even for the wealthy elite of Thailand, who I expect are the main targets of the rule. It's bad enough that TRD loses tax on the received 20 million  of income that is gifted but to then suggest they also forgo tax on the income that generated the gift, that's just unsupportable in any tax regime.

[jerrymahoney]

2 minutes ago, chiang mai said:

20 million per year is extremely generous, even for the wealthy elite of Thailand, who I expect are the main targets of the rule. It's bad enough that TRD loses tax on the received 20 million  of income that is gifted but to then suggest they also forgo tax on the income that generated the gift, that's just unsupportable in any tax regime.

It seems one reason for the revision was that there were tax free gifts well in excess of 20 million baht that were becoming routine as a means to avoid future inheritance taxes.