Reduce taxation by gifting.

[phetphet]

I pay for all GF's daughter's education and extra curricular lessons such as maths and piano lessons to name a couple.

 

As things stand, the government will likely tax me on this money brought into Thailand. Therefore I am thinking of gifting the money to my GF with the express intent of it being for payment of said education. This should reduce any tax bill as it is under the 10 million baht gift limit for non relatives..

 

Does anyone know if the gifting can be done here in Thailand after I have transferred funds to myself? This would be the easiest option.

Or do I need to send them directly to GF from abroad?

Or does it not matter as long as I document the gift?

 

TIA

[Lorry]

5 hours ago, phetphet said:

if the gifting can be done here in Thailand after I have transferred funds to myself?

No, you cannot do it this way.

 

5 hours ago, phetphet said:

Or do I need to send them directly to GF from abroad?

This may work, or not - opinions of AN members vary a lot on this subject. 

 

Imho: Better than sending the money from abroad directly into your GF's account: send the money directly from abroad to her daughter's account. 

(I cannot guarantee that TRD will accept this - but if I were a tax inspector,  I probably would.  GF's account - I wouldn't like this)

[MalcolmB]

5 hours ago, phetphet said:

I pay for all GF's daughter's education

Why are you paying for it and not her parents?

[tomazbodner]

Donating to an organization works - you can deduct 1x the amount that you donated. You need to get a letter from them confirming that donations.

 

However if you donate to organization that directly supports education, then you can deduct 2x the amount you have donated.

 

Example: In first case, let's say you have 30% tax rate and you've donated 50k baht, you can put that 50k on the form and with the deduction get a 15k refund. In second case, you donated 50k for education, you would put 50k into another field, and it will give deduction of 100k, thus you'd receive a refund of 30k.

 

It would be best to check with someone else which organizations allow such double deduction. I've done donation to schools before but it was beginning of the year and by the time it came to submitting paperwork for taxes I've already lost all the documents, so I never submitted it. But I guess that would do.

 

What you're suggesting above would definitely not fly, though.

[Skeptic7]

For a gift received by a person who is not an ascendant, descendant or spouse on occasions of tradition or custom 

Subject to tax on the amount of the gift received in excess of 10 million baht in a tax year.

 

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

[JBChiangRai]

I am a single parent of two adopted Thai daughters.

 

They have their own bank accounts and I transfer money from the UK to them to fund university education, living expenses, car, expenses, clothing, and basically everything else they need including food. The amount I send is carefully calculated and sent on 1 January each year.

 

They want to do work and travel next March And I have just transferred the funds from the UK to them to do that.

 

My advice to you, is to get the girlfriend’s daughter to open a bank account which can be done from the age of seven with GSB, carefully calculate the amount of money needed and send it direct to her and make sure all the expenses are paid from that account and that none of it ever goes to your girlfriend or into her account.

[JBChiangRai]

6 minutes ago, Skeptic7 said:

For a gift received by a person who is not an ascendant, descendant or spouse on occasions of tradition or custom 

Subject to tax on the amount of the gift received in excess of 10 million baht in a tax year.

 

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

You missed one of the classifications, and that is a moral obligation to give the gift. The OP obviously has a moral obligation to give the gift..

[spidermike007]

As of now, that would work, according to this tax expert. If the wife pays the expenses. That could change, but currently, no problem. 

 

 

[CanadaSam]

This is exactly why I use WISE! 

 

ALL foreign funds, private or otherwise, go into my Wise account, and I then choose where to send it, and to whom, whenever it's convenient for me.

 

In your case, you would send it directly to your daughter, so it would not even show up as "your" income in Thailand, so non-taxable! 

[Celsius]

Wow, have you illiterates even read the post 

 

Not his wife, not his daughter.

[JBChiangRai]

10 minutes ago, CanadaSam said:

This is exactly why I use WISE! 

 

ALL foreign funds, private or otherwise, go into my Wise account, and I then choose where to send it, and to whom, whenever it's convenient for me.

 

In your case, you would send it directly to your daughter, so it would not even show up as "your" income in Thailand, so non-taxable! 

 

I don't see what difference WISE makes?

 

 

In my case, money goes into one of my UK bank accounts and I use WISE to send it to my daughters accounts.  I could just as easily do that with (say) HSBC direct to their accounts.  It's exactly the same thing.

[CanadaSam]

3 minutes ago, JBChiangRai said:

I don't see what difference WISE makes?

 

Sorry, I should have explained that I have numerous sources of income abroad, including governmental and private, and it's cumbersome to deal with my banks abroad to transfer funds, each has their own systems and at my age, it's difficult for me, so I just permanently channeled them all to my Wise account, where I find it extremely easy to transfer between currencies, and also to transfer to anybody anywhere, with minimal input, including to myself (my Thai bank accounts) whenever I wish.

[JBChiangRai]

7 minutes ago, CanadaSam said:

 

Sorry, I should have explained that I have numerous sources of income abroad, including governmental and private, and it's cumbersome to deal with my banks abroad to transfer funds, each has their own systems and at my age, it's difficult for me, so I just permanently channeled them all to my Wise account, where I find it extremely easy to transfer between currencies, and also to transfer to anybody anywhere, with minimal input, including to myself (my Thai bank accounts) whenever I wish.

 

Thanks, I got it now.

[cjinchiangrai]

14 hours ago, tomazbodner said:

Donating to an organization works - you can deduct 1x the amount that you donated. You need to get a letter from them confirming that donations.

 

However if you donate to organization that directly supports education, then you can deduct 2x the amount you have donated.

 

Example: In first case, let's say you have 30% tax rate and you've donated 50k baht, you can put that 50k on the form and with the deduction get a 15k refund. In second case, you donated 50k for education, you would put 50k into another field, and it will give deduction of 100k, thus you'd receive a refund of 30k.

 

It would be best to check with someone else which organizations allow such double deduction. I've done donation to schools before but it was beginning of the year and by the time it came to submitting paperwork for taxes I've already lost all the documents, so I never submitted it. But I guess that would do.

 

What you're suggesting above would definitely not fly, though.

You cannot "donate" and write off tuitions. 

[phetphet]

16 hours ago, MalcolmB said:

Why are you paying for it and not her parents?

If you must know. Because father is not in the picture.

I, with her mom have raised her since she was a toddler and want her to have a good education, and a chance at a better life.

It is paying off too, as she is trilingual and top of her class.

[MalcolmB]

50 minutes ago, phetphet said:

If you must know. Because father is not in the picture.

I, with her mom have raised her since she was a toddler and want her to have a good education, and a chance at a better life.

It is paying off too, as she is trilingual and top of her class.

Nice one

[JBChiangRai]

When you marry or date long term you take on all the commitments of the biological father.

 

If you’re not happy with that, walk-away.  Don’t take a Thai mother away from her child. 
 

And if the relationship breaks down, that’s tough because you don’t show a child a better life and walk away when it suits you. It’s a life-long commitment.

[1FinickyOne]

18 hours ago, MalcolmB said:

Why are you paying for it and not her parents?

maybe cause "it" is actually a person?  

[tomazbodner]

4 hours ago, cjinchiangrai said:

You cannot "donate" and write off tuitions. 

Did I say anywhere that you can?

[cjinchiangrai]

1 minute ago, tomazbodner said:

Did I say anywhere that you can?

Reduce taxation by gifting

[FritsSikkink]

8 hours ago, Skeptic7 said:

For a gift received by a person who is not an ascendant, descendant or spouse on occasions of tradition or custom 

Subject to tax on the amount of the gift received in excess of 10 million baht in a tax year.

 

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

That link is for paying tax over a gift, not deductible gifts.

 

Gifts to wife, girlfriend are NOT deductible: Thailand - Individual - Deductions (pwc.com)

[chiang mai]

8 minutes ago, FritsSikkink said:

That link is for paying tax over a gift, not deductible gifts.

 

Gifts to wife, girlfriend are NOT deductible: Thailand - Individual - Deductions (pwc.com)

Agreed

[Skeptic7]

2 hours ago, FritsSikkink said:

That link is for paying tax over a gift, not deductible gifts.

 

Gifts to wife, girlfriend are NOT deductible: Thailand - Individual - Deductions (pwc.com)

This is included in the topic. Directly from the OP...

 

"Or do I need to send them directly to GF from abroad?"

 

This is the answer, as it's already known that gifts from inside Thailand are not deductible. This is also well covered early on in the video from @spidermike007. Surely the OP can decide for himself if this info is beneficial or not. 

[tomazbodner]

4 hours ago, cjinchiangrai said:

Reduce taxation by gifting

That's someone else's title, I never wrote this. I am referring to Por Ngor Dor 91 form, which has these in it:

 

[spidermike007]

14 hours ago, Skeptic7 said:

This is included in the topic. Directly from the OP...

 

"Or do I need to send them directly to GF from abroad?"

 

This is the answer, as it's already known that gifts from inside Thailand are not deductible. This is also well covered early on in the video from @spidermike007. Surely the OP can decide for himself if this info is beneficial or not. 

They are 100% deductible, up to 10 million baht per year, as long as they are sent from overseas. As of now, anyway. 

[jerrymahoney]

25 minutes ago, spidermike007 said:

They are 100% deductible, up to 10 million baht per year, as long as they are sent from overseas. As of now, anyway. 

I watched the gift section of the video and the gent who runs a big tax advisory service and he never says of the 2016 Gift tax revision:

Yeah our big-time well-heeled clients bring in up 20 million baht each year tax free all the time. Routinely.

He does say that this years tax revision was to close the 12 month provision where a foreign earner just had to wait 12 months before bringing in the funds.

But he doesn't say that if someone wanted to bring in this year money earned this year, we would tell our clients to just make a gift. No problema

[Captain Monday]

I have a TIN *very easy to get not a couple days, and have been filing tax returns. My only income in Thailand is interest from Savings accounts. Only to claw back the proportion of interest BKK bank withhold.

Really a waste of time, of which I have plenty when I am in Chiang Mai, but I don't want to bother anymore.

I don't stay 180 days in any country and dont plan on ever staying 180 days in Thailand

 

Captain Monday   -  ”Constant International Travel”

[Skeptic7]

3 hours ago, spidermike007 said:

They are 100% deductible, up to 10 million baht per year, as long as they are sent from overseas. As of now, anyway. 

Right. Thought I'd made that clear, but maybe not. Transfer Gift from own Thai account to GF...NOT deductible.

Transfer from overseas account...deductible. 👍

[jerrymahoney]

To the 'confused' above, this published opinion:

When you give something away as a gift, you are expected to relinquish all benefits from that asset. If you continue to benefit from it in any way, this is known as a ‘gift with reservation’.

For tax planning purposes, it’s crucial to understand that you must not derive any benefit when gifting assets. For example, if an expat sends money from overseas to their Thai spouse and it covers their living expenses, it is not considered a gift. Attempting to bypass the tax regulations in this way is likely to be considered tax evasion, potentially resulting in severe penalties.

https://www.expattaxthailand.com/gift-tax-2024/

-- You don't have to agree -- but I, at least, have not seen any published opinion to the contrary.

[spidermike007]

3 hours ago, jerrymahoney said:

 

 

I watched the gift section of the video and the gent who runs a big tax advisory service and he never says of the 2016 Gift tax revision:

Yeah our big-time well-heeled clients bring in up 20 million baht each year tax free all the time. Routinely.

He does say that this years tax revision was to close the 12 month provision where a foreign earner just had to wait 12 months before bringing in the funds.

But he doesn't say that if someone wanted to bring in this year money earned this year, we would tell our clients to just make a gift. No problema

 

 

If you watch the clip that I attached, it very clearly states that as of now the tax code allows a gift to your spouse, of up to 20 million baht per year. It cannot be carried in, and it must be wired from overseas. And you would have to be quite creative as you're not entitled to have direct benefit from it, but he does say that if the home is in her name for example that paying the mortgage or paying rent would be permissible.