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

[jerrymahoney]

16 minutes ago, chiang mai said:

Going much further down this road takes the discussion into that large grey area that sits between avoidance and evasion.

I came to that conclusion when I was queried:

 

Where is it stated in Thai Law that a gift must not be gifted back?

[4MyEgo]

7 hours ago, StraightTalk said:

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

 

Personal Income Tax (PIT) is a direct tax levied on income of a person.

 

What income, I live off of my wife's rice farm and what she buys me, from her rubber trees, no money in bank, except for immigration purposes, poor falang.

 

A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. 

 

No money brought into Thailand. 

 

You worry to muk 🙂

 

[Lorry]

3 hours ago, 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.

Interesting theory,  and maybe it would work. 

But I wouldn't want to explain this to TRD.

I very much suspect they would laugh at me.

3 hours ago, Yumthai said:

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.   

This sounds much better to me.

A very clean solution to the question of gifting to Thai wife.

TRD might still say,  oh, it's really money you use once the money is in Thailand.  So, just as a precaution, Thai wife could set up a separate account in Thailand where she keeps her gift, and then use the gift only for her personal expenses (paying for her own medical expenses,  supporting her parents,  buying land (not for your common house), paying her airline ticket or her lottery ticket...). Not for shared expenses of daily living. 

[JamesPhuket10]

6 hours ago, mikebell said:

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

 

What is it I have waited all this time for, what time?

 

Enlighten me.

 

I first read this article one or two days ago as I was having a break from programming, I needed something noddy to read for a change. 

 

I can imagine all of the low-income yet self-important pensioners in a panic as they think the tax people have time to chase after their few shillings.😀

 

I think they need to move on. 🚲

 

[gearbox]

12 hours ago, Nemises said:

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

I bet she currently declares every satang of the rental income in her tax return.

[jacob29]

9 hours ago, Yumthai said:

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.

Maybe so, which would make it equivalent to gifting into their foreign bank account, then transferring in.

 

Let's say John remits money into Thailand, that was received as a gift from his mom. Will that remittance avoid tax? I doubt it, for the simple reason that it's too easy to game. You could 'wash' money by transfer to a third party, then receive it back as a gift. These enforcement challenges make me think this system won't last long, and tax on worldwide income will be coming sooner rather than later.

[Lorry]

13 minutes ago, jacob29 said:

Let's say John remits money into Thailand, that was received as a gift from his mom. Will that remittance avoid tax? I doubt it,

I don't doubt it.

This is what tax advisers tell people who want to gift money to their Thai wife. 

Gift it to her in by remitting it into her foreign bank account. 

 

And why should John be forbidden to receive a gift from his mom?

A friend of mine plans to remit inherited money (from his mom) (less than the threshold of 100m) - I think it's not assessable, like gifts are not assessable. 

Yes, he does have the paperwork,  and his mom is really dead. The funds are not comingled with anything else. 

And john should have the necessary paperwork,  too (gift contract, stating amount, time and occasion of gift)

Edited August 28 by Lorry

[jacob29]

9 minutes ago, Lorry said:

And why should John be forbidden to receive a gift from his mom?

He's not forbidden, it just may be treated as assessable income (depending on his foreign source income).

 

I could spend the rest of my life repatriating capital (from pre 2024), while generating foreign income into a separate account. I don't think that would wash. I know some people are going to try this, and maybe it will work, but it seems far too easy to circumvent tax this way.

[Lorry]

1 hour ago, jacob29 said:

He's not forbidden, it just may be treated as assessable income (depending on his foreign source income).

 

I could spend the rest of my life repatriating capital (from pre 2024), while generating foreign income into a separate account. I don't think that would wash. I know some people are going to try this, and maybe it will work, but it seems far too easy to circumvent tax this way.

 

To tax these things (gifts, income pre2024) would be a blatant breach of the law, and go against all public statements of the TRD. It probably wouldn't go down well with many foreigners. 

 

It is one thing to introduce rules of taxation. 

It is another thing to contravene these rules and just impose taxes on foreigners arbitrarily. 

That doesn't mean it can't happen. There are very big countries where the government arbitrarily takes foreigners as hostages,  and people still go there.

[jayboy]

2 hours ago, jacob29 said:

I could spend the rest of my life repatriating capital (from pre 2024), while generating foreign income into a separate account. I don't think that would wash. I know some people are going to try this, and maybe it will work, but it seems far too easy to circumvent tax this way.

 

I understand this to mean someone could make remittances from their home country to Thailand based on pre-2024 investments and thus free of Thai tax, but keep current income offshore.Surely on the information known now, that would be completely legal and would not even fall into the category of avoiding or circumventing tax. If Thailand moved from a remittance system to taxing world wide income, that would of course change the game.

[chiang mai]

24 minutes ago, Lorry said:

 

To tax these things (gifts, income pre2024) would be a blatant breach of the law, and go against all public statements of the TRD. It probably wouldn't go down well with many foreigners. 

 

It is one thing to introduce rules of taxation. 

It is another thing to contravene these rules and just impose taxes on foreigners arbitrarily. 

That doesn't mean it can't happen. There are very big countries where the government arbitrarily takes foreigners as hostages,  and people still go there.

Equality in tax law is a key issue for government's worldwide, it is almost unimaginable that any government today would tax residents based on their nationality. An interesting read from the IMF library on tax laws globally and the top priorities of the laws.

 

https://www.imf.org/external/pubs/nft/1998/tlaw/eng/ch2.pdf

[topt]

51 minutes ago, chiang mai said:

Equality in tax law is a key issue for government's worldwide, it is almost unimaginable that any government today would tax residents based on their nationality. An interesting read from the IMF library on tax laws globally and the top priorities of the laws.

 

https://www.imf.org/external/pubs/nft/1998/tlaw/eng/ch2.pdf

Unfortunately I think a lot has changed since 1996 when this was written.

However I have not read the 56 pages so can't really comment on how relevant it may be. 

Perhaps it would be useful if you can pull out some salient points to get people started?

[jacob29]

1 hour ago, Lorry said:

 

To tax these things (gifts, income pre2024) would be a blatant breach of the law, and go against all public statements of the TRD.

It wouldn't strictly be taxing them, it would be taxing your worldwide income, up to but not exceeding your remittances into Thailand for that year. If you had no foreign source income, your tax burden would be zero. If you earned $100k abroad, and you remit $50k, regardless of source what I expect is your assessable income is going to be $50k.

 

I don't see any other practical way it could be enforced. Yes you could have segregated accounts etc - but what if you leave Thailand for a year.. Does your capital then become the same as pre 2024 income when you return? I don't think it's possible to track all this.

[Lorry]

4 minutes ago, jacob29 said:

It wouldn't strictly be taxing them, it would be taxing your worldwide income, up to but not exceeding your remittances into Thailand for that year. If you had no foreign source income, your tax burden would be zero. If you earned $100k abroad, and you remit $50k, regardless of source what I expect is your assessable income is going to be $50k.

 

I don't see any other practical way it could be enforced. Yes you could have segregated accounts etc - but what if you leave Thailand for a year.. Does your capital then become the same as pre 2024 income when you return? I don't think it's possible to track all this.

This may be  what they do in the future. 

It's definitely not the law right now.

[jacob29]

3 hours ago, Lorry said:

This may be  what they do in the future. 

It's definitely not the law right now.

The law is unclear. They confirmed pre 2024 income won't be subject to tax. There are multiple interpretations of this, if your income is zero then it's simple, it won't be taxed. If your income for the year is $100k I haven't seen concrete indication that it won't be subject to tax (as in, matched up with incoming remittance, where you don't get to choose to defer it).

 

Malaysia has similar rules, they seem to focus on whether tax has been paid. Does that mean gift tax of 0%, meets the criteria? Can't seem to find that information, even though Malaysia has had this for a few years.

Edited August 28 by jacob29

[chiang mai]

8 hours ago, topt said:

Unfortunately I think a lot has changed since 1996 when this was written.

However I have not read the 56 pages so can't really comment on how relevant it may be. 

Perhaps it would be useful if you can pull out some salient points to get people started?

The IMF library is a lot like my old attic, it contains everything but it's impossible to find anything! I linked an older version of that topic, there's a newer version dated 2020 which I will try and find and post...apologies. It talks about the legal framework for tax, the priorities being:

 

Taxes are only ever demanded by laws

Fair Play and Public Trust is vital

Proportionality of taxes is essential

Taxes cannot be retroactive

Establishing taxpayers rights

Importance of international agreements

 

I'll go back and look for the updated version.

 

 

 

 

[Lorry]

7 hours ago, jacob29 said:

The law is unclear. They confirmed pre 2024 income won't be subject to tax. There are multiple interpretations of this, if your income is zero then it's simple, it won't be taxed. If your income for the year is $100k I haven't seen concrete indication that it won't be subject to tax (as in, matched up with incoming remittance, where you don't get to choose to defer it).

 

Malaysia has similar rules, they seem to focus on whether tax has been paid. Does that mean gift tax of 0%, meets the criteria? Can't seem to find that information, even though Malaysia has had this for a few years.

Your point is, if you have income in 2024 and remit money, TRD might not let you choose which money you remit? Income from 2024or savings from before 2024 or gifts?

 

But that's why people use different accounts for all these things. So it's really not a choice,  it's a verifyable fact whether they remit gifts/savings or current income. 

I agree that TRD might twist things the way you say it.

[mikebell]

19 hours ago, JamesPhuket10 said:

What is it I have waited all this time for, what time?

 

Enlighten me.

It was posted nearly 3 weeks ago.  I have moved on to what is current now.

[JamesPhuket10]

50 minutes ago, mikebell said:

It was posted nearly 3 weeks ago.  I have moved on to what is current now.

Oh is that it.

 

I doubt if anything has changed in the last three weeks regarding any new information or any more understanding of what is NOT going to happened anyway.

 

They are after very rich Thai tax avoiders not the few so called expats with their few shillings in comparison, it is not worth their while doing that. 

Edited August 29 by JamesPhuket10
typo

[jerrymahoney]

51 minutes ago, JamesPhuket10 said:

Oh is that it.

 

I doubt if anything has changed in the last three weeks regarding any new information or any more understanding of what is NOT going to happened anyway.

 

They are after very rich Thai tax avoiders not the few so called expats with their few shillings in comparison, it is not worth their while doing that. 

On this and related topics, the 2016 Gift Tax revision has morphed into the notion that the revision now allows up to 20 million baht annual to be imported as a 'gift' tax free. As noted above, the tax was actually enacted as a punitive tax for those (ultra) wealthy individuals who were making 'gifts' maybe in the hundreds of million baht to escape the eventual inheritance tax.

[KhunHeineken]

On 8/27/2024 at 6:56 AM, Lorry said:

It works differently. 

Says you. 

 

On 8/27/2024 at 6:56 AM, Lorry said:

They may just ask incoming expats (more or less visible from their history of entries) how much cash they carry.

They would not be "expats" any longer.  They would be "tourists" with either tourist visas or coming in on 60 visa exemption stamps, paying their 1900 baht for the extension, doing a visa / cash run, and coming back for just short of the 180 days in total. 

 

If you call them "expats" from their home country, I would agree, but they can't be "expats" in Thailand when they spend more time outside Thailand than they do inside Thailand.  

 

On 8/27/2024 at 6:56 AM, Lorry said:

Yes, it's legal to carry it, and you don't have to report it.

Glad we cleared that up. 

 

On 8/27/2024 at 6:56 AM, Lorry said:

But if asked, you have to tell the truth. 

And the truth is, one can say they are based in Vietnam / Malaysia / Bali / Cambodia etc etc etc etc and having a holiday in Thailand, and here some cash to support my stay. 

 

Maybe they will be done with the retirement visa, and will spend pull out their 800k or 65k each month and spend it elsewhere for 6 months of the year.  Their passport will show this. 

 

On 8/27/2024 at 6:56 AM, Lorry said:

This would still require immigration to cooperate with TRD, so it won't happen so soon. And maybe they will feel it's not worth the effort (seriously, how many people would want to carry thousands of dollars in cash across South-east Asian borders? Many members here don't even pay 7-11 cash)

It would be possible if one was living in Thailand on zero remitted funds.  I could accept some type of "crackdown" in the future. 

 

For those that decide their tax liability in Thailand is not worth it, and they decide to do 179 days in Thailand each year on tourist visas, I can't see any breach of the law bringing in cash.  Many would already have a Thai bank account.  They would remit just under the taxable amount, and the rest can be cash. 

 

 

 

On 8/27/2024 at 6:56 AM, Lorry said:

And, of course,  they can always ask you what did you live on.

Yes, they can.  The answer would be I remit some money, go traveling and bring some back with me because I get a better rate elsewhere.  You don't to tell them it's a better tax rate and not exchange rate. 

 

On 8/27/2024 at 6:56 AM, Lorry said:

But the real issue is not the small money, those 400,000 or 800,000 daily expenses. Not much tax to pay on this. 

The real issue are the big ticket items. You don't want to finance a condo (you need the credit advice from the bank) or a car  with your cash runs. 

Completely agree. 

 

I brought this point up in another post and a member point blank refused to believe that by remitting 1 million baht to buy a new car, if that 1 million is taxed, the car has costed him more.  

 

Same example with condo, and emergency serious and major medical treatment. 

 

I hear what you are saying.  Yes, it may push the boundaries, but on the balance of probabilities, getting prosecuted would be slim.  That said, as I mentioned to another member, they do like to make scapegoats here to send a message to others, and since money is involved, anything is possible.  

[Lorry]

1 hour ago, KhunHeineken said:

Says you. 

 

They would not be "expats" any longer.  They would be "tourists" with either tourist visas or coming in on 60 visa exemption stamps, paying their 1900 baht for the extension, doing a visa / cash run, and coming back for just short of the 180 days in total. 

 

If you call them "expats" from their home country, I would agree, but they can't be "expats" in Thailand when they spend more time outside Thailand than they do inside Thailand.  

 

Glad we cleared that up. 

 

And the truth is, one can say they are based in Vietnam / Malaysia / Bali / Cambodia etc etc etc etc and having a holiday in Thailand, and here some cash to support my stay. 

 

Maybe they will be done with the retirement visa, and will spend pull out their 800k or 65k each month and spend it elsewhere for 6 months of the year.  Their passport will show this. 

 

It would be possible if one was living in Thailand on zero remitted funds.  I could accept some type of "crackdown" in the future. 

 

For those that decide their tax liability in Thailand is not worth it, and they decide to do 179 days in Thailand each year on tourist visas, I can't see any breach of the law bringing in cash.  Many would already have a Thai bank account.  They would remit just under the taxable amount, and the rest can be cash. 

 

 

 

Yes, they can.  The answer would be I remit some money, go traveling and bring some back with me because I get a better rate elsewhere.  You don't to tell them it's a better tax rate and not exchange rate. 

 

Completely agree. 

 

I brought this point up in another post and a member point blank refused to believe that by remitting 1 million baht to buy a new car, if that 1 million is taxed, the car has costed him more.  

 

Same example with condo, and emergency serious and major medical treatment. 

 

I hear what you are saying.  Yes, it may push the boundaries, but on the balance of probabilities, getting prosecuted would be slim.  That said, as I mentioned to another member, they do like to make scapegoats here to send a message to others, and since money is involved, anything is possible.  

I am confused. 

You say  "179 days in Thailand".

Then you are not a tax resident anyway,  no need for cash runs.

[chiang mai]

1 minute ago, Lorry said:

I am confused. 

You say  "179 days in Thailand".

Then you are not a tax resident anyway,  no need for cash runs.

I don't think you can be not tax resident everywhere. If the 180 or 183 day rule fails, governments resort to country of domicile or substantial presence tests.

[KhunHeineken]

14 minutes ago, Lorry said:

I am confused. 

You say  "179 days in Thailand".

Then you are not a tax resident anyway,  no need for cash runs.

How does immigration and the TRD know what an individual's tax residency status will be from the 1st Jan to 30th June, and / or the 1st July to the 30th June the following year?  

 

Think about it.   

[KhunHeineken]

13 minutes ago, chiang mai said:

I don't think you can be not tax resident everywhere. If the 180 or 183 day rule fails, governments resort to country of domicile or substantial presence tests.

You say this, but in many cases the physical presence and time based tax residency model repeals the domiciled tax residency model, but I hear what you are saying.  

Basically, we all need to accept that global taxation is changing, and in the near future there will be nowhere for anyone, or their money, to hide. 

[KhunHeineken]

On 8/29/2024 at 3:39 AM, JamesPhuket10 said:

They are after very rich Thai tax avoiders not the few so called expats with their few shillings in comparison, it is not worth their while doing that. 

They will scoop up everyone, in one way or another. 

[JamesPhuket10]

2 hours ago, KhunHeineken said:

They will scoop up everyone, in one way or another. 

They couldn't organize a piss-up in a brewery.

[KhunHeineken]

3 hours ago, JamesPhuket10 said:

They couldn't organize a piss-up in a brewery.

They organize your annual extension pretty well.

 

Maybe wait and see how much next year's extension is going to cost you, in one way, or another.  

Edited August 31 by KhunHeineken

[JamesPhuket10]

On 9/1/2024 at 12:40 AM, KhunHeineken said:

They organize your annual extension pretty well.

 

Maybe wait and see how much next year's extension is going to cost you, in one way, or another.  

 

You mean I filled out all of the forms correctly (twice so far), gave them all the docs and bank account statements they needed, a guy outside the building did a quick check, and the guy inside with the uniform checked again and followed the same set of functions he has done ten thousand times, then a day later they stamp my passport and that is that.

 

I expect the cost will be 1900 baht the same as the last two years.

 

I wonder how they would trace my 20 bank accounts in the UK and the many transactions I make between them.

 

I do not have to bring that much money into Thailand as I have no rent to pay as the house has been bought already, and my car is paid for, so I pay for electricity, water, beer, and food, but I cook at home anyway as I use NZ and Ozzie beef and lamb, etc as I don't like the local low-quality stuff.

 

I have 3000 baht spending money to spend each day but that is hard to spend unless I throw half of it away. 

 

As I said before, they are after the very rich Thais who have millions of dollars hidden overseas, not us small fish whom they have no interest in. 

Edited September 1 by JamesPhuket10
typo

[JamesPhuket10]

On 8/31/2024 at 7:16 PM, KhunHeineken said:

They will scoop up everyone, in one way or another. 

I have been told that job was relegated to bar girls a long time ago, once you have bought them a house, and a car, and paid to keep the mum, dad, and the sick buffalo for a few years many farangs end up being skint, hence the move on to the next mug who turns up. 🤣