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

[Yumthai]

  On 8/27/2024 at 9:42 AM, chiang mai said:

How can a giftee make a remittance to themselves, from another person's' overseas account?

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Giftee receives a remittance from offshore that could be from anybody. That could be either assessable income or exempted income if giftee can justify it is (in this case a gift if amount < THB20M).

  On 8/27/2024 at 9:42 AM, chiang mai said:

Those questions are probably moot since what you're suggesting is that everyone, native Thai's and foreigners, can gift their income to a spouse or relative and nobody anywhere in the country has to pay PIT.....cool!

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Local gift has supposedly been taxed locally.

Offshore gift has supposedly been taxed offshore or not depending on offshore tax rules however it is not Thailand concern. 

 

[chiang mai]

  On 8/27/2024 at 10:00 AM, Yumthai said:

Giftee receives a remittance from offshore that could be from anybody. That could be either assessable income or exempted income if giftee can justify it is (in this case a gift if amount < THB20M).

Local gift has supposedly been taxed locally.

Offshore gift has supposedly been taxed offshore or not depending on offshore tax rules however it is not Thailand concern. 

 

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The question of whether the gift has been taxed offshore is not relevant until those funds are declared to the TRD on a tax return, by the remitter but under your scenario, that is never allowed to happen. There is no presumption by anyone regarding whether tax has been paid or not,  on foreign or domestic funds, until the Thai tax return is filed.

 

If the gifter is a Thai tax resident, they will have remitted funds from overseas which, for the sake of this example, are assessable to Thai tax. The fact the funds were remitted to another person and not to their own account, does not excuse the remitter from declaring the funds on a tax return. If that same remitter had remitted Thai assessable funds from overseas, to, for example, a Thai property developer, in order to buy a condo, those funds would need to be assessed for Thai tax as if they were remitted to their own Thai account. If that were not true, any foreigner living in Thailand could pay all their bills in Thailand, using remittances from their overseas account and none of it would be regarded as assessible income and no Thai tax would be due ever! 

 

The gift is only made when the gifter is willing to give and the giftee is willing to receive, that can only be proven once the remittance has been made, the argument that the gift is made before the remittance is therefore not valid.

[Yumthai]

  On 8/27/2024 at 10:19 AM, chiang mai said:

The gift is only made when the gifter is willing to give and the giftee is willing to receive, that can only be proven once the remittance has been made, the argument that the gift is made before the remittance is therefore not valid.

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That's your opinion. The only way to have clarity is to wait a case report, if that ever happens, where a gifter tax resident is penalized to have gifted from offshore a Thai resident and not declaring it.

[chiang mai]

  On 8/27/2024 at 10:28 AM, Yumthai said:

That's your opinion. The only way to have clarity is to wait a case report, if that ever happens, where a gifter tax resident is penalized to have gifted from offshore a Thai resident and not declaring it.

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Legal opinion is that a gift only exists when it is actually made, the intention of making a gift does not constitute a gift.

"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.

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.

https://www.herrera-partners.com/2024/01/10/on-gift-tax-and-properties-in-thailand/

[Yumthai]

  On 8/27/2024 at 10:37 AM, chiang mai said:

Legal opinion is that a gift only exists when it is actually made, the intention of making a gift does not constitute a gift.

"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.

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.

https://www.herrera-partners.com/2024/01/10/on-gift-tax-and-properties-in-thailand/

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Yes the gift is valid when received. When the gifter sends a gift to the giftee, this is not a remittance event for the gifter. This is my opinion.

[chiang mai]

  On 8/27/2024 at 10:51 AM, Yumthai said:

Yes the gift is valid when received. When the gifter sends a gift to the giftee, this is not a remittance event for the gifter. This is my opinion.

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We do not agree and probably can't go any further. I am certain that a Thai tax resident cannot legally escape tax, merely by remitting funds to another person, the concept flies in the face of any audit and compliance rule and reasonability test that I've ever heard of.

 

Probably all done here now.,

[Mike Teavee]

  On 8/27/2024 at 10:58 AM, chiang mai said:

We do not agree and probably can't go any further. I am certain that a Thai tax resident cannot legally escape tax, merely by remitting funds to another person, the concept flies in the face of any audit and compliance rule and reasonability test that I've ever heard of.

 

Probably all done here now.,

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I was originally in the “No Tax For The Gifter” but what little I’ve read on it from the Tax experts says it’s a complicated area & if audited you’re at the mercy of TRD agreeing it’s a gift with no absolute rules to rely on.
 

They recommend you make the Gift outside of Thailand, document that it’s a Gift & then the receiver of the Gift is remitting income to themselves which they can show is non-assessable. 

[freedomnow]

Endless backflips last page or so - but anyone tax resident has to report worldwide income regardless for tax purposes.

 

[chiang mai]

  On 8/27/2024 at 11:13 AM, freedomnow said:

Endless backflips last page or so - but anyone tax resident has to report worldwide income regardless for tax purposes.

 

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Remitted income only.

[NanLaew]

  On 8/6/2024 at 12:55 PM, norbra said:

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

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I had broadly the same initial response from the 'boss' at the Revenue Office in Udon Thani. She said you're not working and earning here, so you don't need one.

 

When I managed to get her to accept that it was my overseas bank that was seeking proof that I pay tax here and therefore not liable for tax in that country as part of THEIR know-your-customer malarkey, she said I would need to file a Thai tax return after all, but she would only give me my TIN after I had been assessed for and paid Thai tax.

 

Muppets the lot of 'em.

[Mike Teavee]

  On 8/27/2024 at 11:32 AM, NanLaew said:

 

I had broadly the same initial response from the 'boss' at the Revenue Office in Udon Thani. She said you're not working and earning here, so you don't need one.

 

When I managed to get her to accept that it was my overseas bank that was seeking proof that I pay tax here and therefore not liable for tax in that country as part of THEIR know-your-customer malarkey, she said I would need to file a Thai tax return after all, but she would only give me my TIN after I had been assessed for and paid Thai tax.

 

Muppets the lot of 'em.

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That doesn’t make sense as you can’t file a return without a TIN

[4MyEgo]

  On 8/18/2024 at 11:59 PM, 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!

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Yeh, nah I did the math on a mil, after deductions and the threshold amount, it will end up costing me about 35-40k baht, so it's the same as a return ticket. But I won't be registering for an ID until notified to get one.

 

The above said, with the new PM in now, I believe you will see a reversal, or the TRD doing absolutely nothing to falangs who have been caught up in the crosshairs of the wealthy Thai's who this rule came into force for.

[Everyman]

  On 8/7/2024 at 7:22 AM, Lacessit said:

It does sound like a lot of co-ordination and co-operation between the departments.

 

I suppose the test of your speculation will be

 

(a) When I go for my next extension in November, given the Thai tax year does not end until March 2025.

 

(b) whether I get issued a TTN by the RD, or get told it's not needed because I am a national that has a DTA with Thailand, OR I am below their radar as a pensioner.

 

Given I have plenty of documented pre-2024 savings, I am not really fussed. Just another layer of bureaucracy to keep the unemployment figure at 1%.

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Don’t worry. In a year all the scaremongers will be predicting 2026 will be tax doomsday.

[gearbox]

  On 8/19/2024 at 2:54 AM, Nemises said:

You are wrong. I will not be exchanging anything. That will be done by my Thai GF and/or her family. 

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They need to present ID when exchanging your money, and these transactions are tracked. One day either the taxman or the money laundering authority may knock on your Thai's girlfriend door and ask where she got that foreign currency from.

 

 

[JamesPhuket10]

  On 8/8/2024 at 12:48 AM, mikebell said:

I doubt it very much; there aren't enough officials with sufficient English to follow these discussions.

If there are Government people reading this, please be aware, IF you attempt to tax my already taxed pensions in UK, I will be moving to Laos taking my 800K with me.

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No please don't do that as the whole of Thailand's financial systems would collapse without your 800k baht.

 

I can now imagine the Laos government is eagerly waiting for your entry into their country with 800k baht in tow. 

[JamesPhuket10]

The new tax laws are there to be able to process the very rich Thais who are hiding large amounts of overseas income, they have to propose it will include farangs to seem fair.

 

They are not interested and do not have the resources to track farangs as most have nothing compared to the rich Thais they are after anyway, it is not worth their while to track farangs with their meager 800k income.

[jacob29]

  On 8/27/2024 at 10:51 AM, Yumthai said:

Yes the gift is valid when received. When the gifter sends a gift to the giftee, this is not a remittance event for the gifter. This is my opinion.

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Is there anything tangible to back it though? As I'm not aware of any such exceptions hinted at in the official statements. Even if you sent money to a local charity from abroad, I believe the conversion to THB would be treated as a remittance event. In that case, you may be able to claim the tax back as a deduction (unsure tax laws on charities). I don't believe the same would be true of gifts, you almost certainly can't essentially reduce your tax liability by gifting it to someone.

 

Think about the situation domestically, you gift all your salary to your spouse - that is not going to reduce your tax liability to zero. So why would it be any different for foreigners, it's hard to see why there would be any exceptions? Granted lack of enforcement is a likely outcome.

[Nemises]

  On 8/27/2024 at 1:14 PM, gearbox said:

authority may knock on your Thai's girlfriend door and ask where she got that foreign currency from.

 

 

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It’s her rent money that I pay to her for accommodation. 

[Ralf001]

  On 8/27/2024 at 8:12 PM, Nemises said:

It’s her rent money that I pay to her for accommodation. 

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And she will have rent receipts from the landlord as proof !

[StraightTalk]

  On 8/27/2024 at 11:47 AM, 4MyEgo said:

[...]But I won't be registering for an ID until notified to get one.

The above said, with the new PM in now, I believe you will see a reversal,[...]

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Fat chance! https://www.rd.go.th/english/6045.html

[StraightTalk]

  On 8/27/2024 at 2:04 PM, JamesPhuket10 said:

The new tax laws are there to be able to process the very rich Thais who are hiding large amounts of overseas income, they have to propose it will include farangs to seem fair.

 

They are not interested and do not have the resources to track farangs as most have nothing compared to the rich Thais they are after anyway, it is not worth their while to track farangs with their meager 800k income.

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Never underestimate the power and determination of the RD of any country!

Educational reading: https://www.rd.go.th/english/6045.html

[Everyman]

  On 8/27/2024 at 10:19 PM, StraightTalk said:

Never underestimate the power and determination of the RD of any country!

Educational reading: https://www.rd.go.th/english/6045.html

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So<deleted>ingwhat 

 

this is a country that can’t stop children from driving motorcycles down the sidewalk at 80 kn/hr, do you really think they will go after drunk, impoverished pensioners for not filing a form? i am fed up with the hysteria 

[chiang mai]

  On 8/27/2024 at 11:18 PM, Everyman said:

 

So<deleted>ingwhat 

 

this is a country that can’t stop children from driving motorcycles down the sidewalk at 80 kn/hr, do you really think they will go after drunk, impoverished pensioners for not filing a form? i am fed up with the hysteria 

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I understand the sentiment but your logic is skewed. There's no financial benefit to stopping motorbikes on sidewalks plus it's labor intensive and hard work for no thanks. By comparison, it's far easier to sit behind a desk in an air conditioned office, reading a report  from BOT or the banks, containing a list of names and amounts transferred from overseas and then sending somebody a letter or asking an audit team to go have a chat. 

[Yumthai]

  On 8/27/2024 at 7:48 PM, jacob29 said:

Think about the situation domestically, you gift all your salary to your spouse - that is not going to reduce your tax liability to zero. So why would it be any different for foreigners, it's hard to see why there would be any exceptions? Granted lack of enforcement is a likely outcome.

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The point is gifting abroad where there is no clarity from TRD. I believe the remittance event occurs after the gift act so the remittance happens for the giftee not the gifter, whatever the way the gift is transferred in Thailand.

[mikebell]

  On 8/27/2024 at 1:55 PM, JamesPhuket10 said:

 

No please don't do that as the whole of Thailand's financial systems would collapse without your 800k baht.

 

I can now imagine the Laos government is eagerly waiting for your entry into their country with 800k baht in tow. 

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You've waited all this time and this is the best you can come up with?  Move on.

[chiang mai]

  On 8/28/2024 at 12:26 AM, Yumthai said:

The point is gifting abroad where there is no clarity from TRD. I believe the remittance event occurs after the gift act so the remittance happens for the giftee not the gifter, whatever the way the gift is transferred in Thailand.

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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.

https://www.herrera-partners.com/2024/01/10/on-gift-tax-and-properties-in-thailand/

[Yumthai]

  On 8/28/2024 at 1:44 AM, chiang mai said:

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.

https://www.herrera-partners.com/2024/01/10/on-gift-tax-and-properties-in-thailand/

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My view: You gift a Thai resident a house, car, watch, diamond, gold bar,... or 10K USD in country X offshore.

The Thai resident is now the owner of the house, car, watch, diamond, gold bar, 10K USD in country X offshore.

The gift (or gift sale proceed) remittance in Thailand that may or may not happen further in time is a tax-exempted remittance of the giftee property.

 

I didn't read any gift tax treatment differences between tangible and intangible assets regarding gifting offshore and remittance.

 

Again, there is no clarity about Gift rules and way of interpretation as usual with Thai Law.

[chiang mai]

  On 8/28/2024 at 2:20 AM, Yumthai said:

My view: You gift a Thai resident a house, car, watch, diamond, gold bar,... or 10K USD in country X offshore.

The Thai resident is now the owner of the house, car, watch, diamond, gold bar, 10K USD in country X offshore.

The gift (or gift sale proceed) remittance in Thailand that may or may not happen further in time is a tax-exempted remittance of the giftee property.

 

I didn't read any gift tax treatment differences between tangible and intangible assets regarding gifting offshore and remittance.

 

Again, there is no clarity about Gift rules and way of interpretation as usual with Thai Law.

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That's fine, as long as the giftee takes ownership of the gift at the point where it is gifted. That means, the giftee will need to have any overseas property transferred into their name, overseas; the 10k USD will need to be transferred to THEIR account in the foreign country where the gift was made; any gift documented and recorded in the country where it is made; before the value of those things can be transferred by the giftee, in their name, to Thailand. 

 

What happens outside of Thailand is of no interest to TRD, their interest begins with the remittance into Thailand, the person who makes the remittance and the source/origin of the remittance. You could not for example make the gift overseas, whilst Thai tax resident and then remit the funds to the giftee's account in Thailand because the gift is not made in law until it is received by the giftee. You could however make the gift overseas, transfer ownership to the giftee and once they fully owned the gift, they could remit the proceeds of it to their Thai account as non-assessible income.

[Yumthai]

  On 8/28/2024 at 2:48 AM, chiang mai said:

That's fine, as long as the giftee takes ownership of the gift at the point where it is gifted. That means, the giftee will need to have any overseas property transferred into their name, overseas; the 10k USD will need to be transferred to THEIR account in the foreign country where the gift was made; any gift documented and recorded in the country where it is made; before the value of those things can be transferred by the giftee, in their name, to Thailand. 

 

What happens outside of Thailand is of no interest to TRD, their interest begins with the remittance into Thailand, the person who makes the remittance and the source/origin of the remittance. You could not for example make the gift overseas, whilst Thai tax resident and then remit the funds to the giftee's account in Thailand because the gift is not made in law until it is received by the giftee. You could however make the gift overseas, transfer ownership to the giftee and once they fully owned the gift, they could remit the proceeds of it to their Thai account as non-assessible income.

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Transfer of ownership could be as simple, and perfectly legal, as a piece of paper stating Mr Smith gives ownership of 10K USD to Mrs Nong. The 10K USD is located at address A in country C. I don't see why it must be in a bank account at Mrs Nong name or transferred later on only from Mrs Nong bank account.

 

Anyway, if it happens to be the case then the tax loophole is definitely not closed as a Thai resident can just hold a bank account offshore (very easy to open a non-CRS USD account in Cambodia) to receive all gifts and remit it tax-free in Thailand at any time.   

[chiang mai]

  On 8/28/2024 at 3:16 AM, Yumthai said:

Transfer of ownership could be as simple, and perfectly legal, as a piece of paper stating Mr Smith gives ownership of 10K USD to Mrs Nong. The 10K USD is located at address A in country C. I don't see why it must be in a bank account at Mrs Nong name or transferred later on only from Mrs Nong bank account.

 

Anyway, if it happens to be the case then the tax loophole is definitely not closed as a Thai resident can just hold a bank account offshore (very easy to open a non-CRS USD account in Cambodia) to receive all gifts and remit it tax-free in Thailand at any time.   

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Possession is nine tenths of the law, whoever holds the asset is the likely owner, in law at least. If this was 1925 I'd say the paper based exercise would work but not today.

 

Going much further down this road takes the discussion into that large grey area that sits between avoidance and evasion. It's actions like this that made the UK begin to scrutinise  accounts held in the Isle of Man and Guernsey, some care is warranted..